Nepal should earn donors’ trust for effective reconstruction

Murari Sharma

The government of Nepal has invited the international community to a conference it is planning to host in Kathmandu to seek support for the reconstruction of earthquake devastated homes and infrastructures. However, its development partners do not trust the political parties of Nepal.

Nepal relies heavily on foreign assistance for its development activities. Therefore, its government need to take several measures before it can earn the much-needed trust from the donor community and make the conference a success.

The need for reconstruction, generated by the major April and May earthquakes and thousands of aftershocks, is gargantuan. The quakes have killed nearly 9,000 people and destroyed or damaged over 60,000 private houses and 700 temples as well as several roads and other physical infrastructures. The total physical damage has been estimated to the magnitude of 70 billion rupees (Rs.100=US$1).

Obviously, the victims of the quakes do not have a roof over their head, food to eat, seeds to sow, oxen to plough their land, and capacity to sustain them until the next crop arrives. The tremors have destroyed or buried them all and impoverished Nepal, a least developed country with 409 US dollars per capita income in 2014, further.

While the needs are genuine and pressing, the circumstances to fulfill them are questionable. Nepal is one of the most corrupt countries in the world. There is massive fraud and cheating in the tax system. Domestically raised and donor-provided resources are misused and misappropriated widely and consistently. Few are caught for misappropriation and let go under political pressure.

According to Transparency International, the country ranked 126th in corruption perception index in 2014. In 2013, it ranked 116th. Although its ranking has somewhat fluctuated over the years, it is clear that Nepal is one of the worst in corruption. Corruption with impunity is more prevalent among political leaders than among other elites.  This creates a trust problem with donors.

Such trust deficit was evident when donors insisted on distributing their relief materials and using their financial contributions by themselves in the wake of the quakes. Despite the Nepal government’s repeated requests to channel their financial contributions through the Prime Minister’s Fund and relief materials through government agencies, the donors from within and without have been reluctant to heed.

The conference would afford an opportunity for the government to inform the international community about the scale of devastation and the need for reconstruction, to outline the reconstruction program, to convince donors that the government is serious about implementing the program faithfully, and generate the colossal resources for rebuilding. However, the conference is unlikely to sway the donors, unless the government takes several concrete measures to build the requisite trust.

First, there must be credible local government to undertake reconstruction activities at grassroots. Unfortunately, there have been no local elections over a decade. In absence of local government, donors trust grassroots consumers and victims groups, more than the Singha Durbar, with their resources. Kathmandu, however, is headed precisely in the opposite direction — towards forming a national government and creating a powerful reconstruction authority to centralize reconstruction activities. That is a non-sequitur.

Second, the government needs to change the current ministerial line up.  While Prime Minister Sushil Koirala is a mixed bag– donors trust him for being relatively clean but find him ineffective, some of his powerful ministers have become a pernicious drag on the government. Koirala should show guts to remove them and introduce new and clean faces to earn the trust of the donor community.

Third, the prime minister must commit and make concrete provisions for the transparent deployment of resources that are collected from within and outside for monitoring and course correction, as necessary. The selling and the misuse of relief materials at the behest of senior ministers and lawmakers have not sent a positive message.

Fourth, aggressive and robust anti-corruption measures are essential to win donors’ confidence. The government needs to reinforce the mechanisms and policies to strengthen accountability, to bring suspected embezzlers to book and to punish those who have been found guilty. The prime minister can start this process by removing the ministers who have become a liability for him due to their alleged and evident corruption.

Fifth, the idea of national government must be abandoned. While the international community is pleased that the political parties of Nepal have agreed on the contours — though working out the details would be no less challenging — of the new constitution after a long time, the motive behind this agreement does not give them room for comfort. They know, as most of us Nepalis do, the main reason behind the Big Four’s agreement is national government. At least democratic donors are not pleased by their motive.

Collusion breeds corruption. Democracy becomes strong and clean when there is powerful opposition to question the government, to prevent it from going overboard, and to compete at the time of election. A national government is diametrically the opposite of the democratic principle of check and balance. If the idea comes to fruition, there will be no one in the opposition worth the name to counter the government in the Constituent Assembly and inform the public.

Finally, donors would not  support willingly a country that cannot repair its central secretariat but commits to funding eight states and their paraphernalia and chooses to institute an unaccountable national government. The immediate neighbors and several European countries have made it abundantly clear that they support a few economically viable states in federal Nepal. The Big Four have agreed on eight provinces, which NC leader Ram Chandra Paudel has ridiculed as unsustainable. I agree.

Both donors and we Nepalis know that the administrative costs of donor-driven project are high. In some cases, such costs eat up to 65 percent of foreign assistance. Yet they are certain that the rest is more or less properly utilized. However, neither foreigners nor the Nepalis trust that the government would invest more than 35 percent of such resources in the intended target groups or tasks. Hence, donors at home and abroad are reluctant to trust the government.

Whether the conference achieves its goals would depend on the government’s ability to build the bridge of trust with donors that it would do what it has pledged. Therefore, the government must address the issues raised here before donors can be confident that their money is going to be used properly. Otherwise, the donors would want to use their resources themselves to help the Nepali people.

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