Foreign aid is indispensable for a country like Nepal. But both sides of such giving and taking should practice a dispassionate review of objectives, programs, spending systems and impacts. It is a matter of rights for the taxpayers of the donor country and the people of the recipient country.
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The announcement of the closure of the United States Agency for International Development (USAID), known for its work in the areas of global development, humanitarian aid and the promotion of democratic governance, has prompted an analysis of the impact on the countries associated with it. With the decision of US President Donald Trump, the program under USAID is now certain to stop, which will cause a large number of people to lose their jobs.
It will also have long-term implications as the US has now announced a comprehensive review of overall foreign aid. Not only the countries that received foreign aid benefited, countries like the US that gave aid were also expanding their influence. A collaborative review will also review such impact. Therefore, it can be estimated that this latest step may have an impact in various fields of geopolitical, diplomatic or cooperation.
Since Nepal is one of the more than 176 countries that the US works with through USAID, it is natural that this topic is also of interest to us. Because, Nepal is on the 16th place in the list of countries that America gives aid to. The last agreement was reached in 2022 for a grant of 659 million US dollars for 5 years.
According to the agreement between the Ministry of Finance and USAID, American assistance is being used in the fields of good governance, human development, disaster protection and preparedness, infrastructure construction, and education. Similarly, a large amount of US aid is being used in health and population, financial reform, administration reform and agriculture sector.
We must free ourselves from the mentality of counting only on friendship grants with any country. As there are many avenues of trade, cooperation, economic/technological benefits between the two countries, this alone makes the scope of the relationship wider and longer lasting. The subject of USAID closure and its impact in Nepal should also be looked at from two angles.
First, whether or not to subsidize the money collected from American taxpayers in the name of foreign aid and under what conditions is a matter of the right of the government there. This is what happened now. Second, grant recipient countries are also free and empowered to review and formulate policies regarding such assistance/grants. This is what a country like Nepal should do at this time. Until yesterday there was USAID, no more. The cooperation missions of other countries that are still there may also be closed tomorrow. Therefore, the first responsibility is to increase self-reliance, and the second is to make the expenditure system of subsidies from abroad responsible and reliable.
There is also a need for a serious debate about the funds coming through USAID, the programs it runs and the public benefits. Out of the total grant of 659 million dollars mentioned in the 5-year strategic agreement between the government of Nepal and USAID, only 71.7 million US dollars were included in the budget of the government of Nepal. That is, the total amount included in the budget is 10 percent. On the other hand, 587.3 million US dollars have come to various non-governmental organizations.
It is natural to raise public questions about the purpose, transparency and accountability of spending in the name of the country. The positive effects of this cooperation should be appreciated and weaknesses should be criticized. It should pave the way for transparency of assistance/donations from other countries, not just USAID.
Foreign aid is indispensable to a country like Nepal. But both sides of such giving and taking should practice a dispassionate review of objectives, programs, spending systems and impacts. It is a matter of rights for the taxpayers of the donor country and the people of the recipient country. If opaque subsidies promote irregularity rather than good governance, the relationship between the two countries will also weaken. Therefore, rather than worrying about USAID being shut down, this should be used as an opportunity to make grant transactions transparent.
We should seize this opportunity. If we don't review the conditions under which the subsidies are brought by putting the reputation of the country at stake, by what means and how they are spent, we will have to worry about which country's government will come tomorrow.
