Kathmandu, Oct. 10
Just a day after the announcement of the
nation-wide lockdown on 24 March this year, in the wake of the novel
coronavirus outbreak, Finance Minister Dr. Yuba Raj Khatiwada participated in a
meeting of the finance ministers and senior government officials of the South
Asian nations and international financial organisations like the International
Monetary Fund (IMF) and World Bank (WB) about the possible impact the virus
would make on the national and regional
economy.
One of his major concerns in that meeting was
providing relief to the COVID-19 affected communities with the limited
resources available in the country. He suggested the development partners and
large economies to provide special support to the developing countries to help
them in the fight against the pandemic.
Confusion reigned not only over the people
and businesspersons but also the government and global bodies like the World
Health Orgnaisation during the initial days of the coronavirus outbreak. Nepal
was making cautious moves to provide
relief to the daily wage workers who were put off the job as most of the
businesses and construction projects were shut, initially for a couple of weeks, which
later extended to a couple of months.
While the revenue collection was affected
in the initial months of the pandemic outbreak, the country received more
foreign aid compared to the previous years and even the earlier part of the
last fiscal year. The meagre financial resources in the country were aptly
augmented by the international aid.
Funds inflow has drastically gone up to Rs.
84.7 billion in the first two months (mid-July to mid-September) of the current
fiscal year 2020/21.
It’s nearly 39 per cent of the total foreign
support the country received in the last fiscal year 2019/20.
Nepal had received Rs. 219.88 billion
foreign aid from multilateral and bilateral donors as well as international
non-government organisations in 2019/20, said the International Economic
Cooperation Coordination Division (IECCD) at the Ministry of Finance (MoF).
The aid is about 9 per cent higher than in
FY 2018/19 when the inflow of funds stood at about Rs. 200 billion. However,
the country received higher amount of funds in the later five months of the
last fiscal year than the first seven months. The amount it received from the
development partners till mid-February 2020 was Rs. 109.28 billion but the funds
from mid-February to mid-July totalled Rs. 110.6 billion.
WB
provides largest support
Of the five major aid packages received in
the first two months of the current fiscal year, three are from the WB – trade
and connectivity, earthquake support and education sector development projects.
US$ 450 million loan to the trade and connectivity project is the largest
foreign support that Nepal received so far. Likewise, Japan provided 300
million Japanese Yen and the Asian Development Bank and Norway provided loan of
$200 million and grant of $35 million respectively for the power infrastructure
project.
Meanwhile, the United Kingdom has pledged
Rs. 7.12 billion (45.8 million Sterling Pound) to Nepal to help it in the fight
against the COVID-19. State Minister of Foreign and
Commonwealth Office of the UK Lord Ahmed had announced the financial assistance
on August 27 during a virtual meeting with Dr. Khatiwada.
Chief of the IECCD Shreekrishna Nepal said
that the government had updated the development partners that Nepal wanted
COVID-19 focused support in creating health infrastructure, human resources,
expanding health services and rehabilitating the micro, small and medium
enterprises hit hard by the pandemic.
Last month, he had urged all development
partners working in Nepal to provide targeted and direct support to fight
against COVID-19.
Aid
during pandemic
Nepal has received about half a dozen
foreign aid packages to fight against the COVID-19.
The WB, ADB, IMF and India are among the
major donors to provide COVID-19 support to Nepal. While the WB has signed
multiple agreements for COVID support, ADB extended $250 million budgetary
support for the same.
Both the multilateral donors have pledged additional
support whenever required. Funds provided by the ADB are being used to address
the impact of the pandemic and strengthen the public health system, provide
social protection and create jobs.
According to the estimates of the
government and private sector agencies, about 60 per cent workforce, primarily
temporary and daily wage workers, have lost their jobs. Although the government
is running the Prime Minister Employment Programme (PMEP), it is unlikely to
meet the demands of job at least for 100 days to every unemployed citizen.
The European Union (EU) had also announced
to provide Rs. 10 billion (75 million Euro) support to stimulate economy and
labour demand during the coronavirus crisis. Newly appointed Ambassador of the
EU Delegation to Nepal Nona Deprez said recently that EU was studying the
prospects for further cooperation.
Other major donors extending their regular
support at the time of crisis include Green Climate Fund, Asian Infrastructure
Investment Bank and Switzerland.
Published in The Rising Nepal daily on 11 October 2020.
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