Development Cooperation Policy on anvil

Kathmandu, Jan. 8

The government has prepared a draft of a new Development Cooperation Policy, 2081 with provisions for priority areas, focus on the mitigation of climate change impacts and definition of roles of all levels of government and their concerned agencies.

The policy will replace the existing Development Cooperation Policy, 2019. The Ministry of Finance (MoF) has published the draft to solicit suggestions and comments on the document from the experts and concerned stakeholders.

The proposed policy has accorded priority to almost all sectors of national development which is likely to result in the loss of focus.

Focus of the policy include infrastructure including energy, health and education, job creation, poverty alleviation, reconstruction and information technology, disaster management, climate change adaptation and mitigation, and even community capacity development.

Given the current size of development cooperation, around US$ 1.5 billion to US$ 2 billion from 2018/19 to 2021/22, growing areas of priority would create pressure to scatter funds across about two dozen areas.

However, the new development cooperation policy aims to mobilise development assistance in priority sectors and areas with high returns.

It also envisions to align the development assistance to achieving the Sustainable Development Goals (SDGs), and utilisation of climate finance for climate adaptation and mitigation. 

According to the draft of the policy, it's strategy is to enhance alignment between development assistance, and national priorities. Likewise, it plans to increase the capacity for effective utilisation of development assistance by focusing on budget support, programme-based assistance and sectoral aid.

Fostering the development of underprivileged areas, using climate finance to benefit Nepal under the principle of climate justice, addressing the gaps in national capacity and expertise, ensuring rapid mobilisation of disaster and humanitarian assistance when needed, and strengthening the autonomy and coordination among the various levels of government in development assistance mobilisation are also the strategies of the new policy.

Likewise, it has a provision to ensure that assistance mobilised through non-governmental organisations (NGOs) is effectively and transparently utilised in line with national needs and priorities.

Through the policy draft, the Government of Nepal has expressed commitment for effective mobilisation of development assistance. 

"The Government of Nepal is committed to effective assistance mobilisation, prioritising national needs, and aligning with global principles of human rights, democracy, rule of law, green, sustainable, and inclusive development, good governance, zero tolerance towards corruption, transparency, and accountability," it read.

It has also proposed local development partner meetings – twice a year or as per the need – to promote regular dialogue and coordination of the government with them. It will also work as the problem-solving mechanism.

According to the policy draft, the development partners need to identify thematic areas of cooperation through mutual agreement based on their comparative expertise and previous engagements.

It also includes a chapter on risk-minimisation strategy.

Finance Minister will chair the committee to guide the implementation of the new policy. The committee will have vice chairperson of the National Planning Commission and secretaries of Prime Minister's Office, MoF, Ministry of Law, Ministry of Physical Infrastructure and Ministry of Federal Affairs, auditor general and joint-secretary of the International Economic Cooperation Coordination Division at the MoF as its members. 

Published in The Rising Nepal daily on 9 January 2025.