'Foreign aid must be used to increase domestic capacity'

Kathmandu, Nov. 13: Finance Minister Dr. Yuba Raj Khatiwada on Tuesday said that the foreign aid resources must complement, rather than crowd out, the domestic resources mobilisation.

“The ultimate objective of any aid programme should be to build domestic resource capacity so that recipient countries such as Nepal can reduce their dependency on aid,” he said while addressing the International Aid Transparency Initiative (IATI)’s Technical Advisory Group (TAG)’s annual meeting in the Capital.

He was of the view that the foreign aid must not prolong the recipient country’s dependency on international assistance.

Speaking on the importance of improving the transparency of aid resources, Dr. Khatiwada said that transparency was the basis for accountability which in turn ensures that development cooperation resources are better managed for results.

“Development cooperation must support efforts to avoid conflict, protect harmonious social fabric, build peace, and improve global governance,” he stated.

He recalled the aid effectiveness principles set out in the Paris Declaration and the Accra Agenda for Action, and suggested that initiatives like IATI have an important role to play in monitoring the implementation of such principles.

With reference to the Sustainable Development Goals (SDGs), he asked the experts to consider whether there should be a specific indicator in SDG 17 focusing on ensuring aid transparency.

While appreciating the role of global aid transparency initiatives such as IATI, the Minister also recognized the enabling role that partner countries such as Nepal must play, including in the design of credible programs, strategies and policies which allow for cooperation resources to produce intended results.

In order for data to be put to good use, there must be robust systems in place at country level, including for planning, monitoring and public financial management, said Dr. Khatiwada.

According to the Ministry of Finance, more than 150 representatives of governments of all regions of the world, development partners and civil society organisation are participating in the 3-day meeting.

Started in 2008, IATI is a global, multi-stakeholder initiative that seeks to improve the transparency of development and humanitarian resources for addressing poverty and crisis. It’s technical advisory group is an expert community that informs IATI’s approach to data publication and use.

The meeting is being organised in Nepal for the first time.

Published in The Rising Nepal daily on 14 November 2018.