Development Assistance to Nepal Home / Development Assistance / Development Assistance to Nepal
In 1987, the Canadian Cooperation Office (CCO) was established to support the Government of Canada's development cooperation program with the Government of Nepal and programs concerning immigration and public affairs.
CIDA works with a wide range of Canadian and Nepali partner organizations. In addition to bilateral programming, CIDA provides development assistance to Nepal through its Multilateral and Partnership Branches.
CIDA supports development programs based on the principle of strengthening aid effectiveness. These principles include
- Local ownership, which means that development strategies, if they are to be sustainable, must be developed by recipient countries - their governments and people - and they must reflect their priorities, rather than the priorities of donors.
- Improved donor coordination, with recipient countries bearing the main responsibilities for coordinating their development cooperation with other countries and institutions.
- Stronger partnerships, through the development of compacts that would identify the responsibilities of developing countries and their external partners, as well as those shared by all.
- A result-based approach, with improved monitoring and evaluation of development program and,
- Great coherence in those "non-aid" policies of industrialized countries that can have profound effects on the developing world - for example, policies on trade, investment and technology transfer.
In addition to these principles, three other factors are of central importance to the effective use of aid investment:
- Good governance: Governance provides the broad setting for development and its quality has a profound effect on development success and aid effectiveness. A number of studies, including the World Bank's Assessing Aid (1998) and the Role and Effectiveness of Development Assistance (2002) provide compelling evidence that good governance and a sound policy environment are the most important determination of aid effectiveness and development progress.
- Building capacity: Enhanced capacity - public and private sectors - is also critical to sustainable development. It is necessary for developing countries to engage effectively in international trade and in the development of multilateral environmental agreements. Past aid programming often failed because it focused on resource transfers and did not provide enough support for local capacity development efforts to sustain these investments once donor countries had withdrawn support.
- Engaging civil society: Participatory process, particularly those engaging civil society and the people expected to benefit, are essential to establishing clear, locally owned priorities for development cooperation. They are also critical to ensuring that aid investments help meet the needs of the poorest and most marginalized people in a society.
CIDA programming Strategy:
The CIDA's Nepal's programming strategy (2010-2013) aims to promote community-led economic growth being in line with the Canada's one of the four priority areas- the Sustainable Economic Growth (SEG). The current CIDA programming in Nepal directly or indirectly contribute to improved equitable and sustainable economic growth for rural populations. CIDA's SEG seeks to create sustainable long-term economic growth that will increase revenue generation, create employment, and lead to poverty reduction in developing countries. The SEG Strategy will follow three paths:
- Building economic foundations: Support willing governments to build the necessary legislative and regulatory business, industrial and financial framework upon which sustainable economic growth can take place;
- Growing businesses: Enhance the financial viability, productivity and competitiveness of micro, small and medium-sized private sector enterprises resulting in increasing employment opportunities for the poor;
- Investing in people: Improve the employment potential of individuals to increase access to, and benefits from, opportunities in the informal and formal business sectors.
In pursuing the paths mentioned in the strategy, SEG will ensure the integration of equality between women and men, social inclusion, environmental sustainability, and governance across all CIDA programming. The SEG will also compliment and build on CIDA's food security and children and youth strategies.
CIDA has the niche and strength of working with grassroots communities with community based approach for their empowerment in order to negotiate with the local and central governments for resource allocation. Canada is supporting economic growth and poverty reduction by improving market access, local peace building, infrastructure, education, livelihood improvements, local capacity development and strengthening demand side of the governance with increased local government accountability to respond to community-driven development plans and priorities. CIDA programs bring synergies by supporting to address the root causes of the conflict that is necessary to breakdown the deadlock preventing economic growth.
The SEG requires continuing improvements in the drivers and enablers of growth, giving producers both the incentives and the means to keep adapting and improving. As a country emerging from conflict, Nepal confronts challenges for boosting employment and improving well-being as quickly as possible, addressing the root economic causes of the country and establishing the essential economic governance functions.
History of Canadian Assistance to Nepal
Canadian development assistance to Nepal began in 1958 when the Canadian International Development Agency (CIDA) supported a one-time food aid project. Nepal established diplomatic relations with Canada in 1965.
Initial Bilateral Assistance: The bilateral development assistance program was initiated in 1970 with support to the development of Nepal's civil aviation capability. In the 1980s, CIDA's assistance focused on poverty alleviation, health care, and food security. It continued assistance in energy planning and domestic air transportation.
During these years, Canada sought to strengthen Nepal's institutional capacity and human resource base for development of a sustainable level of food and energy production. Since the early 1990s, CIDA has been focusing its efforts on fostering growth with equity through poverty reduction, gender equality, good governance, and environmental sustainability.
Previous Assistance: Prior to 1995, the bilateral program of development assistance had three objectives:
- promoting equitable socio-economic growth through integrated rural development, rural health, and food security in mid-western region;
- further developing and strengthening energy planning and implementation capabilities including environmentally sustainable energy and
- Supporting Nepal's rural transportation strategy by improving domestic civil aviation infrastructure, management capability, and enhanced airport safety and security.
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Lessons Learnt
The main Lessons Learnt from CIDA's previous assistance concluded that:
- In the civil aviation sector, the sustainability of efforts would require greater government capacity and resources.
- In the energy sector, technical assistance had built the capacity of individuals, however building the capacity of institutions presented greater challenges.
- In integrated rural development, the greatest achievement was building the socio-economic infrastructure and confidence of farmers in the most remote districts.
- A key learning from past projects is that communities and community groups can bring about social transformation, economic development, and effective and equitable governance if they are:
- organized for collective action towards a shared vision and common vision,
- empowered for building self-confidence and self-esteem and
- Mobilized to contribute to the strengthening of human and social capital.
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