Written evidence submitted by the Department
for International Development
OVERVIEW
1. Nepal is a fragile country emerging from
a decade of civil war, going through an historic process of transition.
International support is vital if Nepal is to build peace and
avoid a reversal into further conflict, and if it is to tackle
serious poverty and inequality.
2. Nepal is the 15th poorest country in the world,
and the poorest and one of the most unequal in Asia. The civil
war was, in part, driven by poverty and social exclusion of minority
and ethnic groups.
Table
KEY FACTS
| Size: 147,181 km2
|
| Elevation: from 8,848m to 60m |
| Population: 27 million |
| — 1 in 3 people live in poverty, women, girls and excluded groups fare the worst.
|
| — Socially-excluded groups such as indigenous Janajatis, Dalits (formerly known as untouchables) and Muslims are worse off; women of all groups are worse off than men.
|
| — Brahmin (high caste) children (under five years of age), living in the hills, are twice as likely to survive as Dalit children (low caste).
|
| — Literacy as low as 29% among some ethnic groups.
|
| Health: Average life expectancy: 63 (79 in the UK)
|
| — 1 in 16 children die before their fifth birthday.
|
| — Half of all children are malnourished.
|
| — Women are 40 times more likely to die in childbirth than in the UK.
|
| Income: Average annual income per head: £200 (£22,000 in the UK)
|
| — 15th poorest country in the world.
|
| — Poorest and one of the most unequal countries in Asia; inequality is growing and is a driver of conflict.
|
| — While poverty reduced overall by 11% between 1996 and 2004, it did so unevenly; by nearly 50% for high castes like Hindu Brahmins, but by only 5% for Muslims.
|
| — Over 8 million people live below the national poverty line.
|
| — Over a third of people walk more than four hours in the hills and two hours in the plains to reach a road.
|
|
3. The peace process has made some progress since agreements
were signed in November 2006. Elections to a Constituent Assembly
were held in April 2008, making it the most representative in
Nepal's history. Its first decision was to abolish the 240 year-old
monarchy, and declare Nepal a federal, democratic, republic. This
new political moment in Nepal provides a huge opportunity for
the country to renegotiate power relations between differing groups,
in particular elite groups, and agree on a particular form of
state—its "political settlement". People's expectations
have been raised and Nepal's leaders face the challenge of meeting
them and agreeing a way forward that will help to achieve sustainable
peace.
4. But many challenges remain, and the momentum behind
the peace process has slowed in recent months. A new government,
led by the Maoists, was formed in August 2008, but fell in May
2009. A 22 party coalition government, led by the Communist
Party of Nepal (Unified Marxist Leninist—UML) took its place.
This coalition continues to look fragile due to internal and external
pressures on the partners. According to international evidence,
post-conflict countries have a 40% chance of sliding back into
conflict within five years of signing a peace agreement.
5. Despite the 10-year conflict the economy registered
strong economic growth and poverty rates fell from 42 to 31% between
1995-96 to 2003-04, although mainly driven by the rise in remittances.
The economy grew at an average annual rate of 4% between 1995-96
and 2003-04 and GDP/capita increased at 1.6% per year in the same
period. The global downturn reduced economic growth from a forecast
7% in 2008-09 to 4.7%. However economic growth has remained buoyant
being driven by high remittances from migrant Nepalese labour
overseas, and geographical proximity to the high growth economies
of India and China.
6. There are indications of significant macroeconomic
instability with average annual inflation of 13.7% (2008-09),
and food price inflation pushing 18%. Inflation has been driven
by a surge in remittances in the first quarter of 2009, food shortages
created by unfavourable weather conditions in 2007-08 (and a decision
by India to restrict food exports in response to its own food
crisis), and a hangover from the international fuel price crisis.
7. Remittances and migration are a critical factor in
the Nepalese economy accounting for approximately 25% of GDP,
and are more than four times as important as aid. There are opportunities
to accelerate the rate of growth and poverty reduction through
stronger economic links with India and China, investment in agriculture,
tourism and hydro power, and more effective utilisation of remittances.
8. Child mortality was halved over the past decade, and
maternal mortality reduced by 48% according to government figures.
Primary school enrolment is at 89% and gender parity has been
achieved. However, with 40% of children underweight, Nepal will
be unable to achieve the hunger Millennium Development Goal (MDG).
The HIV/AIDS goal is unlikely to be met, and maternal mortality,
despite significant progress made by government, is severely off-track.
Table
MDG PROGRESS
| No | Millennium Development Goal
| Progress |
| 1. | Eradicate extreme poverty and hunger—2015 target: halve 1990 $1 a day poverty and malnutrition rates
| Poverty: On Track
Hunger: Off Track
|
| 2. | Achieve universal primary education—2015 target: net enrolment to 100
| On Track |
| 3. | Promote gender equality—2005 target: education ratio to 100
| On Track |
| 4. | Reduce child mortality—2015 target: reduce 1990 under-five mortality by two-thirds
| On Track |
| 5. | Improve maternal health—2015 target: reduce 1990 maternal mortality by three-fourths
| Severely Off Track |
| 6. | Combat HIV/AIDS, malaria and other diseases—2015 target: halt, and begin to reverse, AIDS, malaria and other major diseases
| Off Track |
| 7. | Ensure environmental sustainability—2015 target: halve the proportion of people without sustainable access to safe drinking water and sanitation
| On Track |
| |
|
9. The UK government has been helping Nepal tackle poverty
for the past 50 years, opening a DFID office in 1999 following
the creation of the new department. An Interim Country Plan guided
DFID's work between November 2007 and March 2009, with a focus
on supporting the implementation of the peace agreement; helping
to build a more effective and inclusive state, and promoting inclusive
economic growth (see Interim Country Assistance Plan 2007-09).[1]
A new Country Business Plan (CBP)[2]
was launched in April 2009 for 2009-12.
10. The approach the UK government is taking in Nepal
has a close fit with commitments in the new UK government White
Paper, Eliminating World Poverty: Building Our Common Future.
These include programmes that address the economy, climate change,
peace building, basic services, working with the international
system, and transforming impact and ensuring value for money.
11. The plan is managed through a country results framework
which has five key goals:
(1) to support a sustainable and inclusive political settlement;
(2) to help build a more capable, accountable and responsive
state at local and national levels;
(3) to promote inclusive, low carbon, economic growth and
better jobs for the poor;
(4) to reduce the vulnerability of the poor and improve resilience
to climatic shocks; and an internal goal
(5) improved effectiveness of the DFID portfolio and management
services.
Table
PAST AND PLANNED DFID PROGRAMME FUNDING
| 2007-08 | 2008-09
| 2009-10 | 2010-11
| 2011-12 | Total for CBP
|
£53m
| £52m
| £56m | £56m | Up to 60m
| Up to £172m |
| | |
| | |
12. Vital to delivery of an effective programme in a
post-conflict environment, is the need to manage risks—political,
security and fiduciary. DFID seeks to ensure delivery of its programmes
through both active risk management, and through a range of actions
to improve public financial management and other safeguards (see
Enquiry Issue 1).
13. Generally security considerations do not greatly impede
DFID's work in Nepal, although this can change at short notice.
However, the failure of law and order is a major issue for programming.
Some districts in the Tarai are insecure, where there are up to
40 armed groups operating. Staff security and direct programme
delivery is protected through measures developed through the conflict,
including high quality advice from the DFID/German Technical Cooperation
(GTZ) Risk Management Office, use of Safe and Effective Development
in Conflict (SEDC) procedures, and joint donor/NGO Basic Operating
Guidelines[3] which set
out agency neutrality in delivering development.
14. Expectations of tangible development are high across
the country and it is expected that, generally, conditions for
development will improve with an evolving peace process. However
on the road to stability, conditions for development may be challenged
by:
— Lawlessness, criminal activity—including fraud
related coercion, and in the worst case, low-intensity conflict
in the Tarai.
— Attempts at programme manipulation through intimidation
by the youth groups of political parties.
— Increased fiduciary risk as groups seek to finance
political activities or use opportunities created by weak law
and order.
— Demands to register and comply with pre-conditions
from violent, federalist, non-state actors in regions such as
the Eastern Hills.
15. Part of the approach to managing risk is also to
use a mix of instruments, with, through and around the state,
to allow flexibility of response in various scenarios, in order
to maintain delivery. In roads for instance, DFID is implementing
two programmes, one with government by putting money into an Asian
Development Bank programme, and another directly implemented around
government. The direct programme (around government) delivered
successfully during conflict, whereas the Asian Development Bank
programme works through government, and will be riskier, but also
helps build the state. DFID can switch resources between the two
depending on an assessment of risks involved.
16. DFID Nepal has scenario plans for all programmes
over £5 million, undertake Fiduciary Risk Assessments, with
government, of key sectors and update them annually, and undertake
routine monitoring of the political and socio-economic context
with the Embassy using agreed stability indicators.
17. DFID's risk register highlights five key risks:
(1) Political instability and return to conflict: which is
addressed through our UK government strategy to support peace
and stability, including through an improved international response.
(2) Global economy, food and fuel prices: addressed in the
short-term through food relief, and in the long-term through building
private sector activity, improving market linkages through roads,
and exploring social protection measures.
(3) Climate Change: addressed through support to delivery
of a National Adaptation Plan of Action, work on forestry, and
support to water resource management.
(4) Fraud and corruption: addressed through ensuring DFID
operates to the highest standards, takes appropriate measures
to safeguard the programme, and supports Nepal's efforts to tackle
corruption.
(5) Risk of natural disasters: addressed through contributing
to national risk reduction measures through the UN and World Bank,
and by having contingency plans for staff in place.
18. Building in learning from evaluations and lessons
from elsewhere is key to improving impact. The DFID Country Programme
Evaluation 2007[4] noted
that DFID Nepal's approach to risk management was a good model
for working in a post-conflict context, through using a mix of
instruments—with and through government, and directly implemented
around government, to ensure delivery regardless of the changing
context. Areas for improvement included aid predictability; documenting
and sharing lesson learning; risks of over-aligning with government
systems; further mainstreaming of use of Safe and Effective Development
in Conflict and other approaches; creating better synergies with
partners, and increasing Nepali staff representation and diversity.
19. These recommendations have been addressed. DFID Nepal
has benefited from additional resources above the agreed aid framework
over the past three financial years; lesson learning and programme
evaluations are being shared, for instance DFID Nepal learning
fed into the DFID approach to peace and state-building approaches,
including in the recent White Paper; a careful use of a variety
of instruments has been adopted to help ensure delivery in fragile
conditions, rather than any over-alignment; work is underway for
further mainstreaming of SEDC, and better synergies with partners
have been enabled through joint sector work (eg Nepal Peace Trust
Fund or the national Local Governance and Community Development
Programme).
20. Internally, managing risk requires significant staff
resources, and there has been a two-thirds increase in the number
of national middle level management/advisory staff, including
representation in the DFID Nepal Management Team. Diversity is
addressed through having an office champion, focused advertising
of posts to excluded groups, and the implementation of an internship
programme targeted at excluded groups (two Dalit staff are currently
interns).
21. Independent evaluations, including of impact, have
been carried out of specific programmes, for instance, of DFID's
agriculture, forestry and community support programmes, and an
impact evaluation is planned to assess several decades of DFID's
work on roads in the eastern Nepal. Cross programme learning is
important. For instance, DFID's experience with the private sector
in Bangladesh has been used to good effect in the design of programmes
in Nepal.
22. DFID Nepal has used global experience of working
in post-conflict contexts eg using lessons from Peace Trust Funds
around the world to help design the Government and the UN Peace
Funds in 2007, or using lessons from Afghanistan's National Solidarity
Programme to feed into design of the national Local Governance
and Community Development Programme. DFID has also commissioned
analytical studies to help better understand the political, social
and economic context. For example these include:
— Participatory Governance Assessment (2007) to assist
the government of Nepal to respond more effectively to poor and
excluded groups' priorities, and which fed into national planning
(Three Year Interim Plan) and into priorities in the Country Business
Plan.
— Strategic Peace Building Assessment (2008) to identify
the key drivers of on-going and potential conflict and instability
in Nepal, which was used in developing priorities in the Country
Business Plan, including a new public security and justice programme.
— Growth Diagnostic (2009) to assess barriers to economic
growth in Nepal, jointly carried out by the Asian Development
Bank and the UN's ILO. DFID also undertook the political economy
analysis for the diagnostic in order to ensure that the report's
recommendations were feasible in Nepal's post-conflict context.
This work is being used in defining priorities for the DFID Inclusive
Growth Centre and private sector development programme, as well
as feeding into government and donor planning.
INTERNATIONAL DEVELOPMENT
COMMITTEE
1. Key enquiry issue: DFID's support for governance and
state-building
1.1 The civil war may be over, but many of the issues
underlying the conflict still remain. There are still fundamental
issues around the nature of the state, and the inclusion of Nepal's
many ethnic and other groups in the political process, that remain
unresolved. Thus to secure sustainable peace and development in
the longer-term, DFID must do more than focus on the MDGs. A capable,
accountable and responsive state is key to a sustainable peace,
and to development in Nepal. For this reason DFID has taken a
peace and state-building approach in Nepal, highlighted in the
recent White Paper, and focused on three core areas:
— The political settlement.
— Core state functions.
— Meeting expectations of the people.
1.2 This approach requires efforts from across all UK
government departments—DFID, the Foreign and Commonwealth
Office (FCO) and the Ministry of Defence (MoD). So the same approach
is used to frame the UK government strategy for Nepal, and close
working across UK government departments—bringing together
development, diplomacy and defence—increases the overall
impact of UK government efforts, including through joint management
of the UK government Conflict Prevention Pool (CPP, see Enquiry
Issue 2 below).
1.3 Political settlement: In order to be sustainable,
the political settlement needs to include a much wider range of
groups previously excluded from power and influence in Nepal.
Our work on the political settlement includes:
— Exclusion: Support to excluded groups such as the
Janajati and Dalit federations, in order to increase their voice
and influence—DFID has provided £4.3 million through
the DFID funded Enabling State Programme and the multi-donor funded
Rights, Democracy and Inclusion Fund over seven years. DFID-supported
Janajati and Dalit federations successfully negotiated proportional
representation for Janajatis and Dalits in state institutions,
and helped achieve greater representation in the Constituent Assembly
(see next bullet).
— Elections: Support to national elections—DFID
funded £1.4 million and the Conflict Prevention Pool funded
£0.8 million for the elections in April 2008, including provision
for 3,750 civic education sessions in 75 districts, and more than
100 international and 20,000 national observers. These elections
were widely seen as free and fair, and helped create the most
representative legislature in Nepali history, with Dalit representation
up from zero to 8%, Janajatis from 25% to 35%, and women from
6% to 33%. The elite Brahmin/Chetri group reduced from 68% to
35%, compared with the 1999 parliament. The assembly is also the
youngest.
— Gender: Support to training of female political leaders.
Of the new female CA members, 40 were trained through DFID programmes.
In 11 districts where DFID worked with local women political leaders,
the number of female members on party committees increased from
9% to 15% in two years.
— Constituent Assembly: Support to the writing of the
constitution in the Constituent Assembly, through a UNDP managed
programme to which DFID will fund £1.7 million over three
years, and the CPP funded £0.7 million, and through a nation-wide
programme of consultation on the constitution at village level.
— Comprehensive Peace Agreement: Support to delivery
of the Comprehensive Peace Agreement (see Enquiry Issue 2 below).
— Human Rights: Support for improving human rights through
funding of the UN Office of the High Commissioner for Human Rights
(see Enquiry Issue 2 below).
— Media: Support to a number of media initiatives to
ensure wider discussion of the Constituent Assembly and the political
process, and to hold government to account, including through
the BBC Worldwide trust to include programmes to raise the profile
of the views of poor and excluded. This included, for example,
support to a media organisation to host TV-based discussions on
the Constituent Assembly. Some 25 weekly episodes took place.
As a result, voters and the general public were better informed
about the CA election processes and issues of importance to them.
1.4 Core state functions: The state in Nepal is historically
weak, hierarchical and over-centralised. It needs to be strengthened
across a range of functions if it is to provide basic services
in a more effective and equitable way. Our work on core state
functions includes:
— Justice and public security: Working with government
and civil society on improving justice and public security. Public
security is critical to secure the peace and enable the economy
to grow. It is also the top priority of poor people. As the recent
White Paper highlighted, it should be treated as a vital and necessary
basic service. DFID plans to support improved police capacity,
and also access to formal and informal justice for the poor. This
will include particular measures for women, in order to reduce
domestic violence through a nation-wide system of village level
paralegal committees.
— Jobs: Support to job creation and improved incomes,
through agriculture, roads and other programmes (covered in Enquiry
Issue 3 below), but which contributes to delivery of a "peace
dividend", and also address unemployment in a post-conflict
environment.
— Climate change: Support to government on preparing
for climate change (covered in Enquiry Issue 3 below), and key
to a sustainable future for Nepal.
— Governance: Support to improved local governance through
the national Local Governance and Community Development Programme.
This programme builds on a number of donor interventions in community
development and local governance, bringing all of these together
in one sector-wide approach under government leadership. DFID
intends to commit £12 million over three years within the
£342 million programme.
— Community support: This Local Governance and Community
Development Programme is partly built on a DFID funded Community
Support Programme, which funded community development initiatives
across Nepal, including during the conflict. Impacts of this programme
include:
— Almost 70,000 households with clean water supply.
— Almost 18,000 households with sanitation.
— 2,500 school buildings constructed.
— Electricity installed in 7,700 rural households.
— 26,000 hectares of land irrigated.
— 200km rural roads and foot trails constructed.
— 5 million days of employment.
1.5 Corruption is and has been endemic in Nepal for decades.
Very intense political competition between parties, a legacy of
the war, combined with the need to amass funds for future elections,
mean drivers of corruption are strong. DFID is combating corruption
in the longer term by helping government build systems and in
the shorter term taking immediate action to protect our resources
from fraud. DFID is building systems through:
— Public financial management: Helping develop a Public
Financial Management reform program with the World Bank, whereby
the Ministry of Finance has now produced a detailed action plan
for improving public financial management.
— Systems: Providing technical assistance to improve
financial management systems and speed up the flow of information
between the districts and the centre. DFID support has meant that
67 out of 75 districts in Nepal are now able to send electronic
expenditure data to the centre, improving budget disbursement.
There has been an increase in the performance of districts on
core public financial management issues as a result of performance-based
funding, pioneered by DFID, and changes in district and village-level
procedures to ensure greater participation of excluded groups
in local development planning.
— Procurement: Supporting a joint government/donor procurement
action plan to address amongst other problems the issue of collusion
and intimidation to bidders. In addition, DFID is undertaking
a comprehensive assessment of procurement in the health and rural
roads sectors with the World Bank.
— Sector governance: Improving governance at the sector
level by incorporating governance and transparency action plans
in all sector budget support programs (roads, health and education).
— In health, DFID support has helped deliver:
— A new computerised annual planning, budget and expenditure
system.
— The use of a web-based logistics management system.
— Guidance and standard bid documents for (national
and international) procurement.
— Performance based funding: Introducing performance-based
funding for our new sector budget support in health and education,
including plans to expand the scale and nature of Technical Advice
in health and in health procurement. Supporting performance-based
financing of district and village development committee level
budgets within the Local Governance and Community Development
Programme.
— Accountability: Promoting accountability to communities
and user groups at the local level in our projects (eg Community
Support Programme, Livelihoods and Forestry Programme).
1.6 Fraud: DFID operates a zero tolerance policy on fraud,
and is undertaking the following to protect our programmes from
fraud:
— Taking action: Agreeing actions with the Ministry
of Health to improve government procurement in the sector, including
use of additional technical support, and in some cases where problems
have occurred, managing procurement directly instead of through
government.
— Investigation: Reporting all allegations through the
DFID Head of Internal Audit and follow agreed investigation plans.
— Fraud Officer: A designated Fraud Officer leads on
fraud in the DFID office; fraud awareness training conducted and
will continue.
— Protect staff: Continue to protect staff through detailed
analysis of risks through our Risk Management Office.
— Increased transparency: Use of the Basic Operating
Guidelines, and Safe and Effective Development approaches which
helps to reduce the risk of fraud at the project level through
increased transparency.
1.7 Expectations of the people: Finally, state legitimacy,
and so peace in the long-term, will depend on the state meeting
the expectations of the Nepali people. DFID's work here, in addition
to public security mentioned above, and jobs (see Enquiry Issue
3 below), includes:
— Health and education: Support to government health
and education sectors, including vocational skills for jobs.
— Roads: Support to rural infrastructure, in particular
roads.
— Social protection: Engagement with government and
others on social protection.
1.8 The peace and state-building approach focuses and
prioritises DFID and UK government efforts across the spectrum
of actions needed to build sustainable peace in the long-term,
rather than just deliver the MDGs. These actions are intended
to mutually reinforce each other for greater impact thus, for
example, supporting greater law and order through work with the
police will also promote private investment and so growth. However
this approach also introduces new dilemmas: DFID Nepal needs to
balance constantly the strategic imperative to work with and build
state capacity and legitimacy if we are to secure peace and development
in the long-term, against the need to ensure UK tax-payers resources
are used responsibly and efficiently.
2. Key enquiry issue: How DFID works with the Foreign
and Commonwealth Office and the Ministry of Defence to support
the Comprehensive Peace Agreement (CPA) and Security Sector Reform
(SSR)
2.1 UK government approach and strategy: Close working
between DFID, FCO and MoD is vital for the success of UK government
efforts. In Nepal, all of the departments are focused on support
to the peace-building agenda. The jointly developed UK government
strategy is structured around a peace and state-building framework—bringing
together development, diplomacy and defence. At its inception,
this strategy was agreed by ministers, and helps guide UK government
actions in Whitehall, posts, and in Nepal. DFID spend is over
95% of total UK government programme spend in Nepal. However,
pension payments, some £54 million annually, from the MoD
to British Gurkha ex-servicemen form an important part of the
remittance picture, as does their administrative support to the
Gurkha Welfare Scheme.
2.2 The strategy, and 6 month action plan, provides a
framework for coordination. This is revised regularly at Chancery
meetings. The UK government Conflict Prevention Pool (CPP) is
managed locally through a cross-departmental steering committee,
and benefits from significant devolved authority from Whitehall.
The CPP has been a vital tool in Nepal to help deliver cross-departmental
interventions that complement the larger DFID programmes. The
Pool's flexibility and the ability to take decisions very quickly
locally have been critical to its success. In addition, departments
locally use and agree "stability" indicators which use
a variety of measures to assess levels and trends of national
stability to inform planning and manage risks to programmes. A
UK government communications grid helps to coordinate activities.
2.3 DFID, FCO and MoD work most closely together on the
political settlement, the peace process, security sector reform
(including public security) and human rights. The UK government
Stabilisation Unit and the Security Sector Development Advisory
Team have been providing advice on security sector reform issues
and policing. The UK government in Nepal also works with the cross
Whitehall Climate Change and Energy Unit in Delhi.
2.4 Comprehensive peace agreement: The UK government
has provided substantial support to the CPA. The UK government,
through the FCO, is a major contributor, both financially and
diplomatically, to the work of the UN Mission in Nepal (UNMIN),
which plays a major role in monitoring arms and armies (Maoist
Peoples Liberation Army and the Nepalese Army). UNMIN's mandate
began in January 2007, and has been renewed a number of times;
the current mandate expires in January 2010. The UK government
is the UN Security Council sponsor for the UNMIN mandate, and
in the early months of UNMIN's deployment provided direct financial
support through the CPP to ensure rapid deployment of personnel.
2.5 The UK is also one of the major funders (more than
£2 million) of the UN Office of the High Commissioner for
Human Rights (OHCHR). OHCHR has been key to ensuring both national
and international actors place human rights at the centre of the
peace process. The UK, largely through CPP and the small Embassy
programme budget, also supports the capacity building of the National
Human Rights Commission and the work of domestic human rights
NGOs.
2.6 OHCHR's work during the conflict led to an end of
conflict-related disappearances by the Army by 2005, and acted
as an important preventive influence on the patterns of abuses
committed by the Communist Party of Nepal (Maoist). It is also
widely acknowledged that their monitoring of the April 2006 protests
acted as a crucial deterrent to violence by state authorities
in repressing the demonstrations. More recently, OHCHR has helped
create greater space for human rights issues to be addressed;
for human rights defenders to carry out their work, and for public
dialogue on human rights issues to continue even in the face of
suppression.
2.7 The UK government through DFID and the CPP, directly
supports the implementation of the CPA through two funds. Firstly,
the UK government has provided £7 million to the Nepal Peace
Trust Fund—the government owned and implemented peace fund.
To date this fund has disbursed over $80 million to support the
elections, the Constituent Assembly process, the construction
and upkeep of Maoist military cantonments, and Internally Displaced
People. Secondly, the UK government has also contributed £4
million to the UN Peace Fund for Nepal. This UN fund has supported
verification of Maoist combatants, disposal of explosive ordnance
at cantonments, mine clearing (also directly supported through
CPP), targeted employment creation and technical assistance to
the electoral process. The fund has also promoted cross agency
working within the UN Country Team.
2.8 DFID, and CPP, has also provided direct support to
the holding of the 2008 national elections, including the direct
funding of 20,000 domestic and 100 international observers, and
to the ongoing Constituent Assembly process.
2.9 Impacts to which DFID contributed include:
— Communist Party of Nepal (Maoist) successfully moved
from `rebel' status into mainstream politics.
— Maoist Army successfully confined and maintained in
28 purpose built camps.
— No serious violation of the ceasefire by either Maoist
army or Nepal Army.
— UN assisted de-mining on track to remove all minefields
in Nepal within three years.
— National elections successfully held, seen as generally
free and fair; and most inclusive Constituent Assembly in Nepal's
history formed (see Enquiry Issue 1 above).
2.10 Security sector reform: Security Sector Reform is
a major issue for Nepal, and is a major issue for the peace process,
primarily around the future of the armies. The UK government,
led by DFID, has provided international experience of integration
and reintegration of military forces, and supports improvements
in parliamentary oversight of security forces, improved understanding
of and dialogue between politicians, government, civil society
and security providers on SSR, and low level support to the Nepal
Ministry of Defence. Discussions are underway with the Home Ministry
for a major DFID funded public security support project. This
would focus primarily on helping the police improve the service
they provide to the public at the community level, but would also
provide strategic policy and planning support centrally to the
Police and Home Ministry. This work would be complemented by additional
DFID funded initiatives aimed at improving access of women and
other disadvantaged groups to justice at the community level,
part of UK government commitments in the White Paper, including
a Community Mediation Project in 10 districts, and £6.5 million
to Women's Paralegal Committees nationwide.
3. Key enquiry issue: DFID's approach to poverty reduction
and improving access to basic services
3.1 The approach to poverty reduction and basic service provision
involves a number of strands:
(1) DFID's focus on peace is key. Without a sustainable peace,
it is difficult to improve the climate for local and international
investment, including for small and medium enterprises, and thus
create growth and raise incomes. It is also difficult to deliver
basic services in health, education or roads.
(2) A focus on building a capable, responsive and accountable
state, mentioned earlier in DFID's governance work, including
helping the state deliver effective and inclusive services, and
a core commitment in the White Paper.
(3) Through work on promoting inclusive, low carbon growth,
and better jobs for poor people. These are key strands in the
White Paper which the DFID Nepal programme addresses, and which,
in a post-conflict context where the need for job creation is
high, are vital to peace as well as to poverty reduction.
(4) Through reducing the vulnerability of poor people and
improving resilience to climatic shocks. This strand of work is
a major part of helping Nepal's vulnerable people adapt to climate
change. In addition to work on low-carbon growth, DFID Nepal's
programme addresses much of the climate change agenda described
in the White Paper.
3.2 Effective and inclusive basic services
Health: DFID has supported the health sector over the last
12 years. £71 million is currently being spent for three
five-year programmes: the health sector programme, safe motherhood
and HIV/AIDS. DFID has played a key role in supporting the expansion
of free services, free maternal delivery, incentives to increase
the use of Skilled Birth Attendants, and provision of safe abortion.
Impacts where DFID has contributed include:
— Maternal mortality substantially reduced from 526
in 1996 to 281 per 100,000 live births in 2006: a reduction, according
to government figures of 48%.
— Infant and under five mortality rates have dropped by
a quarter in the last five years, and halved over the past 15
years, such that in 2006, only one in sixteen children died before
their fifth birthday compared to one in eleven in 2001.
— Deliveries by Skilled Birth Attendants has jumped
six fold from 4.8% in 2000 to 32.8% in 2008.
Education: DFID allocated £20 million over a five year
period from 2004-09 to the multi-donor sector-wide programme supporting
the government's Education for All (EFA) programme. External assistance
accounted for 25% of the government's basic education budget (around
$160 million in 2007-08). DFID, with other development partners,
is currently appraising the government's School Sector Reform
Programme for potential sector support on a similar basis to the
EFA programme, although wider in scope. DFID has encouraged a
special emphasis within this programme on poverty and exclusion
issues and especially the problem of out-of-school children, many
of whom are socially excluded. DFID assistance will be provided
through the European Commission, including seconding a DFID education
advisor. Impacts where DFID has contributed include:
— The number of children enrolled in basic education
has increased from around 4 million in 2003 to 4.8 million in
2008, with enrolment of Dalit children up from over 600,000 to
970,000, and gender parity in enrolments is close to achievement.
— There are now approximately 8% children remaining
out of school in the primary age group, down from 16% in 2004.
Water supply and sanitation: DFID has supported the Gurkha Welfare
Scheme-delivered Rural Water and Sanitation Programme for the
last 20 years, and continues to do so. It includes good sanitation
practice and provides access to potable water for Gurkha ex-servicemen,
their dependents and their wider communities across the country.
Impacts where DFID has contributed include:
— During the 20 years of support to the Gurkha Welfare
Scheme, over 800 rural water and sanitation schemes have been
constructed, benefiting more than 160,000 people. At present,
an additional 159 schemes are under construction for a further
33,000 people.
3.3 Promoting inclusive, low carbon growth, and better jobs
for poor people
Roads: DFID continues its support to road and bridge building.
DFID works closely with government, the Asian Development Bank,
World Bank and Swiss Development Cooperation. DFID has current
commitments of £34.5 million, with £22.5 million on
the directly implemented Rural Access Programme, £10 million
through the government's Rural Reconstruction and Rehabilitation
Sector Development Programme, and £2 million on trail bridges.
The expected impact from DFID's contribution includes over 1,200km
of roads and 2,200 trail bridges, connecting 4.3m people to jobs
and services and creating 100,000 short term jobs, over half for
women. Impacts where DFID has contributed include:
— Better infrastructure support to the government helped
to reduce poverty from 42% to 31% in the last decade.
— Between 2000 and 2008 DFID spent £42m on rural
road programmes, connecting over 2.4 million people in remote
districts to the national road network, to markets and services,
through the construction of 1,500km of rural roads and 1,200 pedestrian
bridges.
— In doing so, it provided 17.5 million days of employment
for poor and disadvantaged people.
Agriculture: DFID has also invested £10 million over
the last five years on pro-poor agriculture programmes working
in 20 of the most needy districts and targeting the poorest and
the most marginalised members of the communities. The programme
introduced an innovative government-NGO partnership approach,
which has now been adopted within government agriculture programmes
in some Districts. Impacts where DFID has contributed include:
— The five year programme has increased the incomes
of 550,000 people and lifted 130,000 out of poverty.
Jobs and skills: In addition to jobs provided through roads,
agriculture and forestry programmes, DFID funded Helvetas, a Swiss
NGO with £3 million in 2008 to provide short term market-led
training to 14,000 young men and women. 60% of these were women
and 80% were from disadvantaged groups. DFID Nepal will spend
around £11m in the next three years in this area, providing
training to 35,000 young people of whom 60% of which will be women,
including £2 million to the World Bank for the Adolescent
Girls Initiative—training and support to 4,400 girls. Linking
their training to real jobs with decent pay and working conditions.
Earnings following these programmes are expected to be at least
4,500 Nepali Rupees (£35) per month, around twice average
national income. Impacts where DFID has contributed include:
— Since the approach to training is market-led, eighty
five percent of those trained were in gainful employment six months
after the training, while creating new jobs.
Investment climate and access to markets for poor people:
Over the next three years DFID Nepal will work to improve the
investment climate and enhance access of the poor to markets in
the agriculture and tourism sectors. This work is expected to
generate around 30,000 jobs—both direct and indirect—in
the next three years.
Inclusive growth centre: The Centre for Inclusive Growth
will provide robust analytical support to the government to increase
the quality of decision making and accelerate inclusive growth.
It will promote a national dialogue on reform and support the
government in communicating the rationale for reforms. The overall
aim of the centre is to increase the quality of decision making
and strengthen the government's accountability to the Nepali public
on key areas of reform. It is envisaged that the Centre will be
operational from March 2010, and will be linked to the DFID funded
International Growth Centre to ensure Nepal can pull on the bets
international experience.
Low Carbon growth: DFID will work in three main areas, all
of which are key commitments in the White Paper. Firstly by helping
Nepal develop a low carbon development strategy, linked to its
climate change adaptation plan. Secondly, to increase utilisation
of its abundant hydro power resources (enough to provide clean
electricity for the whole of the UK) by helping Nepal access global
low carbon energy funds. Thirdly by increasing support to the
Forestry sector to increase its contribution to GDP and job creation
for the poor, whilst capturing carbon. Impacts where DFID has
contributed include:
— DFID's Livelihoods and Forestry Programme sequesters
over 7 million tonnes of CO2 each year. This would have an annual
value of between £11 million-£27 million in carbon markets,
if it can be traded as is expected to be agreed at Copenhagen
(current rules do not allow trade in carbon sequestered through
the management of natural forests, only that of plantations).
3.4 Reducing the vulnerability of poor people and improving
resilience to climatic shocks
Social Protection: DFID is working with the World Bank, the
Asian Development Bank, and the UN (ILO, WFP, UNICEF, and UNCDF)
to support the Government of Nepal to develop a robust national
social protection strategy. Our work focuses on building an evidence
base of what works in Nepal through evaluations and pilots, strengthening
government capacity in this area, and working to improve the effectiveness
and efficiency of social protection systems. DFID is spending
£250,000 through a Social Protection Trust Fund with the
World Bank, and plans to spend approximately another £500,000
over the next two to three years. Additional support to the sector
will be considered after the national strategy had been developed
and approved.
Food Security and Nutrition DFID will also consider ways
to improve food security and nutrition. This will involve working
with government and partners to assess when food aid is the most
appropriate transfer, when cash transfers are more effective,
and when these approaches could be combined. DFID is currently
discussing joint work with WFP to support government in more effective
targeting of social protection programmes to support increased
food security, and with UNCDF a social protection pilot (within
the Local Governance and Community Development Programme) to support
better nutrition. Whilst analysing these issues DFID has already
been addressing immediate food security needs having given £5.4m
to the World Food Programme over the last year—funds which
have provided food to over 80,000 malnourished people.
Access to land: DFID is working to increase access to land
for women and disadvantaged groups. Recent research shows land
is a critical asset that reduces poor peoples' vulnerability in
Nepal's largely agrarian society. Currently only 14% of women
have land registered in their names; half the population own less
than 0.5 Ha (too small to generate enough food to live on) and
2.3 million people have no land at all, with most landless coming
from marginalised ethnic groups and the lower castes. DFID is
addressing this issue in two ways. Supporting the High Level Land
Reform Commission to analyse and propose new reforms to address
land issues, and by working with poor and disadvantaged groups
to gain access to government forest land.
Climate Change: DFID is supporting Nepal to develop the priorities
identified in its National (Climate Change) Adaptation Plan of
Action (NAPA) to reduce the vulnerability of poor people to climate
change. DFID will then pilot work on the ground in these priority
areas including water management, disaster risk reduction, agriculture,
health, and low carbon energy provision for the poor. This will
demonstrate how the far larger "adaptation funds" that
will flow post Copenhagen can be used effectively in highly vulnerable
countries such as Nepal. Other work includes support to the South
Asia Water Initiative, where DFID is working with the World Bank
to improve water resource management regionally and to manage
the impacts of climate change, for which Nepal, the source of
many regional rivers is key to its success. Recent support included
helping to fund a government hosted regional Climate Change Conference
"Kathmandu to Copenhagen". Finally DFID will also be
ensuring that all our programmes are reviewed and include climate
proofing measures where relevant. Impacts where DFID has contributed
include:
— Nepal is already selected to receive support from
adaptation, forestry and renewable climate funds, worth between
$75-150 million over the next five years.
— The Nepal Prime Minister will lead a delegation of
Nepali government, academic and civil society to the COP 15 (Conference
Of the Parties) climate change negotiations in Copenhagen.
Forestry: DFID is investing £19 million over 10 years
in community forestry, which will help almost one fifth of the
population of Nepal to make a better and more sustainable living
from forest resources. This support will help reverse deforestation
and also help Nepal capture an estimated 8 million tonnes of CO2
a year, worth between £11 million and £27 million every
year in the carbon market, many times the annual cost of the programme.
Impacts where DFID has contributed include:
— Forest user group incomes increased by 61% from 2003-08
with over a quarter of this being directly attributable to DFID's
Livelihood Forestry Programme (LFP) and community forestry. For
excluded groups (eg Dalits) incomes nearly doubled. The same study
showed that 433,000 people came out of poverty in seven LFP supported
districts over the same period. For those districts during that
period, it is estimated that for every £35 spent by LFP,
one person left poverty. Within all 15 LFP districts, about 1.5
million person days of employment (equivalent to about 7,500 full
time jobs) are created annually either directly or indirectly
by forestry groups.
4. Key enquiry issue: DFID's efforts to reduce social
exclusion and inequality including its work with women
4.1 A path-breaking report, the Gender and Social Exclusion
Assessment—a joint undertaking of the National Planning
Commission, DFID and the World Bank—was completed in June
2005. It documented what has been generally accepted as one of
the root causes of the conflict: the fact that certain social
groups—defined in terms their of gender, caste, ethnicity,
region and religion—have persistently higher levels of poverty,
lower education and health outcomes and less political voice.
4.2 This work has had a huge impact on the policy and
political landscape in Nepal. The country's 10th National Development
Plan for the first time acknowledged that marginalised groups
are not only "poor" in economic terms, but also in terms
of their lack of representation and empowerment. Subsequent plans
(the Three Year Interim Plan and the Nepal Development Strategy
Paper) made provisions for women, and a range of excluded caste,
ethnic, religious and geographically defined groups—with
quantitative targets and budgets. The Interim constitution has
made a number of provisions that address discrimination against
women and excluded caste and ethnic groups, and there has been
significant legislative reform that gives women and excluded groups
rights that they were denied in the past.
4.3 In 2006 DFID Nepal approved a £1.5 million Social
Inclusion Action Programme. The programme was extended by £1.2
million over three years in August 2009. The programme's goal
is, "To reduce poverty and social exclusion, establishing
the basis for lasting peace", through helping poor and excluded
groups to achieve more equitable access to resources and opportunities.
The programme works with government, the World Bank, a range of
UN agencies, political parties and broader civil society, as well
as on DFID's own internal systems.
4.4 Gender is mainstreamed within DFID, but specific
commitments and targets are captured in the DFID Nepal Gender
Equality Action Plan, which is championed at high level in the
office and drives delivery. So in addition to the social inclusion
programme, DFID is working on gender equality and social inclusion
issues across the portfolio, and particularly in five focus areas:
(1) more and better jobs for women and girls;
(2) greater political voice for women;
(3) focusing education support on girls and excluded groups;
(4) sustaining progress on maternal mortality; and
(5) a more inclusive and gender balanced office and programme.
4.5 Impacts where DFID has contributed include:
— In the health sector, inequalities (between castes
and ethnic groups, as well as between poor and wealthier citizens)
in the use of the child health service, and in health outcomes
for children, have significantly declined: there is virtually
no inequality among ethnic groups in the incidence of diarrhoea
and immunisation, and the trend in the death rates show a sharp
decline among the most disadvantaged ethnic groups. However, disparities
persist in maternal health: for example use of antenatal care
is 18% among the poorest fifth of the population but 84% among
the richest fifth. Deliveries assisted by skilled attendants among
the poorest represent only 6%, whereas assisted deliveries among
the wealthiest represent 47%.
— More than 1.4 million socially excluded children,
including 775,000 girls, have received primary education scholarships,
providing them with the funds needed for books and other materials
as well as examination fees.
— Around 100,000 additional jobs for women have been
created through the DFID-funded Rural Access Programme on road
construction, and the Livelihoods and Forestry Programme.
— The roads programme has also enabled 58% of its road
building group members to clear their debts, freeing women from
the clutches of moneylenders.
— Women Constituent Assembly members are better informed
and able to influence through DFID funded training and support.
— Support to developing the Ministry of Education's
highly disaggregated (social group, sex and poverty) data collection
and analysis system within the Education Management Information
System, and discussions with the Ministry of Health on their Management
Information are on-going.
— Ministry of Health, Ministry of Education, and Ministry
of Local Development plan to establish Gender and Social Inclusion
Units in their ministries.
5. Key enquiry issue: Donor coordination in support of
greater aid-effectiveness and peace-building
5.1 DFID supports improved aid effectiveness and peace-building
in a number of ways:
(1) firstly through support to the Ministry of Finance, who
lead on aid coordination and delivery of the Paris Declaration
and the Accra Agenda for Action;
(2) through various kinds of sector approaches, including
on peace-building;
(3) through support to improved delivery across the UN system,
and
(4) through sustained collaboration with other donors, including
joint planning with the Asian Development Bank and the World Bank.
5.2 There are around 30 donors working in Nepal, including
small donors such as Korea. DFID is the largest OECD bilateral,
with USAID, Japan, Norway, Denmark and Germany providing between
two-thirds to half as much. India provides substantial aid, including
in-kind, and China is also a donor. However, accurate figures
are not known for either. The Asian Development Bank has been
the largest multilateral but is now being overtaken by the World
Bank.
5.3 The peace process has 12 donors and over £100
million committed, but covers a wide range of programmes. DFID
is the only donor to have provisionally committed support to public
security, including policing. The social sectors, education, health
and water supply and sanitation, are receiving high levels of
donor support, in both numbers of donors and the amount of aid.
This partly reflects the harmonised practice in both sectors.
5.4 This is particularly true in education and health,
both supported by 10 donors with over £200 million currently
committed to each area, although in health only DFID and the World
Bank provide sector support. The economic sectors, industry, employment,
tourism and private sector development are relatively under funded.
In other sectors, agriculture and irrigation are well provided
for by the Asian Development Bank and World Bank. In governance
the spread of support is highly variable. Climate Change and water
resources funding is currently small-scale.
5.5 There has been some progress towards targets set
out in the Paris Declaration and Accra Agenda for Action, but
this is partly constrained by Nepal's fragility and government
capacity. The Ministry of Finance leads government efforts to
coordinate aid, and is developing a new foreign aid policy framework
and a national action plan for aid effectiveness. Donor coordination
takes place at a number of levels—through Ministry of Finance
led donor meetings, the Nepal Portfolio Performance Review which
sets annual targets for improving programme delivery (eg on public
financial management, procurement, aid coordination etc.) and
monitors quarterly, and sector approaches which are led by relevant
ministries, eg for the Nepal Peace Trust Fund, education, health
or local government. DFID has been a lead advocate for sector
approaches, where appropriate, which help improve the coordination
and effectiveness of donor support. The UN Resident Coordinator
chairs routine donor meetings, and informal donor meetings also
take place. DFID plays an active role in all of these fora.
5.6 DFID is a lead bilateral, and along with the two
main Banks, is seen by government as one of the most important
and supportive donors. DFID, along with UNDP, supported government
to undertake the Paris Declaration survey and prepare for the
Accra meeting in 2008. DFID will be providing support to a UNDP
project to help the Ministry of Finance, and some sector ministries,
to develop better aid management systems. DFID continues to support
the Government to implement an Integrated Financial Management
Information System—a newly upgraded national budget execution
system that complies with best international standard. The challenge
for donors is to support the Government to manage the transition
from scattered donor projects and programmes outside government,
to effective delivery through government as conditions allow.
5.7 In 2007 only 47% of aid to Nepal was predictable
according to OECD DAC measures which assess disbursements recorded
by government, against aid scheduled by donors for disbursement.
Among the bilaterals DFID scored better than others at 42%, with
Denmark at 22%, and Germany at 9%. There are issues around measurement
in the Ministry of Finance, sector ministries and the Financial
Comptroller General's Office, as well as around government reporting,
but more can be done to improve donor predictability. Only 20%
of total aid was disbursed through programme based approaches
(sector budget support) representing a major challenge to meet
the Paris Declaration target of 66% by 2010. DFID disburses 32%
of its budget through sector budget support compared to Germany,
the UN and the Asian Development Bank all at 14%. DFID is working
with government and donors to increase the use of sector based
approaches, eg for the Local Governance and Community Development
Programme, where conditions allow and financial safeguards are
in place. The fragile post-conflict context makes meeting some
of the Paris Declaration targets difficult.
5.8 In order to improve the effectiveness of the donor
response to peace in Nepal, DFID has worked with government, the
UN and other donors to help create two peace funds, the UN Peace
fund, and the government managed Nepal Peace Trust Fund. These
funds have provided timely and vital support to the peace process,
but have also improved the effectiveness of the UN and donor response.
The UN Peace Fund has enabled a more coherent UN response to the
peace process, including more cross-agency working, and has attracted
funding from a number of bilaterals, as well as the New York based
Peace-Building Fund. The Nepal Peace Trust Fund has supported
government leadership of the peace process backed by well-coordinated
donor support through a common fund.
5.9 The UK government works closely with the UN agencies
in Nepal, both in support of the peace process and in improving
the effectiveness of UN efforts. The UN has played a major role
in the peace process through UNMIN, and through the UN Country
Team, which comprises the main UN agencies.
5.10 Nepal is not a formal "delivering as One"
pilot country, but DFID has supported a number of approaches to
building greater UN effectiveness in Nepal. Firstly DFID helped
create the UN Peace Fund in 2007 (as described above). Secondly,
Nepal is a focus country for UN's Early Recovery initiative—intended
to improve the multilateral response in post-conflict countries.
This should help the UN Country Team strengthen its capacity to
provide peace-building support to the government of Nepal, and
to the international community, as well as address emerging peace-building
challenges through the UN Peace Fund. DFID has provided £0.9
million centrally to this initiative. Finally, discussions are
underway to explore "delivering as One" approaches in
order to enhance development impact across the UN Country Team.
The UN is also leading a donor initiative to bring greater transparency
to donor spending at the district level.
5.11 DFID works closely with the Asian Development Bank
and World Bank, as the two largest donors in Nepal. Consultations
for our country planning were done jointly with both, in part
to streamline consultations, but primarily to provide a platform
for joint planning as a group of donors providing over 70% of
future aid to Nepal. It is intended that joint planning will lead
to clear and strategic agreement on a division of labour and a
set of jointly owned results which we are collectively working
towards, together with Government and other donors. Some progress
on division of labour has been made, with the World Bank taking
on support to HIV/AIDS from DFID. Separately, the European Commission
has taken on support to education from DFID, managing DFID funds
and with a DFID seconded education advisor.
5.12 A concerted international response will be needed
to help Nepal seize this moment to secure the peace, address the
immediate challenges and start to lay the foundations for the
future. Nepal has a relatively small and increasingly well-coordinated
donor community who are bringing additional resources at this
critical time.
September 2009
1
http://www.dfid.gov.uk/Documents/publications/nepal-interim-cap-07-09.pdf Back
2
http://www.dfid.gov.uk/Documents/publications/nepal-country-plan.pdf Back
3
SEDC is a methodology for assessing development interventions
with regards to their potential to promote conflict-a "do
no harm" approach-and in order to maximise their peace-building
impact. The Basic Operating Guidelines were developed by donors
and NGOs during the conflict; they set out minimum standards for
behaviour of humanitarian and development agencies, and call for
reciprocal behaviour from other parties, including agitating groups. Back
4
http://www.dfid.gov.uk/Documents/publications/evaluation/ev679-summary.pdf Back
|
