DFID's bilateral programme in Nepal - International Development Contents

1  Introduction

1. Nepal has the potential to make great economic progress if it can overcome the barriers which have held it back for so long. Hydro-schemes could transform the economy and there are huge opportunities for tourism in a country of great beauty which lies between the huge markets of India and China. Nepal has made impressive progress towards meeting many of the MDGs, particularly in health. The economy has grown, as remittances have increased from Nepalis working overseas[1].

2. Yet Nepal is one of the poorest countries in the world and faces many challenges, which have held it back, including corruption, poor infrastructure, and political instability. Nepal is also one of the most disaster-prone countries in the world, facing the challenges of earthquakes and the effects of climate change.

3. DFID Nepal's budget has increased significantly in recent years, notably from £55.93 m in 2012/13 to £104.7 million in 2013/14. In 2014/15 the figure is £86 million. DFID claims that this has meant that over the last four years it has been able to have a major impact, including building or maintaining over 4,000km of roads in remote areas; providing over 350,000 people with safe latrines; improving the livelihoods of nearly 500,000 people through work on forestry; and making over 3 million people better able to withstand the effects of climate change and natural disasters.[2]

4. Despite the scale of DFID's expenditure, we have not examined DFID's work in Nepal in this Parliament. We are not looking at the whole of DFID's programme, but we focus on a few key areas, including DFID's role in helping Nepal adapt to the effects of climate change, reduce the risk from disasters and develop economically without increasing carbon emissions. Following ICAI's anti-corruption report which included a study of Nepal, we decided to look at the relevant DFID programmes and at the challenges of providing sector budget support. This involves examining the £52 million DFID is spending in budget support to the health sector for the GoN's five-year national health programme. We also looked at women and girls and water, sanitation and hygiene (WASH).

5. As part of the inquiry, we visited Nepal to review DFID's work, where we met Ministers, Parliamentarians, senior officials, the police, and others in Kathmandu as well Nepalese people involved in DFID projects. We also went to Pokhara and the countryside to its west, visiting health posts, community forestry projects, Gurkha Welfare Scheme programmes, security and justice and disaster reduction and preparedness projects[3]. Following the visit we held an evidence session with the Minister of State. We also received written evidence from a range of organisations, including academics, NGOs, private contractors and a trenchant critic of DFID's work. We are grateful for all those who helped us, especially those who put such effort into organising our visit.

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3   For our visit, DFID provided us with in depth briefing which we have drawn on for the Report, in particular factual information Back

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Prepared 27 March 2015