Germany announced a EUR 55.6 million or Rs 7.55 billion grant to Nepal as part of the two-day negotiations on development cooperation that ended in Berlin on September 20, 2018.

A substantial portion of this grant will be distributed among three key sectors of Nepal: Energy (EUR 24.55 million), Sustainable economic development (EUR 13 million) and Health (EUR 11.95 million).

By geography, the cooperation will have its special focus on rural areas of Mid and Far West Nepal, along with additional support to selected districts badly hit by the 2015 earthquake.

Health:
Mother & Child Care in the Kathmandu Valley is the major aspect that the cooperation is looking at as the biggest project with a EUR 8.3 million grant for 2018.

As part of this project, the cooperation intends to support the expansion of Paropakar Maternity and Women’s Hospital services in Kathmandu to the surrounding areas.

Improving availability, access and quality of healthcare services, particularly in the maternal and new-born health, establishment of social health security program to support Nepal’s goal of Universal Health Coverage, are among other activities to be covered under healthcare support.

Economy:
Cooperation in the field of economic development covers creation of sustainable income and job opportunities, especially among disadvantaged groups.

According to the German Embassy in Kathmandu, all the fresh commitments will go in line with Nepal’s Development Co-operation Policy.

With the fresh grant, Germany’s financial aid to Nepal reached approximately EUR 1.2 billion since 1961.

Energy:

The cooperation stands committed to Germany’s continued support for energy efficiency with the Nepali Ministry of Energy, Water Resources and Irrigation as the lead partner.

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In a dismaying turn of events, the Indian Government has refused to take back demonetized Indian currency from Nepal and Bhutan.

When the demonetization drive took place on November 8, 2016, it heavily crippled both the countries who had reserves and used Indian currency; leaving behind a dent worth USD 146 million in Nepal’s reservoir.

Similarly, Bhutan is believed to have a reserve of approximately USD 450 million.

In his address to the media, Indian Finance Ministry top official Subhash Chandra Garg said, “I think they (Nepal, Bhutan) have very little INR 500 and INR 1000 currency notes. No final decision yet on exchanging of demonetized notes in Nepal, Bhutan. There are very little chances that we will accept those Indian notes lying there.”

Garg was briefing the media on the Reserve Bank of India’s annual report that declared completion of processing demonetized notes.

On April 5^, 2018, Indian Prime Minister Narendra Modi had tweeted saying, Addressing the Nepalese Parliament PM Oli said, “The Indian demonetization has hurt Nepali nationals. I will raise this in my meetings with Indian leaders and request them to resolve the issue.”

Another post tweeted by the Indian PM read, “India is one of the major suppliers of consumer goods to Nepal and largest trade partner. Keeping in view of the kind of business both nations indulge in, the Indian currency is widely used in Nepal & kept as savings, said Oli.”

However, the Himalayan nation has still not seen any progress and the current situation only dismisses any hope for both Nepal and Bhutan.

Conclusion:
Considering that Nepal and India have extended friendship towards each other and have decided to work collectively for their mutual benefit, we only hope that the issue of demonetized currency is resolved to continue an uninterrupted journey of development by both nations.

The post Demonetization Effect Continues on Nepal, Bhutan appeared first on Nepali Sansar.

In a parliamentary Finance Committee meeting, the government officials informed the parliament about their plans to use budgetary control system or create a separate basket fund for effective management of foreign funds.

While the currency system doesn’t allow foreign funds through NGOs/INGOs, the officials feel that brining that under budgetary control will ensure more transparency in the process along with increasing productivity of foreign assistance.

“In many cases, foreign donors impose a number of conditions when they provide money as per their commitment. As a result, the fund received via foreign aid yields poor performance against the target,” says Finance Secretary Rajan Khanal said in a statement.

According to the Finance Ministry records, the government could utilize only 50 percent of the committed amount under foreign aid in the last four years.

Investing a large chunk of foreign grants & loans in already-setup projects and programmes, causing duplicate projects, is being seen as one of the prime reasons behind improper utilization of foreign funds.

“So, it’s time to revise the policy on foreign aid disbursement. In addition, the Finance Ministry has also planned to adopt one-window system or set up a single basket fund to address the existing trend of foreign assistance being underutilized,” adds Khanal.

Also Read: Basket Fund for Foreign Aid to Nepal’s Local Projects

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