Role of foreign aid in Nepal: focus on poverty reduction

Abstract

Aid to developing countries by the developed and the richer countries is finally intended to help the recipient countries achieve sustainable development in various areas like economic growth, poverty reduction, infant and maternal mortality rate reduction, disaster resilience etc. Nepal as one of the Least Developed Country in the world has been receiving different forms of bilateral, multilateral and other aids since long ago. Observably it is found that foreign aid has been playing vital role in the field of developmental activities such as construction of road, irrigation, expansion of communication, hydroelectricity, education, drinking water, agriculture health etc. While talking about poverty reduction, foreign aid has somehow assisted but not in expected level. Hence, we conclude that it is obvious that foreign aid has positive influence on poverty reduction but the impact so established is not so noteworthy. Therefore, it is necessary that aid donors including the developed countries as well as the international donor organization should allocate aids for a specific necessities and practice wise steps to make sure that the aid provided are used for the targeted purpose with fact-based assessments and implementation reports rather than only focusing on its own vested interest. Similarly, the country receiving the aid should be need and priority oriented rather than being donor oriented. Keywords: Foreign aid, poverty reduction, least developed countries, donor countries, development partners