Government of Nepal recently published its Development Cooperation Policy 2019, which outlines the Government’s foreign aid policy under the federal system of Governance. DCP has summarized the role of the federal, provincial and local government regarding development cooperation.
DCP aims to achieve the status of middle-income country by 2030. While it has outlined the role of development partners in achieving this target, DCP also makes a clear statement that development assistance is not a long-term solution for the country. For this, it rightly advocates for the gradual reduction in development assistance and increase in mobilization on internal revenue. This is a possible proposition as our revenue administration is yet to cover large segment of the population. Effective revenue management can greatly contribute towards revenue generation. In addition to effective revenue generation, government should also be mindful of reducing unnecessary expenses, thereby providing enough resources for the investment. Although increase in revenue has been specified as a target, DCP has not provided specific timeline to stop receiving development assistance. Such a timeline would be highly desirable so that policy makers have guiding documents for future reference.
The key priority as outlined in DCP is physical infrastructure, education, health and WASH, national production and productivity, employment creation and poverty alleviation, technology transfer, environment and climate change and disaster management. One of the notable issues in the Development Cooperation Policy 2019 of Nepal was its omission of governance support as one of the areas for development support. Governance Reform has not been identified as an important area when a country is embarking on the path to federalism.
Many key development partners are emphasizing support to federalism process as one of the important area, but it is not in the priority list of the government of Nepal. Instead, the DCP is puts more emphasis on infrastructure development and employment generation and poverty alleviation. This is understandable from the GoN ’s point of view.