Economic impact of earthquake – Foreign Aid

After the 2015 Earthquake, Nepal received overwhelming support from the international community. Over NPR 79 billion (USD 784 million) has been pledged by the international community in aid commitments for disaster relief and rehabilitation work. The United States of America is the highest contributor having pledged over NPR 3.31 billion (USD 32.93 million).

Credibility of Government Agencies

Given the overwhelming response from the international community, credibility of government institutions becomes more important than ever. However with government credibility at an all-time low, most aid was initially channeled through different international agencies rather than through the government. Given the funds pouring in, it is essential to put transparency measures in place for governmental and donor accountability. Effectiveness of these measures and the credibility of government agencies will therefore help project a strong image to the world.

Disaster Business

With an influx of relief and rehabilitation oriented organizations entering the country and establishing operations, it is essential for agencies channeling aid to keep overhead costs at a minimum. It is also essential for a higher policing of aid, to ensure that none of these funds are misappropriated. After the 2006 Democracy Movement, while there was a lot of aid coming in for peace and reconstruction, there was no accountability and transparency. Additionally inadequate policing rendered the aid ineffective.


With the International Conference on Nepal’s Reconstruction being held on 25h June 2015, there has been an increase in the amount of foreign aid pledged to the country. While there has been a significant increase in foreign aid, the concern should now be on how efficiently these funds are allocated. It is also essential to to ensure that   be balanced with investments for the most effective impact.