The International Conference on Nepal’s Reconstruction to be held on June 25, has been gearing up with the government setting up a reconstruction body for rebuilding the country. The financial assistance from the multinational lenders community for rebuilding Nepal has also been impeccable, with additional support expected to pour in.
Debt Waivers: Nepal currently owes over USD 3.4 billion in external debt to multilateral and bilateral agencies apart from the USD 2 billion of internal debt payable. A campaign has started with an aim of pushing for a waiver on loans payable. The first of such a petition campaign began with a letter to the President of The World Bank. Nepal owes the World Bank USD 2 billion out of its USD 3.4 billion in external debt. Waiver of future debt servicing obligations will therefore surely help Nepal raise additional money.
Debt Servicing: Nepal paid USD 160 million in debt to external sources in the third quarter of FY 2071-72. In terms of debt servicing, Nepal paid USD 100 million and USD 20 million as principal repayments and interest payments respectively. Last fiscal year, Nepal paid USD 217 million in external debt which is nearly USD 600,000 a day. Cancelling off these amounts for the country will not only help Nepal rebuild without additional foreign aid but also facilitate global partnership for development in the future.
Livelihoods: Rebuilding infrastructure is considered an important issue by Nepal as well as the international community. As most individuals in rural areas have lost their source of livelihood, more thought needs to be put towards what can be done for these affected people after they procure a shelter. Making investments along with providing grants and loans that support income generation activities should therefore be considered.
Accountability: Transparency, accountability and effectiveness are key factors in the upcoming donor conference.To ensure accountability the reconstruction body set up by the government will also have donors as observing members.Additionally, a financial monitoring committee will also be set up to ensure that funds are not misappropriated. The time has come for the government to look beyond political and individual needs and work towards rebuilding the country. There will also be a higher chance of accountability and transparency in the reconstruction body if the international community works with the government.
Nepal’s debt may appear small by global standards, but trying to repay it is a mammoth task for the country. If foreign governments and development partners defer the debt repayment period then it could be a major way to ease the country’s current financial burden.