3 Changing context of foreign aid policy

3.1 Nepal has been implementing development programs and economic reform programs based on foreign aid for a long time. Such a reform program is based on the experience of international development and the interaction between the government of Nepal and the international community. In the past decade, there have been many changes in the status and environment of development assistance at the national and international levels. Mainly, there were significant changes in the development patterns themselves. In the context of globalization, there have been dramatic changes in the role of the state, market, private sector, and civil society organizations, while the world community is paying more attention to issues relevant to development in all areas such as gender issues, governance, transparency, and decentralization. It is universally accepted that instead of conducting projects and programs separately, the economic and social needs of the country can be accurately reflected if development activities are conducted by establishing inter-sectoral, thematic relationships. Such notions have emphasized the need to prepare a comprehensive strategy for the fight against poverty in the countries that receive foreign aid, emphasizing the poverty alleviation results and linking the activities of the projects with the national objectives and sectoral goals.

3.2 These developments have influenced the pattern and quantity of foreign aid and development assistance in various ways. With regard to this new development and the changed development concepts of the international development community and the Nepali development community, it has been felt that the basic principles of foreign aid policy should be tested and analyzed accordingly. Incorrect and ineffective foreign aid policies and practices, whether towards the recipient country or towards the donor, not only harm economic development and good governance, but also bring other unwanted effects. On the contrary, a foreign aid policy that reduces segregation in the development process and increases efficiency and transparency can make a significant contribution to the country's development process. 3.3 The current concept of development emphasizes cooperation in development between the donor and recipient countries. . Unfortunately, a very underdeveloped country like Nepal has to work hard to cooperate as a partner with a donor party that has technical and financial means and expertise. In the case of Nepal, he mentions the decrease in the amount of donor development assistance, while he is sad and dissatisfied with the slow and incomplete achievements made from the use of aid. This topic is clearly mentioned in the documents. Although little is found in the documents, the Nepalese government and local stakeholders have also expressed dissatisfaction with the policies, procedures, conditions and other activities related to foreign aid. Therefore, it is necessary to refresh the policy process related to foreign aid so that mutual understanding between development partners can be increased and the way to real solution of existing problems can be paved. 3.4 The Government of Nepal believes that globally accepted principles, conventions, policies And the formats direct the external resources to be acquired for development. There have been many agreements and agreements at the national and international levels regarding development policy. Nepal has been involved in most of the international treaties, arrangements and agreements so far. Nepal is committed to the United Nations goal of reducing poverty by half in the world by 2015. Nepal also supports international agreements such as environment, women, children, human rights and social summits. Nepal, while formulating development policies and using foreign aid, has reflected on adopting measures agreed at the international level to achieve the set goals. 3.5 Nepal has made poverty alleviation a top priority. Half of Nepal's population is poorIt is below the line and as a democratic country, Nepal is committed to raising the living standards of the people in absolute poverty. In order to alleviate poverty in a sustainable way, it is necessary to adopt a balanced development strategy aimed at increasing economic growth and investment in the social sector. Nepal aims to reduce both income poverty and human poverty. Economic growth is an important prerequisite for poverty alleviation. In its absence, other government efforts cannot be productive. Along with economic growth, it is equally important to achieve social welfare. The development of social sectors such as education and health can contribute significantly to economic growth. The government has indicated that the positive intervention of the government sector can be used for progress at various stages while creating indicators of the economic and social sectors. In such a development process, investments in the economic and social sectors are productive and help to achieve high returns. Especially for poverty alleviation, it is necessary to use foreign aid under this kind of development structure. 3.6 The Government of Nepal is also moving towards the process of making the country's development policy in line with the changing concepts of development. In addition, the government is also committed to removing obstacles in the use of foreign aid in the country. In line with this, Nepal has been adopting various reform measures since the previous meeting of the Nepal Development Forum (in this regard it is mentioned in detail separately). Among them, which are directly related to the foreign aid policy, the interim poverty alleviation strategy paper formulated in 2058, the tenth plan or complete poverty strategy paper which is currently being formulated to be completed by August 2059, and the poverty alleviation fund are mentioned. The Tenth Plan which is currently being prepared is different from the previous plans due to the following reasons – (a) It has taken poverty alleviation as the main objective of the development efforts of the government as a whole. (b) It seeks to link development activities directly with regional and national objectives and targets and poverty alleviation outcomes (अच्याखभाचताथ च्वमगाशलन इगतायमभक). (as in the past

(c) It tries to realistically link the annual budget with goal setting, resource management and financial and implementation capacity.

3 7. On the one hand, the flow of foreign aid has to be linked with the concept of long-term development, on the other hand, it is equally necessary to adopt short-term measures to deal with the problems Nepal is facing. The two main factors in this regard are (a) the challenge of peace and security, in addition to the reduction in development activities in the remote areas of the country, there has been a demand for an excessive increase in security expenditure. Internal events have caused a recession in the economy. As a result, the pressure on Nepal's budget has unexpectedly increased. Despite the additional efforts of the government to raise funds, it is seen that there will be serious obstacles in raising internal funds to spend even for development work. Due to this, it is seen that there will be a serious obstacle in raising internal funds to spend even on the macroeconomic structure of the Tenth Plan, which is about to be finalized. Due to this, it has been seen that the macroeconomic structure of the Tenth Plan, which is about to be finalised, needs to be adjusted. Likewise, the government of Nepal is preparing a separate medium-term expenditure structure for the first time in its history with the aim of protecting its major priorities while adapting the plan to the current financial situation. The Medium Term Expenditure Structure is not intended to be formulated as an alternative to the Tenth Plan, but rather as a bridge between the annual budget cycle and the Tenth Plan, it is coming as a plan management mechanism. This structure is the first attempt by the government to prioritize public spending programs and bring more reality to the annual budget allocation. This is an important effort initiated by the government itself to solve the existing financial crisis. Preparation of Medium Term Expenditure System Related Ministries Ministry of Finance and National Planning CommissionSince it was done with the help of the program, the relevant ministry will have ownership of the program and extensive discussions were also held with the local stakeholders to finalize it. The Interim Poverty Reduction Strategy Paper, Tenth Plan and Medium Term Expenditure System will jointly manage public resources focused on poverty reduction and they will be used as the basis of a new agreement between the government and the donor community for Nepal's foreign aid. 3.8 In the context of changes in the role of the government around the world, even in Nepal, there is no situation where the government can continue to play its current role. Therefore, it is necessary to review the role of the government in economic and social activities. If the government can separate the tasks of depositing or contracting in terms of bringing efficiency in the distribution of public services and goods, resources can be spent on involving civil society, local bodies and the private sector in such tasks. The government will present itself more and more as a supporter and facilitator.

3.9 In this environment, the current foreign aid policy document has been prepared. The implementation of this document will help to give a new shape to the relationship with the development partners and guide the Nepalese government, civil society, charity community and use the limited resources appropriately for development. This policy will be suitable in short term, medium term and long term. But when there are changes in the structure and various elements of the economy, then it is necessary to revise this policy from time to time so that the environment and context of change can be assimilated.