2. Achievement of foreign aid: major issues 2.1 Nepal is considered to be a late development country in the South Asia region. Nepal has been open to the outside world only since the beginning of 1950 and from that time, planned development and foreign aid started in Nepal. Since then, during the social and economic development of the country, foreign aid has been established as an effective mechanism and has contributed significantly to the development of major, physical infrastructures, such as roads, irrigation, hydroelectricity, education, health, and drinking water. Apart from this, foreign aid has also played an important role in developing the necessary dialogue for the formulation of timely policies, guiding economic reforms, enhancing the capacity of public policy makers and providing financial support for public services. It can be seen that there is a long relationship between foreign aid, economic reform and development in Nepal. Despite these various achievements, there are many shortcomings of foreign aid in Nepal. In proportion to the amount of foreign aid that has flowed into the country, the expected success in achieving economic growth and poverty alleviation has not been achieved. Therefore, although foreign aid is very effective in some areas, it is less effective in other areas. Regarding this mixed result, there is a common opinion between the Nepalese and the donor community who receive the aid.

2.2 The problems related to foreign aid are not only different in the context of Nepal. In other countries as well, both the recipient country and the donor party have been expressing concern regarding foreign aid policies, practices and procedures. All countries that receive aid have not only common problems related to foreign aid, but also some specific country-specific problems. Nepal also has some special problems of its own. Such problems include weak institutional capacity, difficult mountainous terrain, unique geographical location, widespread poverty, etcHigh population growth rate and rising environmental concerns etc. are the main ones and they have made it challenging to use foreign aid and continue development efforts. When examining the problems related to foreign aid, it is necessary to always pay attention to the special challenges that Nepal faces. In some cases, there is a need to increase the mutual understanding between Nepal and the donors to solve these problems. There is still a large gap between the results obtained from foreign aid and the potential for improvement. There are many reasons for this. The main reasons are that the speed of economic growth created by past investments is still weak, the basic aspects of the overall economic stability are still unstable, the ability to use aid has not increased significantly, the institutional capacity in various sectors is weak, and the development needs have not been accepted. It is very sad that despite the efforts and increasing flow of financial and technical assistance in the country for the past five decades, this situation still exists. The viewpoints of both the Nepali side and the donor side regarding the main reasons for ineffective foreign aid management and low development returns are mentioned below. Perceptions of donors

2.4 For the past few years (especially the meeting of the Nepal Development Forum in Paris in 2000 and the subsequent period), there has been a wide discussion about the mixed effect on the effectiveness of foreign aid in Nepal, its causes and possible solutions. The main concerns pointed out by the donor community regarding the use of foreign aid are the lack of ownership by the Nepalese government in the development project programs that are borne by the donor, the lack of direction and leadership from the Nepalese side regarding the prioritization of expenditures and the formulation and implementation of project programs, especially the existence of a centralized budget and planning system. Due to the program design and carThere is very little participation of stakeholders such as local organizations and community groups in infrastructure, there is pressure to increase development projects without paying attention to the institutional and absorption capacity of the nation, weak institutional capacity, especially the performance level of the civil service is weak, there is low pay and facilities and low morale. , poor monitoring and evaluation of programs due to lack of accountability and transparency and leakage and misuse of funds etc. In order to solve these problems, donors have pressured the Nepalese government to take competent leadership and take ownership, some of them have reduced the amount of aid and some have made the conditions of aid more stringent. Some other donors have started working directly with local bodies, non-governmental organizations and community organizations, or have implemented programs by their own organizations or by involving other consulting companies. Perceptions of the Nepali side 2.5 The above-mentioned perceptions of the donor side have also been felt by the Nepalese in some form. Also, the Nepali side has been expressing the view that the behavior and actions of the donor side are equally responsible for the problems in the effectiveness of foreign aid in Nepal. He has expressed his opinion that it does not match. Efforts have been made to harmonize the priorities of the Nepalese side with the priorities of the donor side. Despite such efforts, there has been a general perception that many projects and programs are directed by donors. As a result, the effectiveness of foreign aid has decreased. In order to resolve this, determining national priorities by consulting with local stakeholders and selecting development projects accordingly, including local needs, values, recognition and capacity, such cooperation is not manageable and feasible in Nepal's special situation.Everyone has realized that the government should speed up development under its own leadership while paying attention to the matter. For this, it is necessary for the donor side to improve its priorities and harmonize them with the priorities of Nepal.

2.7 Due to the lack of procedures for adequate preparation and management of the project by strictly completing the processes such as project design, implementation, supervision and evaluation through foreign aid. The country is not able to get the maximum benefit from the investment in the operated projects. As a result, some such projects are implemented, which do not reflect the needs, values, beliefs and capabilities of the people. Due to this, the overall resource allocation has not been effective. The use of foreign resources is also not exempt from this trend. In most of the projects, sustainability and maintenance issues have been neglected, while in some projects, there is a lack of ownership by the Nepali government and the Nepalese people for whom the project is designed. Similarly, due to the implementation of projects without appropriate evaluation, foreign aid has flowed into small projects that do not require foreign aid or in areas that are not suitable in the context of Nepal.

2.8 Nepal receives aid from a large number of donor countries and organizations. has done. Due to the inability to determine priorities based on regional and national needs and the inability to coordinate with the donors based on the correct priorities, it is difficult to effectively coordinate the donor community, and it has not been possible to create a position where the various aid agencies play a complementary role to each other. Each donor organization may have its own policies, priorities and perceptions regarding the needs of Nepal, which are not only incompatible with the context of Nepal, but also contradictory to each other. Since foreign aid does not always flow only to the areas of greatest need, there is a lack of resources in many important areas. It is very difficult to reconcile the diverse views of the donors and sometimes in such a taskIt also takes a long time. Therefore, coordinating foreign aid is becoming cumbersome and difficult. 2.9 The increasing interest of the Nepali side is especially in the changing structure of foreign aid. Out of the total foreign aid received by Nepal in 1999, only half of the capital aid, 40 percent of technical aid, and the remaining 10 percent aid was received for balance of payments and emergency rescue work. Based on the above mentioned, the share of technical assistance is increasing rapidly. It is necessary for both the donor and Nepal to review whether this kind of existing practice of receiving foreign aid is appropriate or not. 2.10 Due to excessive reliance on foreign experts, the contribution of technical assistance that should have been made has not been possible. Technical assistance related to capital assistance has not yet been properly mobilized in the technical manpower available in the country. As a result, the situation of having to adopt inappropriate technology remains. Even in technical assistance that is not linked to a specific project, instead of using local technical capacity to increase the capacity of local organizations, excessive use of foreign experts has been made. In such a situation, taking the technical assistance as a loan rather than as a grant will create a huge burden in the future of an underdeveloped country like Nepal. It has to be done. In Nepal, there is still no proper and effective mechanism to evaluate the technical aspects of foreign aid, especially capital aid. Especially in turnkey projects, as the decision of which technology to use is done externally, this trend is more visible in such projects. This has also had a great impact on the sustainability of the projects and their maintenance. Likewise, the means for increasing the quality of the product and reducing the cost of research and development (ch 7 m).There is no arrangement.

2.12 The conditions associated with foreign aid are different depending on the donor organization, project and program. Due to the trend of making it mandatory to follow the conditions along with the foreign assistance, it is difficult to make the maximum use of the available foreign resources. Likewise, such a practice has created an obstacle in using suitable and less expensive materials, time and technology. Due to various policies and procedural conditions placed in some projects that do not match the actual conditions and needs of the country, not only the expected achievements of the projects have not been achieved, but also it seems that the projects have received adverse returns than the targeted ones. Conditions are necessary for donorship. However, when presenting such conditions, it should be discussed jointly with the recipient country and should be kept only with the consent of both parties. If the sectoral program structure is formulated and adopted, such conditions can be reduced as well as made practical.

2.13 The process of using approved foreign aid in Nepal is very slow. This happens due to weaknesses in the country's institutional capacity. However, the policy, behavior and procedures of the donors who do not understand Nepal's problems have also played a role in this kind of delay. If the programs are designed keeping in mind the internal institutional capacity of the country, the use of aid can be more realistic. It is not only by improving the procedure, it is necessary to improve it since the beginning and design of the project.

2.14 A large amount of foreign aid flows through various non-governmental organizations. Although the contribution of such organizations is important, some organizations are conducting activities according to their own priorities and processes without paying attention to the country's development priorities and ignoring the very important aspect of project sustainability. These organizations have neither used the tools in accordance with the national priorities, nor used the resources while using the toolsHe has maintained transparency about the amount received etc. In order to make the activities of these organizations compatible with the national priorities, and to ensure the proper use of resources and transparency in their operations, it is necessary to make effective the reporting and monitoring and evaluation system of aid flowing through such organizations. Likewise, the amount of foreign aid received by the government of Nepal has not been fully included in the budget. Donors sometimes directly deposit funds into the account of a specific project without informing the relevant ministries and departments of the Nepalese government. As a result, it is difficult to update aid records and maintain transparency and accountability in such transactions.

2.15 Nepalese economy's ability to implement projects is not satisfactory. Due to the lack of reliable information system and lack of regular supervision and monitoring, the effective implementation of the project has been hindered. As a result, most of the projects are delayed and cost more. 2.16 Due to the increase in foreign debt for the past several years, the foreign debt obligations of Nepal are gradually increasing. Although there will be a portion of subsidy in foreign loans and all the loans will be available at subsidized rates, the burden of foreign loans is continuously increasing in the budget. Therefore, Nepal needs to be more selective and productive in using such loans. These are some of the major problems that have hindered the efficient and effective use of foreign aid in Nepal. The main reason for this problem is the lack of necessary policies and guidelines to mobilize foreign aid related activities. In the absence of a clear national vision and policy, it is natural that development projects are influenced by the ideas and perceptions of donor organizations or donor parties more than local needs. The presented new foreign aid policy tries to fill this gap.