February 27, 2018 Sujeev Shakya

Reimagining Development Assistance

Social media pages are full of pictures of different folks from the development community meeting the newly elected leaders in the 753 local governments of Nepal. On the one hand, it is good to see that there is so much interest in the formation of new government structures, but at the same time, maybe it is also time to step back and consider whether there are new, fresh ways for the development sector to participate. It is evident that the development assistance sector is a competitive one, with many players competing to engage. While these players may be acting with good intentions, such competition gives rise to a problem wherein the folks in the government have to choose what programmes to prioritise. For example, do they prioritise a $100,000 programme, or a $10 million dollar programme? According to some local government leaders, these officials are spending their entire time attending different programmes, which eats into the time spent doing actual work.

In our quest to run programmes, our country has turned into one that takes enormous pride in the “Open Defecation Free Zone” boards that are placed all over the nation. We have made the construction of toilets in houses that own motorcycles and mobile phones a matter of development assistance. And we have made training and the acquisition of knowledge something to be paid for rather than something that one pays for.

How do we prioritise? How do we ensure that the dollar goes the last mile? How do we ensure that programmes become sustainable? There are many questions being asked.

Fostering entrepreneurial culture

The biggest challenge for Nepal is the establishment of enterprises that can generate jobs or entrepreneurial engagements that can create self-employment. All economic growth stories around the world have shown that the key to ensure better livelihoods is through the economic opportunities presented by jobs and entrepreneurship. This also means that there has to be a shift from a rent-seeking mindset to an entrepreneurial one. We have heard people preaching about taking equity in companies over debt diluting interest and increasing costs. We have seen people advocating for programmes that confuse what firms do for Corporate Social Responsibility (CSR) to help the ecosystem of investing in start-ups, with money set aside for CSR. In a country that is yet to corporatise, and is yet to gain corporate governance and basic corporate responsibility rights, CSR programmes have been discussed. In a country where business cartels are being questioned on their business ethics, programmes on business ethics are held.

The tendency to build on what has worked in the past is very human, but the time has come to question whether the same fundamentals are going to work under the new paradigm. For instance, it was easiest to engage with business associations to get a foothold in certain sectors but the time has come to ask whether working with associations benefits the members, or whether there is more support in converting the associations into cartels. The big question to ask is: Have multiple layered cartels fostered an ecosystem of entrepreneurship or rent-seeking?

The next level of engagement of development assistance will have to be in areas of economic growth that can help Nepal move to create jobs, skills and a mind-set that the culture of entrepreneurial pursuits—whether they entail a job or a venture that is either big or small—will be a big game changer.

Creating threshold levels

For the government, managing multiple players in the arena of development assistance has been difficult. It is now important to categorise development assistance into different areas and have some laser-focused strategies for each. The current president of Afghanistan Ashraf Ghani created a threshold level for development assistance in Afghanistan during his tenure as Finance Minister. Some other countries follow similar strategies. Therefore, for engagement in Nepal, a certain minimum limit has to be set to ensure that the government does not treat institutions that are really putting in large amounts of money the same as those who provide negligible assistance. Former United Nations Assistant Secretary Kul Chandra Gautam claims that the cottage industry of development has to end. This means that the government can work with the big industries in a more meaningful manner. Further, the time has come to distinguish between the agencies that bring money and those who execute projects. Understanding the relationship between these different types of agencies will also help the dollar go the last mile.

Every ‘open moment’, as President Ashraf Ghani says, gives an opportunity to look back into the past and to also look towards the future. As Nepal moves into a new structure of governance, it will be important to ensure that the development assistance sector is also reworked to ensure that it can play a better role in helping Nepal achieve its Vision 2030 and the Sustainable Development Goals. Learning from mistakes and moving forward is simple common sense.

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