Aid To Fight COVID-19 Sees A Substantial Increase

COVID-19

By Modnath Dhakal

Kathmandu, Oct. 11: Just a day after the announcement of the nation-wide lockdown on 24 March this year, in the wake of the novel coronavirus outbreak, Finance Minister Dr. Yuba Raj Khatiwada participated in a meeting of the finance ministers and senior government officials of the South Asian nations and international financial organisations like the International Monetary Fund (IMF) and World Bank (WB) about the possible impact the virus would make on the national and regional economy.

One of his major concerns in that meeting was providing relief to the COVID-19 affected communities with the limited resources available in the country. He suggested the development partners and large economies to provide special support to the developing countries to help them in the fight against the pandemic.

Confusion reigned not only over the people and businesspersons but also the government and global bodies like the World Health Orgnaisation during the initial days of the coronavirus outbreak. Nepal was making cautious moves to provide relief to the daily wage workers who were put off the job as most of the businesses and construction projects were shut, initially for a couple of weeks, which later extended to a couple of months.

While the revenue collection was affected in the initial months of the pandemic outbreak, the country received more foreign aid compared to the previous years and even the earlier part of the last fiscal year. The meagre financial resources in the country were aptly augmented by the international aid.

Funds inflow has drastically gone up to Rs. 84.7 billion in the first two months (mid-July to mid-September) of the current fiscal year 2020/21.

It’s nearly 39 per cent of the total foreign support the country received in the last fiscal year 2019/20.
Nepal had received Rs. 219.88 billion foreign aid from multilateral and bilateral donors as well as international non-government organisations in 2019/20, said the International Economic Cooperation Coordination Division (IECCD) at the Ministry of Finance (MoF).

The aid is about 9 per cent higher than in FY 2018/19 when the inflow of funds stood at about Rs. 200 billion. However, the country received higher amount of funds in the later five months of the last fiscal year than the first seven months. The amount it received from the development partners till mid-February 2020 was Rs. 109.28 billion but the funds from mid-February to mid-July totalled Rs. 110.6 billion.

WB provides largest support

Of the five major aid packages received in the first two months of the current fiscal year, three are from the WB – trade and connectivity, earthquake support and education sector development projects. US$ 450 million loan to the trade and connectivity project is the largest foreign support that Nepal received so far. Likewise, Japan provided 300 million Japanese Yen and the Asian Development Bank and Norway provided loan of $200 million and grant of $35 million respectively for the power infrastructure project.

Meanwhile, the United Kingdom has pledged Rs. 7.12 billion (45.8 million Sterling Pound) to Nepal to help it in the fight against the COVID-19. State Minister of Foreign and Commonwealth Office of the UK Lord Ahmed had announced the financial assistance on August 27 during a virtual meeting with Dr. Khatiwada.

Chief of the IECCD Shreekrishna Nepal said that the government had updated the development partners that Nepal wanted COVID-19 focused support in creating health infrastructure, human resources, expanding health services and rehabilitating the micro, small and medium enterprises hit hard by the pandemic.
Last month, he had urged all development partners working in Nepal to provide targeted and direct support to fight against COVID-19.

Aid during pandemic

Nepal has received about half a dozen foreign aid packages to fight against the COVID-19.
The WB, ADB, IMF and India are among the major donors to provide COVID-19 support to Nepal. While the WB has signed multiple agreements for COVID support, ADB extended $250 million budgetary support for the same.
Both the multilateral donors have pledged additional support whenever required. Funds provided by the ADB are being used to address the impact of the pandemic and strengthen the public health system, provide social protection and create jobs.
According to the estimates of the government and private sector agencies, about 60 per cent workforce, primarily temporary and daily wage workers, have lost their jobs. Although the government is running the Prime Minister Employment Programme (PMEP), it is unlikely to meet the demands of job at least for 100 days to every unemployed citizen.

The European Union (EU) had also announced to provide Rs. 10 billion (75 million Euro) support to stimulate economy and labour demand during the coronavirus crisis. Newly appointed Ambassador of the EU Delegation to Nepal Nona Deprez said recently that EU was studying the prospects for further cooperation.
Other major donors extending their regular support at the time of crisis include Green Climate Fund, Asian Infrastructure Investment Bank and Switzerland.

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