Foreign Aid and Nepal’s Missed Opportunities
Summary
Nepal has received extensive international aid but continues to face economic challenges, unlike Bangladesh and Rwanda which leveraged aid for significant growth. Nepal must transform aid dependency into strategic partnerships to build sustainable industries and economic resilience.
Key Points
- Nepal has received substantial foreign aid but remains economically fragile, relying heavily on remittances and imports.
- Bangladesh and Rwanda effectively leveraged aid through focused strategies and institutional ownership to achieve significant economic growth.
- Nepal lacks strategic intent and institutional discipline to convert aid into sustainable economic transformation, often using aid to finance deficits or social welfare without fostering markets.
- With shifting aid dynamics and Nepal's upcoming LDC graduation, the country must assert ownership, strengthen state capacity, and partner with the private sector to ensure aid supports industrial and export growth.
