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Foreign Donors Suspend Aid to Nepal
Fewer grants from abroad could spell economic trouble
Bikash Lamsal (beenaas)     Print Article 
Published 2005-07-26 16:07 (KST)   
Due to King Gyanendra's Feb. 1 seizure of power, foreign donors have halted financial support to Nepal, which is badly affecting the country's social works and development programs.

Major givers of aid -- Norway, the United Kingdom, the United States and Denmark have suspended or cut back on economic aid. According to a press statement, Nepal is being denied the assistance because of the Feb. 1 movement, which has affected multiparty democracy and human rights in Nepal.

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In the 2005-2006 budget, Nepal's government expected 18 billion rupees ($255 million) from foreign donors, and 14 billion ($198 million) in loans. But due to the lack of aid Nepal will receive about 7 billion rupees ($99 million) less in grants.

Nearly two weeks after the king's move, the United States and India stopped providing security support. Similarly, Denmark brought an end to its developmental assistance, amounting to about 440 million rupees ($25.5 million), which included environmental conservation and tax improvement programs.

The United Kingdom also suspended military support one month after the king seized power. Nepal didn't receive the 180 million rupees noncombative security support for the Global Conflict Prevention Pool.

Likewise, the Swiss held back 1 billion rupees (approximately $14 million) in aid. The European Union also suspended $30 million for education programs. The Danish International Development Agency and UK's Department for International Development have halted aid to the forestry sector.

The World Bank questioned Nepal's government on the implementation of 5 billion rupees ($60 million) for a poverty reduction program.

Norway, Nepal's biggest donor, said that the king's move was a setback to the principles of democracy and human rights in the country, and has stopped financial support for development work for the next fiscal year, which amounts to $2.5 million. The country has also terminated its support for the Melamchi Water Supply Project, an additional $35 million.

The British government has decreased its support by 60 percent in police services, prison improvements and the prime minister셲 office, amounting to 180 million rupees.

At the meeting of the United Nations Human Rights Committee held in Geneva, Switzerland, member countries called for the restoration of human rights in Nepal. Some countries that donate heavily to Nepal, such as Canada, the United States and the European Union, had a "wait and see" attitude.
©2005 OhmyNews
Other articles by reporter Bikash Lamsal

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