You have been looking after programmes of £331 million. What are the achievements made during your tenure in Nepal? 

 

This year alone, we built 453 kilometres of rural roads in Nepal, connecting people to markets. What I have tried to do in the past two years is let people know about our economic programmes. In the past, people used to think that we are funding mostly the social based organisations. In fact more than a third of our portfolio has always been about economic development and that is increasing. We have been making sure that our programmes are creating jobs and making conducive environment to do business for both Nepali and foreign investors and ensuring macroeconomic stability, so that there is stable economy for investment. This has not been focused on as much as it should have been by the government because the economy has been cushioned by receiving remittances. But, Nepal needs to prepare for a time when there will not be so much of remittances coming and Nepalis should be able to get a job within their country and not have to go to Saudi Arabia or Qatar just to find work. Diaspora, returning with good qualifications from US and elsewhere need to be able to find a job here too. That is an important part of a nation developing: you need to bring your talent back and poor people need access to the job. You can’t be included in the nation if you don’t have a job. When people talk about social inclusion we must acknowledge that you can’t have social inclusion without having economic inclusion. We are also working in the forestry where there is a lot of employment potential in Nepal. In many parts of Nepal, the forest is people’s primary resource and that is where people get a livelihood and a job. We are trying to help with that along with major programmes in infrastructure, health and local governance. 

 

DFID had said to adopt the comprehensive ‘Value for Money Strategy’. How successful has this strategy been in the recent times? 

 

I think it’s being effective. We are looking at few different ways to procure directly. DFID has a new initiative worldwide, led by our own Secretary of State, to ensure we are getting better value for money from our commercial partners who win DFID contracts. So, we are driving down cost and increasing value for money while ensuring top class delivery of our development programmes. Similarly, when we disburse our funds through partner governments, we want to see value for money there and they also want value for money. Also, when we work with UN and the World Bank, we are pushing them just as hard on value for money and high quality delivery. We are directly accountable to our parliament and British taxpayers who want to know where we are spending UK funds. We recently published the DFID Nepal portfolio review for 2012/13 that clearly shows where we spent funds, what we spent them on and through whom we spent the money, this means anyone can judge whether that was good value for money, this is the importance of transparency. 

 

DFID Nepal published its Anti-Corruption strategy a few months back. What is the status of its implementation and how is it helping fight corruption in Nepal? 

 

So far,the progress is pretty good but we hope to see more progress soon. We are focussing our efforts on helping Nepal to improve its public financial management system. The focus had been on getting appointments into key positions like the OAG but that is only a small part of the story, there are management systems that need to be in place to ensure Nepal spends its own resources effectively and free from corruption. Corruption has different forms, but the better the system of financial management, the fewer opportunities there will be for corruption. We are working with the World Bank and Asian Development Bank to put a lot of resources into computerised accounting and the single treasury account. All the districts are linked into the single treasury account and somebody in Kathmandu can quickly see how much money is there and where it is going. That reduces opportunity of corruption but there is a long way to go. We need to build a stronger system and more political attention should be given to anti-corruption drive. Nepal can reduce its dependency on foreign aid by using its own resources more effectively. So, instead of criticising donors for providing foreign aid, people who want to reduce dependency should put pressure on their government to improve public financial management. 

 

It is said that the there is severe corruption in the funds and aid provided by donors. What are the measures you have taken to ensure aid transparency? 

 

DFID is world-wide known for transparency and anti-corruption efforts. Before we disburse any funds to a partner government we do what is called a “fiduciary risk assessment” and every time we put money through another organisation we do a “due diligence assessment”. These are very rigorous and if there is any complaint of allegation, we follow up immediately. We try to get there before problems occur. If the risk is too high, we won’t put any money into a government or through a partner. In addition to this we have follow up, training and support to people to spot the potential for corruption before it happens so that we can prevent it happening. In terms of Government of Nepal there is a particular issue at the VDC level. In one of the villages I visited recently with a Joint Secretary from the Government, we looked at the financial books of the VDC and found problems. In that case follow up action was taken.But more action is needed to prevent corruption at this level and the biggest issue at the moment at local level is the lack of election. In some parts of the country there are situations where political parties divide resources not according to what people need but on what the political leaders want or even worse resources are just divided by the number of political parties .This is reckless and will not lead to development We saw that particularly in the Terai and we are hoping to provide extra assistance to the government to prevent that happening. 

 

At times, it is alleged that donors are not transparent themselves. What is your take on it? 

 

I can’t speak for other donors but we are the most transparent donor globally. We recently came top of the IATI transparency rating and in Nepal we are also leading the way. I have just signed a letter to Chairman of the Interim Election Council, Khil Raj Regmi sharing our 2012/13 Nepal Bilateral Portfolio Review which shows every single penny that we spent in the last 12 months, this is also available on the DFID website to anyone. Last year, we were wrongly accused of being opaque in our dealings. We responded to that report and I am confident that we are very transparent and people are able to see everything that we are funding. Details of every expenditure above £500 goes on our website within four weeks. One of the challenges is that all the people or recipients of our development programmes don’t have the Internet. We recognise that as an issue. We need to work on that, obviously and I can’t go to Humla and distribute the report to everyone there. Spreading factual information through the media would be of much help. 

 

What are the problems you see in governance in Nepal? 

 

There are a few different issues. One of them is the problem of capacity of the government with regards to ‘supply’ and ‘demand’ of services like health, education and infrastructure. The government isn’t yet able deliver all of the essential services to people everywhere and, in terms of demand, many peopleare just now starting to expectservices from the government whereas ten years ago, many people had no expectations. So, it’s about trying to balance between supply of services and new demands from people, this will take time to resolve. Then, there is the issue of accountability, there needs to be a robust mechanism for accountability by the Government to the people. If things go wrong, if there is corruption, if somebody does something that was not a right thing to do it is important that they can be held accountable, normally through the justice system or through parliament. On financial side, it is through public accounts committee, which has been absent since May 2012. This takes time but it would be good to see a greater commitment by Nepal’s leaders to this issue. We are still improving our accountability and transparency in the UK, despite being a wealthy nation, it is a challenge, but the systems are there to ensure people are held to account, including Heads of DFID! 

 

What are the major challenges faced by the development partners in Nepal? 

 

There are challenges working with the government, for example we just have seven secretaries changed today, one, the Forest Secretary, has been in place less than a year and is a key partner for the delivery of our programme. With the frequent change of senior officials in the government, we are constantly finding we are working with new people. In addition, due to lack of local elections for many years, when you try to develop a development programmein a district, you end up talking to 10 or more political parties who all say they have the political mandate there. In general though, most of the issues are political, governance and logistical issues. For example, we are establishing new programme in Humla and Jumla (Rural Access Programme). These are two difficult places both logistically and geographically. Nepal is a beautiful place to work but very challenging. Nepal is in a stage where there can be rapid growth and rapid development. Especially in the next 10 years, the Government could eliminate the need of donors and look towards a time when you have much fewer donors or development partners here, and a combination of the private sector and development banks like the World Bank and ADB investing in Nepal to support its development. 

 

When it comes to economy and job creation, the private sector has a tremendous role. How is DFID working with them? 

 

We have a new programme starting very soon and we are just waiting for Government of Nepal approval, the programme is called Access to Finance. This programme will provide micro-loans, SME loans and make equity investments through intermediaries. People talk about donors encouraging aid dependency, that’s not true, we don’t want a country to be aid dependent. The way to remove dependency on aid is through economic development and the private sector andthe economy should grow whatever is the political situation, as long as there is not a return to conflict in that time. In this regard the new Foreign Aid policy of the government could set a target to reduce aid dependency by 50%in five years and eliminate dependency within 10 years. By then the country should still be seeking assistance but in the form of concessional financing and foreign direct investment. So, we are supporting the private sector because only the private sector can create long term sustainable jobs. Government does not create jobs, they should support the Government to do that. It is important to get the private sector moving and ensuring that they can invest. 

 

DFID is alleged for funding minority groups for causing movements that have disrupted social harmony. What is your take on it? 

 

People felt that donors like DFID should not be funding ethnic groups that are pushing identity based politics. The truth is that DFID’s mandate is to work on poverty - that’s our only mandate. So, we have to work with poorest people in the countries we are present in. We know that poverty in Nepal is determined by where you live, by your gender, age, physical ability and ethnicity. When it comes to poverty we know that we can’t focus on one ethnic group over another. What we must do is, ensure our development assistance is getting to the poorest people. People have said to me that DFID doesn’t understand Nepali heritage and culture. Well, we do understand it very well and we bring that knowledge into our programmes. For example, we know that poorest people in Humla are Brahmins and Thakuris. We are working with them there and we don’t say that you are Brahmin and we are not going to help you. I recently met with the new Head of NEFIN and explained that we don’t support politics, whether they are identity based or not, and that our mandate is to support anti-poverty efforts only. We agreed that peace in Nepal will come from ethnic harmony not ethnic division. My advice was that groups like NEFIN should identify the issues affecting their members rather than focussing on identity alone. We know that poorest people are also most vulnerable to the climate change, disasters and hunger. If organisations like NEFIN can advocate actions on those issues, they will deal with the real life issues faced by their members. If it is just about identity based politics, then most donors will be uncomfortable. Our mandate is not to support one group above another but our mandate is to support the poorest people around the world and also in Nepal.