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Billions Pledged for Nepal Reconstruction – But Still No Debt Relief

UNITED NATIONS, Jun 26 2015 (IPS) - A major donor conference in Nepal’s capital, Kathmandu, came to a close on Jun. 25 with foreign governments and aid agencies pledging three billion dollars in post-reconstruction funds to the struggling South Asian nation.

An estimated 8,600 people perished in the massive quake on Apr. 25 this year, and some 500,000 homes were destroyed, leaving one of the world’s least developed countries (LDCs) to launch a wobbly emergency relief effort in the face of massive displacement and suffering.

Two months after the disaster, scores of people are still in need of humanitarian aid, shelter and medical supplies.

Speaking at the conference Thursday, Nepal Prime Minister Sushil Koirala assured donors that their funds would be used in an effective and transparent manner.

Rights groups have urged the government to focus on long-term rebuilding efforts rather than sinking all available monies into emergency relief.

In a statement released ahead of the conference, Bimal Gadal, humanitarian programme manager for Oxfam in Nepal, warned of the impacts of unplanned reconstruction and stated, “The Nepalese people know their needs better than anyone and their voices must be heard when donors meet in Kathmandu. They have been through an ordeal, and now it is time to start rebuilding lives.”

“This conference is a golden opportunity to get people back on their feet and better prepared for the future,” he said.

“This can only happen if the government of Nepal is supported to create new jobs, build improved basic services like hospitals and clinics, and to ensure all new buildings are earthquake-resilient.”

Despite a huge thrust from civil society organisations, the International Monetary Fund (IMF) has announced that the country does not qualify for debt relief under its Catastrophe Containment and Relief (CCR) Trust, which recently awarded 100 million dollars in debt relief to Ebola-affected countries in West Africa.

The Jubilee USA Network, an alliance of over 75 U.S.-based organisations and 400 faith communities worldwide, has been pushing for major development banks, including the IMF, the World Bank and the Asian Development Bank (ADB) to ease debt payments from Nepal, one of the world’s 38 low-income countries eligible for relief from the IMF’s new fund.

According to Jubliee USA, “Nepal owes 3.8 billion dollars in debt to foreign lenders, including 54 million dollars to the IMF and approximately three billion dollars to the World Bank and Asian Development Bank.

“According to the most recent World Bank numbers,” said Jubilee USA in a statement, “Nepal paid 217 million dollars in debt in 2013, approximately 600,000 dollars in average daily debt payments, or more than 35 million dollars since the earthquake.”

Considering that the earthquake and its aftershocks caused damages amounting to about 10 billion dollars – about one-third of the country’s total economy – experts have expressed dismay that the country’s creditors have not agreed on a debt-relief settlement.

“This is troubling news,” said Eric LeCompte, a United Nations debt expert and executive director of Jubilee USA Network. “Given the devastation in Nepal, it’s hard to believe that the criteria was not met.”

“This fund was created for situations just like this and debt relief in Nepal could make a significant difference,” said LeCompte.‎ “Beyond the IMF, the World Bank and Asian Development Bank who hold about three billion dollars of Nepal’s debt have unfortunately not announced any debt relief plans yet.”

Edited by Kitty Stapp

 
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