Aid flow decrease due to autocracy in Nepal: Report

Kathmandu, Apr 5 (UNI) The major donors have slashed aid flow to Nepal after the February 1 take over by King Gyanendra, media reports said here today.

DFID, the British Funding Agency, has cut aid from 47 million pounds it proposed in 2004 to below 32 million pounds in 2006, The Kathmandu Post quoting the DFID official as saying.

''We will now decrease it further as there is no sign of peace and democracy,'' said Mark Mallalieu, head of DFID in Nepal is quoted as saying.

Britain had increased aid to Least Developed Countries (LDCs) in its attempt to reach 0.7 per cent of GDP allocation to poor countries by the year 2013. But it is likely to bypass Nepal if the present situation continues, he said.

Western donors in Nepal say that without protection of human rights, democratic freedoms and institutions, the aid is unlikely to increase from the current level, at worst it will go down, it said.

''Level of development assistance has been decreasing in the aftermath of February 1, 2005,'' The paper quoted Martin Hermann, deputy head of mission, Embassy of Denmark in Kathmandu as saying.

Denmark, among Nepal's top-five bilateral development partners, suspended preparations for a new integrated environment program of approximately 40 million dollar, following the events of February 1, 2005, it is said.

As a result, Danish development assistance has dropped from 205 million Danish Kroner (Approx. Rs 2.36 billion) in 2004 to 143 million Danish Kroner (Aprox.

Rs 1.6 billion) in 2005.

''Though external assistance has declined, Nepal's biggest problem is that many internal resources - both financial and human resources - are not being spent on tackling poverty, political and social exclusion but are instead tied up in armed conflict and political crises post February 1, the Danish official said.

Finnish Embassy in Kathmandu said it has frozen two rural water supply and sanitation projects worth 22 million euros, it said.

The funds for the project, which was originally planned to go operational in 2004, have been diverted to the Office of the High Commissioner for Human Rights and the National Human Rights Commission, following escalation of human rights violations, the Post quoted the embassy official as saying.

''We have not cancelled any ongoing projects or programs, but we'll not enter into new contracts with the present government,'' the paper quoted Pauli Mustonen, Charge d'affaires at the Embassy of Finland, as saying.

UNI XC ARB DS1520