Foreign AidThe world has been narrowed and like a global village. Weak neighbor may come to knock our door at any time for help. Beginning of Foreign Aid.Marshal Plan (Named after US Secretary George Marshal) initiated by the USA to restore the war devastated infrastructure of Europe during WW II at the time of the US President Truman (1948)
Foreign Aid in NepalNepal remained open to the outside world only since 1951. The Four Point Agreement with the USA is the first Agreement on Aid (Jan 23, 1951)In 1952 Nepal became a member of Colombo PlanIn 1955 Nepal became a member of UN.
What is foreign Aid?•It is a donation given to poor countries by generous, rich nations. •Foreign Direct Investment(FDI)is regarded, as an important source of external resources but it is not included in foreign aid.
•i) Broad category:•Loan- has a certain time frame to repay it with or without interest.•Grant- must not be repaid but accept certain conditions tied up with it.
General category:•Project loan•Program loan•Mixed credit•Structural Adjustment Program (loan)•Budgetary Support ( to face financial constraints while making budget)Technical Assistance–Research and studies (feasibility study, project preparation, detail design)–Institutional strengthening–Expert services–Volunteer services programs
General category contd…•Commodity aid•Food aid•Debt Relief Measures (Japan)•Non- Project Grant Aid (Japan)•Emergency and Humanitarian assistance•Military Aid
Sources of FA•Bilateral Aid:An aid that consists of a direct transfer from a donor government to a recipient government.•Multilateral aid: Donors collective support through international organization like, World Bank, UN).
Aid through INGOs:•Aid through Non-governmental Organizationsis a third channel. (donor governments and multilateral agencies do support NGOs).