24-08-2009

Nepal is arguably the most beautiful country in the world. Its peoples are among the richest in cultural diversity and the best in resource management through community ownership and the local, ethnic and indigenous practices. If the national resources were properly used, the 23 million people of this country could have all they want. They have Mount Everest and many of the other highest mountains in the world to attract tourism, a huge amount of freshwater resources, flora and fauna, the most fertile valleys and plains for agriculture and animal husbandry, wildlife and natural ecosystems. But the country is now regarded as the poorest in the world — very hard to believe. Nepal was made poor and is now being made the poorest!

The era of economic dependence and poverty began with Nepal's defeat in a war with the British East India Company followed by an `illegal' Soogauli Treaty in 1816. As a result, Nepal lost its vast fertile land and the rivers from Darjeeling in the East to Kumau-Gadhawal in the West. The British began to recruit large numbers of Nepali youth into their army — brave mountain fighters, known as the Gurkhas.2 Hundreds of thousands of Gurkhas either gave their lives or suffered injuries in the two World Wars and other regional conflicts, from the Far East to the Falklands, but today they are still treated as virtual mercenaries. The `export' of these youth from the rural areas of Nepal and their migration to towns is linked to widespread poverty and the socio-cultural disintegration of their various ethnic communities. Nepal is now known for its continuing export of the youth, either as security guards and British soldiers, or migrant workers in many countries, where they are treated as slaves or severely exploited. The hills and paddy fields are now turning into deserts and all the productive forces have flown either to cities or abroad. Nepalis never got a chance to develop themselves but rely on the sympathy of the donors even for a small hospital or drinking water supply.

As a result, Nepal at present is on the verge of collapse due both to chronic poverty and a Maoist civil war, which began in 1996 with demands for rapid democratisation and drastic land reforms.3 Even the World Bank has recognised this fact recently by describing the Maoist insurgency as `clearly a political movement with a firm political philosophy' and has further blamed the `[h]orizontal inequality and social exclusion' as well as the `[f]ailure of governance'.4 What it does not mention is its own responsibility, and that of other donors, for the creation of such situations by the imposition of severe aid conditionalities in favour of economic liberalisation and privatisation in a feudal-agrarian society such as Nepal. Now more aid is coming in the form of military assistance and arms' supply than help in addressing the root causes of the Maoist conflict and other problems.5

In the five decades of international aid in Nepal, development never meant something local managed by the Nepalis and for the Nepalis; it was a complete dependency syndrome. It always meant a project run by foreigners with no transparency and accountability regarding outcomes. It was also considered as the most sacred area, to be untouched by public scrutiny or criticism. Various studies clearly show that foreign aid only benefited the local feudal-lords and other member of the élite, e.g. the Royal family and their relatives, and the army, which became more rich and also corrupt and powerful. Nepal's acceptance of globalisation and its joining of the World Trade Organisation has made the country just a dumping ground for foreign goods, with the sell-out of its vast national resources — both human and natural. These days, Nepal receives foreign loans and assistance not to build its economy but to destroy it, including the dismantling of public institutions and community systems.

One of the main reasons for the failure of the past 14 years of parliamentary rule in Nepal is the complete domination by international aid agencies and bilateral donors through their conditional loans and aid. The `sovereign' Parliament and the elected governments remained largely as the agents of the foreign interest lobby. Thus we are never allowed to express our own needs and priorities. There are even cases of the government refusing to release secret dealings and agreements with the International Financial Institutions to Parliament and even the Supreme Court. The spirit of democratic governance6 was taken over by donor-driven corporate governance, and human rights and the rule of law were subject to corporate rules. As a result, Nepal's adoption of a democratic constitution and laws, as well as the ratification of dozens of major international human rights and environmental instruments, remained totally ineffective as the governments have always been compelled to comply with the donors' pre-conditions and corporate obligations.

Recent experiences show that it is the donors who are mainly responsible for leading Nepal into the current economic mess and political collapse. The Maoist armed uprising is widely regarded as the result of the mockery of elections, a `sovereign' Parliament that failed to address chronic poverty, and the failure of political commitment, due to destructive lending conditionalities and the militarisation of the state, including the Palace. What we really needed, after the democratic change of 1990, was real democratisation and the decentralisation of political power, as well as economic resources. The rhetoric of `good governance' was in fact defined by the donors and went against the very fundamental principles of human rights-based democratic governance.

In this context, the following two cases provide the most interesting examples of the donors' inability to respect their own policies and procedures in promoting good governance and human rights. They also provide some details of how the people and the communities, who are supposed to be the targets of development, are denied access to their own resources and benefits. The first case of Kali Gandaki `A' is a story of why the donors do not want to learn lessons from their mistakes; the second case of Melamchi River diversion is about how the local resources are transferred, against the will of the local people who own them and how cheaper and better available alternatives to water supply in another basin — the Kathmandu Valley — are being bypassed.

Kali Gandaki `A' Hydroelectric Project
The Kali Gandaki `A' (KGA) is Nepal's largest hydroelectric project, 144 MW, built in the western region of Nepal with conditional loans from the Asian Development Bank (ADB) and the Japanese Overseas Economic Cooperation Fund (OECF), now Japan Bank for International Cooperation (JBIC). Begun in 1997 and completed in 2002, this project is considered as a costly one compared to the original forecast. The reasons were the delays, and corruption. The notorious Italian Impregilo SPA company was the main contractor.

The implementation of the KGA was the result of the cancellation of the Arun III Hydroelectric Project by the World Bank in August 1995.7 Activists and experts had presented the KGA as a better, and cheaper, alternative to Arun III. But it did not happen. The cost escalated from US$250 to US$360 millions by the time of its completion. The civil construction cost was increased by 67%. The ADB, instead of supporting cost reduction measures, was mainly concerned with compliance to its conditionalities and increasing electricity tariffs.8 At present, Nepal has one of the highest tariffs in the world.

Struggle for access to information
The Arun III campaign represented a major shift in the development debate in Nepal. It was the first big campaign that questioned transparency and accountability in a foreign-funded project. In Arun III, the struggle for access to project documents and information was won both at the level of the Supreme Court and the World Bank's Inspection Panel, in October 1994, in the first case ever filed — in which the author was one of the main claimants.9 The Court, in its landmark decision, set clear guidelines and procedures for seeking and receiving information on any issues of public interest, including development projects, as provided for article 16 of the 1990 Constitution of Nepal.10

Despite these achievements, the fight for the right to information in the KGA was not so different from Arun III, except for the accessibility of the loan agreement and Environmental Impact Assessment (EIA) reports. Even then these documents were no use to the local people, as they were all written in English, apart from some small information booklets. Most interestingly, none of these documents was available during the decision making time. The feasibility studies, cost-benefit analyses, and EIA reports, as well as the copies of the contracts, all of which were crucial for any critical debate and decision-making, have never been made available, even since the completion of the project.

Public consultation/participation
In any project, the holding of public consultation meetings is essential for ensuring effective and meaningful participation by the local/affected people. This is also the most important element when it comes to practising good governance.

Unlike in Arun III, some public meetings were held in the KGA project sites and in a Five Star hotel in Kathmandu. The local participants in these meetings were all selected at the instigation of the project officials. Activists were prevented from attending local meetings and presenting their views; those who tried to distribute printed information faced both verbal and physical abuse and harassment. The project also recruited some local politicians and leaders to systematically attack the critics and to blindly defend the project. The ADB officials present in these meetings remained silent and turned a blind eye to what was happening.

The issue of local benefits
When the project loan was being considered, the ADB and the OECF officials were accompanied by ministers and Members of Parliament to the project site and garlanded with flowers. The local people were given sweets and drinks for coming to listen to the `donors', the ministers and the politicians promising them everything imaginable. It was out of the question to raise any critical voice in such a hostile situation. The project officials were even engaged in creating pseudo local groups and arranging fake letters of support to the ADB. Later on, some of these thugs were also used for spying on the local people and suppressing their voice.

The local people were brutally suppressed when they began to demand the promised jobs and effective implementation of the social and environmental improvement plans. There was an incident reported in the media in which an unemployed youth who had joined the protesting crowd was allegedly killed by the police, in the Impregilo office compound. No charges arose from this but about 32 local people demanding jobs were charged by the local authority, under the Public Offence Act. They were set free upon the deposit of their personal property for bail. The charges were dropped only after the completion of the project. The formation of independent unions was virtually banned and the genuine union leaders were fired for their activities. The local traditional village women were exposed to vulgar aspects of western culture and life-style, and were offered only low-level and low-paid household work at the residence of Impregilo masters. No letters of appointment or contracts, which are required by the Nepal Labour Act, were given to workers and labourers. The terms and conditions of hiring and firing were in violation of all domestic and international labour laws and standards. The minimum basic pay and benefits provisions were also ignored. The Head of Impregilo once said to the author that it had no obligations to respect any domestic, international, or ADB rules and regulations on such matters.

The displaced people, however, had no choice but to accept whatever money was made available for compensation. There was, and still is, no provision for the true representation of the affected people in the land acquisition and compensation processes. The Bote indigenous peoples were provided with neither proper resettlement nor guaranteed jobs. Instead, they had to lose their traditional livelihoods permanently. Planned income generation programmes were not adequately implemented.

Several public meetings and protests were organised by the local people against the NEA, the Impregilo, and the ADB during the construction period. The people even complained that the ADB officials were hiding from them to avoid complaints, and that they were largely relying on inaccurate internal reports to judge the project performance. These reports were never made public for comment, despite requests. The activists and the media were also prevented from meeting the local people and visiting the project sites. In some cases, armed police were used to arrest and expel them from the area before reaching the place. The people believed that the local administrative and police officials were paid bribes, on a regular basis, to give `protection' to the project. As a result, at a later stage, the KGA sites were virtually turned into security zones.

The ADB back in Manila knew of all these incidents but never bothered to make inquiries about them. The complaints made by the local Village Development Committee officials and other groups were either ignored or poorly addressed. It was only after a detailed complaint was made by the Water and Energy Users' Federation-Nepal (WAFED) to the ADB in June 2003 that a high-level mission was sent to study the problems. The Mission responded to WAFED in November, admitting that there had been serious violations of the ADB policies and promising that the mitigation plans would be complied with as soon as possible. The Mission had also agreed, in a meeting last January, to monitor continuously the post-project impacts and to develop mitigation plans as and when required. If this is done, it will be something exceptional in the case of such projects.

Melamchi Water Supply Project
The Melamchi Water Supply Project (MWSP) is the first inter-basin river diversion project planned for the supply of drinking water for about two million people living in Kathmandu Valley, the capital of Nepal. The MWSP has been on the political agenda and the donors' priority list for about 20 years but has never been followed through, due to conflicts of interest among the donors — mainly between the World Bank11 and the ADB. The World Bank decided to pull out from the MWSP in 2002 for the very simple reason `that important options have not been explored to utilize the water resources within the valley'. The distribution system needs to be fixed first, but even then it will only benefit the richest 5% of the population, at the expense of other needs and priorities in the country.12 Now the ADB is leading the project with the Japanese Bank for International Cooperation, Japan International Cooperation Agency (JICA), the Swedish International Development Cooperation (SIDA), the Norwegian Agency for Development (NORAD), the Nordic Development Fund (NDF), the OPEC-Fund, and the Norwegian NORPLAN as a consultant.

The main political issue related to the MWSP is whether it is the best option for supplying drinking water to the capital and, if so, how it will be done. So far, various studies, including those conducted by the ADB, clearly show that the MWSP is not necessarily the best option, since there are several other options within the Kathmandu Valley. These include the groundwater resources, rainwater harvesting and best management practice over the existing river and stream sources. Another option is the rehabilitation of existing old infrastructure that is regarded as the main reason for the loss of up to 70% of existing water supply due to leakages and inefficiency. However, all decisions have already been made to implement the MWSP at whatever cost and without any regard to the fundamental issues of how the new policies and institutions will be set up and at what price, and how, the water will be supplied to the Kathmandu population.

ADB taking a big chance
After the repeated failures of the World Bank — in the cancelled Arun III and the KGA and the MWSP from which it has pulled out — the ADB has been taking a big chance in monopolising Nepal's huge water and energy sector investment. Despite its gross failures in the implementation of its various policies, e.g. on information, public participation, environment, compensation and resettlement, indigenous peoples etc., the ADB is doing all it can to undermine the existing public institutions and associated welfare policies of the government, in water, energy and other social sectors. The ADB's main objective in the MWSP is guided by the desire to bring in foreign private management of the water supply system. If all goes well for the ADB and other donors in bringing the country into the international water mafia, Nepal will have to face the collapse of its public institutions, moral strength and skills — e.g. the Nepal Water Supply Corporation, which has a duty of providing safe and clean drinking water as a public service.

It is interesting to see how countries like Norway and Sweden, so well-known for their social welfare systems and democratic values, can be equally bad when it comes to their investment and operation for profit in other countries. One can feel ashamed for NORAD and SIDA in this regard. They have not shown any interest and have not even acknowledged the issues raised by the local groups in the Melamchi Valley, or by WAFED in Kathmandu. The same goes for the JBIC, unless it is specifically challenged under the newly developed complaint procedures. There seems to be a collective vested interest with the ADB to go for the dismantling of Nepal's public water authority, diluting development needs and priorities, and creating a good environment for foreign corporations. It is unfortunate that even the Nordic countries, instead of sharing their rich experiences of public service and social welfare, should unhesitatingly join the international financial and water mafia, for the benefit of their national companies and investment agencies.

Local concerns fall to international interests
As in the case of KGA, the people in the Melamchi Valley have been fighting for access to basic project documents for years, but without any significant success. The massive public campaigns and dialogue with the ADB and MWSP officials have produced little information in Nepali. In any case, these Nepali or English information documents, even if fully available, have no real use, since all decisions about the project have already been made. As regard public participation and consultation, as required for the EIA, the road survey, the land acquisition, compensation and resettlement, the development and implementation of the Social Upliftment Programme (SUP)13 there was a complete lack of transparency and democratic processes. The inputs and suggestions provided by the local people during the meetings have never been properly considered or incorporated into the project documents and programmes, making these exercises mere formalities. The local people have totally rejected the SUP, as prepared by NORPLAN, endorsed by the ADB and implemented by the MWSP as inaccurate, inadequate and imposed by the consultants. The people in the Melamchi Valley want to see the SUP thoroughly discussed, designed, and implemented with their full consent, according to local needs and priorities — including social and economic programmes for the poor Tamang communities, who are known for the `sale' of their daughters and/or tolerance of trafficking, due to poverty and illiteracy. It is yet known whether or not there is any budget for comprehensive environmental mitigation plans.

The MWSP also has failed to satisfy the local people in terms of how much water will be required in the Melamchi Valley for their livelihoods and ecosystems and how much water will really be left for diversion. This is an important issue that the local people are confronting about maintaining a minimum, but adequate, flow of water as needed for sustaining the existing irrigation for the most fertile agricultural land, the ghattas (traditional water mills) and other activities, including the needs of future generations. The existing EIA is full of flaws and does not incorporate a vast range of indirect economic and social impacts. The reduction in the flow of existing water will lead to the closure of hundreds of ghattas and irrigation canals, including those funded by the ADB on loans. There will be a loss of electricity in some villages, and many will be unemployed due to the collapse of their cottage industries. There is also no adequate study of, and income generation programme for, over 50 Majhi families — a fish-dependent ethnic group. There is going to be a major conflict in the future over water rights, if these issues are not settled properly, and now. The people in the Melamchi Valley are also demanding a major share of the profit from their freely supplied water from the people of Kathmandu Valley, through a levy to fund local development and mitigate any future impacts. The proposed provision of a minimum of 0.4 cubic metres (400 litres)/second of water flow may not be adequate at all, bringing into question the credibility of the whole scheme.14

The other issues of local concerns include the need for effective and guaranteed provisions for skill development training and employment for the locals, and either no or less use of technicians and labourers from outside. This issue has already generated conflict between the local people and the contractors. In principle, there is a provision for a minimum 30% of local jobs during construction. There is also a fear that Royal Nepal Army may be used to suppress the local voice, since a new army barracks has been set up in the area at project cost. However, the MWSP and the ADB are denying it, and let's hope this will not be the case; although there have, reportedly, already been some incidents.

Denial of alternatives to water supply in Kathmandu
The most important question that the MWSP, and for that matter the ADB and other donors, have not dared to discuss publicly is the existence of much better, cheaper and easier solutions for water supply in Kathmandu. In the first place, no rivers can meet the demand for water supply in the capital if the population continues to grow at in the current rate, which is due to the centralisation of most of the country's scarce resources, illegal migration from India, and the influx of hundreds of thousands of people from Maoist conflict areas. Secondly, there are already huge amounts of groundwater that are yet to be explored and regulated. Furthermore, there is a large potential for rainwater harvesting, including the best management of existing surface water from ponds and streams around the Bagmati River basin. And, thirdly, enough water could be saved by the rehabilitation of old water supply infrastructure and addressing other technical/institutional leakages. So the problem is not the lack of alternatives, but the denial of these alternatives due to the big project mind-set and the role of the water mafias.

Even if the Melamchi is to be considered the only suitable option for water supply in Kathmandu, the MWSP, together with the ADB and JBIC, has a duty to discuss these issues in public and with experts in the country. Unfortunately, there have not even been proper public consultations with the Kathmandu population — the direct beneficiaries or potential victims of such an ambitious and costly project. It is still not too late to do this, since the major project construction work is yet to begin. The recent studies of the donors cannot simply be ignored, even if the opinions of the Nepali experts and activists are to be ignored. For example, the February 2003 study of JBIC clearly says that the `improvement of the [existing] distribution network, even if it is implemented alone, can deliver a better service to customers by distributing the existing water resources through the improved distribution system. Further, by reducing water losses it should be possible to offer more hours of service to customers in areas where the distribution system has not been improved.'

Privatisation first!
There is another highly sensitive issue of equity and social justice in the proposed water supply system in Kathmandu. The price of water is going to be very high. The bringing in of a foreign private operator, or private management, will add extra, unnecessary costs because of the high profit-making approach of the project. There is no provision yet for making water available to more than 30% of the population who are poor and live in slums or have no income. The connection charge is also going to be high `to suppress demand and subsidise consumption tariffs'. The study shows that many will not be able to pay the connection charge. unless it is paid on an instalment basis or included in the tariffs.15

The problem with the ADB and other donors is that they are not really interested in supporting and building the local capacity for water supply at an affordable price. This could range from collaboration among the five municipalities in the Kathmandu Valley, the involvement of the local private sector, and the communities. There could also be local cooperatives. But this is simply not the objective of the donors. They want to force Nepal towards the ultimate privatisation of its water supply system and the gradual dismantling of the Nepal Water Supply Corporation in favour of foreign companies. Due to strong opposition, from within and outside the government, the ADB is becoming flexible regarding absolute privatisation. It is now proposing a public-private partnership through international management contracts, as in the case with Nepali banks. The ultimate results and impacts, however, will be the same — the sale of water for `profit' in place of `service' and the virtual collapse of public utilities and their duties. What Nepal really needs is the reform of the existing Nepal Water Supply Corporation, with full autonomy from donors and the government, as well as the involvement of local municipalities, the private sector, and community cooperatives. What is also important is the philosophy and approach to water as a `social good' and a `human right', and not as an `economic commodity' for corporate profit.16 One also needs to take into account the very strong social, cultural and religious value of water in Nepali society as a free gift of nature, not something that can be privatised and commercialised for profit and at unreasonable cost.

Comparative findings
These two case studies are Nepal's most widely debated donor-driven development projects — one is completed, the other is in process. Based on the above details of these projects, the following conclusion may be drawn regarding how international aid agencies operate in Nepal in violation of the very basic principles and practices of good governance and human rights:

1. Right to information
The right to information is a human right, recognised by the International Covenant on Civil and Political Rights and many other international instruments. This is also a fundamental right under the Constitution of Nepal and has been widely expanded in various public interest cases. The Final Report of the World Commission on Dams17 is another international document that has emphasised the need for free and prior informed consent of local people and indigenous communities, for example, in all water and energy development projects. These must be respected and implemented by all those involved in financing such projects.

2. Right to meaningful public participation
Free and prior informed consent must be obtained as evidence of effective and meaningful public participation

3. Environmental Impact Assessment and mitigation measures
The conduct of EIA is the most important element in deciding whether a project is good or bad. The main proble m with the EIA and the mitigation measures in the above studies has been the complete lack of access to information and public participation. There was also a lack of recognition of local ownership with regard to the implementation of the mitigation measures.

The affected people and the local communities should have adequate control and ownership over the EIA process and the development and implementation of mitigation plans. All the related costs should form part of the projects, including the mitigation of post-project impacts.

4. Compensation and resettlement
The compensation and resettlement measures in both of these projects have been both arbitrary and inadequate. Most of the compensation has been paid in cash with no offer of land for land for compensation or resettlement. Melamchi is the first project in Nepal with a resettlement component, due to the ADB policy. However, no consideration has been given to guaranteeing at least the same, if not better, living standards, for people displaced by the projects. The affected people must be given the choice of cash or land, and there must be adequate representations in the decision-making bodies that decide the amount and methods of compensation and/or resettlement plans.

5. Sharing benefits
One of the negative aspects of the foreign funded projects is the denial of benefits to the local people and communities upon which the success and future of such projects depend. The authorities should first distribute the project benefits to the affected people and communities. In addition, they also need to guarantee a certain amount of profit for long term local development and environmental mitigation, in addition to overall district or village-level development.

6. Freedom from destructive conditionalities
None of the above projects have come to Nepal without the overall vested interests of donors being reflected in severe lending conditionalities. They range from compulsory global procurement provision to tariff increases and privatisation. Conditionalities imposed on such infrastructure projects largely ignore the use of local resources and capacities, as well as local needs and priorities. As a result, the projects become unnecessarily costly and are also dependent on foreign donors and consultants throughout the project cycle.

Conclusion and recommendations
The KGA and the MWSP cases demonstrate that no project goes to any country unless it meets the donors' criteria, which are largely guided by economic globalisation and corporate rule. Donors pay no attention to any internationally agreed framework of human rights and democratic governance for sustainable development. They do not care about domestic laws and regulations, let alone the needs and priorities of the people. When the IFIs, because of public pressure, do adopt such policies and mechanisms, it is simply a cosmetic exercise. What all these aid agencies need to honestly recognise is that no `governance' can be `good' without being `democratic'. `Good' and `democratic' governance cannot be achieved without the full recognition and implementation of basic human rights — civil, political, economic, social, environmental, and cultural. The violations of these human rights and democratic principles by aid agencies, as in the case of Nepal, will certainly bring more poverty, more debt burden, and the collapse of national institutions that are the foundations of that society, as against the stated goals of national or local development... There are alternatives for local development and national prosperity, based on locally owned democratic development, rather than the present unfair and undemocratic rules of the game. The people and the communities are the best alternatives to globalisation and corporatisation. The lack of a human rights approach to development and aid management will contribute to more violent conflicts, civil war and global population movement. What we urgently need is a more principle-based governance in the international aid system, which is neither above international human rights law nor immune from responsibility for their wrong polices and development crimes.

Nepalis can continue to be poor as domestic servants in India, security guards in Hong Kong, Brunei and on foreign ships and brave, but badly exploited, fighters in the British army. The rest of Nepalis will be forced to live in more and more poverty and related conflicts. But this should never be the destiny of a prosperous and dignified country in the 21st century. International development aid should primarily be for the recipient countries and their people, not the local elites and international business.
Nepalis never got a chance to develop themselves but rely on the sympathy of the donors even for a small hospital or drinking water supply.

Notes

1 Nepal Policy Institute (NPI) is a research, training and advocacy organization involved in providing critical inputs for policy reform in Nepal's public sector policies, membership to the WTO and other regional free trade agreements, and its relations in bi-lateral and multilateral `donors' and lenders, including the United Nations agencies. It also promotes the incorporation of human rights and environmental principles into national and inter-national policy-making, e.g. Nepal Development Forum (NDF) for the real achievement of Millennium Development Goals. NPI also participates in national and international campaigns to prevent the adverse effects of the existing national and global economic and trade policies and programmes, the international financial and trade institutions, and transnational corporations.

2 The `Gurkhas' or `Gorkhalis' are named after the old Gurkha Kingdom in the western region of Nepal. It is now one of Nepal's 75 districts.

3 Upreti, BR (Dr.), `Forty point demands of the Maoists', The Price Of Neglect: From Resource Conflict To Maoist Insurgency In The Himalayan Kingdom, Bhrikuti Academic Publications (2004), Kathmandu, p. 368.

4 The World Bank, Nepal: Country Assistance Strategy, 2004-2007, Report No. 26509-NEP, Washington, DC (2004), p. 9.

5 The US, UK, Belgium and India are the main countries providing military assistance and exporting arms to Nepal. These are being grossly misused by the autocratic King and the Royal Nepal Army over the past two years to cross all the democratic and revolutionary forces.

6 See for details, O S Saasa, G C Gurdian, Z Tadesse & G Siwakoti `Chintan', `Democratic Governance', Improving The Effectiveness of Finnish Development Cooperation: Perspectives From The South, Ministry of Foreign Affairs of Finland, Helsinki (2003), pp. 137-167 & 178-180.

7 See, `The Shelving of Arun III in Eastern Nepal', Encyclopedia of Sustainability: Successful Campaigning against Large Dams, Both ENDS, Amsterdam at www.bothends.org, and also, `Nepal: Arun III Proposed Hydroelectric Project & Restructuring of IDA Credit-2029', Inspection Panel Investigation Report, The Inspection Panel, Washington, DC, 1995.

8 To know more about the ADB, see, The Asian Development Bank: In Its Own Words, an analysis of project audit reports for Indonesia Pakistan, and Sri Lanka, SG Fried, S Lawrence & R Gregory, Environmental Defense, Washington, DC (2003); and Focus on the Global South, An Overview of the ADB's Decision Making Processes and Policies: Good Governance or Bad Management, Bangkok (2002) at www.focusweb.org

9 The author was the main claimant.

10 See, also for various WAFED activities, www.wafed-nepal.org

11 To know more about the World Bank's equally disturbing policies, see, `Water Resources Sector Strategy: Strategic Directions for World Bank Manageent ', The World Bank, Washington, DC (2003) and `Gambling with People's Lives: What the World Bank's New `High-Risk/High-Reward' Strategy Means for the Poor and the Environment', a report by Environmental Defense, Friends of the Earth & International Rivers Network (2003).

12 `The answer is no', an interview with the World Bank President Ken Ohashi, The Nepali Times, July 19, 2002, Lalitpur, p. 1.

13 SUP-identified five key areas of activities are: local income generation, health, education, electrification and buffer-zone management with the budget of about US $6 million. It is a separate component from the EIP mitigation plans. It was prepared and is being supervised by NORPLAN.

14 See for details, M. Bhattarai, D. Pant & D. Molden, Socio-Economics and Hydrological Impacts of Inter-sectoral and Interbasin Water Transfer Decision: Melamchi Water Transfer Project in Nepal, selected paper presented at `Asian Irrigation in Transition-Responding to the Challenges Ahead', April 22-23, 2002 at Asian Institute of Technology, Bangkok, Thailand.

15 A Etherington, J Wicken & D Bajracharya, `Preparing for Private Sector Management of Kathmandu Urban Water Supply' (Discussion Paper, Draft), September 2002, p. 15.

16 See, also, R Stavenhagen, Needs, Rights and Social Development, Overarching Concerns, Paper Number 2, United Nations Research Institute for Social Development, Geneva (2003).

17 The World Commission on Dams, Dams and Development: A New Framework for Decision-Making, Earthscan Publications Ltd., London and Sterling, VA (2000), also at www.wcd.org

Source: The Reality of AID (ROA) - 2004, An Independent Review of Poverty Reduction and Development Assistance published in Philipines in 2004 by IBON (Page 114-124)

URL:

http://www.realityofaid.org/roareport.php?table=roa2004&id=64