Threat of conflict not from ethnic groups but control over resources
Dominic O’Neill is the head of the British government’s Department for International Development (DfID) Nepal. O’Neill, who arrived in Nepal in August, has previously served in Yemen, Iraq and Sierra Leone. A fluent Arabic speaker, O’Neill’s new passion is learning Nepali. In an interview with Rupak D Sharma he talked about challenges faced by Nepal in development process, bureaucratic hurdles that donor agencies face, the ongoing peace process and DfID’s support in Nepal’s federalism effort.
You’ve been in Nepal for six months now. What do you think are challenges in the country’s development process?
I think there are four key challenges, excluding peace process. One is economic stability. I don’t think economic growth, investment and jobs have been given sufficient attention. Many politicians and political parties have assumed that at the end of the peace process there will be an economy that will support and sustain jobs. That is not a safe assumption. Second is the rule of law and corruption. Without a strong rule of law, it is again going to be very difficult to achieve sustained and peaceful development as lack of this means ordinary people cannot get access to justice and investors will go away. Corruption, on the other hand, will erode people’s trust in their leaders.
Third is the inclusion. This means marginalized groups should be fully included, not just politically, but socially and economically as well. This is essential for peaceful development. And the final is the risk of climate induced disasters. You hear stories about glacial lakes about to explode. To reduce the impact of disasters related with climate change, individuals and concerned organizations, along with the government, should take necessary steps. Otherwise, all of the gains made as a result of the peace process and through decades of development could be thrown back.
You have identified lack of inclusion as one of the hindrances to development. Now one of the options on the table is dividing our country based on ethnicity. Will this measure help or hinder creation of a truly inclusive society?
Nepalis know what sort of settlement works best for them. We (donors and development partners) would accept whatever settlement is decided upon, but the federal structure needs to be viable and needs to take into account all different aspects of geography, ethnicity and economic potential of areas. I don’t know the country well enough to say this is the structure you need, but we, along with British Embassy, encourage all to work around these principles. But this is something that Nepal has to decide on.
There are claims that donor agencies, like DfID, in the name of strengthening ethnic communities, are fuelling tensions in these groups. And because of this the state is being divided based on ethnicity. What is your take on this?
I think that is overstating the impact development partners have in the country. First of all, we take great care to do no harm. And I don’t think Western donors have that kind of influence to shake the society to that extent. Undoubtedly, not just the UK, but lots of donors have supported marginalized groups. But that is in response to demands placed by those groups. During my six-month-long stay here, I’ve developed an understanding that what is happening here is a home-grown movement. But the threat of long-term conflict doesn’t come from ethnic groups.
It comes from what control one has over resources. I’ll give you an example. The work that we have supported in forestry means some of the most marginalized and poorest communities now control their own land resources. This, however, does not mean we started or concluded this process; we only supported it. Nepal should understand that people want control over their environment so that they can improve their livelihood and feel secure about their future. So whatever federal structure is formed, it needs to take these aspects into account.
The job of creating a federal state needs substantial investment, doesn’t it? How is DfID going to support this process?
Yes, it needs substantial investment. We are supporting the government to do analytical pieces of work. But we are also considering working with the Ministry of Local Development and other development partners to ensure that once the federal structure is agreed upon, there are sufficient resources to get the federal states established.
Here, we are not only talking about infrastructure of a new federal government, but about systems that need to be in place to ensure transparency and accountability. There will definitely be support from donors and development partners in this regard. But we haven’t had this discussion directly with the government as we are waiting for the final federal structure. But, yes, there is recognition that it will cost a lot of money.
You have pledged 331 million pounds for Nepal over four years till March 2015. Is the promise still intact given Britain’s current economic problems?
It’s very much intact and our government is taking very courageous decisions in this regard. If you read the papers there aren’t many people who are happy about the decision to give money away to other countries, but our secretary of state is winning people’s heart and explaining why development assistance is important, not just for Nepal, but to broader international community. One of the reasons why we are continuing support is that we are getting very good value for our money considering results like 230,000 job creation, 108,000 women getting access to fertility treatment, four million people having increased resilience to disasters, among others. We are getting all this for 331 million pounds. It’s much cheaper for us to come to a country and do this than the international community sending a humanitarian operation in, say, ten years time.
How much are you funding for the peace process?
Our secretary of state recently announced additional 20 million pounds for peace process over the next four years. This money will be made available through the Nepal Peace Trust Fund (NPTF) and the UN Peace Fund for Nepal. That’s in addition to 15 million that we spent since 2007 through the two bodies. The money that we have allocated can be used in agreement with donors and the government on any activity related to the peace process, except voluntary retirement (of Maoist combatants). International community is clear on not contributing to those payments because it is the government’s responsibility.
But we are ready to support what is currently called the rehabilitation program. However, this program shouldn’t be called rehabilitation. It needs to be called resettlement. I’m sure if somebody told me I’d have to go to rehab, I’d say ‘no thanks’. We are currently encouraging the Ministry of Peace and the NPTF to come up with a well designed program on resettlement. The money can also be used for national and local elections as well as in development of federal states. But to secure the fund, the government needs to come up with well designed projects. If not, the money will be diverted to other sectors.
Do you have a breakdown of how you are going to give away 20 million pounds over the next four years?
Not yet. But we can be flexible. For instance, if there is an urgent demand for resettlement process, we will try to bring as much fund forward because our ministers know the importance of this matter.
Do you think distributing money through the government is effective in delivering results?
I don’t think this is the most effective distribution channel in Nepal because the government does not have reach to 100 percent of the population. That’s why we are distributing only 35 percent of our fund through this channel. But 100 percent of our programs get government approval. If the government wants us to put more money through national systems it has to improve accountability and transparency. It has to demonstrate it is able to tackle corruption properly, investigate allegations of corruption effectively and bring people to justice when they are found to be guilty, without impunity. We cannot spend more money through the government unless our taxpayers are convinced that their money will be properly looked after.
You’ve identified economic stability as one of the pillars for Nepal’s sustained development. What exactly is DfID doing in this area?
First of all, you need a stable investment environment to lure foreign investors who have a lower risk threshold. We, through the International Finance Corporation, an arm of the World Bank, are supporting this initiative. The other issue which we are very keen to assist the government in is access to energy. No investor is going to come to Nepal if you have 18-20 hours of load-shedding. That is a critical blockage to investment and we are trying to encourage the government to progress with hydro deals and get investors. Another important aspect of economic stability is labor market reform.
We are also supporting direct job creation programs, which include generation of 60,000 jobs in the short term and 170,000 jobs in the long term in sectors like tourism, agriculture and forestry. We are also working with the IFC to help SMEs gain access to finance of up to Rs 50,000. Recently, when our secretary of state was here, we also had a very good chat with the CEO of the Investment Board and senior private sector leaders and we are very keen to support in the area of investment.
Do you think all of your programs are going to the target groups as DfID itself has acknowledged that good programs that reach the poor are hard to deliver?
It is difficult to work in Nepal because there are lots of bureaucratic hurdles. That’s why we have a large team working over here because we believe we can only deliver by having people on the ground. Our secretary of state, who recently visited Nepal, also checks how we are delivering. We have an independent commission for aid impact that reports directly to the parliament. They came in September and looked at what we were doing to tackle corruption. So we are regularly tested by institutions in the UK.
You said you have to face bureaucratic hurdles while working here. Could you please categorically mention what they are?
What has surprised me—compared with lots of other countries where DfID is based—is that you have lots of qualified civil servants, who have international exposure but are working in a very difficult situation. They must be frustrated with their own bureaucracy as well. I’m sure if there was political stability, they would be able to deliver more effectively.
You mean the main problem is political instability?
Yes, definitely. It is very difficult when you have new political masters coming in time after time. There are other problems as well, but one that I’d like to mention is regular changes in the civil service, especially in the senior level. That causes us great problems. The senior people in the government—the secretaries and joint secretaries—should be given sufficient time to deliver their agendas. And three to six months is not sufficient. In the UK, it’s five years. The other concern is the allegation of corruption linked to those changes in the bureaucracy. This is something that the government has to tackle urgently.
We would like to see the CIAA carry out a full investigation into these allegations. We know it happens in other countries as well but it is very damaging. It damages the confidence in the government and creates resentment and it does not help in the overall peace process and peaceful development.