India and China lead list of earthquake aid donors to Nepal

China and India step ahead of the developed world in bringing post-earthquake aid to Nepal, but delivery of approximately half the assistance in the form of loans raises concerns

Nepal is set to receive an additional $3 billion from other countries to help reconstruction after the 7.9-magnitude earthquake of April 25 that killed an estimated 10,000 people.

The amount, pledged at a donors’ meeting with the government in Kathmandu late last month, is less than half of what will be needed, according to official estimates. Approximately half the funds will consist of grants, and the rest loans.

India and China have overtaken developed countries as the big donors, with India pledging over US$1 billion (6.21 billion yuan) and China over $700 million (4.35 billion yuan). In terms of donation size, then came the Asian Development Bank and the World Bank, followed by Japan, US and the European Union.

China and India both sent their foreign ministers to the donors meeting. Sushma Swaraj, India’s foreign minister, said, “We are ready to put our shoulders to Nepal’s efforts and no stone would be left unturned to help.” Chinese Foreign Minister Wang Yi said, “We should take this as an opportunity, and China being a good neighbour will help Nepal to rebuild.”

Before last week’s meeting, donors had already pledged around $1.4 billion (8.7 billion yuan) to help reconstruction. “The level of participation and pledges encouraged us and raise our hopes,” said Narhari Acharya, Nepal’s Law Minister.

The donors’ meeting was preceded by altercations between aid agencies and Nepal’s government.

Directly addressing the concerns of aid agencies, Prime Minister Sushil Koirala said at the conference, “We will rebuild Nepal together and Nepal is friend of all. We assure you that no funds will be misused.”

After the conference, there are two areas of debate in Kathmandu. First, when will the pledges be kept? In this regard, the experience of Nepal – or any other developing country, for that matter – does not provide grounds for optimism.

Second, should so much of the money come as loans? This has evoked mixed reactions, especially in social media. Many observers feel Nepal has no choice but to take these loans. However, it should ask lenders to exempt the government from repayment of loans taken in the past.

“Supposed not to look a gift horse in the mouth but 50% loans not gifts, surely not good enough – so demand debt forgiveness,” tweeted David Seddon, Nepal expert in the faculty of University of East Anglia in Britain.
This article appeared originally on chinadialogue’s sister website and can be accessed here.