The Chair of the Committee, Rt Hon Malcolm Bruce MP, said:
"In the long run UK aid in Nepal will be judged by its success in helping to reduce poverty, averting the risk of reverting to conflict, and paving the way to sustained development. In the right political circumstances, the country has significant economic potential."
Nepal is the poorest country in South East Asia and the fifteenth poorest country in the world. The UK is the largest bilateral donor in Nepal and will be providing £172 million over the three years to 2012. The Report says that the Department for International Development (DFID/UKAid) must ensure that its assistance is targeted towards the poorest people and those least capable of accessing services.
The Chair said:
"One in three people in Nepal lives in poverty. The ten-year conflict there was caused at least in part by poverty and exclusion, based on ethnicity, gender, caste and religion. These inequalities persist and those who are least vocal or least able to understand the system suffer the most.
"Failure to assist the millions of people living in the most dire conditions will result in the Millennium Development Goals being missed, both in Nepal and globally. DFID Nepal has implemented some very effective programmes, particularly to support livelihoods.
"It now needs to ensure it has more carefully tailored projects which meet the needs of the most vulnerable people, whom other aid interventions have failed to reach."
Despite the disruption and suffering caused by the conflict, the people of Nepal have shown considerable resilience. Nepal has managed to make some progress on a number of poverty indicators. However, millions of people still lack basic services, particularly health care, and find it difficult to earn a living. Access problems are exacerbated by the mountainous terrain.
The Chair said:
"We saw for ourselves that some good progress has been made. For example, DFID has contributed to halving the maternal mortality rate over the last 10 years. But until women are treated as equals in Nepal, and maternal care is given the priority it deserves, thousands of women and babies will continue to die each year.
"As well as funding improvements in health care, the UK is supporting broader measures to reduce gender inequality. These include tackling domestic violence and promoting employment for women. DFID should be commended for this and should continue to prioritise this important work."
Hunger and food insecurity is a chronic problem in Nepal with 40 per cent of the population unable to meet their food requirement. DFID helps to address urgent food needs by funding the World Food Programme but longer-term measures are also required. DFID has recently published a new Nutrition Strategy.
The Chair said:
"Half of all children in Nepal are malnourished and over 1 million people are reliant on food aid. We are pleased that DFID has published a new Nutrition Strategy. We have long argued for this. Nepal is one of the six focus countries for the Strategy. We hope that its implementation will make a real contribution to reducing child malnutrition and dependence on food aid."
The report highlights the risk of post-conflict states falling back into conflict within five years of a peace agreement. The Comprehensive Peace Agreement was signed in 2006 but the political situation in Nepal remains fraught.
The Chairman said:
"The parties in Nepal are yet to reach agreement on a new Constitution, a new federal structure and the future of the 20,000 Maoist ex-combatants. It is for the people and Government of Nepal to resolve these issues. The role of the international community must be to support the mechanisms set up under the Comprehensive Peace Agreement to facilitate a long-term solution, ensuring that the voices of the many and varied communities in Nepal are heard."
DFID’s new focus on fragile states includes a commitment to treat justice and security as a basic service. The importance of this is clear in Nepal where the people have identified security as their top priority. However, corruption, impunity and poor governance undermine security and prevent people having access to formal justice systems.
Although DFID is supporting some projects in these areas, it needs to move quickly to agree a broad justice and security programme with the Government of Nepal, which will address the issues which affect people’s everyday lives, such as criminality and the weakness and ineffectiveness of the police, the report said.
DFID must also ensure that it has robust mechanisms in place to protect its own programmes from fraud and corruption, the Committee added.
Climate change threatens Nepal’s development. The predicted impact includes more rain during the monsoon and less during the already dry winter. Although the precise timescales have been disputed recently, melting of the Himalayan glaciers will increase flood risks in Nepal and the wider region in the short term. In the longer term the loss of ice cover, combined with changing rainfall patterns, could lead to increased strain on water resources.
The Chairman said:
"In developing countries, tackling climate change diverts resources which could be used for poverty reduction and development. DFID has supported Nepal in drawing up its National Adaptation Programme of Action. It must now help Nepal to access international funding to implement adaptation measures and encourage the Government of Nepal to make tackling climate change a policy priority."
Nepal will also provide an interesting test of the effectiveness of the new UKAid brand, as it is one of the countries in which the new logo is being trialled.