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Foreign Aid Funding Terrorism in Nepal

Foreign Aid Funding Terrorism in Nepal

By Vivaswan Kumar

How can foreign aids or loans to a government having no credible accountability and respect for human rights, and handed over to a terrorist group of yesteryear whose activities are evident as unabated, be taken differently than funding Taleban or Al Qaeda or Khmer Rouge regime ?

Until and unless Nepalese government conforms to democratic values, handles the grants and loans with proper accountability, respects human-rights, ensures the rights of all groups, investigates into all human-rights violations and ends the culture of impunity, Nepal should be considered for putting under economic sanction by international community and donor agencies, as remedial procedure to prevent Nepal from turning into a fertile breeding ground of terrorists.

THE responsibilities of donor agencies do not end with approving of loans or funds for a country or an organization, but rather a duty is added as well, to monitor how those loans or grants are spent. It is duty and responsibility of donor agencies to monitor whether those funds, though given for foods, are spent on buying arms and killing people, or are just siphoned to overseas bank accounts of ministers.

1. Implementation and Accountability Issues

Several donor agencies who invested their time to investigate the use of their funds have found them not being used for the intended targets. For example, many grants for poverty reduction and micro-credits have not reached to the targeted grassroots, and many other projects were "drawn" to the area of influential leaders, rather than implementing them where they were really needed. One can easily find out from the records of working areas of the implemented projects that more projects are active in already developed areas like Sunsari or Morang, than in backward areas of Siraha or Saptary. Further, if you look at the staffs involved in such foreign invested projects and international organizations working in Nepal, they seem to be overwhelmingly in the hands of ruling-class people due to their easy access to the government and power structure, and indigenous groups, Dalits and Madheshis are heavily under-represented. For example, according to a survey report by UNDP, participation of Madheshis in international organizations and projects is only 5%, whereas that of Pahadi is 81%. Such a disparate representation in these organizations effectively allows ruling-classes people to "hijack" the projects to their areas, disregarding the real needs of other areas. Also, the reports about various issues prepared by them in these organizations tend to fill-up with the attitude of ruling-classes people, and often ignore or underestimate or even suppress the issues of minorities, indigenous people, Dalits and Madheshis. The issue of under-representation and marginalization of other indigenous groups and Madheshis being largely unknown or ignored by the world before the recent uprising is the consequential evidence of this.

The 2006 World Bank report signals significant deterioration of "voice and accountability" in Nepal in case of project implementations. The report evaluates the "Monitoring and Evaluation Reports" as of lowest category of negative practices with score of 32 (< 33 negative, 34-49 mostly negative, 50-66 mostly positive, and > 67 positive), and the "Public and Legislative Involvement" as the lowest of all countries with score of 7%. Besides, Nepal has CPI (corruption perception index) of 2.5 making it to stand at 117th position in a list of 158 groups of countries. And this CPI score relates to the corruption as seen by business people, academics and risk analysts who are still mostly affiliated with government themselves in Nepal, leaving the possibility of real CPI score to be much lower (highly corrupt).

One example of sheer lack of accountability can be seen in recent allocation of funds by government for Maoists. Regarding the funds released by the government to Maoists at various intervals for ration, logistics and other needs of PLA personnel, finance minister Dr. Ram Sharan Mahat has said that the government has no knowledge of how the Maoists are spending money, further adding, “the Maoists have not submitted the details of expenses incurred so far from the fund.” The government has already funded hundreds of millions rupees to the Maoists. Whether it be from public fund or from donor agencies, if the government is funding these Maoists, who were regarded as terrorists up to few couples of months ago, isn't it the responsibility of the government to take the complete details of how Maoists have been spending the money and make it transparent? On the one side, finance minister have claimed to release more than sufficient money for the Maoists to feed for several months, whereas Maoist cadres in the camps have claimed not to get sufficient amount even for the food and had left the camps in thousands, and yet on the other side, with the cheque of hundreds of thousands rupees, alleged Nepalese Maoist is arrested while purchasing weapons from the terrorist outfit Laskar-E-Toiba in the Indian state of Kashmir by Indian army.

2. Human Rights Violations

There have been innumerable cases of human-rights violations during the decade long conflict in Nepal, both from the government side and Maoists. Some of them are well documented and acknowledged as well, as in OHCHR and AI's reports ( and ). More than 13000 people were killed, hundreds disappeared and thousands others were displaced. There have been hundreds of cases of arbitrary arrests, detentions, disappearances, abductions, tortures and summary executions, and innumerable cases of extortions. There have been several heinous crimes to kill innocent civilians like in Madi incidences. "Bulls on Parade" policy of some of donors on both sides during the conflict just accelerated and elevated the human-rights violations to greater heights.

The human-rights violation by the government during the recent Madheshi uprising is also not unknown any more. The government deployed thousands of its armed police forces, who used live bullets and excessive force to suppress the voices of millions of people. More than 30 people died with hundreds others injured from the bullets of government's forces. The government's forces even attacked hospitals, and manhandled hospital doctors and staffs.

Maoists, who are now a part of the parliament, have not stopped violating human-rights. Looking at their activities even for last one month (a list is available at:, it seems to be soaring rather than showing any sign of slowing down. And now, they seem to have been institutionalizing the terrorism, as the government has been quite protective about their activities, and it has been argued whether these crimes should be attributed to the Maoists or to the government. After all, Maoists are the ones who have their big (and several times the final) say in the parliament and the decision making process of the coalition.

3. Culture of Impunity

Whether it's financial misappropriation and corruption or violation of human rights, barely any case has been seriously considered by the state.

According to the government's latest report, 1917 blacklisted borrowers have defaulted Rs 32.23 billion by the end of fiscal year 2005/06, but still there has been no effective action taken against such willful defaulters, and many of these defaulters have been involved in cabinet and parliament as well. The default loans account for a third of Nepal's annual revenues. Such lack of punishment for defaulters has grave impact on marketing system. In the words of Ken Ohashi, the World Bank chief in Nepal, "The defaulting of huge bank loans conveys the message that the rich do have access to thousands of dollars and they are free to do anything with that loans, whereas the poor people are deprived of a small amount of credit." The foreign managers of banks working in Nepal have also complained that strong political affiliation of such defaulters have made it virtually impossible to force them to pay back their loans. Their efforts towards forcing the defaulters to pay back the loans have been unsuccessful several times in the past due to the government's rejection or protection (e.g. effort of CEO of NBL).

Corruption cases are even more worrying, as barely any ministers can be isolated from it including the premiers. Former prime minister Sher Bahadur Deuba was once convicted in US$464 million Melamchi Water Supply project, and multi-time PM Girija Prasad Koirala has been also involved in a number of corruption cases including Lauda Air corruption scam. Ministers have been involved in past of misusing NPR 4 million from prime minister's relief fund to its political supporters, under the guise of releif aid to Maoist victims. Whether it's the case of former minister Chiranjiwi Wagle for making NPR 30 million by misusing his authority, or Ramagya Chaturvedi, the head of Nepal Oil Corporation for illegal earning of more than NPR 70 million, or Keshar Jung Khadga of Mechi Cusoms Office for corruption case of US$144000, all of them escaped court's premises due to their political power, moments before the verdicts were delivered. Currently the court has more than 150 corruption cases, involving many senior politicians, ministers, administrators and police officials, but it's highly unlikely that any of them will be ever prosecuted, as now all the parties themselves have ganged up in the government.

When royal government comes into power, for some time, people hear buzz about punishing political leaders of parties, and when these parties come into power, they hear buzz about punishing royal ministers. Those actions are more or less politically-motivated maneuvers or a plot to deceive donor agencies that the government is doing something, but at the end, none gets ever punished in this game. These ministers and political leaders live a life as above-the-law creatures. Even PM Girija Prasad Koirala had refused to appear in court to defend against charges by CIAA. Not only that, when his appeal to supreme court went against him, he went on defying the orders of supreme court and verbally abusing and insulting the supreme court itself! These leaders and royals consider themselves above all the jurisdictions and legislations.

Regarding human-rights, it is not unknown to the international community that enormous human-rights violations during a decade long conflict which had death toll of more than 13000 with hundreds other gone missing are not being seriously investigated by the government, despite the repeated requests from bodies like OHCHR and Amnesty International; punishing any of them is far-away thing, they are walking in public openly and boasting their deeds.

Whether it's case of heinous crimes like Madi incidence or issues of hundreds of disappeared ones both by Maoists and the government, the government is not serious at all to take any actions. Maoists are still wielding their arms in public and killing people even after joining the parliament. They are to join the government within few days, but their terrorism seems soaring. Even from the recent activities within a last one month period or so, it becomes completely evident that they are not respecting human-rights at all, and have continued numerous cases of terrorism including attacks on mass-meetings of other parties, murder, abduction, extortion and forcing children into PLAs and their mass-gatherings. More importantly, the government is giving protection to all these crimes, rather than investigating the cases and punishing the criminals. Whether it's Nepalgunj's incidence where police themselves were found to be involved in looting and attacking Madheshi ethnics, or Lahan's case where Maoists shot a teenager, seized the body and forced to cremate, or several other cases of public attacks and killing by Maoists after that, none of them are being seriously investigated. The case of killing of more than thirty people in recent uprising in Madhesh by "excessive use of forces" by the government has gone to limbo, despite a number of requests for investigation from the international bodies as well.

4. Lack of Democratic Values

Some of the incidences/issues that reveal the stance of the government and its coalition towards (un)democratic values are given below.
• The current parliament is not elected one, but major parties have divided the seats among themselves and formed the interim parliament. But decisions even in this parliament are just dictated by less than half a dozen major leaders only. The parliament has been there just for okaying things that they decide. Such unelected interim parliament has been taking many critical decisions without feeling any need for public consultation, which is completely undemocratic.
• The rights of freedom of assembly and free speech have been clearly violated frequently. For example, when MJF leaders voiced their opinions against the interim constitution through a peaceful public assembly in Kathmandu, they were put behind the bars.
• The journalists have been attacked by the government's forces (IFEX:, raising the concerns about press-freedom, unless they publish materials in support of the government.
• The interim constitution made without elected assembly has been claimed to give dictatorial powers to the prime minister (Scoop:
• There have been efforts to provide no opposition at all in the parliament. In the words of Prachanda, 'It will be unacceptable to our party to incorporate provision to have opposition in the interim parliament.' How can an unelected parliament without opposition be called democratic?
• Current parliamentarians have not shown only undemocratic and above-the-law behaviors, but are more inclined towards the way of terrorism. They have found attempting to enter parliament with weapons. MP Lokendra Bista threatened members of parliament belonging to other parties with a pistol inside the parliament, challenging, 'I had the weapon registered with the UN and brought it here. If you have the capacity to take action for my rough remarks, you can arrest me.'
• A bill on political parties has been presented in the interim parliament which makes it illegal for political parties to announce bandh, which effectively means ban on voicing opinions against the government. This is somewhat akin to how Panchayat system banned political parties. This bill suppresses the rights of all minorities and Madheshis to raise their voices, and clearly represents dictatorship of major parties in the coalition.
• There have been numerous attacks on mass-meetings of other parties, both by Maoists and other parties' activists. This clearly violates the democratic right of public assembly.
• Rather than addressing the problem through dialogues, the voices raised by millions of Madheshis in recent uprising have been suppressed by mobilizing thousands of armed police forces and excessive use of forces, killing dozens of people and injuring hundreds others. This strategy of using forces to full capacity and crushing the voices of people is clear signal for dictatorship.
These all facts show that the government is not respecting democratic values, and is mostly leading towards the formation of an autocratic regime.

5. Foreign Aids

Foreign aids given to such a government, which does not respect human-rights and democratic values and is not accountable, will effectively nurture the dictatorship and terrorism and will lead to more corruption, more human-rights violation, and possibly even genocides. It will only allow the terrorists to use the funds and other resources under the cover of Nepalese government, and will turn Nepal into a fertile breeding ground of terrorists. Even funding specifically for certain projects in area like education is dangerous at such time, as it allows the government to essentially divert its funds, which it would have otherwise spent on fulfilling those basic needs, to buy arms, recruit cadres and nurture terrorism.


Therefore, until and unless Nepalese government and its all coalition partners conform to democratic values, handle the grants and loans with proper accountability, respect human-rights, ensure the rights of all groups, investigate into all human-rights violations and cases of disappearances and end the culture of impunity, Nepal should be considered for putting under economic sanction jointly by all international communities and donor agencies. Otherwise, it will take no time to turn Nepal into a fertile breeding ground of terrorists, and the ripple of their atrocities and heinous crimes will not be confined within the border of Nepal, but will shake the opposite side of globe as well. The case of Taliban regime in Afghanistan can just serve as an example.

Also, other diplomatic solution regarding Maoists, as per the tripartite agreement among Maoists, Nepalese Government and UN, is on the verge of failing . Despite Maoists had signed the comprehensive peace deals, they have already breached the agreement, by leaving camps in thousands, still possessing illegal weapons, not submitting all weapons and still continuing terrorism without showing any sign of slowing down. This shows the possibility of effectively "capturing government with arms" by Maoists whether it be in visible and bloody form, or just an invisible "coup" labeled with different deluding political slogans. In such a circumstance, economic sanction can prove a better and effective means to convert them into a rule-abiding political party respecting human rights and democratic values.


(The article was also published at )

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