Nepal received only 60 percent of the total commitment for Aid for Trade (AfT) program during 2009 due to the country´s weak capacity to utilize external assistance.
Though assistance worth $292.5 million was promised to Nepal under the AfT, donors released just $173.5 million during the period. Nepal had received average external assistance amounting to $170.36 million during 2002 to 2005.
Commenting on the huge gap between aid commitments and actual distribution, Chandra Kumar Ghimire, joint secretary at the Ministry of Commerce and Supplies (MoCS), said Nepal received just 0.07 percent of the total global AfT or 2 percent of total AfT allocated for Asian countries, despite the country´s commitment for trade mainstreaming through national policies.
“We have no exact data on AfT to Nepal and its distribution in different sectors,” said Ghimire.
Officials of the World Trade Organization have outlined resource mobilization, trade mainstreaming and impact on ground level are the major indicators on effectiveness of AfT in Nepal.
Under program-wise distribution, AfT flow in economic infrastructure was recorded at $118.95 million against the commitment of $227.17 million. Similarly, a disbursement worth $494,000 was made for trade policy and regulations against the commitment of $2.36 million. Similarly, donors provided only $54.10 million for building productive capacity. The commitment for the purpose was $62.96 million.
Transportation sector is the largest recipient of AfT with its share standing at 45.7 percent of the total flow, followed by energy sector that received 31.7 percent. Banking and financial service sector received marginal 3.5 percent, whereas industrial sector got 3.9 percent of the total aid received.
The World Bank has stood as the major donor for the promotion of Nepal´s international trade, despite shortfall in disbursement of assistance against the commitment in 2008 and 09. Of the total $84.35 million promised by the bank, Nepal received only $46.09 million during the years.
Ministry of Commerce and Supplies has recommended six areas, including development of trade related infrastructure, building productive capacity, trade development, trade related adjustment, trade policy and regulations, for AfT.
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