Donors pledge US$4.4b in aid to quake-hit Nepal

Nepal’s PM Sushil Koirala (C), Finance Minister Ram Sharan Mahat (L) and Minister for Foreign Affairs Mahendra Bahadur Panday observe one-minute silence during the International Conference on Nepal’s Reconstruction in Kathmandu, following an earthquake. ( Photo source AP-/Niranjan Shrestha)

KATHMANDU: Quake-devastated Nepal on Thursday (Jun 25) hailed international donors, led by India and China, for surpassing expectations and pledging US$4.4 billion for reconstruction, as the country's premier vowed "zero tolerance" of corruption and said all aid would go to victims.

The country needs around US$6.7 billion to recover from the April disaster, which killed more than 8,800 people, destroyed nearly half a million houses and left thousands in need of food, clean water and shelter.

As the meeting of foreign donors ended late Thursday, Finance Minister, Ram Sharan Mahat, told reporters that the fundraising drive had been "a grand success". "The total pledge made today was US$4.4 billion, which was more than expected ... US$2.2 billion in loans and US$2.2 billion in grants," Mahat said.

In an interview with AFP prior to the one-day conference, Mahat said the government did not plan to finance reconstruction using only foreign funding. "We will not entirely depend on foreign assistance ... we will use our internal revenue also to rebuild our country," he said.

As the meeting kicked off, India's Foreign Minister Sushma Swaraj pledged US$1 billion while regional rival China promised three billion yuan (US$483 million) in assistance.

Nepal's two giant neighbours have historically vied for influence in the Himalayan nation and both were heavily involved in post-quake rescue and relief efforts.

Additional pledges of US$600 million from the Asian Development Bank, US$260 million from Japan, US$130 million from the US, US$100 million from the EU, US$58 million from Britain poured in through the day, supplementing an earlier offer of up to US$500 million from the World Bank.

The government wants all aid to be channelled through a new state body, raising concerns among some international donors that bureaucracy and poor planning will hamper reconstruction.

Prime Minister Sushil Koirala urged delegates to work with Kathmandu and vowed "zero tolerance toward corruption". "I assure you that we will (leave) no stone unturned in ensuring that the support reaches the intended beneficiaries," he said.

The UN says some 2.8 million people still require humanitarian aid, including access to food, sanitation and medical care, with its initial US$423 million emergency appeal only generating US$153 million in funding.

Nepal, one of the world's poorest countries even before the disaster, now needs fresh assistance to rebuild homes, schools and hospitals destroyed or damaged by the Apr 25 earthquake and a strong aftershock on May 12. One in 10 people are homeless and the country's already weak economy is expected to grow just three per cent, the lowest in eight years.

'NOTHING LEFT'

In Kathmandu, victims of the disaster, still sheltering under tents, welcomed news of international assistance.

Sunita Shrestha, a 28-year-old housewife whose home collapsed in the quake, said, "if foreigners have come to help us then the Nepal government cannot step back ... they will have to do something". "We have nothing left ... I am hopeful but not expecting much since the government has done nothing for us so far," Shrestha told AFP.

As pledges rolled in, participants said it was crucial to ensure the money was spent well. "Money will be important for building back a more resilient Nepal ... but it's not just about money," said World Bank president Jim Yong Kim in a video message to delegates. "Just as important is how these funds are spent."

The international community pledged several billion dollars in aid to Haiti after a catastrophic earthquake struck the Caribbean nation in January 2010. But the pledges yielded little tangible progress as donors delayed implementing projects due to concerns over corruption and political instability, leaving thousands living in temporary shelters five years on.

"Follow-up is extremely important - when pledges are made, the government formulates its plans accordingly and if the money doesn't come, it throws everything out of gear," said Poonam Khetrapal Singh, the World Health Organisation's regional director for South-East Asia.

"We have seen that happen in previous cases with devastating results so I think we will lose our credibility as members of the donor community if we don't act on our promises," Singh told AFP on the sidelines of the conference.

As donors vowed to deliver on pledges, officials urged Kathmandu to lay out a clear roadmap to recovery.

"Now that the pledges have been made, it is the government's responsibility to develop projects and programmes," said UN Under-Secretary General, Gyan Chandra Acharya. "Once it has decided on the projects, it can call on donors and ask them to deliver early on funding," Acharya told AFP.