Stuck between two of the most populous countries in the world who are growing rapidly, Nepal should in theory be benefiting from its strategic proximity to India and China. But the reality is somewhat different. It is one of the 10 poorest countries in the world, 90% of people live in villages where infrastructure and basic amenities are terrible, and political instability over the past two years or so has driven away many tourists – one of its main earners.
I arrived at the capital, Kathmandu, a few days ago and immediately fell in love. In that, I'm not alone. There are not only thousands of backpackers and tourists here at any one time, but the number of people who keep coming back or want to volunteer here is exceptionally high. In fact there's even a word for the latter – volunteer tourism.
Nepal has character, it has great scenery, and it has a hell of a lot of international non-governmental organisations (NGOs) working here. According to one estimate, their number jumped from around 220 in 1990 to possibly over 15,000 today.
With a population of only around 29 million, you would think that given the amount of aid poured into the country, things would be much better. And yet infrastructure is woefully underdeveloped and the average life expectancy rate is appallingly low.
I spoke to several aid workers here who were quite positive about the work being done in Nepal. But behind that optimism there is frustration and also an unwillingness to confront more difficult questions.
For example, the number of NGOs and international NGOs in Nepal is so large that they comprise almost 60% of the country's gross national product (GNP). Without them the economy would collapse. Some estimate that volunteers alone contribute up to 5% of GNP.
This brings up a whole list of questions and related problems. Given there is so much money flowing into Nepal, why hasn't the situation improved faster? Is there even a need for so many international NGOs?
A recent article in the Economist pointed to similar problems with aid in Africa - lots of money coming in as aid but question marks over its effectiveness.
Many, such as Oxfam and Action Aid have criticised governments in the past for not funding them and channeling the money directly to government projects or local Nepalese organisations.
They argue that they have developed years of expertise to effectively deliver aid and services much more effectively than the government can. Indeed, in many ways the third sector is a more desirable channel of delivering services such as housing, food and health services because they are also less prone to corruption.
But the flipside is that by developing their own parallel systems, the thousands of third sector organisations are not only replicating work done by each other, but also taking over the government's role. Surely it would be better over the long term that the Nepalese government itself develops the capacity and knowledge to provide the services it is meant to?
Even worse, international agencies are also fond of flying in their own "experts" when needed, rather than developing and growing local expertise. As the old saying goes – give the man some fish and he can feed his family for a day; teach him how to fish and he can feed them for a lifetime.
Even if the international NGOs are somewhat at fault, more blame can be laid at the door of massive donor countries such as the G8 – who provide a huge bulk of the money flowing into Nepal. Nepalese government officials quietly complain that they spend far too much time trying to manage the big donors and the projects those donors are running.
The World Bank, always fond of lending money to developing countries to build massive infrastructure projects they don't need (contracted out to western companies of course) and contributing to their national debt, is a big part of the same problem too. The money is coming in but the Nepalese government is finding that it has to spend a significant amount of time adhering to their demands and "managing donor business" as one put it, rather than running domestic affairs.
Tied aid is another big issue. The US government ties its own aid so that recipients such as Nepal are forced to spend a proportion of that money with those countries. As the Economist rightly points out, food aid from the US usually acts as a huge subsidy to American farmers, and even destroys local businesses. To top it off, the US government still considers Nepal to be run by terrorists even though this country is rapidly becoming more stable than it has ever been.
People are loth to criticise developmental agencies and foreign aid because they result in good work, but measuring their effectiveness and improving that is a real problem.
In some ways this is changing but then there are social issues too. The trafficking of women from Nepal into India remains a huge problem but neither country is devoting many resources into dealing with it. Groups like Mighty (Maiti) Nepal are trying to address it but have been criticised themselves for their approach towards HIV-positive people, compared to the Blue Diamond Society. As with everywhere, women and minorities face major hurdles and even the aid agencies aren't doing enough to combat it.
The international NGOs working in Nepal need to coordinate and realise that the country's future lies in the hands of local organisations, such as Brac and Grameen Bank in Bangladesh. The Nepalese people don't need charity – they need a helping hand to make this gorgeous country live up to its reputation.
