Thank you, Mr. President T: Ramesh Shrestha

Time to wake up

People have the basic instinct of helping the poor and destitute, especially in times of need; by extension the idea of overseas development assistance (ODA) is perhaps the same ideology at the international level. The recent decisions by several industrialised countries to reduce ODA indicate a decline in the idea of assisting the needy while the support for wars and conflicts are on the increase while upholding peace, justice, freedom and democracy. Is this a contradiction or hypocrisy, perhaps both?

The ODA has its origins following the closure of WW-II in reconstruction of Europe, and extended to providing aid voluntarily by their colonisers to countries freed from colonial grips; it was not in any way any kind of reparation against colonialism. It was simply a gesture to keep them in their sphere of influence. The provision of such assistance became global as the assistance was extended beyond the countries they colonised as in the case of the USA providing assistance almost worldwide through the UN systems, international institutions such as GAVI or bilaterally such as USAID. Other industrialised countries gradually became part of this movement. Recently China is extending its assistance globally although China never colonised any sovereign country.

So, what is the problem?

Do people have the right to complain for reducing or even totally stopping ODA or any other form of assistance as they are all voluntary? Simple answer is no. Providing aid is simply a matter of desire and principled decision the providers make based on humanitarianism or perhaps economic or political reason. According to OECD the total amount of ODA provided in 2024 was $212 billion. This amount is just 0.33% of GNI of the combined OECD countries but this small amount has made developing countries aid dependent. During the 1960s countries like Malaysia, Republic of Korea, People's Republic of China, Singapore and several mid-income countries of today had their economies like any low-income countries of today. What made them different from the present day low-income countries? These countries moved on with people-oriented and uncorrupted governance and did not depend on ODA.

Most ODAs are politically motivated such as during the cold war decades, ODA was attached to political alliances. Another unspoken link between ODA and the recipient countries includes easy access to natural resources through business contracts involving corrupt local political leaders. It would be interesting to take an inventory of palaces and villas in France, United Kingdom and other European cities, owned by political leaders from resource rich developing countries. Easy access to ODA destroys the government's financial system, destroys accountability, promotes corruption and risks political decay where ordinary people without political links become the victims. It is an area talked about but never fully explored to prevent. There was a study conducted by the World Bank on ODA related to corruption but it remained just a study which did not lead to any anti-corruption action in the field. Why should Cote d'Ivoire import fresh milk from France while desert countries like Qatar and Saudi Arabia have their own dairy industry? The problem of aid dependency sits firmly on providers and recipients of ODA alike.

A recent report by UNICEF predicted that about 6 million additional children could be out of school due to a projected shortfall of $3.2 billion in the education sector. It would mean there could be as many as 278 million children out of school globally in 2026. Needless to say, they would all be in low-income countries. Similarly, the IRC projected a shortage of $25 billion for vaccines. WFP also estimated that about 16.7 million people could face food insecurity due to funding shortage. These are not just statistics; it is the future of children and health of nation states devastated by shortage of certain amounts of ODA. Are countries providing ODA responsible for this situation? Are the governments receiving ODA responsible for this? The response depends on how you construe the issue.

'USAID cut affects access to safe sex; end of critical aid has hurt sexual and reproductive health outcomes for at risk communities'. This headline news published during the week of 5 September is a verbatim quote from a country aspiring to be a mid-income country. How could a country or people depend on ODA for condoms? Should anyone's desire for intimacy be based on external assistance?

Education and health are the basic foundation in creating required human resources to strengthen the economy of any country, but aid dependency for these sectors have considerably weakened both sectors which has negative impacts on everything else. Financial resources required for these two sectors are long term investment with continued return. Why should any country depend on ODA for these two sectors? Countries should seek external assistance for improvement in management & new technology but not for basic needs. The practice of aid dependency for supplies, logistics and administration must be reviewed as dependency on external assistance for such recurring cost can never be sustained. External aid is like an unpredictable weather pattern which can change anytime.

The direct budget support introduced by 'like-minded donors' in the early 2000s is like a black hole without accountability. Despite being proposed with good intentions, it is an invitation for corruption, meanwhile making countries forever dependent and obliged. ODA is indeed killing incentives to develop local resources which stagnate the state of development with no motivation to grow. Crude oil in Nigeria was discovered in 1953; it was only in August 2025 that Nigeria was able to process and export refined oil. There are no reasons why countries like Niger and Democratic Republic of Congo or Angola should remain in their current state of political economy. Countries have become aid dependent as the resource management has become totally corrupted with business malpractice involving multinational industries and trading companies. These may also be the reason why people become immigrants and refugees due to lack of opportunities in their own country as the aid dependency has weakened countries' focus on building local capacity and enhancing self-reliance.

Realism or optimism

This is in no way to undermine the importance of ODA. Vietnam was under international sanctions till the end of 1993. Vietnam received more than $80 billion in ODA and concessional loans since 1994 which it invested beneficially and achieved a status of mid-income country in 2009. It was made possible because of proper use of ODA and focus on self-reliance and intolerance on corruption. Vietnam of 1991 while I worked there is not the same country when I revisited in 2008 and 2012. There must be a time to take a pause and eventually say thank you and move on as was done by Malaysia, Singapore and the Republic of Korea.

The 80th session of the UN General Assembly opened with the theme 'better together' but the idea of 'together' has never been so feeble. We might be at the beginning of the end of ODA and with it the end of the collective development agenda forcing countries to be on their own. It is time for realism as much as for optimism. The abrupt announcement by President T created a hurricane in the 'aid industry'. It not only woke up governments but also many international NGOs which are dependent on ODA for their own survival. It is the timeline forced upon by President T to countries so that countries can now take full responsibility for their social budgeting, strengthening the fiduciary relationship between the government and people. We should thank President T for making people realise their responsibility. There are many public services contracted out to the private sector in the name of developing private sector, which is siphoning public funds like osmosis. It is time for the governments to make many people unhappy by sealing all loopholes in business contracts and other government processes, which will generate enough funds for the education and health sector. Meanwhile countries providing ODA must help stop business malpractice in international trade. Time is now; never is too late.

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