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Last Updated: Thursday, 6 May, 2004, 17:42 GMT 18:42 UK
Donors fail to agree Nepal aid
Pro-democracy rally
Pro-democracy protesters gathered in Patan this week
A meeting of Nepal's international donors has ended without reaching an agreement on aid.

Nepal's government had sought a commitment from donors to provide annual aid worth $560m.

But representatives of 30 donor agencies said assistance would depend on restoring democracy and resolving a long-running Maoist insurgency.

The donors, meeting in Kathmandu, re-affirmed their commitment to fighting poverty in Nepal.

The BBC's Sushil Sharma in Kathmandu says the meeting had been crucial for Nepal as it depends on foreign assistance for more than half of its budget.

The failure to get a firm aid commitment is a setback to the government, our correspondent adds.

Human rights

The donor meeting included representatives of the European Union, Japan, the United States and two international financial institutions - the Asian Development Bank and the World Bank.

Protestors around car
There have been angry demonstrations against the king

A statement at the end of the two-day meeting set out the conditions needed for a financial commitment.

This included the settling of the eight-year Maoist insurgency, a restoration of a representative government and an improvement in the worsening human rights situation.

The request for annual aid of $560m for three years had been to allow the Nepalese government to execute its plan to reduce poverty.

Nepal is one of the world's poorest countries, with surveys showing almost half of its 23 million people living in absolute poverty.

Democracy demands

The donors' decision not to make a commitment may boost the morale of major opposition parties which had boycotted the meeting.

They were protesting at what they call an unconstitutional royal government, installed by the king after he assumed executive powers and sacked an elected government two years ago.

The opposition parties have been engaged in street demonstrations since then to press for either the reinstatement of the dissolved parliament or an all-party government comprising their nominees.

They insist this will restore a democratic process and clear the way for a peaceful resolution of the Maoist insurgency and an improvement in human rights.




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