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Long-term development assistance
Nepal has seen modest development progress over the past 15 years: poverty rates have declined steadily; child mortality and tuberculosis infections have been reduced by half; and 90 percent of children are now initially enrolled in school.
But Nepal still ranks 157 out of 187 countries on the United Nations Development Programme's 2012 human development index, and just more than half of Nepal's population lives on less than US$1.25/day. Although remittances and a real estate boom have led to economic growth in the cities, the economic conditions in rural areas, home to about 90 percent of Nepalis, have not improved significantly in recent years. The 2009 economic downturn reduced both remittances and the vital tourism industry, threatening economic growth.
Challenges such as poor market access and limited transportation and energy-distribution systems contribute to low productivity, notably in agriculture. Food insecurity is rising, largely driven by inflation in food prices and uneven rainfall. In the longer term, glacial melting brought on by climate change threatens food and water supplies.
Nepal's civil war ended in 2006, opening new opportunities for economic and social development. The reconciliation process has been slow however, and ongoing ethnic tensions and political and social disparities pose a continual threat to peace. Nepal held a reasonably free and fair national election in 2008, producing an elected constituent assembly widely inclusive of gender, caste, and ethnicity. Nevertheless, Nepal's democratic processes and public institutions are in their formative stages and will need to be strengthened.
Canada's international development programming in Nepal is closely aligned with the country's development strategy (PDF, 1.11 MB, 235 pages), which aims to promote sustainable peace through rapid economic growth and improved social inclusion, decentralization and community-led development.
The goal of Canada's international development program in Nepal is to stimulate sustainable economic growth.
Canada supports efforts to strengthen community-led rural development, including the promotion of local entrepreneurs. In particular, Canada, through support to the Local Government and Community Development Program (LGCDP), will help Nepal build roads, develop irrigation systems, and support rural electrification to ensure communities have the necessary infrastructure for economic development and growth to take root.
Nepal adheres to the Paris Declaration on Aid Effectiveness (PDF, 317 KB, 23 pages). The Government of Nepal's 2009 foreign aid policy (PDF, 219 KB, 23 pages) explicitly endorses the aid effectiveness principles of country ownership, alignment and harmonization.
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