Kathmandu May 2: Experts have pointed out that the US subsidy cut will have a multi-dimensional impact on Nepal. Participants of an interaction on 'Cutting US funding/assistance and cooperation and impact on Nepal' organized by the Center for Policy Research on Thursday, May 1, said that the changing world order and the Trump Administration's decision to stop foreign aid will have a direct impact on Nepal's economy.

Former finance minister and UML Vice-Chairman Surendra Pandey opined that Nepal would face financial trouble due to the suspension of the US aid including MCC and it could affect the entire politics. He said, "Stopping MCC now is just a casting for Nepal. About 75 billion rupees or $ 550 million US dollars committed by the US have been withheld. However, he said there were also negative aspects to the support.

Pandey also said that Nepal is under compulsion to continue the construction work that has already been started. "Three contracts have been awarded. Nepal also had to invest in it. 19 months have passed. In the next three years, Nepal will have to manage Rs 34 billion per year," he said, pointing out the complexities. Compensation has to be paid. Even then, we have to bear the financial burden.

Pandey, a former finance minister, said the US has also stopped the USAID assistance, adding that Rs 90 billion commitment.

He said that the lesson for Nepal is to become self-reliant and work to cut down unnecessary government expenditure.

He said Nepal is not going to take any benefit from increasing customs tariffs for other countries as we don’t have a few items to export to America.

Similarly, economist Keshav Acharya has opined that both positive and negative impacts of the US aid will be felt in Nepal. Stating that this is both an opportunity and a challenge for Nepal, he stressed the need to take the country towards a self-reliant economy.

The government was spending only 10 percent of the budgetary fund, otherwise, the rest of the aid was spent by the Americans themselves.

It is estimated that around five thousand people are directly affected by American support.

As an impact of the halt on the US support, hotels and airlines are getting less business as the seminar and workshop-like activities have declined.

Acharya hoped that by reducing the government expenditure and working towards making the economy sl=elf sufficient through a national political consensus, the country may cope with the situation

People’s News Monitoring Service.