U N C L A S S I F I E D

AGENCY FOR INTERNATIONAL DEVELOPMENT

Washington, D.C. 20523

"7 i

NEPAL DEMOCRACY PROJECT 367-0163

PROJECT PAPER

raancv roo I M T I ) ~ M A T ~ O M A L a m v m u ~ m ~ r I I. TIUUUCTIOY CODE l o o m w r . --. - lo A - Ad4 A m t d m t number .PROJECT DATA SIIEET

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8. COSTS (S I *mu1

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13. PROJECT PUPSOSG (mmmum 480 r i )srctm].

r Strengthen a group of institutions with greatest promise for achieving effectipeness and sustainability in supporting democracy and development.

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16. SUIUJULLD EV&UATIONS 115. SOURCIOIUCLY O r GOODS N4D SERVICES

Interim (z om 1 0 t.od @ Ou~erlSprr~fy) NEPAL p ( r ?? . l n m d m r n r l

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FM:Kri~hna C. Shrestha ---- t l)OCUEIF.:lr RCCilVCD

Kelly C. -Xammerer I:( ALDIW, on r on .\lunv ~ocu. 11. APPROVED

k MENIS. 3 A f t OF DlSf RLnL'TlOl{

BY ~irector, USAID/Nepal

the United States, other countries included in A.I.D. Geographic Code 941, or Nepal.

b. Condition Precedent to Initial Disbursement

The Project Grant Agreement shall contain the following condition precedent to initial disbursement, in substance essentially as follows: Prior to the first disbursement under the Grant, or to the issuance of documentation pursuant to vhich disbursement will to be made, the Cooperating C~untry will, except as the Parties may otherwise agree in writing, furnish to A.I.B., in form and substance satisfactory to A.I.D., a statement of the name(s) of the person(s) holding or acting in the office of HMG/N specified. in Section 8.2 of the Grant Agreement, and of any additional representative, together with a specimen signature of each person specified in such statement.

Signature: * Kelly C. Kammerer

Date: ?/'o / P -L

Clearance:

PPD: JKirk : PPD/PD:THa PR0C:KGuru FM: KCShres DD: TWRterv RLA : ANewton :

Name of Country : Nepal

Name of Project : Democracy Project

Number of Project : 367-0163

1. Pursuant to Sections 105 and 106 of the Foreign Assistance Act of 1961, as amended, I hereby authorize the Democracy Project for Nepal (the "Cooperating Countryt1) involving planned obligations not to exceed three million five hundred thousand U.S. Dollars ($3,500,000) in grant funds ($1 million under Section 105 and $2.5 million under Section 106) over a four year period, subject to the availability of funds in accordance with the A.I.D. OYB/allotment process. These funds will help in financing foreign exchange and local currency costs for the Project. The planned life of the Project is four years from the date of initial obligation.

2. The Project will assist in developing the institutional capabilities and improving the performanca of three key democratic institutions in Nepal: the Parliament, the Judiciary, and local government. The Project will increase their credibility and effectiveness, thus helping to develop well-established democratic values and processes in Nepal. The Project wi2.l support increased pluralism as an integral part of the democratic process. All three components of the Project include elements designed to encourage active participation of women in democratic processes.

3. The Project Grant Agreement, which may be negotiated and executed by the officer(s) to whom such authority is delegated in accordance with A.I.D. regulations and delegations of duthority, shall be subject to the following essential terms and major conditions, together with such other terms and conditions as A.I.D. may deem appropriate.

a. Sourse and Qriain of Commodities. Nationalitv of S:ervices

Comn~odities financed by A.I.D. under the Project shall have their source and origin in Nepal, the United States, or in countries incl-uded in A. I.D. Geographic Code 941, except as A.I.D. may otherwise agree in writing. Except for ocean shipping, the suppliers of comnrodities or services shall have Nepal or countries included in A. I. D. Geographic Code 941, as their place of nationality, except as A.I.D. may otherwise agree in writing. Ocean shipping financed by A.I.D. under the Project shal.1, except as A. I. D. may otherwise agree in writiing, be financed only on flag vessels of

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TABLE OF CONTENTS . . PROJECT DATA SHEEl' ........................................

PR(MECT AUTHORIZATION.......i.................... ............ I' . . GLOSSARY OF ACRONYMS.AND DEFINITIONS ....................... 11 ......................................... MECUTIVE SUMMARY iii .......................... I.PROGRAM FACTORS ;................l

, 8 A.INTRODumION............................................l B-EMERGING DEMOCRACY IN NEPAt.............................l C.RELATIONSHIP TO US GOVERNMENT AND AID POLICY AND

USAID'S STRATEGY.......................................2 . . Introduction.........................................2 . \

' . Policy Guidance......................................4 Linkage to Overall Portfolio and E c o ~ ~ ~ ~ c ....................................... Develo~pn~nt 6

" Extracting Useful Guidance from Recent AID ............... Ekgmrier.?e in Democracy Programing 7 Democracy~Activities in Recent Years.................g . Other Donor Activities..............................lO Activities to be Undertaken Outside the Project and

Activities that Will Not be Undertaken...........ll I1.PROJGCT OVERVIEW ....... ;................................I3

A.PROJECT OQAL AND PURPOSE....,..........................13 .................................... B.PROJECT COW-S. 13 ................... parliamentary Developmerit........ 13 Legal/mdicial Development. ......................... 18

- ...................... . . Local Government Str~gth€ning 22 C.A POLICY DIALOGUE AGENDA...............................29

a D.EXPECTH) A C W I m S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0 . ........................................ e l , E. PRO~ECT B U W ~ , .31

. , a 1 F.OBLIGATXON SOULE....................................34 G.METHODS OF FIN~INCING...................................~~ ......................................... III.~IINISTRATION 34 A.PROJECT IMPLEMENTATION.................................34 B;MO*IDRING, EVALUATION, AND IMPACT w. ....... .37 ...... C . I M P m A T I O N SQ~EDUTJE................................~~ D.GRAY C~NSIDEWLTIONS..........................~~ E ENVIRONMENTAL WESHOLD DECISION.......................38 . 9 F.Wm. . .d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 - N.PROJECi' ANqLYSE.:: :;............;.........................38 A-POLTTICALAND INSmTUTIONAL WYSIS...................38

* .. .................................... B.SOCIAL ANALYSIS.... 43 C - E C O m C AND.FINU7CIAI; ,ANACYSIS ........................ 49

V.ANNEXES , * . r

A. ~ I C A L I -0RK A , B . INITIAL ENVIRONMENTAL 'EXAMINATION

.' 4C;BOWET NOTES ANU;' PRELIMINARY TRAINING AND P R ~ .'PLANS ' " % . r'

;, D. REQUEST 'FOR WAIVER. OF 25% GOVERNMENT CONTRIBUTION - - E *-. OF NEPAL REQUEST PO2 SPPORT

, , ' F. D-CY 'STRATEGIC. OBJECyIVE AND PROGRESS INDICATORS , ' .

G*,AID/W CABLE: PROVIDING PP APPROJUG AUTHORITY TO UGAID/NEPAL . .

-1 * ELDRAFT s a y s OF WORK FOR C O ~ I C T R S AND ~ P E R A I T ~ M AGBSCIES

, !I . I. STATUTORY 'CHECKLIST . $ 4 , .

t I 8 . '

I

* . . I :' 1%.

AID/W - The head office of the Agency for International Development CD-ROM - A computerized system for storing large amounts of information Congress - Short for "Nepali Congress", the dominant party in Nepal DANIDA - The Danish aid organization DDC - District Develogment Condttee Democracy Advisors - US scholars who will advise USAID/Nepal on the

Democracy Pro j ect Democracy Poll - An annual poll to be funded by the Democracy Project DPI - Democratic Pluralism Initiative, an earlier name for democracy

work in AID 8(a) - Designation for a minority US firm FREEDEAL - A Nepalese NGO that focuses on public interest law GON - Government of Nepal HBCU - Historically-Black College or W~..versity LAC - AID'S Bureau for Latin America and the Caribbean LAWASIA - An asuociation of Asian jurists MUPA - Ministry of Law, Justice, and Parliamentary Affairs MP - Member of Parliament: Muluki Ain - Traditional Nepalese legal code that is based on Hinduism Nepal Democracy Strategy - usAID/~epal's strategy, which encompasses

the Democracy Project and other democracy-strengthening activit: I

NGO - Non-gove.mmenta1 organization, equivalent to PV0 ODA - The British aid organization Panchayat - The NgartylessN political t;ystem that preceded democrzcy PIO/T - An AID document which initiates a procurement action PP - Project Paper PSC - Personal services contractor PVO - Private voluntary organization, equivalent to N O PRISM - AID'S new system for program impacts Rs. - Symbol for Nepalese rupees, $1 = Rs.47 SAARC - South Asian Association for Re~ional Cooperation SCOPE Nepalese NGO that works in support of Parliament SEARCH - Nepalese NGO committed to civic education TAF - The Asia Foundation USA1D/~epal - AID'S office in Nepal USDH - US direct hire; pernranent American employee of AID USG - United States Government US Mission - US m s s y , USJS, USAID/Negal, and US Peace Corps/Nepal USIS - United States Information Service VDC - Village Development Committee

- Since April 1 9 9 0 , significant steps have been made toward estab-

lishment of stab16 democracy in Nepal, including promulgation of a new constitution, formation of a government following free and fair elec- tions, completion of two parliamentary sessions, and commencement of much-needed political and economic reforms. A newly-appoirted judiciary is in place and local government elections took place in May 1992. Major challenges to continued democracy strengthening lie in social and political traclitia:~s of hierarchy, nepotism, sexism and intolerance, and in popular expectations that democratic progress will be accompanied by rapid economic development. The Project can do much to strengthen democracy by improving the capabilities of inexperienced democratic institutions and fostering democratic values throughout society. It will complement USAID efforts to achieve broad-based, sustainable development and continue the unusually close collaboration among USAID, USIS and the Embassy which has characterized Mission democracy work until now.

The -1 of the Democracy Project is to achieve increased plural- i m and well-established democratic values and processes in Nepal. The Project putmse is to of ia--

f o r achievinnFf ectiveness in suaDortins democracv dm-. Project comporrents will be:

Parliament: The paramount importance of this institution in a multi-party democracy, and the success of work undertaken so far with MPs and the Secretariat, rake this an essential element of the Project. Activities will include strengthening parliamentary leadership through professional development of Members1 skills in legislative processes and policy formation, and strengthening Secretariat support to Parliament through training in librarianship, research, reporting, and computer skills. University support to Parliament will also be funded.

Judiciary: Given current low levels of professional competence of the judiciary, the lack of a legal record system enabling lawyers and judges to research the law, and the inadequacy of court procedures and management to deal with case loads, a number of Project activities are planned to improve the formal legal system, including: training for judges and judicial officers, establishment of an efficdsnt system of court records, and development of an effective code of procedure. It will also support pilot experiments with alternative dispute resolution systems in rural areas, to enhance efficiency and financial sustainability of the formal system.

Local Government: Significant autonomy is being devolved to local government units, providing real opportunities for grassroots democracy. However, since elected representatives will be inexperi- enced, a sub-set of interested local governments will be invited to coilaborate in Project activities aimed at improving local revenue generation capabilities and accountability. Support may also be extended to institutions responsible for training newly-elected local politicians and the bureaucrats who work with them, and for curriculum development and training of trainers. It may also be appropriate to encourage cooperation between local governments and NGOs through establishment of local collaborative mechanisms, and to support non- party political groups which, represent local interests at the national level, such as an association of District or Village Chairmen.

The Project will be managed in U S A I D / N ~ ~ ~ ~ ' S Program and Project Development Office, with Bay-to-Bay implementation responsibilities carried out. by a PSC project manager. Annupl 9emocracy Polls and periodic visits by Democracy Advisors will guide Project implementation, and provide a unique, ex~eri~ental approach to monitoring znd evaluation. The Project Paper wj.11 be completed and authorized in early July, so the Project Agreement can be signed later in the month.

Parliament 948 Judiciary 642 Local Government 1011 Support Services 302 Audit 5 0 Pro j ect Manager 200 Continqency/Inflation 347 'IW'AL 3500

After four years, the Project will have achieved significank impacts in three activity areas:

Parliament: Ministers and other leaders will be capable of articulating a coherent national strategy and presenting it to Parliament, Nepal's citizens, and donors. There will be a farmal and effective committee system capable of reviewing proposed legislation, soliciting public input as appropriate, and making effective use oE supporting research and analysis. The library, research section, and training unit of the Secretariat will be working effectively in support of Parliamentary committees and the legislative work of the lower house, carrying out, research and analysis which members find useful ar~d which directly impacts on legislation. A policy research and resource unit will be established at Tribhuvan University, which will supply consultants to the Parli~ment for specific research and analybis on a regular basis. Functioning of the Parliament will be further enhanced by the support of graduate interns.

Wiciary: A new Code of Procedura will be developed, and court management will be improved, so all, registered cases reach an initial judgement in a reasonable time. There willlbe an effective system of recording, publishing, and disseminating judicial decisions, and a legal research system which ensures that decisions are based on valid precedent. A set of non-formal adjudicative processes--e.g. mediation, arbitration, village courtn, referral services--will be in place in selected areas to reduce fomal system saseloads and provide ordinary . men and women with timely, affordable, convenient justice. The judicial corps will be widely known to be cometent, incorruptible, knowledgeable about the law, and independent.

tocel aovazamont: Selected local governments will achieve greater autonomy and effectiveness through raising and,effectively using local revenues, and will set a positive example for other local '

governments. Formal accountability systems, such as publication of meeting minutes and budget documents, and regular public meetings, will be in place. Local politicians, and bureaucrats they work with, will be increasingly effective in strategic planning and program implementation. Local governments will establish effective working relationships with local user groups, NGOs, cooperatives, etc.

ensuring all interest groups, particularly those representing the concerns of women and disadvantaged caste and ethnic groups, find an effective role in planning and imglementation processes. Associations

i of local units such as local governments and user groups will \ I q - . effactively represent local concerns at the national level.

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A.INTRODUCTIOB Since April 1990, Nepal's leaders have been steadfast in taking

necessary steps to firmly establish democracy. An appointed, politi- cally-balanced interim government undertook the fundamental tasks of constitutj.on drafting and overseeing initial parliamentary elections. After free ad fair elections, a government was formed and has begun to implement significant economic and political reforms. Parliament has completed two sessions, gassing fundamental legislation. Local govern- ments have been constituted with significant powers, and local elections took place in May 1992. During the democratic movement the US government (USG) supported dialogue and non-violence. Within weeks of the King's announcement of a new multi-party system, USG programs were activ~:y supporting Nepalese non-governmental organizations (NGOs) in demoszacy-strengthening work. Since then, more than 40 democracy activiLies have been carried out in collaboration with Nepalese NGOs, an American NGO, and key governmental units.

Crucial formal institutions--the Parliament, Judiciary, Election Commission--are in place and show promising sip3 they can play assigned democratic roles. Much useful work can be done under a Democracy Project (the Project) toward enhancing the effectiveness of these organizations. But much needs to be done to institutionalize democracy throughout Nepalese society. Traditions of opaque, centralized decision-making; narrowly-based political patronage; caste, ethnic, and gender inequities; intolerance and lack of respect for civil rights; and tight control of media and public dialogue are still present and pose constant threats to the effectiveness, and existence, of democracy in Nepal. The Project can do much to democratize society by fostering pluralism and democratic values--for examgle through selected NGO programs, public education, and trainilig.

B.RMBROINQ DRHOCRACY IN WBPAL Nepal first experimented with democracy in 1951, when a popular

revolution overthrew the hereditary Rana prime minister. The revolution reasserted the primacy of the royal family (descendants of Prithvi Narayan Shah who unified Nepal in 1769) and gave King Tribhuvan a mandate to establish a constitutional monarchy and representative democracy. Following the events of 1951, gradual progress was made in constitution drafting, and modern administration was initiated under an appointed Nepali Congress government. In 1959, initial parliamentary elections were held and a Nepali Congress government was formed. A period of relatively mild disorder ensued, which King Mahenlira (who had succeeded King Tribhuvan in 1956) used as a justification for disbanding the government in 1960, and creating the npartyless panchayatu system in 1961. Political. parties were banned and power was wielded by an absolute monarchy, served by a malleable, appointed National Panchayat.

USAID supported Nepal's experiment in "one party democracyn for several years in the 19608, but quickly became disenchanted when it became iucreasingly clear Government of Nepal (GON) commitments to transfer significant power (notably taxing authorities) to rural areas were boing ignored. The royal family, palace secretariat, bureaucracy and, ironically, many members of the Rana lineage (who have

ictermarried with the royal Shahs far at least seven or eight generations) remained in firm control. By 1967, USAID virtually ended its eumort for "panchayat development".

Following King Mahendrags death and King Birsndra's succession to the throne in 1972, opposition to the system surfaced sporadically. In 1972, a conntitutional amendment allowed for direct election of 112 of 140 National Panchayat members; but the ban on political parties continued. Following sustcined agitation in the late 19708, the leadership assented to a national Referendum on the panchayat system in 1980. Proponents of nulti-party democracy received millions of votss, but not a majxity. Direct elections for National Panchayat members took place in 1981 and 1986. Numerous Marxist candidates contested for National Panchayat and local govenunexlt seats, with their sympathies only slightly concealed. This informal electoral alliance between Marxj.~ts and tho panchayat system was not accepted by avowed Nepali Congress members, who stayed outside the system, often in India or in Nepalese jails. However, after 1980 many discouraged opposition politicians joined the Panchayat government.

In early 1990, Congress and an alliance of Marxist parties agreed to mount a campaign to bring down the panchayat system. From late Febniaa-, the movement gained momentum, and street demonstraticns in the Kathmandu Valley which led to dozens of fatalities in early April, were probably pivotal to mobilizing broad support from the middle class. On April 8, the King assented to multi-party democracy, and democratization has proceeded more-or-less smoothly since then, through formation of cr coalition government (May 19901, drafting and prmlgation of a constitution iNovember 19901, parliamentary elections (May 1991), formation of a Congress governmen", (June 199.L), and relatively effective sessions of Parliament (June-September 1991 and February-March 1992) . Local government elections were hold in May 1992.

There are reasons for optimism that Nepalese democratization will maintain its momentum-the Nepalese are generally tolerant of diverse views and opposed to violence; the military seems inclined to stay out of politics; and the King has gradually accepted the Government's prof- fered role of "first democratN. Perhaps the major challenge to sus- tained democratization lies in expectations of the general populace. As in parallel movements in Eastern Europe and former Soviet states, during Nepal's 1990 movement domeracy and dewlopneat were clearly ideological twins. Eventually (some observers would say ixnnediately), .the government must demonstrate to the people they can bring sustained 'development: while building strong democratic institutions. They must: liberalize the economy, improve administration and public services, create jobs, control expenditure and prices, maintain amicable relations with India and China, keep donors content, build a strong Parliament and judiciary, establish credible local governments, and somehow mobilize the energy and entrepreneurship cf the populace.

C.RBtATIOUSE1P TO US dOVBRWMHm AlOD AID POLICY AND USAID'S STRIITHOY -

The 1980s brought major political shifts toward democracy in Latin America, and the late 1980s and 1990s have brought even more dramatic transitions in Eastern Europe and the former Soviet states.

These changes have reinforced American confidence in the legitimacy of democracy as both mean8 and end. It simultaneously facilitates broad-based, sustainable development and is part of the improved quality of life USAIDts economic assistance strives to achieve.

USAID is developing this Democracy Project for several inter- related reasons. First, the entire US Mission is committed to support Eor Nepalese democracy, since this clearly coincides with our foreign policy and with consistently-expressed aspirations of Nepal's citizens. (As a result of review exercises in No~ember 1991 and February 1992, one of USAID/blepal e three Strategic Obj ectives is "Increased pluralism and well-established democratic values and processes." In their strategy document for FY193, USIS staff clearly state they will vlfosus the full panoply of resources on strengthening democratic awareness and skills within the nedia, academia, the legal community and the legislature." The &ubaeeyge current mission statement proclaims "The United States supports democracy in Nepal as a high priority goal at both policy and program levels.I1) Second, the Nepalese particularly value GS support in building their democracy, so that results are likely to far outweigh those normally expected from a modestly-funded projact. Third, work in democracy strengthening will effectively complement ongoing Mission efforts to encourage and support l i bera . l i ra t ion of Nepal's economy. Fourth, encouraging democratic values and processes will open greater opportunities to women and disadvantag~d caste and ethnic groups. Finally, democratic reforms will be part of a major social/political/economic transformation which, in its totality, can open Nepal to expanded entrepreneurship, and create a potential for broad-based growth never experienced in the past.

The US Mission to Nepal and the State Department supported emerging Nepalese democracy during the Spring 1990 movement through statements decrying violence and encouraging dialogue. Mission elements then moved quickly to strengthen multi-party democracy after April 8, by supportive statements and actions from the Embassy and State Department, USAID support for democracy strengthening activities by local NGOs (see Annex El, and rapid programming of International Visitor (IV) programs for constitution drafters and political leaders by the United States Information Service (USIS). Mission elements (Embassy, USAID, USIS, and Peace Corps) beqan exchanging in£ ormation and coordinating activities through Mie3ion Democracy Committee meetings as early as June 1990. Highly effective coordination has continued since then, at monthly codttee meetings. There are also frequent informal meetings and phone conversations among Ehbassy, USIS, and USAID colleagues. When appropriate, The Asia Foundation's Representative also participates in formal and informal meeting.

Because of close, long-term diplomatic relations between the US Mission and the Government of Nepal, and Embassy political and economic reporting responsibilities, Embassy staff are well-placed to identify areas of opportunity for democracy support, which often open up rapidly and need to be acted on in a timely fashion. In some circumstances, Embassy officers constitute the best channel for approaching Nepalese politicians. A mjor portion of Project training opportunities will be provided to parliamentarians and political party officials with whom the Embassy has already established firm relationships. Embassy colleagues vrill continue to have a significant role in pursuing the democracy policy dialogue agenda, and in selscting high level trainees.

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USIS, responsible for promoting American culture and values, iu an appropriate implemontor of many democracy activities, generallq- through existing programs. Since Nepal's transition to democracy, thts nunlber of International Visitors supported has increased, with funding from both USIS and USAID. Individuals prominently involved in Nepal'rr democratization process (both public and private sector, from many professional fielda) have participated in the program, learning more about elections, legislative piocesses, judicial systems, NO0 act:Lvitiee, and other topics of relevance for democratizing Nepal. The Academic Specialist Program is also provirlg a useful tool for in- couxltry trainin9 programs, and the special expertise of USIA1s Research Directorate is being called upon this year for an in-countzy training program in political polling Because of the effectiveness of USIS programR, USAID will continue to rely on them, mainly under our Development Training Project, to complement activities under the Democracy and PVO Co-Financing Projects. USIS'S close relations with the press, including current technical support for journalism curriculum development at Tribhuvan University, will help to strengthen the independent media, all essential democratic institution. USIS's general program of films and publications about the US provides a vehicle for increasing awareness of the democratic process. -

AID has begun to develop policy guidance, much of it very useful for planning this Project, and academics have begun to address the intellectual challenges of nurturing infant democr&cies and measuring their growth. While it must be recognized sure-fire "recipesw for democracy support are lacking, a democratization "cuisinea is rapidly developing. Relevant sources include: periodic reports on the Democracy Initiative (most recent dated December 19911, the Democracy and Governance Policy Paper (November 19911, the Asia Democracy Program Strategy (I.!arch 1991) , the Nepal Dmocracy Strategy (June 19911, and findings of the recent Asia Bureau Dunocracy O f f i c e r s Coaferonce (January 19 9 2 1 .

The Democracy I n i t i a t i v e : This initiative is largely a prescription for re-orientation of AID, to ensure that democracy is firmly established as a developmental goal. It requires regional bureaus and missions to develop strategy documents (e.g. the Nepal Domcracy S t ra tepy and Apia Democracy Prag'lam S t r a t e g y ) ; report on new training programs for democracy officers; suggests general approaches to democracy progZming; describes ongoing work on measuring progress in democratization; and encourages USAID/Rnbassy/uS1S collaboration in democracy work.

Democracy and Governance : This policy paper gives concreteness to the Democracy Initiative by laying out eight major points: 1)The international environment for democracy has shifted dramatically in the past few years; 2)Dt3n0c~a~y is now recognized as an important mean8 and and in development; 3)Democracy work can encompass a wide range of public and private sector institution building, briefly described in the paper; 4)aDenocratization" isn't only a specializod type of progranuning, but also a general approach to be applied across entire portfolios; 5)Progress in democratization will be factored into future decisions about country programing budgets; 6)Each country ia unique, and separate democracy strategies must be developed for each; 7)"Rapid responsea is needed for newly-democratic countries, and special funds will be set aside for countries not

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currently served by AID; 8)Effective monitoring and evaluation of democrc~y work are cn~cial.

Asia Democracy Program Strategy: This regional strategy offcre relatively concrete, detailed guidance for democracy work in Nepal. It identifies five programmatic "elementsn and a number of "contextual g-.econditionsm which may usefully be addressed in democracy programs, and which have been valuable in conceptualizing and planning a country strategy for Nepal. The progranunatic elements are: 1)Voice: The development and atxengthening of: (a)channels of popular influence on government, a?d (b)channels for the free dissemination of information and oginiot:l,: 2) Choice : Free, fair, and meaningf ul elections; 3)0overnanse: Effective, democratic, and open administration; $)Redrewe: Full protection of individual and group rights; 5)Accountability: Financially responsible government. All anticipated activities under the Democracy Project fit within one or another of these elements, Contextual precondition8 which may hinder or enhance democratic development include: historiral merience of the comtry8s people (especially with democratic institutions), political culture(s1 of the peopla, ethic and religious cleavages, legitimacy of the state (j.nc2uding its boundaries), existence or non- existence of a rule of law, class structure, nffecciveness of goverminelit institiitions, and regional and world-wide "climaten for democracy. These isuues will be considered in detail in political, social, and institutional analyses for the Project Paper.

Nepal Damcracy Strategy: This country strategy was prepared at the Mission's request, and is based on three weeks of fieldwork in Nepal (during March-April 1991) bly a uix member American/Nepalese team. Mission personnel value the documont s deecriptive and suggestive nature, representing "strategic thinking in process", but not offering finai prescriptions for democracy work. Team members affirmed the importance of a flexible, experimental approach by recommending usAID/Nepal*~ Democracy Project be set up as a "demonstration program", incorporating mechanisms for periodic, detailed review of progress made, and for ilrlentifying and pursuing new programing opportunities. While thi# modc~t Project cannot support the recommended full-time Analytical Unit, we are convinced of the value of the "program conceptn proposed by the team, and have attempted to adapt their concept to our limited resources by planning to engage a small group of Democracy Mvl8oo8, who will visit twice a year, assess progress under the Project and in related activities, and will suggest: new directions our work in democracy strengthening might take. (See 1II.B.)

Tho Strategy follows a consistent format, laying out a need, describing any re#"mn#o the mission has made, and laying out one or more rocaarm.ndationu for future action. This format is repeated for each of the five elements of the Aaia Democracy Program, and results in recommended activities under Voice, Choice, dovernanca, Re&o##, and Account:abili ty. The recommendations are a "mixed bagn of: activities the Mission had already initiated, activities already contemplated, activities bast pursued outside the Democracy Project, and some highly original suggestions. Many elements have been incorporated into this Project (training and technical assistance work with Parliament, the judiciary, and local government; support for rural m6diation services); others are being incorporated into our W O Co- Financing and Development Training Projects (training for journalistv and parliamentarians under USIS' International Visitors Program;

5

support to advocacy NQOs); and many are being carried out in advance of this Project, largely with Asia Bureau dernocracy funds (support to SCOPE, a Nepalese NO0 that works in oupport of Parliament; voter education activities of SEARCH, another Nepalese NGO).

I

Democracy Off icers Conferenca: Presentations and discussions during the January 1992 conference in Katkmndu encompassed a variety of useful topics. While most materials covered are relevant for detailed planning and long-term implementation of democracy projects, the overarching significance of a few points wao reinforced by their emergence in virtually every speecil and discussion. These include: the analytical importance of the development/democracy interface, the significance of e l i t e pol i t ica l commitment as the single most reliable predictor of sustained democracy, and the importance of Miseion-wide coordination in democracy programming.

D e v e m

USAID staff are firmly committed to the proposition that political a-nd economic reform are best pursued in tandem. Accordingly, democracy support activities are found in most mission projects (although not necessarily labeled as such). This is not surprising, since affective rural development generally requires broad participation in decision-making and implementation. Well-esta3lished project activities, such as assistance to forsstry and irrigation user groups, to business associations and commercial farmer groups and to indigenous NGOs, support self-help, decentralization, and political dialogue, which in turn stimulate development of open political systems.

There are many examples of democracy activities rendering positive support to "otherf1 activities in our portfolio, and vice versa. Several examples are related to the Minsion's first strategic objective: private sec tor contribution t o income growth. For example, a recent public opinion survey regarding local government legislation (funded by USAID with Asia Democracy funds) directly influenced enacted legislation, with immediate positive impacts under the Rapti Integrated Rural Development Project. A feasibility study regarding local government finance, essential for design of this Project, includes Rapti district in the survey; data will be used as a basis for future work with local governments in the Rapti zone. The US NGO, World Education Inc., is including economic liberalization themes

. in developing reading materials for newly-literate adults.

On a more general level, work with Parliament and its support institutions (the Secretariat; the NGO SC0PE)is providing opportunities for airing issues with political leaders in a manner which improves the quality and technical relevance of political debate and legislation. USAID employees in both the Health and Family Planning and Agriculture and Rural Development Offices have recently briefed Members of Parliament on project activities. The responsiveness of MPs, and the quality of legislation will be further enhanced by: support for improved polling capabilities, public opinion surveys, and increaeed civic awareness, a11 of which are part of the #&pal Democracy Btratogy.

Democracy scholars at the recent Democracy Officers Conference re-affirmed our impression that analysis of causal relationships between damocracy and economic developaent has been inconclusive,

despite conventional wisdom t3aL ~a~saningful democracy is impossible in , the poorest countries (say those with per capita incomes below $100~).

However, many in attendance pointed to Nepal as a particularly promf~ing case for countering conventional wisdom. (India is, of course, a long-term counter example.) Nepal lacks many assumed prerequisites, but benefits from strong e l i t e commitment to open politics and democracy.

However, the practical reality of relationships between democracy and development remain. Nepalese citizens expect that democracy will brina more rapid development. But, in order to "kick startn Nepalese devit ! opment, drastic structural changes are needed, which will cause haru~~hip in the short-term and will be extremely unpopular. In order

I to ensure these changes are followed through, several conditions must be creatsd and political leaders and the public must be convinced these measures are truly essential for economic development: the prevailing misconception that democracy and development necessarily occur simultaneously must be cleared up; and leaders must be able to "stay the coursea with effective policy ref o m . Through encouragement of eemocratic process, and exyosure of parliamentarians, other leaders, administrators, and the public to economic reform issues, the Democracy Project, as part of +he broader Democracy Strategy, can work to achieve enabling conditions for economic reform. The Project will be a model for future A.I.D. democracy work in at least two senses: it presumes to strengthen a I1relatively least de~eloped~~ democracy; and will continue t:le unusually close collaboration characterizing Mission democracy work until now.

E x t r a c t i n c r v - Formal identification of democracy strengthening as a major

institutional goal for AID came only in December 1990. AS a result, there are few projects with a democracy label, and most of those are months, rather than years, old. Nevertheless, there is a concerted effort to extract lessons learned from the wide range of project activities which are relevant to our work in democracy. This includes: activities funded under paragraph 116(e) of the Foreign Assistance Act (human rights, strengthening legal institutions); project activities which respond to Title IX (through work with NOOs, local governments, user groups, and cooperatives); and myriad project activities which respond to the New Directions legislation of 1973 (by seeking the mrticipa t ion of proj ect beneficiaries 1 .

USAID work during the 1960s and 1970s with local government: proved ineffective under the restrictive and centrslized Panchayat regime. However, some aspects of that experience are relevant to programing under the Democracy Project, both for the local government component and the community mediation sub-component. For example, the work eventually foundered when it became clear that central bureaucrats were unwilling to surrender their own power and risk potentially "dangerousn political innovations by surrendering significant fiscal authorities to district and village governments. Undemocratic political human rights practices which became apparent by the mid-1960s made it clear that upartylessw systems do not provide credible approaches to democracy. However, USAID did not choose to become active in support of human rights and legal reform work until the mid- 19808, when a number of 116 (e) -financed activities began to build a

7 I '

knowledge base which has been useful in planning judicial-strengthening activities, and established useful relationships with NGOs already undertaking work which can be directly incorporated into the Democracy Project .

Although AID'S worldwide Democracy Initiative began only in 1990, the Latin America and Caribbean (LAC) Bureau started supporting democracy work in the 1970f3, and in 1985 substantially expanded its democracy program. There are many lessons which can be learned from LAC strategies and projects over the past several years. The Bureau reviewed and redefined its Democratic I n i t i a t i v e Regional S t ra t egy in 1991, and the Democratic Ini t i a t i v e s Performance Monitoring Study f o r the Latin Mlcarica and Caribbean Bureau was also completed in 1991. Both documents provide valuable insights into the probable effectiveness of a wide mriety of democracy support programs. The strategy document includes valuable comments on specific proj ects and project components, such as the Miinicipal development Project in El Salvador which has "proved very popular and successful in empowering local officials and communities and delivering development servicesN. Imglementors of the Democracy Project will find it useful to periodically review relevant information from the LAC Bureau (although details of country strategies clearly vary according to the local situation). It is pleasing to note that many lessons learned in Latin America (and recorded below) are already reflected in the Nepal Mission's democracy work. For example:

*Political sensitivity demands that proj ects be designed and implemented openly and collaboratively with host country institutions and in close coordination with other US Government agencies and interested donors;

*Earlier, AID-funded democracy activities (for example human rights support) can evolve into a substantial dexzocracy program, by building on already-es tabl ished re lat ionshigo of cooperation and trust with host country institutions;

*Most strategic objectives for democracy work focus on i n ~ t i tut ion-bui lding; such programs require a long- term commitment by both AID and host country institutions;

F l o x i b i l i t y is the key to effective assistance; that flexibility must be both reac t ive and proactive;

*Regional program activities can be effective in raising mutual acceptance and understanding of democratic values;

*Successful projects must be based on strong hoot country comduunt to strengthening democratic institutions overall. K

Those fundamentally sound propositions were frequently reiterated at the January 1992 A8ia Democracy Off icer#' Conference in Kathmandu, both by academics such as Larry Diamond and Raymond Gastil and by Mission Democracy Officers. Democracy Officers proved a valuable source of practical information on implementation of democracy activities, and this source should be tapped by implementors of the Democracy Project. Althcugh programming must be country-specific (another idea which emerged during the Conference), neighboring countries often share political, historical, and institutional experiences, and thus will greatly benefit from the exchange of ideas

8

and resources through Regional Programs and direct inter-mission communication.

~ p t j x i t i e s in The rapid arrival, in April 1990, of democracy in Nepal has

encouraged USAID to support a variety of activities well in advance of this Project. The US Mission's democracy program has developed in response to unfolding political developments and action proposals of local organizations. The success of these activities is due in large part to inter-agency cooperation within the Mission, enabling us to share information and quickly sort out the most promising areas and methods for support. Over time, as a result of our own accumulation of experience, a clearer notion of the democratic process on the part of Nepalese colleagues, and preparation of the Nepal DemOcEuZy Strategy in Spring 1991, our approach has become gradually more proactive and etrategfc. Our recent work can be usefully summarized within the framework of "sub-ob j ectives" of the Asia Democracy Strategy. (See activity list in Annex E.)

Voice: Using Asia Bureau democracy funds, USAID has made grants to two Nepalese organizations to undertake nation-wide opinion surveys regarding the constitution (June-August 1990) and proposed local government legislation (December 1991-January 19921, thus ensuring public input into drafting of these funmental documents. Grants have also funded establishment of an NGO newsletter and NGO conferences, and development and publication of civic education materials for newly-lit- esate citizens. An ongoing umbrella grant to The Asia Foundation (TAF) has funded a variety of democracy activities, integrated into a TAF country program which has included support to a local organization to hold public forums on economic reform, and institutionnl support: to the

I National Press Institute. USAID is funding democracy training in col- laboration with the United States Information Service, under the Development Training Project, including programs on "grassroots democ- racyw for NGO workers, "covering legislaturesu for journalists, and ucongressional elections" for parliamentarians. Using general funds under the W O Co-Financing Project, USAID has supported a variety of activities broadly relevant to democracy, including legal aid and legal research, and the work of Private Agencies Collaborating Together (PACT) in ieentifying and strengthening small rural NGOs.

Qofce: The main focus under this sub-objective has been funding for a variety of activities supportive of the national elections of May 1991, including a major voter education campaign by the indigenous NGO SEARCH, a series of election observation activities, and a TAF- supported voter education film produced for the Election Conrmission. Another local NGO produced a series of district political profiles which provide impartial assessments of the political, economic, and social situation in key districts. Initial reports in this series were prepared for election observers in May 1991; an expanded set will greatly Imgrove the quality of political dialogue and analysis.

Oovernauco: Much of the Mission's support for good governance has been channeled into TAFts democracy program. A major element is institutional strengthening of Parliament and it's Secretariat. Specific activities include development of the library and research services, and training for Members and Secretariat employees through I,

study tours in Asia. USAID is directly funding the work of SCOPE, a local NGO established expressly to give institutional support to

9

Parliament, through seminars for Members, publication of a parliamentary bulletin, and assistance to committees, including research and drafting support on request. US training for Members has been provided under th3 USIS International Visitors Program.

Redreee: A number of activities to strengthen the judicial system have been implemented under USAID funding and TAF management. These include support to a local NGO, FREEDEAL, for policy research on Nepal's current arbitration system and establishment of an arbitration council, support to a variety of public interest law groups, and assistance to the Ministry of Law, Justice, and Parliamentary Affairs (MLJP) to update printing equipment. TAF has also received P-ID/W and USAID funds for institutional strengthening of the Judicial Services Training Center.

Several aclivities pre-dating April 1990 contribute significantly to Nepal's democratization. The Irrigation Management Project strengthens the legal and administrative position of farmer-managed systems, and ensures government engineers worlc in a more collegial manner with farmer groups. The Rapti and Forestry Development Projects are improving the legal/administrative position of conanunity forest groups, and hastening turnover of government-managed forest to local groups. PVO grants to CARE and Save the Children support work with village-level development codttees. -

Other bilaterai donors working in democracy strengthening are Denmark (DANIDA) , Germany (GTZ, Naumann and Seidel Foundations) , and the U.K. (ODA). All are finding an ample supply of small, apparently promising, activities to fund, and meet regularly to share information and minimize duplication. By clearly stating USAID plans, the Democracy Project will advance the donor dialogue

Of other donors active in Nepal, DANIDA has been quickest to respond to democratic developments, providing support to elections, Parliament, the judiciary, and the mushrooming NGO community. They have concentrated on provision of hardware and related TA to public institutions such as the Election Commission, Parliament, and the Supreme Court. NGO support, has been for a variety of democracy- strengthening activities--e.g. election monitoring and public advocacy. Danish support for elections has been so comprehensive that USAID anticipates no further support in that area. Regular coordination has enabled the US Mission to establish that, although the Danish will continue to support both Parliament and the judiciary, that support will neatly complement USAID activity under the Democracy Project. DANIDA is emphasizing procurement of hardware and providing closely- related technical assistance for administrative units of Parliament and the Supreme Court where USAID-supported activity will not be taking alace. The Danes are funding a review of indigenous NGOs which have had the greatest involvement in democracy activities so far, and will share the results with USAID ant? other interested donors.

The German aid program, the ~ritish aid program, and UNDP are closely involved in support for strengthening local government. Close coordination has enabled USAID to ensure the complementarity of our resources with those of other donors. The UNDP is currently funding production of an Operating Manual for recently-elected local officials.

USAID plans (using funde outside the Demmracy Project) to fund publication snd dissemination of the Manual.

USAID will continue to coordinate closely with DANIDA and other donors, to avoid duplication and ensure complementarity. The Dam33 are committed to assist the Supreme Court with furniture, equipment, and modest construction work. This will neatly complement TA and Training provided under this Project . Similarly, furniture, equipment, and assistance to the training unit already provided by the Danes will com- glenlent institutional strengthening work in Parliament under the Pro- ject. Ongoing Danish work in support of the Election Commission is quite comprehensive; it is unnecessary to contemplate further assistance to that institution under the Project.

to be Undertalran Outside t h e - The US Mission has identified several activities potentially

significant for building or maintaining Nepalese democracy which will, however, not be supported under the Democracy Project. Some excluded activities will be supported under other USAID projects or by other donors. Other potentially-valuable activities are simply too expensive for this modest Project. Work with indigenous NGOr; will continue under the PVO Co-Financing Project. User groups will continue to receive support under the Sustainable Income for Rural Enterprises Project. Business associations are supported under the Agroenterprise and Economic Liberalization Projects. Some training activitias directly supportive of Nepalese democracy (e.g. programs for parliamentarians and journalists in collaboration with USIS) can be continued under the Development Training Project. Funds remaining under a grant to the International Foundation for Electoral Systems may be used to support an elections-strengthening activity.

Indigenouo NGOs can play many useful roles in strengthening democracy through advocacy at the national level. They enhance voice by representing the concerns of constituents--women, the poor, small business, low castes, user groups--in national policy dialogue and agenda setting. They support choice by providing impartial voter education and organizing election monitoring. They improve governance by providing research services and technical assistance (again, impartial) to parliamentary committees and ministry policy- makers. They improve systems of radreee by providing legal aid, initiating public interest law cases, carrying out legal research, compiling case materials, and training disadvantaged groups in their legal rights. They support accou~tabi l i ty by playing a Uwatchdog" role vis-?-vis Parliament, the courts, and ministries and departments, and publishing critiques and observations. In some ways, it matters relatively little which sectors or problems advocacy NGOs work on. Successful policy work in virtually any area can strengthen democratic systems. However, there are sectors and problm areas of particular interest to USAID, either because they reinforce other work in democracy strengthening, or reinforce our broader portfolio. Useful democracy-strengthening roles can also be played by rural NGOs working at the local level. USAID is supporting a US NGO, Private Agencies Collaborating Together, in a pilot program to identify, train, and strengthen small, indigenous NGOs operating in two rural districts. While NGO-strengthening activities are essential for Nepalese democracy, USAID has already made a strong start under the PVO Co-

Financing Project. The Project is being amended; to better focus activities on USAID' s three Strategic Objectives, ona! of which (seeking 81plural!.sm and well-established democratic values i~nd processes1') is identical to this Project's goal. Thus, NGO-strengthening work will be supported under that Proj ect .

An independent press hao already sprung up, but professional skills and athics are in short supply. USIS regularly includes journalists in the International Visitors Program, aud has developed strong connections with the journalistic community through regular infonnation exchange and work to strengthen the journalism curriculum at Tribhuvan University. It seems most appropriate to strengthen 1'journalism-in-general~9 through collaborative funding for in-country (Academic Expert) and US training (International Visitors Program) for individual journalists. USAID8s Development Training Project (DTP) has been redesigned, will provide significant funds (roughly $250,000 annually) for democracy-strengthening training, and is the most appropriate mechanism for providing training to journalists. The Mission Democracy Committee can play a useful role in identifying potential trainee^ (including a significant number of journalists) as part of the Annual Training Plan under DTP.

Television and radio are strictly state-owned and controlled, and it is widely accepted they should remain so. So long as this view is dominant, there is no scope for supporting broadcast media under the Pro) ect . Nevertheless, Project implementors should be alert to any policy change which allows support for greater pluralism in radio broadcasting. Duo to Nepal's extremely low literacy rate (33 percent overali, 16 percent for women), radio is the medium which reaches the largest number of Nepalese. If government decides to entrust radio broadcast licenses to the private sector, local radio would be the most appropriate place to start, since costs would be low, and broad- casts are not likely to be perceived as a direct challenge to national policies. Our main contributions would be in training and technical assistance. If an opportunity should arise, a relatively quick response could be made through contingency funds under the Project.

Broad-based English training strengthens democracy by putting leaders and citizlens in closer touch with world opinion and democratic alternatives; but work in this area is not contemplated (although English lessons for parliamentarians and Secretariat staff may be appropriate and affordable). Strengthening labor unions is important for Nepalese democracy, but will be pursued under USAIDps Economic Liberalization Project. Development of stable, responsible political parties is also crucial for sustained democratization, but sensitivities in Nepal are such that any support for party strengthening will be perceived as partisan. Civil Service accountability and effectiveness are weak, and reforms can do much to align the administration more appropriately to Nepal's emerging democracy; but work in this crucial area implies financial commitments far greater than this Project can provide. The world Bank is contemplating loan support for a major civil service reform, and USAID is considering provision of complementary funds for technical assistance and training support of this effort. his will require authorization of a new project in FY '93.

A. PROJECT OOBL AND PURPOSE Ths goal of the Democracy Project is to achieve increased plural-

ism and well-established democratic values and processes in Nepal. The project purpose is to strengthen a group of institutions with greatest promise for achieving effectiveness and sustainability in supporting democracy and development.

B.PROJECT COMPONENTS Project activities will be aimed at three key democratic

institutions whose performance must be substantially and rapidly improved in order tc live up to expectations of the general public. By developing the institutional capabilities of Parliament, the judiciary and local government, the project will increase their credibility and effectiveness, thus helping to develop well-established democratic values and processes in Nepal. As certain activities under the three components will be implemented through local NGOs and Tribhuvan Uhiversity, the Project will support increased pluralism as an integral part of democratic process. All components include elements designed to encourage active participation of women in democratic processes.

Project activities will be closely complemented by activities under other USAID projects: the Development Training Project, will provide training focused on democratic process and issues (especially through the USIS International Visitors and Academic Specialist Programs) for members of Parliament, the legislature, judiciary, press, and NGO community; the PVO Co-Financing Project will include support for a network of national-level policy-oriented NGOs; SCOPE will continue to receive support under the PVO Co-Financing Project.

Targeting management systems and human resources in major democratic institutions--Parliament, the judiciary, local government-- will enhance sustainability of Nepalese democracy by gutting systems and people in place which, after a fefl years, can operate effectively without further external financial assistance.

ParllamentarvDevelamnMt Project activities under this component primarily aim to improve

the functioning of the legislative process by strengthening the capacity of parliamentary Members, Secretariat staff, and private support services. The Project will also support civic awareness programs concerning parliamentary process and policy issues, and establishment of improved management systems in Parliament. Activities will focus on developing human resources rather than providing computers and other equipment, which have been a major focus of TAF and USAID programs so far . In developing human resources , particular attention will be given to developing the leadership and technical skills of women parliamentarians and female professionals in the Parliament Secretariat. The Project will:

*Strengthen the leadernhip # k i l l # of elected representatives, ensuring they develop competent, professional parliamentary practices and have a clear understanding of policy issues and their significance to voters;

*Improve the functioning of the Secretariat and other support institutions which, by providing efficient adminintrat ive and

13

reeearch servicee, will enable MPs to carry out their responsibilities to the nation and their constituents; and

*Develop public understanding of the parliamentary system and relevant policy issues and what can be reasonably expected of elected representatives.

v With very few exceptions, Yepal's elected representatives lack

experience of political leadership, and consequently have a limited understanding both of their role and responsibilities and of substantive policy issuee affecting their constituents. Under the Project, leadership development initiatives will address both procedure and policy, in particular through in-country workshops and briefings which will largely be conducted through the mechanism of a "Sgeal;er's ForumM. Members will also participate in study tours of SAARC parliaments and new democracies.

A Spe8kerr8 Forum: The Speaker's Off ice will provide a respected, politically neutral, administrative location for distinguished foreign experts to provide short-term advisory services to parliamentarians, covering policy issues in a specialized field or issues of parliamentary procedure and practice. MPs aoked to participate will generally be senior leaders with a particular need for the infom.tion to be imparted, such as ministers, committee chairmen, opposition leaders, influential members, and sometimes senior administrators. However, some seminars may be opened to a relatively wide audience of parliamentarians and Secretariat staff. The core activity will g~nerally be a daily semAnar of two hours or so, continued over a week or more, so experts can tailor material presented to the needs of Nepal and the participating politicians.

At the same time, experts can seme as short-term consultants to Parliament, working in their area of expertise with individual Members or small groups. Parliamentarians will have ample time during the course of an expert's visit to ask questions and receive specialized information and advice. Infomml education techniques and personalized advisory sessions will be employed to engage Members* full attention and respect, and generate discussion between different Members. Some presentations will be videotaped and edited to form the basis of a video library for parliamentary training (which will be housed in the Secretariat and will include other videos on legislative practice and policy, and English language training.

Experts for the Speaker's Forum will include parliamentarians, senior administrators, and dietinguished Private Sector leaders from other Asian and Western democracies. To professionalize parliamentary practice of Members, subjects covered will include: parliamentary practices and procedures; policy analysis and review; budget analysis; functions and procedures of committees and public hearings; presentation, augmentation and canpranise in passing bills and budgets; legislative drafting; and methods of providing for effective constituency senrices. To strengthen parliamentarians* understanding of specific policy issues and their significance to Nepalese voters, Forums will focus on such topics as '*modern econdc theoryg1, and more specialized topics such as "sharing irrigation water amcng autonomous political units8', and lotax incentives for small industryu.

Other embassies, donor groups, foundations and NGOs will probably want to cooperate with the Speaker's Office in identifying and funding visiting experts for the om. The Forum will thus be a mechanism for programming support from many sources. Subjects covered will be decided by the Speaker and his staff in consultation with parliamentary colleagues. This will be done by establishing a small ;o"\isory cornmitteo, cowrising the Speaker, three or four other senio! 3rs, and donor regresentatJ.fas. A Nepalese professional will be hired to support this activity, working with the advisory committee to identify subjects, set up rchedules and work with visiting experts and sponsoring organizstions. This person will also perform advisory services for other parliamentary support activities and for the Speaker's Office. -

Study Toure t o Other A s i a Countries and New Democracies: Exposure to other countries at varying stages of democratic development can provide opportunities to learn and share experiences with leaders of new and advanced democracies. Observation of other countries in Asia and other new democracies will provide a particularly appropriate context for Nepalese parliamentarians to compare systems and practices. At the request of the Speaker, the Project will include an annual Democracy Tour of parliaments in South Asia, in which about a dozen Members will observe committee structures, the budget process, political party operations in the legislative branch, bill drafting, and other key functions of lwislatures.

There will also be a study and exchange program under which Nepalese parliamentarians can observe different emerging democracies, especially in EasLern Europe and the former Soviet states, and meet with legislators there to discuss common problems and solutions. m c h program will be preceded by a special seminar to brief participants on the Zegislative systems they will be viewing, and followed by a debriefing, so participants can share what they have learned with colleagues. L -

Only with access to accurate, timely information on key issues can Members conduct informed debate and draft and review sound legislation. However, the Secretariat is still far from able to provide the professional information and research services which this requires, largely because of a lack of trained, permanent staff. A priority under the Project will be development of the Secretariat research service, through further training in management and imglementation of legislative information systems, po2icy research methodology, and preparation of briefing materials. Library resources will be increased by procurement of information storage equipment and inotructional videos for Members. The Project strategy is not only to work with the Secretariat in upgrading its support services, but also to increase demand for them by making Members more aware of the benefits of such services to them in the performance of their duties.

Library, Ref arence, and Rewearch Sarvi ce Developman t : The L

final phase of introducing a computerized legislative information system will be implemented, and training of staff in necessary skills will be continued. A half-time Nepalese computer consultant and periodic visits by a Management Inionnation Systems Consultant based in Bangladesh will be the major sources of training. In addition, a specialized training course will be tailored for a core group of six

1 5

Secretariat research staff based on the model of the US Congressional Research Service. This course will focus on research methodology and preparation of basic, non-partisan issue briefs for members that lay out the Background, provisions, and likely impact of measures under consideration.

To eupplement print library resources which are being or will be acquired under TAFls parliamentary support program, the Project will support development of a video library as a training and substantive issue resource for Members. This will include acquisition of existing videotape8 and production of new ones on such issues as legislative practice, policy analysis, and various policy issues, as well as interactive videos for ~nglish-language training. ~egali-language videos on local legislative practice will also be produced, and presentations in the Speaker's Forum will be videotaped and added to I the collection. To store the vast quantities of information produced by Parliament each session, either a CD-ROM system or microfiche equipment will be procured. The feasibility and cost-effectiveness of these alternative uystems will first be determined, by computer and legislative systems management consultants working with the Secretariat.

Management Training: A recent needs aosessment by TAF management information systems staff identified various sections of the Secretariat in need of management attention, in particular the Table, Bill, and Question sections, which are fundamental to legislative process and provision of public information. TAF will concinue to fulld its Regional Legislative Systems Consultant, to asses4 management needs, conduct training and provide TA on a periodic basis. Under the Project, administrative training for staff through in-country workshops will be conducted by Nepalese management consultants as well as US and Asian legislative consultants. As the Project progresses, attention will be paid to specific areas such as committee staff, protocol, financial administration, and budgeting. Each year selected Secretariat staff will also be sent for internships in other legislatures in Asia.

Critical Secretariat staff positions are not being filled due to a government hiring freeze; but once they are hired, new employees will require extensive training. Even following effective development of Secretariat cagabilities in research and analysis, MPs will neee access to outside experts for advice and in-depth analysis on specific issues, as well as an in-house research cauability. At the same time, Tribhuvan University needs to strengthen its ability to provide policy analysis of legislative issues. Establishing a competitive fellowship program for outstanding new graduates, and establishing a University staffed legislative resource unit to serve Parliament will promote linkages between Parliament and University and strengthen both institutions. Meanwhile, primary responsibility for final drafting of legislation for enactment into national law rests with the Ministry of Law, Justice and Parliamentary Affairs (MJLPA). However, since very few of its staff have received training in legislative drafting, the quality of bills going before Parliament is inadequate, which adversely affects the quality of debate and ultimately of enacted law. Training in legislative drafting will enable the MJLPA to more adequately fulfill its appointed role in the legislative process.

Universi t y Fcrllowahips and Research Unit : Annual fellowships will be awarded to outstanding young graduates of Tribhuvan University, to work as Parliamentary Service Interns to assist the Secretariat with legislative research in support of Members and committees. Project funds will cover a stipend for each iiltctm, salary for an intern advisor, and expenses for interns to produce a modest newsletter on their research activities for use by Members and staff. This program will put additional analytical resources at the disposal of Parliament and may encourage some talented students to pursue careers as legislative staff.

In order to establish a pool of expert Nepalese consultants at Tribhuvan University, a survey of research resources inside and outside the University system will be undertaken. From this a list of local experts available to do in-depth resoarch and analysis of issues for Parliament and committees will be drawn up. It is expected the research unit will not only draw upon university faculty, but outside experts, constituting a unit modeled on the (TAF-supported) Korean Institute of Legislative Studies and the Indonesian Parliament's Distinguished Fellows Program. An agreement will be made with the University on procedures for staffing the unit and paying approved consultancies. Establishing a research unit responsive to the needs of Parliament will enhance tha capabilities of the University as well as the Parliament; the unit could evolve into a Nepal Institute for Legislative Studies.

Miniatry o f Law, J u s t i c e and Parliamentary A f f a i r s : As requested by the Ministry of Law, Justice and Parliamentary Affairs, legal scholars will be brought from the United States to conduct a two- week workshop and help devise plans for upgrading legislative drafting capability and related legal skills of the Ministry. In addition, one Ministry staff member will be chosen each year to attend a one-semester course in legislative drafting at the Public Law Center in New Orleans or the Legislative Drafting Program at Columbia University Law Schonl. -

Although programs to develop Parliament's effective ogeratiorl as the national legislative body will help elected leaders (and hence democracy) to live up to popular expectations, general ignorance of the role of Parliament arid its Members feeds unrealistic expectations and hinders responsiveness by MPs to constituentn. Efforts to strengthen the institutional capability of the Parliament must be accompanied by initiatives to expose citizens to Parliament's role in Nepalese government and society.

Proposals will be accepted from NGOs and policy research institutions for programs that offer creative approaches to civic education and public awareness of the legislature, its procedures anti members. Examples might be small newspapers or pamphlets targeted to ' , newly-literate adults, which cover policy issues affecting local communities, advise on how to evaluate local representatives, etc. Proposals for programs to reach as wide an audience as possible, such as through radio programs, will be encouraged,

EL-"- The US Mission is pursuing, as part of its po l i cy dialogua

agaada, reforms in budgeting and persoxinel management to give Parliament greater control over its own financial resources and support staff. USAID doesn't support extravagance in this public institution,

but feels it is essential that sufficient staff be assigned to ensure smooth operation of the legislative process. For example, during the first three sessions, Parliament is being forced to rely on temporary, untrained recorders of floor debates, and there is no formal effort to record committee business. By taking effective control of its own budget and personnel, Parliament can do much to ensure the sustainability of the democratic process.

Z L B g a l / J u d i c i a l D e v e l o a r n e n t Judicial development i3ctiviti.e~ under the Democracy Prclject will

render the judiciary more independent, effective and credible by working with judges, judicial officers and lawyers to articulate the law more clearly and systematically, improve court procedure and management, and broaden professional and popular access to the law. In order to achieve equal access and legal standing for all groups in society, women and members of disadvantaged caste and ethnic groupo must be given special consideration in project activities, particularly in selecting garticipanto in training programs and in setting up community mediation services. All sub-components will. include significant elements of human resource development, but the major focus will be establishment and maintenance of systems of court management, and judicial procedures and research, with training and TA directed towards these ends. Pre-Project funding which USAID is providing to the Judicial Services Training Center exclusively supports development of suotainable judicial training, which will, along with USIS programs funded under the Development Training Project, neatly complement activities working to improve judicial systems. In addition to consultants working in support of particular sub-components, the judicial development: component of the Democracy Project will be supported on a part-time basis by a TAF legal consultant. Activities under this component will work in particular to:

*Slimirma t e delays and i n juatice caused by the present system by developing improved systems of court ad'minietration and case managament, a new procedural code, and by upgrading the aranagement capabili t ies of judges and judicial officers;

*Increase profeeeional access to the law by establishing adequate systems of 1 egal reeearch , publics tSon and dismemina tion I of enacted and case law;

*Provide community-level access to the law through establishment of pilot commtznity mediation activities under a partially formalized system with the support of the legal/judicial connrmnity

The Nepalese court system is hobbled by archaic procedures and administration, by lack of a case management system to process litigation through the courts, and by poorly-paid judges and judicial officers who are untrained in court management. While, recent GON- decisions have increased District Judge salaries substantially, the Project will address other problems, such as development of a new procedural code, establishing adequate systems of case management, and providing training in court management for Supreme Court judges and staff .

? -

Prooedvral Coder Procedural law in Nepal is based on the traditional Hindu-based legal code, the m l u k i A i n , in which many provisions are ambiguous and/or obsolete. The Supreme Court has requested, ax¶ Judge Babcock (who visited Nepal on a USIS-funded trip) has recommended, that support be extended to remedy this. Following translation into English of the Wuluki Ain \'nupported by Asia Foundation core funds), project funds will support development of a nQw procedural code.

As requested by the Supreme Court, a 12 dj.8trict survey will be conducted by a local organization of problems inherent in the current court system, including problems attributable to the existing procedural code, those caused by absence of a case management system, and the diff iculty of enforcing judgements of the courts. Follovring comgletion of the survey, a US consultant specializing in civil and criminal grocedure will visit Nepal to advioe selected ju&geS, government officials , lawyers aud academics, who together will than draft a model procedural code, A team of judges will review the draft code and prepare a final report for the Chief Justice setting forth specific proposals for new procedural rules. The US consultant will make a second short-term trip to Nepal to provide follow-up advice before final adoption of the n w code.

C a m Management: The current absence of a case managemsnt system causes intolerable delay and cost inefficiency, and xaises questions about the fairness of cases being tried. Specific problems stemning from lack of case management will be identified in the survey preceding development of a procedural code. Consultants, from the US or Asia, will be brought to Nepal to work with the Supreme Court on developing systems for docketing cases, maintaining and transferring case files, monitoring judicial caseloads, and avoiding backlogs. The consultants will also make recommendations on court revenue generation mechanisms for raising the salaries of judges and government attorneys, to alleviate the temptation to take bribes. A follow-up visit will be m e by the consultants,,(grobably in the third year of the Project) to evaluate the functioning of the case management system at that stage and make further recmendlations.

Training i n C'ourl: #anagematiit: Development of new systems of grocedure and case management must be supplemented by training for judges and judicial staff in court management. Exposure to judicial systema abroad is effective in encouraginy judges and officials to recognize and resolve pr~bl@mS. Supreme Court judges and staff will be sent to judicial education programs on case management and administration in the US or Asia, and others will participate in stridy tours of the United States (one person per year for six weeks) or Asia. Funds under this activity will also,grovide for the Chief Justice to attend the biennial LIAWASIA Chief Justices Conference, which focuses on court management issues and shared problem ~olving.

Training for the lower levels of the judicial profession will be provided by the Judj.cial Services Training Center, which receivles support under a separate USAID grant to TAF. The professional development of judges will also be supported through small - scale seminars/workshops on issues of grocedure and substance. These will include presentations by: consultants working on the various activities under TAF s legal/ j udicial development program, visiting j udiciatl experts, and senior Nepalese experts.

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Formal legal research systems existing in Nepal are inadequate and inconvenient to such a degree that few lawyers or judges rely on law outside the outdated and ambiguous m l u k i Ain (legal code), and those that do rely heavily on informal research networks. The Asia FounBationls Law Specialist visited Nepal in 1991 and 1992 to assess the existing Nepalese legal system, specify shortcomings, and propose research and information tools which need to be created in order to improve the system. In accordance with his findings and recommendations, one or more of the fcllowing research tools will be developed under the Project:

1) A new Nepal Digest to find judicial questions interpreting the Muluki Ain, statutes, rules, and the Constitution;

2) A new Nepal m o o n Patrika t o locate the full texts of cases digested in the Nepal Digest;

3) A Nepal C i t a t o r Pervice to check the continuirig validity of reported opinions, and locate newer opinions which cite those opinions; axld

4 ) An Index af U~npubliahodl Opinion8 to find the latest unpublished opinions of the Supreme Court by subject matter.

Supreme Court officers will be made responsible for digesting Sapreme Court decisions, which will be included in various publication and dissemination activities by the Supreme Court (see below). TAF will fund Tribhuvan University law students in preparation of an updated digest of Supreme Court opinions since 1979.

TAF will also entertain proposals from legal NGOs or Tribhuvan University law faculty to support private legal documentation systems. The project will seek out: the most promising proposals for research tools necessary for a complete and accessible research system. Priority will be given to propoflals which develop a plan to generate income from their research publications. Because the publications should prove invaluable to any practicing lawyer, it is anticipated that most publications and information services will be profitable ventures.

E U h ; m No mechanism exists for transmitting Supreme Court decisions and

oplnions to lower courts, which in theory are bound to foJlow those precedents. Although Nepalese law consists of a complex layering of traditional, statutory, and constitutional law, the only widely- disseminated legal refererice work is the Muluki M n . The Project will support the Supreme Court in development of a syotematic publication, dissemination and research system, as well as publication of hitherto unpublished decisions and ~nuch-needed procedural bench books.

Publicatione: The Project will provide the Supreme Court with the technical and financial assistance to publish a limits11 number of its most important decisions predating the 1990 Constitution, and assist the Court to establish systems for regular timely p~lblication of all full bench decisions r~i~lce then. Financial and tclchnit:al support will also be provided for production, publication, and distribution of easy-to-use bench books for judges on civil procedure, criminal procedure, and rules of evidence. The bench boeka will be published in a carefully indexed, loose-leaf format which all0~13 for easy

20

reference, and for inclusion of additional material on a regular basis. They will be provided free of charge to Supreme, Appellate, and District Court Judges, and will be sold to lawyers, thus creating a revolving fun8 for use in updating and enhancing the books. Financial and technical support will also he given fdr frequent publication and wide dissemination of a Suproure Court Diges t , to be taken on by the Pesearch and Planning Cell of the Supreme Court.

Diassmlnation: Computers already donated to the Supreme Court by TAF are an important step in modernizirlg the Court research system, along with the onyoing tecP.lica1 assistance and training TAF is providing to the staff. Project activities will complement this by working to improve technical capabilities in researching, publishing and dis~eminating opinions. The Project will support increased desktop publiehing capability for the Supreme Court, by providing additional computer hardware and appropriate software to facilitate publication of Court opinions. In addition, the Court will receive technical assistance in devising a system for timely dissemination of its decisions to the lower courts, lawyers and the public.

Improved JLIdicial Research S k i l l s : Training will be provided to strengthen the research capabilities of Supreme and Appellate Court staff. Strengthening Supreme Court general research capabilities is essential for improving preparation, drafting, production, publication and dissemination of decisions, and training will be provided to Supreme Court and Appellate Court research staff. -

L For Nepal, v i l l a g e - l e v e l d isputa resolution offers a timely,

cost-effective way of alleviating serious problems of delay and inaccessibility in the formal legal system. Mediators and conciliators do not need to be legal professionals (although some training is desirable), for such a system to strengthen the rule of law. Moreover, this system is consonant with Nepalese tradition, under which the majority of disputes among generations of villager^ have been resolved at the village level. Studies completed during the Panchayat regime found, however, that most villagers, including village panchayat officials, were ignorant of the limits of the statutory jurisdiction delegated to local officials, a ~ d *,f prescribed procedures for registering decisions within tho fo~,lal record system. So village councils frequently made decisions beyond their juri~dictional authority, while valid local decisions were too often taken by rich/persistent losers into the formal system. Any attempt to establish a non-formal system must be accompanied by efforts to gain the support of the legal/judicial profession (in particular the Bar), Parliament, and the general public.

Establishment of p i l o t community mediat ion work will be approached in stages, starting with a study to determine the feasibility of coll~rmnity mediation systems. This will involve research into current dispute resolution practices in a few case study areas, focusing on the period since the Village Panchayat Act was abrogated and village judicial zouncils disbanded in 1990. At the same time, locations will be identified for establishing pilot mediation projects as pilot models for strengthening village mediation.

An a c t i o n reaearch team of Nepalese professionals will be constituted from key institutions, ideally including representatives

from at least the joint secretary level from the Ministry of Law and Justice and a representative of the Nepal Bar Association. An observation tour will be organized to Sri Lanka, Bangladesh and the Philippineu to expose team members to working Asian c o m i t y mediation systems. The team will, then review the status of current legislation bearing on community madiation, determine necessary amendments and

-I additions, and! draft new legislation accordingly. The Project will provide a consultant to the group, probably an Asian expert who has been directly involved in drafting a successful community mediation Act (such as the Sri Lankan Secretary of the Ministry of Law).

In the second year of the Project, pilot mediation a c t i v i t i e s will be established in two or three locations, following guidelines provided in the new legislation. This work will be continued on an experimental basis for two years, after which rime a comprehensive emluation will be conducted, to include recommendations on next steps. (As the pilot projects progress, TAF is also going to explore opportunities to establish community legal aid programs as well. Work of this type will be supported from TAF central funds.). -

The Democracy Project Manager will ensure that consultants working with the Supreme Court to set up court management and record systems also assist in establishing adequate =annual budgets for system operation. The Asia Foundation plans to work with legal NGOs on production of the various digests and indexes described above. While publication of these items will be subsidized initially, the organizations will be required to charge for subscriptions before the end of the Project. Potential readership (more than 2,000 practicing lawyers, hundreds of judges and court officials, central government bureaucrats, local government officials) is very high, and it is quite feasible these publications will become elf-financing (perhaps . profitable) within several years. Strengthening community mediation processes will lessen the case and financial burden on the formal court system, and implementors will explore options for making mediation services (staffed by volunteers) self - financing.

St=eIx#AelJlina The Panchayat system provided for the existence of local govern-

ments at the village, municipality, and dist~rict levels. In theory, local governments had substantial authorities to raise revenues, plan local development activities, and review and critique activities of central ministries. In reality, these authorities were severely con- strained. Centrally-appointed officials, notably Zonal Commissioners and Chief District Officers, had very strong powers, were tasked largely with keeping the peace and stamping out political opposition, and generally undercut political and economic entrepreneurship as potential threats to vested interests. Under multi-party democracy, effective, responsive local government is crucial for creating a "spaceff where local initiative and entrepreneurship can flourish, and will provide most citizens with their most immediate experiences in democracy. Competent local governments will need to actively pursue development by ensuring adequate facilities-transport and marketing infrastructure, utility and sanitation services, a sensible regulatory environment, occasional intervention with central authorities, reasonable schools-so businesses, cooperatives, user and special

interest groups, and dynamic individuals can pursue opportunities and perfom to their potential.

In addition to the obvious equation between strong local govern- ment and governance, work in this area should be directed toward enhancing mice (straightforward communication channels from consti- tuents, such as public hearings, open council meetings, etc. ) and accountability (effective communication in the opposite direction, by publishing meeting minutes and budgets, by following open contracting procedures, etc.). In addition to strengthening these elements, the Project must take account of two interlinked pre-condition8 for local democracy: governments must have substantial legal autonomy and significant local revenuee.

Local Oovernmene: New legislation on local governments-- district, municipality, village--was passed by Parliament in March 1992. With election of new local governments in May 1992, there will be strong pressure on village, municipal, and district governments to facilitate economic development. To a considerable extent, they will need their own resources to do this. However, the ability of local governments to raise significant local revenues through taxes, fees, licenses, etc. is open to debate. Some observers feel potential resources, at least in many isolated arid poverty-stricken areas, are too small to be of real interest. Others feel even extremely modest local resources, as little as Rs.10 per capita per annum, are worth collecting and using. Even modest locally-generated funds, available "at the margin" for investment, dramatically shift local relationships with and attitudes toward outside agencies (central ministries, donors, NGOs, etc.). Instead of listening and reacting anxiously as representatives of local "recipients" or "target groups", local leaders respond as investors of precious, locally-generated funds. They are clearly accountable to local residents for sensible decisions and efficient allocation.

The Project will support local government strengthening by working through a local organization (NGO, firm, or research institute), selected competitively, and firmly committed to this type cf work. USAID will also facilitate a relationship between the local organization and a US Historically Black College or University (HBCU) or 8 (a) firm, to provide additional TA and training support. The selected organization ("Cooperating Agencyu, to simplify discussion) will elicit expressions of interest from local governments (district- and village-level) already committed to increasing their revenues, and enhancing accountability and equity in local government operations. We anticipate the Cooperating Agency will work with four district governments and with two village governments in each selected district. The Cooperating Agency will provide technical aenio tsnce and training to new local politicians, and employees of local government and central ministries, and matching funds to local governments that perform well.

It may be possible and appropriate to recruit one or more Peace Corps volunteers with qualifications and experience in local public administration. The possibility of posting such individuals in selected areas to work with the Cooperating Agency will be explored during the early stages of the Project. The possibility of using International Executive Service Corps volunteers to provide expert advice on revenue and accountability systems will also be explored.

- The Cooperating Agency and its US subcontractor will be expected

to implement this Project component as a major training exercise. Cooperating local governments will be selected on the basis of their commitment to performing well, and on the basis of plans for local development they have produced without outside assistance. USAID wants to work with governments committed to eucceee, rather than using more conventional bureaucratic criteria of relative poverty and isolation, which too often assign prcjsct activities to areas of little commitment, with little chance of success. Local governments will demonstrate their commitment by responding to a request for proposals (circulated by the Cooperating Agency) with a detailed plan for increasing local revenues and improving accountability and equity in local governn~ent processes. Governments preparing the most promising proposals will be visited in the field, before a final decision is made. The Cooperating Agency will rank order applications, and recommend final selections, but must have USAID concurrence for the final selection.

Cooperating Agency personnel will develop training plane, mootly on-the-job, for local elected officials, for their bureaucratic counterparts, for locally-hired employees of new governments, and for local residents, who must be encouraged to take more active roles in local planning and implementation, and must gain sufficient understanding of the potential of local people to effectively critique good and bad performance by politicians and bureaucrats. Since women have little access to decision-making institutions at the local level, and virtually no women were elected in recent local elections, project activities (training, TA) will need to take particular account of the needs of women. Women's participation in local government advieory boards and committeee will be strongly encouraged.

Advisors will work with elected officials, involving them from the earliest stages in assessing revenue opportunities, setting dwelogment priorities, and establishing management systems. Informal opportunities for training--taking ten minutes to explain new procedures for handling land revenue paperwork during a District Council meeting; setting up a booth to explain a new Vil3,age Dwelogment Plan at a religious fair--will be vigorously pursued. The Local Government component will offer particularly promising opportunities for peer training, as cooperating officials are encouraged to travel to other coopera?.ing local government areas, share ideas, and work cn comon problems.

While it will be impossible to support national programs to imgrwe revenue generation, there are significant opportunities to work with interested, committed local goverpmente, helping them to increase own-account revenues, and documenting their successes in increasing revenues and applying them to local development, in the process enhancing both autonomy and management expertise. The purpose of this sub-component is to assist and encourage selected local governments to generate local revenues at or near optimal levels.

The cooperating agency will provide technical aa8istance to selected local governments, assisting initially with surveys and

24

financial analyses, to identify promising revenue resources within current statutory authorities of district and village governments. For d i e t r i c t 6 , revenue generating authorities are significant. For mC3t districts, the taxing authority with greatest potential is the local development land tax . ~ l s o significant is the decision of drafters of the District Development Council Act to provide an open ended authority for Districts to identify new taxes, fees, and duties and, with central government permission, to begin collecting them. Another potentially-significant set of revenues are natural reeource-baeed. District Development Councils can collect fees or taxes from river-bed resources such as stone, sand, and stone chips; can collect fees from river rafting companies and operators of water mills; and can tax users of public forests and pastures through taxes on wool, turpentine, herbs, and stray animals.

Other potential revenue sources are infrastructure-based.

. , Districts can levy taxes or user fees for locally-controlled bridges, roads, canals, dams, ponds, etc. District governments can also set up

,, . , f e e - f o r - s e r v i c e f a c i l i t i e e , such as guest houses, libraries, clinics, hospitals, and maeting halls. They can also collect l icenee fee8 for radios, televisiozs, and videos, and finea for a variety of misdemeanoro. In addition, districts have authorities to receive outeide revenuea which will significantly enhance their flexibility and total resource base. Tney can borrow (from banks, apparently); can accept grants and do~~tions from individuals, NGOs, and foreign donors, ao well as from central government; and can sell, rent, or mortgage movable and immovable property. District governments are able to raise funds through auctione, and can set up fee-for-service facilities. Other authorities (such as issuing bonds) are not yet clearly defined.

V i l l a g e e , understandably, have more restricted revenue a~thorities . However, they are sufficient to allow many Village Development Committees to support significant local development, and achieve substantial autonomy. The taxing authority with greatest potential is probably the houee tax . For village governments with significant commercial activity, certain market-baaed taxes and fees , such as fees from vendors in weekly markets, taxes on commercial and trading sites, and fees on transactions in animals may provide substantial revenue sources. Natural reoource-baeed revenue8 may be derived from fees levied on users, or direct sales from public lands, pastures, ponds, gardens, etc., including such products as soil, grass and straw, lopped branches, and roots. Village governments can also collect fees for use of public we11e and tape , and for private us0 o f r i v e r o r atream water. Villages can collect fees or taxes for registration of radios, televisions, videos, rickshaws, tongas, and gush carts. Other sources of funds include gifts, donations, and contributions (including non-gwernment sources), fines, income from local government property, and interest from financial assets held.

Technical advisors from the Cooperating Agency, and its US-based sub-contractor, will assist with design and establishment of systems for assessment ard collection of taxes, administration of licensing and fee systems, f ~ r leasing of public facilities, for establishment of fee-for-service facilities, etc. that are selected as most promising in particular localities. They will also advise on organizing public relations/education campaigns for new revenue sources, help to set up

2 5

complaint and appeals syetems (for citizens who feel they have been assessed unfairly), and advise on systems of fines and other sanctions for those who refuse to pay. There will be intensive training programs : for local goli ti cians, who must understand what is being - done, and why, and must be able to explain and justify these programs to local residents; for revenue officials (employees of local government, or central government revenue officials) who need instruction in efficient, equitable collection methods; and tsxpajrsr~, who must underszand how and why they are being required to gay, and must be convinced that becter government services and significant, recognizable development will occur as a result. To ensure effective use of new local revenues, local gover-ments will also be assisted in getting up formal accounting and budgeting procedures.

Modest financial support can also be extended to cooperating local governments. Matching grants will also be made available to governments, to reinforce initial efforts in revenue generation. Matches will be made against particular taxes or revenue sources, will not exceed a 1:l nlatching ratio in the first year, and will thereafter decline to lower levels. (Matching grants will take some of the risk and "sting" out of enhanced revenue generation until taxpayers can see clear demonstrations their payments are used effectively and honestly.) Small grants may also be provided by the Cooperating Agency to enable cooperating local governments to emplay local revenue officials, or for other coats associated with establishment of effective revenue systems, or fee-for-service facilities. Local governments will also be advised and asctisted in establishing self -financing servicos . Where there is clea..: evidence of local need and willingness to pay (typically through user fees), the Cooperating Agency can assist with TA and training, and perhaps with small matching grants. A variety of services may be appropriate--clinics, suspension bridges, lending libraries, drinking water systems, mini-hydroelectric systems. After the first few months of work with local governments the cooperating agency will select no more than two or three types of services for support, and will assist only a few governments at the outset.

Governments willing to work toward increased local revenues will also be required to meet high standards for accountability to voters and taxpayors. (Creating the impression, and substance, of good g u w r ~ ~ o n t will do much to justify an enhanced local revenue base.) Toclurical assietance will be provided for setting up a variety of accouotability 8y.tsmo. Slightly different packages will probably be appropriate in different locations, depending on; literacy levels, ethnic differences, and degree of physical isolation. However, a basic package of accountability mechanisms might include: regular publication of meeting minutes and budgets, opening meetings to the public, transparent procurement procedures, setting up informational signboards at construction sites, and regular public hearings and forums. There will also be training for politicians, locally-assigned employees of central go-rernment agenciss, local government employees, and citizens on accountability systems, their purpose, and how they can be used in political anY administrative processes.

It is also appropriate to encourage new governments to work collaboratively with local groupe-NGOs, user groups, cooperatives,

Parent Teacher Associations, Mothers' Clubs--and to actively seek the political participation of disadvantaged groups. This will be an integral part of assistance to cooperating local governments, and a condition for receiving assistance with revenue generation. Cooperating governments will be assisted in setting up collaborative mechanisms, in particular through ensuring access of local groups and the disadvantaged to local government planning and decision processes through co-optation of public representatives to various ad hoc and advisory committees, and mechanisms to ensure broad participation in planning processes. Where appropriate, local governments may also he assisted in collaborating with NGOs and user groups through joint planning, funding , and implementation of development activities.

Discussion to this point has emphasized the importance of achieving technical and political competence within a local government area. Effective revenue generation builds l o c a l autonomy. Accountability systems facilitate better l o c a l oxersight and sensitivity to local problems. Technical and management training and equity mechanisms ensure better local planning and implementation. But political competence for local government is compounded of a number o f elsmenta, many requiring alliances and influence bemnd local boundaries.

Local governments must deal with adjacent or nearby loca l governments on a co-equal basis. Several Village Development Committees (VDC) may wish to cooperate in upgrading a major trail, making the bed wide and level enough for mules, and providing bridges at key points. A lowland VDC may wish to tap an unused spring of a higher neighbor to supply a drinking water system. A small municipality and adjacent VDCs might join together in financing and operating a mini-hydro electrical system. Isolated W C s might join in constructing a hostel at the high school in the district town.

In other cases, a VDC needs to exert influence at the d i s t r i c t level, or a District Development Committee (DDC) will henef it from political action at the national level. Village, municipal, and district governments will sometimes benefit from co l l e c t i v e action. Such actions might include: lobbying Parliament, mounting a public information campaign, bringing a case before the Supreme Court, demanding more responsive services from a ministry, or negotiations with the majority party in the Government. Elected local politicians need to learn how and when to work within party boundaries, and when it is more effective to work collectively, across party boundaries.

The call for broader political effectiveness will arise immediately from the need to link local development councils to the national political structure and to government administration. The way in which these institutional relationships are established will be crucial to the process of decentralization and to the delivery of resources from the center to the districts. Needs and opportunities will vary, and the Project Manager, Cooperating Agency employees, and Democracy Advisors must be alert to them.. A VDC Chairman may need advice on how best to approach his colleagues in adjacent villages with a proposal on financing a suspension bridge. A group of farmer-managed irrigation systems may need help in organizing a management structure for an entire watershed. A group of VDC Chairman may want help in

preparing a presentation to parliamentary leaders justifying greater flexibility in administering the house tax.

It will become crucial for local leaders to establish channels for influencing national policy, and elected officials from cooperating local governments are likely to take leading positions in this process. While a foreign donor probably can't exert undue influence in this exglicitly political process, it may be appropriate to provide modest financial and advisory support for national associations and communication networks. For example, the Project might support establishment and initial work of a national association of District Chairmen, a regional association of Village Chairmen, or a district association of user groups. Groups can provide valuable member services-training, newsletters, analynis of new legislation-and undertake political action-through lobbying, policy analysis, preparation of draft legislation, support for symgathetic candidates, etc. Most of these activities will require little or no financial support. However, modest funding ($40,000) will be provided at the outset:, to ensure resources are available when needed.

It will also be worthwhile to explore possibilities for linking Peace Corps Volunteers in selected villages to these political strengthening activitier. For example, a PCV with rural development/revenue generation expertise might take an advisory role with the VDC in his host village. This would free project resources for use on building broader political competences and institutional linkages.

One activity that will be funded from the beginning is a Local Government Mvisory Council. Sympathetic, professionally-committed representatives of the Ministry of Local Development, National Planning Commission, Prime Minister' s Off ice, majority and opposition parties in Parliament, and local NQOs will be invited to join the Council. Council members will receive reports and publications, will attend semi-annual meetings which will rotate through the Cooperating Districts, and will advise the Cooperating Agency and Cooperating Local Governments on their work. Fannation of an advisory council will be one way of cnsuring that experiences of Project model villages can be systematically related to democratic development nationwide. The issue of effective local government can also be included in policy dialogue with national leaders and linked to dialogue on performance of development proj ects .

s.

USAID has deliberately chosen to support local government strengthening through a modest pilot project. It is administratively impractical to work simultaneously with 7 5 District Development Committees and 4000 Village Development Committees under any circumstances, and far beyond the financial capacity of this modest Project. However, with careful attention to documentation of experiences with four district and eight village governments, much can be learned which will be of value to other district and village governments. Thus, substantial resources under this component will be reserved for research, analysis, and dissemination. The Nepalese Cooperating Agency will staff a small, but full-time unit that will regularly: carry out proco.6 documentation (of the work of local governments), focus group and individual interviewe with local residents and elected leaders, review crucial documents (budgets,

2 $8

minutes, contracts, financial accounts), and prepare documents and reports which describe, analyze, and disseminate the experiences of cooperating local governments.

The primary audience for prepared materials will be elected local officials, in other cooperating local governments, and across the country. One promisin; approach to this audience will be through introduction of training materials into the curricula of the Local Development Training Institutes. (See below.) As successes in cooperating local governments begin to accumulate, these governments can expect frequent visits by outsiders--other elected officials, NGO leaders, donor representatives, central government administrators. The Project can assist by offsetting some of the costs of visitors (tea and snacks), can assist in preparation of briefing materials, and can provide guidance in setting up local tours, etc. Other ~ h a ~ e l s for communicating with this group, such as a newsletter, will also be sought. Other audiences will be national politicians arid senior

- bureaucratic policy makers, and limited materials will be developed with them ir, mind. Most materials will be published in Nepali, but some items will be translated into English for donors, international scholars, etc . --

The GON already has a set of training institution~ for bureaucrats and politicians working in local government. Local Development Training Institutes are located at Kathmandu, Jhapa, Janakpur, Dolakha, Pokhara, and Nepalganj. These institutes were established as Panchayat Development Training Institutes in the 19606, with significant assistance from USAID. They are already staffed and reasonably well equipped, and can be expected to proceed with broad- based training for about 45,000 newly-elected local officials. The Local Government component of the Project can contribute to ongoing training work of the Institutes by feeding experiences in cooperating local governments into training curricula. Cooperating Agency employees can assist with: pamphlets that explain Lessons Learned about local revenue generation, acc:ountability, and equity, tapes and slidus, teaching cases and games, and arranging for trainees to visit cooperating local governments to learn from their successes and failures. Materials developed can also be shared rvith international and indigenous NGOs , wit^ donor pro j ects , with other training institutions, and with formal educational institutions.

Sustainability is a major focus of this project component. Local governments will be nutstainable and autonomous to the extent they can raise significant own-account revenues, and thus revenue generation is the primary theme.. The governments will also be sustainable to the extent they build on existing systems of t r a d i t i o n a l l o c a l governance. (See section 1V.B.)

C.A POLICY DIALOGUE AQINDA As in all forms of institutional development, democracy

develogment will be significantly assisted or impeded by the existence of appropriate or inappropriate policies and administrative systems. Thus, democracy-strengthening is an area where policy dialogue is much needed. During U S A I D / N ~ ~ ~ ~ ' s recent PRISM (Program Performance Information System) exercise, it was decided to develop an initial

~ o l i c y dialogue agenda for two purposes: 1) to ensure that institutions we work with will encounter minimal impediments and optimal support in getting established and accomplishing their work, and 2)to enable the US Mission to play a useful, consistent role in supporting Negalese democracy.

Our initial effort resulted in identification of six policy concerns (see Annex F for details) :

*Establish a women's caucus in Parliament to pursue improved women1 s rights.

*Establishment by Parliament of control over i t s own finances and personnel .

*Formal recognition of an a l t e r n a t i v e loca l l e v e l d i spute r eeo l u t i o n sys tom.

-The l e g a l and r e g u l a t o r y environment f o r NGOe is liberalized.

-Central government nlakes administrative changes to ensure c i v i l s e rvan t s work e f f e c t i v e l y wi t h l o c a l governmentrr .

.Central government establishes an e f f e c t i v e local government grant sys tem.

Since these issues impinge closely on Nepal's national sovereignty, US Mission employees will not generally adopt public stands in relation to them. However, the Mission will regularly re- sssoss the pol icy dialogue agenda (at six month intervals, through dialogue among USAID colleagues and inter-agency discussions by the Mission Democracy Cornittee). New items will be identified and added to the agenda, and where there are clear cases of success or failure, other items will be dropped or reformulated. Revised agendas will be widely circulated within the Mission in order to 'keep American and Nepalese professionals well-informed, and facilitate a consistent approach to dialogue with counterparts. By and large, pursuit of the policy dialogue agenda will not require Project funds, although contingency funds (line item VII) may be used to carry out occasional field research and analytical studies, or to fund workshops or information campaigns, as appropriate. The Mission will stand ready to assist local organizations pursuing impartial analysis and measured public discussion of key policy issues. The PSC Democracy Program Manager will be responsible for engaging the Mission in semi-annual updates of tha agenda, and for preparing written guidance and arranging briefings of Mission staff as appropriate. Democracy Advisors will be asked to identify issuec which may be usefully added to the agenda.

D.EXP1CTBD ACHIBVEMENTS After four years the Project will have achieved significant

impacts in three activity areas:

Parliament: Ministers and other leaders will be capable of articulating a coherent national strategy and presenting it to Parliament, Nepal's citizens, and donors. There will be a formal and effective committee system capable of reviewing proposed legislation, soliciting public input as appropriate, and making effective use of supporting research and analysis. The library, research section, and

training unit of the Secretariat: will be working effectively in support of Parliamentary committees and the legislative work of the lower house, carrying out research and analysis which members find useful and which directly impacts on legislation. A policy research and resource unit will be established at Tribhuvan Crniversity, which will supply consultants to the Parliament for specific research and analysis on a regular basis. Functioning of the Par1it:urlent will be further enhanced by the support of graduate interns.

Judiciary: A new Code of Procedure will be developed, and court management will be improved, so all registered cases reach an initial judgement in a reasonable time. There lei11 be an effective system of recording, publishing, and disseminating judicial decisions, and a legal research system which ensures that: decisions are based on valid precedent. A set of non-formal adjudicative processes--e.g. mediation, arbitration, village courts, referral services--will be in place in selected areas to reduce formal system caseloads and provide ordinary men and women with timely, affordable, convenient justice. The judicial corps will be widely known to be competent, incorruptible, knowledgeable about the law, and independent.

Local Government: Selected local governments will achieve greater autonomy and effectiveness through rais:lng and effectively using local revenues, and will set a positive example for other local governments. Formal accountability systems, such as publication of meeting minutes and budget documents, and regular public meetings, will be i.n place. Local politicians, and bureaucrats they work with, will be inc~:easingly affective in strategic planning and program implementation. Local governments will establish effective working relationships with local user groupo,, NGOs, cooperatives, etc. ensuring all interest groups, particularly those representing the concerns of women and disadvantaged caste ant! ethnic groups, find an effective role in planning and implemontation processes. Associatioxis of local units such as local. governments and user groups will effectively represent local concerna at the national level.

Ac t i v i t y E Y U EXP4 EY2!i E Y s Total

A*-

Local Training 6 6 6 6 . 24 Studies & Analysis 10 10 LC 'a1 Support Cost 9 9 9 9 3 6

TA 15 3 5 15 15 6Q Total 4 0 30 3 0 30 13 0

Be- Local Training (for 5) - 2 1 - - 2 1 Local TA, 3 3 . - 6 Foreign TA, 2 - - 2 -aOb3 - 5 6

Total 4 5 37 3 8 5

c.Parliament_.Secretariat:- Local TA 10 10 10 LO 40 Foreign TA LO 5 - - 15

5 5 5 2Q Total 25 2 0 15 ' 15 7 5

D.&x&ersl F a a m Local Trng (Workshops) 9 9 9 9 36 Foreign TA 2 5 2 5 2 5 25 100

9 9 9 9 -46 Total 43 43 43 43 17 2

E . 1 Int'l Training - 3 8 2 5 12 7 5

F.- .- Local Training 5 - 5 - 10 Inttl Training 15 15 15 15 6 0

Total 20 15 20 15 7 0

0.- Local Support 20 2 5 2 5 2 0 90

COMPONENT SUBTOTAL 263 283 219 183 948

A- Studies & Analysis 12 - - - 12

TA 24 - -28,

Total 12 24 36

I 3 . m ~ C a w RPS- - Local Training 6 6 6 5 24 Local Support Cost 9 9 9 9 3 6

Total 15 3 0 17 15 7 7

c.- Intll Training 18 2 0 3 5 18 9 1

TA 15 J5 - 3 Q

Total 33 20 5 0 18 121 I

Local Support 10 2 5 25 15 7 5

E . 1 Int'l Training 12 - - - 12 Studies & Analysis 10 - - - 10

Foreign TA 12 - - - 1 2 10 30 8 5 U

Total 44 30 45 45 164

COMPONENT SUBTOTAL 155 17 5 186 12 6 642

111.- Strencrthenina.. Qov- a 1 A . 1

Local Training 2 3 3 2 1 0 .Tech. Asst. 3 0 3 3 37 4 0 14 0 Travel & Maint. 32 1 2 12 12 68 Local Support 15 45 45 45 150

2 3 10 15 2 Total 8 1 96 107 114 398

B.- i a.Loc.Gov.Qrants 50 60 50 2 5 185

5 10 1 5 10 4 Q Total 5 5 7 0 6 5 3 5 225

c.&-- Technical A S S ~ S ~ . 116 116 2 8 28 288

a 40 40 10 10 l O Q

,, * . Totill , 156 156 3 8 3 8 388

' 7COMPONENT SUBTO'I'AL 292 322 210 187 l o l l

1v.- '' Democracy Advisor . ' 62 6 2 34 3 4 192

Demdcracy Poll 10 1 0 1 0 10 4 0 S n e e , & . h r a l . 5 5 55 5 7Q

SUBTOTAL 77 77 9 9 49 302

TOTAL (without 842 912 799 600 3153 contingency/inflation)

VII.- - 7 3 12 8 14 6 347

GRAND TOTAL 842 985 927 746 3500

',

F . OBLLOATIOW SCHEDULB ( $0 0 0

Funding Account FY92 FY93 FY94 Total EHR 3 8 0 2 2 0 0 ti00 PSEE 635 1200 1065 W J ? J TCn'AL '1G15 1420 1065 3500

Approx $ l o 0 0 Fir lanc in~ Method

I. U.S. lNC30/PV0 1,590 Direct L/Com. 11. Local IJOO/PVO and Support Service 1,313 Direct Pay

I I I11 .Audit 50 Direct Pay 1V.AID Direct Contact for Service 200 Direct Pay Total 3,153

Note: !me balance of $347,000 for contingency/inflation will be added onto applicable elements.

A. PROJECT IMPLEBIENTATION Although relatively small, the Project will require regular,

"hands on" implamentation. With the continuing shrinka.ge of USAID1 o US Direct Hire staff, day-to-day management will be in the hands of a PSC project manager. The Project budget is too small to justify the expense (travel, shipping, differential, etc.) of hiring a manager in the US. However, recent experience suggests it will be possible to

b ,' find appropriate candidates among expatriates and newly returned

Nepalese with extensive professional experience in the US or another democratic country. Tlius, within a month after signing the Project Agreement, USAID will advertise in Nepal for a full-time Project Manager. The ideal candidate will have professional training in law or social scienca, and will have excellent analytical, writing, and leadership skills. However, it is essential the selected person be willing to carry out all the routine tasks--PIO/T preparation, arranging scheduleo of visiting project monitors, drafting of routine implementation reports--of project implementation. We anticipate the selected individual will be an expatriate from a democratic country, but Nepalese candidates with significant, relevant work experience in a democratic country may also be ansi side red. The Project will be managed within the Program and Project Development Office, axid the PSC Project Manager will report to the Supervisory Program Officer or Supervisory Project Development Officer.

The Project Manager will monitor the work of one major grantee I _ . (The Asia Foundation), one locally-selected Cooperasting Agency, will

coordinate the semi-annual visits of the Project's Democracy Advisors, will oversea the annual Democracy Poll, and will organize the periodic updating of the policy dialogue agenda and ensure that Mission professionals are familiar with it. In addition, he or she will have clooe involvement in other democracy-strengthening activities within the Mission which complement the Project, but are not formally part of it. Among these collateral responsibilities are: participation in planning of training activities and selecting trainees for programs

3 4

with direct relevance for democracy-strengthening, under our 1)evelopment Training Project; and work with advocacy NGOs under the PVO C'o-Financing Project. (See Annex F for an overview of USAID'S Strategic Objective # 3 , and how the Project and these related activities will meet our planned Program Outcomes.)

Significant work with Parliament and the Judiciary has already been initiated by The Asia Foundation, and after careful review during P111 preparation, USAID asked TAF officials to develop detailed plans to continue that work over the four years of the Project. A formal grant proposal was submitted in ~pril, and has been revised in light of det,niled discussions between TAF and USAID employees. It includes the activities described above as part of the Parliament and Judiciary com&lonents; all of which will be carried out by TAF. TAF will hire long-term and short-term personnel, award sub-grants, and enter into contracts, as necessary, to carry out this work. Based on past performance in Nepal and elsewhere in Asia, USAID is confident TAF can satisfactorily complete this work, and we expect to sign a grant agreement with The Asia Foundation in September 1992.

&lodest additional support to Parliament and the judiciary will be provided under other USAID projects, and by other elements of the Mission, particularly USIB. A PVO grant to SCOPE, a Nepalese NGO dedicated to providing professional support--seminars, publications, research and analysis, assistance in legislative drafting--to Parliament, will complement TAF1 s work. USAID (working through our Development Training Project) and USIS will continue to identify and support specialized training opportunities for parliamentarians, jurists, journalists who cover Parliament and the judiciary, NGOs which pursue 1,obbying work and public interest law, etc. Our Embassy colleagues may occasionally identify experts who can work for short periods as advisors and trainers in Parliament. An effort will be made to recruit qualified women candidates where appropriate.

The PSC Project Manager will monitor TAF activities on a regular basis, probably through weekly meetings with TAF staff, and monthly or semi-monthly visits to Parliament and the Supreme Court. Regular coordination is esaential to ensure complementarity among the planned and ongoing activities of TAF, SCOPE, USIS, and USAID1s Development Training Project. TAF employees and the Project Manager will also need to be in frequent contact with other donors (particularly DANIDA) that are supporting work with Parliament and the judiciary.

A number of NGOs, consulting firms, and research institutes in Nepal may be appropriate partners for work in strengthening local government. USAID will organize a competitive proposal process in Nepal, and aw,ard a Cooperative Agreement or contract for this work, as appropriate. (See Annex H for a draft Scope of Work.) We will seek an organization with strong conrmitment to working in rural areas with all members of local society, including women and disadvantaged groups, and with sufficierit experience to work with local residents in a manner which is both supportive and tough-minded. Every effort will be made to select Cooperating Local Governments which are genuinely committed to significant financial self-sufficiency and genuine autonomy. The Cooperating Agency must share this commitment, and must be able to mobilize enough practical analytical skills to recognize when a given activity will. support greater autonomy, and when it will reinforce dependency. The Cooperating Agency must also be able to deploy a dozen

35

or more field workers of both sexes and from a variety of caste and ethnic groups, in rural areas, and provide sufficient training, field support, and supervision to ensure they can carry out their difficult but exciting jobs.

Requests for proposals will carefully describe what USAID is trying to accomplish with this Project component, but will also require bidders to lay out their own concepts and plans in considerable detail. It is unlikely that one local organization will be able to mobilize requisite expertise both in operating equity-sensitive rural tievelopment activities, and in analysis of local government management issues. Competing organizations will be allowed, and even encouraged, to form partnerships or consortia. The agreement with the Cooperating Agency will largely cover perso~el costs (salaries, benefits, travel, field expenses), but the budget will also incorporate a substantial fund to be used to buttress the revenue generating efforts of local governments through loans (e.g. to hire a new tax collector) and matching grants (e.g. to match returns from a totally new revenue resource during the first year or two). USAID will issue a Request for Proposals by August 1992, and will finalize an agreement by November. Since this component will give strong emphasis to equity in local government operations, it is particularly appropriate that Nepalese Cooperating Agency staff also represent a broad cross-section of the population. In addition to other technical criteria, preference will be given to bidders which offer and field a professional team which has a cross-section of castes and ethnic groups, and also includes a significant number of women.

While there are some senior Nepalese experts who are broadly familiar with issues of decentralization and local government, the Cooperating Agency will also require considerable outside expertise, for example in planning training programs for newly-elected officials, surveying local revenue generation opportunities, setting up revenue assessment procedures, establishing accountability systems, etc. USAID will seek this expertise in Historically Black Colleges and Universities and 8(a) firms, and will assist the selected Nepalese Cooperating Agency in negotiating a sub-contract with a US minority - organization. The minority sub-contractor will assist largely by supplying short-term assistance for training and advisory serviccs, and the bulk of this work will be completed in the first two years of the Proj ect .

The PSC Project Manager will closely monitor the work of the Nepalese Cooperzting Agency and the US minority organization. All Cooperating Local Government areas will be visited at least once annually by the PSC Project Manager.

Democracy Advisors, probably two or three US-based scholars of the democratic process, will be engaged to visit Nepal on a regular basis, to assist the Mission through assessment of ongoing Project activities, and advice on possible future activities. Democracy Advisors will be engaged as Personal Service Contractors or under a buy-in to an existing contract (such as the Asia Bureau's contract with Ernst & Young) . The contract for the annual Democracy Poll will be competed among local organizations; since several organizations will be trained in polling during Fall 1992, through collaboration between USIS and USAID, we are confident a suitable organization can be located. Subject to satisfactory completion of the first Poll (June

1993), the contracted organization will carry out subsequent polls through 1996. A draft Scope of Work for the Democracy Advisors can be found in Annex H. A Scope of Work for the Democracy Poll will be prepared later, with the advice of USIA polling experts.

The PSC Project Manager will arrange for regular visits by Democracy ~dvisors, will prepare a Scope of Work for each of their visits, and will participate in interviews, field trips, and discussions as appropriate.

B.MONITORINQ, EVALUATION, AND IMPACT MEASUREMENT Progress in democracy strengthening is not easily measured.

Positive results can be identified with relative ease, but are not readily quantified or rank ordered. Thus, it's difficult to differentiate between institutional changes essential to keeping a new democracy "on track", and those which are ,,nice but not essential". Another difficulty is identifying direct causal relationships between Project activities and changes (desirable and undesirable) that take place. Nevertheless, USAID plans to adopt two major approaches to monitoring, evaluation, and impact measurement: First, we will commission an annual Democracy Poll, to be carried out by a local organization. It will take a sounding of public opinion regarding progress in strengthening Parliament, the judiciary, and local government, where possible eliciting specific examples of "impacts achievedu. This poll will be used generally to track progress in democratic development of Nepal, and specifically for monitoring and measuring Project results. Assistance in drafting the Scope of work for the initial poll will be sought from professional polling experts in the Research Bureau of the United States Information Agency in Washington. Polling data will be geader-disaggregated.

Additional small polls on topics related to Nepalese democracy may be carried out occasionally, as needed. In addition to their value in guiding Project implementation, polls will also strengthen democratic processes by providing Parliament, the judiciary, loca: governments, and NGOs with feedback on their performance. Working in conjunction with other Mission elements (the Economics/Private Sector Division, USIS), the Democracy Project Manager will explore approaches

, to commercialization of political, social, and economic polling. Second, we will engage two or three Democracy Advisors to visit

Nepal to assess Project activities periodically (at least six times during the Project, twice annually for the first two years) and prepare brief overviews of successes and failures, rate Project progress, and advise the Mission and grantees and contractors on the future course of the Project. Political reporting, project monitoring reports, and periodic grantee/Cooperating Agency reports will be used by Advisors in assessment work. (A draft Scope of Work for Democracy Advisors is included in Annex H.)

USAID has set up a system of impact indicators under our program gerfonnance measurement (PRISM) system, which are directly relevant in establishing Scopes of Work for annual Democracy Polls and Democracy Advisor visits. Annual Democracy Polls and certain other evaluative activities (e.g. annual assessments of conduct of court cases) will serve a dual purpose. They will support project monitoring and, when published, provide a basis for Nepalese assessment of their democratic processes. with the poll, advisors, and other annual assessments in

37

place, a formal evaluation may not be necessary; however, the budget provides funding for a separate evaluation.

C.IMPLEMENTATIOW SCHEDUGE Events Date

*PP Approved and Project Authorized in uSAID/Nepal 6/92

*Project Agreement Signed with Government of Nepal 7/92

*PSC project Manager Hired 9/92 *Grants and Contracts for Project Components Signed and Initial Cordtments Made 9/92-12/92 *Project Advisorst Initial Visit 1/93

*First Democracy Poll 6/93

*Additional Project Advisors1 visits 7/93,1/94,7/94,7/95,1/96

*Additional Democracy Polls

*Project Completion

D.aRAY AMENDMENT CONSIDERATIONS Proposed work in local government strengthening offers the best

opportunity for working with US minority organizations. A number of Historically Black Colleges and Universities (HBCUs) have appropriate experience and expertise--e.g., in training new mayors and legislators, in revenue administration, and in formation of local government associations. There are also 8(a) firms with expertise in resource generation and general administration. The Mission will actively explore the most appropriate mechanism to set aside funds to enable an HBCU or 8(a) firm to work closely with the selected Nepalese organization on local government strengthening. The selected Nepalese cooperating organization will be assiuced by USAID'S Procurement Office in setting up a sub-contract with an HBCU or 8(a) firm.

B ENVIRONXBNTAL THRESHOLD DBCISION The Project will not finance any construction work, nor procure-

ment of insecticides, herbicides, or other dangerous chemicals. The primary emphasis is on institution building and human resource dwelop- ment. Since no detrimental impacts on the environment are anticipated, AID/W has provided a negative determination.

B. WAIVER Since the Project will be implemented largely through a US NGO

and a Nepalese firm or NGO, there will be no direct GON financial contribution. A waiver of the 25 percent government contribution is being requested of AID/W. (See Annex D.)

A,POLITICAL AND INSTITUTIONAL ANALYSIS

Consistent with US policy worldwide, support for democracy is a primary US objective in Nepal. This support has two interrelated

dimensions: a policy of public and private encouragement of democracy which guides overall US-Nepal relations, and a program of specific activities designed to help strengthen the process: of democratization.

The effectiveness of this policy derives in large meauure from 1

the value that Nepal's new leaders, and much of the population, give to support from the U.S, and other international donors. At the same time, the lack of democratic precedent and an impoverished economy constrain the ability of both democratic leaders and foreign friends to foster democratic values and institutions in Nepal. As a result, the Democracy Project can help strengthen the democratic process in Nepal, but no form of outside influence can guarantee its success.

After a remarkably swift transition from the partyless "Panchayat" system which began with the success of the popular Movement to Restore Democracy in April 1990, Nepal has achieved a relatively advanced stage of democratization. Most of the formal elements of democracy are in place--a constitution, parliament, judiciary, political parties. Local elections in 1992, followed by the formation of local councils, completed the major steps in building Nepal's democratic structure.

Nepal is currently engaged in the consolidation of democracy. The principal features of this process are the establishment of democratic practices in the institutions of government, the deepening of democratic norms and values in the society, and the effective functioning of a state based on the rule of law.

Understanding of and commitment to a Udemocratic ethic" which underlies the formal structures of democracy remain shallow in Nepal. There are no immediate threats to the new system from antidemocratic forces, and the King appears to accept willingly his role as a constitutional monarch. However, Nepal's democratic institutions are constructed on a foundation of an autocratic, centralized, and semi- feudal state. Traditional Nepalese society is very hierarchical, with caste and ethnic distinctions critically important and at times a source of tension. The three main political forces in the country-- the Congress Party, the communists, and those formerly associated with the monarchy and the Panchayat system--have a history of antagonism, and the consensus which binds them in parliamentary government and ~0nStit~ti0nal monarchy, while so far stable, is new.

A breakdown in this consensus between the political parties, leading to a constitutional crisis or state of emergency with a reassertion of palace control lacked by the army, is the most likely scenario in extreme circumstances. But it is economic rather than purely political factors that present the most critical challenge to democratic government.

In Nepal, the guiding political hypothesis being tested is that democracy is required for an equitable distribution of wealth and well- being among the population. This contrasts the other prevailing hypothesis that, in the developing world, a society must achieve a certain level of socio-economic advancement before democracy can function. The key challenge before Nepal's democratic system is to meet widely held and freely expressed economic expectations through reforms. Nepal's scarce resource base and low level of development make this exceedingly difficult, but a probable consequence of failure

to do so in the next three to five years will be an erosion of dmocracy .

In these circumstances, democratization in Nepal remains a fragile endeavor, and progress will be slow. The ilnpoverished population, both rural and urban, has an extensive set of basic needs-- schools, drinking water, health care, roads, electricity. With agriculture largely dependent on rainfall and occupying 90 percent of the population, one bad monsoon creates severe rural hardship, stalls GNP growth, and makes it difficult to supply urban areas with food. Even small price increases in public services and basic gooCs send shock waves through urban society, resulting in intense political pressure on the government, and considerable potential for civil disorder.

The government has no easy choices as it attempts to meet immediate problems, while grappling with the fundamental, long-term issues which are necessary to solving them, such as reforming and motivating an inefficient and autocratic central government administration, liberalizing the economy, and striving for effective implementation of development projects. Whereas Nepal's previous authoritarian regime was generally able to suppress demands from a poorly-educated and poorly-mobilized population, the new government is committed to relying on the more complex but unaccustomed methods of democracy to resolve conflict and move the country forward.

In this context, some conceptual guidelines for implementing the Democracy Project are necessary. First, because project activities can influence but cannot cause democracy, it is virtually impossible to measure directly the impact of the Democracy Project on Nepal's overall democratic progress. For example, provision of fax machines to the court system makes it easier for the judicial system to work, but does not necessarily make it work better. Similarly, International Visitor Prqrem trips by parliamentarians to the US expose politicians to a funckioning democratic system, but do not necessarily make them better democrats. Straightforward measurement of democratization is problematic. For example, respect for freedom of expression can lead to an increase in street protest, presenting government with the need to respond forcefully. Prolonged deliberation in Parliament can result in an apparent failure to resolve pressing issues. As noted above, it will be virtually impossibla to isolate the specific impacts of the Democracy Project within this process. Performance Indicators developed under USAID'S "PRISM" system to measure increased pluralism and democratic processes will help, but these will make most sense when evaluated in conjunction with a more general assessment of democratization, one which takes account of issues such the use of compromise and consensus, effective rule of law, respect for human and civil rights, the integrity of elections, and, perhaps most important, the political will of leaders and elites to remain committed to democracy. It is appropriate to test some relatively unconventional approaches to monitoring and measuring Project success. It is with this challenge in mind that an annual Democracy Poll and regular visits by Democracy Adviaore have been incorporated into project design.

Equally important, because the Democracy Project is necessarily mli ti call even in its most technical aspects, political concerns- - project management guidelines which focus on the basics of

-. democratization, consistent efforts to avoid and reduce political sensitivities--must be in the forefront. Project components are designed to strengthen the democratic process by focusing on democratic institutions such as Parliament, the judiciary, and local government, and on key democratic practices such as compromise, negotiation, and faithful, honest taxpaying. Consultation with the political leadership in the government and opposition regarding new and ongoing activities is extremely important. ~t the same time, project activities must be balanced and non-partisan, and eschew altogether support for particvlar political parties. Parties which participate in the parliamentary system, but adhere to anti-democratic principles will not generally be included in Project activities.

r ocal GQYemmm

The Project will primarily support the formal institutions of Democracy--Parliament, the judiciary, and local government--which are also in some detail:

Parliament : Although Parliament has existed as an institution in Nepal for nearly 40 years (from 1962 to 1990 as the Rastriya Panchayat), it was largely a tool of the monarchy during the Panchayat years. With political parties banned, elections were empty exercises resulting effectively in the appointment to the Rastriya Panchayat of representatives of the King. Parliament had little influence on decision-making, which took place largely in the confines of the Palace. No current parliamentarian had direct experience scrving in the multi-party Parliament of the 1950s. In any case, most current Members spent the years preceding 1990 working for banned political organizations, in prison, or in exile. Although Members are strongly motivated to provide effective democratic representation, they have little relevant exprzence, and generally poor understanding of open leginlative processes, including such key elements as the committee system, public hearings, and legislative debate. Furthermore, skills in policy analyeis, public presentations, and argument are undeveloped. Parliamentarians have 1 imi ted knowledge of substantive policy iseuee, so that well -meant legislation can easily fail in effecting structural reforms necessary for Nepal's sustained development.

The Parliament Secretariat did not previously perform significant services for the Rastriya Panchayat, which, in any case, had little significant work to perform. Although support activities over the past two years (carried out by TAF, SCOPE, USAID, and USIS) have helped to develop basic in£ ormation, management, and training systems, the Secretariat is still unable to cope with the workload arising during legislative sessions. (In part, this arises from the inability of the Secretariat to fill crucial positions for legislative research and recording of debates.) In addition to these problems, the Secretariat suffers from the perception of parliamentarians that they, belong to the "old bureaucracya, still beholden to the "panchayat systemt'. Thus many MPs are suspicious and unwilling to request services, while at the same time holding unrealistic expectations of an inexperienced support unit. This problem and others are exacerbated by the fact that Parliament has not yet learned how to control its own budgot, and is thus limited by financial and administrative decisions made in the Ministry of Law, Justice, and Parliamentary Affairs.

The first two sessions of Parliament reflected these limitations. Important bills have been passed, but without significant legislative review, and in substantially the same form as drafted by bu~eaucrats in relevant ministries. Procedures in the House have been chaotic at times, with substantial political posturing and occasional protest demonstrations on the floor of the lower house. The quality of reporting has been poor, and the relationship between Parliament and Secretariat, although improving, leaves much to be desired.

The Judiciary: Nepalt s adoption of an independent judiciary (through sound constitutional provisions, and sensible appointments to the Supreme Court and appellate benches) is a major departure from the previous judicial system, which was rooted in the executive branch of government. Highly centralized power under the panchayat system ensured that the judiciary remained weak and inaccessible, thus preventing dispensation of justice and effective checks on executive power. The restoration of democracy, and consequent discontinuation of vlllage councils and courts, left a judicial (as well as executive) vacuum. After April 1990, the courts lay in disuse for more than a year, further exacerbating public distrust of the formal judicial system.

At the village level, justice has been rendered for many generations through traditional non-formal dispute resolution methods. To some degree this continued under the panchayat system, and both the previous and current local government laws cede limited judicial or dispute settlement functions to local governments. There is substantial interest at present in strengthening and updating these traditional systems, in order to hold down costs in the formal system and provide more timely, lower cost "justicet' to ordinary citizens.

The Chief Justice of the Supceme Ccurt and most Nepales' citizens are committed to the rule of law, but institutional weaknesses in judicial and legal institutions dictate that the system-strengthening will require building "from scratchw in many areas. Judges have been underpaid and poorly trained; while many may be susceptible to corruption, most (like most lawyers) are ignorant of the law. Case procedure is archaic and unjust, and although Nepal is theoretically a common law country, rule of law must be a misnomer in a system where orderly recording and distribution of judicial systems is totally lacking. An understandable lack of respect for judges, lawyers and the law itself has created a situation of Ulawlessnessu, bolstered by traditional socio-political systems of nepotism, patronage, and corruption.

Local Government: Local governments have been newly r e - eetablished in Nepal. Enabling legislation was passed in March 1992, and elections were held at the end of May 1992. Key administrative regulations are only now being developed. Thus, we can reflect only on potent ial , rather than experience. The Acts provide a wide range of powers to District, Municipal, and Village governments, and seem to be motivated by genuine commitment to decentralization. However, some provisions, notably those that over-spec i fy authori t ies (such as a very specific, short list of revenue authorities for local governments) and those that provide for suspension o r diaeolut ion of local governments without specifying reasons (such as criminal acts or insolvency) lead readily to suspicions that bureaucratic drafters of the bills were protecting some of their traditional bureaucratic

powers. However, it seems clear that the scope of local government power will depend heavily on the specific authorities that relatively aggressive leaders are willing to lay claim to. Major features of the Acts are summarized below:

*Three separate ~cts, for village, municipal, and district governments

*Direct election of party-affiliated candidates at the village and municipal level;

*Indirect election of party-affiliated calldidates at the district level, from among those elected in village or municipality;

*Procedures (monthly meetings, 50% quorum requirement, etc.) and function8 (education, health/family planning, agriculture/irrigation, forestry, drinking water, public works, social welfare) are clearly specified (perhaps over-specified) in the Acts;

*Central government bureaucrats are assigned to work with local government ;

*Local governments can hire staff from their own resources;

*Governments at all levels have substantial specified revenue source8, and districts and municipalities have authority to develop o there ;

*District governments have authority to borrow funds;

*Governments are encouraged to collaborate with NQO8 and to form sub-committees including NGO representatives, intelligentsia, and social workers;

*Village governments have limited nonformal judicial authorities; they can receive complaints about disputeo regarding private land, public property, wages, prices, etc. and attempt to effect co.aciliation;

*District governments can levy fine8 on lawbreakers;

*Local governments can be euspended or di#solved, but only after a public hearing and parliamentary review.

B.BOCIAL ANALYSI8 TWO major conservative forces, one usocial", the other

"institutionaln, will resist dsmocratization of everyday life, as . essential changes are sought in neighborhood, market, community, and ' government office. The Panchayat system worked closely with regressive social forces to ensure there was very little social or economic entrepreneurship in rural areas. Full democratization of the country- side requires significant changes in social relations and bureaucratic culture.

5~ ParvaaiyMgas of Hierarchv The major challenge to more democratic social relations is the

~rv88iwae#8 of hierarchy in everyday life. The Nepalese are not socialized to assume human equality. Rather, they're brought up to accept inequality as a fact and necessity of life. Woman defers to man, younger to elder, sister to brother, and the child never openly challenges the parent on any issue. The caste system dominates in many

areas, and its principles of inequity, ritual pollution, and cultural separateness are a constant sub-text of everyday life. However, casteism is not universal in Nepal and, surprisingly, is not particularly old in many areas where it currently holds sway. It has spread during the 10 generations of the Shah dynasty, part of a cultural package which asserts the dominance of Hinduism over Buddhism, casteism and chauvinism over equality, and central authority over local leadership (which in some ethnic groups is relatively democratic) . These social patterns of ethnic, caste, and gender inequities will never be fully overcome, but must be substantially undercut if democracy and development are to thrive in rural Nepal.

In view of current ethnic problems in the former Soviet states and Eastern Europe, and perennial problems in India, Sri Lanka, and Pakistan, it seems inevitable that democratic Nepal must come to terms with its ethnic difference8 and inequitiee. So far, political leaders have downplayed differences in public, and made occasional political gestures in choosing cabinet ministers from minority groups. Only one parliamentary party has an ethnic base (among non-Nepali speakers in the Terai), and the major parties (Nepali Congress and the United Marxist-Leninists) are led by members of the traditional elite, and have not yet demonstrated they can serve the political or economic interests of minority groups. Nor have disadvantaged groups begun to effectively manipulate the political system. The Constitution expressly forbids ethnic or caste-btsed parties. However, Nepal is a caste-ridden, strongly skewed society. (See table below.)

The population can be broadly divided into the Indo-Nepaleee who are predominantly North Indian in racial type and belong largely to the Hindu faith, and the Tibeto-Negaleee, who are predominantly Tibetan in racial type and were traditionally predominantly Buddhist. The Nepalese caste system is based on ancient Vedic scriptures, but was given legal force in a civil/criminal/socia1 code (the mluki Ain) initially formulated in 1853. This document adapts the ancient system to conditions in Nepal, and attempts to absorb all groups into the Vedic caste hierarchy. In effect, the Muluki Ain was a 19th century approach to nation building, one which severely disadvantaged many individuals and groups. In spite of Vedic ideology, Brahman, Chhetris and the occupational castes are predominantly peasant farmers, with only a small number of Brahmans functioning as priests, and a small core of Chhetris who traditionally ruled the country. Hill and Terai Indo-Nepalese often have different interests. The latter, particularly the Maithili and Bhojpuri speakers, are trying to retain an indepandent identity in a Nepalese socio-political context. They feel they have been deprived of a culturally autonomous status, and oppose imposition of so-called Nepali national dress (from the Hills) and the Nepali language on them.

The Tibeto-Nepalese traditionally had no caste system. They speak Tibeto-Burman languages and belong to various "tribal" groups such as Rai and Limbu in the East, TaxEkngS in the center, Gurungs and Magars in the West, and Sherpas and other quasi-Tibetan groups in the high mountains. Almost invariably, they are either engaged in the upland agriculture, or serve the armies of Nepal, India and Great Britain. Although they do not belong to any of the four main categories of the Hindu caste system, high caste Hindus often categorize them as tldrinking castes1I and assign them relatively low Status. The Newars are 2.n ancient group, originally based in the

4 4

Kathmandu Valley, who speak a Tibeto-Bumn language, have their own caste system, and manifest mixed Indo-Nepalese anrl Tibeto-Nepalese racial and cultural elements. There are alao some e t h n i c a l l y ~nomsloue group#. The Chepangs oL Makwanpur district, the Majhi who live along the Indrawati River in the East, and Tharus who are found across the entire Terai, belong neither to the Hindu nor Buddhist faith, and were generally accordc:td low status under the Afbluki Ain. There are a significant number of Muslims in the Terai.

CASTE, ETHNICLTY, AND LEADERSHIP ( 8 )

Political Unit Brahman Chhetri NeWar Tribes Occupational Other Castes

Total Population (19m) 20.0 40.0 5.0 22 .O 5.0 8.0 Cabinet (N=24 ) 50.0 16.7 12.5 16.7 0.0 4.2 Parliament (N=265) 38.1 20.4 8.7 22.6 1.5 3.8 SeniorCi~.Ser~.(~352) 48.1 11.5 32.7 - - - - 5.8 Pol.Ldrs.19 Di~t(N=516) 40.9 26.4 14.5 9.3 0.8 8.1

The overwhelming majority of Nepalese e l i t ee are Brahmans, Chhetris and Newars, although masly Brahmans and Newars, and the great majority of Chhetris cannot be considered part of even a local elite. But virtually all members of Tibsto-Burman "tribes", Tharus and other Terai "tribals", and members of the occupational castes are denied access to posit.ions of wealth and power. Members of these disadvantaged groups are statistically unlikely to become MPs, party leaders, senior bureaucrats (oee Table above), professionals, or businessmen. If they own land, plots are likely to be small, unirrigated, and of marginal qua~lity. Many are landless, and work as agricultural laborers, bonded selxants, or poorly-paid artisans.

Women are also severely disadvantaged. In spite of constitutional language which proclaims the legal equality of the sexes, traditional Nepalese gender i n e q u a l i t i e e are firmly established in civil and criminal codes and daily life. Following the tradition of the Muluki Ain, women are denied rights to ancestral property, land tenancy, and an equal voice in family life. If a woman plans to go abroed under a scholarship program or for business, or seeks a loan or to register a ktusiness, formal approval of her father or husband is required. The national literacy rate of about 33% is distressingly low, but masks an enormous gender differential; the female rate is 16-18%. Although all Nepalese women are severely disadvantaged undsr existing formal laws and procedures, Indo-Nepalese and Tibeto-Nepalese women have substantially different status within their traditional societies. In general, Indo-Nepalese women are socially and economically less privileged vis-a-vis male counterparts than are Tibeto-Nepalese women. The Hindu religion, through the Vedas, rituals, folklore, etc., cos~sistently assumes and preaches male superiority. According to the scriptures, girls should be married before they reach puberty to ensure chastity; early marriage of girls is still frequently practiced, and is a major obstacle to women's development. Tibeto-Nepalese women generally marry later, can more easily divorce, face no social and religious taboos to remarriage for widows or divorced women, and generally have significant control over their own earnings and over property. In some groups they are actively involved in village-leva1 politics.

Ethnic, caste, and gender inequities have not yet emerged as major challenges to Nepalese democracy. In fact, Nepal is the only

4 5

South Asian nation (the Maldives aside) which does not currently face an ethnic- or caste-based insurgency or social movement. Sri Lanka provides an extreme example, but India faces several insurgencies and political movtments of this type, and there are significant cautionary examples in Palcistan, Bangladesh, and Bhutan. These regional examples, and numerous others from former authoritarian/Marxist regimes (which were able to dampen, but not eliminate, ethnic issues over a period of generations), suggest Nepalese leaders should be prepared to deal with these issues relatively soon.

However, available evidence suggests leaders are largely ignoring or denying these problems. The Constitution prohibits ethnicity, caste, language, and region as bases for establishing political parties, and the Election Commission has accordingly refused to register some partian. (Ironically, leadership of the won-ethnic" national parties is overwhelmingly Brahmin.) The population census provides little information on ethnicity and caste. Nepalese researchers, largely members of higher castes and favored ethnic groups, have shown little intellectual interest in ethnicity and inequity as research topicg, and frequently write about poverty and development processes as if these subjects were caste-free. Nepalese NGOs must face up to issues of inequity from time to time in implementing rural development programs, and have occasioi~ally adopted effective and admirable stands. However, even this sector frequently presents an unfortunate imago of well-meaning urban Brahmins and Newars in a style which substantially recreates traditional patron client relations. Perhaps there ia justification for playing down these issues at the current stage of Nepalese development. However, in the absence of suitable public fora for discussion, and of formal or informal approaches to affirmative action, there is a danger disadvantaged groups--notably Tibeto-Burman "tribes", occupational castes, and certain Terai groups--will be able to raise their concerns only through extra-legal means, in an atmosphere of violence.

There are modest opportunities under the Project and related democracy activities to address this important issue: Local government strengthening, particularly broad-based efforts in training, and work to establish sensible systems for transparency, accountability, and equity can do much to provide a voice for disadvantaged groups. In providing training opportunitiee, especially for parliamentarians, other politicians, and NO0 leaders, particular attention must be given to identifying candidates who are women or members of disadvantaged groups, and to providing special facilities--e.g. special in-country courses, translators, refresher English training--to ensure they can participate fully. Under the PVO Co-Financing Project, the work of adwcacy NWn, including those that responsibly and effectively campaign for the legal rights of women and disadvantaged groups, can be supported. Support for a parliamentary woman's caucue, can also be a useful way of addressing the legal problems of women. Used properly, a capacity for political and social polling can be of great value, enabling national leaders to sound the opinion of groups that seldom enter public debate.

A major institutional challenge to democracy is the preeminence of centralized adlminintration in everyday life. Despite an easily-verified record of lax management and poor service delivery, central ministry bureaucrats enjoy great power and prestige as they

4 6

serve in rural areas or exercise regulatory authorities. In remote areas, this aura extends down to the ordinary policeman, primary teacher, and village health worker. In addition to power and prestige, bureaucrats have traditionally enjoyed opportunities for side payments and other favors. In addition, bureaucrats have often been the primary beneficiaries of donor projects--receiving training, supplementary salary and per diem, honoraria for meeting attendance, etc. As the countryuide is democratized, as new user groups, pressure groups, and special interest groups are formed, as new demands are made on service providers by politicians and ordinary citizens, and as local politicians assort their power, bureaucrats can be expected to resist. meir ability to do so, and probable impacts of resistance on rural democracy, will be a major institutional analysis issue in the PP.

A Disaster i n Public Sector Service Delivery: In a pattern widely accepted in South Asia, many GON officials assume it is necessary for central government to dominate rural service delivery. Kathmandu-based departments accept primary responsibility for primary and secondary education; health and family planning; agricultural research, extension, and input delivery; veterinary, irrigation, and farm credit ssrvices; dri~klng water and electricity; construction and maintenance of roads and other infrastructure; and management of forests and other natural resources. Bureaucrats who perform service delivery tasks are assigned at the district level, and sometimes at the level of sub-district and village. u S ~ ~ ~ / ~ e p a l is currently co- sponsoring, with the World Bank and GTZ, a major review of rural service delivery. The first phase--case studies in three representative districts--has been completed, and the second phase-- examination of options for reform--is proceeding.

Complaints against public sector service providers are legion. Agricultural extension workers seldom visit isolated areas, restrict their services to the well-t~rdo, and offer little useful technical information. Attendance records of teachers in isolated primary and secondary schools are abysmal, and teaching is limited to rota recitation of textbook materials. Male village health workers are ill- equipped and disinclined to provide services to women and children. Health stations are undermanned; too often the assistant bookkeeper or

> peon is found dispensing medicines. Rural electrical and drinking water systems have too many, under-qualified employees, are poorly maintainea and operated, and require large operating subsidies. Every year the Agricultural Inputs Corporation is weeks late in delivering fertilizer to Hill farmers who are planting the winter wheat crop, and offers only three products in the rapidly evolving agricultural sector, where cash cropping farmers would benefit from more varied formulas.

Fortunately in recent years, through donor projects, the work of international and indigenous NGOs, fledgling efforts of private firms, continued operation of traditional management groups in isolated areas, and given enhanced "operating room" under multi -party democracy, a modicum of pluralism exists in rural service delivery. The Congress govornment must carefully establish parameters which allow these essential iilstitutions to flourish. Certain activities--primary school management, agricultural extension, health services--will benefit greatly from a stronger local hand in management. Even where rural work continues to be carried out under strong central control, more can be done to ensure responsiveness to local needs. Administrators of health clinics, hospitals, and agricultural research stations can be

4 7

required to form and consult with local advisoxy committees. The relationship between elected officials and central ministry officials can also be re-structured--e.g. by requiring the District Chairman to write efficiency reports for district technical officers, and making them available to other District Chairmen who may be potential employers. The Administrative Reform Commission wi.11 be examining many of these options over the coming months. The Cormnission has already recommended a major reduction In the Civil Service, and a reduction of one-fifth to one-quarter of all employees is antic:Lpated.

Two component8 of the Project can address issues of bureaucratic r e c a l c i t r a n c e at crucial levels of the political system. Parliamentary s trengthening can coxxtributo suustantially to monitoring, critiquing, and reforming the work of the bureaucracy. Committees, working through a system of public hearings, can call on senior administrators to explain and justify their programs T~ikewise, they can invite consumers of public servicen to comment on the strengths and weaknesses of those services, thus gaining additional insights. In the process, co~nnittees may make significant progress toward identifying appropriate reform measures. ljocal government strengthening can put local people and their :representatives in a stronger bargaining position vis-a-vis central bureaucrats. Enhanced local revenues will enable local governments to match and complement central government resources for programs they find useful, but will incline them to reject investments in programs that are ineffective or poor? y -conceived. Elected local officials will be well-placed to critique services.

Air. a later date, USAID will also consider options for supporting admini - t k a t i v e reform in Nepal, perhaps in collaboration with the World Bank, supplementing their loan funds with. grant funds for such activities as re-orientation training and tec:hnical assistance in designing new administrative and personnel systen~s.

Gov- During the Rana era, central government emphasized revenue

generation and maintenance of law and order. Beyond these limited "functionsN (they can't be termed "services"), local communities were expected to be self-sufficient. Communities and local groups managed a variety of socdal and natural resources, and provided the minimal infrastructure required by a subsistence-.oriented production system. Temp1 98, monas t e r i e s , and ra l i g ious schools may have received occasional support from the royal family or Ranu lineage, but the bulk of these institutions were constructed, managed, and maintained at the community level, fully reliant on local labor and construction materials, and limited cash inputs. Forests and pastures were managed under local committees or appointed o,r elected of:£ icials. Local management skills for forests and pastures were substantially undercut during the 1950s and 19608, as forest lands were nationalized. Over the years, thousands of local groups have construcLed dams or tapped springs, then built the necessary canals and ditches to deliver i :~rr igs t ion water. Many farmer-managed irrigation schemes continue to oxarate, some as small as a couple of hectares, others serving hundreds of hectares, with farmer groups fully responsible for construction, maintenance, and operation, including such challenging tasks as water allocation, and punishment of those who shirk maintenance work or steal water. The Kathmandu Valley is dotted with beautifully-cons~ructed r a t s - tap8 and artificial 2ank8, some still operational.

4 8 i

Traditionally, maintenance and operation of these important community resources was funded from land grants, often made at the time of death. However, granted land was taken over by the Panchayat government in tne 1960s, making effective financing and maintenance far more difficult.

There is much local knowledge of management and governance, although some skills are llrusty" and some systems are defunct, due to takeover of land by the government a generation ago. However, ~lince local managemeilt systems were not mandated or standardized by central government, and had to meet the needs of a v a r i e t y o f locationie, agronomic challenges, ethnic ~ ~ o u p s , etc. they offer a wide range of particularized skills and techniques which may be appropriate for new local governments and the varied user and special interest groups they deal with. While hundreds of useful examples are possible, a few will have to suffice here: The Khan mgger residents Thabaang in Rolga District regularly meet in a village assembly of all adult men and women, for discussion and joint decision-making. This model can be usefully adopted as part of fonnal local government. For example, the Village Development Committee could convene the assembly each year to seek community concurrence for the proposed annual budget. The Th8kali residents of Thukche in Mustang District operate an indigenous social welfare ~ y s t a m which might provide a useful model for other communities.

Thousands of farmer-managed i r r i g a t i o n syrrtems presumably offer dozeus of possible "solutions" to a variety of local management Uproblems". For example, each system must mobilize labor for routine system maintenance. How is this done to ensure reasonable equity and efficiency, and can similar approaches be used by local governments for maintaining trails, suspension bridges, or periodic markets. Each irrigation system must face the challenge of al loca t ing water and many must deal with d e t e c t i n g and pundehing chea t e r s . Can principles of equity and fairness used in allocating irrigation water be applied to assessing the house tax? Can the system of fines and punishments used against those who steal water be adapted for those who steal electricity from a community hydropower ~iystem? Can judicial or mediation procedures used in settling water disputes be applied to commercial disputes equally well? The Cooperating Agency working with local governments will be required to investigate traditional systems of local governance, and to incorporate useful elements into modern systems.

C.ECOWOHIC AND FIWANCIAT~ ANALYSIS A recent study by McMillan, Rausser, and Johnson ("Freedoms and

Economic Growthn, Institute for Policy Reform, November 1991) examines statistical relationships between "institutional reforms" (mainly introduction of enhanced political rights and civil liberties) and various indices of economic growth. Not surprisingly, the results are complex and not easily ga3eralized. Nevertheless, the authors identify the following "implications": (i)the economic benefits of freedom reforms are systematic and significant, (iileconomic benefits, in the form oE increased growth, occur with a substantial lag after the initiation of reforms in political rights or in civil liberties, (iiiltypes of reforms likely to be successful vary by geographic region of the world, and (iv)civil liberties are particularly,advantageous to economies in low growth yearo.

It is widely acknowledged by Nepalese that local governments which raise significant "own account1, revenues will be far more autonomous (and effective) than those wholly dependent on central grants. However, there is no consensue on the feasibility of local revenue generation in rural Nepal. Many policy-makers and scholars believe available resources are so inadequate that revenue authorities for local governments (other than municipalities) are of little interest at this time. However, a study financed by USAID and carried out by Syracuse University in 1986 argues there are eignificant opportunities for local revenue generation. During PP preparation, a Nepalese expert who participated in the 1986 study has been updating that feasibility work and suggesting mechanisms for delivering central grants so they enhance local autonomy. The following conclusions can be drawn from feasibility work in Rasuwa (Mountains), Salyan (Hills), and Jhaga (Terai) districts.

Recent Performance: The democratic era has brought significant backsliding in local revenue collections. With the and of panchayat local gwernmento, district and village leadership reverted to resident central bureaucrats, who hesitated to collect revenues, even at the previous low levels. Many citizens may have come to associate MdemocracyM with non-payment of taxes.

At t i tude#: In general, there are attitudinal and conceptual problems that do not promise early success for local governments working alone in raising own-account revenues. There is an assumption on the part of unsophisticated Nepalese citizens that development can come without payment of taxes, and debilitating preference by local elites for tapping resources available under central (mainly donar- funded) programs. Many taxes and fees are collected by poorly- motivated central government officials, who receive salaries and benefits whether or not they work effectively. Too often, revenue officials collect revenues far lower than they themselves receive in salary. Opportunities: Nevertheless, there are significant opportunities for achieving higher local revenues. In general, d i s t r i c t s will rely on the agricul tural land tax as the base for local resources. ~ o s t v i l l a g e e will depend heavily on the houee tax. It is essential that the Government does not set artificially low ceilings on levels local governments can establish for these taxes while drafting aclninistrative regulations implementing the Local Government Acts. In addition, local governments will need to identify o ther revenue8 which are effective, fair and based on locally- significant economic activities. The probability of success of the local government component of the Project, and in particular the local revenue genera t i o n sub- componen t can be enhanced by taking great care in testing the commitment of local leaders to these goals. Local leaders should be requested to compete for an opportunity to participate in the Project. The opportunity can be advertised, and interested governments will respond with concrete proposals. Proposals will be reviewed for creativity, practicalit>', and commitment to significant local revenue generation and autonomy. Proposals which emphasize external grants will be rejected, and the Project will not support those governments which are poorest (and thus least promising). while no decision has been made on which local governments the Project will collaborate with, it is worzhwhile to briefly examine the potential of three districts recently visited as part of a general survey of the feasibility of enhanced local revenue generation:

mapa: Jhapa is a potentially-wealthy lowland district. Irrigated and unirrigated lands are extensive and very productive, and the ievei of coinmercial and industrial activity is high. However, current revenues are low, and based largely on taxes which are inappropriate or illegal. The octroi, under which a barrier is set up on entry roads, to tax goods entering an area, has the unfortunate effect of discouraging commercial activity within the taxing unit. An export tax, on items transported across the district border to India, is illegal for local governments. Other taxes--on ferries, mills, citizenship registration, and extraction of sand and gravel from local rivers--are assessed and collected at very low levels. In many cases, it's reasonable to assume that tax collection costs exceed revenues - generated. With reasonable conrmitment from local government, revenues can be raised dramatically, acd Jhapa can do much to provide needed infrastructure and services to local residents, businesses, and farms. Current assessed tax levels for local agricultural land (frequently not paid) vary from Rs.40 to RS.76.5 ($0.85 to $1.63) per hectare. Local farm land is generally Valued at Rs.100,000 to Rs.250,000 per hectare, depending on road access and whether or not it is irrigated. An assessment of only 1% of current value would raise assessments more than 20 times, and aggressive collection would further enhance this source of revenue.

With sensible taxation of industrial and commercial activity, the Jhapa Distzict Develogment Committee could easily raise annual revenues of Rs.200-300 ($4.35-6.38) per capita, and begin to: improve the local road network; collaborate with local irrigation user groups on more sophisticated distribution, control, and drainage systems; assist L.. forest user groups with more effective management plans, upgrade infra~tructure in existing markets; assist rural communities in establishing drinking water systems; and provide supplemental funding and personnel to enhance the quality of mediocre central government schools and clinics. Later, as improved services and infrastructure further enhance the revenue base, district government may be able to support libraries and recreation facilities.

Salyan: Salyan is a mid-Hill district, part of which is served by an unpaved, seasonal road. Act:!-ities under USAID'S Rapti Project have already demonstrated the Dist-ict has many promising "pocket areas" for production of specialized comn~ercial crops. Apple and citrus orchards are already in production, and the produce finds a satisfactory market

. - when transported to the lowlan8s. Many other crops--ginger, vegetable seeds, fresh vegetables--are promising. But for many pocket areas, transport is a major challenge. Roads, bridges, and mule trails are needed, and the district government can do much to accelerate development (and enhance its own revenues) by improving transport infrastn~cture. However, at present, local revenues are pitifully low. The agrdcul tural lend tax, potentially the most significant revenue nource for most Hill districts, currently brings Rs.5 to RS.40 ($0.11 to $0.85) per hectare. In an area where agricultur~l land values vary from Rs.50,000 to Rs.200,000 per hectare, these figures represent tax rates on the order of 0.01-0.02%. Raising taxes to 1% of current value, would raise land revenues more than 50 times, and provide a significant base for local government.

meuwa: Rasuwa is a sparsely-populated Mountain district. Much of its land is high mountains, permanently under ice and snow. Taxable farm land is quite limited, and the taxable base of about 9,000 ha.

- 5 1 i I

is taxed at an average rate of Rs.6 ($0.13) per ha. A district gov- ernment dedicated to generating significant revenues might wish to increase this figure by eight to 10 times. There is also a substantial cattle, yak, sheep, and goat population, and the district might wish to levy a per capita tax. The west side of the district has road access to Kathmandu, and sand and stone are regularly quarried for con- struction and maintenance work nearby and at locations as far away as Kathmandu. Local government officials in Rasuwa can usefully examine whether fees currently received (Rs.75,000 or $1,600) can be signifi- cantly increased. Perhaps the most promising source of revenues is tourietrr and pilgrims. About 8,000 foreign tourists trek the Lang- tang Valley each year. While they already pay a substantial fee (Rs.650) for access to the National Park, local authorities need to examine other opportunities for generating revenues from this resource. Twelve thousand, mainly Indian, pilgrims visit Gosainkund Lake each year, and are virtually untaxed. Opportunities for generating addi- tional district revenues from this source should be carefully examined.

Village Governments: Village governments generally encompass an area of 25-35 km2 and a population of 4,000-6,000. Taxes actually assessed and collected will vary substantially. For some, taxes on livestock sales (generally at a bnt, or periodic market) can be the major revenue source. However, for most village governments the houee tax will provide the revenue base. At present, house taxes are ridiculously low. For instance, in Salyan District, permissible annual assessments vary from Rs.1 to Rs.4 ($0.02 to $0.08). If this figure can be raised by a factor of 50 to 100, Village Development Committees can raise sufficient revenues to begin work on local infrastructure-- mule trails, suspension bridges, drinking water taps--which will enhance economic development and improve the quality of life.

Firm establishment of a tradition of local revenue generation will do much to enhance the financial sustainability, and in turn the autonomy, of local government. This will be a major contribution to Nepalese democracy.

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Narrative Sumnary

INPUTS 8 1) Grant t o The Asia Poumla tion (Parliament asd the Judiciary)

2 1 Competed Coopera ti ve Agreement wi th Nepalese Organira ti on (Local Government)

4) Moni toring, Evaluation, ~ d v i s o r y Services, and Audit

- Objectively Verf iable Indicat~~s-End of -act Statue

-42 mmths of US advi- sory services to Par- liament (32 months) and the Judiciary (10 months) -60 months of Nepalese advisory services -Books and training materials -12 traiimes in US -36 trainees in Asian region -10 in-country training courses or workshops, attended by 250 participants -200 gerson mths long- and short-term Nepalese TA services -Sub-contract with minority org., incl. 24 months short-term US advisory services, and 8 in-camtry training courses for local ldrs. -Matching grants to collaborating local

I govelxlnmlt s -48 person months of project mnag-t services -4 annual democracy '

golls -12 gerson months US contract advisory and monitoring services -

Means of Verification

-Grant Agreement with T W -TAF Quarterly re- s -Parliament Secretariat and Supreme Court Records

-Cooperative AgreemMt -Quarterly reports of Cooperating AgeZIcy

1 -PSC contract

-contracts -Canpleted reports

-Adequate OYB funding -Parliament and Judiciary continue to welcane extelnal assistance

-Adequate OYB funding -Suitable organization can be found in Nepal -Suitable counterpart HBCU or 8 (a) firm can be found in US

-Suitable expatriate candidate can be found in Katlrmandu -Local organizations receive appropriate training in polling -Suitable US d m . advisors are found

aOUNTRY 8 Nepal

PROJEOT a Democracy Project (367-0163)

?UNDIHQ $3.5 million

a LIll O? PROJQCP PACD - September 30, 1936 IEE PREPARED BY a 1 , . . . . . - . -

Mission Environmental Officer, ARD

RECOWWENDED IINVIRONMGNTAG ACZION

BUREAU E W I R O N - MENTAL OBPXCER'B DRCIBION

: Negative Deternitla tion of a 1 1 Program Activitieo

Director USAID/Nepal

: Approved: .--. I . - , kb l * I "~ '~ Disapproved:

Date: .sS--. t? -97

Annex B

Page 2

The Democracy Project (DE).vill develop human resouraes and strengthen Nepalese institutions with maximum promise for building effective, sustainable democr~ay in Nepal. Xnatitutional strengthening will focus on Parliament, the Judiciary, and selected local governments. The Project will not finance any construction work, nor will it.procure insecticides, herbicides, or othur Toxic chemicals,.

After reviewing all project components) the Mission Environmental Officer has determined that, DP will have no significant adverse environmental impacts. Theirefore, USAID/Nepal recommends a Negative Determination.

Al.lmms BraaaJ.

BUDGET NOTES AIiD BIZELLMI WARY TRAIMII\TU AND BROCWREMENT PLANS

Short-torm advioory aewicoo a re aooumed t o be leoo than 6 montho. 13hort term U.S. advioory aervicea a r e talcen t o aoot $12,000 per month (with t h e exception of U.S. regionally-baaed conaultanto) and ohort-term regional advioory aerviceo coot $4,000 p.m. Ne'pali advioory aerviceo aoot $500 per month. Regional otudy tour13 averaging a month long f o r 5 t o 1 0 people coot $12,500. In-country Kathnlandu-baoed opecialized t r a in ing coota $1,000 por peroon per month. Regional ohort-tsrm t ra in ing ( l e a n than 6 montbo) coats $3,000 per month per peraon and ohort -term t r a i n i n g i n t h e U.S. coots $10,000 p e r month. Regional internsh:ips aoot $1,000 per month. Local i n s t i tuf ional oupport averages about $750 per month per inot i tut ion. Workohopo/aeminara i n Katk~mandu aoot about $3,000 each, and omall r u r a l workshopo/oeminaro coat $500 each.

A. l 2 a l k x a a n d y Rasearch Unit: 24 Uraduate Fellowrl w i l l each roceive $80 per month f o r 12 months ( t o t a l :! 88 montlro , $24,000) . Preliminary s tudies w i l l require $10,000, I n s t i t u t i o n a l oupport t o t h e research cen te r w i l l average $750 p e r month f o r 48 months ($36,000) and loca l conoulta~ncy eewicea provided by the center w i l l cost $500 pe r person gler month fo r a t o t a l of 120 months ($60,000) .

B. Parliament_SecretU: A specialized in-country t ra ining course ($1,000 per parson per month) f o r 6 people l a s t i ng 3 1/2 months w i l l coot $21,000 i n year 2. Part-time Nepali advisory oewices w i l l require $500 per month fox a t o t a l of 12 monthe ($6,000). Regional advisory services w i l l raquire $1,000 p.m. f o r a tota l , of 2 months ($2,000) . Commoditiec~ (computer hard and software, videotapes, and CD-ROM o r microfiche eysteme) w i l l coat a t o t a l of $56,000.

C. Parlblmt Secre tmia t : MmmgmmL-: Part t i m e (TAF) Elepali advisory services w i l l require $500 p.m.for a t o t a l of 80 months. Par t - t ime ($40,000) Foreign (U.S.) advioory sewic61s .(based i n the region) w i l l require $5,000 per month f o r a t o t a l of 3 montho ($15,000) . 1 0 t ra inees (interne j i n t h e Asian region f o r periods of 2 weeks t o 6 months ( t o t a l 20 months) w i l l roquircb $1,000 per month each ($20,000) .

D . &u&ax~~ F Q Z U U : Local t ra in ing (12 workshops costing an average of $3,000 per workshop) w i l l cos t $36,000. 6 Foreign (U.S. o r equivalent) conrrultancies each las t ing 2 t o 6 weeke w i l l each cos t , on averago, $12,000 ($72,000) , and 7 Regional aonsultancioo, averaging the same length, w i l l coot $4,000 ($28,003) . Foreign T A w i l l thus t o t a l $100,000 f o r short-term

aonoultanaies by high-level grofaaaionala and o f f i a i a l a of other aountrieo. Loaal uupport f o r one organization f o r 48 montha w i l l aoot $9,000 per year, t o t a l $36,000,

E. BrUt;LiAm)Il;arv Btu f ly - J&uxa r Twenty- f i v e pa r t ia ipanto (traineeo) travelling on 4 regional otudy touro eaah laoting one

,month w i l l rogura $50,000, Six par t ia iganta t ravol l ing on one t o u r of Eaetern Europe * f o r one month i n year 2 w i l l require $25;'000.

F. ~ ~ j ~ ~ f - g r A t o t a l of 20 traineeo w i l l each reaeive 2 .weeks t ra in ing i n 2 ageaialized in-aountry workohopo eaah costing

, $10,000 ($1,000 per parson per month, t o t a l $10,000) . 4 traineeo w i l l be 6ent f o r a 1 1/2 month aourae i n the U.S. (Total 6 rnontho . a t $10,,000 per month, $60,000) .

,U. J&bLia l b m m x m a r Loaal oupport costing $760 per month to , eay, 5 local inat i tut ione f o r a t o t a l of 120 monthe w i l l aoat $90,000.

H. Bagxam S e r \ r i ~ G ~ ~ t e tuXU&Umct Coota: TAF Diroct and Indireat coete amount t o roughly 360 of tha en t i r e component eub- t o t a l . For year 1, 360 of $193,000 i o $70,000, For year 2 , 360 of $200,000 i o $75,000. For year 3, 360 of $161,000 is $50,000. For year 4 , 360 of $135,000 is $48,000.

A . Kew Procedural Podet $12,000 w i l l be required f o r preliminary etudiee and analyses and foreign TA w i l l be provided a t a coet of $12,000 pe r month f o r roughly 2 monthe ( t o t a l $24,000) .

B. -p p: A t o t a l of $24,000 w i l l bo epent on loaal t ra in ing , providing 12 partiaipante with t he equivalent of 2 months' t ra in ing a t $1,000 per person per month. Local eupport costs of $750 per month f o r a to ta l of 4 8 months w i l l t o t a l $36,000. Commodities (computer hardware and eoftware) w i l l t o t a l $17,000.

C. Training of 2-6 weeks i n t h e U.S. o r Asia averaging $6,500 ($3,000 f o r regional, $10,000 f o r U.S.) per month w i l l be provided f o r 14 participants, t o t a l 14 pereon monthe ($91,000) . Foreign adviuory services (U.S. based) $12,000 per

, month f o r 2 1/2 months w i l l t o t a l $30,000.

D. ZLenalfteaearcrh: Insti tutional. eupport coeting $750 p.m. f o r t o t a l 100 months (say 1 0 total organizations) w i l l ' require $7S,OOO.

E. ConmrunitvW-: Regional t ra ining (otudy tour f o r 4 t o 6 peraono) w i l l cos t $12,500 f o r 3 t o 4 weeks. Preliminary etudiee w i l l coet $1,000. Foreign (regional) advioory eervicee of a high-level off ic~,al /profeseional w i l l cost $4,000

, per month f o r 5 ~ o n t h L (total $12,000). Local eupport aoete w i l l

Pnna '3

total $130,000, averaging about $750 per month per program for 5 programs for roughly 35 months eaah (total $131,250 rounded to $130,000).

F, -iae Coots a r L U M i x ~ a t Coot~: TAF direct and indirect costs amount to roughly 360 of the entire component sub- total. For year 1, 360 of $114,000 io $41,000. For year 2, 360 of $129,000 io $46,000. For year 3, 360 of $137,000 io $49,000. For yetrr 4, 360 of $93,000 is $33,000.

This activity will be managed by a loaal organization, which will have a sub-aontract with an HBCU or 8 (a) firm, which can offer solid technical expertise on local administration and training of inexperienced loaal politicians. The sub-contract will be for roughly $388,000, to crover costs of 24 months of advisory services at an average $12,000 per month ($288,000), ten in-country training courses (moat associated with advisor visits) at ?LO, 000 eaah ($100,000) . The loaal organization will provide 200 person months of long- term, and 80 persom months of short- term advisory services, at an average $500 ($140,000). There will be 80 person montho of short-term advisory services, at an average $500 per month. There will also be extensive travel and fieldwork expiansee inoluding purchase of an Indian-made vehicle and 8 - 10 motorcycles ($70,000) . Twenty small training seminars and workshops for local leaders and residents will require $500 each ($10,000). A fund of about $225,000 will be resewed for matching grants and other aeeistance to collaborating local governments. Regular publication of the reeults of this pilot project will require $30,000.

A. ' N G I J J R ~ Co- Aaenoy: 20 small training seminars and workshopo for local leaders and residents will require $500 each ($10,000) . The local organization will provide 200 pereon months of long-term and 80 percon ~r~ontha of short-term advisory services, at an average $500 per month ($140,000) . There will be exteneive travel and field work expenses including purchase of an Indian-made vehicle and 8-10 motorcycles ($20,000 for purchase of commodities and roughly $1,200 per month for field travel for 40 monthe, total $68,000). Local support will total $150,000 for 40 months of institutional support (roughly $3,750 per month in 5 locations). Regular publication and dissemination of the results of this pilot project will be increasingly frequent over the life of the project, requiring $30,000 total.

B, v: A fund of about $225,000 will be resewed for matching grants and other assistance to collaborating local governments. Ten grants of roughly $18,500 each will be given. The sum of $40,000 will be set aside for support to associations of local elected leaders at national or regional level or other *local-national linkage syatems,

C. U.9..oraan;lzat;lgnr 2 4 month0 of advioory oerviceo a t an average of $12,000 per month with t o t a l $288,000. 1 0 in-country t r a in ing couroea (mootly aoaociated with Adviaorol v in i to ) w i l l require $13,000 eaah ($100,000) .

I V . W p r t S e w i c ~ p a Four Annual Democracy pollo w i l l coot a s estimated $10,000 eaah ($40,000) . Due t o t he ohortneoo of the v i s i t s (2 t o 4 weeko) , 1 6 person monthe of advioory aewiceo by U.S. expertn w i l l r equ i r e an eotimated $ 1 2 , 0 0 0 pe r month ($192,000). Special and evaluation otudies w i l l require $70,000, with major evaluation ($55,000) being conducted i n year 3 ) .

V. A U j L r Three annual audito by a local f i r m f o r 3 years w i l l require about $15,000 and an audi t under a regional IQC i n the t h i rd year w i l l coot $35,000.

V I . PSC Pro-ject m: ($200,000) I t is assumed a ouitable expa t r ia te BSC project manager can be hired i n Kathmandu a t an annual averaTe salary of $50,000.

V I I . -a Compounded a t approximately 80, o ta r t ing i n FY94. W t e s u e Rate FluctlbELtiPnB : Proj eat implementat ion may be oj.g-nificantly affected by fluctuations i n the Rupee/Dollar exchange r a t e . A s i gn i f i can t por t ion of Project funds w i l l expended i n Rupees--for NU0 grants, oalar ies of Nepalese advisors and experts, in-country t r ave l and p e r diems, t ra in ing i n India, in -count ry seminars and workshops, and g r a n t s t o l o c a l gwernments. I f the Dollar remains s t rong a ~ a i n s t t h e Nepalese Rupee, Nepalese in f la t ion is re la t ive ly low !around 108), and US i n f l a t i o n remains low, projected cos t s wlL3 be covered with re la t ive eaoe within t h i s budget.

I . Pa- S ix graduates of Tribhuvan Univeraity each year w i l l be

awarded places a s i n t e rns f o r one year , working with t h e Parliament Secretar ia t and key o f f i ce holders of the Parliament. Six employees of the Secretar ia t w i l l pa r t ic ipa te i n a specially- t a i l o red in-country t r a in ing couree on l eg i s l a t i ve research i n year 2 . Gver t h e four years of t h e Project , 1 0 Sec re t a r i a t employees w i l l be t r a inea a s interne (each internship l a s t i n g between two weeks and e i x monthe) i n parliaments i n t he Asian region. Each year t q e e t ra ining workshops f o r parliamentarians w i l l be conducted by spec ia l ia te v i s i t i n g t h e "Speakers1 Forum11. Approximately 31 Parliamentarians w i l l p a r t i c ipa t e i n spec ia l study tours of Asia (including an annual SAARC tour) and Eastern Europo, with between f i v e and 1 0 pa r t i c ipan t s on each Tour. Roughly 2 0 omployees of the Minis t ry of Law, J u s t i c e and Parliamentary Affairs w i l l receive t r a in ing i n draf t ing, through two specialized in-country workshops, and 4 employees w i l l each be sent fo r a 1 1/2 month course i n the U.S..

i'

Page 5 -.-

11. ~ n g G h ! a n i n ~ i a _ i r a n t In-country training will be provided to roughly ten otaff

membero at the Supreme Court, to improve reooarch aklllo,and in conjunction with project activity to improve oyotemo of publication and diooemination of judicial deaisiona. Training in Court management in the US or Aoia will be provided for roughly 14

, partiaipanto, including judge8 and court otaff, A otudy tour in , J the Aaia region for the four to oix peroons deoignated to draft

- I' new community mediation legislation will precede establiohment of pilot community mediation projects.

111. Iaml UovwmmnL Strwgkhmiw Provision of local and foreign TA will include informal and

on-site training of local government leaders and residents. Twenty omall training workhoope/oeminaro for local leadere and reoidenta from the selected areas will be held, and 10 additional

4 larger in-country training couroeo which will enable local and national leadero from outoide the Project areau to be exposed to Rmj ect 'areao .

( SSPPL

EY2.3' E D 4 EXeh Total

I .- '+-

A. Parliamentary Fellow 6 6 6 6 24 (6 each year)

~.~ecretariat Employees ' - 21 - - 21 (6 trainoes in FY94)

C.Parliameqt Secretariat 5 5 5 5 2 0 1ntl.Mgmt.Training

D .Speakers1 Fpnm 9 9 9 9 3 6 Wol-kehop . (3 each year)

E .Parliamentary Study - 38 2 5 12 7 5 Tour

F .MUPA Drafting 25 15 25 15 8 0 Training

Sub -Total 4 5 94 7 0 47 2 56

A.Supreme C o u r t Remearch 6 6 6 6 24 Training

11 ( 1 , , . Page 6 df -

* I ,

I / B .Supremo Court Mgmt . , 18 2 0 35 18 9 1 ' Trainiiig

C ,Community M~diation ' 12 - - " 12 i ( Training

1 Sub-Total 36 26 . 41 24 127

' . 111

A.Training by . 2 3 3 2 10 Coqporating Agency

B .Training by US 4 0 4 0 10 10 100

- Organization

Sub-Total 42 43 13 12 110

, . 1.- I B.Parliament Secretariat 40 3 3 - . 5 6

C o m p ~ ter software & hardware, printing equipnent, trarniw equiment, books & v ideo t a p s

11 . z l L z ? u x k

B .Supremo Court - 15 2 - 17 Research, et c . Cam&u ter software & hardware, books &

1 journals

, III. Stuencrthenina.Local aove- - , A. Vehicles 2 0 2 0

1 Indian 4WD,

8 motorcycles TmAL 8 0 18 5 9 3

, b

Annex D

BCTION MEMORANDUM TO THE A8SISTANT ADMINISTRATOR, BUREAU FOR AS19

FROM Kelly C. Kammerer, Director, USAID/Nepal@L[~

SUBJECT : waiver of 25 Percent nost country contribution Requirement for the Nepal Democracy Project (367-0163)

PHOBIIEY: Your approval is required to waive the requirement of FAA section llO(a) that a host country contribute at least 25 percent of total projeat costs, for USAID/Nepalts Democracy Project (367- 0163).

BACKGROUND: For the subject project, AA/ASIA delegated authority to the Mission Director on December 18, 1991 to approve the Project Identification Document (PID) and the Project Paper (PP). The Mission Director approved the PID on April 27, 1992, and the Mission is in the process of finalizing the PP which is expected to be approved in late July, 1992. All funds under the project will '

ba obligated under Project Grant Agreement with the Government of Nepal (GON). The planned life-of-project funding.for this project is'83.5 million, and the planned Life-of-Project ds four years for the date of initial obligation.

The project purpose is to strengthen democratic i'nstitutions and processes in an effective and sustainable manner. The project is aimed at developing institutional capabilities and improving performance of three key democratic institutions: Parliament, the judiciary, and local government. The project will increase their performance and effectiveness, thus helping to develop well- established democratic values and processes in Nepal. The project will support increased pluralism as an integral part of the democratic process. All three components of the project include elements designed to encourage active participation of women in democratic processes.

The p~ojeat will be implemented through t1.S. and Nepalese private voluntary organizations and U.S. consultants, with no disbursement to or through GON agencies. Project activities will directly benefit independent public institutions at the national (Parliament and the judiciary) and local (elected councils and constituents) levels. GON will indirectly contribute through its support for operating costs of Parliament and the judiciary and grants to local governments, although it will be impossiblo to directly attribute the contribution of this support to project activities.

gISCUS8ION: Section 110 (a) of the Foreign Assistance Act, as amended, required that a country Itprovide at least 25% of the costs of the entire program, project or activity with respect to which assistance is to be furnished, except that such costs borne by euch

country may be provided on an 'in kind' basisw. Section 124 of the FAA permits waiver of the FAA Section 110 (a) requirement on a aaso-by-case basis for activities in RLDCs, and regional Assistant Administrators have been delegated this waiver authority. Nepal is a UN-designated RIIDC. The requirements for such waivers are set forth in A.I.D. Handbook 3, Appendix 2Q. The faators that are aonsidered in such cases include: a) finanaial constralint of the host country; b) evidence of host country's commitmont to the projeat; a) nature of the project; and d) other factors.

Although all faators are relevant in this case, justification is based on the nature of the project. The nature of this PVO- implemented project is such that we do not anticipate any si,gnit!iaant direct finanaial contribution from the OON. The projeat will support activities already being carried out by the Parliament, judiciary and local ~lovernments. The projeat will strengthen those activities, but new activities will not be created because of the project. Also, there are no additional contributions required from tlle GON, as all project activities wlKl be implemented by U.8. and Nepalese PVOs and by U.8. consultants. 80 the success of the project is not dependent on a contribution by the OON. However, we expect full GON participation for the successful implementation of this project.

RECOMMENDATION: Based on above, we recommend that you waive the FAA Section 110 (a) requirement for a host country aontributivn of 25 percent of total project costs for the Nepal Democracy Project (367-0163).

Approved : Henrietta H. Holsman Fore -/ASIA

Disapproved: Henrietta H. Holsman Fore A;\/ASIA

1

Date:

Clearances:

His Majesty's Government ANNEX E

MINISTRY OF FINANCE Bngdutbnr,

KATHMANDU NEPAL.

September 17, 1992.

Mr. Kelly C. Kammerer Direct or US.lID/Nepql Kathmandu, Nepal.

Dear Mr. Kammerer,

On behalf of His Majesty's Government of Nepal, I would like to express my sincere appreciation to the Government of the United States of America for its continued support in strengthening democratic proceases in Nepol. His Majesty98 Government would like to request i'urther support in developing institutional capabili+ies and improving performance of certain key democratic institutions - the Parliament, the judiciary and local bodies - in the coming years, through the USAID Democratic Institutionm Strengthening Project.

I am confident that your support for democratic processes will help Nepal strengthen the Parliament, the judiciary and local institutions with greatest promise for achieving , effectiveness and sustainability in supporting democracy and development. Your support through a grant of $3.5 million will certainly be appreciated.

With beet regardo.

Sincerely

M Ram Binod Bhattarai Joint Secretary Foreign Aid Division Ministry of binance

I '

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S T A T E

Annex .R

LOCAL GOVERNMENT COMPONENT OF DEMOCRACY PROJECT DRAFT STATEMENT OF WORK

I BACKGROUND

Oeneral

Since April 1990, significant ,steps have been made toward establishment of stable democracy in Nepal, including promulgation of a new constitution, formation of a government following free and fair elections, completion of two parliamentary sessions, and commencement of much needed political and economic reforms. A newly appointed judiciary is in place and local government el.ections took place in May 1992. Major challenges to continued democracy strengthening lie in social and political traditions of hierarchy, nepotism, and intolerance, and in popular expectations that democratic progress will be accompanied by rapid economic development.

USAID has developed the Democracy Project to help strengthen democracy in Nepal by improving the capabilities of institutions and fostering democratic values throughout society. Specifically, USAID hopes to achieve increased pluralism and well-established democratic values and processes in Nepal through this Project by strengthening the Parliament, Judiciary, and Local Government; a group of institutions with greatest promise for achieving effectiveness and sustainability in supporting democracy and development. This contract will focus on the Local Government component of the Democracy Project.

Local Government

The Panchayat system, which operated from 1960 to 1990, provided for the existence of local governments at the village, municipality, and distric;: levels. In theory, local governments had substantial authorities to raise revenues, plan local development activities, and review and critique activities of central ministries. In reality, these authorities were severely constrained. Centrally-appointed officials, notably Zonal Commissioners and Chief District Officers, had very strong powers, were tasked largely with keeping the peace and stamping out political opposition, and generally undercut political and economic entrepreneurship as potential threats to vested interests. Under multi-party democracy, effective, responsible local government is crucial for creating a glspaceN where local initiative and entrepreneurship can flourish, and will provide most citizens with their most immediate experiences in democracy. Competent local governments will need to actively pursue development by ensuring adequate facilities - transport and marketing infrastructure, utility and sanitation services, a sensible regulatory environment, occasional intervention with central authorities, reasonable schools - so businesses, cooperatives, user and special interest groups, and dynamic individuals can pursue opportunities and perform to their potential.

New legislation on local governments - district, municipality, village - was passed by Parliament in March 1992. With the recent election of new local governments in May 1992, there is strong pressure on village, municipal, and district governments to facilitate economic development. To a considerable extent, they will need their own resources to do this.

The Local Government component of USAIDgs Democracy Project will support local government strengthening through activities which enhance voiae (straightforward communication channels from constituants, such as public hearings, open council meetings, etc.) and aoaountability (effective communication in the opposite direction, by publishing meeting minutes and budgets, by following open contracting procedures, etc.). In addition to strengthening these elements, the Project must take account of two interlinked pre-conditions for local democracy: governments must have substantial legal autonomy and significant local revenues.

Specifically, USAID will focus on promoting effective local revenue generation and local government accountability through a variety of activities. Technical assistance will be provided to assist local governments with design and establishment of systems for assessment and collection of taxes, administration oP licensing and fee systems for leasing of public facilities, for establishment of fee-for-service facilities, etc., that are selectetl as most promising in particular localities. Technical advisors will also advise on establishing public relations/education campaigns for new revenue sources, help to set up complaint and appeals systems (for citizens who feel they have been assessed unfairly), and advise on systems of fines and other sanctions for those who refuse to pay. There will be intensive training programs: for local politicians, who must understand what is being done, and why, and must be able to explain and justify these programs to local residents; for revenua officials (employees of local government, or central government revenue officials) who need instruction in efficient, equitable collection methods; and taxpayers, who must understand how and why they are being required to pay, and must be convinced that better government services and significant, recognizable development will occur as a result. To ensure effective use of new local revenues, local governments will also be assisted in setting up formal accounting and budgeting procedures. As an integral part of assistance to local governments, local governments will be encouraged to work collaboratively with local groups - NGOs, user groups, cooperatives, Parent Teacher Associations, Mothersg Clubs- and to actively seek the political participation of disadvantaged groups. In addition, research and analysis of the opportunities available for revenue raising and the effectiveness of various revenue raising schemes will be carried out, as well as dissemination of local revenue generating experiences to other local governments and the central bureaucracy in Nepal through pamphlets, newsletters, peer training, and contributions to ongoing training work of the Local Government Tra!.ning Institutes by

feeding experiences in cooperating local governments into training curricula.

USAIDINepal shall enter into a Cooperative Agreement with a local (Nepalese) organization or consortium and a U.S.-Fased subrecipient - an Historically Black College or University (HBCU), a consortium of HBCUs, an 8(a) small business or small dioadvantaged business firm, (or an NGO or other type of firm if no appropriate HBCU or 8 (aj firm is identified) - in order to carry out pilot studies and implenisnt activities (described in the Local Government component of the Democracy Project Paper) designed to promote effective local revenue generation and local government accountability in four districts and eight villages in Nepal. The duration of the contract shall be three and a half years.

As a direct result of project activities, a sub-set of local governments, who are working with Project implementurs, shall strengthen local democracy and enhance their autonomy hy raising and effectively using significant local revennes; introducing sound systems for planning, implementation, and service delivery systems; and gaining the trust and respect of voters including women, low- caste and other disadvantaged groups, through transparent equitable procedures, formal accountability systems, and responsiveness.

111. TABKB TO BE PERFORMED:

A. The Local Organization(s) shall, if not already, become familiar with Agency for International Development Bureau, Regional, and Mission democratic pluralism strengthening and policy objectives by reviewing relevant documents.

B. The Local Organization(s) shall develop job descriptions for project staff, and select individuals to fill the positions (as described in Sections VI. and VII., below). Final selections for the positions shall be subject to approval by the USAIDINepal Camalcracy Project Manager and the Democracy Project Officer . Preference should be given to qualified women candidates.

C. The Local Organization(s) shall assign or obtain sufficient office space, equipment, and supplies for its Administrative and Research/Anzlysis and Training Divisions to begin operating. The Divisions shall be located in Kathmandu. The Local Organization(s) shall have shelf-item purchasing capability up to the amount specified in the budget.

D. The Local Organization(s) shall develop a workplan for the first six months of the Project, and for each six-month period thereafter until completion of the Project. The initial workplan shall provide a description of the activities to be carried out and expected outputs, a description of the proposed methodology to be

used for monitoring and evaluation of project activities, and an implementation schedule. Subsequent workplans shall include a description of progress during the previous workplan, a discussion of problems encountered during the reporeing period, and recommendations for changes or additions to the Project. The workplan(s) shall be subject to approval by the USAID Democracy Project Manager and the Democracy Project Officer.

E. In cooperation with USAID/Nepal, the Local Organization(s) shall develop a scope of work for a TJ.S.-based Subrecipient, solicit and review applications, and select an organization to provide technical assistance and training to assist in carrying out project activities.

F. In cooperation with USAID/Nepal, the Local Organization(s) shall establish the Project Advisory Board. The Project Advisory Board shall be comprised of two representatives from the Local Organization (the Project Coordinator and the Research/Analysis and Training Division Coordinator), two representatives fromUSAID (the Democracy Project Manager and the Democracy Pr0jec.t Officer), and one Ex-officio member from the U.S.-based Subrecfpient.

G. The Local Organization(s) shall develop an open, competitive application process, and selection criteria, for choosing the four district and eight village governments in which project activities will ba carried out, and shall solicit and review applications. The Local Organization(s) shall solicit expressions of interest from local governnents already committed to increasing their revenues, and enhancing accountability and equity in local government operations. Final selection of the cooperating local governments shall be carried out by the Project Advisory Board.

H. The Local Organization(s) shall assign the four Field Coordinators to the districts which have been selected for project activitl.es, and shall arrange for suitable office space and living accommodations.

I. Specific project activities shall be identified by the Project Advisory Board and carried out by the Local Organization(s) according to the objectives described in the Local Government component of the Democracy Project Paper.

J. The Local Organization(s) personnel and the U.S.-based Subrecipient personnel shall work with elected officials, involving them from the earliest stages in assessing revenue opportunities, setting development priorities, and establishing management systems. They shall provide technical assistance and training to new local politicians, and employees of local government and central ministries, and matching funds to local governments that perform well. In carrying out specific Project activities, the

Loctil ~rganization(s) personnel and the U.S.-based Subrecipient shall:

- assist with design and establishment of systems for assessu~ent and collection of taxes, administration of 1icens:~ng and fee systems, for leasing of public facilities, for establishment of fee-for-service facilities, etc., that are selected as most promising in particular localities; - advise on establishing public relations/education campaigns for new revenue sources; - help to set up complaint and appeals systems (for citizens who feel they have been assessed unfairly); - advise on systems of fines and other sanctions for those who refuse to pay ti4r.a~. - provide intensive training programs: for local politicians, who musc understand what is being done, and why, and must be able to explain and justify these programs to local resident~e; for revenue officials (employees of local go?chrnment, or central gnvecnmerit revenue officials) who qeed instruction in efficient, equitable collection met:iods; and taxpayers, who must understa~d how and why they are being required to pay, and must be convinced that better government services and significant, recognizable development will occur as a result; - assist in setting up formal accounting and budgeting procedures to ensure effective use of new local revenues - provide small, short-term loans and matching grants to local governments t~ reinforce initial efforts in revenue generation; - advise and assist local governments in establishing self- financing services; - provide technical assistance for setting up a variety of accountability systems, and training on accountability systems, their purpose, and how they can be used in political and administrative processes; - encourage local governments to work collaboratively with local groups - including NGOs, user groups, cooperatives, Parent Teacher Associations, Motherst Clubs - and to actively seek the political participation of disadvantaged groups, and assist local governments in setting up collaborative mechanisms, in particular through ensuring access of local groups, including disadvantaged groups, to local government planning and decision processes through co-optation of public representatives to various ad hoc and advisory committees, and mechanisms to ensure broad participation in planning processes. Where appropriate, local governments may be assistei~ in collaborating with NGOs and user groups through jo!.nt planning, funding, and

implementation of development activities; and - carry out research, analysis, and dissemination such as: process documentation (of the work of local goveramonts) , conduct group and individual interviews with local residents and elected leaders, review crucial documents (budgets, minutes, contracts, financial accounts), and prepare documents and reporta which describe, analyze, and disseminate the experiences of cooperating local governments.

. The Local Organization(s) personnel shall. develop training plans, mostly on-the-job, for local elected o-ficials, for their bureaucratic counterparts, for locally-hircd employees of new governments, and for local residents, who must be encouraged to take more active roles in local planning and implementation, and must gain sufficient understanding of the potential of local government to effectively critique good and bad performance by politicians and bureaucrats. The Local Organization(8) should try to have quitabl gender representation in all their training programs.

L. The Local Orga?ization(s) shall assist and encourage selected local governments to generate local revenues at or near optimal levels by helping them to increase own-account revenues, and documenting their successes in increazing revenues and applying then1 to local development, in the process enhancing both autonomy and management expertise. The Local Organization(s) shall provide technical assistance to carry out surveys and financial analyses to identify promising reveniie zesources within current statutory authorities of district and village governments. The Local Organiza,kion(s), in cooperation with the selected local governments, shall explore the viability and assist with development of as many types of revenue resources as possible, including: local development land tax; natural resource-based; infrastructure-based; license fees; fines; house tax; market-based taxes and fees; fees for use of public wells and taps, and for private use of river or stream water; income from local government property; interest from financial assets held; grants and donations; funcls resulti:,sq from the sale, rental, or mortgage of movable and ir~movable property; auctions; fee-for-service facilities; and outside revenues, to enhance their flexibility and total resource base.

M. The Local Organization(s) shall draft and submit to USAID/Nepal project activity progress reports, on a quarterly annual basis. The progress reports shall include a description sf activities carried out during tine reporting period, a description of problems encountered during implementation, a description of 8 8 s ~ ~ ~ e s ~ 8 8 stories, recommenc?ntions for changes or additions to the project, and a financial reycrt showlng expenditures during the reporting period. At the same time that progress reports are

page 7

submittsd to USAID/Nepal, the Local Organization(s) ahall also submit two copies each of any report, newsletter or other publiaation produced by the Research/Analysis and raining Division.

N. The Local Organization(6) shall cooperate with two or three Democracy Advisors who will viait Nepal periodically to assess Democracy Project activities, including those activities carriad out under the Local Government component of the Project. The L.

Democracy Advisors will probably visit Nepal five to six times during the four years of the Project (twice annually for at least the first two years) to prepare brief overviews of successes and failures, rate Project progress, and advise USAID/Nepal. and grantees and contractors on the future course of the Project. Political reporting, project monitoring reports, and periodic grantee/contractor reports will be used by Advisors in assessment work.

IV. SCHEDULE OF ACTIVITIES

A. During tho first two months of the contract, the Local Organization(8) shall hire the required project staff, locate and organize office space for the Administrative and Research/Analysis and Training Divisions, e~tablish the Project Advisory Board, and develop a scope of work and begin soliciting applications for a U.S.-based Subrecipient.

B. During the third month of the contract, the Local Organization(s) shall identify and contract with a U.s.-based Subrecipient, develop application procedures and selection criteria for choosing the four district and eight village governments in which project activities will be carried out, solicit proposals from potential cooperating local governments, and develop a workplan for the first six months of project activities.

C. During the fourth month of the contract, the Project Advisory Board shall select the cooperatjng local governments, and the Local Organization (s) shall arrant!. for off ice space and living accommodations for the four F,ield Coordinators, post the Field Coordinators in their respective districts to begin identifying/assessing opportunities for implementing project activities, and submit the first workplan to USAID/Nepal for approval.

D. Once tine initial workplan has been submitted and approved, the schedule of activities for the duration of the project shall be determined by the Local ~rganization(s) in coopsration with USAID/Nepal, and shall be described in each subsequent workplan.

V. REPORTINQ

A. The Local Organization(s) shall develop a vorkplan for the first six months of the Project, and for each six-month period thereafter, until copp!.etion of the Project (see: III.D., for a description of the . ,ants of the workplans) . The workplan (s) shall be subject to a;-.,oval by the USAID/Nepal Democracy Project Manager and the Chief, Program and Project Development.

8. The Local Organization(8) shall draft and submit to USAID/Nepal project activity progress reports, on a quarterly basis (see: III.M., for a description of the contents of the progress reports).

C. At the same time that progress reports are submitted to USAID/Nepal, the Local Organization(8) shall also submit two copies each of any report, newsletter or other publication produced by the Research/Analysis and Training Division during the relevant reporting period.

VI. PERSONNEL REQUIREMENT8

A. Loaal Organization(8) Personnel

The Local Organization shall have a minimum of eleven and a maximum of seventeen full-time staff devoted to carrying out project activities: at least se'ven shall operate from the Organization's Central office in Kathmandu, and at least four shall operate from the four districts selected by the project where pilot activities will be carried out.

The Central Office shall have two divisions: the Administrative Division and the ResearchlAnalysis and Training Division.

The Administrative Division shall be staffed by one full-tilde Projeot Coordinator who shall be responsible for overall management of the Project and who shall represent the Local Organization on the Project Advisory Board; one full-time Aaaountant shall maintain all accounts for the project and who shall be responsible for all financial reporting, and who may be involved in planning/organizing training in accounting for local government staff; one Beareta:*y who shall be responsible for typing, filing, maintaining project records and documents, and correspondence; and one Driver/nechania who shall be responsible for driving the project vehicle to be used by Project staff in Kathmandu, and for naintaining all other Project vehicles supplied under the contract/cooperative agreement.

The Reaearah/Analyaia and Training Division shall be staffed by one full-time Division Coordinator who shall be a TraininglCurriculum Development Specialist, who shall coordinate the research, analysis, publication, dissemination, and training activities of the Division, and who shall act as Project Coordinator in his/her absence; one full-time Loaal aovernment Bpecialist who shall devote half his/her time working in the four districts and eight villages where project activities are carried out, working with and advising project staff and local government officials, participating in training programs as train~r or facilitator, conducting surveys, documenting progress, etc., and who shall devote half his/her time at the central office analyzing information and preparing it for dissemination, and planning/organizing training programs for local government officials; one Local Revenue Bpecialist who shall devote half his/her time working in the four districts and eight villages where project activities are carried out, working with and advising project staff and local government officials on local resource generation and utilization, participating in training programs as trainer or facilitator, conducting surveys, etc., and who shall devote half his/her time at the central office analyzing information and preparing it for dissemination, and planning/organizing training programs for local government officials; and one Secretary who shall be responsible for typing, filing, and correspondence.

The Local Organization shall also have four full-time field staff, or Field Buperviaors. One person shall be stations-d in each of the four districts selected for Project pilot activities, and shall be responsible for coordinating activities carried out in cooperation with the district level government and two village governments within the district.

In addition to its full-time staff, the Local Organization shall reserve approximately 200 person months for part-time staff/advisora (Nepalese) who shall be responsible for conducting surveys and research, and who shall assist in developing and conducting short-term training courses for local government officials and employees.

8. Subrecipient

The Subrecipient shall be a U.S.-based Iiistorically Black College or University (HBCU), a consortium of HBCUs, an 8(a) small business or small disadvantaged business firm, or an NGO or other type of firm if nc appropriate HBCU or 8(a) business firm is identified. The s5aff of the Subrecipient shall make periodic visits to Nepal (lasting a minimum of two weeks and a maximum of three months) over the life of the project to provide technical assistance, traininq, and advisory services to the staff of the Local Organizativn a>d to local government officials. The Subrecipient shall ~rovide approximately 30 person months of

page 10

technical assistance, training, and advisory services to the Project, in the form of specialists with expertise in local government systems and administration, local taxlrevenue administration, budget management, curriculum development, and management. The Subrecipient personnel shall spend at least one third of each visit to Nepal at one or more of the four field sites.

VII. QUALIBICATIONB OB THE ItOCAL CONTRACTOR

A. The Local Organization(s) shall have experience in implementing development activities in rural areas of Nepal, preferably working/cooperating with local government(s).

B. The Local Organization(s) shall have experience in planning and eliciting broad participation/cooperation of local groups, including disadvantaged groups, in development activities, and shall have demonstrated sensitivity to issues of equity (caste, gender, ethnicity), through inclusion of local and disadvantaged groups in its development activities.

C. The Local Organization(s) shall be able to deploy twelve or more field staff of both sexes and from a variety of caste and ethnic groups in four districts and eight villages in Nepal.

VIII. QUALIFICATION8 OF THE PROJECT BTAFF

The Local Organization shall develop job descriptions, and select individuals to fill the positions described in Section VI., above. Final selections for the following positions shall be subject to approval by USAID/Nepal: Project Coordinator, Research/Analysis and Training Division Coordinator, Local Government Specialist, Local Revenue Specialist, and the four Field = Supervisors.

Projeat Coordinator

S/he shall have a graduate degree in Public Administration or Management and at least two years experience managing a development project or an NGO, or a minimum of three years experience managing a developnrent project or an MGO. S/he shall have had supervisory experience and have supervised a minimum of five people. S/he shall have knowledge of and experience working with local government administration.

Aaaountant

S/he shall be a certified public accountant with a minimum of three years experience in public sector accounting. S/he shall have knowledge of and experience with development project-related accounting.

page 11

Researah/Analysie and Training Division Coordinator

S/he shall have a graduate degree in Education and at least three years experience developing and conducting training courses for put,? ic sector officials. S/he shall also have management experience.

Loaal Government Bpeaialist

S/he shall have a graduate degree in Public Administration or Management. S/he shall have knowledge of and experience working with local government administration, policy, and procedures, and shall be knowledgeable about local government issues, challenges, and problems.

Loaal Revenue BpeaiaZist

S/he shall have a graduate degree in Public Finance, Financial Management, or Economics. S/he shall have knowledge of and experience working with government budgeting and accounting svstems and procedures, and local taxirevenue administration. Preferably, s/he shall have experience working with local government officials on local resource generation and utilization.

Field Bupervisors

The Field Supervisors shall have graduate degrees in Public Administration, Management, Public Finance, or E C O ~ O ~ ~ C E - They shall have had experience managing a development project in a rural area, and have worked/aooparated with local governments in implementing development activities.

IX. INFORMATION REQUIRED

Potential contractors shall submit a proposal which includes the following information:

A. At least one, but no more than three curriculum vitae for the following project staff positions:

- Project Coordinator - Accountant - Research/Analysis and Training Division - Local Government Specialist - Local Revenue Specialist - Four Field Supervisors B. A detailed description of the organization's experience

in implementing development projects, including a description of the organization's experiencz implementing development activities

page 12

in rural areas of Nepal. If relevant, the organization should include a description of work carried out in cooperation with local governments.

C. An analysis of the issues/problems/challenges facing local governmsnts with particular reference to local resource generation and utilization, accountability, and equity. Reference should be made to work done by organizations and individuals ir, the field of local resource raising and local government performance.

D. An explanation of the objective of the Project and its implications for Nepal's development.

E. Methodalogy/implementation ylan for carrying obt Project activities, including descriptions of how the contractor will address the problems described in section C., above.

F. A research plan/methodology for extracting information from local government offic!.als and citizens on the problems/challenges facing local governments; and a description of how such information would be analyzed and disseminated to assist and encourage broader and more effective participation In local government and the decision-making process.

G. An explanation of how autonomous local governments should work with the central government to carry out development programs to encourage broader and more effective participation in development.

H. In addition, the organization must be able to deploy a dozen or more field workers in rural areas, and povide sufficient training, field support and supervision to ensure they can carry out their work effectively. Potential contractors shall submit an action plan describing how they would deploy staff in rural areas, how they would provide training to enable field staff to carry out project activities, and how and what type of supervision would be provided. Potential contractors shall also describe the type of communication/relatiollahipthat field staff t~ould have with project staff based in Kathmandu?

I. A description of specific accomplishments expected and how they will be demonstrated and measured.

J. An explanation of how Project activities will be made financially sustainable.

K. A detailed budget in rupees for each of the three and half years of the Project.

page 13

X. EVALUATION CRITERIA

Proposals shall be evaluated in Nepal by USAID. The evaluation criteria and the weight given to each are presented below.

1. Institutional Capabilities

i) Experience and reputation of the organization(8) in perforn~ing similar activities and functions

10 points

ii) D e m o n s t r a t e d s o u n d a n d a c c o u n t a b l e administrative/financialmanagement;technicalcompetence in skilful administrative/financial planning and in producing timely, accurate and incisive repo~rts, analyses, estimates and accounts

15 points

iii) Experience in implementatior! Di field-level activities and demonstrated ability to wc;.'. cl.osely with gover;~mei?t instituticrns/organizations/ind.'.viduials at the local level.

15 points

2. Qualifiaations of Personnel Proposed

i) Demonstrated reputation of staff in fields of local revenue generation and administration, local government administration, planning/organizing training for local government officials or public sector employees, and in related fieldwork

10 points

ii) Prior field experience of staff in local revenue generation and administration, local government administration, and planning/organizing training for local government officials or public sector employees

10 points

iii) Educational qualifications of proposed staff 5 points

iv! Suitability of personnel/organizations formingnetworkto implement/monitor program in four districts and eight villages in Nepal

10 points

3 . Quality of Proposal and Propoaed Approaah

page 14

i) Demonstrated understanding of the problem and the program's goal, purpose and potential impact in addressing it

10 points

ii) Adequacy of proposed approach for completing the activities required (including considerations of overall system of management, ffnancial/administrative efficiency, staffing patterns, extent and nature of network of contact, flexibility and inr~ovation of methodjplanning)

15 points

4. Cost

Proportion of administrative costs to program costs 25 points

Annex H - BCOOI OF WORX

DEMOCRACY PROJECT MANAGER

IuUmwm Since the sudden advent of multi-.party democracy in Nepal in

April 1990, USLID has developed a fairly comprehensiv.8 democracy program, including support to Parliamant and its legislative support earvice, the 3udiciary, the press, constitution drafting, general cllections and various NGO activities including civic awareness programs, public opinion surveys and support to Parliament. So far SJ.900.OOQ has been programmed into more than 50 separate activities. Our work has been consistent with A.I.D1s

acv w t i a t . i ~ and the Nepal Democracy Strategy, using funds primarily from the PVO Co-Financing Project, Development Training Project and Asia Democracy Project. In conjunction with the Focus and Concentration and PRISM exercises an,d design of the Democracy Project Paper, a comprehensive and coherent strategy has been developed, encompassing activities supported under the Democracy Project as well as under other Mission and Bureau projects, in particular the PVO Co-Financing ( W O Co-Fi), Development Training Project (DTP) Asia Democracy Project (ADP).

The purpose of this contract is to hire a Democracy Project manager to monitcr and coordinate all Democracy Project activities, to plan and implement Democracy Project activities as appropriate, and to participate in planning, implementation, and monitoring of other democracy-strengthening activities in the Mission.

Approximatel)? three years and nine months. The end of the PSC contract should coincide with the PACD of the Democracy Project. (A shorter contract may be negotiated with an excellent candidate, but in no case will the initial contract be shorter than two years. )

1. Day-to-day managementof Democracy Project activities and other democracy-strengthening activities will be the responsibility of the Project Manager under the supervision of the Democracy Project Officer.

2. Tasks will include monitoring project activities, visiting officers and field sites, arranging schedules of Democracy Advisors and other visitors, preparing PIO/Te, drafting ::outine implementation reports, ensuriirg financial and activity reports are completed by

contractors, grantees, otc.

The Project Manager will also plan and implement Project activities as appropriate.

The Project Manager will keep him/herself informed of activities under other projects closely related to democracy (including the Economic Liberalization Project and support for decentralization and local usersv groups under the Rapti, Forestry and Irrigation Management Projects), and coordinate accordingly, keeping track of democracy support as a Mission-pwdde strategy.

The Project Manager will coordinate closely with the Embassy, USIS and Peace Corps regarding implementation of all Democracy Program activities. T'nis will include calling and attending regular (monthll?) DPI Coordination Committee meat:ings.

The Project Malnager will reprenant USAID in discussions regarding democ:racy projects, policieu, and procedures with mid-level GON officials, NGO loaders, etc, and will keep USAID informed of these discuso,lona, requesting and accepting guidance where appropriate.

The Project Manager will brief visitors (other donors, GOW officials, AID/W and other USAID visitors, contractors, grantees) on USAID/Nepalvs democracy program.

The Project Hanager will 6asure that the Mission considers financial sustain4ability of project and other democracy activ.ities. For example, he/she will explore the possibility of liking polling groups with media and research services and of encouraging diversification into marketing polls. He/she will explore the possibility of developing womenwe NGO (and other) training carriail out under the DTP into self-financing schemes. He/shsl will ensure allgrantees, contractors and cooperating agencies consider and report on financial sustainability cZ their activities under the Democracy Project or other parts of the Democracy Program.

The Project Hanager will ensure that the Democracy policy agenda ia reviewed and updated at least once every aix months, monitor:Lng, with the cooperation of Embassy and USIS colleagues, progress of dialogue.

The Project Mana\ger will ensure that under all Project and other Democ1:acy program activities, equity issues (relating to gender, caste and ethnicity) are considered

and documented at every stage of design, implementation, monitoring and evaluation.

11. A t the beginning of the contract, the Project Manager will work in conjunction with the present Democracy Program Manager, to ensure smooth and complete transfer of responsibilities by the time the present Democracy Program Manager's contract expires on November 14, 1992.

12. The Projoct Manager will, upon request of the Democracy Officar, undertake other tasks related to democracy suppo* .

1)a) The Project Manager will assist the Contracting Office in making any nesessary grants/cooperative agreements/contracts left to be made under the Project (grant to TAF, ~00perative agreement/contract with local cooperating agency/contractor, contract with a local NGO for the Democracy Poll, contract for the Democracy Advisors) . b) The Project Manager will assist the local government cooperating agency to sub-contract with an HBCU, 8(a) firm, or other appropriate US organization.

2) The Project Manager will monitor the work of tho project's major grantee, TAF, on a regular basis, through veekly meetings with TAF staff, which will include semi-mnthly visits to Parliament and the Supreme Court. He/she will coordinate with TAF to ensure compleventarity of T A * ~ General Grant-funded activities, as well as with SCOPE, USIS, and USAID'e Development Training and PVO Co-Financing Projects (both of which contain elements to strengthen Parliament and the judiciary), and any activities funded by tho Asia Democracy Project. The Project Manager will coordinate closely with other donors, in particular the Danes, regarding support to Parliament and the judiciary.

3) The Project Manager will closely monitor the work of the Nepalese Cooperating Agency and the ausociated U.S. organization. All cooperating Local Government aream will be visited at least once annually by the PSC Project Manager, who will also ensure coordination with other relevant projects, in particular the Rapti IRDP.

4 ) The Project Manager will coordinate the semi-annual visits of the Project Democracy Advisors, as well as other official visitors as necessary, and will oversee the Annual Democracy Poll.

5) The Project Manager will ensure completion of project activitise and will report regularly to USAID orally and in writing, including drafting of routine implementation reports.

Aativiti@r outRiPQ the Prola&

In addition to the Project, activities to support democratization are funded under DTP, PVO Co-Fi and ADP. The Democracy Program encompasses these as we12 as Democracy Project Activities.

1) The Project manager will have cloae involvement wi.th democracy supporting activities, through participation in planning, monitoring and reporting on:

a) training activities of direct relevance to democracy- otrengthening (currently using funds earmarked for DPI under DTP);

b) support given to advocacy NGOs, SCOPE, TAF (for its work with the Judicial Services Training Center), and other NGOs involved in democracy strengthening (e.g. civic awareness);

c) The Project Manager will also be responsible for planning, monitoring and reporting on activities funded undur the ADP.

2) He/She will support poteqtial grantees by receiving, reviewj ng and making recommendations to USAID on proposals for democracy work. Where - appropriate he/she will work with applying organizations to improve their proposals and prepare necessary A. I .D. documentatiobr.

, ' * 4 0 .,

r ' , : f

Eeeent ial/Minimum:

- B.A. degree in English medium - National ef! democratic country or significant, rolevant work experience in a democratic country - Good analytical, writing and management skillo - Exco,,lent opoken and written English

- Advanced degree in law or social sciences - Ability to speak and understand Nepali - Experience with Nepalese NGOe and institutions - understanding and experience of AID procedures - Minimum 2 yearsq project management experienca in a developing country

Women candidates will be encouraged.

Annex ,?

DtnOCIUCJ ADVISOR8 TOR 'PB1 DmOCRACY PROJBCT DOUrP CITATBIKNT OI WOZU

Since April 1990, eignificant steps have been .ado tovard establishment of stable democracy in Nepal, including promulgation of a new constitution, formation of a government following free and fair elections, completion of two parldamerrtary sessions, and commenceaont of much needed political and economic refom. A newly appointed judiciary is in place and local government elections took place in Hay 1992. Major challenges to continued duocracy otrengthening lie in occial and political tradition8 of hierarchy, nepotism, and intolerance, and in popular eqmctations that democratic progress will be accompanied by rapid economic development.

USAID has developed the Democracy Project to help strengthon democracy in Nepal by improving the capabilities of institutions and fostering democratic values throughout society. Specifically, USAID hopes to achieve increased pluralism and well-established democratic values and processes irr Nepal by strengthening the Parliament, Judiciary, and Local Government; a group of institutions with graatestpromise for achieving effectiveness and sustainability in supporting democracy and development.

USAID/Nepal has set up a oystem of impact indicators under its program performance measurement (PRISH) systom, vhich has led to a unique approach to evaluating Democracy Project activities. The niesion has determined that by contracting wi a tear of profession&ls who will make periodic visits to N % 1 to assess project progress (by making site visits to areas of Nepal where project activitieo are being carried out; by interviewing Project staff, contractors and grantees, and Nepalese beneficiaries of Project acti'vities; and by reviewing political reporting docurront., project monitoring reports, and periodic grantee/contractor raporto), and who vill make recoancmdations on the future course of the Project, a f o m P .valuation may not k needed. This contract, vill k for Duocracy Advisors, who vill participate in assusing Domocraoy Project progream.

To contract vitb two U.8. citizens, one Political Sciontist and ona Social Scientist or Lawyer, (who may k an anthropologist, sociologist, geographer, legal scholar, political scientist, etc.) who shall periodically visit Nepal to assess Democracy Project activities and prepare brief overviews of successes and failures, rata Project progress, and advise the nission and grantees and

contractors on the future coursa of the Project, including consideration of equity issues, as wall as project implementation.

1. A team of two Demoi:r.rcy Advisors shall visit Nepal twice annually during the four years of M e Democracy Project to assess Project activities.

2. The ~emocrbc~ Advisors shall, if not already, bacono familiar vith Agency for International Development bureau, Regional, 8nd Mission democratic strengthening initiatives and policy objectives by reviewing relevant documents. Tha documents shall be providod by USAID/Nepal.

3. USAIDlNepal shall notify the Democracy Advisors at least two veaks in advance of a scheduled assessment, and shall provide the Advisors with a detailed description of the typec of activitie8 that are to be assessed, and the approximate length of t h o required to conduct the assessment and draft a report of the findings and recommendations.

4. The Democracy Advisors shall report to USAID/Nepalgs Democracy Project Officer and the Democracy Project Hanager vho shall be responsible for developing their scopes of work for each assesoment vimit, receiving and reviewing the asseosunt team's reports, for suggesting changes, and for distributing the reports to relevant agencygs, officas, and individuals.

5. During each of the visits to Nepal, the Democracy Advisors shall make site visits to areas in Nepal where Project activities are being carried out, shall interview Project staff, contractor8, and grantees about Project impleaentation, shall conduct informal interviews with Nepalese beneficiaries of Project activities, and review political reporting documents, projoct monitoring reports, and grantee/contractor reports to asre88 Democracy Project progrems. The Democracy Advisors shall then collpile thair findingd, including reconmendations on the future course of the Project, in 8 joint report.

6. When determinod appropriate by the Duocracy Project Officar and tho Domocracy Project Manager, USAID/Nepal shall arrange for the Domeracy Advisor.' assessment reports to ba tranmlatod into Nepali.

During each of their visits to Nepal, the Democracy Advisors shall compile the findinds of their assessment work, including recommendations on the future course of the Project, in a joint

report. Prior t o departure from Nepal, t he Advisors sha l l s u b ~ i t tvo draf t copies of t he report, one riach t o USAID/Nepal 's Democracy Project Officer and Democracy Project Manager, i n English. The Duocracy Advisors cha l l submit the f i n a l version of the report (five copies, i n English) within f i f t e e n working days a f t e r the receipt of USAID/Nepal'o comments on the d r a f t report.

A. Po l i t i oa l blaientirt: s h a l l have a graduate degree i n Poli t ical Science, a t least th ree years d i r e c t experience in the design, evaluation and implementation of Agency t o r International Development projects , general knovledge about dsmocratic processes including constra ints on f u l l par t ic ipat ion of disadvantaged groups, and apec i f ic knowledge of and experience vorking with pol i t ics and democratic procesres i n Nepal. Abi l i ty t o speak Nepali and/or Hindi is desirable.

8. Boaial Iloientimtr s h a l l have a graduate degree i n Social Science or Law, be familiar with development processes a s carried out by b i la te ra l , multi lateral , o r non-governmental organizations, and be knowledgeable about democratic processes including constraints on f u l l part icipation of disadvantaged groups. Desirable charac te r i s t ics include a t l eae t th ree years' professional experience in South Asia, experience i n conducting o r evaluating development projects, and a b i l i t y t o speak Nepali and/or Hindi is desirable.

*

c: rd l . advsow

tirted blow ere statutory critoria appliaablm ts tho rsrirtance rmsourcmr thomeelvmr, rather than to thm ali ibilit of r country to rmcoivo aerirtanco. ~b 'i r eect 1 on im

. divided into'threm parts. Part A includes criteria applicable to both Devalopmmnt Aseirtrnca 8nd Eaonomic Support ?und ra~~ourcos. Part B includmm atiteria rpplicsblm only to Devolopmmnt Aaristanae rorourcea. Part C includmr oritaria applicable only to tconoaic Support Irundr .

. CROSS REP~RENCBI IS COUNTRY CHECKLIST.'UP I Y ) DATE? _ ~ t - L - + 4 t, s C ~ G F O I C ~ 3 PrrCrgi P y c-@ L&, \QQZ .

A. ITERIA APPLICABLE TO BOTH DEVELX)P)(ENT hSSI8TANCC AND ECONOMIC SUPPORT FUNCS

1. Hort Country 8rvelopaeat Iffortm (?M Bsc. 601 ( 6 ) ) 1 Intomation and conolumiona on whathat r88istanoo w i l l mncourage atfortr of tho country to: (a) incream. thm flow of international trado; (b) tomtor private, initiative and compotftion; (c) mncourage d;rvelopment and u u ot aooparative., credit wionr, anti mavin r and loan asrocirtiono; (4) dfseousago monopo~i*t~s pracCluuul (a) improvo tmohnical offioionay of indumtry, agriaultura, m d commerce; and ( f ) mtrongtnm free labor union#.

--- - 3. V.8. Orivata Tsade .ad Xvert8ont --- f?AII28C6. 601(b)); Information and aonolum~,onm on bow a~elstsncm vill onoourago 0.8. privata trade and invertmmnt abrolrd and anaourags p r i v a k U.8. prxtiaipation fn'forolgn crralmtanoo prograrm (including uem of private trrda channmla and UIm rarvioer of 0.8. private mterprime) .

' I ' 1

. - TEL No. , Jun 3 , 9 1 8:44 N0.003 P.01 I i

11 --.

- a - . . , . 3. Cangrarrlonal Motifio8tion . _ - .

a. aenorrl toquiremaat (FY 1991 Appropriationr Aat 8.c~. $23 and 591;

. FAA 880. 634A). r . If money.. $8 t o be obl i r i tod for an aot ivi ty not proviousli . .. jumtffied t o Conporr, or fo r an amount i n

I

excomm of amount prevlourly jue t i t iod t o Con a$#, har.Congror8 bem properly

I r not f i d (unlerr tho not i t ioat ion roqu i r e~on t hrn been vaivod becaurr o t eubrtant ia l risk t o human hoalth or velfare)? I

b. a ~ o t i o o ' o ~ nav aooount ob l iga t i s s (tY 1991 Appropriationr A c t See. 514): If tundm are being obligated under an appropriation raoount t o which they wore not appropriated, bas the Premidmt conrulted with and providod a vrf t t a n jur t i f S a t i o n t o the House and Senate Appro irtionm Cornittoes and has 8u& obl igr t != on bean subjoct t o rogular no t i t i ca t lon prooeduros?

a. Camb tranmforr and aonprojoot rootor arrir t .aoo (IY 1991 Appropriation# Act 8ec. SfS(b)(J)): I f fundm ate t o k u d e available i n the dona , of camh t ru r r f a r or mnprojact meotor aeo imt~mo, ham tho Congre8rional notioo

./A includod a dotai l rb dcreription of how the fundm v i l l k urod, wfih a dimcuseion of U.8. in terer t . t o k mrwed and r domarription of any aaon.omic poolley r e t o m t o bo promote2 . - -. # I

4. Ilnginarrcimg and l l~nrnai81 7 ? l a a i (FAA 800. 611(a)): Prior t o an obligation i n exoemo of $b00,000, w i l l +hare bor (a) enginmaring, t i n rno l r l or other plmm necemmrry t o oar out the ammletanoe; and (b) a rearonably 7 i r n a r t i u t a of the ooat t o tho 8.1. of tbe rrmimtam?

8. kgiml.tiv9 Aation (FAA 8.0. 611 (8) (a)) a If logir la t ivo aotion im r e q u i t a l within roaipient country v i t h rempoct t o an obligation i n excerm of $500,000, what ir tho barim f o r reraonabla oxpmctrtion tha t auch aatlon

TEL No.

- 3 -

vill be aompleted in time to permit orderly rccoqplimhmant of the pUrp080 of the amriotancat

. . 6. Water emo our arm (FM 8ec. 611(b).; FY 1991 A~propriationc Act Sec. 501): If pxojaat im for water or water-related land remource oonrtruation, have banefit. and oomtr bean computed to the extent . practicablo'in acaordance with tha prinoiplar, standards, and procedures ertabllshad purauant to tha Water Remourcer Planning Act (42 U.S.C. 1962, f& m.)? : (See A.I.D. Handbook 3 for guidelinom . )

7. Caah Truarfrr and 8ootor Aamirtaaoe (W 199k Appropriations Aat Sea. 575(b)): Will each tranefer or nonprojact rector asrietanc~ be maintained in a eoparale aaaount and not cominglad with other fundm (unlarm rucb requirements arm waived by Congraaslonal notica for nonprojact moctor assimtance)?

8 . Capital mmimtraoa (PM sac. 611(e)): If pro act 18 capital arrimtance

'Y , oonmtxuct i on), and total U.8. a88 mtance for it will exceed $1 million, hrm nirrion Diractor oortified and Regional Ammistant Administrator takon into oonridaration tho country'u capability to maintain and utiliza the projeat affectlvely?

9, Wultipla Co~trl, Obj@otiv@r (FAA Sao. 601(a) ) 1 rniorrl_fiondnd qp&lumi,onm on whetbar projeotm will-enaouraga 3ffoStm of the country tor (a) increase tho flw of international trado; (b) tomtar private Initiative and co.grt1tion; (a) ancourage developnnt and ume o f aooporativer, credit union., and mrvingr anb loan ammooiationra (d) dimcoursge monopoliatio praatioer; (0) improva techniaal effiaienoy oL induutry, agrioultura and cornerael and (f) rttengthan free labcr unions.

TEL No. , Jun 3 ,92 8:44 No.003 P.03

I n

. ,

l o . 0.8. Private Trade (?Ah 8.0. 601(b)): Information and ooncluelonc on how projoct v i l l oncourago U . 8 . private -ado and inveotmant abroad and encouraga private U.S.,putloiprtlon i n foreign

%f : . neuirtanco progrur (including uma o f

private trada channel8 and the oarvices of U.8. privat. ontarprim).

a. Rooipiont Contributif,ar (FAA seaa, 612(b), 636(b)): Doocrlbe 8t.p. taken t o asrura that , t o thm maximum u- extont'pormible, tha country l a , p

contributing local ourrancies to moot the comt of oontrrctual and othar rervlaem, and foraign curronciar owned by the U.S. are u t i l i tod in l iau of dollarr. u

b. Ub8.-ovned Currenoy (FAA w ? $ b + , See. b i l (d) ) : Doer tho U.8 . ovn axcors foreign ourroncy of the oountry and, i f 80, what urangamantm have bean made for No. itr roloaro?

c. I r p r a t o roaount (?Y 1991 Appropriation8 A c t S w . 575). I f armirtmce 18 furnished to a foreign

f overnmant under rrrangomentr which resul t n tha generation of local currencies:

(I) tl.8 A.I*D. (8) roquired tha t 1-1 currenciar k de oeitod i n meparato acoount a s rb1irh.d by tho rwipiont government,

-.-- ?

(b) antorod into an a e a u n t w i t h that q~

&0=3ihOUnt of 1 ~ 8 3 -- & ,-- -. govummnt- -. -- oumnoiom C g o n e r a t - and tha tmna a d oondltiona undot which tha ourroncior 80 dlopomited may k .utilicrd, and (0) e8tabliah.d agreurnt tho rmaponmibilit *i ma of A.1.D. and tha t

8 ovmmnt t o monitor and aoaount for opomitr in to and dimbrrrmomantr from tha

roparata asoount?

TEL No.

(3) W i l l ouch locsl aurroncler, or an equivalent mount or loca l currmcieo, ba urod only t o carry out the p\?rpooem of the DA or LSF chapters ./A of the PAA (doponding on which chapter I B the oourco of tho amrirtanco) or for the ,

adminirtrrtivo roquirunontr of tho Unitod stat08 ~ovarmont?

(3) Ha8 A.IeD. taken a l l appropriate mtopr t o onrurm that tho k /A oquivalont of loca l currencies dirburrod from the roparate aeaount aro used fo r t h e agreed pupoaer?

(4) If assistance is terminated t o a country, w i l l any unenouberrd balanoecl of fund. remaining i n 8 reparato account bo disposed of for purposor agreed to by t h e recipient govrrmrnt and the United Stater Govorn~ant?

8. burplum Corrmoditiar (FY 1991 Appropriation. A o t 8.c. 321(8)): fi asmirtanua i m l o r the roduation of any conaodity tar oxport, P r th+ oomodity l i ke ly t o k i n rurplum on vorld aarkotr a t tho tl8e tho r e ru l t i ng productive capacity kcomam opmrativo, an8 ir ruch a e a i r t m m l ike ly to oauro rubrtantial in jury t o V a l . producer8 of the mame, m i m i l u or compotinu commodity?

b. g u t i l o m (Lautoob.r - -.- - -. -t)-7fY 1991 Appropriation! A c t

Sea. S i l ( 8 ) ) : W i l l t ho a r r i r tmoa (oxcept lor togram i n Caribbean B ~ a i n xn&tiative coun t rim under v.8. Tariff sohsdule do , . uSoctlon 807,a which allowr roducrd t a r i t f a on rrtiolom armambled abroad from Urns.--do cm nents) be ured direct ly t o go procuro feami i P i t y atudior, prefoar ibi l i ty mtudior o r projeot p ro t i l e r of poten t ia l invemtment in, or t o amriot tha ortablirhmont of f a o i l i t i e s apeoif ior l l derigned for , tho manufacture for owport ! o the Unitod Btator or t o t h i r d country aarkota in direot conpotition vi th U.8. owportr, of

TEL No.

- 6 - textilor, apparal, footwear, handbag., flat good8 (much 81s va110tm or coin pureee vorn on tho armon), work glovor or loather woar f ng apparel?

13. t~opioaf torortr (PY 1991 Appropriation. Aot: Soc. 533 (c) (3) ) t Will fund8 b8 uoed for eny program, project or MB, rutlvity ashiah would (a) rorult In sny significant lor8 of tropical foreetr, or (b) involve indurtrial tinber extraation in primary tropiaal forort areas?

a. auditing 8nd rogimtration (PY 1991 Appropriations Act Sec. 537) : If aesimtanoo i s k i n g mado available to a PVO, ham that organization providod upon tinoly rqu08t any dooument, filo, or record necoroary to the auditing roquirolaontm of A.I.D., and is tho PVO. registorod with A.X.D.?

b. Punding rouroea (PY 1991 Appropriatione Act, Titlo XI, undor beading "Private and Voluntary Organitationma): X f aasimtanco is to bo aade to a United Stater WO (other than a caoporativo dovoloplsnt organization), door it obtain a t loart 20 porcont of its total annual fundin$ for intarnational activities from eoutcrr other than the United Statem Government?

1s. mo mot Ag&0@8Oat Docmrr5atation 16tato Author i ration Seo. L-+ - - ntorpretod by oonforonco rwTGi eonfirmation of tba data of mign ng of tho

. f rojwt agreement, including tho anaunt nvolvod, barn cabled to Btata LIT and A.1.n. LIE within 60 dry@ of tho agroeaentcm ontry into form with rorpoot to tbo United Stator, and bra tho f u l l text of the a roement boon pouched to thoma ram0 of 8 ioer? (Bee Handbook 3, Appondiw 6Q for agroementr covered by thim proviaion).

TEL No. Jun 3 ,92 8:44 No.003 P.06

16. Yotrio l y f t u (Ommibum Trade and Comp.titivenemm Act o t 1980 Sea. 5164, a6 intorprotad by confuonce report, amending #stric convermion A c t of 1975 Sea. 2, and am iap laaenid +&ouyh A. I .D.. policy) r D o o r tho aroiatance r c t i v i ty ume the metric myrtu of aearursrent i n i t m proauuentm, grrntm and other bumine6s-relrtod aotivitiem, except t o the extant tha t auah ure i u impractical or i s l i ke ly +> ccrume r ignif iaant inefficienciem o r losv of market. t o United States f i r m m ? Are buSk purchamem umually t o be made i n metrio, and are oomponentm, mubassenbliea, and rami-fabricated mater.ialm t o be mpocifiod in metric un i t s vhen eoonomically rvailable and technically adequate? M i l l A.I .D. mpeciSicationm wee metric unitm of ~reaeuro from tho earliomt programmatic mtagem, and from the earliemt documentation of the armimtance processes ( for oxample, project paperm) involving quantifiable meamurementm' (length, area, volume, capaoity, marm and veight), through the i rplmentr t ion mtage?

17. Uorrea in Dmvalopent (PY 1991 Appropriations Aot, Ti t lo 11, under haabing .Itomon i n Devolopmentr) : will rmrimtrnce k derignrd ao tha t tha peraentaqe o t vomen prr t ic ipante w i l l br datmonmtrrbly inorerood?

1 . 1Logiaara and Icul t i la terr l AmmSmt8no. (FAA 8ao. 209) r Ia aeairtanco h. 4a*kUCcGL - . mom off ia iont ly and etPoctivaly provided L~PJH~~;,*A~& ! throu h r ion81 or ~ u l t i l r t o r r l --hi? organ r a o a y 3 @ reelstanom not mo rovidrb=~rztlon and conclus ! onm on vbethor ammistance v i l l oncoura devaloplng oountrioe to ?

A&-- aoopora in regional dovalopment prograu,

TEL No. Jun 3,92 8:44 No.003 P.07 ' 5

19. ~bortikn. (W 1991 Approprirtiona A c t , Title 11, under heading .Population, DAta and Sea. 525)a

ulslbs- C. Re .A rvail8blo to 8ny organication or 'prograa whioh, en d6:amined by tho Prerident, eupporta or prrtioiprtar in the management of r program of aoeroiva abortion or involuntary sterilization?

b. Will any fundo be uaed to lobby for abortion?

db. 20. coopotatire8 (PM sac. ill): :

Will oaalatanoe he1 dovolop oooporative~~ ! i

eapralrlly by techn oal aarl8t&nce, to I

aeeimt rural and urban poor to hmlp ' !

themaolvea toward a better life?

2 Ue8.-0vna6 loralga currraoier - 1. U8m of ourronoloa (FAA Sec8.

612(b), 636(h); N 1991 Appropriatlona A c t Seca. 507, 509): Waoriba atop8 taken to ammure that, to the maximum oxtont po8albl0, foreign currmoiam owned by tho U . 8 . aro utiliced i n lieu of dollar8 to moot the oort of oontractual and other 80YViO0~.

b. Reloarm of ourreaaier (IM Boo. 612(d)) 8 Doam tho 11.8. ovn excess foreign curronoy of tho aountry and, li 80, a r t arrangements have born made for it. rolmamo?

8 . 8-11 burlnor8 (FAA 6mc. 603 (a)) r Are there arrarsgeunta to penit U.8. amall buainemr to

and aerv 1 con finrnoed? rrt ioip.ta aquitabl in tho furnir i w of coauoditios

be W e m e proaurctmoat (FAA 6.8. 604 (a)) a Will all proouromant ba frm the V.8. oxcopt am otherwine dotermined by tho Pro~ldent or doterminod undor dologation from bin?

.,?.-?--- ,:,::. ,I* ?i.;A-.,,-,. ,....,a- i,y..;.4 -p---:-.- .. .. -. -- .,.,. L , - ' * . 2 - - r - - , - ~ * ~ : - - - ~ ~ F ~ - P ~ 7 ~ X b 7 ~ ~ - ' I r . ' -

. . , .. - . * . : - , &.,. . ...&--- ,>,r-,*?... .:*: . . .*:..-:. :.:.y.'ii. .,~$j..~~;,* .,,,'. er:,,;.. . . ' . r.. . r . , . . . . . . ,

TEL No. Jun 3.92 8:44 No.003 P.08 i '

Oa coartruotioa or raqiaooting

1 #Ortria@# FAA 6.c. 604(g))t W i l l \ n b . - L ~ u w b w a oonmtruot on or enginewing aervicoa k procured from firm of advanood developing countries which a r e otherviae eligible undu Codo 941 and uhials have attained a c o ~ p e t i t i v e aapabill ty in intarnational Brrrkotr in om of tborr r r r r r ? (maeptlon fo r Wore countria8 which receive diroct rcon6mic armiatanco under the IM and pormit United 8tatea f i n 8 t o oompte to r mnrtruotion or .rrgineerlng merviwr f i n a n d from amrimtanoe prograu of theme aowrtrioa. )

!

c. ~(uiar iararmor (FAA 8.0. 604 (d)) : It the coo @rating country diaoriminatea again8 ? sarino inruranca oompanler r u t h o r i r d t o do burinoar in tho U.S., w i l l aomodltira k Snrurod .in the United otater rgairut marine r i a w i t h

t. Cargo prefrtenor rbipping rm r e . 60311 s I. the mhi ing O X C ~ U ~ W I &

horn uanpliancw vita t s e ram Yr a u n t im

I

, SO percent o t tho oam tonnage o t P couoditiw (compu od raparately for dry bulk caraiotm, dry a linrr8, and un*ur) ts-.d BhG! iw trrnapo- o i privatol ovnd 0.1. f l rq eonmarair1 vommola r o th. oxtent much veaaelr are a v r i l a b h m t trir a d reaeonabla rater?

muoh a collpupy? - - ' d. Yon-V.8. agtfaulttual i 1

praswuomt (?M ho. 604 (0) ) t 10 non-U.#. procuranent of rgrlculturrl ooruodity or produat thereof l a t o k finanaed, ir tbsre provimion againrt much

t s / ~

praouraaent vhrn the domertio prioa of much commodity i m lemr than parity?

I (txcmption vhare c n r o d i t y ilnancrd could not reamonably k proourad in U.6.)

g. frobnioal arrirtlrhar (FAA 8.0. 621(8 ) : I f tochnicrl rmmirtmco i m f 1 nancad, vi l l muob aarimtanct b. furniehed privato "K. enterprime on r aontrmot mi. t o tha f u l l e r t orrtant practioable? W i l l the

TE? No. Jun 3,92 8:44 No.003 P.09

i

frcil itiom and rerourcer of othor Federal agonciem k util irod, when they ur pa r t iou lu fy muitable, not oorpst i t ive w i t h private entarprima, cnd aado av r i l rb l s without unduo i n t o r f e r e m w i t h domartic pregrau? . . . .

8 . 0.8. air aar r lora , (International A i r 'Pruuportrtlorr Fair

~ o m p t i t i v o P+rotiosr A*, ~ 9 7 4 ) i II a i r . transportation of permon# or,proporty i m finrnoed on grant bari r , w i l l U.B.

.carriorm k usad t o #a extent euob aorvioo 18 rvailoblet

i. fomiaatioa f o r ooaveaienoo of U.B. Oovermsnt (W 1991 Appropriations l ! !@daCOr l i i r ; - '

A d Sea* 504): It tho U . 6 . Government 18 h e - . a party t o 8 aontraot f o r proouremnt, dorm tho contrrot contain a provision authorizing tnmination,of ouch contract f o r the conveniema of tho United Stator?

j. Coorulting rerv$oor (nt 1991 Approprirtionr Act we. 524): rf asr i r t rnoo i m for conrulting aorvica through procuraunt eontract purrnuant t o 5

v* U.8.C. 3109, a re 009trrot acpenditurer a matter of public rocord and available fo r public inrpection (unler. othenrlao provided by law or ~ o o u t l v e o r d u ) ?

k. Matria c +(Onnibur %ado md Con

procurorenta, gnntm min no or-ta1at.d actiu extent t ha t muoh uro 1 l ike ly to arure aignii o r lor. of aarkota to A r m krlk purcha80~ umu motric, and aro aolrpon and #mi-frbrlortod ma meoif ied i n metric un

rarmioa :ltivenesr A c t o t :onforance report, bn A& of 1973

La"* td through A.I.D. ,;gXmga;t"=' ~uramant I o ther lam, except t o t h e Iupraotioal or i r mnt inef f icioncios .te4 state. flrar? ,y t o ?MD mads i n ;., .ubamreabli.m, ~ialm t o bo I vhan

o~~onanical ly aviiiablo aid technically adaquato? W i l l AafeD. mpociticationr use motria unit8 of rrarure from the earlirmt programmatla mtagrr, and from the e r r l i e o t

TEL No. Jun 3,92 8:44 b!o.003 P.10

doamontation of tho raaiatanoo prooeews (for exaapla, projoot prparr) involving qurntit irble nerruremntm (length, aroa, volumo, mprcity, mrr and vright),

. through t h o bplurnta t ion . stage?

1 ceqptit irt : . Ialeotioa Proaodurer (?Ah kc. 601(0)) 1 W i l l the am.i.t.ncm uti1i.e oompetitiva .election 9 p m r m Laurm @ru &La u~LuJL. .~ -8 -re.&- --L-, exoapt where ap liorble procsurersnt ruSola 6110~ otherwira 1

8 a 01 it.& projrot (FAA sac.

J ! 601 d l ) r xi csp t r l (u. conmtruction, A/A pro aot, w i l l 0.8. anginorring and proferaional marviaor k ued?

ba Coartruation ooatraot ( P u 8.0. sl l (o))a If eontraot. fo r rtorutruotion u a t o be r imnod, rill' they A)A be l e t on 8 aoqpotitiva bardm t o maxjmur

. e%tant pn~*ioablot 7 c. Luga projwto, -A Coag'rc~rrioml approval (IM 8rc. '620 (k) ) a

I f for conrluuotlon of produotlvo antupr i re , w f l a aggraqato value o t arrlrtance t o kr fumirhed by tha U 1 6 . not rVP axcood $100 n1lL:m (except for pr0ductiv8 ontarprlmem i n wt tbat Vera damcribad i n the Congrermlonrl Prerantation) , or: doam rmrirtrnoe b v e tho exprerr approval of Congrorm?

- - .Lamst nigbtr (TAU see. - 5-1und 1. ertablit~hsd molely by YA

U.6. oontributionm and 8Uminimtarad by an i n t a r r t i o ~ l orgwairation, dorm Colptrollar Conurl hava audit tight.?

as. uomunimt a ~ ~ i o t ( L a ~ e (PAA 8 ~ . 620(b). Po 8rrrng.wnts u r h t t o inmuro t h a t Unitad Itatom foralgn aid 18 not used i n 8 unner whia)r, oontrrry t o the beat intwe8tm o l the United Btataa, promokm or ammirtr tho foraign rid projeotm or aat ivi t ioa ol #a Coranunirt-blo~ countria.?

T EL No. ' Jwn

a. Cmrb raimburruaato (FAA Sac. 481): W i l l rrtrngesnentm prac13d@ use of financing to.make roiaburmamentr, in tho form of carh papen t r , t o porpono whoa0 i l l i o i t drug cropm u r erabioated?

b. Ameirtunar: to neraotiom . traff$okaro (FAA Bra. 487) t W i l l arrangrrrrntm krke mall roaoonable stapmv t o recluds rrre of finanaing t o o r Ulrough ind ! vidualr or entitiam whim we know pz have roamon t o k l i e v e have either: (1) boon oonviated o i a v io l i t lon lot any Law o r rsgulation of the Unitedl Stlatam o r a foreign country celating t o na~ccotico (or other controllet3 substances) ; or (2) h e n ar. i l l i c s i t t r a f f i c k @ r in, ox o1:herwiao involv+xI la tho1 i l l ici t traltf f <!king of, any such tontrolled eubstanca?

2'1. m r o , p r i r t i o o tmna ~ s ~ o r r (RAA sac. 620(g)): W i l l aemimtanee praeludr uoo of financing t o aompensata owncsro for axpr~eprioteU o r nn t i l~na l i t rd property, axcapft t o oorpenrato :toreign national8 i n aoaor0mco with a :land reform program a a r t i f itd by tho Prsridont?

?Be ~el iacb and BrPmonrr ((FAA 8oc. 660): W i l l asrllrtrrn6o pracludr use of finarming t o provide training, advice, or

'?- any t in rna ia l #upport f o r pal iar , prieonr, or other law mnforooment forcer, except j I for nrrcotiam progttemc?

I

.- . .- .- -1% .-- -- -- 9 CXA Aat i r i t i a r ( P M sot:. 662) 1

W l l l armirtanaa ;preoluda ure of i!inancing 'Ye . , for CIA aot lv i t isr?

, :I ! I

30. Motor 1Vobiol.m (&M Soe. 636(i)) a W i l l atlrirtance procludr use 02 "r- 4 .

f lnrncing for purehare, mala, long-term ! ,I I j laama, axohanga or guaranty o t thn r a l r of

motor vehiolaw manufaeturad outnide U.8., unleer 8 waiver ir obtained? i

i , ,

' I ' I

TEL No.

3%. uiriLrr ~ormoaaol (PU 1991 Appropriationo A o t 800. 503) r will armirtanas precludo uno of financing to pay pensionr, annultiom, retirement pay, or 8dju::tmd morviaa oompensation for prior

.' or aur~rsnt ~ail$tuy~.por#onneP?

32. Pa ont of 0.r. Amseommonto (FY r 1991 Appropr ationr Act ,600. 505): Will .arri#tanw procludo ura of finanaing to pay U.N. aesooraont8, arrearage8 or duer?

Jun 3,92 8:44 No.003 P.12 I

33. Yultllrterrl Organimatioa Landing PY 1991Approprirtions Act sot.. 586): W 1 I1 armlrtanae preclude uro of financing to aarry out provirions of PAI) roction 209(8) (txanrfar of FAA funds to multilateral organizationo for lending)?

3 4 m r t 0f M U O ~ O ~ S ROmOU008 (PY 1991 Appropriationm Act, 800. 510); Will assletancs procludo urn,. of flnpncing to financo tho export of )nuclear oquipmont, tuol, or technology?

35. Soprommiom of ?opulatio:a (PY 1991 Appropri8tlonr Act 8.c. 511): Will rmrirtanca prealudo uro of financing for tha purpoms of aiding tho effort* of the government ot mud aountry to repremm tho legitimate righta of the population of much oountry contrary to the Universal Daalaration of Xman Rightm?

6 hrblioity or Propagrada (PY 1991 Appropriation8 A o t 800. bib): Will amrimtanao be urod for publioity or propaganda purporem derlgned to mupport or dafut logimlrtion pending kioro Congrram, to intluonce in an wa tho outoore of 8 politiaal aleat 1 on I n tho United Stator, or for any pubiicity or propaganda purpoeor not authorized by Congraoa?

' 'I ' I

TEL NO. Jun 3.92 8:44 Na.003 P.13 I

! 1

. . 37. Marina rarutinoe (W 1991

Appropriations A& &c. 163): W i l l any A.I.D. contract and r o l i o i b t i o n , and rubcontraat o n t u r d in to under much contraot, inolude r olruro requiring Mat U.8. marine ineurandca companiem have a f a i r opportunity t o bid tor marine inrurmoe when such inruranm i r nootleeary o r appropriate?

38. &ohar~ga i o r ~ r o h i b i t o d A a t (PY 1991 Appropriation@ Aot 6.c. 569): W i l l any a ~ s i r t s n c e bm p~ovidod t o any foroigtt governrent (including an instrumentali ty o r s sgoncy tbaraot) , t o r d g n pereon, o r United States pareon i n axcbango f o r that foreign government or poreon undertaking an action whioh i n , i f oarr isd ou t by t h e Un 1 t ad Stater aovernrent, a United Stater o f f i c i a l or employee, sxprarsly prohibited by a proviolan of United Statoo lav?

6. CRITPIXA APPLICABLB DEVELOPMENT M8PBTANCt ONLY

1. agrioultur8X txpartr (Burpmra &oad.ont) (nt 1991 Appropriationr A c t Sac. 52l(b), ro interprotod by oonfarenae report for original enactment): ZZ a r r i r t a n w i m for agr ioul tural devalopmant s c t i v i t i o r (mpaolfiorlly, any tmmting or brooding f s a r i b i l i t y mtudy, var fa ty improvement o r introduotion, aonoultancy, publioation, conlaranw, or *raining), u e much a c t i v i t i r a a (1) rpocif icallyY\ prinoipally dorignod t o inoreaao agr iou l tur r l nrportm by the hoat c o u n t y t o wuntry o.$hrt than the Unit04 Stater,

. whoro tha a r t vould lead to diroct . i coapotit ion n that third country vlth export. ol a mimil.ar aomodity grown or produood i n tho United Stater, and can t ho a c t i v i t i o r roaronably be ewpoctad t o oauoa rubs t an t i r l i n ury t o U.6. errporterr of a r i n i l a r a ricu 1 t u r a l commodity; or (2) in 'upport of raraarob that i@ int.nd.6 primarily t o benefit 0.8. producerr?

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TEL .No. Jvn 3.92 8:44 No.003 P.14

2. ' 9i.d U d &edit. (N 1991 Approprlstionr Aat, Title XI, undu beeding aBoonoaic Support Fund*): Will DA a fundr bo umad tor tiad rid oredits?

3. ap~roptiata vaohnology (FAA 800. 107): 18 mpeoial ompharir plaeud on usa of appropriate tachnology (dafinod as relatively raallar, oort-raving, labor-uoing technologie~ thrt are generally momt a proprirte for the rmall farmr, rmall bum neeaer, and nmall incomes of the poor)?

S I. Zabigenour mrmdr and ~oaouroor

(E'k Sac. 28% (b) ) r Dercribo @*ant to f7"*95; a d --d~-&

whiah the aotivity racogniseo tho particular naadr, dorirr8, and aapacitiar of tba paopl. 02 the country1 utilirar the country'. intelleatual rorourcer to onoourage in8titutional dovalopment; and rupportr civic dueation and training in 8killr required for effootive participation fin governmental and political proaessee armantiel to malt-gwernaant.

5. laoaomio Developmmt (FAA 600. lOl(8) ) r Doom M e aotivlty give rsaronabla promiae of contributing to tha davolopmant of aeonomic rarourorr, or to tha inarearm of produotiva orpaaitier and mali-rurtaining e o o n d o growth?

. . - . . - 1 . 1 ,

TEL No. Jun 3,92 8:44 No.003 P.15

. . . - 1 6 - .

and tho improvamont of roian@m mtatua; and (0) u t i l i r a and onoouragr rogional coopuratlon by davoloping oountriar.

7. 8raipl.at Cotlatry contribution (FAA 8aCk 110, 114 (4)) : W i l l the raoipient wuntry prwidr a t learnt 25 puoont of tbr oomtr of tho program, projrat, or ac*.dvity v i tb rerpwt t o vhiob the rrrnrirnknca i. t o ba turnirheb (or l o tho l a t t a r oo~t-mharing requirement baing vaivod for a grolativaly learnt developed* country) ?

8 Imaolit - t o Poor W. ority (FAA 1 sea. 128 (b)) : I) the act iv ty ettmptu t o % a incroarna the inetitutional capabilitiarn of private orgrnitationm or tha govormant of the country, or if it attempt8 to mtimulata rnoiontifio and tachnological ramearoh, bar it beon darnignad and w i l l it be aonitorod t o onmure tha t tha ultimate beneficfarlorn are the poor majority?

9. Abortioar (FAA 800. 104( f ) ; FY 1991 Appropriation. Act, Tit la 11, undor heading nPopu18tion, DA,* and Sac. 535):

h. a. Are 8ny of the funbr t o k

used for the pmrformanca of abortionrn nrn 8 &, method ob family planning or ta motivate or aoorcr any person t o practice abort;iona?

be A r m any of the iundr t o k ummd t o MY for tho mrtorrranoo of .I invoiuatkjtd-.riliz&t&n aa., method of M. - . f u l l y planning o r to-coerce orpro- - any f~nano ia l incontiva t o any M r o n t o undarvo atmrllirationm?

0. 111:. any of tha ~ l r ' t o ba made availabla to an or rnl t r t ion or program whioh, a r de t arm f nod by tba Pramidant, rnupportr o r partiolpater i n the

d@. ranagorant of a program ol owsciva abortion or involuntary mterillration?

0 , 3. I ,

TEL No.

d. Will fund. & made avrilablo only to volunhry family planning project. which offor, oithu direly or through rofarral to, or intonation about accer8 to, a broad rang* of tamlly planning,, m s t ) h o d . and rerviw?

Jun 3,92 8:44 No.003 P.16

0. In avardlng grantr for natural fuily planning, will any applicant k dimarbinatad against becauee of ouch applioantem roligioum or oonroiantiour oonitment to offar only natural family planning?

f. Aro any of the Zunde to be u r d to pay for any biomedical research whioh ralatar, in whole or in part, to methodw of, or tho prformanco of , abortions or involunta rtorilization a8 a run. of i u ~ y p~mn&?

g. UIy of the Z ~ d 6 to be aada availrblo to any organisation i f tho President cortifior that the uro of these fundm by much organiratien would vlolatr any of tbm abovo prwimionm ro1rt.d to abortionr m d invaluntrry mtsrilitrtion?

1 Coatrrot Wardr (rM Sac. 601 (a) ) t Wl11 tba projmct utilirr oorp.titivm rmloction procadwarn for the awarding of oontrautr, amopt where s p liorble procuruant rular allov 0 t?, m i m a ?

. 11.. bimrdvrat.g.6 Istorgrirem (FY 1991 Mproprietionr Act Sot. 667): What -- 4.- -

- --portI~ri-of P a % i a W * on1 for aotivit;imm of ~norioally and BOO I ally dlmadvrntagad antorgrirem, birtoric8lly bladc oallogao univarmitlom, 0011 or and univmroitiam having r atudant 4 y in which moro than 40 p o m t of tho mtudanta u o lleprnia kraricrnm, and rivato md voluntr R 'K organirrtionr v ieb aro oontrolled y individualm yho are black A~orican8, Himpanso Ansricanr, or Nativo Americans, or who rro aconorioally or mocially dimadvantagad (inoluding womon)?

TEL No.

12, liologi-1 Divoority (?M 6ac. w i l l tha arrirtrnca: (a) mupport

trr lrgi9) njmg : and @duoation effot tr lfhioh improw tba aapmaity o i reoipient oountriam t o pravsnt 10.8 of biological d ivur i ty ; (b) k prowidad under' a Xong-tot. r g r m o n t i n which tho racipiant uountry 8 mar t o roteat aoorymtomm or F ! othar v i l l i f a bab tatr ; (o) rupport effort. to identify and nurvay acoryrtum i n rod imt countriar verthy of f rotect an; or d) by any diteot or I fndirmct mmr . gnitioant-ly degrade national park. o r mimilar protrctad araam or introduce axotio p l m t r or animal8 into

'

muoh rzrrm?

Jun 3.92 8:44 No.003 P.17 I - I

I,

1atAon 18: Doos . TEE tha arrirturce @ ' a*1aB* oorrply Y" v Zh the anviromantal rocedurrm ra t forth in A.I*D. Ikgu1.t f on i6?

&&-aB\o/a

b. Coaruvatloat Doar the I

ammirtror placo a high priority on . conrarvrtion and mumkinrblo amrgersent of

I

t ropiar l fororto? 8pooiilcally, door the - amaimtlrRoo, t o thm fullemt extant fearnibla: (1) rtrromr the importrnoe of conranting urd muutalnrbly war ing forest remouroamt (a) ~ p p r t act iv i t f or vhich otter cngloywnt and &noon altrrnativoo W thomo rdro o t b . n i u would uauro

-=-- - tYeatruotion and loam of tarastm, and belp nd4mpl.wnt

m o n i z i q aream; (3) mupport training rogrsrrr, oduaatlonel 1 . effort#, and th. oat8 liabwnt or rtrurgthoning of ~ t i t u t l o n # to improve foromt r m r g u m f 8 4) brlp and doatruotiw #lamb- 4 -bun agrloulturo by ruppolrtlng r t rblo and produativa tarring pracrticom; (9) he1 eonrnervo foramtm which hvm not yot k, on dogrrd.8 by helping t o inororma produotion on land8 already olorrad or dogrrrdodl (6 conrarvo I . forartad wrtorabeUm and rahrbili a ta t;hooa which hrvm boon dofororteb; (7) support training, rorerrob, and other aotionm

I

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* I 11 ' 1,

TEL No. Jun 3.92 8:40 No.003 P.18 I

vbicb load t o rurtainablo and more onviromontally mound practicer for t-r harvomting, ruoval , and procorring; (8) rupport rorouub t o expand knwlodge of tropical forortr aqd identify alternatives miah w i l l provont foraot dortruction, . loma, ot degra8ationt ( 9 ) conmorvo biologiaaldivetmity i n i o n a t .roar b rupporting affortr t o identify, ert8bl 1 oh, and maintain a roprrsentative network o f protootad tropicml forer t ocorymtoru on a vorlbvido barir, by u k i emtablirbmt of protaoto 7 arras a oondition of mupport for ao t iv i t i r r involving lorart olearanco or dogradation, and by helping t o idontify tropical forest ooomymteu an8 mpooiom i n n0.d of protoctlon and omtabliah and aaintain appropriate protected aroam; (10) mook t o inorsame the avaronomm of 11.8. Qovornment agancior and othor donorm of the Slusdiate

lo''! -torn value of t r o p i f ~ l f o r s ~ t 8 ;

(11) u t l i r e tho romourae~ a d ab i l i t io r of a l l relevant U.8. government a onciom; (12) k bread upon cr ioful urrrlyr 1 r of the alt.mativom availrb2;r t o aabiovo the beat mustrinablo urn of the landt am¶ (13) Wu f u l l ~~~t of tba' environmantal inp8cltr of tho proporod activltiom on biological divorrity?

o. lorar t dogradation8 W i l l armimtmca k urod tor: ( I ) M e procunmmt or umo of loggiw equipmont, unl-• an onvironaontal a rmunont indicatar that a l l timbor barvrating oporationr involved w i l l & oonductod i n

~ n v l ~ l l y mound unnor an8 tha t tbo propoud ret ivl ty w i l l produo. pomitiva #onomlo Inrufita and murtainabl. fgomt unaguwnt rymtmmm~ (1). aotionr vbicb w i l l ri i t i o r n t l degrada national p . r ~ er ~ M L & amam

do. oontaan tropiorl r"" o r a r k , or lntroduoe axotio lmtm or animalm in to ruah arear; (3) ac t 1 vitior mioh vould ramult i n the conwaiaa of tomot landm t o tar roaring db.

. of livrrtoclrl (4) tha oonmtruotion, umrding, or uintmanao o i roadm (including tmmpora haul roadr tor l ging or other ox 7 ractlvo indumtriom) dB. v8c)r par8 Uvouph rolativoly undergraded

. I , t b 8 4 , ' . . TEL No. Jun 3,92 8:44 No.003 P.19

. ,

f o r e r t lrndr; ( 5 ) the oolonisation of fore8t landr; or (6) the oonrtmotion 02

d. daam or other wrtor control mtrubtureo vbiob flood relatively undergraded forea t

a,. . . land., unlerr with rerpoct to each much

ac t iv i ty r n anv i~ommta l arrerunont indicatmr that the act ivi ty v i l l contribute mlgnifioantly urd direut ly t o improving tho livrlihood of the rural poor and v i l l be oonduatod in an environaentall mound mannor which mupportr rurta I nrble development?

4. 8urtrSarble goreatryt I f a s m i m t a n w relater t o 'tropical foremtr, w i l l projeot rmrirt countrier i n , . developing a r y r t u a t i o analyaim of thee appropriate ure of M a i r t c t a l tropioal f o r e r t rerourae#, vltb the goal of developi r national program for murt.ina3e f o r e r t m

0. Invitoamontrl impaat '

r t8 toun t r1 W i l l ~ d r b o u d e a v a i l a b l e d / ~ i n accordance w i t h provirion8 of ?Ah Saotion 117 (0) urb rppliarble A. 1, Dm rmgulationr requiring an environaental impact mktemont tor ra t iv i t iaa mignitfiarntly af2aoting the a v i r o m e n t ?

lb. lub-lahrru ~trioa Mmirtanoa . !

(?V 1992 AppropriatSonm Aot 8.0. $628 addsng r now ?A chaptu l o (FAA 8.c. 496))r It armimturco v i l l 0080 iron tbo hrb-amarm A I ~ I - M rooount, 1. it: (a) i 1

!

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* I ,I I , .

TEL No. Jun 3,92 8:44 No.003 P.20

- 21 - . .

private ractor dovalopmsnt, promote individual fnitiativom, and help t o roduca the rolm of wntral governments i n aream more appropriate for tba private aeotar; (a) t o k

' prwidad in 8 u n n a r tha t takeo into account, during tha planning proceeo, the local-lovol parrpoctivem of tha rural a d urban poor, inolub woman, through olore oonrulkt ""I Otr '

vi tb African, Onitod Btatar and other WOr that have domonrtratod affeativanomm i n the promotion of

-10081 grarrrootm ao t iv i t i r r on behalf of long-term development i n Sub-Saharan Atrioa; (d) to be implomentad in a mannar that requires local pooplo, includin wornon, t o k olomaly aonaultod and 1 nvolved, i f the rmriatanco ham a local focum; (e) king umod primarily t o proaota .raferm of ari t f-1 maotoral aaonomio poliaiem, or to mupport tha o r i t i ca l mrctor prioritiem of agrioultural reduction and natural rarourcam,

g-1, voluntary i s l i l y planning oenrlaoa, eduoation, and hooma generathg opportunitiom; and (f) to be rovidod in 8 u n n s r that, if

reto- arm t o a.it.sted, aonta nr proviriojnr to retoot wlnorabla groupm and tg onviromont fror poomible mgutivo aoru~rguono~m oe tba xatorm?

16. Mbf-S?Ol-UatU?O bb.h8ga (?Ah 8oc. 463) r If projtrot w i l l finrnao a debt-tor-natun .xctimnga, domcrik how tho oxahanga w i l l mapport protoetion otz (a) t h m v o r l d * ~ oaeur8 ud atxwphoro, (b) r n h l and plant -mpooirr, and (0) parlc. ud romorvom~ or domci?ibo h w tho axchsngo w i l l promoto: (d) natural romourao managomont, (a) loor? muowat ion

coruarvatAon training pub110 oosulltnant to (la) land nnd oc0mymt.a

aanaga~ont, and t i ragonerativa a~proaoham i n farm 1 nm, iorertw, fishing,

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TEL No. Jun 3.92 e:44 No.003 P.21

II

. . 17. ~ o b r i ation/nooblf grtien

(PY 3991 Appropr I at ionr A c t sac. 51s): I f deob/raob authority i. rought t o bo exrrcirod i n the provirion of M arrirtrnem, a r m tha t u ~ s h i n g oblipatod

. 2or th6 r a ~ o 'gonarrl purpore, and for I

aountrier vithin tho @are rogion a r originrlly obllgatod, and haw tba loure

; and Senate A propriatlonr Comittaee been S , properly not f k a ? ' i a. nqpa mt oapaoity (FAA Sac.

122(b)): Informat r on and conclueion'on capaoity of tho country t o ropay the loan a t a reasonabla r a t e of interrot.

b. mag-ran l plras (PAA sec. 122(b)) : Door the a c t v i ty ive rosronable promire plane and progranu

capaci t ier? oconomi'c rarouroar

c. In terar t rate ( Y M Seo. 122(b)): It developlont loan ir repayable i n dollarr, i r in toror t r r t e a t loart 2 peraent par a n n u during r graco period whioh i m not t o rxased ton year., and a t learnt 3 peraant per annum thoreafter?

8. &port8 to Waited Utatar '(PAA bec. 6lO(b))a I f r r r i r b n e o i r for any productive entarprire vhloh v i l l compete vi tb W.0. an to up rime^, i r there an cgroamont by ti18 r o c i p i e n t s m a ~ t o - - ,- - q! - - Provent emrt to the 0.1. ot .or0 than 20-p

lrrrr

Moont of- the entmrprirovm annual

R reduction during tho l i fe of tho loan, or as. the roguiromant t o optor into auab an . . .

agreerant &on waived by the Rreoidrnt t

bobaura ot A national sauurity intorart?

19. Davrlogrmt Objm~tf~@m (FAA ~ & & z & - d w !I

Secr. 102(8) 1 1 1 1 3 2 ) Extent to vhioh a d v i t y v i 11 a (1) effect ivoly involve tho poor i n davelopmenf, by expanding accorr te economy a t local v-- levol, incraasing labor-intenrive produotfon and tho uae of appropriate teohnology, rprsading lnvestmant out f ro8

- - \ 4 t h

---. - .-- - . - .

) ' v 0 I 1

TEL No. Jun 3,92 8:44 No.003 Y.22

d t i o r t o -11 town8 m d &rl ~ U U , and inawing vidr participation of the poor in the kneti tm of dewlapmmnt on a mustainad bamim, uaing tha appropriate 0.8. inmtitutionr ; (a) help devalop

. cooporativr8, erpeoirlly by teohniaal smmi8tmm, to r a r l r t rural and urban poor to hml thumelvar toward better l i f e r and ~themrmo U I O O Y ~ . . ~ ~ democratia private and l o o r l gwmrmantal inmtitutionr; (3) aupport the ulf-help effort8 of devol inq oountriem; (4) pronotm the p u t i a O! pation of women i n the national economies of devaloping countrieo and thm iaprwenant of woam*m.rtatw; and (5) u t i l i z e and encourage regional cooperation by developing countriem?

10. Agriaolture, Rural Dovalopment and Wutritioa, and Agriaultttrrl Rerouoh (FAA Seam. 103 and 103A)a

be Ihrtritioln8 kmcrik extent to JhioA rmrirtmoa irjr,eB& - -- ooozdination w i t h ef ior t r ore- - - . -

a. Rural poor md m a l l famermr l f asmintanam 1e b i n made

. 1rvail8ble for mgrioultwre, mrcr I ,

developmant or nutrition, demuibo extent b w r t t g e s t o vhicb aativity 18 rpacifiarlly domignad to i n c r u w productivity and income of -81 poor; or i f a r r i m t r m i n klng made availrble for agricultural rereuch, ham account boon t.ka of the need8 0f ,

under 1M &&ion 104 (Population and ner~ta) to be improve nutrit ion of ~ l e 44 poopla of devr i wing counttiocl through amour. W n t sf &norerred produotion of' crop. v f tb groatu nutritional value; improvamnt of planning, rerearch, and education vith rerpeut to nutritlon, pmrtiuularl v i th reference t o inpzwenmt and nxpend J .uro of inbigewourly produaod f oobmtuf f a; a d the undertrkl or Uebonmtration program expl a i t l addramming the problem 01 malnutrit on of poor and vulnerable pooplo.

, Of F1"

+ . I

h

I !

amall farmom, a M oxtenaivo uae of f i e ld baria teserrcti to local 1'

coondit on8 aha rdrp I be nde. - 1

I - .__ _ _ -_.. _- .^ -- - - - . , ------ ---- . ---. -- .. ))1 1 1 1 ,

v TEL No. Jun 3,92 8:44 No ,003 P.23

o , toed reoutStyt Dorerib. axtont t o uhdoh act ivi ty inoreamom national food memrity DY improving food YA policiem and 8ana ucbnt 8nd by 1 mtrangtbming mat orurl, food rourves , with . pa r t i a r~ l a r wnoorn for the needs of thu paor, througb runrt.m amowaging darasmtio prodk~otion, buildin national food reaorvem, expanding avr 1 lable .torage facili*iam, retlucing pomt harvemt food lo8mam, rr~U i8proving food dirtr ibution.

21. Populrtioa and 8ar l th (rm Secs. I I 104 (b) and (a)) : If aoeirtanoa in being made available l o r population or baalth '/A' a c t l v i t l e ~ , domaribs sxtont t o vhlch ac t iv i ty amphamiter lw-oomt, integrated

I: dolivery my8tru for hoaltb, nutri t ion and family planning fo r the pooremt people, w i t h p.r t iaular rttmntion t o the needo of aotharr urd young ohildren, uring paramedical Md auxiliary medical permonnol, olinicm and health poets, cormaeroial distr ibution rymtrar, and othr r 1. modem of community outrcrroh. I

32. Muoation and 8uua lerauroer I

Derelop.ent (FAA 6@& 105); If asristanco Am bow n d e rvr i labla for education, public rdniniatration, or huun romourae devmlopwt, demcrlb ( r ) mrtont to rllicb ~ c t l v i t y mttongtham nonf 0-1 oduca.tion, mkrm f o w l educatiotb more relevant, ompocirlly for rural familiar urd urbnn

%*

13. mergy, ?eivate volttat- Organirrtiosm, and 8eloatad DOve10 maat l o t ~ t i u (tM two. IO6)r x i arm ! stance fib i m bing made availablr for onergy, p r lvn t r voluntary organiratlona, and

' S.1eot.d drvelopmmt roblema, describe extent t o aiob aot iv 1 t y $ma

TEL No,

. conearned w i t h data aollection and anr lyr i r , 01. trrlning of 8kill .d parronnel, raroarah on a b davolopmont of muitable a n e w sourcorn, and p i l ~ t projects t o tamt new ssthodm,of onrrgy prmot ion ; and fao i l i t e t iva of $q , ,

raraarob on .nd drvs3opaant m d ura of 8 m a l l ~ l o , dmaontrrlisod, renewable anorgy roorcer fo r ru ra l araar, ompba8iaing development 02 enorgy rsrourcor vbiab a m environmentally accoptablr md roquirr ninimum capi ta l i n v a r h m t 1

b. aoncarnrd w i t h technical coop.ntion and davelopmt~nt, a#peeially @/Q v i th V.8. private and voluntary, or regional and international development, organitatlonm~

c. roooaroh Into, and ovrluation of, aoonorlo devalopment prooeswr md teohniqusr; d/&

d. reoonmtruution a f t e r natural or manmadm d i r r r t u an8 programr of dirartox prapradnarmt

./A a. for mpoaial development

problem, and t o amble propor u t i l l zs t ion of inframtruoture and ralatod projects fundad vi th ea r l i a r 11.8. aralstanca;

i . f o r urban davalopment, eapecimlly amall, labor-intenrivo .ontteqwi.er. . u k a t i .ye- t o r am811 'f/*

roduearr, md finmnc r l o r othor - . -.=R, "f -r

pa- 80ci.l davelap.mnt. . ,