U.S. Aid to Nepal in the Cold War Period: Lessons for the Future

Abstract

F oreign aid is basically a diplomatic instrument. The United States was the first country to employ aid systematically in order to achieve its major foreign policy goals in the immediate aftermath of the Second World War. Of the several less developed countries that have received U.S. aid since the 1950s, Nepal was one of the first. Nepal and the United States established diplomatic relations in 1947 and four years later signed the General Agreement for Technical Cooperation on 23January 1951. The external factors, i.e. the strategic location of South Asia and the potential risk this region was exposed to from communist powers, motivated the U.S. to provide aid to countries like Nepal. Similarly, the internal factors, such as the weak and uninstitutionalized governments, general poverty and the growing popularity of national communist parties in South Asia, were equally important motivations for the U.S. to supply aid to countries of South Asia. Nepal was definitely one of the poorest to receive aid yet strategically vital because of its physical proximity to the Tibetan autonomous Region of the People's Republic of China. Even more farreaching was the assumption that any communist influence on Nepal could spill over to the South Asian region and beyond to the vulnerable far east. This paper has three main objectives: (a) to examine the fundamental aid objectives of the United States in Nepal during the cold war period, (b) to assess the major accomplishments of the U.S. aid, and (c) to draw conclusions about the directions of U.S. aid in the post-cold war period and explain the implications for Nepal. The paper begins with a brief history of the relations between the two countries. The major part of the paper discusses the United States aid policy in Nepal in the context of its foreign policy objectives and the success of aid in achieving them. The last section draws conclusions about U.S. aid to Nepal and examines possible implications of aid in the post-cold war period.