It would be hard to believe if we say that Nepal is providing more ‘aid’ to the United States in recent years than it receives from it, even before USAID projects were slashed. Or a suggestion that Nepal has given the US $500 million more than what it receives as aid and remittance. What if we go even further and claim that Nepal has provided between $500 million to $4 billion to Canada, the United Kingdom, Japan and Australia each in 2021?

It is very easy to dismiss these numbers as made up figures. But they are preliminary estimates from ongoing research by the Nepal Institute for Policy Research (NIPoRe) to redefine the narrative on foreign aid. These are ‘conservative’ estimates of the net resources transferred from Nepal to the traditional donor countries if we include the economic value of the resources the traditional donors need in the aid calculation.

While we lament over the termination of many USAID-funded projects in Nepal—valued at around $330 million—we are missing a huge opportunity to reset the narrative on ‘aid.’

The Organisation for Economic Co-operation and Development (OECD) defines aid or official development assistance as the “government aid designed to promote the economic development and welfare of developing countries.” It includes grants, loans and technical assistance. This assumes that advanced countries are the donors and developing countries are the recipients, implying that advanced countries provide significant financial support and technical skills that developing countries lack.

Yet, what if the developing countries also provide something of value that the advanced countries need? What about the people or the young workforce? Hence, we define net aid as the difference in the amount of traditional aid Nepal receives from ‘donor’ countries and the economic value of youths Nepal sends in the other direction.

Calculating the value of statistical life (VSL) is a common practice in the cost-benefit analysis of public policies worldwide, especially in advanced countries.

For this research, we calculated the cost of raising a child in either country until 18 years. We used the average for Nepal and the ‘donor’ country to estimate the economic value of the Nepalis migrating abroad as students or on work visas. The cost of raising a child in Nepal was calculated based on the Annual Household Survey, 2017, and the public expenditure on education and health, all adjusted for inflation. Similarly, the corresponding data for the donor countries were taken from their official sources (such as the US Department of Agriculture for the US) or think tanks (such as MoneyFarm for the UK). The number of people’s movement was taken from the student and work visas the five donor countries issued.

The ‘net aid’ flow for 2021 was calculated with the assumption that 25 percent of Nepalis who go to those destinations on student visas return. By this measure, Nepal provided net aid of around$500 million to the US and Canada and $1.3, 2 and 3.8 billion to the UK, Japan and Australia, respectively. In the same year, these countries cumulatively provided $320 million as aid to Nepal.

The estimates suggest that Nepal has subsidised the advanced nations by investing billions of dollars in raising a population who end up migrating to constitute the workforce of the donor countries. Thus, Nepal has the short end of the stick, only receiving a fraction of the value in aid compared to its contributions in the growth of donor nations.

In saying that, the goal here is not to suggest that Nepal should seek equivalent aid or reparations from the donor countries. We also do not argue that Nepalis are investing in raising kids to send them abroad. Additionally, students and workers go to these countries of their own volition. They are not government-mandated decisions to ‘support’ the donor.

However, it is necessary to point out that the traditional donor countries massively benefit from Nepal and Nepalis investing in their child. These countries need to acknowledge that they are the benefactors. Thus, when they provide aid, they are not merely supporting Nepal but primarily investing in their own future. Meanwhile, Nepal can and should deal with confidence, not as a ‘beggar’ seeking aid, but knowing that it provides more to the donor countries than the way around.

It is high time that the narrative of aid comes out of the neo-colonial shadows and moves beyond the idea that finance is the only form of aid and that developing countries are merely recipients. The US has slashed 83 percent of the projects under USAID. European countries will likely follow suit in reducing aid as they invest more in their defense. Global aid is already facing existential questions as we traditionally understood it.

This is the right time for the recipients to view aid differently and redefine it so that the developing countries’ contributions are also acknowledged and valued.

(NIPoRe plans to publish the full report by the end of April 2025.)

Poudel is the lead at the Centre for Strategic Affairs and Syring is a Research Assistant at NIPoRe.