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Difference between Bilateral project and Multilateral projects


Bilateral project: If any project is run by a mutual agreement between two friendly nations than it is a bilateral project. Both countries have an agreement to produce goods and services by using certain resources. In general, the project is run by accepting foreign aids and grants. Aids or grants are provided to poor countries through these organizations. Such organizations are: JICA (Japan), USAID (USA), UFIO (UK), SDC (SWISS), GIZ (Germany), DANIDA (Danish), BICC ( Birendra International Convention Centre) of Kathmandu, etc. are examples. 


Features of Bilateral projects: 
  • This project is based on foreign aids and grants. 
  • This is a mutual agreement between donor country and receiver country. 
  • This project is generally service-oriented. 
  • This projects generally depends upon a large scale projects. 
  • This project helps in the infrastructural development of the country. 

Advantages: 

  • Grants 
  • Economic development 
  • Expansion of Relationship 
  • Employment opportunities 


Disadvantages: 
  • Dependency 
  • Corruption 
  • Uncertainty 
  • Unnecessary Pressure 
  • Negative effect on Culture 

Multilateral Project: 

When a project is run with an agreement with more than two donor agencies to invest to mobilize resource of any country then the project is called the multilateral project. Generally, the donor agencies help the underdeveloped or developing countries to run a project by providing grants or cheap loans. “Making the poor country/ies economically prosperous is the main objective of a multilateral project. The multilateral projects invest mostly in mega or major projects. The world bank, ADB, UNO, UNICEF, WHO, ILO, EU, etc. are the major donor agencies investing in Nepal. In Nepal, Melamchi drinking water project is an example of it. 


Features: 

  • There is an agreement with foreign donor agencies in the projects. This project is service-oriented. 
  • There is merging on labor, capital, and technology in this project. 
  • Such projects generally run on a large scale of organization. 

Advantages 
  • Low cost of funding 
  • Economic development 
  • Employment opportunities 
  • Entry into the global market 
  • Infrastructure development 

Disadvantages: 
  • Cumbersome- providing cheap loan 
  • Corruption 
  • Dependency 
  • Uncertainty 
  • Negative effect on culture 

Bilateral projects
Basis of difference
Multilateral projects
They are the projects under the agreements between two friendly countries
1.      Meaning
They are the projects under the agreement between a multilateral agency and recipient countries/y.
Comparatively smaller in size and needy
2.      Size, nature
Such projects are large in size, complex in nature
Mostly grant-based so recipient country need not to pay
3.      Form
This projects are generally concessional loan. Recipient need to pay back.
This projects are basic of corruption
4.      Corruption
Less chance of corruption
It creates low employment opportunity in  comparison
5.      Employment generation
It creates employee opportunities in large extent.
Such projects are suitable for medium and social projects
6.      Suitability
This projects are suitable for large mega or major projects.
Bilateral projects can be properly utilized, so they are less cumbersome.
7.      Cumbersome
Very large projects cannot be properly utilized because of lack of utilization capacity.
Result can be achieved in short time
8.      Project result
Project result can be achieved in long time.
Grants need not to be paid back. Interests on grants are not implied. So, there is no debt servicing burden.
9.      Debt servicing burden
This projects involve in debt servicing which adversely affect in economic development of nation.


Differentiate between Joint venture and indigenous project 

Joint Venture project: 

The project which is undertaken to produce goods and services through collaboration of foreign and local company investors is called joint venture project. In other words, if there is an agreement between native company and foreign company to run a projects jointly the project is also called joint venture project. The prime objective of this project is to earn profit and distributed among the investors at the ratio of their investment. Here ownership of the project is shared. They can share equity for production, technology transfer, managerial contract and marketing. Some examples of joint venture project is given below. 
  • Maruti, Suzuki care and joint collaboration of Maruti of india and Suzuki of Japan anf 
  • Face-cream of Fair & Lovely by joint collaboration of Hindustan lever company and Nepal lever Company. 

Features: 
  • Joint investment of home country and foreign countries (companies) 
  • It is profit oriented 
  • There is transfer of foreign capital and technology 
  • The domestic and foreign labor, capital and technology are merged. 

Advantages: 
  • Lower labor cost, mutual cooperation 
  • Transfer of capital and technology 
  • Employment opportunities 
  • Market entry 
  • Profit maximization 
  • Low risk 

Disadvantages: 
  • Negative effect on local project 
  • Dependency 
  • Cultural effect 
  • Competition 
  • Negative effect on culture 

Indigenous Project: 

Indigenous projects are those which are funded by local government in order to fulfill the needs of local people by utilization of local resources. In other words, An indigenous project is one which is run by mobilizing local or domestic sources. It uses indigenous material, capital skills, technology to implement the project. The goods and services required within the country are produce in such countries. Nepal is rich in indigenous technology. Eg: Water mills, temples, stupas, erection of rani pokhari, etc. 

Features: 

  • Maximum utilization of local production 
  • It protects culture of the locality 
  • It is specific nature 
  • Project generally of small organization 
Advantages: 
  • Utilization of local resources 
  • Protection of culture 
  • Labor intension 
  • Employment generation 

Disadvantages: 
  • Ignores technology 
  • Rigidity 
  • Limited area 

Differences: 

Joint Venture
Basis of Difference
Indigenous
Project with local and foreign firm. Ownership is shared.
1.      Meaning
Project with local capital, ownership is not shared.
Big size projects
2.      Size
Small size projects.
Advanced technology
3.      Technology
Local/ traditional technology.
It accepts the technology, concept emerged in the world
4.      Rigidity
It ignores the technology and concept emerged in the world.
Depending in foreign economy and management
5.      Dependency
Self- dependency.
More chance of disagreement with local partners so conflict may arise
6.      Disagreement
Little chance of disagreement so little chance of conflict
Low production cost because of advance technology and large scale of production
7.      Production cost
High production cost because of traditional technology and low volume production.
It enter foreign culture and tradition.
8.      Cultural protection.
It protects culture  and tradition.
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