From the beginning, EU-Nepal relations have been based on mutual respect, learning from each other and support to Nepal’s development
The year 2018 marks 45 years of friendship between Nepal and the European Union (EU). From the beginning, the relations between the EU and Nepal have been based on mutual respect, learning from each other and support to Nepal’s development. Nepal is now aspiring to become an inclusive, prosperous and resilient country, aiming to graduate to a Middle Income Country by 2030. For the EU, the overarching goal in Nepal is to join hands in these efforts.
Together with its 28 member states, the EU is the largest development partner and second largest trade partner of Nepal. Since the political and economic relations started in 1973, the EU has been supporting the Government of Nepal through various development cooperation programs. Currently, three focal sectors of EU’s support are: (i) sustainable rural development, (ii) education and (iii) strengthening democracy and decentralization. In recent years, the EU has tripled its assistance to Nepal from € 120 million to € 360 million for the period 2014-2020.
However, our relationship goes much further: People to people contacts through cultural, commercial and educational exchanges, tourism and trade and investment are the real building blocks of an ever stronger and lasting partnership.
In over six decades of its existence, the EU has been promoting economic prosperity, social inclusion and stability, as well as democratic and accountable institutions both within and outside Europe. Experience has shown that in order for a country to grow and develop, multiple conditions have to be met. A country must enjoy peace, security and stability and all its citizens must be equally respected and represented, which is best achieved in a strong democratic system, where human rights are respected. Simultaneously, there must also be sustainable economic growth that involves economic activities within and across the country’s borders, while adhering to the principles and practices of good governance, climate change, as well as disaster preparedness.
Globally, the EU is assuming ever greater role in various areas, including peace building; ensuring security; strengthening relations with the EU’s immediate neighbours through the European Neighbourhood Policy; tackling climate change and human rights issues; as well as its development cooperation, humanitarian aid and crisis response. Collectively, the EU and its constituent countries are the world’s leading donor of humanitarian aid.
The EU-Nepal cooperation programs are developed and implemented together with the Nepal Government, private sector and civil society and are geared to genuinely assist the country in achieving its development goals. Nepal enjoys a privileged access to the EU market, for all products except arms. In fact, the EU is the second largest market for Nepal’s exports. Being the largest trade block in the world, it offers more trade opportunities. The EU is also investing in Nepal’s economy including through loans provided by the European Investment Bank. These actions contribute to production growth and job creation for Nepali people. The EU is also open to further exploring mutually beneficial opportunities on trade and investment. Among the almost one million tourists that visited Nepal in 2017, around every fourth visitor came from Europe. Nepal’s beautiful landscape, culture and welcoming people are unique assets of the country. It has great potential to attract greater and more high-value tourism which can be further exploited, to support its developmental goals.
The EU’s development approach is structured around the ‘5 Ps’ of the EU Consensus on Development: People, Planet, Prosperity, Peace and Partnership. Poverty eradication remains our primary objective, but we are also integrating economic, social and environmental dimensions of sustainable development in a balanced manner. We are reinforcing the links between our development and peace, humanitarian and migration policies. And we are giving more prominence to those drivers of development with the greatest power to transform lives: gender equality, youth empowerment, sustainable energy and climate action, investment, migration and mobility. This policy framework is underpinned by financial instruments which provide a funding platform to translate policy into action and results.
Country ownership and aid effectiveness are overarching principles of our collective efforts. The EU has been providing budget support, whenever possible, as a means to strengthening Nepal’s ownership, financing national development strategies and promoting sound and transparent public finances. Budget support involves the direct transfer of funds to a partner country’s treasury where they can be managed using national systems. Currently, close to 60 percent of EU’s overall support to Nepal is implemented using budget support. This support is based on structured policy dialogue with the Government of Nepal, whose development plans and priorities are the blueprint for our development cooperation.
Committed to noble cause
The EU is a frontline leader on global issues such as the Paris Climate Agreement and the Iran Nuclear Agreement. As witnessed during the United Nations General Assembly meetings recently, the EU has stood as a strong defender of multilateralism, also supported by Nepal, as outlined in the speech of Prime Minister KP Sharma Oli at the UN General Assembly. Consequently, and whenever special technical expertise is required, the EU also works through multilateral agencies like the UN or co-finances investments with Asian Development Bank and /or World Bank group.
We also believe that civil society organisations (including NGOs) are vital partners for decision-makers, as they can support service delivery to those most in need and ensure that their voices are being heard. The role of civil society organisations/non-state actors is growing from being implementing partners to sharing more responsibility with the state on poverty reduction, as developing countries claim ownership of their own development. With civil society organisations, as well as with governments, we promote social and gender inclusion, respect of human rights, good governance and strong, accountable institutions.
The EU has reaffirmed its commitment to assist the elected Government of Nepal in the federalization process. The EU remains a consistent and reliable supporter of a democratic and inclusive constitution. The EU’s political relations with Nepal, along with its development cooperation efforts, aim to build stability and economic, environmental and social development in Nepal.