The UK is immensely proud of 200 years of cooperation between Britain and Nepal. Through our visit we hope to have further strengthened the social, economic and political bonds between our two countries.
We arrive more than one year on from the 2015 earthquakes and we offer our condolences to the family and friends of those who lost their lives. We continue to be filled with admiration for the spirit and resilience of Nepali people.
Citizen's Cultural Peace Walk for National Independence, Co-exi...
The UK remains committed to the reconstruction process and is ready to support the Government of Nepal's leadership in rebuilding Nepal and in building back better.
As a recent exhibition in Kathmandu documented, the UK's development relationship with Nepal goes back 50 years. This is a valuable reminder of what we have achieved together. And Nepal has much to celebrate—with remarkable progress in the health sector on child mortality and maternal health, impressive progress in education notably the net enrolment rate at primary level and improvements in access to clean water.
As Nepal looks to the future, the UK supports its ambition to graduate from Least Developed Country status by 2022 and, in the words of the recent Vision 2030 document, to emerge as an "inclusive, equitable, and prosperous middle-income country having met all Sustainable Development Goals by 2030". The UK is a partner eager to help Nepal realise this ambition. Our hope is that we can draw on the many successes that have gone before, and support the government and people of Nepal to build a stable, peaceful and prosperous Nepal.
To achieve this, we believe it is imperative that there is a shared commitment to inclusive growth. This may sound obvious, but in our experience it cannot be guaranteed. What is often required is a shared commitment by political leaders that growth is central to their legitimacy and worth making compromises for.
To deliver on the Vision 2030, the National Planning Commission says that the economy needs to grow by 9 percent annually. The current GDP forecast growth for next year is 6.5 percent but has averaged about 5 percent since the conflict. In our view, significant investment from both the public and private sectors is critical to growth. But Nepal has lagged in recent years on both accounts. The government has been unable to spend the budget allocations for developmental projects and attracted only US $50 million annually in foreign investment over the past eight years—it seems that investors are not yet convinced that Nepal is the best place to invest for the long-run.
However, the financial completion of two mega hydro deals (GMR for Upper Karnali and SJVN for Arun -3) and the signing of the Power Trade Agreement will be significant markers of progress and strong signals to foreign investors that Nepal is open for business. During our meeting with Investment Board Nepal we discussed the huge potential of domestic hydropower. Further development could eliminate Nepal's energy constraint and generate income and revenue on a low carbon growth path.
Nepal's estimated generation capacity is at least 40,000 MW. It would need around 20,000 MW for internal use if it was a middle-income country, leaving 20,000 MW for export, bringing a major boost to foreign exchange earnings and income for the country. Nepal's current capacity is 760 MW. To complete the project important steps are still needed. We hope all sides can deliver on their commitments and that construction can start in 2017.
During our visit, we met a wide range of people, including senior government officials, partners, beneficiaries, and members of the international and business communities. Vision 2030 is commendably ambitious. We depart committed to continuing and strengthening the UK's forward-looking and modern partnership with Nepal.
Lowcock is Permanent Secretary, Department for International Development; McDonald is Permanent Under-Secretary, Foreign and Commonwealth Office of the UK. Both were part of a recent high-level UK delegation to Nepal to mark the 200 years of diplomatic ties between Nepal and the UK.
