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Nepal-Australia relations: Future perspective

By Peter Graeme Budd
To gain a proper perspective on our future, it is important to understand the historical context and the foundation on which our partnership is built.
In 2010 Australia celebrated 50 years of diplomatic relations. Sometime during my tenure here, I hope to celebrate our 60-year milestone.
Australia’s partnership is an enduring and productive one, founded on strong people-to-people links and shared challenges.
Our commonalities are perhaps not immediately obvious. Nepal, with its Himalaya ranges, proudly wears the white mountainous crown of South Asia. In contrast, Australia enjoys the less lofty title of land down under.
But there are similarities and shared challenges which may go to explain the warm affinity that Australia and Nepal share.
Our populations are roughly similar: Nepal is a country of some 28 million, Australia 24.6 million.
We both share significant economic and investment ties with China and India, and our economic futures are inextricably tied to Asia.
We both regularly face natural disasters. In Nepal it is earthquake, flood and landslides. In Australia, it is flood, drought, bushfire and the all-to-frequent cyclone. Harsh environments require a resilient people, a national trait we perhaps both share.
We both enjoy similarly strong ties to the land, with agriculture historically important to both countries. In the face of rapid urbanization – despite Australia’s outback reputation, more than 70% of Australia’s population is in urban centres – we share the challenges of maintaining viable, robust and economically
Tourism remains an important mainstay for our two economies.
We both face the significant threat of climate change and issues around how to manage our natural resources and protect the beauty of our natural environments. We also share the potential for boundless renewal energy, whether it be hydropower, wind or sun.
With the near completion of Nepal’s local government elections, we now also share a federalized government system.
And apparently there are significant segments of both our populations who enjoy a coffee or a beer.
So we stand to learn much from each other, and to benefit from our partnership. This has been reflected in the forging of some historically strong collaborations.
The partnership of Dr Sanduk Ruit and Fred Hollows, dating back to 1987, has seen the Tiganga Eye Centre with the Fred Hollows intraocular lens laboratory become a leading centre for eye care in Nepal.
The Australian Himalayan Foundation, borne from the inspiration Australians have drawn from Nepal’s Himalayan peaks over many years, has supported education programs for remote communities, sustainable tourist practices, conservation and the arts.
And there are numerous Australian non-government organisations who continue to do great works in Nepal.
Bilateral relationship
Consistent with this community-level engagement, the Australian Government has worked with Nepal and the private sector over many years to support the economic and social development of Nepal.
This has included in the fields of education, health, hydroelectricity, sustainable forestry management, civil aviation, and livestock and grain management.
Australia provided more than $28 million to Nepal following the devastating earthquakes in April and May 2015.
Australia’s support included urgently needed water, sanitation, shelter, medical supplies and food as well as longer term recovery activities focused on helping communities revive their businesses and generate much-needed income, assisting children to return to school, rebuilding better and safer schools and supporting community mediation post-earthquake recovery.
This year Australia will provide an estimated $34.0 million in official development assistance with a continuing focus on education, livelihoods, public financial management, Australian volunteers, the Australian NGO Cooperation Program, and Australia Awards. This includes a couple of flagship programs:
* Australia’s Micro-enterprise Development Program (MEDEP) has supported the establishment of more than 100,000 micro entrepreneurs and whose work will continue through the Government’s Micro Enterprise Development for Poverty Alleviation (MEDPA)
* Australia’s support for the 7-year School Sector Development Plan with World Bank and other donors will support the Nepal Government’s efforts to improve the access, equity, quality, efficiency, quality, and governance of the Nepali school system.
* Australia’s contribution to the World Bank’s Public Financial Management Multi-donor Trust Fund, along with 7 other donors will assist the Nepal Government to improve public financial management and Nepal’s delivery of services.
* Through our Civil Society Water, Sanitation and Hygiene Fund (WASH) Australia is supporting the health and quality of life of the poor and vulnerable by improving sustainable access to safe water, sanitation and hygiene.
* Australia’s Sustainable Development Investment Portfolio (SDIP) is delivering improved water, food and energy security for Nepal, and support to facilitate low carbon economic growth and climate resilient livelihoods, benefiting the poor and vulnerable, particularly women and girls.
Our SDIP partners include a range of institutions with specialised expertise, including Australian Centre for International Agricultural Research (ACIAR), Commonwealth Scientific and Industrial Research Organisation (CSIRO), International Centre of Excellence in water Resource management (ICEWaRM), the International Centre for Integrated Mountain Development (ICIMOD), International Finance Corporation (IFC) and The Asia Foundation
Through Australia’s Business Partnerships Platform, whose partners include Intrepid Group and World Wildlife Fund Australia/Nepal, Australia is also working to accelerate Australia’s collaboration with businesses to address development challenges in Nepal.
Beyond the Development Space, Australia’s relations with Nepal continue to strengthen through development cooperation and growing people-to-people links.
According to the estimates of the Nepalese Diaspora in Australia, there are around 90,000 people of Nepalese ancestry in Australia.
Approximately 50,000 Australians visited Nepal in 2016, up from 36,000 the previous year. Two-way people movement last year was more than 100,000.
Bilateral economic and trade relationship
Australia’s trade with Nepal is small, but there is potential for growth in hydropower, tourism and infrastructure development.
There is also continuing strong potential for growth in the delivery of education services, with the number of private Nepalese students studying in Australia increasing rapidly.
Last year, 22,000 Nepalis studied in Australia, with 15,208 undertaking higher education. Just over 50% of Nepalis studied management and commerce, 14% information technology and 12% health. Nepal now ranks 3rd of all countries pursuing higher education in Australia.
Two-way merchandise trade last year totaled $53 million, with exports to Nepal valued at $45 million. Principal exports to Nepal are vegetables and refined petroleum. Australia also exports food and beverages including – of course – wine. Australia’s main imports from Nepal are floor coverings and clothing.
Committed partnership
Going forward, Nepal faces multiple constraints to economic growth, including low levels of foreign direct investment and poor infrastructure. Around 28 per cent of Nepal’s GDP relies on remittances from migrant workers. Nepal’s economic growth continues to be impacted by political uncertainty and natural disasters.
And more focus needs to be given to economic and other reforms that could improve the investment climate, stimulate growth and create more private sector jobs.
Australia is committed to working with Nepal in boosting investor confidence, spurring economic growth and supporting the Government of Nepal’s aspiration to transition from Least Developed Country to Developing Country Status by 2022.
We have a number of priorities over the next twelve months.
* We will be reviewing our work in the livelihoods space, working with the Nepal government, Nepali businesses and community partners to look at how we can build bridges between micro entrepreneurs to small and medium enterprises and support and support Nepal’s economic development.
* We plan to upscale our support for the activities of the Association of Australian Nepal Alumni. This will include expandingthe reach of the network and developing a digital platform that offers a resource for businesses to leverage Alumni skills, encourages collaboration and support among Alumni, and provides a source of information for Nepalis considering Australia as a destination to pursue further studies.
* We will build on our successful collaboration with the Asia Foundation on community-level mediation, todrive a multi-year sub-national governance program to support Nepal’s transition to a federated system.
* Working with the government and partners such as the International Finance Corporation (IFC), we will strive to unlock Nepal’s hydro power potential, including through private-public partnerships (that encourage private sector investment in Nepal, reduces financial risk and deliver projects on time.
* Building on our support for Nepal’s National Water Policy, Australia will work with the Water and Energy Committee Secretariat (WECS) to share our learnings on policy implementation and water resource management within a federated system.
* This week in Canberra, Australia is signing an MoU with Nepal which will underpin a formal consultative mechanism and framework for regular Senior Officials Talks. This represents an important maturing of our relationship, and will provide an important forum to discuss regional and global issues of mutual interest, including climate change, trade and investment, regional security and refugees.
* We both Australia and Nepal contesting for seats on the 2018-20 Human Rights Council, Australia is hopeful of working with Nepal to advance the work of the council.
Australia will never be Nepal’s largest donor, nor its largest trade and investment partner for that matter. In recognizing this fact, Australia will continue to be selective and creative in identifying those areas where we can work with Nepal to make a real difference.

(Budd is the Australian Ambassador to Nepal)

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