Nepal is the poorest country in South Asia and internal conflict has limited its economic growth in recent years. However, restoration of peace in 2006 brought some stability and a basis for new growth. Currently, the country's main difficulty is building the foundations for its new nationhood. Besides achieving lasting peace, it needs a solid and robust democratic system of good governance and a sustainable economic development strategy. Nepal has been a member of the World Trade Organisation since April 2004. The main objective of European Union cooperation is to help improve the living conditions of the Nepalese, particularly in rural areas, and to enhance the performance of its economy. To achieve this, it is essential to help consolidate democracy and to mitigate the internal conflicts that have been seriously affecting the country's development.
EU Aid programmes 2007-2013
The EU-Nepal Country Strategy Paper (2007-2013) sets out three focal areas for EU support:
- Education (with human rights, gender, conflict prevention and the environment as cross-cutting issues)
- Stability and peace building
- Trade facilitation and economic capacity building
The multi-annual indicative programme for the first four years (2007-2010) allocates €60 million to these three areas.Regional and thematic programmes are also available to provide grant support for relevant organisations in Nepal.
Priorities for 2002-2006 included the promotion of long-term poverty reduction, the consolidation of democracy through conflict mitigation, assistance to trade and investment and integration into the international economy.
Under this framework, the following projects were financed:
- Renewable Energy Project (€15 million). This project started in 2004 and aims to create a renewable energy infrastructure in rural areas to facilitate income generation, sustainable growth and delivery of social services.
- Conflict Mitigation Package I (€3 million). This project started in 2006 to assist vulnerable people in western and mid-western regions of Nepal and reduce the potential for conflict by improving socio-economic conditions, and increasing the general awareness of the root causes of the conflict.
- Conflict Mitigation Package II (€7 million). This project aims to enhance the capacity and effectiveness of the National Human Rights Commission in monitoring and responding to human rights abuses, to provide access to justice for all people in Nepal, and to enhance the capacity of the judiciary.
- Trade Policy Project (€2 million). This project is designed to help establish and improve the basic conditions for stable and sustained economic growth. Following the return to the democratic regime, the project has been put on the fast track for implementation.
In addition, a number of unplanned projects were financed to respond to the changing environment in Nepal in 2005 and 2006:
- Human rights monitoring mission by the Office of the UN High Commissioner for Human Rights. The European Commission contributed €5 million to this project which started in 2005
- Vulnerable community package (€7 million).This programme is being implemented through calls for proposals with the objectives of supporting local communities most affected by the conflict in their reconciliation efforts for a sustainable peace.
Recently completed projects include:
- The Gulmi-Argakanchi rural development project (€14.75 million)
- Mid-west irrigation project (€8.1 million)
- Bagmatic integrated watershed management project (€12.2 million)
- 2001 population and housing census (€2.4 million)
- Greater Kathmandu Valley mapping project (€5.26 million)
- Basic and primary education programme (phase two €20.5 million).
In addition to the programmed assistance above, Nepal has also benefited from support through a number of multi-country and regional programmes including the Asia-wide Programme, the Reproductive Health Initiative for Youth and Adolescents, the Asia Trust Fund, and South Asian Association for Regional Cooperation programmes. A number of thematic programmes, such as the European Initiative for Democracy and Human Rights, non-governmental organisations co-financing, and environment and the health programmes have also provided assistance. Specific aid for Bhutanese refugees living in eastern Nepal has been given through the aid to uprooted people programme.
The European External Action Service is responsible for the EU's cooperation strategy in Nepal.
More details can be found on the website of the Delegation of the European Union to Nepal.