Nepal is a country of just over 147,181 square kilometres situated between India and China. It has a population of over 30 million inhabitants.
Nepal is a least developed country, but it aspires to reach middle-income status by 2030. The country has halved extreme poverty in the past 15 years and is on track to bring it down to less than 5% by 2030.
The country is prone to natural disasters such as floods, droughts and earthquakes. The economy is primarily based on agriculture and tourism, but also largely depends on remittances – representing approximately 30% of GDP. Nepal adopted a new constitution in September 2015 that provides for the transformation of the country into a federal state.
The country needs strong inclusive economic growth and job creation to reduce its trade deficit and promote foreign direct investments, notably for connectivity. It needs to ensure a successful transition to a federal state, ensure quality education for all, modernise its agriculture, manage out-migration and address high levels of inequality, as certain communities are still marginalised or discriminated against on the basis of caste, ethnicity and gender. The country also needs to ensure transitional justice and foster its resilience to natural disasters and climate change.
Programming for Nepal is linked to the development objectives of Nepal’s current 5-year National Development Plan (NDP) 2019-2024. The NDP lays the foundations for the country to graduate to a middle-income country by 2030, to deliver rights to all through a socially based system, to adopt a green economy and to build a climate-resilient society.
With the Multiannual Indicative Programme (MIP) for 2021-2027, the European Union will contribute to Nepal’s green, resilient and inclusive development effort to overcome the impacts of the COVID-19 pandemic, as requested by the government of Nepal.
The MIP focuses on 3 priority areas
- inclusive green growth to support efforts at local level to achieve a green economy, green jobs and sustainable growth in Nepal’s natural resource-based sectors, with a strong focus on the Climate Change Policy of 2019
- human capital development in sectors matching government priorities for climate-resilient development while giving adequate attention to regional disparities and human development indices
- good governance - the EU and its Member States have been long-term supporters of good governance, the democratic transition from conflict to peace, institutions and civil society in Nepal
The Multiannual Indicative Programme for Nepal amounts to €209 million until the mid-term review in 2024.
Inclusive green growth
Actions under this priority area will promote a circular economy in all sectors and are complementary and synergetic with the Regional MIP for Asia and the Pacific. It plans to support the implementation of renewable energy, energy efficiency and agriculture, forestry and other land use and to promote the implementation of the drinking water and sanitation goals of Nepal’s 15th NDP.
This priority area is the backbone of the Team Europe Initiative on Green Recovery. The EU will contribute to increasing the per capita income and productive capacity to produce sustainable goods and services. The aim is to transform the economy while providing basic services and addressing climate and environmental challenges.
Human capital development
We will enhance the resilience of Nepal’s society and economy by increasing the employability of youth, the inclusion of marginalised groups, and bridging the gap between education and training, service delivery and market potential for green and inclusive jobs.
Actions in this area will advance education and training as essential parts of the solution to challenges threatening peace and prosperity such as: preventing and countering radicalisation and violent extremism, promoting equity and respect for diversity, and other root causes of migration. In addition, they will strengthen inclusive and equitable quality education, lifelong learning opportunities for all and quality and equitable nutrition services.
Good governance accelerates overall development and empowers a peaceful and inclusive society. The NDP includes good governance as the driver of transformation and as the means of securing the rights guaranteed by the Constitution of Nepal. The main objective is to support civil society in protecting and promoting democracy, human rights and fundamental freedoms.
This priority area will consolidate peace by promoting equity and by supporting federal, provincial and local level governance in all priority areas. The approach will strengthen state institutions, including the oversight mechanisms to ensure inclusive, transparent and accountable governments, combined with support to civil society to ensure inclusivity and citizens’ oversight.
A gender and youth-specific programme will ensure strong participation in gender-related political dialogue with stakeholders, such as the Ministry of Women, Children and Welfare, and the Ministry of Youth and Sports.
Another target area of support is the continuation of EU engagement to fight gender-based violence and linking civil society organisation engagement with institutional partners to implement national, provincial or local action plans.