Norwegian Development Cooperation with Nepal

06/02/2008 ::  

History and current situation
Good Governance and Human Rights
Education
Energy

History

Diplomatic connections between Nepal and Norway were established 26 January 1973, but already in the 1960s Norway supported volunteer work from different organisations in the country. Norway's cooperation with Nepal started as a people to people relationship, with active participation of non-governmental agencies and academia. It expanded into private joint venture cooperation in the field of hydropower.

Government-to-government development cooperation was established with the signing of a Memorandum of Understanding (MoU) in 1996. In accordance with Nepal’s own priorities, Norway has chosen to concentrate its assistance on basic and primary education, good governance, human rights and energy sector development (with focus on hydropower and electrification). The MoU was signed by the Norwegian Minister for Development Cooperation, Ms Kari Nordheim Larsen and the Nepali Minister of Finance Dr. Ram Sharan Mahat, 22 November 1996.

Nepal is one of Norway’s main cooperating partners, and in order to further enhance the cooperation between the two governments, Norway established an Embassy in Kathmandu in January 2000. The Embassy in Kathmandu has today seven diplomats. In July 2005, Norway decided to reduce development assistance by 10 % as a reaction to the negative democratic development in the country. However, in connection with the restoration of democracy in April 2006, this decision was reversed. The last two years Nepal has seen an overall positive development, and it has been indicated that the Norwegian support to Nepal may increase if this trend continues.

The main motive behind Norway’s development cooperation is to contribute to growth, democracy, resource planning and development of human resources.

Here is a detailed overview of bilateral aid in the period 2005 to 2007. This overview does only contain the aid that is handled through the embassy and does not reflect total Norwegian support.

Budget Report Nepal 2007

Budget Report Nepal 2006

Budget Report Nepal 2005

The level of development cooperation towards Nepal has increased gradually.

Fig. 1 shows the overall bilateral and multi-bilateral aid to Nepal over the last 10 years in Norwegian Kroner. For more detailed information visit http://statistikkportalen.norad.no/

The total development aid for 2007 is approximately 240 mill NOK and it is expected to increase to around 250 mill NOK in 2008. The increase reflects the positive development Nepal is currently experiencing. Of the aid in 2008 the Embassy is responsible for approximately 180 mill, while the rest will be handled by the Ministry of Foreign Affairs or Norad. The main sectors for the bilateral cooperation are the same as defined by the MoU of 1996, but the work related to conflict and later the peace process has now been given more attention. In general the cooperation with Nepal in the areas mentioned has shown good results.

Nepal is a country with a relatively low dependence on development aid. Official Development Assistance consisted in 2005 under six percent of the GNP, which is considerably lower than all of Norway's main cooperation partners in Africa. The country is expected to have the capacity to handle more aid and the ability to achieve reasonable results in chosen sectors. The positive peace and democracy process supports this impression. Nepal can furthermore document a considerable decrease in the number of poor over the last years, and aid is an important contribution to Nepal's efforts to achieve the millennium development goals. The authorities have also experienced an increase in tax income, something which helps secure the more long term sustainable development.
Norway is well regarded in Nepal. The country is perceived as neutral, without hidden agendas, and a strong supporter of the democratic forces and the peace process, with a long term, trustworthy approach. Norway is a medium sized donor in Nepal.

The current situation

Nepal is currently in a fragile, but promising peace process. In many aspects, the country is in a state of transition. Over the past two years, the country has emerged from armed conflict and absolute rule to a peace and democracy process. In May 2006 an interim parliament including representatives from the 1999-elected parliament as well as members of the CPN (maoists), came in place to fulfill the democratic mandate given by the people in the April 2006 uprising. Today, an interim government representing the 6 biggest democratic parties together with the CPN (maoists) runs the country, according to an interim constitution. The head of state is Prime Minister GP Koirala. The Governments main task and challenge is to implement the peace agreement of 22. november 2006, and to conduct elections to a constituent assembly by April 2008.
 
An important part of the peace and democracy process is also the marginalised groups, like women, low castes and indigenous people, who raise their voices to ensure their participation and inclusion in the making of the new Nepal. As the future holds promise of a new era, beginning with a democratically elected constituent assembly, the process of securing peace and inclusive democracy is moving on - in its own, at times, unpredictable way.

Good Governance and Human Rights

After ten years of violent conflict replaced by a democracy process, local democracies are facing many challenges. Among the problems some important factors are that local community leaders have been displaced or ignored due to the conflict. The Government's effort to delegate power to local communities has been hard to implement, and the districts have a lack of resources giving them problems completing their duties. Acknowledging this situation Norway supports the UN Development Programme (UNDP) in Nepal, which aims to strengthen the local governments in development and planning issues, and to support social mobilisation locally.

As a consequence of the conflict, the people, in many cases women and ethnic minorities, have been subjected to countless breaks of human rights. There has been a positive development after the declaration of the ceasefire in April 2006, but still, cases of abuse, abduction, and harassment are reported throughout the country. As a result of the difficult political situation in 2005, Norway ended its support to the national human rights commission. Instead, Norway chose to assist the establishment of the UN Office of the High Commissioner for Human Rights in Nepal, and gave support to non-governmental organisations for monitoring the human rights situation in the country. Furthermore, Norway supports activists and organisations that enforce dialogue across the conflict lines.
 
Together with Great Britain, Finland, Denmark and Switzerland, Norway supports the Nepal Peace Trust Fund. The fund is administered by the Ministry of Finance in Nepal. This is said to be the first peace fund in a post conflict situation that is administered by the recipient country itself. The Norwegian support has mainly been allocated to the camps of former Maoist soldiers and preparations for the elections. Norway also supports the peace process through the UN peace fund and the UNMIN operation in Nepal.

****

The tables below show the majority of Norway's current project agreements within the area of good governance (The tables do not present a complete list). 

Education
The conflict and the absence of local authorities in many districts are factors that had a negative impact on the education sector in Nepal. Due to security issues, the government had problems controlling development within the sector, and the process of decentralisation raised protest and did not have a desirable progress. In many districts, schools were closed down, and several pupils and teachers were killed during the conflict. In many areas, the government was dependent on NGOs and the UN system for keeping the schools open in a safe environment.

The authorities have the last two years showed openness regarding these challenges and the willingness to strengthen the primary education sector through allocations in the state budget. 
 
Despite the difficulties, the number of children enrolled in primary school is increasing. However, low quality education often results in a high number of drop-outs. The authorities aim to educate more teachers, to offer education in the children’s mother tongue to improve the quality, and to introduce flexible arrangements for pupils who can not follow the ordinary scheme.
 
Norway supports, jointly with Denmark, Great Britain, Finland and the World Bank, the Nepalese education program for primary education, Education for All (EFA). The program pursues that primary education will be offered to all children, improve the quality of the education, and to make the school administration more effective. 

****

The tables below show the majority of Norway's current project agreements within the area of education (The tables do not present a complete list). 

Energy

Rural electrification is the main objective in the energy sector. Today, only 40% of the population has electricity, consequently children and women spend a lot of time gathering firewood. The number of power consumers is increasing by 8,1 % every year.

Over several years, Norway has supported the establishment of hydropower plants. As an example, Norway has signed an agreement of ten feasibility studies for small hydropower plants in rural areas, where the Norwegian Water Resources and Energy Directorate (NVE) assists as a technical project partner. These hydropower plants will supply many people living in rural areas in the future. Norway also supports rural electrification and the development of alternative energy sources through the Alternative Energy Promotion Centre. Capacity building and university cooperation are also a part of the portfolio. The Norwegian private sector is involved in the 60 MW power plant Khimti, the largest private power plant in Nepal.
 

****

The tables below show the majority of Norway's current project agreements within the area of energy (The tables do not present a complete list).

For more information regarding the development cooperation between Norway and Nepal, please contact the Embassy, or the Norwegian Agency for Development Cooperation (NORAD).