Fifty years of cooperation: lessons learnt from the EU’s relationship with Nepal

Background and context

With relations with Nepal first established in the early 1970s, the European Union offered significant support in ending the prolonged armed conflict that raged in the country for a decade (1996-2006). After peace was finally achieved and a new republic was built (2008), the EU continued to help with initiatives implemented to “deepen democracy, enhance respect for human rights, and provide assistance to victims of the conflict [...].”¹

Amongst the sectors of support, the EU has played and continues to play an active role in:

• Education which is the sector that has historically benefitted from EU assistance, including Technical and Vocational Education Training (TVET).

• Sustainable rural development, with EUR 146 million invested between 2014 and 2021 and a focus on job creation and infrastructure development, food and nutrition security, as well as disaster risk reduction and management.

• Nutrition, where the EU is committed to backing Nepal’s Multi-Sector Nutrition Plan, aiming to improve nutrition for mothers, teenagers, and children across the country.  

• Agriculture, with a specific focus on helping Nepal improve governance, productivity and market access while strengthening inclusion and the promotion of climate change adaptation.

• Democracy and decentralisation, with more than EUR 50 million allocated to various initiatives to strengthen the capacities of provincial and local governments to fulfil their mandates as per the new constitution (2015) and to improve fiscal decentralisation so it’s easier to operate provincially and locally.

• Gender equality, and much more. 

Lessons learnt and good practices

1. Building a strong partnership with the government takes time, effort and an understanding of the government’s capacities. Many of the initiatives implemented in Nepal have shown positive progress, for example, in education, public financial management and federalism support. However, in sectors where budget support was rushed without the government's full readiness (i.e. agriculture), there is a need to work more on matching actions to the authorities’ capacity, ownership and readiness for change.

2. Political and cultural sensitivity are essential in deepening policy dialogue and require constant iteration and experimentation between the EU and the government to co-identify acceptable entry points and ensure successful cooperation. Sometimes, it can be hard to predict if the identified entry points to foster cooperation and constructive dialogue are the right ones. In the case of Nepal, discussing teachers’ time on task, for example, was not the correct starting point to address the lack of teachers’ accountability, although the latter was clearly identified as holding back learning progress. This showed that more careful considerations must be made when tackling politically and culturally sensitive issues, as there might be areas of discussion that might not be considered accessible by governments and/or communities. 

   Additionally, intercultural workshops were organised to foster more strategic cooperation and create a common ground between EU Delegation staff and important external stakeholders in Nepal, such as ministers, civil society leaders, and the members of the Youth Sounding Board.

3. The micro-macro paradox needs careful attention when deciding the level of engagement. Achieving impactful developmental impact is usually easier at the micro-level, where civil society organisations, NGOs or UN agencies can directly control outcomes. However, micro-level successes only sometimes lead to improvements at the macro-level. This shows that it is essential to strike a balance between delivering benefits at the local level while avoiding the risk of response fragmentation (i.e. different partners implement actions in other ways, using different guidelines and procedures that can lead to a loss of aid effectiveness).“The more political buy-in and the better the integration into domestic systems and structures [...], the less likely these fragmentation effects are to materialise.”²

Supporting Nepal where necessary: conclusions and recommendations

While initiatives have had varying results, with some significantly impacting the situation and others providing limited progress, the special relationship between Nepal and the EU contributed to the country’s path towards leaving behind its UN’s Least Developed Country (LCD) status. Nepal’s graduation will happen in November 2026. Challenges linked to the still-slacking sustainable internal growth have not hindered some progress in health, education and governance.  

The Evaluation report in question reviews all initiatives implemented by the EU in Nepal between 2014 and 2021 and highlights a set of conclusions that will inform future action. The EU assisted Nepal in navigating its development journey partially successfully, but challenges still persist, i.e. corruption and high reliance on remittances.³

The EU has been fundamental across key sectors in Nepal; however, according to the report, more needs to be done to:

• Leverage more commitment to address core systemic issues and help foster more internally generated dynamism in society;

• Continue using the Team Europe approach with a pragmatic case-by-case selection strategy while ensuring that EU Member States’ development policy and practices are broadly aligned to those of the EU in the specific Team Europe Initiatives;

• Increase efforts to generate data and knowledge outcomes, especially in core social service delivery;

• Promote a more systemic approach that puts learning at the centre of the education sector while still placing attention on access;

• Emphasise the use of budget support but with selectivity so that its use can be extended where there is clear commitment and rationale;

• Ensure high scalability, low fragmentation and political buy-in when implementing sub-federal projects; and

• Accelerate efforts to create better jobs through value chain and private sector development. 

1. Evaluation of the EU’s cooperation with Nepal (2014-2021), p. 2.

2. Ibid., p.76

3. Unfortunately, the growth in Nepal’s gross national income has been mostly linked to the earnings the Nepalese diaspora sends home from abroad.