Federalism brings services and politics closer to people: EU Ambassador Lorenzo

Ishwar Dev Khanal

March 18, 2024


Federalism brings services and politics closer to people: EU Ambassador Lorenzo

KATHMANDU: As Nepal and the European Union (EU) mark half a century of diplomatic ties, EU Ambassador to Nepal, Veronique Lorenzo, emphasizes the significance of federalism in bringing services and politics closer to the people.

Amidst the celebrations, she sheds light on the diverse array of events planned to commemorate this milestone.

The EU’s support for Nepal extends across various domains, from development programs and political dialogues to initiatives fostering investment, education, and green economy transitions.

While acknowledging Nepal’s achievements, including its impending graduation from LDC status, the Ambassador emphasizes the need for sustained economic growth and the management of transitioning into federalism.

Addressing the issue of youth migration, she highlights the importance of providing opportunities within Nepal, encouraging reverse migration through investment and business ventures.

The EU’s focus on renewable energy, education, and governance underscores its commitment to Nepal’s development.

Ambassador Lorenzo also envisions Nepal as a burgeoning hub for investment and innovation, inviting greater collaboration and exchange.

In a conversation with Khabarhub’s Ishwar Dev Khanal, Ambassador Lorenzo reaffirmed the enduring friendship between Team Europe and Nepal, expressing optimism for continued collaboration and mutual growth.

She extended a message to the youth, inviting them to explore the vibrant culture and opportunities Nepal has to offer, echoing the sentiment of solidarity and partnership that defines the EU-Nepal relationship. Excerpts:

Nepal and the EU are celebrating 50 years of diplomatic relations this year. How do you plan to commemorate this milestone?

Actually, it’s not just the European Union celebrating this year. Both the EU and Nepal are commemorating the 50th anniversary together (laughs).

And yes, this anniversary holds special significance as our ties have grown stronger and richer over the years. We’re eager to host events to celebrate this growing friendship.

This time around, our focus will be on supporting investment and fostering business connections.

We’ll organize a business forum and provide scholarships to Nepali students to support education, among other initiatives.

Regarding political dialogue, we regularly engage in discussions in multilateral forums.

Additionally, we plan to hold a few think tank events focusing on regional and international matters of importance.

Is a film festival part of the celebration?

Absolutely! The cultural dimension will include a film festival, a photography competition, and a food fair to celebrate our rich respective cuisines.

In fact, the ones that I mentioned are aspects. I mean to say that our relationship has been extremely rich. There are areas where we cooperate such as in development programs where we support the Nepal government.

Besides, there are many other initiatives where we will jointly work with the Government of Nepal.

Are the mentioned events part of the priority areas of the European Union, or are there other priorities in Nepal?

Actually, the events I mentioned are just aspects of our relationship.

Our collaboration extends to various areas, particularly in development programs where we support the Nepal government.

Additionally, there are many other initiatives where we will work jointly with the Government of Nepal.

Nepal’s economy is heavily reliant on remittances, which primarily stem from migration. However, the country faces a significant lack of essential infrastructure necessary for development. In light of this, what would be your suggestion to Nepal for developing its infrastructure?

The reliance on remittances underscores the limited job opportunities within Nepal, leading to a substantial number of young Nepali youths leaving the country in search of better prospects.

This exodus highlights the urgent need to address the dearth of employment opportunities and improve living standards domestically.

In my view, it is imperative for Nepal to invest in creating job opportunities and attracting more investment to stimulate economic growth.

Given that a substantial portion of growth emanates from the private sector, identifying and fostering sectors that serve as catalysts for growth is crucial.

By doing so, Nepal can create an environment conducive to investment and job creation, thereby providing incentives for young people to remain in the country and contribute to its development.

When discussing the EU’s initiatives in the green economy, how do you envision the EU’s role in supporting Nepal in its transition to a green economy?

The green economy has not only become the cornerstone of our policy but also a central focus of our political priorities.

It must be integrated into every aspect of our endeavors. In Nepal, we are supporting its efforts toward a green economy through investments in renewable energy.

This will facilitate the replacement or substitution of coal energy, thereby reducing emissions and aiding Nepal in meeting its international commitments.

However, our support extends beyond direct investments in renewable energies.

We adopt a comprehensive GRID approach—green, resilient, inclusive development—which has been embraced by the government and development partners.

This approach aims to incorporate environmental considerations into all aspects of our work, including transportation, energy, and water infrastructure.

In what ways will the EU support Nepal as it aims to graduate from the list of Least Developed Countries in 2026?

The prospect of graduation is indeed positive news, showcasing Nepal’s progress.

However, it also brings forth challenges. The European Union can aid Nepal’s graduation in two key ways.

Firstly, the EU can support Nepal throughout the entire process of LDC graduation, which entails Nepal potentially losing some access to preferential treatment under various trade schemes.

Nepal will need to fulfill certain criteria to access new schemes, such as the GSP Plus, and the EU stands ready to assist Nepal in meeting these requirements.

Secondly, the EU can contribute to Nepal’s sustainable graduation by promoting investment and attracting both domestic and foreign direct investment.

By fostering an environment conducive to investment, Nepal can further bolster its economic development and ensure a smooth transition beyond its LDC status.

Do you see any challenges for Nepal in its graduation process?

Certainly, there are challenges that Nepal may face during its graduation process.

One significant challenge is the potential loss of trade preferences, which could impact the country’s economic dynamics.

Additionally, there is a concern about sustaining the current pace of economic growth.

While Nepal has made commendable progress in providing access to social services, such as healthcare and education, its performance in terms of economic growth has been comparatively less robust.

Addressing this imbalance will be a key focus of the 16th National Development Plan.

The European Union remains committed to supporting Nepal on this path, particularly in bolstering economic growth and ensuring a smooth transition beyond its LDC status.

How does the EU support Nepal in implementing federalism, one of the EU’s key priority areas, especially at a time when dissenting voices have started to be raised?

Federalism is a multifaceted and intricate process, often accompanied by challenges and frustrations, particularly due to the complexities involved in its transition.

It’s important to recognize that federalism in Nepal is still in its infancy, being just seven years old.

Developing mature structures at the provincial and municipal levels, understanding planning and decision-making processes, and ensuring effective program implementation all require time and concerted effort.

The EU supports Nepal in this transition by focusing on capacity building at the local and provincial levels.

This includes supporting institutions to grow and enhancing the management of public financial resources.

It’s crucial to recognize that these processes take time and patience. Effective service delivery at the local level requires well-managed resources and institutions.

The EU remains committed to supporting Nepal in its federalism journey, recognizing the importance of patience and continuous capacity building to ensure successful implementation.

Is this due to the lack of understanding on the part of the people or the lack of proper implementation on the part of the government?

As I mentioned, these are complex matters. Furthermore, Nepal has historically been a centralized state, so immediate transformation cannot be expected.

Reflecting on our own experience, consider the reunification of Germany after the fall of the Berlin Wall in 1989.

It took a generation for the structures to integrate fully. After being divided for over thirty years, they had functioned in vastly different ways.

Bringing them together required another generation.

Developing institutions and capacity building are arduous tasks that require time and patience.

What remains crucial is to remain focused on the objective: federalism aims to bring services and politics closer to the people. The ultimate goal is to be more responsive to the needs of citizens.

How do shared interests, commitment to a rule-based international order, peace, prosperity, human rights, and democracy contribute to the strong partnership between the EU and Nepal?

These principles serve as the foundation of our robust partnership, guiding our actions on a daily basis.

When we advocate for gender equality and human rights in Nepal, we are aligning with our core values.

However, this commitment extends beyond Nepal; it is international in scope.

In multilateral forums such as the United Nations, Nepal stands as a like-minded partner, lending its voice to the defense of these values, which are increasingly under threat in many parts of the world.

In this context, it’s crucial for the Nepali people to recognize Nepal’s significance as an important player and voice on the global stage.

The freedoms enjoyed in Nepal—such as freedom of expression, democracy, and respect for basic principles—are not only invaluable to Nepalis but also to the European Union and the broader international community.

You’ve been in Nepal for six months now. How has your experience been so far?

Nepal has welcomed me with open arms, and I’ve been pleasantly surprised by the warmth and hospitality of the Nepali people.

In my opinion, Nepal’s greatest asset is its people—they are open, kind, and always willing to engage in dialogue.

This level of openness and hospitality isn’t something you find in every country, and it’s truly a delight to be here.

I’m naturally curious, so I ask a lot of questions about Nepal’s culture, history, religion, and politics, and I’ve been met with candid and open responses. It feels like a genuine dialogue.

As for Nepali cuisine, I must say that “thaali” is my favorite.

However, during my visits to villages and remote areas of the country, I’ve noticed something concerning. There seems to be a lack of young people in these areas. Instead, you mainly see children, women, and elderly individuals.

The land lies barren due to a shortage of manpower, which can be quite frustrating to witness.

Nepal is currently experiencing a significant exodus of young people. Do you have any suggestions for the government of Nepal and its citizens on how to address this trend and discourage youths from migrating abroad for various reasons?

This is indeed a significant issue facing Nepal, carrying substantial risks such as the potential loss of the demographic dividend represented by its young population, which could impact the country’s future and economy.

While remittances bring benefits, there are immediate costs, including labor shortages in sectors like agriculture, often termed as brain drain and muscle drain.

Realistically, the government may not be able to prevent young people from seeking opportunities abroad, as they have the right to pursue better lives elsewhere.

However, Nepal should actively address this challenge, while international partners like us can offer support.

Drawing from experiences in our own countries, we can work on facilitating conditions and business opportunities for those considering returning, a concept known as reverse migration.

This approach has been successful in countries like Spain and Romania.

The government’s focus should be on instilling hope and confidence among its citizens, emphasizing that the situation is not hopeless.

I’ve personally encountered many young Nepalis who have opted to remain in Nepal, investing in and establishing successful businesses despite the obstacles.

While challenges exist, there are remarkable opportunities, particularly in sectors like IT, which can be leveraged to attract and retain talent within Nepal.

As the EU Ambassador to Nepal, what are your three major priorities here?

Firstly, as Team Europe, we prioritize investing in green energy or renewable energy.

This serves as a crucial engine of growth, not only providing energy for consumption within Nepal but also offering potential for future foreign earnings through exports.

We are committed to continuing and increasing our investments in this area.

Secondly, education remains a key priority. With over two decades of involvement in Nepal’s education sector, we have made significant strides in improving access.

However, there is still much work to be done, particularly in enhancing the quality of education and expanding technical and vocational training opportunities to facilitate immediate employment.

We aim to collaborate closely with the private sector, recognizing their pivotal role in employing the country’s youth.

Thirdly, we prioritize supporting the implementation of federalism by promoting good governance.

This serves as the foundation for Nepal’s continued growth and effective delivery of services to its citizens.

Additionally, I am personally committed to leaving a legacy of attracting more investment to Nepal, showcasing its immense potential as a desirable destination for investment and growth.

Lastly, do you have anything to say to the Nepali people?

Team Europe has cherished its friendship with Nepal for the past 50 years, and we look forward to many more years of strong camaraderie.

We are committed to standing by Nepal, offering support during challenging times, and also seeking opportunities to benefit from Nepal’s valuable contributions to the international economy.

To the young Nepalis, I want to emphasize that Nepal is truly a remarkable place, rich in culture and brimming with the vibrant energy of its youth.

I hope more people recognize and appreciate the unique qualities that make Nepal such an exceptional place to live in.

Below is the video interview with EU Ambassador Veronique Lorenzo: