Mero dukha ma roi dine, mero khushi ma ramaai dine,

Sabai bhanda maathi chha, mero euta saathi chha…

That tribute to friendship, set to an unforgettable tune—which I rashly attempted at our National Day (“King’s Birthday Party”, KBP) last week—comes from Sugam Pokharel. To my mind, it beautifully captures the relationship between the UK and Nepal. This year, when I came to write my KBP Speech, it inspired a metaphor about two old friends trekking together.

The UK and Nepal have been travelling together for more than 200 years. We have come to a fork in the path. One track goes straight on. It would take us forward but gain no height. It represents Nepal’s existing business model, reliant on remittances and grant aid. The steeper path would take us more swiftly—up the hill—beyond which lie global capital markets.  

The UK recommends the steeper path—a shorter route to the happy and prosperous Nepal we all want to see. Together, we have mapped out the ascent, fixed some ropes. These include Government achievements such as a positive Sovereign Credit Rating, Nepal’s first international bond (supported by $22m from British International Investment), and important economic reforms backed up by legislation.

Which is just as well. Because the UK has been looking down the apparently easier path and sees several obstacles. Landslides—triggered by things like Russia’s invasion of Ukraine and global trade disputes. We are going to have to climb. The exercise will be good for us!

Here are some of the topics which—being old friends—we discuss amicably along the way:

The national budget

Nepal has a modest supply of provisions but never uses as much as it could. The UK is Nepal’s strongest advocate. But our arguments for climate finance and other benefits are undermined when Nepal does not use its own resources; and use them well.

Concessional international loans

Nepal’s rucksack is full of World Bank and ADB resources. The UK helped procure those entitlements and urges Nepal to take advantage of them. Currently, these sources of finance are largely untouched.

Education

The UK is a big fan of what we call Trans-National Education. We mean any kind of connection between providers in Nepal and abroad which allows Nepal’s young people to get the education they deserve without leaving the country. At affordable prices. The UK has lots of TNE to share. We think it would reinforce Nepal’s economy. It might even attract the other country’s students to this beautiful land.

The diaspora

Many brilliant Nepalis living in the UK are making huge contributions. But the UK doesn’t want them to lose touch with their roots. We want them to help develop Nepal. For this, the UK hopes Nepal will recognise the equivalence of qualifications obtained at British universities. Nepal’s current arrangements seem designed to prevent its children ever investing here.

The last part of the ascent is the steepest. Nepal’s progress is attracting global attention. In London—for example—financiers are starting to talk about Nepal as a destination for investment. They have a sentimental attachment, refreshed by a spectacular visit to Nepal by the Duke and Duchess of Edinburgh. Since then, the UK media and dinner party conversations have been reminding the British public about Nepal’s friendliness and beauty, our proud Gurkha ties, as well as its status as the UK’s “first ally in Asia”.

As well as beauty, these private financiers are coming to understand that Nepal is a land of investment opportunities. But they will not bring their money here until they know they can repatriate their profits. Even the famous Sherpa known as Dolma Impact Fund has had trouble doing that.

This is the altitude we are at today. Close to the summit, beyond which it will be much easier going, downhill all the way to The City of London.

Perhaps it is the rarified air. But my old friend seems conflicted. I recognise the signs. The UK had doubts when we opened our economy to foreign investment. We worried about competition. Loss of control. In practice, however, we found that foreign investment brought not just jobs, but also technology transfer, productivity gains and other good things besides. It is now our life blood. So, let’s continue this journey together.

The author is the British Ambassador to Nepal