Remarks at the Fulbright Lecture: The Next 70 Years and Beyond

December 19, 4:15pm,  Shangri-la Hotel

Namaste and good afternoon. 

I’m very pleased to be joined by Dr. Sharma and look forward to the discussion we will have here today.

For the United States, this year – the year in which we celebrated the 70 years of friendly relations and successful partnerships with Nepal – has been a year filled with successes.

From the signing of the MCC Compact this past September in Washington, DC, to observing and encouraging further progress in Nepal’s democratic transition following the elections, to celebrating reduced child mortality from our health and nutrition programs, to collaborating with the Nepal Police to round up criminals engaged in visa fraud– all these events highlight the multi-faceted partnership we share and value.

But let me emphasize something:  even as we energized 12 months ago to celebrate the 70 years of connectivity between our countries, I started thinking about year 71 and beyond.  What would be the character of the decades to come?  Will the next 70 years be marked by the same successes as the first 70 of our relationship?  Will the nature of our partnership change?  And, if so, how?  It has not been enough to simply reflect on our past and then hope our future continues in the same vein.

Unfortunately, I left my crystal ball at home today so I cannot see the future with perfect clarity…but rather than end my remarks here.  Let me tell you that if I were a betting person, and I was to make a bet on what that future — the future of U.S.-Nepal relations — would look like, I would say the odds were in favor of a strong, but changed relationship.  Moving increasingly away from a donor-recipient dynamic, I believe – I predict — our joint future will be characterized by a collaborative partnership, one that advances common goals – including promotion of a vibrant market economy, political stability, and the alleviation of human suffering.

There are four areas of cooperation I think will be critical in helping us protect our shared interests in the future:

  1. The first is to increase growth by strengthening the economic ties between Nepal and the United States, through increased trade and investment. 

The United States is already a leading trade partner with Nepal—in fact, we are the second leading destination for Nepali exports after India, but much can be done to improve these numbers.

We took an important step towards increasing Nepali exports to the United States in 2017 by implementing a new trade preferences program that grants certain products made in Nepal duty-free access to the United States.

The initial returns are modest, with almost $2 million worth of goods exported in the first 10 months of 2017, but I expect as more producers, exporters, and—very importantly—American buyers learn about this program, these numbers will increase.

Increased prosperity also requires investment.  I meet frequently with American entrepreneurs and U.S. firms that see potential in Nepal, but express frustration about unclear regulations, inconsistent policies, politicized labor, and Nepal’s slow-moving, opaque, and rent-seeking bureaucracy.

As the New Year begins, I hope Nepal’s leaders look around the region – and indeed the world – to see how other countries are attracting investment.  Let’s look at India, for example:  In the Indian state of Telangana, if government officers do not take action on an investment approval within 15 days, it is automatically approved.  And, increasingly countries are providing automatic windows for foreign investments.  These are clever solutions to bureaucratic challenges that give the investor the benefit of the doubt rather than putting the burden on them to show why spending money and creating jobs in Nepal is a good idea.

Nepal desperately needs private sector investment if it is to meet its goal of becoming a middle income country by 2030.  Let me ask you this:  if Nepal is competing with countries like India, Sri Lanka, or Bangladesh, where more than 90 percent of Foreign Direct Investment goes through an automatic approval route, how is it going to attract investment if it has not or will not implement measures to make investment easy?

I hope in 2018 a top priority for Nepal’s new Parliament will be to pass a foreign investment bill that is as progressive and investor-friendly as possible.  Other legislation, such as the Agri-business Promotion bill and new legislation focused on intellectual property rights will go a long way towards improving the investment climate.

Investment in business is crucial, but investment in people is just as – if not more – vital to increasing prosperity for all.  If Nepal wants to reach middle-income status by 2030, then it cannot continue to exclude women from positions of power and influence.  According to World Bank data, in 2017, Nepal is one of only eight countries worldwide where women constitute more than 50 percent of the labor force, and yet on average, a woman only earns about 72 percent of what a man earns in Nepal.

Because women are often disadvantaged when it comes to land ownership, their ability to acquire capital or take out loans, especially because property is often used for collateral, have also been limited.  Ultimately, this puts women at a disadvantage with men in terms of economic participation, which then decreases the potential for Nepal’s rapid and broad-based economic growth.

 

  1. The second area for cooperation is addressing issues of accountability and transparency that stymie both governance and economic growth.  This includes supporting and empowering civil society while helping foster greater openness and collaboration between civil society and government.

As I mentioned at the beginning of my remarks, one of our many flagship U.S.-Nepal endeavors is the Millennium Challenge Corporation compact signed just three months ago.  The MCC Compact is a $500 million grant that will improve the availability of electricity, strengthen infrastructure, and build regional connectivity.  The Government of Nepal will contribute an additional $130 million to the project, bringing the total investment to $630 million.

But I don’t mention this enormous investment just because of what it will do to transform the energy sector.  While I certainly hope that is the Compact’s main outcome, I also expect the Compact will serve as a reminder of how this country can do business transparently.

And how will this be accomplished?  Every year, MCC delivers a scorecard that includes an important indicator for the control of corruption.  While Nepal is making progress in this area, the most recent MCC scorecard showed a significant decline from the previous year – in fact Nepal showed the biggest decline in terms of the control of corruption of any country assessed.  To combat this, it is up to the Government of Nepal to demonstrate its commitment to accountability and transparency – or the Compact, under the terms of our agreement, will grind to a halt.

Out of the many anti-corruption measures Nepal’s leaders may consider, joining the Open Government Partnership is a logical next step.  The Open Government Partnership – or OGP for short – is a multilateral initiative that aims to secure concrete commitments from national and subnational governments to empower citizens, fight corruption, and harness new technologies to strengthen governance.  OGP is also about collaboration between government and civil society to achieve these goals.

Founded by 8 governments – including the United States – in 2011, OGP now includes over 70 participating countries and 15 subnational governments – who have collectively made over 2,500 commitments to make their governments more open and accountable.

In the past few years, Nepal has taken strides toward open government that places it on equal footing with – and in some cases ahead of – many existing members of the OGP.  The 2015 Nepali Constitution offered a progressive framework that enshrined multiparty democracy, civil liberties, periodic elections, freedom of the press and the concept of the rule of law. Now is the time for a new government to adopt a zero tolerance for corruption policy.  Candidates just spent huge sums to get elected, and expect the opportunity to make those investments back.  As a new GON takes office, now is the time to stop this trend and hold officials (and businesses) accountable.

 

Since 2015, Nepal has opted-in to the World Bank’s Global Partnership for Social Accountability, and several OGP partners have led delegations to Nepal to discuss open government issues with government and civil society leaders.  Members of Nepal’s governments have also attended OGP summits in 2015 and 2016, but have yet to sign up for the initiative.

Nepal is already eligible to become a full member of OGP, yet its leaders have not pressed forward.  As the new government forges forward it should consider the benefits of joining OGP – beginning with the growth of citizen confidence in Nepal’s democracy and its leaders’ commitment to reform and accountability in their governance – and take the bold step of becoming an OGP member nation.

In addition to joining OGP, there is much Nepal – government and civil society – can do to confront corruption and improve transparency and accountability.  Another important step in this direction would be for the government to support the creation and maintenance of space for independent civil society organizations to engage.  While civil society, including our friends in the media, can, at times, be difficult or challenge a government — that is precisely why democracies need it.

The United States is committed to working with other democratic governments to enhance civil society – and this will continue to be the case in Nepal.  Nepal’s constitution tasks the Government of Nepal with pursuing policies that relate to social justice and inclusion, including the adoption of a “single door system” for the establishment and management of community-based and national or international non-governmental organizations.  If implemented properly, the one-door policy could help resolve the conflicts between different government entities regulating civil society organizations that clutter today’s civic space.

As an American, I champion my country’s principles every day.  In Nepal, encouraging the growth of a healthy democracy – something the Nepali people showed they support through five rounds of elections – means working on our mutual interest in supporting democratic practices and institutions like transparent government and inclusive, vibrant civic participation.

  1. The third area for collaboration is to work together on ways that Nepal can better manage, fund, and direct its own development through national and local level development plans.

I see our two countries moving increasingly away from a donor-recipient dynamic. In my view, our joint future will be characterized by a collaborative development partnership.  One, in particular, that emphasizes the rapid, continued reduction in poverty and the shrinking of disparities between different Nepali communities related to health, education, and community-level infrastructure.

How do we get there?  I recommend prioritizing support for newly elected governing officials at the local and provincial level.  We’ve modified our development programs to acknowledge the new reality of federalism.  We want to support Nepal’s own home-grown efforts to create a capable, transparent, community-focused government.  I urge the incoming government to do the same by earmarking funding for communities that lag behind certain development areas, such as health and education; and prioritizing funding for and better execution of planning of critical capital expenditures, such as infrastructure, to catalyze economic growth and spur investment.  And, as mentioned earlier, supporting the engagement of civil society to play an advocacy and oversight role as a way to accelerate the government’s ability to usher in the nationwide changes necessary to achieve its 2030 vision.

This isn’t a pipe-dream.  The US Government, and other donors, have had tremendous success in pioneering pilot approaches in Nepal that have been scaled up domestically– demonstrating significant ownership by the government of Nepal spanning various administrations.  For instance, Nepal’s adoption of female community volunteer health workers began as a USAID pilot in 1988 in just 27districts.  Using evidence and data, the Government of Nepal determined this pilot was a highly cost effective way of improving community-level health care and it is now a fixture across the entire country.  Since adoption of this approach, Nepal has seen a 300% reduction in under-five mortality, as well as a 200% reduction in maternal deaths. In addition, Nepal’s experience has guided others, showing Nepal’s global reach.

Establishing stronger public-private partnerships is also an effective way for Nepal to leverage greater investments, utilize local innovations, and drive development while fueling economic growth.  We have seen this happen in the agriculture sector in recent years and many more opportunities exist.

An evolving development partnership is the natural next step in our relationship.  I only have to look at the examples of many countries in Western Europe or Asia to see that a relationship that was once based on the donor-recipient dynamic can be eclipsed by a robust trade and investment partnership.  Our joint future will surely be characterized by fairness, reciprocity, and support for a stable global economic environment.

  1. And the fourth collaborative opportunity is working toward genuine inclusion and realization of individual rights.

I published an op-ed about a year and a half ago called the “Discomforts of Democracy.”  The focus of this short piece was the importance of preserving the rights to free speech and free expression, a high-level concept the U.S. and Nepali constitutions embrace and a value enshrined in the Universal Declaration of Human Rights.  The main point I was trying to make is that democratic discourse – allowing people to express a variety of, sometimes, uncomfortable viewpoints – is fundamental to a healthy democracy.  And it is really important when groups within any democracy believe they are not receiving the recognition, support, inclusion, or empowerment they deserve.  I would be missing the obvious if I said there were not groups in Nepal feeling marginalized and excluded.

As a multi-ethnic, multi-lingual, multi-gendered society, Nepal – like the United States – is going to have some discomfort in its future as people and groups increasingly express themselves politically, socially, and economically in order to achieve the rights granted in – or still needing to be enshrined in – the Nepali constitution.  But this dialogue – whether it seeks to address Madhesi political participation, gender parity, or social issues such as domestic violence – is key to ensuring individual rights, as well as to finding the solutions every country must apply to maintain a healthy, stable, society.

You might be wondering where I see the collaborative element in supporting free expression – other than in my continued ability to publish Op-Eds.  The U.S. provides technical support in terms of training – of journalists, for example, or in the drafting of legislation – but we also can be partners to preserve important rights at home and abroad.  The United States believes that a world that reflects inclusive, democratic values protects our security and prosperity.  I suspect the Government of Nepal would say the same thing.

Advancing inclusive, democratic values also means doing the difficult thing.  While there are many “difficult things” to do in Nepal, one that will forever make a difference is enacting prompt resolution of conflict era grievances.  Without acknowledging, punishing those responsible for heinous crimes, and compensating victims and communities for the wrongs of that time of internal conflict, no future government will be able to move beyond the past, secure full international respect, or free its citizens to fully look to the future.

Finally, true inclusion has to be more than outward appearances.  Quotas for women or marginalized groups in political or other bodies do not, in and of themselves, mean real participation.  Only six women were elected in the first-past-the-post elections recently – and many people have said to me:  that’s okay, many women will be picked up from the PR lists to reach the mandatory 33%.  But they are missing the point.  Women did not have the support of the electorate or their parties to run for FPTP positions.  Few were willing to step up and say that it is important for women to have equal opportunities to lead this country as men, or that they are equally capable of serving their countries.

Tokenism – or making only a symbolic effort to include women and others in public life – does not address gender or ethnic inequality.  Nor does a purely appointment-based system that maintains them dependent on the will of others.  Just putting someone at the table does not mean they can actually participate in the conversation.

I want to close my remarks by calling on Nepalis – not just political or business leaders, but every-day persons – to show with their own choices that genuine inclusion can be a reality in Nepal.  If you look around the room and there are no women present, make sure some are prepared – supported, educated, mentored – to join in next time.  If you form a committee, hire new employees, or make decisions on college admissions – look for opportunities to appropriately balance gender and ethnic composition.  If you sit around your dinner table at home and you see your daughters on their feet performing all the chores while your sons sit and eat, question whether this is the future you want for your children.

Each of you, each of us, can make decisions that can change lives if we make it a priority to create an equal foundation for all to prosper.

As this year comes to a close and the new year is on the horizon, it is my hope our partnership of the next 70 years is dynamic, innovative, and supportive of our mutually held values.  Even without my crystal ball, I know we will be able to work effectively with the new government to support an evolution of the U.S.-Nepal relationship.

So, to all the newly elected officials across Nepal I say, “Congratulations.”  But more importantly: “Now, the real work begins.”  With prosperity prioritized over politics and a sincere commitment to the development of Nepal’s people and their potential, we have much to look forward to.

Thank you.