FOREIGN POLICY OF NEPAL

ObjectiveThe fundamental objective of the foreign policy is to enhance the dignity of Nepal in the international arena by maintaining the sovereignty, integrity and independence of the country.

Guiding Principlesthe foreign policy of Nepal is guided by the abiding faith in the United Nations and policy of nonalignment. The basic principles guiding the foreign policy of the country include:

Mutual respect for each other's territorial integrity and sovereignty;

Non-interference in each other's internal affairs

Respect for mutual equality

Non-aggression and the peaceful settlement of disputes

Cooperation for mutual benefit

The foreign policy of Nepal is also guided by the international law and other universally recognized norms governing international relations. The value of world peace also constitutes a significant element guiding the foreign policy of the country.

Constitutional Provisions on Foreign PolicyThe Directive principle and the State Policy of the Interim Constitution of Nepal (2007) identify the cardinal principles, parameters, and general directions of Nepal's foreign policy. They are:

Directive Principle

The state, in its international relations shall be guided by the objective of enhancing the dignity of the nation in the international arena by maintaining the sovereignty, integrity, and independence of the country (Clause 34.6 ).

State Policy

The Foreign Policy of Nepal shall be guided by the principles of the United Nations Charter, the Panchahseel, International law and the value of world peace (Clause 35.21).

The state shall pursue a policy of making continuous efforts to institutionalize peace in Nepal through international recognition by promoting co-operative and cordial relations in the economic, social and other spheres

on the basis of equality with neighboring and all countries of the world (Clause 35.22).

PolicyIn accordance with the overriding objective and the fundamental principles guiding the foreign policy of the country Nepal has been pursuing a policy of making continuous efforts to institutionalize peace by promoting cooperative and good relations in the economic, social and other spheres on the basis of equality with neighbouring and all other countries of the world. Being desirous of promoting cordial relations and cooperation with other countries, Nepal has established Diplomatic Relations with 128 countries in the world. It is an active member of the Non-Aligned Movement, the United Nations (see Nepal and the UN), its Specialised Agencies as well as other International Organizations, and a founding member of and active player in the South Asian Association for Regional Cooperation (visit Nepal and the SAARC).

NEPAL-CHINA RELATIONS

1. Political RelationsNepal-China relations have always remained good and cordial. These relations have been marked by friendliness, mutual support and understanding and appreciation of each other's aspirations and sensitivities. Our two countries are abiding by the ideals of the Five Principles of Peaceful Co-existence. The history of our relations could be traced back to the 5th century when sages and saints engaged themselves in visiting far and wide in the pursuit of knowledge and peace. The marriage of Bhrikuti to the Tibetan King, Song Sang Gampo, in the 7th century and the White Pagoda temple in Beijing constructed under the guidance of Nepalese architect, Araniko have, inter alia, provided testimony to the historical relations between Nepal and China. Nepal and the People's Republic of China established diplomatic relations on 1 August 1955.

Nepal and China share a long border, spanning a range of about 1414 Kilometres. The two Governments resolved border issue amicably in 1961, and have been conducting joint inspection of the border at regular intervals.

Nepal and China are supporting each other in many international forums, including the United Nations. Nepal has always been upholding 'One China' principle and is committed not to allow Nepalese territory to be used against China's interests. Government, in a press release issued on 16 March 2005, unequivocally supported the Anti-secession Legislation enacted by the National People's Congress on 14 March 2005. At the same time, Nepal has also appreciated 'one country two systems' principle as enunciated by China and applied successfully in Hong Kong and Macao in the form of special administrative regions.

Exchange of bilateral visits including at the highest level has immensely contributed to further nurturing Nepal-China bilateral relations. Their Majesties the King and Queen paid a State Visit to China in July 2002 and had cordial meetings with the Chinese leaders. Their Majesties King Gyanendra Bir Bikram Shah Dev and Queen Komal Rajya Laxmi Devi Shah visited Boao in Hainan Province of the People's Republic of China from 23 to 26 April 2005 in connection with the participation in the 2005 Annual Conference of the Boao Forum for Asia. On the occasion, His Majesty, on behalf of the Nepalese people, handed over a Buddha Statue to the Boao Buddhist Temple constructed in Boao. Their Royal Highnesses the Crown Prince and Crown Princess paid an official visit to China in August 2004.

Similarly, the visits to Nepal paid by Chinese President, H. E. Mr. Jiang Zemin, in 1996 and also by Premier H. E. Mr. Zhu Rongji in May 2001 have been significant in enhancing good-neighbourly relations between the two countries. The official visit by H. E. Mr. Jia Qinglin, Chairman of the Chinese People's Political Consultative Conference in December 2003 has added to strengthening these relations.

Chinese Foreign Minister, H. E. Mr. Li Zhaoxing, visited Nepal from 31 March to 01 April at the invitation of Foreign Minister, Hon. Ramesh Nath Pandey.

Apart from these visits, there have been a number of exchanges of visits to and from Nepal at various levels, contributing immensely to further promoting the understanding between the two countries.

2. Economic RelationsChina has been assisting Nepal in its efforts for socio-economic development since mid-50s. The first 'Agreement between China and Nepal on Economic Aid' (20 million Indian Rupees in cash and 40 million rupees for aided projects) was signed in October 1956. Ever since, China has been providing financial and technical assistance to Nepal, which has greatly contributed to Nepal's development especially in infrastructure building, establishment of industries, human resource development, health, sports, etc.

In the early years, Chinese assistance was pledged in terms of projects and no financial involvement therein was mentioned. From mid-90s, the Chinese Government has been pledging grant assistance to Government under the Economic and Technical Cooperation programme in order to implement mutually acceptable development projects. The volume of such assistance is to the tune of 80 million Yuan every year. Following is the list of such assistance.

Financial and Technical Assistance

S.N.Date of Agreement

Amount Cmmitted(in million RMB)

Equivalent(In million NRs.)

1. July 20, 1994 60 340

2. April 18, 1995 80 475

3. April 18, 1996 80 475

4. December 4, 1996 80 560

5. April 17, 1998 30 240

6. October 16, 1998 50 425

7. December 30 1999 80 679

8. February 16, 2000 30 254.6

9. August 24, 2000 50 436

10. May 12, 2001 80 750

11. July 10, 2002 80 750

12. December 3, 2003 80 750

13. August 16, 2004 50 415

  Total: 830 Million  

Nepal and China have established Inter-Governmental Economic and Trade Committee (IGETC) in October 1982. The IGETC meetings have become the main forum for discussions on Nepal-China bilateral economic and technical cooperation. The IGETC meetings focus on economic and technical assistance, bilateral trade and tourism.

China Aided Projects in Nepal (Completed):

A. Road and Transport  

I. Arniko Highway (104 Km)

II. Arniko Highway (Rehabilitation)  

III. Kathmandu Bhaktapur Road (13 Km)

IV. Prithvi Highway and Surface Pitch Paving (174 Km)

V. Narayanghat-Mugling Road (36 Km)

VI. Gorkha Narayanghat Road  

VII. Kajhuwa-Gorkha-Road (24 Km)

VIII. Kathmandu-Bhaktapur Trolly Bus (14 Km)

IX. Kathmandu Ring Road (27.2 Km)

X. Pokhara-Baglung Road (65 Km)

XI. Seti River Bridge at Pokhara  

B. Industries

I. Bansbari Leather and Shoes FactoryII. Hetauda Cotton Textile MillsIII. Harisidhi Brick FactoryIV. Bhaktapur Brick FactoryV. Industrial Gloves and Apron Manufacturing at BansbariVI. Bhrikuti Paper MillsVII. Lumbini Sugar Mills

C. Water Resources

I. Sunkoshi Hydroelectricity PlantII. Pokhara Water Conservancy and Irrigation Project (Multipurpose)III. Sunkoshi Vicinity Electricity Transmission ProjectIV. Sunkoshi-Kathmandu Electricity Line Transmission Project

D. Health

I. B.P. Koirala Memorial Cancer Hospital, Bharatpur

E. Sports

I. Sports Complex at Kathmandu and LalitpurII. Construction of Sports Facilities for the 8th South Asian Federation Games in 1999III. Repair of Lighting System in the Sports Complex (April 2005)

F. Other Construction

I. National Trading ComplexII. Warehouse at Kathmandu and BirgunjIII. City Hall in KathmanduIV. Birendra International Convention CentreV. Consolidating Seti River Bridge in PokharaVI. A three-month arch bridge training course for 15 Nepalese engineersVII. Pokhara Sedimentation Pond

VIII. Provision for the Television Truck for NTVIX. Mobile X-Ray Machine for Birgunj Dryport Customs Office

Ongoing China-aided Projects:

a. Syafrubesi-Rasuagadhi Roadb. Civil Service Hospitalc. Polytechnic Institute in Banepad. Nepal Television Metro Channel Station Expansion and Improvement.

During the official visit to China by HRH the Crown Prince in August 2004, Government of Nepal/N and the Chinese Government exchanged Letters on the following projects:

a. Installation of Optical Fibre along the Araniko Highwayb. National Ayurvedic Research and Training Institutec. An Outer Ring Road in the Kathmandu Valley

In addition, the Chinese Government has also agreed to send a team for the feasibility study of the Conservation Research Centre for King Mahendra Trust for Nature Conservation. Government of Nepal/N and the Chinese Government have exchanged letters on this matter during the official visit of the Chinese Foreign Minister H. E. Mr. Li Zhaoxing to Nepal from 31 March to 01 April 2005.

3. Education and Culture

Scholarship:Government of Nepal appreciates the Chinese assistance in the field of education. China has been providing 100 scholarships annually to Nepalese students to study in China. In this way, China has been assisting Nepal to meet the ever-increasing demand for technical manpower in the country. It has also contributed to promoting understanding and appreciation of each other's culture and tradition.

Cultural Cooperation:Nepal and China have concluded an MoU on cultural cooperation in 1995. Various activities have taken place since. Cultural programmes have been organised in each other's territories; and visits have been exchanged. For example, China had also organised a cultural fair in Kathmandu in 2003. Similarly, the Chinese Embassy in Kathmandu, in association with Cultural Net, organised China Festival in Kathmandu from 1 to 7 June 2005 on the occasion of the 50th anniversary of the establishment of diplomatic relations. Chinese Acrobatic Show was organised among other various activities. Additionally, a cultural troupe of 20 artistes from Guangdong Province of PRC visited Nepal and presented cultural programmes in Kathmandu and Pokhara, coinciding with the 59th auspicious birthday of His Majesty the King.

4. Nepal-China TradeThe volume of Nepal-China trade is increasing every year. Nepal's trade with China is largely conducted through Tibet and Hong Kong. The volume of Nepal-China trade is given below.

Nepal-China Trade

Rs. in thousand

Fiscal Year Export Import

1999/2000 514276 12530062

2000/2001 528012 11573870

2001/2002 1040075 8744459

2002/2003 1631050 9098978

2003/2004 2348150 9299902

Source: FNCCI

The following six points along the Nepal-China border have been opened for overland trade:

Kodari-Nyalam; Rasua-Kerung; Yari (Humla)-Purang; Olangchunggola-Riyo; Kimathanka-Riwo; Nechung (Mustang)-Legze

5. Investment:Chinese investment in Nepal is growing, and has potential to further growth. Chinese investors are found interested in making investment in hotels and restaurants, electronics, radio paging services, readymade garments (pashmina), nursing home, hydropower, civil construction, etc. As of Baishakh 2060, there were 25 industries operating under Chinese investment, 6 under construction and 13 licensed. Improved law and order situation in the country and enhanced publicity in China could further increase Chinese investment in Nepal. FNCCI, especially under the framework of Nepal-China Non-Governmental Cooperation Forum, is also working towards attracting Chinese investment.

6. TourismThe Government of the People?s Republic of China has designated Nepal as one of the tourist destinations for its people. At the same time, Nepal has made the following arrangements to attract tourists from China:

Chinese Yuan has been made convertible for tourists and businessmen

Government of Nepal has waived visa fee for Chinese tourists

Nepal's Tourism Ministry and TAR Government have formed a joint committee to promote tourism

In addition, following agreement between Nepal and China, direct bus service between Kathmandu and Lhasa has been in operation since 1 May 2005, which will contribute to tourism promotion. Nepal and China have also signed Air Services Agreement and an MoU in August 2003.

7. Fiftieth Anniversary of the Establishment of Diplomatic RelationsThe year 2005 marks the fiftieth anniversary of the establishment of diplomatic relations between the Kingdom of Nepal and the People's Republic of China. The important occasion is being celebrated by both sides by organising various programmes. Government of Nepal has constituted a high-level Committee under the Chairmanship of the Hon. Minister for Foreign Affairs, Mr. Ramesh Nath Pandey, to plan, organize and coordinate programmes on the occasion. Some of the programmes shall be organized jointly with the Chinese side and some shall be organized by Government of Nepal/N. China-related organisations in Nepal, too, are preparing and organising programmes.

On the occasion of the 50th anniversary of the establishment of diplomatic relations, His Majesty King Gyanendra Bir Bikram Shah Dev and H. E. Mr. Hu Jintao, President of the People's Republic of China, exchanged congratulatory messages on 01 August 2005. In the messages, His Majesty the King and H. E. the President highlighted, and expressed satisfaction at, the achievements made in promoting Nepal-China understanding and cooperation. Similarly, Hon. Minister for Foreign Affairs, Mr. Ramesh Nath Pandey, and H. E. Mr. Li Zhaoxing, Minister of Foreign Affairs of the People's Republic of China, exchanged congratulatory messages. In their messages, the Foreign Ministers expressed satisfaction at the expansion and consolidation of Nepal-China relations in the last 50 years.

8. Nepal-China Non-Governmental Cooperation ForumNepal and China have established the Nepal-China Non-Governmental Cooperation Forum in 1996. The Forum has been meeting regularly. The eighth meeting of the Forum was held in Sanya, Hainan Province, from 12 to 13 January 2005. The Forum is being led by FNCCI from the Nepalese side and All China Federation of Industry and Commerce (ACFIC) from the Chinese side.

9. Ongoing Activities:The Third Joint Inspection of Nepal China Border

As per the Border Agreement between Government of Nepal and the Government of the People's Republic of China, the border between the two countries has to be jointly inspected every ten years. Accordingly, the first and the second inspections had taken place in 1979 and 1988 respectively. The

process for the Third Joint Inspection has been initiated.

The two Governments have set up a Joint Inspection Committee and agreed to set up Joint Inspection Teams as necessary. The Joint Inspection Teams are expected to begin field-work in the summer of 2006 and complete the work by the end of the year.

NEPAL-INDIA RELATIONS

Nepal and India are bound together by age-old ties of history, culture, tradition and religion. Our relations are deep and extensive pervading many aspects of our life. There are time-honoured traditions and socio-cultural ethos common to both our peoples. A firm commitment to the principle of peaceful coexistence and sovereign equality of the states has characterized our relations. Both our countries share commonality of approach in many outstanding international issues. With the establishment of SAARC, some more areas have been added for self-reliance within the region. Our main thrust now has been to strengthen and broaden our neighbourly relations based on mutual understanding of each other's aspirations and interests.

A. Exchange of Visits The exchange of visits by the leaders of the two countries at different levels have helped to bring the peoples of our two countries much closer. The visits at the apex-level have served to place Nepal's age-old and multi-dimensional relations of friendship and cooperation with India on a more mature and pragmatic footing.

During the interim Government period, Prime Minister Mr. K.P. Bhattarai visited India from 8 to 10 June 1990 at the invitation of Prime Minister V. P. Singh of India. The Joint Communiqu頩 ssued at the end of this visit reaffirmed the two 0Governments' adherence to and respect for the principles of sovereign equality, territorial integrity, national independence, non-use of force, non-interference in each other's internal affairs and peaceful settlement of all disputes. During the visit, the impasse on Nepal-India trade and transit was broken by restoring the status quo ante before the expiry of the relevant treaties.

Prime Minister Girija Prasad Koirala paid an official visit to India from 5 to 10 December 1991 at the invitation of Prime Minister P.V. Narasimha Rao. A new Indo-Nepal Treaty of Trade, valid for five years and renewable, was concluded. Likewise, a separate Treaty of Transit valid for 7 years was also signed on that occasion.

Prime Minister Man Mohan Adhikari paid an official visit to India at the invitation of Prime Minister P.V. Narasimha Rao from 10 to 14 April 1995. During the visit

the two Prime Ministers held extensive talks on wide ranging issues existing between Nepal and India.

Prime Minister Sher Bahadur Deuba paid an official goodwill visit to India from 11 to 17 February 1996 at the invitation of Prime Minister P.V. Narasimha Rao. During the visit the two Prime Ministers signed a landmark and historic treaty concerning Integrated Development of the Mahakali River.

Prime Minister Girija Prasad Koirala paid an official goodwill visit to India from 31 July to 6 August 2000 at the friendly invitation of Prime Minister Atal Behari Vajpayee. The visit helped to clear the atmosphere and restore the relations of the two countries which were adversely affected in the wake of events such as the hijacking of IC 814, the Rhitik Roshan incident etc.

Their Majesties King Gyanendra Bir Bikram Shah Dev and Queen Komal Rajya Laxmi Devi Shah paid a State Visit to India at the invitation of President K. R. Narayanan in June 2002. This was the first visit abroad by Their Majesties since accession to the throne in June 2001.

The Visit of Their Majesties the King and Queen to India in March 2003 gave a further fillip to our quest for greater mutual understanding and consolidation of bilateral relations.

Prime Minister Sher Bahadur Deuba paid an official goodwill visit to India from 20 to 25 March 2002, for the second time in six years. During the visit, India has greed to undertake a feasibility study of the East West Railway in Nepal and to extend cooperation in establishing a Technology Institute in the Far Western Development Region of Nepal.

Prime Minster Sher Bahadur Deuba paid an official working visit to India from September 8 to 12, 2004 at the invitation of Prime Minister of India Dr. Manmohan Singh.

During the corresponding period, quite a number of visits have taken place from the Indian side also.

The President of India H.E. Mr. Neelam Sanjiva Reddy paid an official visit to Nepal in 1981. President Giani Zail Singh visited Nepal in July 1986. Mr. K. R. Narayanan, President of India and Madame Narayanan paid a State Visit to Nepal from 28 to 30 May 1998. The President of India addressed a meeting of the Nepal Council of World Affairs and was awarded an honorary degree of Doctor of Literature by the Tribhuvan University. The President was given a civic reception and met with intellectuals and eminent persons of Nepal. The President's visit was characterized as vision-setting visit to a friendly neighbour by the Indian side and is taken to have served its purpose of not only consolidating the existing friendship between the two countries but also in putting

forward a vision of a more mature and mutually beneficial relations in the years ahead.

The Prime Minister of India, Mr. Chandra Shekhar visited Nepal on 13-15 February 1991. During this visit, the two Prime Ministers agreed, inter alia, to form a High-level Task Force for the purpose of preparing a program of cooperation between the two countries under the umbrella of Nepal-India Joint Commission.

Prime Minister P.V. Narasimha Rao paid an official goodwill visit to Nepal from 19 to 21 October 1992 at the invitation of Prime Minister Girija Prasad Koirala. The B. P. Koirala Nepal-India Foundation was inaugurated by the two Prime Ministers on 21 October 1992. The Foundation provides an institutional framework for promoting academic, cultural and technical exchanges and cooperation between India and Nepal, the specific thrust areas being agricultural research, science and technology, health, technical training, developmental and area studies and women's studies. The activities funded by the BPKIF are financed through revenues/interests generated from a Trust Fund which has been set up principally through grants made available by the governments of the two countries. Both the secretariats maintain the Trust Fund contributed by their respective Governments. Currently Government of Nepal has contributed IRs.3 corore for the Trust Fund and GOI has contributed IRs. 8 corore. The Foundation also accepts unconditional grants from other agencies, both public and private. Its focus is on higher studies, research, in-service training of teachers, research scholars, technocrats etc. During the visit, the two countries had also reached understandings for accelerating joint ventures and investigating and preparing reports on a number of projects on flood protection, power exchange, water resources etc.

Prime Minister I. K. Gujral visited Nepal from 5 to 7 June 1997. Prime Minister Lokendra Bahadur Chand and Prime Minster I. K. Gujral held extensive discussions on all aspects of bilateral relations and the status of Nepal-India cooperation was also reviewed in detail. The Joint Press Statement issued at the end of the visit set a time bound calendar for examination and discussion of all major issues of bilateral interests including the opening of the Kakarbhitta-Phulbari-Banglaband transit route.

Prime Minister Atal Behari Vajpayee visited Kathmandu in January 2002 to attend the 11th SAARC Summit meeting. Other Important Visits

a. Union Minister for Health and Family Welfare Mr. B. Shankarananda paid an official visit to Nepal from 18-20 October 1994. During the visit he attended the foundation laying ceremony of Academy and 350 Bed Hospital Complex of the B.P. Koirala Institute of Health Science in Dharan to be constructed jointly by the governments of the two countries.

b. India's then Minister for External Affairs Mr. Pranab Mukharjee paid a 3 day official goodwill visit to Nepal from January 26 to 29, 1996. During his visit, extensive discussions were held regarding the development Mahakali river including Tanakpur issues between the high officials of the two Governments. And the two Foreign Ministers initialed a treaty for the 'Integrated Development of Mahakali River including Pancheswor and Sarada Barrage'.

c. Foreign Minister Dr. Prakash Chandra Lohani paid an official visit to India in August 1996. The major highlight of the visit was the agreement to set up a Joint Working Group to evolve modalities to monitor movement across the Nepal-India border.

d. Foreign Minster Mr. Kamal Thapa visited India from 10-14 September 1997 and held extensive discussion on all issues of bilateral interest with Prime Minister Gujral. At the meeting with Prime Minister Gujral as well as at the official meeting at the Ministry of External Affairs, Foreign Minister Thapa put forward Nepal's proposal for a new Treaty of Friendship and Cooperation with India that would reflect the present realities while ensuring continuation of the traditional bonds of friendship and cooperation between Nepal and India.

e. Indian Minister for Commerce Mr. Ramakrishna Hegde paid an official visit to Nepal from January 5-6, 1999. During the visit the renewed and modified Treaty of Transit was signed on 5 January 1999 in Kathmandu by Commerce Ministers Mr. Purna Bahadur Khadka and Mr. Ramakrishna Hegde.

f. Foreign Minister Dr. Ram Sharan Mahat paid a consultation visit to India from 17-19 August 1999 in connection with the 11th SAARC summit which was scheduled to be held in Kathmandu in November 1999.

g. Foreign Minister Chakra Prasad Bastola paid an official visit to India on 7-10 May 2000, at a time when Nepal-India relations were marked by mutual suspicion in the wake of IC 814 hijacking and the Rhitik Roshan incident. The visit helped to clear the air in bilateral relations.

h. After the Royal Palace incident of 1 June 2001, Indian External Affairs Minister Mr. Jaswant Singh came on a goodwill visit to Nepal on 18-19 August 2001.

i. Indian External Affairs Minister Mr. K Natwar Singh paid an official visit to Nepal in June 2004 as the first of his foreign visit after the UPA Government took over the helm of the Government in India.

j. Nepalese Foreign Affairs Ramesh Nath Pandey paid working visit to India from March 7 to 9, 2005.

k. Indian Minister of State for External Affairs Mr. Rao Inderjit Singh visited Nepal from July 21 to 23, 2005 in connection with garnering support of Nepal on India's bid for permanent seat in the expanded UN Security Council. This was the first high-level visit to Nepal from India after the February 1, 2005.

B. Nepal-India Cooperation:India has been extending cooperation to Nepal in diverse areas for more than fifty years. Following is a glimpse of the on-going Indian aided projects as well as those decided to be taken up by the Government of India after the 5th meeting of the High Level Task Force (HLTF). The HLTF periodically meets to identify and prioritize such cooperation projects. The 5th meeting of the HLTF was held in Kathmandu from 5-7 June 2000. The Chief Secretary of Nepal and Principal Secretary to the Prime Minister of India lead the respective delegations to the HLTF.

1. BP Koirala Institute of Health Sciences, Dharan: It was established on 8 January 1998 under a bilateral agreement between Nepal and India. Since then, consecutive batches of MBBS courses are being conducted smoothly. The Institute has also started the B. Sc. Nursing course. The Government of India handed over the BPKIHS to Nepal during the visit of Indian External Affairs Minister Mr. Jaswant Singh to Nepal in September 1999. During the fifth HLTF meeting held in Kathmandu on 5-7 June 2000, the Indian side confirmed that the cooperation of the Government of India would continue, including the faculty support to the BPKIHS, up to the year 2009.

2. Bir Hospital Expansion Project:Prime Minister I.K. Gujral laid the foundation stone of Trauma and Emergency Centre during his visit to Nepal in June 1997. An expert team from India visited Kathmandu and held discussions with the concerned Nepalese authorities on 1-3 June 2000 on the preparation of the Detailed Project Report of the proposed Emergency and Trauma Centre. Another expert level meeting was held in Kathmandu on 5-6 October 2001. A MOU on this project has been signed between the two countries and DPR of the same has been completed. The construction works of the project was to be started from the beginning of October 2004 and completed by 2007.

3. Paropakar Indra Rajya Laxmi Maternity Hospital: The work on the setting up of the Maternal and Neo-Natal Intensive Care Units at Paropakar Indra Rajya Laxmi Maternity Hospital including training of the personnel has been completed and the GOI has agreed to continue its association with this hospital.

4. Construction of 22 bridges on Kohalpur-Mahakali Highway Sector:The construction work of the 22 bridges on Kohalpur-Mahakali Highway

sector under Indian cooperation has been completed and already handed over to Nepal in 2001.

5. Raxaul-Sirsiya Broad-Gauge Rail Link Project:The Construction of Inland Clearance Depot (ICD) at Sirsiya, Birgunj, in cooperation with the World Bank, under 'Nepal Multimodal Transit and Trade Facilitation Project', has already been completed. A 5.3 km. rail line from Raxaul to Sirsiya (ICD) has also been laid under Indian cooperation. Nepal and India have concluded Rail Services Agreement on May 21, 2004 for the operation of the ICD Birgunj. Accordingly, the ICD has been operated since July 16, 2004 for the third country transit traffic. Bilateral cargo trade has also been operationalized from ICD Birgunj since March 2006.

6. Greater Janakpur Development Project:Yatri Niwas: A traveler's rest house (Yatri Niwas) was constructed at a cost of Rs.10 million. The facility was handed over to the Greater Janakpur Development Project after its completion.

7. (a) Rangeli-Bhadrapur Road, (b) Chatara-Birpur Road, and (c) Janakpur Outer Ring Road

A consultant would be appointed to draw up a plan of action and assess the viability of the development of infrastructure, including transportation and communication links at the adjoining border districts - the Bhadrapur-Rangeli-Biratnagar Road, Birpur-Chatara road, and the Janakpur outer ring road, subject to the availability of resources.

8. Mahendranagar-Tanakpur Link Road Project:The DPR of the project has been finalized. Land acquisition by the Government of Nepal is in progress. Discussions on the draft Letter of Exchange were held in Kathmandu in April 2002, and it is now in the process of being finalized. The construction work would start after the Letter of Exchange is signed between the two Governments.

9. Embankments along Bagmati, Kamala, Khando and Lal Bakaiya Rivers:The construction work on the extension of the right embankment on the Lalbakaiya river in Nepal has commenced and that the construction of embankments on Kamala, Bagmati and Khando rivers would be finalized thereafter. It was agreed that the proposed Nepal-India Task Force on Flood Control and Flood Forecasting would be constituted shortly to review cooperation in this area and recommend short term and long term measures. The first meeting of the Nepal-India Committee on Flood Forecasting was held in New Delhi on 26-27 April 2001. The Committee held its second meeting in Kathmandu from 6 to 8 May 2002.

10. Implementation of the provisions of the Treaty on Integrated Development of the Mahakali Treaty:So far, 18 meetings of the Joint Expert Group have been held for the purpose of preparing Detailed Project Report of the Pancheswor Multipurpose Project. The DPR is being prepared. The JEG is scheduled to meet soon in Kathmandu.

11.Cooperation under the Umbrella AgreementAs per the agreement signed between the two governments on 7 November 2003, the Government of India has been providing financial assistance for the implementation of more than 60 small development projects in different parts of the country. Such development projects range from construction of school building to provision of ambulance to the hospitals to implementation of drinking water projects.

Proposals put forward at the Fifth HLTF Meeting (June 5-7, 2000): 1. Infrastructure Development:

To improve the physical facilities and infrastructure development at important border crossings - Birgung/Raxaul, Bhairahawa/Sunauli and Biratnagar/Jogbani, a consultant would be appointed shortly to prepare a blue print in consultation with the concerned authorities of two Governments. The Government of India has appointed M/s RITES as consultant for undertaking a study on this project.

A Memorandum of Understanding (MoU) between Nepal and India has been signed in Kathmandu on August 3, 2005 to provide technical and financial support for the development of infrastructures at four border check points (Biratnagar, Birgunj, Bhairahawa and Nepalgunj) along Nepal-India border. Infrastructure development at these points includes link roads, administrative blocks for custom offices, laboratories, staff quarters, security posts, quarantine check posts and other facilities. It is estimated that Rs. 5060 million will be required for the development of infrastructures in these four border points.

The Government of India has supplied 2 diesel engines and 12 coaches for the narrow-gauge Janakpur-Jayanagar Railway. The request to convert the narrow-gauge railway to broad gauge is still pending. At the fifth HLTF meeting, India has agreed to see its economic viability for the conversion of the Janakpur-Jayanagar Railway and extension of Janakpur broad-gauge Rail Route to Bardibas.

2. Pilot Projects in Nepal:Nepal and India agreed to launch jointly developed pilot projects in Nepal

in the field of rural and community development. Two districts - Doti and Nawalparasi - have been selected. The National Planning Commission is handling the matter.

3. Run-of-the-river Hydropower project:India has proposed to jointly set up a small/medium sized run-of-the-river hydropower project during the fifth HLTF meeting. An Indian team visited Nepal in February 2001 and held preliminary discussions with the Nepalese authorities in this regard. The two sides are yet to moot the projects.

4. Dairy Development:The Indian side has agreed to cooperate in developing dairy industry in Nepal with the involvement of the National Dairy Development Boards of Nepal and India.

5. Technology InstituteIndia has agreed to extend cooperation in establishing a technology institute at the Far Western Development Region of Nepal. Both sides are yet to identify the appropriate location of the proposed institute.

6. East-West Railway Project:Indian has agreed to undertake a feasibility study of the East West Railway project. The project is still at the inception phase. Detailed studies and preparation of the feasibility studies is yet to be done.

7. East West Highway Optical Fibre ProjectIndia provided grant assistance for the laying of optical fiber cable network and its associated technical structures along the East West Highway in accordance with the technical scope and specifications as mutually agreed. First phase of the project has been completed with laying of optical-fiber from Jhapa to Kohalpur section of east-west highway and has already been inaugurated in 2005. Nepal has asked India to consider support for the second phase of the project to connect the network in the remaining section of the east west highway.

During the official visit of Prime Minister Girija Prasad Koirala to India in August 2000, the recommendations of the HLTF were endorsed and directions given to expeditiously implement the following new projects:

improving infrastructure and physical facilities at important border customs stations;

development of infrastructure including transportation and communications links in the adjoining districts of Nepal and India;

launching a rural and community development pilot project;

setting up a small/medium hydropower project in Nepal;

setting up an EPZ near the ICD in Birgunj;

cooperation in dairy development, and

cooperation in establishing a Technology Institute in Nepal with information technology as one of its key components.

During Prime Minster Sher Bahadur Deuba's official working visit to India from September 8 to 12, 2004, the following agreements were concluded:

Agreement between Nepal Oil Corporation and Indian Oil Corporation was reached for a joint venture regarding construction of an oil pipeline between Amlekhgunj (Nepal) and Raxual (India).

Agreement between Nepal Bureau of Standards and Metrology and Bureau of Indian Standards,

Agreement on Cooperation in the fields of Culture and Sports,

Memorandum of Understanding on Cooperation in the field of Weather Forecasting,

Also, the Government of India agreed to consider the ulitization of Jawahar Lal Nehru Port in Mumbai for Nepal's use of its transit cargo.

During the visit, directions were given to expeditiously complete the following projects and welcomed the following new proposals:

completing the remaining mandated tasks of Joint Technical Level Boundary Committee by June 2005.

the proposed Institute of Technology in the Far-Western Region of Nepal

projects on Pancheshwar and Upper Karnali and preparation of the DPR of Budhi Gandaki project

New Proposals

cooperation for development of road network in the Terai, including the development of identified stretches of Hulaki Rajmarg.

cooperation for conservation and development of Churia range in Nepal

establishment of the Joint Project Office for Sapta Koshi Multipurpose Project and Sun Koshi Storage cum Diversion Scheme.

Government of India has expressed its support to the reinstatement of the House of Representatives on April 24, 2006 and the handing over of political power to the representatives of the people of Nepal. In a statement issued on 25 April 2006, the Government of India stated that "as a close friend and neighbour, India has all along stood by the people of Nepal in their unrelenting struggle for the restoration of their democratic rights. We are ready to render unstinted support to the people of Nepal in whatever manner they wish...".

India has recently released about Nrs. 1.2 billion to Nepal under the DRP scheme that it had withhold since June 2005 and, expressed willingness to extend assistance as per the need and wish of the Nepalese Government.

NEPAL-UNITED STATES OF AMERICA RELATIONS

Historical BackgroundThe relations between Nepal and the United States of America (USA) date back to the fag end of the Rana regime. The USA is the second country after the United Kingdom with which Nepal entered into diplomatic relations on 25 April 1947. In 1953 the relations between the two countries were upgraded to Ambassadorial level. General Shanker Shumsher, Royal Nepalese Ambassador resident in London presented his Letters of Credence as the first Royal Nepalese Ambassador to the United State on February 24, 1953, while Mr. Chester Bowles, Ambassador of the USA resident in New Delhi became the first American Ambassador to Nepal. Mr. Bowles presented his Letters of Credence to His Majesty the King on February 16, 1952.

Nepal established its Embassy in Washington D.C. on 3 February 1958. Mr. Rishikesh Shah became the first resident Royal Nepalese Ambassador to the USA. Mr. Shah presented his Letter of Credence on October 27, 1958. The US government opened its Embassy in Kathmandu on 6 August 1959. H.E. Mr. Henry E. Stebbins was the first resident US Ambassador to Nepal. Mr. Stebbins presented his Letter of Credence on November 25, 1959.

Over the period of time the relations between the two countries have been widened, diversified and deepened. Growing cooperation, high level visits to and from both countries, and exchange and sharing of views on various issues of mutual concern at bilateral, regional and international levels have further strengthened to our mutual satisfaction. US assistance in development endeavours of Nepal has been instrumental. The American development assistance is concentrated on the sectors of education, health, environment and agriculture. US assistance also comes through other Non-Governmental Organisations for the development activities of Nepal. The social service of the Peace Corps Volunteers in the remote parts of Nepal is instrumental to enhance people-to- people contacts and understanding.

Exchange of VisitsExchange of high level visits has significantly contributed to strengthen the Nepal-US relations.

Important visit to Nepal from the US side US First Lady Hillary R. Clinton and Chelsea Clinton visited Nepal in 1995.

US Assistant Secretary of State for South Asian Affairs, Mr. Karl Indurfurth visited Nepal from 9 to10 September 1997.

US Senator Charles Robb visited Nepal on Nov 27, 1997 and called on the then Prime Minister Surya Bahadur Thapa. During this visit, Senator Robb also met Chief of Army Staff Gen. Dharmapal Bar Singh Thapa.

Senator Thomas A. Dachle, Minority Leader of the US Senate visited Nepal from 12 to13 January 2000 leading a delegation of Senators.

Senator Thomas A. Brownback, Chairman of the South Asian Subcommittee paid a visit to Nepal in January 2000 and discussed regional situation as well as bilateral relations. Likewise Commander of the US Pacific Command participated in the Multi-platoon training event organized by the Royal Nepal Army at Panchkhal in January 2000.

US Assistant Secretary of State for South Asian Affairs Mr. Karl F. Inderfurth and US Assistant Secretary of State for Refugees and Migration Ms. Julia V. Taft paid a visit to Nepal from November 30 to December 3, 2000. The Assistant Secretaries paid a courtesy call on the then Prime Minister and the then Foreign Minister. On those occasions, issues of bilateral interests and regional and international situation were discussed.

Mr. Alan W. Eastham, Acting Assistant Secretary of State for South Asian Affairs, visited Nepal in April 2001 and held discussions with high-level officials of Government of Nepal on bilateral relations.

The US Assistant Secretary of State for South Asian Affairs Mrs. Christina B. Rocca paid a visit to Nepal at the end of July 2001 and held discussions with high-ranking officials of Government of Nepal. She was granted an audience by His Majesty the King. She also paid a courtesy call on the then Prime Minister Sher Bahadur Deuba. She also visited Nepal in January 2000, December 2002, December 2003, and May 2005.

The US Acting Deputy Assistant Secretary of State for South Asian Affairs Mr. Donald Camp paid a visit to Nepal in December 2001 and October 2002. In the capacity of Principal Deputy Assistant Secretary of State for South and Central Asian Affairs of the State Department Mr. Camp visited Nepal from October 7 to 9, 2004, June 26 -28, 2005 and March 8-9, 2006.

U.S. Secretary of State Gen. Colin L. Powell paid an Official Visit to Nepal from 18 to 19 January 2002. He was accompanied by Mr. Alan Larson, Under Secretary of State for Economic Affairs, Mr. Richard Boucher, Assistant Secretary of State for Public Affairs, Ms. Christina B. Rocca, Assistant Secretary of State for South Asia and Vice Admiral Walter Doran, Assistant to the Chairman of the Joint Chiefs of Staff. The Secretary of State had an audience with His Majesty the King. He held official talks with the then Prime Minister and Minister for Foreign Affairs Mr. Sher Bahadur Deuba. He also had a meeting with the then Chief of the Army Staff Gen. Prajwolla Shumshere J. B. Rana. During the meetings

both sides reviewed the status of bilateral relations and ways of further strengthening and expanding the friendly ties between the two countries. The two sides exchanged views on economic cooperation, commercial interaction, and contacts as well as current trends on international relations.

Ms. Michael Sisson, Principal Deputy Assistant For South Asia Bureau, US Department of State visited Nepal in February, 2004 and had a meeting with Dr. Bhekh B. Thapa, Ambassador-at-Large.

Ambassador J. Cofer Black, US Coordinator, Office of the Counter Terrorism, Department of State visited Nepal in March, 2004 and held meetings with Dr. Bhekh B. Thapa, Ambassador-at-Large, Foreign Secretary, and Royal Nepalese Army and Police officials.

Mr. Torkel Patterson, Deputy Assistant Secretary for South Asian Affairs, Department of State paid a visit to Nepal in March, 2004. He had an audience with His Majesty the King and he paid call on to the then Prime Minister Mr. Surya Bahadur Thapa, and Foreign Minister Dr. Bhekh B. Thapa.

A three-member congressional delegation comprised of Congressman Mr. David Dreier (Republican), Chairman of the House Rules Committee, Congresswoman Mr. Karen McCarthy (Democrat), member of Energy & Commerce Committee, and Congresswoman Ms. Grace Napolitano (Democrat), member of the Resources Committee, Small Business Committee, and House International Relations Committee visited Nepal from 8 to 10 April, 2004. During their visit, they had an audience with His Majesty the King, and called on the then Prime Minister Mr. Surya Bahadur Thapa and Foreign Minister Dr. Bhekh B. Thapa.

US Assistant Secretary of State for the Bureau of Population, Refugees and Migration, Arthur E. Gene Dewey visited Nepal from October 18 to 20, 2004 to take stock of the situation of the Bhutanese refugees and ask Nepal and Bhutan to move towards a solution.

Former Senator and Minority Leader of United States Mr. Thomas Andrew Daschle also known as Tom Daschle paid a visit of Nepal from July 21-27, 2005. During the visit Mr. Daschle met Minister for Foreign Affairs Hon'ble Mr. Ramesh Nath Pandey at his office. Mr. Daschle also met the agitating political leaders. Mr. Daschle was granted an audience by His Majesty the King.

The commander of the US Pacific Command (PACOM), Admiral William J. Fallon, visited Nepal from February 1 to 2, 2006. His Majesty the King granted audience to him at the Narayanhiti Royal Palace. During the visit, Admiral Fallon called on Hon'ble Ramesh Nath Pandey, Minister for

Foreign Affairs at Shital Niwas and held discussion on bilateral relations. He also met Hon'ble Kamal Thapa, Minister for Home Affairs and Chief of the Army Staff Gen. Pyar Jung Thapa, at their respective offices.

Important visits to USA from Nepalese Side Their Late Majesties King Birendra and Queen Aishwarya paid a State Visit to

the USA in December 1983.

The then HRH the Crown Prince Dipendra visited the USA in July-August 1996 during the Summer Olympics in Atlanta.

The then Prime Minister Sher Bahadur Deuba paid a visit to the USA from May 6 to 11, 2002. During the visit, the Prime Minister was received by H. E. Mr. George W. Bush, President of the USA at the Oval Office on May 7, 2002. The two leaders held discussions on bilateral relations and ongoing cooperation against terrorism as well as regional and international matters of common interest. While in Washington, D.C., the then Prime Minister also met the US Secretary of States Mr. Colin L. Powell, National Security Advisor Dr. (Ms) Condoleezza Rice, and Congressmen and Senators at the Capitol Hill. He also delivered a speech on the Nepalese perspectives on War against Terrorism at the Woodrow Wilson International Centre for Scholars in Washington, D.C.

The then Minister of State for Foreign Affairs Dr. Prakash Sharan Mahat visited Washington, DC from 22 to 25 Sep 2004 to request the US officials, Senators and Congressmen for their support for early passage of Nepal textile bill laying at both the Houses of US Congress.

US Development Cooperation to NepalThe USA is one of the first countries to provide development assistance to Nepal. It has been assisting Nepal in its economic development programs since the beginning of 1951. The USA has contributed more than $ 1 billion bilaterally and multilaterally since 1951. In more than four decades, the United States has provided assistance to Nepal in various sectors such as transport, communication, public health, family planning, malaria eradication, agriculture, forestry etc. The US cooperation has been helpful also in the fields of manpower development and institution building.

On bilateral basis, annual grant assistance from the US is in the form of training, equipment, expert services and program cost financing. In addition, it also contributes through multilateral channels like IDA, ADB and the UN specialized agencies. At present the US assistance encompasses sectors like rural development, agriculture (research, extension and education) irrigation, population, health, forestry, natural resources conservation and manpower development. The major ongoing development projects being implemented with the US assistance are:

Nepal-US Trade RelationsThe US is one of the important sources of hard currency for Nepal. From the export of garments and carpets to the US as well as from US tourist, Nepal earnes about US$90 to 100 million every year.

After the end of the quota system under Multi-fibre Agreement in 2005, export of the Nepalese Readymade Garments to the United States of America has declined. The trade figure of the Garments Association of Nepal has revealed 41 percent decline in the month of March 2005 in comparison to the previous year. In terms of value, garments worth US dollar 3.19 million was exported during the first three months of the last year in comparison to US dollar 1.68 million for the same period of this year.

Major export products from Nepal to the US are ready-made garments, woollen carpets, handicrafts, silver jewellery and leather goods. On the other hand, Nepal imports mainly industrial machinery, telecommunication and electrical equipment, processed food and photographic goods from the US. The trade balance has so far remained in Nepal's favour and there exists a tremendous scope and opportunity for the expansion our trade with the US being the largest market in the world.

US tourists visiting NepalThe numbers of tourist arrival from the US to Nepal in the past five years are as follows:

YearNumber of Tourist

2000 40,442

2001 32,052

2002 17,518

2003 18,838

2004 20,584

US Peace Corps VolunteersSince 1962, more than 4000 Peace Corps volunteers have served in a wide variety of capacities, helping Government of Nepal, USAID and Private Voluntary Organizations (PVO) to provide development service to the people of Nepal. The programs of Peace Corps with over 100 volunteers are well integrated with the plans and programs of Government of Nepal. The Peace Corps is collaborating with USAID in its agriculture Research and Production and Rapti Rural

Development Projects. Additionally, the Peace Corps/Nepal collaborates with various UN organizations to promote water systems, rural income generation, urban planning, community forestry, appropriate technology and education.

The Peace Corps volunteers programme has played an important role in bringing the people of both countries together. The programme, which was temporarily suspended since September 2004 due to Maoist threat in Nepal, has officially closed from January 18, 2006. However, the Country Agreement between Government of Nepal and the Peace Corps remains active in order to restart the programme as soon as possible.

Europe America DivisionMinistry of Foreign AffairsGovernment of NepalLast updated on April 3, 2006

NEPAL-RUSSIA RELATIONS

PoliticalNepal and the then Soviet Union had established diplomatic relations in 1956. Soon after the collapse of the former Soviet Union, Government extended full and formal diplomatic recognition to the Russian Federation as a sovereign and independent state on December 28, 1991. Foreign Ministers of Nepal and the Russian Federation exchanged congratulatory messages in July 2001 on the occasion of the 45th anniversary of the establishment of diplomatic relations. They both emphasized the need for enhanced exchanges of visits and interactions at various levels for consolidating bilateral relations.

Some Important Visits1. In 1958, His Late Majesty King Mahendra Bir Bikram Shah Dev paid a

state visit to the Soviet Union.

2. On his way to participate in the twenty-fourth Session of UNGA in New York, Foreign Minister Mr. Gehendra Bahadur Rajbhandari paid a friendly visit to the Soviet Union in 1969.

3. Mr. Krishna Raj Aryal, then Minister for Foreign Affairs paid a visit to the Soviet Union in 1975.

4. In 1976, Mr. Lokendra Bahadur Chand, then Deputy Chairman of the Rastriya Panchayat, led a delegation to Moscow to participate in the 20th anniversary of the establishment of diplomatic relations between Nepal and the Soviet Union.

5. His Majesty King Birendra Bir Bikram Shah Dev paid a state visit to USSR in 1976.

6. HRH Prince Gyanendra Bir Bikram Shah Dev paid an informal visit to the Soviet Union in 1985.

7. Hon. Minister for Foreign Affairs Mr. Ramesh Nath Pandey paid an official visit to the Russian Federation from October 23 to 26, 2005.

From Russian Side1. The Soviet Union sent its President Marshal Voroshilov on a state visit to

Nepal in 1960.

2. In May 1977 Mr. N. P. Firyubin, Deputy Foreign Minister of the USSR paid an official visit to Nepal.

3. The First Deputy Chairman of the Presidium of the Supreme Soviet of USSR Mr. V. V. Kuznetsov visited Nepal in December 1981.

4. Deputy Prime Minister of Moldavia Republic of the Soviet Union Ms. Nelly Pavlovna Kiriyach visited Nepal in 1985. Her Majesty the Queen granted audience to her during her visit to Nepal.

5. First Deputy Minister of Justice Mr. Yuri Dmitrievich Severin visited Nepal in 1996 on the occasion of 30th anniversary of the establishment of diplomatic relations between Nepal and the USSR.

6. Mr. Yuri Fokin, Secretary General of USSR Foreign Ministry visited Nepal in August 1987 for consultation.

7. The Deputy Foreign Minister of USSR, in charge of South Asia Mr. Igor Alexseevich Rogachyov visited Nepal on May 28 and 29, 1987 at the invitation of Government of Nepal.

8. Mr. Georgi F. Kunadze, Deputy Foreign Minister of Russia, paid an official visit to Nepal from December 24 to 26, 1992.

9. Visit of Hon'ble Minister for Foreign Affairs Mr. Ramesh Nath Pandey to Russian Federation

Hon. Minister for Foreign Affairs Mr. Ramesh Nath Pandey visited Russia from October 23 to 26, 2005. During the visit, Hon'ble Minister Pandey met with the Minister for Foreign Affairs of the Russian Federation H. E. Mr. Sergey Lavrov. Both the Ministers held one-to-one meeting and shared extremely useful views on further widening and deepening relationship and cooperation in political, trade and economic, educational, cultural, security and technological fields. Both the Ministers have realised the need for upgrading bilateral consultation at the level of Foreign Minister. The discussion also covered issues of common concerns

such as terrorism, multipolar world structure, disarmament, non-proliferation and strengthening of the United Nations.

Like Nepal, Russia also shares the views that foreign domination and interference of any kind should not be acceptable. Russia said that it has deep understanding of the current situation in Nepal and reaffirmed support for Nepal's fight against terrorism and measures aimed at ending internal conflict. Russia has also assured of its continued support towards this end. Russia shares with Nepal the firm views that double standard and selective approach to deal with terrorism must be stopped for the elimination of terror from the world.

Russia has also appreciated Nepal's role in UN peacekeeping and Nepal's constructive efforts for the development of regional cooperation in South Asia. Both the countries have expressed commitment to faithfully implement the provisions of the Outcome Document adopted by the High Level Plenary Meeting of the United Nations General Assembly, including the provisions relating to terrorism and democracy.

Hon'ble Foreign Minister Mr. Pandey also exchanged constructive views with influential lawmakers in Russia. Hon'ble Minister met the Chairman of the Committee on International Link of the Russian Parliament, DUMA, H. E. Mr. Konstantin I. Kosachev. This meeting proved useful in acquainting the Russian Parliament about the importance of Nepal-Russia relationship in promoting mutually beneficial cooperation. H. E. Kosachev expressed the views that the Russian Parliament is eagerly waiting to establish an effective link with the Nepalese Parliament and that the forthcoming general elections in Nepal would provide that opportunity.

While in Russia, Hon'ble Foreign Minister Mr. Pandey also visited the State Technical University (MADI), one of the oldest universities in Russia, and exchanged views with the Dean and Heads of different faculties of the University. The discussion was focussed mainly on enhancing academic cooperation between the University and the Nepalese academic institutions. Hundreds of Nepalese nationals have been educated in the University.

In reflection of deep respect to the institution of Monarchy and the people of Nepal, the University has decided to confer the title of Honorary Doctorate on His Majesty King Gyanendra Bir Bikram Shah Dev and to open a scientific research hall dedicated in the name of His Majesty with inscription on illustrious and visionary personality.

The other important event that took place during the visit of Hon'ble Foreign Minister Mr. Pandey was the visit to the Institute of Oriental Research of the Russian Academy of Sciences. Hon'ble Foreign Minister shared with the scholars at the Institute the situation in Nepal and apprised them of the efforts undertaken by Nepal to end terrorism, restore peace and stability and reenergize democratic

process.

During the visit, Hon'ble Foreign Minister Mr. Pandey attended a programme organised by the Russia-Nepal Chamber of Commerce and held extensive discussion with businessmen and entrepreneurs with a view to encouraging them to increase trade between the two countries and attract investment in Nepal. Hon'ble Foreign Minister also attended a programme organised by the Russia-Nepal Friendship and Cooperation Society. He had an interaction with Former Russian Ambassadors to Nepal, imminent businessman and industrialists and friends of Nepal during the programme. They have expressed their commitment to work for promoting Nepal-Russia relationship at people-to-people level.

Hon'ble Foreign Minister Pandey, along with the Russian Deputy Foreign Minister H. E. Mr. Alexander U. Alekseev jointly inaugurated the first-ever Handicraft Exhibition organized at the Royal Nepalese Embassy. A large number of people from various strata of Russian society including senior officials from the Russian Foreign Ministry, Chairman and office bearers from Russia Nepal Friendship Society, leading businessman and industrialists and friends of Nepal attended the Exhibition. The Deputy Foreign Minister and the Chairman of the Committee on International Links of the Russian Parliament, DUMA, also spoke during the programme. They expressed that the visit by the Foreign Minister has expanded the scope of cooperation between the two countries.

The official visit to Russia by the Minister for Foreign Affairs of Nepal took place after 30 years. Former Minister for Foreign Affairs Mr. Krishna Raj Aryal had visited the then USSR in 1975.

Other VisitsMr. Georgi F. Kunadze, Deputy Foreign Minister of Russia, paid an official visit to Nepal from December 24 to 26, 1992. The visit contributed towards strengthening the bilateral relations between the two countries. During the official talks, the two sides discussed ways and means of strengthening bilateral relations between Nepal and Russia, particularly through trade and exchange in cultural and educational fields. The two sides also agreed on the idea of annual consultations at the Foreign Ministry level.

A Nepalese delegation led by Foreign Secretary Mr. Kedar Bhakta Shrestha made an official visit to Moscow in September 1995. During the visit, a protocol for bilateral consultation between the two Foreign Ministries was signed in Moscow on September 5, 1995. The protocol is mainly aimed at broadening exchange of views between the two Foreign Ministries on bilateral cooperation and on global, regional and international issues of mutual interests.

The Director of the Third Asian Department of the Russian Foreign Ministry Mr Rashit Hamidullin visited Nepal from February 28 to March 2, 1997. On October 1998, Foreign Secretary Mr. Murari Raj Sharma visited Russia. During the visit

Foreign Secretary Mr. Sharma had a meeting with the Deputy Foreign Minister of the Russian Federation Mr. Grigory Karasin.

Consultation MeetingThe last round of bilateral consultation between Nepalese and Russian delegations was held at the Ministry of Foreign Affairs in Kathmandu on February 13, 2003. The Director of the Third Asian Department of the Ministry of Foreign Affairs of the Russian Federation Mr. Gleb A. Ivashentsov led the Russian delegation. Similarly, Mr. Nabin Bahadur Shrestha, Joint Secretary at the Ministry of Foreign Affairs led the Nepalese delegation. During the consultation, both sides reviewed current international situation and the status of Nepal-Russian Federation bilateral relations.

Russia's position on Nepal's political development after the Royal Proclamation of February 1, 2005

On February 2, 2005, the Ministry of Foreign Affairs of Russia issued a following statement on events in Nepal:

"A state of emergency was declared in the Kingdom of Nepal on February 1. A number of articles of the Constitution have been suspended in this connection and King Gyanendra Bir Bikram Shah Dev has headed up the Government himself. The term of office of the new Cabinet has been set for three years. During this period the King says he expects to restore peace and order in the country. The measures undertaken by the King have been triggered by the complicated internal political situation in Nepal, stemming from large-scale actions by left-wing extremists for the last few years, which had blocked the democratic processes in the country, in particular, the holding of parliamentary elections. The efforts of the previous governments to solve problems with the insurgents by negotiations and to return the country into the mainstream of democracy had failed.

Moscow is watching the course of events in the Kingdom. Russian and Nepal are bound by long-standing relations of mutual sympathies and cooperation. It is expressing the hope that friendly Nepal will be able to independently solve the problems facing it and the restoration of conditions of stability and security in the country will combine with the strengthening of democracy and economic and social progress.

In a congratulatory message sent to Hon. Mr. Ramesh Nath Pandey on his appointment as Minister for Foreign Affairs, H. E. Mr. Sergey V. Lavrov, Minister for Foreign Affairs of the Russian Federation expressed hope stating, "the friendly relations traditionally existing between Russian and Nepal will further develop to the benefit of our nations, in the interest of peace, security and cooperation in Asia and all over the world."

While thanking H. E. Mr. Lavrov for his congratulatory message, Hon. Foreign Minister Mr. Pandey mentioned that Nepal and the Russian Federation enjoy the age-old friendly relations based on mutual trust and cooperation. Hon. Pandey further said that Government of Nepal highly appreciates the Government of the Russian Federation's understanding and cooperation on the Nepalese efforts to bring about peace, stability and prosperity to the Nepalese people and institutionalization of democracy.

Economic CooperationThe then Soviet Union had extended important economic and development cooperation to Nepal's development efforts. Their cooperation in building physical and industrial infrastructure also contributed to accelerate the modernization process in Nepal in the past. Similarly, a large number of technical manpower was trained in the then Soviet Union mainly in the engineering and industrial fields. Entrepreneurs from the Russian Federation participated in a big way in the Nepal Investment Forum meeting held in Kathmandu in November 1992 and a number of letters of intent were signed between the two sides.

There are good possibilities of promoting bilateral economic co-operation between Nepal and Russia, especially in the field of joint industrial venture. Russian technology specially relating to hydro-power plants and accessories, building materials, non-conventional uses of energy and small and medium-scale labour-intensive industries, is considered to be particularly suitable for Nepal. Private airlines have bought Russian helicopters for operating passenger and cargo services in the remote areas of Nepal.

TradeBalance of trade between Nepal and Russia has been remaining unfavourable to Nepal since last several years. Nepal's major exports to the Russian Federation consist of hand knotted carpets. Nepal mainly imports electrical equipment, industrial raw material, parts of airplane and helicopter and newsprint from the Russian Federation.

TourismTourist arrival in Nepal from Russian Federation is gradually increasing over the years. Aeroflot, the Russian airline closed its weekly flight to Kathmandu since January 13, 2002 stating that the route was not commercially viable. However, it has maintained the right of Russian airlines to operate flights to Kathmandu and is prepared to resume flights once it decides that they are commercially viable.

Joint VentureA joint venture in the area of gliding service has been operating with the financial collaboration of Russian investor. License has been provided to open an industry to produce generators under joint venture. Similarly, a firm has been licensed under Russian joint investment to produce computer software.

Scholarship:Since 1992, Nepalese students have been going to Russia for higher studies on self-finance basis. Moreover, Russian Federation has been providing a limited number of scholarships to Nepalese students in the fields of medicine and engineering. At present, permissions granted to the students, who would like to pursue further studies with approval of the concerned Universities or educational institutions on self-finance basis, by the Education Ministry and the Ministry of Foreign Affairs.

Bilateral agreementsAgreement on the Abolition of Visa Requirements for the Holders of Diplomatic and Service Passports was signed in Kathmandu on 16 April 2002. The Agreement simplifies the official travel of diplomatic and official passport holders of the Kingdom of Nepal to the Russian Federation and vice versa by eliminating visa requirements for a maximum period of 180 days.

Europe America DivisionMinistry of Foreign AffairsGovernment of NepalLast updated on April 3, 2006

NEPAL-SAUDI ARABIA RELATIONS

Political RelationsThe Kingdom of Nepal and the Kingdom of Saudi Arabia established their diplomatic relations on March 15, 1977. Immediately, Nepal opened its Embassy in Saudi Arabia in 1978. Ever since the establishment of diplomatic relations, Nepal and Saudi Arabia have been enjoying best of relations with each other.

Despite Nepal being an only Hindu Kingdom in the world and the Saudi Arabia, Holy-land of the Muslims all over the world, bilateral relations have continued to be strengthened on the basis of five principles of peaceful co-existence, friendship and cooperation. Both the nations have expressed avowed commitments and loyalty to the principles of the United Nations Charter and work together in the United Nations as well as other international for a for the common benefit of the humankind.

Bilateral Visits His Majesty the King Gyanendra Bir Bikram Shah Dev visited Saudi Arabia on

an official visit in 1983 at the capacity of His Royal Highness Prince.

Their Late Majesties King Birendra and Queen Aishwarya also paid a visit to Saudi Arabia in 1983.

The then Minister for Labour Mr. Bal Bahadur K.C. also visited Saudi Arabia on a official visit in 1999.

After the killing of 12 Nepalese nationals by terrorists in Iraq, a high level delegation headed by then Minister for Information and Communication Dr. Mohmad Mohsin visited Saudi Arabia in 2004. The delegation included then Minister of State for Foreign Affairs Dr. Prakash Sharan Mahat and then Minister of State for Labour and Transport Management Mr. Urba Dutt Pant.

Representing His Majesty the King, His Royal Highness Crown Prince Paras visited Riyadh to express condolences on the sad demise of His Majesty King Fahd Bin Abdul Aziz al-Saud in August, 2005.

High-level visits between the two countries have greatly contributed in enhancing the relations between the two countries. People to people relations have grown steadily after the arrival of Nepalese labourers in the Kingdom of Saudi Arabia just a decade ago. Despite coming from a very starkly different social, geographical and religious as well as cultural environment, Nepalese have been welcomed by the Saudi people very much due to their dedication to work, loyalty, sincerity and integrity.

Every year a large number of Nepalese Muslim community pay a visit to the holy sites Makkaha and Madina to perform Haz pilgrimage. Government of Nepal has been facilitating to the Community so that they could perform their time-honoured pilgrimage without any hindrance. The support and cooperation received from the Saudi Government to Nepalese pilgrims is also noteworthy and has greatly contributed in further cementing the bonds of friendly relations existing between the two countries and the people.

Economic CooperationEconomic cooperation between the two countries began in 1978 when Nepal opened its Embassy in Saudi Arabia. The economic cooperation extended by the Saudi Government has been primarily focused towards upliftment of Muslim community, agricultural development and emergency assistance.

Nepal has received loan assistance from the Saudi Fund for Development for several hydroelectric projects including Marsyngndi Project. Saudi Arabia has also extended loans to the Bagmati Irrigation Project.

A great prospect of economic cooperation exists between the two countries. Trade, Commerce and promotion of tourism are yet to be explored and tapped. Saudi Arabia is a country with vast oil and mineral resources and Nepal can explore for cooperation in this sector.

The trade between Nepal and Saudi Arabia has remained in favor of Saudi Arabia. Nepal exported items of Rs. 517,616 in the period of 2003/4. The major export items included Handbags, Carpet, CD Cassette, and Woolen Shawls. At

the same period, Nepal imported items of Rs 2,547,900,875.Major imported items were Comin Seeds, Cardamom, Lubricating Oil, Antibiotics, Motor Sprits, Personal Deodorants, and Polyisobutylene. The trade deficit stood at Rs 2,547,383,259. Nepal should explore the ways to fill the gap of trade deficit by increasing export to Saudi Arabia.

NEPAL-QATAR RELATIONS

PoliticalThe diplomatic relations between Nepal and Qatar were established on 21 January 1977. Thereafter the friendly ties between the two countries have always remained cordial. The friendship between Nepal and Qatar are based on trust, understanding and cordiality. Both countries have played active role in the United Nations system and Non-Aligned Movement. At the United Nations and other international fora Nepal and Qatar hold similar views on many issues including promotion of peace and security in the world. The Qatari Ambassador based in New Delhi is concurrently accredited to the Kingdom of Nepal.

Memorandum of Understanding on Consultation Mechanism between Foreign Ministries of Government of the Kingdom of Nepal and the Government of the State of Qatar was signed on June 16, 2005.

VisitsThe exchange of visits and contacts at various levels has been instrumental in strengthening the bonds of friendship.

Private visits paid by His Late Majesty King Birendra in 1999 and by then His Late Royal Highness the Crown Prince Dipendra in January 2000 generated tremendous goodwill between Nepal and Qatar.

The then Prime Minister Girija Prasad Koirala paid a visit to Qatar in 1998 following the 12th NAM Summit held in Durban, South Africa.

After the killing of 12 Nepalese nationals by terrorists in Iraq, a high level delegation headed by then Minister for Information and Communication Dr. Mohmad Mohsin visited Qatar in 2004. The delegation included then Minister of State for Foreign Affairs Dr. Prakash Sharan Mahat and then Minister of State for Labour and Transport Management Mr. Urba Dutt Pant.

Hon. Ramesh Nath Panday, Minister for Foreign Affairs visited the State of Qatar in March 2005. On the occasion, the much-awaited Labour Agreement between Nepal and Qatar was signed.

His Majesty King Gyanendra Bir Bikram Shah Dev and Her Majesty Queen Komal Rajya Laxmi Devi Shah paid an official visit to the State of Qatar in June 13-17, 2005 to participate in the Second South Summit of G-77 in Doha. During the visit, two agreements: Memorandum of Understanding between the Ministry of Foreign Affairs of Government of Nepal and the

Ministry of Foreign Affairs of the State of Qatar and Agreement on Economic, Commercial and Technical Cooperation between Government of Nepal and the Government of the State of Qatar were signed.

His Majesty King Gyanendra and Her Majesty Queen Komal visited the State of Qatar on November 14-15, 2005.

Hon. Ramesh Nath Panday, Minister for Foreign Affairs visited the State of Qatar in November 2005.

Economic and CommerceBoth Nepal and Qatar are endowed with natural resources. There is ample scope of cooperation between the two countries in the fields of trade, investment and manpower utilization. Thousands of Nepalese labourers are working in Qatar.

The trade between Nepal and Qatar has remained in favour of Qatar. Nepal exported items of Rs 621,397 in the period of 2003/04. The major export items included garment of textile fabric and rubberized textile fabric, CD cassette, vegetables. Salt Trading Corporation has opened its office in Doha last year to export vegetables. At the same period, Nepal imported items of Rs 162,000,896. Major imported items were polyethylene, Colour Television, Polypropylene, Gold, VCRs, and Parts of VCRs. The trade deficit stood at Rs 161,379,499. Nepal should explore the ways to fill the gap of trade deficit by increasing export to Qatar.

To enhance the economic cooperation between two countries, Government of the Kingdom of Nepal and the Government of the State of Qatar have signed following agreements:

Memorandum of Understanding on Consultation Mechanism between the Ministry of Foreign Affairs of Government of Nepal and the Ministry of Foreign Affairs of the State of Qatar.

Air Services Agreement

Labour Agreement

Agreement on Economic, Commercial and Technical Cooperation

Tourism ProspectsThe number of tourists from Qatar visiting Nepal is still very small, because most of the Qataris have not known much about Nepal. The direct air service linking Kathmandu and Doha has served much in this respect. The opening of the Royal Nepalese Embassy in Doha on 11 July 2000 has further contributed positively towards promoting Nepal by disseminating relevant information to the Qatari nationals and expatriates in Qatar.

NEPAL-UNITED ARAB EMIRATES RELATIONS

PoliticalDiplomatic relations between Nepal and the UAE were established in January 1977. The two countries maintain friendly and cordial relations. As members of the UN and non-aligned movement, both countries share common views in major international issues. While Nepal has maintained the Royal Nepalese Embassy in Abu Dhabi since April 2004, the Embassy in New Delhi is accredited to Nepal.

Nepal looks forward for further strengthening its relations with the UAE. Nepal opened its Mission in view of the increasing importance of UAE in the region. Another important reason is a large community of Nepalese expatriates working in the Emirates.

Bilateral Visits His Majesty King Gyanendra and Her Majesty Queen Komal paid a friendly

visit to the United Arab Emirates from June 18-22, 2005. Their Majesties' visit to the UAE has further consolidated the cordial and friendly relations between two countries.

His Royal Highness Crown Prince Paras and Her Royal Highness Crown Princess Himani visited United Arab Emirates in April 2006.

Hon. Ramesh Nath Panday, Minister for Foreign Affairs visited United Arab Emirates in March 2005.

Then Minister for Information and Communication Dr. Mohmad Mohsin visited United Arab Emirates in 2004. The delegation included then Minister of State for Foreign Affairs Dr. Prakash Sharan Mahat and then Minister of State for Labour and Transport Management Mr. Urba Dutt Pant.

Earlier Dr. Prakash Sharan Mahat, then Minister of State for Foreign Affairs visited United Arab Emirates in 2004 representing Government of Nepal in the funeral of the Late President of the United Arab Emirates, His Highness Sheikh Zayed bin Sultan Al Nahyan, who died on November 2, 2004.

Royal Nepal Airlines started its flight to Dubai in 1985 in transit to its European destinations. It is one of the oldest foreign airlines operating in the region. At present, the Qatar Airways and the Gulf Air are catering to the needs of the travelers. There are now 20 scheduled weekly flights from the UAE to Nepal.

Tourism can be one of the potential areas in the development of Nepal-UAE relations. Nepal can become a destination for the local population who visit abroad during the summer. There is a need for increasing direct flights to Nepal keeping in view the increasing traffic. Similarly, Nepal has tremendous scope for eco-tourism. Family tourism for a longer duration is another way to attract the Emirates because of its climate. Nepal took part in the ATM in May last year and Dubai Shopping Festival this year in 2005.

Trade between the two countries is negligible and is in favour of the UAE. There is a need for enhancing trade relations in the interest of both the countries. Nepal imported copper scraps, machinery, electronic goods, transport equipment, imitation jewellery, industrial raw materials and some quantity of fertilizer and exported garments, black cardamom and refined copper wire. According to the Trade Promotion Center, in 2003/04 Nepal exported items of Rs 81,296,812 and imported of Rs 407,933,164, the trade deficit stood at Rs 326,636,352 in favour of the UAE.

With the industrial development of especially in the Dubai Emirate, there is a scope for increase in the imports from the UAE. Similarly, Nepal is exploring market for export of organic vegetables. The Salt Trading Corporation has recently opened its branch office in Dubai to expand its vegetable market in UAE. The Federation of Nepal Chamber of Commerce and Industry is also active in promoting trade relations with UAE. As Nepal has become a member of WTO recently there are possibilities to broaden the scope of imports from this country.

Remittance from the workers in UAE, estimated to be over 90,000, contributes substantially to the economy of Nepal. The new measures taken by the Nepal Rastra Bank to stop the illegal inflow of funds through Hawala/Hundi system has encouraged the Nepalese workers to remit their earnings through banks and legalized money exchange companies.

NEPAL-UNITED KINGDOM RELATIONS

PoliticalNepal established diplomatic relations with Britain in 1816. Relations between the two countries have been characterized by friendship, mutual understanding and respect for each other's national interests and aspirations. The Treaty of Sugauli (1816) provided for the exchange of accredited Ministers to each other's court. A new Treaty of Friendship between Great Britain and Nepal was signed and the status of British Representative in Kathmandu was upgraded to an Envoy. In 1934 Nepal established a legation in London. In 1947, the status of these representatives was promoted to the level of Ambassadors, Extraordinary and Plenipotentiary.

Exchange of visits at different levels and periodic consultations between the two sides have played major role in further promoting bilateral relations.

Some important visits:1. His Majesty Late King Mahendra Bir Bikram Shah Dev paid a state visit to

THE United Kingdom in October 1960.

2. Her Majesty Queen Elizabeth II, accompanied by HRH Prince Philip, the United Kingdom of Edinburgh paid a state visit to Nepal in 1960 and in 1986.

3. Their Late Majesties King Birendra Bir Bikram Shah Dev and Queen Aishworya Rajya Laxmi Devi Shah visited the United Kingdom in 1980.

4. His Late Majesty King Birendra along with Her Late Royal Highness Princess Shruti visited the United Kingdom in May 1995 on the occasion of the 50th Anniversary of the Victory of the Allies in the Second World War.

5. Diana, late Princess of Wales, paid a visit to Nepal from 2 to 6 March 1993, and visited various development projects financed by the United Kingdom.

6. His Royal Highness Prince Charles paid an official visit to Nepal from 6 to 9 February 1998.

7. Their Majesties King Gyanendra Bir Bikram Shah Dev and Queen Komal Rajya Laxmi Devi Shah paid a private visit to United Kingdom from August 27 to September 7, 2003 in connection with medical check up at Cromwell Hospital in London.

8. Prime Minister Mr. Sher Bahadur Deuba paid an official visit to the United Kingdom from 10 to 13 November 1996. Rt. Hon. Prime Minister Deuba paid again a visit to the United Kingdom from 12 to 14 May 2002.

9. H. E. Mr. Richard Spring MP, Member of the House of Commons and Shadow Minister for Foreign Affairs visited Nepal from 19 to 23 February 2003.

10.Mr. Gareth Thomas, British Parliamentary Under Secretary of State (PUSS) for International Development visited Nepal from 28 to 30 July 2004.

Economic Cooperation

The British aid to Nepal in various fields of activities started in 1961. The United Kingdom has been offering fellowships to Government of Nepal since 1950s. British volunteers are engaged in Nepal since 1964. These programmes have contributed to Nepal's need for specialized and trained manpower and also have developed important links between the people of the two countries.

The assistance of British Government generally comes through an Umbrella Agreement. The British aid to Nepal is channelled through Department for International Development (DFID). The level of DFID aid for the year 2000/2001 was to the tune of £ 18.52 million, which was increased to £ 22 million by 2002 and to £ 35 million in 2004.

The British Government has been extending its assistance particularly in different

Socio-economic fields. Britain's development assistance programme in Nepal is designed to reduce poverty and social exclusion and thus contribute to establishing the basis for a lasting peace. The programme covers work to support governance reforms; improve basic services for poor people (including basic education, health, water and sanitation, agriculture and rural infrastructure); and activities in support of peace building and conflict resolution. Assistance is projected to increase from £26 million in 2003-04 to £35 million in 2004-05 and £47 million in 2005-06.

The United Kingdom has assisted Nepal in the areas of agriculture, transport, local development, communication, education, administration, health, water supply and forestry

Technical cooperation agreement to strengthen the traditional cooperation between Nepal and the United Kingdom was signed on 31st May 1994. This agreement provides for the roles and responsibilities of the two governments regarding the British Technical Cooperation and the British Council activities.

The DFID and its office in Nepal

The Department for International Development (DFID) is the British Government Department responsible for promoting development with emphasis on the reduction of poverty in the developing countries. The DFID opened its office in Kathmandu in March 1999.

International Conference on Nepal in London and Follow up Meeting in Kathmandu

The British Government organized International Conference on Nepal in London on 19-20 June 2002. The meeting expressed its profound concern at the Maoist insurgency in the country and reaffirmed the solidarity with the government's position and its action to protecting lives and property of its citizens. The meeting also reaffirmed the commitment of the international community to provide development support to Nepal.

British Parliamentary Under Secretary of State His Excellency Mr. Mike O'Brien paid a working visit to Nepal on 9-11 October 2002 to chair the follow up of the London meeting held in Kathmandu on 11 October 2002.

Appointment of Sir Jeffery Russell James as Special Representative of British Government to NepalThe British Government appointed Sir Jeffrey Russell James as the United Kingdom's Special Representative for Nepal from February 24, 2003. In an announcement made by the Minister for Foreign and Commonwealth Affairs of the United Kingdom, the British Government committed to assisting Nepal and identifying ways to help resolve her problems, including putting an end to a

conflict that has resulted in immense suffering for the Nepalese people. The statement further stated that Sir Jeffrey's role would be to provide a strong focal point for the United Kingdom policy towards Nepal and in particular to coordinate the United Kingdom and international efforts in support of the cease-fire and the peace process.

After his appointment, Sir Jeffrey visited Nepal several times and called on high-ranking officials of Government of Nepal and discussed about the political and security situations of Nepal. His visited Nepal last time as Special Representative from 24 April 2005 to May 4, 2005.

Visit of Mr. Gareth Thomas, British Parliamentary Under Secretary of State for DFID

Mr. Gareth Thomas, British Parliamentary Under Secretary of State (PUSS) for Department for International Development visited Nepal from 28 to 30 July 2004. The purpose of his visit to discuss the development and political situation in Nepal with high ranking officials of Government of Nepal/Nepal as well as to give details of the United Kingdom support for education and health sector programme and to meet DFID staff in Nepal.

Explaining the remarkable boost in British government aid to Nepal in recent months, Thomas said that the British government thinks that normal development activities should not be disturbed even in a conflict situation. "This is the reason why we have made a remarkable increment in our assistance to Nepal in recent years," he said, adding that since poor and rural people are the worst hit by the ongoing conflict, British aid has been directed to addressing the problems of those people.

He also stressed that one of the objectives of the increased assistance is to extend support to efforts to restore peace and to accelerate development activities in the country, and underlined that, "Concerned parties should understand this purpose." Mr. Thomas further said that British government is particularly interested in the country's long-term and sustainable development, explaining, "That is why our assistance has been mainly focused on the education and health sectors in recent years."

He also expressed his delight over the successes of the programs and projects running under British aid, particularly in rural areas, and said that most of the programs have been successful in achieving their goals.

Visit of Mr. Douglas Alexander, Ministry of State for Foreign and Commonwealth Office

H. E. Mr. Douglas Alexander, Minister of State of the Foreign and Commonwealth Office of the United Kingdom visited Nepal from 8 to 10 November 2004. The purpose of his visit was to familiarise himself with the political and economic situation in Nepal, including through meetings with high level official of Government of Nepal and leading political figures, and also visits to development projects funded by the British Government.

While in Nepal, H. E. Mr. Alexander said, "Our two countries have close ties. The United Kingdom has the longest history of representation in Nepal of any foreign state; many prominent Nepalis have studied and lived in the United Kingdom; we have one of the largest bilateral development assistance programmes in the country and we are all familiar with the formidable reputation of the Gurkhas and of the valuable contribution they have long made to the British army."

Referring to bilateral trade and investment, Mr. Alexander stated that Nepal and the the United Kingdom are yet to tap trade potentials and opportunities.

British Gurkhas

The recruitment of Gurkha Army was organised by way of the Tripartite Agreement of 1947 among Nepal, India and the United Kingdom. Currently the strength of the Gurkhas in the British Army is about 3,500.

British Gurkhas is a fully integrated part of the British Armed Forces. It constitutes an important element in Nepal-Britain relations. In recognition of their distinguished service, the British Gurkhas servicemen from Nepal has won 13 Victoria Crosses (VC), the highest British gallantry honour.

BGN administers the Gurkhas Welfare Scheme through 24 of its Area Welfare Centres (AWCs) located in areas where ex-servicemen live. Welfare assistance includes grants to relieve hardships, family pensions, and scholarship for children, medical aid and support for projects such as building potable water systems, bridges and schools.

Compensation for Gurkha prisoners

The British Government set up a separate office in Kathmandu in March 2004 to receive applications from the Gurkhas who were held prisoners by Japan during the Second World War. The applications were sought following the decision of

the British High Court to award Sterling Pound 10,000 to such prisoners as compensation. By March 2005, the British Embassy made an Ex-gratia payment of £ 10,000.00 to those applicants whose applications were processed.

Granting of Permanent Residency to Ex-British Gurkhas

British Government announced on 29 September 2004 that the immigration rules would be changed to let the former British Gurkha soldiers to stay in Britain. Gurkha soldiers who have served at least four years with the British Army and were discharged after July 1, 1997, the date at which the brigade's headquarters was moved to the United Kingdom, will be eligible to apply to citizenship. Thus a large number of Gurkha soldiers who want to settle in the United Kingdom with their families would be allowed remain permanently in the United Kingdom.

Business and Commercials Relations

The United Kingdom occupies among the top ten countries in Nepal's bilateral trade. Major Nepalese exports to the United Kingdom are goatskin, leather goods, Nepalese paper and paper products, woollen carpets, handicrafts, ready-made garments, silverware and jewellery. Likewise, major imports from the United Kingdom are copper scrap, hard drinks, cosmetics, medicine and medical equipment, textiles, copper wire rod, machinery and parts, aircraft and spare parts, scientific research equipment, office equipment and stationery.

An agreement on promotion and protection of investment between Nepal and the United Kingdom was signed on March 2, 1993. There are some British joint ventures in the areas of hotel, travel & trekking, tea production, garments, biotechnology and consultancy.

Tourism

A sizeable number of British tourists come to Nepal every year for trekking and mountaineering and other leisurely activities. A total number of 24,644 British tourists visited Nepal in the year 2004.

NEPAL AND UN

Nepal's role in the UN peacekeeping operations

Nepal has been regularly contributing to the UN Peacekeeping Operations since 1958. Out of the total 61 UN Peacekeeping Operations authorized by the United Nations so far, Nepal has participated in as many as 29 such Operations with the contribution of 50,167 Nepalese Peacekeepers. Nepalese Peacekeepers have won acclaim for their sterling performances in guarding peace in the difficult trouble spots of the world. 49 Nepalese peacekeepers have laid their lives in line of their duties for serving the cause of peace in nook and corner of the world and 48 have suffered serious injuries in the process. Inclusion of a Nepalese peacekeeper Mr. Ratna Gurung in the Entourage of the UN team that went to receive the Nobel Peace Prize in Oslo in 1988 duly recognizes Nepal's contribution to the maintenance of international peace and security. Gen. Krishna Narayan Singh Thapa and Gen. Victory Rana of the Royal Nepalese Army served as Force Commanders of the various UN Peacekeeping Operations. Gen. Balananda Sharma is currently serving as the Force Commander of the United Nations Truce Supervision Organization (UNTSO) in Israel-Syria Border.

Of the current 17 UN Peacekeeping Operations deployed around the world in February 2006, Nepal has deployed 3,485 peacekeepers. Nepal was ranked 5th largest troop contributing country in March 2006. Nepal also has a Stand-by arrangement with the United Nations for 2000 troops. Nepal also serves as a member of the Special Committee on Peacekeeping Operations.

Participation of Royal Nepal Army in various UN MissionsAs of February 2006S.N.

Year Missions CountryParticipation

11973-1974

UNEFMIDDLE EAST

571

21977-2002

UNIFIL LEBANON 28,067

31992-1996

UNPROFORYUGOSLAVIA

6,342

41993-1994

UNOSOM SOMALIA 622

51994-1995

UNHIM HAITI 820

61991-1994

UNGCI IRAQ 200

72000-2002

UNTAET/UNMISET

EAST TIMOR

775

82001-2004

UNAMSILSIERRA LEONE

4,000

92003- Till now

MONUC CONGO 4,532

102003- Till now

UNMIL LIBERIA 160

112004- Till now

ONUB BURUNDI 1,860

122004- Till now

MINUSTAH HAITI 1,500

132005- Till now

UNMIS SUDAN 200

TOTAL CONTINGENT PARTICIPATION 49,649

MILOBS, UNHQ/MSN HQ STAFF, LIAISON/TRG OFFICER IN VARIOUS MISSIONS

518

TOTAL PARTICIPATION 50,167

Death on duty in various UN PKO Missions 49

Disabled on duty in various UN PKO Missions 48

Participation of Nepal Police as CIVPOL and FPU Personnelin various UN Missions

S.N. Year Missions CountryParticipation

1 199 UNPROFOR Former 245

2 Yugoslavia

21996

UNTAESFormer Slovania

44

31996

UNIPTF/UNMIBHFormer Bosnia

273

41999

UNMIKFormer Kosovo

201

51992

UNTAC Combodia 86

61994

ONUMOZMozambique

51

71995

UNMIH Haiti 55

81995

UNICTYThe Netherlands

2

91995

UNICTR Rwanda 3

101995

UNGCI Iraq 85

111999

UNTAET/UNMISET

East Timor 132

122000

UNAMSILSierra Leone

29

132001

P-4 UN DPKO 1

142001

New YorkUN Afg. Desk

1

152001

MONUC Congo 2

162002

Adv. SRSG Afghanistan 3

172003

Advisor Liberia 23

182004

MINUSTAH Haiti 4

192004

UNMIS Sudan 4

202004

MINUSTAHHaiti as FPU

250

Total 1,494

NEPAL AND UN

Nepal and the United Nations (1955-2006)

Nepal-UN Relations

Since her joining the United Nations on 14 December 1955, Nepal has reposed her abiding faith in the principles and purposes enshrined in the UN Charter. Nepal attaches great importance to the centrality of the United Nations in the multilateral affairs, especially in the maintenance of international peace and security and in promoting international cooperation for the economic and social development. The Constitution of the Kingdom of Nepal, 1990 states that the UN Charter shall be one of the five guiding principles of Nepalese foreign policy.

Nepal firmly believes that UN should play a central role in addressing the emerging issues of 21st century such as increasing threat of terrorism, disarmament, human rights, sustainable development, and poverty alleviation besides its primary responsibility of promoting collective security.

Peace and Security

Promotion of international peace and security assumes paramount importance of the United Nations. Nepal has been consistently supporting the UN efforts in the maintenance of international peace and security through her continuous participation in the UN Peacekeeping operations since 1958. Nepalese peacekeepers have won applauses for their sterling performances while keeping peace in difficult conflict zones around the world. So far Nepal has deployed 50,167 troops in various peacekeeping missions under the aegis of the United Nations. About 50 security personnel have laid down their lives in line of duty for the service of the humanity. As of February 2006, Nepal's contribution remains at a strength of 3,485 personnel in 12 peacekeeping operations, despite our own difficult security situation at home.

Terrorism

Of late, the world has experienced increasing menace of terrorism. The escalation of grisly terrorist attacks worldwide has brought home the grim reality that terrorism knows no geographical boundaries and basic human values. Nepal unequivocally condemns terrorism in all its forms and manifestations. Nepal stresses the need for concerted international response to terrorism through enhanced level of coordination, cooperation and support.Nepal supports international efforts to convene an international conference to formulate a joint

response of the international community to fight terrorism in all its forms and manifestations. Nepal also seeks special considerations of the needs to the countries affected by terrorism.

Disarmament

Nepal stands for general and complete disarmament of all weapons of mass destruction including nuclear, chemical, and biological and others. As a party to Nuclear Non-proliferation Treaty (NPT) and signatory to Comprehensive Test Ban Treaty (CTBT), Nepal supports the nuclear weapons free zones wherever they are established. Nepal has also supported the confidence building measures through the establishment of regional centres for peace and disarmament in different parts of the world. In this regard, Nepal has offered to host the UN Regional Centre for Peace and Disarmament in Asia and the Pacific, which was established in 1989 and has been functioning from New York. The Government has expressed its reaffirmation to relocate the Centre from New York to Kathmandu as soon as possible through the signing of host country agreement with the UN.

Human Rights

Nepal is committed to the promotion and protection of human rights as contained in the Universal Declaration of Human Rights and other international human rights instruments to which Nepal is a party. Nepal holds the view that all human rights are indivisible, interdependent and interrelated and as such they all deserve equal emphasis. As a party to 16 human rights instruments and signatory to three others, Government of Nelpal announced its reaffirmation on the implementation of human rights and international humanitarian law on 26 March 2004. Constituted under the Paris Principles as an independent and statutory body, National Human Rights Commission (NHRC) is empowered to monitor and investigate human rights situation in the country. In April 2005, Government of Nepal signed an agreement with the UN High Commissioner for Human Rights for the establishment of the High Commissioner's Office in Nepal. OHCHR-Nepal has already commenced its operations. A three-year national human rights action plan is under implementation. Human Rights Cells have been established in all the security agencies. Security personnel mobilized to maintain peace and security in the country are well sensitized to protect human rights while fighting terrorism.

Nepal has always cooperated with the Commission on Human Rights special procedures mandate holders and has, in principle, extended open invitations to them to visit Nepal. In this context, Ms. Louise Arbour, UN High Commissioner

for Human Rights, paid a visit to Nepal in January 2005. A team consisting of the Chairman of the Working Group on Enforced or Involuntary Disappearances (WGEID) Prof. Stephen J. Toope visited Nepal from 6-14 December 2004. Prof. Walter Kaelin, UN Secretary General's Representative on the Human Rights of Internally Displaced Persons (IDPs) and Mr. Dennis McNamara, Director, UN's Internal Displacement Division visited Nepal in April 2005. The Special Rapporteur on Torture Mr. Manfred Nowak visited Nepal in September 2005.

Development Issues Nepal attaches high priority to the implementation of Millennium Declaration especially relating to halving of the proportion of people living in extreme poverty and special needs of the least developed countries. Nepal has underlined the need to redouble the international efforts to realize these goals by effective implementation of internationally agreed programme of actions. Nepal articulates in regional and international forums the development challenges of fragile and vulnerable countries with special challenges emanating from natural disasters and conflict.

North-South Dialogue and South-South Cooperation Nepal is always supportive of the idea that there should be mutual cooperation as well as mutual understanding on international issues between the North and South. We have always upheld the view that North should enhance its financial and technical assistance to the South, in order to alleviate their difficulties. Nepal has emphasized the need for increasing South-South cooperation. Nepal reiterates that South-South cooperation should be promoted through the sharing of development experience, transfer of technology and exploiting latent synergies and complementarities among Non-Aligned countries. Nepal also urges the developed countries to fulfill their commitment of providing 0.15 -0.20 of ODA to the least developed countries as reaffirmed in the Brussels Programme of Action adopted at the Third UN Conference on the Least Developed Countries, 2001.

International Trade and Debt Relief Measures

Nepal has followed the policies of economic liberalization, privatization and deregulation of her economy. Nepal is the first LDC to accede to the WTO in April 2004. WTO membership has provided Nepal with the opportunities to integrate its economy in global economic system for greater export potentials. The immediate challenge for a country like ours is how to make our products more competitive. Nepal, therefore, calls for supportive measures for the

marginalized countries, including debt relief measures; increased ODA and duty free and quota free access for the products of LDC's.

Nepal supports that the new global trading regime must be a rule based giving equitable benefits to the developed and developing countries alike. In view of the ever increasing debt-burden of the LDCs and LLDCs, Nepal calls for its easing and where possible to writing-off such debts. Nepal supports the Highly Indebted Poor Countries (HIPC) initiatives and believes that this initiative should be extended to the LDC's as well. Nepal also notes with concern the continuing decline of ODA and urges the developed countries to fulfill the agreed target of 0.7% of GNP as ODA to developing countries and 0.15 to 0.2. % to LDC's.

Least Developed Countries

Nepal participated in all three Conferences on the Least Developed Countries (Paris, 1981 and 1991, and Brussels, 2001) and urged for the effective partnership between LDCs and their development partners in order to achieve the goals set by the Millennium Summit for development and poverty reduction. Nepal has also taken the position that debt burden of the LDCs should be written off; the commitments of donors to allocate 0.15 - 0.20 percent of GNP as ODA to LDCs should be fulfilled; and the duty-free and quota free access be given to the markets of the developed countries for the exports of LDCs. Nepal supports the Brussels Programme of Action on LDCs, which has urged the development partners to provide LDCs with more aid, wider debt relief and improved market access.

Environmental Issues

Nepal participated in the World Conference on Environment and Development held in Rio de Janeiro in 1992 and in the Summit on Sustainable Development held in Johannesburg in September 2002. Nepal is committed to implementing the strategy for sustainable development focusing on poverty alleviation and believes that the burden of protecting the world's environment should be shared equitably between the developed and the developing countries and that there should be flow of resources commensurate with the consumption and production patterns. Nepal has formulated and implemented Poverty alleviation and Sustainable Development Strategy with a view to protecting the environment while carrying out development activities. Nepal deposited the Instrument of Accession on 16 September 2005 on the sidelines of the 60th UN General Assembly, and became a party to the Kyoto Protocol on Climate Change.

UN Reforms and Restructuring Nepal supports the ongoing efforts of the international community to introduce timely reforms and necessary restructuring through preserving and promoting the centrality and sanctity of the principles and purposes enshrined in the UN

Charter. The reform plan should give more emphasis on strengthening the role of the UN in promoting international cooperation for the economic and social development of the Member States, particularly the developing countries. Nepal supports the need of reforming and restructuring the UN in view of the increase in total membership of the UN to 191 at present from 51 members in 1945. Nepal supports the measures for revitalizing the work of the UN General Assembly.

Security Council: Nepal believes that there is a need to reform the Security Council and it should be done on the basis of equal geographical distribution while giving priority to enhancing the number of representation of the developing countries in the Security Council. Nepal also supports measures to improving the Security Council's working method, to increasing efficiency and transparency of its work and ensuring acceptance of opinions and views from those countries, which are not members of the Security Council. As the reform of the Security Council involves vital stakes of all member states, extensive and intensive deliberations are required. General Assembly: Nepal has consistently maintained that the UN General Assembly, as the UN's principal deliberative body needs to be further strengthened. While Nepal supports the proposal on the working methods of the Assembly by streamlining the agenda, it should not compromise its key role as a policy-making and decision-making organ of the UN.

Economic and Social Council: Nepal attaches great importance to the Council as a principal body for coordination, policy review, policy dialogue on the issues of economic and social development and stands strengthening the Council for the effective implementation of the UN's development agenda, including the MDGs. Human Rights Council: As a party to major human rights instruments, Nepal is committed to its international obligations on human rights. It is our firm belief that all human rights are indivisible, interdependent and interrelated and as such they all deserve equal emphasis. Nepal played a supportive role to the establishment of a Human Rights Council for the progressive enjoyment of human rights by all. We firmly hold the view that the mechanism of the Council should be representative and inclusive to represent the various geographic regions and to accommodate the genuine concerns of developing countries. It should be working in a way to overcome criticisms and difficulties faced by the earstwhile Human Rights Commission.

The main objective of the Human Rights Council is to serve as the UN forum for a dialogue and cooperation on human rights. A subsidiary body of the General Assembly, it consists of 47 UN members to be elected by the GA by absolute majority. Among the members 13 are to be selected from the Asian region. The membership is subject to the Council's new universal review mechanism during the term of membership. As a permanent body based in Geneva, the Council will hold at least 3 sessions a year.

Peacebuilding Commission: Nepal has been working with the UN in the maintenance of international peace and security through her continuous

participation in the UN Peacekeeping operations since 1958. Nepal supported the General Assembly's decision to create an inter-governmental Peacebuilding Commission, which could significantly contribute to the UN efforts for sustained recovery and institutions building in the countries emerging from conflict. The Commission aims at post-conflict recovery in countries emerging from conflict by assembling international resources to devise integrated strategies. The Organizational Committee of the Commission is widely representative as it comprises, in addition to SC permanent members, 5 top financial contributors, 5 top troop contributing countries and the countries experiencing post-conflict recovery. As one of the top 10 troops contributing countries in the UN peace keeping missions, Nepal feels that the membership of the Commission should have equitable geographical distribution and balanced representation among the troops contributing countries.

Landmark Events

Nepal obtained the membership of the United Nations on 14 December 1955 at the 10th Session of the UN General Assembly.

Nepal's First Delegation to the United Nations was led by the then Foreign Minister Mr. Chuda Prasad Sharma in 1956, who addressed the Eleventh United Nations General Assembly in 1956 after becoming the member of the Organization.

Nepal had the singular privilege to lead the Commission of Investigation into the Conditions and Circumstances resulting in the tragic death of the then Secretary-General of the United Nations Mr. Dag Hammarskjold and of Members of the Party accompanying him, who were killed in a Plane Crash at Ndola in Lusaka in 1961. H.E. Mr. Rishikesh Shahaa the then Leader of the Nepalese Delegation to the 16th Session of the UN General Assembly, was entrusted to take this onerous responsibility.

His Late Majesty King Mahendra Bir Bikram Shah led the Nepalese Delegation to the Twenty-Second Session of the UN General Assembly in 1967. His Late Majesty the King addressed the 22nd Plenary Meeting of the UNGA on 6 November 1967.

The Nepalese delegations to the UN have been led many times by the Head of the Government. Prime Ministers Mr. Bishweshwar Prasad Koirala, Krishna Prasad Bhattarai and Girija Prasad Koirala addressed the United Nations General Assemblies in 1960, 1993 and 2000, 1995 and 1999 respectively.

The Hon. Minister for Foreign Affairs Mr. Ramesh Nath Pande led the Nepalese Delegation to the High-Level Plenary Meeting of the 60th Session of the UN General Assembly in September this year.

Nepal served as a member of the Special Committee on the South African Government's Policies of Apartheid (Popularly known as Anti-Apartheid Committee) since 1962 till Nepal was elected Vice-Chairman of the Committee in 1969. The then Permanent Representative of the Kingdom of Nepal to the United Nations continued to contribute as the Vice-Chairman of the Committee till its dissolution in 1994 following the dismantling of apartheid regime in South Africa and installation of popularly elected President Mr. Nelson Mandela.

Candidature for the UN Security Council: Nepal was twice elected as non-permanent member of the powerful UN Security Council during 1969-70 and 1988-89. Nepal has again presented her candidature to the non-permanent member of the UN Security Council for the period 2007-08.

Visits of the UN Secretary Generals: Mr. U Thant, Mr. Kurt Waldheim, Mr. Javier Perez de Cueller and Mr. Kofi Annan visited Nepal as Secretaries-General of the United Nations during their stints at the United Nations. Mr. Lakhdar Brahimi, Special Advisor to the UN Secretary-General of the United Nations, visited Nepal from 10 to 15 July 2005.

Dhaka Declaration Thirteenth SAARC Summit Dhaka13 November 2005

The Prime Minister of the People's Republic of Bangladesh, Her Excellency Begum Khaleda Zia; the Prime Minister of the Kingdom of Bhutan, His Excellency Lyonpo Sangay Ngedup; the Prime Minister of the Republic of India, His Excellency Dr. Manmohan Singh; the President of the Republic of Maldives, His Excellency Mr. Maumoon Abdul Gayoom; the King of Nepal, His Majesty Gyanendra Bir Bikram Shah Dev; the Prime Minister of the Islamic Republic of Pakistan, His Excellency Mr. Shaukat Aziz; and, the President of the Democratic Socialist Republic of Sri Lanka, Her Excellency Mrs. Chandrika Bandaranaike Kumaratunga met at the Thirteenth Summit meeting of the South Asian Association for Regional Cooperation (SAARC) in Dhaka, Bangladesh on 12 - 13 November 2005.

Regional cooperation

1. The Heads of State or Government noted that the Thirteenth Summit was taking place at an important moment in the evolution of South Asia when SAARC stood at the threshold of a new decade of its existence. They agreed that the Summit provided a unique opportunity to consolidate the gains made in regional cooperation during its first two decades and to chart a forward-looking strategy to promote effective cooperation at all

levels to realize the objectives and principles set out in the Charter of the Association.

2. The Heads of State or Government noted that cooperation and partnership within the framework of SAARC is based on the sound foundation of shared values, beliefs and aspirations. The objectives and goals of SAARC, they affirmed, were of continuing relevance and importance to all Member States. The dynamics of recent political and economic changes in South Asia and the world highlighted the importance of, and the compelling logic for, a more vibrant and effective process of constructive regional cooperation. They emphasized their commitment to making such cooperation an enduring feature and thus contribute to the region's peace, progress and stability.

3. The Heads of State or Government noted that SAARC has evolved in a positive direction during the first two decades of its existence and that its agenda encompassed concerns and areas vital for the fulfillment of the Charter objectives of promoting the welfare of the peoples of South Asia, accelerating economic growth, social progress, cultural development and strengthening collective self-reliance among the countries of South Asia. They stressed that realization of these objectives not only called for continued and serious result-oriented efforts but also for consistent endeavours to translate pledges and commitments into concrete actions, regional initiatives and projects. They reiterated their commitment to making SAARC an effective instrument for cooperation, which will visibly improve the quality of life of millions in South Asia.

4. The Heads of State or Government emphasized that efforts must continue to free South Asia from poverty, hunger and other forms of deprivation and social injustice which present a daunting challenge. Member States expressed determination to work towards significantly accelerating regional cooperation in economic areas. The main emphasis will be to secure a wider economic space, so that benefits and opportunities offered therein can be shared by all, and that the true economic potential of South Asia can be fully realized. Efforts will be made to create dynamic complementarities in the development of human resources and capacity of Member States to address their common challenges. They underlined the need to accelerate regional cooperation through all possible means and mechanisms, including exchange of best practices in various fields in the Member States.

5. The Heads of State or Government reiterated that the peoples of South Asia are the real source of strength and driving force for SAARC and resolved to make regional cooperation more responsive to their hopes and aspirations. They agreed that the Association should broaden its engagement with the civil society organizations, professional groups, and entrepreneurs. Member States should also strive to promote and assert their South Asian identity, encourage greater people-to-people contact and draw strength from their shared cultural heritage.

6. The Heads of State or Government emphasized the importance of initiating project cooperation under the SAARC auspices. They encouraged Member States to undertake projects, as per existing provisions of the Charter. These projects may pertain to economic and social sectors, including Human Resource Development and Poverty Alleviation. These may be undertaken, where required, with financial or technical assistance, from International Financial Institutions (IFIs) or, UN Funds and Programmes or, any extra-regional State, as appropriate.

Poverty Alleviation

7. The Heads of State or Government decided to declare the decade of 2006-2015 as the SAARC Decade of Poverty Alleviation. During the Decade, endeavours ? both at the national and regional level - will continue to be made with a sense of commitment and urgency to free South Asia from poverty.

8. The Heads of State or Government appreciated the valuable work of the Independent South Asian Commission on Poverty Alleviation (ISACPA). They also endorsed the SAARC Development Goals (SDGs), as recommended by the Commission, and called for follow-up and implementation of the Plan of Action on Poverty Alleviation, adopted by the 12th SAARC Summit. They entrusted the ISACPA to continue its advisory and advocacy role in this regard. They endorsed the priorities for action identified in the Report of ISACPA adopted by the Twelfth SAARC Summit. They agreed that these priorities would be duly taken into account while working out the elements for regional initiatives in this vital area. They decided to focus on formulation and implementation of concrete regional programmes and projects as well as forging partnerships among all stakeholders.

9. Underlining the need for an exclusive forum for focused and comprehensive examination of poverty related issues, the Heads of State / Government decided to replace the three-tier mechanism on poverty alleviation by a two-tier one, comprising the Ministers and the Secretaries dealing with Poverty Alleviation at the national level.

Funding Mechanisms

10.The Heads of State or Government decided to establish a SAARC Poverty Alleviation Fund (SPAF) with contributions both voluntary and/or, assessed, as may be agreed. They called upon the Finance Ministers to formulate recommendations on the operational modalities of the Fund, taking into consideration the outcome of the Meeting of the Financial Experts. In this regard, they welcomed the offer of Pakistan to host the next meeting of the Finance Ministers. The operational modalities of the SPAF shall be decided by the Finance/ Planning Ministers. They agreed that the SPAF shall function within the SADF to be reconstituted, as

SAARC Development Fund (SDF), to serve as the umbrella financial institution for all SAARC projects and programmes and comprise three Windows namely Social Window, Infrastructure Window and Economic Window with a Permanent Secretariat.

11.The Heads of State or Government decided that Finance Ministers should meet within the first quarter after every Summit and also on the sidelines of the World Bank and ADB annual meetings, to take stock of macro-economic developments and outlook for South Asia, achievement of SAARC Development Goals as co-related to Millennium Development Goals (MDGs) and to assess the investment climate, foreign capital inflows, financial sector reforms and other areas of cooperation.

Advancing Economic Cooperation

12.The Heads of State or Government stressed that accelerating cooperation in the core economic areas was of vital importance for the realization of Charter objectives and also for making South Asia truly vibrant, dynamic and secure in its robust progress. They reaffirmed their commitment to accelerate cooperation in the economic and commercial fields, especially in the energy sector. They noted the progress in the negotiations on outstanding issues and directed early finalization of all the Annexes ensuring entry into force of the SAFTA Agreement as agreed, with effect from 1 January 2006.

13.The Heads of State or Government stressed the importance of the entry into force of the SAFTA Agreement on the scheduled date i.e. 1 January 2006. The launching of SAFTA would mark an important milestone on the road to a South Asian Economic Union. They directed that the negotiations on the outstanding issues under the Agreement should be completed by end November 2005. They further directed that the necessary national procedures should be completed in time to facilitate the operationalisation of the Agreement.

14.They reiterated the need to strengthen transportation and communication links across the region for accelerated and balanced economic growth. They directed further measures aimed at trade liberalisation, as provided for in the SAFTA Agreement. They noted with satisfaction the ongoing SAARC Regional Multimodal Transport Study to enhance transport connectivity among the Member States. The Heads of State or Government agreed to undertake trade facilitation measures, including transit among SAARC countries, on the basis of understanding among concerned countries, for enhancing intra-regional trade and other economic activities. They noted the Indian proposal in this regard. They agreed to study the proposal by India for daily air service facility by designated airlines, on a reciprocal basis and without prejudice to existing rights, to all the SAARC Member States and also the proposal to extend fifth freedom rights to designated airlines from the Member States, both intermediate and beyond, within the SAARC region on a reciprocal basis.

15.The Heads of State or Government recognized the need to take the process of regional economic integration further by expanding the scope of SAFTA to include trade in services, enhanced investment and harmonized standards.

16.The Heads of State or Government welcomed the signing of the following Agreements during the thirteenth SAARC Summit:

The Agreement on Mutual Administrative Assistance in Customs Matters The Agreement on the Establishment of SAARC Arbitration Council The Limited Agreement on Avoidance of Double Taxation and Mutual Administrative Assistance in Tax Matters 18. They emphasized the need for parallel initiatives for dismantling of non-tariff and para-tariff barriers. In this context, they called for expeditious action on conclusion of agreements on mutual recognition of standards, testing and measurements with a view to facilitating intra-regional trade. They recognized the potential of trade in services which have expanded rapidly at the informal level. They called for a study to see how services could be integrated into the SAFTA process.

17.The Heads of State or Government decided to encourage, where appropriate, trade-creating investment in the Member States. They stressed the need for closer regional cooperation in the field of Information and Communication Technologies (ICT), including Tele-communications.

18.The Heads of State or Government welcomed the Joint Statement of the First SAARC Energy Ministers meeting in October 2005 in Islamabad. They agreed to the recommendation to establish the SAARC Energy Centre in Islamabad; to promote development of energy resources, including hydropower; and energy trade in the region; to develop renewable and alternative energy resources; and promote energy efficiency and conservation in the region. They underlined the need to constitute a South Asian Energy Dialogue process, involving officials, experts, academics, environmentalists and NGOs, to recommend measures to tap potentials of cooperation in energy sector to provide inputs to the Working Group on Energy.

19.The Heads of State or Government noted the proposal for the establishment of a Regional Food Bank proposed by India and agreed to examine the proposal.

20.With regard to paragraph 15 of the Council of Ministers Report, the Heads of State or Government noted the offer of Nepal to host the Regional Support Unit.

South Asia's Social Challenges

21.The Heads of State or Government reiterated their commitment to take initiatives at national as well as regional levels for achieving the specific objectives contained in the SAARC Social Charter. They recognized that

realization of these objectives is crucial to enable SAARC to meet the hopes and aspirations of the common peoples of South Asia and visibly improve the quality of their lives. They emphasized that in outlining future actions in this regard national implementation efforts should be complemented by regional programmes and projects in areas requiring collective regional response. They appreciated the establishment of National Coordination Committees (NCCs) in all Member States, decided on annual meetings of the Heads of NCCs and directed convening of their first meeting at the earliest for follow-up and implementation of the Social Charter. In this regard, they noted the proposal from the Maldives to convene an experts' group meeting on establishing a Civil Society Resource Centre.

22.The Heads of State or Government called upon the Member States to expeditiously complete the process of preparing their national strategy and plan of action. They also emphasized that national implementation efforts should be complemented by regional projects and programmes. In this context, they directed that regional projects, particularly in health and poverty alleviation, should be initiated.

23.The Heads of State or Government reiterated their pledge to continue to work in the next decade and beyond to address the formidable challenges faced by women and children, especially the girl child. They noted that sustained efforts were needed on the part of the Member States not only to free them from all types of deprivation but also to make them full partners and beneficiaries of South Asian progress and development. In this context, they decided that a mid-term review of the progress in realizing the objectives of SAARC Decade on the Rights of the Child (2001 ? 2010) should be undertaken in 2006.

24.The Heads of State or Government affirmed their strong resolve to continue to work together to address the problem posed by trafficking in women and children. They expressed satisfaction at the ratification of the SAARC Conventions relating to Trafficking in Women and Children and Promotion of Child Welfare by all Member States and called for effective measures for their early implementation. They noted that the civil society organizations and the media have an important role to play in raising awareness of the degrading and inhuman treatment faced by the victims of trafficking. They encouraged them to continue their constructive role in this regard. They stressed that law enforcement agencies in the Member States should also coordinate and strengthen their efforts to address this problem effectively.

25.The Heads of State or Government noted the achievements of the Member States during recent years in the area of primary education through sustained efforts and adoption of country specific innovative approaches. They recognized that regional initiatives in this particular area might focus on sharing of experiences and best practices. They also called for optimal utilization of resources and identification of strategic

interventions in the area of training, management and performance evaluation of these programmes so as to ensure sustainability, coverage and quality of education imparted and services provided. They stressed that freeing South Asia from the scourge of illiteracy is a major objective of SAARC in the third decade of its activities. They called for effective measures to realize the SDGs, in particular universal primary education in the context of pursuing the Millennium Development Goals.

26.The Heads of State or Government stressed that to meet the challenges of the twenty-first century Member States must make important strides in the areas of science, technology and higher education. They decided to give priority attention to encourage regional cooperation in these areas to derive benefits from the synergy of collective, well-planned and focused initiatives undertaken by Member States. They directed that a SAARC Plan of Action for Science, ICT and Technology be elaborated for consideration during a Meeting of SAARC Science, ICT and Technology Ministers to be convened as soon as possible. They noted the offer of India to establish a South Asian University and agreed to examine this matter further.

27.The Heads of State or Government recognized the need to collaborate on preparedness for addressing health emergencies, including prevention and control of pandemics like avian influenza, as these pose a major global threat with impact on health, trade and tourism involving human mobility. They emphasized on the need to develop a regional strategy for such emergencies as soon as possible; and identify and strengthen collaboration within and beyond the region and establish links with other regional organizations. They called for early establishment of a SAARC Health Surveillance Centre and a Rapid Deployment Health Response System, to deal with emerging and re-emerging diseases.

28.The Heads of State or Government welcomed the preparation of a strategy for collective SAARC response to prevent the spread of HIV/AIDS. They noted that regional response in this regard should be further enhanced to eliminate this dreadful disease from South Asia. In this regard, they emphasized the importance of early implementation of the Regional Strategy of HIV/AIDS. At the same time, they underscored the need for increasing cooperation to develop regional strategies for the prevention and treatment of Dengue, Malaria and other infectious or communicable diseases constituting major public health concerns.

29.The Heads of State or Government agreed to launch a regional initiative with regard to basic healthcare services and sanitation in the rural areas and encouraged exchange of experience and best practices within the region. They called for expediting elaboration of a SAARC Plan of Action for cooperation in medical expertise and pharmaceuticals, as well as traditional medicine, and availing affordable pharmaceuticals produced in the region, harmonization of standards and certification procedures and production of affordable medicines. They also agreed that steps should be

taken to promote traditional medicine and to protect the intellectual property rights related to them as a matter of regional priority.

South Asia's Environmental Challenges and Natural Disasters

30.They further decided to consider the modalities for having a Regional Environment Treaty in furthering environmental cooperation among the SAARC Member States. They expressed deep concern at the continuing degradation of environment and reaffirmed the importance of concerted action in the protection and preservation of environment. While expressing satisfaction at the progress in implementation of the SAARC Environment Action Plan, the Leaders welcomed the decision of the Council of Ministers to establish a SAARC Forestry Centre in Bhutan. They emphasized on the need for the Centre to have a coordinating role in the field of Forestry for exchange of information, expertise, training and formulation of regional projects with emphasis on social forestry.

31.The Heads of State or Government welcomed the Declaration of the Special Session of the SAARC Environment Ministers in Male in June 2005 convened in the wake of the tsunami catastrophe. They endorsed the recommendation for elaboration of regional programmes and projects for early warning, preparedness and management of tsunami and other natural disasters. They called for elaboration of a Comprehensive Framework on Early Warning and Disaster Management.

32.They endorsed the decision of the Special Session of the SAARC Environment Ministers to further enhance the capacity of the existing SAARC Institutions namely, SAARC Meteorological Research Centre and SAARC Coastal Zone Management Centre, to carry out their mandated tasks. 35. In view of the extensive loss of life and colossal damage to property as a result of earthquake and tsunami and other natural disasters in South Asia, the Heads of State or Government underscored the urgency to put in place a permanent regional response mechanism dedicated to disaster preparedness, emergency relief and rehabilitation to ensure immediate response. They directed the concerned national authorities to coordinate their activities in such areas of disaster management as early warning, exchange of information, training and sharing of experiences and best practices in emergency relief efforts.

33.The Heads of State or Government underlined the need for collaborative action in the area of environment, including water conservation, to promote sustainable development. They decided to proclaim the Year 2007 as the "Year of Green South Asia" devoted to a region-wide aforestation campaign. They also agreed to address the problem of arsenic contamination of groundwater and assistance to affected peoples.

Combating Terrorism

34.The Heads of State or Government agreed that terrorism violates the fundamental values of the SAARC Charter and the United Nations, and constitutes one of the most critical threats to international peace and security. The Heads of State or Government expressed their satisfaction at the ratification of the Additional Protocol to the SAARC Convention on Suppression of Terrorism by all Member States and called for putting in place effective mechanisms for its implementation. They strongly condemned terrorist violence in all its forms and manifestations, agreed that terrorism is a challenge to all States and a threat to all of humanity, and cannot be justified on any grounds. They underlined that there should be no double standards in the fight against terrorism. In view of the continuing and recent terrorist attacks in the region and their impact on security, economic stability and social development, they expressed their determination to unite in their efforts in preventing and combating terrorism. They also noted the United Nations Security Council resolution 1373 (2001) in this regard.

35.They called for early and effective implementation of the Additional Protocol to the SAARC Convention on Suppression of Terrorism. They underscored the need for an early conclusion of a Comprehensive Convention on International Terrorism. They also agreed that Member States would strengthen their cooperation in such important areas as exchange of information, coordination and cooperation among their relevant agencies.

36.They decided that SAARC Interior/Home Ministers would meet annually preceded by a meeting of the Interior/Home Secretaries.

37.The Heads of State or Government directed that concrete measures be taken to enforce the provisions of the Regional Convention on Narcotic Drugs and Psychotropic Substances through an appropriate regional mechanism.

Security of small states

41. The Heads of State or Government noted that due to their specific vulnerabilities, small states require special measures for support from all concerned for safeguarding their sovereignty, independence and territorial integrity. In this context, they stressed that protection of small states should be firmly rooted in scrupulous adherence to the UN Charter, rule of law and the strict adherence to universally accepted principles and norms related to sovereign rights and territorial integrity of all States, irrespective of their size. They committed themselves to give concrete expression to protect the interest and security of all small states through the pursuit of appropriate policies and actions.

People-to-people contact and cultural cooperation

38.The Heads of State or Government noted that the spirit of SAARC needed to be sustained by efforts to promote people-to-people contact and by a vibrant civil society throughout South Asia actively engaged in forging links across national boundaries. They felt that the Association of SAARC Speakers and Parliamentarians should meet at an early date to establish a mechanism for periodic contacts among the Parliamentarians of South Asia. They stressed that continued efforts would be made by the Member States at all levels to promote people-to-people contact by facilitating travel among SAARC countries, promotion of youth exchanges in culture and sports, promotion of intra-SAARC tourism, establishment of linkages among professional bodies and through adoption of other concrete measures. They decided to launch 2006 as "South Asia Tourism Year." They directed their Ministers for Tourism to meet at an early date and elaborate a plan of activities to be undertaken during the year 2006. They also stated that Member States would encourage initiatives by private sector entities in promoting understanding and harmony in the region.

39.The Heads of State or Government recognized the crucial role of culture in bringing the peoples of South Asia closer. They also stressed that cooperation in the area of culture was vital for reinforcing and projecting the distinct identity of South Asia. In this context, they expressed satisfaction on the progress made in establishing the SAARC Cultural Centre in Kandy and underlined the importance of making it operational at the earliest. They also directed the SAARC Ministers of Culture to meet as soon as possible to elaborate a SAARC Agenda for Culture. They noted the offer of India to establish a SAARC Museum of Textiles and Handicrafts inter alia to preserve designs in various crafts and related traditions, train artisans and crafts persons, foster design skills, hold promotional events, undertake research.

International political and economic environment

40.The Heads of State or Government reviewed international political and economic developments since their last Summit in Islamabad. They underscored the imperative need to ensure universal adherence to the principles and objectives enshrined in the UN Charter. They called upon the international community to redouble efforts to meet the commitments of the Millennium Summit and the Monterrey consensus. They noted the outcome of the UN World Summit 2005 and underlined the need for meaningful reforms of the United Nations system in consonance with its role as the central organ for the cooperative management of the global problems and for the promotion of peace, security, development, justice and human rights. They also reiterated their full support for a comprehensive approach, which would facilitate implementation of the Millennium Declaration and the Millennium Development Goals (MDGs) in a time bound manner.

41.The Heads of State or Government stressed that promotion of global peace and security inter alia called for removing the existing asymmetries in security and in ensuring undiminished security for all, at the regional and global levels. They also emphasized the importance of pursuing effectively the global objectives of universal disarmament and preventing the proliferation of weapons of mass destruction.

42.The Heads of State or Government reaffirmed their commitment to further strengthen the multilateral trade regime of WTO. They called upon all WTO members to demonstrate necessary understanding and accommodation for a breakthrough at the Hong Kong Ministerial meeting in December 2005 to pave the way for the successful conclusion of the Doha Development Round. They underscored that the development dimension should continue to be at the heart of the on-going negotiations so that the legitimate concerns of the developing countries are adequately reflected in the outcome of the current round of trade negotiations. They agreed that the SAARC Member States would work closely together to coordinate their positions in the on-going negotiations on trade and other key economic issues. The Heads of State or Government directed the Commerce Ministers to hold consultations on the sidelines of the 6th WTO Ministerial Conference to be held in Hong Kong in December 2005, to evolve a common SAARC Position on issues of common concern.

43.The Heads of State or Government addressed the question of electing the Secretary-General of the United Nations in the year 2006, being aware of the unanimous view that the well-established principle of geographical rotation should be observed and that an Asian should be appointed as the next Secretary-General of the United Nations. In this regard, they noted that Sri Lanka has offered a candidate. Enhancing Political Cooperation

44.The Heads of State or Government welcomed the growing importance being placed by all Member States to promote cooperation in an environment of enduring peace and stability in South Asia. They reiterated their commitment to the principles of sovereign equality, territorial integrity and national independence, non-use of force, non-intervention, and non-interference in the internal affairs of other Member States. Recognizing the increasing interdependence and the imperative of pursuing the objectives of peace, freedom, social justice and economic prosperity, they re-affirmed their resolve to foster mutual understanding, good neighbourly relations and a more meaningful cooperation through sustained constructive engagement among Member States.

External Profile and Linkages of SAARC

45.The Heads of State or Government welcomed the observer status granted to SAARC by the United Nations General Assembly at its Fifty-ninth Session; and expressed the hope that this would not only enhance the profile of SAARC in the world body but would also enable Member States to project common positions of SAARC in various multilateral forums.

They also acknowledged the renewed interest of other regional and international organizations, bodies and entities to cooperate with SAARC in various collaborative endeavours in accordance with the objectives and priorities of SAARC. The Heads of State or Government welcomed the request by the Islamic Republic of Afghanistan for membership and invited Afghanistan as a member, subject to the completion of formalities. They also welcomed and agreed in principle with the desire of the People's Republic of China and Japan to be associated as observers. The Council of Ministers will decide the modalities in this regard at their twenty-seventh meeting in July 2006.

Strengthening Institutional Mechanisms of SAARC

46.The Heads of State or Government agreed that with the incremental broadening of the SAARC agenda and increased emphasis being placed on implementation of plans and programmes, there was a need for a commensurate strengthening of institutional capabilities of SAARC. Recognizing the importance of thematic Ministerial meetings, they emphasized that these meetings should focus on regional challenges and priorities and contribute to the realization of the objectives of SAARC. They agreed that on completion of twenty years of SAARC's existence, it was essential that a comprehensive review and reform of all SAARC institutions and mechanisms, including the Secretariat and the Regional Centers should be undertaken. In this context, they called on the Council of Ministers to convene a Meeting of Experts, to be nominated by each Member State, to undertake a detailed Study and present a report to the next Council of Ministers. They empowered the current Chairman of the Council of Ministers to prepare within the next fifteen days a draft Terms of Reference for the Study to be approved, if necessary, by tele-conferencing of all SAARC Foreign Ministers.

SAARC Vision: An agenda for Third Decade of SAARC

47.The Heads of State or Government reiterated their commitment to the realisation of the vision of South Asian Economic Union in a phased and planned manner. They agreed that as SAARC completed its twenty years of its existence, it was an opportune occasion to draw a roadmap for regional cooperation in South Asia for the next decade. In view of the new challenges facing the region, pledges and commitments made in the last two decades should be translated into concrete actions in the form of regional projects and programmes and innovative initiatives.

48.They directed all SAARC institutions and mechanisms to work collectively towards a decade dedicated to implementation so that a visible and discernible impact can be felt across South Asia. They emphasized that while this would enable SAARC to realize its basic objectives of improving the quality of life of all South Asian peoples, it would at the same time

create an enabling environment towards the establishment of a South Asian Economic Union. They directed the Standing Committee to formulate its recommendations, at its next Special Session, on a Vision for SAARC's Third Decade and the course of action for its realization, to be elaborated by a high-level Committee of Senior Officials.

Date and venue of the Fourteenth SAARC Summit

49.The Heads of State or Government welcomed the offer of the Government of India to host the Fourteenth SAARC Summit in 2007.