Nepal Korea Friendship:Comprehensive Partnership on

Development

Kaman Singh LamaAmbassador of Nepal to Republic of Korea

Contents

Geographic Location of Nepal Nepal at a glance Nepal-Korea Bilateral Relation Political Development Cooperation

• Economic and Technical• Human Resources Development and Educational Exchanges

Social and Cultural Exchanges Tourism People to people contacts

New Dimensions in Nepal-Korea Relations

NEPAL IN ASIA

Political Map of Nepal

NEPAL AT A GLANCE

Area: 147,181 Sq. Km Location: China – North

India- East, West and SouthCapital: KathmanduPopulation: 26 MillionLanguage: Official Language is Nepali and

there are more than 92 spoken languagesPolitical System: Multiparty Parliamentary System (Officially Turned to Republic from Kingdom in 2008 following peoples movement)Religion: A Secular StateEthnic Group: 102, officially recognized 59Life Expectancy at Birth 65 yrsLiteracy Rate (63%), Free education up to grade 10 in govt. school

Cont…..

Three Physiographic Regions:- Himalayan Region (17%)- Mountainous/Hilly Region (68%)- Terai/Plain Region (15%)

Four seasons; autumn, winter, spring and summer and climate varies from semi-tropical to tundra

Cont….

• Agriculture is the mainstay of the economy, accounting for 38% of GDP.

Hydropower , tourism and agriculture are major areas of recent foreign investment.

GDP : 3-5% ; Inflation rate: 8-10 %

GDP - composition by sector: agriculture: 38% industry: 20% services: 42 %

Population below poverty line: 24% (2010)

Agriculture products: rice, corn, wheat, sugarcane, jute, milk, water buffalo meat

Industries: tourism, carpet, textile; rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production

Major Trading Partners : India, China

Nepal-Korea Relation

POLITICAL:Diplomatic Relations: Diplomatic relations between Nepal and the Republic of

Korea was established in 1969. The Republic of Korea opened its Embassy in Kathmandu

in 1974. The Government of Nepal opened its Embassy in Seoul in

2007.

Cont….Exchange ofVisits:Exchange of visits from Nepal: Former Minister for Physical Planning, Works and Transportation of the

Government of Nepal Mr. Hridayesh Tripathi, visited of the Republic of Koreafrom August 20-24, 2012.

Former Finance Minister Mr. Barsha Man Pun visited South Korea fromNovember 29-December 1, 2011 to take part in the fourth High Level Forumon Aid Effectiveness.

Former Prime Minister Mr. Lokendra Bahadur Chand visited the Republic ofKorea from August 18-22, 2004 to participate in the Inter-religious andInternational Federation for World Peace.

Former Minister for Labor and Transport Management Mr. Raghuji Pant visitedthe Republic of Korea leading a Nepalese delegation from October 16-22,2004.

Former Minister for General Administration Mr. Krishna Lal Thakali visited theRepublic of Korea from May 24-27, 2005 to participate in the 6th Global Forumon Reinventing Government.

Cont…..

Exchange of visits from Korea: Congressman Mr. CHOI Kyu-Sung of RoK visited Nepal on 8-11

August, 2011. Chang Nae Sam, Deputy Minister for Construction and Water

Resource Policy, Ministry of Land, Transport and Maritime Affairs,RoK visited Nepal on 25-26 July, 2011.

H.E. Mr. Yu Myung-hwan, Minister for Foreign Affairs and Trade ofRepublic of Korea visited Nepal on 22 June, 2009.

Deputy Foreign Minister of the RoK H.E. Mr Cho Young-jai visitedNepal as Congratulatory Envoy of the Republic of Korea in May2004.

No, state and official visit up to now.

Cont…..Agreements and Mechanisms: Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect

to taxes on Income on 5 October 2001 Air Services Agreement (ASA) on 21 September 2004. The Korean Air has

already started its flights in the Seoul-Kathmandu-Seoul sector every week. Cultural Agreement on 30 March 2005 envisaging to promote and develop

the cooperation between the two countries in the field of culture, art,education, youths, sports and tourism.

Consultation Mechanism between the two Foreign Ministries in October2001 at the Joint-Secretary Level meeting.

Nepal-Korea International and Cooperation Committee of Industrialistsand Businessmen.

A Nepal-ROK Parliamentarian Friendship Group was established in 2002consisting of then five members of House of Representatives.

MOU on Employment Permit System (EPS) on 23rd July, 2007 for recruitingNepalese Workers in Korea.

Development Cooperation

Economic andTechnical Cooperation South Korea continues to remain a reliable development

partner of Nepal. South Korea provides two types of grantsthrough Korea International Cooperation Agency (KOICA):

a) Equipment b) Project aid.

Under the Economic and Technical Cooperation scholarshipsare provided in areas such as agriculture, hydropower,infrastructure, communication, health, education, and culture.

Since 1991, the Korean government is contributing to thesocio-economic development of Nepal through the variousprogrammes implemented by the Korean InternationalCooperation Agency (KOICA).

Cont…….

KOICA invites government officials for training andeducation in Korea and shares Korea's developmentexperience and knowledge since 1992.

So far, around 1000 Nepalese officials and professionalhave received training in Korea with KOICA assistance.

KOICA also sends many volunteers to impart training invarious fields.

Cont….Trade and Investment South Korea is one of the five top investors in Nepal. The

volume of Nepal-South Korea trade is growing and so isthe trade imbalance. This needs to be corrected to makeour bilateral trade sustainable in the long run. Nepal'strade with South Korea in the last three years:

Value in '000 Rs

Source: MoFA, Nepal

Year Export Import Trade Balance

2010 35,267,492 5,518,205,002 -5,482,937,510

2011 88,881,380 6,127,034,645 -6,038,153,265

2012 33,959,309 4,411,206,579 -4,377,247,270

Past Economic Cooperation (Grant) Sericulture Development Project (1978-1992) Khopasi Sericulture Center Construction (1993-1995) Sericulture-training center at Itaharai (1996) Feasibility study of Modi Khola Hydroelectricity Project (1993-1994) Preliminary study of Kanti Rajpath improvement (1998-1999) Feasibility study of Kanti Rajpath improvement (2002-2003) Feasibility study of Chamelia Hydroelectricity project (2000-2002) Support to Habitat for Humanity to build 1000 bamboo houses in Jhapa

district (2007-2008) Korea-Nepal Friendship Hospital Project (2006-2008) Government Integrated Data Center (GIDC) Project (2007-2009)

Cont…….

Development Cooperation in Nepal Korea-Nepal Institute of Technology Project (2008-2011) Establishment of ICT Center to Enhance ICT Capabilities in Nepal (2010-2012) Development of Community-Based Health Insurance (2010-2011) Modernization of Customs Administrations in Nepal (2011-2013) Health Services Improvement I Tikapur (HIT) (2011-2014) Establishment of Technical Training Center at Kathmandu University (2011-2013) Master Plan for the LumbiniWorld Peace City Preservation and Development

(2011-2012)

Human Resources Cooperation Introduction of the employment permit system since 2004

replacing Industrial Trainee scheme Nepal signed an MoU with Korea on 23rd July, 2007 to send

workers under the EPS program. Currently there are about17000 EPS workers from Nepal working in Korea and thenumber is gradually increasing.

Currently, about 1000 Nepalese students and researchers arestudying in various universities and colleges in South Korea.

Many Korean Students are also visiting Nepal for theirinternship and exchanging ideas on their respective fields.

Korea can help in the filed of higher education to produceskillful, competent man power in Nepal.

Cont….Historical and Cultural linkage:Birth Place of Buddha Nepal and South Korea have commonalities of cultural values based on the

ideals of Buddhism, though both the countries are secular states.

TOURISM

A significant number of Tourists arrive in Nepalfrom South Korea and it is increasing in the recentyears.

In recent years, Nepalese tourists to South Koreaare also increasing in number.

People to people contacts between Nepal andSouth Korea are increasing.

About 26,000 Nepalese live in Korea. Korea hasaround 600 national living in Nepal.

New Dimensions on Nepal-Korea Relations

Comprehensive economic cooperation will play a key role in further advancing Nepal-Korea relations in future.

Nepal can be the attractive destination of FDI for Korea Investors.With abundantsupply of low cost labor, availability of cheap natural resources, a huge domestic marketand being a land linked country between china and India, FDI investors can find marketfor their products beyond the territory of Nepal as well. Its products enjoy duty-freeand quota free access into EU and other major economies in the world.

Recently many Korea investors have shown keen interest to invest in Nepal mainly onHydro power, constructions and service sectors. In other hand, joint ventures are alsotaking place on the sectors like electronics, hotel industry, chemical industry, medicinalgoods, mineral water etc.

At present, there are 21 Korean joint venture companies operating, 1 underconstruction, 6 has been licensed and 28 have been approved.

KOSEP is investing in 216 MW capacity Upper Trisuli Hydropower project and K-Water is involved in Upper Modi Khola hydropower.

A Korean construction company is involved in the feasibility study of the InternationalAirport in Nijgadh, Bara.

The Chungsuk Engineering Company is carrying out feasibility study of KathmanduMetro Project and eastward section of East-West Electrical Railway.

Cont…. Korea has been supporting Nepal in achieving MDGs by 2015. It has been supporting Nepal in achieving rapid socio-economic

development. Korea is also providing assistance on clean development mechanism. Nepal and South Korea can further work together to address the adverse

effect of climate change. Both are the parties to Kyoto Protocol which obliges the contracting

parties to reduce carbon emission to certain level. As a signatory of the Kyoto Protocol, Nepal can earn carbon credits

through the CDM (Clean Development Mechanism) window. It can sellthem as Certified Emission reductions (CER’s) to the rich counties whichcannot meet their own carbon reduction levels. The resources generatedthrough these programs could be effectively utilized for adaptationprograms.

Cont…. South Korea is the host country of the Global Green Growth Institution

(GGGI) and Green Cooperation Fund (GCF). In near future Nepal would be amember of the GGGI.

Aid Assistance from GGGI could be a milestone for converting Nepal’sMillennium Development Goals into Sustainable Development Goals.

Sustainable water resources development could be an area of futurecooperation between Korea and Nepal.

Water Resources DevelopmentNepal’s Development

IndustryAgriculture Commerce Infrastructure Development

Health and education

Communication

Enormous Potential But "Unless we timely harness it there is no meaning to be proud of such potential

Water ResourcesConsidering environmental sustainability

•Water is not only a life-line for all living beings on the earth but also a foundation for the overall development of human society.•Water is required for drinking, sanitation, food production, energy etc.

W A T E R

Water Resources Availability

Surface water: 225 BCM Ground water: 8.8 BCM Current use: 15 BCM

Basin-wise distribution

Hydropower

Total potential: 83000 MW Commercially feasible: 45610 MW Currently generated: about 750 MW

Irrigation

Cultivated area: 2642,000 ha (18% of land area) Potentially irrigable: 1766,000 ha (2/3rd of cultivated area) Present irrigation: 42% of cultivated area but 17% only has

year round irrigation

Water supply Only about 72% of the country’s population has access to

basic water supply and only 25% of the whole population has sanitation facility

Conventional Approach of Water Resources Development

Stand alone projects: Hydropower projects producing the electricity only Water supply project for water supply only Irrigation project for irrigation only

Trading: PPA between Nepal Electricity Authority and Independent

power producer only. No provision for trading between private industry and

power producers.

Impact of Climate Change on Water Resources

Warming temperature will enhance snowmelt Rainfall is likely to increase whereas snowfall is likely to

decrease Snowmelt contribution will increase in the short-term

but in the long term rainfall contribution will increase as there will be less snow and glacier available

Flooding and sediment transportation will increase Run-of-the-river plants are very vulnerable and reservoir

schemes are the most suited to mitigate the impact of climate change

Future Approach: Multi-purposescheme

Water Supply Irrigation Hydropower generation Flood control Navigation Recreation Fisheries Tourism Transportation

Multi-purpose reservoirs Multi-purpose reservoirs are needed because About 80% rainfall occurs during monsoon (June-September) Reservoirs will provide flow regulation Reservoirs would be useful to mitigate climate change impact Multi-purpose reservoirs will be economic and efficient

Sunkoshi as an example Dovantar, Kavre district, East of Kathmandu

Catchment area at Pachuwarghat = 4920 km2

High Dam Nepal

Water Availability Annual Average Flow of 222 m3/s at Pachuwarghat 75% of flow occurs during 4 months (Jun-Sep) 13% is contributed by snowmelt and 87% by rainfall.

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Flood problems in Koshi

In July 1991, about 6000 persons of 12 villages had to be evacuated to safer places and 40 ha of agricultural land were washed away.

On 18th August 2008, the flood caused the displacement of more than 107,200 people with a death toll of eight in Nepal. Approximately 493 lives were lost and 3,500 were reported missing after the disaster on the Indian side.

It caused extensive damage to the optical fiber cable network laid along the highway.

In addition, telephone exchange, power plant, the main distribution frame transmission system were submerged in the floods and caused disturbances to the communication network in the eastern region of Nepal.

Conclusion

Multi-purpose reservoir scheme in Sunkoshi river could be a pilot project. Government of Nepal welcomes investment of Korean government and

private companies in this sector. Multi-purpose reservoir schemes will be in line with government policy of

water resources development and climate change adaptation. As a developing country, Nepal is always happy to work in cooperation

with Korean Government and with full mobilization of public and private sectors in Nepal to put green growth at the heart of economic planning in future.

In Conclusion, Nepal and Korea have been enjoying very cordial relationship so far. These above mentioned new dimensions on Nepal-Korea relations would have the capacity to take this longstanding friendship and cooperation to the level of optimum height.

Thank You !

15th May 2014