By Sujan Dhungana and Sushila Budhathoki

Nepal established diplomatic relations with Norway, a constitutional monarchy in Northern Europe on January 26, 1973. Norway, opened a residential embassy in Kathmandu in January 2000.  The Nepali Embassy in Copenhagen, Denmark, oversees the diplomatic activities with Norway as well because Nepal does not have a residential embassy there.

With a population of five million inhabitants, Norway is one of the five countries comprising the Nordic Region while it remains outside the European Union. An increasing demand for a wide range of quality imported goods and services of all kinds make it the right country for exportable products and quality services. Norway, a modern and highly developed country, has a strong and stable economy. It has achieved enviable progress in human development. According to the UNDP’s Report in 2010, Norway heads the group of 42 very high human development countries being world’s first country in terms of human development. Norway also has the second highest GNP per capita in the world (USD 55,600) in terms of purchasing power parity. 

Norway’s economy is essentially based on the exploitation of its natural resources, mainly oil, gas, hydroelectric power, forests and minerals.  Oil production dominates the economy, accounting for nearly a quarter of the GNP. Norway is also a major producer and exporter of natural gas.  The service sector in Norway is also a highly developed one. Norway’s agriculture contributes to about 2% of the GNP and fishery is a major activity, making Norway the biggest exporter of fish in the world. 

Visit exchanges

The number of visits at different levels from both sides depicts the increasing interests between Norway and Nepal and has helped in strengthening the relationship between the two countries. Prime Minister Jens Stoltenberg paid a one-day visit to Nepal on February 8, 2008. Foreign Minister,  Knut Vollebaek, also visited Nepal in January 2000. Similarly, in June 2012, Minister for International Development, Heikki Holmas, visited the country and the Minister for Environment and Development, Erik Solheim, paid a visit  in January 2012. Earlier, he had visited Nepal twice in different ministerial capacities.  

The then Prime Minister, Pushpa Kamal Dahal, paid an official visit to Norway in March 2009 and Upendra Yadav, Minister for Foreign Affairs, participated in the International Conference entitled “Melting Ice – Regional Dramas, Global Wake-up Call” in April in the same year. Earlier, the then Minister for Foreign Affairs, Chakra Prasad Bastola,  also travelled to Norway in September 2000 responding to an invitation of  the Norwegian Foreign Minister. 

Norway’s support

Norway has been voluntarily supporting different projects in Nepal through different NGO’s and bilateral organization since 1960s. The country has regularly provided aid to different sectors in Nepal and has supported different development projects. Some of the sectors covered by Norwegian aid are climate, environment and food production, conflict prevention and resolution and peace and security. There are other sectors also subsidized by Norway such as education, energy generation and supply, government and civil society, among others. The aid from Norway to Nepal is consistent since 2009 (See graph). 

The Government of Norway has provided NOK 30.6 million for Nepal Peace Trust Fund. This country is also taking the initiative on the third country resettlement of Bhutanese refugees. According to the Ministry of Foreign Affairs Nepal, Norwegian firms have invested Rs. 1135 million in 12 various projects in Nepal, which have generated 726 employment opportunities until July 2012. Norway also supports Nepal through UN agencies, good governance and private sector development, focused on hydropower and electrification. It is also supporting Rural Renewable Energy and Development through Energy Sector Assistance Program (ESAP), which has provided significant results in terms of improving cooking stoves and rural electrification (solar home systems and micro hydro). Regarding the academic field, Norway   offers NORAD (Norwegian Agency for Development Cooperation) annual fellowships to Nepali students in different fields of studies. 

Cooperation

The cooperation between the two governments started with the signing of a memorandum of understanding (MoU) in 1996.  According to Royal Norwegian Embassy, the cooperation is based on shared dedication to achieve the Millennium Development Goals (MDGs). Norway has been prioritizing key areas of cooperation in four sectors, namely peace building, democracy and inclusive governance, education and energy. There are cross- cutting issues like peace and human rights, environment, gender and equality and anti-corruption for all projects . 

Norway has been a key partner to Nepal in exploiting hydropower resources. The country has a number of  cooperation in the hydro power sector in Nepal. Some of them are Himal Hydro and General Construction Company, Butwal Power Company, Himal Power Ltd, National Hydro Power Co. and Nepal Hydro and Electric Pvt. Ltd.  According to the Royal Norwegian Embassy, Norway is currently focusing in three thematic areas, namely accelerated hydro power development, rural renewable energy and development and technical energy research in energy sector.  

Norway is also interested in supporting Nepal when conducting a feasibility study of different large scale projects. The Royal Norwegian Embassy in Nepal is currently working on developing new plans to support Nepal regarding energy sector; the Norwegian mission in Nepal has posted on its website.  Moreover, with the 60 per cent financial contribution from NORAD, Turbine Testing Lab of Kathmandu University is running a three- year project which started in August 2010.  According to Kathmandu University, the project would give a platform and foundation for associated professional parties to come together and create a turbine manufacturer in Nepal. 

Trade and Tourism

The agreement on avoidance of double taxation with Norway, signed in 1996, has been regarded as one of the reasons behind the growing trade between both countries.  The trade figure of TEPC (Trade and Export Promotion Center) shows the growing trade both in imports and exports  between the two countries.  Nepal exported goods worth Rs 41.37 billion in 2009. In 2012 it was Rs 52 billion. Similarly, it imported goods worth Rs 22.52 billion and Rs 96 billion in the year 2009 and 2012 respectively. Thus Nepal had a trade surplus in 2009 and 2010, but in the recent years Nepal has a trade deficit. 

Norway is the first country to register Nepali Pashmina products. Nepal mainly exports products such as paperboard, articles of paper pulp, coffee, tea, essential oils, cosmetics or toilet preparations, ceramic products and carpets among others. The imports from Norway are comprised of products like fish and crustaceans, aluminum, rubber, boilers, machinery or mechanical appliances. The flow of Norwegian tourists visiting Nepal is also rising. According to the data provided by the Ministry of Foreign Affairs, Norwegians are among major tourists visiting Nepal.