I am so happy to be here in Kathmandu. I last visited over three years ago and it is amazing to see how much positive change has happened during that time. Nepal is a truly remarkable success story. Very few countries on the globe can boast of having transitioned from monarchy, ended a bloody civil war, and launched a new democracy, all within the space of a few short years.
And the achievements keep happening. November’s successful election of the new Constituent Assembly was a key moment in which the Nepali people demonstrated their commitment to democracy. An amazing 78% of the electorate cast its vote. Nepal is becoming a democratic leader here in the South Asia region.
Today, I would like to share a little about how the United States is focusing on Asia and working to promote broader regional stability and prosperity through economic opportunity and regional interconnectivity.
Asia is full of opportunity. With a growing, youthful population and increasing economic development, Asia is rightfully gaining the attention it deserves. The United States is working with our partners throughout this region, including Nepal, to help unleash that opportunity. President Obama and Secretary Kerry have said that “The United States will play a larger and long-term role in shaping this region and its future.”
Currently, South Asia is experiencing a wave of incredible change and transition manifested more than anything else through the recent elections throughout the region. Like Nepal, India recently held an election. With over 530 million Indians going to the polls, the Indian elections were an incredible exercise in democracy which should inspire us all. The United States looks forward to working closely together with the new BJP government and Prime Minister Modi.
We believe there is great untapped potential in the region in general and specifically in Nepal – and now is an excellent time to begin realizing that potential.
South Asia has immense economic potential – unfortunately, it is not coming close to realizing it. South Asia is one of the world’s least economically connected regions – with intra-regional trade flows under five percent and intra-regional investment flows under one percent. To put this simply, this means that South Asians are not trading with one another and not investing in one another’s projects. So, while the world is getting smaller, the distance between South Asian countries is remaining the same.
Individually, we see South Asian countries doing so well. Yet, with its incredible economic diversity and extraordinary human capital, if the countries in South Asia traded with each other and invested in each other, we’d see this growth be so much higher. Nepal would buy things from Bangladesh that Bangladesh is good at making. And Bangladesh would buy things from Nepal that Nepal is good at making. And from Pakistan. And India. And Burma. Everybody would be selling and everybody would be buying, instead of what we have now. Sure, there is growth now, but we can put the growth into hyperdrive. We’d also see more travel across borders. Instead of exporting so many workers to the Gulf, more workers can remain in India and Nepal and Bangladesh, helping build the region.
South Asia can reap the benefits of increased connectivity which trade, technology, and regional economic integration offers. A more integrated South Asia is one in which markets, economies, and people connect can thrive and prosper. To see this, look at the European Union, or America’s trade agreement with our neighbors Canada and Mexico. Canada and Mexico are two of the United States’ top three trading partners. We work together, we all benefit from what the others do well.
Hydropower: This is perhaps nowhere more evident than in the energy sector. With 42,000 megawatts of commercially viable potential, Nepal’s hydropower could eventually provide not only an abundant source of clean energy for Nepal, providing a major boost to investment and economic growth, but could also produce a sizable surplus that can be exported to energy-poor countries throughout the region. Time and again we hear of interest throughout region in developing Nepal’s vast hydropower for the benefit of Nepal and its neighbors.
How do we realize this potential? It is going to take a lot of hard work by you and your neighbors. To begin with, it will require a power-trade agreement – first with India, and then among countries in the region. It will also require these countries to cooperatively manage and share the benefits of these transboundary river basins. And it will require a better electrical transmission grid, and the development of a business environment here in Nepal that features market-based pricing and streamlined government oversight and regulation. I don’t mean to make this sound easy. That last requirement – improving the business environment – may be harder than anything else. It will require some attitudinal change: I suspect you would not be surprised if I said this region might suffer from a bit too much red tape. But the rewards are great, and I firmly believe that you here in this room, and your colleagues outside of it, have more than enough will and expertise to make this happen.
Some of you may wonder why someone like me, an official from a large country halfway around the world, would be encouraging you to develop stronger economic linkages with your neighbors. What does the United States get out of that? It’s a very good question.
Certainly there’s self-interest: if you grow, that means larger markets for American companies and more opportunities for American trade. But we also believe that open markets and vibrant international trade lead to prosperity, development, and even peace. Over the last 70 years, the countries of Europe, largely through efforts to promote regional economic integration, have become friends and allies. Here in South Asia, the potential may even be greater. Regional economic integration between India, Nepal, Pakistan, Bangladesh, Burma, and Sri Lanka can be a game changer, just as it has been in the Asia Pacific region through APEC.
We in the United States are committed to bringing together countries from all over the world. We will work with governments, the private sector, and international financial institutions to identify where U.S. engagement could make the most difference. We want to help develop an investment ecosystem that supports strong intellectual property protections, rule of law, and transparency. And we strive to play a critical role in connecting people across this region, which ultimately is the heart of connectivity.
70% of the population of Nepal is under 35, and 2,000 Nepalis leave every day for work abroad. Remittances account for 30% of Nepal’s GDP. It drains jobs, saps investment, and keeps talent from developing here in Kathmandu. It would be much better – I’m sure you’ll agree – to have a Nepal where young men and women have viable economic prospects close by and even at home. That is why accelerating economic growth through regional integration is a top priority for our embassy here.
Economic growth also means ensuring more people--women and traditionally disadvantaged groups-- are educated. To create a prosperous country, Nepal needs the full participation of all its citizens.
The roughly $88 million my government spends here every year on assistance is trying to build this shared prosperity. By focusing on President Obama’s priorities: maternal and child health, combatting climate change, and increasing food security, the U.S. government is making a significant investment in Nepal’s future.
Yes, there are still political challenges. While the drafting of the Constitution is understandably a top priority, there are other priorities as well. Economic growth is one of the most important among them. Nepal has to focus on making it easier to do business here. So, even while a Constitution is drafted --and other aspects of the Peace Process (such as the Truth and Reconciliation Commission) are concluded -- Nepal can also focus on economic growth. Your country can’t afford to wait.
The good news is that government is only part of the picture. South Asia, Nepal in particular, has an abundance of entrepreneurial talent. They just need a little support. Just last month in Nepal, we brought together 40 entrepreneurs from 12 countries in the region for training, mentorship, and start-up development during the Regional Entrepreneurs Connect Boot Camp event. This workshop not only helped individual entrepreneurs develop their businesses, but by convening innovators from around the region, we are promoting linkages and partnerships that are the seeds for future development, that will result in future economic connections and opportunities that we can only dream of today.
The United States values South Asia and recognizes the region’s growing importance. We seek to be a partner that helps the countries of South Asia – especially Nepal -- achieve their full potential and provide economic and social development for their citizens.