Key points
- Australia and Nepal celebrated the 60th anniversary of diplomatic relationship in 2020
- Nepal unable to capitalise on the relationship
- Nepali community in Australia can play an important role to increase two-way trade
Officials from both Australia and Nepal say the friendship between the two countries is "special" with both parties playing an "equal" role. But when it comes to trade and commerce, Australia appears to have the upper hand.
Over the last ten years, the total bilateral trade between the two was valued at US$401million, of which Nepal's share is just over 13 per cent (Click for trade data from International Monetary Fund). While Australia's export mainly relates to food and beverages, including wine, it primarily imports carpets and clothing from Nepal.
During the initial phase of the Nepal-Australia diplomatic relationship decades ago, the south Asian nation was known more for natural adventure and heaven for trekking and mountain climbing.
The culture of outdoors helped attract many Australians to the Himalayas, which was a prime selling point for Nepal’s tourism industry.
However, after years of changes in political and economic dynamics, the trade figures suggest both countries have been unable to grasp potential opportunities. In fact, the trading values between Australia and Nepal had gone down and remained low between 2011 and 2014, before it started to pick up again.
Data published by Nepal’s government reveals that it imports ten times more from Australia than it exports (2019 data), though this ratio fluctuates every year.
Source: Getty
Reasons for trade imbalance?
Some question why Nepal, which can offer a low-labour cost and unique business opportunities, such as hydro-power, has failed to garner any attention despite well-rooted connections here in Australia.
Many point to Canberra’s "apparent lack of interest" towards Nepal as one reason for this trade imbalance.
Nepal born Australian billionaire Shesh Ghale, who has significant commercial interests both in Australia and Nepal says Australia's priority is more for the Pacific region due to geographic proximity.
"Nepal is on the fringe and does not catch much attention of Australian policy-makers," he told SBS Nepali.
"Nepal's commercial aspirations has never been noticed," says Ghale, who formerly led a global Nepali diaspora association called Non- Resident Nepali Association.
Australian entrepreneur and former NRNA President Mr. Shesh Ghale Source: SBS Nepali
Ministerial level engagement
The last visit to Nepal from any Australian minister was back in 1985 - 35 years ago - when Bill Hayden, then Minister for Foreign Affairs visited the Himalayan nation as a part of South Asian diplomatic tour.
Nepal’s ministers, on the other hand, have been visiting Australia on a frequent basis to bolster the mutual friendship.
However, a lack of ministerial visits has not diminished Australia's support to Nepal in time of crisis.
Nepal received more than $20 million from Australia as humanitarian assistance during 2015 earthquake. In the last financial year- Australia allocated a budget of $22m as official development aid (ODA) to Nepal, which gets the yearly support in the form of bilateral, regional, and global funding from Canberra.
Some analysts believe that Nepal is to be blamed, not Australia, for the unequal trade partnership between the two countries.
Nepal's forgeign minister Prakash Sharan Mahat during his visit to Australia in Nov 2016. Source: SBS Nepali
“The world is a global market and there are many competitors,” says Ganesh KC, a Sydney-based entrepreneur currently investing in Nepal's vocational training sector.
"The Nepali business sector has to do research on what appeals to Australians and has to come up with products and services that make economic sense,” he adds.
The data from the Department of Foreign Affairs also appears to support KC’s arguments. Nepal has largely failed to diversify its products when it comes to exports (which mainly are carpets and clothing) for several years.
“There are several organic Himalayan herbal products that would have a great demand here in Australia," KC adds. “But we have failed to capitalise on those unique products.”
Prem Jung Thapa, a Canberra-based economist is hopeful that imports from Nepal will grow in coming years.
“With the ever-growing Nepali community in Australia, there will be a lot of demand for Nepali products in the coming years. The connection of Nepali diaspora with other Australians can help Nepali business to flourish in one way or other.”
Trade between Nepal and Australia Source: Ministry of Industry, Commerce and Supplies of Nepal
Education Sector
One of the sore points, raised by some when it comes to unequal advantage between these two countries, has been Nepali students who arrive in Australia for further studies.
The federal Department of Education values the Nepali market around $3 billion. In 2019 alone, more than 53,000 Nepali students came here for further studies, and the Himalayan country is the third-largest source country for international students in Australia.
“This is an enormous amount that Nepali students pay, which ultimately supports the Australian economy. Given the size, population and economy- Nepal is punching well above its weight,” said Prakash Kharel, who runs a VET college here in Sydney.
“Where is the reciprocal gesture from the Australian government? Meagre token amount in the name of aid!!” Kharel mentioned that as a part of a long-term friendship, Australia should return a favour by investing large sums in Nepal to support economic growth.A similar sentiment was expressed by a Melbourne-based student Aneesh Karki (name changed), who is seeking permanent residency here in Australia.
"One of the many educational consultancies in Kathmandu providing services to students wanting to study in Australia". (Representative Photo) Source: Sewa Bhattarai / SBS Nepali
“We pay a lot of money by selling farmlands back home. I am still repaying loans that my family took out four years ago to send me here, “ he said.
“I know it was our choice to come here, but we feel like Australia only knows to squeeze money out from us and does not know how to give back.” He was hinting towards the Australian government's reluctance to support the international students during coronavirus pandemic.
Embassy of Nepal, Canberra held a program this year to mark 60th anniversary of Nepal-Australia relationship. Source: Embassy of Nepal, Canberra
Nepali-Australian success stories
Outside trade and commerce, there are many success stories as a result of the Nepal-Australia partnership.
The Fred Hollows Foundation, which helps to restore the eyesight of thousands of Nepalis is one. Sanduk Ruit, a celebrated Nepali ophthalmologist, is actively involved in this foundation.
Despite the statistics, there have been some positive steps taken towards bilateral trade growth as well.
Nepal Australia recently signed an air services agreement that allows both countries to fly across each other's border. Nepal now can operate seven flights a week to major Australian cities as per the agreement.
There is also an Australia Nepal Parliamentary Friendship Group, which is active in the federal parliament to lobby for the Nepal-Australia partnership.
Nepal Australia signed air service agreement on 30 September 2019 Source: Nepal Tourism Ministry
Federal Liberal Senator Andrew Bragg and Labour party MP Peter Khalil, both co-chairs of this group, agree that the Nepali diaspora in Australia can play a huge role to initiate and promote the trade growth between two countries.
“There are a lot of potentials in a sector like animal husbandry, technology and infrastructure development-where we both can learn and utilise each other skills,” said Peter Khalil.
“And Nepali residing here in Australia can play a crucial role in promoting trade that could benefit both countries.”
There is no doubt that friendship has brought both these countries very close to each other, but one participant who attended the 60th anniversary of the Nepal-Australia diplomatic relationship says more can be done, especially in the business sector.
Nepal- Australia Parliamentary Friendship Group labelled cake during an event held at Parliament House in Canberra on 11 Feb 2020 to mark diplomatic relations. Source: Nepal Embassy, Canberra
“The relationship started during the age of propeller aeroplane and has unfortunately stuck there ever since. Both countries need to recognise the new era of jet aeroplanes,” she added.
In a statement to SBS, the Department of Foreign Affairs and Trade has highlighted the "unique position" that the Nepali diaspora in Australia maintain.
"They are in a unique position to advocate for increased transparency and certainty for the Australian businesses sectors who are looking to invest in Nepal."
However, it further added that any Australian investment in Nepal is a commercial decision, "which is influenced by a number of consideration, including the level of confidence and transparency in the business environment."
