Finland to reinforce links between trade and development with Nepal, which is on path to becoming middle-income country

Finland to reinforce links between trade and development with Nepal, which is on path to becoming middle-income country

Nepal, Finland's long-term partner country in development cooperation, is expected to graduate from a Least Developed Country (LDC) status in 2026. Finland and Nepal established diplomatic relations 50 years ago. Finland is now aiming to diversify its partnership with Nepal and increase commercial and economic cooperation with the country by taking advantage of the links between trade and development. Effective development cooperation plays a key role in bilateral relations.

Finland is the largest donor of UN women in Nepal. Fruit entrepreneurs in the Kavre region have received support and training in skills enhancement and business development and branding from the organisation. Photo: Srijana Bhatta.

Nepal, Finland's long-term partner in development cooperation, has taken steps forward over the recent decades and achieved significant development results. Yet at the same time, the country has suffered from crises and natural disasters: a decade-long civil war ended in 2006, and the most devastating earthquake in the country's history took place in 2015. On top of this, the COVID-19 pandemic affected Nepal's fragile healthcare system and hit hard the country's economy, which is dependent on tourism and remittances. However, Nepal and Nepalese have proved their resilience.

The country's economy is slowly recovering, and growth has been steady, if moderate, in recent years. Poverty has decreased, there has been a significant increase in the level of education and the Constitution of 2015 has promoted gender equality. As a result of these developments, Nepal is scheduled to graduate from the UN's Least Developed Country (LDC) status in November 2026. Finland, together with other international donor countries, is supporting Nepal's ambition to graduate to the middle-income country status in the next few years.

Achieving results through long-term cooperation

The long-term partnership between Finland and Nepal has focused on development cooperation. Finland has supported Nepal's forestry sector, water supply, sanitation and hygiene, and the education sector since the 1980s. In addition to the above, current cooperation focuses on promoting gender equality and social inclusion.

The long-standing bilateral development cooperation between Finland and Nepal has yielded significant results. Over two million people in Nepal have gained access to clean drinking water. The progress in the education sector has been impressive: when Finland started its development cooperation in Nepal, only one fifth of the population could read. Today, the literacy rate is around 76 per cent, with a significant relative increase among women. Finland has focused its support on promoting gender equality, and the outcome of this work is visible especially in local decision-making, in improved financial position of women and in reduced discriminatory practices.

Cooperation between Finland and Nepal is considered to be a good example of long-term, successful development cooperation based on joint ownership and genuine partnership. Finland's Development Policy Results Report published in 2022 highlights Nepal's strong initiative in development cooperation and describes it as a success. The fact that Nepal has co-financed a large number of joint projects reflects the country's commitment to development cooperation.

Half-century of diplomatic relations

The anniversary of diplomatic relations between Finland and Nepal was celebrated at the Finnish Embassy in Nepal in November 2024. The photo shows Ram Sahaya Yadav, Vice President of Nepal, Ville Tavio, Minister for Foreign Trade and Development, and Riina-Riikka Heikka, Ambassador of Finland to Nepal. Photo: Srijana Bhatta.

Finland and Nepal established diplomatic relations in 1974, this year marking the 50th anniversary of relations between the countries. The year has seen the countries highlight the themes and results of development cooperation, engage in close dialogue with key partners and deepen their relations.

Bilateral cooperation has yielded positive results and will continue. The key objective of development cooperation is to strengthen Nepal's own economic capacity and thus reduce the country's need for external funding. In future, Finland will focus on increasing commercial and economic cooperation with Nepal. The aim is to diversify the relations between the countries and to explore new opportunities for cooperation in trade by taking advantage of Finland's long-standing and effective development cooperation.

Public link

Please use the above public link if you want to share this noodl on another website.