Economic Diplomacy for Tourism Promotion in Nepal

The use of diplomatic channels for promoting economic interest including tourism is of paramount importance

Nepal’s dealing with the external world should focus on economics rather than politics. Due to the multitude of restrictive factors—difficult geography, inadequate military capacity, poor technological development, less influential leaders Nepal’s national capacity to play a big game of political diplomacy in the world stage is limited. Now, the only option left for us is steering our whole gamut of international affairs towards economic diplomacy. For instance, as a robust comparative advantage to others, tourism promotion at the forefront can harvest enormous benefit to enhance economy. The better economy would eventually increase our internal capability.

Nepal Tibet War                        Photo:Nepal Army

The economy had been at the essence of diplomacy during 18th and 19th century, when Nepal established business ties and an effective trade system with Tibet and British India. The relation, as a strategic alliance, was purely based on economic interest rather than political gain. Even after the war broke out between Nepal and Tibet--as a conclusion Thapathali treaty was signed in 1856. As per the truce, Tibetans agreed to pay an annual subsidy of ten thousand rupees to the Nepal Durbar and to allow a Nepalese trading station and agency to be established in Lhasa.

Government of Nepal (GoN) realized that tourism can contribute to the country’s economy only during the late fifties. Tourism Administration was formed in 1957. Next, a major step forward in Nepal’s tourism appeared in 1972 by the formation of ‘Nepal Tourism Master Plan’. Among other tourism promotion strategies, the master plan also recommended establishing ‘tourist bureaus in Western Europe and USA’. Also, the plan advised to distribute Travel Agents Manual for wholesalers in North America, Europe, Japan and Australia that operate in the Asian marketplace. Nevertheless, those recommendations are still a great challenge for implementation.

Namobuddha Monastry in Kabhre district   Photo: Author

Moreover, Tourism Policy, 1995 made special emphasis on promotion of tourism from Asian markets. Under its working policy, it attempted to direct attracting tourists from neighboring countries during the lean season when overseas tourists were few. In addition, it envisaged the then Royal Nepalese embassies and consulates abroad to mobilize promotion of Nepal's tourism. It also emphasized the provision of Nepalese people abroad, or foreign citizen involvement in tourism business or with a keen interest in tourism, could be appointed as representatives for tourism promotion.

Eventually, the GoN established Nepal Tourism Board (NTB) in 1999 after the realization that private sector’s effort is also necessary.  The Board is the public—private partnership model incorporating the participation of the private sector under a legitimate leadership of the government.

Nevertheless, the effort being made for tourism promotion through diplomatic channels is not sufficient.  NTB has been hit hard by lack of sufficient budget. Consequently, the board has not been able to deploy its office abroad.  In a contrary, other National Tourism Organizations (NTOs) with similar tourism potential has posed great threat to Nepal’s tourism promotion body. Nepal is facing a sharp competition from destinations--China, Sri Lanka, Thailand, Malaysia, Hong Kong, Singapore, Vietnam, and Laos. Due to adequately high promotional budget, these East Asian countries have comparative advantage over Nepal in many factors. However, Nepal is doing its best with its inadequate budget.

After the fall of the Soviet Union in the early nineties, the cold war eventually ended that gave a new dimension to diplomacy. Although it started a bit earlier, cessation of cold war put economy at the forefront of diplomacy rather than political gains.

Amid shifting global ideology, Nepal also underwent through major political transference i.e. restoration of democracy in 1990. Thus, Nepal adopted policies of open market economy, giving high priority to integration into the world economy. In this context, the Government emphasized economic diplomacy, a set of actions linked to cross-border economic activities. Economic diplomacy is a part of diplomacy that promotes the economic interests in its interactions with other countries, regional and international organizations. Diplomacy is the art and practice of conducting negotiations with other countries to secure national interests.

In order to mainstream the potentiality of Nepal’s advantageous sectors into foreign policy instruments, a separate division--Multilateral Economic Affairs Division (MEAD) was formed within the Ministry of Foreign Affairs. The division undertakes the function of promoting Nepal's economic interests abroad. It also emphasizes promotion of tourism along with foreign direct investment, export and development cooperation.

Today, amid insufficient tourism promotion in the country, and its continual failure to draw in foreign nationals, diplomatic and consular missions of Nepal is the only hope left behind. The political transition of this time has radiated hope in the international arena that Nepal is no more a dangerous place to shoot the breeze. 

This is a great leverage for Nepal’s diplomatic missions who have their presence in 29 countries, many of which have greater affinity for visiting destinations like Nepal. There is a need for further orientation of these staff of the missions who can play a vital role in tourism promotion. NTB can provide orientation programs for those mission members prior to performing their project. To lead the process ahead, the Ministry of Foreign Affairs should have adequate cooperation with other line agencies, including the Ministry of Culture, Tourism and Civil Aviation.

Furthermore, the GoN’s proposed action plan to promote tourism as well as foreign employment, investment, and hydropower through the medium of economic diplomacy should materialize as soon as possible. In that direction, GoN has formed a high-level coordination committee led by the Minister for Foreign Affairs and set up an economic diplomacy desk including representatives of the representatives from Nepalese diplomatic missions abroad.

The private sector’s role is also instrumental in promoting tourism overseas as the government’s effort is insufficient. As per examples from other states, private sector’s bilateral chamber of commerce in a foreign country supporting honorary consulate generals by organizing tourism trade fairs is highly fruitful. It is indeed a good initiative of the Non Resident Nepalis Association (NRNA) that its president Shesh Ghale has called supporting Nepal’s economic diplomacy through their presence in 65 countries across the globe. So far, supportive role of NRNA in Hongkong for promoting Visit Nepal Year 2011 is commendable.

A vigorous public, private initiative for promoting tourism through Nepal’s diplomatic and consular missions abroad is the need of this hour. Private sector’s expertise and resources coupled with GoN’s already established workstation can better promote the country’s brand image in the world. Besides 29 diplomatic missions, 4 consular missions in Kolkata, Beijing, Lhasa and Jeddah are important hub for showcasing Nepal’s sight-seeing portfolio. Federation of Nepal’s Chamber of Commerce and Industries (FNCCI) can start an immediate promotion plan in tandem with limited government staffs deployed in those missions in the region. 

Drawing the global customers starting from the immediate region is a proficient heads up for a start. A diplomatic leverage for promoting tourism in the neighbor and the rest of the world is something practically feasible approach. Amongst growing regional powers in the vicinity Nepal’s political dealing has reaped no fruits. At this juncture, Nepal has to use its comparative advantage--tourism to collect currency reserve that will ultimately protect national interests.