This paper assesses the level of alignment of the Nepal’s development strategies as outlined in the 15th Plan, government’s current year budget and the 2023 National Trade Integration Strategy with the key action areas of Doha Programme of Action (DPOA). It identifies gaps in the alignment between the national strategies and DPOA, and based on which suggests strategies and action areas that are to be included in the upcoming 16th Plan of the Government of Nepal. The integration of DPOA in the 16th Plan will help its effective implementation of the DPOA, and support smooth and irreversible graduation of Nepal.

The mapping of national development strategies using a grading scheme reveals that all key action areas (KAAs) of DPOA are reflected in the national strategies of Nepal. Out of the 38 KAAs, the Nepal’s development strategies are well aligned with 12 KAAs (31.6%), and partially aligned with other 25 KAAs (68.4%). However, the extent of alignments varies widely across six focus areas of the DPOA. The status of alignment is better in the case of focus areas 1 (investing in people) and 5 (addressing climate change) environmental degradation, recovery from COVID-19). Of the 10 KAAs under focus area 1, seven are adequately aligned, whereas all the KAAs of focus area 5 are adequately aligned. All other focus areas have their KAAs with partial alignment excluding one KAA of focus areas Three.

While Nepal is at the crossroads of multiple development challenges, the two core issues that it is facing today are: low economic growth in the domestic sector, and high trade deficit in the external sector. They require various interventions including increasing productivity and enhancing export competitiveness. There seems to be inadequate policy priority by the GON in these areas. The mapping exercise found that KAAs related to supporting structural transformation, enhancing international trade and mobilizing reinvigorated global partnership of DPOA are not well reflected in the national development strategies. These are the areas which are of critical importance in view of the growing trade deficit and increasing debt burden in Nepal.

Nepal cannot not continue to be a remittance-based economy forever, otherwise it could not sustain its graduation in view of the growing global shocks. As the remittance including other service-based sector such as tourism are highly affected by a global shock, the paper has advanced following strategies to be integrated in the 16th Plan: (i) Enhance productivity and economic growth; (ii) Increase exports and substitute imports; (iii) Mobilise finance; (iv) Accelerate enabling environment for engagement of private sector; (v) Develop capacity; and (vi) Enhance cooperation with transit countries and support from development partners. In addition, building infrastructure including clean energy, and investing in human capital formation among the poor and vulnerable, as well as improving governance and effective implementation of policies is necessary. It is through these actions Nepal can build resilience, achieve the SDGs as well as sustain its graduation. This is possible through full integration of the focus areas of structural transformation; enhancing trade and regional integration; and mobilizing international solidarity and reinvigorated global partnerships of the DPOA into the national strategies of Nepal.

The Government of Nepal should harness the benefits of all the provisions and commitments of the DPOA including the preferential trading arrangements and concessional finance before its graduation in November 2026. Subsequently, it should also receive support from the developed country partners to continue the benefits that it gets being LDC. For this to happen, GON needs to negotiate from now on with the relevant developed country partners for continuing such support after graduation. It should also fulfill some of the requirements of developed country partners such as that of the EU’s GSP+ provisions for continuing to receive the trade related benefits in the future.