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In today’s time, the omnipresence of AI is undeniable. From virtual assistants like Siri and Alexa to self-driving cars and advanced medical diagnoses, the potential of AI technology is limitless. It has rapidly pervaded various sectors, including finance, communication, education, and government. As AI technologies become more ingrained in everyday life, the need for comprehensive regulation becomes increasingly apparent. Nepal has been without the necessary laws and regulations to govern the AI sector. Recognizing this gap, the government has developed its first-ever concept paper to lay the groundwork for creating essential policies and legal frameworks.

Key points of concept paper

a. General approach of paper on regulating AI 

The concept paper has proposed to formulate a national policy for Artificial Intelligence that ensures cyber security, data protection and upholds user privacy, aligning with international standards and best practices. The paper has also mentioned developing a centralized national portal to expedite the sharing of AI-related information, facilitating communication and collaboration across different sectors. Such effort will help to ensure that all stakeholders have access to the latest information. Another major highlight of the paper is on human capital development. It mentions identifying and enhancing the skills of existing human resources to ensure that a sufficient number of the skilled professionals are available in both public and private sectors for AI development and advancement. This involves assessing the current workforce’s capabilities and implementing targeted training programs to fill any skill gaps in the AI sector. Investing in human capital development enhances the country’s ability to compete globally in the AI sector. A skilled workforce can attract international investments, collaborations, and partnerships, further boosting the nation’s AI ecosystem. With a well-trained workforce, there is a greater potential for innovation and research in AI technologies. This can lead to the development of new AI applications, solutions, and advancements, keeping the nation at the forefront of technological progress.

Similarly, the concept paper emphasizes the need to integrate AI technologies across various sectors, including healthcare, financial services, construction, education, government services, social security, sports, research and development, agriculture, and tourism. The goal of such sectoral application of AI is to enhance the efficiency and effectiveness of these sectors through AI-driven innovations. Different sectors have unique challenges and needs. Tailoring AI applications to each sector allows for solutions that are more relevant and impactful, addressing specific issues effectively. For instance, in healthcare, AI can enhance diagnostic accuracy and personalized treatment, while in financial services, it can improve fraud detection and automate routine tasks. This tailored approach ensures that AI applications are highly relevant and effective in solving sector-specific problems. 

b. Special approach of paper regarding research and development on AI 

The Concept Paper for AI regulation in Nepal outlines a strategic approach to advancing research and development (R&D) in AI technologies. Emphasis is placed on enhancing privacy protection, transparency, and accountability through increased research and investment. Similarly, Specialized AI research centers and laboratories are proposed to be established in universities and industrial settings to drive technological progress in AI. Additionally, the concept of collaboration between academia and industry is also highlighted. Financial support mechanisms, including grants, scholarships, and funding programs, are recommended to encourage collaboration between academia and industry. This mechanism is intended to incentivize both academic researchers and private sector experts to engage in AI development by providing essential resources and support. The paper also mentions developing Common Computing Infrastructure in order to boost AI research and development. This will help to distribute the essential capabilities required for progressive AI research across different institutions and sectors. The major focus is on partnerships with global AI research organizations and universities to promote knowledge exchange and collaborative research, integrating Nepal into the international AI research community.

Expectations onwards

In the Government AI Readiness Index, 2023, Nepal has been ranked 150th out of 193 countries with the total score-30.77. In the Index, the total score is calculated from three bases- government pillar, technology sector pillar, and data and infrastructure pillar. With a total score, 30.77, Nepal has achieved 31.04 in government pillar, 24.21 in technology sector pillar, and 37.06 in data and infrastructure pillar. The three pillars were analyzed by setting different dimensions. Under the government pillar, there were four dimensions- vision, governance and ethic, digital capacity, and adaptability. Similarly, the technology sector pillar comprised three dimensions- maturity, innovation capacity, and human capital. The third pillar, data and infrastructure, has also included three dimensions, infrastructure, data availability and data representativeness. The ranking and scores achieved by Nepal underscores the urgency for the country to establish the vigorous regulatory framework for AI. And the expectation from such regulatory policies and laws is that Nepal will be achieving a higher ranking in the Government AI Readiness Index in coming years. 

Similarly, the laws are expected to be formulated in a manner that align with core democratic principles of the nation and firmly safeguards the fundamental rights such as right to privacy, right to information, right against discrimination, right to freedom of expression etc. that are provided by the Constitution of Nepal. AI technology relies heavily on the collection and analysis of vast amounts of data, often personal and sensitive in nature. The law shall address the issues of these data being misused or improperly accessed leading to the violations of individuals privacy rights. AI systems are only as good as the data they are trained on, and if this data is biased or flawed, the algorithms can perpetuate and even amplify existing prejudices and inequalities. In a country as diverse as Nepal, where ethnicity, language, and religion play significant roles in the social fabric, the risk of biased AI algorithms is especially concerning. Additionally, the right to freedom of expression shall also be the priority of the AI regulatory framework as the AI technologies have the potential to influence and even censor the flow of information. There shall be transparency regarding how these technologies are being used and the data they are collecting. The lack of transparency can undermine people’s right to access information about how their data is being used and processed. Moreover, the introduction of Nepal’s concept paper on AI regulation itself marks a significant step towards the creation of a legal framework and policies regulating AI. It is crucial that these laws are thoughtfully crafted and enforced to ensure that AI technologies positively contribute to the development of the nation by inviting growth and progress in the AI sector while also mitigating the potential risk and harm.

Established in 1985 with the aim of regional cooperation, integration and socio-economic development of its member countries and the region as a whole, South Asian Association for Regional Cooperation (SAARC), as of now, is a “zombie” organization that could only be technically said to be operational; its spirit, ambitions and zeal dead as no progress has been made in its mandate. Upon its foundation, SAARC’s main goals included enhancing the well-being of South Asians, advancing their quality of life, fostering economic growth, social progress, and cultural advancement, ensuring dignity and realizing full potential for all individuals, and furthering collective self-sufficiency. However, despite having great potential as an intergovernmental organization to uplift the entirety of the South Asian diaspora, SAARC’s performance in recent times is underwhelming at best and utterly disappointing at worst.

Failure of SAARC

SAARC currently finds itself in a state of inertia, lacking clear direction and meaningful mandates for the future. This stagnation can be attributed to a multitude of factors plaguing the organization. Foremost among these are the longstanding bilateral conflicts, notably the deep-rooted animosity between India and Pakistan, which overshadows SAARC's agenda and hinders consensus-building among member states. The Indo-Pak conflict deeply impacts SAARC, hindering its functionality by causing recurrent tensions that divert attention from its agenda, fostering insecurity and instability in South Asia. This cycle of suspicion undermines cooperative efforts within SAARC, exacerbated by India’s dominant position in the region, which complicates efforts to promote equality. 

The last SAARC Summit was scheduled to be held in Islamabad, Pakistan, in Nov 2016. However, it was indefinitely postponed due to escalating tensions between India and Pakistan. The URI surgical strike, which occurred on 29 Sept 2016, led to heightened military activity along the Line of Control (LoC) and exponentially increased the already dense diplomatic hostilities between the two countries. This ultimately led to the cancellation of the summit. The ongoing bilateral conflicts and diplomatic hostilities between India and Pakistan have since prevented the resumption of SAARC summits, underscoring the organization's challenges in fostering regional cooperation amidst deep-seated geopolitical rivalries.

Further adding to this issue is a pervasive lack of trust among member nations, stemming from historical grievances and competing geopolitical interests. Political instability and governance challenges within member states further detract from regional cooperation efforts, while economic disparities limit the scope for mutually beneficial initiatives. SAARC’s institutional capacity is also hampered by weak administrative structures and bureaucratic inefficiencies, exacerbating its inability to deliver tangible outcomes. External interference from global powers and regional actors seeking to advance their own interests further complicates SAARC’s ability to pursue an independent and coherent agenda. Collectively, these challenges render SAARC a ‘zombie organization’, struggling to navigate a complex landscape fraught with obstacles to meaningful regional cooperation and development.

Amidst the failure of SAARC to fulfill its mandate, India to strengthen its geopolitical grasp in South Asian region as well as Southeast region made a strategic move by extending invitations to the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) leaders to the BRICS summit held in 2016 at Goa. This move signaled a major diplomatic shift, showcasing India’s willingness to turn to BIMSTEC in response to SAARC’s ineffectiveness at meeting its expectations. Subsequently, the Indian Prime Minister engaged in a bilateral meeting with BIMSTEC leaders. Since then, the member states have been reluctant to resume the SAARC summit. India has been consistently participating in the BIMSTEC summit, looking to establish it as a formidable alternative regional platform for the five SAARC nations to discuss sub-regional cooperation.  

Rise and Significance of BIMSTEC

BIMSTEC was established on 6 June 1997 through the Bangkok Declaration. At present, BIMSTEC consists of seven member states out of which five member states are also the member of SAARC namely, Bangladesh, Bhutan, India, Nepal, Sri Lanka and two member states are from Southeast Asia, namely Myanmar and Thailand. Basically, BIMSTEC is a sector-driven institution unlike SAARC and many other regional alliances. Since its establishment, fourteen priority sectors of cooperation have been identified through the BIMSTEC ministerial summit held on different occasions. These sectors are trade and investment, transport and communication, energy, tourism, technology, fisheries, agriculture, public health, poverty alleviation, counterterrorism and transnational crime, environment and disaster management, people-to-people contact, cultural cooperation and climate change. The member countries of BIMSTEC  lead these sectors which are divided among them. They meet at different levels, like BIMSTEC summits, ministerial meetings, senior officials’ meetings, and expert groups.

BIMSTEC, as a trade bloc, presents numerous opportunities as the combined GDP in the region is around $2trn which is likely to grow exponentially in the near future. Among the member states, Myanmar’s intra-BIMSTEC trade accounts for approximately 36.14 percent of its overall trade, while Nepal and Sri Lanka have intra-regional trade shares of roughly 59.13 percent and 18.42 percent respectively. Bangladesh’s intra-BIMSTEC trade share stands at 11.55 percent, whereas India and Thailand have shares of around three percent within the BIMSTEC. 

Could BIMSTEC be an alternative to SAARC?

SAARC is a purely regional organization characterized by member nations sharing a collective history, geographical closeness, shared cultural identity and regional values. The member countries of SAARC are bound not only by historical ties but also by common developmental challenges, necessitating collaborative efforts for effective resolution.

Conversely, BIMSTEC serves as a bridge between South Asia and Southeast Asia, leveraging its potential to connect the economies of both regions. By integrating South Asia with the vibrant economies of ASEAN, BIMSTEC acts as an inter-regional organization facilitating economic cooperation and trade. Its scope extends beyond the confines of South Asia, embracing a broader regional outlook.

SAARC and BIMSTEC are not interchangeable options or substitutes for each other. Rather than viewing SAARC and BIMSTEC as competing entities, it is more appropriate to recognize them as complementary frameworks with distinct but mutually reinforcing objectives. SAARC’s emphasis on intra-regional cooperation complements BIMSTEC’s inter-regional connectivity aspirations. The collaborative efforts within SAARC pave the way for addressing common developmental challenges, while BIMSTEC’s outreach to ASEAN economies opens avenues for enhanced trade and economic prosperity.

The authors are a law student at Kathmandu School of Law