Nepal currently has diplomatic relations with 178 countries, but maintains residential missions in only 40 of them. The government runs most of these missions from rented properties, for which it spends billions of rupees every year. The costs of maintaining residential embassies outweigh the benefits, say government officials and former diplomats. According to them, Nepali missions are not yielding the desired results, particularly on the economic diplomacy front. There are a couple of reasons for this. An official at the Ministry of Foreign Affairs (MoFA) says failure of successive governments to appoint the right person for the ambassadorial role is the main reason for the poor performance of Nepali foreign missions.

Nepal government assigns ambassadorial jobs to both party loyalists and career diplomats. And in the case of the former, there is always a chance of conflict between them and the MoFA. Political appointees are rarely knowledgeable about foreign policy and international relations, and the host countries do not take them seriously.

The MoFA official says foreign governments would rather directly deal with the leadership in Kathmandu, instead of reaching out to unqualified ambassadors. Another reason is political instability in Nepal. Frequent government changes have resulted in ambassadors getting recalled from their jobs before they could complete their tenure, adds the official. A lack of coordination between embassies and the government is also affecting Nepali diplomacy. The ministry official says when there is no clear policy guidance regarding foreign relations, embassies and the ministry work according to their own rules and principles. Besides, the status of some ambassadors to powerful countries like India, China and the United States of America get ministerial status, making them senior to even foreign secretary. The MoFA official says such ambassadors do not want to brief about their activities to the department heads, which are led by joint secretaries, because they feel their position is on a part with that of a foreign minister. Some former ambassadors appointed on political quota, however, blame the MoFA for creating obstacles. Bishwambhar Pyakurel, who formerly led the Nepali mission to Sri Lanka, claims the bureaucracy is not serious about any issues. Ambassadors do not even have the authority to evaluate the performances of staff members working under them, he adds. Career diplomats who become ambassadors are also not faring well. They are scared of taking decisions in order not to create a controversy or anger the government, as it could affect their future promotion. The MoFA official says career diplomats who become ambassadors are happy just to perform their routine work. For instance, Nepali migrant workers, mainly in the Persian Gulf countries, continue to face hardship and exploitation, but our embassies there have not done little to address their problems. With the ambassadors either underperforming or reluctant to perform at all, Nepali embassies are only racking up bills while doing little to justify their existence. Let’s consider the expenses of our embassies, which are ever increasing. According to the report of the Auditor General, in the previous fiscal year, the government spent Rs 906m on rent and upkeep of its foreign missions. The government has taken a policy of purchasing land and buildings for its embassies. But so far, only the Riyadh mission has bought a property for the purpose, for which it paid Rs 527.7m. The government has also bought land to construct non-residential buildings in Canberra, Kuala Lumpur, Colombo, Islamabad, and Beijing, but the properties remain vacant to this day. The government released Rs 101.5m to pay leasing fees for Nepali missions in these five cities in the running fiscal year. This cost would have been saved if they had their own buildings. The MoFA had also allocated Rs 700m to build embassy buildings in Beijing and Canberra this fiscal year. However, the funds were transferred elsewhere, and Canberra received only Rs 1m of the allocated sum, which remains unspent. The Office of the Auditor General has instructed the Foreign Ministry to construct embassy buildings on its land to reduce leasing expenses. The Nepali Embassy in Canberra has leased 6,198 square meters of land for 99 years by paying a fee of AUD 1.2m.  According to Clause 3 (A) of the lease contract signed on March 21, 2018, the embassy was required to initiate building works within 18 months of the contract signing and complete them within 36 months. The Australian Capital Authority had given the Nepali Embassy until May 5, 2022, to begin construction works. However, 50 months since the signing of the contract, the embassy has only come up with the drawings of the building. The embassy has notified that the procurement process will begin once resources for construction are ensured. Similarly, two buildings built on 2,867 square meters of land owned by the Nepal government in Bonn remain unused after the embassy was moved to Berlin after the unification of Germany. But the embassy has been paying 8,626 euros annually as security utility fees for this property in Bonn. In the past 21 years, the government has spent more than Rs 18.6m on the maintenance and upkeep of its unused buildings in Bonn. The OAG has suggested in previous reports that the government should manage the property through sale or other means. The embassy notified the Foreign Ministry only recently that it has begun the process of selling the property. The Nepal government also owns three buildings, including a chancery, ambassador's residence and staff quarters, in Washington DC. About 30,000 square feet of land out of the 0.93-acre property that houses the ambassador's residence remains unused for a long time. The OAG has called on the government to make use of the land at the earliest. Since the government has been paying insurance and other fees for assets that are no longer in use, the OAG has advised that the concerned missions can take needful decisions for their proper management. However, there is a need to establish proper work procedures for the management of such assets. Lucky Sherpa, former ambassador to Australia, says bureaucratic hurdles from the MoFA are the main reason why the embassies are unable to take the initiative to manage such properties.  She says ambassadors cannot do anything because the foreign secretary rarely receives their calls. The process of opening embassies is not target-driven. Embassies are opened on the whims of top officials or politicians, not on the basis of necessity and proper evaluation, adds Sherpa. Nepal has bilateral trade with 154 countries, but enjoys a trade surplus with only 33 countries, including Denmark, United States, Algeria, Cambodia, Norway, Romania, Chad, Uruguay, Afghanistan, and Latvia. Most Nepali embassies have not made any progress to bridge the trade deficit. India, United States, Germany, United Kingdom, Canada, Turkey, France, Australia, Japan, and Italy are the top 10 export destinations of Nepal. Nepal’s passport is among the weakest in the world. According to the Henley Passport Index, it ranks on 102nd spot out of 108 countries, below North Korea and Palestinian Territory and one spot above Somalia. Analysts say so long as political instability continues to reign supreme in Nepal, political parties continue to appoint their loyalists to head foreign missions and bureaucracy continues to function with traditional mindset, the country will never prosper and its passport will not get strong. MoFA Annual budget  2022/23: Rs 5.8335bn 2021/22: Rs 6.0507bn 2020/21: Rs 6.5171bn   Nepali missions in numbers Diplomatic relations: 178 Trade relations: 154 Number of embassies: 30 Permanent mission: 3 Consulate general: 7 Honorary consuls: 53 Annual rent fee: 906m Key priority issues 

1. Trade imbalance
2. Passport category
3. Foreign investment
4. Resolving migrant issues
5. Tourism promotion

Top five export destination countries: India, USA, Germany, UK, Turkey Top five source countries of import: India, China, Argentina, UAE, USA Top five foreign investors: China (Mainland), India, USA, South Korea, British Virgin Islands Top five tourist source countries: India, China, USA, UK, Russia Top five destinations for overseas employment: Qatar, Saudi Arabia, UAE, Bahrain, Oman