<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141132/636bac079c7e80680e077f0ejpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Prime Minister K P Oli inaugurating the first electric bus service in 2018 after announcing 20% of vehicles in Nepal would be battery-powered by 2020. The government did not allow those electric buses to go into service, and has now reversed its tax policy favouring battery-operated vehicles. Photo: Bikram Rai</figcaption></figure>Developing countries are usually late-comers in adapting to advanced technologies, but new innovations like battery-powered cars give countries like Nepal the chance to leapfrog to clean and green energy.Nepal has been kept back by poor and limited education, low levels of industrialisation and bad governance. However, this actually puts the country in a position to catch up through the adoption of new technologies.Especially when it comes to energy and the environment, Nepal does not need to reinvent the wheel. It just has to build on past policies that have worked – like the community forestry program, manage hydropower to generate surplus electricity, and restore tax subsidies for electric vehicles.When Sajha Yatayat introduced <a href="https://en.setopati.com/market/132700">five new BYD electric buses </a>in 2018, there was great optimism that Nepal was on the right path. Prime Minister K P Oli himself inaugurated those buses by riding them into Singha Darbar, and announced that 20% of vehicles in country would be electric in two years time. Well, it is now 2020 and instead of promoting EVs, this year’s budget has withdrawn the tax breaks for battery-powered cars.Nepal needs to foster a new climate for investment in green technologies with a paradigm shift in reducing the technology gap. One such paradigm shift had been the tax concessions on electric vehicles, but Finance Minister Yuvaraj Khatiwada’s budget raised <a href="https://www.nepalitimes.com/latest/nepal-takes-3-steps-back-on-e-cars/">excise tax by 40% with another 60% of custom duty</a> and put a question mark on the government’s commitments to its own sustainability goals.There are two compelling reasons to support EV growth: controlling air pollution and cutting petroleum imports. <a href="https://www.nepalitimes.com/here-now/air-pollution-is-more-dangerous-than-smoking/">An estimated 35,000 people die annually</a> from pollution emitted by fuel-driven vehicles. Nearly <a href="https://oec.world/en/profile/country/npl">15% of Nepal’s total imports</a> is for petroleum making it Nepal’s number one item of import.According to <a href="https://gggi.org/site/assets/uploads/2020/02/GGGI_Nepal_Investment-Projects-for-Electric-Mobility_Final.pdf">Global Green Growth Institute</a>, proposed new 6.8GW of hydropower projects will give Nepal excess electricity supply in next few years. Electrifying the transportation sector will allow <a href="https://www.nepalitimes.com/latest/nepals-chance-to-green-its-budget/">proper utilisation of domestic resources</a>, and enable  new innovative business strategies for energy sufficiency.To benefit from both aspects, the government needs proactive subsidies to encourage the adoption of electric vehicles. This not only helps in low-cost access to electric vehicles, but also create the environment to <a href="https://gggi.org/site/assets/uploads/2020/02/GGGI_Nepal_Investment-Projects-for-Electric-Mobility_Final.pdf">build an electric mobility ecosystem</a> for sustainable growth.China provides a good example. Its economic development formula starts with local experimentation of reform initiatives, which then can be replicated at the national level.Back in 1998, China’s first phase of EV development actually happened on a small scale across 12 major cities.For the next 10 years, the focus was given to battery production and setting up of necessary infrastructure which then got integrated into the national plan. Subsequently, after 2008, <a href="https://www.researchgate.net/publication/321869464_Electric_mobility_and_the_quest_for_automobile_industry_upgrading_in_China">conventional fossil consuming motorcycles were banned</a> across 16 major cities, and government promoted preferential treatment and subsidies including purchase tax waiver, trade barrier removal and infrastructure subsidy that expanded pilot initiative from 12 to 88 major cities.Since then, <a href="https://thediplomat.com/2020/05/can-chinas-electric-car-industry-weather-the-covid-19-storm/">450 new EV manufacturers</a> have been registered in China, including giant  oligopolies like BYD which have taken the global lead in electric vehicles. For the past three decades, EV sales have seen an increasing trend in China and they are projected to reach <a href="https://www.chinadialogue.net/article/show/single/en/11405-Can-China-electrify-all-new-passenger-cars-by-2-3-">price parity with petrol</a> and diesel by 2030.The <a href="https://about.bnef.com/blog/battery-pack-prices-fall-as-market-ramps-up-with-market-average-at-156-kwh-in-2019/">87% drop</a> in battery prices worldwide between 2010 to 2019 will also reduce the price of electric vehicles and make them more competitive vis-à-vis fossil cars.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141132/636bac0a9c7e80680e077f0fjpeg.jpg" alt="" width="1086" height="672">For Nepal, this means electric vehicles will gradually replace petrol and diesel vehicles whether we like it or not. It is better to stay ahead of the curve and actively promote battery-powered cars now so that Nepal gets an early-bird advantage from reduced imports, improved air quality and better public health.As the Saudi Arabian Oil Minister <a href="https://www.economist.com/leaders/2003/10/23/the-end-of-the-oil-age">Seikh Zaki Yamani once said: </a>‘The stone age did not end for the lack of stones, and the oil age will end long before the world runs out of oil.’ Despite the global importance of alternative energy, Finance Minister Khatiwada’s  argument that an increase in imports of electric vehicles would drain the economy does not hold much water. Being a one-time import, EVs replace up-front cost of petrol cars, but reduce the long-term running cost by cutting the use of <a href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/">imported fuel.</a>Similarly, the argument that only high-end vehicles were imported in large numbers fails to take into account that cheaper Indian and Chinese electric cars and e-scooters like <a href="https://www.nepalitimes.com/banner/electri-city-cars/">Niu and Terra Eco</a> had begun to replace petrol-powered scooters. Instead of raising taxes, Khatiwada should have should have been given incentives for <a href="https://english.khabarhub.com/2020/18/105016/#.Xurj2Xw2GrQ.twitter">entry-level or mid-range EVs</a> and electric buses which cater to local needs, reduce other costs and promotes sustainability.Germany subsidised solar power and China subsidised electric vehicles more because they made economic sense, than just because of their ecological benefits. Nepal should also embrace the benefits of electrifying the transportation sector for economic and health reasons, rather than try to convince Nepalis to reduce the country’s carbon footprint to save the planet.Raunab Singh Khatri is a graduate student in economics at the Yenching Academy of Peking University

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Why Nepal needs to restore EV tax subsidy

https://www.youtube.com/watch?v=087QDbzzKCM&amp;t=6sDespite an initial lukewarm response, sales of electric two-wheelers have spiked in Kathmandu as commuters realise that their initial and running cost is much lower than petrol motorcycles.If this trend continues, the shift from petrol bikes to battery-powered two-wheelers will help clean up Kathmandu’s air pollution. Today, the more than 800,000 two-wheelers in the Valley are the main contributors of poisonous gases like carbon monoxide, hydrocarbons, nitrous oxides and ozone. Read also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=31866&amp;preview=true" target="_blank" rel="noopener">Plug-ins</a>, Sanghamitra Subba<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=31851&amp;preview=true" target="_blank" rel="noopener">Fully Charged</a>, Nepali TimesThese gases, combined with particulate matter from the exhaust pipes of motorcycles, account for most of our air pollution. People living along busy roads and commuters with long-term exposure to these pollutants can have their life expectancy reduced by up to four years. In addition, motorcycles raise the <a href="http://archive.nepalitimes.com/blogs/thebrief/2017/03/14/how-bad-is-the-air/" target="_blank" rel="noopener">noise level</a> on city roads to dangerous levels.A shift to electric two-wheelers would also reduce Nepal’s dependence on imported petroleum. Indeed, electric scooter sales first picked up in the aftermath of the <a href="https://www.nepalitimes.com/here-now/virtually-a-blockade/" target="_blank" rel="noopener">Indian Blockade</a> in 2015, but once petrol was available again, sales tapered off.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a542d9c7e80680e052393jpeg.jpg" alt="" width="326" height="405"/><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a542e9c7e80680e052394jpeg.jpg" alt="" width="320" height="403"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a542f9c7e80680e052395jpeg.jpg" alt="" width="337" height="405">“For a long time we had difficulty convincing customers to switch from petrol to electric scooters, but with tax breaks for battery vehicles, there has been an upsurge in people buying electric in the recent months,” explains Subash Acharya of Bella Motors. With India committed to banning petrol two-wheelers by 2025 and <a href="https://www.nepalitimes.com/banner/poisoning-the-air-we-breathe/" target="_blank" rel="noopener">China manufacturing only electric vehicles by 2030,</a> Nepalis will have no choice but to buy electric, he adds.It is now compulsory for electric two-wheelers in Nepal to be registered and their drivers need a license. However, customers now only pay 24% vehicle tax, the annual tax has been waived, and there is a 50% rebate on road improvement tax. Owners of e-bikes and e-scooters pay only Rs125 to renew their bluebook compared to Rs2,500 for petrol two-wheelers.“A lot of my customers chose electric because of its low running cost,” says Shyam Sapkota of <a href="http://archive.nepalitimes.com/blogs/thebrief/2014/06/05/visitors-throng-ecofair/" target="_blank" rel="noopener">Terra Motors</a>, which has sold over 1,500 electric two-wheelers since 2014. He says an average user saves up to Rs45,000 a year over a petrol bike.https://www.youtube.com/watch?v=T6OXqYKuHhg&amp;feature=youtu.beSuraj Joshi bought five NIU electric scooters for his staff at Real Time Solutions in Dhobighat, and says they were a great investment: “Electric scooters are very smooth for city rides, you don’t have to spend on maintenance and energy consumption is very low.”With more regular electric supply, electric scooters can be recharged at night like mobile phones. They are also much lighter, reducing back problems and muscle stress, especially for women and the elderly. Misconceptions about mileage and range often put off potential buyers, but electric motors give better torque and range has improved with newer batteries.Says Pranayna KC (pictured above) of Eco Infinity, which sells the NIU brand in Nepal: “If you use electric vehicles your running cost stays in Nepal, and they will also not pollute the air we breathe.” Despite positive growth, industry players say there is a long road ahead before the capital's petrol two-wheelers are replaced by electric ones. Better marketing, as well as more government incentives and policy clarity, will play a key role. <img width="1000" height="1500" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54309c7e80680e052396jpeg.jpg" alt="">“Because of the sheer number of two-wheelers, electric scooters should be the top government priority,” says environmentalist <a href="https://www.nepalitimes.com/here-now/cleaner-air-with-greener-buses/" target="_blank" rel="noopener">Bhushan Tuladhar</a>. Eight brands of electric two-wheelers will be launched at the Nepal Automobile Dealers’ Association (NADA) auto show 27 August-1 September.  Read also:<a href="https://www.nepalitimes.com/banner/nepals-electric-transport-future-is-here/" target="_blank" rel="noopener">Nepal's electric transport future is here</a>, Sonia Awale<a href="https://www.nepalitimes.com/banner/poisoning-the-air-we-breathe/" target="_blank" rel="noopener">Poisoning the air we breathe</a>, Sonia Awale<a href="https://www.nepalitimes.com/from-the-nepali-press/more-than-half-of-nepals-electricity-imported-from-india/" target="_blank" rel="noopener">More than half of Nepal’s electricity imported from India</a>

Sonia Awale

More e-scooties for cleaner Kathmandu air

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

The final investigation report on the crash of a Saurya Airlines jet on 24 July 2024 at Kathmandu airport has revealed flaws in the carrier’s technical operation procedures, poor monitoring by the Civil Aviation Authority of Nepal (CAAN) and gaps in the airport’s emergency response. Eighteen people including a child were killed, and only the captain survived as the plane plunged seconds after takeoff, crashing within the airport perimeter. This was the latest in a series of aircraft accidents in previous years, and further tarnished Nepal’s already poor aviation safety record and contributed to the country being retained in the EU’s air safety list. &nbsp;&nbsp;&nbsp; The circumstances in the Saurya crash were different from the Yeti Airlines crash in Pokhara in January 2022 that killed all 72 on board, and two Tara Air crashes in February 2016 and May 2022 on approach to Jomsom that together claimed 45 lives. However, all four tragedies were a result of negligence of carriers and crew, failure to follow procedures, regulatory slackness, and overconfidence. The Saurya crash, especially, was a glaring example of how an ailing airline broke its own rules to allow passengers, including non-employees, a joy ride to Pokhara on a maintenance ferry flight. CRASH REPORT The Final Investigation Report prepared by the Aircraft Accident Investigation Commission and released on the first anniversary of the crash last week carried a long list of rules that were ignored or broken, and of regulatory failure. The first mistake was to cram spares, tools and inflammable chemicals needed for the aircraft’s C-Check in Pokhara into the cargo hold flouting its own ground handling procedures.&nbsp; There was no check-in of passengers, some of whom were not even employees – even though regulations say only flight and maintenance crew should be on board a maintenance positioning flight. Many brought their own luggage into the plane and stored it unsecured in the cabin. There was no flight attendant to give a safety briefing to passengers. The load and trim charts given to the flight crew were rough estimates, and the total takeoff weight of the plane was 18,300kg plus or minus 200 kg. That would still have been all right, but there was a glaring mistake in the speedchart Saurya pilots were using to calculate the minimum takeoff speed (known as VR), and it had been wrong ever since the 21-year-old aircraft entered service with the airline in 2017. FAULTY DATA&nbsp; The Commission probed Flight Data Recorder inputs from previous takeoffs of the Canadian-built CRJ200-LR in 2023-2024 and found that the undetected error in the speedchart had caused the plane to pitch up at an abnormal rotation rate at least 18 times on previous takeoffs.&nbsp; Any rotation rate more than 3°/sec is regarded as unusual. But on at least two occasions, this aircraft with tail number 9N-AME had rotation rates of 5.8°/sec and 5.5°/sec, the second one was when the pilot who survived was flying in March 2024.&nbsp; On this particular day, the plane’s rotation rate was 6.5°/sec, causing it to go into a deep stall soon after takeoff, the Commission report said. Essentially, the plane was not flying fast enough down the runway to take off safely.&nbsp; It is not yet clear whether excess weight, unsecured luggage, wrong centre of gravity were also factors, but relying on a faulty speedchart for the given takeoff weight, the captain flying pulled back on the yoke before the plane had reached takeoff speed and at a pitch angle that was too steep. The investigation report says the plane then went into a deep stall and started banking right with the stick shaking. At this point, the flight officer on the right hand seat is heard on the cockpit voice recorder saying: “Whoa, whoa, whoa. Sir, Sir, Sir…” It then banked left before the pilot flying turned the plane sharply to the right again in an evasive action to avoid the parking aprons of the international and domestic terminals. Had he not done so, there would have been a disaster of a much greater magnitude at Kathmandu airport that day. The plane scraped the runway with its right wingtip, collided with a container having helicopter spare parts, and plunged into a gully east of the runway, exploding in a fireball. The investigation also noted that the impact forces seemed to be survivable for some occupants. The fire trucks took unnecessarily long to reach the site even though it was inside the airport perimeter. The absence of an ICAO-standard runway strip, inadequate rescue drills, lack of training, and a blocked emergency service gate leading to the crash site were cited as other factors. &nbsp;&nbsp; <h2>Timestamp of a Disaster</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725.jpg" data-media-id="editor_0" data-image-id="20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725" data-rendition-name="original" width="778" height="826" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:10:34 - The Saurya Airlines CRJ200 on the takeoff roll from runway 02. It had a takeoff weight of about 18,300kg, but the pilot’s speedcard had a previously undetected mistake about the minimum takeoff speed. 11:10:55 -The plane with tail number 9N-AME goes into deep stall soon after takeoff because it does not have enough speed to lift its weight. The plane also has an abnormally steep nose-up attitude.&nbsp; 11:11:03 - Without enough speed to generate lift, the plane banks right, then left and right again in CCTV photos taken from the domestic apron (below). If it had not banked right, it could have hit the aprons and terminal buildings. Seen parked is Saurya’s other CRJ200 with tail number 9N-ANM.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd.jpg" data-media-id="editor_1" data-image-id="20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd" data-rendition-name="original" width="770" height="555" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:11:08 - The plane scrapes the runway with its right wingtip, and falls into the gully. The captain is thrown off the left side of the cockpit and survives. 11:11:15: Plane explodes in a fireball inside the airport perimeter. Firefighters take time to reach the site because of lack of access road and a blocked gate. Read the full investigation report <a href="https://www.tourism.gov.np/files/9N-AME%20AIC%20Final%20Report.pdf">here</a>.

Flouting rules caused Saurya tragedy

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

French citizen Louis arrived in Nepal for the first time earlier this year, planning to <a href="https://nepalitimes.com/banner/the-abcs-of-a-winter-trek-in-nepal">trek the Annapurna Circuit </a>before heading down to Bardia to hopefully catch a glimpse of some<a href="https://nepalitimes.com/news/nepal-counting-its-tigers"> tigers</a>. Before he began his journey from Besisahar, Louis (who only revealed his first name) had imagined breathing crisp mountain air, and following the melodious gurgle of the Marsyangdi.&nbsp; Instead, he had to breathe fumes and dust all the way to Chame. Louis says he masked his face with a handkerchief: “It was not what I expected, this is not right.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080304080_f03fce1527cf8a63178e4e82589a1a7096c8cfa28893ca4a5f7fe82d91a6e38a.jpg" data-media-id="editor_2" data-image-id="2025080304080_f03fce1527cf8a63178e4e82589a1a7096c8cfa28893ca4a5f7fe82d91a6e38a" data-rendition-name="original" width="2419" height="1814" loading="lazy" alt="Manang trails NT 1"> </figure>  Many other trekkers are similarly disappointed as roads have been built along what used to be <a href="https://nepalitimes.com/banner/a-walk-back-in-time-chandragiri-hatiban">walking trails</a>. Manang and Humla are the last remote regions in the Himalaya to be connected to the national road network. &nbsp;Construction of the 87km Besisahar-Manang road began in 1994, but was stalled during <a href="https://nepalitimes.com/news/14-years-after-conflict-no-closure-in-nepal">the Maoist conflic</a>t, and finally finished in 2012.&nbsp; Most of it has not yet been blacktopped, and sections have been carved out of vertical cliff faces, making them treacherous. But it has allowed road access to Manang, a journey that previously took a week on foot.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080304084_32b3ca875a0df9f1dd42dbe915e6f6a2cd4f2e53f1cf2d3ee5cbdb3435905000.jpg" data-media-id="editor_5" data-image-id="2025080304084_32b3ca875a0df9f1dd42dbe915e6f6a2cd4f2e53f1cf2d3ee5cbdb3435905000" data-rendition-name="original" width="2400" height="1505" loading="lazy" alt="Manang trails NT 1"> </figure>  While the <a href="https://nepalitimes.com/opinion/the-road-out-of-nepal">road has improved access</a>, it has impacted on<a href="https://nepalitimes.com/here-now/trekking-in-the-time-of-climate-change"> trekking tourism </a>— the mainstay of Manang’s economy. The number of tourists visiting the scenic valley behind the Annapurnas grew from 21,245 in 2023 to 30,866 in 2024. The Annapurna Circuit is known for unique sights like <a href="https://archive.nepalitimes.com/news.php?id=9194">Tilicho</a>, one of the highest lakes in the world, the Thorong La pass that connects Manang to Mustang, and the valley’s own rich cultural heritage. Thorong La at 5,416m is the highest hiking pass in the world, and was used by locals for trade with Mustang before it became a <a href="https://nepalitimes.com/opinion/comment/lift-restrictions-on-upper-mustang">popular trekking route</a>. &nbsp; “For guests, the excitement of reaching Thorong La is now overshadowed by their disappointment of having to journey through dusty roads to get there,” says Manang lodge-owner Ongma Gurung. “That is the complaint we get the most.” <a href="https://nepalitimes.com/banner/tourism-that-treads-lightly-on-the-land">Local tourism </a>operators are trying to get the government to build alternative foot trails. But there have been delays due to a lack of budget.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080304084_c5f76e398182785bb17846a148e3ca89de5687b4623580f8e2d725a7a287edfa.jpg" data-media-id="editor_11" data-image-id="2025080304084_c5f76e398182785bb17846a148e3ca89de5687b4623580f8e2d725a7a287edfa" data-rendition-name="original" width="2419" height="1762" loading="lazy" alt="Manang trails"> </figure>  The Naso Rural Municipality has identified other routes along the Annapurna Circuit in Chyamche, Tal, and Khotro so trekkers can bypass heavy vehicles involved in the construction of the Manang-Marsyangdi Hydropower Project. “But the local government cannot do everything,” admits the chair Dhan Bahadur Gurung. “And for leaders in Kathmandu, Manang is out of sight and out of mind.” Munindra Jung Gurung represents Manang in the Gandaki Provincial Assembly, and says he has raised the issue in <a href="https://nepalitimes.com/news/pokhara-s-tourism-woes">Pokhara</a>. He is hopeful there will be a hearing. To be sure, the road is not all bad news. Locals benefit, the number of visitors has grown, and trekkers can now also save time and use it to explore <a href="https://archive.nepalitimes.com/news.php?id=5960">side valleys in Manang</a>, visiting the villages like Nar and Phu. Annapurna Conservation Area (ACA) chief Rabin Kadariya concedes that the road to Upper Manang was crucial to connect the remote region with the rest of Nepal, but adds: “We have built an alternative trail connecting Talgaun, and we will consult local communities about their priorities on other hiking trails.”&nbsp;

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Trailing off in Manang