The <a href="https://www.ohchr.org/en/special-procedures/wg-arbitrary-detention/opinions-adopted-working-group-arbitrary-detention/opinions-adopted-working-group-arbitrary-detention-its-101st-session" target="_blank">United Nations Working Group on Arbitrary Detention</a> in a report published this month has found the Bhutanese government to have detained its citizens without parole for expressing their political opinions, in direct contrast to its multiparty democratic system and its claim of being an enlightened land that promotes “gross national happiness”.&nbsp;
Human Rights Watch and the Global Campaign for the Release of Political Prisoners in Bhutan (GCRPPB) identified at least 37 <a href="https://www.hrw.org/news/2023/03/13/bhutan-free-long-term-political-prisoners" target="_blank">political prisoners</a> in the country in 2023. The vast majority of this group – 32 prisoners – belong to Bhutan’s Nepali-speaking Lhotshampa community, which has faced <a href="https://www.hrw.org/news/2003/06/18/nepal-bhutanese-refugees-rendered-stateless" target="_blank">decades of discrimination and abuse</a> from the Bhutanese government. Most of them were convicted because of prohibited political activity between 1990 and 2008.
Five of the 37 prisoners were released upon completion of lengthy sentences, but were found to have imprisoned in dire conditions, facing long-term physical and psychosocial wounds.&nbsp;
A report by the UN Working Group highlighted a catalogue of violations of fundamental rights upon examination of the cases of three out of the 32 remaining <a href="https://nepalitimes.com/here-now/political-prisoners-languish-in-bhutan-s-jails">political prisoners</a>.&nbsp;
Birkha Bahadur Chhetri, Kumar Gautam, and Sunman Gurung &nbsp;became refugees at a young age after the government expelled 90,000 Nepali-speaking Bhutanese in 1990. When the three men returned to Bhutan in 2008, they were arrested for distributing political pamphlets and sentenced to life without parole under Bhutan’s 1992 National Security Act.
Read also: <a href="https://nepalitimes.com/news/prisoners-of-conscience-languish-in-bhutan-jails">Prisoners of conscience languish in Bhutan jails</a>
The Act deems anyone who conspires, solicits, or commits offenses against Tsa-Wa-Sum—which refers to the King, the people, or the country— a political prisoner.
The UN Working Group found the three men’s detention to be arbitrary in four different ways, all of which make their imprisonment illegal under international human rights law. The circumstances of their arrest and incommunicado detention were found to be outside the protection of the law and in two cases amounted to enforced disappearance.&nbsp;
As it relates to the distribution of phamplets, the three individuals were simply exercising their rights to freedom of thought and opinion under the <a href="https://u7061146.ct.sendgrid.net/ls/click?upn=u001.gqh-2BaxUzlo7XKIuSly0rC6qW-2FnvSGJskOuXf1mmv7fb-2BiYM7QGwU6H-2Bf6KIGuxAW8-2BkBKAx7BEev71tQe8HgenEdlZgM1cj0gDMDAHtXRtI-3Dl5XL_FSNxcQr-2BB-2FhcOdIidi6wdSUEqxUucKsRY8L7gcmE0dj99C71Z1DrszIvW2IyfMsa6FzM5M1J2gY2prfUknme7t6-2FejYw5H9zGkpZDOqKdUpcPR75fvavpCESm81yhl2cTPMp8VoiXwHrUH2gtzEGvT2s9j6RwrigCP2v8jWoptGwkE5huuOssPClxOMnuxN9-2FnwnWoWOsOYX0Oz9hMw2WmzuhLnKJ4p9YTCH5Jq67eztiDA7zAEFfWOg9zAhaPsh02wXkL-2BQgCCcDM1ir5Aw6VHhLw3e-2FRyIdVLb7BqKGZwPTTewI66CHyO7A7QpeOL-2FYtebxH602F1I4IyQaijxSw-3D-3D" target="_blank">Universal Declaration of Human Rights</a>, the Working group stated.
Breaches of the prisoners’ right to a fair trial were also traced by the group, which found that the prisoners were “deprived of their liberty on discriminatory grounds, because of their political opinion and status as members of a linguistic minority.” The body also expressed grave concern at the prisoners being denied visitors.&nbsp;
The cases of Chhetri, Gautam, and Gurung echo other cases of unjust imprisonment which Human Rights Watch and GCRPPB have been documenting consistently. As it stands, the remaining detainees live under brutal conditions, wherein they do not have access to adequate food, clothing, or medical assistance.
The government of Bhutan did not respond to the UN Working Group’s communications.&nbsp;
A former inmate, Ram Bahadur Rai, had previously spoken to the Human Rights Watch explaining conditions of reduced food rations, poor quality of clothing, minimum medical assistance and lack of welfare checks. Rai said that sometimes the clothing they were provided would be so small that the prisoners had to make do with rice sacks, not just for clothing but also bedding.
While many of these prisoners continue to serve life sentences without parole in dire conditions, Bhutanese authorities completely deny their existence. Rai further added that many of them are in very poor health as they are obligated to seek medication on their own and sometimes need to wait for months just to see a doctor.
<a href="https://www.hrw.org/about/people/meenakshi-ganguly" target="_blank">Meenakshi Ganguly</a>, Deputy Asia director at Human Rights Watch, has urged Bhutan’s international partners to call on the Bhutanese government to release all remaining political prisoners immediately.
Read also: <a href="https://nepalitimes.com/news/no-country-for-dissent">No country for dissent</a>

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Detainees in dire straits in Bhutan’s prisons

A man who served 30 years in a <a href="https://www.hrw.org/asia/bhutan" target="_blank">Bhutanese</a> prison for distributing political pamphlets has said that political detainees like him are surviving on meagre rations and are reduced to using rice sacks for clothing and bedding. Human Rights Watch called on the Bhutan government to immediately free its remaining <a href="https://www.hrw.org/news/2023/03/13/bhutan-free-long-term-political-prisoners" target="_blank">political prisoners</a>, who it said are kept in appalling conditions and serving lengthy sentences following unfair trials and torture. Ram Bahadur Rai, 66, spoke with Human Rights Watch after he was released and deported after completing his sentence on 5 July. At least 34 other political <a href="https://nepalitimes.com/news/no-country-for-dissent" target="_blank">prisoners are still in Bhutan’s prisons</a> and most of them are Nepali-speaking citizens from ethnic groups of which <a href="https://nepalitimes.com/banner/gross-national-reconciliation-in-bhutan" target="_blank">100,000 were expelled</a> in the 1990s and lived in refugee camps in Nepal. The tiny Himalayan kingdom has been a multi-party democracy since 2008, but it continues to hold prisoners accused of being opponents of the former autocratic system. “Bhutan’s government cultivates an enlightened international image by propounding the theory of <a href="https://www.qeh.ox.ac.uk/news/bhutan-gross-national-happiness-index-shows-increase-2015-despite-pandemic" target="_blank">gross national happiness</a>, but the blatantly abusive treatment of these prisoners tells a different story,” said <a href="https://www.hrw.org/about/people/meenakshi-ganguly" target="_blank">Meenakshi Ganguly</a>, deputy Asia director at Human Rights Watch. “While the Bhutanese government attempts to strengthen its ties with international partners, foreign governments and multilateral organisations should push for the release of political prisoners.” In 2023, <a href="https://www.hrw.org/news/2023/03/13/bhutan-free-long-term-political-prisoners" target="_blank">Human Rights Watch documented</a> 37 inmates <a href="https://www.nab.gov.bt/assets/uploads/docs/acts/2014/Prison_Act_of_Bhutan,_2009eng3rd.pdf" target="_blank">classified by Bhutan’s government</a> as political prisoners, who were first detained between 1990 and 2008. Following the <a href="https://www.hrw.org/news/2023/09/13/bhutan-freed-political-prisoner-describes-dire-conditions-0" target="_blank">release</a> of three people in the past year, at least 34 remain, many imprisoned for life without parole. Under Bhutan’s law, only King Jigme Khesar Namgyel Wangchuck can commute a life sentence.&nbsp; Ram Bahadur Rai was among the 100,000 Nepali-speaking Bhutan people who were <a href="https://www.hrw.org/news/2003/05/03/we-dont-want-be-refugees-again" target="_blank">forced to flee the country</a> in 1991 after violence and persecution under the government at that time. He sneaked back into Bhutan in 1994 and was caught distrubuting pamphelts of the banned Bhutan People’s Party in the border town of Gelephu . He said he was accused to taking part in political violence, but had no defence lawyer during his trial. He was so severely tortured that he was hospitalised, only to be returned to jail and further tortured. By the time he was convicted and sentenced to 31 years and 10 months in prison, he said the torture had left him unable to write his own application for an appeal. The appeal was rejected, and he was warned that if he appealed again his sentence could be increased.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240713060756_328136fb3903d1d0c9fcc4bfe04b74d4a9a7004a8dc9d28bb89effa9767f0b30.jpg" data-media-id="editor_10" data-image-id="20240713060756_328136fb3903d1d0c9fcc4bfe04b74d4a9a7004a8dc9d28bb89effa9767f0b30" data-rendition-name="original" width="946" height="1871" loading="lazy" alt="Bhutanese prisoners"> <figcaption>Ram Bahadur Rai</figcaption> </figure>  Rai said that since 2012, when the International Committee of the Red Cross (ICRC) stopped arranging family contact for national security prisoners in Bhutan, he had had no communication with his family. Upon his release, he sent a photograph to his four children “so they can know what their father looks like”. In Chemgang prison, near the capital, Thimphu, Rai was held in a block with 24 other ‘anti-national’ prisoners. “It’s a very painful situation. The facilities have almost halved since the Red Cross left ,” Rai said. Prisoners are obliged to buy their own medication if they fall sick and can wait up to eight months if they need to see a doctor, and frequently receive no treatment. Several are in very poor health, Rai said. Food rations have been reduced to half, prisoners get a poor quality blanket only every three years and a mattress every 18 months. Rai said the clothes they are provided are too small so prisoners wear rice sacks for clotheing and bedding.&nbsp; Rai said that the Bhutan Red Cross Society, which is supposed to have taken over the duties of the ICRC in supporting prisoners’ welfare, don’t do anything. Bhutan’s legal system is formally based on concepts in the Buddhist tradition such as compassion. The king, who is head of state while most government functions are the responsibility of an elected government, retains the power to grant ‘kidu’, or relief, including by commuting sentences. Said Ganguly. “<a href="https://nepalitimes.com/news/bhutan-king-must-free-political-prisoners" target="_blank">King Jigme Khesar Namgyel Wangchuck</a> could end the unjust suffering of these prisoners and their families with a stroke of a pen, as both <a href="http://www.bhutannewsnetwork.com/2022/04/six-political-prisoners-released/" target="_blank">he</a> and <a href="https://www.ucanews.com/story-archive/?post_name=/1999/12/28/king-pardons-bhutan-prodemocracy-leader-after-10-years-in-prison&amp;post_id=15081" target="_blank">his father</a> have previously done in other cases. Sixteen years since Bhutan’s transition to democracy, all of the remaining political prisoners should finally be released.”

Prisoners of conscience languish in Bhutan jails

A recently released political prisoner from <a href="https://www.hrw.org/asia/bhutan" target="_blank">Bhutan</a> has revealed ghastly conditions that political imprisoners in Bhutan are subjected to including food shortages and inadequate medical care, urging foreign countries to press for the immediate release of those held in violation of their human rights.
Madhukar Monger was released in August 2023 after serving 29 years. At least 36 others including a woman are in Bhutan jails, convicted of political offenses following unfair trials that frequently relied on confessions coerced under torture. 
 
“Bhutan’s government has sought to cultivate its global image by espousing ‘gross national happiness,’ but its treatment of political prisoners tells a different story,” says <a href="https://www.hrw.org/about/people/meenakshi-ganguly" target="_blank">Meenakshi Ganguly</a>, deputy Asia director at Human Rights Watch. “King Jigme Khesar Namgyel Wangchuck should exercise compassion and his sole authority to grant amnesty to these unjustly held prisoners and release them.” 
 
Most of Bhutan’s political prisoners belong to the country’s marginalised Nepali-speaking community known as Lhotshampa and were convicted because of prohibited political activity between 1990 and 2008.&nbsp;
Read also: <a href="https://nepalitimes.com/news/bhutan-king-must-free-political-prisoners">Bhutan king must free political prisoners</a>, Nepali Times
Some 90,000 of them were forced to leave the country as refugees. A majority of them ended up in refugee camps across eastern Nepal before they were eventually resettled in eight different countries with the United States taking a bulk of them.
Monger, now 57, fled Bhutan with his family in 1990 but returned to campaign on behalf of the banned Bhutan People’s Party. He was arrested and tortured by the army in February 1994. And at 26, he was sentenced to 31 years for “anti-government activities,” following a trial in which he had no defense lawyer. He was released a year early after paying a fine of $250.
Monger was held in a section of Chemgang prison near Thimpu, known as the “anti” block, short for “anti-national.” He said the authorities refer to the political prisoners as “rajbandi” and the guards address them as “traitors.”
<a href="https://www.nab.gov.bt/assets/uploads/docs/acts/2014/Prison_Act_of_Bhutan,_2009eng3rd.pdf" target="_blank">Bhutanese law</a> defines a “political prisoner” as “any person convicted for conspiring, attempting, soliciting, abetting or committing offenses against the Tsa-Wa-Sum (king, country, and people).”&nbsp;
Many are serving life sentences without parole, and they are all denied contact with their families or the outside world, in violation of international standards. Bhutanese authorities have long denied the existence of these prisoners.
Read also: <a href="https://www.nepalitimes.com/here-now/political-prisoners-languish-in-bhutan-s-jails">Political prisoners languish in Bhutan’s jails</a>, Devendra Bhattarai
Monger describes the conditions for political prisoners as having declined drastically in recent years. He told Human Rights Watch that the authorities cut the monthly rice ration from 20kgs to 12, wheat flour from 6kgs to 1.5 and lentils from 3kgs to 2.
Prisoners do receive a small weekly allowance of fresh meat and vegetables but they were compelled to sell a portion to police and guards in order to buy medicine and clothes which the authorities did not provide.&nbsp;
Monger further adds that at the time of his release, at least four prisoners in the “anti” block had serious health problems, including one who received back surgery twice for a condition that the prisoners believe resulted from torture, and three who are regularly hospitalised for chronic conditions.
The neglect has gotten worse since the Covid-19 pandemic, Monger says. Prisoners have not received new bedding or clothing since the coronavirus outbreak, and Chemgang is cold much of the year. Families do not get to visit then. Phone calls and letters too are prohibited.&nbsp;
Read also: <a href="https://nepalitimes.com/banner/gross-national-reconciliation-in-bhutan">Gross National Reconciliation in Bhutan</a>, Suraj Budathoki
Following a Human Rights Watch <a href="https://www.hrw.org/news/2023/03/13/bhutan-free-long-term-political-prisoners" target="_blank">report</a> in March identifying 37 political prisoners, most of them held at Chemgang but also at other prisons, government officials assured prisoners regularly that they would be “released soon,” according to Monger. However, none aside from Monger is known to have been released. 
 
Under <a href="https://www.judiciary.gov.bt/storage/files/1/Sentencing%20Guideline%20for%20the%20Judiciary%20of%20Bhutan%202022.pdf" target="_blank">Bhutanese law</a>, a person serving a life sentence can only be released if the king grants an amnesty. In 2022, King Jigme Khesar Namgyel Wangchuck <a href="http://www.bhutannewsnetwork.com/2022/04/six-political-prisoners-released/" target="_blank">granted amnesty </a>to one political prisoner serving a life term. In contrast, his father King Jigme Singye Wangchuck in 1999 <a href="https://www.ucanews.com/story-archive/?post_name=/1999/12/28/king-pardons-bhutan-prodemocracy-leader-after-10-years-in-prison&amp;post_id=15081" target="_blank">granted amnesty</a> to 40 political prisoners, including some serving <a href="https://www.amnesty.org/en/documents/asa14/002/1994/en/" target="_blank">life sentences</a>. 
 
Monger is currently in a refugee camp in Nepal while his family has moved to the United States under a resettlement program for Bhutanese refugees. Governments of Nepal and the United States with the assistance of the United Nations Refugee Agency must assist him to rejoin his family. 
 
“At least 36 people remain in prison for their alleged political activities seeking democratic choice, which Bhutan’s multiparty constitution has recognised since 2008,” says Meenakshi Ganguly. “The Bhutanese authorities should release these prisoners now and reunite them with their families.”
Read also: <a href="https://nepalitimes.com/here-now/real-refugees-want-to-go-back-to-bhutan">Real refugees want to go back to Bhutan</a>, Sujata Dhungana

No country for dissent

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

Nepal is graduating to become a developing country on 24 November 2026 after half-century in the Least Developed Country (LDC) category. By 2030, the country hopes to transition to middle-income status.&nbsp; Everone from Prime Minister K P Oli have boasted that this is a matter of national pride, and will have a multiplier impact on trade and economy.&nbsp; But will it make any difference to the average Nepali? Not unless improved governance <a href="https://nepalitimes.com/news/why-invest-in-nepal">spurs investment and creates jobs</a>.&nbsp; Countries need to meet at least two of the three criteria in two consecutive triennial reviews to be eligible for graduation from LDC. Nepal has consistently met the thresholds for the Human Assets Index (HAI) and the Economic and Environmental Vulnerability Index (EVI) in 2015, 2018, and 2021. But Nepal was recommended for graduation before meeting the per capita <a href="https://nepalitimes.com/banner/nepals-great-income-divide">Gross National Income (GNI)</a> threshold of $1,306. “A major implication of LDC graduation is the loss of preferential market access available through Generalised System of Preferences (GSP) and other arrangements,” explains economist Sameer Khatiwada. “But over two-thirds of <a href="https://nepalitimes.com/news/nepal-doesnt-produce-its-2-biggest-export-items">Nepal’s exports</a> are to India, and the preferential market access to India is through a bilateral trade agreement. This has nothing to do with our LDC status.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85.jpg" data-media-id="editor_3" data-image-id="20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85" data-rendition-name="original" width="640" height="470" loading="lazy" alt="LDC graduation "> </figure>  Furthermore, a provision under the South Asian Free Trade Area (SAFTA) allows Nepal to export to India duty-free if the items are at least 30% value-added. Nepali traders take advantage of this by re-exporting edible oils without meeting that requirement, falsely boosting Nepal’s exports.“ Following graduation from LDC, the value addition threshold might increase to 40%,” says Kalpana Khanal of the Policy Research Institute. “This is supposed to work to our advantage, because on paper value addition inherently means <a href="https://nepalitimes.com/multimedia/staying-home-to-create-jobs">job creation at home</a>.” But Nepal’s exports to other major destinations will face <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">tariff increases</a> with the graduation. A South Asia Watch on Trade, Economics and Environment (SWATEE) study shows that while tariff increase in the US market is relatively low (see page 5) it is considerably higher in Europe. The International Trade Centre (ITC) in a 2022 study also estimated that graduation could result in a 4.3% decline in Nepal’s projected exports, but this is excluding the impact of changes in ‘rules of origin’ provisions in preference-granting countries such as the UK and Europe.&nbsp; Nepal’s top export to these preference-granting countries is <a href="https://archive.nepalitimes.com/news.php?id=1482">carpets</a>, and will not be impacted, but other items such as textiles and apparel will be heavily affected due to higher cost of production. The impact will felt mostly by small and medium enterprises which represent the largest share of exports to LDC-specific preference-granting countries. As for the service exports, Nepal never really made use of the World Trade Organization’s LDC services waiver anyway, hence the effect will be minimal, if any. There is also concern about Nepal’s graduation at a time when the global economy is topsy-turvy, amidst <a href="https://nepalitimes.com/opinion/turning-point-in-us-india-relations">tariff wars and conflicts</a>. This affects Nepalis abroad directly and may impact <a href="https://nepalitimes.com/news/more-remittance-more-than-remittance">remittances </a>which hit $11 billion in 2024. In comparison, Nepal only received $350 million in foreign loans and grants last year.&nbsp; Tourism arrivals have finally reached pre-pandemic levels, but bad publicity about pollution, poor infrastructure and bureaucratic hurdles hinder further growth. Manufacturing continues to struggle, while hydropower and the IT sector have taken off.&nbsp; “Look at data -- <a href="https://nepalitimes.com/news/tourism-needs-a-new-push">tourism arrivals</a> are up, spending is up, IT exports are up, <a href="https://nepalitimes.com/news/why-nepal-needs-to-restore-ev-tax-subsidy">EV sales </a>are up, Europe still needs 85-90 million skilled workers. We are sitting on $16 billion in cash reserves, our balance of payment, foreign exchange reserve, tax to GDP ratio, credit flow are all positive, we have to build on these factors,” says Sujeev Shakya of the Nepal Economic Forum. He adds: “Our mindset creates negativity to promote rent-seeking behaviour, but this cynicism will go away after 2026 with LDC graduation. We must deal with data, look at trends, and projects which will bring in <a href="https://nepalitimes.com/from-the-nepali-press/why-there-is-no-foreign-investment-in-nepal">international investments</a>.” Khanal agrees that investment is not dependent on<a href="https://archive.nepalitimes.com/regular-columns/backside/Nepal-not-the-least-developed-country,306"> LDC status</a>. The factors that that affect investment are policy stability, a strong legal framework, market potential and ease of doing business. She adds, “That is where our focus needs to be, and we need to retain <a href="https://nepalitimes.com/diaspora-diaries/migrant-worker-returns-to-create-work-at-home?fbclid=IwAR09xJfsClCwn8uRVAmz28CU658vdKpuyDwB_b1sNlvKtAFFnSldnA0JS2g">Nepalis with jobs at home</a> for our sustained growth.” After 2026, financing support from donors and aid agencies could be affected and Nepal will no longer be able to access Least Developed Countries Fund (LDCF) to adapt to the impacts of climate change. But the Global Environment Fund and Green Climate Fund will still be available.“ LDC status does not determine bilateral development aid, that is usually driven by broader <a href="https://nepalitimes.com/here-now/looking-beyond-two-boulders">geopolitical considerations</a>,” says Sameer Khatiwada. “The World Bank and Asian Development Bank, which provide concessional loans to Nepal, it is determined mainly by per capita income, not LDC status.” &nbsp;However, Nepal may lose some concessional terms for loans. Nepal is currently a lower-middle-income country as per the World Bank in the bracket for GNI between $1,036 and $4,045. The country is already receiving more loans than grants and in July the World Bank increased its interest rate on loans by 100% from 0.75 to 1.5%. “All this means that the impact of LDC graduation for Nepal might not be as earth-shattering as some tend to think. Countries that have recently graduated, such as Botswana and the Maldives, have shows that graduation is just a step in a country’s development path,” says Khatiwada. Sujeev Shakya also sees the glass as half full, explaining that LDC graduation is just a stepping stone if Nepal has the right policies in place. He adds, “Nepal’s biggest advantage is our<a href="https://nepalitimes.com/opinion/investing-in-people"> working age population</a> and we have investments coming in. These aided by how adaptive we are as a society are the very foundations on which Nepal will grow.”

Not poor, but not rich

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

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>.