<img width="3000" height="1800" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131128/637235339c7e80680e0c4974jpeg.jpg" alt=""/>Nepal is ruled by a coalition of parties that espouse social-democratism, Maoism, Marxism-Leninism. But all three adhere to just one ideology: extractivism.  Nepal’s history of the past 60 years has been a struggle between विकाश and विनास, the need to balance development and destruction. The songs of the early Panchayat period glorified the destruction of mountains and forests for the country to forge ahead. Nature had to be tamed and sacrificed on the path to ‘development’. ‘Growth’ would allow South Asia’s oldest nation state to catch up with the outside world. Along the way, we forgot that ‘growth’ can also mean malignancy. The pursuit of development mutilated mountains and denuded forests, the greed that drives growth has corrupted society, amplifying social inequities.   Whether monarchy or republic, Nepal has been a kleptocracy in which the politics of patronage sets the rules. King Mahendra’s trans-migration policy to move entire villages from the mountains to the Tarai led to the loss of vast jungles in the plains. King Birendra’s referendum to safeguard the absolute monarchy bought time, but came at the cost of further destruction of forests.  Read more: <a href="https://www.nepalitimes.com/here-now/the-business-of-politics-undermines-nepals-democracy/">The business of politics undermines Nepal’s democracy</a>, Ramesh KumarFederalism was supposed to devolve power to local governments and <a href="https://www.nepalitimes.com/banner/local-government-by-the-people-for-the-people-of-the-people/">make them more accountable</a>, but it just decentralised patronage and corruption. In the absence of other resources and a manufacturing base, extraction of nature is the easiest path to enrichment for politicians and businessmen.  After 2017, <a href="https://www.nepalitimes.com/here-now/business-bureaucracy-and-politicians-all-plundering-the-chure/">many contractors became mayors</a> who allocated budgets to rent their excavators to maul mountains. The destruction from quarrying has ravaged the fragile Chure range. Rivers across Nepal have been ransacked by sand and boulder contractors who have paid rural municipalities a pittance in royalty.Those who stand up against the devastation are threatened, or <a href="https://www.nepalitimes.com/editorial/crushers-of-justice/">even killed like Om Prakash Mahato ‘Dilip'</a>, who was crushed by a tipper truck nearly three years ago in Dhanusa district for daring to protest against illegal sand-mining. The perpetrators were let off.  Local, provincial and the central government are infiltrated by patronage. The prime minister and leaders of the coalition are forging ahead with <a href="https://www.nepalitimes.com/banner/does-nepal-need-a-4th-international-airport/">building a new international airport in Nijgad</a>, even though numerous studies have shown that it spells economic and ecological disaster to one of the last expanses of native forests in the eastern Tarai.Read more: <a href="https://www.nepalitimes.com/latest/the-business-of-politics-in-nepal/">The business of politics in Nepal</a>, Shekhar KharelThere is also an uncontrolled hydropower building spree on rivers across Nepal, and the real destruction will start with proposed new reservoir projects. Elsewhere, quarries supplying limestone to cement factories have disfigured the landscape.In state and community forests, even national parks, there is <a href="https://www.nepalitimes.com/here-now/the-business-of-politics/">rampant encroachment by powerful businesses</a> with political connections to build resorts, ashrams and cable cars. The deals are opaque, and no heed is paid to the environment.The kindest explanation for this groundswell of destructive development is ignorance or incompetence of those in power. But the more likely reason is the nexus between politics and business that is now so deep that it is impossible to tell apart a contractor and a politician.This is a well-oiled machinery that is lubricated at election time by <a href="https://www.nepalitimes.com/here-now/purchasing-power/">pre-paid campaign financing</a>. Natural resources are converted into <a href="https://www.nepalitimes.com/latest/the-business-of-politics-in-nepal/">party war chests that make the nouveau riche richer</a>, and the perpetually poor poorer. Read also: <a href="https://www.nepalitimes.com/editorial/crushers-of-justice/">Crushers of justice</a>, EditorialB P Koirala was a Gandhian social democrat who wrote 70 years ago that large production centres and industries breed two types of crimes: machines first displace humans, and then business monopolies engender tyrants. B P was far ahead of his time in understanding that nature does not just have intrinsic value, but is inextricably linked to human wellbeing and survival. And that genuine democracy would be inclusive, and deliver social and environmental justice.Today’s Nepali Congress is a far cry from B P Thought. Their Marxist-Leninist and Maoist coalition partners do not even have that ideological underpinning about the need to nurture nature. Forests, mountains, rivers, water, are all there to be harnessed ostensibly for ‘development’ and ‘economic growth’, but those are hollow euphemisms for personal greed and partisan gain. The <a href="https://www.nepalitimes.com/here-now/the-business-of-politics-undermines-nepals-democracy/">ongoing loot by Nepal’s extractivist politicians</a> is now peaking. Soon, there will be few  forests left to log, rivers that have not been mined to death, or mountains not ruined by redundant roads.The interests of communities completely dependent on natural resources need to be protected, citizens most impacted by the degradation of nature need to rise up against state-sponsored destruction. When essential infrastructure is necessary, it needs to be constructed with minimal impact on the ecology.  Gandhi said the Earth provides enough to satisfy everyone's need, but not every man's greed. We have to stop destroying what is left before it is too late. Read also: <a href="https://www.nepalitimes.com/here-now/purchasing-power/">Purchasing power</a>, Ramesh KumarRabin Giri

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Need and greed

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc189c7e80680e0a0b6ajpeg.jpg" alt="" width="620" height="364"/><figcaption>Illustration: NEPALI TIMES ARCHIVE</figcaption></figure>The cause of prolonged political paralysis in Nepal is cronyism, and the only way to uproot it is by tackling its source: vote-buying and campaigns funded by big business.The criminalisation of politics and the politicisation of crime means that it is becoming more and more difficult to separate business and politics. None of the parties are free of this cronyism which fuels corruption, and the business of politics.Those being investigated or convicted by the courts and criminals on the wanted list walk freely in and out of the prime minister’s residence. Lawbreakers become lawmakers. Gangsters become ministers.Post-1990, there have been many ways to get into politics: student union leaders and dropouts become whole-timers, retired bureaucrats try their second innings by joining parties, and the really smart ones take the short-cut to become legislators and ministers without even standing for elections. They buy their way to the top.Idealism has become a fairy tale. Politics without principle is possible, but politics without money is unimaginable. Political integrity has become an oxymoron. No matter how popular or honest politicians may be, they cannot win elections without financial backing. And the cash comes from businesses seeking a healthy return on investment.There are two ways to seek ROI from politics. Firstly, by offering a straightforward donation (a bribe in polite parlance) to a politician standing for elections and demanding a pound of flesh later. The second is to offer an even heftier ‘campaign contribution’ to directly become a nominated MP from that party without ever contesting an election.The constitutional provision to ensure proportional representation for marginalised communities has become the backdoor for tycoons to enter the House chambers.Education entrepreneur Umesh Shrestha became an MP through proportional representation, and he is now state minister for health.This was one of Sher Bahadur Deuba’s first ministerial appointments after assuming office two weeks ago, and one he took without consulting his party or coalition members, and it has understandably been met with much flak.Shrestha is a self-made but wealthy man, and has announced he will not take a salary as minister. Unlike politicians, he may be less tempted by petty payoffs. However, appointing someone who is setting up a chain of private hospitals to the Health Ministry is akin to putting a fox in charge of the chicken coop. The conflict of interest has sent a clear message to the public: anything goes in Nepal’s crony capitalism.Deuba had earlier appointed Shrestha as MP from the Nepali Congress reserve quota after the second Constituent Assembly election in 2013, and the private school operator sat in the Education Committee of the legislature.The prime minister has not been able to give a clear rationale for appointing Shrestha, and after widespread criticism of the move, he said rather ambiguously: “It won’t happen again.” It is clear that Shrestha is being rewarded for being a major party donor.This week, the Ministry of Health under the new businessman-turned-state minister announced that the private sector can import Covid-19 vaccines. How does this make sense when there are G2G agreements in place, COVAX doses are in the pipeline, and private importers will be competing with the government for vaccines from the same global supply chain?We can give Shrestha the benefit of doubt, and argue that the boy who came from Bhojpur to Kathmandu in his flip-flops to build a business empire, may be better at managing healthcare delivery than clueless and corrupt politicians who have been ministers before.In fact, if there is blame to be placed on anyone, it should be on an expensive system that allows greedy political actors to elevate their cronies to important positions in government.Who is next, Nepal’s richest man <a href="https://en.wikipedia.org/wiki/Binod_Chaudhary" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://en.wikipedia.org/wiki/Binod_Chaudhary&amp;source=gmail&amp;ust=1628230509987000&amp;usg=AFQjCNHy8AJanSbKIsOE1kgjHV6i5VpGaQ">Binod Chaudhary</a> who is also a NC donor and MP?All this is nothing new, of course. Prime Minister K P Oli also promoted his favourite cronies, and appointed industrialist Moti Dugad minister. Cronyism was also in full display in the Gandaki Province drama last month: Dobate Biswakarma was all set to become the only Dalit minister in the provincial government, but he was suddenly supplanted by Bindu Thapa, a Deuba loyalist rewarded for his generous contributions to the party.When Nepal’s development is driven by sand mining magnates, quarry tycoons, and infrastructure contractors, it is no surprise that politics is also contracted out. This is why for politicians, ‘prosperity’ is measured by highways, bridges, view tower contracts, and not by quality schools, accessible health care and meaningful jobs for young Nepalis.<a href="https://archive.nepalitimes.com/article/from-nepali-press/Elected-contractors,4182" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://archive.nepalitimes.com/article/from-nepali-press/Elected-contractors,4182&amp;source=gmail&amp;ust=1628230509987000&amp;usg=AFQjCNFjiW9tcKmZX0bJuBB7Bmhx_i7SCA">An investigation in this paper</a> after the 2017 elections showed that up to 40% of elected local government representatives were contractors who now rent out their own excavators and tipper trucks to themselves. This is behind the recent spurt of destructive road-building and unregulated natural resource exploitation.The way to address this rot is to stop allowing Nepal’s richest businessmen from using the quota for indigenous and ethnic minorities to become unelected ministers. The ballot box is not a cash box, and for Nepal’s equitable progress, the next election must stop votes being bought with notes.Transliteration of Shekhar Kharel’s <a href="https://www.himalkhabar.com/news/125267" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.himalkhabar.com/news/125267&amp;source=gmail&amp;ust=1628230509987000&amp;usg=AFQjCNFdMPoAPlyZ3H5OCibSylDZy-9_mA">original op-ed in Himal Khabar</a> by Aryan Sitaula.

The business of politics in Nepal

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>.

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