A lot of the discussion on the new budget has hinged on taxes. But the fact that it allocated more money for debt servicing than for capital expenditure is a much more stark indication of the state of the economy.&nbsp;
The government earmarked Rs331 billion to pay back domestic and external loans and interests, higher than Rs320 billion set aside for capital expenditure. In essence, this means there will be less money for health, education, or infrastructure.&nbsp;
In fact, the government plans to borrow Rs240 billion in internal loans, but will be spending over Rs275.79 billion paying off old debt.
With falling tax revenue unable to cover expenses, more than a quarter of the budget is now borrowed from outside and within the country. Public debt as a proportion of GDP before the earthquake was 22%, now it has exceeded 42%.&nbsp;
Read also: <a href="https://www.nepalitimes.com/here-now/nepal-s-tax-system-widens-rich-poor-gap">Nepal’s tax system widens rich-poor gap</a>, Ramesh Kumar
“We are falling into a domestic debt trap, we have reached a point where we are having to borrow more money to pay our debt,” warned former finance minister Yubaraj Khatiwada. “Alternatively, the government’s capacity to spend on development is now weaker.”
According to the Public Debt Management Office, Nepal’s total public debt has exceeded Rs2.15 trillion. Of this, domestic debt is Rs1.08 trillion and the other half is foreign loans. In 2015, domestic debt as a proportion of GDP was 8.1% and foreign debt was 14.2%. By the end of December 2022, this ratio increased to 19.9% and 22.7% respectively.&nbsp;
Government housing grants post 2015 earthquakes, implementation of financial mechanisms within the federal system including building of new infrastructure, and the Covid-19 pandemic have been blamed for the increase in public debt. Wanton expenditure by successive ruling parties has also played a hand.&nbsp;
“The expenditure will increase now that the internal bonds taken by the government have matured and the repayment period has started,” says Finance Ministry spokesperson Dhaniram Sharma. During the pandemic, the government had requested donors to postpone loan repayment period by a few years. We have now passed that grace period.&nbsp;
Read also: <a href="https://www.nepalitimes.com/editorial/institutionalised-inequality">Institutionalised inequality</a>, Editorial
On the other hand, the government has started to raise more domestic debt through development bonds since 2018/19. This will lead to an increase in the amount earmarked for interest and capital repayment, further diverting resources from development. &nbsp;
In the financial year 2022/23, the government allotted Rs.609 billion for development and Rs.188 billion for the payment of interest on loans. This fiscal year, the development budget has shrunk by 23%, while debt repayment increased by a whopping 76%.&nbsp;
“Because all of this is costing the government more money, it is raising the debt of the market. Now what this does is create a situation where only a few in the private sector can manage to get loans,” says Khatiwada.
Foreign loans from donor countries, agencies and multilateral organisations are concessional in nature, meaning they have an affordable interest rate of less than 1%. Many of these loans have a repayment period of up to 40 years. For example, the government has taken a loan of about Rs16 billion from the Japanese government to build the Nagdhunga tunnel. The interest rate of such a loan taken for 40 years is only 0.01%
Read also: <a href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank">Some are more equal than others</a>, Anil Chitrakar
However, internal borrowing is expensive. As soon as the interest rate of loans of banks and financial institutions increases, the government also has to borrow more expensively. According to the Public Debt Management Office, the average interest rate on bonds is 10.30%, up from 5.75% in 2017, primarily due to the lack of investable funds in the financial system.
“Internal debt is an invisible tax imposed on the common man. As the internal debt increases, the government starts looking for ways to generate income to pay it. As a result, taxes are added to goods and services used by citizens,” says former secretary at the Finance Ministry Rameshore Khanal.
But in addition to paying off instalments of the old loans, the Finance Ministry is also under pressure to increase salaries, social security allowances and other expenditure obligations. As such, the government has started imposing higher tax rates to increase its income. Nepal is already one of the countries with the highest tax rates in South Asia. Revenue makes up 22% of Nepal’s GDP.&nbsp;
More than half of the country’s annual budget is being spent on salaries, administrative expenses, social security, subsidies, etc., so the government relies on debt to raise resources for development. Large budget and distribution-oriented programs in turn have further increased the internal debt. Experts say loans should be taken only for priority areas and for productive sectors that can repay the amount.&nbsp;
Says economist Pushkar Bajracharya: “Otherwise, taking out loans and spending them indiscriminately will only further burden the future generation of our people.” &nbsp;
Read also: <a href="https://www.nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">State-sponsored economic crisis</a>, Ramesh Kumar

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Till debt do us part

<img width="640" height="452" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171144/6369368a9c7e80680e03fde7jpeg.jpg" alt=""/>We see signs of stalled development all around us, every day, all over Nepal. Dusty, half-finished highways, national pride projects like Tama Kosi and Melamchi delayed by decades, crumbling infrastructure. Where there is economic activity, it is usually extractive, and happening at great cost to the environment — exposing corruption and lack of accountability of those in authority.All this has become such a given in present-day Nepal that citizens do not even bother to complain anymore. Since they do not expect anything from their elected leaders, the people are not even outraged by this lack of performance. Public fatalism and a high threshold for punishment has let politicians and bureaucrats off the hook, and encouraged impunity.At the root of this deep malaise <a href="https://archive.nepalitimes.com/article/editorial/government-to-governance-editorial,4200" target="_blank" rel="noopener">is poor governance</a>. And the starkest proof yet of political failure is that in the first quarter of the current fiscal year, the central government has been able to spend only 11% of its budgeted capital expenditure. The situation in the seven provinces is even more alarming: with one-fourth of the fiscal year finished they have spent less than 1% of their development budgets. Even the relatively better-governed Gandaki Province has only spent 5% of its budget in four months, and even that is mostly to cover overheads.It is a supreme irony of our times that a strong government led by a monolithic Communist Party with no political opposition in sight, and one which has made prosperity its main slogan, should be so incompetent. Like in any business, it is a sign of good governance when a state maximises revenue, minimises running costs and prioritises development expenditure. Capital spending in productive sectors helps the economy by creating jobs, spurring development, and augmenting growth.Read also: <a href="https://www.nepalitimes.com/banner/roadblocks/" target="_blank" rel="noopener">Roadblocks</a>, Ramesh KumarAt present we have got it upside down. In fact, the government’s own statistics show that in the first four months of this fiscal year, current account expenditure (for salaries, day-to-day costs of running government) was three times higher than capital spending. All this goes to prove once more that Nepal is not poor, it is just poorly governed.To be sure, this is nothing new. Even in the bad old days of the absolute monarchy, Nepal had a <a href="http://archive.nepalitimes.com/article/editorial/Beggars-and-choosers,1338" target="_blank" rel="noopener">chronic problem of not spending</a> its budget. This persisted after the democratic changes in 1990, and usually it was blamed on unstable coalition politics. In the past 12 years after the war ended, the excuse for the inability to spend has been the rocky political transition.How long are we going to pretend that we are in perpetual transition? If a government with a two-thirds majority cannot get its act together, which government will? We now have political stability, the peace process is over, and governance has been decentralised to seven provinces and 753 elected municipalities. Still, the reasons for the woeful inability to get projects off the ground are manifold. They mostly stem from a lethargic political and bureaucratic class that is loath to sanction any project unless there is direct personal benefit. Then, there are structural issues like convoluted approval processes, red tape within and between line ministries, delays in issuing and selecting tender bids, and the culture of spending most of the budget in the last two months of the fiscal year in order to maximise kickbacks and payoffs. This points to a systemic defect in the state structure that has not been corrected by improved accountability and performance of elected governments. The lack of visionary leadership at all levels of government means there is no one to untie the knots and untangle the nexus between a rent-seeking state and private greed. Home Minister Ram Bahadur Thapa started off vigorously to try to dismantle transportation cartels, others promised speedy service delivery and expediting delayed projects. Most people have even forgotten what was promised. One year after they were installed, even elected local governments which want to get projects off the ground have been stymied by Singha Darbar <a href="https://www.nepalitimes.com/editorial/fear-of-letting-go/" target="_blank" rel="noopener">refusing to let go of the purse strings</a>. The impact of capital budgets not being released has unleashed another credit squeeze in the <a href="https://www.nepalitimes.com/opinion/banks-biting-off-more-than-they-can-chew/" target="_blank" rel="noopener">banking sector</a> that is reeling under a liquidity crisis. It has slowed job creation and encouraged outmigration. At this rate we will not meet the 8% growth target for this year. The rot is deep and the solution is a structural overhaul of governance. But the buck stops with the Prime Minister. It is he who will be blamed for failing to deliver even with such a strong majority government.

Communist capital

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171136/636934779c7e80680e03dff9jpeg.jpg" alt="" width="1400" height="1069"/><figcaption>Bhanu Bhattarai</figcaption></figure>Nepal’s banks have once more entered the dark tunnel of scarcity of loanable funds. Commercial banks have misinterpreted the monetary environment for three years in a row -- they lend aggressively during the first quarter, and run out of steam thereafter until the final quarter of the fiscal year.The seeds of the trouble were sown five years ago. As the IMF puts it in its most recent South Asia Regional Update, ‘Loose monetary conditions, along with a fourfold increase in banks’ paid-up capital in the two years to mid-2018 required by the Nepal Rastra Bank (NRB), have fueled a strong credit expansion. Private sector credit growth has averaged 22% (y/y) in the past two years, even as the NRB maintains ceilings on banks’ loan-to-deposit ratio and the loan-to-value ratio on car loans.’Nepal’s financial landscape is heavily skewed towards banking. According to a recent World Bank report, banks account for 87% of financial sector assets in Nepal. Private equity and venture capital space are still in nascent stages. The <a href="https://www.nepalitimes.com/banner/why-the-private-sector-is-spooked/" target="_blank" rel="noopener">private sector</a> thus largely depends on bank debts, and in their absence, businesses have had to postpone plans or slow down operations. This has resulted in increased cost or lost opportunities.Recurring <a href="https://www.nepalitimes.com/here-now/crunching-the-numbers-on-credit/" target="_blank" rel="noopener">credit crunches</a>, which last several months every year, have impacted the economy as a whole. Key responsible parties here are:<ul><li>Government of Nepal for its inability to spend on capital expenditures</li> 	<li>NRB for instigating the crisis and then offering regulatory forbearance that encourages banks to push prudential boundaries</li> 	<li>Banks which appear to be driven with the sole objective of servicing increased capital</li></ul>Nepal’s economic growth over past two decades has been largely led by the private sector, in spite of ineffective governments and inefficient bureaucracy. Banks should refrain from pointing fingers at NRB or the government. The NRB has not always been pro-active, its regulatory approach has often been ‘one step forward two steps back’. The government’s norm has always been to bulk up capital expenditure towards the end of the year. We want NRB and the government to be more responsive, but it will be a gradual process at best. And frankly, the banking business has thrived even in this environment, so let’s be reasonable.Read also: <a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/banking-crisis-explained,1096" target="_blank" rel="noopener">Banking Crisis Explained</a>, Suman JoshiAs the most transparent sector of the economy, the onus is on the banks collectively to manage public perception and repair the community’s battered image. Here’s a list of items they need to consider:1. Anticipate better, and get your basics right. Will the market offer sufficient new deposits to fund growth in loan books? Nepal may be more stable politically, but with compromises from bureaucrats and politicians, it will be a while before their Key Performance Indicators align with Nepal’s aspirations for rapid economic growth. It is unrealistic, this early, to expect government spending to veer from tradition to follow a desired timeline that match banks’ need for new deposits.2. Who is winning that debate in the boardroom? Most banks appear to have adopted a strategy to grow lending books aggressively to meet shareholder expectations of return on equity. The impact of this on their lending behavior is worrisome. What is the quality of loan assets banks are booking when they are expanding at 22% while the economy grew at 3-4% annually over last few years? Also the continued contribution of banks to real estate buoyancy may someday come back to haunt them. Excessive reliance on real estate as collateral has affected a loan officer’s approach to lending. Under the current loan loss provisioning norms and multiple banking context, it is possible to keep masking bad loans, which raises doubts about quality of profits. The IMF has singled out this challenge and suggests: ‘Rapid credit growth underscores the need to accelerate banking sector reforms. Building on the recent amendments to the regulatory framework, loan classification, provisioning, and banks’ risk management practices should be upgraded.’3. Is it possible that many banks have bitten off more than they can chew by expanding their operations and branch network rapidly? Frequency of operational risk events suggests that quality of human resource and internal control mechanisms need significant improvement.Banks have finally acknowledged the need to adopt digital channels of delivery. Better late than never. Even so, there is little chance of sufficient investment happening here. It is not enough to link bank systems to a digital payment platform. A key driver for consumer uptake is a cultural shift within individual banks to champion digital banking services.Read also: <a href="https://www.nepalitimes.com/banner/nepals-budding-e-commerce-ecosystem/" target="_blank" rel="noopener">Nepal's budding e-commerce ecosystem</a>, Sikuma RaiClearly, Nepal is an over-banked economy with smaller banks struggling to stay relevant. Industry experts agree that there is a case for reduction in number of banks. Market prices are currently at interesting levels for more capable banks to consider acquiring other institutions. It may be easier said than done, but if there is an industry-wide resolve, the ducks will line up.Suman Joshi is a former banker and Founder and Chairman of True North Associates, a private equity firm.

Banks biting off more than they can chew?

Architecture can be a powerful agent of change, shaping not just spaces but the way people live, connect, and experience the world.&nbsp; For Nepal, which is <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">gifted by nature</a> and rich in <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/ambassador-fund-cultural-preservation-nepal,2092">cultural heritage</a>, &nbsp;reviving rural architecture with modern amenities could hold the key to more <a href="https://nepalitimes.com/here-now/what-sustainable-tourism-means-in-practice">sustainable tourism </a>that benefits local people more. “<a href="https://nepalitimes.com/banner/bayalpata-hospital-in-nepal-wins-global-design-award">Design and architecture</a> are amazing tools to create a unique experience for visitors,” says Spanish architect Tomeu Esteva of Esteva i Esteva Architecture Studio. “Difficult destinations have beautiful hotels with design and comfort.” Esteva was in Kathmandu with his colleagues at an event organised by the Spanish Honorary Consulate at Dwarika’s Hotel last week to showcase buildings which Nepali architects can adapt with local material and design inputs.&nbsp; Rural architecture holds a unique significance: it is more than a shelter and must reflect <a href="https://nepalitimes.com/here-now/inking-an-idenity">local identity, culture</a> and <a href="https://nepalitimes.com/here-now/saving-humla-from-heritage-loss">heritage</a>. An area’s natural and cultural harmony can be upset by <a href="https://nepalitimes.com/here-now/protecting-protected-areas-from-infrastructure?fbclid=IwAR1wK0MDFlFST_2EYb3f54LS4-fPt6rYfLG1DJ1JaQsU3w8-ezyXIxGOqzk">poorly planned development</a>, speakers at the event said, but the environment can be improved and revitalised by well-integrated structures.&nbsp; Another Spanish architect, Belen Moneo, has designed hotels at elevations of 3,700m in her home country Spain that supply natural spring water spas. “<a href="https://nepalitimes.com/banner/lost-in-reconstruction">Creativity in construction</a> must be encouraged. Rural architecture always shows possibilities of what we can do better,” Moneo explains, adding that designs must enhance <a href="https://nepalitimes.com/opinion/the-healing-power-of-nature">the beauty of nature</a> and give a natural feel at a time when steel, glass and cement dominate <a href="https://nepalitimes.com/here-now/rebuilding-kathmandu-after-the-1934-quake">urban design</a>.&nbsp; This is why the <a href="https://nepalitimes.com/here-now/weaving-nature-into-craft">use of natural products</a> such as bamboo, local timber, straw and rammed earth are in demand from customers who want a fresh eco-friendly look encouraged in construction of rural architectural structures. The demand for boutique hotels has increased world over, with &nbsp;more and more tourists favouring aesthetics, experience and comfort over price. While creativity is an important part of <a href="https://nepalitimes.com/here-now/architecture-for-mountains">construction and architecture</a>, incentives to build and use <a href="https://archive.nepalitimes.com/article/nation/Building,370">rural construction materials</a> still remain minimal, and Moneo emphasises the significance of design and execution.&nbsp; Esteva helped design the Vana Retreat in Dehradun that kept the natural environment in focus, with the structure giving an elaborate aesthetic experience to visitors. Another example is Hotel Las Mercedes in the Dominican Republic which was designed and constructed by Moneo and the company she co-founded Moneo Brock, respecting and revaluing the traditional architecture of the area. Hotels providing such experience could attract tourists and revenue. The Spanish ambassador to Nepal Juan Antonio March Pujol said, “The role of architecture and architects in developing tourism is crucial, not only in urban areas but rural settings as well.”&nbsp; The concept of rural boutique hotels gained traction in Spain during the 1990s, particularly in regions like Majorca with economic and environmental sustainability as the main focus. In Nepal <a href="https://nepalitimes.com/opinion/12-full-opinion/guiding-nepal-s-tourism-industry">the tourism industry</a> directly employs about 1 million people, and makes up about 8% of the country’s GDP. In Nepal, the stone homes of <a href="https://nepalitimes.com/news/reviving-himalayan-vulture-and-culture">Mustang and Manang</a>, bamboo and mud structures of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">the Tarai</a>, and the Kathmandu Valley’s terra cotta tile skylines, graceful temples, and tranquil bahal courtyards are all examples of <a href="https://nepalitimes.com/here-now/nepal-s-traditional-seismic-resistant-designs">Nepal’s traditional architecture</a>.&nbsp; Nepali architect Sarosh Pradhan has been working for the past eight years on the Brakka Village project in Manang Valley north of <a href="https://nepalitimes.com/banner/municipalities-want-to-manage-annapurna">the Annapurnas</a>. Other examples of this kind of rural architecture for high-end tourism are the Shinta Mani Hotel in Mustang and Khumbu Lodge below <a href="https://nepalitimes.com/news/mt-everest-pvt-ltd">Mt Everest</a>. Says Pradhan, “There are places in Nepal that radiate purity and embrace simplicity. Creating projects in such settings require deep reflection and thoughtful planning.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421030444_a07a23f6b60fa89c0f35b9dc1aaf19937da4881e6bfb2e1858f3c27dff91729f.jpg" data-media-id="editor_19" data-image-id="20250421030444_a07a23f6b60fa89c0f35b9dc1aaf19937da4881e6bfb2e1858f3c27dff91729f" data-rendition-name="original" width="4608" height="2184" loading="lazy" alt="A new architecture for Nepal's tourism"> </figure>  Rural architecture is not easy, and sometimes more expensive. Inflation, energy efficiency, <a href="https://nepalitimes.com/here-now/those-who-stay">the climate crisis</a>, and <a href="https://nepalitimes.com/banner/cost-of-living-in-a-big-city">increased costs of living</a> pose obstacles to sustainable rural architecture. Read also: <a href="https://nepalitimes.com/here-now/forgotten-international-starchitects-in-nepal">Forgotten international starchitects in Nepal</a>, Anne Feenstra and Varun S Bapu Esteva says faith and trust between client and architect is necessary for any project to be successful. He adds that architects must practice being humble, the process of designing always involves learning and not imposing their ideas on clients. Nepal is uniquely positioned for the growth of <a href="https://nepalitimes.com/banner/hiking-up-the-benefits-of-tourism">rural tourism</a> because of its stunning countryside as well as its internationally renowned traditions in holistic wellness. Creating infrastructure that is small, thoughtfully planned and that respects both tradition and contemporary hospitality standards is crucial. “Projects in Nepal can be made cost effective by using materials from houses that have been brought down,” says Esteva. “Pilot projects involving <a href="https://nepalitimes.com/banner/local-government-by-the-people-for-the-people-of-the-people">local people </a>and simple designing also helps the process.” <a href="https://nepalitimes.com/banner/vacant-homes-become-homestays-in-nepal">The growth of homestays in Nepal</a> is a step in the right direction, but they are still a bit too rustic for the international traveller who also wants comfort and is willing to pay extra for it. Upgrading the facilities in homestays and ensuring that the <a href="https://nepalitimes.com/here-now/an-archive-of-nepali-heritage">architectural heritage</a> of the locality is preserved using locally sourced building material could allow owners to charge more. Says Sangita Shrestha of Dwarika’s Hotel, “Our effort is to build upon rural architecture by empowering local communities and using what is available locally. We can fine tune and encourage indigenous design and training.” The vision goes beyond just boosting the economy, it is about building a future where tourism helps villages grow in a healthy and lasting way. Instead of using up resources, it gives back to the land and the people. It supports local communities by<a href="https://nepalitimes.com/opinion/staying-in-nepal-to-create-jobs"> creating jobs</a>, improving infrastructure, and protecting natural beauty. When done right, tourism can be a tool for <a href="https://nepalitimes.com/editorial/progress-and-or-preservation">preserving culture and nature</a>, not harming them. Architects must therefore see their work as more than just designing buildings, they also need to care deeply about people and places, especially in rural areas that can benefit the most.&nbsp; With global interest in sustainable and off-the-beaten-path travel increasing, Nepal stands at the cusp of a <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">tourism transformation</a> that values community-driven, eco-conscious hospitality. A mix of modern ideas and traditional knowledge could transform rural tourism in Nepal. Says Shrestha, “Young architects should spend time with <a href="https://nepalitimes.com/latest/the-unsung-heroes-of-conservation">local and indigenous communities</a>, listen to their stories, and learn from their <a href="https://nepalitimes.com/banner/life-and-livelihood-in-remote-nepal">ways of living</a>. These communities have deep knowledge about the land, materials, and climate. If this wisdom is used in new designs, it can help create tourism spaces that truly benefit everyone.” &nbsp;

A new architecture for Nepal's tourism

Extract from an addendum to Nepal's Two Wars, Chapter 2 in the updated edition of Essays on Nepal: Past and Present by Sam Cowan, a retired British Army general with a long association with the Gurkhas. The book was first published in 2018, and republished earlier this month by FinePrint exclusively on Amazon. The addendum details a one-to-one conversation the author had in the <a href="https://archive.nepalitimes.com/news.php?id=8884">Royal Palace </a>with the <a href="https://archive.nepalitimes.com/news.php?id=8371">King Gyanendra</a> in November 2002 just after he had taken his initial steps on the road that ultimately led to <a href="https://archive.nepalitimes.com/news.php?id=14681">the abolition of the monarchy</a> in Nepal in 2008. In the early evening of September 16, 2002, in my role as Colonel Commandant of the Brigade of Gurkhas, I had my second and last official audience with King Gyanendra to give him an update on the Brigade’s activities over the previous 12 months. I had some 6 or 7 such audiences with <a href="https://nepalitimes.com/here-now/preserving-king-birendra-s-family-home">King Birendra</a>.&nbsp; These were official affairs with the British ambassador of the day present, along with key <a href="https://archive.nepalitimes.com/news.php?id=12233">palace officials</a> and a representative from Nepal's Foreign Ministry. The two monarchs were very different in character and temperament, but both treated me with the utmost civility and made the audiences as relaxed and easy for me as possible.&nbsp; It is, however, worth recording that when the official business had been covered, King Birendra, with a twinkle in his eye, often ended by asking, “Now General, what’s the gossip in London?” The second audience with <a href="https://archive.nepalitimes.com/news.php?id=8026">King Gyanendra </a>was my last official act in uniform. We came back to Kathmandu in the first week of November (after treks) to stay for a few nights with our Defence Attaché before heading back to the UK. Waiting for me was a message from the Palace saying that King Gyanendra would like to meet me informally: <a href="https://archive.nepalitimes.com/news.php?id=6933">no uniform</a> and no ambassador.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080420_f9046f9882d4481781d14f2b64f18c7fbbea62562e1d74e3465de6d01fb43750.jpg" data-media-id="editor_7" data-image-id="20250421080420_f9046f9882d4481781d14f2b64f18c7fbbea62562e1d74e3465de6d01fb43750" data-rendition-name="original" width="1750" height="2406" loading="lazy" alt="Gyanendra crowned page 1"> <figcaption>Nepali Times Special Edition of 6-14 June 2001 with enthronement of Gyanendra. </figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_21333d6ae21828eb47fe3f849438d215fe2804460d47bb2896ef4aee4e895ad2.jpg" data-media-id="editor_8" data-image-id="20250421080424_21333d6ae21828eb47fe3f849438d215fe2804460d47bb2896ef4aee4e895ad2" data-rendition-name="original" width="1500" height="1857" loading="lazy" alt="Royal massacre"> <figcaption>Nepali Times 22-29 June 2001 covering the royal massacre after which Gyanendra became king. </figcaption> </figure>  Although I had no idea what the purpose of the meeting might be, events in Kathmandu since I last saw the king put me on edge. On October 4, 2002, Gyanendra had dismissed Prime Minister Sher Bahadur Deuba, allegedly for failing to hold <a href="https://nepalitimes.com/news/what-goes-on-in-nepal-s-elections">elections</a>. He had put in place a new prime minister and a cabinet personally selected by him. When I heard the news on my travels, the people I met were generally supportive of the king’s actions. There was a general view that something had to be done, the country was going nowhere, and the king deserved his chance, not least to solve<a href="https://nepalitimes.com/latest/14-years-after-conflict-no-closure-in-nepal"> the Maoist </a>problem. Back in Kathmandu, views were not so sanguine. The chosen prime minister, Lokendra Bahadur Chand, was a relic from <a href="https://nepalitimes.com/here-now/mob-movement-and-mayhem">the Panchayat period</a> whose party had failed to win a single seat in the last elections held in 1999. Some of the chosen cabinet ministers had, to put it mildly, dubious reputations, and others had no record of proven competence in any field. There was a fear that the king’s real motive in dismissing <a href="https://nepalitimes.com/editorial/deubas-denouement">Deuba</a> was to start to reverse the democratic gains made since 1990. I informed <a href="https://nepalitimes.com/news/nepal-britain-mark-centenary-of-1923-treaty">the British ambassador</a> about the invitation. He was strongly against accepting it, which was probably the clinching reason for my decision to do the polite thing and accept it. On the evening of November 7, 2002, I presented myself at the royal palace, alone and in civilian attire.&nbsp; As in the past, the Military Secretary, Major General Vivek Shah, met and escorted me into the presence of the monarch. This time, however, he was politely asked to leave the room and shut the door behind him. King Gyanendra greeted me warmly and invited me to sit down.&nbsp; Read also:<a href="https://nepalitimes.com/news/the-ghost-of-monarchy-returns-to-haunt-nepal"> The ghost of monarchy returns to haunt Nepal</a>, Shristi Karki  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_e382af945d0ad2a04ae41fabe5393f793dd10f54cb1220f111c7c9e7423eb558.jpg" data-media-id="editor_15" data-image-id="20250421080424_e382af945d0ad2a04ae41fabe5393f793dd10f54cb1220f111c7c9e7423eb558" data-rendition-name="original" width="1000" height="993" loading="lazy" alt="Gyanendra coup"> <figcaption>Nepali Times 4-10 February 2005 after king Gyanendra's coup imposed media censorship. anendra became king. </figcaption> </figure>  I had wondered, and to be truthful, had worried, not just about the purpose of the meeting, but about how the conversation might start and develop. I reduced my resolve to two points: be polite but speak candidly. The latter resolve was quickly put to the test with the king’s opening words: “Sam, [in previous meetings it had been ‘General’, you walk the highways and byways of this land more than most, tell me what the common man is thinking?” &nbsp;“Your Majesty, I have no idea what they are thinking, but they are waiting.” “Waiting?” “Yes, Your Majesty, they are waiting to see whether what you did some weeks ago in appointing your own prime minister and cabinet ministers is going to make any difference to their lives or whether it is just going to be more Kathmandu hot air.” “Everything is going to be difficult and is going to take time, a lot of time.” “Your Majesty, time is the one thing you don’t have. You must act quickly and decisively to take advantage of the opportunity you have created. Everyone knows that you have appointed these new ministers. Why don’t you get them in here one by one and tell them that they have three months to deliver a programme in their area of responsibility that is going to make a difference to people’s lives? Most will fail to do so. Sack them! It will be a powerful signal of your strong intent to deliver real change.” I can express the opening of our conversation in this way because just about every word is still etched in my mind. The king’s response to my last quoted words was to challenge me to give an example of something that could be delivered quickly. I can give a verbatim record of what I said in response to this unexpected challenge: “Health posts, Your Majesty, there is no shortage of them throughout the country as building them has been one of the sources of local corruption, but very few have any medicine to issue at present or have skilled people to assess and meet medical needs. Your Majesty, children are dying for lack of a few pills. Given the right priority, over a period, say of six months, every health post could be fully stocked with medicine and manned with trained people. This is something I could help to lead for you as I know it would have strong international backing. At last, people would know that you mean business.” As I warmed to the theme, I could see no sign of the king having any enthusiasm for the idea, and I quickly disengaged as it dawned on me, as it had clearly dawned on the king, that the reason for the deficiencies in health posts was to prevent any Maoist combatant from gaining access to any <a href="https://nepalitimes.com/opinion/tech-away/nepal-s-health-tech-industry-is-here-to-stay">medical support</a>, and if this meant people suffering, so be it. The subject of the Maoist insurgency inevitably came up, and I took the opportunity to elaborate on what is written in the final four paragraphs of the article above. I advised King Gyanendra that, self-evidently, since there were three parties in the conflict—him, the Maoists, and the political parties—it was imperative that he form an alliance with one of them, preferably the political parties; otherwise, he would find himself isolated, as the other two parties would inevitably, at some stage, form their own alliance. However, it quickly became apparent that the king’s mind was on a totally different track. On the Maoists, he told me that he had channels open to them, but he was scathing about the political party leaders. He made it clear that they would be waiting for a very long time before he gave any power back to them, and that is a polite way of expressing the actual words he used, but “crawling through the door” is a phrase which has stuck in my mind.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_5403455ff6168f0d202a96cb53edea69136d74d59b989cfcc7cc4a1d57672cb5.jpg" data-media-id="editor_17" data-image-id="20250421080424_5403455ff6168f0d202a96cb53edea69136d74d59b989cfcc7cc4a1d57672cb5" data-rendition-name="original" width="2000" height="1317" loading="lazy" alt="fall of monarchy"> <figcaption>Nepali Times 28 April-3 May 2005 with cover image by Ajay Joshi of jubilant protesters after street demonstrations sidelined king Gyanendra, paving the way for a ceasfire and restoration of democracy. </figcaption> </figure>  As the conversation developed, it became ever clearer that King Gyanendra had decided to go in alone, relying on the misleading assurances he was constantly receiving from <a href="https://archive.nepalitimes.com/news.php?id=14954">the army</a>, and no doubt his close advisers, that the Maoists could and would be quickly defeated militarily, and taken out of the equation. This would obviate the need for him to do any deal with the political parties.&nbsp; Thus, the way would be clear for him to establish a version of his father’s Panchayat system, under a constitution that would be granted to the people by him, their sovereign, as his father and brother had done in 1962 and 1990. As in those constitutions, ultimate power would have remained in the sovereign’s hands. This proposed direction of travel was very clear from what the king said to me. In sum, King Gyanendra was motivated by a desire to emulate his immediate predecessors by granting his people a constitution that would restore his father’s Panchayat system in a modern form and give him a central role in decision-making. What was particularly dispiriting was that beyond this single objective he had no plan worthy of the name, nor demonstrably did he have the people with the skills to implement an appropriate plan even if one had existed. Crucially and depressingly, there was little or no indication from the king that he realised that such a course of action could put Nepal’s monarchy into serious jeopardy, as indeed proved to be the case. <h2>King Twice</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250420110436_315d519fe3d68d2406ebe1480fed54720fbf21b8907a4da5cde751fdc623d445.jpg" data-media-id="editor_19" data-image-id="20250420110436_315d519fe3d68d2406ebe1480fed54720fbf21b8907a4da5cde751fdc623d445" data-rendition-name="original" width="1302" height="632" loading="lazy" alt="“Tell me what the common man is thinking!”"> </figure>  <a href="https://archive.nepalitimes.com/news.php?id=8371">Gyanendra Bir Bikram Shah has been king twice</a>. In 1950 he was enthroned briefly as a child king (left, above) by the Rana Prime Minister Mohan Shumsher when his grandfather, King Tribhuvan, fled to exile in India. In 2001 he was crowned king again after the massacre in the royal palace in which his brother King Birendra and nine other members of his family were killed by Crown Prince Dipendra.&nbsp; During his second reign, Gyanendra gradually asserted power by sacking Prime Minister Sher Bahadur Deuba in 2002, and then taking full control after the 1 February 2005 coup. He was sidelined after the ceasefire in April 2006, and became a commoner after the Constituent Assembly finally <a href="https://archive.nepalitimes.com/article/from-nepali-press/Ftnp-abolishing,624">abolished the monarchy in 2008</a>. In the past year, Gyanendra has tried to exploit public dissatisfaction with the political parties to restore the monarchy.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080432_26ef4a4b0e3cee9fdc6794446702efe16550d293904b4f6dd46fe35d4d10c788.jpg" data-media-id="editor_22" data-image-id="20250421080432_26ef4a4b0e3cee9fdc6794446702efe16550d293904b4f6dd46fe35d4d10c788" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Essays on Nepal by Sam Cowen"> </figure>

“Tell me what the common man is thinking!”

“It's Kathmandu.” Just as the family was sitting down for one of its extended lunches, that jubilant cry was from François Driard’s grandfather announcing the next posting for his diplomat parents.&nbsp; Driard (pictured) was 18 in the summer of 1996,<a href="https://nepalitimes.com/opinion/suburban-tales/chasing-a-nomad"> a bit of a hippie</a> already, and his life was about to change forever with the magical word “<a href="https://nepalitimes.com/banner/time-capsule-of-kathmandu">Kathmandu</a>”. “I was awed with that information from my grandfather, nothing else mattered … In France <a href="https://nepalitimes.com/here-now/tales-of-courage-and-suffering-cx95f89e">in the 1990s</a>, Kathmandu had a mythical aura,” Driard recalls. He came to Kathmandu for Christmas that year to visit his stepfather, the French Ambassador Michel Lummaux. It was to be the first of many visits during school holidays, before he decided to permanently settle down in Nepal. “Kathmandu, and Nepal, were very different then, it was magical, I liked the nature, the people, civilisation, temples, trees,” says Driard, who explored the country sitting on the top of buses. “Visitors talk about the crazy <a href="https://nepalitimes.com/banner/cost-of-living-in-a-big-city">urbanisation</a>, traffic jams today, and all that is true. But Kathmandu has not <a href="https://nepalitimes.com/here-now/loss-of-soul-and-soil">lost its soul</a>.” After his stepfather’s tenure in Nepal ended, Driard worked as a business reporter for international publications but decided he did not want to be anyone’s employee anymore. In 2007 he landed in Kathmandu with €20,000 in savings to invest.&nbsp; He knew a few crucial things about himself: he liked food and nature, which is very much tied up with his upbringing--full of lively conversations during lunch and dinner at the family table between <a href="https://nepalitimes.com/here-now/nepals-yak-cheese-is-on-world-map">abundant cheese, wine and cigars</a>. So he decided it would be cheese, and registered Himalayan French Cheese and went to the French Alps for a month to learn how to make Tomme de Savoie. “<a href="https://nepalitimes.com/banner/the-story-of-langtang-cheese">Cheese making is such an ancient craft </a>and so I thought I won’t need much money or studying which I hated and indeed, if you have a tamako bhado and fire you are set,” explains Driard. But Nepal’s temperature and humidity were not ideal, even at higher altitudes. The first customers for his cheese were the Hyatt Regency and Nina and Hager. But he needed to create a market for cheese in a country which only knew hard churpi in the north and soft paneer in the south. He started selling his cheeses at the Summit Hotel weekend market, expanding to his own 1905 Farmer’s Market which later moved to Le Sherpa in Maharajganj, where it is now, and also a market at Labim Mall in Pulchok. He had cow dairies in Nuwakot and Dhulikhel, and finally a yak cheese unit at 3,379m in Ramechhap. It was the yak blue cheese from here that went on to win a Gold Medal in France, putting Nepal’s French cheese on the world map. “People come and try our cheese at the market, they ask questions. There is a lot of education to be done about cheese,” adds Driard, who also has three cheese shops in the Valley. Driard now makes 25 types of cheese. The products are being noticed and every year he has French students coming to Nepal to learn the art of yak cheese making. “In France, one family or company makes one kind of cheese for generations. In that I’m very unique as a cheese artisan,” he says. “The students come in to learn but I tell them to also teach us something too, add another cheese to my collection.” Read also: <a href="https://nepalitimes.com/here-now/langtang-after-10-years">Langtang after 10 years</a>, Sonia Awale Being a foodie, Driard is now also dabbling in meat with his own charcuterie at Meatini with bacon, ham, sausage and pâtés. All of this is now served at his Emilio’s Pizza, a leafy hideaway in Lazimpat. His South Side in Moksh is probably the smallest wine bar in the world. “I call the process sublime,” says Driard of his ventures, which have grown organically. “You need the same temperature and humidity of 12°C and 80% for cheese, meat and wine.” Emilio’s speciality is the eight-cheese pizza (which has eight types of cheeses), and a pizza with bhutan topping (not the country but fried intestines and organs Nepali-style). He has opened a small branch at Courtyard in Pokhara.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250426070456_bacae302c040dc18eeecdeafda72ddf06a6d2cec138ea9be7e45fe94cdf8b5b3.jpg" data-media-id="editor_8" data-image-id="20250426070456_bacae302c040dc18eeecdeafda72ddf06a6d2cec138ea9be7e45fe94cdf8b5b3" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="8 cheese pizza"> <figcaption>Eight-cheese pizza</figcaption> </figure>  With two artisanal cheese units, two farmers’ markets, a <a href="https://nepalitimes.com/here-now/the-meat-of-the-story">meat processing unit</a>, a bakery, and wine bar he now envisions a vineyard so he can add Nepali wine to his repertoire. Another future plan is to start up an agri-tourism business where customers can drink, eat and work in peace. In the past 20 years in Nepal, Driard has not always succeeded in his ventures but this hasn’t curbed his enthusiasm. He is learning as he goes, and like an old wine, Nepal is growing on him. Its slowness suits his French art de vivre with eating slowly outdoors, having conversation, importing less.&nbsp; “I have proven that with even a little money you can do a lot of things in Nepal,” adds Driard. “In the West, they easily invest half a million euros on a cheese factory, I invested 10 times less.”&nbsp;

Fromage, vin et charcuterie Népalais

Bhuthan भुठान starts with Bishnu Bahadur KC played by <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/dhuwa-smoke-telefilm,2671">Hari Bansha Acharya</a> on a call, requesting to speak to the visa officer. By this point, he had <a href="https://nepalitimes.com/here-now/nepal-should-now-allow-visa-on-arrival">applied for a visa </a>to Bhutan 10 times, but was denied each time. KC was a <a href="https://nepalitimes.com/here-now/nepal-s-women-excel-in-sports-in-2024-z9ramyct">national football player </a>in Bhutan in 1988 before he and other Nepali-speaking Lhotsampa people were forced out of the country in the 1990s as part of the Druk regime’s ‘One Nation One People’ campaign. Over 100,000 Bhutanese Nepalis were forced out, driven across India and dumped in Nepal where they lived in seven<a href="https://nepalitimes.com/here-now/elderly-left-in-bhutan-refugee-camp"> refugee camps</a> supervised by the United Nations and other charities until they were resettled in the United States, Australia, New Zealand and some European countries starting in 2007. In the fictional movie with the satirical English title The World’s Happiest Man, KC has resettled in the state of Ohio in the US but wishes to visit his home country once before he dies. Between flashbacks, we learn KC has died without having fulfilled his wish. &nbsp; The drama then focuses on KC’s two families from two marriages as they debate whether to cremate him as per <a href="https://archive.nepalitimes.com/article/from-nepali-press/muslim-hindu,2996">Hindu rites </a>or give him a Christian burial. A mediator played by Hollywood actor Bruce Dern urges them to take a firm decision before it is too long.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250430140420_b398a08091b866da2b0b8f6c1e6e26781609749aba896bfd2c68a10a519295c3.jpg" data-media-id="editor_5" data-image-id="20250430140420_b398a08091b866da2b0b8f6c1e6e26781609749aba896bfd2c68a10a519295c3" data-rendition-name="original" width="945" height="945" loading="lazy" alt="Bhutan, the movie"> </figure>  There are drawn out scenes of KC being baptised and when he is confronted by his first wife from Darjeeling played by Anuradha Majumdar, he says he changed his religion in the hope that he will be <a href="https://nepalitimes.com/opinion/comment/bhutan-s-refugees-between-hope-and-despair">allowed back in Bhutan</a>.&nbsp; We find out KC has a second wife, a Christian Nepali played by Puja Chand. Dayahang Rai as the younger son doesn’t have much screen time to flex his acting chops. &nbsp; Acharya competently portrays a man that is equal parts haunted by the memories of and longing for his home country. KC’s pain and loss is acute when he is teaching football to Gungun but between mid-scene, he freezes, perhaps lost in memories of being in Bhutan’s national team. &nbsp; In another scene, KC recalls his mother singing a lullaby in Dzongkha. He also has a box filled with medals, photographs and a football which he deflates with a knife in a powerful depiction of his <a href="https://nepalitimes.com/here-now/searching-for-a-homeland-away-from-home?fb_comment_id=1506516030025634">complicated emotions about his homeland</a>. KC keeps checking his mailbox in the hopes that his <a href="https://archive.nepalitimes.com/news.php?id=4977">visa application</a> has been accepted. He says in Nepali: “If a tree that has already struck roots in one place is shifted to another, it will not survive.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250430140420_4a9c27410326489576c04dedf40016bda3825e8f9663317f54fbfec4cbda6d34.jpg" data-media-id="editor_9" data-image-id="20250430140420_4a9c27410326489576c04dedf40016bda3825e8f9663317f54fbfec4cbda6d34" data-rendition-name="original" width="1422" height="2048" loading="lazy" alt="Bhutan, the movie"> </figure>  Dern’s character says that the <a href="https://nepalitimes.com/opinion/comment/nepal-s-transitional-justice-and-the-west-s-recalibration">western world</a> has become “lonely in pursuit of happiness”, another reference to Bhutan’s obsession with its Gross National Happiness index. Scenes shift quickly throughout making the story difficult to follow at times. The use of symbolism is a trite overdone. Nonetheless, भुठान is a nuanced depiction of raw pain and agony of losing one’s homeland. But one cannot help but leave the theatre feeling deflated. KC dies without having visited <a href="https://nepalitimes.com/here-now/small-bhutan-dreams-big">Bhutan</a>, but perhaps he does in his afterlife. It is up to the audience to create its own ending to this sad story of exile. भुठान Mad Monkey Films, 2025 Directed by Binod Paudel 102 minutes In cinemas in Nepal