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?

Where will Nepal be in 2050? It is only 25 years away. The country’s population will be peaking at 36 million, the poverty rate will drop to near zero. Maternal and child mortality rates will fall further. Nepal will be generating up to 40,000MW of hydro and solar power, more than half of that for export. Upgraded highways will improve connectivity, railways will make transport cheaper. Pokhara and Birganj will only be two hours away from Kathmandu. Nijgad airport could be Nepal’s new aviation hub, reducing Kathmandu’s congestion. Nepal will hitch its wagon to the engines of economic growth in India and China. Investment and job creation will reduce outmigration, Nepal's data centres will be powered with surplus electricity. Remote areas will prosper with high-value tourists. That is if all goes well. But if Nepal’s politics remains dysfunctional with incompetent leadership, then the country will muddle along as it is doing now. Society will be more unequal, public discontent may boil over as politicians resort to faith to hide failures, the exodus abroad of youth will continue. Climate breakdown will exacerbate these crises. Global average temperature will have risen to 2.7°C above pre-industrial levels (it is 1.1°C now). The remaining Himalayan icecap will shrink by half, glacial lakes will threaten valleys. The hydrology of rivers will change, reducing dry season flow. Severe and prolonged heat waves in the Tarai will force people to migrate back to the mountains. In the final analysis, it all boils down to a political system that is more accountable, and displays more integrity and efficiency. <h2>Mission 2050</h2> · Melamchi Water Supply Project · Pokhrara International Airport · Bhairawa International Airport · Upper Tama Kosi Hydroelectric Project . Kathmandu-Tarai Expressway What do these biggest infrastructure projects in Nepal have in common? All ended up being more expensive than they should, all have been delayed and are not fully operational, two were badly damaged in climate-related disasters that should have been foreseen. The $800 million Melamchi is Nepal’s most expensive infrastructure project to date. It took 30 years to build, but was nearly destroyed by a glacial debris flow in June 2021. The headworks need major repairs. The 456MW Upper Tama Kosi was severely damaged by a rockfall and floods in last September’s floods. It is still not operating at full capacity, and other hydropower plants were damaged in recent glacial floods. Pokhara and Bhairawa airports were supposed to be the new aviation gateways to Nepal to take the pressure off Kathmandu, and become game changers for tourism and pilgrimage. Nearly three years later, both handle domestic flights. Poor and inadequate design, kickbacks on contracts, cost overruns, failure of diplomacy to get India’s nod on air routes, and lack of planning and marketing have made the airports a pair of white elephants. Some of these setbacks can be blamed on natural calamities, but mostly it is political incompetence and greed, lack of accountability and poor implementation. That is no surprise, since these are the hallmarks of doing business in Nepal, often delaying projects, adding to the cost, and even when completed they are already outdated. That is the story of the last 25 years, are the next 25 going to be any different? Not if governance does not improve. “What we really need for the future is vision, idea, and understanding, and then the domestic capacity to implement them,” says infrastructure expert Surya Raj Acharya, who laments the total absence of technical and planning expertise. “None of our national highways meet technical standards, our cities are unplanned. The priority was never on quality. Politicians sold us short-term infrastructure that have now become a barrier to prosperity,” he adds. One silver lining has been private sector involvement in hydropower, and the energy strategy aims to generate 11,769MW by 2030. But hydropower is high-investment, high-risk due to climate breakdown, and ecologically damaging. “Hydropower is a good example of how government incentives and public-private partnership can work wonders, although we now have to take climate change into account,” explains economist Kalpana Khanal of the Policy Research Institute. She adds, “We now have to identify other key infrastructure areas that also enhance the growth of other sectors.” The National Planning Commission’s periodic plans guide overall social and economic strategy for the country into the coming decade. Nepal’s current five-year plan (2024-2029) has set a target of 7.3% annual economic growth against the current 3.9%, $2,351 per capita income up from $1,456 at present, and poverty reduction to 12%. The plan aims to export nearly half the hydropower generated by 2030, earning the country Rs41 billion annually. But there is no real coordination between line agencies, and bureaucratic lethargy leads to constant delays, says former member of the National Planning Commission (NPC) Min Bahadur Shahi. “Development in Nepal is still very much synonymous with building roads and bridges, and infrastructure is rudimentary,” he says. “Elsewhere in the world, digital infrastructure and governance go hand in hand, we are far behind.” The frustration of a man who served in the National Planning Commission is an indication where the problem lies: in actually executing plans and implementing strategies. “We need to prioritise projects based on our geography, climate, societal needs,” Shahi continues. “We want to push Nijgad airport when we can’t even operate Pokhara and Bhairawa. Have we even studied potential air routes and needs of international carriers?”  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250726070744_0547e5a7fd4424b5de8c279cab637ee7ebd9e65f2673b15e6dbd4eb2aa2524f2.jpg" data-media-id="editor_0" data-image-id="20250726070744_0547e5a7fd4424b5de8c279cab637ee7ebd9e65f2673b15e6dbd4eb2aa2524f2" data-rendition-name="original" width="3600" height="2400" loading="lazy" alt="Pokhara airport"><figcaption>NO FLY ZONE: Pokhara airport was supposed to be the new aviation gateway to Nepal but nearly three years after its inaguration, it mostly handles domestic flights. Photo: RADHIKA KANDEL </figcaption></figure>  TARGET PRACTICE Export of hydropower, manpower and lately information technology are the mainstays of Nepal’s economy, and will carry the country to its graduation from Least Developed Country status to a developing country in November 2026, and hopefully to middle-income by 2030. Nepal has an installed capacity of about 3,800MW, most of it from hydropower, and increased adoption of electric cars has reduced the import of petroleum products, decreasing the trade deficit with India. Meanwhile, Nepalis abroad sent home $11 billion in remittances last year, and at least $900 million in backend IT exports. But demographer Yogendra B Gurung is not impressed: “Despite the reduction in the poverty rate, and our improving income status, life expectancy, income, even maternal and infant mortality are not on par with countries with similar economic status.” He says relying on remittances is an unsustainable economic model, vulnerable to external factors and remittances are mostly spent on day-to-day needs, and not invested in productive sectors. Remittance is credited with reducing poverty in Nepal which is down to 20.27% from 42% in 1990. Money sent home by workers abroad has allowed families to afford basic healthcare and education, in turn helping to reduce childhood malnutrition and maternal mortality while improving female literacy. But the progress has stalled in recent years, and many doubt Nepal will meet its Sustainable Development Goals (SDGs) targets. The National Planning Commission has said Nepal is likely to achieve just 60% of the targets by 2030. Sex ratio at birth, which is 112 boys to 100 girls in Nepal in particular, is worrying, as it is much higher than the biological ratio of 105 to 100. This is much more pronounced in Karnali, Sudurpaschim and Madhes Provinces which suffer from historical neglect. Despite a rise in female literacy, patriarchy is still deeply entrenched and the provinces are behind the rest of the country for gender equality, education, healthcare, nutrition and economic opportunities. “Karnali is resource-rich, especially hydropower and the recent discovery of the methane gas, but inequality is much greater,” says Shahi, who is with the Karnali Integrated Rural Development and Research Centre (KIRDARC). “Federalism in Nepal is only on paper, we need a total structural reform to devolve political power to really bring about change.”  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250726070744_fd4a218656e1fbf6f13f5f87a47bfe624516c6a0232481b6be77875ae866deb9.jpg" data-media-id="editor_1" data-image-id="20250726070744_fd4a218656e1fbf6f13f5f87a47bfe624516c6a0232481b6be77875ae866deb9" data-rendition-name="original" width="3600" height="2400" loading="lazy" alt="Butwal-Narayangadh "><figcaption>The Daunne section of the Butwal-Narayangadh road notorious for traffic jams and accidents, it has been in never-ending construction for three years. Photo: BISHNU PRASAD GAUDEL / RSS </figcaption></figure>  Despite limited resources, Nepal also suffers from wasteful investment as a result of politically (mis)guided decision-making, instead of people-centric plans and policies, says demographer Gurung. “People are overwhelmingly moving to the cities but our leaders are hell bent on building roads to every village and now there are empty schools in the mountains,” he adds. Nepal needs data-driven planning but its long-term economic vision 2020-44 seems more of a wish-list than realistic goals, including average annual GDP growth of 10.5%, $12,000 per capita income and population under the absolute poverty line at 0. Other goals include raising electricity generation capacity to 40,000MW, access to motor transport to 99%, life expectancy at birth to 80, maternal mortality down to 20% and literacy to 99% and 100% access to the internet, among others. Meanwhile, Nepal is committed to net-zero by 2045 and 100% renewable energy by 2050. “Our planners have no idea what kind of infrastructure we need 20, 30 years down the line to sustain and accelerate growth. We need a big structural change in the political leadership, in technocratic planning, and for policy implementation,” says infrastructure expert Surya Raj Acharya. Meeting such targets would require large investment, and it would be unwise to rely on remittances for the longer run, especially as Nepal’s demographic dividend will diminish as it turns into an aged society by 2065. Reversing out migration requires a favourable investment climate so jobs are created. Good governance marked by accountability and transparency are the basic prerequisite for ease of doing business. But lack of rule of law and illicit funds put Nepal in the grey list of the Financial Action Task Force (FATF), the global money-laundering watchdog. “Everything comes down to a political will. The established parties must realise that if they don’t perform, they will be replaced by alternatives,” says Kalpana Khanal. “In the meantime, we must engage the youth and find ways to retain them as well as attract the diaspora to invest in Nepal.”

Nepal in 2050

MetLife Nepal has signed Rohit Paudel and Indu Barma, the captains of the national men’s and women’s cricket teams, to promote the importance of life insurance.

Metlife signs Nepal cricket captains

Many of us former Nepal Peace Corps volunteers (PCVs) would agree that our time in Nepal changed in significant but very different ways our perspectives on life if not the future paths we chose to follow. Of no one was this truer than Dorothy Mierow. Dorothy was born in 1920, in Colorado Springs. Her father Charles C Mierow was a classics scholar and Latin professor, who served for ten years as president of Colorado College.&nbsp; Dorothy developed an interest in animals as a child, graduated with a BA degree in natural history from Carlton College in 1942, a Master’s in biology from the University of Pittsburgh, and another Master’s in geography from the University of Minnesota.&nbsp; As a young woman, Dorothy traveled with her father throughout Europe, including a visit to ancient Greek ruins, and took a Magellan Tour by cruise ship around the world in 1958.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071901074_0bad133ab22aada319e74bbad95d563e191371db291c08f373839fbd15440262.jpg" data-media-id="editor_0" data-image-id="2025071901074_0bad133ab22aada319e74bbad95d563e191371db291c08f373839fbd15440262" data-rendition-name="original" width="903" height="1178" loading="lazy" alt="How the Peace Corps changed a volunteer's life"> <figcaption>HOME AWAY FROM HOME: Dorothy Mierow as a college student in her native Colorado.</figcaption> </figure>  She was a college teacher during much of the 1940s, also teaching at a girls’ school in Hawaii. Then back to her native Colorado in 1953, where she became a curator and later director of the Colorado College Natural History Museum. She taught geography classes, and in her free time, Dorothy climbed 22 of Colorado’s 14,000-foot peaks. Traveling in India in 1960, Dorothy decided to spend two weeks in Nepal. In late 1961, she filled out an application to join the Peace Corps and specified that she wanted to go to Nepal, ‘because I admired the people so much when my father and I were there on our trip’.&nbsp; Dorothy reached Kathmandu in September 1962 as the first group of American Peace Corps volunteers in Nepal. She stood out from the others: one of the few women in that group, surely the oldest at age 41, a world traveler, and a woman who already had established a professional career.&nbsp; One doubts if Dorothy had had a husband and children whether she would ever have gone to work and spend much of the rest of her life in Nepal.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071901078_68e84ade1ffb0f6c83c7f8fa5c1e7315b5f6c543217f96cde012e4d86f171515.jpg" data-media-id="editor_1" data-image-id="2025071901078_68e84ade1ffb0f6c83c7f8fa5c1e7315b5f6c543217f96cde012e4d86f171515" data-rendition-name="original" width="1259" height="910" loading="lazy" alt="How th Peace Corps changed a volunteer's life NT"> <figcaption>Pokhara Bazar in 1962.</figcaption> </figure>  The Peace Corps assigned Dorothy to teach geography at Tri-Chandra College. After the school closed in the winter due to lack of heating, USAID and the College of Education asked Dorothy to help train general science teachers.&nbsp; She taught for two months and became involved in a textbook-writing project, commenting: ‘I would like the children to know something about public health, conservation (the trees are going fast and so is the soil), and learn the names of some of their common birds, trees, and flowers. They are more impressed with electricity, airplanes, and cell structure.’ When a new college opened in Pokhara in 1963, Dorothy was transferred there and lived with a Nepali family. The college boasted 30 students and no permanent buildings.&nbsp; In October 1963, Dorothy wrote: ‘Pokhara is a town of almost 5,000 people … We are in a fertile valley surrounded by foothills … There is a small Mission Hospital … a Leper Hospital and Tibetan Refugee Camp started by the Red Cross and now run by the Swiss. With winter approaching, more Tibetans are appearing in town, often with pack horses or donkeys. Some have been carrying large boxes of powdered milk,donated (by USAID) to the camp from the airport … There is no electricity, and the transportation problems make many items scarce and expensive. I am really a sort of a museum. The landlord brings all kinds of people in to see how I live and count my shoes and dresses. They express amazement at my books, pictures, tin oven, Nepali dolls from Kathmandu, screened food shelves and curtained closet.’ The standard term for Peace Corps volunteers was two years, but Dorothy extended her term and was still at Prithvi Narayan College at the end of 1965, when she wrote that she had 20 Geography students in the first-year class and 6 in the second year preparing for the IA Examination. The college enrollment was 125 students, and the foundation for a new science building was being excavated.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071901074_c6a80e5e0db0c705b2f8733c6d30dc0386fe3abbd2238ea9d947b7d746f94a29.jpg" data-media-id="editor_2" data-image-id="2025071901074_c6a80e5e0db0c705b2f8733c6d30dc0386fe3abbd2238ea9d947b7d746f94a29" data-rendition-name="original" width="902" height="605" loading="lazy" alt="How the Peace Corps changed a volunteer's life"> <figcaption>Mierow and friends at Phewa Lake.</figcaption> </figure>  Dorothy noted that she ate one meal a day at the (Shining Mission) Hospital but otherwise lived on dal-bhat, momo, and potato curry at local shops. However, she had developed a new passion: to build what she initially called the Pokhara Museum of the Himalaya. In commendable Peace Corps fashion, Dorothy always worked with Nepalis and respected the culture. ‘The greatest joy and satisfaction I have had has been from the building of a Museum-Library in memory of my parents … It has been possible to feel like a wealthy benefactor with the money saved by father for the family’s education and now available for the education of others… (Father) would have loved to be in on the founding of a new college and be able to plan a library. Several hundred of the books to be in the museum-library came from his collection and were carefully selected to be of use for students in Nepal…’&nbsp; ‘The museum part is to satisfy my own inclinations and was thought of when I found how little diversion there was for the people of Pokhara… It is part of the University requirements for the college that it should have a geography and biology museum. The museum building is small but adequate.&nbsp; I have tried to design it in harmony with Nepalese architecture and decorate it with some of the art of the best artists or woodcarvers… Posts holding up the porch roof are carved by Cottage Industries to represent different peoples of Nepal in typical costumes. The door was carved by a local wood carver and has typical birds of Nepal around it. Inside are 10 roof-support carvings designed by the retired Director of the National Museum in Kathmandu, Mr. C.M. Maskey.&nbsp; They were carved by the best wood carvers in Patan very skilfully. The building has three rooms: the library, the exhibition room, and a smaller workroom which can be used by our newly formed Woman’s Club as well as other groups or classes.’  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071901074_03d3359c65389d30a0134e9a4862778994121e7e833b7d28b18e06e36fc76ff8.jpg" data-media-id="editor_3" data-image-id="2025071901074_03d3359c65389d30a0134e9a4862778994121e7e833b7d28b18e06e36fc76ff8" data-rendition-name="original" width="629" height="599" loading="lazy" alt="How the Peace Corps changed a volunteer's life"> <figcaption>Mierow with local women in Pokhara in 1969.</figcaption> </figure>  Dorothy promoted her project to influential Nepalis connected with organisations whose support she solicited: The Department of Archaeology, the Department of Agriculture, the Godavari Botanical Gardens; Tribhuvan University’s Science and Education Department, Nature Conservation Society.&nbsp; The museum was opened officially in early 1967. The Annapurna Natural History Museum, the building Dorothy designed and had constructed, is still open and features some exhibits which she created many years ago.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071901074_54326a8a0685e980e782378076de2f5cd02d2426e9b0d94eed972d3dbe83af26.jpg" data-media-id="editor_4" data-image-id="2025071901074_54326a8a0685e980e782378076de2f5cd02d2426e9b0d94eed972d3dbe83af26" data-rendition-name="original" width="1333" height="1000" loading="lazy" alt="How the Peace Corps changed a volunteer's life"> <figcaption>The Annapurna Natural History Museum.</figcaption> </figure>  Dorothy returned to America in 1967, but she longed for Nepal. In the spring of 1969, she again tried to enroll as a Peace Corps volunteer but was told that as she had spent more than four years, she would not be eligible for another assignment. Undeterred, she persuaded the college in Pokhara to invite her to return as a teacher.&nbsp; UNICEF and the Forestry Department sponsored Dorothy to prepare charts on trees, birds, animals and flowers in colour for distribution to the schools of Nepal. Dorothy, back in the Peace Corps, returned to Pokhara and the Museum in 1972. She formed a friendship with her former geography student from Sikles, Chandra Prasad Gurung, and in 1974, she brought Chandra to America, where he enrolled in Colorado College and studied cultural anthropology.&nbsp; Chandra subsequently earned his PhD in geography from the University of Hawaii and returned to Pokhara to become director of the Annapurna Conservation Area Project. Gurung actively promoted ecotourism, landscape conservation, and biodiversity conservation in Nepal. His life was cut short along with those of 23 other Nepalis and foreigners who perished in a helicopter crash near Taplejung in September 2006.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071901074_322d3c3ac6f1b08ffa07c44a19998b937a7db9eb43527f7539cf6481e1546314.jpg" data-media-id="editor_5" data-image-id="2025071901074_322d3c3ac6f1b08ffa07c44a19998b937a7db9eb43527f7539cf6481e1546314" data-rendition-name="original" width="2500" height="1000" loading="lazy" alt="How the Peace Corps changed a volunteer's life"> <figcaption>Mierow's four books on Nepal and its biodiversity. </figcaption> </figure>  Dorothy worked with several well-known Nepalis to publish her paintings and photos in beautifully illustrated books. She and Hemanta Mishra of the National Parks and Wildlife Service wrote Wild Animals of Nepal (Ratna Pustak Bhandar, 1976). More than 400 photos Dorothy took on treks to the Everest region, Gosaikunda, Muktinath, Jumla and Rara Lake, as well as travels in the Tarai, appeared in Himalayan Flowers and Trees (Sahayogi Prakashan, 1978).&nbsp; The botanist Tirtha Bahadur Shrestha identified the species. Dorothy and Kesar Lall published This Beautiful Nepal (Sahayogi Press, 1981). Birds of the Central Himalayas (1988) contained Dorothy’s paintings of 250 species of birds found along the areas of the Kali Gandaki River, Pokhara, Chitwan and the central Tarai. Dorothy summed up her life and work in Nepal in Thirty Years in Pokhara (Pilgrims Book House, 1997). Dorothy returned to Pokhara and her adopted Gurung family several times during the 1980s and 1990s to celebrate festivals and meet old friends. Her final years were spent at her mountain cottage in Green Mountain Falls north of Colorado Springs. She died at the age of 79 in August, 2000. Nepal gave new meaning and purpose to Dorothy Mierow’s life. Daniel W Edwards was a Peace Corps volunteer in 1966 and is the author of several books on Nepal. The author thanks Special Collections, Tutt Library, Colorado College.

How the Peace Corps changed a volunteer’s life

· On the night of 15 May, two glacial lakes burst in Tharka in Humla and the debris flow washed away homes and bridges.&nbsp; · Last week, a slurry surge on the Kali Gandaki in Upper Mustang caused at least Rs15 million in damage, and was traced to a melting glacier. · Dozens are feared dead after <a href="https://nepalitimes.com/news/rasuwa-flood-likely-a-glof">an expanding glacial lake in Tibet overflowed</a>, sweeping down into Nepal and damaging four hydropower plants generating 230MW, nearly 8% of the country’s total grid supply.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060748_45225dc707c1e9c2968ca8dbf6e564e01e4eb6e2ff254fb8eb940cf62cdd910b.jpg" data-media-id="editor_1" data-image-id="20250718060748_45225dc707c1e9c2968ca8dbf6e564e01e4eb6e2ff254fb8eb940cf62cdd910b" data-rendition-name="original" width="2667" height="1500" loading="lazy" alt="Rasuwa flood"> <figcaption>Miteri friendship bridge connecting Nepal and China was swept away in the Rasuwa flood. Photo: PRAKASH CHANDRA TIMILSENA / NPL</figcaption> </figure>  And those are just in the past month. Climate scientists say Himalayan glacial lake outbursts are becoming more frequent and destructive, and a warning for Nepal not to put all its eggs in the hydropower basket.&nbsp; <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">Record precipitation last September</a> unleashed floods that killed 200 people, and temporarily slashed Nepal’s total generation capacity of 3,000MW by nearly half. The <a href="https://nepalitimes.com/banner/nepal-valley-suffers-quadruple-disaster">Melamchi flood of 2021</a> caused by <a href="https://nepalitimes.com/multimedia/the-not-so-permanent-frost">permafrost melting</a> on a glacier upstream nearly destroyed a $800 million water supply scheme, Nepal’s largest infrastructure project which four years later still has not resumed full operation. The <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">glacial lake overflow in Sikkim</a> caused by record rainfall in September 2023 that destroyed the $1.2 billion Chungthung Dam and caused catastrophic damage to infrastructure on the Teesta River. This was a warning to the cascade of hydropower plants on the Arun and Marsyangdi river basins.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060736_6f61797a6be308321e3bae26e55d2f64cba4b9e5eb262adacb9e92fb5f3c6152.jpg" data-media-id="editor_6" data-image-id="20250718060736_6f61797a6be308321e3bae26e55d2f64cba4b9e5eb262adacb9e92fb5f3c6152" data-rendition-name="original" width="919" height="549" loading="lazy" alt="hydro disasters and hydropower plants"> </figure>  Nepal has set a target of generating an additional 28,500MW by 2035 -- out of the feasible 48,000MW -- but how viable is an energy strategy that is exposed to heightened risk due to climate breakdown? &nbsp; “As extreme weather events increase, we must design and build infrastructures respecting river flow and topography,” says former Energy Secretary Dwarika Nath Dhungel. “We must make the best use of our water resources, but not by letting excavators loose everywhere mining riverbeds and building haphazardly where we shouldn’t.”&nbsp; Although no project can be disaster-proof, <a href="https://nepalitimes.com/banner/climate-smarter-himalayan-infrastructure">climate smart design</a> can minimise damage from flash floods and landslides. Recent disasters have driven up insurance premiums for energy projects in Nepal, and smaller ones cannot even afford them. The 456MW Upper Tamakosi hydroelectric project which is still not fully functional after the September floods has claimed insurance worth Rs1.8 billion. The alternative to high risk high investment hydropower projects is <a href="https://nepalitimes.com/here-now/what-s-cooking-in-nepal-besides-politics">energy diversification</a> to other renewables such as solar, wind or biogas. Nepal gets annual sunlight of 300 days with 6-7 hours on average to total 50,000 terawatt-hours (TWh) per year.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060744_4acd452b4117180ca9bb5d3be839ff46dfd5464e4d507f5ad3704cef6253bc48.jpg" data-media-id="editor_9" data-image-id="20250718060744_4acd452b4117180ca9bb5d3be839ff46dfd5464e4d507f5ad3704cef6253bc48" data-rendition-name="original" width="1080" height="720" loading="lazy" alt="solar power"> <figcaption>Farmers in Tarai using solar powered water pump. Photo: GHAMPOWER</figcaption> </figure>  The Solar and Wind Energy Resource Assessment (SWERA) calculates that Nepal could source 3,000MW from wind energy alone, considering 10% of the area with more than 300W/m2 wind power density. <a href="https://nepalitimes.com/opinion/people-power/decentralising-power-in-nepal">Solar energy</a> stations are cheaper and quicker to build, and would be an ideal alternative to reliance on hydropower.&nbsp; “There has been some investment in solar power, especially from the state sector,” says water expert Madhukar Upadhyay. “But there is an issue of land acquisition since the arrays need a lot of space. It is comparatively easier to get a permit to put up a hydropower plant on a river.” As for biogas, there is simply no incentive to build on past success with household level plants to <a href="https://nepalitimes.com/here-now/more-bullshit">promote industrial-scale production</a>. Scaling up biogas by integrating it with urban biodegradable waste would still be a viable alternative to LPG.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250718060744_715d44afd5eb4ba8dafa209b0ad0f19400665797b5f078f5636821e600f96684.jpg" data-media-id="editor_12" data-image-id="20250718060744_715d44afd5eb4ba8dafa209b0ad0f19400665797b5f078f5636821e600f96684" data-rendition-name="original" width="1419" height="954" loading="lazy" alt="windmill"> <figcaption>A wind mill in Hapsikot in Nawalpur. Photo: WINPOWER NEPAL</figcaption> </figure>  Nepal’s public sphere is buzzing with excitement over the discovery of potentially 430 billion cubic metres of methane gas beneath Dailekh district that, if properly harnessed, would meet the country’s energy demand for the next 50 years. Even though a feasibility study is awaited, politicians from the prime minister down see this as a petro bonanza that will make Nepal rich. But drilling, storage and distribution of CNG in the country’s current kleptocratic state make that unlikely. If Nepal was to get rich solely on its hydro-energy potential, it could have done so in the past 50 years. Says Dhungel: “This is not exactly a new discovery, but it is premature to celebrate until its extraction is proven to be cost effective. And let us hope it does not get <a href="https://nepalitimes.com/news/balance-of-power">tangled in geopolitics</a>, since China is involved in the prospecting and drilling, which could make India uneasy.”&nbsp; The country suffers from the Dutch Disease curse even before its resource is fully exploited. And the same cronyism, corruption and rent-seeking structure cannot deliver the riches we expect from Dailekh’s methane discovery. Now, <a href="https://nepalitimes.com/here-now/right-climate-for-nepal-s-energy-transition">with hydropower in jeopardy</a>, Nepal’s planners will have to evolve a new strategy for energy security into the future. But first, governance needs to be cleaned up with long-term strategic planning that takes climate risk into account. For example, do we need to mine fossil gas when there are renewable options? Will Dailekh take Nepal away from its climate commitments? Says Madhukar Upadhyay: “Nepal has always been resource rich and management poor. And the larger the resource, the bigger our management incapacity. It is a societal malaise.”&nbsp;