<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141140/636bae439c7e80680e077fe2jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Illustration: DIWAKAR CHETTRI</figcaption></figure>After weeks of bitter infighting within the ruling Nepal Communist Party (NCP), the three feuding factions have now agreed on a ceasefire and there is an uneasy calm in Kathmandu.The political counter-coup by Prime Minister K P Oli last week allowed him to keep his job for now, but in the process he had to make some compromises. The upshot is that the concentration of power in the prime minister’s office that had characterised Nepal’s politics for the past two-and-half years has now been replaced with a tense triangular standoff.Although Oli managed to forestall attempts to oust him, he is not as strong as before and has been forced to yield to party co-chair Pushpa Kamal Dahal and the faction led by former prime minister Madhav Kumar Nepal.It is difficult to say what tricks Oli had in the bag to defuse the threat from Dahal, but political analysts agree that one major factor was the strong message from Beijing delivered by the Chinese Ambassador not to split the NCP. The party rank-and-file got the message and lobbied intensely with Dahal and Oli to sort out their ego-clash and not hold the party and nation hostage.The deal hammered out allows Oli to complete his term and effectively serve as incumbent during the 2022 election. In return the prime minister has agreed to back Dahal as the sole executive head of the NCP during its forthcoming Special Convention in November. Oli even convinced Dahal that Maoism as an ideology was obsolete, and he should espouse the ‘people’s democracy’ of the late UML leader Madan Bhandari. But Dahal may have also realised that his next rival in the party is Nepal and not Oli, and decided to jump ship.<a href="https://www.nepalitimes.com/editorial/you-stab-my-back-i-stab-yours/">You stab my back, I stab yours</a>, EditorialOli has also reportedly agreed to reshuffle the Cabinet by inducting more Dahal loyalists. There may have to be additional portfolios for supporters of Madhav Nepal, who already has two loyalists in the Cabinet: Agriculture Minister Ghanashyam Bhusal  and Tourism Minister Yogesh Bhattarai.Critical in the political arithmetic that allowed Oli to survive the latest threat was the defection of Home Minister Ram Bahadur Thapa and UML leader Bam Dev Gautam. We can only speculate what those two got in return. But it looks like that the prominent third-tier leaders deeply involved in mediation, including former Maoist guerrilla commander Janardan Sharma, Devendra Poudel and Haribol Gajurel, would probably also stand to be rewarded with posts in the next government.Finance Minister Yubaraj Khatiwada has made no secret of his desire to be the next ambassador to the US, and he may be replaced in the reshuffle by either Surendra Pandey or Bishnu Poudel. There may also be a rearrangement of Chief Ministers, and Oli may have to let go of some his people including Prithvi Subba Gurung of Gandaki Province and Shankar Pokhrel of Province 5.After all that hectic horse-trading, all is quiet in Khumaltar, Balwatar and Koteswor this week – the three residences of Dahal, Oli and Nepal respectively. Dahal is said to be spending time with his family, and feeding pigeons. Nepal is sulking. And Oli, being Oli, must be plotting his next move.Now that there is no imminent threat of government collapse, it would be a good time for Prime Minister Oli to focus all his attention on the monsoon disaster relief and the COVID-19 crisis. But he will probably busy doling out portfolios so as to appease the factions.There is so much bad blood between the three NCP factions that even when the reshuffle happens, the Cabinet will probably function like a coalition government.

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Push and pull of Nepali politics

<img width="909" height="453" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141136/636bad4e9c7e80680e077f87jpeg.jpg" alt=""/>Why Prime Minister K P Oli decided to use the birth anniversary of Nepali poet Bhanubhakta Acharya on Monday to get embroiled in what he should have known would create a huge backlash in India is not known. We can only speculate.Oli put forth the wild theory that the mythical Hindu god Ram was born in Nepal, and that the kingdom of Ayodhya where his family ruled was actually in present day Chitwan district near the Indian border. Never mind that neither Nepal nor India existed at that time.The prime minister may have unintentionally blurted it out because he had a sympathetic physically-distanced and mask-wearing audience that was laughing at all his previous repartees. After all, it was a function celebrating the Nepali language as one of the unifying pillars of nationhood.Either that or the reference to Ayodhya was a trial balloon and an attempt to fall back on ultra-nationalism. This has always been his default button whenever he faces a domestic political crisis, or challenge to his authority from rivals within his own Nepal Communist Party (NCP).Either way, the remarks have been greeted with understandable outrage in India which is governed by Prime Minister Narendra Modi’s Hindu-right BJP that has itself politicised the Babri Masjid-Ram Janmabhoomi temple at Lord Ram’s nativity site.In Nepal also, the utterance backfired on the prime minister who has been ridiculed non-stop on social media. Even Oli’s own supporters have called the remarks ill-timed and detrimental in getting Nepal-India relations back on track.If it was a calculated move on Oli’s part, it could have been an attempt to get back at Indian television news channels which have been demonising him ever since he confronted India over a sliver of territory on Nepal’s remote northwestern corner that is <a href="https://www.nepalitimes.com/editorial/territorialism/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/territorialism/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNHyJ4jL68XvBObXesYf4X6ZJU20Iw">occupied by India</a>.Faced with brewing mutiny led by co-chair Pushpa Kamal Dahal in May, Oli used the anger in Nepal against the Indian move and defied New Delhi by getting all parties to <a href="https://www.nepalitimes.com/latest/nepal-passes-map-bill-india-reacts/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-passes-map-bill-india-reacts/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNHx4IFCmFjuhHCbbMi1Sskz8PoPAA">amend the constitution</a> and use the new map in Nepal’s national emblem.That bought him some time, but faced with another challenge in the party’s Standing Committee last month, he accused New Delhi of trying to unseat him, and threatened to <a href="https://www.nepalitimes.com/latest/nepal-ruling-party-on-verge-of-split/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-ruling-party-on-verge-of-split/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNG_-2yLNXXhYKZZ7fcpxjtDnQlu_g">split away from the party</a> by re-registering the old UML at the Election Commission.<a href="https://twitter.com/prcambnepal?lang=en" data-saferedirecturl="https://www.google.com/url?q=https://twitter.com/prcambnepal?lang%3Den&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNH5In2SuSSwWgVfYZmbsQKHDQqvuw">Chinese Ambassador in Nepal Hou Yanqi</a> then became active, and started a slew of meetings with Nepal’s President Bidya Devi Bhandari, Dahal and NCP comrades opposed to Oli. She carried a message from Chinese President Xi Jinping saying that splitting the part would be a bad idea. Such open involvement by a Chinese ambassador in an internal party power struggle used to be unheard of.Indian tv channels and troll factories on social media then launched an all-out war directed solely at Oli, and calling openly for his ouster. Some tv channels went as far as to insinuate that Prime Minister Oli was dating Ambassador Hou, with graphics showing Valentine’s Day hearts. Nepal’s direct-to-home tv operators then pulled the plug on all Indian news channels.Oli’s off-the-cuff remark about Ayodhya therefore came at a time when Nepal-India relations was already at its worst since the five-month Indian border blockade of Nepal in 2015. It will not help get relations back to an even keel.What has so far been an escalating government-to-government spat has the potential to now turn many Indians against Nepal at the people’s level. Intentional or not, Oli should have known better than to drag an explosive mixture of religion and politics into an already volatile relationship. Oli might have been thinking that Indians do not have a monopoly on arrogance and threatening language, but he seems to have forgotten that size matters. However, Nepal cannot choose its neighbours, we are stuck with the two we have. And they together represent one-third of humanity.Over the past two-and-half centuries, Nepal’s survival strategy has been to keep both neighbours at arms length by maintaining a stable and balanced relationship with them. Oli is upsetting the cart. Remarks supposed to stoke ultra-nationalist (read: anti-Indian) fervour have <a href="https://www.nepalitimes.com/banner/nepal-pm-oli-under-pressure-to-resign/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/nepal-pm-oli-under-pressure-to-resign/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNEB97iqvMxIwt1D0wwMKxS7qTxJEA">worked for him before</a>, and he might have thought it will work again. This time, it will take a lot to undo the damage those ill-chosen words have done. And by making people bring up the issue of side-effects from medications, it may have also raised questions about whether he should step down on health grounds. The Ayodhya reference also came during a tense ceasefire between Oli and Dahal as a result of Ambassador Hou’s meetings last week. Loyalists on both sides now say they do not want to split the party, but the real issue has always been what will be the give-and-take between Oli and Dahal that will keep the party united.At the heart of the dispute is Dahal’s impatience to head the government and/or party. He had banked on Oli’s health deteriorating to such an extent that he would automatically take over. He did not expect it to drag on for so long, and Oli seems to have come out physically stronger after his second kidney transplant in March.It is not in Nepal’s national interest to allow an ego-clash and <a href="https://www.nepalitimes.com/editorial/bow-out/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/bow-out/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNFKrED3M6da0visGwFil2WQUzuHlg">power struggle at the top</a> of the ruling party to impact any more on core concerns like <a href="https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/post-truth-politics-in-nepal/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNHFMfskRewlxUW0Nsk2ZGqWAdhfIA">the MCC</a>, <a href="https://www.nepalitimes.com/here-now/nepal-ruling-party-feud-affecting-covid-19-response/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepal-ruling-party-feud-affecting-covid-19-response/&amp;source=gmail&amp;ust=1594811076993000&amp;usg=AFQjCNFzmj10SaKUscjrOK3IlCOOCmPojA">COVID-19 response</a>, or the country’s geo-strategic survival.

K P Oli rams it home

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101136/636b74f29c7e80680e0623bfjpeg.jpg" alt="" width="1512" height="1134"/>Wednesday was Nepal’s Democracy Day, it was the 27th anniversary of Kantipur Media Group, and the day Anup Kaphle was stepping down as editor of The Kathmandu Post. What he probably did not expect was such a high profile send-off from the Chinese Embassy in Kathmandu.A strongly worded statement by the embassy named Kaphle, accused him of being ‘always biased' against China and issued unspecified threats against the paper for <a href="http://www.koreaherald.com/view.php?ud=20200216000248" data-saferedirecturl="https://www.google.com/url?q=http://www.koreaherald.com/view.php?ud%3D20200216000248&amp;source=gmail&amp;ust=1582210409064000&amp;usg=AFQjCNFwYJiI7rrY96bToHdKN_KCuyQuPg">a column reprinted</a> (pictured above) from The Korea Herald by former US ambassador to NATO Ivo Daalder, that was critical of China’s response to the Covid-19 epidemic.This was uncharacteristic of an embassy that usually keeps a low profile in Nepal, and has upheld an official policy not to interfere in Nepal’s internal affairs, to go so public with such a direct attack against a Nepal-based media. In the past, the embassy has preferred to work discreetly behind the scenes by channelling its complaints against editors through the Foreign Ministry or Home Ministry.However, it looks like the reaction from the embassy was not restricted to Nepal, but part of a broader worldwide offensive against negative coverage of China over the coronavirus epidemic, and a backlash from Beijing against those it saw as ‘kicking China when it is down’. Beijing has been critical of especially the United States for using the epidemic for geo-strategic gain.On Wednesday itself, China <a href="https://www.theguardian.com/world/2020/feb/19/china-bars-wall-street-journal-reporters-over-derogatory-column" data-saferedirecturl="https://www.google.com/url?q=https://www.theguardian.com/world/2020/feb/19/china-bars-wall-street-journal-reporters-over-derogatory-column&amp;source=gmail&amp;ust=1582210409064000&amp;usg=AFQjCNH4tCOLDDpSnxZ-kUc1Xr1zUHutVA">cancelled the press accreditation</a> of three Wall Street Journal reporters for a story that in its headline called China ‘the real sick man of Asia’. The Foreign Ministry in Beijing said the story was racist and set back the country’s efforts to combat the epidemic. This is the first time that there have been multiple expulsions of Beijing based foreign correspondents since the time of Mao Zedong.In Kathmandu, the embassy’s press statement brought a quick rebuke from a group of editors from a cross-section of the media which hit out at the embassy for naming the editor, and issuing threats against the media.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101136/636b74f59c7e80680e0623c0jpeg.jpg" alt="" width="640" height="868">‘We condemn the statement by the embassy which also violates diplomatic norms,’ the statement (pictured above), signed by 17 of the editors of Nepal’s mainstream newspapers and magazines, said.The <a href="http://np.chineseembassy.org/eng/News/t1746464.htm" data-saferedirecturl="https://www.google.com/url?q=http://np.chineseembassy.org/eng/News/t1746464.htm&amp;source=gmail&amp;ust=1582210409064000&amp;usg=AFQjCNFiLAwHHDHDUHH8QWpxMuUOd2t9QA">Chinese embassy statement</a> lashed out at The Kathmandu Post, and singled out its outgoing editor for special mention. It said the Ivo Daalder op-ed: ‘deliberately smeared the efforts of the Chinese government and people fighting against the new coronavirus pneumonia and even viciously attacked the political system of China ... This fully revealed its ignorance and prejudice on China, deeply hurt the feelings of the Chinese people ...’The statement concluded with the following sentences: ‘It is regrettable that Mr Anup Kaphle, Chief Editor of The Kathmandu Post has always been biased on China-related issues. This time he went as far as disregarding the facts and becoming a parrot of some anti-China forces and, therefore, his ulterior purpose is destined to failure. The Chinese Embassy in Nepal has made solemn representations to the newspaper and himself and reserves the right of further action.’<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101136/636b74f79c7e80680e0623c1jpeg.jpg" alt="" width="640" height="167">Chinese Ambassador Hou Yanqi immediately tweeted (pictured above) the statement, provoking a firestorm in social media from both those who supported and opposed the issue. Some pointedly reminded her that Nepal was a democracy, unlike China -- and that it had no right to tell Nepal’s media what to do on the country’s Democracy Day. Others criticised The Kathmandu Post for insulting a friendly neighbouring country, and most of those posts used the identical analogy: asking what would have happened if it was an illustration of Gandhi wielding a gun in Kashmir.The objection seemed to be less about the content of the Daalder op-ed which many did not even seem to have read, and more about the Shutterstock image of Mao Zedong on China’s 100 yuan banknote wearing a mask. There are no reports of the Chinese Embassy in Seoul issuing any statement against The Korean Herald which first published the op-ed.Many social media users posted pictures of the cover of a recent issue of The Economist (pictured below, left) which also depicted Mao wearing a mask, and asked what the fuss was all about. Others dug up an issue of Himal bimonthly magazine from 25 years ago which photo montaged a Nepali cap on Mao Zedong (pictured below, right) to illustrate a story about the spread of Maoism in South Asia.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101136/636b74fa9c7e80680e0623c2jpeg.jpg" alt="" width="1244" height="844"><a href="https://kathmandupost.com/editorial/2020/02/19/why-china-s-statement-targeting-the-post-is-a-cause-for-concern" data-saferedirecturl="https://www.google.com/url?q=https://kathmandupost.com/editorial/2020/02/19/why-china-s-statement-targeting-the-post-is-a-cause-for-concern&amp;source=gmail&amp;ust=1582210409064000&amp;usg=AFQjCNGXhRe14kLViyhe6gqFi2AVpdamMQ">In a strongly-worded editorial</a>, The Kathmandu Post on Wednesday fired back: ‘... the Chinese embassy did not just express its discontent with the article published; it went so far as to disparage the Post’s Editor-in-Chief and employ threatening language. The undiplomatic—and frankly menacing—manner in which the Chinese embassy made its objections known is condemnable ... If Nepal is to keep its sovereignty, it needs to ensure that no foreign nation, no matter how powerful, gets to dictate what principles Nepalis uphold.’China is sensitive to the epidemic bringing out racist stigmatisation of people of Chinese ethnicity all over the world, and feels that it is not getting due credit for its strict quarantine rules to prevent the virus from spreading.Nepal has felt its geopolitical fallout. For a country that hardly ever sees anti-Chinese protests or criticism of China’s human rights record in the media, the embassy statement and the debate it has sparked will mark a watershed.

Kunda Dixit

Nepal media feels China’s wrath in coronavirus fallout

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

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