<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd9989c7e80680e080220jpeg.jpg" alt="" width="2036" height="1180"/><figcaption></figcaption></figure><a href="http://campuspress.yale.edu/rpande/">Rohini Pande</a>is Professor of Economics and Director of the <a href="https://egcenter.economics.yale.edu/">Economic Growth Center (EGC) at Yale University</a>. She was Professor of Public Policy at Harvard Kennedy School and Co-Director of Evidence for Policy Design (EPoD).  A respected economist, she is interested in the role of public policy in providing the poor and disadvantaged greater political and economic power, and has been involved in Nepal-based research work since 2017. Pande spoke to Nepali Times about EGC/Nepal Administrative Staff College’s recently released <a href="https://egc.yale.edu/preparing-nepals-upcoming-flood-season-and-covid-19">Covid-19 and Nepal’s Health Financing study</a> aimed at understanding health activity financing during pandemic, along with her research in other policy areas including employment and federalism. Nepali Times: Could you give us a quick overview of your work in Nepal?  Rohini Pande: For the last few years, I have been working with my US-based colleagues as well as the Kathmandu-based Governance Lab and Daayitwa on trying to understand how federalism is working. A particular area of interest to us is to understand how the move to federalism has enabled inclusion in the three spheres of government; recognizing that the demand for inclusion was an important reason underlying the prior conflict and that the Constitution gave this goal priority.Once Covid-19 hit, a question that naturally came to the fore is how well the three spheres of government are coordinating in their response. This is especially important given that local governments are in the frontline but don’t directly have access to additional resources beyond their local budget. So we have been conducting a series of phone surveys with officials in both local and provincial governments to better understand the coordination challenges and financing issues that have come up during the pandemic.Could you talk about the results, and the policy lessons?Covid-19 has brought to the fore the absolute importance of ensuring that adequate resources are being dedicated to frontline health activities. There is only so far you can go with across-the-board policies like lockdowns, and you have to move to policies such as quarantining a smaller number of people, contact tracing and testing activities. Many of these activities remain split across the three spheres of Government. Quarantine facilities, for example, are managed by local governments but funded from higher-level governments.  We were interested in understanding exactly how well the financing for different activities under Covid-19 match up with where the responsibilities are.We had two main findings. First, in the short run, during the lockdown, local governments typically said that lack of resources was a big issue. This was particularly true for municipalities in the Tarai and those bordering India where they saw more returnees requiring quarantine facilities. The Tarai also has fewer remaining disaster relief funds, as much of it was spent on flood relief efforts earlier in the financial year. So essentially, local government budgets did not reflect their caseload. We argue that this creates a case for needs-based financing.This brought us to the next question: if we wanted to move towards a need-based financing approach, how well would this work? This requires flow of data across spheres of government – which currently occurs through then CMIS data system. We observe that CMIS data entry is patchy for several local governments pointing to a need to complement rollout of new software with providing local governments the personnel and hardware necessary for data entry. This is an area where we want to see more investments to make evidence-based financing systems viable, and the government officials we have been talking to have been responsive.I also want to flag a recent World Bank report on health financing that suggests very low overall health spending by Nepal. So, it is not just about how to allocate the small set of resources better as we discussed, but the total amount of resources allocated on health needs to be increased as well.With festivals around the corner, how do we prepare for the upcoming months?Ensuring ongoing public health awareness campaigns and requiring social distancing is, of course, important. The extent to which local governments can actually limit indoor events and implement crowd-size control measures will be important, as more and more studies show that super-spreading events are a key factor. The harder task is to continue to intensify the levels of both testing and contact tracing.Given your work with MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) in India what have been the lessons, and how can data and evidence help with implementation?The value of a program like MGNREGA becomes clear especially during times like this, as it is the largest social safety net available to individuals across rural India when overall private sector employment is falling.From the very start, MGNREGA placed a lot of emphasis on transparency, so there are clear websites where you see data, down to the level of local government, on how employment is progressing. My one suggestion would be that as PMEP is being rolled out, it would be valuable to have a strong Management Information System from the beginning as a backing. When MGNREGA started, there were concerns about a significant amount of corruption. To the extent that researchers and the policy community were able to triangulate data across different sources including the MIS, we have strong reasons to believe that corruption levels over time has decreased significantly over the 15 years. So, for evidence such as that, a strong MIS is valuable.The other aspect that Indian states are also wrestling with is knowing how much demand for employment in MGREGA there actually is on the part of local citizens. The reality is programs like MGNREGA and PMEP tend to be more supply-driven rather than demand-driven, when in theory, these projects are meant to be demand-driven. Thinking upfront how you plan to register local demand is going to be crucial.In terms of my research, we have looked at the digital architecture of MGNREGA and the extent to which the transition to electronic payment systems has improved the funds flow. We just published some work arguing that with digital payments, it is possible to have greater transparency on who is getting paid and that can reduce corruption.We have also been doing work on how the programs can be strengthened to reach women. This is also important in the Nepal context today because COVID-19 has had a disproportionate impact on women worldwide. So, the extent to which programs like PMEP can be used not just to provide households with employment but to also ensure its equal access to men and women is important. This would also involve combining PMEP-style programs with financial inclusion efforts because ensuring women’s wages are directly deposited into their individually controlled bank accounts that are secure will be valuable.Your other area of work is economic empowerment of women. Women’s participation in paid jobs is low whether within Nepal or overseas. What is the available evidence on policy interventions to increase women’s labour force participation? Raising overall labour force is important but right now, with decline in economic opportunities globally, a bigger question is what can be done to keep those in the labour force employed, and to bring those who lose the jobs back to it. These are the groups closely tied to the labour market and currently threatened.  Carefully tracking the rates at which women are losing jobs compared to men, ensuring employers face incentives to equally employ men and women, and that women also have access to information on employment opportunities is important.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd99b9c7e80680e080221jpeg.jpg" alt="" width="796" height="545"><figcaption>Select Findings from the COVID-19 and Nepal's Health Financing Survey</figcaption></figure>As a parting question, what is your overall experience working in Nepal been like as you try to inculcate a wider appreciation for evidence-based work? What could media’s role be?We have been lucky as we are working with colleagues in the Government who are genuinely interested in understanding what is in the data. Our survey work is being done in collaboration with the Nepal Administrative Staff College and our previous work was also jointly done with Government officials. Since there is already interest in what is in the data, the main issue really is to create the infrastructure.The extent to which media can also start investing in more data-based stories, which may require recruiting individuals who can conduct such data analyses or partnering with organizations with strong databases to write more columns involving data can be valuable.

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

1250x600

1084x550

Local governments lack resources to tackle Covid-19

<figure><img width="1368" height="562" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110915110/636bb3069c7e80680e07bb16jpeg.jpg" alt=""/><figcaption></figcaption></figure>Seven noted public health experts have described an Oxford University study three months ago that projected 50,000 Covid-19 deaths in Nepal by October as dangerously alarmist, and which could have led to flawed policy decisions.  The study was commissioned by the British aid agency DFID and predicted a peak of the pandemic in Nepal from June to September with an astounding 846,000 new cases a day in the worst-case scenario. Titled <a href="https://reliefweb.int/sites/reliefweb.int/files/resources/Nepal_COVID-19_modelling_-_final_published.pdf" data-saferedirecturl="https://www.google.com/url?q=https://reliefweb.int/sites/reliefweb.int/files/resources/Nepal_COVID-19_modelling_-_final_published.pdf&amp;source=gmail&amp;ust=1599273893445000&amp;usg=AFQjCNEINOvQjYDEsS6CfYBXhCSMpz7NIQ">Modeling of COVID-19 Strategies in Nepal,</a> the report was recently made public by UKaid, Oxford Policy Management and University of Oxford, and spread alarm when it was carried by the media.  ‘Nepal is fighting against Covid-19 pandemic within its capacity, and so far it is doing well compared to global average,’ read a statement by the public health experts. ‘Projections such as this are the basis for further planning to mitigate the risk and hence should be based on available data and rational assumptions close to reality. A wrong prediction will lead to misguided policies and strategies, resulting in failure to address the actual problem.’ Issued by Mahesh Maskey, Sharad Onta, Badri Raj Pande, Aruna Uprety, Sameer Dixit, Abhinav Baidhya and Rajendra BC, the statement questioned the validity of the study, calling it misleading and one that could have created widespread panic among the general public. The spread of SARS-CoV-2 has gained tempo in the past month in Nepal with a record 1,228 new confirmed cases on Thursday, with 481 of them in Kathmandu Valley alone. There were 6 additional deaths, bringing the total to 257. However, there were also 768 recoveries, highest in a single day and the total recoveries now stands at 24,207.Despite these figures, the projections in the study even for the best-case scenario seem to be way off. The model predicted:<ul><li>In case of low disruption strategy, the peak of the epidemic will extend from early June to early September, reaching a maximum of nearly 846,000 new COVID-19 cases per day with less than 10% of cases (75,000) reported to the health system and 49,200 cumulative deaths due to COVID19 by the end of the year.</li><li>In case of medium disruption strategy, the peak of the epidemic will extend from mid-July to early October, reaching a maximum of nearly 548,000 new COVID-19 cases per day with less than 10% (50,000) of cases being reported to the health system and around 5,000 less deaths compared to low disruption strategy.</li><li>In case of high disruption strategy, peak of the epidemic will extend from mid-June to late October, reaching a maximum of nearly 531,000 new cases per day with less than 10% of cases (46,800) reported to the health system and 11,300 less deaths compared to medium disruption strategy.</li></ul><figure><img width="1010" height="1312" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110915110/636bb3089c7e80680e07bb17jpeg.jpg" alt=""><figcaption></figcaption></figure>Completed in May the modelling does not have monthly figures for new cases and deaths, but includes complicated graphs that indicate only daily case peaks. For example, as per the medium disruption scenario, there should be a total new 548,000 cases a day in the last week of August. And if we are to assume that less than 10% of these were actually reported per day, as suggested by the study, there should have been some 50,000 new cases a day, except this is 50 times higher than the actual cases reported per day last week.The Nepali experts say that instead of helping Nepal mitigate the Covid-19 crisis, the study added to the burgeoning challenge of testing, tracing and treating coronavirus patients. They added: ‘The scale of panic aside, what if government had accepted this report and spent its scarce resources on preparing hospital beds and ventilators at a massive level? Would it be a proper use of resources or misuse?’The experts also questioned the basis for assuming such a high incidence and mortality in Nepal, and for assuming that less than 10% of the total cases would be reported to the health system. ‘Given that the predictions are widely off the mark so far, why should Nepal trust the projections for rest of the year?’ they ask, adding that the authors of the study should clarify the assumption before they cause further damage.

Nepal experts reject Covid-19 model

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

American artist Peter Makela was in Nepal in 2022 on a Fulbright scholarship when he experienced the Matya festival in Patan in which devotees made the rounds of the city’s shrines.&nbsp;
He joined the procession, walking through 2,600 stupa and 140 bahal of the town. That immersion left a lasting impression.
As part of Gallery Mcube’s international residency program in Patan, he put his inspiration to canvas in the exhibition Yala Yatra: Walking, Working, Worshipping. The exhibition also coincides with this month’s Matya festival.&nbsp;
Makela has visited Nepal often in the past 11 years but he mostly stayed in and spent his time around Boudha. “This time I stayed in Patan, put the sites I wanted to visit on my map, and off I went,” he tells us. “Each of my artwork is inspired by the stupas and shrines in Patan that I visited.”
The stupa and Ganesh are recurring motifs in his watercolours, and the elephant gods are located in chaityas — reflecting the interplay and blending of the Hindu and Buddhist faiths in Kathmandu Valley.&nbsp;
The stupas and Ganesh are painted in vivid red, yellow, blue and green against abstract backgrounds meant to represent the sky.
“I use the sky as a backdrop because the sky has no border,” says Makela. “The four colours represent the four elements, the different Buddha families and also lights bouncing off of a rainbow.”
The use of just four colours for all the artwork stands out, and combined with the absence of heavy canvases, frames or stands render Makela’s art striking in its simplicity.&nbsp;
The Ganesh is always holding something and the art also portrays the elephant god’s sacred vehicle, the mouse.
While his vibrant stupas and Ganesh reflect the tangibility of Patan’s tradition and heritage, it is as if the backdrops with their shades of grey and red and yellow capture the soul of the city’s shrines.
“If you look closely, there is a sense of form and formlessness at the same time,” he says.&nbsp;
Makela walked 108 kora around the shrines during his exploration of the town, and in the process developed a spiritual connection with Patan’s heritage and traditions.&nbsp;
The exhibition connects with visitors on a deeper, more spiritual, level as well. And with it, they feel a sense of pride as well as the need to urgently preserve Patan’s heritage for future generations.
“Peter’s inclination and approach towards Nepali art and culture is fascinating, and it reflects in his work,” says Mcube curator Manish Lal Shrestha, whose international artist residency program promotes Nepal’s cultural heritage. &nbsp;&nbsp;
Yala Yatra: Walking, Working, Worshipping
1-5 August&nbsp;
10AM-7PM
Gallery Mcube, Patan

covid-19-study

Local governments lack resources to tackle Covid-19

Nepal experts reject Covid-19 model

Visit Nepal in the monsoon

Not poor, but not rich

Nepal’s bubble economy

Walking, working, worshipping in Patan