<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722f129c7e80680e0c24f7jpeg.jpg" alt="" width="960" height="640"/>Urmila Kapali works as a seamstress in Kathmandu. She has seen her household expenses double in the past six months. Kapali’s son has a job, but his earnings go towards his own family. This joint family of five in Kathmandu is struggling to survive from one day to the next.Modnath Dhakal from Gorkha has been delivering newspapers door-to-door in Kathmandu for three decades. The rising cost of basic food items, combined with soaring monthly rent for his room, has become unaffordable.“How are we going to survive?” asks the 70 years old.Urmila Kapali has to borrow money daily to buy food. She says: “If this continues, I don’t know how much longer we will stay afloat.”As the world emerged from the Covid-19 pandemic, there has been a global crisis in the supply chain. Just as economies around the world were getting back to normal, Russia invaded Ukraine — setting off a chain reaction of food and fuel price inflation that has affected vulnerable countries the most.In South Asia, Sri Lanka has officially declared bankruptcy and no longer has the foreign currency to buy any more petroleum. Elsewhere, Pakistan’s foreign currency reserves have dwindled to cover only one month of imports.Read also: <a href="https://www.nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard/">Ukraine crisis hits Nepal economy hard</a>, Ramesh Kumar<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722f149c7e80680e0c24f8jpeg.jpg" alt="" width="540" height="536">India has been relatively unscathed, but even there the inflation rate rose to 7.8%, the highest in eight years. This is directly affecting the price of goods in Nepal.Two-thirds of Nepal’s imports are from India, most of which are petroleum products. Nepal and India have a fixed exchange rate, which puts Nepal at a disadvantage every time the Indian rupee weakens against the US dollar, as it is happening now.Nepali consumers are therefore bearing the brunt of rising prices for imported goods and services. Some experts argue that Nepal’s monetary policies have been unable to rein in inflation because of the fixed INR-NPR exchange rate.Nepal used to import corn, coriander, soybean oil and sunflower oil from Ukraine. The disruption of supply of these goods, along with the shortage of wheat and the global rise in fuel prices and transportation cost, has affected Nepal’s own manufacturing sector.Nepal’s inflation rate had been increasing at an average of 4.6% for the last five years, but it nearly doubled to 8% in April. Average annual consumer prices are expected to exceed that by the end of this year.Experts predict that this year’s budget will actually make matters worse. Says economist Keshav Acharya: “This year’s expansionary budget as well as salary increases for government employees will put more pressure on the market and on consumers.”Nepal’s 15th Five-year Plan had put 18.7% of the population below poverty line, a steady decline in the past 20 years. But now, the progress of the past decades is likely to be reversed.Read also: <a href="https://www.nepalitimes.com/editorial/how-not-to-be-a-sri-lanka/" target="_blank" rel="noopener noreferrer">How not to be a Sri Lanka</a>, Editorial<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722f169c7e80680e0c24f9jpeg.jpg" alt="" width="535" height="536">The World Bank estimates that about 45% of Nepal's high-risk low-income groups live just above the poverty line. The rising cost of basic food and fuel once again puts them at risk of falling below.According to the Household Survey of 2017, Nepal’s poorest 10% spends more than two-thirds of the total expenditure on food, while the richest 10% only spends a quarter. A 2019 study by Min Bahadur Shrestha, former deputy chairman of the National Planning Commission, and Shashikant Chaudhary concluded that a 10% increase in the price of food will lead to a 4% increase in poverty.Inflation has also affected middle-income families, reducing the value of savings as inflation rates soar higher than bank interest rates. Costs of goods from food items and construction material have shot up. Many of Nepal’s ongoing infrastructure projects have been hit by cost overruns and breached contracts.This is not new. The cycle of high inflation has been going on for decades in Nepal, with an average of 8% increase over the last 40 years. The main reason for this is the 20% annual increase in credit to the private sector by banks and financial institutions over the past decades, which has led to a boost in imports and an increase in real estate prices rather than economic expansion and job creation. Meanwhile, profits generated by the bank's credit flows have helped to enrich the wealthiest by increasing the value of their assets.With few exceptions, inflation has overtaken monetary policy targets every year. This indicates that Nepal Rastra Bank (NRB) has failed in its responsibility to maintain price stability and curb lending to unproductive sectors.Moreover, the central bank has increased the supply of money by printing new notes, which automatically increases the cost of goods and services, and decreases the value of money.Read also: <a href="https://www.nepalitimes.com/editorial/state-sponsored-economic-crisis/">State-sponsored economic crisis</a>, Editorial<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722f199c7e80680e0c24fajpeg.jpg" alt="" width="1072" height="283">Although about two-thirds of Nepal's population is dependent on agriculture, farm yield is not sufficient for farmers to even feed themselves, let alone sell their produce to the market. The government’s chronic failure to import chemical fertiliser means that harvest has declined.India has begun to control its export of wheat and sugar, and is said to be moving to control rice exports next. As of April 2022, Nepal imported rice worth Rs42 billion, sugar worth Rs4.7 billion, and wheat worth Rs6.32 billion from India. So far, New Delhi has spared Nepal from grain export bans, but that could easily change and spell disaster for Nepal.Indeed, the disruption of the supply chain has raised fears of a global food crisis, with the worst case scenario being famine in parts of Africa and Asia. The Global Hunger Index 2021 ranked Nepal 76th out of 116 countries in terms of food insecurity. UNICEF figures show that even before this crisis, 43% of children under the age of five in Nepal are undernourished.Meanwhile, Biswash Gauchan, executive director of the Center for Comprehensive Development Studies, argues that further inflation is inevitable because of the deteriorating international economic situation as Russia’s war on Ukraine drags on and keeps fuel prices high.“It is normal for inflation rates to be higher in developing countries than in developed ones,” explains Siddharth Bhatt, deputy director of the NRB’s Economic Research Department. “Inflation does not have to always be detrimental if it is in the 2-4% range.”An NRB study concluded that an annual inflation rate of up to 6.5% will help boost Nepal’s economy. Numbers beyond that would be harmful, says Nara Bahadur Thapa, a former NRB executive.Read also: <a href="https://www.nepalitimes.com/here-now/economy-in-trouble-but-no-need-not-to-panic-yet/">“Economy in trouble but no need to panic yet”</a>, Nepali Times<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722f1a9c7e80680e0c24fbjpeg.jpg" alt="" width="960" height="640">Political intervention could help ease inflationary pressure, but Nepal’s leaders and corporates have a patronage relationship as shown by the influence of some business leaders in drafting recently sacked Finance Minister Janardan Sharma’s budget.Indeed, the ministry has paid no attention to monitoring the supply and distribution of goods, and existing protocols are ineffective to right what is wrong in the Nepali market.So far, overseas remittances have saved Nepal from going the Sri Lanka way, but with imports soaring and shrinking foreign exchange reserves the signs are not good.Economist Keshav Acharya says that the government must immediately set up adequate stocks of food grains and essential food items across all provinces.“Making these necessary arrangements can save Nepalis not only from food price inflation in the event of a shortage, but also from falling victims to black marketeers and food cartels,” says Acharya.Amul Kaji Tuladhar of the Nepal Retailers’ Association blames big producers and importers for the inflation because they have been hoarding food items. “If the government had a proper monitoring mechanism to curb speculation of wholesalers, consumers would not have suffered so much,” he says.Says Keshav Acharya: “Nepal’s poor are bearing the brunt of rising inflation, and things are spiraling out of control, all the while, the government and the opposition, are too distracted with their power games to take decisive action.”Read also: <a href="https://www.nepalitimes.com/opinion/how-nepal-can-avert-an-economic-crunch/">How Nepal can avert an economic crunch</a>, Kalpana Khanal

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State-sponsored economic crisis

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722ef39c7e80680e0c24edjpeg.jpg" alt="" width="1280" height="852"/><figcaption>Photo: NEPALI TIMES ARCHIVE</figcaption></figure>Prime Minister Sher Bahadur Deuba was forced to sack Janardan Sharma this week, but only after his finance minister became a political liability because of sinking neck-deep in scandals.Instead of trying to resolve Nepal’s growing economic crisis, Sharma inducted yes-men with no finance background into the ministry, and ousted the Rastra Bank governor for blocking a money-laundering scam. He then involved an unauthorised ‘expert’ at a late-night budget drafting meeting to change tax rates, and later alleged deleted CCTV footage implicating him.Much of the credit for exposing Janardan Sharma goes to Nepal’s mainstream media which investigated his wrongdoings, as well as exposing corporate houses including the Chaudhary Group, Shanker Group, Saurabh Group and Jagadamba that stood to benefit directly from Sharma’s tax rebates.Deuba coddled his finance minister till the end despite growing criticism from within his Nepali Congress, as well as pressure from Sharma’s Maoist Centre party. All this meant that the prime minister and his finance minister took their eyes off the ball as Nepal’s economy started going into free-fall.This week Sri Lanka declared it did not have cash to import any more fuel, and officially declared bankruptcy. Nepal’s officials have said the country is not in the same debt trap, but there are many indications that the crisis is deepening.The clearest yet was Nepal Oil Corporation (NOC) asking the government this week to implement 10 austerity measures to reduce petroleum consumption, including by reimposing the two-day weekend, odd-even traffic rule, quota at filling stations, discouraging vehicle use, car pooling, and a ban on import of petrol and diesel vehicles.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722ef69c7e80680e0c24eejpeg.jpg" alt="" width="800" height="565"></figure>Illustration: RABINDRALast week, the government reduced the tax on petroleum imports to reduce petroleum prices, but the NOC warned of “dire consequences” because it was running out of money.“Reducing gas prices by reducing taxes was absolutely of no use in the long run. They could have instead used tax money to promote and invest in sustainable measures,” says climate negotiator Manjeet Dhakal.He adds: “By reducing the tax the government is essentially abusing democracy by claiming to reduce the burden to the people in the guise of improving its chances in elections.”It is because of such short-sightedness that Nepal’s economy was in trouble long before Covid and Ukraine. The banking sector had a liquidity crisis because it had over-extended loans to real estate speculators. Stagnant overseas remittance, falling exports and a jump in imports had led to a growing trade deficit, and depleted foreign exchange reserves.However, some experts still believe that Nepal’s macroeconomic picture is sound, a healthy monsoon so far could mean a good rice harvest, and the INR-NPR peg cushions Nepal from the worst impact of the global crisis.They also say the fuel crisis provides Nepal with the perfect opportunity to accelerate the shift away from fossil fuels in transport, industry and households. Nepal needs to wean itself off petroleum not just to reduce its per capita carbon footprint, but to cut consumption of fossil fuels which now make up 20% of the total import bill.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722ef89c7e80680e0c24efjpeg.jpg" alt="" width="1150" height="1488"></figure>In the last nine months, Nepal spent Rs218 billion importing petroleum products, which is 82% higher compared to the same period last year. This is nearly 20% of the country’s total imports, and is worth nearly double the income from all exports.Switching to electric public transport and battery vehicles to reduce the petroleum import bill by just 10% would save the county at least Rs21 billion a year.However, from July-December 2021, Bagmati Province alone saw the registration of 81,227 new vehicles, 75,573 of which were motorcycles and scooters. If they had been electric two-wheelers, fuel costs would have been reduced.“At this rate, we maybe fast approaching the fate of Sri Lanka and the only way ahead is maximising the use of domestically generated electricity primarily in the transport sector,” says Bhushan Tuladhar, board member of Sajha Yatayat which is starting electric buses in Kathmandu starting this week.“We have policies in place, but crucial details are missing such as how to incentivise electric buses, dedicated charging stations and coordinated management of public transport,” Tuladhar adds.Electric mass transit has long been identified as a cost-effective solution, and the government needs to facilitate loans for electric buses which are about five times more expensive than diesel ones, or subsidise them so that the private sector can invest in them.Industry experts are reworking Nepal’s Nationally Determined Contribution target submitted to the UNFCCC (Framework Convention on Climate Change) in 2021 with a particular focus on electric public transport.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722efb9c7e80680e0c24f0jpeg.jpg" alt="" width="3214" height="2143"></figure>Photo: AMIT MACHAMASI/NEPALI TIMESThey have proposed an increase in sales of electric public transport to 60% by 2030, reduction in custom and excise duties for electric buses, grants and soft loans to procure them, and ensuring at least three provinces operate electric public transport by 2025.The other low-hanging fruit is a shift from LPG to electricity in households and restaurants, but transmission lines and distribution need to be upgraded so the grid can handle the load.In the Tarai, electric rickshaws are becoming popular, and municipal biodegradable garbage and crop residue can all be turned into compost to reduce imports of chemical fertiliser.All of this will also help Nepal meet its global climate targets set at Glasgow during the COP26 last year to achieve net-zero by 2040, and 45% forest cover by 2030.Nepal therefore needs to do its bit to reduce its petroleum imports to save both the economy and ecology. But that needs political will, which is sorely lacking during this election year.Says Bhushan Tuladhar: “If we don’t act even now, it will be too late. We need to work on energy, economy and environment simultaneously by involving both the government and the private sector.”Read more: <a href="https://www.nepalitimes.com/latest/sky-high-fuel-price-hits-nepals-tourism-airlines/">Sky high fuel price hits Nepal’s tourism</a>, airlines, Nepali Times

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Fueling Nepal’s economic crisis

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111412114/637220f49c7e80680e0c0292jpeg.jpg" alt="" width="1200" height="700"/><figcaption>Motorcyclists queued in front of a petrol pump fearing shortage after businesses stopped transport of petrol. Photo: Amit Machamasi</figcaption></figure>The Covid-19 pandemic <a href="https://www.nepalitimes.com/banner/economic-cost-of-5-months-of-nepal-lockdown/">adversely impacted the global production</a> and supply chain. Rising food prices reversed decades-long gains in poverty alleviation, pushing millions around the <a href="https://www.nepalitimes.com/latest/covid-19-affecting-food-security-in-nepal-wfp/">world into food insecurity</a>.Global recovery has been uneven with economic growth concentrated in some major economies, and most developing countries and emerging markets lagging behind.Nepal’s agriculture, infrastructure, construction, industry, tourism, supply chain and other service sectors have been  been hit hard. Hundreds of thousands have <a href="https://www.nepalitimes.com/latest/half-of-nepalis-lost-jobs-in-past-month/">lost their jobs</a>, especially daily wage workers, small and medium enterprises, as well as marginalised and economically disadvantaged communities, pushing them deeper into poverty.And just as the worst of the pandemic and the economic collapse was over, the global economy was shaken off course by <a href="https://www.nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard/">Russia’s invasion of Ukraine</a>, with the effects reverberating across the world and in Nepal. Experts are concerned that any economic recovery program, weakened by the global pandemic and war, will be largely ineffective.A recent research conducted by the Policy Research Institute on the policies, tactics and strategies adopted by developed countries in pandemic management has found that the <a href="https://www.nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard/">Ukraine crisis</a> has increased the trade deficit and depleted foreign exchange reserves of developing nations like Nepal. Indeed, Nepal <a href="https://www.nepalitimes.com/here-now/nepal-living-beyond-its-mean/">depends heavily on the import</a> of <a href="http://Read also: State-sponsored economic crisis, Editorial">food</a> grains, crude oil, medicine, fossil fuel, motor parts, and other commodities.Sri Lanka continues to <a href="https://www.nepalitimes.com/editorial/how-not-to-be-a-sri-lanka/">reel under an economic crisis</a> brought on by the country having adopted some of the worst economic policies for decades, and exacerbated by the decline of foreign exchange reserves due to the loss of tourism and remittance during the pandemic.Sri Lanka’s foreign debt is now 110% of its domestic production, while its revenue only makes up 9% of its GDP. Its fiscal deficit stands at 11%. Almost half of the assigned government spending has gone towards paying off the country’s loans, and it is not in any position to take more loans to pay off what it owes. Increase in agricultural imports has also adversely impacted foreign exchange reserves.Read also: <a href="https://www.nepalitimes.com/editorial/state-sponsored-economic-crisis/">State-sponsored economic crisis</a>, EditorialNepal also has <a href="https://www.nepalitimes.com/editorial/how-not-to-be-a-sri-lanka/">much to learn</a> from the effects of the pandemic, the war in Ukraine, and the Sri Lankan experience to develop a clear roadmap for its economic recovery. Here are some recommendations:<ul><li>Maintaining food security within the country by reducing and replacing agricultural imports.</li> 	<li>Reducing fossil fuel imports, increasing hydropower production and capacity, and becoming self-reliant in the energy sector.</li> 	<li>Diversifying foreign currency to improve Nepal’s foreign reserves.</li></ul>Although the Covid crisis had accelerated the decade-long decline of Nepal’s industry and service sectors, the agricultural sector seems to have some external influences on the economy. This signifies the need for <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/">agricultural independence</a> to make Nepal self-sufficient in food, lessen the impact of inflation, reduce the pressure on Nepal’s foreign reserves and strengthen the economy.The government needs to direct attention to the commercialisation of the agricultural sector. Nepal needs sufficient infrastructure to strengthen the supply of farm produce, the key for this is cooperation between the government and private sector to create competitive markets . Any agricultural  policy must encourage private investment.It is entirely possible for Nepal to reduce its trade deficit by <a href="https://www.nepalitimes.com/latest/aid-rarely-aids-agriculture-in-nepal/">increasing agricultural productivity</a>.  The government must establish small and medium industries that can capitalise on   comparatively advantageous indigenous products, and facilitate such industries through easy access to agricultural finance and economic aid. As such, agricultural cooperatives also have an important role to play.To increase agricultural exports, Nepal must fully exploit and expand access to currently available trade concessions and duty-free markets before it is upgraded from the Least Developed Countries in the next five years. It will have to move towards making use of the various concessions and duty-free markets available in its current status.Nepal must also focus on trade negotiations and economic diplomacy by making maximum use of bilateral and multilateral talks and regional forums.Nepal’s <a href="https://www.nepalitimes.com/latest/nepals-remittances-forex-reserves-drop/">foreign exchange reserves</a> have also been affected by skyrocketing fossil fuel prices due to global supply chain disruptions caused by the Russian invasion of Ukraine, and the consumer price index is likely to rise as well.According to the Nepal Rastra Bank, petroleum products accounted for 13.6% of the total imports in the first seven months of the 2021 fiscal year, with prices soaring that much be higher now.Nepal must now adopt policies to increase the production and use of <a href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/">renewable energy</a>, to reduce fuel consumption, combat climate change, and control air pollution. Initiatives should be taken to facilitate the sale of surplus electricity to energy markets in India and Bangladesh.An independent energy sector could prove to be an appropriate long-term national security strategy. The use of household electrical appliances and vehicles should be increased to encourage production of renewable energy.Read also: <a style="background-color: #ffffff; font-weight: bold; letter-spacing: 0.15px;" href="https://www.nepalitimes.com/editorial/state-sponsored-economic-crisis/">State-sponsored economic crisis</a>, EditorialSunday’s budget speech by the Finance Minister has shown that the government is set to take steps to move into the use of electric infrastructure — beginning with a discontinuation of LPG gas at Singha Darbar, which will consequently be rolled out across Nepal’s major cities.  More than Rs75 billion in the budget has been earmarked for the energy sector.Attention must also be directed towards necessary infrastructure for power transmission. The maximum utilisation of the recently approved Millennium Challenge Corporation Compact (MCC) must be a way forward. There is also a need for major reforms in existing climate policies.According to NRB's seven-month data for the current fiscal year, the reserves of the banking sector can support little more than seven months of goods imports, and less than seven months of goods and services imports. It is thus important to divert foreign exchange resources to sectors other than tourism and remittances.Foreign direct investment can be a sustainable source of foreign exchange for Nepal. A 2021 study conducted by the Policy Research Institute on foreign direct investment had emphasised on the need to integrate and align regulatory mechanisms to create an environment for a sustainable agricultural sector.Foreign investment would also stimulate domestic capital once Nepal’s credit rating is bumped up after it is upgraded from the list of Least Developed Countries in 2026. That would provide new opportunities for Nepal in resource mobilisation in the international capital market.It is necessary for Nepal to move forward beyond a remittance and tourism-oriented economy and explore possibilities in the agricultural, energy, and other sectors.  For this, co-operation between the government and private sector is key.Read more: <a href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/">From a fossil past to an electric future</a>, Om Astha RaiKalpana Khanal is the head of the Center for Economic and Infrastructure Development Policy Studies at the Policy Research Institute. Adapted by Shristi Karki from the May issue of Himal monthly magazine.

How Nepal can avert an economic crunch

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114111128/637218569c7e80680e0baa38jpeg.jpg" alt="" width="1531" height="1021"/><figcaption>All photos: AMIT MACHAMASI</figcaption></figure>Nepal’s media has been rife with comparisons between Sri Lanka and Nepal.Madhu Kumar Marasini, Secretary at the Ministry of Finance dispels doubts as Nepalis raise questions about the state of the economy.Nepali Times: Is Nepal going to be a Sri Lanka? Madhu Marasini: Nepal’s economy cannot be compared to Sri Lanka. Nepal has historically mobilised enough resources to prevent itself from going bankrupt.As of January, Nepal has foreign exchange reserves worth Rs11.71 trillion, while the national debt stands at about Rs40.5 billion, which means we are able to pay interest on foreign loans. Whereas, Sri Lanka has Rs7 billion national debt against Rs2 billion in foreign reserves.The nature of foreign loans taken by Nepal is also different from Sri Lanka, in that Nepal hasn’t taken out large loans or loans with high interest. Moreover, Nepal collects 23% revenue on its GDP, which becomes government spending.However, what has happened in Sri Lanka has lessons for Nepal, what kinds of loans to take, to what extent tax should be exempt, and the consequences of indiscriminate grants.Read also: <a href="https://www.nepalitimes.com/editorial/how-not-to-be-a-sri-lanka/" target="_blank" rel="noopener noreferrer">How not to be a Sri Lanka</a>, EditorialWhy doesn’t the government have policies to address foreign exchange reserves, lack of liquidity, and inflation?Nepalis living abroad sent significant remittances back home during the pandemic, this meant our foreign reserves remained unchanged compared to pre-Covid days not because our exports increased. So when the worst of the pandemic was over and economic activity resumed, imports surged to meet rising demand, putting pressure on our foreign reserves.At present, we have discouraged the import of luxury goods to reduce the pressure on foreign reserves.  Additionally, remittance accounts are now being given 1% more interest, and non-resident Nepalis can open remittance accounts by simply depositing $1,000 virtually.The hundi remittance network was shut off during the Covid lockdowns. Nepali banks have been encouraged to expand services abroad so that remittance can come through official channels. We are also discussing setting quotas for overseas Nepalis that enable them to obtain shares in companies that facilitate remittances officially.As far as the liquidity of the banking sector is concerned, credit flow increased although deposits did not go up significantly and has exceeded Rs4.7 trillion, while the size of our economy is Rs42.66 trillion.Demand for loans increased as economic activity picked up after the pandemic. The refinancing services provided by Nepal Rastra Bank (NRB) also increased loans, whereas concessional loans also saw a significant rise. We have proposed increasing interest rates on loans to reduce demand. Moreover, the local elections have increased public and private spending as well as the budget, which is expected to ease liquidity crises.It would be better to set up stricter rules for loans now, lest Nepalis have to give up their property and livelihoods to the bank in the future due to bad debts.Lastly, we have set a 6% inflation target, but that will be challenging to maintain. Because inflation is not just unique to Nepal— it is the result of the disruption of the global supply chain. Demand has grown significantly in the wake of the pandemic, and has been exacerbated by Russia’s invasion of Ukraine— particularly the price of fuel. Rising  fuel prices have a domino effect, leading to an increase in transportation and industry costs, as well as commodity prices.At present, there seems to be little coordination between the Finance Ministry, the NRB, and the National Planning Commission.The Ministry of Finance, the central Bank and the Planning Commission have been holding discussions to assess the economy and find solutions to problems. We believed increased imports would mean increased economic activity, but our foreign exchange reserves could not sustain that. Additionally, we also could not have predicted global crisis such as Russia’s invasion of Ukraine.There were other inconsistencies in the economy. For example, there is a widespread misuse of loans, Nepalis have been taking out agricultural loans to invest in real estate.  There has been increased spending in luxury goods, and instances of smuggling gold and silver to other countries. This created a perfect storm even as we were working on a long-term economic plan.Has the government failed to curb the flow of uncontrolled debt?In retrospect, it would be fair to say that Nepal’s policies regarding credit flow have been liberal to the detriment of the country. Credit flow needs to be controlled, because the increase has not had a positive effect on product expansion or economic growth. There is excessive monetisation in Nepal, which the 2008 global financial crisis taught us is risky.The agricultural credit that we prioritised and subsidised has been unproductive. Questions have been raised about NRB’s capacity to oversee the payment of such loans. There is a need to increase the capacity to supervise and monitor credit flow.How will the import control policy be effective when it simultaneously impacts the source of government revenue?The NRB has urged banks to maintain discipline while distributing loans to make them accountable, and has suggested to tighten the import of luxury goods for the time being, not halt them altogether. The decision whether to stop or continue imports lies with the government, not the NRB.What is astonishing is that the demand for imports and loans should decrease across the world as interest rates on loans increase, but that has not been the case in Nepal. Which is why we are thinking of employing financial tools and not monetary ones. However, we are trying to find a middle ground, as there is the risk of a double whammy to the economy if both revenue as well as foreign exchange is lost.Read also: <a href="https://www.nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard/">Ukraine crisis hits Nepal economy hard</a>, Ramesh Kumar<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114111128/637218599c7e80680e0baa39jpeg.jpg" alt="" width="960" height="640">What if imports continue to grow at the current rate while foreign exchange remains unchanged?Yes but the problem is not unsolvable. This monsoon, we will have upwards of 800MW of surplus electricity. This is an opportunity for us to transition to electric transport and industry.Furthermore, as our ability to repay our debt increases, development partners will not provide grants, but loans. This will further increase our national debt in the coming years. Failure to take advantage of our agriculture, hydropower and tourism sector to increase domestic production will indeed lead to another crisis in the near future.Why has not there been any initiative to check tax evasion?Ours is a liberal economy, and as such, the government always seeks honesty rather than control. Yes, the hundi network may have led to low invoicing at customs. But due to VAT, those evading taxes will most probably be caught by the time they reach the market even if they are able to avoid paying tax at customs.Nepal’s tax rate, considering its GDP, is higher than other Asian countries. The system that is in place is working, and it is strong.Shouldn't the government be more frugal?I agree that the government has not been disciplined in its spending. But the expansion of our local governments has increased expenditure in recent years.The Finance Ministry has issued an austerity policy against the establishment of new organisations, the operation of gatherings and seminars, foreign trips by authorities, and more. However, the onus of its implementation does not lie with the ministry alone, but with all government bodies.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114111128/6372185b9c7e80680e0baa3ajpeg.jpg" alt="" width="1770" height="1770">Read also: <a href="https://www.nepalitimes.com/latest/sky-high-fuel-price-hits-nepals-tourism-airlines/">State-sponsored economic crisi</a>s, EditorialIf the budget cannot be implemented efficiently, doesn't it make sense to change our spending system?Yes, the current system needs to be changed. While we prepare the budget, the focus now should be on completing existing projects rather than adding new ones that we lack manpower and resources to undertake.However, ad hocism will prevent us from making improvements to our expenditure. Indeed, we had consulted with the other ministries and set a target spending of 10% of the budget every month after September this year, but no one followed through, and eventually, all the criticism fell on the Finance Ministry.What does the forthcoming budget offer in order to tackle the current economic crisis?Traditional budgets do not work in times of crises, and the forthcoming one will have to reflect that fact. We will need to begin with the effective implementation of federalism, in that we will decentralise expenditure so that provinces and local governments implement necessary projects. The finance minister is clear on this.Secondly, agriculture, tourism, hydropower, and entrepreneurship will be prioritised in order to increase domestic production, improve exports and discourage imports to stimulate the economy.How will you dispel doubts about Nepal's economy?The economy runs on confidence. Comparing our economy to Sri Lanka and perpetuating fear will get it into more trouble. The macroeconomic indicators of our economy remain positive.The government is not in favour of creating havoc in the market by unnecessarily stopping imports and creating an environment where Nepalis have to line up to buy consumer goods. But Nepalis should begin buying Nepali goods, and should be disciplined enough to reduce the consumption of foreign luxury goods.We have learned that the economy will not be sustainable unless we increase our capacity to produce. Moreover, our exports are much less than imports.The economy is not in a favourable position, but there is no need to panic. We are not in a crisis, and we will not be in the future. The government’s short-term policies haven’t made the economy any worse. Our problems will not be solved overnight, but we have taken the initiative to find necessary solutions.Translated by Shristi Karki from the <a href="https://www.himalkhabar.com/news/129296" target="_blank" rel="noopener noreferrer">original interview</a> in <a href="http://himalkhabar.com" target="_blank" rel="noopener noreferrer">Himalkhabar</a>.

“Economy in trouble but no need to panic yet”

<figure><img width="1300" height="500" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114111144/63721cc29c7e80680e0bd4aajpeg.jpg" alt=""/><figcaption> Finance Minister Janardhan Sharma (left), Nepal Rastra Bank Governer Maha Prasad Adhikari (centre), and Prime Minister Sher Bahadur Deuba (rig</figcaption></figure>On 8 April, Finance Minister Janardan Sharma suspended Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari at a time when the country struggles to cope with a <a href="https://www.nepalitimes.com/editorial/urgency-about-nepals-economic-emergency/" target="_blank" rel="noopener noreferrer">serious economic crisis </a>during an election year.
Minister Sharma has, without evidence, accused the governor of damaging the country's banking and financial system, being “dishonest” and “inefficient” at his post in the central bank. Adhikari was also accused of leaking confidential information to the media about a $35 million transfer to a Nepali that the US anti-money laundering regulators had flagged.
The allegations against Adhikari are so vague that the minister does not even have to prove them. In fact, the chair of the three-member judicial committee set up to investigate the suspended governor is a kin of Finance Minister Sharma himself, and casts doubt on an impartial inquiry.
To be sure, Governor Adhikari was appointed by the preceding UML government, and had been at odds with Minister Sharma ever since Prime Minister Sher Bahadur Deuba’s <a href="https://www.nepalitimes.com/latest/deubas-long-and-winding-road/" target="_blank" rel="noopener noreferrer">coalition government took over last year</a>. 
The Maoist minister’s list of grievances against Adhikari are obviously a smokescreen for <a href="http://archive.nepalitimes.com/blogs/thebrief/2017/05/01/lady-justice/" target="_blank" rel="noopener noreferrer">political retaliation</a>, and a way to divert attention from his incompetent handling of the economy. 
Minister Sharma was put on the hot seat just as Nepal’s economy began sliding, first due to the pandemic and then by the <a href="https://www.nepalitimes.com/here-now/ukraine-climate-and-nepal/" target="_blank" rel="noopener noreferrer">Ukraine War</a>. 
The minister is understood to have met Deuba to try to oust the governor, and when that did not work, brought in his boss Pushpa Kamal Dahal to convince the prime minister that Adhikari was working for the UML. 
Deuba, who is already accused to be in the sway of his Maoist coalition partners for giving away the <a href="https://www.nepalitimes.com/editorial/coalition-calculation/" target="_blank" rel="noopener noreferrer">Bharatpur mayorship</a> to Dahal’s daughter Renu, agreed to the governor’s ouster.
The pandemic has affected <a href="https://www.nepalitimes.com/latest/more-remittance-more-than-remittance/" target="_blank" rel="noopener noreferrer">remittance inflow</a>, imports surged after the lockdown was lifted, which has led to a serious depletion of foreign exchange reserves. This has led to inflation, a liquidity crunch in the banking sector due to unproductive loans, and surging <a href="https://www.nepalitimes.com/latest/sky-high-fuel-price-hits-nepals-tourism-airlines/" target="_blank" rel="noopener noreferrer">petroleum</a> imports.
The governor can be blamed for failing to curb lending to <a href="https://www.nepalitimes.com/banner/kathmandus-unreal-real-estate-prices/" target="_blank" rel="noopener noreferrer">real estate</a> and imports since last year, but it was the government which prioritised increased spending, ensuring revenue by taxing imports.
The Ministry of Finance is responsible for the economy, not the NRB, plain and simple. Instead, Minister Sharma has used the pandemic and the Ukraine War as an excuse, and made the the central bank governor a scapegoat to absolve himself of blame.
The plot thickened a few months ago when Minister Sharma sought to implicate Governor Adhikari in bribery allegations case involving NRB board member Subodh Kumar Karna. He accused Adhikari of failing to take action against Karna, who was accused of demanding a $30,000 bribe from a well-known businessman. Actually, the Nepal Rastra Bank Act 2001 does not give the governor any authority to take action against a board member, it is up to the council of ministers.
In a democracy, central banks are generally free from direct government intervention. Indeed Nepal’s National Bank Act envisages the institution as an ‘autonomous organisation with uninterrupted’ succession. This is not to say that Nepal Rastra Bank has been completely free from political interference in the past. 
The previous K P Oli government, while selecting both NRB deputy governors had sidelined competent and capable candidates in favour of cronies from his home district. Even so, the NRB is known to be relatively unaffected by political wheeling-dealing, <a href="https://www.nepalitimes.com/latest/what-is-happening-to-nepals-supreme-court/" target="_blank" rel="noopener noreferrer">unlike other agencies</a> of government. 
This row could not have come at a worse time. The economy may not be in a crisis as Sri Lanka, but it is <a href="https://www.nepalitimes.com/here-now/ukraine-crisis-hits-nepal-economy-hard/" target="_blank" rel="noopener noreferrer">headed for a free-fall</a>. Governor Adhikari’s suspension and Subodh Kumar Karna’s absence have reduced the seven-member NRB board of directors to five. The terms of two other members is set to expire on 16 April.
The coalition government has created further instability by weaponising its authority, and running out the governor to create a vacuum that will aggravate the economic crisis, and in this Prime Minister Deuba is as much to blame as Finance Minister Janardan Sharma. 
The coalition government weaponising its authority to suspend the central bank governor only threatens to aggravate an economic crisis of its own making.
Ramesh Kumar
Adapted by Shristi Karki from the<a href="https://www.himalkhabar.com/news/129237"> Nepali original</a> in <a href="http://himalkhabar.com/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=http://himalkhabar.com/&amp;source=gmail&amp;ust=1649816859917000&amp;usg=AOvVaw1CrRQ0XMhG7aYqqq0y3LDT">himalkhabar.com</a>

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208569c7e80680e0b54dfjpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Land being plotted in KAthmandu's Sankhu for sale. Photos: AMIT MACHAMASI</figcaption></figure><ul><li>A two-bedroom 185 sq m flat in an apartment block in Hatiban is on sale for Rs8.5 million. An average Nepali civil servant who earns Rs36,000 a month would need 20 years worth of salary to be able to afford it.</li> <li>Just to buy a plot of land to build a small house in the same locality of Lalitpur costs Rs16 million, for which the civil servant would have to pay a lump sum worth 37 years of salary earnings.</li> <li>A small plot of land by the highway bought 20 years ago in Bhaktapur is worth an astounding 7,000% more today. Even considering the devaluation of the Nepali rupee, that is sky-high appreciation.</li> <li>Another plot 4km off the Ring Road in Kathmandu that cost Rs10 million five years ago is now worth Rs50 million.</li> <li>A property in Kathmandu’s prime Darbar Marg area recent sold for Rs90 million ($750,000) per 33 sq m. This is one of the highest real estate values in the world.</li> <li>A house with land that was bought for Rs20 million in Tinkune six years ago sold for Rs80 million recently.</li></ul>A Nepal Rastra Bank report this year shows that <a href="https://www.nepalitimes.com/opinion/home-is-where-the-heart-is/" target="_blank" rel="noopener noreferrer">property value in Kathmandu Valley</a> is increasing at 27.7% a year, doubling real estate value every 3.5 years. This is despite average salaries in Nepal increasing by only 7.45% per year.Property value appreciation is even higher in other urban areas of Nepal, especially in Madhes Province and the Tarai towns of Far West Province. The price of real estate is doubling every two to three years here because of the soaring demand for land due to migration to the cities, plains and valleys from the mountain districts.There was a prediction that <a href="https://www.nepalitimes.com/here-now/kathmandu-creeps-up-surrounding-mountains/" target="_blank" rel="noopener noreferrer">Kathmandu’s property values</a> would decline after the 2015 earthquake, but the opposite has happened. Despite the government valuation for the property being much lower, land transactions are taking place arbitrarily, with no scientific basis for real value, or linked to productivity.Economists say there are many factors driving this real estate bubble in Nepal. Kathmandu Valley’s urbanisation pressure increased after free market forces were unleashed following the changes in the early 1990s, and people from across the country streamed into Kathmandu for education and jobs. The 1996-2006 conflict exacerbated this trend as people fled the fighting in the hinterland.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208599c7e80680e0b54e0jpeg.jpg" alt="" width="1500" height="1001"><figcaption> </figcaption></figure>This process further accelerated further after 2006, and surveys have shown that one-third of all Nepalis have now moved away from the place where they were born. <a href="https://www.nepalitimes.com/banner/nepalis-moving-from-mountains-to-plains/" target="_blank" rel="noopener noreferrer">Domestic migration</a> is  highest in Bagmati Province where Kathmandu Valley is situated, and where 47.3% of the residents are recent arrivals from outside. The percentage for Gandaki where Pokhara is located is also a high 40.2%, while Province 1 has 38.9% of its population from outside – mainly in the densely-populated Jhapa plains.<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://archive.nepalitimes.com/article/nation/paddy-planting-replaced-by-real-estate,3833" target="_blank" rel="noopener noreferrer">Fuelled by remittance income</a>, this influx led directly to a steep rise in land prices. Adding to this is the unregulated loan disbursement by the banking sector which fuelled land transactions – leading directly to property speculation. This in turn tempted people with cash to convert it into real estate investment – leading to the indiscriminate ‘plotting’ of prime agricultural land in Kathmandu, Pokhara, Chitwan and other urban centres.Real estate transactions do not need to be routed through companies, and since anyone can be involved, this has opened up opportunities for buying and selling by bankers, politicians contractors and others who have inside information on future infrastructure projects. Even the Nepal Army is involved in real estate business, turning its property in Kirtipur into a housing colony.<a style="font-size: 15px; letter-spacing: 0.01em;" href="http://archive.nepalitimes.com/news.php?id=15834#.Yf3eCy2B3ow" target="_blank" rel="noopener noreferrer">Banks are in on</a> this unregulated real estate speculation. They have distributed loans worth Rs516 billion, which is a full 11% of their entire portfolios. More than 16% of overdraft facilities also mostly go for real estate transactions. Two-thirds of all loans have property as collateral. Even loans given for agriculture are diverted to property market. In the past three years, there has been a 60% increase in loans for agriculture projects, but neither farm production not productivity have not gone up in that period.In fact, one of the reasons for the liquidity crisis in the banking sector today is due to over-lending for land loans. These loans are not invested in productive sectors, they do not create jobs, or contribute to the economy. They just recycle cash, creating nothing but capital gain for those for whom gambling in real estate is a fulltime occupation.This trend is driven by unbridled greed which the government and the regulators are unable or unwilling to control because they themselves benefit from it. The end result is that it has distorted Nepal’s economy and created a vicious cycle, with the danger that the artificial bubble could burst at any time.Former finance secretary Rameshore Khanal says that most governments try to regulate the property market to make housing affordable to citizens, as well as to manage urbanisation.Read also: <a href="https://www.nepalitimes.com/banner/nepal-struggles-to-balance-nature-and-industry/" target="_blank" rel="noopener noreferrer">Nepal struggles to balance nature and industries</a>, Ramesh Kumar“As long as banks are careful about giving out loans for land, property prices can be kept in check,” Khanal says. “In fact Nepal Rastra Bank should immediately stop allowing borrowers to put land as collateral to buy more land, and for home owners to get a loan to amass more property – because it is an abuse of the savings that citizens deposit in banks.”However, the central bank is unlikely to agree to such measures because its own officials have too much personal interest tied up with real estate. A private bank official who sanctioned a loan for a housing colony in Bhaisepati recently bought a lucrative 1 ropani plot for himself. Without any extra effort, and with low capital gains tax, it made sense for him to make the personal investment even though there was a clear conflict of interest.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/6372085c9c7e80680e0b54e1jpeg.jpg" alt="" width="1500" height="1125"><figcaption> </figcaption></figure>Nepal Rastra Bank governor Maha Prasad Adhikari himself has invested in property in Lalipur, Jhapa, Heatuda and elsewhere. Ministers, ex-ministers, politicians, senior civil servants and Supreme Court justices own property that exceed the land ownership ceiling.The unrealistic price of land has impacted on the government’s infrastructure development plans and private sector investment in hydropower, and other projects. It is now established practice for land owners, speculators, middle men and the land mafia to milk the government in infrastructure projects.Read also: <a href="https://www.nepalitimes.com/banner/hiding-their-head-in-the-sand/" target="_blank" rel="noopener noreferrer">Hiding their head in the sand</a>, Ramu SapkotaThe government spends Rs 20 billion or more every year just in acquiring land for infrastructure projects. Bhairawa International Airport cost only Rs7 billion to build, but the government had to pay out Rs23.58 billion just in acquiring land for the project. Even the 2.38 km Nagdhunga Tunnel project has had to pay as much as Rs4.2 million per ana (33 sq m) of land.Twenty years ago, during his second tenure as prime minister, Sher Bahadur Deuba got Parliament to announce a ground-breaking lowering of the threshold for land ownership, and also stipulated that land should be used for none other than the designated purpose. The law was never properly implemented, and to date the government does not even have a unified database of land ownership in the country.The real estate bubble is so lucrative that most companies that have gone bankrupt because of falling business have managed to stay afloat because of the increased value of the property they own. Nepal has been growing at an average of 4% a year for the past two decades, but this is not reflected in manufacturing or productivity.“Unless we stop this vicious cycle and prevent investment in real estate speculation that is supposed to go into the productive sector, the bubble in Nepal’s economy is going to burst sooner or later,” says economist Dilli Raj Khanal.Those with ancestral property in the city centre, and those specialising in buying and selling real estate have become overnight billionaires. This is feeding the market in luxury items, mainly SUVs. In the past four months of the last fiscal year alone, despite an economic downturn, Nepal imported Rs57 billion worth of vehicles and spare parts.Imports have now risen so sharply in the past two years at a time when exports and remittances have fallen, that Nepal’s hard currency reserves have declined to their lowest level in decades, and able to finance only 6 months worth of imports. This, in turn, has increased the income gap between the poorest and richest Nepalis.Although there are no figures to prove that the gap between the have’s and have not’s has grown in Nepal, it is clear that the astronomical profits that can be made from real estate transactions have made a limited number of Nepalis extremely wealthy.One of the reasons for the real estate bubble is that the tax on land transactions in Nepal is so low. In fact, if a land is sold within five years of being bought, the seller only has to pay 5% of the capital gain tax to the government. If the land is sold after more than five years, the tax is only 2.5%. Compare this to income tax up to 36% that individuals pay in Nepal, and there is a transaction fee of 25% in most businesses.Read also: <a href="https://www.nepalitimes.com/here-now/ground-reality-of-landlessness-in-nepal/" target="_blank" rel="noopener noreferrer">Ground reality of landlessness in Nepal</a>, Rabi GiriThis is besides the tendency to bribe officials to undervalue the rate at which property is sold, so as to reduce the taxable amount. In fact staff at the land tax office as what the “unofficial” amount for property sales is, presuming that it is undervalued.“Raising the tax rate for real estate transactions will immediately discourage property speculators, reduce the number of transactions, and put a check on the runaway increase in land prices,” admits Gunakar Bhatta of Nepal Rastra Bank.The reason property transactions have not gone down despite sky-rocketing real estate prices is that Nepal’s economy is run mainly through informal channels. Many unscrupulous businesses are cashing in on a weak state to get rich quick, and investing their ill-gotten wealth by laundering it through real estate.In fact the reason for the abnormal rise in land prices is the lack of state regulation, corruption and self-interest at high levels of government, says economic professor Achyut Wagle. “Real estate has become the ideal venue to park wealth earned through corruption, so that even people who do not really need land are investing in it,” he adds. “And since one does not need to work anymore to get rich quick, the real estate speculation has also killed entrepreneurship.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208609c7e80680e0b54e2jpeg.jpg" alt="" width="1500" height="1001"><figcaption> </figcaption></figure>One recent example of just how high up the rot has gone is the Lalita Niwas scam at Baluwatar where government property was transferred to private ownership with collusion between the real estate mafia and senior politicians. Another is the example of real estate tycoon Ikshya Tamang who allegedly cheated hundreds of investors but was never prosecuted by the UML government of which he was a nominated MP.In his previous tenure as prime minister Sher Bahadur Deuba allowed Gopal Dahit to lift a ban on fragmentation of agriculture land for housing colonies. A lot of money is said to have changed hands to allow this law to be passed. When K P Oli was prime minister, his Land Management Minister Padma Kumari Aryal lifted the ban on turning agriculture land into housing colonies, if a local  government office certified that it was not used for farming.Read also: <a href="https://www.nepalitimes.com/here-now/owning-land-gives-former-slaves-self-respect/" target="_blank" rel="noopener noreferrer">Owning land gives former slaves self-respect</a>, Unnati ChaudharyThe Supreme Court ruled last year not to allow the fragmentation of land holdings for housing colonies, but in reality it never stopped. In fact just in the past year, there have been more than 500,000 new property ownership certificates distributed by dividing larger holdings. Corrupt officials are even demanding under the table payments to approve property sales where dividing up a property is legitimate.The standard operating procedure at the land tax office is that most of these transactions go through only after money exchanges hands under the table.What is the solution?Most economists agree that tightening the process through which banks finance land purchases can burst the bubble on real estate prices. For example, a house owner should not be given a loan to buy more than one property.Sujeev Shakya of the Nepal Economic Forum agrees that buying house or property other than the one a person is living in should be taxed heavily. He has another idea: slap an inheritance tax on property that is passed down from one generation to the next, as is the practice in other countries.The other measure would be a hefty increase in the currently nominal land transaction tax. “How can it be that a person who earns a living through hard work pays 36% income tax while profit from selling property is only 2.5%-5%?” asks chartered accountant Seshmani Dahal, adding that other measures like enforcing banking transactions for land sales should also be taken to ensure that the sale is not deliberately undervalued to lessen the tax amount.A lot of the unregulated buying and selling of land and speculation would also be curbed if proper urban planning is strictly enforced. Only after utilities and other facilities are installed should an area be opened for residence.The government should also be involved in building and establishing affordable housing for middle income families. The Constitution establishes the right of all citizens for decent housing, and it is up to the government to fulfill that pledge.

Kathmandu’s unreal real estate prices

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016110/636d12189c7e80680e0a98bajpeg.jpg" alt="" width="664" height="450"/>Nepal Rastra Bank’s report last month was badly timed — it was a bad idea to sound a warning that Nepal is going belly up just as the country was grinding to a halt for a month of Dasain-Tihar-Chhat festivals.The indicators were ominous: Nepal’s foreign currency reserves fell to $11.1 billion in September, much below the figure for last year and only enough to pay for 8 months of imports. There has been a 76% increase in the import bill to a record Rs352 billion last fiscal year — despite a pandemic slowdown.In the first two months of this fiscal year, <a href="https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHKGPEf-eEDtwjn0f_p_HMzrqYQGw">overseas remittances that had held steady despite the pandemic</a> went down by 6.3% to Rs155 billion.One of the holy days of Tihar last week was dedicated to Goddess Laxmi, and many prayed for individual wealth and prosperity. We should have been praying for the country’s economic survival.Just those two figures for falling remittances and rising imports should have been enough to sound the emergency alarm. But fatalism is so steeped in Nepal’s governance culture that we hope things will sort themselves out.After all, if things go really wrong, Pashupatinath will come to the rescue. But the Lord Protector of Nepal must be shaking his head at the disarray of the state.We have come to expect lack of accountability in self-dealing politicians and elected officials, but the judiciary used to be relatively untainted and independent.The violation of the principle of separation of powers by <a href="https://www.nepalitimes.com/latest/what-is-happening-to-nepals-supreme-court/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/what-is-happening-to-nepals-supreme-court/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNG-raVzHQQBlpr5oUCza97BMC7wkA">Chief Justice Cholendra SJB Rana</a> and the mutiny in the Supreme Court has dragged the judiciary also into dysfunction.With the court system paralysed, Rana has been reported to be looking for a ‘graceful exit’, and apparently proposed a leave of absence until his term expires. The <a href="https://www.nepalitimes.com/latest/who-wants-early-elections-and-why/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/who-wants-early-elections-and-why/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHWRzSQmjSbl2C65i3KvLsEqN0uUA">top leadership</a> of the main parties have been silent about the fate of Chief Justice Rana, who after all was instrumental in overturning K P Oli’s dissolution of the Lower House which <a href="https://www.nepalitimes.com/here-now/nepal-court-orders-deuba-to-succeed-oli/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepal-court-orders-deuba-to-succeed-oli/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHI-krjS3d3YX690askSFTe2LB0vA">put Deuba in office</a> on 14 July.They also have all kinds of pending cases in the Supreme Court, and do not want antagonise a Chief Justice in case he survives this crisis. Rana has reportedly used the holidays for intense political lobbying through emissaries. That would likely entail a quid pro quo over not starting an impeachment process in Parliament in return for future favours.Whether Rana remains chief justice or is forced to step down is mixed up with politics — after all it was the failure of politicians to sort out their power struggles in Parliament that allowed the judiciary to have such a magnified role in who gets to be in government and who doesn’t. There is so much corruption and vested interest in the political nominations to the Supreme Court that just removing Chief Justice Rana will not stem the rot.Besides, the real emergency Nepal faces today is not about who succeeds Rana or if the coalition remains intact till elections, but the fate of the economy.Remittances pay for imports, and inflows are down and imports are up. Hard currency reserves to finance <a href="https://www.nepalitimes.com/editorial/blood-sweat-tears/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/blood-sweat-tears/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNH52fe2VOfxxaDWmxbqr8rkJcg-Hg">Nepal’s imports, mainly of petroleum</a>, food and other items are falling. Exports did go up, but the trade deficit rose to Rs270 billion in the past two months.Besides, Nepal’s main item of export is processed palm and soya oil that depend on massive imports of raw material. A <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHt2gsBj5b0itg1RhxrL9unH8Y3-Q">growing asymmetry between imports and exports</a> means the balance of payments is now Rs83.4 billion — double what it was in July.Prime Minister Sher Bahadur Deuba pledged at COP26 to reduce Nepal’s carbon footprint, and Energy Minister Pampha Bhusal is pushing for a transition to electric transport. They seem to have finally realised that having a petroleum import bill more than all exports combined is not sustainable.Destructive post-monsoon rains will reduce rice harvests by 20%, which means increased food import. What will we use our remaining foreign exchange reserves for: to buy food or fuel? It might to be an either/or.There does not seem to be a sense of urgency about this emergency in the Finance Ministry. It must act immediately to increase taxes on luxury items, encourage local agriculture production and invest heavily in infrastructure to create local jobs.The economic crisis is a result of political neglect and disarray. Trouble is: we cannot wait for the politics to sort itself out to fix the economy this time.

Urgency about Nepal’s economic emergency

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161132/636d19939c7e80680e0ac827jpeg.jpg" alt="" width="664" height="450"/><figcaption></figcaption></figure>Even as Nepal tries to recover from the impact of the pandemic, the country’s economic indicators released this week by the central bank show dismal performance in the first two months of the fiscal year.The report by the Nepal Rastra Bank shows that Nepal’s foreign currency reserves fell to $11.1 in mid-September, 6.6% below the figure for last year, this is enough to pay for only 8 months of total imports.Even more worrying is that <a href="https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/" target="_blank" rel="noopener noreferrer">overseas remittances that had held steady despite the pandemic</a> for the past two years have now started declining. Nepalis abroad sent home Rs155 billion in the past year, which is 6.3% below the same period last year.Despite the pandemic, remittances had risen by 8.1% in fiscal year 2019-2020. Experts attributed that to overseas workers sending money home as the economic crisis hit families back home, and not necessarily due to higher earnings.The concurrent decrease in foreign currency reserves to finance <a href="https://www.nepalitimes.com/editorial/blood-sweat-tears/" target="_blank" rel="noopener noreferrer">Nepal’s imports, mainly of petroleum</a>, food and other commodities, is seen as an indicator of an impending economic crisis. The main reason for the current downturn is shrinking remittances, which prop up Nepal’s economy.Indeed, compared to 2019-2020, the past year has seen a steep 76% increase in imports to a record Rs352 billion, mainly due to a rise in the import of petroleum products, gold, silver and other items, according to Rastra Bank figures.Even though exports went up by 115% in the same period to Rs44.4 billion, it did not put much of a dent on the trade deficit which has risen to Rs270 billion in the past two months of the fiscal year. This represents a 71% increase in the trade gap compared to last year.The <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/" target="_blank" rel="noopener noreferrer">growing asymmetry between imports and exports</a> means that the country’s balance of payments situation is now Rs83.4 billion in the red — up from Rs38.7 billion in July.With the alarm bells ringing, the government has drastically reduced the amount of money Nepalis can officially exchange before traveling abroad from $1,500 to $200-500. This week, further austerity measures were announced, including a ban on the purchase of vehicles for official use.The negative trend in economic indicators could not have come at a worse time. Just as the country was recovering from the <a href="https://www.nepalitimes.com/banner/the-real-cost-of-nepals-second-wave/" target="_blank" rel="noopener noreferrer">economic impact of the pandemic</a>, it was hit by extreme rainfall this month which killed more than 110 people across the country, and destroyed up to one-third of the country’s ready to harvest rice crop.The Ministry of Agriculture estimates that nearly 90,000 hectares of rice fields were severely damaged by <a href="https://www.nepalitimes.com/latest/post-monsoon-rain-ruins-nepals-crops/" target="_blank" rel="noopener noreferrer">the unseasonal post-monsoon rains</a>, and paddy losses will amount to more than Rs8 billion. Lumbini Province is said to have suffered the worst, with more than half of the initially reported damage nationwide.The unprecedented destruction comes just as farmers and officials were optimistic about a healthy rice harvest because of a healthy monsoon season. Rice is such an important component of Nepal’s economy that it will impact on the GDP, economic growth, and have a knock-on effect on the trade deficit because more rice will now need to be imported.Last year Nepal produced 5.6 million tonnes of rice from 1.4 million hectares of paddy fields, up 1.3% from the previous year. However, rising income levels of Nepalis has also meant that rice consumption is growing, and the country had to import Rs 51 billion worth of rice last year, compared to only Rs23 billion in 2019.Analysts say the <a href="https://www.nepalitimes.com/here-now/are-nepalis-really-eating-more-rice/" target="_blank" rel="noopener noreferrer">sharp increase in rice imports</a> cannot be attributed only to rising consumption, explaining it by the rise in demand from Nepal’s breweries and the dramatic rise in domestic beer consumption.

Nepal’s remittances, forex reserves drop

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc2c9c7e80680e0a0b73jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Photo: MONIKA DEUPALA</figcaption></figure><ul><li>Two years ago after going through a bad relationship, a 36-year-old Kathmandu-based doctor started getting suicidal thoughts. During the long months of lockdown, he would be on the rooftop and imagine jumping off to end it all. But before long he realised that he was causing self-harm, and sought help. He was diagnosed with depression, eight months into treatment he is rid of suicidal thoughts and is back to his outgoing ways.</li> <li>The bubbly young woman used to be the life of every party, but few of her friends and relatives realised what was going on inside her mind. As the pandemic hit, she started having violent thoughts about harming others and herself. The 22-year-old tried to deal with it herself, but two months ago she sought help from a mental health doctor. She was diagnosed with Obsessive Compulsive Disorder (OCD) and started treatment. Looking back, she advises others to also seek professional help in time.</li> <li>The young woman felt worthless, lacked confidence, avoided crowds and had self-inflicted cuts on her arm. Her inability to come in terms with her sexuality aggravated her sense of insecurity. When the pandemic foiled her plans, she blamed everything on herself, she felt irritated and uncertain, stopped attending virtual classes and her eating habits changed. She finally sought help for her depression and she is now under regular psychiatric counselling and medications. Grounding exercises in particular have helped her overcome self-harm and feelings of inadequacy. “I am okay now,” she says.</li></ul>As the pandemic turns lives upside down, there has also been a global <a href="https://www.nepalitimes.com/here-now/post-pandemic-mental-health-epidemic/" target="_blank" rel="noopener noreferrer">outbreak of mental health disorders</a>, and Nepal has reported a rise in suicides. However, as these cases show, professional counselling and medication can save lives.Recoveries rarely make news, only suicides do.“Most of my patients who attempted suicide have gone on to lead normal lives after they get treatment, and oftentimes they look back to their mental health crisis as nothing more than a lapse of judgment,” says psychiatrist and researcher Rishav Koirala.There has been a sharp rise in <a href="https://www.nepalitimes.com/latest/have-suicides-increased-during-nepal-lockdown/" target="_blank" rel="noopener noreferrer">suicides in Nepal</a> since the Covid-19 pandemic in March 2020 and subsequent lockdowns. Nepal Police data shows that in the last 12 months, there have been 7,141 reported deaths due to suicides nationwide, up from 6,252 the year before.Do not shy away from seeking help. If you, or anyone you know, would like to speak to a trained mental health professional, please contact:TUTH Suicide Hotline: 9840021600Transcultural Psychosocial Organisation-Nepal Crisis Hotline: 1660 0102005Mental Health Helpline Nepal: 1660 0133666Centre for Mental Health and Counselling Nepal Toll-free: 16600185080, Hotline: 1145Koshish Toll-free helpline: 166001-22322 (Bagmati Province)Patan Hospital Helpline: 9813476123National Suicide Prevention helpline operated by Mental Hospital Lagankhel and TPO: 1166<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc2e9c7e80680e0a0b74jpeg.jpg" alt="" width="640" height="475"><figcaption> </figcaption></figure>In a survey last year, <a href="http://www.tponepal.org" target="_blank" rel="noopener noreferrer">Transcultural Psychosocial Organisation (TPO) Nepal</a> which works with mental health compared five years of suicide data for March-July to see if there was any change during the lockdowns in 2020 and 2021.The results are revealing: suicides have been increasing steadily at an average rate of 8.5% every year, but it spurted to 19.4% in the first four months of the lockdown. Researchers also conducted key informant interviews across Nepal, who reported witnessing an increase in <a href="https://www.nepalitimes.com/latest/suicide-watch/" target="_blank" rel="noopener noreferrer">suicidal behaviours</a> in the community as well as health facilities.“We now have both quantitative and qualitative evidence that mental health problems have increased following the pandemic,” says TPO Nepal’s executive director Kamal Gautam. “And given that the majority of suicides are caused by psychological problems, we can say that Covid-19 has significantly contributed to its increase.”Mental health professionals have long been warning of an epidemic of psychological disorders following the Covid-19 crisis. They have reported an increase in anxiety, depression, post-traumatic stress disorder (PTSD), hypochondria, obsessive disorders and psychotic symptoms among the general population in the last two years.Economic collapse, job loss and slashed income due to the pandemic as well as <a href="https://www.nepalitimes.com/latest/in-nepal-lockdown-a-domestic-violence-spike/" target="_blank" rel="noopener noreferrer">increased domestic and sexual violence</a> and added workload during the lockdowns have all acted as contributing factors. In addition, those afflicted do not have normal social interactions that used to be a safety valve during more normal times.Moreover, many patients on treatment and medication have relapsed due to the limited access to health services, counselling and psychotropic drugs during the pandemic, and in many cases because of Covid phobia.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc319c7e80680e0a0b75jpeg.jpg" alt="" width="1052" height="690"><figcaption> </figcaption></figure>Up to 80% of suicides have mental health disorders as an underlying cause. A significant portion of cases are also a result of impulsive behaviour.Experts agree that the official <a href="https://www.nepalitimes.com/here-now/nepals-suicide-rate-vastly-underestimated/" target="_blank" rel="noopener noreferrer">numbers on suicides are vastly underestimated</a> due to a lack of suicide registry. Official figures are based solely on police data and post-mortems, and because of stigma associated with mental health, many families also often refrain from revealing the actual cause of death.Official records also do not take into account <a href="https://www.nepalitimes.com/here-now/in-the-minds-of-nepals-migrant-workers/" target="_blank" rel="noopener noreferrer">suicides of Nepali migrant workers overseas</a>, mainly Malaysia and South Korea. Similarly, suicides among those in the LGBTIQ community who have lost their limited sources of livelihood during the pandemic have been largely neglected.“Reported cases alone are not conclusive, but given that we now have a year and a half long trend and data, we have seen a significant increase in mental health disorders, and can assume that pandemic has played a crucial part in the rise in the number of suicides,” adds Rishav Koirala.<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.who.int/news-room/fact-sheets/detail/suicide" target="_blank" rel="noopener noreferrer">More than 700,000 people die by suicide</a> every year around the world, that is one in every 100 deaths -- more than HIV, malaria, breast cancer, or war and homicide. And for every suicide, there are many more who make attempts to end their lives.Nepal is among the countries with the highest suicide rates in the world and consistently ranks within the WHO’s top 10 list. The Nepal Health Research Council (NHRC)’s <a href="http://nhrc.gov.np/wp-content/uploads/2020/09/Factsheet-Adults-1.pdf" target="_blank" rel="noopener noreferrer">National Mental Health Survey</a> published earlier this year found the prevalence of suicidality (current suicidal thoughts, lifetime suicidal attempt and future likelihood of suicidal thoughts) to be high at 7.2% among Nepalis.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc339c7e80680e0a0b76jpeg.jpg" alt="" width="1464" height="752"><figcaption> </figcaption></figure>The first of its kind survey in Nepal interviewed 15,088 participants and was carried out before <a href="https://www.nepalitimes.com/opinion/coping-with-anxiety-in-new-lockdown/" target="_blank" rel="noopener noreferrer">the pandemic</a> from January 2019 to January 2020. The study revealed that 10% of Nepal’s adult population had mental health problems in their lifetime with 4.3% experiencing some disorders at present.Mood disorders and neurotic and stress-related disorders were among the most common <a href="https://www.nepalitimes.com/latest/tackling-nepals-mental-health-pandemic/" target="_blank" rel="noopener noreferrer">psychological problems among Nepalis</a>. The prevalence of lifetime disorders was found the highest in Province 1 (13.9%), in the age group 40-49 years (13.3%) and among males (12.4%). As for current disorders, Bagmati scored the highest (5.9%) as well as those in the age group 40-49 years (6.3%) and females (5.1%).These figures correlate with Nepal’s suicide data of the past five years. Despite fewer attempts, men accounted for 57% of total suicides, against 43% of women. Among minors, however, more girls died by suicide, which experts ascribe to possible victimisation and a higher prevalence of borderline personality disorder among younger females.Suicide deaths are also disproportionately distributed across Nepal with Province 1 recording 65 deaths per 100,000 populations. Lumbini and Gandaki follow closely with 58 and 52 per 100,000 respectively. Traditionally neglected by the state and economically disadvantaged Karnali, Far West and Province 2 regions have lower suicide rates.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc369c7e80680e0a0b77jpeg.jpg" alt="" width="2287" height="1816"><figcaption> </figcaption></figure>More people are dying of suicides in urban centres such as Kathmandu Valley and Ilam district, which reported 32 and 38 suicide deaths respectively per 100,000 populations last year against Rautahat’s 18 and Humla’s 6.This is in direct contrast with the global trends where 77% of suicides occur in low and middle-income countries. Unemployment and poor economic condition have long been associated with a high risk of suicides, but only up to a certain point, as proven by recent data. Japan, <a href="https://www.nepalitimes.com/here-now/dead-end-of-the-korean-dream/" target="_blank" rel="noopener noreferrer">South Korea</a> and Hungary with their higher per capita GDPs have some of the highest suicide rates in the world.“Poorer nations have weaker education and health systems, which translates into delayed or even lack of diagnosis but poverty is not a sole factor for suicides,” says Kamal Gautam. “Suicide is complex and there are multiple factors at play which means a linear approach to prevention would be incomplete, it needs an integrated approach.”Addressing underlying mental health disorders is the most effective way to prevent suicides. This means increased awareness and education about psychological disorders, which in turn can help <a href="https://www.nepalitimes.com/here-now/all-in-the-family/" target="_blank" rel="noopener noreferrer">reduce societal stigma</a>. An introduction to and discussion on mental health in the school curriculum can further sensitise the public.In addition to medication and counselling, societal structure and family dynamics is an important support system for individuals suffering from psychosis, trauma and depression. Telemedicine in particular has been essential in preventing self-harm during the pandemic-induced restrictions but mental health services need to be scaled up across the country.On the other hand, a strict regulation must be implemented on the <a href="https://www.nepalitimes.com/here-now/suicide-by-pesticide-in-nepal/" target="_blank" rel="noopener noreferrer">availability of pesticides</a>, an easy means of suicide for many. Access to alcoholic products must also be supervised with Nepalis known to self-medicate to cope with stress and trauma, in turn increasing the risk of self-harm and suicide.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfc399c7e80680e0a0b78jpeg.jpg" alt="" width="1280" height="853"><figcaption> </figcaption></figure>But most of all, analysing suicide attempts can be a powerful tool for prevention. On average, there are six attempts behind every suicide. Up to 80% of people with suicidal ideation reveal their intention to either a family member, friends or their doctors within a month before their attempt.“We forget that even before the pandemic suicide rates were very high in Nepal and while the pandemic might have added to the problem, the figures alone don’t mean anything if we fail to also study suicide attempts to find a stronger link between the prevalence and the contributing factors,” says Rabi Shakya, psychiatrist and director of Patan Academy of Health Sciences.He adds: “Historically, there have been more suicides after than during the crisis due to the long-term socioeconomic impacts. So we must start preparing for the pandemic of mental health problems including suicides post-Covid. Our health care workers must be trained and fanned out across the country.”Nepalis are not new to mental health problems induced by a crisis. The 10-year-long Maoist insurgency killed 17,000 people but many more continue to suffer from <a href="https://www.nepalitimes.com/here-now/the-mental-scars-of-violence/" target="_blank" rel="noopener noreferrer">PTSD, depression, anxiety and distress</a>. A 2017 report published in the journal Lancet found as high as <a href="https://archive.nepalitimes.com/article/nation/stigma-and-silence-mental-health-nepal,3486" target="_blank" rel="noopener noreferrer">37.5% of the general public</a> had some form of psychological disorder.The <a href="https://www.nepalitimes.com/here-now/its-all-in-the-mind/" target="_blank" rel="noopener noreferrer">2015 earthquake</a> further added to Nepal’s epidemic of mental disorders. Survivors who had narrow escapes or lost family members reported increased panic attacks, anxiety and trauma.But <a href="https://archive.nepalitimes.com/article/editorial/the-republic-of-insomnia,3311" target="_blank" rel="noopener noreferrer">conflicts, disasters</a> and pandemics have shined a light on mental health with an increased national and foreign investment in prevention and management. With larger chunks of the population impacted, there is now more acceptance and the field is starting to get the priority it warrants.Says Rishav Koirala, WHO focal person for mental health post-2015 earthquake: “The best way to prevent suicides is to address underlying psychological disorders and crises, despite adding to the burden has helped normalise them because many more people can now relate and understand that they are treatable.”

Nepal sees spike in suicides during pandemic

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b94279c7e80680e06f1e3jpeg.jpg" alt="" width="2540" height="1426"/><figcaption>Richshaw operator Kancha Lama hardly gets one ride a day. He mostly depends on people distributing free food during the lockdown.</figcaption></figure>After two months in which there were new records of cases and fatalities every day, the second wave of the Covid-19 pandemic <a href="https://www.nepalitimes.com/banner/kathmandu-covid-19-lockdown-relaxed/" target="_blank" rel="noopener noreferrer">appears to be cresting in Nepal</a>, but it has left the economy in ruins with a crisis-ridden government offering no hope to citizens.<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/banner/we-knew-the-tsunami-was-approaching/" target="_blank" rel="noopener noreferrer">At its peak in mid-May</a>, there were more than 9,000 new infections and up to 250 deaths daily. And that was just the official count, models put the figures at least three times higher. However, the real impact of the pandemic is in the country’s economic meltdown, with more than half the employed losing their jobs.The Covid-induced lockdowns have pushed millions of  Nepalis back below the poverty line, which means they are now <a href="https://www.nepalitimes.com/banner/nepals-epidemic-of-hunger/" target="_blank" rel="noopener noreferrer">unable to access food and water</a>, basic health care and education. This has completely reversed Nepal’s gains in poverty reduction in the past ten years.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b942a9c7e80680e06f1e4jpeg.jpg" alt="" width="225" height="225">Back in March, at the tail end of the first wave, <a href="https://www.nepalitimes.com/latest/covids-collateral-damage/" target="_blank" rel="noopener noreferrer">Himalmedia’s tv magazine Saglo Samaj interviewed</a> farmers, tourist guides, hotel operators and taxi drivers most affected by the lockdowns.This week, the team revisited each of the same people to find out what had become of them. Their stories are a microcosm of a society ravaged by the pandemic, where the poor have got poorer.https://www.youtube.com/watch?v=Yni_6WWbmAo&amp;feature=youtu.beNepalis suffered altogether <a href="https://www.nepalitimes.com/banner/economic-cost-of-5-months-of-nepal-lockdown/" target="_blank" rel="noopener noreferrer">five months of lockdown in 2020</a>, and another nearly two months this year. The restrictions were eased this week, even though the daily number of fatalities and active cases are higher than when the lockdown was imposed on 29 April.The pandemic and the lockdowns have disabled every sector. Some 1.1 million people in the <a href="https://www.nepalitimes.com/latest/nepal-tourism-may-take-5-years-to-recover/" target="_blank" rel="noopener noreferrer">hospitality industry</a> have been directly impacted by the pandemic and more than half of Nepalis lost their jobs in the past month alone.Yet, the government has no clear plans to provide alternative employment opportunities for those who lost their jobs. In fact, it has been too <a href="https://www.nepalitimes.com/banner/court-debates-nepal-pm-olis-future/" target="_blank" rel="noopener noreferrer">preoccupied with a political power struggle for most </a>of the pandemic to plan a real exit strategy. Every response to the crisis has been too little, too late.On Tuesday, even though other districts prepared to relax their lockdown just as Kathmandu did, Nepal saw 4,522 new cases and 41 fatalities. There are a total of 52,648 active infections, 762 of them in ICU and 218 in ventilator support in hospitals across the country.Public health experts are already warning of a possible third wave and urging the government to make preparations for <a href="https://www.nepalitimes.com/latest/nepal-covid-19-impact-worse-than-official-figures/" target="_blank" rel="noopener noreferrer">increased contact tracing</a> and hospital treatment to avoid much devastation.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b942b9c7e80680e06f1e5jpeg.jpg" alt="" width="2552" height="1428"><figcaption> </figcaption></figure>MILKED DRYBuffalo milk is the only source of income for farmers in Kamdi village of Banke district in the western Tarai. But many of the dairy farmers were unable to sell their milk during the lockdowns in 2020. Later, they didn’t get a fair price and the Dairy Development Corporation was slow to pay even what they were owed.“The market is closed, there is barely any feed for the cattle. We are working day and night, but for nothing,” says Malati Prasad Yadav, who has 150 buffalos, but little income since the pandemic.The farmers took loans to buy feed and take care of the buffalos, but the second wave has quashed the little hope they had. They were hoping the government would announce a relief package in this year’s budget. But their hopes were dashed.“We are having to pour the milk into the drains, there are no consumers for ghee or cheese. We are running at a loss and there is no telling how long it will last,” says Saroj Pandey of the SJ Dairy in Nepalganj. “The government should boost the morale of farmers and local businesses, subsidise their electricity or promote Nepali goods by stopping import from the third country.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b942e9c7e80680e06f1e6jpeg.jpg" alt="" width="1500" height="844"><figcaption> </figcaption></figure>TOURISM AND REALISMOne of the hardest-hit sectors is tourism. And while professionals of most fields have had to cope with the challenges brought on by the pandemic, <a href="https://www.nepalitimes.com/latest/where-have-all-the-guides-gone/" target="_blank" rel="noopener noreferrer">tourist guides have been unemployed</a> for more than a year now.Four months ago, tourist guide Shankar Bhattarai had taken up teaching to make a living but was spending all his free time reading up about Nepal’s history and culture to better prepare himself for when the tourists would come back post lockdown. But the second wave killed what was left of <a href="https://www.nepalitimes.com/editorial/survive-revive-thrive/" target="_blank" rel="noopener noreferrer">Nepal’s tourism</a>.He has since given up any hope of normalcy and is constantly worried about debt collectors. Hoping for an alternative for tourists guides like himself, he was further depressed with this year’s budget.“There were provisions only for the big hotels and travel agents, we didn’t find ordinary tour guides like us anywhere in the relief packages,” says Bhattarai, who had been a tourist guide since 2011. “I’ve tried my best to promote Nepal through my work but at our time of need, we have no government support. I now question myself about staying back in Nepal.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b94309c7e80680e06f1e7jpeg.jpg" alt="" width="2537" height="1425"><figcaption> </figcaption></figure>UNSERVICEABLEBig businesses have their own woes. The three-star Airport Hotel in Kathmandu has seen only a handful of guests in more than a year. The hotel’s original staff of 100 is down to 10, and only 10 of its 62 rooms are kept serviceable.“We are doing much worse than last year, we did survive 15 months somehow, there were some domestic tourists, but then the second wave happened and it destroyed what little we had,” says owner Binayak Shah, adding that he has not been able to pay the monthly instalments on its loan for 17 months.He adds: “I have no income, so how can I pay them? This means sooner or later, the bank is going to blacklist me, and put this hotel up for auction.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b94339c7e80680e06f1e8jpeg.jpg" alt="" width="2544" height="1420"><figcaption> </figcaption></figure>DOWN AND OUTWhile some worry about paying millions in bank loans, daily wage labourers worry about the next meal. Kancha Lama has been operating a rickshaw in Kathmandu for 38 years, but his <a href="https://www.nepalitimes.com/banner/pandemic-puts-brake-on-kathmandus-rickshaws/" target="_blank" rel="noopener noreferrer">business is down and out</a>. He hardly gets one ride a day, and mostly depends on people distributing free food.“It’s easy for the government to tell us to stay home and eat healthy, where is the money? It doesn’t even allow me to beg on the streets. At least they should distribute rations for people like us,” says Lama. “If I get Covid, at least I will be out of this misery.”Bir Bahadur Lama is in Asan every day, and if it is his lucky day he will get a client or two to carry loads for them. Otherwise, he sits on the temple steps passing the day with other jobless porters. Before the pandemic, they used to carry loads for Asan’s many shops. Sometimes, good samaritans offer them food, but that is rare.“I just wish I did not have to sleep hungry and lockdown would end soon, that is all I wish for,” he says.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b94379c7e80680e06f1e9jpeg.jpg" alt="" width="2539" height="1430"><figcaption> </figcaption></figure>TAKEN FOR A RIDEDuring the lockdown last year, a bank took possession of Ganesh Tamang’s taxi which he had bought with Rs500,000 out of savings from years of toil in the Gulf.With no other source of income, he is now back to his village and raises livestock. “I often feel like I was born in a wrong country, to a wrong family, and at the wrong time, it wouldn’t have come to this anywhere else,” he says.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b943a9c7e80680e06f1eajpeg.jpg" alt="" width="1500" height="844"><figcaption> </figcaption></figure>Sagar Bohora has a sickly mother at home, and a family of young children dependent on him. But his taxi has broken down because it has not run much for the past year-and-a-half. He needs at least Rs30,000 for repairs, but he has barely enough after paying off the auto loan.“I only ask banks and financial institutions that they give us a few months until after the lockdown so that we can pay our dues, by then we will be able to get up, with or without government help,” says Bohora.<h2>Pandemic makes the poor poorer</h2><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121148/636b943c9c7e80680e06f1ebjpeg.jpg" alt="" width="2538" height="1424"><figcaption> </figcaption></figure>There is empirical evidence that the second pandemic wave has <a href="https://www.nepalitimes.com/latest/nepal-prepares-for-economic-fallout-of-pandemic/" target="_blank" rel="noopener noreferrer">further impoverished Nepal’s poor</a>. Even by modest estimates, some 9 million Nepalis have been pushed back below the poverty line due to Covid-19 induced lockdowns. In this week’s Saglo Samaj tv magazine, Shankar Sharma, former ambassador to the US and vice-chairperson of the National Planning Commission spoke to Kanak Mani Dixit. Excerpts:Kanak Mani Dixit: We went back to people we had interviewed four months ago, and found that their situation had further declined. Do they represent the current Nepali society?Shankar Sharma: They are an accurate representation. There are three categories that have been hit the hardest by the pandemic: the first are <a href="https://www.nepalitimes.com/latest/pandemic-offers-chance-to-revive-farming/" target="_blank" rel="noopener noreferrer">subsistence farmers</a> below the poverty line, this also includes disadvantaged groups. The next are people in the informal sector whose livelihood has been endangered with the extended closure of the market. Then there is the hospitality industry and unlike others, they haven’t been able to pick up after the first wave because the impact of the lockdown on the <a href="https://www.nepalitimes.com/banner/tourism-that-treads-lightly-on-the-land/" target="_blank" rel="noopener noreferrer">travel industry</a> is long-term. These businesses had loans and now their debt has accumulated.These impacts are directly reflected in our macroeconomic numbers. Economic growth rate last year was 2% and this year it won’t be more than 1%. Similarly, the World Bank estimates following the pandemic there are now a total 9 million people in Nepal below the poverty line.Would you say that because it is not monetised rural subsistence living is faring better?Back during the Maoist insurgency, some development partners had conducted a study about people who had migrated to the cities due to the violence. They asked people if they would go back to the village once the peace accord was signed, 93% of the respondents said no.One of the main reasons behind this was <a href="https://www.nepalitimes.com/editorial/back-to-the-future-of-farming/" target="_blank" rel="noopener noreferrer">Nepal’s agriculture</a> couldn’t compete with Indian and Chinese produce. This also led to more people migrating abroad. Experts have suggested the concept of contract farming, which is also included in this year’s budget and will do well for the country.But one of our biggest problems is our <a href="https://www.nepalitimes.com/banner/nepals-fake-poor/" target="_blank" rel="noopener noreferrer">inability to identify the poor</a>. The government has developed ID cards for their identification, but 23% of the poor are not on the list but 25% are those who have listed themselves in hopes of getting some relief. As a result, the real poor have been deprived even of their social security fund.What should we do to boost their morale and of the country?The affected people are those in rural Nepal but they also have an advantage of three levels of government. But it is still the responsibility of the central government to provide relief worth at least two months at $1 per day for its people. Unfortunately, there is no mention of this in the budget this year.The Nepal government has also allocated a total of Rs50 billion for training in the last two budgets but hasn’t been able to spend that money. This fund should be used in skill development for Nepalis post lockdown, effective spending of the budget is a must. Similarly, the government should support cottage and small industries so that they don’t close down. If we lack funding, we could use loans and grants we have received from international development partners.Despite the pandemic, there is still talk about Nepal graduating from Least Developed Country (LDC) status to a middle-income country. What will happen now?Following the pandemic, the United Nations has set a new deadline for the LDCs to graduate to lower-middle-income and middle-income countries. The good news is that we have made some progress in our per capita income, and the fact that our economy is now dependent on multiple factors is a positive sign. But what is worrying is that our economic growth is still lower than the average growth of underdeveloped countries. This means we will have to work more on increasing our living standard.It is said that Nepal is not a poor country, but the government just cannot seem to spend its development budget. If they were held more to account by civil society and media during this pandemic that might help? I think that is an appropriate conclusion to make. The government will always play the lead role, but it is important to highlight the importance of civil society and journalists in creating awareness about various programs at the local level such as the <a href="https://www.nepalitimes.com/banner/missing-the-plot-in-nepals-job-scheme/" target="_blank" rel="noopener noreferrer">Prime Minister’s Employment Scheme</a>, which goes a long way in rejuvenating elected representatives in villages and towns.

The real cost of Nepal’s second wave

Nepal’s only international aviation gateway, at Kathmandu airport, will cut night-time operation hours to allow construction of taxiways, and airlines have been told to curtail flights. This is expected to lead to more than normal chaos during the height of peak autumn and spring tourist seasons at an airport that is congested even at the best of times. The airport will close from 10PM to 8AM from 8 November-31 March 2025. The taxiways will now connect to the thresholds at both ends of the runway, making the airport more efficient in handling higher frequencies of landings and takeoffs. The parallel taxiway extension will allow international flights to land every 4 minutes instead of the current every 7 minutes. At present planes have to wait to land until a plane taking off backtracks along the runway.&nbsp; Kathmandu is Nepal’s only airport with international operations, and it has only one runway that is only one way in from the south over the mountains. With the taxiway improvement, the airport will be able to handle 42 aircraft landings and takeoffs per hour — double the current capacity.&nbsp; The Civil Aviation Authority of Nepal (CAAN) has been trying to entice international airlines to also start flying to and from the other two international airports at Pokhara and Bhairawa (Lumbini) by slashing landing and handling charges. But so far only Nepal Airlines operates a weekly flight to Bhairawa from Kuala Lumpur.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241018161016_046569e53d1d66cd445cc66c697c0ef724810aec9f54bdf827481e3cd6b80c32.jpg" data-media-id="editor_0" data-image-id="20241018161016_046569e53d1d66cd445cc66c697c0ef724810aec9f54bdf827481e3cd6b80c32" data-rendition-name="original" width="2356" height="1134" loading="lazy" alt="Kathmandu airport expansion"> <figcaption>Kathmandu Airport Expansion plan with extension of taxiways to the thresholds of runways 02 and 20 that will limit airport operations from 8 November 2024 - 31 March 2025. Areas in blue are existing structures, including the international terminal which in future will be the domestic airport, and the new international terminal near the north end of the runway,</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241018121028_6e17cc2ee87c1b02d78cb54905825b7aa15299b7a00f5eddb01a59579ab85c1a.jpg" data-media-id="editor_1" data-image-id="20241018121028_6e17cc2ee87c1b02d78cb54905825b7aa15299b7a00f5eddb01a59579ab85c1a" data-rendition-name="original" width="1353" height="1328" loading="lazy" alt="Kathmandu airport NT"> </figure>  CAAN has reportedly told international airlines to cut their flight frequency to Kathmandu citing the shorter operation hours and has told budget airlines to shift some of their flights to Pokhara or Bhairawa, or face cuts. Many airlines currently operate regular flights to and from Kathmandu between 10PM and 8AM: Air Arabia to Sharjah, Fly Dubai to Dubai, Jazeera Airways to Kuwait, Cathay Pacific to Hong Kong, Singapore Airlines, several Nepal Airlines flights, and one of four daily flights by Qatar Airways to Doha. Jazeera Airways, FlyDubai, and Thai AirAsia have applied and got permission from CAAN to begin regular flights to Bhairawa’s Gautam Buddha International Airport. Starting 9 November, FlyDubai will start making a stopover in Bhairawa before flying on to Kathmandu. Immigration, customs and security are all fully functional in Bhairawa. In Kathmandu, the next phase of the airport upgrade includes converting the current international terminal for domestic operations, the construction of a new international terminal where the domestic departure area is now, as well as moving the hangars and the Nepal Army Air Wing to the eastern side of the runway. The apron area will also double its parking space for widebody jets. This is part of a Airport Capacity Enhancement Project that was initially funded through a $80 million loan from the Asian Development Bank (ADB), and the entire masterplan is expected to cost $800 million. This project is the latest upgrade to Nepal’s only international airport since it saw its first flight in 1949. The current international and domestic terminals are too small to handle the current annual traffic volume of 8.5 million passengers a year that is growing at 20% a year.

Kathmandu airport to cut flight hours

As Kathmandu becomes more congested and polluted, and with remote online work becoming the norm, many professional Nepalis are planning to retire in Pokhara, or move there.&nbsp; With its stunning mountain panorama, balmy winters and proximity to a profusion of wilderness areas, builders are responding to this demand with new townhouses, housing development and apartments. One such block of flats is the 10-storey <a href="https://sungavaapartment.com/">Sungava Apartment</a> located at Phulbari above the Seti River, near the point where it flows into and under Pokhara. The imposing structure near Manipal Hospital is almost complete, and on a recent visit the site was strewn with huge boulders unearthed while digging the foundation.&nbsp; The Seti brought down these boulders during a gigantic flood that geologists estimate happened 800 years ago when a chunk of Annapurna IV broke off and ploughed into the glacier below. Today, Sungava (means ‘orchid’) sits safely on a high terrace, 100m above the blue-green Seti and commands a view of Dhaulagiri, Annapurna South, Machapuchre, Annapurna III and IV.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024102411104_5f8fc736c86ea3c08d7bef43bb727081d3cc1a2caa55ae2b441717e6044de7e9.jpg" data-media-id="editor_1" data-image-id="2024102411104_5f8fc736c86ea3c08d7bef43bb727081d3cc1a2caa55ae2b441717e6044de7e9" data-rendition-name="original" width="2016" height="1512" loading="lazy" alt="High living below the Himalaya NT"> </figure>  The soil here is conglomerate that has solidified like concrete, and the boulders were extracted by heavy earthmovers. It is intriguing to think that these metamorphic rocks as big as cars, rounded by glacial grinding, were once a part of a much higher Annapurna IV. Even for those with little interest in geology, Sungava is an ideal place to contemplate the tectonic forces that pushed these peaks into the sky to be sculpted into delicate shapes by wind, snow, earthquake and avalanche over millions of years. The view of the Himalayan panorama from Sungava’s many balconies are breathtaking when not obscured by clouds, or the haze that drifts in from across the southern border. On most days, just watching the towering pyramid of Machapuchre (Tamu name: कतासुँ क्लिको) play hide and seek with the clouds is mesmerising. There are rocks aplenty at Phulbari, and it is probably the flowers that grew along the flat terraces e that gave the place its flowery name. The boulders will hopefully be turned into a rock garden while landscaping. An nearby restaurant complex is making the best use of the stones in its design, using flat rocks as outdoor benches and tables. Sungava was designed by the husband-wife architect team of Deepak Sherchan and Jyoti Joshi of <a href="https://thedarkmermaidamarbshrestha.blogspot.com/2013/12/creative-builders-collaborative-cbc.html">Creative Builders Collaborative (CBC)</a>, which also built Heritage Plaza, Indreni Apartment and numerous other projects in Nepal. Sadbhavana retains CBC’s trademark Newari-style masonry and here it borrows from the orange brickwork of the old town of Pokhara, integrating it with modern design elements. A few of those heritage houses are still standing in Ganesh Tole and Ram Krishna Tole in Pokhara’s old quarter.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024102411108_5eb64a4885961b6d30781cefeb1e8a313da313ac5227c7a66b60f0c7d48d6fab.jpg" data-media-id="editor_3" data-image-id="2024102411108_5eb64a4885961b6d30781cefeb1e8a313da313ac5227c7a66b60f0c7d48d6fab" data-rendition-name="original" width="1362" height="595" loading="lazy" alt="High living below the Himalaya NT"> </figure>  About 400m from the apartment past a bend on the river, and down below three tiers of terraces in the canyon is a suspension bridge. Below it, the Seti is still swollen with post-monsoon flow as it tumbles away in a hurry to head down south.&nbsp; Back at the apartment, it is quiet, far away from the hubbub of Lakeside a 15 minute drive away, and in the lap of greenery. There are 52 units at Sungava and it already has a close-knit prospective community of professionals, including doctors, publishers, engineers, and businesspeople from the renewable energy and IT sectors.&nbsp; Some residents say they opted for a second home in Pokhara to make it a ‘base camp’ to explore the Annapurnas with its many hiking trails made newly accessible with new roads. With the NRN citizenship law, overseas Nepalis can now also buy the flats. &nbsp; The floor plans include options for north and south-facing 3-bedroom apartments with verandas, and the facility has underground parking has EV charging, heated pool, sauna and gym. There are still some unsold apartments with panoramic views of the mountains and one can imagine oneself at the kitchen with its huge window, humming a ditty while preparing breakfast: “खाना पकाउँ हिमाल हेरेर...”

High living below the Himalaya

When the United Nations held its Summit of the Future at its headquarters in New York in September, many world leaders, including Nepal’s Prime Minister K P Oli, highlighted the effect of climate breakdown in increasing the frequency and intensity of natural disasters. What did not get as much attention was the long term impact of the climate crisis on food production. In fact, heat stress, weather extremes and the consequences on rain-fed agriculture is already being felt worldwide, undermining the chances of the <a href="https://unstats.un.org/sdgs/">UN’s Sustainable Development Goals (SDGs)</a> being met by 2030.&nbsp; The SDG’s 17 targets commit countries like Nepal to reduce poverty and inequality, end malnutrition, protect the natural environment, and ensure that citizens all enjoy health, justice and prosperity without leaving anyone behind.&nbsp; However, besides the impact of climate breakdown on agricultural production, in Nepal the area under cultivation is impacted by urban expansion, falling productivity and the need for expensive inputs like fertiliser and pesticides.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241019041052_626413c5baf4dae407ac9579231b41daeb51510aa636b75aeb7489d94cca6a62.jpg" data-media-id="editor_1" data-image-id="20241019041052_626413c5baf4dae407ac9579231b41daeb51510aa636b75aeb7489d94cca6a62" data-rendition-name="original" width="999" height="1500" loading="lazy" alt="urban agriculture in Kathmandu"> <figcaption>Kathmandu's urban sprawl is eating into its fertile cultivable lands. Photo: TAYLOR MASON</figcaption> </figure>  Now, a new study led by Nepali researcher Prajal Pradhan at the University of Groningen in The Netherlands looks at how urban agriculture may offer a solution to falling food production and meeting SDG targets. The researchers evaluated 1,450 publications exploring the contributions of urban agriculture with both positive and negative effects, and published their findings in the journal Cells Report Sustainability. Urban agriculture can help achieve 17 SDGs, positively influencing 81 targets. However, it could also undermine 51 goals.&nbsp; Read also: <a href="https://nepalitimes.com/here-now/the-vanishing-land">The vanishing land</a>, Taylor Mason “Urban agriculture offers immense potential for sustainable development, but realising this potential depends crucially on adopting practices that minimise its adverse effects while maximising its benefits,” Pradhan explains. Urban agriculture can substantially enhance urban food security, provide employment to the urban poor, serve as ground water recharge in built-up areas, and preserve open spaces that can serve as safe havens during disasters like earthquakes. However, it also presents problems like the potential health risks from contamination and the need for expensive inputs. &nbsp; “Urban agriculture plays a definitive role in advancing the SDGs, but achieving this requires tailored, context-specific solutions that address the unique challenges of different regions,” says Yuanchao Hu of Wuhan University in China and who is a researcher at the Potsdam Institute for Climate Impact Research. “But it needs equitable access and rigorous management of environmental risks.”&nbsp; Rapid urbanisation is eating into Nepal’s most fertile agricultural land, which means farming in remaining open spaces inside cities can be a viable alternative, especially as food prices rise.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241019041052_7b7c9413086226fbdc630d45acf772cfa1ced77a8970b9056ec5ec7e5226fdf8.jpg" data-media-id="editor_3" data-image-id="20241019041052_7b7c9413086226fbdc630d45acf772cfa1ced77a8970b9056ec5ec7e5226fdf8" data-rendition-name="original" width="1500" height="999" loading="lazy" alt="urban agriculture in Kathmandu"> <figcaption>A vegetable patch in between new houses in Thimi. Photo: TAYLOR MASON</figcaption> </figure>  “The conversion of Nepal’s most fertile land into cities is a severe problem,” Pradhan told Nepali Times. “Crop cultivation, horticulture, agroforestry, beekeeping, livestock rearing, or aquaculture can all be farming activities within and around cities.”&nbsp; The study makes recommendations for sustainable practices that build on the positive aspects of urban agriculture while mitigating the downsides, thereby promoting more resilient cities in future. Research shows that urban agriculture has been helping many countries attain SDG targets by enhancing food security and biodiversity while helping education and preservation of open spaces.&nbsp; Indeed, many farmers from the hinterland who have settled in Kathmandu Valley or other urban areas of the country have been practicing urban agriculture, leasing neighbourhood patches or cultivating roof gardens both out of necessity because of inflation and falling income to grow their own food, and also as a fulfilling hobby. Saurav Dhakal, a sustainability advocate with Story Cycle and now research fellow at the Asian Institute of Technology in Thailand, says there are socio-economic and environmental benefits of urban agriculture. “It provides benefits to all urban dwellers, regardless of their income status,” says Dhakal, “families get fresh food, and there are many other benefits like water retention, heat regulation and biodiversity. These are all public goods, so special government incentives may be needed.” It is not unusual to see vegetable patches and even paddy fields within inner city Kathmandu where an older generation of farmers are using available fertile land and <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/rooftop-gardens-kathmandu,1415">roof gardens to produce fresh, nutritious food </a>to reduce their dependence on food items that have to be bought after being trucked in from large distances.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024101905100_1291ce98dbbb8caed8702ac4b1d469b3e13016d7ecaaf3bfd5f91c974d3c0c77.jpg" data-media-id="editor_5" data-image-id="2024101905100_1291ce98dbbb8caed8702ac4b1d469b3e13016d7ecaaf3bfd5f91c974d3c0c77" data-rendition-name="original" width="1500" height="999" loading="lazy" alt="urban agriculture in Kathmandu"> <figcaption>An older generation of farmers are using any available fertile land to continue farming but it is getting more and more difficult. Photo: TAYLOR MASON </figcaption> </figure>  Nepal’s urban population grew rapidly from only 3.6% in 1991 to 25% today. There is large outmigration from the mountains to peri-urban areas of the Tarai, to Kathmandu Valley and Pokhara, with many young men then moving abroad for work. Kathmandu Valley’s population has swelled to nearly 3 million, and is growing at 6.5% a year. Dilip Shrestha, 71, used to work for Nepal Food Corporation, so he knew firsthand about inflation, shortages and vegetables with pesticide residue. So, when he designed his new house in Kathmandu, he built a spacious roof where he grows cucumber, ginger, garlic, coriander, onions, tomatoes, chili, beans, okra, pumpkin and lettuce. His family eats healthier, and he has reduced dependence on the market.&nbsp; The co-author of the Cell Reports Sustainability journal article, Daya Raj Subedi who is a PhD candidate at Beijing Forestry University, says urban agriculture also promotes inclusion and psycho-social wellbeing.&nbsp; He says, “A crucial finding of the study is the identification of opportunities and challenges associated with urban agriculture, it can promote sustainable transformation of society.” In Banepa, 55-year-old Bijaya Manandhar in her lifetime has watched the fertile farms of her neighbourhood that used to supply vegetables to Kathmandu, now completely built up with no open space left. The pandemic lockdown prompted her to turn to the family’s <a href="https://nepalitimes.com/banner/rooftop-agriculture-on-the-roof-of-the-world">ancestral livelihood by growing food</a> not on terrace farms, but on the roof terrace. Manandhar is now a part of <a href="https://nepalitimes.com/banner/rooftop-agriculture-on-the-roof-of-the-world%5C%5C">कौसी खेती र करेसाबारी क्रान्ती</a> (Rooftop Farming and Garden Revolution) which has an online membership of 52,000, and awards annual prizes to women who excel in urban agriculture.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241019041052_7257f5def8f823f35a799fa6f6825e153f2ffa406ac11325d4fe74049b79e96d.jpg" data-media-id="editor_8" data-image-id="20241019041052_7257f5def8f823f35a799fa6f6825e153f2ffa406ac11325d4fe74049b79e96d" data-rendition-name="original" width="1600" height="736" loading="lazy" alt="urban agriculture in Kathmandu"> <figcaption>Rooftop farming is gaining popularity as a form of urban agriculture. </figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241019041052_beff1a4494ce896dd8fd383ee1f518e5448bcf7ea8bb138255391c7bcb9769ed.jpg" data-media-id="editor_9" data-image-id="20241019041052_beff1a4494ce896dd8fd383ee1f518e5448bcf7ea8bb138255391c7bcb9769ed" data-rendition-name="original" width="4000" height="3000" loading="lazy" alt="urban agriculture in Kathmandu"> </figure>  Pradhan says the challenge now is to upscale such examples of successful urban agricultural practices so they support Neal’s efforts to meet SDG targets. He adds, “Crop cultivation around cities can be protected by land use plans and regulations. Promoting community-based agriculture, including rooftop gardens, requires community engagement and public-private partnerships across the food value chain.”&nbsp; Such support would accelerate the popularity of existing rooftop farming and community gardens in Kathmandu Valley, or kitchen garden initiatives in Pokhara, and building on traditional farming practices that are preserved and integrated into urban settings like in Bhaktapur and Banepa. In Lalitpur, the Women Entrepreneurship Facilitation Center promotes urban farming enhancing both sustainability and empowerment.&nbsp; Another co-author of the report, Yuanchao Hu from China says followup research of the team will aim to identify good practices in local urban agriculture practices. He adds, “There are examples of urban agriculture that optimise sustainability, ensuring that it remains a viable solution for cities globally while countries try to meet SDG targets.” Prajal Pradhan, Daya Raj Subedi, Kshitij Dahal, Yuanchao Hu, Prakriti Gurung, Sijal Pokharel, Sagar Kafle, Biplav Khatri, Sudeeksha Basyal, Monika Gurung, and Aruna Joshi. Urban Agriculture matters for sustainable development. Cell Reports Sustainability, 1:100217, 2024. [DOI: 10.1016/j.crsus.2024.100217] Prajal Pradhan (<a href="mailto:p.pradhan@rug.nl">p.pradhan@rug.nl</a>) This article is brought to you by <a href="https://nepalitimes.com/" target="_blank">Nepali Times</a>, in collaboration with <a href="https://inpsjapan.com/en/" target="_blank">INPS Japan</a> and <a href="https://sgi-peace.org/" target="_blank">Soka Gakkai International</a>, in consultative status with UN ECOSOC.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240630110640_30c3782f9c09219bf1c249b51483a3cfb7a53a06d117d2aebd23ca7080d12758.jpg" data-media-id="editor_14" data-image-id="20240630110640_30c3782f9c09219bf1c249b51483a3cfb7a53a06d117d2aebd23ca7080d12758" data-rendition-name="original" width="680" height="103" loading="lazy" alt="SDG logo"> </figure>

Back to the land in the cities

The 700-year-old Lakshmi Narasingha temple in Bhaktapur houses a rare half-lion and half-human incarnation of Lord Vishnu carrying the Goddess Lakshmi. The temple was destroyed in the 1934 mega earthquake that killed 10,000 people and destroyed many monuments in Kathmandu Valley. It was rebuilt by a German project in the 1980s, but as a single-storey structure instead of its original two-tier pagoda design.&nbsp; With new findings from in-depth research, Bhaktapur municipality began re-restoring the temple in 2021, preserving its original architecture.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241017131016_2fae38cce543ad7b1f6de632feb3e212e08ed1acedd747830e949d7b8e878f18.jpg" data-media-id="editor_0" data-image-id="20241017131016_2fae38cce543ad7b1f6de632feb3e212e08ed1acedd747830e949d7b8e878f18" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="In with the old in Nepal NT"> </figure>  “Our temples and heritage sites hold deep meaning. It is disheartening to witness how often they lose their original elements, whether by design or accident,” explains Kumar Chawal of the Consumer Committee of Bhaktapur. “There is a need to preserve our architecture and protect its historical value for future generations. Otherwise, we risk losing a vital part of our identity.” The Laksmi Narsingha restoration is similar to the Bhai Dega temple in Patan Darbar Square which also collapsed in 1934, but was rebuilt with a Moghul-style dome by the Rana government at the time. Only two months before the 2015 earthquake, heritage conservationists had started to rebuild Bhai Dega as the original three-tier based on early photographs. But priorities shifted when four other temples in the square were brought down by the 7.8M earthquake on 25 April 2015.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241017131016_697ea707d9ad163be5de5f2efbf5b70d3cab771adcc22f0fae6bf937c6cb0130.jpg" data-media-id="editor_1" data-image-id="20241017131016_697ea707d9ad163be5de5f2efbf5b70d3cab771adcc22f0fae6bf937c6cb0130" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="In with the old in Nepal NT"> </figure>  This showed how damage to monuments in Kathmandu Valley spanned from one earthquake to the next. Bhai Dega restoration remains half-complete to this day because money for its restoration ran out.&nbsp; Whereas Bhai Dega restoration was done by the Kathmandu Valley Preservation Trust with grants from western embassies and international foundations, in Bhaktapur it is the municipality itself that allocated the Rs30.7 million needed to restore the Lakshmi Narasingha temple. The expected date of completion is early 2025. The municipality and local communities are focusing on two main aspects: preserving the past and promoting localisation. The restoration team has designed a blueprint for the temple by using historical photographs and insights from older generations.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241017131016_182882fdc393c99e70d1d0490319e415229563666c4934e3a582426ebf00ca30.jpg" data-media-id="editor_2" data-image-id="20241017131016_182882fdc393c99e70d1d0490319e415229563666c4934e3a582426ebf00ca30" data-rendition-name="original" width="1200" height="560" loading="lazy" alt="In with the old in Nepal NT"> </figure>  “At first, the Lakshmi Narasingha temple had only one entrance, but during the demolition process, we uncovered the foundations of four doors. Now, we are restoring all of them. This is an example of how our ancient structures have changed over time, often without our knowledge,” says Chawal. “Constructing temples is not like building houses. They carry historical and spiritual values, which is why they hold a special place in our hearts,” he adds. By replicating ancient design elements and rebuilding the temple as accurately as possible to its original form, the team has stayed true to Bhaktapur’s soul. But the restoration also revived ancient techniques that were in danger of being forgotten, generating employment for woodcarvers, masons, and contractors. The community of Bhaktapur’s Gahiti neighbourhood near the famous Nyatapola Temple has also set aside specific days for locals to volunteer in the reconstruction work. This has encouraged young people to take pride in ownership of their heritage. Families have also supported the effort by donating funds for bells, the temple pinnacle, and other structural features to the temple.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241017131016_db850ec0c084cdbe54f65bee92dad2ad8122d20fd60ec87ec086fbb9d2f72bd6.jpg" data-media-id="editor_3" data-image-id="20241017131016_db850ec0c084cdbe54f65bee92dad2ad8122d20fd60ec87ec086fbb9d2f72bd6" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="In with the old in Nepal NT"> </figure>  “I feel at peace knowing I have contributed my sweat to restoring this temple,” said one volunteer. “It is our duty to preserve our temples and heritage. The Nyatapola area will look magical once this temple is completed.” Community mobilisation is a long-standing tradition in Bhaktapur. In the past, locals have actively participated in the restoration of other temples in the city, such as Bhairav and Nyatapola fostering a strong sense of ownership. This collective engagement has not only been crucial in preserving the city's historical monuments but also in strengthening the bond between local communities and their heritage, says officials at the municipality. While securing funding is essential, and the municipality showed it values heritage conservation, the Lakshmi Narasingha restoration is proof that active involvement and sense of responsibility of the local community is as important, if not more. Local involvement also means that the monuments will be cared for into the future, When locals take ownership of these efforts, the restored monuments are not only protected in the present but are also cared for in the future.