Late last week, under pressure from banks and big business, Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari unveiled a new monetary policy.&nbsp;
The policy expands credit of banks and credit sector, relaxing several regulatory provisions. But the Rastra Bank is careful not to allow banks to resume reckless lending.&nbsp;
“A cautiously accommodative monetary policy,” is how Adhikari described it.
The private sector has welcomed the policy, and the NEPSE soared steeply into two circuit breaks on Sunday, the first trading day after the policy was announced. &nbsp;
NRB has set a target for credit expansion to 12.5%, up from 11.5% last year. Excluding the last two fiscal years, credit has expanded at an annual rate of 20% in the last three decades, against an economic growth rate of about 4%.&nbsp;
Read also:<a href="https://nepalitimes.com/news/despite-politics-nepal-s-stock-market-is-bullish"> Despite politics, Nepal’s stock market is bullish</a>, Santosh Pokharel and Sudyumna Dahal
This is proof that <a href="https://nepalitimes.com/opinion/nepals-care-economy">Nepal’s economy</a> has not benefited from private sector credit expansion.
NRB tried to ease interest on loans following the pandemic but revised it to slow credit expansion due to economic turbulence.&nbsp;
The IMF (International Monetary Fund) also blamed an anaemic economy on the post-pandemic monetary policy, and its effects linger. &nbsp;
NRB’s decision to signals that it wants to further reduce the lending rates of banks. However, Nepal’s banks and financial institutions at present are flush with cash, and do not need to borrow from the central bank.&nbsp;
The policy change therefore will not affect the market interest rate. The deposit collection rate, which is unchanged at 3%, will ensure that the interest rate on bank deposits will not go down.
<a href="https://nepalitimes.com/editorial/central-role-of-the-central-bank">The central bank </a>has chosen to make the monetary policy more liberal through regulatory arrangements rather than monetary instruments to ease the pressure on the capital funds of financial institutions.&nbsp;
The existing loan loss provision of 1.2% on good loans has been reduced to 1.1%, which is estimated to increase the profits of the banking and financial institutions by up to Rs5 billion.&nbsp;
Similarly, the regulatory retail portfolio limit has been increased to Rs25 million lessening the strain on bank capital and making it easier for them to provide loans.
In addition, the new policy includes concessions to the construction sector with struggling businesses after builders complained about being blacklisted for not paying billions owed to the government.&nbsp;
Contractors will not be blacklisted for bounced cheques. The deadline for the loan interest payment has also been extended till mid-December.&nbsp;
But while NRB says it will review existing credit notice and blacklisting directives, a no-penalty policy for dishonouring checks would increase the risk for businesses.&nbsp;
All this is proof that<a href="https://nepalitimes.com/news/democracy-s-sidekicks"> the new NC-UML coalition</a> is beholden to business. This week, the prime minister ordered NEA to resume electricity supply to industries which have not paid power bills worth millions.&nbsp;
NRB also stated that it would ease the current working capital loan guidance, as well as revise the working capital limit (short-term financing extended to businesses to cover its day-to-day expenses) for micro, domestic, small and medium enterprises.&nbsp;
Read also: <a href="https://nepalitimes.com/news/soaring-debt">Soaring Debt</a>, Ramesh Kumar
The bank also announced that Nepalis who had obtained<a href="https://nepalitimes.com/here-now/speaking-the-language-of-overseas-work"> overseas work</a> permits would be able to obtain loans without collateral, increasing the possibility for such people to borrow at a cheaper rate.&nbsp;
The IMF has also suggested that Nepal amend the 2002 Rastra Bank Act to guarantee its independence. It is neither theoretically nor morally appropriate for every change in government to interfere with NRB policies. &nbsp;
Under pressure from big business, Prime Minister Oli, as soon as he assumed office, made direct comments about changing the monetary policy to make it more flexible.&nbsp;
Governor Adhikari had no choice but to give in to that pressure, but he has been equally careful not to repeat the mistakes of the past. He opened the door to credit expansion through his first monetary policy as governor enabling borrowers to obtain billions in refinance and working capital loans.&nbsp;
Read also: <a href="https://nepalitimes.com/news/poor-cash-rich-nepal">Poor cash-rich Nepal</a>, Sonia Awale
Although he has increased the target for credit expansion, Adhikari has been more prudent than before.&nbsp;
The governor has emphasised that seeking economic growth through monetary policy will not work as long as jobs, investment, and productivity do not improve.
“Seeking short-term solutions through a flexible monetary policy poses a <a href="https://nepalitimes.com/editorial/state-sponsored-economic-crisis">challenge to achieving long-term economic stability</a>,” Adhikari said.&nbsp;
In recent years, Nepal’s government and the private sector have pushed for economic revival through monetary policy. But that has allowed real estate and share market speculators a free rein.&nbsp;
The positive impact of such directives have been short-lived, and point to structural problems with the economy.&nbsp;
Economic opportunities in the country are limited because little has been done to create jobs, increase production, and encourage investment — factors that would contribute directly to long-term economic stability.&nbsp;
More than 850,000<a href="https://nepalitimes.com/here-now/a-long-way-to-europe"> Nepali youth left the country for foreign employment</a> and further education in the past year alone.&nbsp;
The biggest problem in Nepal’s financial system is credit abuse. And although NRB has accepted this it has not done much to curb it. The new monetary policy therefore may be ‘flexible’, but does not fix the economy’s old problems.
Ramesh Kumar

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Monetary politics

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101152/636a26e49c7e80680e043a3ejpeg.jpg" alt="" width="800" height="1178"/><figcaption>Diwakar Chettri</figcaption></figure>Whatever the political ambitions of the Maoist leaders, their justification for taking up arms was the inequality historically embedded in Nepali society. The rebels lit the spark on terrain that was tinder dry with disparities. Nepal would have gone up in flames sooner or later, the Maoists just had their timing right.The tragedy, of course, is that in an allegory of Animal Farm 13 years after the war, the Maoist leaders people elected to government forgot what they fought for, and Nepal’s income and wealth gap have grown even wider. As our review of a recent report shows, Nepal’s poor are <a href="https://archive.nepalitimes.com/article/editorial/Nepal-%20Multidimensional-Poverty-Index,4115" target="_blank" rel="noopener">trapped in poverty</a> while the few rich have prospered.The report by HAMI, South Asian Alliance for Poverty Eradication and Oxfam paints an alarming picture of <a href="http://archive.nepalitimes.com/news.php?id=17298" target="_blank" rel="noopener">deprivation</a>  and disparity in Nepal: the average income of the richest 10% of Nepalis is more than three times that of the poorest 40%. Worse, the richest 10% own 26 times the wealth of the poorest 10%.Read also:<a style="background-color: #ffffff; outline: 0px; font-weight: bold; letter-spacing: 0.01em; font-size: 15px;" href="https://www.nepalitimes.com/?p=21837&amp;preview=true" target="_blank" rel="noopener">Nepal's great income divide</a>, Ramesh Kumar<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank" rel="noopener">Some are more equal than others</a>, Anil Chitrakar<a href="https://www.nepalitimes.com/opinion/gadfly-opinion/removing-poverty-with-jobs/" target="_blank" rel="noopener">Removing poverty with jobs</a>, David Seddon<a style="background-color: #ffffff; outline: 0px; font-weight: bold; letter-spacing: 0.01em; font-size: 15px;" href="https://www.nepalitimes.com/banner/its-a-rich-mans-world/" target="_blank" rel="noopener">It's a rich man's world</a>, Ramesh KumarEconomic inequality is most evident in agriculture in which 66% of Nepalis still depend. The wealthiest 7% of households own 31% of the agricultural land, and many landless are tenant farmers at the mercy of landowners. Social discrimination multiplies the misery: 81% women are landless, as are 44% of Dalits in the Tarai.Nepal’s <a href="http://archive.nepalitimes.com/news.php?id=15026#.XGzGkOQza70" target="_blank" rel="noopener">wealthiest man</a> has a net worth of $1.6 billion and is the 1,561 richest in the Forbes list. His wealth grew by $200 million last year. A history of feudalism, a rent-seeking state and neoliberal economic policies have concentrated Nepal’s wealth in the hands of a dominant elite which has made policies and laws to perpetuate its hold on it. Rulers and hangers-on have deliberately kept the poor out of reach of new opportunities, depriving them of a chance of a better life.Such disparity also gives the movers and shakers an unfair advantage in a democracy because they can bend the system to keep getting elected, which then deprive the underserved even more. Politicians, bureaucrats and businesses can carry on with <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/editorial/red-rice/" target="_blank" rel="noopener">business-as-usual</a> with no accountability, full impunity and no fear of retribution from a <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/editorial/bulldozing-democracy-2/" target="_blank" rel="noopener">rigged system</a>.The government’s failure to deliver on basic services like health and education have driven the private sector to fill the gap. But consequent over-commericalisation and lack of regulation have put quality schooling and medical care out of reach of the poor. The government’s reaction has been to back a populist call for nationalisation to cover up its own delivery failure.Inequality is taking its toll on the physical and mental development of children. <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="http://archive.nepalitimes.com/article/nation/the-face-of-hunger-debt-malnutrition,3604" target="_blank" rel="noopener">Malnutrition</a> begins at a very young age: 36% of Nepali children under five are stunted, 27% are underweight, and 10% suffer from wasting due to lack of adequate food. There is no greater proof of chronic governance dysfunction than this: the apathy and failure of the state to protect its most vulnerable.No society or nation can have totally equal income or wealth distribution. But there must be a certain equilibrium so that all citizens can attain a basic quality of life and earn a standard, minimum income.But inequality is so bad that the 8 million Nepalis who live in poverty have shorter lifespans. A poor Nepali child is three times more likely to die before age 5 than a rich child. The poor and excluded receive unequal care at government hospitals.What is most tragic is that there is minimal recognition or commitment from successive governments to redress this injustice. Nepal ranks 138, which is nearly at the bottom of a list of 157 countries, for its Commitment to Reducing Inequality. Rampant <a href="http://archive.nepalitimes.com/article/from-nepali-press/poor-of-kathmandu,2153" target="_blank" rel="noopener">poverty and extreme inequality</a> build frustration among suffering citizens, increasing the chances of social instability, and possibly renewed conflict. After a revolution to liberate the poor from poverty ended up killing 17,000 of Nepal’s poorest people, the gap between the rich and poor has actually widened.The way countries try to compensate for the inequality inherent in free market capitalism is through progressive land reform and taxation, by spending on a social safety net, and through  government investment in affordable, quality health care and education. There must be minimum wages for even those working in the informal sector, because that is where majority of Nepalis are engaged. All this would lay the foundation for a more equitable society, where the poor may not be immediately guaranteed greater income but all citizens would have a level playing field.We have seen the current government make tentative moves to address some of these issues, but they are too little and too half-hearted. The chasm between the rich and poor is so wide that it will take more than the hollow populism of the government's ‘Prosperous Nepal and Happy Nepalis’ slogan for prosperity and happiness in our lifetime.10 Years ago this weekThis passage from the Editorial in Nepali Times #439 of 19-26 Feburary, 2009 about how the still Royal Nepal Army was trying to reassert itself warns of danger to the civilian chain of command. Excerpt:The Nepal Army's 'recommendations' to the CA Committee on Protection of the National Interest has raised hackles. While it is the fundamental right of every citizen to respond to the CA's call for suggestions, an instrument of state is expected to abide by operational norms of proper procedure. The NA brass has clearly overstepped its limits by bypassing the executive to present its case directly before the legislature. Under normal circumstances, an organ of state has to access parliament through the concerned ministry. But even more alarming is the tone of the content. A civilian chain of command means the army shouldn't have a political position of its own other than that of the government of the day.

Mind the Gap

This week at the National Population Policy launch Prime Minister K P Oli exhorted Nepalis to get married by age 20 and have three babies by the time they are 30. This was the first indication that the highest office in the land has understood the need to address Nepal’s dramatically <a href="https://nepalitimes.com/news/nepals-demographic-window-is-closing">falling birth rate</a>, but Oli’s statement was greeted with ridicule on<a href="https://nepalitimes.com/banner/avoiding-the-quicksand-of-social-media"> social media</a> — especially by women. Most urban young are already grappling with economic pressures and shifting life priorities. Even with a university degree,<a href="https://nepalitimes.com/here-now/workers-return-to-jobless-nepal?%2F"> many cannot find jobs</a>, and are taking the first flight out for overseas employment. Having a child is now a fraught decision shaped by income, individual autonomy, and family pressure. The <a href="https://www.unfpa.org/swp2025">UNFPA’s State of the World Population report </a>released last month, highlighted a significant <a href="https://nepalitimes.com/here-now/migrating-males-and-population-decline">decline in fertility rates </a>around the world. The global average fertility rate is 2.25 children per woman, and 18% of the reproductive adults said they will not be able to have the number of children they desire. The total fertility rate in Nepal has plummeted to 2.1 births per woman — down from 5 just 30 years ago. This is considered replacement level, meaning the newborns will replace their parents.&nbsp; However, birth rates are not declining as rapidly everywhere. The Tarai in has a total fertility rate of 2.20, and northwestern mountains is still 2.24.&nbsp; There are multiple factors in play, and the report broadly divides them into four categories: health issues, economic concerns, fears about the future, and lack of a supportive partner or their absence. More than half of the respondents said finance, which includes unemployment and increased cost of housing, as well as parenthood, was a barrier to having children. “More and more people prefer one or two children at maximum. Many women also decide to have children at a much later age,” says Kamala Devi Lamichhane of Tribhuvan University. “The opportunity cost is far higher for women.” But there is also a cost for the country, as the National Population Policy notes. At the rate the total fertility rate is falling it will soon be below replacement level — meaning that in the next three decades Nepal will be confronted with an <a href="https://nepalitimes.com/opinion/the-future-is-older">ageing population</a>.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250714140740_bac3e5a284b69a77d97b3b99daf2e7fd3019bc48f1a399fb2771381c751d8291.png" data-media-id="editor_6" data-image-id="20250714140740_bac3e5a284b69a77d97b3b99daf2e7fd3019bc48f1a399fb2771381c751d8291" data-rendition-name="original" width="1302" height="501" loading="lazy" alt="Nepalis having fewer babies. Why?"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250714140740_251115b0a88d4e82be70245c43cb74477f3be18042ef1aa3b904c597d815f13b.png" data-media-id="editor_7" data-image-id="20250714140740_251115b0a88d4e82be70245c43cb74477f3be18042ef1aa3b904c597d815f13b" data-rendition-name="original" width="1125" height="500" loading="lazy" alt="Nepalis having fewer babies. Why?"> </figure>  Besides income, there are also cultural factors at play in women having fewer babies — they are expected to do all the childcare duties, even putting their careers on hold. In general, there is little help from spouses, and with more nuclear families there is less support from relatives. “Women today are well educated, career-oriented, and economically independent, allowing them to delay marriage as well as being conscious about their body and <a href="https://nepalitimes.com/multimedia/nepal-far-from-hitting-contraceptive-target?%2F">reproductive rights</a>,” says Laxmi Tamang of the International Confederation of Midwives (ICM). Also present at the policy launch was demographer Yagya Bahadur Karki, who said that women are more educated and hence, empowered to take their own informed decisions regarding having children.&nbsp; He adds, “But the fertility rates have reached replacement rate, and that stands as a warning for the future.”&nbsp; Fertility rates have fallen in inverse proportion to the rise in female literacy. The regions of Nepal where couples have more babies is where women are less educated. Couples in Madhes and Sudur Paschim provinces, where child marriage, gender-based discrimination, menstrual huts and dowry are still widespread are where the fertility rate is still high.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250717120740_ababfd31ed5ff79ded427e1f1adfff02e6af2384bd541e51dfe05e52fbbccb39.jpg" data-media-id="editor_9" data-image-id="20250717120740_ababfd31ed5ff79ded427e1f1adfff02e6af2384bd541e51dfe05e52fbbccb39" data-rendition-name="original" width="994" height="682" loading="lazy" alt="TFR Map"> </figure>  And because female literacy also has a direct correlation with <a href="https://nepalitimes.com/news/fatal-discrimination">infant and child mortality</a>, couples in those regions tend to have more babies so some of them survive.&nbsp; But it is Nepal’s urban centres among the educated where the increased choices in reproductive health, including alternative methods of conception like IVF and treatment for infertility, as well as <a href="https://nepalitimes.com/banner/implant-service-providers-take-contraception-to-nepals-poor">contraceptives</a> offer more options for family planning. “There are more choices regarding reproductive health, and there is more awareness as well, which is why people decide carefully on whether or not to bear a child,” says population expert Yogendra Gurung. <a href="https://nepalitimes.com/here-now/migrants-returning-from-the-gulf-with-infertility">Migration is another factor</a> adding to the decline in fertility rates. Many young Nepalis of reproductive age leave every day in pursuit of better jobs overseas. Spousal separation means fewer children.&nbsp; “Once away, even if not educated, they realise that child-rearing costs are high, and try to have fewer and even no children in some cases,” Gurung adds. Recent studies have also shown that men returning after their stint in the Gulf and Malaysia, where they are <a href="https://nepalitimes.com/news/gulf-workers-need-protection-from-heat">exposed to extreme heat </a>for extended periods as well as various chemicals and toxins in their work environment &nbsp;have a range of health problems, including infertility. To increase the birth rate, Nepal will have to reverse its family planning strategy of the past 40 years. Complicating this is that some regions of Nepal will need measures to control the birth rate, while urban areas will need a strategy to help parents have more babies. One way to help families have more children is to develop more <a href="https://nepalitimes.com/here-now/future-proofing-nepal-s-population-strategy?s=04&amp;fbclid=IwY2xjawFQf-NleHRuA2FlbQIxMQABHRxSwwGPfm7_2cBhDVAowPxEmFXP0Os-KRs1DXqIW_84wDhciExtZuNi1g_aem_jzRqN2cEVAppfwr5qedxRg">family-friendly policies</a> that favour women and youth as the Nordic countries, which also have falling birth rates, have done. They have introduced flexible parental leaves for both parents, including financial and health incentives. China, also concerned about its declining birth rate and an ageing population, now has a three-child policy as well as tax deductions, expanded childcare services, and leave policies to encourage couples to have more children. “We must work towards childbirth and childcare policies and plans that are suitable for Nepal, so that couples planning for children do not have to think twice about it because of finances or other reasons,” adds Gurung. Tamang of the International Confederation of Midwives says a gender transformative approach is needed to address the issues of the gender gap which is adding to the decline in childbirth. Husbands need to play a more important role in child-rearing. Instead of increasing fertility for the sake of it, the objective should be to assist young people to start the families they desire, at a point and time of their choice. Respect for everyone’s rights and dignity lays a foundation for a more balanced demographic trend. Lamichhane sums it up: “If fertility rates are to be sustained, it requires changes in the gender roles and behaviour, keeping the youth’s aspirations in mind.”

Nepalis are having fewer babies. Why?

Does anyone know that 2023-33 was declared the <a href="https://nepalitimes.com/banner/visit-nepal-again">Visit Nepal</a> Decade? Or that Pokhara announced that 2025 is a Special Tourism Year? The fuselage of Nepal Airlines jets still carry the Visit Nepal Year 2020 logos. Such ad hoc and unnoticed promotion is emblematic of the way Nepal has tried to increase visitor arrivals <a href="https://nepalitimes.com/news/nepal-hopes-for-tourism-rebound-in-2021-rk4dlo9t">post-Covid</a> — and of the country’s wider political disarray. Deepak Raj Joshi of the Nepal Tourism Board (NTB) has his work cut out to coordinate various agencies of the government to boost arrivals.&nbsp; He says, “We have been working on marketing strategies to revive the tourism sector, and are hopeful that this year will mark a 8-10% increase in arrivals compared to the pre-pandemic times.” On paper, tourist numbers have rebounded to pre-Covid numbers with over 1 million last year, but official figures do not give a true picture of duration of stay, average spending, and the fact every visitor is counted as a ‘tourist’, even repeat visitors who come on business. The few bright spots are largely a result of private sector promotion of niche tourism products, individual social media posts of <a href="https://archive.nepalitimes.com/page/top-10-treks">adventurous treks in Nepal</a>, or the fact that Indians are allowed to enter China again to visit Lake Mansarovar and Mt Kailash via Nepal. Indeed, Simkot airport has up to 15 flights a day from Nepalganj bringing in <a href="https://nepalitimes.com/opinion/borderlines/nepal-india-trans-boundary-bonds">Indian pilgrims</a> who are then ferried by helicopter to the border in Hilsa, or Lapcha Pass from where the holy sites in Tibet are visible. The rudimentary hotels and rest houses along the route in Humla have been bursting at the seams for the past month, to the point that some establishments are no longer able to provide patrons basic amenities.&nbsp; Last year, 1.14 million tourists visited Nepal, and the government has projected up to 10% increase in tourist arrivals this year. International tourist arrivals to Nepal have been steadily increasing, especially from the US, Europe, and India. Domestic and regional travel has also increased after the <a href="https://nepalitimes.com/news/lockdown-5-utlzqtvs">Covid lockdowns</a>.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250717120756_e1c8f08e7e26496d2b2394e0be776e147fb46c415347b781ed9e5c64d9c9e505.jpg" data-media-id="editor_5" data-image-id="20250717120756_e1c8f08e7e26496d2b2394e0be776e147fb46c415347b781ed9e5c64d9c9e505" data-rendition-name="original" width="1145" height="668" loading="lazy" alt="Tourist numbers"> </figure>  The tourism industry employs at least 1 million people, trekking injects money directly into the <a href="https://nepalitimes.com/editorial/not-rising-nepal">rural economy </a>and sustains ancillary sectors like handicrafts and domestic aviation. In the last fiscal year, tourism brought in Rs82.33 billion, according to Nepal Rastra Bank. But the industry has been affected by negative publicity about poor infrastructure, air pollution in Kathmandu, travel safety and news of disasters like the <a href="https://nepalitimes.com/news/rasuwa-flood-likely-a-glof">China-Nepal flood last week</a> that made international headlines. Growing worries about the climate crisis is also affecting youth travel, especially from Europe. Read also: <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">Missing out on Nepal’s tourism potential</a> “The limitations of airport and road infrastructure has hindered the development of the tourism sector,” admits Joshi. “And many are put off by the appalling state of our road network, especially during <a href="https://nepalitimes.com/opinion/managing-the-monsoon">the monsoon season</a>.” Nepal is home to 20 protected areas, 10 heritage sites, and eight out of the world’s 10 highest mountains, and despite all the obstacles it is still the perfect destination for the modern social media savvy traveller, who are experience-driven and inclined to look for itineraries that emphasise wellness and cultural immersion.&nbsp; Some hotels around Kathmandu, Pokhara, Jomsom and the Khumbu have strived to adapt to this new tourism landscape, expanding facilities with significant international investment. <a href="https://nepalitimes.com/business/a-thamel-within-thamel">Luxury hotels like Aloft Kathmandu</a> in Thamel were inaugurated just before the pandemic lockdowns, survived the crisis and thrived as it. Says General Manager Vikram Singh (pictured, below): “Our prime location in Thamel enhances the guest experience, especially for those seeking convenience and immersion in the local scene and travellers who want to be in the centre of it all.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025071805070_8d29803e8b52bcd4439422e7b7a0bc25aa68ef3d227b9130bd0e079af626677d.jpg" data-media-id="editor_11" data-image-id="2025071805070_8d29803e8b52bcd4439422e7b7a0bc25aa68ef3d227b9130bd0e079af626677d" data-rendition-name="original" width="1066" height="1600" loading="lazy" alt="Aloft GM"> </figure>  <a href="https://nepalitimes.com/here-now/what-sustainable-tourism-means-in-practice">Sustainability </a>and environmental consciousness has also become an integral part of the hospitality industry. ISO certifications as well as sustainability initiatives like the Travelife sustainability certification for eco-friendly resorts validate credibility of hotels. Aloft is the first five-star hotel in Nepal to have earned the Waste Smart Certificate, and it has also been awarded the ISO 14001:2015 certification, which is the internationally recognised standard for environmental management systems (EMS). But such investments will not amount to much unless Nepal makes serious efforts to promote itself as a<a href="https://nepalitimes.com/here-now/peak-tourism-in-2023-9ukoi8iz?utm="> tourism destination</a>, especially to its two giant neighbours. More importantly, the country needs to increase activities in which tourists can spend the money they want to. “While <a href="https://nepalitimes.com/here-now/nepal-pushes-mountain-bike-tourism?fbclid=IwAR1MNH0iFGv1vRz5G9uZ4AzUlKxB6nY7JKq0qT6je_FV4_SuxPZqviwKGn0">mountaineering and adventure tourism</a> are extensively promoted, we have fallen short of marketing other elements such as wildlife, pilgrimage and cultural heritage,” says Joshi. “There is a need to diversify promotion to increase income from the tourism sector.” Meanwhile, making Nepal more accessible to international and domestic visitors, must also be a priority. Kathmandu remains the sole aerial gateway despite new airports in Pokhara and Bhairawa. “International airlines have shown interest, and if access and flights are increased these airports can be fully functional,” says Joshi. But Sichuan Airlines has stopped flying to Pokhara, and there does not seem to be much interest from Thai, Vietnamese and Cambodian carriers to fly directly to Lumbini. Says Singh: “There’s tremendous opportunity to strengthen Nepal’s destination marketing by telling richer, more compelling stories that <a href="https://nepalitimes.com/opinion/comment/culture-cannot-be-an-afterthought">connect travellers with our culture</a>, nature, and people.”

Tourism needs a new push

Local residents of Mustang, including a sitting MP and several politicians, submitted a petition to Prime Minister KP Oli in Kathmandu this week urging the government to lift the region’s ‘restricted’ status. This is not the first time such a demand has been raised, and as infrastructure the region’s accessibility improved over the years, calls to remove the long-standing restriction have grown louder.&nbsp; Upper Mustang is no longer weeks away <a href="https://nepalitimes.com/here-now/postcards-from-kathmandu">from Kathmandu.</a> Nearly 85% of the road from Beni to Kagbeni has been blacktopped, and one can drive from Kathmandu to Lo Manthang with an overnight stop in Pokhara. Between April 2024 and April 2025, Lower Mustang received 144,745 international tourists, a near 50% increase compared to the previous year. Most of these were <a href="https://nepalitimes.com/opinion/borderlines/nepal-india-trans-boundary-bonds">Indian pilgrims </a>travelling to Muktinath. <a href="https://nepalitimes.com/here-now/comings-and-goings-in-mustang">Mustang</a> is also gaining popularity among Nepali visitors, with 700,000 visiting the region in 2024. A hotel operator in Kagbeni estimated that about 20% of Nepali visitors to Muktinath also travel to Korala, the trade and transit checkpoint on the <a href="https://nepalitimes.com/latest/north-of-the-border">China border</a>. That would mean that nearly 100,000 domestic tourists visit Upper Mustang annually. In stark contrast, international tourist numbers to Upper Mustang (north of Kagbeni) have remained stagnant, hovering around 4,000 visitors per year. The primary reason is the continued enforcement of the region’s restricted status. Foreign visitors must pay a steep permit fee: a minimum of $500 for 10 days, with an additional $50 per day thereafter. Tourism some entrepreneurs, politicians, and residents want these fees to be abolished so Upper Mustang can attract a broader range of international travellers. The success of Lower Mustang, where relaxed restrictions have led to a<a href="https://nepalitimes.com/here-now/boom-time-in-central-tarai"> tourism boom</a>, is often cited as proof of what lifting restrictions could achieve. Upper Mustang is not the only region in Nepal with a restricted status. Several northern areas prefixed with ‘Upper’ (Upper Manaslu, Upper Dolpo, Upper Kanchenjunga, and Upper Arun) also need similar permits and fees. Although no clear official explanation exists, these areas were primarily restricted due to historical inaccessibility, ecological and cultural fragility and security concerns. Read also: <a href="https://nepalitimes.com/news/upper-mustang-opposes-prohibited-areas">Call to scrap Upper Mustang tourist fee</a> In the 1960s and 1970s, these remote regions served as shelters for Khampa guerrilla fighters who launched cross border ambushes on the <a href="https://nepalitimes.com/here-now/the-last-days-of-the-khampa">Chinese military </a>across the border.&nbsp; Though the Khampa have long gone, security concerns rooted in that era seem to persist. The government in Kathmandu is seemingly unaware of the changed political and security landscape. If concerns do remain, they are not made public. One of the main reasons for maintaining the restricted designation is to limit visitor numbers. But with <a href="https://nepalitimes.com/opinion/the-road-out-of-nepal">improved road access and services</a>, as Upper Mustang has seen, this justification no longer holds. When Upper Mustang first opened to international tourists in 1992, it had no formal lodges or hotels, and it took four to five days of trekking from Jomsom to Lo Manthang.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250716120744_4e4405cf10e6f127f90a1cd40feda0b9d8d69efd13093a2563530ca31489ba9f.jpg" data-media-id="editor_8" data-image-id="20250716120744_4e4405cf10e6f127f90a1cd40feda0b9d8d69efd13093a2563530ca31489ba9f" data-rendition-name="original" width="2000" height="509" loading="lazy" alt="Lift restrictions on Upper Mustang"> <figcaption>Photo: SHRIJAN PANDEY / NT ARCHIVE</figcaption> </figure>  Without a nechyang (a household with traditional friendship), it was difficult to find a place to stay or get a proper meal. Only a few elite households offered accommodation. Today, there are now more than 80 lodges and hotels above Kagbeni, spread across nearly every village. Several upmarket hotels now struggle to stay afloat during the off-season, relying on low-spending domestic visitors to survive. Lo Manthang, once a remote destination, is now just a few hours’ drive from Jomsom, easily reachable by lunchtime for early starters. Once the remaining road sections are blacktopped, travel time will be further reduced. Yet, the government still charges a flat $500 fee for a 10-day permit based on outdated &nbsp;assumptions from a bygone era. There has been no serious review of the permit structure to align with current realities, nor any response to local aspirations to attract more international tourists and <a href="https://nepalitimes.com/here-now/peak-tourism-in-2023-9ukoi8iz">harness tourism for economic development</a>. Concerns about over tourism are valid. There is a risk that increasing visitor numbers could erode Upper Mustang’s <a href="https://nepalitimes.com/here-now/a-million-mantras-in-mustang">cultural heritage</a>, social fabric, and fragile natural environment, precisely the features that make it special. However, the region’s 33 years of tourism experience have been largely positive.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250716120744_5c7e5e05097cd0e5a1027b51c7e3db3be0bd67e0f7cbaea6d2c447b1dacafc8a.jpg" data-media-id="editor_11" data-image-id="20250716120744_5c7e5e05097cd0e5a1027b51c7e3db3be0bd67e0f7cbaea6d2c447b1dacafc8a" data-rendition-name="original" width="1400" height="1050" loading="lazy" alt="Lift restrictions on Upper Mustang"> <figcaption>Photo: MUKESH POKHREL / NT ARCHIVE</figcaption> </figure>  Tourism has contributed significantly to the restoration and <a href="https://nepalitimes.com/here-now/the-history-of-heritage?%2F">preservation of religious and historical sites</a> like the Thubchen and Jampa monasteries in Lo Manthang, the ongoing conversion of the old palace in Ghami into a premium hotel, and the rehabilitation of many monasteries and chortens.&nbsp; These efforts, supported by international donors and heritage experts, demonstrate that tourism—when well managed—can be a powerful driver of <a href="https://nepalitimes.com/here-now/shrinking-tourism-s-ecological-footprint">conservation</a>. The high permit fees have been somewhat effective in limiting international visitors, but they have no influence on the growing number of domestic tourists, particularly during the Dasain and Tihar holidays. The most pressing need now is for all levels of government—federal, provincial, and local—to<a href="https://nepalitimes.com/news/why-invest-in-nepal"> invest in </a>managing tourist flows and maintaining tourist sites. These efforts are essential not only to enhance visitor experience but also to build long-term resilience and sustainability for the destination. Read also: <a href="https://nepalitimes.com/news/greening-nepal-s-tourism">Greening Nepal’s tourism</a>, Hanna Wells Visitor numbers are central to any tourism development strategy that aims to balance economic, social, and environmental goals. Clinging to obsolete policies and concerns to justify Upper Mustang’s restricted status is not only unfair, it also suggests an undemocratic and discriminatory attitude toward a remote district.&nbsp; Shailendra Thakali, PhD, is from Jomsom and is a freelance consultant on protected areas, tourism, conservation, and sustainable livelihoods.

Lift restrictions on Upper Mustang

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

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