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

Sonia Awale

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Not poor, but not rich

One of the greatest obstacles to better jobs and faster <a href="https://nepalitimes.com/news/nepal-s-bubble-economy">economic growth in Nepal </a>today isn’t a shortage of natural resources, challenging geography, or limited access to finance. It is the unrealised potential of its people—not due to a lack of talent, resilience, or ambition, but because the country has not invested enough to unlock that potential.
Too many <a href="https://nepalitimes.com/here-now/no-country-for-young-men-c89lgrrl">young Nepalis </a>are growing up without the quality education, healthcare, and skills needed to succeed in the modern economy—especially those in <a href="https://nepalitimes.com/editorial/not-rising-nepal">poorer and more remote areas</a>. As a result, much of Nepal’s human capital remains underdeveloped and underused, reinforcing <a href="https://nepalitimes.com/editorial/institutionalised-inequality">inequality</a> and holding back productivity, innovation, and inclusive growth.
This is not a challenge unique to Nepal. Around the world, successful economies are not those that only have abundant <a href="https://nepalitimes.com/opinion/working-with-nature-to-protect-people">natural resources</a>, but those that invest early and consistently in their people by ensuring access to <a href="https://nepalitimes.com/banner/after-quantity-nepals-education-needs-quality">quality education</a>, <a href="https://nepalitimes.com/banner/altruistic-healthcare-models-in-nepal">healthcare</a>, and nutrition. These are the building blocks for accumulating human capital.
When these foundations are strong, countries benefit from a more productive workforce, healthier communities, and faster economic growth. But when these investments are neglected, entire generations are left behind, trapped in cycles of low productivity and limited opportunity.
A new World Bank report—the <a href="https://www.worldbank.org/en/country/nepal/publication/nurturing-nepali-talent-to-foster-economic-growth-a-human-capital-review-for-nepal" target="_blank">Nepal Human Capital Review</a>—finds that a child born in Nepal today is expected to achieve just 51% of their full productivity potential by age 18.
Limited access to quality education, healthcare, and nutrition means that half of a child’s productivity potential remains unrealised. This is more than a missed opportunity for the child— it represents a significant productivity loss for the country’s long-term growth.
Beneath this national average lie even deeper inequalities. Imagine two children born on the same day in 2020—one in the<a href="https://nepalitimes.com/here-now/the-karnali-s-hunger-emergency"> remote hills of Karnali</a>, the other in the more urban and better-connected areas of Bagmati, near the capital.&nbsp;
The child in Bagmati is far more likely to attend a private school or benefit from better education and health services, thanks to higher household incomes and greater availability of providers. In contrast, the child in Karnali is more likely to rely solely on the public system, which remains under-resourced and overstretched.
The statistics are striking—a child born in Karnali is expected to reach just 46% of their productivity potential, which is well below the average for lower-middle-income countries. Meanwhile, a child born in Bagmati is expected to reach 58% —a level comparable to upper-middle-income economies.&nbsp;
These differences stem not just from geography, but from unequal access to quality services—whether public or private. They reflect a public system struggling to deliver quality services for all, and one that families with more resources are often able to supplement through private investments. These are not just numbers, they are life trajectories—shaped not by ability or ambition, but by the simple event of where a child is born and raised.
Even for those who manage to build their human capital, the labour market often fails to reward their efforts. Given the difficulties of finding a good job, a child born in Nepal today is expected to realise just 18% of their productivity potential—one of the lowest rates in the world. The reason is simple: there are too few quality jobs.
Read also: <a href="https://nepalitimes.com/news/brain-gain-into-brain-drain">Brain gain into brain drain</a>, Sonia Awale
Between 2010 and 2018, only four in ten new entrants to the working-age population were able to secure paid employment. Most jobs are informal, low-paid, and offer little in terms of security or career growth. The situation is especially challenging for young people—more than a third of those aged 15 to 24 are not in education, employment, or training. And for women, <a href="https://nepalitimes.com/review/the-women-left-behind">labour force participation</a> remains stubbornly low at just 29%, about half the rate of men.
Nepal’s low levels of human capital—combined with the wide gap between the number of people seeking work and the availability of jobs—pose a serious threat to the country’s long-term growth and social inclusion.
SHAPING A FUTURE
To change the course of Nepal’s human capital trajectory and lay the foundation for a more prosperous future, public investments in education, health, and social protection must increase while ensuring that every rupee is spent effectively and reaches those most in need. Closing the gap in access to quality services—especially for those who rely exclusively on public provision—must be a top priority.
Investments must be targeted so that every child—regardless of where they are born—has access to early learning opportunities, qualified teachers, textbooks, nutritious meals, and basic health services. These are the corner stones to build human capital.
Just as important as building human capital is ensuring there are job opportunities. Over the next three decades, Nepal will need to create 6.5 million jobs just to keep up with its expanding working-age population. Therefore, the need to accelerate job creation at scale has never been more urgent.&nbsp;
This requires more than business as usual. It calls for a fundamental shift from short-term fixes to long-term, <a href="https://nepalitimes.com/news/why-invest-in-nepal">strategic investments </a>in people and systems and by making Nepal a better place to invest, by Nepalis and foreigners, alike.
Creating jobs in Nepal must be a combination of efforts to simultaneously build a workforce with the skills for the 21st century while simultaneously making the policy reforms and investments to let the world know that Nepal is, truly, “open for business”.
Today, too many young people leave school without a clear path into the workforce—and that needs to change. Boosting youth employability demands stronger links between training and labour market needs, expanded reskilling programs, and developing public-private partnerships that deliver modern, relevant skills.
Young people must be equipped with quality technical and vocational education, digital skills, and lifelong learning opportunities—especially in underserved communities. These must become core elements of Nepal’s education system if the country is to be competitive in an increasingly fast-moving, technology-driven economy.
The future of a Nepali child should not be determined by whether they are born in Karnali or Bagmati. This is a moment for bold action. Investing in people is not just the right thing to do, it is the smartest strategy for creating jobs, driving growth, and building a more inclusive economy where all young Nepalis can thrive.
David Sislen is the World Bank Country Division Director for Maldives, Nepal, and Sri Lanka.

Investing in people

It is the same every year. Just as the <a href="https://nepalitimes.com/banner/now-the-economy-stupid">finance minister prepares to deliver his budget</a>, there is a last minute spending spree across the country to disburse as much money as possible before the fiscal year ends in July.
The habit even has a pejorative Nepali phrase: असारे विकास, the frantic last-minute resource execution. But every year, even after all that eleventh-hour expenditure, the budget remains woefully underspent. &nbsp;
Nepal’s budget is classified into three parts: current expenditure for administrative spending, capital expenditure for long-term <a href="https://nepalitimes.com/here-now/protecting-protected-areas-from-infrastructure?fbclid=IwAR1wK0MDFlFST_2EYb3f54LS4-fPt6rYfLG1DJ1JaQsU3w8-ezyXIxGOqzk">development and infrastructure</a>, and debt servicing.
Current <a href="https://nepalitimes.com/news/till-debt-do-us-part">expenditure and debt servicing</a> account for a significant portion of government spending, leaving little money to improve roads, build facilities and buy equipment. But every year for the last nine years, the government underspent by an average of 35.3%. &nbsp;&nbsp;&nbsp;&nbsp;
Till Wednesday, the three layers of government had spent only 66% of the total budget of Rs1.8 trillion, and 37% of its Rs352 billion development budget. Where does all that unspent money go?&nbsp;
Unused funds from some ministries go back to the national treasury. But Nepal has a revenue shortfall, and there is a tendency to allocate funds without ensuring resource availability.&nbsp;
“The main reason Nepal is unable to spend even the money allocated for development is because projects are not prioritised properly,” explains economist Kalpana Khanal.&nbsp;
The National Planning Commission’s (NPC’s) Project Bank is tasked with selecting national projects for <a href="https://nepalitimes.com/news/unique-hospital-handover-in-dolakha">public-private partnership</a> investments and ranking them into three tiers based on priority. &nbsp;
Per the classification, the standards for Priority 1 projects include a completed Detailed Project Report and Environmental Impact Assessment report, as well as land acquisition guarantees. But these are just on paper, which means resources are diverted to politically expedient projects or those not fully developed. &nbsp;&nbsp;
Furthermore, Nepal’s procurement mechanism involves choosing the lowest bidder, which presents domestic barriers since contracts are stretched beyond capacity and expertise. This is compounded by the quick turnover of skilled administrative and technical staff, and project managers.&nbsp;
Then there is over-regulation. Budget expense categories are rigid, which limits the ability to reallocate funds where they are needed.&nbsp;
In October 2024, a High-Level Commission on Economic Reform, was formed to assess <a href="https://nepalitimes.com/news/nepal-in-the-red">the country’s overall economic situation </a>and provide recommendations. Khanal was a member of the commission, and says it remains to be seen whether their suggestions are implemented in the budget.&nbsp;
“We must first properly identify national priority projects, strengthen our internal capacity and human resources, diversify our procurement process, and ensure oversight agencies focus on monitoring and evaluation without over-regulating,” says Khanal. “For this, we need both political and bureaucratic integrity.”
That is a polite way to say that there is too much <a href="https://nepalitimes.com/here-now/nepals-only-growth-industry-private-sector-corruption">corruption and cronyism</a>. Case in point: discussions surrounding the new budget took a backseat this week as Home Minister Ramesh Lekhak was embroiled in a scandal involving payoffs for Nepalis leaving on visit visas.&nbsp;
Opposition parties including the Maoist-Centre and the RSP obstructed Parliament and demanded Lekhak’s resignation. The scandal has already led to the removal of and an investigation into Chief Immigration Officer Tirtharaj Bhattarai.&nbsp;
This is reminiscent of last year’s budget presentation by Prime Minister Puspha Kamal Dahal’s government. The Nepali Congress, which was then in opposition, similarly obstructed Parliament and demanded the resignation of Home Minister Rabi Lamichhane citing his involvement in a cooperatives fraud.&nbsp;
Home Minister Lekhak, who was not able to explain himself in Parliament, held a press conference to deny any wrongdoing. Despite obstruction, opposition parties said they would allow the budget to be presented, and the Finance Minister is presenting the budget in Parliament on Thursday.
29 May was also Republic Day, and marked symbolically by the monarchist RPP to launch a campaign of<a href="https://nepalitimes.com/news/republicans-and-royalists-on-nepal-s-streets"> pro-royal rallies in the capital</a>.
The budget comes as the government faces a revenue crunch, as well as the loss of funding for the social sector because of the <a href="https://nepalitimes.com/news/how-usaid-cut-affects-nepal">USAID cutoff </a>and <a href="https://nepalitimes.com/news/the-great-game-2nd-half">shrinking donor aid</a>. Rights-based programs related to gender, health, and education will suffer. Common sense would dictate that the unspent funds in the next budget be quickly reallocated to health and education. &nbsp;&nbsp;
Says Khanal: “Once the budget is allocated, the budget cycle must be improved— the tendency to overspend towards the end of the fiscal year must be minimised.”&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/how-nepal-can-budget-wisely">How Nepal can budget wisely</a>, Siddhartha Rayamajhi

Shristi Karki

Understanding Nepal's underspending

I have just finished reading the recently published Cuckooland: Where the Rich Own the Truth, by Tom Burgis that was <a href="https://nepalitimes.com/here-now/nepal-s-crony-communism-exposed">recently reviewed in this paper</a>, and examines the phenomenon of corruption across several continents, and the career of powerbroker Mohamed Amersi. 
In the Nepal section, the focus is on Amersi’s links with prominent Nepali ‘businessman’ <a href="https://archive.nepalitimes.com/news.php?id=776#google_vignette">Ajeya Sumargi</a>, the activities of the Nordic telecommunications giant TeliaSonera and its Nepali network Ncell, and Amersi’s relationship first with <a href="https://nepalitimes.com/banner/food-of-the-royals">the royal family</a> and after 2006, with certain prominent politicians, including the <a href="https://nepalitimes.com/banner/all-is-fair-in-war-and-peace">Maoist </a>leader formerly known as ‘Prachanda’.
It is well recognised in Nepal that <a href="https://nepalitimes.com/editorial/nepal-s-corruption-carousel">corruption</a> in high places is one of the major features of Nepal’s political economy. In February, while I was visiting Kathmandu for the first time in five years, there was an editorial in The Kathmandu Post headed ‘Rotting from the Head’ which suggested that ‘frustration with corruption, mismanagement and bad governance is reaching a boiling point’.
The latest Transparency International report showed that the corruption perception index (CPI) for Nepal was 34 out of 100, marginally lower than the previous year. In the review period, <a href="https://archive.nepalitimes.com/news.php?id=15139">Prachanda</a> (the CPN Maoist Centre chair Pushpa Kamal Dahal) was prime minister until mid-July 2024 when he was replaced in the merry-go-round of <a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">Nepali politics</a>, by UML chief K P Oli, the current prime minister.
Several decisions of the <a href="https://nepalitimes.com/banner/left-led-coalition-upturns-nepal-politics">Oli-led government</a>, including one to build his party’s central office with funds from <a href="https://archive.nepalitimes.com/news.php?id=5082">Min Bahadur Gurung of Bhatbhateni</a> and the Giribandhu Tea Estate scam related to the illegal <a href="https://archive.nepalitimes.com/regular-columns/This/peaceful-land-movement,658">use of land</a> exceeding the prescribed ceiling, were just the latest <a href="https://nepalitimes.com/news/ciaa-traps-small-fish-lets-big-ones-go">corruption cases </a>linked to the prime minister.
Pushpa Kamal Dahal claimed that the two other major parties, the Nepali Congress (NC) and the UML had plotted his removal because of his ‘campaign against corruption’, but he himself was compromised by colleagues like <a href="https://nepalitimes.com/banner/the-rise-and-fall-of-comrade-mahara">Krishna Bahadur Mahara</a>, who was implicated in a gold smuggling case and, arguably, by his own dealings with Ajeya Sumargi and TeliaSonera, that are discussed by Tom Burgis in Cuckooland.
The <a href="https://nepalitimes.com/banner/rsp-quits-nepal-coalition">Rastriya Swatantra Party (RSP) </a>emerged dramatically as the fourth largest party in the House of Representatives in <a href="https://nepalitimes.com/news/nepals-local-polls-a-rehearsal-for-federal-elections">2022</a> on a platform of <a href="https://archive.nepalitimes.com/news.php?id=5944">corruption control </a>and <a href="https://archive.nepalitimes.com/regular-columns/Comment/compassion-better-governance-Nepal-development,299">good governance</a>. But its president, <a href="https://nepalitimes.com/news/the-rise-and-fall-of-rabi-lamichhane">Rabi Lamichhane</a>, had been suspended as a lawmaker and faces charges of embezzlement of the deposits of cooperatives in five districts.
Other politicians also, including former NC home minister Balkrishna Khand, who was only released on bail after detention on the charge of sending Nepalis as <a href="https://nepalitimes.com/opinion/comment/scapegoating-a-champion-of-democracy">fake refugees from Bhutan</a> to the United States, and former prime ministers Baburam Bhattarai and Madhav Kumar Nepal (now leaders of their own small parties) were considered not to be ‘above question’ with regard to illegal sales of government land at Lalita Niwas.
On 20 March 2025, the East Asia Forum published a piece by Anil Sigdel, founder of Nepal Matters in Washington DC, lecturer at the University of Vienna and author of India in the Era of China’s Belt and Road Initiative: How Modi Responds to Xi. He looked back on the previous year and suggested that corruption and crisis defined Nepal’s <a href="https://nepalitimes.com/editorial/south-asia-2040-qxr16oup">2024</a>.
In addition to the <a href="https://nepalitimes.com/news/poor-cash-rich-nepal">dire state of the economy</a>, stagnant <a href="https://nepalitimes.com/news/nepal-economy-shifts-away-from-farming">agricultural production</a>, the virtual absence of industry, massive<a href="https://nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity"> trade deficit especially with India</a> and crippling <a href="https://nepalitimes.com/editorial/the-new-equaliser">reliance on remittances</a> from <a href="https://nepalitimes.com/here-now/nepal-on-my-mind">Nepalis living and working abroad</a>, Sigdel highlights the sclerosis, the pervasive corruption and the rent-seeking of the political elite, and the phenomenon of what might be termed ‘the abuse of public trust for private gain’ -- a definition of corruption provided by Tom Burgis.
Now, Nepal has introduced a fresh provision in its newly-amended <a href="https://nepalitimes.com/opinion/anti-corruption-vaccine-for-nepal">anti-corruption</a> law that will penalise public officials not only for the abuse of power but also for their inaction or indecision. The amended Anti-Corruption Act 2002, which took five years to pass through the federal parliament, has now come into effect following presidential approval. Offenders could face up to six months detention or a fine of up to Rs50,000, or both. 
The Act also imposes up to a year’s imprisonment or a fine of Rs500,000, or both, for officials found guilty of abusing their official position or duties. But this amendment is directed essentially at <a href="https://nepalitimes.com/opinion/comment/nepals-uncivil-servants">civil servants</a>, and does little to deal with those in high places, <a href="https://nepalitimes.com/news/the-business-of-politics-in-nepal">politicians and businesses</a>, who continue all too often to abuse public trust for private gain.
Is it too much to hope that continued pressure from the public and scrutiny by the media will not only bring to light corruption where it exists but gradually reduce its incidence? 
David Seddon is Director of Critical Faculty, author and co-author of many publications on Nepal, including Nepal in Crisis (with John Cameron and P M Blaikie) first published in 1980.

Higher corruption in high places

https://www.youtube.com/watch?v=uNdMuD_4yGwTim Gocher, Founder of the Dolma Impact Fund, speaks to Nepali Times Studio.Nepali Times: It looks like you have quite a soft spot for Nepal.Tim Gocher: I first came here in 2003 and just like for a lot of westerners, there was something magical here for me. And, over the years, I have begun to put my finger on what that magic is. I almost found what I was looking for in a remote Himalayan village. But I have to say the real magic was my wife Pooja Gurung who I met in Dhunche during a trek 15 years ago. I have never looked back.And how did the Dolma Impact Fund come about?It was not a business to begin with, it was the love for the country. I had met a girl named Dolma, she was nine, but not going to school. I sponsored her education, and that grew into the <a href="http://www.dolmafoundation.org/">Dolma Foundation</a> which still educates hundreds of children. I lived a double life. I had this voluntary charity while also working for investment banks in Singapore, London, and New York. I wanted to bring the two together – to bring the power of markets and capital to stimulate sustainable growth. It took us three years to persuade anybody to invest in the first private equity fund for Nepal. I got laughed at in quite a few offices.Which sector do you think is most critical for Nepal’s economic development?I don’t think we at <a href="http://www.dolmaimpact.com/">Dolma Impact Fund</a> are focused in any one sector. The underlying fundamentals for infrastructure are holding companies back. So we have invested in two hydro power projects and I was going say how great the political stability is till … (Laughter, as a political demonstration passes the street outside).How did the <a href="https://www.nepalitimes.com/here-now/nepal-turns-to-solar-and-batteries-to-meet-peak-demand/">transition to peak demand generation from solar</a> happen?We saw companies across the board operating at this cost disadvantage, and wanted to use new energy technology to help with domestic energy production. Solar and battery costs are going down. We can provide through Dolma Himalayan Climate Fund a solution which is very similar to seasonal hydro storage where they would deliver power on as needed basis in the dry season by storing water in summer. The beauty of it is speed. Big hydro storage plants take a long time to build, but solar can be built in two years. It is not going to replace hydro, but it does give Nepal another energy option to offset some of the imports from India.How do you see the political and economic future of Nepal?I certainly won’t tell you how I see the political future of Nepal, none of my business. But I will tell you a bit about business future. Do you want the bad news first, or the good news?Bad news?I have invested and done business in many countries, and there is obviously need for reform. We tend to see some restrictive things. Things that are meant well actually might stop the initial investment growth, job creation, prosperity. But it doesn’t stop us, we were certainly well aware before we came in. We now provide employment in our portfolio companies to 3,000 people. If that’s the bad news the good news must be really good.This is not a small country, it has the population of Malaysia. There is rarely a place where the regulations are perfect. Where else do you get to meet the ministers and governors, and they will hear you out. They are not always going to act, but sometimes they do. It is not all not mapped out for us business people and as investors it is risky. But you also feel like you are a part of something bigger. It’s not just about the money. If was just about the money I would still will be in London or New York.Read also: <a href="https://www.nepalitimes.com/here-now/nepal-turns-to-solar-and-batteries-to-meet-peak-demand/">Nepal turns to solar and batteries to meet peak demand</a>, Kunda Dixit

“A part of something bigger”

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

Visit Nepal in the monsoon

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

Nepal’s bubble economy

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

economy-of-nepal

Not poor, but not rich

Investing in people

Understanding Nepal's underspending

Higher corruption in high places

“A part of something bigger”

Visit Nepal in the monsoon

Not poor, but not rich

Nepal’s bubble economy

Flouting rules caused Saurya tragedy