<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11dc9c7e80680e0da4fcjpeg.jpg" alt="" width="973" height="690"/><figcaption>Director Bernardo Bertolucci and producer Jeremy Thomas, with photographer Lynn Davis (behind) and screenwriter Rudy Wurlitzer on the Little Buddha recce in Chitwan, 1992. Photo: LISA CHOEGYAL</figcaption></figure>In 2005, Hollywood actress Cameron Diaz, hosted a documentary series for MTV called Trippin’. The show had celebrities visit ecological locales around the world to educate young viewers about nature.The first episode was filmed in Nepal, featuring Diaz with actress Eva Mendes, rapper Redman and Mark Hoppus of the hit rock band Blink-182. The film was shot on location in Kathmandu and Chitwan.Carolyn Syangbo was a production liaison for the show in Nepal, and recalls the producers being concerned about paparazzi in Chitwan. In Honduras, the shoot was nearly ruined because fans and media recognised Diaz and Mendes.“In the end, I said, look, I am going to be really honest and burst your bubble, no one knows who Diaz is here,” Syangbo says. “It took me ages to convince them that we did not need a security protocol to control paparazzi in Chitwan.”When Michael Palin was in Pokhara in 2004 to shoot his BBC series Himalaya, he was pleasantly surprised not to be recognised at all by Nepalis — until he was mobbed by a British tour group while filming in Boudha.In 2015, Benedict Cumberbatch was being filmed near Pashupati dressed in a frayed overcoat followed by a camera crew and a microphone attached to a pole overhead.Marvel’s Doctor Strange was being shot in Kathmandu, but after the first photo went viral, crowds gathered in Thamel, Indra Chok, Swayambhu and Patan to catch a glimpse of the actor.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11df9c7e80680e0da4fdjpeg.jpg" alt="" width="2878" height="1200"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11e49c7e80680e0da4fejpeg.jpg" alt="" width="2880" height="1128"><figcaption> </figcaption></figure>Director Scott Derrickson decided to film Doctor Strange in Nepal to feature an “Eastern city" that would not be familiar to audiences. In the original comic, Strange travels to Tibet, but that was cancelled because of fears of Chinese censorship.Cumberbatch and Derrickson came to Nepal despite the 2015 earthquake so the film could potentially boost tourism here.On top of that, any Nepali watching the film would have felt a connection to see the title card ‘Kathmandu, Nepal’ about 21 minutes in, followed by a minute-long montage of Strange walking around the familiar historical and cultural sites in the Valley.Bollywood has also chosen Nepal as a location for its many films, starring major stars like Dev Anand in Haré Rama Haré Krishna in 1971 and Amitabh Bachchan in Uunchai last year. Finding one’s country represented in a Hollywood or Bollywood blockbuster, that too as an important piece in the story, is a moment of instant recognition and special delight.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11e89c7e80680e0da4ffjpeg.jpg" alt="" width="1200" height="969"><figcaption> </figcaption></figure>Philippe de Broca’s 1965 adventure-comedy Les Tribulations d'un Chinois en Chine (later retitled Up to His Ears) starring the French screen idol Jean-Paul Belmondo features 15 minutes of Kathmandu landmarks and the Himalayan backdrop.Several scenes of the 1986 fantasy martial arts film The Golden Child with Eddie Murphy were also filmed around Asan and Indra Chok with some Nepali extras.Éric Valli’s Oscar-nominated 1999 adventure film Himalaya (also titled Caravan), was shot in widescreen over nine months on location in remote Upper Dolpo.Pier Paolo Pasolini’s 1974 fantasy adventure Arabian Nights includes a sequence with a character named Yunan whose story begins and ends in Nepal. In one scene, he plays hide and seek with his friends in and around the Jaisi Deval Temple in Kathmandu, and in another he runs to his father's palace on Kathmandu Darbar Square to tell him he wants to go to the sea. He finds his father in the sunken bath of Patan’s Sundari Chowk. After his return home from his adventures he says farewell to his royal life on Bhelukhel Square in Bhaktapur. Other places to feature in the film are the Kumari Baha, Ashok Binayak Temple in Kathmandu, the Golden Gate, the courtyard of Pujari Math in Bhaktapur, and Saraswati Hiti in Patan.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11ec9c7e80680e0da500jpeg.jpg" alt="" width="1605" height="1000"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11f09c7e80680e0da501png.png" alt="" width="1609" height="1000"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11f79c7e80680e0da502jpeg.jpg" alt="" width="1870" height="1000"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe11fc9c7e80680e0da503png.png" alt="" width="1611" height="1000"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12059c7e80680e0da504png.png" alt="" width="1610" height="1000"><figcaption> </figcaption></figure>The Hong Kong supernatural film Witch from Nepal and the British film To the North of Katmandu, were both shot on location in Nepal  in 1986.Then there is Bernardo Bertolucci’s ambitious drama Little Buddha, filmed in 1992 and released a year later, starring the pre-Matrix Keanu Reeves as Siddhartha Gautam. The film follows three children, one American and two Nepali, who might be the reincarnation of a Buddhist spiritual teacher Lama Dorje, and their story is told in parallel with the story of Gautam Buddha.Lisa Choegyal, who was a production liaison for Little Buddha in Nepal, remembers how the Bhaktapur Darbar Square had been transformed with fibre-glass sculptures and wood trellises to stand in for Siddhartha’s Kapilvastu palace.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe120c9c7e80680e0da505jpeg.jpg" alt="" width="640" height="480"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12119c7e80680e0da506jpeg.jpg" alt="" width="640" height="480"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12159c7e80680e0da507jpeg.jpg" alt="" width="640" height="480">Set designs showing the transformation of the Kathmandu Valley World Heritage Sites for the 1992 production of Little Buddha that starred Keanu Reeves. Photos: LISA CHOEGYALChoegyal wrote in her Nepali Times column in 2017 that local residents were confused because the recreated sets could not be differentiated from the real thing.“It was the most elaborate, ambitious movie to be filmed in Nepal then,” recalls Choegyal. “This was after the 1990 People’s Movement and Girija Prasad Koirala was prime minister. The Tourism Ministry really got behind us because it was the same crew who had done The Last Emperor in Beijing.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12199c7e80680e0da508jpeg.jpg" alt="" width="792" height="520"><figcaption> </figcaption></figure>The Last Emperor went on to win 13 Oscars, and after its release visitors to China increased by 25%. And that is why the production of Little Buddha was backed by Koirala’s cousin Niranjan who was adviser to the Ministry of Tourism. The Prime Minister’s Office also assigned a special official to iron out any problems while filming.“So, in the 10 months of preparation and three months of filming, we didn’t lose a single day,” recalls Choegyal.Little Buddha was very successful in France, and made around $48 million globally. It also featured in several Year-end lists, including The Washington Post and The New York Times. This kind of exposure, Choegyal says, is valuable to Nepal because it boosts tourism and the economy.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe121c9c7e80680e0da509jpeg.jpg" alt="" width="2010" height="1000"><figcaption> </figcaption></figure>Little Buddha’s production contributed one-tenth of 1992’s tourism revenue in Nepal. Doctor Strange employed around 70 Nepalis in the production side of things and 500 extras.But lavish productions like Little Buddha are no longer possible on the same scale. The cost of filming on location has gone up, as has the development of CGI and visual effects. For instance, BBC’s Black Narcissus, a 2022 three-episode series based on Rumer Godden's novel of the same name partly filmed in Jomsom, was made almost entirely in studios with only a handful of scenes filmed in Mustang.Unlike the 1998 IMAX documentary Everest, the 2015 movie Everest starring <a href="https://en.wikipedia.org/wiki/Jason_Clarke">Jason Clarke</a>, <a href="https://en.wikipedia.org/wiki/Jake_Gyllenhaal">Jake Gyllenhaal</a>, <a href="https://en.wikipedia.org/wiki/Josh_Brolin">Josh Brolin</a> and about the 1996 deaths on the mountain, was shot only till Base Camp. The rest of the climb was recreated in the Italian Alps and Pinewood Studios in the UK with real-life pilot Vijay Lama playing the character of the helicopter rescue pilot, Madan KC.Producers are also avoiding location shooting because of more expensive and stricter insurance and liability laws in the US and UK. Kathmandu’s notorious pollution could also be another reason.Bertolucci had clear blue skies and stretches of green hills, but Syangbo recalls filming for the upcoming film Tiger’s Nest in Chitwan and Surkhet: “The footage was just thick and murky. We were down there filming, and we couldn’t breathe and sometimes we couldn’t even see well.”She says it is not cheap to film in Nepal, and poor infrastructure adds to the risk.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12219c7e80680e0da50ajpeg.jpg" alt="" width="1919" height="792"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12249c7e80680e0da50bjpeg.jpg" alt="" width="1919" height="958"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe12289c7e80680e0da50cjpeg.jpg" alt="" width="1919" height="762"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe122b9c7e80680e0da50djpeg.jpg" alt="" width="1919" height="951"><figcaption> </figcaption></figure>Ram Krishna Pokhrel of Icefall Productions helps with location scouting for NatGeo, BBC, HBO and others. Among the projects he has worked on are the 2015 Japanese film Everest: The Summit of the Gods and the 2017 adventure comedy L'Ascension.“Our government doesn’t fully understand filmmaking and there has been no change in its attitude towards films,” Pokhrel laments. “They celebrate when a film comes out but are not supportive during production. Policies are not clear and there are too many restrictions.”Pokhrel believes that Nepal needs to keep up with international developments in filmmaking techniques to boost the country’s tourism. Nepal could also give tax incentives, like New Zealand, UK and Iceland, for international producers who were to shoot on location here.“It is not surprising why not many feature films which require large crews are shot in Nepal these days,” says Pokhrel. Documentaries and short films, by contrast, are smaller productions.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230228150236/63fe122f9c7e80680e0da50ejpeg.jpg" alt="" width="316" height="785">When foreign filmmakers come to Nepal to shoot, it is also an opportunity for the local crew to learn and be familiar with what is happening in the industry outside Nepal.Kiran Bhakta Joshi of Incessant Rain, wants to promote Nepal as a location destination to create jobs and generate foreign exchange income. Right now, mountains remain the most popular subject, but Joshi believes we also need to explore our arts and culture in our films, whether narrative or documentary.“A step to take in that direction would be to create content ourselves and export abroad,” he adds. “In addition, the system right now does not allow for open competition and works almost like a syndicate. We see the same names making films in Nepal, and even though there are young, talented artists, they haven’t been able to enter the mainstream. This needs to change.”Joshi previously worked for Disney and co-developed the herding system for the wildebeest stampede sequence in The Lion King. He left the company in 2017 to establish Incessant Rain in Kathmandu, and has worked on visual effects and set extension for Stranger Things, House of the Dragon and A Series of Unfortunate Events.“We can even create a studio hub here, with a proper sound stage, green screen room,” adds Joshi. “Filmmakers from the US, Italy, even India will want to come here and make films in Nepal. We should think about promoting Nepal not just as a shooting location, but a filmmaking destination.”

Ashish Dhakal

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Lights, Camera, Action in Nepal

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

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

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