<img width="640" height="360" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92ad9c7e80680e06f160jpeg.jpg" alt=""/>Extreme rainfall over the past three days on Himalayan foothills that were ravaged by wildfires just four months ago have led to dangerously high water levels in the Gandaki Basin in Central Nepal.Major damage has been reported after a flash flood on the Melamchi River that has left eight people missing. Nepal Army helicopters rescued people marooned on the tops of homes in Melamchi Bazar. Many bridges, parts of the highway and some of the headworks of the Melamchi Water Supply project were also damaged.The southwest monsoon arrived on schedule earlier this week, propelled by a massive low pressure system over the Bay of Bengal, and as the moisture-laden clouds rose over the Himalaya they dumped above-average rainfall from Makwanpur to Dolpo.As a result, the Narayani River at Bharatpur is flowing above the danger mark as the flood waters race towards the Indian border. Most of the tributaries of the Narayani upstream have also seen floods. <figure><img width="610" height="380" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92b09c7e80680e06f161jpeg.jpg" alt=""><figcaption>The flashflood on the Melamchi River (above) on Tuesday swept away camps set up by the Nepal Police, Nepal Army and Armed Police Force in Sindhupalchok, a district also devastated by the 2015 earthquake. Residential homes and bridges in Melamchi Bazar also suffered damage (below).</figcaption></figure><img width="720" height="960" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92b29c7e80680e06f162jpeg.jpg" alt=""><img width="720" height="960" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92b49c7e80680e06f163jpeg.jpg" alt=""><figure><img width="1440" height="812" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92b79c7e80680e06f164jpeg.jpg" alt=""><figcaption></figcaption></figure>Manang district, which suffered a wildfire that lasted three months and ravaged most of the forests in its southern region, saw flash floods on Tuesday morning on the Timang Khola and Syalkhyu Khola that washed away a 32kW hydropower plant, and put homes at risk in the district capital of Chame. Fifty families have reportedly been displaced. The rivers feed into the Marsyangdi, which is now in spate as it rushes past several of Nepal’s major hydroelectric plants downstream. In Kaski district, high water on the Madi river damaged a 44MW hydropower plant under construction. The powerhouse and headworks were damaged, while 15 excavators, tipper trucks and other vehicles were washed away. Interestingly, areas of the Himalayan rain shadow which usually lie north of the mountains and receive scanty rainfall, saw the worst floods after continuous rain for 24 hours from Monday till Tuesday afternoon. <figure><img width="640" height="368" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92b99c7e80680e06f165jpeg.jpg" alt=""><figcaption>Rainfall mapped from 14-15 June at 8:45 AM. Central Nepal's Gandaki watershed was particularly affected. </figcaption></figure>In Mustang, people in the village of Lupra had to move to higher ground after a tributary of the Kali Gandaki brought down a viscous paste of water and mud from the glaciers in the mountains above.In southern Dolpo, a newly-built bridge on the Thulo Bheri River was washed away by raging flood waters. The rainfall chart of the Department of Hydrology and Meteorology (DoHM) showed between 150-200mm of rainfall in 24 hours right across Myagdi, Kaski, Tanahu, Lamjung, Gorkha, Chitwan, and Makwanpur. The DoMH had been sending out persistent warnings about heavy rainfall all this week, but even it seems to have been caught by surprise by the intensity of the rainfall and the location of some of the heaviest precipitation in the trans-HImalayan districts of Manang, Mustang and Dolpo.The highest rainfall in the past 24 hour period was recorded in Syangja with 214mm, and 30 of the Department’s 200 rainfall recording stations measured precipitation above 100mm in the past 24 hours. Nearly all of these were in the Gandaki watershed in Central Nepal. <figure><img width="640" height="407" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121144/636b92bb9c7e80680e06f166jpeg.jpg" alt=""><figcaption>Total rainfall measured 14-15 June in DoHM monitoring stations across Central Nepal.</figcaption></figure>Raging muddy flood waters on the Kali Gandaki forced the Nepal Electricity Authority to open all sluice gates on the Kali Gandaki A hydropower project, which means that some of the settlements downstream in Syangja are at risk. Last week, the National Disaster Risk Reduction and Management Authority (NDRRMA) had cited weather modelling by the South Asian Climate Outlook Forum that had projected heavier than normal rainfall this monsoon over most of Nepal. But no one expected the monsoon to hit with such a bang so early into the season. “We are now bracing up for the 2021 monsoon season, and it is predicted to be <a href="https://www.nepalitimes.com/here-now/nepal-braces-for-monsoon-pandemic-double-hit/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepal-braces-for-monsoon-pandemic-double-hit/&amp;source=gmail&amp;ust=1623841700340000&amp;usg=AFQjCNHaCMaofU6i3lkvp2EUK0l8ZIzjng">much more intense than last year</a>," NDRRMA’s Anil Pokhrel wrote in Nepali Times last week. He predicted that this year’s monsoon comes after the <a href="https://www.nepalitimes.com/banner/nepal-is-going-up-in-smoke/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/nepal-is-going-up-in-smoke/&amp;source=gmail&amp;ust=1623841700340000&amp;usg=AFQjCNEP17YMAtY9auxstOArLq2HGommqA">worst wildfire season ever</a>, and it could make it <a href="https://www.nepalitimes.com/opinion/a-disaster-resilient-nepal-is-possible/">even more destructive. </a> “<a href="https://www.nepalitimes.com/banner/wildfires-ravage-nepal-mountains/">Wildfires that raged for months</a> burnt through forest-shrub cover, undermining the ability of mountain slopes to absorb rainfall and prevent soil erosion. This could potentially result in more landslides and floods,” Pokhrel said.  Besides heavier than usual rainfall, what made the floods more destructive  in Melamchi and other rivers are: poorly constructed roads triggering landslides, slopes scorched in the spring wildfires unable to soak in water, mountains still unstable from the 2015 earthquakes, as well as rampant sand and boulder mining along rivers that increased the velocity of the rivers.

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Monsoon hits Nepal with a bang

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141132/636bac959c7e80680e077f3ejpeg.jpg" alt="" width="1400" height="933"/><figcaption>Villagers in Rautahat move to higher ground along a road embmankment to prepare for the flood season. This year it coincides with the pandemic, and experts warn that crowded shelters can be hot spots for the spread of the virus. Photo: BIKRAM RAI</figcaption></figure>Even as Nepal braces for the full socio-economic impact of the COVID-19 lockdown, the monsoon brings the risk of yet another disaster – floods.The lockdown has lasted three-and-half months, causing not just a public health crisis but also mass unemployment and economic dislocation. Experts have warned that because the lockdown has not been accompanied by adequate test-trace-treatment, there is a looming threat of community transmission.If that happens, the pandemic <a href="https://www.nepalitimes.com/latest/after-the-coronavirus-the-deluge/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/after-the-coronavirus-the-deluge/&amp;source=gmail&amp;ust=1594282153999000&amp;usg=AFQjCNH45ArnnHWwf3p04i8SISD5h-eGkQ">peak in Nepal could coincide with the monsoon peak</a> which brings with it an increased risk of landslides and floods.  This year, unusually heavy early monsoon rains have already triggered landslides across the mid-mountains, causing at least 36 deaths.The Department of Hydrology and Meteorology has forecast 100-200mm of rain in 24 hours from Friday onwards into the weekend, warning of flood risk in the central and <a href="https://www.nepalitimes.com/banner/nepal-tarai-learns-from-past-floods/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/nepal-tarai-learns-from-past-floods/&amp;source=gmail&amp;ust=1594282153999000&amp;usg=AFQjCNHjQgqhlpUVvl5eApCTDlj0GZnn-A">eastern Tarai</a>. It is not just the precipitation that has <a href="https://www.nepalitimes.com/editorial/flood-of-recrimination/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/flood-of-recrimination/&amp;source=gmail&amp;ust=1594282153999000&amp;usg=AFQjCNFll8mIfpIC-Vxe_TfcdXeq3eqHbA">intensified flood risk</a>, but also poor drainage, denudation of the <a href="http://archive.nepalitimes.com/blogs/thebrief/2017/07/11/chure-denudation-and-floods/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=http://archive.nepalitimes.com/blogs/thebrief/2017/07/11/chure-denudation-and-floods/&amp;source=gmail&amp;ust=1594282153999000&amp;usg=AFQjCNEBryjJNyUZb8d49R3dodj47Lmy4A">Chure Hills</a>, and road and embankment construction across the border in India that impound water in Nepal.“This is the new normal,” explains Bimal Regmi, a climate change expert at the Policy and Institutions Facility (PIF), a program funded by the British aid agency DFID. “Extreme weather causes floods, but change in land cover and loss of vegetation are aggravate their intensity.”Experts say awareness about flood risk preparedness in Nepal starts when the rains start, and by then it is usually too late. The government also invests more on relief and not enough on prevention. This could change with the new Disaster Risk and Management Act 2017 which puts more emphasis on preparedness and mitigating risk, and also hands more responsibility to first-responders at local government level.“We are now looking at disaster risk management much more comprehensively, and addressing early warning and immediate response at the district and provincial level,” says Anil Pokhrel, head of the National Disaster Risk Reduction and Management Authority.This rainy season, there is the additional risk of COVID-19 and the need to maintain physical separation and maintain personal hygiene in shelters. Unlike the previous years, the pandemic has also brought returnees from overseas and in-country migrants, increasing the population living in areas at flood and landslide risk. People also need to be made aware of maintaining hygiene and physical separation in shelters.“These factors will magnify social, economic, health and political problems,” says retired Nepal Army general and disaster management expert Balananda Sharma.Nepal has enhanced its flood early warning system on major river basins like the Gandaki, Kosi, and Karnali and issues regular bulletins through social media and the mobile network, reducing the loss of life and property in recent years.Says Dinanath Bhandari, an expert on early warning and adviser to the Authority: “Because of limited data, early warning does have its limitations in Nepal. But when there is heavy rainfall, we send out alerts to at-risk communities.”While the national government usually springs into action after a disaster, more emphasis is needed before floods strike. <a href="https://www.nepalitimes.com/here-now/only-half-prepared/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/only-half-prepared/&amp;source=gmail&amp;ust=1594282153999000&amp;usg=AFQjCNEVxtjoSxnZ3vrXXyM6NahadSpxdg">Preventive measures</a> and preparation like better designs for road embankments and drainage need to be integrated into plans.Tapendra Rawal, the Mayor of Tikapur in the floodplain of the Karnali in western Nepal, is aware of this, and uses community action to clear blocked drains and ensure proper outflow before the rains arrive, and he has rafts on standby for flood rescue. This year, he has added  public awareness about COVID-19 precautions to his preparedness plans.At Mahakali Municipality, Mayor Bir Bahadur Sunar says the presence of returnees from India and overseas can be channeled for flood prevention and rescue. He says: “Many people who came back from foreign work are unemployed at the moment, and many have raised concerns about their livelihoods. We could deploy them for flood mitigation efforts.”While the country braces for the coming months, there is also the need to look at the longer term so that the Land Use Policy 2015 is closely followed to discourage settlement in high-risk areas, and in planning for flood risk reduction through livelihood enhancement measures.There are <a href="https://www.nepalitimes.com/banner/nepal-villages-learn-to-cope-with-climate-crisis/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/nepal-villages-learn-to-cope-with-climate-crisis/&amp;source=gmail&amp;ust=1594282153999000&amp;usg=AFQjCNGlr8UC_WND2qI2qHZXkfamofjd1A">success stories like the villagers of Kailali and Kanchanpur</a> which have been supported to manage flood risk through agriculture. They plant bamboo and napier grass on embankments and sugarcane on riverbanks to not just protect them from floods, but also augment income from the cash crops.Says Bimal Regmi: “Many communities have used the areas affected by the floods as vegetation for livelihood, degraded land rehabilitation, tree plantation, bioengineering, and other disaster risk management methods to minimise the impact of floods.”It is obvious that these best practices need to be scaled up.@NDRRMA_Nepal on Twitter and NDRRMA on Facebook

Preparing for floods during a lockdown

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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