Chronic winter drought and decades of unmanaged forest biomass have turned wildfires into a systemic risk for Nepal. We need to re-learn to convert fire fuel in forests into fertilizer for crops.&nbsp; On 11 January, a huge forest fire spread rapidly from China into the forests of Sindhupalchok, 40km northeast of Kathmandu. The newly-opened Tatopani border checkpoint was closed. Smoke from the fire spread across central Nepal, blocking the sun.&nbsp; The fire burnt itself out within a few days, but the border stayed closed for longer. Such wildfires were once rare in mid-winter, and traditionally peaked between March and May as temperatures rose ahead of pre-monsoon showers. What is unsettling is not just the early onset of the fires, but also their scale. This shift is not accidental, the pattern has been unfolding over years due to winter drought, weakening post-monsoon moisture, and the accumulation of dry forest biomass as Nepal’s forest area doubled in the past 30 years.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022009024_5f4a84bb389f9b56f4fa47d4f694adcd464eb13b192d184af0f1eb20efdfeebf.jpg" data-media-id="editor_0" data-image-id="2026022009024_5f4a84bb389f9b56f4fa47d4f694adcd464eb13b192d184af0f1eb20efdfeebf" data-rendition-name="original" width="2000" height="1055" loading="lazy" alt="Wildfire season NT"> <figcaption>A NASA FIRMS image of Nepal with red dots signifying fires in February 2025.</figcaption> </figure>  Together, these factors have made forests tinder dry in spring, just waiting for a spark. Nepal has experienced winter drought in eight of the past ten years (this winter was an exception). Winter rain and snow at higher elevations play a decisive role in maintaining surface moisture, recharging shallow aquifers, and keeping forest floors damp enough to resist ignition. When winter rains fail, forests dry out months earlier than usual. Satellite-based assessments show a steep decline in surface moisture across the middle mountains of Nepal, particularly in areas with dense forest cover but limited undergrowth management. Springs that once flowed year-round are now seasonal.&nbsp; More than half of the springs in the mid-hills have either dried up or show significantly reduced discharge, a trend closely linked to declining soil moisture and disrupted recharge zones. Dry soil does not just threaten water security — it helps the vegetation ignite. FUEL WITHOUT FUNCTION For decades, Nepal’s forests have been accumulating dry leaf litter, fallen branches, shrubs, and deadwood. Historically, this biomass was not considered waste because rural households regularly collected leaf litter for livestock bedding, which was later composted and returned to farms as fertilizer.&nbsp; Forest floors were therefore relatively clean while the mulch fertilized farms. That relationship has steadily eroded due to outmigration, changes in livestock systems, restrictions on access to community forests, and the growing availability of chemical fertilisers.&nbsp; Community forests across the country today are thick with dry twigs, branches and leaves — a highly combustible carpet. When prolonged drought dries this biomass, even a small spark from a herder’s intentional fire, a cigarette, or lightning strike can trigger massive fires.&nbsp; Under such conditions, the question is no longer whether fires will occur, but how intense and widespread they will be. Forest fires are often framed as an environmental issue concerning trees and wildlife. In reality, their impact extends far beyond forest boundaries.&nbsp; Smoke travels faster and further than flames. Fine particulate matter, especially harmful PM2.5, spreads across countries. In recent fire seasons, air quality monitors in Kathmandu have recorded air quality levels several times higher than WHO guidelines. The smoke adds to Kathmandu’s own pollution and lingers for days.&nbsp; Flights are cancelled or delayed in cities like Pokhara, and poor visibility blocks mountain views affecting tourism. Health facilities report spikes in respiratory complaints, particularly among children and the elderly. Just as wildfires have multi-sectoral causes, the impact of forest fires go beyond forests. One critical dimension remains largely invisible: the soil. The fires cause silent damage beneath the ash, and the emergency does not end when the flames subside. Beneath the surface, soil suffers long-term damage. Organic matter burns away, beneficial microorganisms die. The soil structure weakens, reducing the land’s ability to absorb and retain water. The scorched earth is more prone to erosion, increasing the risk of floods and landslides once the rains return.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022009028_cc54ff056b2cac8b789cfd4d11afef9eaf943368e47b99aabd57c7b63b776cf2.jpg" data-media-id="editor_1" data-image-id="2026022009028_cc54ff056b2cac8b789cfd4d11afef9eaf943368e47b99aabd57c7b63b776cf2" data-rendition-name="original" width="1717" height="2143" loading="lazy" alt="Wildfire season NT"> <figcaption>Wildfire risk map based on the validated Random Forest model (a) Overall reclassified wildfire risk map of Nepal, (b) District level wildfire risk, and (c) Municipality wildfire risk map.</figcaption> </figure>  In many of Nepal’s agricultural areas, soil organic matter levels are already below 2% -- lower than what is needed for resilient and productive farming. Repeated fires push these levels even lower, undermining soil fertility and forcing farmers to rely more heavily on chemical fertilisers, unleashing a vicious cycle of higher costs and food insecurity.&nbsp; Climate breakdown is often cited as the primary culprit, and rightly so. Rising temperatures and erratic rainfall have intensified fire risk. But fires in Nepal are increasingly the result of human intervention.&nbsp; The response of all three levels of government remains too little, and too reactive. Each year, resources are mobilised to extinguish fires once they have already spread. Far less attention is paid to managing the fuel load within forest undergrowth that makes such fires inevitable.&nbsp; Meanwhile, forestry and agriculture policies are not coordinated, missing opportunities to address shared challenges. Forest fires are not natural disasters, but predictable outcomes of governance choices. National plans and climate pledges set an ambitious target of raising soil organic matter to 4%. The science behind this goal is solid. Higher organic matter improves water retention, stabilises yields, reduces fertiliser dependence, and enhances long-term food security. What remains unclear is the pathway.&nbsp; Where will the organic inputs come from? How will they be processed and applied safely at scale? Without practical answers, the 4% target risks remaining aspirational rather than achievable. Forest undergrowth can be turned into fuel and fertiliser. Biochar is produced by heating organic biomass in a low-oxygen environment, converting it into a stable form of carbon that can be added to soil.&nbsp; When properly produced and applied, it improves soil structure, enhances water and nutrient retention, supports microbial activity, and locks carbon into the ground for decades. In Nepal biochar addresses two interconnected problems: reducing the accumulation of combustible biomass in forests, lowering fire risk, while simultaneously rebuilding depleted soils. In doing so, it restores the broken link between forest management and agriculture.&nbsp; Done well, biochar is not merely an environmental intervention. It is an economic one, with potential to create local employment, reduce farmers’ input costs, and support climate-smart agriculture. But biochar propagation depends on improved governance. If promoted as isolated pilots or short-term projects, it will fail. What is needed is institutional clarity: standards for production and safety, quality control mechanisms, farmer extension services, and coordination across local, provincial, and federal levels.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022009028_e6e2218f38fae5b1fe81d9f99078fe01f58d04b4b3b2c41447f017c3f838a1d4.jpg" data-media-id="editor_2" data-image-id="2026022009028_e6e2218f38fae5b1fe81d9f99078fe01f58d04b4b3b2c41447f017c3f838a1d4" data-rendition-name="original" width="1536" height="2048" loading="lazy" alt="Wildfire season NT"> <figcaption>Freshly prepared biochar under control tempature (350-600°C).</figcaption> </figure>  Community forest user groups could manage biomass collection. Local governments then support safe, decentralised production units. Agricultural extension services guide farmers on application, linked to soil testing and monitoring. Such an approach would reduce fire risk, improve soil health, and generate rural livelihoods.&nbsp; Poorly produced biochar or contaminated feedstock can harm soils and human health. Without training, standards, and oversight, good intentions can backfire. Nepal needs to move beyond fire-fighting to fire prevention and confront the structural causes that make them a growing risk. It is not just a technical choice – it is one that demands political will from newly-elected leaders after March. &nbsp;&nbsp; Ngamindra Dahal is a hydrometeorologist with the Nepal Water Conservation Foundation specialising on climate and water management issues.&nbsp;

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RED ALERT: Get ready for the wildfire season

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4ba9c7e80680e0966c9jpeg.jpg" alt="" width="3072" height="2048"/><figcaption>All photos: AMIT MACHAMASI</figcaption></figure>Nagarkot’s Datadol forest is the latest to experience a wildfire, as a series of fire incidents continue to be reported from across the country.A fire sparked off by ‘unknown causes’, according to the local residents, engulfed major parts of the forest on Saturday, starting at around 5PM. It took three fire trucks, assisted by local men, several hours into the night to douse the fire.There had been smaller fires incidents in the community forest in the past, but locals say they had never seen anything of the scale recorded on Saturday night.https://www.youtube.com/watch?v=QIbZqjPO260<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4be9c7e80680e0966cajpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4c19c7e80680e0966cbjpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4c49c7e80680e0966ccjpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4c79c7e80680e0966cdjpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4ca9c7e80680e0966cejpeg.jpg" alt="" width="3072" height="2048">"We've no idea how the fire started," Bane Tamanag, a Nagarkot resident told Nepali Times.Local residents said they were not aware what had started the fire. Similar feedback has been reported in other forest fire incidents in other parts of the country, with witnesses saying the source of the fire was unknown.On Sunday, a forest fire also broke out in Shivapuri Nagarjuna National Park. Nepal Police, Nepal Army, Armed Police Force and choppers from private airlines were deployed to douse the fire, which continued in some parts of the conservation area during the night, leaving the area shrouded in dense air.An extended winter drought left the forests tinder-dry, sparking fires across the Himalayas late last year. Forest fires had started spreading in the Manang Valley around Chame in late November, and <a href="https://www.nepalitimes.com/banner/kangchenjunga-wildfire-visible-from-space/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/kangchenjunga-wildfire-visible-from-space/&amp;source=gmail&amp;ust=1618205140220000&amp;usg=AFQjCNHfyQyHSyP5Q4GmbAHC7vpg4fvzOw">in Pathibhara in eastern Nepal</a>, in December. Since then, hundreds of wildfires have spread across the Tarai and mid-mountains of Nepal.The country continues to endure the record <a href="https://www.nepalitimes.com/latest/wildfires-in-nepal-cause-air-quality-to-plummet/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/wildfires-in-nepal-cause-air-quality-to-plummet/&amp;source=gmail&amp;ust=1618205140220000&amp;usg=AFQjCNG8vIfbdr-yViYeRHWfeDfPwOTApQ">worst air quality</a> in recent years because of the wildfires that have ravaged the forests at unprecedented rates. The country has been shrouded in smoke from forest fires for close to three weeks, made worse by the vehicular emissions and industrial pollution.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4cd9c7e80680e0966cfjpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4d09c7e80680e0966d0jpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4d39c7e80680e0966d1jpeg.jpg" alt="" width="3072" height="2048"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121144/636ce4d79c7e80680e0966d2jpeg.jpg" alt="" width="3072" height="2048">Similar fire situations have been reported in neighbouring India. Last week, four people were killed in India’s Uttarakhand, when a fire engulfed 62 hectares of forest area. The Uttarakhand government deployed 12,000 forest guards and firefighters to put out the fire and also called an emergency meeting.  The state has reported 983 incidents of wildfires that have destroyed 105.85 hectares already.In Nepal, no such measures have been taken and there is no account available of the loss of wildlife or areas of forest, to the fires. Concerns over the situation have been expressed by a number of people who are working in the environment and climate change sector, while the government has come under criticism for its lack of response to the situation from various quarters.“An environment crisis is never just about the environment: climate change has political-economic antecedents in energy policy, hazardous air pollution is caused by regulatory failure, political neglect leads to health crisis,” wrote environmentalist Bhushan Tuladhar, on Twitter.Read also: <a href="https://www.nepalitimes.com/latest/thick-haze-adds-to-nepal-covid-19-woes/">Thick haze adds to Nepal Covid-19 woes</a>, Sonia Awale

While the forests are burning

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108141116/636a57679c7e80680e0547e0jpeg.jpg" alt="" width="1100" height="735"/><figcaption>UP IN SMOKE: Failure of successive monsoons led to massive fires across Nepal, shown in a NASA satellite image from 12 March 2009, which covered almost the whole country in smoke. There were similar fires this spring. Photo: NASA</figcaption></figure>The global media, world leaders, celebrities and environmental activists have expressed alarm at the mass arson in the Amazon rainforest, even as Hurricane Dorian and the heatwaves of this northern hemisphere summer underline the seriousness of the climate emergency.The Amazon spans nine South American countries, and the vast continental forest was a biodiversity hotspot even before the fires were started by farmers emboldened by Brazil’s President Jair Bolsanaro’s encouragement to clear trees to make way for farms.The Amazon acts as a vast sink for atmospheric carbon. Scientists have said that preserving forests and re-greening degraded land is the single most effective way to reduce carbon dioxide in the atmosphere, even as countries globally work on slashing emissions.Mass burning of forests not only releases more carbon into the atmosphere, but also decreases the capacity of the planet to absorb carbon dioxide. Besides this, forests also fulfil critical life-affirming functions, such as maintaining water quality, sustaining bio-diversity and regulating micro-climates and weather processes.Read also: <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=32836&amp;preview=true" target="_blank" rel="noopener noreferrer">Mustn't blame everything on Climate Change,</a> Editorial<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=32864&amp;preview=true" target="_blank" rel="noopener noreferrer">The Third Pole is warming faster than expected,</a> Kunda DixitHowever, Brazil does not have a monopoly on forest destruction. In 2017 and 2018, massive forest fires in California raged for weeks, killing 100 people. Fires started by farmers clearing forests for agriculture and palm oil plantations in Kalimantan and Sumatra blanket Southeast Asia in smoke every year.Forest fires have also become more common in Nepal and across the Himalaya. In March 2009, following the failure of winter rains, enormous fires raged across the country destroying more than 105,000ha of forest land, and killing 43. (See NASA satellite image below.) In the past year there have been 2,771 fires in which 89 people have been killed, according to the National Emergency Operation Centre. Damage to property and livestock totalled Rs4 billion.Big multiple fires, like these during spring, lead to black carbon or soot being transported by prevailing up-valley winds to be deposited on the snow, reducing its ability to reflect sunlight, and increasing ice melt during the spring thaw. Measurements on the Yala Glacier in Langtang have shown that up to a quarter of the ice melt is now due to dirty snow — the rest is caused by rising global average temperatures.Increasingly rapid warming of the earth’s surface, erratic rain and droughts make forests more vulnerable to fires — even in Nepal’s successful community forests, which have helped increase the country’s total canopy cover.Read also:<a href="https://www.nepalitimes.com/?p=32892&amp;preview=true" target="_blank" rel="noopener noreferrer">Tree-mendous,</a> Peter Gil<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/trees-politics-and-greed/" target="_blank" rel="noopener noreferrer">Trees, politics and greed</a>, Mukesh PokharelThere has been a global effort to compensate countries, forest dependent people and local custodians for protecting forests instead of cutting them down. After a conference in Bali in 2007, Nepal got involved in the program Reducing Emissions from Deforestation and forest Degradation (REDD+). But despite the transfer of some global funds to forest groups, uncertainty about the mechanism, technical considerations around measurement, and avoiding loss of the carbon stock have prevented REDD+ from being more effective, efficient and equitable. Moreover, in countries like Nepal with leaky bureaucracies, the benefits rarely reach local communities and the real managers of forests.Other issues, such as unclear tenure rights, limited access to resources for forest dependent people, lack of governance reforms, centralising tendencies of forest departments, inequitable benefit sharing and the poor implementation of social and environmental safeguards, continue to plague programs like REDD+. Overharvesting, illegal logging, infrastructure and conversion to plantations make conservation more difficult when we need forests more than ever before.Read also: <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/mosquitoes-move-up-mountains-as-the-earth-warms/" target="_blank" rel="noopener noreferrer">Mosquitoes move up mountains as the earth warms</a>, Sonia Awale<a href="https://www.nepalitimes.com/here-now/climate-health-emergency/">Climate-health emergency</a>, Sonia AwaleForests have inherent intrinsic value: they cool the air, sustain biodiversity, provide food, absorb carbon and produce a range of other ecosystem services. Yet, rising temperatures will introduce new risks, making forest areas more susceptible to fires, including in Nepal. The land turns dry during non-monsoon months, fanning fires that in turn destroy vegetation and undergrowth, exposing more land surface to erosion during rains and increasing the sediment loads on rivers, leading to more flash floods.Already burdened with growing enough to feed their families, small-scale farmers across Nepal will find it increasingly harder to adapt to this changing reality. Without pragmatic measures involving communities and buttressing local capacity to address fires, the climate crisis will bring risks to the very idea of banking carbon in forests across the mountains, hills and plains.The Amazon fires should remind us of the urgency of formulating policies for least developed countries like Nepal, policies that emphasise building institutional capacity backed by resources to deal with potential large-scale forest fires. Without this effort, the past success of Nepal’s community forestry programs could be in serious peril.Read also: <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/protecting-kathmandus-historic-roofscape/" target="_blank" rel="noopener noreferrer">Protecting Kathmandu’s historic roofscape</a>, Anne Feenstra<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/tourism-aviation-and-carbon/" target="_blank" rel="noopener noreferrer">Tourism, aviation, and carbon</a>, Sanghamitra Subba<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/climate-summit-leads-packed-un-agenda/" target="_blank" rel="noopener noreferrer">Climate Summit leads packed UN agenda</a>, Thalif DeenAjaya Dixit is research adviser at the Institute for Social and Environmental Transition (ISET-Nepal) and contributes this column Climate for Change monthly.  This story is part of <a style="background-color: #ffffff; letter-spacing: 0.15px;" href="https://www.nepalitimes.com/latest/world-joins-to-cover-climate/" target="_blank" rel="noopener noreferrer">Covering Climate Now</a>, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story.

It's a jungle out there in Nepal and the Amazon

Samsung Nepal has opened pre-orders for the Galaxy A57 5G and A37 5G. Both phones run Samsung’s One UI 8.5, featuring AI capabilities like voice transcription, Circle to Search, and photo editing. They feature a 50MP triple-camera system, a Super AMOLED display, and six years of OS and security updates.

Galaxy A series

The war in West Asia has exposed the fragility of the economic architecture Nepal has built on over two generations. If the conflict continues, growth across developing Asia will slow and prices will rise. For Nepal, this will be felt through higher living costs, weaker economic activity, and growing uncertainty for the millions of families who depend on remittances.&nbsp; Nepal now needs to structurally transform from exporting labour to investing in domestic job creation. &nbsp; The country's current path toward a knowledge economy has a blind spot. A <a href="https://iids.org.np/wp-content/uploads/2025/02/unleashing.pdf" target="_blank">report</a> by the Institute for Integrated Development Studies (IIDS) in Kathmandu shows that IT export companies alone generated 7,228 jobs and income for 66,509 freelancers.&nbsp; We are building digital labour export, not an economy that accumulates institutional knowledge. The Nepali Upwork developer and a migrant construction worker in the Gulf are engaged in the same economic activity, but with different tools. Nepal’s reliance on a <a href="https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=NP" target="_blank">remittance-driven economy,</a> means the country has failed to create enough <a href="https://www.worldbank.org/en/country/nepal/publication/unlocking-nepal-s-growth-potential" target="_blank">quality jobs</a> at home. For millions of young people, leaving the country is not a choice but a necessity to survive and support families back home. <a href="https://www.worldbank.org/en/country/nepal/publication/unlocking-nepal-s-growth-potential" target="_blank">Remittances</a> have no doubt helped reduce poverty. Thirty years ago, 55% of Nepal’s population lived on less than $2.15 a day, now it is 20% after the absolute poverty line was revised upwards. This progress has come at a cost — &nbsp;an economy that depends more on exporting workers than creating opportunities at home. This development reflects a deeper political failure to create meaningful jobs within the country. Since the democratic transition in 1991, Nepal’s leadership has largely recycled the same faces, with limited progress on job creation or industrial growth.&nbsp; Nepal cannot build a <a href="https://nipore.org/accelerating-nepals-startups/" target="_blank">knowledge economy</a> while its most ambitious people are outbound to Doha and Tokyo. We are also not just losing ‘labour’. We are losing the entrepreneurial risk tolerance of our youth.&nbsp; If the most ambitious 25-year-olds are abroad, who is left to support innovation and entrepreneurship? The same people who are working tirelessly abroad, are our biggest asset for development. Their work ethic and the know-how inurban renewal could well fit into the new RSP government’s mandate of 7% annual growth.&nbsp; The <a href="https://english.biznessnews.com/posts/-nepal%E2%80%99s-it-exports-cross-1-billion-" target="_blank">$1B milestone</a> of IT exports is a celebratory moment for Nepal. However, that cannot lead to a pathway to a $100 billion economy without innovation ecosystems that go beyond individual labour export. Companies like SecurityPal and industry associations such as NASIT have made significant efforts in building such an environment, recently championed by private sector leaders as a &nbsp;<a href="https://www.securitypalhq.com/blog/silicon-peaks" target="_blank">Silicon Peaks</a> model that emphasises a home growth tech cluster. The need to accelerate this transition is even more urgent with the escalating conflict in West Asia. &nbsp;The recent International Labour Organisation (ILO) <a href="https://www.ilo.org/sites/default/files/2026-03/Nepal%20LDC%20Graduation%20Employment%20Impacts%20Report.pdf" target="_blank">report</a> shows that LDC graduation is expected to adversely impact manufacturing with losses of $1 billion by 2030.&nbsp; If manufacturing takes such a large hit from losing trade preferences, then Nepal’s services and IT sectors need to structurally transform and shift from exporting individual talent to building firms. &nbsp; A generation’s frustration has finally forced a shift in Nepal’s political structure, handing the new government a clear mandate to fix failures. But the question still persists: what prevents Nepal from achieving sustained, productivity-driven growth? &nbsp;&nbsp; RSP is in the right place at the right time to put Nepal's economy on a firm footing. At the heart of Nepal’s economic underperformance lies a major development binding constraint: low returns to investment on projects.&nbsp; The government invests like a high-growth economy, with gross capital formation at around <a href="https://data.worldbank.org/indicator/NE.GDI.FTOT.ZS?locations=NP" target="_blank">25–30 percent of GDP</a>. Yet economic growth remains modest. The problem is not how much the country invests, but how little it gets in return. One way to see this is by looking at how much investment is required to generate growth.&nbsp; Nepal needs large amounts of capital to produce relatively small gains in output (graph, below). For instance, in 2024, the ICOR was 8.29, this suggests that Nepal had to invest more than 8 units of capital to produce a one unit of additional economic output.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260406040412_605dc527641d2ff2dc5723ed8bbec946898331d5538a55b9941e32a0725bf811.jpg" data-media-id="editor_9" data-image-id="20260406040412_605dc527641d2ff2dc5723ed8bbec946898331d5538a55b9941e32a0725bf811" data-rendition-name="original" width="1827" height="925" loading="lazy" alt="Economy graph"> <figcaption>Source: Author's calculation based on a Growth Diagnostic simulation</figcaption> </figure>  This reflects a deeper issue in how investment is allocated and executed. Capital is often locked in low-productivity sectors or diluted by delays, inefficiencies, and policy uncertainty.&nbsp; As a result, even high levels of investment fail to translate into sustained growth. Until investment shifts toward productive, firm-building activities, higher spending alone will not deliver results. &nbsp; To reverse this, the government must focus on raising the returns to investment by enabling firms to grow and compete. This requires a shift from managing scarcity to creating an environment where capital can generate consistent and predictable returns. A central priority should be given to attracting and retaining both domestic and foreign private investment. Investors do not just respond to direct incentives, but also to policy stability in the country. Nepal’s economy cannot sustain high growth if its human capital continues to leave the country.&nbsp; The goal should not simply be to create jobs, but to build companies that scale, innovate, and compete beyond Nepal. This requires supporting sectors with strong productivity potential and ensuring that firms can expand without being constrained by infrastructure gaps or regulatory friction. Finally, the state must improve the quality of its own investment. Public spending should focus on lowering the cost of doing business through reliable electricity, efficient logistics, and digital infrastructure.&nbsp; The GenZ movement took two days to bring change. The economic transformation of Nepal might take a generation. The RSP can accelerate this transition, but only if it focuses on building a better investment climate for business and not just feeding the global labour pool. Kailash Raj Pandey is an MPA/ID and MBA candidate at Harvard Kennedy School and MIT Sloan School of Management and a fellow at MIT Kuo Sharper Center for Innovation and Prosperity.&nbsp; Siddhartha Raymajhí is a policy researcher based in Kathmandu.

Creating a firm future for Nepal

Know your Ministers

Prime Minister Balendra Shah on Wednesday broke tradition and met with 17 foreign envoys collectively, a move that was a notable departure from how his predecessors operated.&nbsp;
Shah had already set himself apart by talking less, listening more, and delegating to trusted friends. But by meeting all ambassadors at one go in the presence of the Foreign Ministry, he signalled a paradigm shift in how he wants Nepal to be seen: no longer just balancing India and China, but as a country confident about its <a href="https://nepalitimes.com/opinion/guest-editorial/tripolar-contestation-over-nepal">strategic importance and place in the world</a>.
In just two weeks, the <a href="https://nepalitimes.com/news/rsp-dos-and-don-ts">RSP has sprung into action </a>on multiple fronts to implement its ambitious 100-point, 100-days action plan. It has taken short-term measures to mitigate the impact of the Gulf war, as well as medium- and long- term measures to streamline the bureaucracy. A few high-profile figures have been made examples of to drive the message home.
Earlier this week, the government recalled six politically appointed ambassadors, the most notable being long-serving Shankar Sharma from New Delhi. The Kathmandu District Court issued arrest warrants against former prime minister Sher Bahadur Deuba and his former foreign minister wife Arzu Rana on charges of money laundering and corruption.
Each ministry has been trying to clean up the accumulated rot from the past three decades: regulatory overhaul of microfinance, education, health and service delivery.&nbsp;
These actions widely disseminated campaign-style on YouTube and TikTok have made most Nepalis hopeful that the party they installed in power means business.
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BACKLASH
But such attempts to overhaul a long-entrenched political culture were bound to face backlash. In their impatience and enthusiasm to get things done, some of Prime Minister Shah’s ministers have over-reached.
It was common knowledge that government-paid advertising in the mainstream press was kickback-driven, but the PMO’s directive that official notices be published or broadcast only on state-run media has been denounced — especially as the media industry struggles to stay afloat.
More serious are some recent appointments by ministers of relatives and figures closely associated with the RSP to key positions. This has rankled because this party built its political plank on ending nepotism and graft.&nbsp;
News that Home Minister Sudan Gurung allegedly had not paid rent on leased land, which illegally encroached on the lake in Pokhara did not help. &nbsp;
Prime Minister Shah himself has come under scrutiny for appointing a kitchen cabinet full of male buddies from his time as Kathmandu mayor. To douse criticism he brought in as adviser investigative journalist Deepa Dahal, who has exposed corruption in high places of the previous coalitions.&nbsp;
Shah’s appointment of another political adviser Asim Shah to the head Constitution Amendment Task Force, is also seen as problematic. He is a filmmaker and former lawmaker, but does not have a background in constitutional law.&nbsp;
Even more controversial is the Cabinet’s decision to appoint RSP Chair Rabi Lamichhane’s legal counsel, Narayan Kandel, as Attorney General. Kandel used to be a UK permanent resident, and does not have as much experience practicing law in Nepal.&nbsp;
Kandel’s appointment drew flak and raised eyebrows, and with the pending legal cases against Lamichhane this appointment represents a flagrant conflict of interest.
Health Minister Nisha Mehta was also accused of favouritism after reappointing Junu Shrestha, wife of Labour Minister Dipak Kumar Shah, as member of the Health Insurance Board which had earlier suspended her. The Labour Minister’s rambling rant at the Board’s meeting on Tuesday has not helped the RSP’s image.&nbsp;
(UPDATE: On Thursday, Prime Minister Shah sacked the Labour Minister after the RSP found him in breach of the party's code of conduct and discipline. He served 14 days in the Cabinet, one of the shortest tenures for a minister in Nepal )
It is hard to know what <a href="https://nepalitimes.com/news/ball-in-balen-s-court">Balendra Shah is thinking</a>, and how Rabi Lamichhane is going to justify some of these moves. After all, making politics, governance, and bureaucracy a meritocracy has been the core tenet of the RSP, and it risks alienating its mainly youth base if these missteps persist.
But at least for now, most RSP supporters seem to be giving the party the benefit of doubt.