<figure><img width="1040" height="550" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161148/636d1e039c7e80680e0af3e8jpeg.jpg" alt=""/><figcaption></figcaption></figure>If it was clear that the UML convention last month was actually the party’s first election rally, it is even more evident during this week’s Nepali Congress (NC) jamboree in Kathmandu.In his opening remarks to the NC’s 14th general convention, party leader and Prime Minister Sher Bahadur Deuba had urged delegates to bury differences and focus on the 2023 elections. His predecessor K P Oli had said the same thing two weeks ago in Chitwan, directing UML cadre to mobilise for a majority in local and federal polls.At its own convention last week, the Rastriya Prajatantra Party (RPP) positioned itself by pushing an anti-secular, monarchist electoral platform, and overhauled its leadership by electing Rajendra Lingden.Pushpa Kamal Dahal’s CPN (Maoist Center), the third-largest party in Parliament and NC’s coalition partner, is set to hold its own national conference next month with full focus on elections.  All four parties are using publicity surrounding their conventions to jump-start their party machinery for 2023. It is as if they have suddenly woken up from slumber, and party infighting that had sapped morale.For the past three years, the UML and Maoist Centre were  too preoccupied with their internal power struggles to pay attention to what voters might think. The NC was not even playing opposition politics. And the Covid crisis gave everyone the excuse to do nothing. That is why the conventions have been a way to energise the parties, galvanise voters, make up for lost time so parties can throw campaigning into high gear during 2022.“The conventions were mini elections,” admits the UML’s Krishna Pokhrel. “They were rehearsals for the real thing, and allowed the parties to streamline themselves for the election.” On Thursday, Gagan Thapa and Bishwa Prakash Sharma were elected general secretaries of Nepali Congress. This is proof that younger leaders at climbing up the party ladder. Neither are from Deuba’s camp in the party elections.However, except for the RPP, the three main parties have retained their tried, tested and failed leadership. Five-time prime minister Deuba was re-elected party chair, as was Oli and most certainly Pushpa Kamal Dahal will also head the Maoist Centre.“The conventions were an opportunity for the parties to rebrand themselves, but they have not seized it,” says political analyst Puranjan Acharya. Indeed, the country’s sinking economy, the Covid crisis and the urgent need for socio-economic reform were not even mentioned in the party conclaves which were obsessed with leadership contests and electoral alliances. Deuba’s NC presides over the coalition government made up of Dahal’s MC, Madhav Kumar Nepal’s newly-minted Unified Socialists, Upendra Yadav’s Janata Samajbadi Party (JSP), and the Rastriya Janamorcha. Dahal and Nepal need the NC’s grassroots base, and have warned Deuba not to break the coalition, which is on thin ice  mainly due to differences over the MCC which Parliament is due to ratify. While Deuba’s NC supports the $500 million American infrastructure project, Dahal and Nepal are opposed. The UML’s Oli strongly backed the MCC while he was in power, but now sees it as a useful tool to chip away at the governing coalition.“The Nepali Congress has no plans to form an alliance with anyone in 2023,” says the party’s Gagan Thapa, “we are confident that we are going to sweep the polls with a majority by ourselves.”Indeed, the NC has benefited from left disunity and wants to deploy its new young supporters to rally voters in 2023.Meanwhile, the main priority in polls for Dahal and Nepal is to weaken the UML and emerge as the second party with an electoral alliance if possible — proving correct the theory that Communists everywhere see the parties immediately to their left as more of a threat than those on the right.

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All eyes on 2023

<figure><img width="1554" height="870" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110151116/636d07ea9c7e80680e0a5fe9jpeg.jpg" alt=""/><figcaption>Prime Minister Sher Bahadur Deuba waits for his turn at a J&amp;J vaccination centre in Kathmandu. Photo: PMO</figcaption></figure>During his address to Parliament on 18 July <a href="https://www.nepalitimes.com/here-now/nepals-accidental-prime-minister/" target="_blank" rel="noopener noreferrer">while seeking a confidence vote</a>, Prime Minister Sher Bahadur Deuba claimed his government’s topmost priority was vaccination and managing the Covid-19 pandemic.
“The government's first priority is vaccination, second priority is vaccination, third priority is vaccination,” he said emphatically.
This week, he had a photo-op with American Ambassador Randy Berry as the handicapped received <a href="https://www.nepalitimes.com/banner/nepals-disabled-get-a-shot-at-covid/" target="_blank" rel="noopener noreferrer">the Johnson &amp; Johnson single jab inoculations</a>. He then waited in line with others to get his own shot.
He then summoned health officials to Singha Darbar for a pow-wow and instructed them to be at battle stations against a possible third wave by setting up holding centres at the border as well as increasing testing, supply of oxygen, beds and ICUs in hospitals.
After becoming prime minister for the fifth time, Deuba has spent most of this first week in office dealing with <a href="https://www.nepalitimes.com/banner/once-nepal-gets-vaccines-they-need-to-be-fairly-distributed/" target="_blank" rel="noopener noreferrer">Covid-19</a>, leading many to believe his priority is indeed the health sector. 
However, he has yet to appoint a health minister, <a href="https://www.nepalitimes.com/editorial/from-the-fire-into-the-frying-pan/" target="_blank" rel="noopener noreferrer">even as he was quick to name</a> trusted supporter Bal Krishna Khand as Home Minister and hand over powerful finance and the energy and water resource portfolio to the Maoist Centre.
This is in direct contrast to the Oli administration that <a href="https://www.nepalitimes.com/latest/3-health-ministers-in-1-year/" target="_blank" rel="noopener noreferrer">switched five Health Ministers in three years</a>, and four since the pandemic. The very lead ministry in tackling the pandemic has been plagued with uncertainty and indecision.
Nepal might be at the tail end of the second wave but the rate of decline in daily infections and deaths has stalled. There is also the threat of a possible third wave and spread of newer strains as the country struggles to increase its vaccination coverage.
“Unstable leadership affects the entire system and its operations. And in a country like ours with underdeveloped mechanisms, stable leadership is of utmost importance, ”says Bhoj Raj Pokhrel, former Chief Election Commissioner.
Bhanubhakta Dhakal was the Minister of Health in January 2020 when the first case of Covid-19 was detected in Nepal. He was in charge when the first scandals broke in the procurement of Covid-19 test kits, which were found to be <a href="https://www.nepalitimes.com/latest/nepal-relying-on-unreliable-covid-19-kits/" target="_blank" rel="noopener noreferrer">faulty and overpriced</a>.
Hiradyesh Tripathi then took over and was entrusted by the Oli administration to buy 5 million doses of the Sputnik V vaccine. That did not materialise, and he negotiated with the Serum Institute of India (SII) to buy 2 million doses of the AstraZeneca Covishield vaccine. But only 1 million doses were delivered before India banned the export.
Tripathi later <a href="https://www.nepalitimes.com/latest/our-health-system-cant-contain-the-pandemic/" target="_blank" rel="noopener noreferrer">blamed SII’s representatives in Nepal</a> for trying to take a bigger commission from the next order of 5 million doses. This was followed by the devastating second wave.
Tripathi was succeeded by Sher Bahadur Tamang, who served just three weeks as health minister before the Supreme Court ordered Oli’s Cabinet appointments null and void. Krishna Gopal Shrestha, who was also the Education Minister, had an even shorter tenure because the Oli government fell on 13 July.
Former director of the Epidemiology and Disease Control Division Baburam Marasini says that at a time when the Health Ministry should have been most proactive it became a victim of politics.
There are rumours that Deuba may appoint <a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/Policies-for-the-people,3640" target="_blank" rel="noopener noreferrer">Gagan Thapa</a> as health minister, and many remember his previous tenure during which he showed <a href="http://archive.nepalitimes.com/article/nation/gagan-care-kidney,3633" target="_blank" rel="noopener noreferrer">decisiveness and knowledge of the job</a>. 
He says: "Only when the leadership is strong and stable can all agencies of government effectively implement a strategy. It is imperative that the government appoint a can-do, well-informed health minister soon.”

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Nepal has no health minister as Covid-19 cases rise again

<figure><img width="1248" height="832" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd92c9c7e80680e0801fbjpeg.jpg" alt=""/><figcaption>Photo: PMO</figcaption></figure>After lying relatively dormant since January, SARS-CoV-2 is spreading rapidly in Nepal, with <a href="https://www.nepalitimes.com/here-now/covid-19-lessons-for-kathmandu-from-the-tarai/" target="_blank" rel="noopener noreferrer">most of the cases now in Kathmandu Valley</a>, affecting even close advisers of Prime Minister K P Oli. On Saturday, four of Oli’s aides including press adviser Surya Thapa, political adviser Bishnu Rimal, foreign policy adviser Rajan Bhattarai and secretary Indra Bhandari said they had tested positive. Two other staff at the PMO in Baluwatar had also tested positive last week. Also on Saturday, 28 Nepal Army soldiers guarding the prime minister’s official residence at Baluwatar also tested positive, but none of them were said to be assigned as Prime Minister Oli’s personal body guards. The infected soldiers are in the process of being replaced. The <a href="https://www.nepalitimes.com/latest/covid-19-spreads-closer-to-nepals-ruling-circle/" target="_blank" rel="noopener noreferrer">spread of the virus within Nepal’s corridors of power</a> at Baluwatar has raised worries about the wellbeing of Prime Minister Oli who has had <a href="https://www.nepalitimes.com/latest/prime-ministers-health-condition-under-wraps/" target="_blank" rel="noopener noreferrer">two kidney transplants</a> and is said to be immuno-compromised. Then came news late on Saturday that four members of the opposition Nepali Congress had also tested positive: Gagan Thapa, Arjun Narsingh KC and two other central committee members. KC is Thapa’s father-in-law. Thapa announced that he had Covid-19 through his Twitter account, and said his condition was normal but that he was isolating at home. He also warned anyone who had been in close proximity to him to consult a doctor if they had any problems. Interestingly, NC leader KC said through a Twitter post that he was surprised to hear that he had tested positive through the mass media, and added that the party headquarters where the tests were conducted had not informed him. The other two NC central committee members who tested positive are Ganga Chaudhari and Sambhulal Shrestha. On 1 October the party had tested 240 of its secretariat staff, security guards and party members ahead of a meeting that has been called for 5 October. Meanwhile, the Prison Management Department announced on Saturday that more than 700 inmates across the country had tested positive for Covid-19, and eight of the prisoners had died. Six of the fatalities were in the Central Jail in Kathmandu and one each in Banke and Morang.  So far, 1,900 prison inmates have been tested so far, and aside from the 700 active cases 200 have recovered. The Department has only been testing those with symptoms, and it is expected that the real number of positive cases is higher. Those who have tested positive so far have been in jails in Parsa, Banke, Suyangja, Lalitpur, Sindhupalchok, Kathmandu, Jumla, Saptari, Siraha, Sunsari and Morang. The Department has cancelled all visits at prisons, and spread out the detainees. Nepal’s prisons are notoriously crowded and <a href="https://www.nepalitimes.com/latest/prisons-can-be-incubators-for-covid-19/" target="_blank" rel="noopener noreferrer">experts have warned that they could be hotbeds for the virus</a>. There have been calls to <a href="https://www.nepalitimes.com/here-now/nepals-prisons-need-to-be-depopulated/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepals-prisons-need-to-be-depopulated/&amp;source=gmail&amp;ust=1601862869062000&amp;usg=AFQjCNF4YWZCS0PK7CRkWiXeeVHkmwVbPw">depopulate the prisons</a> by releasing those serving time for relatively minor crimes. <figure><img width="2340" height="1008" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd92f9c7e80680e0801fcjpeg.jpg" alt=""><figcaption>Charts: WORLDOMETER</figcaption></figure><img width="1388" height="770" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd9329c7e80680e0801fdjpeg.jpg" alt=""><img width="1376" height="770" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd9359c7e80680e0801fejpeg.jpg" alt="">After being relatively unscathed since January, the coronavirus has been spreading rapidly in Kathmandu Valley. The first surge was seen after the <a href="https://www.nepalitimes.com/latest/nepal-ends-covid-19-lockdown/" target="_blank" rel="noopener noreferrer">first lockdown was partially lifted in July</a>, and the second since the <a href="https://www.nepalitimes.com/banner/muddling-through/" target="_blank" rel="noopener noreferrer">restrictions were lifted on 10 September</a>. Eight more deaths were reported all over Nepal on Saturday, two of them in Kathmandu Valley, taking the total to 528. Most of the dead are over 60 years old. 103 of the total fatalities are from Kathmandu, 25 from Bhaktapur and 24 from Laitpur districts. Of the nearly 13,000 tests done in the past 24 hours nationwide, SARS-CoV-2 was detected in 2,120, taking the total confirmed cases to 84,570. There were 2,044 who had recovered on Saturday, taking the total recovered to 62,740 and giving Nepal a recovery rate of 74.1%. There are now 21,302 active cases all over Nepal, of which nearly 10,000 are in hospitals and the rest in home isolation. The Ministry of Health had warned that the lockdown may need to be reimposed if the <a href="https://www.nepalitimes.com/here-now/kcs-fast-highlights-nepals-covid-19-failure/" target="_blank" rel="noopener noreferrer">number of active cases exceeded 25,000 because of the limitations on hospital beds</a>.  Unlike during the early weeks of the pandemic, many more cases now are symptomatic and the deaths are among the elderly population, indicating a rapid spread of the virus in the community.  The number of patients in ICU is now 217, and there are now a record number of 31 people in ventilators.

Coronavirus in Nepal’s corridors of power

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>.