The <a href="https://www.nepalitimes.com/banner/ancient-panautis-french-connection/">ancient town of Panauti</a> is preparing for its once-in-12-years Makar Mela this month, a festival that dates back 1,000 years. Despite the Omicron scare, the town 40km east of Kathmandu expects 6 million pilgrims from Nepal and India during the month of Magh.  Although it is among the better preserved historic <a href="https://www.nepalitimes.com/here-now/khokana-and-bungamati-strive-to-save-heritage/">Newa towns</a>, even here the sloping tile roofline is being replaced by flat-top concrete blocks that dwarf the temples and shrines. But the town is preserving its past, not just by restoring its monuments but also reviving its many festivals like the Makar Mela. The recent release of the bilingual book Panauti: Passé– Présent Panauti Past- Present (1976-2020) is perfectly timed not just for the 12-year festival which starts on 15 January, but also to draw attention to the town’s many other festivals.<img class="alignnone size-full wp-image-84494" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203819c7e80680e0b2812jpeg.jpg" alt="" width="3072" height="2048"/><img class="alignnone size-full wp-image-84495" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203859c7e80680e0b2813jpeg.jpg" alt="" width="3072" height="2048">Indreswor Mahadev Temple. Photos: Gerard Toffin, 1976 (left) and Prasant Shrestha, 2020 (right)With French and English text by Gérard Toffin of the French National Center for Scientific Research (CNRS), and illustrated with before and after photographs by Toffin, the ethnologist Corneille Jest and Panauti-based photographer Prasant Shrestha, the book is a must-have guide to anyone interested in exploring the history of this unique town.Toffin and Shrestha met in 2010 during the last Makar Mela and were both struck by the changes that Panauti was undergoing, mostly for the worse, and decided to make a photographic documentation before it was too late.‘This book is a testimony to the mutations in Panauti,’ writes Toffin in the Introduction. ‘It gives a real importance to photography, aims at highlighting the local cultural heritage and how the current uncontrolled urbanisation threatens it.’ <img class="alignnone size-full wp-image-84489" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203889c7e80680e0b2814jpeg.jpg" alt="" width="1528" height="1036"><img class="alignnone size-full wp-image-84490" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/6372038c9c7e80680e0b2815jpeg.jpg" alt="" width="3072" height="2048">Panauti. While the town's roofline has changed, the surrounding hills have more forest. Photos by Gerard Toffin, 1976 (left) and Prasant Shrestha, 2011 (right). For Shrestha, it was a matter of using his profession to further the cause of the preservation of the heritage of his beloved hometown, and this passion shows in the meticulous care he has taken in repeat photography of shrines and landscapes. Just as the German government undertook to <a href="https://www.nepalitimes.com/here-now/saving-kathmandus-past-for-the-future/">restore Bhaktapur</a> as a coronation gift to King Birendra, the French chose the out-of-the-way town of Panauti. Legend has it, Panauti was given by the king of Bhaktapur as dowry to his newly-married sister.  Panauti is located in the sacred tri-junction of the Punyamati, Lilawati (Rosi Khola) and the mythical underground river, Rudrawati – a miniature replica of the holy confluence of the Ganga, Jamuna and Saraswati at Prayag in India. Which is why the Makar Mela is also called Nepal's own Kumbha Mela.<img class="alignnone size-full wp-image-84488" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/637203909c7e80680e0b2816jpeg.jpg" alt="" width="3077" height="2048"><img class="alignnone size-full wp-image-84493" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/637203959c7e80680e0b2817jpeg.jpg" alt="" width="3072" height="2048">Tribeni Ghat as photographed by Gerard Toffin, 1976 (left) and Prasant Shrestha, 2020 (right)Panauti’s Tribeni was so revered that it was among the sources from which holy water was poured into the Rani Pokhari by Pratap Malla when he consecrated the royal pond in Kathmandu in 1669.Archaeological evidence points to Panauti having been settled from the early Kirat period 1,500 years ago. It escaped being conquered by Prithvi Narayan Shah, and was annexed when <a href="http://archive.nepalitimes.com/news.php?id=15468">Bhaktapur</a> fell in 1769.  The town was on a ancient trade route to the Tarai, and with its Indreswar Mahadev, Bhadrakali and Unmatta Bhairav shrines it is <a>predominantly Hindu</a>. However, there are Buddhist influences.<img class="alignnone size-full wp-image-84502" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/637203999c7e80680e0b2818jpeg.jpg" alt="" width="4096" height="2777"><img class="alignnone size-full wp-image-84559" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/6372039d9c7e80680e0b2819jpeg.jpg" alt="" width="3252" height="2068">Panauti Layaku Area. While the traditional houses have been replaced with concrete blocks, the temple appear to be in a better state.   Photos by: Gerard Toffin, 1976 (left) and Prasant Shrestha, 2020 (right). Panauti was the <a href="http://archive.nepalitimes.com/news.php?id=10973#.YdPsrMlBypo">scene of a battle</a> during the insurgency in 2006, and suffered damage in the 2015 earthquake. But now, its glorious past is threatened by modernisation, which is why this book by Toffin and Shrestha is so important. It does not just show us the changes in the past 40 years, but also encouraging signs of how its monuments and festivals are being restored.The Makar Mela itself is a celebration of Panauti’s proud heritage during which there is a vigil for the king of the serpents, Vasuki Nag. (This is the reason the Shah kings never attended the Mela because they would have to compete with another ‘king’.)Other examples of revival are the Devi Pyakhan masked dance which used to be performed in the past to ward off cholera, and the Jya Punhi full moon festival which is only celebrated here. And in 2015, Panauti also reinstated its own <a href="https://www.nepalitimes.com/here-now/a-goddess-among-people/">Kumari Living Goddess</a> tradition.The book reprints a scroll dating back to 1635 that depicts the sacred Tribeni confluence which we learn is now in the Virginia Museum of Fine Art in the United States. To draw attention to the stolen holy objects from Nepal, Bhaktapur-based architect Rabindra Puri has set up the Museum of Stolen Arts in Panauti with replicas of the statuary from this town, and other parts of the Valley.<img class="alignnone size-full wp-image-84505" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/637203a09c7e80680e0b281ajpeg.jpg" alt="" width="4096" height="2797"><img class="alignnone size-full wp-image-84506" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/637203a49c7e80680e0b281bjpeg.jpg" alt="" width="3072" height="2048">Panauti with Gorakhnath Hill in the backdrop. Photos: Gerard Toffin, 1976 (left) and Prasant Shrestha, 2020 (right)Under federalism, Panauti became a municipality that includes some of the surrounding villages. Mayor Bhim Neupane was elected in 2017, and says preparations are complete to manage the influx of pilgrims from 15 January – 12 February.“Despite the pandemic, we are expecting about 200,000 people a day,” says Neupane. “We are directing everyone to take health precautions seriously, and have cleared the Tribeni area to make space. There is a bypass road and extra bus parks.” Panauti: Passé– Présent Panauti Past- Present (1976-2020) is a book that proves to other towns in Nepal that it is indeed possible to save what is left of the country’s unique cultural heritage and diversity.<img class="alignnone size-full wp-image-84532" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410110/637203a89c7e80680e0b281cjpeg.jpg" alt="" width="1550" height="594">Panauti: Passé– Présent Panauti Past- Present (1976-2020)Text:Gérard Toffin Photos: Prasant ShresthaAmbassade de France Népal and Alliance Française,2021ISBN 978-9937-0-8212-9114 pages

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Creation to destruction, then revival

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36e19c7e80680e048331jpeg.jpg" alt="" width="1500" height="507"/><figcaption>Panauti in 2013. Photo: PRASANT SHRESTHA</figcaption></figure>The 13-century town of <a href="http://archive.nepalitimes.com/news.php?id=10973#.XMai0zAzaUk" target="_blank" rel="noopener">Panauti</a> has the ambience of a place that has been bypassed by history. The fertile valley along the Rosi Khola was given by the king of Bhaktapur as dowry to his newly-married sister.  However, archaeological finds prove that Panauti was settled much sooner, in the early Kirat period 1,500 years ago.It escaped the Gorkha invasion of the Valley, 30km to the west, and was annexed into the unified Kingdom of Nepal by default. Situated astride the India-Tibet trade route, <a href="http://archive.nepalitimes.com/article/nation/electing-better-future,3714" target="_blank" rel="noopener">Panauti</a> was set back far enough from it not to be tainted by commerce. In 1964, the Kodari Highway linking Nepal with China once more circumvented Panauti. Today, a new alternative road from Lalitpur to the B P Highway in Kavre passes through the town, but it is still not a major highway.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36e49c7e80680e048332jpeg.jpg" alt="" width="170" height="250"><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36e49c7e80680e048333jpeg.jpg" alt="" width="640" height="426"><figcaption>Panauti in 1970s. Photo: GERARD TOFFIN</figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36e89c7e80680e048334jpeg.jpg" alt="" width="640" height="426"><figcaption>Panauti today. Photo: PRASANT SHRESTHA</figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36ec9c7e80680e048335jpeg.jpg" alt="" width="640" height="426"><figcaption>Photo: GERARD TOFFIN</figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36ef9c7e80680e048336jpeg.jpg" alt="" width="640" height="426"><figcaption>Photo: PRASANT SHRESTHA</figcaption></figure>All this has meant that despite the march of modernity and the non-traditional reconstruction after many of its monuments were brought down by the <a href="http://archive.nepalitimes.com/blogs/kundadixit/2015/05/27/a-month-that-felt-like-a-year/" target="_blank" rel="noopener">2015 earthquake</a>, Panauti still retains much of its quaint and bucolic charm. The town has a sacred location at the confluence of the Rosi Khola and the Punyamati, as well as a third mythological river, Lilawati. Panauti is also the seat of the famous Indreswar Temple – one of Nepal’s oldest standing pagoda shrines, built in 1294 to honour Lord Shiva. The temple grounds now house a museum as well.Panauti also has intangible heritage: it is still a largely cohesive town, which has preserved its Newa culture that has similarities, but also differences, to Kathmandu Valley traditions. Piles of newly harvested paddy are still spread out to dry in golden circles along the brick-paved square of the old palace. Next month, on full moon day, the town will mark the three-day chariot festival and the exciting mass-crossing of the Punyamati by devotees.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36f29c7e80680e048337jpeg.jpg" alt="" width="640" height="434"><figcaption>Picture taken in 1974. Photo: GERARD TOFFIN</figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36f59c7e80680e048338jpeg.jpg" alt="" width="640" height="390"><figcaption>Harvested paddy is still spread out to dry in golden circles along the old palace today. Photo: PRASANT SHRESTHA</figcaption></figure>This year will also see the Makar Mela, which happens every 12 years in Panauti, when tens of thousands of people from surrounding districts -- including Kathmandu Valley -- will converge on the town to take a dip in the holy confluence of the rivers.  The month-long festival will be held in January.It was at the last Makar Mela in 2010 that Panauti native and photographer Prasant Shrestha met <a href="http://archive.nepalitimes.com/news.php?id=13550#.XMZ2d8Mza70">Gerard Toffin</a>, the French anthropologist who has researched Nepal’s Newa civilisation. Toffin is now emeritus professor at the <a href="http://www.cnrs.fr/en/research">Centre national de recherche scientifique (CNRS)</a> and was involved in detailed research of Panauti’s culture and architecture with Vincent Barré, Patrick Berger and Laurence Feveile. This led to French Government involvement in the restoration of Panauti and its urban renewal from 1979-1989, just as the <a href="https://www.nepalitimes.com/banner/clash-of-cultures-in-bhaktapur/" target="_blank" rel="noopener">Germans were involved in restoring Bhaktapur</a>.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36f89c7e80680e048339jpeg.jpg" alt="" width="640" height="1016"><figcaption>Bramhayani temple in 1970s. Photo: GERARD TOFFIN</figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36fb9c7e80680e04833ajpeg.jpg" alt="" width="640" height="1021"><figcaption>Bramhayani temple today. Photo: PRASANT SHRESTHA</figcaption></figure>To find out more about Panauti’s past, present and perhaps even the future, Shrestha and Toffin have collaborated on an exhibition of old and new photographs at the Alliance Française in Jhamsikhel, on display till 6 May. The exhibition is part of events to mark the 70th anniversary of the establishment of diplomatic relations between France and Nepal.Toffin’s photographs of Panauti from the 1970s are juxtaposed with Shrestha’s recent images from the same spot. The before-and-after photography depicts the changes that have taken place in the town in the past four decades, but it is also heartening to see how much of the core area of Panauti is preserved. In fact, a temple that is in ruins after the 1934 earthquake in Toffin’s photograph, has been meticulously restored in Shrestha’s image of the same shrine.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a36fe9c7e80680e04833bjpeg.jpg" alt="" width="640" height="426"><figcaption>Photo: GERARD TOFFIN</figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a37019c7e80680e04833cjpeg.jpg" alt="" width="640" height="426"><figcaption>Photo: PRASANT SHRESTHA</figcaption></figure>Says Shrestha: “We have managed to restore and salvage much of Panauti’s history and culture, and now we need to get the younger generation to value our heritage. That is why this exhibition is important: to prove that our past is precious.”Changes in PanautiPhoto ExhibitionTill 6 May, 9am-5pm<a href="http://www.alliancefrancaise.org.np/event/photo-exhibition-changes-in-panauti/">Alliance Française Kathmandu</a>Jhamsikhel  01 5009221Free Entry<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110812110/636a37049c7e80680e04833djpeg.jpg" alt="" width="200" height="283">

Ancient Panauti’s French Connection

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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