<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151116/636a65199c7e80680e059911jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>HIGH AND DRY: A village in Mustang is one of the increasing number of settlements that have been abandoned because of water shortage caused by climate change. Photo : GOPEN RAI</figcaption></figure>In the past, Nepalis have migrated to India for seasonal labour and military recruitment. Today they fly overseas for work. Tomorrow they may have to migrate in increasing numbers because of climate-induced disasters.But the reason for migrating remains the same: <a href="https://nepalitimes.atavist.com/recharging-the-mountains-" target="_blank" rel="noopener">reliance of Nepal’s farmers on rain-fed agriculture</a>, which leaves them vulnerable to <a href="https://www.nepalitimes.com/opinion/where-is-the-monsoon-this-year/" target="_blank" rel="noopener">erratic monsoons</a>. And as extreme weather events become more frequent due to the climate emergency, more and more Nepalis may be forced to move out.Read also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=37135&amp;preview_nonce=066ab9802a&amp;preview=true" target="_blank" rel="noopener">Migration mitigation,</a> Editorial<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=37197&amp;preview_nonce=e98b9c3c62&amp;preview=true" target="_blank" rel="noopener">Women in climate hot spots face challenges adapting, Marty Logan</a>Already, <a href="https://www.nepalitimes.com/editorial/climate-damage/" target="_blank" rel="noopener">climate change</a> is causing more frequent <a href="https://www.nepalitimes.com/here-now/the-waste-land/" target="_blank" rel="noopener">droughts</a>, flash floods and rising temperatures, reducing crop yields across Nepal. Climate change has lowered the water table and dried natural springs, the <a href="https://www.nepalitimes.com/banner/a-terrifying-assessment-of-himalayan-melting/" target="_blank" rel="noopener">snowline has receded across the Himalaya</a>, and <a href="https://www.nepalitimes.com/opinion/climate-for-change/the-great-himalayan-thaw/" target="_blank" rel="noopener">glaciers are retreating dramatically</a>.The shortage of water is already <a href="https://nepalitimes.atavist.com/high-and-dry-upper-mustang" target="_blank" rel="noopener">forcing entire villages to relocate</a>, and the situation is expected to worsen in the next few decades as the dry season flow from snow-fed rivers declines because little ice remains to melt.Nepalis have been migrating for centuries to escape <a href="https://www.nepalitimes.com/banner/nepals-great-income-divide/" target="_blank" rel="noopener">poverty</a>, indebtedness and monsoon failures. All these push factors have now been magnified by climate-related hazards, and are already resulting in increased mobility.Read also:<a href="https://www.nepalitimes.com/latest/clock-starts-ticking-at-cop-25/" target="_blank" rel="noopener">Clock starts ticking at COP25</a>, Josie Wang<a href="https://www.nepalitimes.com/latest/the-carbon-footprint-of-tourism/" target="_blank" rel="noopener">The carbon footprint of tourism</a>“We are witnessing a rapid rise in temperature and a resulting climate shift. But <a href="https://nepalitimes.atavist.com/recharging-the-mountains-" target="_blank" rel="noopener">people in rural mountainous</a> and coastal areas have not been able to adapt to these changes, forcing them to move,” explained climate expert Manjeet Dhakal, who is in Madrid for the United Nations climate summit, COP25, citing the example of pastoralists relocating in Mustang district because of prolonged drought.Scientists have had to revise estimates of the rate of global warming because the impact is being felt much earlier than expected, with <a href="https://www.nepalitimes.com/opinion/turning-on-the-heat/" target="_blank" rel="noopener">heat waves</a>, larger forest fires, more intense storms, unseasonal blizzards and extreme rainfall events. The past decade was the hottest ever on record, Europe saw its hottest ever June this year, sub-Saharan Africa experienced unprecedented drought, while Cyclone Fani triggered the evacuation and displacement of 3.5 million people in Bangladesh and India in May.Here in Nepal, over 80,000 people were infected with <a href="https://www.nepalitimes.com/banner/mosquitoes-move-up-mountains-as-the-earth-warms/" target="_blank" rel="noopener">dengue this monsoon</a> in an unprecedented outbreak that scientists said was exacerbated by a warming climate. Bara district recorded <a href="https://www.nepalitimes.com/here-now/groound-zero-in-pheta/" target="_blank" rel="noopener">a rare tornado</a> that killed 80 people, and razed villages. <a href="https://www.nepalitimes.com/editorial/flood-of-recrimination/">Floods in the Tarai</a> are <a href="https://www.nepalitimes.com/banner/nepal-villages-learn-to-cope-with-climate-crisis/">getting worse every year</a>.“There are many reasons for people to migrate, but the additional stress from the risks of increased floods and droughts, or changes in farming or water supply, may just push people’s decision past the tipping point,” said David Molden, director of the International Centre for Integrated Mountain Development (ICIMOD). “For others, there may be no choice but to migrate if a water source is lost, or the damage from floods or droughts is too great.”Read also: <a href="https://www.nepalitimes.com/banner/the-third-pole-is-warming-faster-than-expected/" target="_blank" rel="noopener">The Third Pole is warming faster than expected</a>, Kunda Dixit<a href="https://www.nepalitimes.com/banner/a-terrifying-assessment-of-himalayan-melting/" target="_blank" rel="noopener">Terrifying assessment of a Himalayan melting</a>, Kunda Dixit Migration usually begins as a temporary response, but many people have had to relocate permanently or have been displaced. Millions of climate refugees are moving across borders. Human mobility of any kind in the face of the changing climate will have an enduring impact on societies and economies.“When some members of a family migrate, the country’s dependence on remittance will increase. When entire families migrate, the country will lose a major portion of its labour force. Eventually, dependence on remittance and a shrinking labour force will inhibit the economy,” said Dhakal.As far back as 1990, the Inter-governmental Panel on Climate Change (IPCC) warned that the single greatest impact of <a href="https://www.nepalitimes.com/banner/weather-warning-for-climate-meeting/" target="_blank" rel="noopener">climate change</a> would be on human migration. Now, experts are saying there may be 200 million climate refugees worldwide by 2050. By then, 42 million Bangladeshis and 36 million people in coastal India will have to relocate because of rising sea levels.A recent Oxfam report named climate change-fuelled disasters as the number one driver of internal displacement over the last decade, having forced more than 20 million people to leave their homes annually.Read also:<a href="https://www.nepalitimes.com/editorial/climate-climax/" target="_blank" rel="noopener">Climate climax</a>, Editorial<a href="https://www.nepalitimes.com/editorial/climate-damage/" target="_blank" rel="noopener">Climate damage</a>, Editorial“If the current development pathway and governance persists, human mobility upheaval will have huge humanitarian and social costs. We in Nepal may not remain immune to this disruption even though we are landlocked,” says water expert Ajaya Dixit.Following the 2015 Paris Agreement, the executive committee of the Warsaw International Mechanism established a task force on displacement to develop recommendations to avert, minimise and address displacement due to climate change. Agencies, including the International Organisation for Migration, are building support for the second phase of the task force in <a href="https://www.nepalitimes.com/latest/clock-starts-ticking-at-cop-25/" target="_blank" rel="noopener">Madrid this week</a>.Climate migration is also being discussed in 25 panels and events at COP25. With a rising backlash against migrants and refugees worldwide, it is likely that climate change impacts will cascade, stretching institutional capacity and governance and increasing the cost of adaptation. As displaced people move onto other people’s land, political confrontation and conflict between native populations and migrants can result.Governments represented in Madrid need to devise policies not just to reduce emissions, but to deal with the political, cultural and economic fallout of climate migration.Says Dixit: “The <a href="https://www.nepalitimes.com/editorial/climate-climax/" target="_blank" rel="noopener">climate crisis</a> poses an existential threat. Let us hope human ingenuity and collective wisdom will prevail to begin much needed transformative action.”

Sonia Awale

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Nepal must prepare for climate migration

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151116/636a65169c7e80680e059910jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>SHOULDERING THE BURDEN: The workload for women like Nanimaya Dhungana in Kavre (Above) may have increased because of the climate crisis. Photo: KUMAR ACHARYA</figcaption></figure>Women in Asia and Africa hardest hit <a href="https://www.nepalitimes.com/editorial/climate-climax/" target="_blank" rel="noopener">by climate change</a> have a tough time adapting to the climate emergency, even with support from family or the state, finds a new study. The results raise questions for global agreements designed to help people adapt to the <a href="https://www.nepalitimes.com/editorial/climate-damage/" target="_blank" rel="noopener">climate emergency</a>, it adds.The findings are based on 25 case studies in three agro-ecological regions on the two continents: 14 in semi-arid locales, 6 in mountains and glacier-fed river basins (including one in Nepal) and 5 in deltas. The main livelihoods in these natural resource-dependent areas include agriculture, livestock rearing and fishing, supplemented by wage labour, petty trade and <a href="http://archive.nepalitimes.com/article/editorial/doubts-on-zero-cost-migration-deal-coming-into-force,2157" target="_blank" rel="noopener">income from remittances</a>.Environmental risks include <a href="https://www.nepalitimes.com/here-now/the-waste-land/" target="_blank" rel="noopener">droughts</a>, floods, rainfall variability, land erosion and landslides, <a href="https://www.nepalitimes.com/banner/on-thin-ice-in-the-khumbu/" target="_blank" rel="noopener">glacial lake outburst floods</a><a href="https://www.nepalitimes.com/opinion/turning-on-the-heat/" target="_blank" rel="noopener">, heat waves</a> and cyclones, all of which negatively affect livelihoods. The study, A Qualitative Comparative Analysis of Women’s Agency and Adaptive Capacity in Climate Change Hotspots in Asia and Africa was published in the journal Nature Climate Change.Read also: <a href="https://www.nepalitimes.com/?p=37135&amp;preview_nonce=066ab9802a&amp;preview=true" target="_blank" rel="noopener">Migration mitigation, Editorial</a><a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=37206&amp;preview_nonce=9067429ee4&amp;preview=true" target="_blank" rel="noopener">Nepal must prepare for climate migration,</a> Sonia AwaleIt found that when households take steps to <a href="https://www.nepalitimes.com/opinion/the-climate-threat-multiplier/" target="_blank" rel="noopener">adapt to the impact of climate change</a>, the result is that the strategies ‘place increasing responsibilities and burdens on women, especially those who are young, less educated and belonging to lower classes or marginal castes and ethnicities’. This occurred even in cases where support appeared to be available in the form of families/communities or via the state.Examples include when men migrate to find work because of climate change-induced impacts at home. While the money they earn can boost family incomes, when men are away <a href="https://nepalitimes.atavist.com/recharging-the-mountains-" target="_blank" rel="noopener">women must shoulder a larger burden</a>. As a result, most women ‘reported reduced leisure time, with negative consequences on their wellbeing, including the health and nutrition of themselves and their households,’ says the report.Read also:<a href="https://www.nepalitimes.com/latest/clock-starts-ticking-at-cop-25/" target="_blank" rel="noopener">Clock starts ticking at COP25</a>, Josie Wang<a href="https://www.nepalitimes.com/latest/the-carbon-footprint-of-tourism/" target="_blank" rel="noopener">The carbon footprint of tourism</a>In other cases, governments stepped in with support but during floods or droughts, for example, men dominated state-provided aid and relief facilities, making women rely on their male relatives to receive support.‘In a sense, women do have voice and agency, yet this is not contributing to strengthening longer-term adaptive capacities,’ concludes the report.But in three examples in the study, one in Nepal, women did adapt to the increased burdens delivered by climate change. In Chharghare of Nuwakot district, support from a well-established cooperative enabled many women — excluding Dailit women — to switch from raising buffalo and cattle to rearing goats, which adapted better to growing rain scarcity.“By enhancing women’s agency, we need to understand that we are helping them to create an enabling environment where a women’s right to make decisions about her own life is recognised, where women are economically empowered and free from all forms of discrimination and violence,” said Anjal Prakash, who worked on the case study for the Integrated Centre for Mountain Development (ICIMOD).Poverty is the main factor in the declining decision-making power of women in some hot spots, says the report, even when women share responsibilities in the family and work outside of the home. In semi-arid Kenya, for example, women of female-headed households sell alcohol to earn money to pay for children’s schooling, but this exposes them to health risks, such as engaging in sexual activities with their clients.Read also: <a href="https://www.google.com/url?client=internal-element-cse&amp;cx=011870630917993763279:opm7uqsat-4&amp;q=https://archive.nepalitimes.com/page/Recharging-the-mountains-kavre&amp;sa=U&amp;ved=2ahUKEwjrk7jMyZ7mAhVSzTgGHXMsCPkQFjAAegQIBhAB&amp;usg=AOvVaw0Hk35TvXLe8RkYPj4gjG58">Recharging the mountains</a>, Sonia AwaleA 35-year-old woman told researchers, “Despite our efforts, there is a high level of malnutrition here. We can’t afford meat, we just eat rice and potatoes, but even for this, the quantity is not enough.”The study notes that international agreements, such as the gender action plan of the United Nations Framework Convention on Climate Change (UNFCCC) require information about what builds the adaptive capacity of women, and men, so that agreements can support sustainable, equitable and effective adaptation.It suggests that effective social protection, like the universal public distribution system for cereals in India, or pensions and social grants in Namibia, could contribute to relieving immediate pressures on survival.‘This however cannot always be done on the “cheap” — investments are needed to enable better and more sustainable management of resources. ‘Women’s self-help groups are often presented as solutions, yet they are confronted by the lack of resources, skills and capacity to help their members effectively meet the challenges they confront,’ the report adds.

Marty Logan

Women in climate hot spots face challenges adapting

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>.

head-waves

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Not poor, but not rich

Nepal’s bubble economy

Flouting rules caused Saurya tragedy