<figure><img width="1198" height="1227" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13819c7e80680e0a9926jpeg.jpg" alt=""/><figcaption>Photo: BIKRAM RAI/ NEPALI TIMES ARCHIVES</figcaption></figure>Nepal could lose Rs142 billion a year in wasted surplus energy if the <a href="https://www.nepalitimes.com/editorial/just-do-it/" target="_blank" rel="noopener noreferrer">Millennium Challenge Corporation (MCC)</a> project designed to upgrade the electricity grid and highways is not endorsed by Parliament.
Nepal is currently generating 2,000MW of <a href="https://www.nepalitimes.com/editorial/manpower-and-hydropower/" target="_blank" rel="noopener noreferrer">hydroelectricity</a> with an additional 2,500MW under construction. This figure will soar to 7,300MW by 2025 as per Nepal Electricity Authority (NEA) estimates.Presently, Nepal consumes 1,500MW of electricity during the peak season, which is increasing by 20% every year. At this rate, in the next four years, the peak demand will be at 2,600MW, which means there will be an excess of 4,700MW.  
Nepal can export this surplus power to India and there are already agreements in place to facilitate trade between the two countries, but the existing Dhalkebar-Muzaffarpur cross border <a href="https://www.nepalitimes.com/latest/mcc-damned-if-we-do-damned-if-we-dont/" target="_blank" rel="noopener noreferrer">transmission line</a> can only handle 800MW each way. 
“If Nepal is unable to sell excess energy, we will be losing Rs142 billion every year. At a time when we are lagging in infrastructure, we shouldn’t stop the MCC from being approved,” says Dinesh Shrestha, chair of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
FNCCI, Confederation of Nepalese Industries (CNI), Nepal Chamber of Commerce, Federation of Contractors’ Associations of Nepal, Independent Energy Producers’ Association and Nepal-US Chamber of Commerce and Industry have submitted a memorandum to Prime Minister Sher Bahadur Deuba urging the government to stop delaying <a href="https://www.nepalitimes.com/latest/missing-links-in-nepals-mcc-debate/" target="_blank" rel="noopener noreferrer">the five-year compact</a> and implement it soon. 
This is the private sector’s second memorandum to the government in a month. The group also states that some 7,000 Nepalis will be employed during the construction phase of the MCC, which also includes the upgrade of arterial highways to facilitate efficient transportation. The FNCCI memo comes just before the arrival in Kathmandu on Wednesday of US Assistant Secretary for South and Central Asian Affairs, Donald Lu during which he is expected to discuss the MCC ratification with Prime Minister Deuba and other party leaders.It is an indication of the importance the US attaches to the project that Deputy Assistant Secretary for South ans Central Asian Affairs Kelly Keiderling also arrives in Kathmandu on Thursday. Deuba met US President Joe Biden at the COP26 Glasgow summit two weeks ago, and revealed that he and Maoist leader Pushpa Kamal Dahal had written jointly to the US government saying the MCC would be ratified. But the project has become such a political hot potato in Nepal that Dahal quickly backtracked, clarifying that he had only said that it needed amendments before being passed. A large chunk of the US-aided $500 million grant project is set aside to build the Kathmandu-Hetauda-Butwal 400KVa transmission line which will distribute electricity from existing and new hydropower plants on the Budi Gandaki, Trisuli, Kali Gandaki, Marsyangdi, Kosi, and Tamakosi corridors, and also connect to a high-capacity line to Gorakhpur so Nepal can sell surplus monsoon electricity to India.  
In fact, in anticipation of the MCC project being completed, the NEA <a href="https://www.nepalitimes.com/latest/india-nepal-sign-power-exchange-deal/" target="_blank" rel="noopener noreferrer">signed an agreement</a> with the state-run Power Grid Corporation of India (POWERGRID) for the Butwal-Gorakhpur cross border transmission line extension two months ago in September, ahead of MCC vice president <a href="https://www.nepalitimes.com/banner/mcc-ball-in-nepals-court/" target="_blank" rel="noopener noreferrer">Fatema Z Sumar's visit to Nepal</a>.
But the MCC, the biggest grant aid Nepal has ever received has become the victim of intense power struggle and political infighting within the country. It was first weaponised to unseat K P Oli and now <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">threatens to split the ruling coalition</a> led by Prime Minister Sher Bahadur Deuba. 
The project is seen by the critics as part of America’s Indo-Pacific Strategy to counter China’s Belt Road Initiative. The anti-MCC rhetoric has gained such momentum that the public is convinced it supersedes Nepal’s Constitution and is anti-national, forcing even the staunch supporters from speaking in its favour.
Adds FNCCI’s Dinesh Shrestha: “The MCC is crucial for Nepal’s energy sector and <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">is to our benefit</a>. Moreover, this is a grant, not a loan. Further delaying and cancelling the compact will <a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" target="_blank" rel="noopener noreferrer">tarnish Nepal’s image and credibility</a> in the world community.”
MCC or no MCC, one thing is for sure. Nepal must build transmission lines and upgrade its electricity grid one way or the other so as not to waste surplus energy it is set to generate in the near future. 
Alternatively, experts say, the government must work immediately to <a href="https://www.nepalitimes.com/editorial/good-cop-bad-cop/" target="_blank" rel="noopener noreferrer">electrify transport and cooking</a> for domestic consumption of surplus power and reduce its import bill on petroleum products and LPG.

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The cost of no MCC

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016110/636d12189c7e80680e0a98bajpeg.jpg" alt="" width="664" height="450"/>Nepal Rastra Bank’s report last month was badly timed — it was a bad idea to sound a warning that Nepal is going belly up just as the country was grinding to a halt for a month of Dasain-Tihar-Chhat festivals.The indicators were ominous: Nepal’s foreign currency reserves fell to $11.1 billion in September, much below the figure for last year and only enough to pay for 8 months of imports. There has been a 76% increase in the import bill to a record Rs352 billion last fiscal year — despite a pandemic slowdown.In the first two months of this fiscal year, <a href="https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHKGPEf-eEDtwjn0f_p_HMzrqYQGw">overseas remittances that had held steady despite the pandemic</a> went down by 6.3% to Rs155 billion.One of the holy days of Tihar last week was dedicated to Goddess Laxmi, and many prayed for individual wealth and prosperity. We should have been praying for the country’s economic survival.Just those two figures for falling remittances and rising imports should have been enough to sound the emergency alarm. But fatalism is so steeped in Nepal’s governance culture that we hope things will sort themselves out.After all, if things go really wrong, Pashupatinath will come to the rescue. But the Lord Protector of Nepal must be shaking his head at the disarray of the state.We have come to expect lack of accountability in self-dealing politicians and elected officials, but the judiciary used to be relatively untainted and independent.The violation of the principle of separation of powers by <a href="https://www.nepalitimes.com/latest/what-is-happening-to-nepals-supreme-court/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/what-is-happening-to-nepals-supreme-court/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNG-raVzHQQBlpr5oUCza97BMC7wkA">Chief Justice Cholendra SJB Rana</a> and the mutiny in the Supreme Court has dragged the judiciary also into dysfunction.With the court system paralysed, Rana has been reported to be looking for a ‘graceful exit’, and apparently proposed a leave of absence until his term expires. The <a href="https://www.nepalitimes.com/latest/who-wants-early-elections-and-why/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/who-wants-early-elections-and-why/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHWRzSQmjSbl2C65i3KvLsEqN0uUA">top leadership</a> of the main parties have been silent about the fate of Chief Justice Rana, who after all was instrumental in overturning K P Oli’s dissolution of the Lower House which <a href="https://www.nepalitimes.com/here-now/nepal-court-orders-deuba-to-succeed-oli/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepal-court-orders-deuba-to-succeed-oli/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHI-krjS3d3YX690askSFTe2LB0vA">put Deuba in office</a> on 14 July.They also have all kinds of pending cases in the Supreme Court, and do not want antagonise a Chief Justice in case he survives this crisis. Rana has reportedly used the holidays for intense political lobbying through emissaries. That would likely entail a quid pro quo over not starting an impeachment process in Parliament in return for future favours.Whether Rana remains chief justice or is forced to step down is mixed up with politics — after all it was the failure of politicians to sort out their power struggles in Parliament that allowed the judiciary to have such a magnified role in who gets to be in government and who doesn’t. There is so much corruption and vested interest in the political nominations to the Supreme Court that just removing Chief Justice Rana will not stem the rot.Besides, the real emergency Nepal faces today is not about who succeeds Rana or if the coalition remains intact till elections, but the fate of the economy.Remittances pay for imports, and inflows are down and imports are up. Hard currency reserves to finance <a href="https://www.nepalitimes.com/editorial/blood-sweat-tears/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/blood-sweat-tears/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNH52fe2VOfxxaDWmxbqr8rkJcg-Hg">Nepal’s imports, mainly of petroleum</a>, food and other items are falling. Exports did go up, but the trade deficit rose to Rs270 billion in the past two months.Besides, Nepal’s main item of export is processed palm and soya oil that depend on massive imports of raw material. A <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/&amp;source=gmail&amp;ust=1636429484700000&amp;usg=AFQjCNHt2gsBj5b0itg1RhxrL9unH8Y3-Q">growing asymmetry between imports and exports</a> means the balance of payments is now Rs83.4 billion — double what it was in July.Prime Minister Sher Bahadur Deuba pledged at COP26 to reduce Nepal’s carbon footprint, and Energy Minister Pampha Bhusal is pushing for a transition to electric transport. They seem to have finally realised that having a petroleum import bill more than all exports combined is not sustainable.Destructive post-monsoon rains will reduce rice harvests by 20%, which means increased food import. What will we use our remaining foreign exchange reserves for: to buy food or fuel? It might to be an either/or.There does not seem to be a sense of urgency about this emergency in the Finance Ministry. It must act immediately to increase taxes on luxury items, encourage local agriculture production and invest heavily in infrastructure to create local jobs.The economic crisis is a result of political neglect and disarray. Trouble is: we cannot wait for the politics to sort itself out to fix the economy this time.

Urgency about Nepal’s economic emergency

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161132/636d19939c7e80680e0ac827jpeg.jpg" alt="" width="664" height="450"/><figcaption></figcaption></figure>Even as Nepal tries to recover from the impact of the pandemic, the country’s economic indicators released this week by the central bank show dismal performance in the first two months of the fiscal year.The report by the Nepal Rastra Bank shows that Nepal’s foreign currency reserves fell to $11.1 in mid-September, 6.6% below the figure for last year, this is enough to pay for only 8 months of total imports.Even more worrying is that <a href="https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/" target="_blank" rel="noopener noreferrer">overseas remittances that had held steady despite the pandemic</a> for the past two years have now started declining. Nepalis abroad sent home Rs155 billion in the past year, which is 6.3% below the same period last year.Despite the pandemic, remittances had risen by 8.1% in fiscal year 2019-2020. Experts attributed that to overseas workers sending money home as the economic crisis hit families back home, and not necessarily due to higher earnings.The concurrent decrease in foreign currency reserves to finance <a href="https://www.nepalitimes.com/editorial/blood-sweat-tears/" target="_blank" rel="noopener noreferrer">Nepal’s imports, mainly of petroleum</a>, food and other commodities, is seen as an indicator of an impending economic crisis. The main reason for the current downturn is shrinking remittances, which prop up Nepal’s economy.Indeed, compared to 2019-2020, the past year has seen a steep 76% increase in imports to a record Rs352 billion, mainly due to a rise in the import of petroleum products, gold, silver and other items, according to Rastra Bank figures.Even though exports went up by 115% in the same period to Rs44.4 billion, it did not put much of a dent on the trade deficit which has risen to Rs270 billion in the past two months of the fiscal year. This represents a 71% increase in the trade gap compared to last year.The <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/" target="_blank" rel="noopener noreferrer">growing asymmetry between imports and exports</a> means that the country’s balance of payments situation is now Rs83.4 billion in the red — up from Rs38.7 billion in July.With the alarm bells ringing, the government has drastically reduced the amount of money Nepalis can officially exchange before traveling abroad from $1,500 to $200-500. This week, further austerity measures were announced, including a ban on the purchase of vehicles for official use.The negative trend in economic indicators could not have come at a worse time. Just as the country was recovering from the <a href="https://www.nepalitimes.com/banner/the-real-cost-of-nepals-second-wave/" target="_blank" rel="noopener noreferrer">economic impact of the pandemic</a>, it was hit by extreme rainfall this month which killed more than 110 people across the country, and destroyed up to one-third of the country’s ready to harvest rice crop.The Ministry of Agriculture estimates that nearly 90,000 hectares of rice fields were severely damaged by <a href="https://www.nepalitimes.com/latest/post-monsoon-rain-ruins-nepals-crops/" target="_blank" rel="noopener noreferrer">the unseasonal post-monsoon rains</a>, and paddy losses will amount to more than Rs8 billion. Lumbini Province is said to have suffered the worst, with more than half of the initially reported damage nationwide.The unprecedented destruction comes just as farmers and officials were optimistic about a healthy rice harvest because of a healthy monsoon season. Rice is such an important component of Nepal’s economy that it will impact on the GDP, economic growth, and have a knock-on effect on the trade deficit because more rice will now need to be imported.Last year Nepal produced 5.6 million tonnes of rice from 1.4 million hectares of paddy fields, up 1.3% from the previous year. However, rising income levels of Nepalis has also meant that rice consumption is growing, and the country had to import Rs 51 billion worth of rice last year, compared to only Rs23 billion in 2019.Analysts say the <a href="https://www.nepalitimes.com/here-now/are-nepalis-really-eating-more-rice/" target="_blank" rel="noopener noreferrer">sharp increase in rice imports</a> cannot be attributed only to rising consumption, explaining it by the rise in demand from Nepal’s breweries and the dramatic rise in domestic beer consumption.

Nepal’s remittances, forex reserves drop

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109191124/636bf0a94b0ad905ca02f024jpeg.jpg" alt="" width="1618" height="1000"/><figcaption>Pushpa Kamal dahal and K P Oli factions within the ruling Nepal Communist Party is on the verge of a formal split. Illustration: BHANU BHATTARAI</figcaption></figure>After a year of stagnation due to the Covid-19 crisis, Nepal’s economy has just started getting back on track. But political uncertainty once more threatens to derail it.Just as Nepal Rastra Bank put out an optimistic economic report last week, Nepal plunged once more into instability as the ruling Nepal Communist Party (NCP) <a href="https://www.nepalitimes.com/latest/nepals-1-party-2-central-committees-system/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepals-1-party-2-central-committees-system/&amp;source=gmail&amp;ust=1609215418397000&amp;usg=AFQjCNFz9xXx-qQQ18yjS74HPf9Ap1Xpdg">headed for a split</a> after Prime Minister Oli’s dissolution of the Lower House on 20 December.All macro-economic indicators were looking up: foreign exchange reserves and balance of payment situations have improved, the trade deficit has narrowed, remittances from Nepali workers overseas is robust, bank lending rates are going down, and as economic activity picks up even tax revenue is looking satisfactory.Imports of industrial raw materials have hit Rs38 billion in November, which is only slightly lower than last year, and capital investment is back to pre-Covid levels indicating that the wheels of the economy are starting to turn again.All these are indications that despite Covid-19, Nepal’s economy has not been hit too badly — at least at the macro level. However, the dissolution of the Lower Home last week, daily protest rallies on the streets, and <a href="https://www.nepalitimes.com/editorial/step-back-from-the-brink/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/step-back-from-the-brink/&amp;source=gmail&amp;ust=1609215418397000&amp;usg=AFQjCNHlqurvAcevQGFke2PyBadt7SErdQ">moves to split the NCP</a> do not bode well for the economy. Snap elections in April-May next year will be expensive, and will eat a big hole in the budget.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109191124/636bf0ac4b0ad905ca02f025jpeg.jpg" alt="" width="1125" height="750"><figcaption>Protests erupted across the country against the Prime Minister’s move to dissolve the House of Representatives early last week. Photos: BIKRAM RAI</figcaption></figure>Three private sector organisations have expressed deep concern about the country being pushed towards uncertainty. They said continuity in economic policy and investment are only possible when politics is stable.“There is a real need now to accelerate infrastructure development, create jobs and spur economic growth, but because the NCP government’s focus is elsewhere, we are wasting the opportunity,” says economist Biswo Poudel.Nepal’s foreign exchange reserves have hit $12.65 billion, the highest ever, and enough to pay for a record 14 months of imports. Most developing countries have foreign exchange reserves only for 4-5 months of imports. Just in the past five months, the treasury added another $1 billion in reserves.While <a href="https://www.nepalitimes.com/business/remittances-from-nepali-workers-rise/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/business/remittances-from-nepali-workers-rise/&amp;source=gmail&amp;ust=1609215418397000&amp;usg=AFQjCNHNXypcj_xP95YRL0I-zxi7vZNF6A">remittances have defied expectations</a> by not decreasing drastically, Nepal’s imports also fell because of the lockdown. Petroleum imports came down in the first half of 2020, and because there were no tourists, the import of luxury items also fell.Experts say that the foreign exchange reserves should be put to good use to import industrial machinery and capital investment to boost manufacturing and infrastructure, which in turn will generate employment and create lasting downstream benefits for the economy.Says Poudel: “We are not putting this huge foreign exchange reserve to productive use. It is being wasted.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109191124/636bf0af4b0ad905ca02f026jpeg.jpg" alt="" width="1125" height="750"><figcaption></figcaption></figure>Nepal’s current account position is also finally looking healthy after four years of recurring deficits. This year, the current account savings were at Rs20.46 billion, indicating that the deficit fell sharply this year because of the drop in imports. Similarly, the balance of payments is also looking better than previous years because imports fell by 10.6% in August-November, and exports rose by 10.8%.The average bank lending rate has fallen to 9.5% this year compared to last year’s 12%, and this could encourage investors. Says economist Keshav Acharya: “This is the perfect opportunity for those interested in starting quality medical care, better schools, and financing infrastructure and manufacturing.”In fact, there is no lack of money in Nepal, what the country lacks is the capacity to spend. The government wastes billions every year on infrastructure projects that never get built. Even in the first five months of this fiscal year, only Rs35.1 billion has been spent, which is 10% of the development budget.Economist Poudel says the government has enough resources to accelerate the construction of 500km of fast-track highways. “You need the political will to go ahead with it, and the slow pace of work on infrastructure is proof that such political will is absent,” he adds.Indeed, there are several hydropower projects with 700MW capacity under construction, but no one seems to be in a hurry to complete them because of delays in putting up transmission lines. Similarly, the Kathmandu-Tarai expressway, Melamchi Water Supply Project, Tama Kosi Hydropower project, Sikta Irrigation and the Mid-Mountain Highway are all languishing.Prolonged political uncertainty will delay these projects further, and remove the benefits that Nepal can accrue from its healthy macro-economic position.

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Instability to cost Nepal dear in 2021

<img width="1466" height="992" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109131156/636ba4109c7e80680e07364ajpeg.jpg" alt=""/>A typical urban Nepali kitchen is globalised these days: there is rice grown in India, soybeans from the United States, the garlic is from Shandong in China, the chilies are Vietnamese. Vegetables are cooked in soybean oil from as far away as Paraguay, the small cardamom is from Guatemala and even the dal lentil is from Tanzania.Other food essentials could be from Australia, Ukraine, Indonesia or Argentina. Even staples like rice and dal, vegetables and spices are not likely to be home grown. Despite this growing dependency on food imports, Nepal still officially describes itself as an agriculture-based economy.  In fiscal year 2019/20, Nepal spent Rs243 billion importing food which was an increase of Rs19 billion compared to the previous fiscal year. Although two-thirds of Nepalis depend on agriculture, the country now fully dependent on food imports – despite every government in the past decades <a href="https://www.nepalitimes.com/banner/the-rise-of-rice-in-nepal/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/the-rise-of-rice-in-nepal/&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNGLJ-9nTdEyVPZTU9bxLLr2KxTCWQ">making agricultural productivity a priority</a>.There is hope that the return of hundreds of thousands of Nepali workers from abroad due to <a href="https://www.nepalitimes.com/latest/pandemic-offers-chance-to-revive-farming/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/pandemic-offers-chance-to-revive-farming/&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNHarPce7h632XBPT2X5Drad8V8Ozg">the COVID-19 lockdown</a> will increase the number of farmhands, and help raise the production especially of paddy this year. A <a href="https://www.nepalitimes.com/banner/nepal-celebrates-paddy-planting-day/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/nepal-celebrates-paddy-planting-day/&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNG2L6fxeSO0NlRwPT8bz9Xd3q7YlQ">healthy monsoon</a> has also lifted <a href="https://www.nepalitimes.com/editorial/back-to-the-future-of-farming/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/back-to-the-future-of-farming/&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNFspnGZZhHBepcOLQ_mH_dPS9HCpQ">prospects of increased rice production</a> this year.However, a severe shortage of fertiliser and heavy flooding in the Tarai grain basket, and deadly landslides across the mountains may <a href="https://www.nepalitimes.com/latest/covid-19-affecting-food-security-in-nepal-wfp/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/covid-19-affecting-food-security-in-nepal-wfp/&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNFzCagxbcdLGUIRcFD5ddRCgOQHyQ">cancel out some of those gains</a>.   <img width="640" height="233" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109131156/636ba4139c7e80680e07364bjpeg.jpg" alt=""><figure><img width="1672" height="1086" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109131156/636ba4159c7e80680e07364cjpeg.jpg" alt=""><figcaption>Rice production and productivity in Nepal from 2010 to 2019 (Source: MoALD, 2019).</figcaption></figure>The trend for the past few years is alarming: Nepal is now importing 80% of the grain it consumes, and spending on food imports has increased 62% in the last five years. Even crops like rice, dal and vegetables that are farmed extensively in Nepal, are imported. For instance, last year Nepal spent nearly Rs33 billion <a href="https://www.nepalitimes.com/editorial/nepals-rice-economy/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/nepals-rice-economy/&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNHF9ru9-ELyVljFn1YAnTJiRIs_1Q">importing rice</a>, Rs15 billion worth of maize and Rs15 billion for millet. The country bought Rs33billion worth of vegetables, mainly from India.Imports of fruits, pulses and vegetables have also increased. This fiscal year, Nepal spent Rs 20.74 billion just importing fruits and cashew nuts. Fish and meat worth nearly Rs3 billion were also imported last year despite the abundance of livestock and aquaculture in the country. Nepal grows abundant tea and coffee and production is going up, but the country still imported Rs11 billion buying tea and coffee from abroad. From honey to milk, from sugar to spices, almost everything Nepalis consume is imported. Despite ambitious plans to raise agricultural production, and increase productivity of the land with irrigation, <a href="http://archive.nepalitimes.com/article/nation/productivity-empowerment-and%20job-with-mechanization-and-cooperative-in-agriculture,2378" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=http://archive.nepalitimes.com/article/nation/productivity-empowerment-and%2520job-with-mechanization-and-cooperative-in-agriculture,2378&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNEQk5TVURkA-nMk8dH5F5pF_9pqpA">mechanisation and modern inputs</a>, imports are going up faster than population increase. Since the policies have never been effectively implemented, output of grains, vegetables, fruits and other staples have not gone up, the shortfall can only be met by imports.  <figure><img width="640" height="296" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109131156/636ba4189c7e80680e07364djpeg.jpg" alt=""><figcaption>Average quantity of plant nutrient (nitrogen, phosphorus and potassium) used in crop production in Nepal from 2008 to 2018 (Source: MoALD, 2019).</figcaption></figure>Other reasons for the need to import more food are: changing eating habits of Nepalis, increased household income from remittances, out-migration from rural farms, and prime farmlands being built over. The government and donors have invested heavily subsidising chemical fertilisers, improved seeds, irrigation, farming methods, and <a href="https://archive.nepalitimes.com/article/nation/rice-self-sufficiency,3834" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://archive.nepalitimes.com/article/nation/rice-self-sufficiency,3834&amp;source=gmail&amp;ust=1596420044659000&amp;usg=AFQjCNExCuSfPJO2pAlZqH_4laXSq6lmlA">paddy productivity</a> did increase from 2,400 kg per hectare to 3,800 kg per hectare in the past 30 years. Maize productivity has also increased, but the productivity of millet in the mountains has not gone up. However, the increase does keep pace with the rise in demand for the grains.The government had announced that it will double the productivity in five years. But according to the Central Statistics Office, the average annual growth rate of the agricultural sector has been only about 3% over the past decade. Experts say the main reason is the lack of adequate fertiliser, slow pace of adoption of mechanisation, poor farm management, lack of irrigation and climate change. Only 56% of Nepal's total arable land is irrigated, and of that only one-third of farms have irrigation all year round. The rest have to depend on rain-fed agriculture.

Nepal agro imports at all time high

Qatar is one of the most popular overseas destination for Nepali workers, and because of that the Gulf state’s strict measures to stop the spread of coronavirus has had a direct impact on Nepal’s economy.On 9 March Qatar banned the entry of nationals from 14 countries including Nepal, and at least 2,000 Nepali workers in the country have been quarantined. The restriction has also affected Nepal’s economic activities beyond labour migration.<a href="https://www.nepalitimes.com/banner/greens-from-nepal-in-qatars-desert/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/greens-from-nepal-in-qatars-desert/&amp;source=gmail&amp;ust=1584429126680000&amp;usg=AFQjCNHn7YwEcZztCHzoi81nGBan7Kbocg">Kalyan Ghimire’s company</a> Al Saman used to export three consignments of agriculture produce by air to Doha every week, but that business has ground to a halt since the ban on passengers and cargo."We had just received an order for 5,000 kg of strawberries from Qatar, and had sourced them from a farm in Kakani, but the order was cancelled,” Ghimire says. The company also exported vegetables and even gundruk which is in high demand from Nepalis in the Gulf state.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78db9c7e80680e0646cajpeg.jpg" alt="" width="1280" height="960"/><figcaption>The Nepali company Al Saman that sells farm produce like these strawberries have had to halt exports to Qatar because of the ban on passengers and cargo to Doha. All Photos: KALYAN GHIMIRE</figcaption></figure>Ghimire had also just started exporting Nepali bottled water from Rasuwa to Qatar, and sent especially packaged 480 bottles for test marketing in Doha to compete with Evian and other brands. However, the COVID-19 scare has put an end to that experiment as well.Ghimire was part of a 40-member team of government officials, entrepreneurs and farmers taking part in the Agriteq 2020 in Doha from 18-22 March, but the trade fair has been called off.“Such ups and downs are to be expected in any business, and I try not to lose sleep over this as it is beyond my control, but let’s hope we can resume exports,” says Ghimire, who credits Qatar’s ambassador to Nepal Yousuf Bin Mohamed for getting Nepali exporters to diversify their product range.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78de9c7e80680e0646cbjpeg.jpg" alt="" width="1024" height="768"><figcaption> </figcaption></figure>Only Qatar Airways still flies Kathmandu-Doha after Nepal Airlines and Himalaya Airlines both suspended operations between the two capitals after the travel ban. Qatar airways is still carrying transit passengers via Doha to and from Kathmandu and Europe/North America.Ghimire's son Saman who is based in Qatar and manages the business there returned to Nepal earlier this week. "I did not want to be trapped in Qatar as business is down, likely till the end of April, so I managed to get out before the flights got canceled," he says.Read also: <a href="https://www.nepalitimes.com/opinion/labour-mobility/crossborder-virus-and-nepali-migrant-workers/" target="_blank" rel="noopener">Crossborder virus and Nepali migrant workers</a>, Upasana KhadkaThe Qatar Government's travel ban and Nepal's decision to stop issuing labour permits to all destinations including Qatar has put thousands of Nepalis in Qatar as well as in Nepal in limbo. Some 40,000 Nepali individuals who were set to go to Qatar to start employment are stuck in Kathmandu. An unknown number of workers in Nepal on vacation from Qatar are also stranded here, with concerns about their visas or work permits expiring.There are 401 COVID-19 cases in Qatar with four recoveries, and there are supposed to be about 2,000 Nepali workers who have been quarantined. On Wednesday there was a spike of 238 new cases in Qatar was related to quarantined expat workers but details on nationalities have not been revealed.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78e19c7e80680e0646ccjpeg.jpg" alt="" width="1200" height="1600"><figcaption> </figcaption></figure>COVID-19 has not distinguished between nationals and expats, politicians and those at the lower rungs of the ladder or between rich and poor. But workers in camps neither have the luxury of social distancing nor the opportunity to work from home."There is definitely a sense of fear among workers,” says Mahesh Nepal, who has been working in Qatar for five years. “There is increased surveillance in the labour camps, and all workers have to undergo tests before and after work each day. Mobility has been restricted and authorities including emergency response teams are on call at all times."Read also: <a href="https://www.nepalitimes.com/here-now/nepals-economy-already-weak-takes-direct-hit/" target="_blank" rel="noopener">Nepal’s economy, already weak, takes direct hit</a>, Sanghamitra SubbaMigrant workers have benefited from the strong health infrastructure and containment efforts in Korea, Malaysia and the Gulf that together have about 1.5 million Nepalis. The consequences of the coronavirus pandemic goes beyond health to Nepal’s economy.As the top destination for Nepali workers in 2018/19, Qatar is important for Nepal’s remittance-based economy. Doha is also an important aerial gateway for tourist traffic and the Nepali diaspora, and any further flight curtailments will have consequences for Nepal beyond migration.The Saudi and UAE blockade of Qatar for the past two years has actually helped the country become more self-reliant and bolstered its capacity to deal with the epidemic. In addition, Qatar has announced a $23 billion stimulus package to help the private sector weather the crisis.Says Mahesh Nepal: “The impact of the pandemic on the Qatar economy could have been worse due to external disruptions on supply chains or imports.”

Upasana Khadka

Nepalis quarantined in Qatar

<img width="1000" height="717" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a53fa9c7e80680e05237cjpeg.jpg" alt=""/><img width="550" height="393" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a53fc9c7e80680e05237djpeg.jpg" alt="">With increasing awareness about the climate emergency and air pollution, many around the world have taken steps to reduce their own carbon footprints by flying less, being more energy efficient and switching to <a href="http://archive.nepalitimes.com/article/nation/Be-smart-go-electric,3062" target="_blank" rel="noopener">electric cars.</a>Till now, the cost of battery-powered vehicles meant that only the most committed bought them to make a green statement. But <a href="http://archive.nepalitimes.com/blogs/kundadixit/2018/01/24/electric-cars-shock-fossil-industry/" target="_blank" rel="noopener">lithium-ion battery prices have come down</a> from $1,160/kWh in 2010 to $171/kWh today, and are expected to be half that in the next five years. This has prompted big auto manufacturers to launch plug-in vehicles. The number of electric cars has doubled in the past two years – there are now <a href="https://www.iea.org/gevo2018/" target="_blank" rel="noopener">five million electric cars in circulation worldwide.</a>Nepal’s dependence on imported petroleum is increasing every year, and with the completion of the <a href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/" target="_blank" rel="noopener">69km Motihari-Amlekhganj</a> fuel pipeline it is clear the government expects fossil fuel use to grow. However, Nepal <a href="https://www.nepalitimes.com/banner/electri-city-cars/" target="_blank" rel="noopener">slashed taxes on electric vehicles</a> five years ago, and since the duty on imported cars is more than 260%, it has put the cost of electric cars at par with similar petrol or diesel vehicles.The batteries are now not just cheaper but have more energy density, meaning the newest electric SUVs give a range of 400-450km, enough to drive from Kathmandu to Biratnagar and still have lots of juice left.Six new battery-powered car models and eight two-wheeler brands are making their debut at this year’s NADA Auto Show 27 August–1 September. Says NADA President Sambhu Dahal: “<a href="https://archive.nepalitimes.com/article/nation/Be-smart-go-electric,3062" target="_blank" rel="noopener">The future of electric vehicles is very bright in Nepal</a> and the response has been outstanding. With the world going electric, Nepal will soon follow.”Indeed, Kia, Hyundai and Mahindra have seen a surge in customer demand and cannot keep up. Some are taking orders for delivery in December. Says Suhrid Ghimire from Kia Motors in Nepal: “We are being flooded with inquiries for our Niro electric SUV and are rerouting vehicles made for the UK market here to keep up with demand. Because diesel SUVs are taxed so high, electric vehicles are now competitive.”And where customer preference goes, banks follow. Laxmi Bank is unveiling its electric vehicle auto loan scheme at NADA. “Electric vehicles are becoming more appealing to consumers as tax on petroleum products increase. We hope our auto loan will make it feasible for consumers to go electric,” says Bharati Pandey of Laxmi Bank.Read Also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=31918&amp;preview=true" target="_blank" rel="noopener">More e-scooties for cleaner Kathmandu air</a>, Sonia Awale<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=31851&amp;preview=true" target="_blank" rel="noopener">Fully Charged</a>, Nepali TimesEven luxury car manufacturers like Audi are coming to the market with the high-end eTron model which at Rs17.5 million will cost more than double the Hyundai Kona or Kia Niro. Mahindra’s much smaller and affordable e2o Plus, with a price tag of Rs2.2 million, has dominated the Nepal electric car market for years, selling over 200 units.Even if private car owners switch to <a href="https://www.nepalitimes.com/banner/nepals-electric-transport-future-is-here/" target="_blank" rel="noopener">battery-powered cars</a> it will not make much of a dent on air reducing air pollution and the petrol import bill. “Only switching to <a href="https://www.nepalitimes.com/here-now/cleaner-air-with-greener-buses/" target="_blank" rel="noopener">electric public transport</a> can Nepal  hope to reduce its carbon footprint,” says Bhushan Tuladhar of Sajha Yatayat, which is inducting 30 electric buses this year.The <a href="https://www.nepalitimes.com/here-now/the-cost-of-light/" target="_blank" rel="noopener">Nepal Electricity Authority</a> says it had surplus power this monsoon, and Nepal can stop import of electricity from India by 2021. If that is the case, the spread of electric vehicles will use locally available renewable energy instead of depending on imports. And the beauty of it is that the vehicles will charge at night when demand for power is lowest.     <img width="1000" height="750" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a53fe9c7e80680e05237ejpeg.jpg" alt=""><img width="590" height="431" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54019c7e80680e05237fjpeg.jpg" alt=""><img width="1000" height="557" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54039c7e80680e052380jpeg.jpg" alt=""><img width="622" height="455" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54059c7e80680e052381jpeg.jpg" alt=""><img width="1000" height="660" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54079c7e80680e052382jpeg.jpg" alt=""><img width="578" height="391" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a540a9c7e80680e052383jpeg.jpg" alt=""><img width="1000" height="571" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a540c9c7e80680e052384jpeg.jpg" alt=""><img width="641" height="338" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a540e9c7e80680e052385jpeg.jpg" alt=""><img width="1000" height="638" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a540f9c7e80680e052386jpeg.jpg" alt=""><img width="564" height="389" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54129c7e80680e052387jpeg.jpg" alt=""><img width="1000" height="534" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54149c7e80680e052388jpeg.jpg" alt=""><img width="727" height="396" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54169c7e80680e052389jpeg.jpg" alt=""><img width="989" height="484" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54189c7e80680e05238ajpeg.jpg" alt=""><img width="568" height="337" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a541b9c7e80680e05238bjpeg.jpg" alt=""><img width="1000" height="586" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a541c9c7e80680e05238cjpeg.jpg" alt=""><img width="603" height="333" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a541f9c7e80680e05238djpeg.jpg" alt=""><img width="1000" height="664" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54219c7e80680e05238ejpeg.jpg" alt=""><img width="610" height="425" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814114/636a54239c7e80680e05238fjpeg.jpg" alt="">Read Also:<a href="https://www.nepalitimes.com/banner/electri-city-cars/" target="_blank" rel="noopener">Electri-city Cars</a>, Bhrikuti Rai<a href="https://www.nepalitimes.com/banner/nepals-electric-transport-future-is-here/" target="_blank" rel="noopener">Nepal's electric transport future is here</a>, Sonia Awale<a href="https://www.nepalitimes.com/banner/20-electric-by-2020/" target="_blank" rel="noopener">20% electric by 2020</a><a href="http://archive.nepalitimes.com/article/nation/implementation-on-ev-friendly-policy-nil,2689" target="_blank" rel="noopener">Electrified transportation</a>, Sahina Shrestha