<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111156/636cd90a9c7e80680e092e77jpeg.jpg" alt="" width="640" height="497"/>Almost two decades have passed since the <a href="http://archive.nepalitimes.com/news.php?id=7600#.YFb5li2B3-Y" target="_blank" rel="noopener noreferrer">Income Tax Act</a> came into effect in Nepal. But complications abound for taxpayers, even if they have paid their taxes on time and have a legitimate claim to overpaid tax refund.The Act provides for taxpayers who register more than the liable tax amount to be refunded by the government. The taxpayer is supposed to receive the refund amount within 60 days of application.However, barring exceptional cases, this rarely happens. The contradiction in implementation is an interesting one—a government that fines <a href="http://archive.nepalitimes.com/news.php?id=11068#.YFb5ri2B3-Y" target="_blank" rel="noopener noreferrer">the taxpayer</a> for delayed tax payment itself does not pay back the refund.When approached on the matter, a government officer responded by saying that it is not possible to refund from the ongoing fiscal year's budget, and thus the amount could only be refunded in the upcoming year.This is a common rhetoric heard in the tax offices, whenever a taxpayer approaches the government for a refund, even if the request is made within the stipulated 60 days.The Federation of Nepalese Chamber of Commerce Industries (FNCCI) tax expert and entrepreneur, Ashok Kumar Todi says, “It is very, very difficult to get a refund. Actually, it is almost impossible.”The Income Tax Act 2058 underlines that <a href="http://archive.nepalitimes.com/news.php?id=6342#.YFb5lC2B3-Y" target="_blank" rel="noopener noreferrer">the taxpayer</a> must pay the due amount for the running year based on estimates within the Nepali months of Poush (December-January), Chaitra (March-April) and Asar (June-July). If the total estimated amount is 100% then the taxpayer has to pay 40% in advance in the month of Chaitra and the remaining 30% in the month of Asar.In addition, if the paid tax based on an estimate is less than the actual amount, then the taxpayer is liable to be fined. If such tax is paid on installment in theory, and if it so happens that the estimate is greater than actual, then the over-paid amount should be refunded easily.Income Tax Act Clause 113 and Income Tax Rules number 36, both say that the tax must be refunded. However, in practice, the overpaid tax amount is being withheld by the tax officers, without any explanation.“The overpaid tax amount must be refunded, but in practice, it is not happening,” confirms tax expert Bhavanath Dahal who says that Gyanendra Shah while still king of Nepal had received a refund for overpaid taxes for his Soaltee Hotel— but only after it was vetted by the Cabinet. There are a few other exceptions in which the taxpayers got their overpaid tax refunded, but the processes were mostly cumbersome.Tax expert and entrepreneur Todi says that the tax administration should return the overpaid tax at least within the current year. However, in practice, the overpaid tax is passed on the next fiscal year under the heading of ‘government reserve’.This process repeats itself year after year, leading to the overpaid tax amount being transferred to the next fiscal year on a continuous basis—at the cost of entrepreneurs.“We pay taxes by taking loan from banks, and the overpaid tax amount just gets accumulated in the government reserve fund. It is impossible to get a refund,” ays a businessman who requested anonymity.A high level Tax System Review Commission six years ago recommended improvement in the refund process, but it was never enforced. Internal Revenue Department (IRD) officers themselves admit that returning the income tax is very difficult.IRD spokesperson Arjun Dhakal says the tax amount overpaid by the taxpayer cannot be directly paid back by the IRD itself as the applications are forwarded to the Finance ministry.“The process to get the overpaid income tax back is a very lengthy and difficult one and as a result, there are very few instances of taxes actually being refunded,” he admits.Entrepreneurs say that the total amount that the government owes to taxpayers as overpaid tax refund has now accumulated to astronomical amounts. Even IRD Tax Refund Department director Devnarayan Poudel has no idea how much it is.The IRD has introduced a new process to ease the refund of overpaid taxes, regarding which a circular has been sent to the tax office, but entrepreneur Todi is skeptical.According to law, if the tax officer makes an overestimate of the tax to be paid then the taxpayer can go to the Revenue Judiciary of Nepal and the taxpayer will get back the amount overpaid. But that is only in paper.Anyone choosing the path of litigation ends up losing even more. In order to process the litigation for administrative review, the overpaid tax payer has to deposit one-fourth of the disputed amount. If the taxpayer is still not happy with the administrative review, one can deposit 50% of the disputed amount and file a lawsuit to the Revenue Judiciary for further review.The caveat however, is that it may take several years before a settlement is reached by the Revenue Judiciary. As a result, a large amount of taxpayer’s deposit is accumulated in the government reserves.Even if the court rules in favour of the taxpayer, by the time the decision comes through, the taxpayer would have been seriously overburdened with the loan and interest. On the other hand, if the taxpayer loses the lawsuit, the government will charge the individual or the firm, an interest on the disputed amount since the beginning or the initial date of the filing of the lawsuit and the disputed amount will not be deducted.“In some cases, even if the taxpayer has won, the government has refused to return the disputed amount along with interest,” says Arun Raut, a tax expert.FNCCI Chair Shekhar Golcha, however, says that even though the process of getting back overpaid taxes is difficult, it is not impossible. According to him, since the overpaid tax amount from the previous year is adjusted in the tax payable the next year, it is automatically sorted out.He says that last fiscal year the total claim amount for overpaid tax refund was Rs6.67 billion, but the IRD refunded only 57% of that amount. In the earlier fiscal year the amount to be refunded was Rs3 billion of which Rs2.26 billion was refunded.Even so, tax expert Dahal says the non-refund has affected Nepal’s business environment. He says: “It is the right of the taxpayer to get a refund of his overpaid taxes. But the problem is not limited to this. It is a systemic problem.”

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Taxing process of fund reclaiming in Nepal

<figure><img width="620" height="366" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bc9c7e80680e092dfdjpeg.jpg" alt=""/><figcaption></figcaption></figure>Aside from second-guessing what will happen in the restored Parliament on Sunday, the major past-time of urban Nepalis these days is to speculate about the country’s violatile stock market.Dring the past six months, the <a href="http://www.nepalstock.com/" target="_blank" rel="noopener noreferrer">Nepali Stock Market (NEPSE)</a> has soared, which immediately begs the question: is a fall imminent?The NEPSE Index is at a record high market capitalisation, which is the total value of shares listed in the stock market. Daily turnovers have started crossing the Rs10 billion mark, invetors seem to be raking it in.All this has happened at a time when the <a href="https://www.nepalitimes.com/latest/instability-to-cost-nepal-dear-in-2021/" target="_blank" rel="noopener noreferrer">economy is being battered by the impact of the pandemic</a>, which has led to heated debates over whether the market is in a bubble and likely to crash, bringing ordinate ionvestors down with it.  Current highs are the combination of several factors:<ul><li>Low interest rate (see figure 1)</li><li>High liquidity in the banking system</li><li>Dematerialisation (conversion of physical certificates to electronic units) of shares</li><li>Restrictionof ‘kitta-kaat’ in real estate</li><li>Fear of missing out (FOMO)</li></ul>Low share prices between 2017-2019 have been attributed to the appointment of <a href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener noreferrer">Yubraj Khatiwada as finance minister</a>. He famously (or infamously for investors) once remarked that investing in stocks was “not productive”. <figure><img width="953" height="560" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bd9c7e80680e092dfejpeg.jpg" alt=""><figcaption> </figcaption></figure>One factor that has gone relatively unnoticed but has been a game-changer is the advent of ‘online trading’. The possibility to make transactions through the online banking system has ushered in a new breed of investors. Online trading has made the Nepali stock market easily accessible to the public, who can now trade from their living room instead of going to a broker office or bank to make a payment.This trend was starting to be reflected in the data before Covid-19 gripped the country (figure 2). From October 2019 to February 2020, the number of monthly share transactions doubled from an average of 200,000 to 400,000, which pushed the NEPSE Index to the 1,600s, despite relatively higher interest rate hovering above 11%. <figure><img width="961" height="541" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bf9c7e80680e092dffjpeg.jpg" alt=""><figcaption> </figcaption></figure>Following Covid-19 restrictions, the number of transactions further increased and reached a whopping 1.1 million per month in recent months. This reflects the unprecedented entry of retail investors who, with a click of a mouse, can invest money that otherwise would be sitting idle, earning savings account interest rates. This increased participation and diversification of the investor base is also reflected by the data on stock market penetration. DEMAT accounts have increased from 800,000 in mid-July 2017 to 1.4 million in mid-July 2019, and is currently estimated at 2.5 million -- about 8% of Nepal’s total population. More than 1.5 million Nepalis applied for the recent IPO of an infrastructure finance company. Compare this number with India, where around 2% of the country’s population invest in the stock market, while in China this number is estimated to be around 7%. But, online trading also brings a host of new challenges. Asymmetric information, poor advisory services and buying shares based on rumours are big concerns. Investors can lose money in the share market if they overpaid for stock or if their investment horizon is not long enough. However, by not investing they can also ‘lose’ potential gains. So, investors need to understand and be aware of cognitive biases that limit investing success. It is as much about human psychology as it is about finance and economics. The importance of diversifying across different companies and sectors, having a long-term investment horizon and personal finance management are even more important these days, but these are severely lacking in Nepal. An investor’s main motto always has to be: buy a diversified set of companies, invest regularly, keep track of the company’s financials and hold for a long period of time. Crucial reforms now await Nepal’s stock market, these can include: <ul><li>Increased participation of companies in manufacturing, agribusiness, etc</li> <li>Strong regulation on insider trading</li> <li>Better trade settlement systems</li> <li>Increasing the limitation of 50 brokers</li> <li>Creation of index funds and exchange traded funds (ETFs)</li> </ul>The NEPSE Index jumped more than 100% in the past year. You could argue that its current level is a bit high, but just because it has gone up by 100% it does not mean that it is overvalued, and vice versa. The cumulative annual growth rate of the NEPSE between 2001 and 2021 is around 12%, which is in line with the 10% return of the S&amp;P 500 (which tracks 500 of the largest US companies) in the same period. During these 20 years, there have also been periods where the NEPSE fell as much as 75% (between August 2008 and June 2011) and soared over 500% (between June 2011 to July 2016). Stock markets are cyclical by nature. Corrections, and subsequent rises, are bound to happen. In this apparently chaotic environment of ups and downs, one thing is here to stay: a fundamental shift and dynamism thanks to a new breed of investors trading online. This will have short-term disruptions, but it is likely to stabilise the Nepali capital market for years to come. Santosh Pokharel, CFA works in development sector. Sudyumna Dahal is Doctoral candidate at CAMA, <a href="https://cama.crawford.anu.edu.au/">Australian National University.</a>

Despite politics, Nepal’s stock market is bullish

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109181120/636be1539c7e80680e083e40jpeg.jpg" alt="" width="1500" height="1001"/><figcaption>Photo: MANISH PAUDEL</figcaption></figure>Nepal has only slightly progressed in the annual overall prosperity rankings this year, but rose 15 steps over the last decade with <a href="https://www.nepalitimes.com/latest/security-reduces-poverty/" target="_blank" rel="noopener noreferrer">substantial improvement in security</a> and social capital. Worldwide, global prosperity was at its highest ever level when Covid-19 struck.The London-based Legatum Institute’s 2020 Prosperity Index released on Tuesday analyses 167 countries around the world on 12 measures in three broad metrics: inclusive societies, open economics and empowered people.With an overall ranking of 114, Nepal still maintains its position of <a href="https://www.nepalitimes.com/latest/nepal-rises-in-prosperity-index/" target="_blank" rel="noopener noreferrer">22nd poorest out of the 29 countries in Asia-Pacific</a>. It has made the most dramatic progress over the last decade in prosperity measures such as safety and security (scoring from 47.2 to 68.5, a jump of 66 points in the global ranking) and social capital (37.5 to 50.5, up 59 position).<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/banner/its-a-rich-mans-world/" target="_blank" rel="noopener noreferrer">It's a rich man's world</a>, Ramesh Kumar<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://archive.nepalitimes.com/article/editorial/Nepal-%20Multidimensional-Poverty-Index,4115" target="_blank" rel="noopener noreferrer">28.6%</a>, EditorialBut this is countered by the fact that there was little to no improvement in the country’s investment environment and enterprise condition, highlighting Nepal’s less than friendly investment climate, further proving that the openness of the economy has stagnated. Nepal’s enterprise condition has fallen by 22 points in the global ranking, from 100th to 122th in the world and 25th in South Asia.There were also minimal gains in economic quality and governance, largely owing to the local elections in 2017, the first one in two decades that led to some grassroots development and accountability in the recent years.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109181120/636be1589c7e80680e083e41jpeg.jpg" alt="" width="1654" height="612"><figcaption>Source: THE LEGATUM INSTITUTE</figcaption></figure>As expected there was some healthy development in market access and infrastructure, health, education and living condition of Nepalis but keeping up with the regional trend, Nepal dropped in personal freedom and natural environment measures. While not a major loss in terms of points, these are significant indicators of the changing times.<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/banner/nepals-great-income-divide/" target="_blank" rel="noopener noreferrer">Nepal's great income divide</a>, Ramesh Kumar<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/editorial/mind-the-gap-2/" target="_blank" rel="noopener noreferrer">Mind the gap</a>, EditorialPrior to the pandemic, prosperity stood at a record high, with 147 out of 167 countries seeing prosperity rise over the last decade, driven by improved health, education, and living conditions, and more open economies. However, weaker personal freedom and deteriorating governance are holding back further improvements in prosperity.In fact, the improvement seen in the last 12 months had not kept pace with the progress of the previous two years, as Asia-Pacific and Western Europe stalled and North America deteriorated slightly. In addition, stagnating personal freedom and governance around the world is holding back further improvement in prosperity.“There is never a good time for a worldwide health crisis, but if there has to be one, the progress that has been made over the last decade provides emerging nations with a better context in which to tackle it. But the Western world must beware the trap of falling into a mindset of an overdeveloped society, vulnerable to entitlement and complacency,” says CEO of the Legatum Institute Philippa Stroud.She adds: “Never has it been more important for leaders to recognise the holistic nature of prosperity and make strategic choices to further build inclusive societies and more open economies, and to improve the lived experience of all citizens.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109181120/636be15b9c7e80680e083e42jpeg.jpg" alt="" width="1352" height="1092"><figcaption>Source: THE LEGATUM INSTITUTE</figcaption></figure>The Index also shows that further growth in global prosperity is being held back by <a href="https://www.nepalitimes.com/editorial/lockdown-crackdown/" target="_blank" rel="noopener noreferrer">stagnating personal freedom and governance</a>. Globally 121 countries had seen a decline in the freedom to speak and access information and 116 had seen a reduction in the freedom to assemble and associate over the past 10 years, and political accountability and executive constraints – which measures the checks and balances on elected governments and their officials – had both weakened.This deterioration is even <a href="https://www.nepalitimes.com/latest/south-asia-tightening-press-controls-amidst-covid-19/" target="_blank" rel="noopener noreferrer">more pronounced in the post Covid era</a> where government across the world have tried to downplay their inability to control the pandemic and rather undermined it in multiple ways, including by withholding vital information and by creating <a href="https://www.nepalitimes.com/latest/covid-19-shrinks-civic-space/" target="_blank" rel="noopener noreferrer">roadblocks for journalists reporting from the frontlines</a>.Decisions that build prosperity and respect freedom and responsibility is crucial to lead world through Covid, says the Legatum Institute urging the leaders globally to hold firm to a holistic view of prosperity and <a href="https://www.nepalitimes.com/opinion/journalism-is-not-a-crime/" target="_blank" rel="noopener noreferrer">the core principles of freedom and responsibility</a> as they respond to the ongoing Covid-19 pandemic.Says Stephen Brien, Director of Policy at the Legatum Institute: “Prosperity is underpinned by an inclusive society, with a strong social contract that protects the fundamental liberties and security of every individual. It is driven by an open economy that harnesses ideas and talent to create sustainable pathways out of poverty. And it is built by empowered people, who play their part in creating a society that promotes wellbeing.”

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Nepal stalls in Prosperity Index

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141112/636ba76b9c7e80680e073781jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>Photo: AJAYA UPADHAYAYA</figcaption></figure>As serious as the rapid spread in Nepal of the novel coronavirus looks, even more frightening is what the lockdown meant to prevent it will do to the <a href="https://www.nepalitimes.com/here-now/nepals-economy-already-weak-takes-direct-hit/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepals-economy-already-weak-takes-direct-hit/&amp;source=gmail&amp;ust=1598352647267000&amp;usg=AFQjCNHMB3uRxLtXPB1J9V0PQdJF-f6E6w">country’s economy</a>. The health impact of the virus may pale in comparison to <a href="https://www.nepalitimes.com/latest/nepal-plans-to-revive-economy-hit-by-covid-19/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-plans-to-revive-economy-hit-by-covid-19/&amp;source=gmail&amp;ust=1598352647267000&amp;usg=AFQjCNHZ73Q3ug57-h3IKB7NUBfuqD8LyQ">long-term damage</a> to the country from a prolonged lockdown that enters its sixth month today.It is difficult to make predictions on how Nepal’s economy will fare till the end of the year because that will depend on how the virus behaves. But all indications are of that SARS-CoV-2 is here to stay, and that it will resurface with added virulence in winter.On 21 July when Finance Minister Yubaraj Khatiwada triumphantly announced that the pandemic in Nepal had peaked, and the <a href="https://www.nepalitimes.com/latest/nepal-ends-covid-19-lockdown/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-ends-covid-19-lockdown/&amp;source=gmail&amp;ust=1598352647268000&amp;usg=AFQjCNEfmOWpPyfs0PHIzdD4yHmecUC6hg">lockdown had been lifted</a>, traders, businesses and industries were cautiously optimistic. But since then there has been a surge, with cases and fatalities more than doubling in the past three weeks.Aside from essential food and other items, business transactions are down by more than half since 24 March when the restrictions were first announced. Even when the lockdown was eased last month, the people’s purchasing capacity had gone down and businesses did not really pick up.The Rastra Bank estimates that it will take at least nine months after the lockdown is fully lifted for the economy to come back to previous levels. This means Nepal is not going to see a recovery this fiscal year. The central bank says 22.5% of those employed in the country have lost their jobs in the past five months of lockdown.The central bank expects Nepal’s economic growth rate to plunge from 6.9% last year to less than 1% this year. But the World Bank is even more pessimistic, it says the growth rate may even go into negative 2.8% if the crisis continues.“Everything is at a complete standstill, there are no transactions taking place except people buying food from day to day,” says Shekhar Golchha of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI). “The question is how long before businesses run out of cash to pay salaries, and families run out of savings.”Factories along the Itahari-Biratnagar and Simara-Birganj corridors have been hardest hit not just by the plunge in demand but because workers who had returned from India after 21 July started falling sick.One of those hit was Jagadamba Steels, whose Sahil Agrawal says: “The sale of steel rods had picked up somewhat after the lockdown was lifted, but after workers tested positive, the local administration closed the factories. Now, with the lockdown everything is closed.”Even worse hit is the tourism and <a href="https://www.nepalitimes.com/latest/domestic-flights-need-to-resume-so-the-economy-can-take-off/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/domestic-flights-need-to-resume-so-the-economy-can-take-off/&amp;source=gmail&amp;ust=1598352647268000&amp;usg=AFQjCNHQz5xiYmnvrrNu2XXeOqvI6eqyXQ">aviation sector</a> where revenue is zero for the past five months. Banks had given loans worth Rs1.1 trillion for hotels and restaurants, and had lent Rs40 billion to the transport sector. They are not in a position to replay even the interest, let alone the capital.Imports are down 20%, from Rs1.7 trillion in the first half of last year compared to only Rs85 billion in the same period this year. That should be good news, but it means the <a href="https://www.nepalitimes.com/latest/nepal-unveils-covid-19-budget/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-unveils-covid-19-budget/&amp;source=gmail&amp;ust=1598352647268000&amp;usg=AFQjCNEHmYyroAVpq5ZVmt1E9zdYH6duUQ">government’s tax revenue</a> has gone down by more than half.The middle class has been hit hardest with incomes falling. Of the 923,000 registered businesses in Nepal, nearly all are small and medium enterprises employing less than ten people. As a result, house and property transactions have gone down by half last month compared to the same period in 2019.“Except for mobile phones, motorcycles, fast moving consumer goods, nothing else is moving,” says Golchha. “Even when they do shop consumers are buying cheaper items, which is an indicator of a drastic fall in income.”Even the sale of alcohol products are down by up to 80%. Bhat Bhateni Supermarket’s Panu Poudel says turnover in the nationwide chain had picked up after 21 July, but was still down by a third, but now it is back to zero again.But the real barometer of just how bad the crisis is can be felt in the banking sector where on the one hand liquidity is overflowing because of reduction in loan disbursement, but collection has also shrunk because of defaults. The print editions of the Nepali language press in the past month are full of bank notices for auctions of collateral property. However, even if the property is up for auction, they may be no buyers.In the whole of July-August the banks collected Rs34 trillion in loan repayments, but they lent only Rs28 billion. “The reason is that it is difficult enough just to survive for businesses, and they are in no position to take a loan to invest,” says businessman Pashupati Murarka.The government had told borrowers they had a grace period till December to repay bank loans without being put on the defaulters’ black list, but it is looking like even that is being optimistic.One ray of hope for businesses was that public spending would increase in the run up to Dasain, which this year falls at the end of October. But most businessmen have given up on a Dasain-Tihar revival this year. Car sales used to go up at this time, but the Nepal Automobile Dealers’ Association has cancelled its annual auto show, and its chair Krishna Dulal says: “This year we are just trying to get by, there is no hope for sales.”With revenue down, the government will be forced to borrow. But the state borrowing already makes up 37% equivalent of the GDP, and it could go up to 51% by the end of this fiscal year. Economist Govinda Bahadur Thapa says the government may run out of money if the current trend continues. He says: “We have brought the economy to a standstill to save lives, but we need to save the economy as well. It is a very difficult balance.”Former finance secretary Rameshore Khanal is not as pessimistic. Although he does not discount the seriousness of the crisis, he thinks what could save Nepal is that it is still largely a subsistence economy and families have coping mechanisms to get by in times of extreme hardships. For example, <a href="https://www.nepalitimes.com/latest/cash-flow-crisis-for-migrants-and-families/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/cash-flow-crisis-for-migrants-and-families/&amp;source=gmail&amp;ust=1598352647268000&amp;usg=AFQjCNEYYoLn_p_-ES3VLLcSEZMh_J0QPQ">remittances from Nepalis working overseas</a> have not gone down despite predictions it would drop drastically.He says the <a href="https://www.nepalitimes.com/latest/ways-nepal-can-rebound-from-covid-19/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/ways-nepal-can-rebound-from-covid-19/&amp;source=gmail&amp;ust=1598352647268000&amp;usg=AFQjCNH425REk3c_X8wnX5A6WbreQBdGKw">crisis also presents opportunities</a> for the government. “We can have a pro-active policy to channel unemployed Nepalis to the jobs 1.5 million Indian workers used to do before they went home, and this would be the time to flood the market with liquidity in order to inject cash and raise purchasing power.”Read also: <a href="https://www.nepalitimes.com/latest/ways-nepal-can-rebound-from-covid-19/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/ways-nepal-can-rebound-from-covid-19/&amp;source=gmail&amp;ust=1598352647268000&amp;usg=AFQjCNH425REk3c_X8wnX5A6WbreQBdGKw">Ways Nepal can rebound from Covid-19</a>, Bikash Pandey

Economic cost of 5 months of Nepal lockdown

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101120/636b711e9c7e80680e0600b4jpeg.jpg" alt="" width="1400" height="902"/><figcaption>Nepal's great income divide. Photo: BIKRAM RAI</figcaption></figure>Anyone who visits Nepal seeking <a href="https://www.nepalitimes.com/editorial/invest-in-investment/" target="_blank" rel="noopener">investment opportunities</a> will look at two indicators: the first is the exchange rate of the Nepali rupee against major currencies, and the second is the state of the toilet in <a href="https://www.nepalitimes.com/opinion/kathmandu-airport-is-nepal-in-a-microcosm/" target="_blank" rel="noopener">the airport</a> arrival hall.When asked a simple question such as, “How far is Bhaktapur from Thamel?” The answer in kilometers may be easy but it is nearly impossible to answer in units of time. The answer therefore will be, “It depends”. What does it depend on? Well that also depends.In a country where we cannot tell anyone how long it will take to get to the next city, we have the world’s most complex and sophisticated statistics to indicate <a href="https://www.nepalitimes.com/banner/nepals-great-income-divide/" target="_blank" rel="noopener">where Nepal stands</a> on anything and everything compared to the rest of the world.Does this country really need a Human Development Index, a Doing Business Index, a <a href="https://archive.nepalitimes.com/article/editorial/Nepal-%20Multidimensional-Poverty-Index,4115" target="_blank" rel="noopener">Multi-dimensional Poverty Index</a> and many others? How do you monitor and verify so many <a href="https://www.nepalitimes.com/latest/nepal-rises-in-prosperity-index/" target="_blank" rel="noopener">indicators</a>?It is quite obvious that the number of tigers in Chitwan is an indicator for the deer population there, and the grazing area and water available to the deer. <a href="https://www.nepalitimes.com/banner/how-many-tigers-in-nepal/" target="_blank" rel="noopener">The tiger count</a> would serve as a proxy indicator for the state of the environment.The system of conducting a national census was first carried out in the United States in 1790. In Nepal, the first census was conducted in 1911 during the reign of Prime Minister Chandra Shamsher. We are now preparing for the <a href="https://www.nepalitimes.com/banner/nepal-in-the-2020s/" target="_blank" rel="noopener">National Census 2021</a>, which will provide many indicators that will then hopefully be used to set priorities and allocate our scarce financial resources.The reason we cannot say how long it will take to get to Bhaktapur is because of the huge traffic jam at Koteshwor. Is the number of two- and four-wheel vehicles that converge at this junction and many others in the valley an indicator of the failure of seventy years of rural <a href="https://www.nepalitimes.com/banner/how-will-nepal-develop-in-the-next-decade/" target="_blank" rel="noopener">development</a>?Why are people not staying in the villages where the government has been pumping annual budgets for as long as we know?It is very unpopular to tell development experts that rural Nepal does not need another school building because the parents have moved their children to the cities or to India or further afield. Pregnant women move to the nearest urban area with its good maternity health facilities when they are six months into their pregnancies.Two and half billion people will need old-age care globally by 2030 and this indicates that nursing is a good choice of profession. The sizes of different hoarding boards at major street junctions indicate which countries top the list of places to which young Nepalis are aspiring to move. <a href="https://www.nepalitimes.com/banner/why-nepalis-are-flocking-to-okinawa/" target="_blank" rel="noopener">Japan</a> and <a href="https://www.nepalitimes.com/here-now/dead-end-of-the-korean-dream/" target="_blank" rel="noopener">Korea</a> seem to be most popular, and yet these billboards are small compared to the English boarding school signs found all over Nepal.The ruling parties of Nepal have a vision and a mission -- prosperous Nepal, happy Nepalis. Can we agree on three indicators for each and hold politicians accountable to them? And then make sure that each cabinet and parliament session always begins by re-visiting these six indicators and reporting to the citizens on where we stand on each?A problem with statistics is that data can be bent every which way. For example, does the high growth we have seen in the domestic airline business indicate Nepalis are getting rich or that <a href="https://www.nepalitimes.com/banner/nepals-deadly-roads-take-their-toll/" target="_blank" rel="noopener">road travel is risky</a>?Does the growing number of private hospitals indicate wealth or that people are becoming sick? Does the increased forest cover in Nepal indicate that people have internalised conservation or that <a href="https://www.nepalitimes.com/opinion/look-whats-cooking-in-nepal/" target="_blank" rel="noopener">imported LPG</a> and cement have made it redundant to collect firewood and building materials?While GDP per capita is the most popular indicator we use, we know few report their true income. Should income be replaced by the prices of the <a href="https://www.nepalitimes.com/editorial/new-news/" target="_blank" rel="noopener">phones we carry</a> or the size of the TV owned or <a href="https://www.nepalitimes.com/banner/nepals-electric-transport-future-is-here/" target="_blank" rel="noopener">vehicle driven</a>?Indicators are a good management tool, but we often do not like to be held accountable to them. There are too many variables that affect our work and hence the goal post keeps changing. But if we agree that the toilet at the airport is a critical indicator to inspire potential investors, we need to make it functional and impressive.Anil Chitrakar is President of Siddharthinc

Anil Chitrakar

Counting what counts in Nepal

https://www.youtube.com/watch?v=Kd5O93-Ipg4&amp;feature=youtu.beDil Bahadur Gurung was 13 when he left his isolated home village of Orang in <a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/heritage-conservation-outside-kathmandu,3487" target="_blank" rel="noopener">Dolakha district</a> to get a better education in Kathmandu. He was used to hard work, and was prepared to face any hardship to pay his way through school. He worked as domestic servant for a family in exchange for food and shelter.The teenager had to wake up at 4AM and finish all household chores to able to join morning classes at 6am and return to finish the rest of his work. At night, after all the cleaning and washing he would do his ‘homework’. In three years, he graduated from high school and joined a college, while working at a cargo company to pay for his studies.Read also: <a href="https://www.nepalitimes.com/opinion/migrant-worker-finds-farming-in-nepal-more-rewarding/" target="_blank" rel="noopener">Migrant worker finds farming in Nepal more rewarding</a>, Naresh newar“It wasn’t an easy life, but I was so determined to study. My self-confidence and motivation prepared me for this life, and later on in my business,” says Dil, now 47.He started working in a shop in Thamel and took technical training in hand-crafted products at the Department of Cottage and Small Industries. He had some savings by then, and with help from an uncle he invested it in his own company, ‘Handcraft’ in Kapan to produce lamp shades, notebooks, boxes, greeting cards from <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/Putting-it-down-on-paper-nepali,3750" target="_blank" rel="noopener">Nepali lokta paper.</a><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151128/636a67b09c7e80680e0599efjpeg.jpg" alt="" width="1500" height="1125"/><figcaption>Photos: NARESH NEWAR</figcaption></figure>But competition was stiff, he had few customers and he did not have access to raw materials. He struggled to keep his business afloat. His parents insisted that he close down the shop, and <a href="https://www.nepalitimes.com/editorial/reducing-labour-pain/" target="_blank" rel="noopener">migrate to the Gulf</a> for a more stable salary, like many of his peers.“Everyone was asking me to close down my company, but that just increased my determination to keep going. I believed that I could make the business of paper handicrafts a success,” recalls Dil.So, he headed back to his village in Dolakha to collect wild lichen, pipal leaves, and lokta pulp to create handmade greeting cards. Back in Kathmandu, he went door to door, from one shop to the next, walking and cycling all over Kathmandu with his products. Even after being rudely rejected often, he did not lose heart and gradually managed to find loyal customers.Read also: <a href="https://www.nepalitimes.com/opinion/rupeshs-epic-journey/" target="_blank" rel="noopener">Rupesh's epic journey</a>, Naresh NewarHe slowly diversified his products and started making lamp shades, small boxes, pouches – all made from lokta. Before long, the original designs started bringing in orders from wholesalers, hotels, restaurants, schools. He started a small outlet in Dhobighat which became popular. As business picked up, he hired 16 fulltime staff and also involved another 150 painters, flower and other suppliers.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151128/636a67b49c7e80680e0599f0jpeg.jpg" alt="" width="640" height="480"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151128/636a67b89c7e80680e0599f1jpeg.jpg" alt="" width="640" height="480">Today, Dil Bahadur Gurung’s company is valued at Rs10 million, and he has an annual turnover of Rs4 million. He is also encouraging his 20-year old son to finish his studies and join the business so he does not have to move abroad.“I am so glad that I didn’t migrate abroad to work as a labourer, and I want to encourage other Nepalis to stay in the country because this place is full of opportunities for those who are willing to work hard starting small businesses,” says Dil. “Working abroad is not a solution. We Nepalis have to tap our abilities to start our own ventures and create jobs for other Nepalis at home.”Read also: <a href="https://www.nepalitimes.com/opinion/lighting-up-her-darkness/" target="_blank" rel="noopener">Lighting up her darkness</a>, Naresh NewarInstead of the <a href="https://www.nepalitimes.com/here-now/nepal-and-malaysia-rewrite-rules-for-migrant-labour/" target="_blank" rel="noopener">Nepal government working on deals with foreign countries</a> to send labourers, it can do just the opposite by bringing in more <a href="https://www.nepalitimes.com/editorial/invest-in-investment/" target="_blank" rel="noopener">foreign investment</a> to create jobs right here in the country, he says, adding: “We cannot afford to lose any of our younger generation by migrating abroad and working in dirty and dangerous jobs.”Journalist-turned-farmer Naresh Newar presents this multimedia column, Made in Nepal, in Nepali Times every fortnight profiling stories of successful small entrepreneurs.

Staying in Nepal to create jobs

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151128/636a67779c7e80680e0599dcjpeg.jpg" alt="" width="3000" height="1668"/><figcaption>Illustration: BHANU BHATTARAI</figcaption></figure>Legend has it that the real reason Nepal stayed an independent nation state while all around us were colonised was that our powerful neighbours took one look at the terrain and people here and concluded that the country was ungovernable.In the three decades after 1990, Nepal’s elected leaders have shown even fewer smarts than past feudal dynasties. The <a href="https://www.nepalitimes.com/editorial/another-decade-to-get-it-right/" target="_blank" rel="noopener">biggest let-down has been in the last two years</a>, after the unified Nepal Communist Party swept the country’s first three-tier federal elections. The strongest government in Nepal’s democratic history is showing itself to be more feckless than those fragile do-nothing coalitions.Perhaps the latest example of shooting ourselves in the feet has been the wrangling within the NCP over the US Millennium Challenge Corporation (MCC). If there was one vivid example of how not to look a gift horse in the mouth, this is it.The awkwardly-named MCC was launched by President George W Bush in 2004 after the 9/11 attacks to reorient American aid towards the kind of infrastructure projects that USAID or the World Bank would not touch. At first, with an ongoing war Nepal was deemed ineligible for the MCC.But by 2012, with <a href="https://www.nepalitimes.com/banner/how-will-nepal-develop-in-the-next-decade/" target="_blank" rel="noopener">progress in health and education and economic</a>, political and press freedom, as well as prospects for the rule of law, Nepal qualified for membership. A threshold program in Kathmandu went about shortlisting investments in infrastructure that could jumpstart development.Nepali planners, working with their American counterparts, singled out transmission lines and highways as main economic bottlenecks. But they worried that Nepal did not have a governance track record, transparency or policy continuity to guarantee that the MCC’s $500 million could be effectively spent in five years.Finally in 2017, the Nepal government committed $130 million as counterpart funds, and the Hetauda-Damauli-Butwal 400kVA transmission line, as well as rehabilitation of 305km of highways from Itahari-Kakarvitta and Pokhara-Butwal, were selected for the MCC.These were not chosen arbitrarily — serious homework was done to find catalytic projects that could transform economic growth through quick returns on investment. This was a departure from the way planning is normally done in Nepal: ad hoc, whimsical, wasteful. The MCC also made provisions to ensure transparency and minimise the kind of delays in large infrastructure projects that Nepal has become notorious for.Any other government worth its salt, and one that knows what is good for its people, would have jumped at a deal like this. But not Nepal under the NCP. Members of the party’s central committee have objected that the MCC is part of the US <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" target="_blank" rel="noopener">Indo-Pacific Strategy</a>, objecting to a clause that would require Indian go-ahead on the transmission line, and at provisions for independent outside auditing.It is true that there is rarely a free lunch in official development assistance — even a grant is somehow tied to the strategic interest of the donor. But the MCC predates both China’s Belt and Road Initiative (BRI) and the Indo-Pacific Strategy. Yes, there is a new cold war between Beijing and Washington, the two compete globally for political, economic and military domination, and both superpowers have <a href="https://www.nepalitimes.com/here-now/nepal-now-has-to-balance-not-just-india-and-china-but-also-the-west/" target="_blank" rel="noopener">strategic concerns in Nepal</a>.But it would be in Nepal’s own strategic interest to take maximum advantage and get both the BRI and the MCC to contribute to Nepal’s infrastructure development. Instead, some sections of the NCP are doing their best to wreck both initiatives so Nepal is left with neither.The reason the MCC needs to be cleared with Delhi is because Nepal’s planners decided to upgrade the transmission line to 400kVA so it can also export electricity to India through Gorakhpur. And having Parliament ratify the compact would ensure political continuity and commitment.Last week in this newspaper we projected an optimistic scenario of <a href="https://www.nepalitimes.com/banner/nepal-in-2030/" target="_blank" rel="noopener">what Nepal may look like by 2030</a>. Infrastructure-led development is necessary because jobs will be created during construction, and improved connectivity will have downstream benefits into the future.However, there are good, bad and ugly infrastructure projects. The ‘excavator roads’ that maul our mountains are not just ugly, they are an environmental disaster.  <a href="https://www.nepalitimes.com/banner/pokhara-nepals-new-aviation-gateway/" target="_blank" rel="noopener">Pokhara’s new international airport</a> is too costly for its capacity, but at least it is being built and may help diversify tourism while decongesting Kathmandu.The <a href="https://www.nepalitimes.com/banner/does-nepal-need-a-4th-international-airport/" target="_blank" rel="noopener">proposed airport in Nijgad</a> is an example of ill-advised megalomania. In fact, it is not an airport project but a timber concession. Yes, it is a game changer but only in the sense that it will <a href="https://www.nepalitimes.com/here-now/economy-ecology-of-nijgad-airport/" target="_blank" rel="noopener">wreck both our economy and environment</a>.Decisions on large, expensive projects must be taken by technocrats and planners who know what they are doing, not by ignorant, populist politicians with edifice complexes who want to commit <a href="https://www.nepalitimes.com/editorial/megalomania-kleptomania/" target="_blank" rel="noopener">colossal blunders like Nijgad</a> and sabotage a worthy initiative like the MCC.<h2>10 years ago this week</h2>Go back 10 years to read <a href="http://archive.nepalitimes.com/issue/482" target="_blank" rel="noopener">Nepali Times #482</a>, 25-31 December 2009, and its front page news roundup titled ‘<a href="http://archive.nepalitimes.com/news.php?id=16624#.XgRialUzaUk" target="_blank" rel="noopener">End on a high</a>’. It shows us that the more things change in Nepal, the more they remain the same. An excerpt:‘A rollercoaster week of recriminations and reconciliations began with a three-day Maoist bandh marked by violence and intimidation across the country. It peaked with a massive Maoist assembly in New Baneswor. Chairman Pushpa Kamal Dahal then delivered a fiery anti-Indian tirade during which he labelled the rest of the political leadership ‘remote-controlled robots,’ who he would bypass to hold direct talks with Delhi.Amidst widespread condemnation, the Maoist supremo weakly argued the following day that his comments were meant to be a ‘satire’ on the shape of things in Nepali politics.’<a href="http://archive.nepalitimes.com/issue/482"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151128/636a677a9c7e80680e0599ddjpeg.jpg" alt="" width="506" height="807"></a>

A millennium challenge

<a href="https://www.nepalitimes.com/wp-content/uploads/2019/12/8-9.jpg" data-elementor-open-lightbox="no"></a><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151124/636a66e89c7e80680e0599afjpeg.jpg" alt="" width="1500" height="1163"/>Ten years ago, at the beginning of the last decade, Nepalis looked forward with optimism to a country with greater connectivity — at least a railway or two, smart cities, more energy sources and <a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/A-great-leap-forward,198" target="_blank" rel="noopener">a great leap forward</a> in infrastructure. The war had ended, a new constitution was being drafted and there was optimism about the future in 2010.Fast forward 10 years and many of those projects have not materialised, while even the ones nearing completion, like <a href="http://archive.nepalitimes.com/page/melamchi-coming-to-kathmandu" target="_blank" rel="noopener">Melamchi</a>, Pokhara Airport, or the <a href="https://www.nepalitimes.com/banner/our-land-is-us-we-are-our-land/" target="_blank" rel="noopener">Kathmandu-Tarai Expressway</a>, are delayed. The 2015 earthquake and Blockade, as well as endemic corruption, were blamed. But it was mainly failure of political leadership.Read Also: <a href="https://www.nepalitimes.com/editorial/trilateral-trains/" target="_blank" rel="noopener">Trilateral Trains,</a> EditorialYet, many of these projects and others planned for the coming decade are more ambitious than ever. The government hopes to start on a new international airport in <a href="https://www.nepalitimes.com/here-now/economy-ecology-of-nijgad-airport/" target="_blank" rel="noopener">Nijgad</a>, upgrade Kathmandu airport, build two highway tunnels to Rasuwagadi, start a feasibility study on the Kerung-Kathmandu railway, expedite <a href="https://archive.nepalitimes.com/article/nation/planned-new-east-west-railroad-and-expressway-threaten-the-Chitwan-National-Park,1079" target="_blank" rel="noopener">the East-West Railway</a>, and add at least <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener">10,000MW of hydropower</a> to the grid in the next decade.Nepalis have got used to delays and disappointment, and there is a ‘we will believe it when we see it’ attitude about the megaprojects in the pipeline. A government that cannot even upgrade the Nagarkot road or finish the 5km stretch from Chabahil to Gokarna, it is felt, has no right promising a $6billion new airport by clearing native forest.Read Also: <a href="https://www.nepalitimes.com/here-now/an-energy-windfall-for-nepal/" target="_blank" rel="noopener">An energy windfall for Nepal</a>, Kushal GurungEarlier this year, Finance Minister Yubaraj Khatiwada promised that the government would complete the feasibility study of the <a href="https://www.nepalitimes.com/banner/which-way-will-the-tibet-nepal-railway-go/" target="_blank" rel="noopener">Kerung-Kathmandu railway</a> and begin construction by 2022. This came without a definite budget or financial modality, still the Nepali engineer on the project, Paribesh Parajuli says it will happen within the coming decade.“The detailed project report and feasibility study for the Kerung-Kathmandu Railway will take more than two years but we are hopeful that it will be done within the given timeframe,” Parajuli told Nepali Times. “If everything goes as planned, the railway should be completed within nine years of the start of construction.”Read also: <a href="https://www.nepalitimes.com/?p=38023&amp;preview_nonce=024823c344&amp;preview=true" target="_blank" rel="noopener">Towards 2030</a><a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=38038&amp;preview_nonce=e8166bf726&amp;preview=true" target="_blank" rel="noopener">Another decade to get it right,</a> EditorialAnother faraway project is the 945km East-West Railway. To span 24 Tarai districts from Mechi to Mahakali, it is expected to be completed by the middle of the coming decade. In fact, 30km of the track-bed from Bardibas to Nijgad is scheduled to be finished next year. This line will connect with the 69km Janakpur-Jayanagar-Kurtha line that will start operating in March 2020. Also being surveyed is the <a href="nepalitimes.com/nepali-times-polls/do-you-think-kathmandu-raxaul-rail-will-ever-be-built/" target="_blank" rel="noopener">Raxaul-Kathmandu Railway</a>.Out of the 22 <a href="https://www.nepalitimes.com/editorial/communist-capital/" target="_blank" rel="noopener">national pride projects</a>, 17 are scheduled for completion in the next 5 years, according to the National Planning Commission's Approach Paper. Sushil Bhatta of the NPC says: “The government is focusing on giving priority to certain projects, making sure that resources are effectively and efficiently utilised in order to meet the targets that have been outlined.”Read Also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=38061&amp;preview_nonce=012fb23553&amp;preview=true" target="_blank" rel="noopener">Nepal in the 2020s,</a> Sewa Bhattarai<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=38073&amp;preview_nonce=5c5e53a600&amp;preview=true" target="_blank" rel="noopener">How will Nepal develop in the next decade,</a> Sonia AwaleIn the next five-year periodic plan, the government is prioritising completion of projects that have already begun, allocating resources on the basis of the progress achieved and the significance of the projects to the economy.Bhatta says: “We want to give priority to result-oriented national pride projects and those that help enhance economic growth.”The government is determined to complete Nijgad International Airport in the coming decade despite strong protests from environmental activists and criticism that it is too grandiose. Bhairawa and <a href="https://archive.nepalitimes.com/article/nation/Pokhara-waits-for-take-off,4136" target="_blank" rel="noopener">Pokhara</a> airports will be operational in 2020 and 2021, but whether they will act as alternative airports and reduce congestion in Kathmandu is debatable.Read Also: <a href="https://www.nepalitimes.com/banner/does-nepal-need-a-4th-international-airport/" target="_blank" rel="noopener">Does Nepal need a 4th international airport?,</a> Om Astha RaiDuring this year’s <a href="https://www.nepalitimes.com/editorial/invest-in-investment/" target="_blank" rel="noopener">Nepal Investment Summit</a> there were numerous proposals for smart cities in Hetauda — integrated urban development programs that were built on digital frameworks, improved technology, energy-efficient apartments, electric vehicle charging stations and bus rapid transit.Between 2020-2030 there will also be explosive growth in the <a href="https://www.nepalitimes.com/here-now/nepal-telecom-or-go/" target="_blank" rel="noopener">telecommunication sector</a> with the introduction of 4G and 5G networks. Anand Khanal at the Nepal Telecommunications Authourity says, “In the next decade, we will see blanket coverage of mobile broadband in the country. The infrastructure will be established so that 100% of the public will have access to the internet and broadband service. “Nepal hopes to become a <a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/muddy-road-middle-income,928" target="_blank" rel="noopener">middle-income country by 2030</a>, and the country needs to invest more than $1billion annually on infrastructure development to reach this goal.Bhatta says: “To achieve our 5-year goals and even 25-year goals, we need to streamline our projects, strategically invest in those projects and push for a paradigm shift in the way Nepal manages development.”Read Also: <a href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener">Calendar of economic change</a>, Om Astha Rai

Nepal in 2030

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151124/636a66d89c7e80680e0599a9jpeg.jpg" alt="" width="1750" height="1164"/>Ram Sharan Mahat, <a href="https://archive.nepalitimes.com/article/nation/ram-sharan-mahat-fund-raising-conference,2299" target="_blank" rel="noopener">former foreign and finance minister</a> of the Nepali Congress, has published an important book that serves as an explainer and update on Nepal’s political transition and state restructuring exercise. It is an encyclopaedic dive into the political economy of present-day Nepal, useful not only for non-Nepali readers, but also Nepali students seeking to understand history, trends and context.A senior member of the Nepali Congress party, Mahat lost his seat in Parliament in 2018, after having consecutively won four parliamentary elections from Nuwakot since 1994. This forced respite actually allowed the economist-politician the time required to pen his thoughts on critical national events of the past two decades, committed as he is to the middle way that shuns populism and profligate governance.This work, together with <a href="https://www.nepalitimes.com/featured-videos/kul-chandra-gautams-long-journey-home/" target="_blank" rel="noopener">Kul Chandra Gautam</a>’s <a href="http://archive.nepalitimes.com/article/nation/Lost-in-transition-kul-chandra-gautam-review,2734" target="_blank" rel="noopener">Lost in Transition</a> (2014), provides antidote to the English language narrative of the conflict and post-conflict transitional era, which has been presented mainly by writers bowled over by radical leftism. Trials, Tremors and Hope also complements Mahat’s earlier work, <a href="http://archive.nepalitimes.com/news.php?id=739#.Xfs9dZMzaUk" target="_blank" rel="noopener">In Defence of Democracy</a> (2005), published even as King Gyanendra sought to convert Nepal into a royal autocracy.Mahat is the person who guided Nepal into the era of liberal economics, and rather than be coy he spends considerable space here defending his plans and policies as a six-time finance minister. He introduces us to BP Koirala’s evolving thinking on economic governance, and reminds the readers of once-important entities such as the Socialist International, and the Club of Rome and its ‘Limits to Growth’.Mahat was sceptical of not a few elements that went into the new Constitution, fought a rearguard action on the establishment of provinces, and advocated local government energy channelled via the 75 districts. And yet, unlike many Constituent Assembly members who became lukewarm towards the document they promulgated, the author seeks ways to implement the Constitution as the only way forward.He writes: “Managing the new federal structure is an un-tested and daunting challenge. The multiple levels of governance in a relatively small country with a history of centralised administration creates problems of overlap, ambiguity and conflict of authority… The main task at present is to building of institutional capacity at the sub-national and local levels … (with) supporting legislation, regulations and necessary manpower they are lacking at present.”With the Constitution declaring Nepal a ‘socialism-oriented’ (‘samajbad unmukh’) economy, it has been imperative to have authoritative interpretations of the phrase to avoid confusion, and to save the society from the radical trap. The economist and administrator in Mahat does not fail in providing his elucidation. Noting that “there has been no major change in the fundamental orientation of the country” despite the regime change, he writes: “ The socialist objectives are to be met through democratic norms and values including competitive plural politics, as well as an elaborate list of fundamental rights, including those related to social protection, the security of property rights, among others.”Elsewhere, to drive home the point, Mahat writes that the goal of socialism is guaranteed to be based on “competitive multiparty politics – including periodic elections, adult franchise, press freedom, civil liberty and an independent and impartial judiciary.”Decrying the “unproductive recurrent spending which is rising as a result of competitive populism”, the author suggests capitalising on the comparative advantage possessed by the country in “clean energy, biodiversity, eco-tourism, together with cultural heritage, strategic <a href="https://www.nepalitimes.com/latest/political-geography-of-india-nepal-china-ties/" target="_blank" rel="noopener">geo-political location between China and India</a>, and the goodwill accorded to Nepal by the international community.”At a time when many intellectuals prefer to handle the Maoists with kids gloves, especially now that they are tied umbilically to the erstwhile UML, Mahat is clear on what the <a href="https://archive.nepalitimes.com/article/nation/wartime-rape-victims-of-Kanchanpur-speak-out-wait-for-justice,4222" target="_blank" rel="noopener">Maoist conflict</a> “inflicted on the nation” – besides the deaths and maimings, “disruption of social and economic lives, destruction of physical assets and infrastructure, leading to derailment of development and slowing down of economic growth”.For a work with such a sweep, over 12 chapters and 242 pages, there are some aspects that Mahat has preferred to side-step partly that maybe because he is top leader of the Nepali Congress, which itself is hardly playing the role of a responsible and critical opposition to the present very-powerful CPN government. One would have wanted Mahat to be less descriptive and non-opinionated, and not be too careful about who’s toes he would be stepping on.While the author does refer to <a href="https://archive.nepalitimes.com/article/editorial/autopsy-of-a-blockade%20,2863" target="_blank" rel="noopener">the Indian blockade of 2015</a>, he does not dwell much on how those five months became an economic and geopolitical watershed for modern Nepal. He is ideally placed to discuss the potential debt trap of being over-beholden to Chinese debt largesse, but there is not enough discussion of that here. As Nepal rushes <a href="https://www.nepalitimes.com/banner/in-conservation-nepal-is-not-out-of-the-woods-yet/" target="_blank" rel="noopener">headlong into infrastructural development</a>, Mahat should have made his position clear on what is propped up as the ‘development vs. environment’ debate, but he takes a pass.How is Nepal to emerge from the <a href="https://www.nepalitimes.com/editorial/reducing-labour-pain/" target="_blank" rel="noopener">remittance economy</a>? Mahat does warn that the reliance on remittance “has reduced pressure to generate more productive employment leading to loss of the country’s competitiveness”, but the author was well placed to provide a guide to generating in-country employment. Similarly, a wide-ranging work such as this required rumination on the <a href="https://www.nepalitimes.com/banner/nepal-must-prepare-for-climate-migration/" target="_blank" rel="noopener">climate crisis</a>, which is set to hit Nepal’s population and economy, and Southasia as a whole.Trials, Tremors and Hopeby Ram Sharan MahatAdroit Publishers, New Delhi (2019)IRS795       242 pages<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108151124/636a66db9c7e80680e0599aajpeg.jpg" alt="" width="1079" height="1632">

History and context from Mahat

<figure><img width="1050" height="700" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110814110/636a53a79c7e80680e052361jpeg.jpg" alt=""/><figcaption>Photo: IKRISHNA PAUDEL</figcaption></figure>Yogesh Bhattarai is Nepal’s 37th Tourism Minister in 41 years. He has taken the place of Rabindra Adhikari, who was <a href="https://www.nepalitimes.com/banner/the-last-journey/" target="_blank" rel="noopener">killed in a helicopter crash</a> in April, and wants to continue projects his predecessor was keen on, like Nijgad Airport. Bhattarai spoke withNepali Times this week about the prospects of Visit Nepal Year 2020, rescuing Nepal Airlines and speeding up construction at Pokhara and Bhairawa airports.Nepali Times: You now head a ministry infamous for frequent changes and wheeling-dealing. How will you clean up its image? Yogesh Bhattarai: As the 37th Tourism Minister my appointment is unusual, and I have a pile of extraordinary tasks to complete. I will only step down after we have accomplished them. The centres of power in this country are the government and the <a href="https://www.nepalitimes.com/banner/dangerous-driving/" target="_blank" rel="noopener">Nepal Communist Party</a>, so there is no room for any wheeling-dealing.How are the preparations for Visit Nepal 2020? Since there was no minister for a long time, the preparations are not satisfactory. Infrastructure has not taken off. The challenge is to speed it up, and within two weeks we will release a detailed workplan laying out the responsibilities of the government, the ministry, the department, Nepal Tourism Board, organising committees and embassies for the Visit Nepal Year.The <a href="https://www.nepalitimes.com/latest/crowd-funding-from-mt-everest/" target="_blank" rel="noopener">last Mt Everest climbing season</a> was controversial. What are your plans for future expeditions?Much of it was intended to give Nepal’s mountains a bad reputation. There are some weaknesses on our side, but the <a href="https://www.nepalitimes.com/banner/most-days-its-not-so-crowded-on-mt-everest/" target="_blank" rel="noopener">weather window of just three days led to the crowding</a>. Like every year there were casualties and we are concerned about reducing them. Some agencies are also <a href="https://www.nepalitimes.com/banner/expeditions-brings-down-11-tons-of-mt-everest-trash/" target="_blank" rel="noopener">cleaning up the garbage on Everest</a>. We will issue new climbing rules and from the next season, only trained liaison officers will be employed.Read also:<a href="https://www.nepalitimes.com/banner/nepal-airlines-has-new-planes-but-no-new-plans/" target="_blank" rel="noopener">Nepal Airlines has new planes, but no new plans</a>, Sharaj Ojha<a href="https://www.nepalitimes.com/banner/keeping-nepal-airlines-airworthy/" target="_blank" rel="noopener">Keeping Nepal Airlines airworthy</a>, Sharad OjhaWhere has the investigation on <a href="https://www.nepalitimes.com/banner/heli-rescue-fraud-tarnishes-nepals-image/" target="_blank" rel="noopener">fake helicopter rescues</a> gone? The investigation committee under the general secretary has made some recommendations. Based on that document, further investigations are underway and <a href="https://www.nepalitimes.com/banner/nepal-trekking-industry-in-damage-control-mode/" target="_blank" rel="noopener">the culprits</a> will be punished.The number of tourists has increased, but their spending has not. This year, average spending per tourist came down to $44 from $55. But transactions via informal channels have been reduced.You said you would make Nepal Airlines “wow worthy”. What did you mean?We have to make <a href="https://www.nepalitimes.com/banner/nepal-airlines-has-new-planes-but-no-new-plans/" target="_blank" rel="noopener">Nepal Airlines</a> fly high again and turn it into a flag carrier we can be proud of. There are problems — we know what they are. The company should be in profit, and pay its debts. We cannot achieve that in two months, and there is no silver bullet. We need shock therapy.Mismanagement and political interference are blamed.  I don’t wish to blame anyone personally. I don’t think anyone intended for <a href="https://www.nepalitimes.com/banner/keeping-nepal-airlines-airworthy/" target="_blank" rel="noopener">NAC</a> to collapse. But as I said, we are looking at a dramatic turnaround in management. Those who can handle the change will stay, those who can’t will have to go. If management can convince the government that the company is financially viable, then it will invest.You seem to be all for building <a href="https://www.nepalitimes.com/here-now/economy-ecology-of-nijgad-airport/" target="_blank" rel="noopener">Nijgad Airport</a>. What about the trees?  I am not here to cut trees, but we need to build the airport. Its investment modality will be decided after a discussion with Investment Board Nepal. We will talk with the Ministry of Forests, and local governments will work on resettlement. It is a national pride project, so it also requires political commitment. We aim to lay the foundation stone by November.Nepal’s aviation is still under the EU blacklist, even if ICAO has delisted us from the list of countries with safety concerns.  As per ICAO, a country should score a minimum of 60 points to pass the safety test — we have 66 points and have been delisted. But as far as the EU is concerned, a team is visiting Nepal for a safety audit. We believe that Nepal will soon be taken off the blacklist.

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