Just as Nepal prepares to showcase business opportunities at the Nepal Investment Summit 2024 this week, the government seems to be doing its utmost to dissuade international stakeholders. A combination of red tape, corruption and geopolitics is sending the wrong message at the wrong time to potential investors, industry sources say. Several Chinese companies that had been waiting to develop energy projects in Nepal have been left hanging in limbo due to geopolitical pressure. The Chinese company <a href="https://en.risenenergy.com/">Risen Energy</a> was ready to sign a project development agreement (PDA) for Nepal’s biggest solar electricity plant at the Summit this week, but the $190 million project is on hold for unspecified reasons. The Investment Board Nepal (IBN) which is organising the Summit was itself involved in negotiations with Risen’s subsidiary, Risen Energy Singapore JV for the <a href="https://www.risinenergy.com/news/nepals-largest-solar-energy-project-to-be-established-by-a-spv-of-singapore-based-risen-energy-co-ltd/">grid connected photovoltaic generation system</a>.&nbsp; The board’s spokesperson Pradyumna Upadhyay said the agreement was delayed because “final preparations are not complete, and negotiations are ongoing”. But sources in the government revealed there was pressure from India not to go ahead with the agreement because the two solar array sites were close to the southern border. Risen’s proposal was to install two 125MW solar generation plants in Banke and Kapilvastu districts in the Tarai. The installation would store 20MW each of daytime generation to be transmitted during the morning and evening peak hours. “The main reason it is stuck is because of Indian objections about a Chinese project so close to the Indian border,” the source told Nepali Times.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240428070432_9df0424d873f99aa110e7cfc9ea6c9add335558c6572b1524085b2f94e7ed779.jpg" data-media-id="editor_2" data-image-id="20240428070432_9df0424d873f99aa110e7cfc9ea6c9add335558c6572b1524085b2f94e7ed779" data-rendition-name="original" width="2048" height="1535" loading="lazy" alt="Solar panels"> </figure>  The CEO of IBN Sushil Bhatta and Wang Qiyang of Risen Energy Singapore JV signed an agreement three years ago to carry out a detailed feasibility study report, which was delayed due to the pandemic. The Department of Electricity Development had even issued a survey license.&nbsp; Under the agreement, the entire capital investment for the project would have been from Risen which is registered as a public limited company at the Shenzhen Stock Market.&nbsp; The company makes its own photovoltaic panels which is what made the project feasible. And Risen was the main contractor in the Nepal Electricity Authority’s 25MW solar generation plant in Devighat of Nuwakot which is already in operation.&nbsp; Indeed, despite being a Chinese company, Risen in 2020 completed a 110MW <a href="https://en.risenenergy.com/product/case_detail?cid=44">solar electricity generation system in India</a> and other investments in Mexico and Kazakhstan. It is also a global supplier of solar energy components. To be sure, both of Nepal’s giant neighbours have geopolitical sensitivities about water and energy projects in Nepal. In 2018, IBN had given a go-ahead to the European company Dolma Fund Management to survey a 150MW solar electricity generation project in Mustang near the Chinese border.&nbsp; Dolma completed its preparations and was ready to launch when Industry Minister Matrika Yadav wrote to IBN to cancel the Dolma agreement. The minister was said at the time to have acted on Chinese pressure. “It is not easy to push foreign investment in Nepal there are many hurdles to cross,” says Risen’s assistant manager in Nepal Dixita Shahi. “Negotiations are going on, and the project will move ahead in future.” This is not the first time that a Chinese investor in the energy sector has faced problems in Nepal. IBN had signed up with a Chinese contractor to build the 762MW Tamor Project in eastern Nepal that was agreed on during president Xi Jinping’s visit to Nepal in 2019.&nbsp; By the government pulled out of the export-oriented project because India has said it will not buy power from projects in which the Chinese are involved. Tamor is now likely going to India’s state-owned <a href="https://sjvn.nic.in/">Satluj Jal Vidyut Nigam</a>, which is building a series of plants on the adjoining Arun River that will generate a total of 2,000MW.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240428070416_dc72bb190f0775234a50525c7a5fa998620876838056c9adb819b61b22d60ad0.jpg" data-media-id="editor_5" data-image-id="20240428070416_dc72bb190f0775234a50525c7a5fa998620876838056c9adb819b61b22d60ad0" data-rendition-name="original" width="800" height="467" loading="lazy" alt="Nepal Investment Summit"> </figure>  Indeed, Indian companies are currently involved in building six hydropower projects worth nearly 5,000MW on the Arun, Seti and Karnali basins. Not only is India pressuring Nepal to cancel projects with Chinese investment, it is <a href="https://nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">not buying electricity from existing plants</a> that have Chinese involvement. For example, even though the 460MW Upper Tama Kosi project was built with Nepal’s own investment, India will not buy power sourced from it because Chinese contractors were involved in the construction. Although Nepal’s power generation is pooled in the grid, India is buying only 690MW of power that it regards as ‘China-free’. Nepal’s agreement to export only 50MW of power to Bangladesh is also stuck because it would have to use Indian transmission lines.

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Nepal’s China-India love-triangle impacts investment

For Prime Minister Pushpa Kamal Dahal the past week has been eventful in more ways than one. His Home Minister Rabi Lamichhane’s troubles is shaking the coalition, and there are rumours of the NC and the UML in talks. By-elections in Ilam and Bajhang are set to become a referendum on legacy parties.&nbsp;
In the midst of all this, there was the overnight state visit of the emir of Qatar which was so epic the government declared a national holiday. Qatar and Nepal signed a commerce agreement, and to sweeten the deal the emir was gifted two elephants.&nbsp;
The Qatari visit set the stage for the third Nepal Investment Summit on 28-29 April that will showcase 150 projects for potential investors, including schemes for hydropower, transport, tourism, and agriculture.
Previous investment summits in 2017 and 2019 pledged $13.5 billion and $17 billion respectively, of which not much ever materialised. This time, the investment climate is worse because of political instability, too few laws, and too much red tape. &nbsp;
“The state of Nepal’s economy, combined with bureaucratic hurdles and the challenges faced by foreign investors in land and resource acquisition, has made attracting FDI difficult,” says Pushkar Bajracharya, formerly of &nbsp;the National Planning Commission.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/comment/nepal-looks-at-alternative-investments">Nepal looks at alternative investments</a>, Siddhant Raj Pandey
The same woes from the last two investment summits persist. Nepal has had three coalition governments in the last two years, banks are flush with cash because no one is borrowing, &nbsp;and there is a mass exodus of skilled Nepalis.&nbsp;
“Lack of political stability results in policy instability,” explains economist Posh Raj Pandey. “This is why Nepal’s FDI has not lived up to commitments. Potential investors have decided that internal risk factors outweigh any business opportunities.”&nbsp;
Everyone went to sleep after the last investment summit, and there was little preparation for this hurriedly planned one. Nepal’s private sector has long urged the government to amend laws to improve the investment climate. The government did amend nine out of dozens of laws, but through ordinance on Tuesday. &nbsp;
“What kind of message are we sending to internationals when we amend laws through ordinance rather than Parliament?" asks Pandey. “Amendment will not inspire confidence unless they are put into practice, which we historically have not done.”
Read also: <a href="https://nepalitimes.com/editorial/invest-in-investment">Invest in investment</a>, Nepali Times
While some experts think ordinances speed things up, they admit most legal changes brought to address Nepal's investment environment have been ad hoc and limited to paper.
Forget foreign investors, even domestic businesses face obstacles and corruption. Nepal’s internet service providers (ISPs) and the Nepal Telecommunication Authority are on the warpath.&nbsp;
ISPs have been unable to pay Indian firms that provide &nbsp;bandwidth after the government refused to provide them with INR, citing unpaid royalties and taxes.
Such stonewalling is present in just about every sector, dissuading investors in IT, banking and the service industry. Most investors are in natural resource extraction, which has little value added.&nbsp;
Read also: <a href="https://nepalitimes.com/editorial/invest-in-investment">Invest in investment</a>, Nepali Times
This time the government is &nbsp;giving investors a shopping list that includes 18 hydropower projects and 19 transport schemes.&nbsp;
“While hydropower may create short-term jobs, efficiency-seeking investment in the manufacturing, agricultural, and other sectors will create more long-term opportunities for Nepalis, and will be in our best interest,” says Pandey. &nbsp;&nbsp;
Although the summit will have attendees from over 50 countries, most potential investors are from India and China.
“Current investment summits seem to be guided by India and China’s vested interest in Nepal rather than the market and economic possibilities here,” notes Bajracharya. However, Nepal can leverage its proximity to hitch its wagons to these two giant locomotives.&nbsp;
Adds Bajracharya “Our long-term prospects look good, because India and China are set to overtake the US as the world's biggest economies over the next few years, which will attract investors from elsewhere. Our immediate goal must be to first create a conducive investment climate. After that, investments will come.” &nbsp;
Read also: <a href="https://nepalitimes.com/opinion/killing-investment-in-nepal-in-10-easy-steps">Killing investment in Nepal in 10 easy steps</a>, Dibesh Karmacharya

Shristi Karki

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Why invest in Nepal?

In the run-up to the third Nepal Investment Summit this weekend, there have been seminars, conferences and workshops where the discourse has revolved around the economy and the investment climate.
The consensus that Nepal needs foreign direct investments (FDI) to grow was repeated, and the familiar litany of reasons about why it has not been able to was discussed.&nbsp;
Policy advocates and regulators have understood that the lack of urgency is compounded by procedural inconsistencies, on top of the already deficient investment environment in the country.
It is a welcome change from what used to be flippantly accepting matters as given. There now seems to be a sense of urgency, with procedural inconsistencies and lack of harmonisation between various Acts and regulations openly discussed.&nbsp;
Government stakeholders also appear more willing to learn and attempt to be part of the solution. Whatever policy changes have been introduced in the past have been piecemeal and address the few rather than the entire industry. This left dual regulatory approaches aimed at similar players.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/killing-investment-in-nepal-in-10-easy-steps">Killing investment in Nepal in 10 easy steps</a>, Dibesh Karmacharya
This time, unlike in the past two Summits, the government seems to be committed to amending 9 Acts, a positive step towards showing commitment to change. However, the deadline to do so during the winter session of Parliament is over. The option mooted has been to have it passed through ordinance, a lesser appealing step; albeit, a positive one moving forward.&nbsp;
To attract FDI in a competitive global market means that Nepal has to demonstrate that it is serious about bringing in investments with a more consultative and collaborative approach with investors. A departure from procedural to a result-oriented focus is needed.&nbsp;
To put issues in perspective, Nepal needs US$20 billion in investments to meet the UN’s Sustainable Development Goals (SDG) targets by 2030. If net-zero decarbonisation targets are to be met by 2045, another US$7 billion will be required annually.&nbsp;
Looking at our investment history and poor government capital expenditure, the gap is long and wide. In fiscal year 2022-23 Nepal booked a lamentable ~$59 million in FDI (equity). Nepal is in fact the lowest market in South Asia for FDI with 0.3% of the regional average.&nbsp;
What is it that we can do to fill the gap?&nbsp;
First, we need to move away from the notion that Nepal only needs large investments. This has proven to be a mistake, and time series data have proven that smaller investments, in aggregate, make a larger impact on economies.&nbsp;
Read also: <a href="https://nepalitimes.com/news/poor-cash-rich-nepal">Poor cash-rich Nepal</a>, Sonia Awale
We talk about an ‘enabling environment’ but without the right tools. We place restrictions on interest on debt ceiling (SOFR +5.5), without risk premium adjustments, we do not have an active secondary market for bond trading, nor do we have a yield curve, an integral part of the bond market, which is inhibiting us from tapping into the trillion dollar green bond market.&nbsp;
In order to attract green financing, Nepal needs to develop its bond market. Sovereign risk rating has been mooted and was expected to be operationalised before the Investment Summit.&nbsp;
However, to be rated in an adverse economic environment could further deteriorate investment potential due to a lesser-than-expected rating.&nbsp;
Hedging is another instrument that needs further research on. A commercial bank last year showcased the first risk-hedging mechanism for an investment of $8 million. This can be the beginning to expand on its modality. &nbsp;
Subordinated debt instruments have been introduced, but on a special nod basis, this now needs to be institutionalised as it is the most applicable form of investment after equity in a market that has volatile forex reserves.&nbsp;
Read also: <a href="https://nepalitimes.com/editorial/invest-in-investment">Invest in investment</a>, Nepali Times
Viability Gap Funding has been introduced by multilateral development agencies implemented in solar installations. It is a tool to incentivise the private sector to invest in projects that are not financially lucrative initially, but have potential for profitability in the long run. This needs to be scaled up and replicated in sectors like infrastructure, where returns may not be immediate.
Moving forward, to attract FDI, Nepal needs to tap into the funds that are available for the growth of small and medium enterprises (SMEs) and climate change. Alternative investments such as Private Equity Venture Capital (PEVC) have been around in a structured manner in Nepal for nearly a decade now.
These funds have blended finance components and have attracted climate funding as well. PEVC is a new asset class and can address the issues of penetrating into SME financing by incorporating environment, social and governance issues into their investment process.&nbsp;
SMEs are the backbone of any economy, PEVC comes with the ability not only to scale up the enterprise with risk capital, but with the ability to bring technical knowhow to enhance not only the enterprise but also the entrepreneur.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/success-in-nepal-means-not-having-to-work">Success in Nepal means not having to work</a>, Anil Chitrakar
A differentiator from all other forms of financing available till date in Nepal. Blended finance is a way of de-risking investments, especially in frontier markets. Business Oxygen (BO2) is an example of blended finance with subordinated debt investments of IFC (World Bank Group) taking the lead and Climate Investment Funds along with FCDO as co-investors.&nbsp;
On a larger scale, the 216MW Upper Trisuli 1 is another example of blended finance with IFC, a Korean consortium and local investments. So far, we see that development finance Institutions have been taking the lead in Nepal as their risk appetite is greater than commercial investors and they are eager to help develop the financial markets.&nbsp;
In order to be sustainable, we need to step on this and attract commercial capital from all over the world. To do this there has to be political will to make that pivot.&nbsp;
Instead of being a means to an end, the two previous Investment Summits turned out to be intermittent and cosmetic, providing hardly any results. The third one’s success will depend on how the event will be implemented as a platform for continuous marketing for the country and facilitation for investors in future.&nbsp;
Nepal has outdone many countries in its macro-economic indicators, with sound forex reserves and a stellar history of debt payments to its creditors. This story needs to be propagated along with the drive for change to attract potential investors.
Read also: <a href="https://nepalitimes.com/opinion/comment/alternative-investments-to-attract-fdi">Alternative investments to attract FDI</a>, Siddhant Raj Pandey

Siddhant Raj Pandey

Nepal looks at alternative investments

Nepal is not poor, it is just poorly governed. At no time has this been more true than today.
<a href="https://nepalitimes.com/business/remittances-up-and-up">A spurt in remittances</a> and a slowdown in imports has meant that Nepal’s foreign exchange reserves have hit an all-time high of $14 billion. Just in the past seven months, diaspora dollars totalled $6.35 billion – a 21.6% increase over the same period last year. The trade deficit has declined, and the balance of payments situation is improving.
So why are we not celebrating? The problem is that while the macroeconomy is on a firm footing, the same statistics also point to a deep malaise within. Imports are down because purchasing power has declined, and banks are not lending, this means government revenue has also fallen drastically. Most remittance money is spent on household expenditure, much of it again to pay for imports.&nbsp;
All this means <a href="https://nepalitimes.com/opinion/killing-investment-in-nepal-in-10-easy-steps">investment</a> fell by 11% in 2023 after growing by nearly 4% the year before. Tighter financing conditions post-Covid and global factors following the Ukraine war have impacted both public and private investment.&nbsp;
“Nepal’s economy grew at 1.9% fiscal year 2023. Is that too low? Yes, very low. Are we in an economic crisis? No. But we are stuck in a situation where aggregate demand is low. Nepal is in a crisis of low economic growth,” says economist Sameer Khatiwada.
Indeed, banks have money to lend and borrowing rates have gone down, but there is no demand from the private sector because a large chunk of the middle class has<a href="https://nepalitimes.com/editorial/brain-drain-into-brain-gain"> left the country</a>.
And that is the irony: Nepalis are migrating abroad in droves, but fewer consumers back home means less economic activity, which in turn pushes more people out. Nearly a million young Nepalis left for jobs and study overseas last year. More than 400,000 left on work permits in the first seven months of this fiscal year. Some 3,000 leave every day.
The economy could pick up in 2024 and 2025, with increased demand, increased <a href="https://nepalitimes.com/news/blueprint-for-nepal-india-electricity-trade">hydropower</a> output, and rising tourist arrivals. But sustaining growth year-on-year relying solely on remittance and hydropower is not possible.&nbsp;
Remittances were the main reason for poverty reduction, raising living standards, improving access to health, nutrition and education. Nepal is set to graduate from LDC status by 2025.
Nepal’s economy is suffering a form of ‘Dutch Disease’ where high income from one source paradoxically keeps other sectors of the economy down. Remittance growth has increased savings, but there is nowhere to invest it except to speculate on the real estate bubble, which has burst.&nbsp;
Economist Khatiwada says we have to go beyond the symptoms to the disease: “Nepal is caught in a trap of low productive capacity, lack of competitiveness, lack of foreign investment and lack of business dynamism.”
So, what is the way out? Experts recommend more competition in the private sector and promoting industrialisation by leveraging areas where Nepal has a comparative advantage like the service sector, <a href="https://nepalitimes.com/news/it-is-it">information technology</a> and exports of high-value niche products.&nbsp;
“We were complaining when our foreign exchange reserves were low, and now we are complaining when reserves hit the roof. Our biggest problem is that we are sitting on all that money instead of investing it,” says Sujeev Shakya of the Nepal Economic Forum.&nbsp;
He adds: “We have to allow Nepali companies to invest outside, and reap the low-hanging fruits like energy and ICT. Nepal exported $900 million worth of software last year.”&nbsp;
If there was some hope the change in the coalition government last week would bring solutions, those have fizzled. Finance Minister Barsaman Pun is Prime Minister Dahal’s left-hand man and Dahal’s disagreement with former coalition partner Sher Bahadur Deuba of the Nepali Congress to sack its finance minister Prakash Sharan Mahat was one reason behind the Maoists switching to the UML.
Finance Minister Pun is already under a cloud for <a href="https://nepalitimes.com/editorial/skeletons-in-the-cabinet-k5x6py1v">his alleged involvement with a gold smuggling ring</a>, and he has reportedly been brought in with the express purpose of passing a budget that would be favourable to cronies. There are indications he will raise taxes on certain brands of electric vehicles, ostensibly to increase government revenue.&nbsp;
With the new government’s priorities so centred on personal and partisan gain, there is little time to solve the other crisis: underspending of the development budget. There is money for infrastructure and service delivery, we just cannot seem to spend it. Only 25% of the annual development budget has been spent in the past seven months of this fiscal year.
Delays in infrastructure and connectivity have further undermined economic growth and job creation.&nbsp;
Underspending is directly related to corruption. Public procurement is lubricated by kickbacks, and delays are caused by rival cronies with <a href="https://nepalitimes.com/editorial/need-and-greed">political patronage</a>. The focus is on low-cost bidder and not on the technical quality of bids. Contractors abandon half-finished projects by bribing officials.&nbsp;
In short, Nepal’s crisis of low economic activity is directly related to governance failure and lack of accountability of high elected officials. The new coalition has a chance to set things right at the third Nepal Investment Summit on 28-29 April in Kathmandu. But experts do not pin much hope on it. &nbsp;
“No matter how many laws and regulations we revise to make doing business easier in Nepal, unless we have better infrastructure we will not be able to attract foreign investors to Nepal. Second, soft infrastructure such as skills and quality of the workforce is also a critical ‘pull’ factor,” says Khatiwada.&nbsp;
Shakya takes a broader view: “It all really comes down to our mindset. We think of Nepal as a small, poor country but it is a potential $100 billion economy. We must have that imagination, must take risks, reform how we do business, break away from commission-oriented, rent-seeking approach.”

Sonia Awale

Poor cash-rich Nepal

<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.”

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.”

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

Architecture can be a powerful agent of change, shaping not just spaces but the way people live, connect, and experience the world.&nbsp; For Nepal, which is <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">gifted by nature</a> and rich in <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/ambassador-fund-cultural-preservation-nepal,2092">cultural heritage</a>, &nbsp;reviving rural architecture with modern amenities could hold the key to more <a href="https://nepalitimes.com/here-now/what-sustainable-tourism-means-in-practice">sustainable tourism </a>that benefits local people more. “<a href="https://nepalitimes.com/banner/bayalpata-hospital-in-nepal-wins-global-design-award">Design and architecture</a> are amazing tools to create a unique experience for visitors,” says Spanish architect Tomeu Esteva of Esteva i Esteva Architecture Studio. “Difficult destinations have beautiful hotels with design and comfort.” Esteva was in Kathmandu with his colleagues at an event organised by the Spanish Honorary Consulate at Dwarika’s Hotel last week to showcase buildings which Nepali architects can adapt with local material and design inputs.&nbsp; Rural architecture holds a unique significance: it is more than a shelter and must reflect <a href="https://nepalitimes.com/here-now/inking-an-idenity">local identity, culture</a> and <a href="https://nepalitimes.com/here-now/saving-humla-from-heritage-loss">heritage</a>. An area’s natural and cultural harmony can be upset by <a href="https://nepalitimes.com/here-now/protecting-protected-areas-from-infrastructure?fbclid=IwAR1wK0MDFlFST_2EYb3f54LS4-fPt6rYfLG1DJ1JaQsU3w8-ezyXIxGOqzk">poorly planned development</a>, speakers at the event said, but the environment can be improved and revitalised by well-integrated structures.&nbsp; Another Spanish architect, Belen Moneo, has designed hotels at elevations of 3,700m in her home country Spain that supply natural spring water spas. “<a href="https://nepalitimes.com/banner/lost-in-reconstruction">Creativity in construction</a> must be encouraged. Rural architecture always shows possibilities of what we can do better,” Moneo explains, adding that designs must enhance <a href="https://nepalitimes.com/opinion/the-healing-power-of-nature">the beauty of nature</a> and give a natural feel at a time when steel, glass and cement dominate <a href="https://nepalitimes.com/here-now/rebuilding-kathmandu-after-the-1934-quake">urban design</a>.&nbsp; This is why the <a href="https://nepalitimes.com/here-now/weaving-nature-into-craft">use of natural products</a> such as bamboo, local timber, straw and rammed earth are in demand from customers who want a fresh eco-friendly look encouraged in construction of rural architectural structures. The demand for boutique hotels has increased world over, with &nbsp;more and more tourists favouring aesthetics, experience and comfort over price. While creativity is an important part of <a href="https://nepalitimes.com/here-now/architecture-for-mountains">construction and architecture</a>, incentives to build and use <a href="https://archive.nepalitimes.com/article/nation/Building,370">rural construction materials</a> still remain minimal, and Moneo emphasises the significance of design and execution.&nbsp; Esteva helped design the Vana Retreat in Dehradun that kept the natural environment in focus, with the structure giving an elaborate aesthetic experience to visitors. Another example is Hotel Las Mercedes in the Dominican Republic which was designed and constructed by Moneo and the company she co-founded Moneo Brock, respecting and revaluing the traditional architecture of the area. Hotels providing such experience could attract tourists and revenue. The Spanish ambassador to Nepal Juan Antonio March Pujol said, “The role of architecture and architects in developing tourism is crucial, not only in urban areas but rural settings as well.”&nbsp; The concept of rural boutique hotels gained traction in Spain during the 1990s, particularly in regions like Majorca with economic and environmental sustainability as the main focus. In Nepal <a href="https://nepalitimes.com/opinion/12-full-opinion/guiding-nepal-s-tourism-industry">the tourism industry</a> directly employs about 1 million people, and makes up about 8% of the country’s GDP. In Nepal, the stone homes of <a href="https://nepalitimes.com/news/reviving-himalayan-vulture-and-culture">Mustang and Manang</a>, bamboo and mud structures of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">the Tarai</a>, and the Kathmandu Valley’s terra cotta tile skylines, graceful temples, and tranquil bahal courtyards are all examples of <a href="https://nepalitimes.com/here-now/nepal-s-traditional-seismic-resistant-designs">Nepal’s traditional architecture</a>.&nbsp; Nepali architect Sarosh Pradhan has been working for the past eight years on the Brakka Village project in Manang Valley north of <a href="https://nepalitimes.com/banner/municipalities-want-to-manage-annapurna">the Annapurnas</a>. Other examples of this kind of rural architecture for high-end tourism are the Shinta Mani Hotel in Mustang and Khumbu Lodge below <a href="https://nepalitimes.com/news/mt-everest-pvt-ltd">Mt Everest</a>. Says Pradhan, “There are places in Nepal that radiate purity and embrace simplicity. Creating projects in such settings require deep reflection and thoughtful planning.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421030444_a07a23f6b60fa89c0f35b9dc1aaf19937da4881e6bfb2e1858f3c27dff91729f.jpg" data-media-id="editor_19" data-image-id="20250421030444_a07a23f6b60fa89c0f35b9dc1aaf19937da4881e6bfb2e1858f3c27dff91729f" data-rendition-name="original" width="4608" height="2184" loading="lazy" alt="A new architecture for Nepal's tourism"> </figure>  Rural architecture is not easy, and sometimes more expensive. Inflation, energy efficiency, <a href="https://nepalitimes.com/here-now/those-who-stay">the climate crisis</a>, and <a href="https://nepalitimes.com/banner/cost-of-living-in-a-big-city">increased costs of living</a> pose obstacles to sustainable rural architecture. Read also: <a href="https://nepalitimes.com/here-now/forgotten-international-starchitects-in-nepal">Forgotten international starchitects in Nepal</a>, Anne Feenstra and Varun S Bapu Esteva says faith and trust between client and architect is necessary for any project to be successful. He adds that architects must practice being humble, the process of designing always involves learning and not imposing their ideas on clients. Nepal is uniquely positioned for the growth of <a href="https://nepalitimes.com/banner/hiking-up-the-benefits-of-tourism">rural tourism</a> because of its stunning countryside as well as its internationally renowned traditions in holistic wellness. Creating infrastructure that is small, thoughtfully planned and that respects both tradition and contemporary hospitality standards is crucial. “Projects in Nepal can be made cost effective by using materials from houses that have been brought down,” says Esteva. “Pilot projects involving <a href="https://nepalitimes.com/banner/local-government-by-the-people-for-the-people-of-the-people">local people </a>and simple designing also helps the process.” <a href="https://nepalitimes.com/banner/vacant-homes-become-homestays-in-nepal">The growth of homestays in Nepal</a> is a step in the right direction, but they are still a bit too rustic for the international traveller who also wants comfort and is willing to pay extra for it. Upgrading the facilities in homestays and ensuring that the <a href="https://nepalitimes.com/here-now/an-archive-of-nepali-heritage">architectural heritage</a> of the locality is preserved using locally sourced building material could allow owners to charge more. Says Sangita Shrestha of Dwarika’s Hotel, “Our effort is to build upon rural architecture by empowering local communities and using what is available locally. We can fine tune and encourage indigenous design and training.” The vision goes beyond just boosting the economy, it is about building a future where tourism helps villages grow in a healthy and lasting way. Instead of using up resources, it gives back to the land and the people. It supports local communities by<a href="https://nepalitimes.com/opinion/staying-in-nepal-to-create-jobs"> creating jobs</a>, improving infrastructure, and protecting natural beauty. When done right, tourism can be a tool for <a href="https://nepalitimes.com/editorial/progress-and-or-preservation">preserving culture and nature</a>, not harming them. Architects must therefore see their work as more than just designing buildings, they also need to care deeply about people and places, especially in rural areas that can benefit the most.&nbsp; With global interest in sustainable and off-the-beaten-path travel increasing, Nepal stands at the cusp of a <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">tourism transformation</a> that values community-driven, eco-conscious hospitality. A mix of modern ideas and traditional knowledge could transform rural tourism in Nepal. Says Shrestha, “Young architects should spend time with <a href="https://nepalitimes.com/latest/the-unsung-heroes-of-conservation">local and indigenous communities</a>, listen to their stories, and learn from their <a href="https://nepalitimes.com/banner/life-and-livelihood-in-remote-nepal">ways of living</a>. These communities have deep knowledge about the land, materials, and climate. If this wisdom is used in new designs, it can help create tourism spaces that truly benefit everyone.” &nbsp;

A new architecture for Nepal's tourism

Extract from an addendum to Nepal's Two Wars, Chapter 2 in the updated edition of Essays on Nepal: Past and Present by Sam Cowan, a retired British Army general with a long association with the Gurkhas. The book was first published in 2018, and republished earlier this month by FinePrint exclusively on Amazon. The addendum details a one-to-one conversation the author had in the <a href="https://archive.nepalitimes.com/news.php?id=8884">Royal Palace </a>with the <a href="https://archive.nepalitimes.com/news.php?id=8371">King Gyanendra</a> in November 2002 just after he had taken his initial steps on the road that ultimately led to <a href="https://archive.nepalitimes.com/news.php?id=14681">the abolition of the monarchy</a> in Nepal in 2008. In the early evening of September 16, 2002, in my role as Colonel Commandant of the Brigade of Gurkhas, I had my second and last official audience with King Gyanendra to give him an update on the Brigade’s activities over the previous 12 months. I had some 6 or 7 such audiences with <a href="https://nepalitimes.com/here-now/preserving-king-birendra-s-family-home">King Birendra</a>.&nbsp; These were official affairs with the British ambassador of the day present, along with key <a href="https://archive.nepalitimes.com/news.php?id=12233">palace officials</a> and a representative from Nepal's Foreign Ministry. The two monarchs were very different in character and temperament, but both treated me with the utmost civility and made the audiences as relaxed and easy for me as possible.&nbsp; It is, however, worth recording that when the official business had been covered, King Birendra, with a twinkle in his eye, often ended by asking, “Now General, what’s the gossip in London?” The second audience with <a href="https://archive.nepalitimes.com/news.php?id=8026">King Gyanendra </a>was my last official act in uniform. We came back to Kathmandu in the first week of November (after treks) to stay for a few nights with our Defence Attaché before heading back to the UK. Waiting for me was a message from the Palace saying that King Gyanendra would like to meet me informally: <a href="https://archive.nepalitimes.com/news.php?id=6933">no uniform</a> and no ambassador.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080420_f9046f9882d4481781d14f2b64f18c7fbbea62562e1d74e3465de6d01fb43750.jpg" data-media-id="editor_7" data-image-id="20250421080420_f9046f9882d4481781d14f2b64f18c7fbbea62562e1d74e3465de6d01fb43750" data-rendition-name="original" width="1750" height="2406" loading="lazy" alt="Gyanendra crowned page 1"> <figcaption>Nepali Times Special Edition of 6-14 June 2001 with enthronement of Gyanendra. </figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_21333d6ae21828eb47fe3f849438d215fe2804460d47bb2896ef4aee4e895ad2.jpg" data-media-id="editor_8" data-image-id="20250421080424_21333d6ae21828eb47fe3f849438d215fe2804460d47bb2896ef4aee4e895ad2" data-rendition-name="original" width="1500" height="1857" loading="lazy" alt="Royal massacre"> <figcaption>Nepali Times 22-29 June 2001 covering the royal massacre after which Gyanendra became king. </figcaption> </figure>  Although I had no idea what the purpose of the meeting might be, events in Kathmandu since I last saw the king put me on edge. On October 4, 2002, Gyanendra had dismissed Prime Minister Sher Bahadur Deuba, allegedly for failing to hold <a href="https://nepalitimes.com/news/what-goes-on-in-nepal-s-elections">elections</a>. He had put in place a new prime minister and a cabinet personally selected by him. When I heard the news on my travels, the people I met were generally supportive of the king’s actions. There was a general view that something had to be done, the country was going nowhere, and the king deserved his chance, not least to solve<a href="https://nepalitimes.com/latest/14-years-after-conflict-no-closure-in-nepal"> the Maoist </a>problem. Back in Kathmandu, views were not so sanguine. The chosen prime minister, Lokendra Bahadur Chand, was a relic from <a href="https://nepalitimes.com/here-now/mob-movement-and-mayhem">the Panchayat period</a> whose party had failed to win a single seat in the last elections held in 1999. Some of the chosen cabinet ministers had, to put it mildly, dubious reputations, and others had no record of proven competence in any field. There was a fear that the king’s real motive in dismissing <a href="https://nepalitimes.com/editorial/deubas-denouement">Deuba</a> was to start to reverse the democratic gains made since 1990. I informed <a href="https://nepalitimes.com/news/nepal-britain-mark-centenary-of-1923-treaty">the British ambassador</a> about the invitation. He was strongly against accepting it, which was probably the clinching reason for my decision to do the polite thing and accept it. On the evening of November 7, 2002, I presented myself at the royal palace, alone and in civilian attire.&nbsp; As in the past, the Military Secretary, Major General Vivek Shah, met and escorted me into the presence of the monarch. This time, however, he was politely asked to leave the room and shut the door behind him. King Gyanendra greeted me warmly and invited me to sit down.&nbsp; Read also:<a href="https://nepalitimes.com/news/the-ghost-of-monarchy-returns-to-haunt-nepal"> The ghost of monarchy returns to haunt Nepal</a>, Shristi Karki  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_e382af945d0ad2a04ae41fabe5393f793dd10f54cb1220f111c7c9e7423eb558.jpg" data-media-id="editor_15" data-image-id="20250421080424_e382af945d0ad2a04ae41fabe5393f793dd10f54cb1220f111c7c9e7423eb558" data-rendition-name="original" width="1000" height="993" loading="lazy" alt="Gyanendra coup"> <figcaption>Nepali Times 4-10 February 2005 after king Gyanendra's coup imposed media censorship. anendra became king. </figcaption> </figure>  I had wondered, and to be truthful, had worried, not just about the purpose of the meeting, but about how the conversation might start and develop. I reduced my resolve to two points: be polite but speak candidly. The latter resolve was quickly put to the test with the king’s opening words: “Sam, [in previous meetings it had been ‘General’, you walk the highways and byways of this land more than most, tell me what the common man is thinking?” &nbsp;“Your Majesty, I have no idea what they are thinking, but they are waiting.” “Waiting?” “Yes, Your Majesty, they are waiting to see whether what you did some weeks ago in appointing your own prime minister and cabinet ministers is going to make any difference to their lives or whether it is just going to be more Kathmandu hot air.” “Everything is going to be difficult and is going to take time, a lot of time.” “Your Majesty, time is the one thing you don’t have. You must act quickly and decisively to take advantage of the opportunity you have created. Everyone knows that you have appointed these new ministers. Why don’t you get them in here one by one and tell them that they have three months to deliver a programme in their area of responsibility that is going to make a difference to people’s lives? Most will fail to do so. Sack them! It will be a powerful signal of your strong intent to deliver real change.” I can express the opening of our conversation in this way because just about every word is still etched in my mind. The king’s response to my last quoted words was to challenge me to give an example of something that could be delivered quickly. I can give a verbatim record of what I said in response to this unexpected challenge: “Health posts, Your Majesty, there is no shortage of them throughout the country as building them has been one of the sources of local corruption, but very few have any medicine to issue at present or have skilled people to assess and meet medical needs. Your Majesty, children are dying for lack of a few pills. Given the right priority, over a period, say of six months, every health post could be fully stocked with medicine and manned with trained people. This is something I could help to lead for you as I know it would have strong international backing. At last, people would know that you mean business.” As I warmed to the theme, I could see no sign of the king having any enthusiasm for the idea, and I quickly disengaged as it dawned on me, as it had clearly dawned on the king, that the reason for the deficiencies in health posts was to prevent any Maoist combatant from gaining access to any <a href="https://nepalitimes.com/opinion/tech-away/nepal-s-health-tech-industry-is-here-to-stay">medical support</a>, and if this meant people suffering, so be it. The subject of the Maoist insurgency inevitably came up, and I took the opportunity to elaborate on what is written in the final four paragraphs of the article above. I advised King Gyanendra that, self-evidently, since there were three parties in the conflict—him, the Maoists, and the political parties—it was imperative that he form an alliance with one of them, preferably the political parties; otherwise, he would find himself isolated, as the other two parties would inevitably, at some stage, form their own alliance. However, it quickly became apparent that the king’s mind was on a totally different track. On the Maoists, he told me that he had channels open to them, but he was scathing about the political party leaders. He made it clear that they would be waiting for a very long time before he gave any power back to them, and that is a polite way of expressing the actual words he used, but “crawling through the door” is a phrase which has stuck in my mind.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_5403455ff6168f0d202a96cb53edea69136d74d59b989cfcc7cc4a1d57672cb5.jpg" data-media-id="editor_17" data-image-id="20250421080424_5403455ff6168f0d202a96cb53edea69136d74d59b989cfcc7cc4a1d57672cb5" data-rendition-name="original" width="2000" height="1317" loading="lazy" alt="fall of monarchy"> <figcaption>Nepali Times 28 April-3 May 2005 with cover image by Ajay Joshi of jubilant protesters after street demonstrations sidelined king Gyanendra, paving the way for a ceasfire and restoration of democracy. </figcaption> </figure>  As the conversation developed, it became ever clearer that King Gyanendra had decided to go in alone, relying on the misleading assurances he was constantly receiving from <a href="https://archive.nepalitimes.com/news.php?id=14954">the army</a>, and no doubt his close advisers, that the Maoists could and would be quickly defeated militarily, and taken out of the equation. This would obviate the need for him to do any deal with the political parties.&nbsp; Thus, the way would be clear for him to establish a version of his father’s Panchayat system, under a constitution that would be granted to the people by him, their sovereign, as his father and brother had done in 1962 and 1990. As in those constitutions, ultimate power would have remained in the sovereign’s hands. This proposed direction of travel was very clear from what the king said to me. In sum, King Gyanendra was motivated by a desire to emulate his immediate predecessors by granting his people a constitution that would restore his father’s Panchayat system in a modern form and give him a central role in decision-making. What was particularly dispiriting was that beyond this single objective he had no plan worthy of the name, nor demonstrably did he have the people with the skills to implement an appropriate plan even if one had existed. Crucially and depressingly, there was little or no indication from the king that he realised that such a course of action could put Nepal’s monarchy into serious jeopardy, as indeed proved to be the case. <h2>King Twice</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250420110436_315d519fe3d68d2406ebe1480fed54720fbf21b8907a4da5cde751fdc623d445.jpg" data-media-id="editor_19" data-image-id="20250420110436_315d519fe3d68d2406ebe1480fed54720fbf21b8907a4da5cde751fdc623d445" data-rendition-name="original" width="1302" height="632" loading="lazy" alt="“Tell me what the common man is thinking!”"> </figure>  <a href="https://archive.nepalitimes.com/news.php?id=8371">Gyanendra Bir Bikram Shah has been king twice</a>. In 1950 he was enthroned briefly as a child king (left, above) by the Rana Prime Minister Mohan Shumsher when his grandfather, King Tribhuvan, fled to exile in India. In 2001 he was crowned king again after the massacre in the royal palace in which his brother King Birendra and nine other members of his family were killed by Crown Prince Dipendra.&nbsp; During his second reign, Gyanendra gradually asserted power by sacking Prime Minister Sher Bahadur Deuba in 2002, and then taking full control after the 1 February 2005 coup. He was sidelined after the ceasefire in April 2006, and became a commoner after the Constituent Assembly finally <a href="https://archive.nepalitimes.com/article/from-nepali-press/Ftnp-abolishing,624">abolished the monarchy in 2008</a>. In the past year, Gyanendra has tried to exploit public dissatisfaction with the political parties to restore the monarchy.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080432_26ef4a4b0e3cee9fdc6794446702efe16550d293904b4f6dd46fe35d4d10c788.jpg" data-media-id="editor_22" data-image-id="20250421080432_26ef4a4b0e3cee9fdc6794446702efe16550d293904b4f6dd46fe35d4d10c788" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Essays on Nepal by Sam Cowen"> </figure>

“Tell me what the common man is thinking!”

He had just sat down for lunch after tending the garden at his house in Lagan Tole on 25 April 2015 when the ground began to shake violently. &nbsp; Gautam Nepal, 56 at the time, realised it was an earthquake. He panicked at the thought of his neighbours' multi-storied buildings toppling on top of his modest one-storey house. He rushed out as the high-rises swayed and groaned. “We were used to earthquakes, moderate ones are a regular occurrence in Kathmandu, but I had never felt fear like I felt on that day,” recalls Gautam. “My house proved strong, it did not collapse.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_82a74881218223df70e30eb1759cd3a7c9edbb7728acef83c3f8b397d6e6dfe9.jpg" data-media-id="editor_0" data-image-id="20250419040440_82a74881218223df70e30eb1759cd3a7c9edbb7728acef83c3f8b397d6e6dfe9" data-rendition-name="original" width="1737" height="1000" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>LAGAN TOLE'S TOLL: Lagan Tole photographed by tour guide Neil S Rawlins during his travel to Kathmandu in February 1970.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040448_90914720a75b7d31a12bc27f0c0af9484a5e5efc7dd797dc6bcd190fc28ecdcb.jpg" data-media-id="editor_1" data-image-id="20250419040448_90914720a75b7d31a12bc27f0c0af9484a5e5efc7dd797dc6bcd190fc28ecdcb" data-rendition-name="original" width="1500" height="1004" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Lagan Tole photographed by Neils Gutschow in 1992.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_9a4dd35b070949949bfe275eff8216dd29f88f74a30b063dc614845226f68f03.jpg" data-media-id="editor_2" data-image-id="20250419040440_9a4dd35b070949949bfe275eff8216dd29f88f74a30b063dc614845226f68f03" data-rendition-name="original" width="1501" height="1000" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Lagan Tole in 2025.</figcaption> </figure>  Other residents of Lagan who also live in traditional low rise houses had the same fear. Tara Nepali, then 48, was doing the washing that Saturday.&nbsp; She recalls, “When my house began to shake, I could only think about the bigger buildings falling on top of me. I was sure my house would collapse, but to my surprise, it survived, and so did we.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_2b4b1ec427d9aec5980021b97b25ca3164d5f79337f113ba02b1d802f71b7cad.jpg" data-media-id="editor_3" data-image-id="20250419040440_2b4b1ec427d9aec5980021b97b25ca3164d5f79337f113ba02b1d802f71b7cad" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Gautam Nepali in front of his one-storey Lagan home, where he had been having lunch just before the earthquake struck 10 years ago.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040436_6f8a7057bbd269214712076e13117b665165e03a0351db0e3666aee05e91f63c.jpg" data-media-id="editor_4" data-image-id="20250419040436_6f8a7057bbd269214712076e13117b665165e03a0351db0e3666aee05e91f63c" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Tara Nepali in front of her house in Lagan. She was doing the washing during the earthquake in 2015.</figcaption> </figure>  But Buddha Khadgi, 68, was not so lucky. His was one of the few houses in the neighbourhood to be reduced to rubble. His lifelong collection of photographic prints were buried, and so were the traditional Newari musical instruments passed down through generations of his family that he used to give music lessons.&nbsp; “I lost the things that connected me to my roots and my heritage. That was infinitely more heartbreaking than the fact that my house was gone,” says Khadgi, now living in a new cement structure.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040436_58f4a8ee4eb740536c69096a4d8c0cd2007fdbcc4ef56551ff460d2ef0ef6f2b.jpg" data-media-id="editor_5" data-image-id="20250419040436_58f4a8ee4eb740536c69096a4d8c0cd2007fdbcc4ef56551ff460d2ef0ef6f2b" data-rendition-name="original" width="2496" height="1671" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Lagan's Maka Galli some decades ago. Photo: SHREE RAM NEPALI</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_6b2bacaf0a1e93b441aff8093b343836d6de0b44d7b29f9b758209845f675bff.jpg" data-media-id="editor_6" data-image-id="20250419040440_6b2bacaf0a1e93b441aff8093b343836d6de0b44d7b29f9b758209845f675bff" data-rendition-name="original" width="1000" height="1500" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Lagan's Maka Galli in 2025. The neighbourhood's old Newari houses have been replaced by concrete structures, although the falcha has been rebuilt in traditional style.</figcaption> </figure>  Lagan Tole in Kathmandu's historic heart emerged relatively unscathed from the earthquake in large part because, like in nearby Asan, the buildings are densely packed and lean on each other. But in the years after the earthquake, urban pressure and fear of future quakes have made families tear down their traditional houses with sloping tile roofs and replace them with concrete structures.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_25983e79dc88388cb370b16f7f631e4c276cfc997ffa1f9ce3701e40c876b355.jpg" data-media-id="editor_7" data-image-id="20250419040440_25983e79dc88388cb370b16f7f631e4c276cfc997ffa1f9ce3701e40c876b355" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>Glimpses of present-day Lagan.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_9a6a88df8815352a452895c43840a898d4b6c080b79562383306c0cfe8bcd952.jpg" data-media-id="editor_8" data-image-id="20250419040440_9a6a88df8815352a452895c43840a898d4b6c080b79562383306c0cfe8bcd952" data-rendition-name="original" width="1000" height="1500" loading="lazy" alt="Loss of soul and soil NT"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_a348b974bd3a5e76d0bf9b309f98813556d43dd6c361856c67e79c03d4283e69.jpg" data-media-id="editor_9" data-image-id="20250419040440_a348b974bd3a5e76d0bf9b309f98813556d43dd6c361856c67e79c03d4283e69" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Loss of soul and soil NT"> </figure>  Lagan’s longtime residents, especially the elderly whose families have lived here for generations, say that the neighbourhood with its characterless new tall cement boxes is no longer familiar to them. “We used to say that our houses are not supposed to be taller than temples, the houses of our gods,” says Gautam. “Now, the houses here dwarf the temples and even the chariot of Seto Machindranath.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_88d18ce580abaf9e62fd807403f2e3c9a5bd8972d3b32bdacb97d8991c7fec35.jpg" data-media-id="editor_10" data-image-id="20250419040440_88d18ce580abaf9e62fd807403f2e3c9a5bd8972d3b32bdacb97d8991c7fec35" data-rendition-name="original" width="1041" height="1441" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>The Seto Machindranath procession at Lagan on 10 April 1998, during which the chariot caught fire. Photo: SOCIAL MEDIA</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250419040440_c403f91f9a48c14eaaeed2d38a2cb97714416765730b6d12f29487f9b0f47e83.jpg" data-media-id="editor_11" data-image-id="20250419040440_c403f91f9a48c14eaaeed2d38a2cb97714416765730b6d12f29487f9b0f47e83" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Loss of soul and soil NT"> <figcaption>The Seto Machindranath procession at Lagan earlier this month.</figcaption> </figure>  &nbsp;The old baha courtyards, falcha resting places, and open spaces where Lagan’s residents used to grow vegetables and gather as a community are nearly all gone. And the taller the houses get, residents say they feel less anchored to the soil. Lagan has also lost its soul -- the community spirit is eroding as elderly neighbours rarely venture down to meet each other in the evenings. &nbsp; “This no longer feels like the tole I grew up in,” says a resident. “We are beginning to lose the relationships we had with each other as a community, and with it, the spirit of Lagan.”&nbsp;

Loss of soul and soil

Dealer Cimex has extended warranties on BYD EVs sold in Nepal for 10yrs/200,000km, up from 8yrs/160,000km. Lights, tyre pressure monitors, suspension and ball joints now have 5yr/125,000km warranties, and all other parts now have 7.5yr/187,500km warranties.&nbsp;

investment