<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111132/636cd3d79c7e80680e08f98ejpeg.jpg" alt="" width="900" height="680"/><figcaption>Nepal and Israel sign an ‘implementation protocol’ agreement for the recruitment of 500 caregivers in Israel.</figcaption></figure>Thursday, 21 JanuaryNepal and Israel signed an ‘implementation protocol’ agreement for the recruitment of 500 caregivers in Israel.  The government-to-government deal that excluded recruiters itself was signed in September.In 2009, Israel stopped recruiting Nepalis after migrant workers were found to be paying hefty fees to recruiters for lucrative job opportunities in Israel. It was <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/08/07/israel-calling/" data-saferedirecturl="https://www.google.com/url?q=http://archive.nepalitimes.com/blogs/thebrief/2015/08/07/israel-calling/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNE9-vfw9KfZq6J_mKk0hrc9BfY1Fg">reopened in 2015</a> under a pilot Nepal-Israel agreement that <a href="https://www.nepalitimes.com/here-now/demand-grows-for-nepali-caregivers-in-israel/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/demand-grows-for-nepali-caregivers-in-israel/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNFix5IvyK7VcKFsktwKWmfQOkdgeQ">sent about 80 workers</a>.The new agreement will place Nepalis as auxiliary workers in old-age shelters and not private homes, and they can earn as much as Rs200,000 a month. <a href="https://www.nepalitimes.com/here-now/nepals-women-envoys-make-a-mark/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/nepals-women-envoys-make-a-mark/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNH9HzBB4gwAx_a0kexvSoX8UiIecQ">Nepal’s Ambassador to Israel Anjana Shakya</a> lobbied for the agreement which has a higher preference for women workers because there are more female elderly in Israel, and they prefer caregivers from the same gender.Israeli Ambassador to Nepal Hanan Goder says the agreement can help transform the lives of Nepali women and their families. Goder says he will meet the workers pre-departure and assure them that they will enjoy all labour rights just like Israeli citizens.Ambassador Shakya is hopeful that the current quota of 500 can be expanded as there is demand for caregivers and other jobs in Israel. She says recruitment should be transparent and workers should not get charged illegally and Nepali migrants should not overstay their visas in Israel. However, she says there are already cases of middlemen charging workers for jobs. She says: “This should be stopped with strict regulation.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111132/636cd3da9c7e80680e08f98fjpeg.jpg" alt="" width="720" height="513"><figcaption>“Life is full of laughter and happiness, you can grow gold in Nepal itself if you work hard.” Life returned in a coffin and a suitcase.</figcaption></figure>Saturday, 23 January There is a coffin with the word ‘Fragile’ alongside a drag-on luggage in the back of a pickup. Painted on the truck’s bumper are the words: हाँसी खुसी जिन्दगी चल्छ, मेहनत गरे नेपालमै सुन फल्छ (Life is full of laughter and happiness, you can grow gold in Nepal itself if you work hard.)The pathos and irony of the photograph made it viral on Nepali social media. The body was among 18 coffins repatriated from Malaysia on Saturday. The 19th was just the ashes of Bir Bahadur Tamang from Nijgad.Dinbandhu Subedi at the Foreign Employment Board explained there was a backlog of bodies because smaller Nepal Airlines jets could not carry enough coffins home. Finally, a wide-body Airbus 330 was used to fly the coffins out. There are still 16 bodies left to be brought back from Malaysia.There are over 380,000 documented Nepali workers in Malaysia, the largest overseas destination for Nepalis. There have been 628 deaths in Malaysia in the last 12 years, the highest number of fatalities among countries with Nepali migrant workers.Out of the <a href="https://www.nepalitimes.com/here-now/his-last-journey-home-to-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/his-last-journey-home-to-nepal/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNEPFne5aW9pEtt2qX6KtiBqsWfOxg">656 deaths of Nepali workers overseas</a> in 2019/20, 176 were in Malaysia, the highest, followed by Saudi Arabia (151) and Qatar (115). The main causes were officially listed as <a href="https://www.nepalitimes.com/banner/the-heat-is-killing-us/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/banner/the-heat-is-killing-us/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNGG3RWE7FbjGcphydReZtiLQT2xSA">cardiac arrest, ‘natural causes’, and suicide.  </a>These deaths have become mere statistics. For the airlines, the coffins are just cargo.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111132/636cd3dc9c7e80680e08f990jpeg.jpg" alt="" width="455" height="418"><figcaption>Recruitment companies stage a protest in front of the Department of Foreign Employment (DOFE).</figcaption></figure>Sunday, 24 January Nepal’s recruitment companies staged a protest in front of the Department of Foreign Employment (DOFE) on Sunday, submitting a 21-point demand that included compensation for migrant workers who have returned prematurely during the pandemic.The Nepal Association of Foreign Employment Agencies (NAFEA) wants compensation to be decided on a case-by-case basis. DOFE set up a 7-member joint taskforce to address the demands, and Director General Kumar Prasad Dahal said that while some of the demands may be reasonable, there is malpractice in the industry which will not be tolerated.The same day, reports surfaced that Nepalis had joined the Qatari Police bypassing DOFE approval by travelling via India. <a href="https://www.nepalitimes.com/latest/qatar-police-recruitment-row-hits-nepalis/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/qatar-police-recruitment-row-hits-nepalis/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNFb5M0GUYcF1T1UYR8dWeL3bBv0OQ">A row broke out in November</a> when Qatari officials were found conducting interviews for security jobs without permission from DOFE as required by the law.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111132/636cd3de9c7e80680e08f991jpeg.jpg" alt="" width="459" height="485"><figcaption>Labour Minister Gauri Shankar Choudhary.</figcaption></figure>Monday, 25 January DOFE’s Monitoring Team conducted a sting operation on Kalyan Security Private limited in Sina Mangal. the very next day, newly appointed Labour Minister Gauri Shankar Choudhary (pictured) has allowed another company, <a href="https://www.nepalitimes.com/here-now/labour-recruiter-netted-in-sting-raid/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/labour-recruiter-netted-in-sting-raid/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNEdrNMzRxR_SOtUzZft2WkGAtg3rg">SOS Manpower</a> which had been suspended for conducting interviews for Qatar without official approval, to resume operations.While one hand of the government apprehends those cheating workers, politicians set them free. Loopholes, a powerful trans-national nexus, vested interests and the desperation of migrants for jobs overseas drives recruiters to figure out new ways to squeeze workers who will do anything for a better future.Kushal Baral of the Monitoring Team took part in the raid on Monday and seized applications forms for Qatar Police. We asked Baral how long before he gets transferred from DOFE. It will not be the first time an honest bureaucrat or <a href="https://www.nepalitimes.com/editorial/blood-sweat-and-tears/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/blood-sweat-and-tears/&amp;source=gmail&amp;ust=1611744207966000&amp;usg=AFQjCNGxiVX8Dja6Tq_TuqeDM0KPPu9Igg">politician</a> posing a threat to easy money-making is removed.Baral replied matter-of-factly: “It is not under my control. Until then, I will continue to do what I can.”

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4 days, 4 scenes

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd93b9c7e80680e080200jpeg.jpg" alt="" width="1500" height="844"/><figcaption>Nepali Times Archives/Om Astha Rai</figcaption></figure>Nepal has set a positive image in the region for adopting a ‘employer pays’ principle that removes the cost burden on its overseas migrants. The reality is that it has remained just that: a principle.Only a negligible number of Nepali workers have benefited from the free visa and free ticket policy – even under bilateral agreements with some Gulf countries and Malaysia that require employers to pay the costs.The issue of recruitment costs has resurfaced with the <a href="https://www.nepalitimes.com/here-now/demand-grows-for-nepali-caregivers-in-israel/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/demand-grows-for-nepali-caregivers-in-israel/&amp;source=gmail&amp;ust=1601892756901000&amp;usg=AFQjCNF4sMxqHE6wL_TK2WWv0yxqKiRe8w">Israel-Nepal agreement</a> for caregivers signed last week. Early indications are that the recruitment fees may not be zero, and workers will have to bear costs such as air travel and pre-departure training.Nepal has bilateral agreements with other countries which do not have the employer pays model. Korea has signed Employment Permit Scheme (EPS) with 15 countries for employment in five sectors. Japan has Specialised Skilled Worker program with 10 countries for employment in 14 specific sectors. The agreement between Israel for 500 more Nepali caregivers is similar to the ones it has with Georgia and the Philippines.<a href="https://www.nepalitimes.com/here-now/nepali-workers-stuck-in-no-mans-land/">Nepali workers stuck in no-man's land</a>, Nepali TimesIn all cases workers have to bear some of the cost of recruitment, all countries have specific quotas. And they are often the only legal pathway for Nepalis to get jobs in those countries. The criteria of these overseas worker programs uniformly apply to the sending countries.Nepal’s agreements with the Gulf states and Malaysia, however, are different. They are generic and not part of any specific overseas worker employment program with criteria that apply to all sending countries. The provision in the agreements are outcomes of country-specific negotiations, there are no quotas, and jobs are not tied to any sector. With or without MoUs, Nepali workers continue to migrate legally to those countries.While there is more leeway in the negotiations of such generic agreements, it is difficult for Nepal to be a sole fighter for the employer pays principle in specific bilateral labour programs such as those with South Korea and Japan.Average recruitment costs also vary widely across sending countries (see figure). For example, the Philippines allows an equivalence of one month’s salary as recruitment fee. South Korea is not going to have a flagship bilateral labour scheme for Nepal that says ‘workers from 14 countries will pay $700 but Nepalis will pay 0’.There are therefore limitations to what labour diplomacy and negotiations can achieve. A zero-cost or bust strategy may deprive Nepali workers from benefiting from the most attractive opportunities overseas with guaranteed returns.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd93e9c7e80680e080201jpeg.jpg" alt="" width="954" height="551"><figcaption>Average recruitment costs and monthly earnings (2016) of Nepali workers. SOURCE: IOM/KOICA</figcaption></figure>It would help if all sending countries adopted a single voice on common issues such as recruitment costs. Regional platforms like the Colombo Process for cooperation between sending countries have very little to show for now. Instead, each sending country’s priority is the size of the quota it can bag for its workers in South Korea or Japan.Recruitment costs also need to be considered not just on their face value but in terms of their equivalence to wages. There is a vast difference in the returns to employment across countries. Some are more attractive than others in terms of returns and in our case, Japan, Israel and South Korea are relatively better despite room for improvement in worker treatment.The difference between job opportunities in Israel/South Korea versus the Gulf/Malaysia may be an inter-generational social mobility jump versus just sending enough remittances to make ends meet.EPS workers in South Korea have three advantages: they are charged the same amount, there is a transparent breakdown of costs involved that apply equally to all, and they will be able to recoup this cost within a month.On the other hand, workers headed to Malaysia face a completely different reality, even if there is a zero cost pact between the two countries: they are arbitrarily charged <a href="https://www.nepalitimes.com/opinion/brokers-going-for-broke/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/opinion/brokers-going-for-broke/&amp;source=gmail&amp;ust=1601892756901000&amp;usg=AFQjCNGVwF9oATSp2EVcyePLm9CY65x_2A">as per the recruiter’s demand</a>. There is no certainty when they can recoup costs, usually it will take many months.  If workers headed to Malaysia knew that they would be able to recoup recruitment cost within a month of arrival, as in the case of South Korea, they would likely see it as a blessing considering the status quo.<a href="http://nepalitimes.com/opinion/zero-sum-game-in-zero-cost-migration/">Zero-sum game in zero-cost migration</a>, Upasana KhadkaNepal’s bilateral schemes with Korea, Japan and Israel have evolved to address high recruitment costs. The EPS itself is remodeled after its predecessor, the Industrial Trainee Scheme, under which workers paid as much as $10,000 for their jobs, and the process was rife with malpractice and exploitation.The Israel market was shut down for Nepali caregivers in 2012 when recruiters started charging up to $8,000 each. Removing intermediaries in these programs is an attempt to reduce costs for workers. In the quest for the ideal ‘employer pays’ model in which workers pay nothing, we disregard the achievable progress in government-to-government schemes like the most recent Israel-Nepal agreement.While Nepal may have signed agreements with employer pays provisions for visa fee and air tickets, there are no mechanisms to ensure its implementation. These principles are only as good as the impact they bring to migrants.In the past few years since it was set up, the <a href="https://www.nepalitimes.com/opinion/brokers-going-for-broke/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/opinion/brokers-going-for-broke/&amp;source=gmail&amp;ust=1601892756901000&amp;usg=AFQjCNGVwF9oATSp2EVcyePLm9CY65x_2A">Ethics Practitioners Association of Nepal (EPAN),</a> an umbrella organisation of recruiters committed to ethical recruitment including no cost for workers, has been able to mobilise zero workers. The only reason they are surviving is because they have alternate businesses in other sectors.There are some positive signs. Glove factories in Malaysia are <a href="https://www.nepalitimes.com/latest/global-glove-makers-compensate-nepali-workers/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/global-glove-makers-compensate-nepali-workers/&amp;source=gmail&amp;ust=1601892756901000&amp;usg=AFQjCNE4L3qB7b5YW3AoiKNQQl9UGlYvCw">reimbursing recruitment fees of workers</a> from all nationalities – not just workers from Nepal with which Malaysia has signed a zero-cost pact (see figure). This move was not due to the goodwill of employers or the Malaysian Government, but pressure from the United States after their exports faced a ban from CBP (Customs and Border Protection) and a potential damage to their reputation from profiting during the pandemic.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd9419c7e80680e080202jpeg.jpg" alt="" width="965" height="472"><figcaption>Recruitment costs (Months of earnings at destination) SOURCE: World Bank</figcaption></figure>This calls for a more strategic approach to bring real change alongside non-binding, soft commitments, or moral agreements on zero-cost migration that get all the media attention. Another unintended consequence of focusing only on the principle of no-cost migration is that more practical solutions may be disregarded.One of the biggest downsides of financing recruitment costs for Nepali workers is that they are slapped hefty interests by informal lenders that add up significantly. Financing collateral free, low interest loans, as was <a href="https://www.nepalitimes.com/opinion/zero-sum-game-in-zero-cost-migration/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/opinion/zero-sum-game-in-zero-cost-migration/&amp;source=gmail&amp;ust=1601892756901000&amp;usg=AFQjCNGtkqeNW-PNxTlOIsFKLrrB3Sp62A">implemented by DfID in Province 2</a> before the lockdown, is an example of a more practical short-term approach to ease the burden on migrants.Is it fair to deprive them of low cost financing solutions knowing that workers are paying to go abroad regardless of whether it is to a country with which we have signed a zero-cost pact or not,Nepal’s well-intentioned policies have failed to deliver, but anyone who cares about migrant welfare will champion the employer pays principle. The bosses of migrants, often migrants themselves but referred to as ‘expats’ for being in a higher position, are not only exempted from recruitment costs but also get compensated for relocation. It is counterintuitive that those in the lowest rungs of the ladder who cannot afford the costs are being made to borrow to pay exorbitant fees just to get the jobs.Nepal’s implementation capability and whether policies are practical in the current context, the incentives for those involved, regional dynamics, and the diverse situation of worker treatment across countries, all have to be taken into account.Turning this aspiration to reality is a long game, and we would be remiss to disregard a whole range of shorter-term, practical alternatives en route.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109171144/636bd9449c7e80680e080203jpeg.jpg" alt="" width="95" height="105">Upasana Khadka writes the column Labour Mobility every month in Nepali Times analysing trends affecting Nepal’s workers abroad.

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The theory and practice of zero-cost migration

The monsoon has got bad press because Nepal’s tourism operators actively told visitors to avoid <a href="https://nepalitimes.com/opinion/managing-the-monsoon?%2F">the rainy season</a>. It is time to change that. The reason can be found right here in the vast alpine meadows of Central Nepal where this time of year you can walk on velvet grass of pastures abloom with delicate pink, red and yellow flowers as the mist rolls up the valley. There is no sound except the hum of bumble bees. &nbsp;&nbsp; There are dozens of places across high Nepal called Chaurikharka, which means yak pasture. But this particular Chaurikharka in Rukum East located at an altitude of 4,000m stands out for its serene beauty, rustic charm and bucolic setting. There is just the occasional chime of <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">yak bells</a> in the distance, and the sharp whistle of herders corralling sheep. &nbsp;&nbsp; The grass shoots are so fragile that one hesitates to step on them, the rounded ridges appear and quickly vanish in waves of mist. With the<a href="https://nepalitimes.com/here-now/before-the-next-monsoon"> arrival of monsoon</a>, these meadows are a soothing shade of green dotted with millions of <a href="https://nepalitimes.com/review/the-anatomy-of-a-flower?%2F=">multi-coloured flowers</a>. Until very recently, it took a week or so to hike up to places like Chaurikharka, but with the expansion of the road network even to these far-flung mountains in the lap of Dhaulagiri, they are much more accessible. It is just a three-hour uphill from the Mid-Hill Highway on the border between Baglung and Rukum East.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16.jpg" data-media-id="editor_4" data-image-id="20250802130828_a0b06b494d751b2144ffbbf10894ea64b29e8aed844bc8c66171783abfaf4e16" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Purists would say that such easy access devalues the sanctity of these remote high meadows, but it also means more people will be moved to treasure the experience, appreciate <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">the value of nature </a>so they can take steps to protect it.&nbsp; To be sure, the <a href="https://nepalitimes.com/here-now/deadly-monsoon-in-nepal-turns-deadlier">monsoon season can be challenging for road travel</a>. The roads are rough even at the best of times, and in the monsoon they become muddy and treacherous, often blocked by<a href="https://nepalitimes.com/news/monsoon-deluge-in-nepal"> landslides</a>. But that could be precisely the kind of adventure that the more intrepid visitors crave. Improved road connectivity has already made Chaurikharka and places like Badimallika &nbsp;and other sacred lakes in the mountains of western Nepal popular with domestic tourists. What is driving this traffic is the urge to go to exotic new places and share videos and selfies on social media. Several of Nepal’s travel vloggers have visited Chaurikharka and popularised the place, enticing followers on TikTok or YouTube to retrace their footsteps. But even as they become more popular, these fragile and once-remote places should be protected from over-tourism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446.jpg" data-media-id="editor_8" data-image-id="20250731110736_f97110b7cdc3e7f80d5877690948fc9f4c95a09c583deb23b07355491e6c5446" data-rendition-name="original" width="1083" height="699" loading="lazy" alt="Visit Nepal in the monsoon NT"> </figure>  <h2>INCREASING FOOTFALL</h2> Chaurikharka is located in Bhume Rural Municipality of East Rukum, near the scenic valley of Dhorpatan in Baglung district. Even in the <a href="https://nepalitimes.com/banner/monsoon-culture">middle of the monsoon</a>, there is a steady stream of Nepali hikers trooping to these high pastures – especially during festival days like Saune Sankranti which this year was on 17 July and actually marks the auspicious beginning of the monsoon here. “This year the rains have not been as heavy and there have been some clear mornings when we could see everything from Dhaulagiri to Machapuchre,” says Khageswar Bhandari, who trekked up here from the road. “The flowers, the greenery and the snowy mountain views make this an incredibly unique place.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9.jpg" data-media-id="editor_10" data-image-id="20250802130824_1b9e26f2e9853fdfe69154bb42a7c9ea6da4bf4940efc1da99b304dcfbd7d3d9" data-rendition-name="original" width="2048" height="1152" loading="lazy" alt="Visit Nepal in the monsoon"> </figure>  Chaurikharka is worthwhile to get to in any season, but it has a different charm during the monsoon. Word has spread and because it is now easy to get to from Baglung or even Pokhara, people have been flocking here.&nbsp; “Holidays and Saturdays see the largest crowds, with up to 500 visitors every day,” says ward chair Mankaji Pun of Bhume.&nbsp; There was a time not too long ago when local herders brought sheep, goats, cows, buffaloes, horses, and mules to graze here during the monsoon. Although there are still livestock around, animals have been replaced by visitors taking selfies. Read also: <a href="https://nepalitimes.com/here-now/the-monsoon-and-nature-s-arithmetic">The monsoon, and nature’s arithmetic</a>, Tom Robertson Ward Chair Pun says infrastructure development is his main priority. A foot trail to Chaurikharka was built last year by the Tourism Division Office in Kohalpur, but access via the Raniwas-Koipa road section still remains challenging.&nbsp; “If we get more budget, we can improve the road and facilities to make Chaurikharka the main tourist attraction of this region,” says Bhume Municipality Chair Hom Prakash Shrestha. “After that, we hope to promote Chaurikharka as a top tourist spot.”&nbsp; Economic activity is also picking up with the arrival of visitors, but there seems to be a need to manage the makeshift sheds made of corrugated sheets that spoil the beauty of the place. Tea shops and lodges are also available but facilities are basic. Kuldeep Neupane took a three-day trip from Ghorahi in Dang to visit Chaurikharka recently, and says: “This is an ideal trip to make a quick getaway and let nature recharge your mind and body. And it is much more fun with a tent, to watch the sunrise over the Himalaya or the mist blowing in.”

Visit Nepal in the monsoon

Nepal is graduating to become a developing country on 24 November 2026 after half-century in the Least Developed Country (LDC) category. By 2030, the country hopes to transition to middle-income status.&nbsp; Everone from Prime Minister K P Oli have boasted that this is a matter of national pride, and will have a multiplier impact on trade and economy.&nbsp; But will it make any difference to the average Nepali? Not unless improved governance <a href="https://nepalitimes.com/news/why-invest-in-nepal">spurs investment and creates jobs</a>.&nbsp; Countries need to meet at least two of the three criteria in two consecutive triennial reviews to be eligible for graduation from LDC. Nepal has consistently met the thresholds for the Human Assets Index (HAI) and the Economic and Environmental Vulnerability Index (EVI) in 2015, 2018, and 2021. But Nepal was recommended for graduation before meeting the per capita <a href="https://nepalitimes.com/banner/nepals-great-income-divide">Gross National Income (GNI)</a> threshold of $1,306. “A major implication of LDC graduation is the loss of preferential market access available through Generalised System of Preferences (GSP) and other arrangements,” explains economist Sameer Khatiwada. “But over two-thirds of <a href="https://nepalitimes.com/news/nepal-doesnt-produce-its-2-biggest-export-items">Nepal’s exports</a> are to India, and the preferential market access to India is through a bilateral trade agreement. This has nothing to do with our LDC status.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85.jpg" data-media-id="editor_3" data-image-id="20250815060832_f5eabe7628a8cdf84f33b25d7cef3c4dc8913a26d8e5b253ea52a36e176b8a85" data-rendition-name="original" width="640" height="470" loading="lazy" alt="LDC graduation "> </figure>  Furthermore, a provision under the South Asian Free Trade Area (SAFTA) allows Nepal to export to India duty-free if the items are at least 30% value-added. Nepali traders take advantage of this by re-exporting edible oils without meeting that requirement, falsely boosting Nepal’s exports.“ Following graduation from LDC, the value addition threshold might increase to 40%,” says Kalpana Khanal of the Policy Research Institute. “This is supposed to work to our advantage, because on paper value addition inherently means <a href="https://nepalitimes.com/multimedia/staying-home-to-create-jobs">job creation at home</a>.” But Nepal’s exports to other major destinations will face <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">tariff increases</a> with the graduation. A South Asia Watch on Trade, Economics and Environment (SWATEE) study shows that while tariff increase in the US market is relatively low (see page 5) it is considerably higher in Europe. The International Trade Centre (ITC) in a 2022 study also estimated that graduation could result in a 4.3% decline in Nepal’s projected exports, but this is excluding the impact of changes in ‘rules of origin’ provisions in preference-granting countries such as the UK and Europe.&nbsp; Nepal’s top export to these preference-granting countries is <a href="https://archive.nepalitimes.com/news.php?id=1482">carpets</a>, and will not be impacted, but other items such as textiles and apparel will be heavily affected due to higher cost of production. The impact will felt mostly by small and medium enterprises which represent the largest share of exports to LDC-specific preference-granting countries. As for the service exports, Nepal never really made use of the World Trade Organization’s LDC services waiver anyway, hence the effect will be minimal, if any. There is also concern about Nepal’s graduation at a time when the global economy is topsy-turvy, amidst <a href="https://nepalitimes.com/opinion/turning-point-in-us-india-relations">tariff wars and conflicts</a>. This affects Nepalis abroad directly and may impact <a href="https://nepalitimes.com/news/more-remittance-more-than-remittance">remittances </a>which hit $11 billion in 2024. In comparison, Nepal only received $350 million in foreign loans and grants last year.&nbsp; Tourism arrivals have finally reached pre-pandemic levels, but bad publicity about pollution, poor infrastructure and bureaucratic hurdles hinder further growth. Manufacturing continues to struggle, while hydropower and the IT sector have taken off.&nbsp; “Look at data -- <a href="https://nepalitimes.com/news/tourism-needs-a-new-push">tourism arrivals</a> are up, spending is up, IT exports are up, <a href="https://nepalitimes.com/news/why-nepal-needs-to-restore-ev-tax-subsidy">EV sales </a>are up, Europe still needs 85-90 million skilled workers. We are sitting on $16 billion in cash reserves, our balance of payment, foreign exchange reserve, tax to GDP ratio, credit flow are all positive, we have to build on these factors,” says Sujeev Shakya of the Nepal Economic Forum. He adds: “Our mindset creates negativity to promote rent-seeking behaviour, but this cynicism will go away after 2026 with LDC graduation. We must deal with data, look at trends, and projects which will bring in <a href="https://nepalitimes.com/from-the-nepali-press/why-there-is-no-foreign-investment-in-nepal">international investments</a>.” Khanal agrees that investment is not dependent on<a href="https://archive.nepalitimes.com/regular-columns/backside/Nepal-not-the-least-developed-country,306"> LDC status</a>. The factors that that affect investment are policy stability, a strong legal framework, market potential and ease of doing business. She adds, “That is where our focus needs to be, and we need to retain <a href="https://nepalitimes.com/diaspora-diaries/migrant-worker-returns-to-create-work-at-home?fbclid=IwAR09xJfsClCwn8uRVAmz28CU658vdKpuyDwB_b1sNlvKtAFFnSldnA0JS2g">Nepalis with jobs at home</a> for our sustained growth.” After 2026, financing support from donors and aid agencies could be affected and Nepal will no longer be able to access Least Developed Countries Fund (LDCF) to adapt to the impacts of climate change. But the Global Environment Fund and Green Climate Fund will still be available.“ LDC status does not determine bilateral development aid, that is usually driven by broader <a href="https://nepalitimes.com/here-now/looking-beyond-two-boulders">geopolitical considerations</a>,” says Sameer Khatiwada. “The World Bank and Asian Development Bank, which provide concessional loans to Nepal, it is determined mainly by per capita income, not LDC status.” &nbsp;However, Nepal may lose some concessional terms for loans. Nepal is currently a lower-middle-income country as per the World Bank in the bracket for GNI between $1,036 and $4,045. The country is already receiving more loans than grants and in July the World Bank increased its interest rate on loans by 100% from 0.75 to 1.5%. “All this means that the impact of LDC graduation for Nepal might not be as earth-shattering as some tend to think. Countries that have recently graduated, such as Botswana and the Maldives, have shows that graduation is just a step in a country’s development path,” says Khatiwada. Sujeev Shakya also sees the glass as half full, explaining that LDC graduation is just a stepping stone if Nepal has the right policies in place. He adds, “Nepal’s biggest advantage is our<a href="https://nepalitimes.com/opinion/investing-in-people"> working age population</a> and we have investments coming in. These aided by how adaptive we are as a society are the very foundations on which Nepal will grow.”

Not poor, but not rich

Two weeks ago, Prime Minister KP Sharma Oli announced jubilantly on social media that Nepal had achieved a historic annual growth of 81.8% in exports. He was right. Nepal’s trade did take a great leap forward compared to last year. But the dramatic rise was mainly due to processed soya bean oil.&nbsp; However, Nepal does not produce the edible oil it exports. In fact, the soya and palm oil that make up 44% of total exports are imported from Southeast Asia and South America, and simply re-exported, mostly to India.&nbsp; Under the SAFTA (South Asian Free Trade Area) Agreement, Nepal can export products to India duty-free if it has at least 30% value-added. Nepal’s traders have taken advantage of SAFTA even though the edible oils they export do not reach that value addition threshold. “The 30% value addition requirement is often only on paper,” says former commerce secretary Purushottam Ojha. “It is clear that simply packaging edible oils in Nepal does not fulfil the terms of the trade agreement.” Prime Minister Oli is aware of this, and even called Nepal’s export figures “fake” at an earlier event. The government is relying on other iffy figures to suggest that Nepal’s economy is strong and getting stronger. For example, the value of imports rose by 13.25% in 2024-25 compared to the previous fiscal year.&nbsp; Some of it was due to a jump in electric vehicle imports worth Rs 31.76 billion, but mostly it was because more wholesale soya oil was imported to be re-packaged and sold in India. The very fact that the government boasts about increased imports is an indication of how much it relies on taxing them for revenue. Touting such trade figures cannot be the basis to claim an economic rebound.&nbsp; “A jump in the value of imports can be interpreted as an increase in purchasing power, but it is not evidence of a stronger economy,” says economist Keshav Acharya. “Even though imports have increased, Nepal's domestic production and productive capacity have not improved.” Nepal Rastra Bank's semi-annual economic activity study report shows that industrial production was down in the first six months of the last fiscal year. This despite an increase in the number of new industries registered and investment commitments. Out of the Rs70.2 billion proposed foreign investment, Nepal received only Rs17.9 billion last year.&nbsp; Meanwhile, the rate of capital formation was limited to 24% last year, which is lower than the year before, suggesting that new investment, job creation and economic expansion all declined. If domestic production does not improve in relation to this year’s inflated trade figures, the outflow will put pressure on foreign exchange reserves like it did three years ago. At that time, Nepal borrowed from the IMF under its Extended Credit Facility Program to kickstart the economy.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f.jpg" data-media-id="editor_0" data-image-id="2025080710084_2cdaaa5795828c4a7de93a0604ba884ef0a8b8f24cccd939f6c24e279ab6058f" data-rendition-name="original" width="1633" height="723" loading="lazy" alt="Nepal's bubble economy NT"> <figcaption>Source: NEPAL RASTRA BANK</figcaption> </figure>  The macroeconomy is on firm footing with foreign exchange reserves at a comfortable Rs2,520 billion in May, up 23% from last year. This was largely due to remittances, and partly due to a falling NPR exchange rate. Real estate transactions and the stock market index have also been climbing as a result of government policies to revive the sector.&nbsp; However, former executive director of Nepal Rastra Bank Nar Bahadur Thapa cautions: “This is not organic growth, it is the result of deliberate policy decisions to relax rules on real estate and stock markets transactions.” In reality, the sharp rise in land prices have increased the cost of production, and excessive monetisation of the real estate has become the main source of Nepal’s economic woes. The central bank has announced a slew of new policies, shifting the terms of loan repayment for industrialists and entrepreneurs, reducing interest rates, and injecting more working capital — all designed to inject adrenaline into the real estate and stock market sectors.&nbsp; When he was governor, Mahaprasad Adhikari made several financial reforms during the latter half of his tenure to stimulate the economy, including tightening credit flow.&nbsp; By the last fiscal year, additional financial reforms had resulted in a credit expansion rate of around 8%. As the pace of credit expansion slows, real estate prices have started to fall. This is actually beneficial to the economy, because it lays the foundation for improvements in land-related entrepreneurship, production, and the construction sector. Just because real estate and the stock market transactions increase, it does not indicate an economic turnaround — especially when manufacturing and productive sector continues to languish.&nbsp; “It is foolish to believe that real estate and the stock market have magically revived our economy. Agriculture employs more than half of the population, but it is in decline. Investment in the productive sector has not increased, and job creation has not increased.” Two years ago, Nepal’s industrialists, business leaders, and political leadership predicted a recession amidst a sluggish business, declining market demand, large-scale job loss, and a shrinking real estate and share market.&nbsp; Still, the economy grew by 3.36% in fiscal year 2023/24. In fact, Nepal’s economy has grown nominally over the last two decades even when all sectors of the economy are in decline.&nbsp; Says Keshav Acharya: “The growth in trade, real estate, and the stock market are bubbles. The real economy remains stagnant.”

Nepal’s bubble economy

The final investigation report on the crash of a Saurya Airlines jet on 24 July 2024 at Kathmandu airport has revealed flaws in the carrier’s technical operation procedures, poor monitoring by the Civil Aviation Authority of Nepal (CAAN) and gaps in the airport’s emergency response. Eighteen people including a child were killed, and only the captain survived as the plane plunged seconds after takeoff, crashing within the airport perimeter. This was the latest in a series of aircraft accidents in previous years, and further tarnished Nepal’s already poor aviation safety record and contributed to the country being retained in the EU’s air safety list. &nbsp;&nbsp;&nbsp; The circumstances in the Saurya crash were different from the Yeti Airlines crash in Pokhara in January 2022 that killed all 72 on board, and two Tara Air crashes in February 2016 and May 2022 on approach to Jomsom that together claimed 45 lives. However, all four tragedies were a result of negligence of carriers and crew, failure to follow procedures, regulatory slackness, and overconfidence. The Saurya crash, especially, was a glaring example of how an ailing airline broke its own rules to allow passengers, including non-employees, a joy ride to Pokhara on a maintenance ferry flight. CRASH REPORT The Final Investigation Report prepared by the Aircraft Accident Investigation Commission and released on the first anniversary of the crash last week carried a long list of rules that were ignored or broken, and of regulatory failure. The first mistake was to cram spares, tools and inflammable chemicals needed for the aircraft’s C-Check in Pokhara into the cargo hold flouting its own ground handling procedures.&nbsp; There was no check-in of passengers, some of whom were not even employees – even though regulations say only flight and maintenance crew should be on board a maintenance positioning flight. Many brought their own luggage into the plane and stored it unsecured in the cabin. There was no flight attendant to give a safety briefing to passengers. The load and trim charts given to the flight crew were rough estimates, and the total takeoff weight of the plane was 18,300kg plus or minus 200 kg. That would still have been all right, but there was a glaring mistake in the speedchart Saurya pilots were using to calculate the minimum takeoff speed (known as VR), and it had been wrong ever since the 21-year-old aircraft entered service with the airline in 2017. FAULTY DATA&nbsp; The Commission probed Flight Data Recorder inputs from previous takeoffs of the Canadian-built CRJ200-LR in 2023-2024 and found that the undetected error in the speedchart had caused the plane to pitch up at an abnormal rotation rate at least 18 times on previous takeoffs.&nbsp; Any rotation rate more than 3°/sec is regarded as unusual. But on at least two occasions, this aircraft with tail number 9N-AME had rotation rates of 5.8°/sec and 5.5°/sec, the second one was when the pilot who survived was flying in March 2024.&nbsp; On this particular day, the plane’s rotation rate was 6.5°/sec, causing it to go into a deep stall soon after takeoff, the Commission report said. Essentially, the plane was not flying fast enough down the runway to take off safely.&nbsp; It is not yet clear whether excess weight, unsecured luggage, wrong centre of gravity were also factors, but relying on a faulty speedchart for the given takeoff weight, the captain flying pulled back on the yoke before the plane had reached takeoff speed and at a pitch angle that was too steep. The investigation report says the plane then went into a deep stall and started banking right with the stick shaking. At this point, the flight officer on the right hand seat is heard on the cockpit voice recorder saying: “Whoa, whoa, whoa. Sir, Sir, Sir…” It then banked left before the pilot flying turned the plane sharply to the right again in an evasive action to avoid the parking aprons of the international and domestic terminals. Had he not done so, there would have been a disaster of a much greater magnitude at Kathmandu airport that day. The plane scraped the runway with its right wingtip, collided with a container having helicopter spare parts, and plunged into a gully east of the runway, exploding in a fireball. The investigation also noted that the impact forces seemed to be survivable for some occupants. The fire trucks took unnecessarily long to reach the site even though it was inside the airport perimeter. The absence of an ICAO-standard runway strip, inadequate rescue drills, lack of training, and a blocked emergency service gate leading to the crash site were cited as other factors. &nbsp;&nbsp; <h2>Timestamp of a Disaster</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725.jpg" data-media-id="editor_0" data-image-id="20250731110724_39cdd04693994ce6e55a5b302905c0fa4884fe85bed21ff0779bb1439f3a5725" data-rendition-name="original" width="778" height="826" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:10:34 - The Saurya Airlines CRJ200 on the takeoff roll from runway 02. It had a takeoff weight of about 18,300kg, but the pilot’s speedcard had a previously undetected mistake about the minimum takeoff speed. 11:10:55 -The plane with tail number 9N-AME goes into deep stall soon after takeoff because it does not have enough speed to lift its weight. The plane also has an abnormally steep nose-up attitude.&nbsp; 11:11:03 - Without enough speed to generate lift, the plane banks right, then left and right again in CCTV photos taken from the domestic apron (below). If it had not banked right, it could have hit the aprons and terminal buildings. Seen parked is Saurya’s other CRJ200 with tail number 9N-ANM.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd.jpg" data-media-id="editor_1" data-image-id="20250731110732_608132f7225c649125cca2691dd6a6bf930984c5b359e888d7ad9e5eacce3afd" data-rendition-name="original" width="770" height="555" loading="lazy" alt="Flouting rules caused Saurya tragedy NT"> </figure>  11:11:08 - The plane scrapes the runway with its right wingtip, and falls into the gully. The captain is thrown off the left side of the cockpit and survives. 11:11:15: Plane explodes in a fireball inside the airport perimeter. Firefighters take time to reach the site because of lack of access road and a blocked gate. Read the full investigation report <a href="https://www.tourism.gov.np/files/9N-AME%20AIC%20Final%20Report.pdf">here</a>.

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