<a href="https://nepalitimes.com/multimedia/the-last-of-the-kusunda">The Kusunda</a> are among the last remaining hunter-gatherer communities left in Nepal, and it has only one fluent speaker left of a language that is not related to any other language group in South Asia.&nbsp; The Kusunda call themselves the King of the Forests ((गेम्येहाक़ in Kusunda,वन राजा in Nepali) and used to have a nomadic lifestyle till recently. But decades of exclusion from mainstream society and modernity have forced the Kusunda to assimilate. &nbsp; Today, most Kusunda live across Nepal’s mid-hills and western plains, choosing to identify themselves as Thakuri and adopting names like Sen, Shahi, and Khan to avoid ostracisation. Over time, inter-ethnic marriages between the Kusunda and other communities became increasingly common.&nbsp; However, the assimilation with other communities also meant that almost no one from the Kusunda community can speak their mother tongue – considered by linguists to be a ‘language isolate’ not related to any other language group in the world, and lacking set rules of grammar that are foundational to other languages. There are no words for ‘Yes’ or ‘No’ in Kusunda, nor are there words to signify direction. There are 23 languages with less than 1,000 speakers listed in Nepal's 2021 census, with Kusunda being the language with the least number of speakers. The number of people who identified as Kusunda has decreased with each subsequent census. Only 253 individuals identified themselves as Kusunda in the last National Census of 2021, down from 273 in 2011.&nbsp; <div class="embed-block"><iframe src="https://creators.spotify.com/pod/show/raithane-bhakha/embed/episodes/Kusundas---the-last-of-the-forest-kings-e23ge6p/a-a9peei1" height="102px" width="400px" frameborder="0" scrolling="no"></iframe></div> The government’s decision to provide a social security stipend to the community for the past few years has prompted many from the Kusunda community to reclaim their identity and in the process, explore their culture and language. Kamala Sen Kusunda, who lives in Dang, is the only fluent native Kusunda speaker alive, although there are now other Kusunda and non-Kusunda people learning how to speak the language. By the time Kamala Sen Kusunda was born in 1975, her family had settled in a village in Rolpa. Although she did not experience the nomadic life of her forebears, she still roamed the forests freely as a child and many of the values and socio-cultural practices of her community were instilled in her and her siblings.&nbsp; This meant that Kamala grew up speaking Kusunda with her family. But by then, the Kusunda had increasingly begun to interact with people beyond their community, and inter-ethnic marriages had become a norm.&nbsp; Kamala herself married at 18 to a 52-year-old man from the Chhetri community. She would go on to have four children, but they were brought up with her husband’s culture and community rather than her own, and teaching them her mother tongue seemed impractical.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250628030648_afaa298bf8ea3b7086e2ed086b11eab463ef2b20a82a4aad74df3dd2e922a4c3.jpg" data-media-id="editor_2" data-image-id="20250628030648_afaa298bf8ea3b7086e2ed086b11eab463ef2b20a82a4aad74df3dd2e922a4c3" data-rendition-name="original" width="855" height="641" loading="lazy" alt="Kusunda NT"> <figcaption>Gyani Maiya Kusunda with Kusunda youth in 2015.</figcaption> </figure>  “If I had spoken my language to them when they were children, they would have learned,” she tells us ruefully. “But they were growing up in a different community, so I never pushed, and they never expressed interest.” At the time, she had other things to worry about, such as earning a livelihood and sustaining her family. To find work, Kamala and her family moved to Shimla in India, where she worked at an apple orchard for six years.&nbsp; Over the next years, Kamala and her family moved back and forth between India and Nepal for work, and Kamala was not actively conversing in the language of her people or being able to connect with members of her community now scattered across Nepal.&nbsp; Had she not forgotten her language after all those years? “How could I forget the language of my ancestors?” she replies. “Not speaking it did not mean that it ceased to be a part of me.”&nbsp; Kamala had been working at a brick kiln in Thimi seven years ago when the National Language Commission tracked her down, offered her a paid position as a Kusunda language consultant and source person for basic language training in Dang.&nbsp; It was there that Kamala met her cousin Gyani Maiya Sen Kusunda, the only other person able to speak Kusunda fluently, who had been working with the Commission to conserve Kusunda language and culture. It was also where Kamala met language researcher and lexicographer Uday Raj Ale. Ale had been in the middle of his research into the Tharu language and community 15 years ago when he met Gyani Maiya Kusunda’s son, who told him that his mother was one of the few people who spoke Kusunda, but that no one had shown an interest in studying and preserving the language and culture. Ale met Gyani Maiya, spending time with her learning and researching Kusunda. By 2017, Ale had collected enough words to put together a Kusunda dictionary. The Kusunda vocabulary currently comprises 2,000 words. His research into the Kusunda language and culture has taken him to every known Kusunda household in Nepal. Although the census puts the number of Kusunda at 253, Ale reckons there are only 158.&nbsp; “Kusunda language is endangered due to its lack of use in everyday life, literature, and religious and socio-cultural practices, as well as the prevalence of inter-ethnic marriages,” explains Ale. In 2019 the Language Commission began its language transfer programs for youth from indigenous communities. Since then, the Commission has completed multiple phases of Kusunda language classes in Dang facilitated by Uday Raj Ale. The classes have 20 students, not just from the Kusunda community, but also interested non-native students.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250626120632_c6c378bc00af450f2b7f0cf17af1c3b2b6f7b7226927c458c3e01ec389869d33.jpg" data-media-id="editor_3" data-image-id="20250626120632_c6c378bc00af450f2b7f0cf17af1c3b2b6f7b7226927c458c3e01ec389869d33" data-rendition-name="original" width="1485" height="1535" loading="lazy" alt="Kusunda NT"> <figcaption>Students learning Kusunda with instructor Uday Raj Ale (second row, left)</figcaption> </figure>  Khamba Rokaya, who worked as a caretaker for young Kusunda children in Dang, became interested in learning the language as she sat in with the children during their lessons, and for the last few years has been among the few non-native Kusunda language learners in Dang. “I am not from the Kusunda community, but now that I have learned the language, I hope to do my part to carry on the work and share my knowledge with as many people as possible,” she says. “One way to ensure that we preserve this language is to extend its speaker base, both within the Kusunda and non-native communities.” Ale and Kamala have continued to work together since Gyani Maya’s passing in 2020, expanding the Kusunda vocabulary and creating appropriate curricula to fit the needs of the students as their knowledge of Kusunda expands.&nbsp; But without any documentation of Kusunda history, the community’s traditions, stories, values and language were at risk of being lost to time. “The loss of an ethnicity, language or culture in a country is akin to losing a vital organ, and a unique perspective of looking at the world,” says Ale. Which is why Archive Nepal in collaboration with the British Council’s Cultural Protection Fund and the UK’s Department of Culture, Media, and Sport in February launched a book of creative writings in the Kusunda language titled पिन्डा (meaning ‘The First’ in Kusunda): A Compilation of Kusunda Literature. The book is a collection of informative essays about the Kusunda language and culture, short stories that explore themes from nomadic life to universal Nepali experiences of poverty and migration, letters to loved ones, as well as conversational pieces by five Kusunda students ranging from ages 16 to 30. The works in the Kusunda language are also translated into Nepali and English.&nbsp; “Language is an important part of ethnic identity, and our indigenous languages cannot evolve or be conserved unless they are spoken or taught,” said Ale during the launch of the book earlier this year. “But most importantly, language exists as long as there exists literature in that language.” Kamala was in Kathmandu for the launch of the book, and smiled proudly as she looked at the young writers who had contributed to the collection. She said: “I’m glad the young people have chosen to learn and preserve Kusunda. Otherwise, our language would have died with me.” &nbsp;

Shristi Karki

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Saving the Kusunda language from extinction

The Kusunda are one of the two last remaining hunter-gatherer societies left in Nepal, the other being the nomadic Raute. The 2011 Census showed that there were only 273 Kusunda individuals remaining, and there are probably even fewer today.&nbsp; The Kusunda language is not related to any other language group in South Asia, and has only one native speaker still alive: Kamala Khatri Sen in Dang district. Decades of social exclusion has nearly obliterated this ethnic group.&nbsp; One of the earliest mentions of Kusunda comes from Brian Houghton Hodgson, the British Resident to Nepal in 1833, who extensively documented Nepal’s human and natural diversity.&nbsp; ‘Amid the dense forests of the central region of Nepal, to the westward of the great valley, dwell, in scanty numbers and nearly in a state of nature, two broken tribes having no apparent affinity with the civilized races of the country, and seeming like the fragments of an earlier population,’ Hodgson wrote of the Kusunda and Chepang. <div class="embed-block"><iframe src="https://podcasters.spotify.com/pod/show/raithane-bhakha/embed/episodes/Kusundas---the-last-of-the-forest-kings-e23ge6p/a-a9peei1" height="102px" width="400px" frameborder="0" scrolling="no"></iframe>Listen to this podcast with spoken Kusunda, a language isolate with no other language in its category, one of the rarest in the world with just one native speaker alive. Sewa Bhattarai brings excerpts from this audiobook, and speaks to Kusunda language teacher Uday Raj Ale and one of his students Hima Kusunda. </div> More than 150 years ago, Hodgson was already calling the Kusunda 'a broken tribe'. Today, they are even fewer in number with a few scattered between Gorkha and Dang, as the groups migrated westwards.&nbsp; Researcher Narayan Prasad Adhikari writes that the Kusunda believe their ancestors lived originally in Arghakhanchi, and Palpa, wandering to Tiram of Pyuthan and Ambapur of Dang. &nbsp; Read Also: <a href="https://www.nepalitimes.com/here-now/lost-in-translation">Lost in Translation,</a> Alisha Sijapati Hodgson noted in 1870 that the Chepang, Kusunda, and Hayu are of the same lineage, and Adhikari notes that there are indeed some similarities in their physical structure and language. Hodgson conjectured that the Kusunda migrated from even further east, and are a branch of the Lhopa of Bhutan.&nbsp; Of their lifestyle, Hodgson wrote: ‘They toil not, neither do they spin, they pay no taxes, acknowledge no allegiance, but, living entirely upon wild fruits and the produce of the chase, are wont to say that the Rajah is the lord of the cultivated country as they are of the unredeemed waste. They have bows and arrows, of which the arrow-heads are procured from their neighbours, but almost no other implement of civilization. And it is in the very skillful snaring of the beasts in the field and the fowls of the air that all their little intelligence is manifested.’  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230512110512_1252a7572aad0a92f8197902b9a7d9fcd228957a711bf93f9471c210a4c0bb89.png" data-media-id="editor_2" data-image-id="20230512110512_1252a7572aad0a92f8197902b9a7d9fcd228957a711bf93f9471c210a4c0bb89" data-rendition-name="original" width="1053" height="802" loading="lazy" alt="Kusunda house and prayer "> <figcaption>A model Kusunda house (left) and the place of ritual worship of Kusundas (right). Photo: Johan Reinhard</figcaption> </figure>  Kusunda language and grammar cannot be categorised under any regional language family, although some researchers say it is derived from Tibeto-Burman roots because of the similarity of some words.&nbsp; “There is no other community like the Kusunda in the whole world,” says linguist Madhab Prasad Pokharel. “They do not drink running water, and only drink spring water. They do not touch cows, or drink cow milk. They hunt and eat monitor lizards and weasels. Their DNA shows some links to the eastern Pacific.”&nbsp; Pokharel says Kusunda language has many unique features. For example, although they live in the forest, they have no word for the colour green. The way they create pronouns is different from other languages. My hand is 'tawei', your hand is 'nawai' and his/her hand is 'ginawai'.&nbsp; Uday Raj Ale and Tim Bodt note in a 2020 article in the journal Babel, that spoken Kusunda has sounds not found elsewhere. ‘The voiced uvular and the uvular nasal have now basically disappeared from the language, but we can still recognise that they were once pronounced,” they wrote. Uvular stops are relatively common in Caucasian, Semitic, and Pacific Northwest languages, but are absent in South Asia. Read Also: <a href="https://archive.nepalitimes.com/article/nation/Mind-your-languages,133">Mind your languages</a>, Mark Turin The Kusunda could be a branch of some early migration streams out of Africa en route to the Subcontinent, East Asia and Australasia. The Babel article says: ‘They may have inhabited a much larger geographical area, but were gradually replaced or absorbed by speakers of other languages.’&nbsp; Can we find these stories in the origin stories of the Kusundas? Can their myths trace the path of the primitive humans who had wandered through the earth? Is it possible to find their relationships with the indigenous people of East Pacific Ocean through their folklore? One is curious to know whether the oral history of one of the world's most unique communities can answer these questions. Sadly, we find that the history, mythology, and folklore of the Kusundas have already disappeared a few generations ago. Imposed mythology  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023051211058_a99bb08817c66baef34b720e3cc9c093e156aa2de0859e1545b25fa2dc62f11f.jpg" data-media-id="editor_4" data-image-id="2023051211058_a99bb08817c66baef34b720e3cc9c093e156aa2de0859e1545b25fa2dc62f11f" data-rendition-name="original" width="1750" height="1228" loading="lazy" alt="Kusunda ritual sacrifice "> <figcaption>Two Kusunda men engaging in ritual sacrifice. Photo: Johan Reinhard</figcaption> </figure>  Uday Raj Ale has researched and documented the Kusunda extensively, and has collected some of their origin stories in his book Gemjehaq. The Chepang chapter of Dor Bahadur Bista’s book Sabai Jat ko Phulbari traces the origin myths of Kusunda history to the Ramayana.&nbsp; Sita gave birth to a son named Lohori at the Valmiki Ashram. She took the baby out of its crib to play with it, and when Valmiki saw an empty crib, he panicked. He created a baby from the kush grass and put it in the crib. When she returned, Sita was surprised to see another baby in the crib. She raised the second baby as her own. The baby which was made from kush was called Kushari. Kushari's descendants became Kusundas and Lohori's descendants became Chepang. Interestingly, an aboriginal forest-dwelling community with distinct lifestyle and language unconnected to mainstream Nepali culture has a Hindu story for its origin myth. Elderly Kusunda reject this story, however, as Ale writes in his book. Dhan Bahadur Kusunda, president of Kusunda Development Society, states that the Sita story has no resonance in his community.&nbsp; Even the very word 'Kusunda' seems to have been imposed on the community. Ale says that word does not even exist in Kusunda language, and the people call themselves Myak or Gemyehak. He speculates that people who were familiar with Hindu mythology manufactured this lore for the Kusundas.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230512110544_355425e25289a3cea76d509374a4550783da988417e80c6722c4a70e9b9f3756.jpg" data-media-id="editor_5" data-image-id="20230512110544_355425e25289a3cea76d509374a4550783da988417e80c6722c4a70e9b9f3756" data-rendition-name="original" width="1750" height="1287" loading="lazy" alt="the last of the kusunda"> <figcaption>Jhankri attending to a patient. Photo: Johan Reinhard(Photo: aaram)</figcaption> </figure>  But the question remains: how is a community that calls itself 'Gemyehak' come to be called 'Kusunda' in the first place. The answer may be found in the popular meanings of the word Kusunda. In rural Nepal, the word 'Kusundo' is derogatory and and means 'uncivilised' 'barbarian', or 'stupid.' In the <a href="https://www.nepalitimes.com/review/ghatu-dance-of-lamjung">Ghatu dance </a>performed in Gurung and Magar communities in Central Nepal, there is a section called 'Kusunda Ghatu,' where the protagonist King Pashramu wanders into the jungle as a mendicant, hunts deer, and begs for alms. The 2001 movie Darpan Chhaya also has an episode where the hero is marooned in a jungle, forced to wear leaf-skirts, and expresses his anger by saying he became a Kusunda. Many folklore researchers, like Dharmaraj Thapa and Mukunda Sharma, have documented the use of the word ‘Kusunda’ to mean ‘uncivilised’ in Nepali songs. The tenth edition of Nepali Brihat Shabdakosh dictionary gives the first meaning as 'a nomadic tribe that lives in the jungles south-west of Kathmandu, and is presently declining' but establishes gives the secondary meaning of Kusunda as असभ्य (uncivilised).&nbsp; Overshadowed 'Gemyehak' It is not clear whether the existing word 'Kusunda' was used to describe the Gemyehak, or whether the lifestyle of the Gemyehak was the reason this word was created. Whatever the reason, the Kusunda today feel insulted that a derogatory word is used to label their community in the country's most respected dictionary. The Kusunda name for themselves, Gemyehak, has a much more exalted meaning. ‘Ge’ means forest and ‘Myak’ means tiger. Hima Kusunda, 20, from Pyuthan says: “So Gemyehak means tiger, king of the forest. Even today, we call ourselves वनराजा or king of the forest.&nbsp; In Pyuthan the Kusunda are called 'Ban Raja, substantiating the claim that Kusunda ancestors were indeed kings of the forest, writes Narayan Prasad Adhikari. Hodgson himself noted that the Kusunda ‘had clearly once known a condition far superior to the present one or to any that has been theirs for ages.’ How did a community that called itself kings of the forest look at nature, life, and mainstream village life? Their perspective was probably quite different from that of social animals in villages and settlements. But today, we can only imagine what it was like, because the myth of 'Kushari' has overshadowed all these earlier narratives.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230512110540_603a3a2ce6337c319c87b8c2ee89649c10b0ee62f49f63ca9a3f191967f40ef3.jpg" data-media-id="editor_7" data-image-id="20230512110540_603a3a2ce6337c319c87b8c2ee89649c10b0ee62f49f63ca9a3f191967f40ef3" data-rendition-name="original" width="1750" height="1363" loading="lazy" alt="the last of the kusunda"> <figcaption>Gyani Maiya Sen and Kamala Khatri Sen leafing through a Kusunda dictionary. Photo: Johan Reinhard</figcaption> </figure>  Although Gyani Maiya and other elderly Kusunda reject the story of Kushari, they have no story of their own to replace it, and are also unable to remember any songs or dances in their language.&nbsp; “I believe songs existed in the Kusunda language, because they have words for 'song' and 'dance'. They also remember singing and dancing to celebrate some events in their nomadic past, but when asked to sing, they only sing in the Nepali language,” explains Ale. Extinction is forever&nbsp; The Kusunda language and culture has gone into decline because the community is scattered and not unified. Kusunda society started fragmenting when their nomadic lifestyle became threatened by modernity.&nbsp; But when the government started strictly regulating forest use, the Kusunda found it impossible to sustain their traditional lifestyle. They could not find people of their own tribe to marry, and started assimilating with villagers and settled down. Hima Kusunda’s grandfather and his younger brother lived in the forests as nomads even after their parents died when they were young. But one day, his brother ate a snake egg, believing it to be a lizard egg, and died.&nbsp; Hima says, “Then my grandfather had no option but to come live in a village to be near people. Also, there was no Kusunda woman for him to marry so he married a Kawar woman.” The pace of development, the changing times, socialisation, deforestation, difficulties in livelihood, exogamous marriage system, lack of unity among Kusundas, their reluctance to develop, and their traditional viewpoints were found to be the reasons why Kusunda language and culture are near extinction, writes researcher Adhikari. ‘When Kusundas started marrying villagers and dispersing instead of living together, their language and culture disappeared. They stopped practicing their language and culture in order to assimilate with modern society.’ The Kusunda have been further pushed out of their forest homes by societal exclusion, population pressure and competition for resources. Community forests, national parks and nature reserves have also driven them away.&nbsp; The Kusunda started hiding their identity when they inter-married non-Kusunda villagers, and that is also one reason for the decrease in their numbers, says Hima. When her father married a Dalit woman, he was teased and harassed by the villagers. He did not like the Kusunda label, and started calling himself a Thakuri. Ale says that the drive to identify themselves as Thakuri is widespread among Kusunda, and many have adopted the surnames Sen, Shahi, or Khan. When Kusunda married members of Magar, Kumal, or other communities, their children adopted those names instead of Kusunda. Saving what is left  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023051211058_2ca8520dd328f8b7bcb765e5a3d781b18a1eb228cde58390dbac670559d40322.jpg" data-media-id="editor_8" data-image-id="2023051211058_2ca8520dd328f8b7bcb765e5a3d781b18a1eb228cde58390dbac670559d40322" data-rendition-name="original" width="4860" height="3121" loading="lazy" alt="the last of the kusunda"> <figcaption>Hima Kusunda (left) and Uday Raj Ale (right)</figcaption> </figure>  There have been some efforts by the government to save what is left of the Kusunda people, culture and language. With Gyani Maiya Sen and Kamala Khatri as source persons, the Language Commission has already completed three phases of Kusunda language classes. These are facilitated by Uday Ale and have 20 students, most of them Kusunda. Hima Kusunda, a student of class 12, and her younger sister, are among them. “As a child, when I heard people from other communities like Tharus of Dang and Magars of Pyuthan speak their language, I wished I could speak in my own language too,” Hima recalls. “So, when the opportunity to learn the language came up, I signed up eagerly. The language class has extended the life of the language, but we need to do more.” &nbsp; Hima's father and grandfather have died, and she and her sister are the only ones who know the language in their family. The two teach the language to elders at home, and Hima has even written a song in Kusunda which she sings at events. The lyrics are about living with wild animals in the forest and surviving on foraged food, stories she heard from her father and grandfather. “The next phase of language classes should be held at the family level. Otherwise, the language will not survive past this generation,” Ale says. “Students who have learnt it cannot converse at home, and the language is unable to flourish.” The government has also been providing social security stipend to the community for the past few years. As soon as a Kusunda baby is born and registered, the family gets a stipend of Rs4,000 per month.&nbsp; Read Also: <a href="https://archive.nepalitimes.com/article/International/Endangered-language-preserved-through-technology,977">The internet's rescue act</a>, Mark Turin “I have not faced any harassment for being Kusunda, but my father did,” says Hima. “The government's incentive has made us less embarrassed about our identity.” Indeed, people who had adopted surnames like Sen, Shahi and Thakuri in the past are now reverting back to Kusunda. The language classes also help extend the lifespan of the language, its corpus and preserve the history and culture of the Kusunda people.&nbsp; Says researcher Uday Raj Ale: “Since they lived in the jungle, they had vast knowledge of the forest, wildlife, plants, and nature. When they hunted, they rarely killed, instead skillfully snaring animals. Gyani Maiya Sen used herbs to remedy minor illnesses. But she believed that sharing it would reduce its efficacy. So now all of that knowledge is lost.&nbsp; Sewa Bhattarai is a freelance journalist. Her series, On The Margins, will focus on folk music, folklore, and mythology of Nepal's marginalised communities.

Sewa Bhattarai

The last of the Kusunda

Nepalis worship the sun, and mark its seasonal passage with festivals. Adding to that spiritual reverence now is the economic relevance of solar power. Fast-flowing Himalayan rivers give Nepal a total feasible hydropower generation capacity of 48,000MW, of which only 3,600 has so far been harnessed. Yet, Nepal’s total solar power potential has been calculated to be nearly 10 times higher at 432,000MW. &nbsp; With over 300 days of sunshine a year, the country could produce 3.6 to 6.2 units of electricity per square meter based on its solar radiation levels.&nbsp; This potential, combined with decreasing installation costs of Chinese-manufactured photovoltaic cells and other means, is a viable and affordable alternative to Nepal’s over-reliance on hydropower which faces concerns about the destruction of riverine ecosystems, as well as risk from glacial lake floods caused by climate breakdown. However, restrictive domestic energy policies and geopolitical sensitivities mean Nepal is failing to diversify fast enough to tap this tremendous solar energy potential. Nepal’s hydropower generation is almost entirely from run-of-river projects that do not have large reservoirs. Many such projects in Nepal and across the Himalaya have been swept away by glacial lake outburst floods in recent years.&nbsp; Such risks and limitations to hydropower should have prompted the Nepal government to jump-start investment into solar farms, but the main reason is that the Nepal Electricity Authority (NEA) caps solar power at just 10% of total capacity. There is no official explanation, but it is likely due to the outdated perception that solar technology cannot supply a consistent energy stream at evening and morning peak loads.&nbsp; But today, there are plenty of ways around it, including pump storage schemes that use daytime solar power to pump water from a river to a reservoir and drain it to generate electricity at night. Battery technology is now more advanced, and affordable enough to make grid-scale batteries feasible.&nbsp; But then there is an issue of tariffs, which are much lower for solar at Rs5 per energy unit, and competitive bidding forces companies to lower it even further. But there is no bidding process for hydropower and licenses are given out on a first-come, first-served basis with a fixed rate of Rs6.5 per unit regardless of location.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025112303118_c3280cddae6f3305d07319011dd9c187005822a9b905bb849c36b95e3ad0d516.png" data-media-id="editor_0" data-image-id="2025112303118_c3280cddae6f3305d07319011dd9c187005822a9b905bb849c36b95e3ad0d516" data-rendition-name="original" width="1109" height="887" loading="lazy" alt="Here comes the sun"> </figure>  SUPPLY VS DEMAND Hydropower is supply-driven, while solar responds to demand, so under such a discouraging scenario, solar power accounts for only 5% of Nepal’s total energy mix. “Given the environmental risks to hydropower, investors are now demanding tariffs on hydropower to be increased. So the question to the government is, are you paying more money for hydropower or willing to buy more of the cheaper solar power,” said energy entrepreneur Kushal Gurung. Solar investors are lobbying the government to raise the cap on solar power to 30% and expand zoning policies so that solar plants can be built in areas with high potential, such as Dolpo and Mustang in the trans-Himalaya. These regions are sparsely populated, arid, have a cold climate and high solar radiation levels — ideal conditions for photovoltaics. Solar power’s biggest advantage is its cost-effectiveness compared to hydropower, with the operating cost of a hydropower plant up to four times higher than of a solar plant of the same generation capacity. Investors are no longer assured of a return on investment on hydropower due to climate risk which have increased insurance premiums. “Last year, when the government opened a bidding for 800MW of solar power, the private sector was ready to invest 3,000MW. Both banks and investors were convinced about the potential for solar energy, but the government and especially the bureaucracy, was not on the same wavelength,” added Gurung.&nbsp; Interim Energy Minister Kulman Ghising is said to be interested in increasing the cap on solar energy, but there is a question whether he will remain in office since he has launched his only Ujyalo Nepal party to contest elections in March. GEOGRAPHY AND GEOPOLITICS In 2018, Nepal’s only foreign private equity form Dolma Himalayan Climate Fund (DHCF) pitched a proposal to generate 150MW from a solar farm and store 20MW of it in battery systems in Mustang to meet seasonal and daily peaks. It got approval from Investment Board Nepal (IBN) and had already poured millions into the project when the Department of Mines instructed all developers in Mustang to halt their projects, citing the discovery of uranium ore. But insiders say the real reason was due to pressure from the Chinese government’s security concerns about a Western investor being involved so close to the border with Tibet.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025112303118_5946a5f1ba63f34c88f900c6d12b37d0101effb76e8a7a5397cd6451c16cd5b2.jpg" data-media-id="editor_1" data-image-id="2025112303118_5946a5f1ba63f34c88f900c6d12b37d0101effb76e8a7a5397cd6451c16cd5b2" data-rendition-name="original" width="800" height="450" loading="lazy" alt="Here comes the sun NT"> <figcaption>Photo: GHAM POWER</figcaption> </figure>  The same thing happened, but in reverse, when the Chinese company Risen Energy was interested in investing $190 million on a grid-connected 125MW photovoltaic generation system in Banke and Kapilvastu districts near the Indian border. Risen’s subsidiary, Risen Energy Singapore JV, was negotiating with IBN to commit $190 million in the project which would also store 20MW of daytime generation for morning and evening peak demand. But the agreement was not signed because the Indian authorities were concerned about Chinese involvement so close to their border. India has also refused to buy electricity from any hydropower plant in Nepal that has Chinese or other foreign investment or contractors. Indian state-owned companies are currently building or planning hydropower plants in Nepal to generate nearly 3,000MW, mostly for export.&nbsp; But not every Chinese-backed project has been blocked. In 2024, China handed over two solar-powered livelihood projects to a local community in Lalitpur — a community solar bathhouse and a rooftop photovoltaic power system. Funded by the Yunnan People’s Association for Friendship with Foreign Countries, the projects aim to improve living conditions. The initiative forms part of the Chinese Embassy’s ‘Happy Community’ program (幸福社区, Xìngfú Shèqū) under the China–South Asia Poverty Reduction and Development Cooperation Center.&nbsp; Says Gurung: “Hydropower is a geopolitical mess, but it has well and truly started in solar power too. It now all comes down to how we handle it, and we need deft diplomacy to make sure our projects are not indefinitely delayed as has happened in the past.”&nbsp; LOW-HANGING FRUIT Despite domestic restrictions and geopolitics, there are still small-scale opportunities for solar energy entrepreneurs to cash in, such as net metering. Most industries in Nepal have enough rooftop space to generate 500KW to 1MW of solar energy. Combined, they would generate a substantial amount of energy to feed into the grid. Factories, supermarkets and chain stores are often bankable and trusted by financial institutions from which they could easily get credit.&nbsp; China could also take advantage of Nepal’s high solar power potential. Given that the United States has only imposed a 10% tariff on Nepal, China could set up PV manufacturing plants in Nepal.&nbsp; However, this requires government-to-government which could run into trouble, again because of geopolitics. The same applies for the Carbon Border Adjustment Mechanism which is a carbon tariff on carbon intensive products, such as steel, cement and some electricity, imported to the European Union.&nbsp; Chinese products have suffered under this mechanism but Chinese products made in Nepal can be competitive in the European market given lower carbon tax for Nepal. Clean energy has long been an area where Nepal hopes to attract Chinese investment — not only in hydropower, but also in solar and wind energy.&nbsp; With contributions from Qian Sun, Global Voices.&nbsp;

Nepal, here comes the sun

Youth protestors who sustained injuries at the hands of state security forces during the September protest staged a sit-in at Maitighar Mandala on Friday, protesting what they have called the interim government’s inadequate efforts to address the demands of the GenZ movements. The demonstrators also sought to bar the UML from gathering at Maitighar, where party chair K P Oli was expected to announce its Youth Volunteer Force on Friday. The organisers consequently relocated the event. Friday’s demonstration at Maitighar comes as UML and GenZ representatives agreed to sit down for talks in Simara, where a curfew was imposed this week after youth protestors and party cadres clashed near the airport as demonstrators sought to stop UML leaders from flying in for a political event to Simara from Kathmandu.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251121131148_c0b3bfb861f73bee456efbd12f523af55ce3c258742c39e1dea7dbf768774ea5.png" data-media-id="editor_0" data-image-id="20251121131148_c0b3bfb861f73bee456efbd12f523af55ce3c258742c39e1dea7dbf768774ea5" data-rendition-name="original" width="2160" height="1440" loading="lazy" alt="GenZ Maitighar"> <figcaption>Youth protestors who sustained injuries at the hands of state security forces during the September protest staged a sit-in at Maitighar Mandala on Friday. Photos: SUBASH SHRESTHA</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251121131152_85f3606728d137b334d782ac1b5d1ed6383544493f96ebcc0398fcd9f0c5add7.png" data-media-id="editor_1" data-image-id="20251121131152_85f3606728d137b334d782ac1b5d1ed6383544493f96ebcc0398fcd9f0c5add7" data-rendition-name="original" width="2160" height="1439" loading="lazy" alt="GenZ Maitighar"> </figure>  &nbsp;Nepal’s interim government is increasingly cautious about the nation’s sensitive security situation in the lead-up to the 5 March election, as evidenced by pro-monarchy businessman Durga Prasai’s midnight arrest earlier this week over his inflammatory remarks as he called for protests this month. On Thursday, the Supreme Court ordered the government to present Prasai before the court within 24 hours.&nbsp; As it stands, the UML’s inauguration of a youth collective amidst its disregard for the demands of Nepalis for party reforms and a change in leadership highlights party chair and former PM K P Oli’s continued lack of remorse for the excesses of 8 September.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251121131144_aaa296e2e812ef5f6473064bc4b679bf605e14e06ac0ec9be1d6d047b56f96f9.png" data-media-id="editor_2" data-image-id="20251121131144_aaa296e2e812ef5f6473064bc4b679bf605e14e06ac0ec9be1d6d047b56f96f9" data-rendition-name="original" width="2560" height="1707" loading="lazy" alt="UML Youth Volunteer Force NT"> <figcaption>The UML launched its Youth Volunteer Force on Friday. Photos: SUMAN NEPALI</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251121131148_bfa8df3fc382195b4cdb9c4804cd67e169d2d9c0b8d218e61bbef0c4c9dbdaad.png" data-media-id="editor_3" data-image-id="20251121131148_bfa8df3fc382195b4cdb9c4804cd67e169d2d9c0b8d218e61bbef0c4c9dbdaad" data-rendition-name="original" width="2560" height="1706" loading="lazy" alt="UML Youth Volunteer Force"> </figure>  Families of those killed and injured on 8 September have demanded that the ousted PM and home minister be held accountable for state brutality.&nbsp; This week, Human Rights Watch published a <a href="https://www.hrw.org/news/2025/11/19/nepal-unlawful-use-of-force-during-gen-z-protest" target="_blank">comprehensive report</a> concluding that security forces fired indiscriminately on youth-led protestors on 8 September.&nbsp; The human rights watchdog urged the Sushila Karki-led interim government to investigate the excessive use of force as well as arson, vandalism and mob attacks on individuals on 9 September. The government has created a judicial commission to inquire into the deaths of 76 people over two days of protests.&nbsp; “The recent violence in Nepal included serious human rights violations, and those responsible should be held accountable, whether they are security forces or political actors,” said Meenakshi Ganguly, deputy Asia director at Human Rights Watch.&nbsp; She added: “The government should ensure that the investigations are independent, time-bound, and transparent, and that no one found responsible for breaking the law is unfairly protected from proper prosecution.” HRW’s investigation was based on testimony from 52 witnesses, victims, journalists, healthcare workers, politicians, and sources close to security forces. Researchers also verified photos and video footage shared on social media and with researchers; and visited the scenes of protests, properties subjected to arson and vandalism, and hospitals.&nbsp; A police officer said that officers opened fire with lethal force five minutes after the District Administration Office declared an emergency curfew around Parliament. Witness accounts and analysed footage did not show grave and imminent danger to life that would justify the intentional use of lethal force, stated the human rights watchdog in the report.&nbsp; The protestors and witnesses identified security forces who fired live ammunition at the protestors by their uniforms as members of the Armed Police Force (APF) and Nepal Police’s Special Task Force (STF). &nbsp; “They literally aimed at us and started shooting,” said one witness who sheltered behind a barricade as police continued shooting.&nbsp; A retired senior police official said police had failed to follow procedures for dispersing protests and using lethal force.&nbsp; Pathologists at a Kathmandu morgue told HRW that they determined 35 cases of death caused by “high velocity gunshot wounds” to the head, neck, chest, or abdomen.&nbsp; The witness recounted being taken into custody along with 33 other protestors by STF officers in riot gear, and said that police police personnel beat him with batons. Detainees were threatened and their IDs destroyed. Several witnesses said that the mob attacks on businesses, politicians, media companies, and educational institutions were very targeted, noting the absence of security personnel on 9 September as arson and violence raged across the capital.&nbsp; Some suggested that the violence may have been instigated by infiltrators associated with various political movements.&nbsp; On Discord, the platform where a significant number of demonstrators organised, participants noted that while there were calls for peaceful movement in the days leading up to the protest, some on the platform advocated for violence.&nbsp; Human Rights Watch has said that any credible allegations of criminal acts contributing to the violence must be investigated.&nbsp; Said Ganguly: “The authorities should recognise that widespread impunity for human rights violations in the past helped enable the violence that occurred this time in Nepal. It is crucial to reverse the decades-long tendency by successive governments in Nepal to bury investigations and stall prosecutions, and to bring about accountability and security sector reform.”

Security forces targeted protestors disproportionately: HRW

&nbsp;Nepal has finally become famous the world over for something else besides Mt Everest — the GenZ Movement. The 8 September protests in Kathmandu may have been triggered by what happened in Jakarta a week previously, but it inspired street uprisings all over the world. This week, Mexico’s GenZ are clashing with riot police. Last month, the president of Madagascar fled to Dubai. <a href="https://nepalitimes.com/here-now/nepal-genzs-inspired-filipinos" target="_blank">Philippines</a>, Morocco, Peru, Timor Leste all have seen similar anti-government protests against corruption, nepotism and poor governance. A Himalayan republic, a Latin American federation, a Southeast Asian archipelago, or a North African kingdom may have little in common, their histories, religions, languages, and political systems are worlds apart. But <a href="https://www.nytimes.com/2025/10/19/world/gen-z-revolutions-protests-louvre-heist-gaza.html" target="_blank">the common thread</a> running through these demonstrations were the simulacra and symbols spread on social media platforms.&nbsp; The young crowds marching through the streets of these countries were holding up the same icons. They painted the same images on cardboard, waved the same flags, stitched the same badges on their backpacks. They chanted &nbsp;the same references from the same corners of the internet.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_2ff7cf4ce7a9590359ed18753f4977648a6db83e95dd62d602a3f81e9eec42c4.jpg" data-media-id="editor_2" data-image-id="20251122031128_2ff7cf4ce7a9590359ed18753f4977648a6db83e95dd62d602a3f81e9eec42c4" data-rendition-name="original" width="1250" height="1047" loading="lazy" alt="Meme movements"> <figcaption> One Piece reference meme on Instagram, 115K likes(Photo: Shristi Karki)</figcaption> </figure>  To anyone who did not grow up online, this looks random. To anyone who did, it feels like the most obvious thing in the world. A new kind of global identity has formed — one that cuts across nationalities and cultures. In Nepal older relatives mock the ‘जेन्जी’. My neighbour asked me if ‘GenZ’ was a new political party.&nbsp; Around the world, when youth-led protests appear, reporters and politicians ask the same question: ‘Who is the leader?’ The answer is the same: there is no leader.&nbsp; Some names come up more prominently, as people did during <a href="https://nepalitimes.com/here-now/nepal-s-historic-youth-dissensus?fbclid=IwY2xjawNPQnZleHRuA2FlbQIxMQABHk5Nazeqz3K9aNddXa-dQfCbwtId0nLclQwHzIYhTfg8tzGWXZMBJ5pjm5Qx_aem_a5JoyT1FRqzCVtnnPM7zUw" target="_blank">the Nepali protests</a>: Sudan Gurung. Miraj Dhungana, Rakshya Bam and other organisers who appeared in livestreams and interviews. But look closely and the leader is hiding in plain sight. The leader is not a person. The leader is the internet meme.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_b2319eb8d7abec7ed5e12baf1a53e0a27cfd7a49ee15c058c47cdf2603a7fa8a.png" data-media-id="editor_4" data-image-id="20251122031128_b2319eb8d7abec7ed5e12baf1a53e0a27cfd7a49ee15c058c47cdf2603a7fa8a" data-rendition-name="original" width="662" height="1038" loading="lazy" alt="Meme movements"> <figcaption>Aurafarming, 233K likes(Photo: Shristi Karki)</figcaption> </figure>  <a href="https://nepalitimes.com/here-now/nepal-s-meme-revolution" target="_blank">Memes today</a> are doing the quiet organising work that pamphlets and party cells once did. They offer identity, coordinate action, level power differences, and they do it without any central command. This is not because memes cause revolts. It is because memes are the connective tissue of a generation that grew up on the same visual language, the same jokes, the same references, and the same sense of shared digital childhood. Older generations did not share cultural symbols in the same way. Whether they read a certain comic book or watched the same cartoon depended on class, religion, caste, the country, or neighbourhood they grew up in. These divisions created stratified cultural memories.&nbsp; Today, an entire global cohort has been raised on the same visual media. The same YouTube creators. The same TikTok jokes. The same anime storylines. It is truly what McLuhan predicted the Global Village would be.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_136d009a48d8f8daee82ada1b220e0b0c8ec482b52dcd44e0942e2185a70421b.png" data-media-id="editor_6" data-image-id="20251122031128_136d009a48d8f8daee82ada1b220e0b0c8ec482b52dcd44e0942e2185a70421b" data-rendition-name="original" width="738" height="1012" loading="lazy" alt="Meme movements"> <figcaption>Masked K P Oli, 63K likes(Photo: Shristi Karki)</figcaption> </figure>  This has also created the perfect environment for <a href="https://observer.co.uk/news/international/article/revolution-20-frances-political-future-could-be-won-or-lost-by-bots-and-memes" target="_blank">memes to become political tools</a>. They are instantly recognisable, emotionally charged, and open for remixing. They allow young people to signal their values without stating them. They compress identity, anger, humour, and belonging into something that the rest of the world dismisses as unserious. The perfect example of a GenZ meme is the famous skull and crossbones in protest flags from Kathmandu to Manila to Mexico City. The Strawhat Pirates from the <a href="https://www.france24.com/en/asia-pacific/20251006-one-piece-manga-revolt-morocco-indonesia-nepal-madagascar" target="_blank">anime One Piece</a>, is a show with over 1,000 episodes and a global fanbase that spans continents. One Piece follows Luffy, a justice driven pirate who travels across a world ruled by corrupt older elites who hoard power and suppress dissent.&nbsp; It is not hard to see why that story resonates with young people who feel locked out of political systems built by generations before them. I even printed stacks of my own flyer that explained memetic warfare using Minecraft visuals and handed them out in the crowd. Each one linked to a Telegram group with the Strawhat Pirates logo called MemePack HQ.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031144_1b12e920be6e312e1dc8768d318c1d1332e32694293b48984089867e7e525a27.jpg" data-media-id="editor_9" data-image-id="20251122031144_1b12e920be6e312e1dc8768d318c1d1332e32694293b48984089867e7e525a27" data-rendition-name="original" width="1100" height="1000" loading="lazy" alt="Meme Movements"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_08b720667a9ff36537e58992c8a8030b090900847de5eecd479bbb3fc727349d.png" data-media-id="editor_10" data-image-id="20251122031128_08b720667a9ff36537e58992c8a8030b090900847de5eecd479bbb3fc727349d" data-rendition-name="original" width="696" height="1004" loading="lazy" alt="Meme movements"> <figcaption>Indonesia-Nepal comparison, 17.7K likes(Photo: Shristi Karki)</figcaption> </figure>  CULTURE EXPOSURE The Strawhat logo is not the only symbol making people protest. That would be like saying video games cause real world violence. Instead, the logo works like a modern version of mythology. It packs meaning for those who understand it. It represents loyalty, rebellion, chosen family, and resistance against unfair structures. It works as a rallying flag because it is already a shared story. And unlike older myths, it is accessible regardless of religion, caste, language, or national identity. Across Nepal, the Strawhat symbol has shown up on posters, badges, and protest outfits. But it is only one piece of a larger ecosystem of youth symbols. From Nepali meme pages remixing political speeches into ironic audios, to posts that place politicians into familiar pop culture formats, to clips that exaggerate the absurdity of daily life under slow moving governance, these are not just jokes. These are narrative units. Each post is a tiny story with its own punchline and its own political edge. Each TikTok video or meme functions like a religious shlok, a short piece of narrative that carries layers of meaning depending on who consumes it. Someone who has spent years studying a religion, in this case, inside GenZ online culture will recognise the symbols instantly. Someone outside this world will only see noise. This creates a literacy divide that is not about formal education but cultural exposure.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_2d09f075663678fe92d4e4dcc631ee6ad1aa8a99996f4c4a3649e4bf4d85132f.png" data-media-id="editor_11" data-image-id="20251122031128_2d09f075663678fe92d4e4dcc631ee6ad1aa8a99996f4c4a3649e4bf4d85132f" data-rendition-name="original" width="810" height="1208" loading="lazy" alt="Meme movements"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_d591c4dc857864cc833ffc6baece3f4c2798bbaf70b557f965463fc8f802900e.png" data-media-id="editor_12" data-image-id="20251122031128_d591c4dc857864cc833ffc6baece3f4c2798bbaf70b557f965463fc8f802900e" data-rendition-name="original" width="568" height="1124" loading="lazy" alt="Meme movements"> </figure>  Protesting youth spent countless hours scrolling, interpreting, remixing, and responding to content. They built a shared symbolic universe across borders without planning to. This is why their political movements feel leaderless. They are not following individuals. They are following stories that define what justice looks like. Stories that define who the villain is. Stories that define how to respond when power is abused. In Nepal, memes about broken roads, delayed passports, political inheritance networks, and bureaucratic absurdity circulated for months before they became slogans or chants. By the time people took to the streets, the narrative groundwork had already been completed by thousands of posts liked and shared in private. The protests did not emerge from nowhere. They emerge from years of digital storytelling. Which is why the government’s ban on 26 digital platforms on 5 September became such a rallying force. The platforms that distribute these memes are not neutral, they are actually designed to maximise engagement because engagement translates to ad revenue. Right now, there is an engineer in Silicon Valley getting paid an enormous salary to find the perfect colour shade for a singular pixel on your screen so that you linger for fractions of a second longer.&nbsp; Algorithms reward content that trigger emotion. Sometimes the emotion is delight. Sometimes it is envy. Often it is anger. When rage becomes a business model, movements built inside these systems can feel powerful but unstable. The platforms democratise attention but centralise emotion. They allow anyone to broadcast, yet they shape the emotional tone of what becomes viral.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251122031128_f22baab05910305ea435045824b25b796d5630715e2e17c3f3c0991e8371843c.png" data-media-id="editor_13" data-image-id="20251122031128_f22baab05910305ea435045824b25b796d5630715e2e17c3f3c0991e8371843c" data-rendition-name="original" width="974" height="1156" loading="lazy" alt="Meme movements"> </figure>  GenZ sits inside this tension. Empowered by the ability to speak without gatekeepers. Trapped inside systems that monetise their attention and amplify their frustration. This is why these leaderless online movements feel both organic and volatile. The algorithm filters which stories rise and which fade. It becomes an unintentional political actor. Not elected. Not accountable. Yet influencing millions. When the state is no longer the primary distributor of information, and when the algorithm becomes the new filter of reality, the public is left with a new responsibility. We have to learn to read memes the way past generations learned to read pamphlets or manifestos. A 15 second video can carry more political weight than a two hour speech. A symbol on cardboard might represent a decade of digital storytelling. Older generations often dismiss these images as childish. They are actually literacy markers of a new political class, one that does not wait for leaders. A political class fluent in remixing power, raised on global stories that feel more honest than the institutions they inherited. The youth did not create these platforms. They inherited them. But through memes they found a new language, one that lets them organise without permission. One that lets them build solidarity without needing meetings or manifestos. One that allows them to resist systems that feel too old to reform. It is time to take that seriously. Nobel Rimal is a researcher of digital culture and political communication who studied and participated in the meme driven mobilisations during the Nepal protests&nbsp;

Meme movements

Double-taxation, profit repatriation and capital gains tax have always been a headache for foreign investors in dealing with rent-seeking that Nepal is infamous for.
When Dolma Impact Fund, the only international venture capital company in the country, applied last year for exemption from capital gains tax citing Nepal’s Double Taxation Avoidance Agreement (DTAA) with Mauritius, bureaucrats at the Finance Ministry gave it the runaround.&nbsp;
But the interim government’s Finance Minister Rameshore Khanal, himself a respected former bureaucrat, is someone who knows that international treaties take precedence over national law.&nbsp;
On 30 October he gave Dolma a strategic capital gains tax break, convinced that Nepal needed to restore investor confidence especially after videos of the arson, vandalism and looting of the Hilton and Hyatt hotels and businesses on 9 September went all over the world.&nbsp;
Dolma’s stakeholders include other investment funds in the UK, US, Japan, Netherlands, Finland, Austria, Sweden as well as the World Bank. Nepal needs investment for future large infrastructure projects, and to tap those funds it has to &nbsp;streamline its bureaucracy, increase transparency and adhere to international obligations.
The argument is that making it easier for Foreign Direct Investment (FDI) is a much more efficient way to spur the economy and create jobs than the government raising revenue mainly through taxation, since the chances of that money being leaked through corruption or wastage in Nepal is high.&nbsp;
After news of Finance Minister Khanal’s decision on 3 October exploded in the media, Prime Minister Sushila Karki inquired about it. Chief Secretary of the GoN Eaknarayan Aryal clarified that the decision was not in the minutes of the Cabinet.
TAXING TWICE
Critics like economist Pushkar Bajracharya argue that it is important for Nepal to have a consistent taxation policy for FDI, and apply it uniformly so it does not deter investors. The Dolma decision could encourage other offshore investors to demand similar treatment, hurting Nepal’s tax base.
“Besides, the evidence just isn’t strong that tax cuts lead to higher investment, or more jobs,” Bajracharya adds.
Nepal has double-taxation avoidance treaties with 11 countries, and there are reports of moves to end the DTAA with Mauritius signed in 1999. But just like with the Ncell’s capital gains row and the controversy over the US-funded Millennium Challenge Corporation (MCC) there has also been nationalist flag-waving in Nepal.&nbsp;
“We were raising a fund that could have brought $1 billion in for energy, and we had to stop it due to the reputational damage to Nepal by not upholding an international treaty,” Tim Gocher, CEO of Dolma, told Nepali Times on the phone from London.
Dolma claims that Nepal’s DTAA with Mauritius means profit arising from sale of shares should be taxed only in the resident state and not in Nepal, and also cited the Treaty Act 1990 which states that treaties signed by Nepal supersede domestic law in case they contradict each other.
Gocher said it makes sense for his fund to be based in Mauritius: “When you have investors from all over the world, you have to choose a domicile, and Mauritius is probably the most popular for development finance institutions due to strong governance, anti-money laundering laws and treaties with developing countries like Nepal.”&nbsp;
Nepali officials, however, see Dolma as a conduit company sourcing funds from outside Mauritius or Nepal and label it as possible ‘treaty shopping’. A similar case involving the sale of Ncell ownership went to the Supreme Court and all the way to the International Tribunal at The Hague, and both ruled against exemption to DTAA.
Officials argue that approving an exemption for Dolma would contradict that precedent. The Attorney General’s office cited Section 73 of the Income Tax Act of 2002 which states that to avoid double taxation, more than half of the company has to be owned by individuals residents of both Nepal and a foreign country.
Bureaucrats also seem to be wary about being hauled over the coals at the Commission for the Investigation of the Abuse of Authority (CIAA) if they agree to Dolma’s demands, even though there is a legal argument that the Nepal treat act stipulates that in case of disagreement international obligations take precedence over domestic laws..&nbsp;
“It was when the new government decided to uphold the treaty that the whole hoo-hah started,” said Gocher. “It is crystal clear, and the way international treaties are dealt with all over the world.”
Chief Secretary Acharya, who is retiring next week, seems to want to avoid being haunted by any whiff of controversy before he leaves, but also faces intense lobbying by the international community for Dolma’s exemption.&nbsp;
Dolma currently invests in companies such as Chirayu National Hospital, CloudFactory Holdings Limited, Foodmandu, FuseMachines, Rhododendron Biotech, Setikhola Hydropower, and Solar Farm Nepal.&nbsp;
Dolma has asked to be exempt from being taxed twice: in Nepal, where it invests, and in Mauritius, where it is based, and points to a law that says international treaties override domestic law in the case of a contradiction. Government officials point to the Ncell precedent saying it will be illegal. But the government is not giving in, due to the Ncell precedent and to prevent others in future asking for similar exemptions.&nbsp;
<a href="https://www.youtube.com/watch?v=uNdMuD_4yGw&amp;t=5s" target="_blank">Watch interview</a> on Nepali Times Studio with Tim Gocher.

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