Philanthropy will never replace<a href="https://nepalitimes.com/news/uk-aid-for-nepal-s-covid-affected-mp4ab6lw"> public aid</a>, but it can be a powerhouse if we use it right. With global development funding under strain, <a href="https://nepalitimes.com/news/e75-million-eu-aid-to-nepal-for-covid-19-ckmyfbkq">European aid</a> budgets being redirected toward defence and rearmament, and the <a href="https://nepalitimes.com/news/how-usaid-cut-affects-nepal">United States rethinking foreign assistance</a> altogether, the aid community has been left scrambling.
The reactions so far have been of two kinds: calls for <a href="https://nepalitimes.com/here-now/philanthropy-in-the-time-of-pandemic">philanthropy</a> to fill the gap, and moralising statements shaming governments for stepping back. Unfortunately, the first is unrealistic, and the second is ineffective.&nbsp;
Private donors cannot solve systemic <a href="https://nepalitimes.com/opinion/12-full-opinion/our-uncommon-future">global challenges</a> alone, and telling politicians that they are morally bankrupt generally does not bring them around to your side. Instead, we need to meet policymakers where they are, sharpen our arguments, and focus on what actually works. The hard truth is that most <a href="https://archive.nepalitimes.com/page/foreign-aid-policy-to-balance-infrastructure-investment-with-social-sector-investment">government aid</a> is not even designed for effectiveness, because it prioritises processes over results. Nor has philanthropy been immune to this impulse.
In early years at the Eleanor Crook Foundation, we funded holistic, multisectoral programs that tried to tackle all causes of malnutrition simultaneously. But the results were underwhelming. The approach looked good on paper, but produced no measurable improvements in <a href="https://nepalitimes.com/here-now/nepal-s-epidemic-of-hunger">malnutrition</a>. So, we learned from that failure and changed course. Now, we direct our funding where the evidence is strongest and the results most immediate.&nbsp;
At the recent Nutrition for Growth (N4G) Summit in Paris, we announced a $50 million commitment, alongside $200 million from other donors, to scale up one of the most cost-effective interventions in global health: prenatal vitamins – known as multiple micronutrient supplements (MMS). This funding will go toward a $1 billion roadmap to ensure access to MMS for pregnant women no matter where they live.
The science on this issue is unequivocal. MMS replaces outdated iron and folic acid (IFA) tablets still given to many pregnant women in low-income countries. With MMS, women receive 15 nutrients, instead of just two, leading to a dramatic reduction in maternal anemia, stillbirth, and low birth weight. The estimated economic returns are $37 for every $1 invested while infant mortality is reduced by nearly one-third.
The global inequities in maternal health are profound. In London, a pregnant woman routinely has access to comprehensive prenatal vitamins. In Lagos, she might receive IFA, or nothing at all. The difference reflects a gap in will, not knowledge. Ending such disparities does not require a scientific breakthrough, just greater investment in already proven solutions.
More than two decades of research, three Lancet studies, and multiple World Bank investment cases have identified roughly ten nutrition interventions that are consistently underfunded despite their proven efficacy. These are not flashy, multisector, utopian initiatives. They are targeted, evidence-based programs that can be implemented immediately to deliver measurable results.
Solutions like breastfeeding support, Vitamin A supplementation, prenatal vitamins, and ready-to-use foods for severely malnourished children belong to a package of interventions that could save at least two million lives over five years if scaled up in nine high-burden countries. Such life-changing results would cost just $887 million per year.
Malnutrition is now the leading driver of <a href="https://archive.nepalitimes.com/news.php?id=16505">child mortality</a> globally, contributing to some three million deaths in 2023 alone. These are not mysterious tragedies. They are predictable and in many cases cost little to prevent. In a world that routinely sends tourists to space, we obviously can afford to ensure that all <a href="https://nepalitimes.com/here-now/saving-one-nepali-mother-at-a-time">pregnant women</a> have access to a $2 bottle of vitamins.
This year’s N4G Summit may be the last of its kind. It was part of a summit series linked to the Olympics, which will next be hosted by the US. With the current <a href="https://nepalitimes.com/editorial/trump-s-second-coming">US administration </a>already signaling that it will not continue the tradition, recent commitments made in Paris have gained new urgency. Vague pledges and political posturing will no longer do.
We are not asking governments to spend like they used to. Rather, we are urging them to look at the evidence and use their remaining budgets for official <a href="https://nepalitimes.com/review/small-is-bountiful?fbclid=IwAR0wRoEdhgYO9qATGiukFQvK2fE6N8rCDZ4CBJBdkTC6_Es-6_mdVHldlic">development assistance</a> to scale up proven, <a href="https://nepalitimes.com/here-now/small-is-still-possible">cost-effective solutions</a>. A modest investment in MMS – representing less than the cost of one week of G7 countries’ defense spending – could save 600,000 lives.
Even with constrained budgets, we have a chance to save millions of lives. But only if we stop trying to do everything, and focus instead on what is the right thing to do.
William Moore is the CEO of the Eleanor Crook Foundation and Chair of Stronger Foundations for Nutrition.

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

1250x600

1084x550

thumbnail

viewImage

Philanthropy in an era of declining development aid

<figure><img width="1600" height="1200" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221129151140/638619ea9c7e80680e0ccccfjpeg.jpg" alt=""/><figcaption>Young children suffering from undernutrition have poorer school achievement, diminished cognitive and language ability, and more behavioural problems. Adults who were malnourished in childhood have less economic productivity and increased incidence of health problems.</figcaption></figure>Malnutrition has long been identified as a major barrier to development in Nepal, and other low-income countries. The solution seems obvious: ensure that children eat enough of a balanced diet so they get the needed proteins, vitamins and minerals.Two recent projects set out to do just that. The first provided animal source foods (meat, fish, eggs and dairy), vegetables and a diverse diet to children in low-income farming households in Nepal’s Banke district. The second helped women in Bajura to grow vegetables in kitchen gardens. Both succeeded, but would have done even better if the beneficiary families did not face so many other obstacles.In Bajura, researchers found that ‘structural barriers’ prevented some women participants, all of who were pregnant or had children two years old or younger, from committing fully to the garden.‘Participants demonstrated high levels of knowledge about the program’s nutrition messages and expressed interest in and motivation to engage in the program,’ wrote the study’s authors. ‘However, access to water, land, and time determined the extent to which their full participation in the program was feasible.’<a href="https://www.nepalitimes.com/banner/nearly-half-of-nepali-children-still-malnourished/">Nearly half of Nepali children still malnourished</a>, Sonia Awale <img width="1600" height="1200" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221129151140/638619ef9c7e80680e0cccd0jpeg.jpg" alt="">That finding was not surprising, says Pooja Pandey Rana, deputy chief of party for the Suaahara nutrition program, the operational arm of Nepal’s multi-sector nutrition plan. Based at Helen Keller International, which carried out the garden project, Rana was a co-author of the study, ‘Navigating structural barriers to the implementation of agriculture-nutrition programs in Nepal’ published in the journal <a href="https://link.springer.com/article/10.1007/s12571-020-01031-0" data-saferedirecturl="https://www.google.com/url?q=https://link.springer.com/article/10.1007/s12571-020-01031-0&amp;source=gmail&amp;ust=1589177540738000&amp;usg=AFQjCNFVbcRmzXA6g1wjMOG3fB0pgUvJzQ">Food Security</a> in April 2020.<a href="https://www.nepalitimes.com/latest/covid-19-affecting-food-security-in-nepal-wfp/">COVID-19 affecting food security in Nepal: WFP</a>, Nepali Times“We have made massive progress on stunting, on the nutrition indicators. But on the underlying barriers, access to food, to all these resources, I think we can do a lot more and not one project can do everything,” said Rana in a telephone interview. “It also raises the question of what the broader interventions we can do in a nutrition program, and are donors ready to support them. They have their own targets, their own agenda and theory of change.”The study notes that difficulties accessing water were raised in nearly every conversation researchers had with participants and staff and in focus group discussions with female community health volunteers. In some cases, the barrier was the time required to fetch water, in others it was a ban on Dalit villagers using taps or scarcity of water overall.The research suggested solutions to overcome such barriers, at least in the short term. For water, that included ‘micro-irrigation’ equipment (sprinklers and hoses). ‘Enabling households to access such equipment, possibly by subsidising it or through community sharing schemes, could ease access to water and substantially reduce the work burden associated with kitchen garden cultivation for many participants,’ the report said.<a href="http://nepalitimes.com/article/nation/child-undernourishment-a-major-risk-after-the-earthquake,2379" target="blank" rel="noopener noreferrer">You eat what you sow</a>, Sahina ShresthaRana says that phase two of the project has incorporated some such ideas. These include training women farmers on wastewater management and forming village farmer networks so women growers can better negotiate with traders.Overall, she is optimistic, partly because of interest from local governments: “Most of the municipal leaders we’ve interacted with want to do really good, impactful work. But they need support on strategic things, for example who to contact for poultry vaccination. They need these sorts of networks and connections and capacity-building.” <img width="1600" height="1200" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221129151140/638619f29c7e80680e0cccd1jpeg.jpg" alt="">In Banke, researchers found that over four years the contribution of diet to developmental status were striking. ‘Even small changes in dietary intake were associated with impressive improvements in child developmental performance,’ wrote the authors in the journal <a href="https://onlinelibrary.wiley.com/doi/epdf/10.1111/mcn.12964" data-saferedirecturl="https://www.google.com/url?q=https://onlinelibrary.wiley.com/doi/epdf/10.1111/mcn.12964&amp;source=gmail&amp;ust=1589177540739000&amp;usg=AFQjCNHBxK1QHeXh453q39WMO2zTUc8MEg">Maternal &amp; Child Nutrition</a> in January.   But that impact was tempered by household wealth, mother’s education and ‘home environmental quality’ including such things as availability of toys, dolls, and books, interactive activities such as mothers and children reading together, telling stories, and playing, and how often the child was left alone or under the supervision of another child.‘Limited resource environments present many potential hazards to growing children, including poor nutrition, lack of medical care, increased exposure to infections, physical and emotional neglect,stress, and lack of stimulation for cognitive development ... lower educational levels of the parents (particularly the mother) are one of many additional risk factors in impoverished households.’<a href="http://nepalitimes.com/article/nation/the-face-of-hunger-debt-malnutrition,3604" target="blank" rel="noopener noreferrer">The face of hunger</a>, Om Astha Rai‘We found that child developmental scores were significantly associated with household wealth, maternal education, and the home environmental quality’, the authors concluded.Those findings echo the analysis in <a href="https://www.nepalitimes.com/opinion/newborn-deaths-and-a-vision-for-a-post-pandemic-nepal/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/opinion/newborn-deaths-and-a-vision-for-a-post-pandemic-nepal/&amp;source=gmail&amp;ust=1589177540739000&amp;usg=AFQjCNFcHt-4ZzGFqJg6SysOZykYQjFvvg">another recent study</a>, which concluded that Nepal’s poorest families are 50 years behind its richest households in terms of newborn health. Key risk factors for neonatal mortality were a mother’s lack of a tetanus vaccination, her education status, giving birth before the age of 20, household air pollution, poverty, and having no toilet at home.Rana says she sees hope in the next generation of women, who are different than their mothers: “Almost 70% of them have access to cell phones in Bajura. How do we use that technology to empower them? They want to do more, study more … The progress we’ve made is tremendous in terms of nutrition indicators but adolescence and youth is a missed opportunity — we need to do more.”Read also:<a href="https://archive.nepalitimes.com/article/nation/malnutrition-stunting-wasting,3603">Thought for food</a>, Marty Logan<a href="https://www.nepalitimes.com/banner/junk-food-is-making-nepali-children-shorter/">Junk food is making Nepali children shorter</a>, Marty Logan

Food for thought for Nepal’s nutrition planners

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714114/636902cc9c7e80680e037c85jpeg.jpg" alt="" width="640" height="480"/>The 15-year-old boy weighs 54kg, much more than an average Nepali his age. He is malnourished.His breakfast and lunch consist of biscuits, instant noodles and other packaged foods. His uncle buys him <a href="http://archive.nepalitimes.com/article/nation/diabetes-in-south-asia,3018" target="_blank" rel="noopener">fizzy, sugary drinks</a>. The boy does not like home-cooked meals, and when he does they are oily and deep-fried.Read also: <a href="https://www.nepalitimes.com/here-now/nepalis-binge-on-junk-foods-the-west-rejected/" target="_blank" rel="noopener">Nepalis binge on junk foods the West rejected...</a>, Duksangh SherpaWhen he came to me, the boy was already suffering from a sore back, he could not run, and found it difficult to climb the stairs to the third floor.There is a strong chance he will suffer from diabetes and hypertension by the time he is 25. His grandmother is worried about his addiction to sugar-sweetened sodas and packaged foods.While in the US, 15 years ago, I saw many obese adolescents, and remember thinking we had the opposite problem in <a href="http://archive.nepalitimes.com/article/nation/malnutrition-stunting-wasting,3603" target="_blank" rel="noopener">Nepal: under-nourishment</a> and stunting. Not any more, however, because urban Nepal is now seeing an American-style epidemic of malnutrition.It used to be rare to see an overweight child in Nepal’s schools, but today it is a common sight. In a recent informal survey of a school in Sindhupalchok, I found students mostly bring money from home to buy packaged food for lunch. Teachers themselves consumed junk foods for snacks, and had no idea about the lack of nutritional value. They purchased the packets out of convenience.The mothers of the students told me they always believed instant noodles were nutritious. They liked the fact that it was cheap, didn’t need to be cooked, and their children loved it. They were aghast when I showed them pictures of children gaunt with malnourishment. Some mothers asked: if junk food was so bad , then why were there so many celebrity-endorsed TV advertisements? If the government does not care about your health, we have to think of it ourselves, I answered.A three-year-old in Far Western Nepal was dying from malnutrition: not because she had nothing to eat, but because she had been eating the wrong food. Her mother took the child to a health centre, where she admitted her daughter only ate instant noodles and cheese balls. The girl was referred to the Nutrition Rehabilitation Center in Nepalganj, and was nursed back to health.I have an acquaintance who works in one of the instant noodle factories in Nepal, and he says he wouldn’t touch the stuff - he knew what went into it. “I would never eat it, and never give it to my children,” he told me.The junk food industry is all about creating demand through marketing and branding. It equates packaged foods with modernity, affluence, and a trendy lifestyle. What it is really all about is putting them in non-biodegradable single-use plastic into our landfill sites, and robbing our people of their health. Junk food is another symptom showing we are becoming a throw-away society, and if we are not careful we will throw away our children’s futures.Aruna Uprety is a public health specialist and co-author of the book 'Khana Khanu Bhayo'?Read also: <a href="https://www.nepalitimes.com/?p=10606&amp;preview=true" target="_blank" rel="noopener">Could Nepali cuisine go global?</a> Thomas Heaton<a href="http://archive.nepalitimes.com/news.php?id=2409#.W2L-r9UzbIU" target="_blank" rel="noopener">Junk food epidemic</a>, Aruna Uprety<a href="http://archive.nepalitimes.com/regular-columns/GUEST-COLUMN/promoting-nutritious-local-food-for-post-quake-children,524" target="_blank" rel="noopener">Local is best</a>, Aruna Uprety

Living to eat

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>.