<figure><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111410114/637204a99c7e80680e0b2874jpeg.jpg" alt=""/><figcaption>Nepal's coalition leaders meet at the Prime Minister's residence in Baluwatar on Tuesday. Photo: RSS</figcaption></figure>Nepal’s ruling political parties are facing growing calls from civil society, constitutional experts and the public to announce dates for local elections which need to be held by April this year. However some members of the governing coalition, fearing lack of preparation and loss at the polls, are using various pretexts to try to postpone elections. A meeting of top leaders of the coalition partners on Tuesday is trying to forge a common position.Prime Minister Sher Bahadur Deuba’s Nepali Congress wants local polls to be held on schedule, and elections to the federal parliament later this year or early 2023. While the opposition UML agrees with this view, coalition partners Maoist Centre and the Unified Socialists want the local elections postponed till November and held together with voting for the other two tiers.They cite the <a href="https://www.nepalitimes.com/here-now/3rd-wave-in-2-years/" target="_blank" rel="noopener noreferrer">Omicron surge</a>,  the huge costs of holding separate elections at a time when the economy is in trouble, as well as saving the public from too many elections this year.The Election Commission has warned the government that it needs to decide on the date by the end of this week if polls are to be held on 27 April.Read also: <a href="https://www.nepalitimes.com/latest/is-democracy-too-expensive-for-nepal/" target="_blank" rel="noopener noreferrer">Is democracy too expensive for Nepal</a>, Laxmi BasnetBut pressure on the government to hold elections as mandated by the Constitution is growing. On Monday, umbrella organisations representing Nepal’s local elected bodies joined the call to conduct local elections.The National Association of Rural Municipalities in Nepal, Municipal Association of Nepal and Federation of District Coordinating Committees issued a joint press release to pressure the governing parties and the Election Commission to begin the process for local polls by May. ‘In a system where provincial and federal governments do not govern local political institutions, Nepal’s Constitution has not envisioned even a single day without locally elected leaders,’ the statement co-signed by the chairs of the three organisations reads. ‘We hope that the elections are held in a timely manner, and that local bodies do not go without elected representatives even for a day.' The Election Commission has recommended that elections be held on 27 April across the country in a single phase, or on 27 April and 5 May in two phases.The five-year terms of Nepal’s locally elected representatives, which began on 20 May 2017, will officially end on 19 May 2022. Nepal’s Constitution requires that  local elections be held within six months of the end of the current officials’ terms. Before that, Nepal is set to elect 20 members to the National Assembly on 26 January to replace those  retiring from the Upper House following the end of their four-year terms.Minister for Health and Population Birodh Khatiwada declared on Monday that dates for local elections will be decided within this week.Speaking at a press conference in Biratnagar on Monday, Khatiwada said: "The five-party alliance is committed to holding the local elections.” Read also: <a href="https://www.nepalitimes.com/editorial/battle-lines-drawn-for-nepal-elections/" target="_blank" rel="noopener noreferrer">Battle lines drawn for Nepal elections</a>, EditorialIf the elections take place on the recommended dates, Nepal will go into the election cycle at a time when the third phase of Covid-19 infections is spreading across the country. On Monday, Nepal reported 5,747 positive cases out of 14,014 RT-PCR tests and 987 positive cases out of 3,451 antigen tests. Out of the total 6,734 positive cases, 3,939 are from the Kathmandu Valley, which has a significant concentration of registered voters in the country.Meanwhile, even as Nepal’s rightwing political parties capitalise on the growing debate about scrapping federalism and secularism from the Constitition, India’s state-level elections have reignited geopolitical tensions between the two countries once again. India’s Prime Minister Narendra Modi sparked outrage in Nepal after  remarks during an election rally in India’s Uttarakhand state, during which he spoke about plans to extend a road to the <a href="https://www.nepalitimes.com/latest/politics-and-history-of-nepals-kalapani-claim/" target="_blank" rel="noopener noreferrer">disputed region </a>of Lipulekh. Some of India’s state-influenced tv channels have since been labelling Nepal as ‘pro-China’.While India-bashing is a popular past-time during elections in Nepal when parties join the nationalism bandwagon, it seems that Nepal-bashing has now also become a sport in Indian elections. Five Indian states will be holding elections in January-February, in votes that will determine the fate of Modi’s BJP government ahead of general elections in 2024. How the BJP fares in these elections will broadly influence the federalism and secularism debate in Nepal.Read also:<a href="https://www.nepalitimes.com/here-now/clean-up-elections-to-clean-up-politics/" target="_blank" rel="noopener noreferrer"> Clean up elections to clean up politics</a>, Shristi Karki

Shristi Karki

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Nepal coalition dilly-dallying on polls

<figure><img width="2250" height="3149" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203509c7e80680e0b2800jpeg.jpg" alt=""/><figcaption>Illustration: SWORUP NHASIJU</figcaption></figure>On 26 January, Nepal will elect 20 members to the National Assembly to replace those  retiring from the Upper House following the end of their four-year terms, marking the beginning of the second series of elections under the federal system. Leaders of the governing five-party coalition have already divided up the 19 electable seats amongst themselves, and appointed their nominees – making it certain they will win. The <a href="https://www.nepalitimes.com/latest/tis-the-season-of-conventions-in-nepal/" target="_blank" rel="noopener noreferrer">general conventions </a>of three of Nepal’s biggest and most influential parties in the last months, which were mini elections unto themselves, marked the beginning of campaigning for <a href="https://www.nepalitimes.com/here-now/all-eyes-on-2023/" target="_blank" rel="noopener noreferrer">local and federal elections</a> in the coming year. All major parties including the <a href="https://www.nepalitimes.com/latest/nepali-congress-party-time/" target="_blank" rel="noopener noreferrer">Nepali Congress</a> (MC), <a href="https://www.nepalitimes.com/latest/post-convention-uml-eyes-set-on-elections/" target="_blank" rel="noopener noreferrer">UML</a> and the Maoist Centre (MC) retained their gerontocracies.Preparations are now underway for local elections, which the Election Commission has recommended should be held on 27 April across the country. Nepal conducted its first legislative assembly elections as a multiparty system in 1959. Since then, there have been 10 elections for the National Legislature, with the 2017 general elections being the first of its kind after the country ushered in federalism. The year also marked the first time sub-national elections were held in 20 years.There were 14.2 million ballots cast during local elections in May 2017. However, the number jumped to 15.4 million in provincial and parliamentary elections in November the same year. Read also: <a href="https://www.nepalitimes.com/here-now/all-eyes-on-2023/" target="_blank" rel="noopener noreferrer">All eyes on 2023</a>, Mukesh PokharelIn March 2021, the Election Commission stopped voter registration and published an updated list of 16.2 million voters after former Prime Minister <a href="https://www.nepalitimes.com/latest/oli-sweeps-uml-party-polls/" target="_blank" rel="noopener noreferrer">K P Oli</a> dissolved Parliament and announced early elections. The registration process resumed after the Supreme Court reinstated the house in July.And right after the Election Commission announced the National Assembly polls in November, it also announced the beginning of a month-long special voter registration program during which an additional 600,000 Nepalis registered.  As elections approach, Nepal’s political discourse is already dominated by <a href="https://www.nepalitimes.com/editorial/volatile-mix-of-politics-and-religion/" target="_blank" rel="noopener noreferrer">parties stoking nationalistic and religious fervour</a>.  This has made for surprising political partnerships, with the Hindu-right and leadership from self-proclaimed ‘alternative’ parties uniting in their rejection of federalism, secularism and even republicanism.And if their <a href="https://www.nepalitimes.com/latest/unconventional-party-conventions/" target="_blank" rel="noopener noreferrer">general conventions </a> were any indication, the parties will use this rhetoric to vilify opponents and gain voters at the expense of issues most pertinent to the people, such as education, migration, healthcare, the economy and the pandemic. <img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203539c7e80680e0b2801jpeg.jpg" alt="">In an ideal democracy, elections force public officials to be accountable. Candidates are elected based on promise of performance. But in Nepal, the polling system itself lacks transparency -- right from election funding. But electoral reform measures like re-demarcation of constituencies based on population, polling systems and voting rights of diaspora Nepalis who cannot cast votes in person, remain neglected.There has been much back and forth about the demarcation of election constituencies. While Article 286 (5) of Nepal’s Constitution states that the delineation should be done on the basis of population and geography, Madhes-based activists have pressed for constituencies to be divided on the basis of the population only.Read also: <a href="https://www.nepalitimes.com/editorial/battle-lines-drawn-for-nepal-elections/">Battle lines drawn for Nepal elections</a>, EditorialThe government formed a five-member Constituency Delimitation Commission to look into possible rearrangement of constituencies for the federal and provincial elections in July 2017. The commission demarcated constituencies by giving 90% weightage to population size and 10% to geography.Govind Subedi, a professor of population studies at Tribhuvan University, has argued that recent practices have gone in the ‘wrong direction’. He writes in his book Political Demography of Nepal: 'The uneven distribution of representatives … is likely to increase if we adopt a population-size only-method [of delineation] … it can have a far-reaching implication in the geo-polity of Nepal.'Subedi, who was an adviser to the Commission, continues: ‘It is more likely that the sparsely populated districts in provinces which lie in the western mountains and the far western region will feel regional imbalances in sharing of political power in the national polity, which in turn may lead to provincial conflicts in the years to come.’Furthermore, Nepal’s election laws are lax enough that the wealthiest in the country who previously bankrolled parties in exchange for personal, professional and policy favours have<a href="https://www.nepalitimes.com/here-now/purchasing-power/" target="_blank" rel="noopener noreferrer"> entered politics themselves</a>. The number of businessmen and contractors elected into leadership in 2017 proves that money, not political competency, decides who is ultimately elected to lead. Read also: <a href="https://www.nepalitimes.com/latest/is-democracy-too-expensive-for-nepal/">Is democracy too expensive for Nepal?</a>, Laxmi BasnetIndeed, the First Past the Post (FPTP) system has become a hotbed for corruption by businessmen, thus undermining democracy, say election experts. Prominent leaders from across the political aisle, particularly women elected into office like Minister for Women, Children and Senior Citizens Uma Regmi, have spoken in support of an overhaul of Nepal’s current election system into a fully proportional electoral system after having experienced firsthand how the current system <a href="https://www.nepalitimes.com/here-now/the-business-of-politics/" target="_blank" rel="noopener noreferrer">benefits the rich, powerful and the establishment</a>, while they are burdened with election debt long after they have left office.Former Acting Chief Commissioner of the Election Commission Dolakh Bahadur Gurung says that the reform should be such that MPs are not allowed to become ministers, and term limits must be set so that the same people do not hold on to their seats until they are 90 years old. ‘Our Constitution has been amended a fair number of times,’ wrote Gurung in October, ‘it is not impossible to reform our electoral system.’Meanwhile, the debate about mailed ballots and absentee voting has gained much traction among the <a href="https://www.nepalitimes.com/editorial/the-year-of-migrant-workers/" target="_blank" rel="noopener noreferrer">Nepali diaspora</a> in recent years. An estimated 4 million Nepalis work, study and live in India, the Gulf, Malaysia, Japan, Korea, Europe and North America.The Supreme Court issued a directive to facilitate voting for Nepali diaspora across the world in March 2018. However, successive governments have shown no interest in ensuring voting rights for millions of eligible voters living overseas.And even as the government has begun to <a href="https://www.nepalitimes.com/latest/its-in-the-mail/" target="_blank" rel="noopener noreferrer">expand the reach of its archaic postal service</a> by delivering items like passports to people’s homes, it has not considered postal voting to keep the service relevant. The political establishment seems to fear that Nepalis in the Gulf and Malaysia are fed up with the government back home, and allowing them to vote by mail will be predominantly anti-incumbent.  The Sweden-based International Institute for Democracy and Electoral Assistance (IDEA) says 151 of 216 countries around the world allow voters living abroad to cast ballots in some capacity. According to the Election Integrity Project, 40 countries used postal ballots in their most recent national election before the Covid outbreak.Nilkantha Uprety, the former Chief Election Commissioner, believes there are two options to eliminate election irregularities. Firstly, there must be an improvement from within parties and candidates such that undemocratic practices are turned into fair competition during elections.Read also: <a href="https://www.nepalitimes.com/latest/the-business-of-politics-in-nepal/" target="_blank" rel="noopener noreferrer">The business of politics in Nepal</a>, Shekhar Kharel‘But since it is not easy to achieve that, the second option is to radically change our current electoral system, and it would be unwise to delay in choosing which of the two options is more convenient and effective,’ he warned in a<a href="https://www.himalkhabar.com/news/127010" target="_blank" rel="noopener noreferrer"> recent op-ed</a> in Himal magazine.Uprety also noted that in the end, the electoral system does not matter as much as the people involved in the elections.‘Elections can be free and fair regardless of the electoral system if political parties are democratic, candidates are committed, and there is a guarantee of good governance,’ he wrote. ‘Ultimately, elections can only be successful if the majority of voters make informed choices about the parties and candidates instead of only being interested in when and where to show up to vote.’ Read also: <a href="https://www.nepalitimes.com/here-now/nepals-rudderless-political-leadership/" target="_blank" rel="noopener noreferrer">Nepal’s rudderless political leadership</a>, Santa Gaha Magar

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Clean up elections to clean up politics

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

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

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