Nepal’s consumer inflation reached 8.19% in mid-September compared to 8.64% last year, latest Nepal Rastra Bank figures show.
Food and beverage inflation hit 9.74%, and non-food and service sector prices increased by 6.99% during the review period. The highest costs hit low and lower-middle-income families especially hard during Dasain.
The only saving grace is remittances from Nepali abroad, where even the official inflow figures through banks and registered exchanges have increased to record levels.
The cost of spices (especially important items at festival time) went up by a whopping 45.46%. There is a severe shortage of sugar in the market, and even when available it is 17.86% costlier than last year. Vegetable prices rose 14.51%, and the price of milk and eggs are up 12.6%. Ghee is the only commodity for which the price has declined: by 13.08%.
Read Also: <a href="https://nepalitimes.com/news/business-not-happy-with-the-imf">Business not happy with the IMF</a>, Ramesh Kumar
Prices in the entertainment and culture sub-category have also increased by 15.55%— with miscellaneous goods and services going up by 12.21%, education 9.10%, household goods 8.11%, as well as furniture and household appliances by 6.59%.
While the inflation rate remains high, wages and salaries have not kept pace. The salary and wage rate index increased 5.25% in mid-September compared to 11.68% a year ago.
The government’s expenditure was Rs131.14 billion while revenue collection amounted to Rs141.08 billion. Gross foreign exchange reserves have also increased by 3.9%, mainly due to remittances and lower imports. Remittance inflow increased by 22.1% to Rs.228.37 billion compared to a 19.8% increase in the same period last year.
Meanwhile, Nepal’s current account and balance of payments were both in surplus during the first two months of fiscal year 2023/2024. The current account shows a surplus of Rs23.5 billion compared to a deficit of Rs36.84 billion during the same period last fiscal year while the BoP had a surplus of Rs53.61 billion by mid-September against a deficit of Rs 20.81 billion during the same time last year. &nbsp;

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Bada Inflation at Bada Dasain

In a move more reminiscent of the days of IMF structural adjustment conditionalities in Latin America, Nepal’s business community has bristled at what it called “interference” by the International Monetary Fund in Nepal’s domestic economic policy.
In January 2022, the IMF &nbsp;granted Nepal concessional loans worth $395.9 million under its Extended Credit Facility (ECF) following multiple discussions with Finance Ministry officials in Kathmandu under the previous government. &nbsp;
At the time, Nepali officials were alarmed at pandemic-induced fall in foreign exchange reserves and increasing current account deficit due to high imports, and agreed to accept the IMF’s conditional loan which extends until February 2025.
&nbsp;The conditions included deep reforms to Nepal's financial system, and public finance management, including amending the law to make Nepal Rastra Bank autonomous, a banking regulatory mechanism, preparing a blueprint to prevent misuse of loans, conducting external audits of the ten big commercial banks, and maintaining transparency by making tax exemptions granted by the government available to the public.
&nbsp;In the past, those closely associated with Nepal’s communist parties have criticised global financial institutions like the World Bank and the IMF for their pursuit of ‘neoliberal and imperialistic policies. But now it is the business community expressing their contempt, accusing foreign donor agencies of interfering in Nepal's internal economic policy.
&nbsp;Nepal's economy is beholden to foreign donor agencies and the small loans that they have provided us,” said the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Chandra Prasad Dhakal during a recent panel attended by Prime Minister Pushpa Kamal Dahal. “If our economic indicators are positive, we should pay off those loans.”
Dhakal claimed that Nepal’s economy is in crisis on account of the country having to follow strict conditions put in place by the IMF for its loans, and that paying them off would mean that the terms and conditions of the ECF agreement would cease to apply.&nbsp;
ECF provides medium-term financial assistance to low-income countries with protracted balance of payments problems, granting loans at zero interest rates to nations where the amount of money leaving the country exceeds the amount coming into the country.&nbsp;
The Confederation of Nepalese Industries (CNI) was even more direct. Chair Rajesh Kumar Agrawal warned the IMF to “stay in its lane” following a meeting with its representatives in September.&nbsp;
Chairman Agrawal highlighted the fact that undue pressure must not be put on Nepal because economic policies and principles of other nations are not entirely applicable to Nepal's economy, which has its own unique characteristics,’ read a statement released by the CNI after the meeting.
And while the government has initiated some reforms stipulated by the IMF in the loan agreement, major terms remain unmet— such as granting autonomy to the central bank.&nbsp;
The IMF withheld the third instalment of the ECF loan, and the funds were eventually released after Finance Minister Prakash Sharan Mahat assured the IMF in October that Nepal would make necessary reforms per the loan agreement.&nbsp;
These commitments have now put the government at odds with the private sector, which has expressed dissatisfaction over NRB’s new loan classification as well as the new provision of a six-month wait for non-performing loans to be upgraded.&nbsp;
Industrialists have taken special issue with the recently implemented guidelines on working capital loans, per which the NRB banned the practice of industries taking out current capital loans to clamp down on borrowers who take loans for industries and invest them elsewhere.&nbsp;
The NRB eventually revised the guidelines to make them more flexible for borrowers after the private sector lobbied against the provision, arguing that the guidelines — which they claim is the result of interference by the IMF—could not be implemented when Nepal is in a ‘difficult economic position’.&nbsp;
Panicked bankers— who are suspected to have colluded with internal auditors to hide that they were in cahoots with businesses and industries— have also been trying to stop the central bank from implementing the IMF-stipulated international audit of the ten biggest commercial banks.&nbsp;
All of this has led the private sector to attribute Nepal’s economic slowdown to increased regulation of financial institutions by the NRB.
“Our economy is where it is because we have implemented financial and economic policy directives given by Western lenders without contextualising suitability and effectiveness for Nepal’s economy,” CNI chair Agrawal said last month.&nbsp;
But officials at the Nepal Rastra Bank say that the IMF is being unfairly blamed for trying to prevent the misuse of loans and blocking laws and policies pertaining to financial governance and transparency. “The private sector is trying to block economic reforms in order to protect their own interests,” one NRB executive told Nepali Times.&nbsp;
A former secretary at the Finance Ministry says that economic policy terms and conditions set by the IMF expand its influence and force economically weaker countries to implement its norms, thereby distorting such countries’ economies, adding that the IMF is putting similar pressure on Nepal.&nbsp;
But Rastra Bank Governor Maha Prasad Adhikari says that Nepal is making amendments on its own even though they might inconvenience the private sector. Former Finance Minister and governor Yuvraj Khatiwada also doesn’t agree that the IMF is interfering in Nepal’s economic policy.
“The mandate of these agencies includes giving advice for financial stability and external sector reforms—issues like economic growth and credit expansion are not within their purview,” notes Khatiwada, adding that Nepal has no obligation to implement IMF’s suggestions. “Instead of pointing fingers at the IMF, the government must set policies that prioritise Nepal’s financial and external stability and economic growth.”
IMF representatives were unavailable for comment.&nbsp;
&nbsp;

Business not happy with the IMF

Assaulted daily by news of politicians getting away with larceny, convicted criminals being freed, impunity and then the tragic news of <a href="https://nepalitimes.com/here-now/war-in-israel-earthquake-and-grief-in-nepal">10 students brutally killed</a> by Hamas in Israel, the mood ahead of Dasain this year is subdued.
<a href="https://nepalitimes.com/news/state-malfunction">Adding to the woes</a> are everyday economic worries about inflation, low purchasing power, a slump in retail trading. Street front shops are shuttered, and have to-let signs. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
But at the macro-economic level, things are looking rosy, with Finance Minister Prakash Sharan Mahat trying to raise spirits this week by declaring that the death of <a href="https://nepalitimes.com/news/business-as-unusual">Nepal's economy</a> was exaggerated.
The World Bank has projected that the economy will grow by 3.9% this fiscal year, and by 5% in fiscal 2025.&nbsp;
Removing import restrictions, loosening monetary policy, surging remittances, and the locomotive of India’s economic growth together appear to be pulling Nepal’s wagons along.&nbsp;
But the Bank also warned of risks: an <a href="https://nepalitimes.com/news/sikkim-flood-is-warning-to-nepal">erratic monsoon </a>that could harm agriculture, a new spike in commodity prices due to India’s food export ban. Higher inflation could keep policy rates elevated, increase domestic debt servicing costs, and drag growth.
The Asian Development Bank (ADB) projected Nepal’s economic growth at a slightly higher 4.3% for fiscal 2024, up from 1.9% in 2023. But both projections are far short of the government’s 6% growth target, and behind India, Bangladesh and Bhutan.
The overall scenario does not look precarious because of bulging forex reserves driven by last year’s import restrictions and remittances.&nbsp;
From suffering daily electricity rationing Nepal is now exploring exports, <a href="https://nepalitimes.com/news/it-is-it">the IT sector is booming</a>, e-commerce has taken off, and agriculture is going from subsistence to commercial.&nbsp;
However, all this could have happened much more rapidly with better policy implementation. Money <a href="https://nepalitimes.com/opinion/guest-editorial/the-migration-myth">Nepalis abroad</a> send home is not being invested in productive sectors.
“Nepal needs $7-8 billion in investment per year. Capital formation is low, so we have to get more FDI. The scale of projects that need to come up has to be larger so that it can drive legislative and institutional reforms,” says Sujeev Shakya of Beed Management. “Only then can we create jobs, accelerate the economy and stem migration.”
<a href="https://nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">Nepal’s economy has been stagnant </a>in recent years, with high inflation, fiscal imbalance, inadequate investment, low domestic production, deteriorating bank asset quality, and mass out-migration. Export continues to lag further behind burgeoning imports.
Nepal’s economy is still reeling from long-Covid complications, but many of the underlying problems are structural, and lack of strategic thinking.&nbsp;
The economy did reap the peace dividend in the 2006-2016 decade after the peace agreement: fiscal management was in good shape, public debt was decreasing, the external sector was robust, and resources for expanding credit was adequate.&nbsp;
Investment in infrastructure at that time could have boosted growth and created jobs, but the private sector opted for quick returns on real estate, stock market speculation and trade. Politicians also never followed through on grand speeches about attracting and retaining foreign investors.&nbsp;
Coalition politics, bureaucratic inefficiency and counterintuitive policies<a href="https://nepalitimes.com/news/state-of-the-state"> remain major hurdles</a>. The private sector shielded by insular policies do not want the status quo to change, even though there has been no major economic reform legislation for four long years.
One does not need a Nobel Prize in Economics to figure out what to do: move on the next set of macro-fiscal reforms, create a genuine investment friendly environment, and curb the rampant rent-seeking mindset.&nbsp;
Often accused of being a compulsive optimist, Shakya maintains that although the road is serpentine, Nepal is moving in the right direction. “Nepalis are resilient,” he notes.&nbsp;
“We overcame war, earthquake, blockade and Covid. We are generally happy with what we have, but what Nepal needs is forward-thinking policies and transformative reforms to actually drive the economy forward.” &nbsp;

Sahina Shrestha

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A Member of Parliament operates a fast-food restaurant. Another MP runs a trout hatchery. A female party leader owns a pig farm. All three <a href="https://www.nepalitimes.com/latest/nepali-women-go-from-home-to-house">women are in the business of politics</a>, and they have established and run their own enterprises on the side to augment household income and to backstop their careers. While their male counterparts in <a href="https://www.nepalitimes.com/banner/can-nepal-elections-change-its-male-stream-politics">local, provincial and federal</a> governments have earned some notoriety for having a conflict of interest because they are also infrastructure contractors, these women <a href="https://www.nepalitimes.com/latest/women-leaders-set-example-for-rest-of-nepal">multitask without mixing business with politics</a>.&nbsp; Coffee, avocado and banana  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230314100332_7a5870a2238cf1567a28cc76eedff184b91864c9e900dd8db4aed064296a64f5.jpg" data-media-id="editor_3" data-image-id="20230314100332_7a5870a2238cf1567a28cc76eedff184b91864c9e900dd8db4aed064296a64f5" data-rendition-name="original" width="1200" height="800" loading="lazy" alt="devi khadka"> <figcaption>Photo: DEVI KHADKA</figcaption> </figure>  Devi Khadka is a <a href="https://www.nepalitimes.com/banner/guerrilla-turned-member-of-parliament">former guerrilla</a> and Maoist Centre MP from Dolakha who was elected to the Constituent Assembly in 2008. And while she might have once walked the corridors of power in Kathmandu, Khadka is still attached to the roots of her family’s farming profession. &nbsp; In 2008, Khadka established a trout farm in Dolakha, but it was irreparably destroyed during the 2015 earthquake. However, she remained steadfast in her decision to continue her business and began growing tomatoes in greenhouses in Bhaktapur. But while Khadka’s farm thrived, things were not going so well back home in Dolakha, where she was the district in-charge under the erstwhile Nepal Communist Party formed after the merger of the UML and the Maoist Centre. A meeting of elected officials of nine municipalities of Dolakha were worried that subsidised farming and agriculture in general had become all but impossible in the district because of out-migration and low yield. Khadka was determined to do something about it – not through politics but with enterprise. “The decline of agriculture shook me to my core,” Khadka recalls. “I realised that it would be impossible to revive the people's hope and trust in farming unless I did not show them myself that properly done agriculture in Dolakha was still worthwhile.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230314110312_c6dfaed9dfa3fa749e4465979344458f3af67ce6191c2839f71dde6ee9a8d561.jpg" data-media-id="editor_5" data-image-id="20230314110312_c6dfaed9dfa3fa749e4465979344458f3af67ce6191c2839f71dde6ee9a8d561" data-rendition-name="original" width="800" height="423" loading="lazy" alt="devi khadka 2"> <figcaption>Photo: DEVI KHADKA</figcaption> </figure>  So, Khadka returned home and set up the Women Floris Agriculture Private Limited in Gaurishankar Municipality, where for the last three years, Khadka and her husband Raj Kumar Shrestha have been growing coffee, avocados and bananas. Along with two other women, she set up the farm with an investment of Rs5 million. The three women are involved full-time in the business and employ 12 men on a part-time basis whenever it is farming season.&nbsp; Khadka juggles this with her role as a Central Committee member of the Maoist party. And while avocado and banana sell mostly in the domestic market, she has successfully negotiated to export her farm’s coffee to South Korea, Australia and Japan and other countries. “The business has not only given me financial independence, it has also made me an ethical politician,” she says. “Because of my business, I am able to engage in politics without resorting to dirty business, I get to demonstrate a high moral standing to my children and ensure that they have a good future.” Read also: <a href="https://www.nepalitimes.com/banner/women-in-the-driving-seat">Women in the driving seat</a>, Shristi Karki Fast food and slow fashion  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230314100336_8b919284442cc235aef28995d6a6019c4ae30b59f4909c12a2d38b2eace55d6b.jpg" data-media-id="editor_7" data-image-id="20230314100336_8b919284442cc235aef28995d6a6019c4ae30b59f4909c12a2d38b2eace55d6b" data-rendition-name="original" width="1200" height="800" loading="lazy" alt="NABINA LAMA 1"> <figcaption>Photos: SUMAN NEPALI</figcaption> </figure>  Nabina Lama was an MP in Nepal’s last Federal Parliament and is currently a central member of the UML. But despite an active political career, Lama owns not only one but two businesses. Her restaurant, Doban Pool Burger House in Kathmandu employs dozens of people. And many more benefit from her clothing store Rimthim Ethnic Collection, where she sells products made out of traditional dhaka and allo fabric. &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230314100336_d66df1ecbfe9bd68801a6f79c910b48a6f9fac6abc5772cb8735069fdfc37b7d.jpg" data-media-id="editor_8" data-image-id="20230314100336_d66df1ecbfe9bd68801a6f79c910b48a6f9fac6abc5772cb8735069fdfc37b7d" data-rendition-name="original" width="1200" height="800" loading="lazy" alt="NABINA LAMA 2"> </figure>  Lama’s ethnic fashion store is a joint venture with four other women entrepreneurs, and she is a 70% partner in the fast food restaurant. Whenever Lama is busy with her party work, her husband looks after day-to-day business at both outlets. &nbsp; Like Khadka, Lama agrees that entrepreneurship has made her financially self-sufficient and independent. She adds, “Having a business is the only reason I have been able to actively engage in politics.” Read also: <a href="https://www.nepalitimes.com/banner/nurture-in-her-nature/">Nurture in her nature</a>, Babita Shrestha Piggery and soap  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230314100336_856e2ee40a5325ef875171139823c68a89637985bde3910396fda3e74dbf736b.jpg" data-media-id="editor_10" data-image-id="20230314100336_856e2ee40a5325ef875171139823c68a89637985bde3910396fda3e74dbf736b" data-rendition-name="original" width="1200" height="800" loading="lazy" alt="DHAN KUMARI SUNAR 1"> </figure>  Dhan Kumari Sunar, president of the Women's Organisation of the Scientific Socialist Communist Party of Nepal, operated a pig farm until it collapsed due to poor market management. But she did not let failure get her spirits down. Two years ago, she started the Tillikka Jhol Sabun Udhyog that makes liquid detergent together with Rs120,000 in investments from 12 other women from her party. Sunar took inspiration from her party’s ‘scientific’ ideology of an independent and self-reliant economy to set up her business.&nbsp; “The economic ownership of Nepali women in terms of resources and property is only 26%,” explains Sunar. “Entrepreneurship is <a href="https://www.nepalitimes.com/here-now/in-nepal-women-hold-up-more-than-half-the-sky">crucial to women’s freedom</a>, we cannot be truly free until we are financially independent.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230314100336_02ffdefb8f1a074d28eb890aa7d2c9cf2dcc1c8d22899aff999d9aeb21014566.jpg" data-media-id="editor_12" data-image-id="20230314100336_02ffdefb8f1a074d28eb890aa7d2c9cf2dcc1c8d22899aff999d9aeb21014566" data-rendition-name="original" width="1200" height="800" loading="lazy" alt="DHAN KUMARI SUNAR 2"> </figure>  Sunar’s business runs on word-of-mouth, and is doing well. But the politician in her is critical of the lack of state support for small businesses, adding that her loan proposal has been stalled. Says Sunar: “The government promises to facilitate self-employment of Nepali youth, but it is not happening on the ground. Powerful middlemen who control businesses seize the loans set aside for women and low-income individuals and communities." Translated from the Himal Khabar <a href="https://www.himalkhabar.com/news/134729">original</a> by Shristi Karki.&nbsp; Read also:&nbsp; <a href="https://www.nepalitimes.com/news/women-moving-nepal-s-climate-activism">Women moving Nepal’s climate activism</a>, Sewa Bhattarai <a href="https://www.nepalitimes.com/banner/the-women-connecting-nepal">The women connecting Nepal</a>, Sahina Shrestha

Nepal’s enterprising women in politics

<figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109121112/636b8b9c9c7e80680e06b2afjpeg.jpg" alt=""/><figcaption>Illustration: DIWAKAR CHHETRI</figcaption></figure>The COVID-19 pandemic has caught the world off guard, with enormous repercussions for Nepal’s economy because of its reliance on overseas migration and tourism.Nepal’s three week lockdown has been extended till at least 27 April. Flights are not going to restart till mid-May at the earliest. The country’s remittance-fueled, consumption-led economy, low manufacturing capacity, unemployment, huge trade deficit, high reliance on import-based consumption have been pre-existing challenges even before the lockdown. The pandemic has made everything more difficult.Tourism is the hardest hit, especially the hotel industry which is most vulnerable due to the fixed cost associated with not only salary and wages but also regular maintenance well as loan servicing obligations. Tourism is cash flow sensitive, and its oxygen supply has come to complete halt. It will take at least till 2021 for travel and tourism to revive, or rebound. Priority rescue measures are urgently required.Transport is another sector that needs urgent attention. Once the lockdown situation improves, transportation will kickstart itself. But till then, the industry needs support to manage maintenance and financial obligations.Aviation witnessed a quick rebound after the double whammy of the earthquake and Blockade, particularly for domestic movement. The situation is different this time. The high cost of grounded aircraft due to leasing, fixed and variable costs will pose a major challenge. Big ticket loan exposure and interest expense may just kill some operators. Most airlines have equipment on ‘Dry Lease’ that carry certain fixed costs ranging from $100-150,000 per month for smaller aircraft. Dollar fares for expats and tourists have been a major revenue earner for operators, and with tourism down this will dry up.Finance industry including the banking sector are operating at bare minimum, and only offering basic services such as cash operation including remittance services and basic trade finance. New book creation has virtually stopped as no loan processing is being carried out. <a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/opinion/also-keeping-financially-healthy-in-a-lockdown/" target="_blank" rel="noopener">Also keeping financially healthy in a lockdown</a>, Siddhant Raj PandeyLiquidity has been a problem that predates the pandemic. Nepali BFIs have  been long plagued by liquidity crunch, particularly after the real estate crash of 2009. After the earthquake, the industry faced a major credit crunch. The capital hike, reconstruction demand, a stable government all led to a surge in loan demand. But an unstable liquidity supply was a chronic threat.If prolonged, this could lead to assets price burst and real-estate could take the plunge. Banks would have to revalue risk assets, as most are backed by real estate collaterals. In short, non-performing assets need to be closelh monitored.  Remittance-dependence has fuelled consumption growth, and this could be affected by coronavirus outbreaks in destination coutnries for Nepali migrants like Japan, Malaysia, Korea and the Gulf. In addition, there is now <a href="https://www.nepalitimes.com/editorial/commercially-important-people/" target="_blank" rel="noopener">uncertainty about labour demand</a> because of the global downturn. Annual remittances could take a nosedive.Construction could pick up as soon as the lockdown is lifted. But big ticket projects, particularly ones with foreign contractors, in hydro, airports, highways could slow down and costs could overshoot. Banks with guarantee exposure in the construction sector could also be hit. The non-funded instrument could see ‘Willful Claim’ capitalising on grey area of force majeure, currently under discussion at the Nepal Rastra Bank and the banking sector. Trade may rebound quickly because of Nepal’s import-based consumption patterns. However, the dent in purchasing power capacity due to loss of business and employment could be a matter of concern.The Health Sector ironically may see a slowdown during the pandemic. The banks carry significant exposure in medical care in heads like working capital, term loan and fixed assets. Balance of Payments could be a major concern as remittances drop. Tourism is another forex earner that is hit hard. Exports were always negligible, but even that will be slowed further with the lockdown.  Revenue Collection could dry up due to shortfall in revenue targets.  This could limit spending and development in infrastructure projects, creating problems in multiple areas from employment, base level economic activities, consumption amongst others.Small and Medium Enterprises are key economic enablers and yet largely out of formal sector reach. This impact assessment could be bit tricky and may require a deep dive into both formal and informal source of borrowings.Perhaps linkage to cooperatives could be one way to establish the relationship so as to gauge the depth of the impact. The critical focus here should be on employment generation, domestic production and revenue collection. GDP has 15 main sectors contributing to it. It may be wise to run a predictive analysis of each critical sector that may impact employment, value chain, economy amongst others.These are trying times for the economy, and we must be strategic about pressing the right buttons to speed up the rebound. Sanjib Subba was until recently the CEO of Nepal Banking Institute.

Unlocking the economy post-lockdown

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78a69c7e80680e0646b2jpeg.jpg" alt="" width="1000" height="763"/><figcaption>Photo: BIKRAM RAI</figcaption></figure>With business coming to a grinding halt globally due to the COVID-19 pandemic, Nepal’s migration and tourism-based economy is being severely impacted.Global stock markets are in freefall, the US has halted trans-Atlantic flights, Italy is in lockdown, India has stopped issuing tourist visas, schools in Japan are closed, Qatar has banned nationals from 14 countries, Saudi Arabia has halted travel to nine countries, and although the virus has stabilised in next-door China, there is a danger there of reverse infection.But as the epidemic spreads, Nepal has officially admitted to only one confirmed case of COVID-19. Public health experts say this does not mean there are no infected people, it just means suspected cases have not been tested yet. They say the country is not prepared to deal with an outbreak.“The situation around the world is getting out of hand, but Nepal has been able to dodge a full-blown health crisis till now,” says Sameer M Dixit, a scientist at the Centre for Molecular Dynamics Nepal. “In an ideal situation the country would be under lockdown, but right now Nepal should stop all direct flights from highly affected countries.”Even though there are no overt signs of a health crisis, Nepal’s economy has already been hit hard and the impact is expected to worsen in the coming months as tourism collapses and air travel is further curtailed.The Asian Development Bank’s ‘<a href="https://www.adb.org/publications/economic-impact-covid19-developing-asia" target="_blank" rel="noopener">COVID-19 Economic Impact Assessment Template</a>’ released this week lays out the best- and worst-case scenarios for countries in the region. For Nepal, the bank predicts a loss of up to $322 million.The tourism sector has been impacted by travel restrictions imposed by Nepal and other countries, and airlines cancelling flights.The government decision late Thursday, after the print edition of this paper had gone to press, decided to revoke visa on arrival at Kathmandu for nationals of all countries. Visitors will still be allowed to enter Nepal but they will require a visa from a Nepali mission abroad and also a Coronavirus-free health certificate. The visa rule be effective 14 March to 30 April for now.The move comes one day after China cancelled all expeditions from its side of Mt Everest. The Nepali government has also cancelled all climbing expedition permits including Mt Everest for the spring season.Read also: <a href="https://www.nepalitimes.com/banner/why-nepal-must-watch-about-coronavirus-but-not-panic/" target="_blank" rel="noopener">Why Nepal must watch Coronavirus, but not panic</a>, Sameer M DixitEven before the government <a href="https://www.nepalitimes.com/latest/lets-call-off-visit-nepal-year-2020/" target="_blank" rel="noopener">called off Visit Nepal Year 2020</a>, the campaign was criticised for lack of international promotion and the money being wasted on domestic extravaganza. Although tourist arrivals saw only a slight drop to 101,400 in February, there was a 80% decrease in visitors from China.Official figures are not yet available for March and April, but the travel industry is reporting widespread cancellations. <a href="https://www.nepalitimes.com/latest/nepal-postpones-international-events-as-fear-of-covid-19-intensifies/" target="_blank" rel="noopener">Many international conferences and sports events have been postponed</a>. Hotel occupancy rates are dropping at what should have been peak season. Trekking and mountaineering expeditions have gone ahead but there has been a 50% decline in the number of clients. There are also reports of cancellations for April.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78a99c7e80680e0646b3jpeg.jpg" alt="" width="981" height="497"><figcaption> </figcaption></figure>“Hotel bookings are down by 60% in the 5-star hotels around Nepal,” Shreejana Rana, President of <a href="https://www.hotelassociationnepal.org.np/" target="_blank" rel="noopener">Hotel Association of Nepal</a>, told Nepali Times. “We had <a href="https://www.nepalitimes.com/banner/chinese-tourist-influx-to-nepal-in-2020/" target="_blank" rel="noopener">expected a surge in bookings </a>after Chinese New Year and during the spring from American and European tourists but that isn’t the case.”The first airlines to cancel flights were the ones operating to Chinese destinations: Himalaya Airlines, Sichuan Airlines and Tibet Airlines. Air China, China Southern and China Eastern are still operating flights, but with reduced frequency and smaller aircraft.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78ab9c7e80680e0646b4jpeg.jpg" alt="" width="4096" height="2730"><figcaption> </figcaption></figure><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78ae9c7e80680e0646b5jpeg.jpg" alt="" width="3644" height="2429"><figcaption> </figcaption></figure>“The tourism industry is very sensitive. The smallest problem has widespread impact, and it takes a lot of time to recover from it,” says Deepak Raj Joshi, former CEO of <a href="https://www.welcomenepal.com/" target="_blank" rel="noopener">Nepal Tourism Board</a>. “We need to start preparing for the future right away.”The Tourism Ministry is now repurposing <a href="https://www.nepalitimes.com/editorial/the-nepal-brand/" target="_blank" rel="noopener">Visit Nepal Year 2020</a> towards a 2020-2030 ‘Tourism Decade’, and the hotel industry is relying on domestic promotion, encouraging Nepalis to travel to Pokhara and to go trekking during the new-year break in April.Nepal expects about 250 climbers from 24 expeditions on Mt Everest this spring, even though Korean, Japanese and some western expeditions have cancelled. This is half down from last year, when there was a <a href="https://www.nepalitimes.com/banner/most-days-its-not-so-crowded-on-mt-everest/" target="_blank" rel="noopener">notorious traffic jam on the summit</a>. On Wednesday, China closed its side of the mountain due to the COVID-19 scare.“Everest expeditions are starting soon but we are still trying to figure out what to do if the mountaineers catch coronavirus during the trip,” says Sarita Lama of the <a href="https://www.taan.org.np/" target="_blank" rel="noopener">Trekking Agencies’ Association of Nepal (TAAN)</a>. “This is so bad it may take us years to recover from the crisis.” Trek bookings are also at half of last year’s numbers.Nepal’s main source of foreign exchange, its <a href="https://www.nepalitimes.com/opinion/for-nepals-migrant-workers-good-news-in-small-bites/" target="_blank" rel="noopener">two million workers abroad</a>, will also be hit. Qatar this week imposed a ban on workers from 14 countries, including Nepal. Nepal is preventing workers from flying to South Korea.The High-Level Coordination Committee also decided on Thursday to stop issuing labour permits for Nepali migrants seeking to go abroad for work. It is uncertain when the migration ban will be lifted.Read also: <a href="https://www.nepalitimes.com/opinion/labour-mobility/crossborder-virus-and-nepali-migrant-workers/" target="_blank" rel="noopener">Crossborder virus and Nepali migrant workers</a>, Upasana KhadkaNepal’s major infrastructure projects all face delays because of the reliance on Chinese contractors and workers. The start of the epidemic in January coincided with Chinese New Year, which meant that workers at new airport projects in Pokhara, Bhairawa and numerous hydropower plants under construction who had gone home could not return.Even among those who have returned, some have been quarantined, including 70 who work on Pokhara’s new airport. If given the all-clear, they will be released only on 16 March.“Although work has slowed down these past couple of months, we will work night and day to meet the target completion date of July 2021,” Pokhara airport manager Binesh Munakarmi assured Nepali Times.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109101152/636b78b19c7e80680e0646b6jpeg.jpg" alt="" width="3000" height="1688"><figcaption> </figcaption></figure>Construction at Bhairawa airport, which was scheduled to open later this year, is expected to be delayed.“Many of our engineers and workers have not been able to come back to Nepal,” says Bhairawa airport project chief Prabesh Adhikari. “There are about 25 Chinese workers on site and we are trying to move construction forward, but we need the rest to return.”The timely completion of<a href="https://archive.nepalitimes.com/article/nation/reservoirs-of-suspicion/hydropower-geopolitics%20,3991" target="_blank" rel="noopener"> hydropower projects</a>, of which 65 have the involvement of Chinese companies, looks more bleak. Construction at 25 of these under-construction projects have not resumed since Chinese New Year. Workers have not been allowed to travel out of China, and necessary electro-mechanical equipment has also not been dispatched from China to Nepal.“Even if one Chinese engineer is absent, or if one critical piece of equipment does not arrive from China, work stops,” says the <a href="http://www.ippan.org.np/public/page/ippan-committee" target="_blank" rel="noopener">President of the Independent Power Producers’ Association</a> Shailendra Guragain. “If the situation worsens, we may be seeing losses amounting to a billion dollars in our projects.”Read also: <a href="https://www.nepalitimes.com/here-now/the-climate-connection-to-covid-19/" target="_blank" rel="noopener">The climate connection to Covid-19</a>, Rastraraj Bhandari

Nepal’s economy, already weak, takes direct hit

Nepal is ranked highest among South Asian countries in the GDP growth with 7.5% in FY2017, showing steep recovery after the earthquake and Blockade. The country must create 240,000 jobs a year to maintain its employment rate which is expected to slow down to 4.6% in 2018, according to South Asia Economic Focus report by World Bank. However, growth in FY2018 will be 4.6% according to the Bank’s twice-yearly Nepal Development Update. The main challenge will be managing fiscal and current account deficits.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110710114/6368cabd9c7e80680e02f32fjpeg.jpg" alt="" width="472" height="337"/><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110710114/6368cabf9c7e80680e02f330jpeg.jpg" alt="" width="325" height="331">Similarly, the World Economic Outlook of the International Monetary Fund (IMF) shows Nepal’s monthly remittance rose to an all-time high of $680 million in March 2018. The reason is said to be an increase in bank deposits to almost 16%. However inflation rate also rose to the 6% in the same period, the IMF said.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110710114/6368cac09c7e80680e02f331jpeg.jpg" alt="" width="491" height="335">

Growing GDP and remittance

India and Pakistan are twins separated at birth. Tensions between them have been at a hair trigger ever since independence and has erupted into full scale conflict at least four times in the past 80 years.
The 22 April terrorist attack in Kashmir that killed 25 Indian tourists and a Nepali citizen, threatens to escalate tension between the two nuclear-armed nations. India has squarely blamed Pakistan for the attacks, and Prime Minister Narendra Modi has given his military “operational freedom” to respond. Pakistan has said it has credible intelligence of an Indian military strike and its officials have promised a “full spectrum” response — a code for a <a href="https://nepalitimes.com/editorial/thinking-the-thinkable">nuclear retaliation</a>.
For Nepal, the killing of its national in the Pahalgam attack comes as another stark reminder that in conflicts from Afghanistan to Iraq, from <a href="https://nepalitimes.com/opinion/how-to-agree-an-armistice-in-ukraine">Ukraine</a> to Israel, <a href="https://nepalitimes.com/news/10-nepalis-from-one-town-fighting-in-ukraine">Nepalis are getting caught in the crossfire</a>. The last time full-scale fighting broke out between <a href="https://nepalitimes.com/opinion/peacemongers-at-india-pakistan-border">India and Pakistan</a> on Kargil in 1999, at least 22<a href="https://nepalitimes.com/here-now/india-s-trial-by-fire-for-soldiers-from-nepal?%27%5C%22="> Nepalis fighting for the Indian Army</a> were killed in action.
Three of Nepal’s immediate neighbours (China, India, Pakistan) have nuclear weapons, and they do not have good relations. With China supplying weapons, <a href="https://nepalitimes.com/editorial/war-and-warming">missile technology</a> and other support to Pakistan, this triangular friction could set off a regional conflagration.&nbsp;
<a href="https://www.nature.com/articles/s43016-022-00573-0" target="_blank">Research at Rutgers University</a> has calculated that even a week-long tactical nuclear exchange between India and Pakistan would throw up so much smoke and debris into the atmosphere that it would block out the sun for years, and lead to a collapse of the <a href="https://nepalitimes.com/news/grow-nourish-sustain-together-world-food-day">global food system</a>. This does not take into account the radioactive fallout that prevailing winds would blow up to <a href="https://nepalitimes.com/here-now/lives-on-the-line-in-the-himalaya">the Himalaya</a>, contaminating glaciers that are the sources of <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">Asia’s main rivers</a>.
The impact of <a href="https://nepalitimes.com/news/climate-breakdown-linked-to-thame-flood">climate breakdown </a>on High Asia was already ringing alarm bells about its <a href="https://nepalitimes.com/news/himalayan-icecap-melting-faster-than-thought">shrinking ice cap</a> reducing the dry season flow of water downstream. Water was going to be the next strategic commodity, geopolitical experts warned, and the next wars in Asia would be over water.
That water war is already happening. India retaliated to the Kashmir attack by suspending the <a href="https://www.nytimes.com/2025/04/24/world/asia/india-pakistan-indus-waters-treaty.html" target="_blank">Indus Waters Treaty</a> of 1960 mediated by the World Bank that has withstood at least three wars between India and Pakistan. The treaty gives India control over the three eastern tributaries of the Indus (<a href="https://en.wikipedia.org/wiki/Beas_River" target="_blank">Beas</a>, <a href="https://en.wikipedia.org/wiki/Ravi_River" target="_blank">Ravi</a> and <a href="https://en.wikipedia.org/wiki/Sutlej" target="_blank">Sutlej</a>), while Pakistan got water from the Indus and two of its western tributaries (<a href="https://en.wikipedia.org/wiki/Indus_River" target="_blank">Indus</a>, <a href="https://en.wikipedia.org/wiki/Chenab_River" target="_blank">Chenab</a> and <a href="https://en.wikipedia.org/wiki/Jhelum_River" target="_blank">Jhelum</a>.
Pakistan was assured of 70% of the annual flow, and India could use a reasonable amount of water for<a href="https://archive.nepalitimes.com/news.php?id=15231"> irrigation and hydropower</a>. &nbsp;Within days of its threat, India stopped water flowing down to Pakistan from the Chenab river and is reportedly preparing to do the same on the Jhelum.
The sabre-rattling has reached a crescendo. Besides threats and counter-threats there are also symbolic drills, with the Indian Air Force practicing landing on an expressway in Uttar Pradesh by its Rafale, Su-30 and Jaguar fighter jets to demonstrate ‘operational readiness’. In response Pakistan test-fired its Abdali ballistic missile that can carry a nuclear warhead and has a range of 450km.&nbsp;
The danger is that with ultra-nationalist rhetoric and the beating the war drums by both sides, India’s government and Pakistan’s military may have to ‘do something’ to appease domestic public opinion. But any tactical strike, an artillery exchange, or territorial incursion could quickly escalate out of control.
Expecting an Indian retaliation for the Pahalgam killings, Pakistan is using<a href="https://nepalitimes.com/opinion/interfaith-collaboration-for-nuclear-disarmament"> nuclear deterrence </a>and warning of “catastrophic consequences”. The two neighbours came close to a nuclear exchange in 2019 after an attack on the Indian military in Kashmir, and prompt international intervention led by the United States cooled tensions.&nbsp;
This time, the <a href="https://nepalitimes.com/news/trump-shock-wave-hits-nepal">Trump administration</a> is too distracted and not as engaged. Pakistan has denied it was responsible for the terrorist attack and called on Washington to stop a possible Indian retaliation. India and Pakistan have stopped overflights by each other’s airlines, and some international carriers have even stopped flying over Pakistan fearing an air war.
Washington, Beijing, the UN and the EU have all urged restraint. Iran, which has good relations with both India and Pakistan has sent its foreign minister to urge both countries not to go into a tit-for-tat war. Iran has its own nuclear flashpoint to worry about with tensions in Israel, &nbsp;Yemen and Syria.
India and Pakistan both share similar problems of joblessness, <a href="https://nepalitimes.com/here-now/why-nepal-s-poverty-rate-is-stuck">poverty </a>and <a href="https://nepalitimes.com/here-now/climate-change-new-threat-to-nepal-s-rhinos">environmental threats</a>. Neither side needs the threat of a senseless war, and we in the neighbourhood do not need it either.&nbsp;
Kunda Dixit
This Editorial is brought to you by <a href="https://nepalitimes.com/" target="_blank">Nepali Times</a>, in collaboration with <a href="https://inpsjapan.com/en/" target="_blank">INPS Japan</a> and <a href="https://sgi-peace.org/" target="_blank">Soka Gakkai International</a>, in consultative status with UN ECOSOC.

Nukes in the neighbourhood

The streets of Patan are alive this month with lavender jacaranda trees under rain-washed skies as <a href="https://nepalitimes.com/banner/the-red-god-rises-again-in-patan">the chariot of Rato Matsyendranath</a> is pulled across town. This is the festival of the rain god, and inevitably the heavens opened up and pre-monsoon showers pelted the chariot as it started being pulled in Pulchok last week. Thousands of devotees, onlookers and the chariot procession organisers thronged the streets on the first day last week. The rhythmic cymbals and drums exuded a vibrant energy as the enormous four wheels turned and the chariot lurched.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025051007050_81df97744db16f732a419dc1f1579d235ce3df37642b078f50b83bd4bd026688.jpg" data-media-id="editor_1" data-image-id="2025051007050_81df97744db16f732a419dc1f1579d235ce3df37642b078f50b83bd4bd026688" data-rendition-name="original" width="1000" height="1503" loading="lazy" alt="Divine chariot"> </figure>  The<a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/Red-rain-god,3141"> red rain god</a> has Hindu and Buddhist antecedents, alternatively called Bungadya and<a href="https://nepalitimes.com/here-now/kathmandu-s-gravity-defying-chariot-festival"> Karunamaya</a> — reflecting Kathmandu Valley’s syncretic mixture of the two religions.&nbsp; “Bungadya is a profoundly <a href="https://nepalitimes.com/opinion/12-full-opinion/marketing-the-intangible">intangible form of heritage</a>,” explains heritage expert Monalisa Maharjan. “It embodies traditional knowledge,<a href="https://nepalitimes.com/multimedia/reviving-nepal-s-craft"> artisanal skills passed down through generations</a>. Local communities and specific families have specified roles in being custodians of the heritage, ensuring their survival over the centuries.” There are many legends and stories about this annual tradition. Lichhavi king Narendra Dev is supposed to have brought Rato Matsyendranath from Assam to Kathmandu Valley to convince Guru Gorakhnath to lift a spell that created a two-year drought in Kathmandu.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250510050520_347a9a398f8a9abc4a7fb4e2774fde8264cccbdce8bdab23851ab3f0e73c3e8a.jpg" data-media-id="editor_6" data-image-id="20250510050520_347a9a398f8a9abc4a7fb4e2774fde8264cccbdce8bdab23851ab3f0e73c3e8a" data-rendition-name="original" width="1503" height="1000" loading="lazy" alt="Divine chariot"> </figure>  Matsyendranath was Gorakhnath’s mentor, and upon seeing him, the serpents were released, unleashing the rains. The chariot festival honours the return of this life-giving rain. The deity is seen as an icon for thriving agriculture, t<a href="https://nepalitimes.com/here-now/before-the-next-monsoon">he arrival of monsoon</a> showers, and the welfare of the community. Read also: <a href="https://nepalitimes.com/opinion/the-reign-of-the-god-of-rain">The reign of the god of rain</a>, Vidhu Prakash Kayastha Till this day, the Rato Matsyendranath festival is no ordinary celebration. Patan does not sleep for a month as the chariot is pulled through various neighbourhoods. It unfolds at a state level with the president (formerly the king) attending the climax of the Bhoto Jatra in Jawalakhel later this month.&nbsp; The intergenerational transmission of tradition is unique in the world, and the reason the festival is one of the most vibrant cultural expressions that thrives despite inroads of modernity. The other unique aspect is that it is a transnational festival, binding Patan with Guwahati in the Indian state of Assam.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025051005058_8bc685ada13045d863b28e3eed91c931da2b510714586af6fd7eb5d1e298a24a.jpg" data-media-id="editor_9" data-image-id="2025051005058_8bc685ada13045d863b28e3eed91c931da2b510714586af6fd7eb5d1e298a24a" data-rendition-name="original" width="1000" height="1503" loading="lazy" alt="Divine chariot"> </figure>  “Unlike Nepal, where the deity commands grandeur and devotion, many in Assam are unaware of Rato Matsyendranath,” says Khagen Sharma of Gauhati University, which convened <a href="https://nepalitimes.com/news/nepal-assam-connection-revived">a symposium in February in Guwahati on the rain god</a>. Attending was a delegation led by Lalitpur Mayor Chiribabu Maharjan, organisers of the festival, and builders of the chariot. After the symposium, a committee was formed to explore and revive the tradition in Assam as well. Although the team had planned to visit Nepal this month, logistical challenges delayed the trip. Still, there are plans to build a Guru Matsyendranath statue in Assam to reestablish regular worship practices in the Guwahati shrine.&nbsp; The vines used to build the chariot in Patan are sourced from the jungles of Assam. But Sharma notes that in recent years unclear regulations have blocked the official import of the vines, although they are still brought to Nepal informally. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/makers-of-machhindranath,2204">chariot making</a> has also had a taste of modernisation in recent times. In the past, even a single nail or piece of steel was avoided. But over time, the wooden structure, particularly the shaft between the wheels, has been replaced with bronze. When that too proved unstable, metal clamps were introduced, which have become a pragmatic compromise.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250510050524_b2a819a5791612f14c81d30fc393dbd3f99f0c64b90a9110e8b0855d944bfa93.jpg" data-media-id="editor_12" data-image-id="20250510050524_b2a819a5791612f14c81d30fc393dbd3f99f0c64b90a9110e8b0855d944bfa93" data-rendition-name="original" width="1500" height="998" loading="lazy" alt="Divine chariot"> </figure>  Another welcome change is the focus on safety. Builders climbing the chariot’s tower now wear harnesses and there are efforts in crowd control. The most visible change in recent years has been the involvement of Patan’s enthusiastic youth in the festival — the tradition is now passing to a new generation. Says Matsyendranath expert Vidhu Kayastha: “There is more energy, the young people in red t-shirts this year were very organised, these modern touches aren’t diluting our culture, they’re keeping it alive in new forms.” He adds, “We are <a href="https://nepalitimes.com/here-now/searching-for-a-homeland-away-from-home">reconnecting with our roots</a>, we have more resources, more awareness than ever before. We must not be swept away by western values that may not serve us, and in some ways, cause more harm than good. We must revive our own culture.”&nbsp;

Divine chariot

In 2025, two seemingly disconnected acts of violence shattered the illusion of stability in the region. In March, <a href="https://www.ft.com/content/16f7f947-1e96-4206-9844-891378adc683" target="_blank">militants hijacked a passenger train</a> near the Bolan Pass in Balochistan, executing soldiers in cold blood. A month later, <a href="https://www.nytimes.com/2025/04/22/world/asia/kashmir-terrorist-attack.html" target="_blank">gunmen in Kashmir’s</a> Pahalgam Valley massacred tourists. 
In both Islamabad and New Delhi, <a href="https://www.aljazeera.com/news/2025/4/25/were-cursed-kashmiris-under-attack-across-india-after-pahalgam-killings" target="_blank">the reaction was reflexive:</a> condemn the violence, <a href="https://www.economist.com/asia/2025/04/22/india-and-pakistan-could-come-to-blows-over-kashmir" target="_blank">blame external enemies</a>, declare the situation contained. But South Asia’s leaders are not fighting terrorists alone. They are fighting the consequences of their own betrayals.
Across <a href="https://www.bbc.com/news/world-asia-26272897" target="_blank">Balochistan</a>, <a href="https://www.bbc.com/news/world-south-asia-11693674" target="_blank">Kashmir</a>, <a href="https://www.crisisgroup.org/asia/south-asia/india/346-finding-way-out-festering-conflict-indias-manipur" target="_blank">Manipur</a>, and beyond, decades of <a href="https://www.amnesty.org/en/projects/enforced-disappearance-in-south-asia/" target="_blank">enforced disappearances</a>, broken promises, and brute militarisation have hollowed out the social contracts meant to hold these nations together. The grievances that drove rebellions from the 1940s through the 1990s – demands for dignity, recognition, and political agency – were never meaningfully addressed. They were buried beneath asphalt and propaganda, paved over by development projects and security checkpoints.
States may claim victory. But their victories are mirages, dissolving the moment anyone looks too closely. South Asia’s unfinished wars are not relics of a violent past. They are live ammunition, loaded into the future.
<a href="https://www.theguardian.com/world/2025/mar/24/he-only-wanted-revenge-the-bloody-insurgency-in-balochistan-gaining-lethal-momentum" target="_blank">Balochistan</a> has been at war with Pakistan for most of its modern history. Rich in gas, minerals, and coastline, the province has been plundered for decades under the language of national development. 
Projects like the <a href="https://eastasiaforum.org/2020/11/26/pakistans-three-evils-cpec-and-good-governance/" target="_blank">China-Pakistan Economic Corridor (CPEC)</a> promise progress but deliver exclusion: minerals are mined, ports are secured, but Baloch homes are raided. 
The insurgency endures not because of foreign conspiracies, as Islamabad endlessly insists, but because the Pakistani state remains incapable of seeing its <a href="https://thebalochistanpost.net/2025/01/enforced-disappearances-in-balochistan-in-december-2024-tbp-report/" target="_blank">Baloch citizens</a> as anything other than a security problem to be managed.
In <a href="https://www.forbes.com/sites/ranisingh/2016/07/12/kashmir-in-the-worlds-most-militarized-zone-violence-after-years-of-comparative-calm/" target="_blank">Kashmir</a>, the Indian government claims to have <a href="https://www.nytimes.com/2023/03/08/world/asia/kashmir-village-defense-committees.html" target="_blank">“normalised” the valley</a> after revoking its autonomy in 2019. It <a href="https://www.cfr.org/global-conflict-tracker/conflict/conflict-between-india-and-pakistan" target="_blank">looks a lot like occupation</a>. Soldiers outnumber local leaders, dissent is criminalised, internet shutdowns suffocate public life. Tourism campaigns and investment summits cannot erase a generation raised under curfew and surveillance.
<a href="https://www.bbc.com/news/world-asia-india-66260730" target="_blank">Manipur’s descent into ethnic bloodshed</a> in 2023 exposed another fault line Delhi prefers to ignore. Long-simmering tensions between the Meitei and Kuki communities erupted into violence that shattered any illusions of northeastern integration. The central government’s delayed, politicised response made clear what many Manipuris had always suspected: they are citizens of India only when convenient.
Even the <a href="https://msf.org.au/rohingya-worlds-largest-stateless-population" target="_blank">Rohingya, stateless and exiled from Myanmar</a>, find themselves entangled in South Asia’s ethnonationalist calculus. Fleeing genocide, they are criminalised anew in Bangladesh and India – trapped between the countries that reject them and the memories that refuse to let them go.
South Asia’s states have excelled at suppressing rebellion. But failed at extinguishing the reasons rebellions rise in the first place. And the wars South Asia tries to forget at home have found new life abroad.
Across <a href="https://www.abc.net.au/news/2024-06-17/modis-indian-government-accused-of-spying-silencing-critics/103974414" target="_blank">Canada, Australia, Britain, and the United States</a>, diasporic communities have become memory-keepers and, increasingly, <a href="https://www.business-standard.com/world-news/khalistan-supporters-hold-protest-outside-indian-consulate-in-vancouver-123092600087_1.html" target="_blank">the agitators</a> for the struggles their home states would rather erase.
Khalistan flags fly outside Indian consulates in Vancouver and <a href="https://www.tribuneindia.com/news/punjab/perturbed-over-waving-of-khalistani-flags-at-an-event-in-melbourne-india-warns-australia-of-khalistan-separatists-and-their-links-with-terror-groups-458320/" target="_blank">Melbourne</a>. Tamil activists march through London, demanding accountability for the <a href="https://www.aljazeera.com/news/2024/5/19/grim-reminder-sri-lankas-tamils-mark-15-years-since-end-of-civil-war" target="_blank">massacres in Mullivaikkal</a>. Kashmiri protests in Washington and New York refuse to let India’s crackdown slip into diplomatic amnesia.
For host countries, these movements pose uncomfortable questions. Freedom of expression collides with fears of extremism. Clashes erupt between communities carrying wounds that their new homelands.
Meanwhile, South Asian states pursue their adversaries across borders. India faces allegations of <a href="https://www.nbcnews.com/news/world/canada-says-india-home-minister-ordered-campaign-against-sikh-activist-rcna177972" target="_blank">targeting Sikh activists for assassination in Canada</a> and the <a href="https://www.npr.org/2024/10/27/g-s1-29561/sikh-separatist-assassination-india" target="_blank">United States</a>. Pakistan continues to court Kashmiri separatists abroad while crushing Baloch dissent at home. <a href="https://apnews.com/article/sri-lanka-tamils-civil-war-dead-5b372b0bba567837c5a4d94250040e7d" target="_blank">Sri Lanka</a> lobbies furiously to brand Tamil diaspora organisations as fronts for terrorism, even as it stonewalls investigations into its own wartime atrocities.
The old insurgencies have not been defeated. They have been globalised. South Asia’s governments have long mistaken silence for stability.
In Punjab, India broke the back of the <a href="https://www.cnn.com/2023/10/06/india/india-canada-sikh-khalistan-analysis-intl-hnk/index.html" target="_blank">Khalistan insurgency</a> through brute force. The fields grew green again, the trains ran on time. But the wounds were never closed, the <a href="https://www.dw.com/en/why-is-indias-khalistan-separatist-movement-on-the-rise/a-65081729" target="_blank">movement’s heart beats</a> not in Amritsar but in Brampton and Surrey.
In Sri Lanka, the <a href="https://www.academia.edu/4738983/The_Man_Who_Destroyed_Eelam" target="_blank">military crushed the Tamil Tigers</a> with <a href="https://www.newyorker.com/magazine/2011/01/17/death-of-the-tiger" target="_blank">overwhelming brutality in 2009</a>. <a href="https://www.scmp.com/week-asia/politics/article/3264148/we-want-our-children-back-sri-lankan-families-still-demanding-justice-their-missing-loved-ones" target="_blank">Tamil families still search for their missing</a>, still mourn their dead – and still organise across the diaspora for justice that remains undelivered.
In Kashmir, Delhi boasts of new <a href="https://www.aljazeera.com/opinions/2023/2/4/kashmir-is-bleeding-its-economy" target="_blank">highways and investment corridors</a>, showcasing the region as a trophy of unity. But when the visitors leave and the cameras are packed away, <a href="https://harvardlawreview.org/print/vol-134/from-domicile-to-dominion-indias-settler-colonial-agenda-in-kashmir/" target="_blank">the checkpoints, the raids, and the quiet despair remain.</a>
Victory parades fade. Grievance endures. Suppressing insurgency may end battles. It does not end the ideas that fueled them. In a region where <a href="https://www.nytimes.com/2025/04/23/world/asia/kashmir-attack-india-pakistan.html" target="_blank">history is rarely past</a>, and memory is rarely voluntary, states that rule through repression are only ever buying time. And often, not very much.
South Asia’s unfinished wars are not accidents. They are the inevitable consequences of states that confuse conquest with consent, and erasure with reconciliation. They cannot legislate memory out of existence.
Every <a href="https://www.bbc.com/news/articles/c15qyyzz89lo" target="_blank">disappeared son in Balochistan</a>, every <a href="https://medium.com/the-wvoice/the-half-widows-in-kashmir-fef80c6b88e9" target="_blank">half-widow in Kashmir</a>, every <a href="https://www.doctorswithoutborders.org/what-we-do/focus/rohingya-refugee-crisis" target="_blank">refugee child born stateless in a Rohingya camp</a> carries forward the memory of betrayal – a memory that outlives soldiers, politicians, and peace accords alike.
The region’s future will not be decided by GDP figures or infrastructure projects alone. It will be decided by whether its governments can summon the political courage to face the truths they have long suppressed – or whether they will continue down a path <a href="https://theconversation.com/india-is-using-the-g20-summit-to-further-its-settler-colonial-ambitions-in-kashmir-205166" target="_blank">where forgetting is demanded</a>, and rebellion becomes inevitable.
Shyam Tekwani is a professor at the Daniel K. Inouye Asia-Pacific Center for Security Studies in Hawaii. This <a href="https://dkiapcss.edu/nexus_articles/ghosts-at-the-border-south-asias-unfinished-wars/" target="_blank">article</a> was originally published on <a href="https://dkiapcss.edu/security-nexus/" target="_blank">DKI APCSS Security Nexus.</a> The views expressed in this article are those of the author and do not reflect the official policy or position of DKI APCSS, the Department of Defense, or the US Government. The appearance of external hyperlinks does not constitute endorsement by the United States Department of Defense (DoD) of the linked websites, or the information, products, or services contained therein. DoD does not exercise any editorial, security, or other control over the information you may find at these sites.

Balochistan to Kashmir

Most Nepalis thought they had seen the last of it after <a href="https://nepalitimes.com/news/11-56-25-april-2015-wkc9q2an">the 25 April 7.8 magnitude </a>earthquake ten years ago. But the Himalaya had more surprises in store. On 12 May, another 7.3 magnitude tremor that some said was an aftershock, but was strong enough to itself be a major earthquake, struck Dolakha.&nbsp; Not many people had heard of Singati till then — a cluster of houses by the Tama Kosi River along a narrow gorge that is the roadhead to Rolwaling Valley.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_57b6e316656851f71eca56ca6f98d9bbcc820c1a00d62af3c990725b4361244d.jpg" data-media-id="editor_1" data-image-id="20250508110520_57b6e316656851f71eca56ca6f98d9bbcc820c1a00d62af3c990725b4361244d" data-rendition-name="original" width="1000" height="1500" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_016534fb2b6a79957402281cda768efb83a146786377e39e11df3e251d37159e.jpg" data-media-id="editor_2" data-image-id="20250508110520_016534fb2b6a79957402281cda768efb83a146786377e39e11df3e251d37159e" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>  It was here that dozens were killed on 25 April in the first earthquake. Hundreds of <a href="https://archive.nepalitimes.com/article/nation/Singati-rising-from-rubble-rebuilding,3703">Singati survivors</a> had lined up for food and relief supplies in the morning of 12 May when the second earthquake triggered a rock slide that buried a nearby camp. At least 50 people were killed. &nbsp; Three hours later, a US Marine Corps UH-1Y Venom helicopter landed in a nearby cornfield to pick up the wounded, and flew off. The aircraft lost contact with air traffic control in Kathmandu and its wreckage was located high on Kalinchok four days later. Six American servicemen, two Nepal Army soldiers, and five wounded civilians from Singati were killed. Today, Singati bears little physical scar of the multiple tragedies that struck the town ten years ago. Most <a href="https://nepalitimes.com/multimedia/bungamati-builds-back">houses have been rebuilt</a> as urban-style concrete structures, and Singati has become an economic hub on the road leading up to several hydropower plants and a<a href="https://nepalitimes.com/banner/off-the-beaten-trek-in-nepal"> popular trekking destination</a>.&nbsp; The town looks less like a village and more like a suburb of the Dolakha district headquarter of Charikot, 47km away.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_196f341d1df1403ba133e5dfeb837eec20d7cbcb4c8c56b17cc5598810de5df2.jpg" data-media-id="editor_6" data-image-id="20250508110520_196f341d1df1403ba133e5dfeb837eec20d7cbcb4c8c56b17cc5598810de5df2" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110524_ae66c4a92430f67db51b5e11e017059eedfbac4cb18c8e073f2a50cca1fe904e.jpg" data-media-id="editor_7" data-image-id="20250508110524_ae66c4a92430f67db51b5e11e017059eedfbac4cb18c8e073f2a50cca1fe904e" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>  “The demand for construction material, cement, iron rods and bricks peaked after the earthquakes,” says Suresh Khadka, who owns a hardware business here and now supplies material to the 456MW Upper Tama Kosi hydropower project that is undergoing repairs after it was damaged by a landslide last year. The demand for cement boomed since most residents believe, not necessarily correctly, that <a href="https://nepalitimes.com/banner/in-a-disastrous-state">cement houses are safer</a>. Although Khadka did well selling construction material after the earthquake, he worries that most new structures do not follow seismic-resistant building codes.&nbsp; The construction boom financed by bank loans has in turn forced many from Singati to <a href="https://nepalitimes.com/banner/making-overseas-migration-better">migrate overseas for work</a> so they can service their debt.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110524_50caa4530bd5ff9120cf7ab70a62173846d337ef448ff8bac339f3faa375a9e2.jpg" data-media-id="editor_10" data-image-id="20250508110524_50caa4530bd5ff9120cf7ab70a62173846d337ef448ff8bac339f3faa375a9e2" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> <figcaption>Suresh Khadka</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_ef8b7d3993fc3b5df852bbf952feb3fbabc96d6883b0d5eb74ee5c60f4123b83.jpg" data-media-id="editor_11" data-image-id="20250508110520_ef8b7d3993fc3b5df852bbf952feb3fbabc96d6883b0d5eb74ee5c60f4123b83" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> <figcaption>Phu Doma Sherpa (right)</figcaption> </figure>  “My family had no choice but to borrow money to rebuild our home since the government compensation was not enough, and ten years later we are still paying off the loan,” says Phu Doma Sherpa, 60. Because of the shortage of qualified masons and proper seismic engineering, <a href="https://nepalitimes.com/here-now/structural-problems">many of the buildings are of questionable building standards </a>and the traditional architecture has been abandoned, admits Kul Bahadur Budathoki, deputy chair of the municipality. “But these buildings were more expensive than what the government grants could cover, many people here are heavily in debt and the men have <a href="https://nepalitimes.com/here-now/every-day-is-closer-to-pay-day">migrated to the Gulf to pay their loans</a>,” Budathoki says.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_32f89e97b7e757fc9286c0bbb671f48ea8d4468e9634fa646d7247c650ad8480.jpg" data-media-id="editor_14" data-image-id="20250508110520_32f89e97b7e757fc9286c0bbb671f48ea8d4468e9634fa646d7247c650ad8480" data-rendition-name="original" width="1501" height="1079" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> <figcaption>Kul Bahadur Budathoki</figcaption> </figure>  Singati is in a multi-hazard zone. The <a href="https://archive.nepalitimes.com/article/nation/Singati,3091">12 May 2015 earthquake </a>could have led to the collapse of Nepal’s largest glacial lake, <a href="https://nepalitimes.com/here-now/stairway-to-heaven">Tso Rolpa</a>, upstream. Due to global warming, the glacier has turned into an expanding lake 3.5km long, and its collapse would have unleashed a catastrophic Himalayan tsunami down the Tama Kosi Valley, with Singati directly in its path. Singati has literally risen from the ashes of 2015, with its residents beginning to recover from the trauma and financial toll. But it is not out of danger as <a href="https://nepalitimes.com/news/climate-breakdown-linked-to-thame-flood">climate breakdown </a>magnifies the risk from future earthquakes.

nepal-economy