Bhogendra Kathayat successfully defended his PhD thesis at Tribhuvan University, and the very next night he was at Tribhuvan International Airport.&nbsp; No, not to emigrate, but to captain a Nepal Airlines Airbus A330 on a 7-hour flight to Narita. Capt Kathayat, 41, is now the only PhD airline pilot in Nepal, and one of a handful actively flying internationally. Read also: <a href="https://archive.nepalitimes.com/page/women-standing-above-the-ground">Standing above the crowd</a>, Ayesha Shakya Born in the village of Sanischare in Morang to a farming family, it was a hard life. Money was always short, and the four siblings went to a village school with mud floors.&nbsp; Kathayat excelled in his studies, earning a scholarship after topping the entrance exam out of 1,000 students for admission into<a href="https://nepalitimes.com/banner/tri-chandras-run-down-state-is-a-microcosm-of-nepal"> Tri Chandra College in Kathmandu</a>. Always good in maths, he passed his MSc in Physics with flying colours – which may be why he took up flying next.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024082213088_f1f4ffbfff44f8701cf6808495375afecc6f978632e5c1090af614ed5ccf2b45.png" data-media-id="editor_2" data-image-id="2024082213088_f1f4ffbfff44f8701cf6808495375afecc6f978632e5c1090af614ed5ccf2b45" data-rendition-name="original" width="1298" height="1316" loading="lazy" alt="doctor-pilot Capt Kathayat NT1"> </figure>  This was 2006, <a href="https://archive.nepalitimes.com/news.php?id=10616#.YV7B7tVBypp">the conflict</a> had just ended, and Nepal Airlines announced a scheme for pilot training. His parents did not have the collateral to afford the Rs3.4 million loan to pay for flight school. But Kathayat managed to borrow from relatives, and was off to Kota Bahru in Malaysia.&nbsp; When he returned after a year to join Nepal Airlines, Kathayat was flying Twin Otters but did not even have a driving license because he could not afford a car or motorcycle. He was a Himalayan bush pilot for the next seven years, flying in challenging weather and terrain to remote airfields carved out of mountainsides.&nbsp; Read also: <a href="https://nepalitimes.com/banner/60-years-of-living-dangerously">60 years of living dangerously</a>, Kunda Dixit In 2015, <a href="https://nepalitimes.com/latest/jet-closure-benefits-nepal-airlines">Nepal Airlines</a> bought two Airbus A320s, and Capt Kathayat was off to Toulouse – leaping straight from Twin Otters to twin jets. But it was easier for him than for colleagues who had been flying 757s, because Boeing and Airbus have different philosophies of flying. After being on 320s for three years, Kathayat upgraded to the bigger Airbus A330s, but still does not have a car license and arrived for this interview in a Honda Unicorn. “Although I felt like aviation was in my blood, there was this nagging sense that my education was incomplete,” Capt Kathayat recalls. Meeting Nepal’s foremost atmospheric scientist Arnico Panday on a flight, he was convinced that Nepal needed more scientific research into<a href="https://nepalitimes.com/here-now/air-pollution-is-more-dangerous-than-smoking"> air pollution</a>. Since Panday is an aviation buff himself, they devised a way to use decades of visibility data from Nepal’s airports to come up with policy-level solutions to <a href="https://nepalitimes.com/business/making-monsoon-flying-safer-in-nepal">improve aviation safety</a> as well as public health.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240822120848_523fef9cb91959c2b39f2798fbbd066d9d55f4c9778ff692dd957cb58cdd827e.png" data-media-id="editor_8" data-image-id="20240822120848_523fef9cb91959c2b39f2798fbbd066d9d55f4c9778ff692dd957cb58cdd827e" data-rendition-name="original" width="1922" height="1062" loading="lazy" alt="doctor-pilot Capt Kathayat NT3"> <figcaption>Capt Kathayat(right) and Arnico Panday(left)</figcaption> </figure>  Capt Kathayat used long layovers in Dubai, Doha and Tokyo to pore over historical airport data from Bhairawa and Kathmandu to look into how domestic and crossborder pollution sources, humidity, or aerosols affected the optical property of suspended particulates. He also analysed seasonal and time of day variations. The results were predictable: the number of days with <a href="https://nepalitimes.com/editorial/good-cop-bad-cop">heavy smog in Kathmandu</a> increased steeply after 2000. The days when planes could land under visual flight rules (VFR) had gone down in Bhairawa, especially as winter fog had become thicker, more frequent and long-lasting.&nbsp; Kathayat’s PhD thesis also carries recommendations. Bhairawa may not always be useful as an alternate airport for big jets in winter because it is fogged up when Kathmandu visibility is also below minima. Bhairawa will need a Cat II Instrument Landing System (ILS).&nbsp; The long-term solutions are to control pollution at source, and in Kathmandu that means vehicular emission, open garbage fires, cross residue burning, and in Bhairawa reducing industrial and crop burning. But for both airports, visibility will remain marginal unless pollution is controlled in north India. Capt Kathayat’s PhD adviser,<a href="https://nepalitimes.com/banner/arnico-panday-the-political-scientist"> Arnico Panday who is also a member of the opposition RSP</a>, is a proud mentor. He says: “Capt Bhogendra is the hardest working student I have ever supervised, and his topic is very relevant for aviation safety and efficient flight operations.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240822120856_f455cfac962eada84c53b588575b80051845107ab83371509d9eab6648fe03e8.png" data-media-id="editor_11" data-image-id="20240822120856_f455cfac962eada84c53b588575b80051845107ab83371509d9eab6648fe03e8" data-rendition-name="original" width="1636" height="1302" loading="lazy" alt="doctor-pilot CaptKathayat NT 4"> <figcaption>Arnico Panday, Capt Kathayat, and his Phd supervisor Narayan Chapagain after his Phd thesis defence </figcaption> </figure>  At a time when most <a href="https://nepalitimes.com/news/brain-gain-into-brain-drain">young Nepalis are cynical about the country’s future</a>, this doctor-pilot is an example of how, given the opportunity, even Nepalis from the humblest beginnings can rise up. Says Capt Kathayat: “It is fashionable nowadays to be negative about the government, but I keep reminding myself that I would not be where I am today without government subsidies, government scholarships and the opportunity that a government-owned airline provided me.” Yes, and plus a lot of hard work and perseverance.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024082306084_adf00d94a8d7229ab1ef05fe5862dfc3203e7f9a9a36b4df30ae328005c2368b.jpg" data-media-id="editor_13" data-image-id="2024082306084_adf00d94a8d7229ab1ef05fe5862dfc3203e7f9a9a36b4df30ae328005c2368b" data-rendition-name="original" width="996" height="2048" loading="lazy" alt="Nepal's flying doctor"> </figure>

Kunda Dixit

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Nepal’s flying doctor

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101128/636a219c9c7e80680e04174cjpeg.jpg" alt="" width="1400" height="933"/><figcaption>Photo: BIKRAM RAI</figcaption></figure>Nepal Airlines is once more making headlines for all the wrong reasons: this time it is over the state-owned carrier’s purchase of two Airbus 330-243s last year.A sub-committee of the Public Accounts Committee (PAC) of Parliament said Wednesday that it found irregularities in the deal involving the widebody jets, that it violated the Public Procurement Act, did not meet specifications, and that Rs 4.36 billion in kickbacks was involved.A parliamentary sub-committee on Tuesday recommended that the airline’s Managing Director Sugat Ratna Kansakar be sacked, and action be taken against Tourism and Civil Aviation Minister Rabindra Adhikari and two of his predecessors, the present and two past secretaries in the ministry, and dozens of other officials.Scandals are not new in the history of Nepal’s <a href="http://archive.nepalitimes.com/news.php?id=6057#.XC7qN1UzbIU" target="_blank" rel="noopener">flag carrier</a>, especially after 1990 when politicial interference in the airline ruined Nepal’s once-reputed flag-carrier. Allegations of corruption on appointments of general sales agents in Europe, kickbacks on the lease of jets and  high-level corruption dogged the airline throughout the 1990s.Read also: <a href="https://www.nepalitimes.com/here-now/what-can-nepal-learn-from-ethiopia/" target="_blank" rel="noopener">What can Nepal learn from Ethiopia?</a>, Kunda Dixit The $210 million Airbus deal is the biggest ever in the country’s aviation history, and so is the sound and fury surrounding allegations of payoffs. Once again, the airline is caught in a web of political and financial intrigue.The sub-committee report says the airline inflated the cost of the plane to $104.8 million, whereas the 2016 price tag was $88.09 million. It also says the plane's weight is only 230 tons when it should be 242 tons.But airline sources say the $88.09 was the price of the plane in 2009, and the escalation corresponds to inflation. They add that the jet's maximum takeoff weight was configured for full payload long-haul takeoffs from Kathmandu airport's high-and-short runway.The Airbus case has become political football as agents for aircraft manufacturers who lost out on the deal, rival carriers that stand to lose if Nepal Airlines does well, and those interested in its future privatisation, are all involved in stoking the crisis.Read also: <a href="https://www.nepalitimes.com/banner/more-than-luck-in-lukla/" target="_blank" rel="noopener">More than luck in Lukla</a>, Rikki WaltersLast month at an employees union meeting, Foreign Minister Pradeep Gyawali warned: “There is a whole mafia involved in trying to wreck Nepal Airlines.”He said rivals felt threatened by the carrier’s route expansion plans with the acquisition of new jets, and were deliberately trying to bring it down. There are indications that some vested interests in the airline’s own management are abetting this effort.The coordinated attacks coincide with the airline finally showing signs of a turnaround. In 2018, Nepal Airlines became the number one international carrier with a 12% market share, outpacing Jet Airways (see graph).<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101128/636a21a29c7e80680e04174djpeg.jpg" alt="" width="650" height="587"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101128/636a21a49c7e80680e04174ejpeg.jpg" alt="" width="1500" height="1036">This despite the fact that its management had made no preparations for training extra pilots, or renewing route rights for destinations in China, Korea, Japan and Australia before the 330s arrived in mid-2018.The Airbus 330s need to be in the air 16 hours a day for full utilisation, but currently fly only 7 hours on short and medium-haul routes like Delhi, Kuala Lumpur and Doha. Even so, in the first six months of operation, the Airbus 330s registered an imprssive 72% load factor, while the Airbus320s operate at 80% of full capacity.Says a CAAN official: “The widebodies have a huge potential because of diaspora and tourist traffic on long haul routes, but <a href="http://archive.nepalitimes.com/regular-columns/Comment/Keep-the-flag-flying,49" target="_blank" rel="noopener">Nepal Airlines management</a> did nothing to plan for route expansion and market those destinations. The airline is being undermined by its own weak management.”It is doubtful if Nepal’s flag carrier can withstand such sustained internal mismanagement, political interference, and attacks by private rivals. Daily headlines in the national media are an indication that the vultures are circling. Instead of a proper non-political, independent probe, vested interest groups have converged to wreck Nepal’s national airline over the Airbus330 deal.Ironically, this comes at a time when the airline is poised to spread its wings with its two long-haul Airbus 330s, two medium-range Airbus 320s, and a plan to add Viking Twin Otters to the domestic <a href="https://archive.nepalitimes.com/article/business/saving-nepal-airlines-with-fleet-route-expansion-drives,1983" target="_blank" rel="noopener">fleet</a>, as well as two more 320s once Lumbini and Pokhara airports become operational.The airline did overstretch itself with the 330 purchases, but the losses accumulated because the two planes sat in the hangar for more than two months awaiting CAAN clearance.Now, they are not airborne long enough to start making money. Airline insiders say full utilisation of the fleet would easily increase the carrier’s annual turnover by Rs9 billion a year.But such market expansion would directly affect the revenue of carriers competing with Nepal Airlines on the Gulf and Malaysia routes. Cartelling on the profitable Delhi route kept fares artificially high at up to Rs40,000, but after Nepal Airlines resumed regular twice-a-day service on this route fares have dropped to Rs15,000.Fares to Dhangadi have also halved to Rs5,000 after Nepal Airlines broke the domestic monopoly on the trunk route. Private carriers operating Jomsom and Lukla also stand to lose business if Nepal Airlines modernises its STOL fleet.“Cartels over-charging passengers would like nothing better than if our planes sat on the ground,” said Nepal Airlines Managing Director Sugat Ratna Kansakar, who denied wrong-doing and said he has sent Airbus330 files to the Parliament committees.Political interference in the airline is relentless. The government forced it to induct Chinese MA-60 and Y-12s, which have been a big liability. Last year, the PMO foisted Madan Kharel as executive chair without removing Kansakar.Read also: <a href="http://archive.nepalitimes.com/news.php?id=295#.XC7rC1UzbIU" target="_blank" rel="noopener">The wonderful women and their flying machines</a>, Abha Eli PhobooStrangely, one of Kharel’s first acts in office was to bring out a report that concluded the airline was bankrupt. Most airlines go through a liquidity crunch during the <a href="https://archive.nepalitimes.com/article/nation/Nation-sliver-lining-in-the-Nepal-sky,521" target="_blank" rel="noopener">expansion </a>phase, yet the crisis was magnified through selective leaks in the media.Credible insiders told Nepali Times in separate interviews that management appears to be working to deliberately undermine the company’s image so as to benefit those eying its future privatisation.Nepal Airlines now competes directly with Himalaya Airlines, a joint venture between China’s Tibet Airlines and Yeti Airlines.Update 4 January 1800:The Cabinet late Thursday set up a high-level committee to probe the Airbus 330 purchase deal of Nepal Airlines and come up with a report within 45 days.The three-member team is headed by former Chief Justice Govinda Prasad Parajuli, ex-deputy attorney Narendra Prasad Pathak and  Madan Sharma, a chartered accountant.

Keeping Nepal Airlines airworthy

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107161120/636922289c7e80680e03a112jpeg.jpg" alt="" width="1400" height="1051"/><figcaption>DREAM COME TRUE: Capt Pradeep Shrestha in the cockpit of a Boeing 787 Dreamliner (left) says there is no reason Nepal airlines cannot replicate Ethiopian’s success. Pic: Kunda Dixit</figcaption></figure>Nepal and Ethiopia have travelled similar trajectories as nations. Both are ancient landlocked <a href="http://archive.nepalitimes.com/article/nation/nepal-from-royal-to-republic,3736" target="_blank" rel="noopener">former monarchies</a>, both suffered ruinous wars, both struggle with governance and <a href="https://archive.nepalitimes.com/article/editorial/trickledown-corruption,4176" target="_blank" rel="noopener">corruption</a>, both are now vibrant democracies, but poverty and disease are persistent and endemic in the two countries.Compared with Ethiopia, however, Nepal has a much higher GDP per capita, is ahead in the ease of doing business, and Nepal has made much more progress in <a href="https://www.nepalitimes.com/editorial/poor-health/" target="_blank" rel="noopener">improving health indicators</a>.There is one area in which Ethiopia is far ahead of Nepal, however: running a global airline. While Nepal Airlines is mired in government <a href="http://archive.nepalitimes.com/blogs/kundadixit/2015/11/02/prepared-for-takeoff/" target="_blank" rel="noopener">interference and mismanagement</a>, state-owned Ethiopian Airlines is a reputed award-winning airline.“What has allowed Ethiopian Airlines to fly high is that from the time of [former emporer] Haile Selassie, the carrier has been insulated from government interference. It is state-owned, but does not depend on the state,” explains Pradeep Shrestha, a Nepali captain who flies for Ethiopian.Having flown for Nepal Airlines for nearly four decades, Shrestha has a unique perspective for comparing the two countries and their airlines. He credits Ethiopia’s former rulers, who saw the national airline as a global ambassador flying the country’s flag, whereas in Nepal, <a href="https://archive.nepalitimes.com/article/business/saving-nepal-airlines-with-fleet-route-expansion-drives,1983" target="_blank" rel="noopener">politicians interfered with the national airline</a>.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107161120/6369222b9c7e80680e03a113jpeg.jpg" alt="" width="1400" height="1150"><figcaption> </figcaption></figure>Ethiopian Airlines was voted Best Airline in Africa last year and is the most profitable carrier in the region. The airline is the envy of other African nations because of the full autonomy it enjoys, despite being owned by the government. The airline has a fleet of 103 aircraft, including the latest model Boeing 777 and 787, and Airbus 350s, one of which is named Mt Everest. It has its own state-of-the-art maintenance hangar, and an advanced crew training school.From the beginning, Ethiopian has set its sights on being a global airline and accomplished it with a deep sense of nationalism, commitment, and transparency. There was a time Royal Nepal Airlines also had vision, and was regarded as one of the best airlines in the region for its service and equipment. It was one of the first carriers in Asia to buy state-of-the-art Boeing 757s in 1985, which today would be like acquiring brand new Dreamliners.“Actually, I believe we have as much potential as Ethiopian,” Capt Shrestha told Nepali Times. “Ethiopian is leveraging the country’s location, while Nepal can promote its destination.”Indeed, Ethiopian Airlines has pivoted its Addis Ababa hub as the gateway to Africa, offering connections to nearly 30 destinations in the continent for its flights from China, South Asia, Europe and the Americas.Shrestha returned to Nepal after getting his pilot’s license in Canada in 1982, flew Twin Otters, then Boeing 757s. He went back to flying STOLs for Kasthamandap to remote area airports.But when Ethiopian Airlines announced vacancies for pilots, he applied because his “dream was to fly Dreamliners”. At first he flew Ethiopian 767s chartered to the U.N., and often flew Nepali peacekeeping forces from Sudan, Haiti and East Timor to a familiar Kathmandu airport.Shrestha says he often wonders what Nepal Airlines would need to take off again. He thinks adding wide bodies would be the first step, but much more important would be visionary leadership, elimination of government interference, discipline, and a merit-based management.He adds: “There is no reason why Nepal cannot do what Ethiopian has accomplished. I am positive about it.”

What can Nepal learn from Ethiopia?

There were two Bhutans on display during Narendra Modi’s visit this month. The first: a trusted partner, modernising rapidly with Indian support, inaugurating hydroelectric projects, and signing healthcare deals. The second: a nation that <a href="https://www.fmreview.org/gazmere-bishwo/#:~:text=In%201990%2D91%2C%20about%20a,are%20therefore%20not%20Bhutanese%20citizens.">ethnically cleansed 17% of its population </a>and has never been held accountable.
Modi chose to see only the <a href="https://kuenselonline.com/news/pm-modi-concludes-bhutan-visit-with-prayers-for-peace-and-prosperity">first </a>during his <a href="https://economictimes.indiatimes.com/news/india/india-announces-rs-4000-cr-concessional-credit-line-to-fund-energy-projects-in-bhutan/articleshow/125253915.cms?utm_source=contentofinterest&amp;utm_medium=text&amp;utm_campaign=cppst">11-12 November visit</a>, granting $450 million in credit, offering birthday tributes to Fourth King Jigme Singye Wangchuk, and inaugurating another hydropower project.
New Delhi has opted for strategic silence on Bhutan’s systematic persecution of the Lhotshampas in the 1990s. The displaced remain scattered across the world and in refugee camps in Nepal, their property seized, their citizenship revoked.&nbsp;
Now, on that same contested land Bhutan is building the <a href="https://nepalitimes.com/here-now/small-bhutan-dreams-big">Gelephu Mindful City (GMC)</a>, a megaproject intended to <a href="https://kuenselonline.com/news/pm-modi-announces-inr-40-billion-credit-line-new-rail-links-and-land-for-bhutanese-temple-in-varanasi">connect directly to Indian infrastructure</a>. The victims are gone, and democratic India’s values remain conspicuously absent.&nbsp;
With no Lhotshampas left to challenge the official narrative and India unwilling to raise it, Bhutan continues to suppress dissent with impunity.&nbsp;
Earlier this year, social media influencer Raghu Pati Subedi was arrested on the Assam side of Gelephu after returning from a visit to relatives in India. His family members reportedly came under intense pressure, including threats of arrest, accusing them of hiding his whereabouts. After his arrest, he was transported to Thimphu and imprisoned.
This was not an isolated incident. It is part of systemic repression that first gained international attention in the 1990s, when over 100,000 Nepali-speaking Lhotshampa were systematically stripped of their citizenship and forcibly exiled. This mass expulsion, which human rights organisations have characterised as ethnic cleansing, created a decades-long refugee crisis that continues to define the regional political and human rights landscape.&nbsp;
EXODUS
The Lhotshampa crisis of the 1990s was not a spontaneous event but the culmination of years of state-led discrimination. Through a series of legislative acts, notably the 1985 Citizenship Act and the 1989 Driglam Namzha, the ‘One Nation, One People’ policy, the Bhutanese state systematically dismantled the rights of its Nepali-speaking citizens.&nbsp;
The use of the Nepali language was suppressed, the traditional dress of the ruling ethnic group was mandated, and citizenship was revoked en masse, rendering a significant portion of the population stateless in their own homeland.
The new manuscript I am editing has harrowing accounts by the authors of those atrocities. The parallels with what happened to Subedi recently are striking and troubling, showing that even after 35 years the regime has not changed its spots. The methods may have evolved, but the repression against dissidents remains disturbingly consistent.
This refugee exodus was an immense and unasked-for burden on Nepal. Despite being a country grappling with its own political instability and limited resources, Nepal accommodated them on humanitarian grounds. Nepal has consistently advocated for a durable solution centered on the refugees’ right to safe, voluntary, and dignified repatriation.
For years, it engaged in bilateral talks with Bhutan, culminating in a joint verification process. However, these efforts ultimately foundered on what Nepal described as ‘continued rigidity and non-implementation of the agreed decisions by the Bhutanese side’.
Nepal fulfilled its moral and humanitarian duty, but the international community largely failed to hold Bhutan accountable. Bhutan’s rulers deflected global attention with the masterful narrative of Gross National Happiness (GNH), while the grim reality in the refugee camps persisted.&nbsp;
Ultimately, with repatriation proving impossible, Nepal acquiesced to a third-country resettlement program led by a group of eight countries, including the United States, Canada, and Australia. From 2007 to 2016, more than 113,500 Bhutanese refugees were resettled in <a href="https://www.unhcr.org/media/nepal-factsheet">one of the largest group resettlement programmes globally</a>, though 6,365 remain in refugee camps in eastern Nepal.
While this solution provided a lifeline for thousands, it was a tragic capitulation to Bhutan’s ethnic homogenisation project. The refugees’ right to return to their homeland has been denied. It is a cautionary tale about the limits of international diplomacy in the face of state intransigence.
Bhutan’s global brand is one of its most successful exports. The <a href="https://www.gnhcentrebhutan.org/">Gross National Happiness </a>doctrine, which promotes holistic well-being over just economic growth, has captivated the Western imagination and policymakers. It offers a vision of a mindful, environmentally conscious, and peaceful Himalayan kingdom. This carefully cultivated image has historically aimed to shield Bhutan from the level of scrutiny applied to other nations with similar human rights records.
The GNH facade, however, cracks under the weight of documented evidence. The same kingdom that champions ‘happiness’ has, for decades, maintained a justice system that human rights groups allege relies on torture, coerced confessions, and draconian laws to silence opposition.
The 1992 National Security Act, with its vague definitions of ‘treasonable acts’ against the Tsa-Wa-Sum (King, Country, and People), has been a primary tool for suppressing political dissent, particularly from the Lhotshampa.
Overlooked by the international community and ignored by global powers including India, in responding robustly to the ethnic cleansing of the 1990s sent a clear message to Thimphu: such actions could be undertaken with impunity. The monarchy emerged unscathed, its reputation burnished rather than tarnished.&nbsp;
This historical impunity now echoes in the case of Raghu Pati Subedi and the <a href="https://www.cijnepal.org/new-list-of-political-prisoners-expected-to-set-off-discussion-on-bhutans-human-rights-record">continued imprisonment of dozens of political prisoners</a> of conscience. The global community’s reluctance to challenge the GNH narrative has, in effect, become a form of complicity.
The arrest and sentencing of a social media influencer demonstrates how old tactics have been adapted for the digital age. Subedi, 40, was a new kind of threat to the state-controlled narrative and he had to be made an example of.&nbsp;
As the founder and administrator of the popular Facebook page ‘The Don of Asia’, he bypassed traditional, state-influenced media to speak directly to about 78,000 followers. His content, informational and satirical videos on rural poverty, corruption, and the GMC project, was the kind of social media activism that was deemed intolerable.
Subedi was arrested in early 2025 and sentenced to 24 years in prison. The charges allegedly stemmed from Subedi’s social media criticism of the GMC, a flagship project of Nepal-born Bhutanese fifth King Jigme Khesar Namgyel Wangchuck.&nbsp;
For <a href="https://thenewamericansmag.com/2024/11/18/the-kings-gelephu-mindfulness-city/#:~:text=Ganga%20Lamitare%2C%20who%20owns%20four,ancestors%20in%20building%20the%20nation.">Bhutanese refugees like Gangaram Lamitare</a>, the GMC represents a bitter irony, a development rising on their confiscated ancestral lands.&nbsp;
Gangaram, who owns four acres where the GMC’s international airport is now under construction, says: “Many people from villages fled at night in 1990, leaving everything behind to escape oppression. Now, the Bhutanese king and ministers are spreading falsehoods worldwide, calling this land vacant, which actually belongs to those forced to leave the country.”&nbsp;
There are signs that international support that has benefited Bhutan may be waning. The United Nations has become increasingly vocal and last year the <a href="https://www.ohchr.org/sites/default/files/documents/issues/detention-wg/opinions/session101/a-hrc-wgad-60-2024-bhutan-advance-edited-ve.pdf">UN Working Group on Arbitrary Detention</a> said the detention of several Bhutanese political prisoners was arbitrary and illegal under international law.&nbsp;
In April 2025 from a group of six UN human rights experts raised grave concerns about the use of torture, denial of fair trials, and the ‘severe chilling effect’ of Bhutan’s legal framework on civic space. These developments owe much to the consistent advocacy of the Hague-based Global Campaign for the Release of Political Prisoners in Bhutan (GCRPPB) since its formation.
However, they also reflect broader shifts in international human rights scrutiny. This places Bhutan’s key international partners, particularly the European Union, in a critical position. Bhutan enjoys lucrative benefits under the EU’s ‘Everything but Arms’ trade scheme, which grants developing countries tariff-free access to the EU market contingent on respect for human rights.&nbsp;
The EU is also a significant provider of development aid to Bhutan which provides it with substantial leverage. In April 2025, members of the <a href="https://bsky.app/profile/saskiabricmont.bsky.social/post/3lmrn5mkmrs2q">European Parliament formally called on Bhutan</a> to release all political prisoners. This action signals a growing recognition that trade and partnership cannot be divorced from human rights obligations.&nbsp;
“Bhutan’s international partners and investors, including the EU, should make it clear that they expect Bhutan to comply with its human rights obligations and release them without further delay,” says Meenakshi Ganguly, of Human Rights Watch.&nbsp;
Bhutan stands at a crossroads. Its desire for deeper global economic integration is colliding with its unresolved history of human rights abuses. The international community now has a choice: either continue being charmed by the myth of a happy shangri-la or insist that the kingdom adheres to democratic values it professes to the world.&nbsp;
Nepal’s recent Gen-Z uprising offers a lesson to Bhutan. In September, when authorities attempted to ban 26 social media, Nepali youth took to the streets and, within hours, toppled the entire pro-establishment political apparatus. Their message was clear: in an age of digital connectivity and mass mobilisation, authoritarian tactics such as detaining social media influencers are both unjust and ultimately unsustainable.
This incident echoes the prophetic warnings of Devi Bhakta Lamitare, Bhutan’s first-generation democratic leader, who died in exile in India in 2022. In his seminal 1970 book
Dankindo Bhutan, Lamitare chronicled the systematic suppression of people’s rights and envisioned a path toward liberation.
Before his death, I worked with him to update and edit this work, which the Bhutan Media Society published posthumously in 2023. In a December 2020 interview I conducted for the book on the Ganga riverbank in Haridwar, Lamitare laid out a stark three-front offensive: political mobilisation from within India to awaken resistance inside Bhutan itself, relentless pressure on New Delhi to champion democracy, and a global ‘pamphlet war’ waged by resettled Bhutanese in the West.&nbsp;
Only through such sustained action, he argues, can Bhutanese citizens win the right to choose their own rulers, a principle India, the world’s largest democracy, should be championing, not abandoning.
Binod Dhungel is the Nepal correspondent for Reporters Without Borders.
<a href="http://linkedin.com/in/dhungelbinod" target="_blank">linkedin.com/in/dhungelbinod</a>, @BinodDhungel

Bhutan imprisons social media influencer

The COP30 climate summit in Brazil ended this week <a href="https://nepalitimes.com/opinion/cop30-to-cop31">without tangible commitment</a> from countries to reduce fossil fuel emissions. Its impact will be felt halfway around the planet here in Mustang which is already seeing weather extremes.&nbsp; Geographically, Mustang is on the Tibetan Plateau, north of the main Himalayan chain. It is in the rainshadow, and a high altitude desert. Winter snow has failed for eight of the past ten years, unseasonal blizzards, and frequent glacial collapse leading to floods. The Kali Gandaki Corridor follows one of the deepest gorges in the world between Annapurna and Dhaulagiri, the world’s seventh and tenth highest peaks. Lush pine forests cover the southern flanks of these mountains, but within a few kilometers the vegetation undergoes a dramatic change to a landscape of red, brown and grey cliffs.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_c66ade5e32d20530003abba893869426d75b42d10e4725c28361d738b402721f.jpg" data-media-id="editor_1" data-image-id="20251129021144_c66ade5e32d20530003abba893869426d75b42d10e4725c28361d738b402721f" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  It gets more arid the more north you go. Snow and rain in Upper Mustang used to fall mostly in winter, but now there are cloudbursts and blizzards at other times of the year.&nbsp; In the ancient walled city of Lo Manthang, elderly men have gathered at a local tea shop to drink the salted butter tea. Some sip home-made liquor infused with medicinal herbs.&nbsp; The sun has set, the temperature plummets, and the wind howls outside. Everyone agrees it does not snow like it used to any more. Read also: <a href="https://nepalitimes.com/here-now/comings-and-goings-in-mustang">Comings and goings in Mustang</a>, Shrijan Pandey  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_ffaabf00a533984cadf160b2e56734cddb6f64d1a660401417d2982a3818f161.jpg" data-media-id="editor_3" data-image-id="20251129021144_ffaabf00a533984cadf160b2e56734cddb6f64d1a660401417d2982a3818f161" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> <figcaption>The flat mud roofs are leaking because rain is now falling where there used to be snow.</figcaption> </figure>  “The weather has changed drastically over the years,” says Lopsang Tsomfel Bista, Chair of the Lo Dekhar Municipality. “It doesn’t snow in winter, and it falls when it is not supposed to.”&nbsp; Lack of snow means that in spring, the pastures where nomadic herders graze their yaks and goats do not have enough grass. Previously, winter snow on the meadows would seep slowly into the soil with the spring thaw, bringing out fresh grass shoots. &nbsp; In recent years, even if there is winter precipitation, it falls as rain. The soil is not able to soak in rain as efficiently, and torrential downpours increase the risk of soil erosion and floods.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_93ca69bec63577c5f6cbff8db809c11bce2d8fe01469d3374c20a6f20a7c93f1.jpg" data-media-id="editor_4" data-image-id="20251129021144_93ca69bec63577c5f6cbff8db809c11bce2d8fe01469d3374c20a6f20a7c93f1" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  “There used to be up to 1,500 mountain goats in every village, but now they have stopped keeping livestock,” says Bista. This is due to lack of grass and new lowland diseases moving up the mountains. Mustang has lost 28% of its population between the census in 2011 and 2021, and outmigration also means there are fewer people left to carry on a pastoral lifestyle.&nbsp; “Herders have asked for vet services in their communities because there are new insect-borne diseases,” says Yangchen Dolker Gurung of the Lo Gyalpo Jigme Foundation. Read also: <a href="https://nepalitimes.com/opinion/winds-of-change-sweep-mustang">Winds of change sweep Mustang</a>, Jagannath Adhikari  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_902593732af83db5792128be5a3bd87c00e0c62ff894afa4c98bffde64e96d26.jpg" data-media-id="editor_6" data-image-id="20251129021144_902593732af83db5792128be5a3bd87c00e0c62ff894afa4c98bffde64e96d26" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> <figcaption>The mud walls of monasteries and homes are crumbling because of unseasonal rainfall. </figcaption> </figure>  Mustang is flanked to the east and west by mountains that rise up to 6,000m, and glaciers on their slopes are melting fast, turning into lakes. With the rising temperature, the risk of Glacier Lakes Outburst Floods (GLOFs) has also risen.&nbsp; At the rate global average temperatures are rising, scientists say that the Himalaya will lose up to two-thirds of the remaining ice caps. When glaciers melt, it not just raises the risk from GLOFs but also affects water supply downstream.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025112903114_1a6af68965ded5f23897a623bec2e2bed0da4c6663f0af5b5bf79883f2a11c9f.jpg" data-media-id="editor_7" data-image-id="2025112903114_1a6af68965ded5f23897a623bec2e2bed0da4c6663f0af5b5bf79883f2a11c9f" data-rendition-name="original" width="1022" height="767" loading="lazy" alt="Mustang map NT"> </figure>  FLOODS Ringzin Sangbo Gurung in Chumjung village recalls the devastation caused by a GLOF on 8 July this year that swept away a newly inaugurated bridge. The floodplain is now strewn with boulders and sand brought down by the flood which caused damage worth Rs28 million. The flood also damaged the irrigation canals that feed riverside farms where locals grew potato, buckwheat, millet and spinach. Nyima Wangmo Gurung runs a homestay in Nyamdok village, and says: “We don’t have water when we need it. And there is too much when we don’t need it.”&nbsp; Read Also: <a href="https://www.nepalitimes.com/banner/mustang-forced-to-adapt-to-climate-crisis">Mustang forced to adapt to climate c</a><a href="https://www.nepalitimes.com/banner/mustang-forced-to-adapt-to-climate-crisis">risis</a>, Ronan Wallace and Yungdrung Tsewang Gurung  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_7ae98274ea20e910311ec4431ba0aa3ecd9fe92caaed029a33c185198b33d0d2.jpg" data-media-id="editor_10" data-image-id="20251129021144_7ae98274ea20e910311ec4431ba0aa3ecd9fe92caaed029a33c185198b33d0d2" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  With warming temperatures, farmers in Mustang are growing lowland vegetables which was not possible before in plastic greenhouses. The farms depended on snowmelt in spring to irrigate their fields, but there is less snow to melt in past years. “The last heavy snowfall in winter was about eight years ago, since then we have got little or no snow,” says Tashi Norbu Gurung, Chair of Lo Manthang Rural Municipality. “This affects farmers during the April planting season.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_010e09f4e9335f39c62f4d6027489c86423b3d10ddfb83558820f6a7a56a477b.jpg" data-media-id="editor_11" data-image-id="20251129021144_010e09f4e9335f39c62f4d6027489c86423b3d10ddfb83558820f6a7a56a477b" data-rendition-name="original" width="1000" height="1500" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  It is not just lack of snowfall that is a problem. Springs have gone dry, and some villages like Dhey have been forced to relocate because life became &nbsp;impossible without water.&nbsp; Villagers of Samjung also <a href="https://nepalitimes.com/news/climate-migration-is-already-happening">migrated</a> to Namashung, near a river when water sources dried up. But now the new settlements are threatened by GLOFs. Karma Gurung, who runs a lodge in Choser, remembers the big flood of 35 years ago which swept away farms and covered them with debris. There have been more frequent, but destructive floods since then in Kagbeni, Lubra and other valleys. Read also: <a href="https://www.nepalitimes.com/banner/mixed-blessings-in-mustang">Mixed blessings in Mustang</a>, Mukesh Pokhrel  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_da2212bc1ad49c17d126e24bbd92d3fca18e3e6bdd58ac61df14c962deb2edcd.jpg" data-media-id="editor_14" data-image-id="20251129021144_da2212bc1ad49c17d126e24bbd92d3fca18e3e6bdd58ac61df14c962deb2edcd" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  MUD WALLS Because snowfall has been replaced by rain, Mustang’s traditional mud-wall architecture is now in <a href="https://nepalitimes.com/here-now/leaky-roofs-on-the-roof-of-the-world">danger of collapsing</a>. The homes here are closely packed, have flat roofs stacked with juniper branches for firewood. With rain in place of snow, the roofs now leak.&nbsp; Women in Thinkar village say their walls are falling apart. Some homes have collapsed, and families forced to move out. Yangchen Dolker Gurung of the Lo Gyalpo Jigme Foundation says locals need plastic sheets, cement walls and corrugated roofs to cope with the rain.&nbsp; But this would mean that Mustang’s villages would lose their traditional architecture style.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_59c475cdde3bee8d03ed05e9038c0cf36f1acd31e3d3596f145469e5b4404d9d.jpg" data-media-id="editor_16" data-image-id="20251129021144_59c475cdde3bee8d03ed05e9038c0cf36f1acd31e3d3596f145469e5b4404d9d" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  The ancient 1.5m thick mud walls around Lo Manthang built 600 years ago, the king’s palace, and monasteries are also at risk. “Changes in precipitation patterns, altering the intensity, frequency, and timing of rainfall and snowfall, have damaged traditional and cultural infrastructure, particularly mud-built private and public buildings as well as religious and heritage sites,” explains Bhawani Pandey at the Lo Gyalpo Jigme Foundation. “With the rain, and because the monuments and stupas are made from mud, they have eroded. There is leakage, and the monuments are in a dilapidated condition.” Read also: <a href="https://www.nepalitimes.com/banner/climate-smarter-himalayan-infrastructure/" target="_blank">Climate-smarter Himalayan infrastructure</a>, Sonia Awale  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251129021144_dfc8c93a0a8619893f0d97076d1f9cbba3818e1cc716a903ff9908dbb8939ef6.jpg" data-media-id="editor_18" data-image-id="20251129021144_dfc8c93a0a8619893f0d97076d1f9cbba3818e1cc716a903ff9908dbb8939ef6" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Too little snow, too much rain NT"> </figure>  The Lo Manthang Rural Municipality along with Lo Gyalpo Jigme Foundation, are working on a Local Adaptation Plan of Action and the Disaster Preparedness and Response Plan, which the Nepal government has made mandatory for every municipality. “We took a bottom-up approach and collected data from each village, they know best the impact of climate change and what their needs are,” says Yangchen Gurung. To address the hazards of climate change, local communities and municipalities are adapting through their own resources, without waiting for outside help to improve water conservation, control soil erosion and protect from flood.&nbsp; Says Pandey, “We are returning to conserving traditional drought-resistant crop varieties, organic pest and disease control, cultivating high-value crops and fruits, and practicing sustainable pasture management through rotational grazing. We have also developed new building codes for homes that incorporate water-resistant coating for mud roofs and walls.” &nbsp; Additional Reporting by Tashi Wangyal. &nbsp;

Too little snow, too much rain

Groundwater is like a phone battery, it needs to be regularly recharged. As springs go dry across the Himalayan foothills due to over-extraction and climate change, communities in eastern Nepal are reviving traditional knowledge to replenish aquifers. The town of Dhankuta is located along the spine of a ridge and is struggling with its water supply. Unregulated pumping is one reason, and weather extremes due to climate breakdown is the other. Since water is so important for life, necessity has become the mother of invention here. More accurately, it is the mother of re-invention — since recharging ground water is a traditional practice that has been discontinued. Communities are practicing sustainable water management again by reviving recharge ponds that had fallen into disuse as well as rainwater recycling. Some of these indigenous practices have eroded over time with outmigration and modernisation. The nearby village of Khambela is dominated by the indigenous Aathpahariya Rai community and is building on its ancestral practice of rainwater harvesting with new technology developed by the group, SmartPaani.&nbsp; Households collect rainwater during four monsoon months in tanks of up to 10,000 litres for household use and irrigating &nbsp;vegetable patches in the dry season.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251124031112_b48e18e9c85ed460210d475041dce6ba5917ab31db0a16aca2c8e0f0356c9038.jpg" data-media-id="editor_0" data-image-id="20251124031112_b48e18e9c85ed460210d475041dce6ba5917ab31db0a16aca2c8e0f0356c9038" data-rendition-name="original" width="1125" height="1500" loading="lazy" alt="Storing rain inside mountains NT"> </figure>  “The rainwater harvesting installation here uses a rapid sand filter system that allows rainwater to move rapidly through the builtin filtration unit,” says Jyotsna Lama from Kathmandu-based SmartPaani. “The clean water is stored in tanks for future use.” The initiative is supported by the International Centre for Integrated Mountain Development (ICIMOD) and local municipalities. Local households contribute Rs50 a month for maintenance. “During the rainy season there is enough water in the wells and springs,” says a local farmer Sangita Rai. “But storing monsoon rain is enough to last the whole dry season.” Dhankuta town itself has a recharge pond at Sukepokhari, which itself means ‘dry pond’. &nbsp;The 24m diameter pond can hold up to 200,000 litres and lets it seep slowly to recharge the aquifer. One in four springs in &nbsp;Dhankuta have dried up, and Sukepokhari is helping revive them.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251124031112_0db2a186eec5194d37492066e6d0b939569254e8feca6c6dd757d28147267b2f.jpg" data-media-id="editor_1" data-image-id="20251124031112_0db2a186eec5194d37492066e6d0b939569254e8feca6c6dd757d28147267b2f" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Storing rain inside mountains NT"> <figcaption>Sukepokhari</figcaption> </figure>  The mountains around Dhankuta act like a sponge, absorbing water in the dry season and letting it out through springs. But water started becoming scarce when the town’s expanding population started pumping up water. Plastic waste and other pollutants contaminated the remaining water. Sukepokhari’s caretaker is Krishna Kumar Thakuri, fondly known as ‘Pani Ba’ by locals who regard him as a passionate father figure. He regularly monitors rainfall and the water level in the pond to gauge how much of it is seeping into the ground to recharge the groundwater.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025112403118_b412598c4473f2bb33900bab7e2084f584e7e88c1a92f6b9c09e940e23e4ce29.jpg" data-media-id="editor_2" data-image-id="2025112403118_b412598c4473f2bb33900bab7e2084f584e7e88c1a92f6b9c09e940e23e4ce29" data-rendition-name="original" width="1000" height="1475" loading="lazy" alt="Storing rain inside mountains NT"> <figcaption>Caretaker of Sukepokhari Krishna Kumar Thakuri fondly known as Pani Ba.</figcaption> </figure>  “We harvest rain that falls in the surrounding slopes,” explains Thakuri. “But a lot of leaves, vegetation and sediment also flows into the pond and has to be desilted every year.” The pond provides drinking water to around 150-200 households and enables irrigation to 10 households in surrounding areas. Water from the pond further flows and supports springs down the mountains.&nbsp; Off the walking trail is Dale Pokhari, another recharge pond in the scenic village of Dhojedanda. After the pond was revived two springs sprang back into life again, supplying water to six households. “There used to be multiple springs and water sources, and biodiversity was diverse, but as people started to dig up wells and drag water sources to their homes via plastic pipes, the water sources started drying up,” explains Phurba Sherpa. But now there is more water flowing out of springs.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251124031112_dd71cdc337f6275b179fdab9ded358a1dcdb53c5e286d493aa2182e3f35ce32e.jpg" data-media-id="editor_3" data-image-id="20251124031112_dd71cdc337f6275b179fdab9ded358a1dcdb53c5e286d493aa2182e3f35ce32e" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Storing rain inside mountains NT"> <figcaption>Dalepokhari</figcaption> </figure>  WATER IS LIFE Syaule-Sipting Homestay in Dhankuta has been using water sustainably after facing shortages. It has now built a bio-sand filtration system in the water tanks, so that water is safe for use by four households One of the homestays also uses a rainwater harvesting system. While the bio-sand and rainwater harvesting are used for cooking, washing and other purposes, table top filtration systems are used for drinking. Adequate safe drinking water is also helpful to revive the area’s eco-tourism potential. Safe drinking water is important so visitors are not turned off, says Anu K Lama of ICIMOD. She adds, “Health and hygiene are important for everyone. But foreigners do not have the strong immune system that locals have. Clean and adequate supply is necessary especially if we are targetting foreign guests.”

Storing rain inside mountains

The September protests and worry about what is in store for Nepal in 2026 have added more uncertainty to a <a href="https://nepalitimes.com/here-now/nepal-needs-to-use-its-money-better">struggling economy</a>. Real estate transactions are stagnant, industries are operating below capacity because of declining domestic demand, the construction sector is slack, and investors are in wait-and-watch mode. In contrast, total bank deposits increased by Rs124 billion in the month before mid-October to Rs7.4 trillion. Official remittance inflows hit a record $13 billion in the past year. Nepal’s banks are flush with cash, with nowhere to put it. &nbsp; “The economy has flatlined. Non-performing assets are up, and real estate is at a standstill,” said Ashoke SJB Rana, CEO of Himalayan Bank.“There is excess liquidity in the market, with not many places to invest.” The main reason seems to be that both <a href="https://nepalitimes.com/here-now/relocate-reallocate-recover">domestic and foreign investors were spooked</a> by the targeted violence of 9 September, and are so worried about the runup to elections in March that they are holding on to their wallets. Not just businesses, the political uncertainty is keeping individuals &nbsp;from making big financial decisions.&nbsp; Sujeev Shakya, author of the <a href="https://nepalitimes.com/review/retrofitting-nepal-for-future-shocks">newly-released book Nepal 2043</a>, notes that the current doldrum is due to Nepalis playing it safe with their money. &nbsp; “People are holding on to their assets, and keeping their cash,” he says. “They are not investing in real estate, and avoiding buying gold because it is so volatile.”&nbsp; One sector in which banks have a lot of exposure is hydroelectricity, but even here recent floods have shown that this investment is <a href="https://nepalitimes.com/here-now/global-warning-bell-in-belem">increasingly at risk from climate breakdown</a>.&nbsp; Nabil Bank, with its focus on sustainable banking, for instance, has financed 56 hydropower projects with an installed capacity of 3,000MW.&nbsp; Says Nabil CEO Manoj Kumar Gyawali: “We cannot ignore unpredictable rainfall, increased glacier melt, more frequent glacier lake outburst floods, and landslides. These risks mean that while hydropower is essential, Nepal must diversify its energy mix." &nbsp;&nbsp; An open secret in the banking sector is that much of the liquidity is supected laundered money. Banks also have close ownership links with big businesses, and this means that even with a slow economy, banks lend to themselves or to each other to keep transaction volumes up.&nbsp; This is one reason for a high default rate. In the first three months of this fiscal year, 4.86% of bank loans were non-performing, meaning one out of about every 20 borrowers had defaulted. A year ago, this figure was 4.04%. Banks are therefore reluctant to lend, dampening the overall investment climate. &nbsp; Ironically, the high default rate is keeping mainstream newspapers in Nepal afloat at a time when the media business is also in crisis. Even as they suffer from a massive drop in advertising revenue, most daily newspapers often add pages to fit notices to borrowers about repayment, or announcements of bank auctions of collateral property. “While banks may be making a much smaller percentage of income compared to a few decades ago, they are still making a profit,” notes Shakya. “And so they are actually quite happy to be in this low-risk situation. Banks are conservative organisations after all.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251128041136_b33dd18d7ce221e273bd18d8a5c4ba4c9196f762b95b87fd24c60df6c2426065.jpg" data-media-id="editor_4" data-image-id="20251128041136_b33dd18d7ce221e273bd18d8a5c4ba4c9196f762b95b87fd24c60df6c2426065" data-rendition-name="original" width="1500" height="1022" loading="lazy" alt="Banks"> <figcaption>Illustration: BHANU BHATTARAI / NEPALI TIMES ARCHIVE</figcaption> </figure>  Among the most striking videos of the September protests that was shared globally by tens of millions of people was the Hilton and Hyatt hotels and the Ncell building burning. That recognisable international brands were targeted did not just cause huge losses to owners, but also damaged Nepal’s overall investment climate. Looting Bhat-Bhateni and homes of businessmen also sent a negative message, spurring capital flight.&nbsp; “That was very bad optics for potential investors, you simply worry about the security of your investment when you see things like that,” says Himalayan Bank CEO Ashoke SJB Rana.&nbsp; Nepal will graduate to Middle Income Country status next year, and donors are set to move from aid to private investment. While this could reduce misuse of money, it could dry up grants and soft loans to the health and education sectors.&nbsp; But the harm may go deeper than just the aftermath of the September events. The recent<a href="https://nepalitimes.com/news/double-trouble-with-taxes"> double taxation issue</a> involving the Dolma Impact Fund, and an earlier controversy over Ncell’s capital gains tax have also put Nepal’s business climate in negative spotlight internationally.&nbsp; The banking sector is firmly on the side of investors. Says Ashoke Rana at Himalayan Bank: “This is a tax regime, it is absurd to order the payment of these taxes retrospectively. When investors see that the rules of the game can change arbitrarily, they won’t really want to put their money here. ” &nbsp; One of the positive changes in the ways Nepalis are using money is digital transactions through QR codes and mobile banking. With smartphones making up 70% of all mobile phones, QR transactions are easy and have become a part of daily life. ONLINE BANKING&nbsp; Most businesses and ride shares have this feature on board, and people do not need to carry a lot of cash or multiple bank cards. But as digital payments become the norm, the days of free transactions may be coming to an end.&nbsp; “Right now these transactions are free for the most part. This is a subsidy by the banks, because of course, it does cost something to make sure the payments go through,” says Rana at Himalayan Bank. “However, as income decreases, banks may have to look for ways to make money, so they may charge small percentages on each QR transaction.”&nbsp; Rapid digitisation has changed not only how customers use money, but also how banks think about their offices. Himalayan Bank’s new Thamel branch, for example, has cancelled plans to redesign the office for 20 tellers.&nbsp; “We realised that people were able to do so much of what they wanted digitally that we plan to have only four tellers,” says Rana.&nbsp; But cutting down on facilities and staff has not always made for a better customer experience at some bank branches.&nbsp; Economist Sujeev Shakya conducts ghost customer experience checks for banks which involves decoys entering banks to evaluate what it is like for somebody to set up a bank account.&nbsp; The stealth missions found that standards of service have regressed, with banks having a working environment reminiscent of government offices.&nbsp; Shakya points out that the general experience of going to the bank should be much better. “Sometimes it’s a knowledge issue -- banks may try to ask for non-disclosure contracts even when they don’t know why they want them,” he says.&nbsp; Despite digitisation, many banks still require paper-based forms and documents. Bankers and customers alike note that it feels archaic, almost absurd, to have to carry multiple copies of documents, sometimes only in Nepali lokta paper, across several family members and fill out what seems to be the same form over and over even though digital files exist. That could soon be changing as well. As more and more Nepalis adopt the National ID, banks have adopted pilot programs that use it to create bank accounts, replacing the myriad documents that customers had to previously present to officials, making all banking transactions more efficient and less of a hassle for the customer.&nbsp; DIGITAL SECURITY As Nepalis move their cash online, digital infrastructure needs to become more secure as well.&nbsp; Bankers spend quite a lot to make sure necessary digital security infrastructure is in place, but some banks could be using pirated software which are not trustworthy.&nbsp; There has to be better regulatory oversight to prevent phishing and fraud as online payments and digital banking spread across Nepal.&nbsp; Banks must also be innovative and ambitious. Says Shakya: “Nowhere else in South Asia are bank loans such a high ratio of the nation’s GDP. &nbsp;This actually points to a well-developed financial system and we have to take advantage of it."&nbsp; Shakya also notes that many bank executives in foreign countries, like Myanmar are actually Nepali, and that banks from Nepal could use their staff and know-how to partner with or acquire banks overseas.&nbsp; While these innovations are all welcome, it is unclear how Nepal's banking sector can jumpstart economic activity in the country. Nepal’s political future looks uncertain and stability is not a guarantee.&nbsp; In the face of continuing progress in hydro electricity and the IT sector seems to be the way forward to stimulate the economy.&nbsp; The GenZ movement was a wakeup call also to financial institutions and the need for greater transparency. Nabil Bank CEO Manoj Kumar Gyawali says the September protests sent a clear message that young Nepalis want an end to corruption, good governance, and real opportunities at home: "The banking sector has a &nbsp;responsibility to direct more lending toward the real economy, sectors that create jobs, build productivity, and strengthen long-term growth," he says.&nbsp; Despite a subdued investment climate, Gyawali is optimistic. "I do see early signs of improvement. Lower interest rates are beginning to restore public and business confidence. Rising remittances provide a safety net and fresh investment capacity for households," he says. "If government capital expenditure continues to improve, it will boost private sector activity."&nbsp;