<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101144/63720df49c7e80680e0b78edjpeg.jpg" alt="" width="960" height="640"/><figcaption>Photo: NEPALI TIMES ARCHIVE</figcaption></figure>“The paradox is this: if economic rationality tells us that the next century will be the age of global integration of the world’s economies, cultural ‘irrationality’ steps in to inform us that it will also be the century of ethnic demands and revived nationalisms. Both reason and imagination tell us that the name of the solution, that point where you can balance the demands of integration and those of the nationalities, is federalism.”-Carlos Fuentes, 1996These were the concluding remarks in 2003 by <a href="https://www.nepalitimes.com/latest/remembering-harka-gurung/" target="_blank" rel="noopener noreferrer">geologist Harka Gurung</a> quoting the Mexican novelist in his discourse ‘Trident and Thunderbolt: Cultural Dynamics in Nepalese Politics’ as part of Social Science Baha’s Mahesh Chandra Regmi Lecture.There was a reason and relevance to Gurung quoting Fuentes. Nepal was at the peak of the <a href="https://www.nepalitimes.com/here-now/from-the-frontlines-of-nepals-war/" target="_blank" rel="noopener noreferrer">Maoist conflict</a> and had just come off one of the bloodiest years of the insurgency. Abolition of the monarchy and state restructuring were being hotly debated even in the remotest corners of Nepal. King Gyanendra had staged a coup and political parties were preparing to take to the streets.Gurung was killed in the <a href="https://www.nepalitimes.com/here-now/remembering-nepals-conservation-heroes/" target="_blank" rel="noopener noreferrer">Ghunsa helicopter crash</a> a few months after the ceasefire, but his 'federalism' solution was finally adopted in the 2015 Constitution.The preamble to the Constitution reads, ‘... resolving to build an egalitarian society based on the principles of proportional inclusion and representation to ensure economic equality, prosperity and social justice by assimilating the multi-ethnic, multi-lingual, multi-religious, multi-cultural and geographically diverse characteristics...’In accordance with this constitutional commitment and provision, elections for 753 local governments were held in 2017. Next month, it will be five years since they took office and on 13 May <a href="https://www.nepalitimes.com/editorial/think-nationally-vote-locally/" target="_blank" rel="noopener noreferrer">Nepalis will vote</a> for the second time in local elections.How successful have local governments been in 'establishing prosperity with social justice by addressing the diverse features of Nepali society' as directed by the Constitution? How much has service delivery improved, is it equitable, and is there <a href="https://www.nepalitimes.com/banner/power-to-the-periphery/" target="_blank" rel="noopener noreferrer">better governance</a>? What worked, what did not?The lessons learnt during the past five years can be a guide for the next crop of <a href="https://www.nepalitimes.com/latest/nepals-local-governments-lead-from-the-front/" target="_blank" rel="noopener noreferrer">local leaders</a>. We need to thoroughly review the workings of local governments.If we were to believe the political class and commentators in Kathmandu, <a href="https://www.nepalitimes.com/opinion/federalism-rule-of-law-and-the-judiciary/" target="_blank" rel="noopener noreferrer">federalism</a> in five short years has failed Nepal. They argue that federalism has decentralised corruption and sowed the seeds of social division.However, despite some of this being true, most local governments have performed above expectations. According to a recent evaluation, most municipalities scored more than 50 points out of 100 in their report cards.The three local governments that scored above 75 points were all rural municipalities.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101144/63720df69c7e80680e0b78eejpeg.jpg" alt="" width="967" height="649">This assessment has challenged nay-sayers and proved that real federalism is <a href="https://www.nepalitimes.com/here-now/all-politics-is-local/" target="_blank" rel="noopener noreferrer">working well in the hinterland</a>. The constitutional provision that women should mandatorily be either mayor or deputy in municipalities and the Dalit community should be represented has changed the dynamics of how Nepal is governed.Local governments are ahead of federal and provincial governments in their ability to spend development budgets. While the centre was <a href="https://www.nepalitimes.com/latest/reinstate-remove-repeat/" target="_blank" rel="noopener noreferrer">embroiled in power struggles</a> that paralysed provincial governments, the municipal and ward levels were quietly carrying out their duties. This has meant that there is not as much disillusionment with democracy and federalism at the grassroots.Perhaps the best example of this is how local governments handled the Covid-19 pandemic. While the federal government was engulfed by international procurement scandals, it was the <a href="https://www.nepalitimes.com/latest/women-leaders-set-example-for-rest-of-nepal/" target="_blank" rel="noopener noreferrer">local leadership that stepped in</a> to provide immediate relief.This is not to say the local government were without faults which they cannot just blame on the lack of necessary laws, intervening agencies and the bureaucracy. Many elected officials have also been accused of being self-serving, inefficient and working as party cadres and not as people’s representatives.We have to learn from these mistakes, remove legal and policy ambiguities and make local governments more responsible and capable by emphasising good governance and <a href="https://www.nepalitimes.com/latest/including-the-excluded-in-the-bureaucracy/" target="_blank" rel="noopener noreferrer">inclusion</a>.This requires a paradigm shift. The federal government with its centralised mindset, meddling provincial officials and non-cooperation from the bureaucracy must change radically. After that, <a href="https://www.nepalitimes.com/editorial/polls-in-the-time-of-pandemic/" target="_blank" rel="noopener noreferrer">it is up to the local government</a> to make further reforms.In their first term, local governments focused on laying the foundations for development. Now, it has to look for economic opportunities to create jobs, raise living standards, develop human resources and conserve heritage.The first order of business to achieve this is to increase the capacity and awareness of the people to question elected representatives so that local levels are sufficiently empowered.The local unit of government is not just the cornerstone of federalism, but also a representation of participatory democracy that connects the state with the people.Federalism is also a threat to anti-democratic and regressive forces that want to take Nepal back to past instability. Federalism is not why the country is falling apart, as some would have it, but the cement that binds this diverse nation together.

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Nepal’s local election gives power back to people

<figure><img width="1750" height="919" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/6372033d9c7e80680e0b27f9jpeg.jpg" alt=""/><figcaption></figcaption></figure>The Election Commission has set local elections for May, with federal elections following early next year. Given the heated debate about federalism and <a href="https://www.nepalitimes.com/opinion/secularism-and-sectarianism/" target="_blank" rel="noopener noreferrer">secularism</a> the polls will be a referendum on those two issues. In 2017, Nepal held sub-national elections after 20 years. Those ward, municipal  and provincial representatives were pushed into uncharted territory, and coped the best they could. The hope was that locally-elected leaders would demonstrate more accountability than their national-level counterparts.Indeed, some ward and municipal chairs <a href="https://www.nepalitimes.com/latest/women-leaders-set-example-for-rest-of-nepal/" target="_blank" rel="noopener noreferrer">performed exceptionally well</a>. But many mayors are <a href="https://archive.nepalitimes.com/article/from-nepali-press/Elected-contractors,4182" target="_blank" rel="noopener noreferrer">contractors</a>, and are involved in blatant malfeasance. Political devolution has decentralised corruption as well. News reports about Bagmati Province’s bloated ministries as well as the provincial governments just being reflections of the power balance in Kathmandu have given federalism a bad name. Which is why some political leaders want federalism scrapped. Local elections this year is a chance to set things right. All politics is local – or should be. And we have seen since 1990 in Nepal that decentralised political decision-making is the best way to govern.However, there are indications the polls will be a dirty political game where politicians devoid of ideology stoke <a href="https://www.nepalitimes.com/from-the-nepali-press/back-to/" target="_blank" rel="noopener noreferrer">religious fervour </a>to get votes. This is dangerous, it will polarise and destabilise Nepali society.  This requires vigilance from voters who must vet candidates and cast their ballots for those who are more likely to address their most urgent needs like health, education, jobs and a streamlined administration – and not fall for extremist slogans.We need to make sure that the people at the local level, especially those who have been excluded till now in decision-making, benefit the most from federalism. Given Nepal’s diversity in ethnicity and religion, a prosperous and democratic society is not possible without the stability that secularism  guarantees. Going by the general conventions of the major parties over the last months, it looks like secularism, restoration of the monarchy and federalism will dominate the upcoming polls. <a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/editorial/battle-lines-drawn-for-nepal-elections/" target="_blank" rel="noopener noreferrer">Rajendra Lingden’s resounding win</a> over Kamal Thapa as the leader of the RPP means that the party will be even more aggressive in promoting the royal-Hindu line. Even self-proclaimed democratic and progressive parties that stood for alternative politics like Bibeksheel Sajha are falling back on religion and monarchy to gain popular votes.  Republicanism, federalism and secularism became the main pillars of the Constitution that was drafted after two elections following the People’s Movement of 2006. Remove any one of these three pillars and the country could be pushed back to instability. Some of the very leaders who once played a key role in writing that Constitution, like Shashank Koirala and Shekhar Koirala of the ruling Nepali Congress (NC), are in favour of a Hindu state. The main opposition UML’s K P Oli has himself been dabbling in religion. An eager gathering of former prime ministers at a recent reception for Indian guru Baba Ramdev in Kathmandu in November also showed that political leaders across the spectrum recognise the power of religion in vote mobilisation. Much of this is due to the <a href="https://www.nepalitimes.com/editorial/a-yam-between-two-indias/" target="_blank" rel="noopener noreferrer">gravitational pull that India exerts on Nepal</a>. Narendra Modi’s Bharatiya Janata Party (BJP) has actively used Hindu nationalism to stay on in power, and he has made no secret of his desire for Nepal to revert being a Hindu state. In Nepal, some leaders are deliberately bending the definition of ‘secularism’ to mean ‘anti-faith’ to disrupt Nepal’s long-standing religious harmony and tap the majoritarian vote bank. In her article Shaping Secularism in Nepal on European Bulletin of Himalayan Research, Chiara Letizia says that secularism in Nepal will be determined by how the Hindu majority is addressed: ‘Nepal is a post-secular laboratory, where the state’s policy must walk a tightrope, upholding ‘absolute’ secular values such as equal citizenship, and yet balancing the Hindu majority tradition, Hindu fears, and the claims of minorities for social, political and religious recognition.’Rajeev Bhargava, a political theorist who has studied India's secularism, suggests a principled stand for <a href="http://archive.nepalitimes.com/article/editorial/separation-of-state-and-temple-in-nepal,1444" target="_blank" rel="noopener noreferrer">secularism</a> in countries like India and Nepal which are ethnically, culturally and linguistically diverse. The state should give equal respect to all religions, but can also push universal values of tolerance and human rights.The test of a true democracy is how well it treats its minorities. Following secularism in letter and spirit makes such tolerance possible, and having it enshrined in the Constitution is not enough. It should be followed in practice. Indian historian Bipan Chandra in his 2008 book Communalism: A Primer analyses how the anti-secularism spread: ‘Communalists call themselves good nationalists and communalism as nationalism. Therefore, the good fight against communalism must be fought on the same ground of nationalism.’To prevent Nepal from falling into the same trap and keep our democracy vibrant and inclusive, we must use upcoming elections to eschew parties that espouse majoritarianism, exclusion and division.At the very least Nepal’s political leaders must adhere to <a href="https://archive.nepalitimes.com/regular-columns/by-the-way/new-constitution-should-adopt-inclusive-democracy-with-federalism-republicanism-secularism,538" target="_blank" rel="noopener noreferrer">values enshrined in the Constitution</a> as their true ‘religion’.Rabin Giri

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Volatile Mix of Politics and Religion

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161144/636d1c609c7e80680e0af356jpeg.jpg" alt="" width="1800" height="1200"/><figcaption></figcaption></figure>K P <a href="https://www.nepalitimes.com/latest/oli-sweeps-uml-party-polls/" target="_blank" rel="noopener noreferrer">Oli’s re-election as leader</a> of his CPN-UML party has been portrayed by critics even within his own party as just the latest example of his authoritarian streak, but Nepal’s former prime minister has not done anything other party leaders have not done to consolidate internal power.Oli did try to get himself and his supporters appointed unopposed into leadership positions in the central membership and Central Committee. But after a rival faction led by Bhim Rawal pressed for a vote, he agreed and went on to win hands down.But had the <a href="https://www.nepalitimes.com/latest/unconventional-party-conventions/" target="_blank" rel="noopener noreferrer">much-delayed UML general convention</a> been pushed back only three months more, Oli would not have been allowed to stand for party chair since he would have crossed the age limit of 70 for executive positions.Oli, who has undergone two kidney transplants, will therefore be leading the country’s biggest party till 2025. But this is the trend in all of Nepal’s main parties which are led by elderly male politicians who have clung on to power by sidelining rivals and bending rules.Oli beat <a href="https://www.nepalitimes.com/here-now/making-up-is-hard-to-do/" target="_blank" rel="noopener noreferrer">his main rival Madhav Kumar Nepal</a> in the previous general convention seven years ago by a slim margin, and relations between the two were never good. When the UML united with the Maoists to form the Nepal Communist Party (NCP) after the electoral victory in 2018, things started to sour between Prime Minister Oli and  Maoist leader Pushpa Kamal Dahal, who found a convenient ally in Nepal.Cornered by the Nepal-Dahal faction, Oli used all the tricks in the book to stay on as both party chair and prime minister. But running out of trump cards, he dissolved the Lower House not once but twice, both times reinstated by the Supreme Court which also ruled earlier this year that the UML-Maoist party alliance was null and void.Nepal then <a href="https://www.nepalitimes.com/latest/nepals-post-breakup-politics/" target="_blank" rel="noopener noreferrer">split from the UML and set up his own Unified-Socialist party</a> and teamed up with the ruling five-party alliance with Dahal and Sher Bahadur Deuba of the Nepali Congress (NC).It is with this background that the UML party election this week has to be analysed – Oli has placed himself as the helmsman to steer the UML towards victory in the 2023 elections. The criticism against him from the other parties (by calling him authoritarian, and one cartoonist even portraying him as Adolf Hitler) is because they see him as a formidable foe.As it turned out, 2,153 votes fell at the UML general convention for various party positions, so whatever give-and-take happened behind the scenes, the outcome was democratic.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161144/636d1c639c7e80680e0af357jpeg.jpg" alt="" width="1040" height="550"><figcaption></figcaption></figure>Among the candidates for senior party functionaries, Asta Laxmi Shakya with 1,976 ballots for deputy chair, and <a href="https://www.nepalitimes.com/editorial/blood-sweat-and-tears/" target="_blank" rel="noopener noreferrer">Gokarna Bista</a> with 1,974 for secretary topped the list of those with the most votes from delegates. Surendra Pandey for the second largest number of votes for deputy chair with 1,925 votes and Yogesh Bhattarai came second for secretary with 1960.Needless to say, Shakya, Bista, Pandey and <a href="https://www.nepalitimes.com/here-now/unusual-appointment-extraordinary-tasks/" target="_blank" rel="noopener noreferrer">Bhattarai</a> were all Oli’s critics and in fact were once in the Madhav Nepal faction. Neither Thakur Gaire and Ushakiran Timsena who were elected to central membership used to be pro-Oli, either.It was even more symbolic for Oli to try to get former Maoists into the top echelons of his party, which is why he fully backed the candidacies of Ram Bahadur Thapa for deputy chair, Top Bahadur Rayamajhi and Lekhraj Bhatta as secretaries.On 28 November, the close door meeting of an 11-member committee drew up a list for the 19 member Secretariat high command and candidates for the central membership. Questions can be raised about Oli having manipulated the process in his favour, but even if he did it, it did not go against party rules. And the fact that his candidates got the most votes makes the point moot now.With his <a href="https://www.nepalitimes.com/here-now/nepals-rudderless-political-leadership/" target="_blank" rel="noopener noreferrer">eyes firmly set on elections</a>, he deliberately promoted the Nepal-faction candidates and ex-Maoists to top party positions. Even his detractors within the party understood that strategy and went along with it.And by not allowing Oli to elevate his candidates to the central membership and Secretariat unopposed, Bhim Rawal and Ghanshyam Bhusal actually helped him gain legitimacy, and earn credit for upholding internal democracy. That Oli and his supporters would win was a foregone conclusion, which is why Rawal and Bhusal actually ended up strengthening the UML.To be sure, Oli pushed his own blue eyed boys as well: Ishwar Pokhrel as senior deputy chair, Shankar Pokhrel as general secretary, as well as Bishnu Rimal as deputy general secretary and Padma Aryal as secretary.Ironically, the most dissatisfied with Oli were his close allies Bishnu Poudel, Subhas Nembang, Lalbabu Pandit, Binda Pandey, Radha Gyawali, Goma Devkota, and Bishal Bhattarai who did not get the positions and seniority they thought they deserved.

Post-convention, UML eyes set on elections

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;