<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171152/636937e49c7e80680e03fe66jpeg.jpg" alt="" width="1400" height="934"/><figcaption>Kunda Dixit</figcaption></figure>Bikash Thapa in Annapurna Post, 24 DecemberJust as the much-delayed Melamchi water supply project neared completion with 90% of its tunnel construction complete, it is once more in limbo. Every politician in the past few years has been promising the citizens of Kathmandu Valley adequate water supply from the project. The deadline has been pushed back repeatedly for the last 30 years, and the latest official completion date was mid-February 2019.The Italian contractor had asked for Rs 1.61 billion compensation for delays caused by the earthquake and Indian Blockade in 2015. A Dispute Resolution Board decided in October to award the contractor Rs 350 million, and to pay the amount by 16 November. But when the money did not materialise, the contractor said it could not continue the work and wrote a letter to the ministry saying it was withdrawing from the project.The talk in the ministry is that Secretary of the Water Supply Ministry Gajendra Thakur and Surya Raj Kandel of the Melamchi Project were ‘bargaining’ with the contractor for kickbacks. Secretary Thakur has a reputation for even forcing subordinates in every ministry he has worked in to pay up to be evaluated positively. The contractor refused to fork out any kickback. Thakur and Kandel then retaliated by refusing to sanction the compensation payment.Thakur even complained to Prime Minister Oli that the contractor was going to flee the country with Rs 2 billion. Oli ordered action to be taken against Cooperativa Muratori e Cementisti di Ravenna (CMC). Italian and other nationals from the project who were going home for Christmas holidays were stopped at the airport and their passports confiscated. Thakur himself accompanied Police on a raid in a hotel in Thamel where some CMC staff were staying.The extortion and corruption of this sordid case is bound to have a negative impact on Nepal’s investment climate, besides further delaying Melamchi. Thakur even called Nepal’s top companies, offering them new contracts to complete the project.The tunnel work is nearly finished, but the headworks construction has not even started, and this will take another year-and-half. Thakur’s plan was to award this contract to someone else, by more than doubling its cost to Rs 4 billion.There is also evidence that Secretary Thakur is working with the knowledge of Minister Bina Magar. It is a shame that a bureaucrat who has left a trail of corruption everywhere he has served should be in charge of a National Pride Project like Melamchi.Corruption in Melamchi is not just corruption, it is a crime against the people.

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Melamchi delayed by government extortion

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/6369374c9c7e80680e03fe2ajpeg.jpg" alt="" width="1400" height="933"/><figcaption>Monika Deupala</figcaption></figure>Now that school <a href="http://archive.nepalitimes.com/news.php?id=464#.XBImEVUzbIU" target="_blank" rel="noopener">enrolment</a> in Nepal is approaching 100%, attention has turned to upgrading the quality of instruction and keeping the curriculum in tune with the times with a stronger focus on science and mathematics.This is because STEM education that integrates science, technology, engineering and mathematics in experiment-based learning is now needed in everyday life, and in every profession.With the convergence of technology, all appliances and applications need hands-on technical experience. However, most education in Nepali schools is still light years <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="http://archive.nepalitimes.com/article/nation/education-sector-neglected-in-mountain-communities,3690" target="_blank" rel="noopener">behind</a> with <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/not-catching-them-young-schools-in-rural-nepal,3773" target="_blank" rel="noopener">rote-based text book learning</a> of stultifying and irrelevant content.“A focus on STEM education can unleash students’ creativity, and it begins with small steps,” explains Irina Sthapit who was involved in STEM education in Nepal is now at Stanford University. “Hands-on STEM learning is not about fancy equipment, but how we can use the simplest of materials to encourage students to think and create. “Sthapit used paper cups to make rudimentary robots that could make sketches, and says STEM instruction is missing an ‘A’ for art, and the acronym should actually be STEAM. She says future careers will depend on students being fluent with technology, arts and humanities, and they have to be able to adapt for jobs of the future.Robotics Association of Nepal’s Manoj Lekhak agrees: “Even if students make simple lamps, they can learn about electricity, design-thinking, and create useful products.” Starting schooling with the basics of science, technology and mathematics can radically improve learning. And adding ‘art’ in STEAM encourages students to enhance their 4Cs: creativity, critical thinking, collaboration and communication.By working on projects like designing automatic street lights using photoresistors, or wearable tech with solar-powered LEDs, school-going children come up with solutions for real-life problems such as <a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/" target="_blank" rel="noopener">load-shedding</a> and <a href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/" target="_blank" rel="noopener">energy</a> efficiency.In recent years, research has shown that STEM education must start early, from primary school or even younger, to lay foundations of necessary thinking skills and learning culture.The Nepal government has been talking about creating child-friendly schools, which also entails an engaging learning process. But in most government schools, especially in remote areas, teachers are unable to align learning with experimental activities, and are often unaware of the latest technological advances. Moreover, there is pressure on them to finish a rigid course for the supposed supreme measure of success: exams.Read also:<a href="http://archive.nepalitimes.com/article/nation/Learning-from-experience,2038" target="_blank" rel="noopener">Learning from experience</a>, Beth Norford<a href="https://www.nepalitimes.com/banner/after-quantity-nepals-education-needs-quality/" target="_blank" rel="noopener">After quantity, Nepal's education needs quality</a>, Prakriti KandelThe process of change must start with a new government strategy to prioritise STEM learning, experts say. Teachers need to receive experiential training, and teaching-learning processes in classrooms must change. Scientists and teachers agree that instead of simply listening to lectures, children would learn more by making and inventing, using their hands to expand their minds and come up with solutions to real world problems.Suyog Shrestha, a Nepali particle physicist at the European Organisation for Nuclear Research (CERN) in Geneva, notes that Nepal’s schools need to attach a premium to hands-on experimenting in the classroom. “Nepali education puts a lot of emphasis on deriving and memorising formulae, applying them to get an answer, and to pass exams,” Shrestha said in an interview. “There is not enough emphasis on experiments. For example, I never had any exposure to laboratory work till Grade 11.”Beyond this, <a href="http://archive.nepalitimes.com/article/nation/school-mismanagement-committee,3123" target="_blank" rel="noopener">school leadership</a> plays a vital role to envision the philosophy of learning, provide support to teachers and ensure accountability. Most government schools that have done well have done so because of the activism of their leadership.In Dhading’s Bhubaneswori School, principal Ram Chandra Acharya worked consistently to foster responsibility in teachers for quality education so that the school even succeeded in attracting students from private schools.But Acharya also realises that Nepal is behind on STEM education, and is concerned that teachers themselves may not have adequate training to pass on that knowledge. He thinks there should be a provision to compulsorily post undergraduate and graduate science students to public schools as temporary support teachers to improve the quality of instruction.STEM education is urgently needed for innovation and Nepal’s sustainable economic future as well. The country has a lot of catching up to do, and the  few Nepalis who have achieved notable scientific breakthroughs have done so after going abroad.Moreover, with unprecedented growth in all STEM sectors, there is rising concern about how Artificial Intelligence will affect the future job market, removing options available today and creating new ones that do not even exist yet.The fact that there are young Nepalis involved in cutting-edge scientific research across the world proves that given the opportunity, they could be  contributing to STEM-related fields back home. Many brilliant Nepali scientists have gone on to work in organisations such as NASA and CERN, or have made breakthroughs in transplant surgery or astrophysics.If students had more opportunities starting at a young age in school in Nepal, many more could in future achieve even greater success. STEM education is not an absolute solution to the crisis in Nepal’s education, but it is a significant gap which if filled can empower students to find jobs, and be innovators.<h2>Innovating in Nepal</h2>Mahabir Pun does not just talk about science education, the Magsaysay Awardee has been working hard to retain Nepali technical talent in Nepal through his <a href="https://www.nepalitimes.com/banner/drones-to-the-rescue/" target="_blank" rel="noopener">National Innovation Center</a>.Just like he returned to Nepal from America, he wants Nepali scientists to come back to nurture science and <a href="https://www.nepalitimes.com/banner/lifting-livelihoods-by-lifting-water/" target="_blank" rel="noopener">engineering graduates</a> to become entrepreneurs and bring economic growth. Pun’s Centre still lacks adequate funding but is already supporting a range of projects in science, engineering and technology which include medical drones, alternative animal protein resources for poultry and an <a href="https://www.nepalitimes.com/banner/nepals-budding-e-commerce-ecosystem/" target="_blank" rel="noopener">e-commerce</a> platform.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636937509c7e80680e03fe2bjpeg.jpg" alt="" width="1400" height="933"><figcaption> </figcaption></figure>Pun says reversing the brain drain is a tough task, but there are measures that can be taken without much money to improve the chance of retaining Nepal’s science-minded students. “There have to be laboratories, equipment and tools for professionals to work in. Mentoring is another important element to help youth to reach their potential, but the main ingredient is transferring your passion to the students,” Pun told Nepali Times.Suyog Shrestha, a Nepali scientist at the particle research station at CERN in Geneva also notes that the least policymakers can do is to create policies at the national level to invest in science and technology and to relate those investments to development goals.“I know several Nepalis, all world-class scientists working abroad, who want to return to Nepal but will not because there is so much uncertainty and distrust,” Shrestha says, adding that some have returned in spite of initial drawbacks.Still, scientists like Pun have not been deterred by a cynical working environment, bureaucratic hurdles, and discouragement. But if they can overcome those givens, scientists can provide platforms for today’s students to get be a part of, and even initiate, their own state-of-the-art research in Nepal. Pun is a living example that it can be done.<h2>Green STEM</h2>After decades of emphasising environmental education, Nepal’s Curriculum Development Centre under the Ministry of Education is now planning to remove Health, Population and Environment (HPE) as a compulsory subject, and integrating its content into other science and social studies subjects.This controversial move, it is feared, will detach students from environment related-exposure during their high school education, especially at a time when pollution, global warming and water scarcity are such important topics with impacts on health.However, government curriculum developers under pressure from some donor agencies are arguing that HPE has not been very effective because, like other subjects, students had been just memorising concepts like biodiversity and conservation without understanding them -- just so they could write long answers during examinations.Proponents of environmental education, however, say that with <a href="https://www.nepalitimes.com/banner/on-thin-ice-in-the-khumbu/" target="_blank" rel="noopener">climate change</a>, air and water pollution, wetland destruction and rapid urbanisation becoming serious national and global crises, far from removing the subject, Nepali students need to understand it even more in-depth.Reshu Aryal works at Habeli Outdoor Learning Centre outside Kathmandu that gives students an immersive outdoor learning experience.“Children today need radical awareness about building climate resilience. They need to learn about the human rights connection to the environment, and about the natural resourcefulness of Nepal to be innovative and create a sustainable economy,” she told Nepali Times.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636937549c7e80680e03fe2cjpeg.jpg" alt="" width="800" height="1067"><figcaption> </figcaption></figure>Incorporating the need for environmental protection as a strong element of STEM would empower students to amalgamate science, technology and engineering to create sustainable solutions, Aryal added.By combining environment and engineering, for example, Nepal’s future professionals would not treat environmental protection as just an after-thought in infrastructure and health projects.Read also: <a href="https://www.nepalitimes.com/here-now/economy-ecology-of-nijgad-airport/" target="_blank" rel="noopener">Economy and ecology of Nijgad airport</a>, Om Astha RaiActivists argue that adding nature and environment studies into STEM will dilute their importance at a time when sustainable development should be Nepal’s primary focus. Instead, they advocate more intense training of teachers for hands-on field instruction of environmental subjects and nature studies.<h2>The World of Science</h2>Nations across the world have recognised the importance of STEM, and have taken steps to include it in their education system.Finland has a strong emphasis on STEM-philosophy in learning. A research-based master’s degree is a prerequisite for all teachers, who in turn work to foster inquiry and problem solving skills. Since 2004, technology was included in the craft curriculum that encourages students to design and create products. Standardised tests do not dominate learning, and teachers are given time to thoroughly plan classes.STEM education is also big in Singapore. In 2015, Prime Minister Lee Hsien Loong said, “In the next 50 years, we need strong STEM capabilities to be what we should be - a vibrant, exciting, advanced society.” Singapore honours its teachers, and only the top 5% of graduates are recruited as teachers.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636937579c7e80680e03fe2djpeg.jpg" alt="" width="1150" height="491">South Korea has focused on STEAM (the ‘A’ is for ‘art’) to engage students and inspire creativity. Teachers receive STEAM-specific training and a study by KOFAC revealed that students in STEAM classes showed greater interest in all different elements of science, and demonstrated enhanced creative thinking skills.When he was US president, Barack Obama launched the Educate to Innovate project that worked to train 100,000 STEM teachers and increase federal investment in STEM. Obama said in 2013: “How do we create an all-hands-on-deck approach to science, technology, engineering, and math? We need to make this a priority to train an army of new teachers in these subject areas, and to make sure that all of us as a country are lifting up these subjects for the respect that they deserve.”In China, there is a nationwide effort for a comprehensive STEM education system from policy-making right down to curriculum reform and teaching innovation.STEM education is encouraged in Switzerland and Germany, where students engage in hands-on experiments and activities in class. Ireland released a STEM Education Policy Statement 2017-2026 which presents objectives, actions and implementation of policies for STEM education in the country.

The Science of Learning

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

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