Nepal’s Finance Minister Bishnu Poudel is a Red. And as Finance Minister in a coalition led by his Communist Party of Nepal (Unified Marxist-Leninist) he has the unenviable job of saving a country deep in the red.
Despite its impressive name, there is nothing even remotely ‘<a href="https://nepalitimes.com/here-now/forgotten-woman-who-sheltered-communist-activists?%2F">communist</a>’ about his party as Poudel works on the upcoming budget. He has warned repeatedly about a massive revenue shortfall with <a href="https://nepalitimes.com/news/till-debt-do-us-part">Nepal’s expenditure</a> now 25% higher than its income.&nbsp;
The government has already reduced subsidies to local governments due to lack of money, and plans to cut small-scale programs entirely in the budget. But such rollbacks do not even make a dent in reducing the deficit gap.&nbsp;
Revenue has been falling since <a href="https://nepalitimes.com/news/nepal-s-uneven-covid-19-deaths">Covid-19</a>, and never really recovered — even though in 2023/2024 revenue was a record high compared to the previous year. The fiscal year 2022/23 marked the first time in the last five decades that Nepal experienced a negative growth rate in revenue.
This year, collections rose to Rs919 billion by mid-May, a 11.5% increase over the previous year, but with only two months to go before the end of this fiscal year, the government has only collected 65% of the expected revenue.
<div class="embed-block"><iframe title="Nepal’s income-expenditure gap" aria-label="Interactive line chart" id="datawrapper-chart-wFxbc" src="https://datawrapper.dwcdn.net/wFxbc/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); </script></div>
Revenue mainly comes through VAT, customs, excise and income tax. A slowdown in imports and <a href="https://nepalitimes.com/news/poor-cash-rich-nepal?%2F">domestic economic activity </a>has led to a fall in collection. Domestic consumption has slowed as <a href="https://nepalitimes.com/here-now/no-country-for-young-men-c89lgrrl">young Nepalis migrate</a> overseas. There is also concern about<a href="https://nepalitimes.com/news/human-trafficking-patterns-changing-in-south-asia"> smuggling across the border</a>.&nbsp;
“Our revenue is not rising in proportion to<a href="https://nepalitimes.com/from-the-nepali-press/more-than-half-of-nepal-s-electricity-imported-from-india"> our imports</a>,” says Kewal Prasad Bhandari, former Secretary to the Government of Nepal. “This points to significant leakage at border checkpoints.”
Customs evasion has been rising since Covid-19, and non-compliance with custom duty regulations worsened during the 2022 elections. This prompted lawmakers to approve an amendment to Nepal’s Revenue Leakage Act 1995 that proposes the formation of a Central Revenue Leakage Control Committee under the coordination of the Finance Minister.&nbsp;
Read also: <a href="https://nepalitimes.com/banner/now-the-economy-stupid">Now the economy, stupid</a>
“Customs evasion has been out of control since 2022, with people blatantly flouting the laws,” says a former secretary who wished not to be named. “Customs fraud is widespread because there is little political will to hold those who break the law to account because of their political connections.” &nbsp;
The Finance Ministry is currently staffed by officials who have no experience and expertise in the sector. “It used to be called a ‘Super Ministry’ with capable financial administrators, but that is no longer the case,” adds the former secretary.&nbsp;
VAT fraud is also rampant with almost 28% of registered taxpayers failing to file annual turnover details to revenue offices. Another 24% of VAT-registered taxpayers who do file documents show zero VAT on transactions.
<div class="embed-block"><iframe title="Nepal’s National spending (in %)" aria-label="Stacked Columns" id="datawrapper-chart-Qpj3c" src="https://datawrapper.dwcdn.net/Qpj3c/4/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); </script></div>
“We can generate up to Rs2 trillion in revenue if we make active efforts to monitor tax, VAT, and customs fraud,” says Min Bahadur Shrestha, former Vice President of the National Planning Commission.&nbsp;
With the implementation of the federal system, government expenditure has increased exceptionally in the form of grants administered by the central government for provinces and municipalities. Such grants are a significant part of current expenditure, which also includes social security and administrative spending.&nbsp;
Even as the number of <a href="https://nepalitimes.com/here-now/protecting-protected-areas-from-infrastructure?fbclid=IwAR1wK0MDFlFST_2EYb3f54LS4-fPt6rYfLG1DJ1JaQsU3w8-ezyXIxGOqzk">development and infrastructure</a> projects goes down, the size of the budget has increased every year, primarily due to the debt burden. Unable to raise enough revenue to cover expenditure, the government has borrowed extensively from within and outside the country, quadrupling its public debt over the last decade.&nbsp;
Nepal has now reached a point where it is borrowing more money to pay back what it has borrowed.
Current expenditure and debt servicing make up much of government spending, leaving little money for essential development. In the previous fiscal year, 67.6% of Nepal’s spending was current expenditure and 18.% on debt servicing, leaving only 13.6% for development projects.&nbsp;
Nepal’s public debt has exceeded Rs2.67 trillion as of mid-April, and forms 46.75 % of its GDP in comparison to 22.3% ten years ago. Officials have attributed Nepal's debt load to post-earthquake reconstruction, a bloated federal machinery, and the pandemic.
Nepal has to either significantly cut spending, or scale up <a href="https://nepalitimes.com/here-now/nepal-s-tax-system-widens-rich-poor-gap">revenue generation</a>. Min Bahadur Shrestha, says reducing expenditure is not the right policy for a country like Nepal, the focus should be on income generation.&nbsp;
<div class="embed-block"><iframe title="LOAN MOUNTAIN (in trillion Rupees)" aria-label="Interactive line chart" id="datawrapper-chart-bnVny" src="https://datawrapper.dwcdn.net/bnVny/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); </script></div>
Last year’s High-Level Tax Reform Advisory Committee led by former Finance Secretary Bidyadhar Mallik projected a revenue increase of up to Rs300 billion annually through reforms like tax hikes and reducing VAT exemptions.&nbsp;
The Economic Reform Commission under former Finance Secretary Rameshore Khanal this month was recommended new revenue-raising ideas, including a controversial inheritance tax on property and real estate transactions, which it suggested would also discourage people from accumulating large amounts of wealth. Critics say this will discourage saving and disrupt <a href="https://nepalitimes.com/here-now/nepals-only-growth-industry-private-sector-corruption">Nepal’s business environment</a>.&nbsp;
And then there is the <a href="https://nepalitimes.com/editorial/nepal-s-corruption-carousel">corruption</a>. Instead of holding those flouting tax laws to account, politicians pander to lobbyists and special interest groups. Defaulters and tax evaders get away, and cronies are appointed to leadership positions in regulatory bodies whose job it is to monitor tax evasion.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/higher-corruption-in-high-places">Higher corruption in high places</a>, David Seddon
“The government’s credibility comes into question when it allows itself to be bribed into handing over leadership of regulatory bodies to middlemen,” says &nbsp;Shrestha. “A lot of money goes not towards our national coffers, but to line the pockets of a select few individuals.
Various committees have recommended economic austerity in order to minimise wasteful spending, including banning unnecessary travel, cutting down on the purchase of vehicles, furniture, and IT infrastructure, as well as closing and downsizing offices. None of this has been followed through.
Says former secretary Kewal Prasad Bhandari: “There is no other country in the world with such large-scale waste of government resources like ours, that is why we need stronger policies that make appropriate use of taxpayer money. Otherwise we will just go deeper into the red.”

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Nepal in the red

This year, the <a href="https://nepalitimes.com/opinion/quo-vadis-un-80-9vthn7mg">United Nations is marking its 80th anniversary</a> and it is being celebrated with special events across the world to commemorate its establishment on 24 October 1945. It has also been 75 years since the first UN adviser, the Swiss geologist Toni Hagen, was sent to Nepal to explore development opportunities. In 1950, there were no roads and Hagen walked on foot across the length and breadth of Nepal’s mountains, valleys and plains. This year also marks the 60th anniversary of the United Nations Development Program (UNDP) in Nepal, and much of Hagen’s work laid the basis for the UN’s involvement in education, health, and connectivity in Nepal’s future development. Despite frequent changes in government and political system, Nepal has made remarkable progress. The poverty rate has gone down by half in the past 30 years to 20.27% of the population. Much of it has to do with remittances from Nepalis working overseas, but it is also a result of the Nepal government’s investment in education, health care and social welfare.&nbsp; There have been special initiatives like the Prime Minister’s Employment Program that have provided jobs to nearly 800,000 people in the country’s 743 municipalities — especially in those areas with lower Human Development Index (HDI) like the far-west and the Tarai.&nbsp; This year’s HDI report by UNDP shows that Nepal’s score had risen to 0.622, whereas it was only 0.404 in 1990. In the past 33 years, the average lifespan of Nepalis has risen by 15.6 years to 70.4 years, whereas it was only 54.8 in 1990. However, the country’s HDI ranking is still 145 among the world’s 193 countries. “Yes, there has been significant improvement in living standards in the past 60 years, road connectivity has improved, the maternal mortality rate has gone down dramatically, almost everyone has phones, there are schools,” says Saru Joshi of the thinktank Nepal Policy Institute. But, she adds: “It is still difficult to get citizenship papers, especially in the name of the mother, and this has excluded many women from banking services, inheritance. After all our progress in physical infrastructure, Nepal now needs to prioritise inclusive social development.”&nbsp; Some of this is also happening. Eighteen years ago, Nabaraj Subedi, 49, of a village in Baglung decided not to join his peers &nbsp;fleeing the Maoist conflict to find work overseas. He invested Rs500,000 to buy a diesel generator and start a small furniture business.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071044_eeef308e19a73de507a425b2c6afc47269884549cf4c8fac07ca9a4898c8e031.jpg" data-media-id="editor_1" data-image-id="20251024071044_eeef308e19a73de507a425b2c6afc47269884549cf4c8fac07ca9a4898c8e031" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Nawaraj Subedi"> <figcaption>Nawaraj Subedi, 49, proprietor of Tarakhola Furniture Factory. </figcaption> </figure>  Today, with the installation of the 380 kilowatt small hydroelectric plant, he does not need to depend on his unreliable generator to power his equipment anymore. There is now a road connecting his village, and Subedi has generated local jobs, opened a sales branch in the city, and gets orders from as far away as Pokhara and Chitwan. “My costs have gone down drastically because of the electricity, and sales have gone up because of the road connecting my furniture to markets. My business has expanded,” Subedi says. Back in 1960 in a report he prepared for the Nepal government on behalf of the United Nations, Toni Hagen had emphasised just this: investing in electricity generation and connectivity to uplift the remote rural areas of Nepal.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024081024_188ab121dc3cf2816ee71a72cb3687493eda37ab99ecc04802d647c8c9b4cd2d.jpg" data-media-id="editor_2" data-image-id="20251024081024_188ab121dc3cf2816ee71a72cb3687493eda37ab99ecc04802d647c8c9b4cd2d" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Tarakhola Furniture Factory"> <figcaption>Subedi's staff at the Tarakhola Furniture Factory.</figcaption> </figure>  Subedi’s furniture factory gets its electricity from the nearby Tarakhola Hydropower, a company set up eight years ago with financial and technical support from UNDP’s Renewable Energy for Rural Livelihood (RERL) project. &nbsp; “The project completely transformed living standards in this village,” says municipality chair Dhan Bahadur BK. “It has helped create jobs locally, there is now money to invest in education and healthcare. Households can pay their electricity fees electronically through smart billing.”&nbsp; After working with the government on rural electrification, UNDP is focussed on using that power for local employment creation. A women’s group, for example, has bought an electric-powered potato processing machine that can produce chips.&nbsp; “We are 12 of us mothers, daughters, daughters-in-law who process, package and market the potato that we grow ourselves, and it has raised our income,” says Sukmaya Roka, 57, who chairs the group.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071044_70b22418699178bcdd0abb0aa308796980ecd29634bcda6ff113a7624e709751.jpg" data-media-id="editor_3" data-image-id="20251024071044_70b22418699178bcdd0abb0aa308796980ecd29634bcda6ff113a7624e709751" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Sukamaya Roka"> <figcaption>Sukamaya Roka, 57, chair of Sipa Aalu Chips Utpadan Samuha from Tarakhola Rural Municipality, Baglung. </figcaption> </figure>  Today, 6.1 million households in Nepal (92.2% of total) have electricity in their homes, up from 17.9% 30 years ago. Access to electricity has not just brought lights to homes, but improved everything from productivity, quality of education, healthcare and phone connectivity.&nbsp; “To see what electricity and roads can do, just look at our municipality,” says chair Dhan Bahadur BK, “citizens have become more self-reliant, more aware of the outside world.”&nbsp; NETTLES INTO CASH&nbsp; Just a little bit of training, resource backup and local empowerment can uplift the living standards of Nepalis. The progress made in harvesting abundantly-available allo (nettles) and turning it into household products is an example. When a landslide swept away his home and farm in a flood 40 years ago, Buddhi Purja of Parbat became destitute. But he took part in a government training program supported by UNDP and Australia to harvest the wild nettles that grew on mountain slopes and turn the fabric into bags.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071048_56c440c478dffbc13911369b6f4133baf658cc3667773cdb44b7c40e006463ce.jpg" data-media-id="editor_4" data-image-id="20251024071048_56c440c478dffbc13911369b6f4133baf658cc3667773cdb44b7c40e006463ce" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Rhitu Saugat Handicraft"> <figcaption>A worker at Rhitu Saugat Handicraft making a bag out of nettles.</figcaption> </figure>  “After the landslide, we had to go hungry if we did not get a day job,” Purja recalls, “but after this training we have found that we can turn nettles into cash.” His allo bags are now hanging in tourist shops in Pokhara Lakeside and Thamel.&nbsp; The idea that nettles can be processed into useful fabric has not spread across the country, and new ecologically conscious consumers in Europe and elsewhere now import Made in Nepal nettle products.&nbsp; Purja started out with an investment of Rs500,000, and had a Rs20 million business that employed 25 workers. The Covid crisis in 2020 affected the sales, but Purja has recovered from it, sent his daughter off to study abroad, and is thinking of diversifying his product range.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071044_ab6d15abcbb9a643e12a384f4bc488b7e210a8c95303fbe1b2f77716d26eede9.jpg" data-media-id="editor_5" data-image-id="20251024071044_ab6d15abcbb9a643e12a384f4bc488b7e210a8c95303fbe1b2f77716d26eede9" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Buddi Purja"> <figcaption>Buddi Purja, proprietor of Rhitu Saugat Handicraft in Pokhara.</figcaption> </figure>  While UNDP’s project has made successful businessmen out of people like Purja, nationwide it has created 187,000 jobs in rural medium-scale industries. Much of what has worked in Nepal has been at the community level with decentralised projects like these that use the entrepreneurship of people like Buddhi Purja, Navaraj Subedi, and Sukmaya Roka. It is tantalising to imagine how much more progress Nepal would have made if their work could be replicated nationside and upscaled to the state-level.

Think locally, invest locally

Imagine a high-end fair trade tea brand from Nepal that has done everything right, with ethical sourcing practices and international certifications. It has built a loyal base of socially conscious, premium customers in an export market and focuses on quality over quantity. Then one day, a government in the export market introduces a new ‘listing criteria’ that requires exporting a certain amount of tea to at least three countries in the past five years. But this was never a numbers game, it was about a niche market of socially responsible tea lovers. Suddenly, fair trade tea companies are restricted from exporting tea to that country. Pretty unfair for the company, for consumers, for the tea sector. More importantly, for tea farmers and families benefiting from fair standards. The overseas labour industry is facing a similar risk as recruiters, including those that have adopted ethical standards, may soon be barred from finding workers for Malaysia. On 27 October, the Malaysian Ministry of Foreign Affairs sent letters to five countries including Nepal, Bangladesh, Burma, Pakistan and India to ‘rationalise the number of licensed private recruitment agencies permitted to facilitate recruitment and placement of workers to Malaysia’.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251030141040_050274dddc6cf10224b0ad9283eec7b3bc3c0acd650543a808a8ea473ecf40db.jpg" data-media-id="editor_0" data-image-id="20251030141040_050274dddc6cf10224b0ad9283eec7b3bc3c0acd650543a808a8ea473ecf40db" data-rendition-name="original" width="961" height="1135" loading="lazy" alt="Malaysia recruitment"></figure>  The letter includes 10 criteria for private recruiting agencies including at least five years of operating experience, deployment of 3,000 workers in the past three years of operation, experience sending workers to at least three countries, a 10,000 sq m office maintained for three years, valid licenses and good conduct certificates, five employer testimonials, and operating their own training and accommodation centres. Two conditions stand out as potentially harmful to Nepal’s ethical recruitment movement. First, although the letter cites a minimum of 3,000 workers, it says three years in the heading and five in the body text. A big enough difference to affect a significant number of recruiters from making the cut, but problematic regardless. Second, the requirement to send workers to at least three countries disproportionately impacts responsible recruiters in Nepal and elsewhere. Turning the selection of workers into a numbers game is dehumanising. Responsible recruiters deprioritise volume, focus on quality of jobs even when business sustainability comes under threat as ethical opportunities that do not require workers to pay any feed and ensure greater transparency are difficult to come by. Sending workers is further impacted by a series of external shocks. For example, in the Malaysian context Nepal banned emigration to Malaysia for two years followed by the Covid pandemic, and then Malaysia’s decision to stop the intake of foreign workers for the last two years.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251030141040_b1b88b3ae2e94c6bc077529ac6f2a4e380a385ee9a22219edfed25067c9d25a1.jpg" data-media-id="editor_1" data-image-id="20251030141040_b1b88b3ae2e94c6bc077529ac6f2a4e380a385ee9a22219edfed25067c9d25a1" data-rendition-name="original" width="595" height="841" loading="lazy" alt="Malaysia recruitment"></figure>   <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251030141040_2cf252908d18aaf09c875002eef2d92ab45897a56b560addd2dc02311725c8a7.jpg" data-media-id="editor_2" data-image-id="20251030141040_2cf252908d18aaf09c875002eef2d92ab45897a56b560addd2dc02311725c8a7" data-rendition-name="original" width="590" height="238" loading="lazy" alt="Malaysia recruitment"></figure>  Many ethical recruiters have focused on Malaysia because it is a more common labour market for responsible recruitment than other destinations like the Gulf. There is no credible justification to why responsible recruiters well regarded by scores of Malaysia-based multinational companies and with decades of experience should be ‘disqualified’ for not diversifying. Finding jobs for Nepalis in new markets is difficult given fierce competition, challenges identifying companies which follow the employer-pays principle, lack of networks and shortcomings in marketing strategies. These factors hit responsible recruiters harder because profit-motivated employers are often unwilling to cover the costs and fees associated with workers’ recruitment. “The volume of deployment does not determine a recruiter’s capability or the quality of services provided,” says Sujit Shrestha of the Nepal Association of Foreign Employment Agencies (NAFEA). Nepal recently scrapped the licensing renewal requirement that mandated sending at least 100 workers a year as it was impractical. The new Malaysian criteria is similar in nature, he added. The ball is now in Nepal’s court at a time when the interim government does not even have designated heads in the Foreign Ministry and the Ministry of Labour, Employment Employment and Social Security. When rumours about the Malaysian action started circulating, NAFEA had raised the issue, but was assured that this was not an attempt to set up a syndicate.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251030141044_83c8a174ef116603f747d1cd254c4d353e8b855a41fb99feec54e701f5fc4c3f.jpg" data-media-id="editor_3" data-image-id="20251030141044_83c8a174ef116603f747d1cd254c4d353e8b855a41fb99feec54e701f5fc4c3f" data-rendition-name="original" width="3456" height="5184" loading="lazy" alt="Malaysia recruitment"></figure>  How will governments and recruiters in other origin countries now respond? There is precedence from Bangladesh. Dhaka-based journalist at the Daily Star, Porimol Palma who says, “Earlier, the Malaysian authorities had selected 101 Bangladeshi recruiters unilaterally, despite Bangladesh’s call for a syndicate-free recruitment mechanism.” Between 2022-2024, 450,000 Bangladeshis were recruited under this system with workers paying between $4,500 and $6,000, even though the legal limit was $750. Palma attributes part of the high fees workers had to pay were for commissions or bribes to recruitment syndicates. Adrian Pereira heads the North South Initiative in Malaysia says: “The criteria seems a bit fishy, as they do not appear to address the actual problems in the the recruitment of foreign workers. Some of the criteria seem to encourage a system of monopoly or syndicate rather than a rights-based approach. Every government has the right to set criteria for recruiters, but conventions and ILO (International Labour Organization) standards on recruitment exist. It looks like we’re back to square one.” Whether migrant origin countries including Bangladesh and Nepal accept the terms sent without reservations or push back in good faith remains to be seen. In an ideal world, a collective stance should put workers’ needs and welfare at the centre. How rational is the proposed ‘rationalising strategy’? What aspects of it are promising to curb recruitment abuse and what merits serious reconsideration? Even if the move from the Malaysian side is well-intentioned to address rampant malpractices migrant workers face, Nepal should deliberate on the conditions set, the collateral damage especially on the responsible actors and small but capable recruiters. Alternate options that might serve everyone better before rushing to respond with a chosen list by 15 November. If the proposal is accepted, how would it be done in a transparent and accountable way? It is noteworthy that Indonesia was not listed even though it has the most workers in Malaysia among the 16 countries that send migrants to Malaysia. The Responsible Business Alliance (RBA), the ILO, the International Organization for Migration (IOM), and certification programs like On the Level (OTL) also need to use their leverage to ensure that recruiters, including those they have trained or certified on ethical recruitment principles, are not penalised. This is more than just about protecting the ethical recruitment movement, but raising even more basic questions: Who can legally be a recruiter in Nepal? There are already obligations like hefty security deposit and minimum office requirements. But requirements to have building facilities with ‘accommodations’ or ‘testing centres’ are not among them. There are 1,150 plus players in Nepal’s recruitment sector, with a few hundred engaged in the Malaysian market. A unilateral selection criteria could risk foul play, or lead to unintended, unfavourable consequences. To be sure, overseas recruitment in Nepal is known for ‘settings’, corruption, dog-eat-dog competition, and collusion. The profiteering is out of control, often at the expense of workers. But the solution does not lie in stifling the industry with criteria like deployment volume, building worker accommodations or expanding office floors. The focus should instead be on enforcing rules and laws in both countries that govern the industry, and the Malaysian labour agreement that has not been renewed since October 2023. Meddling in the industry in ways that harms fair competition and ethical actors means workers suffer. The only issue that should be taking precedence is: how will Malaysia’s 10-point criteria and planned arrangement affect migrant workers? We have seen how for identical Malaysia-based jobs, one worker might pay zero while another pays up to Rs400,000, depending on the employer and recruiter. It is unclear if the 10-point selection criteria rewards the employer. As a longstanding host country for Nepali migrants, Malaysia deserves credit for nurturing the small but growing ethical recruitment industry here. Export-oriented companies in Malaysia need responsible recruitment partners and have mentored recruiters to strengthen their practices and move away from worker-paid models. The business case for ethical recruitment standards has led many recruiters in Nepal to pivot with many now in various stages of transition from traditional to hybrid or purely ethical practices. This progress needs to be acknowledged and built upon. Large, well-networked recruiters with large physical assets and high volume of workers seem to be the winners of Malaysia’s 10-point criteria after two years of waiting for the Malaysian market to reopen. Responsible recruiters endure long periods of minimal or no deployments that threatens their survival. The letter now sitting on the desk of the interim government in Nepal deepens the concern: rather than just failing to recognise or reward responsible recruiters, does the international recruitment market actually punish them? Upasana Khadka heads Migration Lab, a social enterprise aimed at making migration outcomes better for workers and their families. Labour Mobility is a regular column in Nepali Times.

Who gets to recruit for Malaysia?

Public anxiety about immigration has become a powerful political currency across many liberal democracies. In Australia, as elsewhere, legitimate concerns about housing and economic fairness can be, and increasingly are exploited by anti-democratic actors who frame migration not as a policy issue but as a cultural threat.&nbsp;
When these narratives move from online spaces to public rallies, they do more than divide opinion; they erode the social trust and pluralism on which democracy depends. Understanding how populist and far-right movements weaponise migration debates is crucial to recognising the early challenging signs of liberal democracy.
Immigration has become one of the most politically charged issues in Australia, not only because of the numbers but because of its entanglement with cost-of-living pressures, housing shortages, and rent spikes.&nbsp;
The latest Household, Income and Labour Dynamics in Australia (HILDA) <a href="https://www.unimelb.edu.au/newsroom/news/2025/september/how-we-live-latest-hilda-data-gives-insight-into-a-changing-australia">data</a> shows rising household financial stress as Australian households spending more on rent and income tax. These changes likely reflect a mix of economic and policy factors but create a lot of room for people to hold inaccurate and occasionally contradictory attitudes on these issues.&nbsp;
While net overseas migration has started to decline from its post-pandemic peak, public concern remains high, amplified by populist rhetoric. Some surveys have <a href="https://www.theguardian.com/australia-news/2025/feb/04/australians-want-less-migration-but-oppose-cutting-international-student-numbers-study-finds">revealed</a> a nuanced picture: most Australians want lower migration overall but oppose cutting international student numbers, and support targeted skilled migration to address workforce gaps.&nbsp;
As former Home Affairs Minister Clare O’Neil <a href="https://minister.homeaffairs.gov.au/ClareONeil/Pages/how-australia-broke-its-migration-system.aspx">argued</a> in 2023, Australia’s migration system is “broken and un-strategic”, not delivering for business, for migrants, or for the larger population. This is a situation that frustrates both sides of the debate and makes immigration an easy political flashpoint.
The recent <a href="https://marchforaustralia.org/">March for Australia</a> rallies turned these anxieties into street-level mobilisation. Tens of thousands <a href="https://www.bbc.com/news/articles/czjmre371l1o">protested</a> at what they called ‘mass immigration’, while far-right groups seized the opportunity to inject xenophobic slogans and calls for ‘remigration’ into the public space. These demonstrations were not only about visa caps or housing and jobs; they became performances of who is entitled to belong.&nbsp;
When immigration is framed not as a policy question but as a cultural test of Australianness, it risks shrinking the demos, the very community that democracy is meant to represent.
What made the March for Australia so striking was not only its size but its composition. Recent investigative reporting <a href="https://www.theage.com.au/politics/victoria/don-t-mention-hitler-and-you-re-sweet-the-great-march-for-australia-deception-20250909-p5mtlc.html">revealed</a> that neo-Nazi groups were not merely present at the March for Australia rallies but played a role in covertly organising them. They amplified messaging online, coordinated attendance, and sought to mask their involvement to broaden appeal.&nbsp;
This highlights that democratic erosion is rarely spontaneous; it requires actors who deliberately exploit social grievances, mistrust, and polarisation to mobilise anger for their anti-democratic ends. The banners reading ‘<a href="https://www.theguardian.com/commentisfree/2025/sep/01/how-do-i-feel-safe-after-march-for-australia-anti-immigration-protest-ntwnfb">Stop Immigration</a>’ revealed that public hostility towards migrants, <a href="https://www.afr.com/politics/federal/pressure-mounts-for-price-to-apologise-to-indian-australians-20250908-p5mt7x">particularly</a> from the Indo-Pacific, is growing.
For many migrants, these displays are more than conceptual debates about white national identity. They are experienced emotionally. Writing shortly after the rallies, Melbourne-based writer Jafrin Kabir <a href="https://www.theguardian.com/commentisfree/2025/sep/01/how-do-i-feel-safe-after-march-for-australia-anti-immigration-protest-ntwnfb">reflected</a> that she had never felt so foreign on Australian soil. She pays taxes and inflated rents, contributes skills in the national interest, cheers for the Tillies and calls Melbourne “home”, yet suddenly felt unsafe because of the origin and colour of her skin.&nbsp;
Similarly, Chinese national interviewed by media outlet <a href="https://www.scmp.com/news/china/diplomacy/article/3325127/i-feel-insecure-chinese-nationals-australia-blindsided-anti-immigration-marches">reported</a> cancelling weekend plans and feeling “blindsided” by the scale of the marches.
Scapegoating migrants especially in times of economic stress is an age-old phenomenon and is not just limited to Australia. Across the democratic world, from the United States to the UK and parts of Europe, hostility toward migrants and minorities has become a route for anti-democratic forces. Populist actors often <a href="https://www.theguardian.com/australia-news/2025/mar/27/peter-dutton-keeps-blaming-migration-for-the-housing-crisis-but-can-it-really-be-that-simple">use</a> cultural anxiety and demographic change to justify illiberal and undemocratic measures, claiming to restore order while actually dismantling checks and balances.
By analysing democratic decay, scholars like Lydia Khalil at the Lowy Institute, <a href="https://interactives.lowyinstitute.org/features/democratic-erosion/">argue</a> that democracies rarely break down at once. Instead, they incrementally weaken through vicious cycles: declining trust in institutions, entrenched division based on hate, the normalisation of political violence, and the bit by bit removal of norms and guardrails.&nbsp;
Though some of the conditions are present in Australia to be exploited by anti-democratic actors, for example, almost two-thirds of Australians believe their leaders intentionally mislead them, according to the <a href="https://www.edelman.com/au/trust/2025/trust-barometer">2025 Edelman Trust Barometer</a>, &nbsp;but their presence is not determinative.
Australia’s democratic guardrails remain strong: independent courts, transparent elections run by the AEC, and a free press continue to hold power to account. Federalism and active civil society further diffuse power and create space for contestation.&nbsp;
But if public trust continues to erode and social divisions deepen, these safeguards will come under strain. Early recognition and action are crucial to ensure that today’s street-level hostilities do not translate into institutional regression.
Preventing such outcome requires a socially embedded understanding of migration, an understanding that goes beyond simplistic optimistic and pessimistic views. Policy makers should go beyond Push-Pull models, functionalist and neoclassical and historical-structural theories.&nbsp;
Consulting the work done by <a href="https://www.guilford.com/books/The-Age-of-Migration/Haas-Castles-Miller/9781462542895#:~:text=International%20Population%20Movements%20in%20the%20Modern%20World,-Hein%20de%20Haas">Hein de Haas</a> et-el, migration should be conceptualised as an intrinsic part of broader processes of development, social transformation and globalisation rather than a 'problem to be solved'. We need more nuanced views that have an eye for the complexity of migration processes and the diversity of its causes and impacts.
Sohail Akhtar is a Melbourne- based researcher focusing on governance, public policy, and migration. He contributes to Lowy Institute Sydney.
This article was issued by the Toda Peace Institute and is being republished from <a href="https://toda.org/global-outlook/2025/is-street-level-hostility-a-challenge-to-liberal-democracy-reflections-from-australia.html">the original</a> with their permission.

Is street-level hostility a challenge to liberal democracy?

Intricately painted Buddha, Aryatara, Krishna, and Parvati gaze serenely at visitors at the Kathmandu Art Gallery under muted amber lights. Moving from one artful devotion to the next, a quiet, profound connection to the divine envelopes the visitor. This transcends art to the realm of the spiritual. &nbsp; The gallery’s latest exhibition, Masters of Devotion, features art by 22 artists all from Bhaktapur. They also include Ajay Karmacharya, Purna Prasad Hyoju, Nhuche Kaji Bajracharya, Rajani Sinkhwal, Shashi Dhar Sainju, Surya Bahadur Chitrakar and Sundar Sinkhwal from the Khowpa Paubha Chowmi Pucha. Paubha are religious and devotional art depicting deities and mandala that date back to the 7th century, when Newa artists began to paint images of the gods on cloth. For the artists who practice this craft, the art form is as meditative as it is meticulous.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251025041028_de34b51d48bcee50ae391301e2ff1890be7ecba3df7e563537c273818825aad5.jpg" data-media-id="editor_0" data-image-id="20251025041028_de34b51d48bcee50ae391301e2ff1890be7ecba3df7e563537c273818825aad5" data-rendition-name="original" width="1280" height="960" loading="lazy" alt="art review "> </figure>  The exhibition at the newly-opened space Kathmandu Art Gallery coincides with the festival season and is a collection of extravagant works done in mineral and stone colour, sakura and gouache. The vintage art space is located at Babar Mahal Revisited and is a fitting accompaniment to the paubha featured in the exhibit.&nbsp; Sundar Sinkhwal’s vividly painted Harihara is among the more eye-catching works. “Half of the painting is Shiva and half is Vishnu, hence the name Harihar,”explains Sinkhwal. “Together with their consorts Parvati and Laxmi, I have painted Uma-Maheswor and Laxmi-Narayan.” Nandi and Garuda, the vehicles of the two gods, complete the vibrant painting.&nbsp; In contrast, for his piece titled Lakshmi, Sinkhwal shrouds his canvas in dark colours to paint Kuber, the deity revered as the custodian to the wealth in the Hindu pantheon, accompanied by two khyak apparitions —one black, the other white— both mythical creatures in Newari folklore.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251025041032_1bde6de442b742c300bb8c9278ea8886445aa8df47076fd9aa362ce1f8bef903.jpg" data-media-id="editor_1" data-image-id="20251025041032_1bde6de442b742c300bb8c9278ea8886445aa8df47076fd9aa362ce1f8bef903" data-rendition-name="original" width="1280" height="960" loading="lazy" alt="art exhibition"> </figure>  “The black khyak is considered inauspicious, while white ones are a symbol of good luck,” explains Sinkhwal. Purna Prasad Hyoju has used mineral paint on canvas for a powerful depiction of Ardhanareswar, the composite form of Shiva and his consort Parvati.&nbsp; “I drew inspiration from the Newari Swasthani story about the separation of Shiva and Satidevi,” says Hyoju. Legend has it that Shiva, unwilling to part from his consort, reincarnated as a unified dual gender form of himself and Parvati. Hyoju has painted goddess Parvati in bright yellow, in homage to one of her other manifestations, Gauri, which means radiant.&nbsp; Meanwhile, Ratna Gopal Sinkhwal’s Kurkula Devi, done in stone pigment, is radiant on the cotton canvas. “Kurkula Devi is a tantric goddess whose traces are found in the Sadhana Mala,” says Sinkhwal. “The stone pigment is what makes the goddess look like she is gleaming.” One of Sinkhwal’s other works draws from stories in the Mahabharat to depict Bhimsen, Draupadi, Dushasan and Akash Bhairav in confrontation, expressions fierce.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251025041028_72eea52c8504eccb8b3be7cd4cef616dfb8efd821e8b1e1ae8f440f10782be11.jpg" data-media-id="editor_2" data-image-id="20251025041028_72eea52c8504eccb8b3be7cd4cef616dfb8efd821e8b1e1ae8f440f10782be11" data-rendition-name="original" width="1280" height="854" loading="lazy" alt="art exhibition"> </figure>  The opening of the exhibition last week also featured a music session, during which some of the artists sang traditional songs. Their voices joined the rhythm of the madal and melody of the harmonium, adding warmth to the crisp autumn evening.&nbsp; Each painstakingly detailed paubha reflects the artists’ devotion to divinity and mythology, as well as their heritage. Masters of Devotion showcases the work of veritable masters of their craft, and is a must-visit for art connoisseurs and devotees alike. Says the gallery’s Sangeeta Rana Thapa: “It is our honour to celebrate the artists’ work—to stand among pieces that embody both devotion and mastery, and to witness a tradition that continues to inspire us.” Masters of Devotion Kathmandu Art Gallery Baber Mahal Revisited Until 22 November

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