<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109141112/636ba7959c7e80680e073790jpeg.jpg" alt="" width="640" height="426"/><figcaption>Photo: Jan Møller Hansen</figcaption></figure>Sometimes it can feel as though Nepal goes through endless cycles that bring us back every time to the place where we started. Maybe we just need more years to look back and see the progress.But up close, we seem to stand still. The present moment is like that. Consider these needs that remain urgent, yet have been forgotten:- The need for independent commissioners to deal with the demand of conflict victims for transitional justice, and the permanent need of society for the rule of law- The need for independent police accountability mechanism to deal with the way democratic rights are sometimes repressed, especially during this Covid-19 crisisBoth pre-requisites continue to be urgent if this country is ever <a href="https://www.nepalitimes.com/here-now/just-not-justice/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/here-now/just-not-justice/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNGtLWBs7Xus1L_zPT0WtkitV5kdIA">to deal with impunity</a> and the daily humiliations of injustice that go unanswered. But we have been diverted time and again by petty politics.It is now two-and-half years since the elections that led to the creation of the Nepal Communist Party. Many saw this as a decisive moment, a time when we left behind our turbulent past and unified Nepal to bring prosperity.Some saw an opportunity at last for a ‘peace dividend’. In the international community, many considered it as a harbinger of stability, which would allow them to finally fully implement development programs free from the disruption of war and political intrigue.Very few were alert to the risks to human rights. It was almost as though political commentators and the diplomatic community shared the view that the political stability they thought was assured for the foreseeable future would automatically lead to a sudden respect for rights.These days, the pandemic is occupying people’s thoughts. Nepal faces grave risk as the disease spreads, and there is an urgent need for appropriate and effective countermeasures. But even before this massive unforeseen shock to our society, political stability and respect for human rights was looking less and less certain. In the past few months the uncertainty is even greater.One of the costs of ‘stability’ has been<a href="https://www.nepalitimes.com/latest/rights-groups-laud-nepal-supreme-court-ruling/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/rights-groups-laud-nepal-supreme-court-ruling/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNGRsGP_JdoKTy2P5hcxFIywbmrKKQ"> transitional justice</a>. Remedy for victims of the conflict was put on hold after 2006, and especially two years ago, before the pandemic appeared on the scene. The promised truth commission has failed to deliver. Many of us had hoped that the <a href="https://www.nepalitimes.com/opinion/justice-in-transition/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/opinion/justice-in-transition/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNGglmiYgU0GqwUo5BNdPUdaNVZGvQ">truth telling process</a> would be the foundation for institutional reforms in the justice system that had been put off year after year since the <a href="http://archive.nepalitimes.com/blogs/thebrief/page/36/" data-saferedirecturl="https://www.google.com/url?q=http://archive.nepalitimes.com/blogs/thebrief/page/36/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNFhkaxpPA84enmCgy6J2kws8NXaTQ">Comprehensive Peace Accord (CPA)</a> of 2006.The marginalised in our society are denied access to justice, notably minorities such as Dalits and women victims of violence. Legitimate public protest is still met with harsh and excessive use of force by the police. Convictions in the courts still largely depend on confessions under torture and cruel treatment rather than proper, non-coercive investigation -- still a rare skill in Nepal to the shame of all of those involved in efforts to improve public security for all.Political, social and economic instability have gone hand in hand with violation of basic rights. They are mutually supporting dynamics.Since 2006, more and more Nepalis have come to rely on remittances from family members working overseas for their economic survival. This safety valve is now in doubt because of the economic downturn caused by the global pandemic.The idea that political stability and prosperity would put an end to human rights violations was always a pipe dream. A society with such entrenched discrimination is always going to find consensus difficult, and end up resorting to violence and coercion to maintain the status quo, or to resolve inevitable disputes.We can all agree that Nepal faces a difficult short and medium-term future. All human rights defenders now need to consider some key fundamentals:- Political infighting in the leadership can easily generate protests and counter-protests where human rights violations are common- The power struggle can impact political harmony at provincial and local levels which can lead to a higher risk of conflict- The health and economic crises risk endangering social stability. Medical staff are already at the frontlines of disputes and must get full support from the state and civil society to help them carry out their tasks, which are a matter of life and death not only for their patients but for the whole country.All this is also happening in a wider context of rising geopolitical tension between our two neighbours. On top of all the crises at home, we are now also living in a region which feels a lot less stable than it did a year ago.If we are to come out of this crisis stronger, some lessons will need to be learnt, and fast.Human rights defenders need to find better ways to work together and to set common agenda and activities which address the priority problems that our society is facing, including pervasive discrimination. Such injustice is real and corrosive, and most Nepalis suffer some form or other of discrimination every single day, wherever they live and whatever their occupation. Discrimination is like a ball and chain on the ankle of the country which slows our progress.This should also be a moment of reflection for our international friends who in the past have given such valuable support for the <a href="https://www.nepalitimes.com/latest/nepals-transition-to-peace-needs-justice/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepals-transition-to-peace-needs-justice/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNHHjkC_zEjI8bw-PwG570G1FgPMsw">peace process and the defence of human rights</a>. As the <a href="https://www.nhrcnepal.org/" data-saferedirecturl="https://www.google.com/url?q=https://www.nhrcnepal.org/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNEOabp5mzf2S4-IxxXBLGjQcf5pBw">National Human Rights Commission</a> (NHRC) international conference of 2018 indicated clearly, little or no progress has been made since the CPA on impunity -- the biggest obstacle in establishing genuine rule of law with equitable access to justice. Law and order cannot be maintained by harsh policing and ever more draconian legal restrictions on privacy and personal rights.We need to learn from the crisis which is upon us after two years of false promises of stability and social peace. We are no nearer to our common goal of rule of law than we were 14 years ago.Probably the most important step we can take once public health conditions allow, is to ensure that a genuine transitional justice process is finally implemented to mark the end of arbitrary governance and <a href="https://www.nepalitimes.com/latest/amnesty-on-nepal-impunity/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/amnesty-on-nepal-impunity/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNGXUvh7Qv8HPrhYFlIzKg-vT4i2GQ">the end to impunity</a>.Our international partners have to give top attention to the fact that without rule of law, it will be hard to achieve economic development and investment. Respect for human rights is the foundation of Nepal’s economic progress and social harmony. We need our partners to be actively, constantly and transparently <a href="https://www.nepalitimes.com/latest/nepal-runs-out-of-excuses-to-address-war-crimes/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/latest/nepal-runs-out-of-excuses-to-address-war-crimes/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNEeJv7d9e9j38e65VAtjAYQeCs-Mg">promoting transitional justice</a>, human rights and rule of law.The international community must make it clear to our leadership, with one voice, that they believe investing in Nepal is not an attractive prospect if a repressive and discriminatory justice system damages stability. The prospect of political stability does not remove the need for active promotion of human rights. The opposite is the case.One good starting point would be for human rights defenders and the international community to strongly urge a proper selection process, with civil society participation, for the new NHRC later this year.The same is true for the <a href="https://www.nepalitimes.com/editorial/rocky-transition-to-justice/" data-saferedirecturl="https://www.google.com/url?q=https://www.nepalitimes.com/editorial/rocky-transition-to-justice/&amp;source=gmail&amp;ust=1598491315641000&amp;usg=AFQjCNGjI50aSrYxicT7JYce-kNXMFQmzA">transitional justice commissions</a> and the constitutional commissions. The crisis of political stability must lead to a reflection on the errors of the past two years and teach us that without active promotion of human rights there is unlikely to be much progress in any sector in Nepal.With rule of law and justice, there will be progress. Without justice and respect for human rights, there will be nothing.Mohna Ansari is Commissioner, National Human Rights Commission of Nepal.

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Nepal must reboot human rights, rule of law

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108121144/636a41ab9c7e80680e04a68bjpeg.jpg" alt="" width="1400" height="519"/>The organisational infrastructure of the court system is of critical importance for the success of Nepal’s <a href="https://www.nepalitimes.com/here-now/federalisms-birth-pangs-or-death-rattle/" target="_blank" rel="noopener">new constitutional order</a>. It is in the lower courts that people come face to face with the judicial branch of government, and where the ordinary and routine forms of justice most directly affecting daily life are in practice. Subnational courts therefore should not be forgotten in considering the judiciary’s irreplaceable role in instilling a commitment to the rule of law and encouraging a <a href="https://www.nepalitimes.com/here-now/grassroots-democracy-is-delivering-development/" target="_blank" rel="noopener">new way of doing politics</a>.Nepal’s network of 77 district courts is the gateway for virtually all of the country’s litigation (85,000 cases in 2017-18, over which district courts oversaw final resolution to 60%). Yet both in resource allocation and in public imagination, these courts are the most neglected. It is remarkable that a mere 241 judges discharge the enormous workload.Read also:Part 1: <a href="https://www.nepalitimes.com/opinion/federalism-rule-of-law-and-the-judiciary/" target="_blank" rel="noopener">Federalism, rule of law and the judiciary</a>, George Varughese and Iain PaynePart 2: <a href="https://www.nepalitimes.com/opinion/constitutional-guardianship-in-nepal/" target="_blank" rel="noopener">Constitutional guardianship in Nepal</a> , George Varughese and Iain PayneWhile the <a href="https://www.nepalitimes.com/here-now/share-rule-and-self-rule/" target="_blank" rel="noopener">2015 Constitution</a> has changed the executive and legislative, the court structure has not undergone significant revision, except to add two district courts — for a total of 77 — and to refashion 16 appellate courts as seven high courts with their 11 benches extended across respective provinces.The subordinate courts now have slightly enlarged purview. For the first time, provincial high courts will be able to hear public interest litigation, hopefully lessening some of the Supreme Court’s caseload burden. District courts now supervise all justice institutions, formal and informal, below the district level.District courts also have increased authority to oversee criminal offences punishable by more than one year imprisonment, many of which were previously adjudicated by quasi-judicial bodies like the district administration office. They have new jurisdiction over some civil matters previously supervised by the district executive.Critical access-to-justice issues have been inherited from the previous governance setup. For example, the geographical inaccessibility of the district courts, which remain the lowest court in judicial hierarchy and sit at the now obsolete district headquarters, are one of the key reasons why only a fraction of disputes tends to be registered with the proper court and judicial authority. The judiciary’s absence in municipal government is glaring and hardly addressed by the presence of so-called judicial committees, which fall under the municipal executive.Moreover, wholesale state restructuring must take into account roles and responsibilities of different justice sector institutions at the local level, and the judicial branch’s reflections on these would be timely in guiding other branches of government. This is especially the case with regard to judicial committees in 753 locations, about which inconsistent visions are projected in <a href="https://www.nepalitimes.com/opinion/constitutional-guardianship-in-nepal/" target="_blank" rel="noopener">the Constitution</a> and the Local Government Operations Act of 2017— the federal framework legislation that presently guides local government operations. This is also the case with the option provided for in the Constitution allowing the creation of local courts if required. The judicial branch’s reluctance to provide guidance on constitutional provisions for accessing justice beyond district courts could result in costly adjustments.These issues need to be addressed to guide the creation of a coherent and coordinated system for accessing justice locally, one that builds community and citizen trust in the entire justice sector and positions the judiciary in its rightful place in government. The lowest rungs of the judicial branch carry the greatest burden in making justice more accessible to more people. Much work, therefore, remains to be done to ensure that the promise of bringing all three branches of government closer to the people is fulfilled.Renewed commitments to judicial independence headlined the recently concluded National Conference of Judges. However, aside from the hot-button topic of judicial appointments that dominated discussion, only a few creative ideas emerged. Perhaps the most federally relevant of those related to empowering provincial courts to settle disputes between provinces and municipalities. Ideas such as this, while nascent, indicate that the judiciary may be willing to look for ways to be more responsive to the needs of the changed governance context.With a recently appointed Chief Justice and remaining vacancies filled, Nepal’s Supreme Court is drafting its fourth strategic plan with more stable leadership and better prepared justices than ever before. This will drive the judiciary’s institutional vision, direction and contribution to democratic government in Nepal over the next five years.Previous strategic plans have focused on court administration, caseload management, infrastructural and modernisation needs, and training programs. These remain necessary but will be insufficient to fulfil the difficult role of rethinking and reworking access to justice in a federal context. Oversight of the judicial functions of the state — wherever those may be located — is a key strategic metric of performance of the judicial branch.More difficult will be the deep institutional introspection and principled actions required to assert independence while exercising guardianship of the rule of law. It is vital that the judicial branch of the government sees itself as a trusted partner of both state and society, with its functionaries embracing their role as ‘justices of the people’ and not just of the court.Only then will a constitutional culture shaped by the rule of law translate into access to justice in federal Nepal.This concludes a <a href="https://www.nepalitimes.com/opinion/federalism-rule-of-law-and-the-judiciary/" target="_blank" rel="noopener">three-part series</a> by Iain Payne and George Varughese who are associated with <a href="http://nitifoundation.org/" target="_blank" rel="noopener">Niti Foundation</a>.

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Devolving the judiciary

<figure><img width="1250" height="1145" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108121140/636a40489c7e80680e04a610jpeg.jpg" alt=""/><figcaption>Pic: Bhanu Bhattarai</figcaption></figure>The 2015 Constitution and arrival of fresh political leaders through nationwide elections in 2017 promised a more equal and inclusive New Nepal. Political power would be devolved from elite-captured Kathmandu,  and development balanced across all regions of the country, with greater appreciation for religious and ethnic diversity and increased participation of the marginalised in governance.There is broad acceptance that this ongoing transformation will have durable effects on the quality of the country’s governance. Yet there remains widespread anxiety that those now in decision-making positions in government will shirk their responsibility and opt for cosmetic adjustments rather than fundamental change.Part 2: <a href="https://www.nepalitimes.com/opinion/constitutional-guardianship-in-nepal/" target="_blank" rel="noopener">Constitutional guardianship in Nepal</a>, George Varughese and Iain PayneThe Constitution promises to bring government closer to citizens through a new federal structure wherein federal, provincial and local governments are coequal.  With 753 local governments, seven new provinces, and local and provincial assemblies with more than 35,000 elected representatives, the executive and legislative levels of government are now functional and more visible to citizens.However, minimal attention has been given to the judiciary’s key role in impelling constitutional values in government — starting with the rule of law and access to justice — and contributing to the success of the ongoing transformation.This is neither mysterious nor casual: neglect of the judiciary is quite usual in Nepal. The undermining and sidelining of the judiciary over many years is part of a sordid story of collusion by political parties across the spectrum to weaken, co-opt and subordinate state institutions that deter impunity and constrain opportunism.A quick measure of this neglect is the steady decline in the already-meagre annual allocation of state resources for the judiciary, today at its lowest levels of funding in years — a mere 0.34% of the government’s budget, down from 0.57% in 2015-16. Continued failure to invest in this co-equal branch of government — the one meant to constrain unlawful action — undermines the transformational project of the 2015 Constitution.Three years after the adoption of a new Constitution it is also necessary for the judicial branch to consider its role in ensuring that rule of law and access to justice is better under federalism.While much hope has been placed in the 2015 Constitution, it cannot in and of itself transform the country’s constitutional and political culture, which has been shaped over decades of perverse governance praxis that accepts collusion and impunity, crises and destabilisation, and backroom deals and horse-trading as normal.New norms of politics must be embraced. The rule of law, and buttressing it the judicial branch of government, is at the heart of this reshaping of politics.The rule of law is concerned with the principled exercise and accountability of governmental power. It requires adherence to the laws of the land, beginning with the Constitution, by all.Elected representatives and appointed officials alike must abide by the same rules as everyone else, there is no special pass for those in power. Sadly, the main threat to federalism in Nepal is the absence of the rule of law, exemplified by ongoing abuse of the Constitution by those charged with protecting it.It has been persuasively argued elsewhere that the rule of law demands public justification for the exercise of public power. This process must be championed by the judicial branch as the expression of its own authority, one to which public actors and citizens must learn to conform. In the setting of the courthouse, the branches of government must justify the legitimate exercise of power and be able to defend their actions. The judicial process thus contributes to a constitutional culture in which the arbitrary exercise of power is discouraged.It is in this sense that the rule of law may be talked about as a value. It is a critical, missing feature of Nepal’s constitutional culture, one which the judicial branch of government must salvage, nurture and return to public service.This is the first of a three-part series by George Varughese and Iain Payne who are associated with Niti Foundation.

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Federalism, rule of law and the judiciary

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

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

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

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>.