A 7.8 magnitude earthquake in 1255 shook the entire Himalayan region, Tibetan plateau and northern India. We know the exact date because there are historical records that one-third of the population of Kathmandu was killed, including King Abhaya Malla. At about this time, in central Nepal the entire western flank of Annapurna 4 broke off and fell into the glacier below, damming the Seti River gorge and covering the basin in pulverised rock and melting ice. Geologists have known that it was a debris flow on the Seti that formed the terraces of sediment in Pokhara Valley, but <a href="https://www.nature.com/articles/s41586-023-06040-5">a recent paper</a> in the journal <a href="https://www.nature.com/articles/s41586-023-06040-5">Nature</a> has for the first time described just how cataclysmic this event was and that it could happen again. The rockslide was so enormous that it chopped off 500m of the top of the paleo-summit of Annapurna 4, which means the mountain was at one time an eight-thousander. The peak is now 7,525m, and scientists estimate that 23 km3 of rock fell nearly 3,000 vertical metres into the Sabche Cirque with terrific kinetic energy. The study titled Medieval Demise of a Himalayan Giant Summit Induced by Mega-landslide has Jérôme Lavé of CNRS, Université de Lorraine in France as lead author, and includes among others Ananta Prasad Gajurel of the Department of Geology, Tribhuvan University. Although the study is an investigation into ways in which Himalayan mountains erode along their glaciers and headwalls, it takes as a case study the Annapurna 4 rockfall in approximately 1190CE. &nbsp;&nbsp; ‘Our data suggest that a mode of high-altitude erosion could be mega-rockslides, leading to the sudden reduction of ridge-crest elevation by several hundred metres and ultimately preventing the disproportionate growth of Himalayan peaks,’ the introduction to the paper notes, suggesting that the erosion of the peaks could happen in sudden ridge collapses and not just through mass wasting.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230718150720_d574c8ddc7596812293db6982abe17a0cb4005d5ed9c4c8d81b64f93af064c07.png" data-media-id="editor_2" data-image-id="20230718150720_d574c8ddc7596812293db6982abe17a0cb4005d5ed9c4c8d81b64f93af064c07" data-rendition-name="original" width="1806" height="1698" loading="lazy" alt="Pokhara Valley"> <figcaption>Nepali Times issue #704 of 2 May 2012 analysing the rockfall of 2012. Read the story: https://issuu.com/nepalitimes/docs/nepali_times__705</figcaption> </figure>  The scientists examined the debris in the Sabche Cirque which in the past 800 years has eroded into sharp limestone pinnacles with exposed glacier-polished bedrock below. They conclude that the breccia came down in the collapse of Annapurna 4. In their paper, Lavé et al have sketched models of the mountain as it probably existed before its collapse, showing where the immediate debris fell, and where it was eventually transported downstream by the Seti River to create the 200m deep sediment fan on which the city of Pokhara is located today. The deposits brought down by the river dammed side streams, creating Phewa, Rupa, Begnas and other lakes that make the valley so scenic today. The Nature paper says the catastrophic Sabche rockslide has lessons for present-day Nepal: ‘Giant rockslides also have implications for landscape evolution and natural hazards: the massive supply of finely crushed sediments can fill valleys more than 150 km farther downstream and overwhelm the sediment load in Himalayan rivers for a century or more.’ Indeed, the summit ridge of Annapurna 4 is still raw and sees frequent rockfalls, including a smaller one almost <a href="http://archive.nepalitimes.com/article/nation/Anatom-of-a-Himalayan-tsunami,1330">exactly at the same spot in May 201</a>2 and an ensuing flood on the Seti River that killed at least 70 people downstream near Pokhara. Although the authors do not seem to think the rockslide 800 years ago was caused by a seismic event, there are records of big earthquakes in central Nepal in 1223, 1255 and five years later in 1260, which approximately fit the timeline of the scientists for the Sabche event.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230718150720_be91b7bfe18290a2f0bbc16e263413ee5994d0bf2656a58719d4252cc306ef9a.png" data-media-id="editor_4" data-image-id="20230718150720_be91b7bfe18290a2f0bbc16e263413ee5994d0bf2656a58719d4252cc306ef9a" data-rendition-name="original" width="1231" height="809" loading="lazy" alt="Annapurna Pokhara Valley"> <figcaption>Google 3D map of the Annapurnas, showing Annapurna 4 before its collapse in an event 800 years ago, as proposed by scientists recently in a paper in the journal Nature. This satellite image taken in October 2017 shows dust from a more recent rockfall in 2012.</figcaption> </figure>  Even if the rockfall was not directly caused by an earthquake, the differential in the pace of erosion of the glacial valley and the headwall could eventually lead to failure of overhanging slopes. Scientists have speculated that climate change-induced melting of the permafrost that cements rocks together above the 0oC isotherm could have been a factor in the <a href="http://archive.nepalitimes.com/article/nation/Anatom-of-a-Himalayan-tsunami,1330">2012 collapse on Annapurna IV</a> and on <a href="https://www.nepalitimes.com/here-now/nepal-s-mountains-are-melting">Saldim Peak in the Makalu-Barun in 2017</a>.

Kunda Dixit

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Pokhara 800 years ago

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636936d19c7e80680e03fdffjpeg.jpg" alt="" width="1500" height="994"/><figcaption>The West Seti Gorge on the traditional trade and pilgrimage route to Tibet is so scenic, it should be preserved as a World Heritage Site. Photos: ULRICH LACHENMAIR</figcaption></figure>N<a href="http://archive.nepalitimes.com/news.php?id=18383#.XAj57NszaUk" target="_blank" rel="noopener">epal’s rivers</a> are older than the Himalaya, and their waters have been cutting channels over millions of years as the mountains rose. The Arun, Budi Gandaki, Marsyangdi, Kali Gandaki, Bheri and <a href="https://www.nepalitimes.com/here-now/nepalganj-gets-moving/" target="_blank" rel="noopener">Karnali </a>all begin north of the mountains, and their waters have carved the most spectacular canyons in the world.But by far the most stunning gorge in the Himalaya is located on the West Seti river on the trail from Simikot to Chainpur. After crossing Chaupha La in winter conditions last month, we followed a trail traditionally travelled by traders to Tibet, and pilgrims to the holy Lake Mansarovar.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636936d59c7e80680e03fe00jpeg.jpg" alt="" width="1500" height="994">This landscape should be protected as part of Nepal’s natural heritage. However, like other gorges on other rivers, a new road now threatens the Seti canyon. Surveyors are already at work between Talkot and Urai La, the border pass between Nepal and China.Read also: <a href="https://www.nepalitimes.com/banner/trails-less-travelled/" target="_blank" rel="noopener">Trails less travelled</a>, Joy Stephens Local businesses want the road because they think it will increase pilgrim traffic. But is it really the aim of a pilgrimage to amass money? How does the promotion of pilgrimage justify the destruction of fragile slopes, rock cliffs and precious forests of oak, fir, pine, walnut, cedar. Roads in other parts of Nepal have already ravaged the landscape, and here in remote northwestern Nepal, it will be a sacrilege.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636936d89c7e80680e03fe01jpeg.jpg" alt="" width="1500" height="2265">A road here would not just be environmentally and culturally destructive, a simple input-output analysis will show it is also economically unviable. The construction and maintenance will cost billions, and this will far exceed any future income from pilgrims. In fact, as seen in the rest of Nepal, the road will not bring down prices of essentials, but will promote consumerism, bring garbage and lead to an outmigration of young people.Besides, there is an alternative road from Simikot to Hilsa that will soon be ready. Pilgrims who cannot endure the hardship of walking through the Seti gorge can use jeeps and buses plying there. Goods required by the villages between Talkot and Dhuli are at present reliably delivered by mules, sheep and goats. They do this on well-built trails on which maintenance costs are negligible.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636936db9c7e80680e03fe02jpeg.jpg" alt="" width="1500" height="994">If just a small part of the road budget is used to improve the trail and repair bridges along the uninhabited Seti gorge, it would actually keep local jobs and ease access. Local communities could keep the trail clean, especially the litter at camp sites.The West Seti Gorge should be registered as a natural heritage site at UNESCO with the help of the IUCN and WWF in Kathmandu. The Seti Trail can be promoted as the longest, hardest and most beautiful <a href="https://www.nepalitimes.com/here-now/nepalganj-gets-moving/" target="_blank" rel="noopener">pilgrimage route from Nepal to Mansarovar and Kailash</a>.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636936de9c7e80680e03fe03jpeg.jpg" alt="" width="1500" height="994">The rest of the road budget could go to improve school and health posts in this underserved part of Nepal. At present the clinics lack medicine and classrooms are dark, cold and poorly built. Health and education are basic needs of any human being and should take precedence over unnecessary road construction.The upper reaches of the West Seti are a natural jewel, and God’s gift to mankind. It should be our responsibility to protect it.Herman Warth was the former country director of the German Development Service.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171148/636936e19c7e80680e03fe04jpeg.jpg" alt="" width="1500" height="994">

Seti's gorgeous gorges

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

American artist Peter Makela was in Nepal in 2022 on a Fulbright scholarship when he experienced the Matya festival in Patan in which devotees made the rounds of the city’s shrines.&nbsp;
He joined the procession, walking through 2,600 stupa and 140 bahal of the town. That immersion left a lasting impression.
As part of Gallery Mcube’s international residency program in Patan, he put his inspiration to canvas in the exhibition Yala Yatra: Walking, Working, Worshipping. The exhibition also coincides with this month’s Matya festival.&nbsp;
Makela has visited Nepal often in the past 11 years but he mostly stayed in and spent his time around Boudha. “This time I stayed in Patan, put the sites I wanted to visit on my map, and off I went,” he tells us. “Each of my artwork is inspired by the stupas and shrines in Patan that I visited.”
The stupa and Ganesh are recurring motifs in his watercolours, and the elephant gods are located in chaityas — reflecting the interplay and blending of the Hindu and Buddhist faiths in Kathmandu Valley.&nbsp;
The stupas and Ganesh are painted in vivid red, yellow, blue and green against abstract backgrounds meant to represent the sky.
“I use the sky as a backdrop because the sky has no border,” says Makela. “The four colours represent the four elements, the different Buddha families and also lights bouncing off of a rainbow.”
The use of just four colours for all the artwork stands out, and combined with the absence of heavy canvases, frames or stands render Makela’s art striking in its simplicity.&nbsp;
The Ganesh is always holding something and the art also portrays the elephant god’s sacred vehicle, the mouse.
While his vibrant stupas and Ganesh reflect the tangibility of Patan’s tradition and heritage, it is as if the backdrops with their shades of grey and red and yellow capture the soul of the city’s shrines.
“If you look closely, there is a sense of form and formlessness at the same time,” he says.&nbsp;
Makela walked 108 kora around the shrines during his exploration of the town, and in the process developed a spiritual connection with Patan’s heritage and traditions.&nbsp;
The exhibition connects with visitors on a deeper, more spiritual, level as well. And with it, they feel a sense of pride as well as the need to urgently preserve Patan’s heritage for future generations.
“Peter’s inclination and approach towards Nepali art and culture is fascinating, and it reflects in his work,” says Mcube curator Manish Lal Shrestha, whose international artist residency program promotes Nepal’s cultural heritage. &nbsp;&nbsp;
Yala Yatra: Walking, Working, Worshipping
1-5 August&nbsp;
10AM-7PM
Gallery Mcube, Patan

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Nepal’s bubble economy

Walking, working, worshipping in Patan