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.”

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Nepal’s bubble economy

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01229c7e80680e0a3614jpeg.jpg" alt="" width="1050" height="637"/><figcaption></figcaption></figure>Nepal Rashtra Bank’s (NRB) tightness on share collateral, signs of a lack of liquidity and the opening up of other investment avenues post-lockdown are some of the factors behind the share market’s sharp decline of late.On Sunday, <a href="http://www.nepalstock.com/" target="_blank" rel="noopener noreferrer">Nepal Stock Exchange (Nepse)</a> recorded the highest-ever fall in its history after the market dropped by 5.03% in just the first two hours of trading. A 40-minute long circuit break was imposed, as 60 companies saw their share values decline by 10%, and the Nepse index to 2782.52 points.A slight recovery was soon posted, but Nepse still fell by 3.7% from the previous day, losing 108.26 points from 2928.8 points to an end-of-day total of 2811.16 points. By day’s end, 31 companies lost up to 10% value on their shares.Despite the fall in the index, there were as many if not more people trading shares and the volume of transactions were unaffected, with 23 million 79 thousand shares of 223 companies clocking in Rs11.24 billion in turnover.The current dip in the share market is in sharp contrast to the <a href="https://www.nepalitimes.com/latest/despite-politics-nepals-stock-market-is-bullish/" target="_blank" rel="noopener noreferrer">boom during the lockdowns and prohibitory orders</a> when other investment sectors remained shut, allowing big and small investors to trade from home with the online trading system flourishing unabated.Bank interest rates also fell as the investment sector shrunk during the closures. As demand for credit in other sectors began to decline, banks also increased their investments in equity securities. As a result, the stock market traded at a record high with a turnover of Rs19.55 billion and Rs21.64 billion on 14 May and 15 July respectively.However, since then with the reopening of other sectors, the demand for bank loans has increased. There are indications that the lack of investment capital will be repeated. As such, banks are preparing to raise interest rates.The share market’s decline has been particularly concerning over the last week, falling from 3044 points to 2817 in five days. This has resulted in a loss of Rs1.5 trillion, down to Rs39.44 trillion on Sunday from last week’s Rs40.89 trillion.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01249c7e80680e0a3615jpeg.jpg" alt="" width="623" height="351"><figcaption></figcaption></figure>Sunday’s fallout also prompted the Capital Market Reform Struggle Committee, led by investor Ram Krishna Dhakal, to demand the resignation of NRB governor Maha Prasad Adhikari for activities that have negatively influenced the share market.The committee has put forward 15-point demands including the limit of Rs120 million on margin loans brought by the central bank through monitory policy to be scrapped, the cap on dividends distributed by microfinance companies to be removed and the provisioning be modified.As per the NRB’s new stricter monetary policy, banks and financial institutions are allowed to give a maximum loan of Rs40 million to an individual or institution on the security of shares. Similarly, an investor can take a loan of only Rs120 million by pledging shares.Read also: <a href="https://www.nepalitimes.com/latest/instability-to-cost-nepal-dear-in-2021/" target="_blank" rel="noopener noreferrer">Instability to cost Nepal dear in 2021</a>, Ramesh KumarThe NRB didn’t only tighten its monetary policy, but all subordinate banks were also placed under strict restrictions, effectively banning them from share trading.To be clear, the NRB’s austere policies have caused the market correction by dislodging the confidence of large and institutionalised share traders, says share market analyst Mukti Aryal.The <a href="https://www.nepalitimes.com/here-now/insider-trading-taints-nepal-capital-market/" target="_blank" rel="noopener noreferrer">Sarbottam Cement share scandal</a>, in which Nepal Securities Board Chairperson Bhishma Raj Dhungana and Nepse CEO Chandra Singh Saud engaged in insider trading on IPOs, had recently dented confidence in the fledgling stock market.But the only way forward is for the NRB to examine its restrictive policies, adds Aryal: “The tightening of stock pledges is the chief reason for the market’s decline. Pledging one’s own assets as securities for trading should not be restricted.”However, instead of agitating against the regulatory bodies, investors themselves must adopt careful share-trading practices, says a share broker, adding that it is natural for the market to fall after being propped up by companies that very recently had bad portfolios.“If investors had invested in companies with solid portfolios, none of this would be happening,” he says. “Instead of investing smartly in profitable companies, investors hedged their bets on hydropower projects, development banks and finance, following the market rumours rather than prudent investment.”Translated by Kaustubh Dhital from the <a href="https://www.himalkhabar.com/news/125732?fbclid=IwAR1n22ltLRWRA6Yi8Lg23aGzl8ZLzgKvIlBx_UTy1R_3m9GZlgogZ9Y4F80" target="_blank" rel="noopener noreferrer">Nepali language original</a> in Himal Khabar.

Inside Nepal’s biggest stock market tumble

<img width="1508" height="900" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbb39c7e80680e0a0b49jpeg.jpg" alt=""/>The heads of the Nepal Stock Exchange (Nepse) and Securities Board of Nepal (SEBON) as well brokers and industrialists have been found to have profited from insider training and conflict of interest, eroding the <a href="https://www.nepalitimes.com/latest/despite-politics-nepals-stock-market-is-bullish/" target="_blank" rel="noopener noreferrer">public’s trust in the country’s stock market</a>.   Documents show that they were engaged in ‘front running’ in contravention of existing rules governing the role of regulators and brokers in stock valuation and transactions. An investigation by <a href="https://www.himalkhabar.com/news/125318">Himal Khabar</a> this week found Nepse CEO Chandra Singh Saud and SEBON Chair Bhishma Raj Dhungana bought shares for family members in Sarbottam Cement at far lower prices just before its Initial Public offering (IPO). The board of directors of Sarbottam Cement decided to sell 6 million shares in the company through a book building process. The shares were valued at Rs750 per unit to raise Rs4.65 billion, of which only 12.9% were included in the initial public offering.  However, many of the shares were sold pre-IPO for less than Rs250 per unit even before the public offering, and others are believed to have been given for free as ‘presents’ to important people. Benefiting were close family members of SEBON’s Chair Dhungana, Nepse CEO Saud, as well as Global IME Capital which was handling Sarbottam’s IPO. <img width="2284" height="1512" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbb69c7e80680e0a0b4ajpeg.jpg" alt="">Says share market expert Rabindra Bhattarai: “This is a clear case of an attempt by insiders to unethically influence the market price of a company offering premium shares.”Global IME Capital’s parent company Global IME Bank is headed by Chandra Dhakal, who is vice-chair of FNCCI and is also a member of SEBON. Dhakal’s brother has 30% share in an investment company that bought some of the shares. Chandra Dhakal therefore had a conflict of interest in being in a position to be the regulator in the sale of investment vehicles in a company that his family had invested in. Documents show that Saud and Dhungana also used their positions to leverage cheap purchases of the shares in the cement company, while Sarbottam benefited by getting permission to enter the share market, illegally influencing the regulators’ decision-making. In the eyes of the law, this is equivalent to corruption and considered a crime.  <img width="1028" height="718" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbba9c7e80680e0a0b4bjpeg.jpg" alt="">“For a CEO of the Stock Exchange or its employees to use information about an IPO to personally buy shares is a direct and serious conflict of interest,” explains capital market expert Mukti Aryal. “Buying shares in a company that is going to be traded on its own platform opens up the possibility of share price manipulation. In a case like this the SEBON official has to declare a conflict of interest and step down.”Front running is a form of insider trading where those with knowledge of a company’s share value use it to make a personal profit at the expense of the public. For example, it is ‘front running’ when a stockbroker receives customer orders to purchase a large stock in a company, but instead speculates the value of the shares and buys or sells off shares for themselves accordingly. Such actions are not just unethical, but can even be considered a financial crime. Nepal’s Securities Act 2007 Clause 91 codifies into law measures against front running, prohibiting SEBON staff from divulging and profiting off any inside information received by their position. Regulatory authorities are also not allowed to be in contact with company executives, founders and managers or exchange any benefits with them.  <img width="2288" height="482" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbbd9c7e80680e0a0b4cjpeg.jpg" alt=""><a href="https://www.himalkhabar.com/news/125244">Nepse CEO Saud told Himal Khabar</a> he did nothing wrong, and admitted that he bought shares in Sarbottam at Rs250 per unit in the name of his wife, Sushila Kumari Bohara, but only after the cement company’s book building process had started. “It is only prohibited to buy and sell in the secondary market, there are no restrictions on buying shares in a company’s initial public offering,” Aryal told the magazine.However, Saud has been accused of purchasing the shares at a price lower than the company’s book-building, or share price evaluation.  <figure><img width="2000" height="1026" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbbf9c7e80680e0a0b4djpeg.jpg" alt=""><figcaption>Nepse CEO Chandra Singh Saud.</figcaption></figure>Companies that are going public must disclose all operations to regulators to ensure market transparency, but in no way are regulator officials, investment executives, brokers, company employees and others with an inside track allowed to enrich themselves using the company’s open books. Similarly, the investigation showed that SEBON chair Bhisma Raj Dhungana had also bought 11,992 shares in the name of his US-based daughter, Rebika Dhungana, in Sarbottam Cement before its book building process had started. SEBON’s Code of Ethics bars the board’s members and chair and their families from engaging in any transaction from which they can financially benefit.“Yes, my daughter sent me money from the United States to buy the shares, and yes, they are her shares,” Dhungana admitted. “Just because I am the chair of SEBON does not mean the law bars my married daughter from buying shares from any company she wants.”Dhungana was formerly with Nepal Rastra Bank, and is believed to have been nominated for the four-year term in SEBON at the recommendation of President Bidya Devi Bhandari. <figure><img width="1604" height="860" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbc39c7e80680e0a0b4ejpeg.jpg" alt=""><figcaption>SEBON Chair Bhishma Raj Dhungana.</figcaption></figure><a href="https://www.himalkhabar.com/news/125258">An expert in share market regulations told Himal Khabar</a>: “This is a straightforward case of insider trading. There is no question about it.”Sarbottam Cement had signed an agreement with Global IME Capital to handle the IPO in March in the presence of SEBON officials, but the process has been delayed till later this month. Nepal’s manufacturing companies, especially in the construction and hydropower sector are currently riding a wave of market confidence. Another compnay, Shivam Cement, recently went public clocking a similarly strong stock market performance. The revelation of insider trading has been greeted by outrage on Nepal’s social media, and is likely to erode people’s growing trust in the stock exchange, with many commentators and financial analysts equating the secondary market with skulduggery, insider trading and outright theft.‘Are board members allowing suspicious companies to release shares under the temptation of illicit rewards?’ asked one social media post. Another went: ‘Is the share distribution process transparent?’ Yet another said: ‘Have finance bosses, chiefs and sales executives rigged the process to earn favourable shares for themselves?’ The share market had been anticipating a surge, riding a wave of investment interest of the Nepali public in the manufacturing and construction sectors. But the reports of insider trading confirm the public’s suspicions of hanky-panky, and are expected to dampen the stock market.  Moreover, moving forward, companies wishing to list their IPOs via book building will be cautious of possible behind-the-scenes dealings.The irregularity in Sarbottam Cement share offering is not the first of its kind, with the Securities Act 2007 violated previously.  In 2014, investors at Citizens Investment and Employees Provident Funds were caught exchanging investment with the Upper Tama Kosi Hydropower with shares for themselves in return. The regulations were subsequently overhauled and loopholes plugged.The Upper Tama Kosi and Sarbottam Cement cases are similar in the sense that they were both examples of graft, wherein two parties are believed to have exchanged confidential information for personal profit. Given the impunity that is rife in Nepal’s political and business spheres, the Sarbottam issue will further damage the reputation, trust and transparency of the share market, hurting an already moribund economy.Stock exchange legal expert Amrit Kharel is clear about the rules: “Three generations of the family members of a person with inside information about an initial public offering are barred from benefiting from any transaction, It is not just unethical, it is considered insider trading. And if any member of staff of SEBON is found to be violating this, they are liable to prosecution.”Links to Himal Khabar series on this subject:<a href="https://www.himalkhabar.com/news/125318">https://www.himalkhabar.com/news/125318</a><a href="https://www.himalkhabar.com/news/125244">https://www.himalkhabar.com/news/125244</a><a href="https://www.himalkhabar.com/news/125258">https://www.himalkhabar.com/news/125258</a>Translated by Kaustubh Dhital

Insider trading taints Nepal capital market

<figure><img width="620" height="366" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bc9c7e80680e092dfdjpeg.jpg" alt=""/><figcaption></figcaption></figure>Aside from second-guessing what will happen in the restored Parliament on Sunday, the major past-time of urban Nepalis these days is to speculate about the country’s violatile stock market.Dring the past six months, the <a href="http://www.nepalstock.com/" target="_blank" rel="noopener noreferrer">Nepali Stock Market (NEPSE)</a> has soared, which immediately begs the question: is a fall imminent?The NEPSE Index is at a record high market capitalisation, which is the total value of shares listed in the stock market. Daily turnovers have started crossing the Rs10 billion mark, invetors seem to be raking it in.All this has happened at a time when the <a href="https://www.nepalitimes.com/latest/instability-to-cost-nepal-dear-in-2021/" target="_blank" rel="noopener noreferrer">economy is being battered by the impact of the pandemic</a>, which has led to heated debates over whether the market is in a bubble and likely to crash, bringing ordinate ionvestors down with it.  Current highs are the combination of several factors:<ul><li>Low interest rate (see figure 1)</li><li>High liquidity in the banking system</li><li>Dematerialisation (conversion of physical certificates to electronic units) of shares</li><li>Restrictionof ‘kitta-kaat’ in real estate</li><li>Fear of missing out (FOMO)</li></ul>Low share prices between 2017-2019 have been attributed to the appointment of <a href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener noreferrer">Yubraj Khatiwada as finance minister</a>. He famously (or infamously for investors) once remarked that investing in stocks was “not productive”. <figure><img width="953" height="560" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bd9c7e80680e092dfejpeg.jpg" alt=""><figcaption> </figcaption></figure>One factor that has gone relatively unnoticed but has been a game-changer is the advent of ‘online trading’. The possibility to make transactions through the online banking system has ushered in a new breed of investors. Online trading has made the Nepali stock market easily accessible to the public, who can now trade from their living room instead of going to a broker office or bank to make a payment.This trend was starting to be reflected in the data before Covid-19 gripped the country (figure 2). From October 2019 to February 2020, the number of monthly share transactions doubled from an average of 200,000 to 400,000, which pushed the NEPSE Index to the 1,600s, despite relatively higher interest rate hovering above 11%. <figure><img width="961" height="541" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bf9c7e80680e092dffjpeg.jpg" alt=""><figcaption> </figcaption></figure>Following Covid-19 restrictions, the number of transactions further increased and reached a whopping 1.1 million per month in recent months. This reflects the unprecedented entry of retail investors who, with a click of a mouse, can invest money that otherwise would be sitting idle, earning savings account interest rates. This increased participation and diversification of the investor base is also reflected by the data on stock market penetration. DEMAT accounts have increased from 800,000 in mid-July 2017 to 1.4 million in mid-July 2019, and is currently estimated at 2.5 million -- about 8% of Nepal’s total population. More than 1.5 million Nepalis applied for the recent IPO of an infrastructure finance company. Compare this number with India, where around 2% of the country’s population invest in the stock market, while in China this number is estimated to be around 7%. But, online trading also brings a host of new challenges. Asymmetric information, poor advisory services and buying shares based on rumours are big concerns. Investors can lose money in the share market if they overpaid for stock or if their investment horizon is not long enough. However, by not investing they can also ‘lose’ potential gains. So, investors need to understand and be aware of cognitive biases that limit investing success. It is as much about human psychology as it is about finance and economics. The importance of diversifying across different companies and sectors, having a long-term investment horizon and personal finance management are even more important these days, but these are severely lacking in Nepal. An investor’s main motto always has to be: buy a diversified set of companies, invest regularly, keep track of the company’s financials and hold for a long period of time. Crucial reforms now await Nepal’s stock market, these can include: <ul><li>Increased participation of companies in manufacturing, agribusiness, etc</li> <li>Strong regulation on insider trading</li> <li>Better trade settlement systems</li> <li>Increasing the limitation of 50 brokers</li> <li>Creation of index funds and exchange traded funds (ETFs)</li> </ul>The NEPSE Index jumped more than 100% in the past year. You could argue that its current level is a bit high, but just because it has gone up by 100% it does not mean that it is overvalued, and vice versa. The cumulative annual growth rate of the NEPSE between 2001 and 2021 is around 12%, which is in line with the 10% return of the S&amp;P 500 (which tracks 500 of the largest US companies) in the same period. During these 20 years, there have also been periods where the NEPSE fell as much as 75% (between August 2008 and June 2011) and soared over 500% (between June 2011 to July 2016). Stock markets are cyclical by nature. Corrections, and subsequent rises, are bound to happen. In this apparently chaotic environment of ups and downs, one thing is here to stay: a fundamental shift and dynamism thanks to a new breed of investors trading online. This will have short-term disruptions, but it is likely to stabilise the Nepali capital market for years to come. Santosh Pokharel, CFA works in development sector. Sudyumna Dahal is Doctoral candidate at CAMA, <a href="https://cama.crawford.anu.edu.au/">Australian National University.</a>

Despite politics, Nepal’s stock market is bullish

Who is accountable for teacher-student relationships?

Early on Monday morning, a bus from Pokhara to Kathmandu plunged off the highway in Dhading killing 19 passengers. Two weeks ago, another bus fell into the Tama Kosi in Manthali, killing 12. A few days before that a bus crash in Baitadi killed 13 people.&nbsp; In just the month before Nepal's election, more than 50 people have been killed in road traffic accidents. Most of these cannot be called 'accidents'. They are a direct result of poorly maintained highways and lack of enforcement of traffic discipline. Political parties in Nepal have rolled out their election manifestos, and voters are once again presented with a flood of promises. Page after page, these documents list megawatts and microcredit, highways and airports, jobs and investment. In these manifestos, growth is quantified, projects itemised, revenue forecast — and there are even threats to beat up contractors who do not finish their jobs. But when everything is declared a priority the stale promises are empty. The voter is left confused as to where the party’s loyalties really lie. Will any of these plans and pledges actually ever materialise and help Nepalis live longer, safer, healthier lives? The main job of any accountable government is to protect its citizens, not so much from foreign enemies but from domestic mismanagement. And this means the most basic test the new government should be made to pass is whether it can ensure basic well-being and protection for all its people. The problems of safety, health, and survival remain unresolved for most Nepalis, and are quietly eroding their lives. In the past year alone, the country’s <a href="https://nepalitimes.com/news/roadkill">roads and highways claimed more than 2,300</a> lives. An estimated 41,000 Nepalis die each year directly because of <a href="https://nepalitimes.com/here-now/what-is-invisible-is-more-dangerous">air pollution</a>, and their <a href="https://nepalitimes.com/news/air-pollution-killing-season-starts-early">lifespans are lessened by 3.4 years</a>.&nbsp; <a href="https://nepalitimes.com/editorial/poor-health">Non-communicable diseases</a> now account for well over half of total deaths in the country. And even where survival has improved, deprivation remains. Chronic malnutrition continues to haunt communities in <a href="https://nepalitimes.com/here-now/mass-migration-from-muktikot">Nepal’s western mountains</a> despite progress in maternal and child health.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260223130240_4f4ef83a31c3c4ae36ecdffb33a355e2fa3de9e98244b840a895af2d95c35ac0.jpg" data-media-id="editor_5" data-image-id="20260223130240_4f4ef83a31c3c4ae36ecdffb33a355e2fa3de9e98244b840a895af2d95c35ac0" data-rendition-name="original" width="1024" height="683" loading="lazy" alt="A life-first manifesto for Nepal NT"> </figure>  These are the lived realities of most Nepalis, and it is here that development can deliver its most immediate returns. A rising GDP, in and of itself, does not make roads safer, clean polluted air, or provide enough nutrition to children. Such outcomes demand intentional, granular policies that confront the specific, everyday problems shaping people’s lives.&nbsp; Macroeconomic growth, trade and investment are important, but these alone cannot guarantee improvements health and safety. The word ‘growth’, after all, is also synonymous with malignancy. Economic progress and human protection are correlated only when governance deliberately links them. Impact on life is the unit in which ordinary Nepalis calculate progress. What is needed, then, is a governing philosophy measurable in these same terms: a ‘life-first’ standard where every policy, budget, and reform can be understood and judged by its impact on protecting and extending human life. Such a ‘life-first’ approach would scrutinise three aspects of every policy. First, whether the policy prevents loss of life. A death is termed preventable if better, more coordinated response systems and regulations could have avoided it (vaccines, drugs, road safety, clean drinking water). A newly built six-lane highway <a href="https://nepalitimes.com/here-now/highway-accidents-are-no-accident-in-nepal">can be a death trap</a> due to poor design or lax enforcement of safety rules. If neonatal deaths continue in a district despite hospitals being present, or if malnutrition claims lives in predominantly agricultural regions, they too are failures. Preventable deaths also cluster where accountability is less direct. Just last year, <a href="https://nepalitimes.com/news/suicides-a-pandemic-within-a-pandemic">Nepal recorded 6,866 suicides</a>, with nearly 20 lives lost every day, yet these deaths fail to prompt any serious examination of governance. The same holds for fatalities linked to domestic or communal violence, alcohol and substance misuse, or ‘natural’ disasters, which register as ‘tragedies without remedy’ rather than as outcomes policy can influence. But when avoidable loss of life recurs at scale, isolated incidents become patterns, and patterns reveal systemic neglect. Saving lives, however, is only the first step, and what matters just as much is the quality of years lived. Nepal’s life expectancy now stands at 71 years, yet many citizens spend years in avoidable disability, untreated chronic illness, or mental distress. A life- first government must ask not only whether people live, but whether they thrive. Are citizens able to pursue education, work, and family life without fear of preventable harm? Do communities have access to clean air and water, nutritious food, and basic healthcare? Can a teenager anywhere in Nepal imagine a future not foreclosed by premature marriage, or untreated depression?  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260223130240_157d72b80b82a07699b6bffbb30036b86f0f767a5674cc3db3d5c20343442940.jpg" data-media-id="editor_8" data-image-id="20260223130240_157d72b80b82a07699b6bffbb30036b86f0f767a5674cc3db3d5c20343442940" data-rendition-name="original" width="2529" height="1427" loading="lazy" alt="A life-first manifesto for Nepal NT"> </figure>  Thriving requires policies that prevent suffering and promote well-being in addition to ensuring survival.&nbsp; Finally, governance must consider graceful aging. Elderly Nepalis should not be left to navigate disease, poverty, or isolation alone. Social systems, healthcare, and community support must enable their continued participation and dignified well-being. Adopting this three-layered standard would gradually reorient how success of any new government is defined. Transportation would be judged by fatalities reduced on the roads. Electricity generation would be measured by whether households can switch from firewood dependence to smoke-free electric stoves.&nbsp; Increase in annual rice harvest must translate into better nutrition, reducing the prevalence of chronic diseases like diabetes. Accountability must follow problems rather than stop at Singha Darbar. Only then will politicians and bureaucrats eventually recognise that their work converges on the same human endpoint. Critics will argue that economies are complex, trade-offs are inevitable, and that governance cannot be reduced to a single metric.But, as Acemoglu and Robinson show in their book <a href="https://ia801506.us.archive.org/27/items/WhyNationsFailTheOriginsODaronAcemoglu/Why-Nations-Fail_-The-Origins-o-Daron-Acemoglu.pdf">Why Nations Fail</a>, the key difference between prosperity and poverty lies in inclusive institutions that empower citizens and create broad incentives for well-being.&nbsp; Extractive institutions concentrate power and wealth in the hands of a few while keeping the majority trapped in neglect. Nepal’s governance has remained a striking example of extraction. If lawmakers in the new Parliament continue to resist changes that would save and improve the lives of ordinary citizens, the same systemic rot will persist for generations to come. A life-first mentality can cut through this inertia by clarifying the moral centre of governance and reminding policymakers that behind every policy failure lies human cost. <a href="https://nepalitimes.com/here-now/epicentre-of-hunger">Every mother in Bajura</a> with a child going hungry at night, every farmer in the Madhes unable to afford medical care, and every family that has lost <a href="https://nepalitimes.com/opinion/comment/saving-kidneys-to-save-nepal">a migrant son to kidney failure</a> understands the true <a href="https://nepalitimes.com/multimedia/dirty-dangerous-difficult-and-dehydrating">value of a life saved</a>. Life is the one metric that transcends ideology, ethnicity, and region. Centering governance on this single, focused metric, can shift an election from a contest of rhetoric to a contest of evidence. Which party ensured access to safe water and basic healthcare? Which made work at home and abroad safer and less exploitative. Which measurably extended healthy years of life for ordinary citizens? Health is wealth. By improving the healthy lifespan of citizens economic prosperity would follow naturally. A ‘life-first’ governance model would therefore compel Nepal to address the underlying structural failures across all sectors, rather than merely alleviating their symptoms. The GenZ protest that toppled the government last September was, at its core, a demand for accountability and a rejection of politics as usual. But as the country edges closer to the polls, that clarity has started to dissipate. Parties are now echoing the language of reform, but the public discourse remains dominated by promises that feel disconnected from Nepal’s most immediate and basic priorities. Every preventable death, every hungry child, and every neglected elder becomes a direct failure of governance and a moral debt the state must answer for. It is how we can make sure we keep the next government in check. The writers are Nepali GenZ students of biomedical engineering at the Hong Kong Polytechnic University.

Nepal’s life or death election

Chronic winter drought and decades of unmanaged forest biomass have turned wildfires into a systemic risk for Nepal. We need to re-learn to convert fire fuel in forests into fertilizer for crops.&nbsp; On 11 January, a huge forest fire spread rapidly from China into the forests of Sindhupalchok, 40km northeast of Kathmandu. The newly-opened Tatopani border checkpoint was closed. Smoke from the fire spread across central Nepal, blocking the sun.&nbsp; The fire burnt itself out within a few days, but the border stayed closed for longer. Such wildfires were once rare in mid-winter, and traditionally peaked between March and May as temperatures rose ahead of pre-monsoon showers. What is unsettling is not just the early onset of the fires, but also their scale. This shift is not accidental, the pattern has been unfolding over years due to winter drought, weakening post-monsoon moisture, and the accumulation of dry forest biomass as Nepal’s forest area doubled in the past 30 years.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022009024_5f4a84bb389f9b56f4fa47d4f694adcd464eb13b192d184af0f1eb20efdfeebf.jpg" data-media-id="editor_0" data-image-id="2026022009024_5f4a84bb389f9b56f4fa47d4f694adcd464eb13b192d184af0f1eb20efdfeebf" data-rendition-name="original" width="2000" height="1055" loading="lazy" alt="Wildfire season NT"> <figcaption>A NASA FIRMS image of Nepal with red dots signifying fires in February 2025.</figcaption> </figure>  Together, these factors have made forests tinder dry in spring, just waiting for a spark. Nepal has experienced winter drought in eight of the past ten years (this winter was an exception). Winter rain and snow at higher elevations play a decisive role in maintaining surface moisture, recharging shallow aquifers, and keeping forest floors damp enough to resist ignition. When winter rains fail, forests dry out months earlier than usual. Satellite-based assessments show a steep decline in surface moisture across the middle mountains of Nepal, particularly in areas with dense forest cover but limited undergrowth management. Springs that once flowed year-round are now seasonal.&nbsp; More than half of the springs in the mid-hills have either dried up or show significantly reduced discharge, a trend closely linked to declining soil moisture and disrupted recharge zones. Dry soil does not just threaten water security — it helps the vegetation ignite. FUEL WITHOUT FUNCTION For decades, Nepal’s forests have been accumulating dry leaf litter, fallen branches, shrubs, and deadwood. Historically, this biomass was not considered waste because rural households regularly collected leaf litter for livestock bedding, which was later composted and returned to farms as fertilizer.&nbsp; Forest floors were therefore relatively clean while the mulch fertilized farms. That relationship has steadily eroded due to outmigration, changes in livestock systems, restrictions on access to community forests, and the growing availability of chemical fertilisers.&nbsp; Community forests across the country today are thick with dry twigs, branches and leaves — a highly combustible carpet. When prolonged drought dries this biomass, even a small spark from a herder’s intentional fire, a cigarette, or lightning strike can trigger massive fires.&nbsp; Under such conditions, the question is no longer whether fires will occur, but how intense and widespread they will be. Forest fires are often framed as an environmental issue concerning trees and wildlife. In reality, their impact extends far beyond forest boundaries.&nbsp; Smoke travels faster and further than flames. Fine particulate matter, especially harmful PM2.5, spreads across countries. In recent fire seasons, air quality monitors in Kathmandu have recorded air quality levels several times higher than WHO guidelines. The smoke adds to Kathmandu’s own pollution and lingers for days.&nbsp; Flights are cancelled or delayed in cities like Pokhara, and poor visibility blocks mountain views affecting tourism. Health facilities report spikes in respiratory complaints, particularly among children and the elderly. Just as wildfires have multi-sectoral causes, the impact of forest fires go beyond forests. One critical dimension remains largely invisible: the soil. The fires cause silent damage beneath the ash, and the emergency does not end when the flames subside. Beneath the surface, soil suffers long-term damage. Organic matter burns away, beneficial microorganisms die. The soil structure weakens, reducing the land’s ability to absorb and retain water. The scorched earth is more prone to erosion, increasing the risk of floods and landslides once the rains return.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022009028_cc54ff056b2cac8b789cfd4d11afef9eaf943368e47b99aabd57c7b63b776cf2.jpg" data-media-id="editor_1" data-image-id="2026022009028_cc54ff056b2cac8b789cfd4d11afef9eaf943368e47b99aabd57c7b63b776cf2" data-rendition-name="original" width="1717" height="2143" loading="lazy" alt="Wildfire season NT"> <figcaption>Wildfire risk map based on the validated Random Forest model (a) Overall reclassified wildfire risk map of Nepal, (b) District level wildfire risk, and (c) Municipality wildfire risk map.</figcaption> </figure>  In many of Nepal’s agricultural areas, soil organic matter levels are already below 2% -- lower than what is needed for resilient and productive farming. Repeated fires push these levels even lower, undermining soil fertility and forcing farmers to rely more heavily on chemical fertilisers, unleashing a vicious cycle of higher costs and food insecurity.&nbsp; Climate breakdown is often cited as the primary culprit, and rightly so. Rising temperatures and erratic rainfall have intensified fire risk. But fires in Nepal are increasingly the result of human intervention.&nbsp; The response of all three levels of government remains too little, and too reactive. Each year, resources are mobilised to extinguish fires once they have already spread. Far less attention is paid to managing the fuel load within forest undergrowth that makes such fires inevitable.&nbsp; Meanwhile, forestry and agriculture policies are not coordinated, missing opportunities to address shared challenges. Forest fires are not natural disasters, but predictable outcomes of governance choices. National plans and climate pledges set an ambitious target of raising soil organic matter to 4%. The science behind this goal is solid. Higher organic matter improves water retention, stabilises yields, reduces fertiliser dependence, and enhances long-term food security. What remains unclear is the pathway.&nbsp; Where will the organic inputs come from? How will they be processed and applied safely at scale? Without practical answers, the 4% target risks remaining aspirational rather than achievable. Forest undergrowth can be turned into fuel and fertiliser. Biochar is produced by heating organic biomass in a low-oxygen environment, converting it into a stable form of carbon that can be added to soil.&nbsp; When properly produced and applied, it improves soil structure, enhances water and nutrient retention, supports microbial activity, and locks carbon into the ground for decades. In Nepal biochar addresses two interconnected problems: reducing the accumulation of combustible biomass in forests, lowering fire risk, while simultaneously rebuilding depleted soils. In doing so, it restores the broken link between forest management and agriculture.&nbsp; Done well, biochar is not merely an environmental intervention. It is an economic one, with potential to create local employment, reduce farmers’ input costs, and support climate-smart agriculture. But biochar propagation depends on improved governance. If promoted as isolated pilots or short-term projects, it will fail. What is needed is institutional clarity: standards for production and safety, quality control mechanisms, farmer extension services, and coordination across local, provincial, and federal levels.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022009028_e6e2218f38fae5b1fe81d9f99078fe01f58d04b4b3b2c41447f017c3f838a1d4.jpg" data-media-id="editor_2" data-image-id="2026022009028_e6e2218f38fae5b1fe81d9f99078fe01f58d04b4b3b2c41447f017c3f838a1d4" data-rendition-name="original" width="1536" height="2048" loading="lazy" alt="Wildfire season NT"> <figcaption>Freshly prepared biochar under control tempature (350-600°C).</figcaption> </figure>  Community forest user groups could manage biomass collection. Local governments then support safe, decentralised production units. Agricultural extension services guide farmers on application, linked to soil testing and monitoring. Such an approach would reduce fire risk, improve soil health, and generate rural livelihoods.&nbsp; Poorly produced biochar or contaminated feedstock can harm soils and human health. Without training, standards, and oversight, good intentions can backfire. Nepal needs to move beyond fire-fighting to fire prevention and confront the structural causes that make them a growing risk. It is not just a technical choice – it is one that demands political will from newly-elected leaders after March. &nbsp;&nbsp; Ngamindra Dahal is a hydrometeorologist with the Nepal Water Conservation Foundation specialising on climate and water management issues.&nbsp;

RED ALERT: Get ready for the wildfire season

Party flags and banners wave from electric poles, houses and e-rickshaws are festooned with posters. Madhes Province is in the grip of election fever, and in a tour through four of its districts, there is the sense that any efforts by mainstream political parties at reforms have come too little too late. Among the banners, the sky blue of the<a href="https://nepalitimes.com/news/new-vs-new-in-nepal"> RSP is more prominent </a>here this time, and the rallying cry across the country for new and improved leadership is echoed on the ground. “For the people around here, whatever these old leaders are saying has become just noise,” says a lassi shop operator in Janakpur, waving a dismissive hand at flags with the NC’s tree symbol across the street. In Janakpur, UML nominee Raghubir Mahaseth was barred from canvassing door-to-door. Campaign posters of the mainstream parties have been torn from walls and replaced with RSP posters.&nbsp; In Inarwari village of Rautahat in the Madhes heartland, local elected officials whose parties have been merged into the Nepali Communist Party hope to retain enough supporters this election. But not many residents say they would vote for its candidate. &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022005024_a793e3a19cbd536fde50708c4a41b8b0d39a4716c6973feddad889097b655641.jpg" data-media-id="editor_1" data-image-id="2026022005024_a793e3a19cbd536fde50708c4a41b8b0d39a4716c6973feddad889097b655641" data-rendition-name="original" width="1600" height="1200" loading="lazy" alt="Battleground Tarai NT"> <figcaption>Photos: SHRISTI KARKI</figcaption> </figure>  A first-time voter in Sarlahi’s Haripur is home on a semester break from medical school in Kathmandu, and is waiting excitedly for 5 March. “You can’t really say out loud whom you’re voting for around here,” he says, as he mimes ringing a bell. “It is time for someone new to be in-charge." In the highway town of Bardibas, an elderly teashop owner says that all she hears are calls for घण्टी, the RSP’s bell symbol. “After all, bells are rung in the house of gods,” she says. “It seems like the right choice.” The RSP wave sweeping the nation after the GenZ movement is seen in Madhes, and the PR ballots might reflect that, notes political analyst Tula Narayan Shah.&nbsp; “But the socio-cultural networks, organisational setup, and legacy of democratic movement of traditional parties might still give them a fighting chance on the first past the post ballot,” he says. &nbsp;“The door-to-door campaign style of candidates has always been more prominent in Madhes than elsewhere.”&nbsp; Villages like Dhankaul in Sarlahi-4 where <a href="https://nepalitimes.com/news/grand-split-in-nepal-s-grand-old-party">Gagan Thapa</a> of the Nepali Congress (NC) is running against incumbent Amresh Singh, is an NC stronghold. Singh won the election here twice before in 2013 and 2017 when he was an NC leader, and still had goodwill among NC voters when he ran and won as an independent during the 2022 election. “I voted for him twice before when he was in the NC, but he did not do anything for this or other villages. Once he is elected, he has not set foot here,” says Rajiv Yadav, a voter in Dhanakul. “The RSP will get more votes here than last time, but Gagan is sure to win. This village will vote for him.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022005024_26691bb5a37edf705cc197a632d0bf032f984079a838d31bcd943bc0b9c97ff3.jpg" data-media-id="editor_3" data-image-id="2026022005024_26691bb5a37edf705cc197a632d0bf032f984079a838d31bcd943bc0b9c97ff3" data-rendition-name="original" width="1600" height="1200" loading="lazy" alt="Battleground Tarai NT"> </figure>  Madhes is in the spotlight this election because two prime ministerial candidates have focused their attention in the region. Balen Shah began his campaign in Janakpur (main picture, left) in January as a ‘Son of Madhes’, and Gagan Thapa chose Sarlahi-4 as his constituency over Kathmandu-4, from where he has been elected since 2013.&nbsp; The Madhes has always been the battleground for Nepal’s electoral politics, and candidates from here, like Krishna Prasad Bhattarai from Parsa, Pushpa Kamal Dahal from Siraha, Jhala Nath Khanal from Sarlahi, and Madhav Kumar Nepal from Rautahat, have all been prime ministers. Despite electing politicians to high office in Kathmandu, districts of Madhes have consistently ranked low in development and service delivery indicators, especially in basic healthcare and education. Socio-economic inequalities stemming from a lack of opportunities has also meant that Madhes districts have the highest rate of out-migration in the country.&nbsp; What is different this time is that the people of the province have a Madhesi prime ministerial candidate who will represent them in national politics, and the main competition ultimately will be between the NC and RSP prime ministerial candidates. Interestingly, voters seem to be looking beyond Madhes-based parties who have historically campaigned on identity and federalism.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026022005024_1b5c1134fb02ded72a12221200918df584b0cd003139bb2be44951efe9a65bf1.jpg" data-media-id="editor_4" data-image-id="2026022005024_1b5c1134fb02ded72a12221200918df584b0cd003139bb2be44951efe9a65bf1" data-rendition-name="original" width="1600" height="1200" loading="lazy" alt="Battleground Tarai NT"> </figure>  “Leaders of Madhes parties have glorified their struggle for votes but failed to perform on good governance at local and provincial levels,” explains Tula Narayan Shah. “Now, Balen has become a PM candidate as a face of the region, and as someone who will deliver based on his work as Kathmandu mayor.” If the RSP wins, it will be governing in the absence of provincial leadership that would play a crucial mediatory role between Kathmandu and local units. On Wednesday, RSP’s Madhes province chair Mamta Sharma resigned from the party and joined the NC. There is also some underlying tension between RSP cadre loyal to Balen Shah and Rabi Lamichhane. “It is not prudent to predict who will win the election and whether parties will deliver on promises,” says Tula Narayan Shah. “But win or lose, there is little basis at this time to believe that the RSP will be committed to making the federal system and provinces more functional.” Voters here in the heart of the federalism movement, however, are willing to give the RSP the benefit of the doubt. &nbsp;Resident Brahma Dev in Janakpur told us: &nbsp;“The RSP, like parties that came before them, deserve a chance to prove their leadership in the next five years. If they do not deliver, we can always vote them out next time.”&nbsp; On Wednesday, NC leaders unveiled the party’s 10-point election manifesto at a large rally in Janakpur (main picture, right). Gagan Thapa began by addressing a cheering crowd in Maithili, and said the NC was reformed, adding:&nbsp; “The GenZ did not reject us, they told us to change our ways.” Also on Wednesday 800km away at the other end of the country in Dhangadi, Balen Shah, in a speech that lasted just three minutes, he said: “Don’t vote for us, give us work to do.”&nbsp;