<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f899c7e80680e04fd11jpeg.jpg" alt="" width="1920" height="1080"/>https://www.youtube.com/watch?v=byB2UFWlCs4&amp;feature=youtu.beWhen actress, fashion designer and, more recently, the director of her debut film #Horror, Tara Subkoff, popularised the term ‘upcycling’, she may not have known that she was launching a new fashion trend. Even in faraway Nepal.Young, idealistic Nepali social entrepreneurs may have borrowed the word, but they have gone beyond the world of fashion to craft items for everyday household use repurposed from products that would otherwise be discarded at landfill sites. The idea is not just to be trendy and smart, but also to address growing environmental concerns among customers about garbage, pollution and consumerism.In this centrefold, Nepali Times profiles some companies that have upscaled upcycling to a whole new level.<h2>Shailee Crafts</h2><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f8c9c7e80680e04fd12jpeg.jpg" alt="" width="1080" height="1350">PHOTOS: SHAILEE CRAFTSAfter water buffaloes are converted into momos, their innards are often discarded by the banks of Kathmandu’s rivers, where kites, crows and dogs pick at them, while their bones are ground into powdered <a href="https://www.nepalitimes.com/banner/getting-our-shit-together/" target="_blank" rel="noopener">fertiliser</a>.But lately, some of the horns and bones are collected from butcher shops and taken to <a href="https://www.youtube.com/watch?v=SG-de1eofhM&amp;t=9s&amp;fbclid=IwAR01xSi7CBBWUnHIHBQ_4KNnc1xArLG-P0BHnDz0ZOhmVzw1OH6Re_kojZ0" target="_blank" rel="noopener">Shailee Crafts</a>, where they are turned into carved figures, pendants and buttons.Shailee was set up by the father of Success Dhamala and his brother Shailesh to make handicraft items that had a strangely Polynesian look. In 2013, years after their father’s shop went out of business, Success and Shailesh revived the business to sell modern items with ethnic designs, made from natural and sustainable materials.Their raw material of choice: buffalo horns and bones. The raw materials are gathered, cleaned, cut, shaped and carved by the steady hands of local artisans, who use traditional Nepali tools to fashion intricate Maori designs like the Pikorua (twist), Toki or Hei-Matau (fish hook). Buttons and statues are made with keen attention given to minute details, each ridge and curve carved with precision.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f8e9c7e80680e04fd13jpeg.jpg" alt="" width="640" height="800"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f919c7e80680e04fd14jpeg.jpg" alt="" width="1080" height="1620"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f949c7e80680e04fd15jpeg.jpg" alt="" width="640" height="800">Shailee Crafts also makes pendants based on Game of Thrones themes, with the sigils of House Stark, Targaryen and Greyjoy. And beyond the traditional Pacific or pop culture designs, the brothers also turn buffalo bones into quirky buttons with geometric cutouts and unorthodox patterns.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f969c7e80680e04fd16jpeg.jpg" alt="" width="1080" height="1350"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f999c7e80680e04fd17jpeg.jpg" alt="" width="1080" height="1080"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f9c9c7e80680e04fd18jpeg.jpg" alt="" width="720" height="900">Although upcycling bones and horns is new to Nepal, pendants made from carved bones have been an integral part of Polynesian and Maori culture for centuries. Leftover bones from animals have been used to create traditional jewellery, like fish hook pendants, or hunting tools, like spears.“When we first started using buffalo bones for pendants, we were just following what they do elsewhere, but we realised we were also reducing <a href="http://archive.nepalitimes.com/news.php?id=15234#.XTBlpfIzbIU" target="_blank" rel="noopener">Kathmandu’s waste </a>by upcycling,” says Success Dhamala.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4f9f9c7e80680e04fd19jpeg.jpg" alt="" width="1080" height="1080">Prayer beadsShailee Crafts uses natural products like hemp and recycled fabric for the buffalo bone necklaces, adding a modern feel to traditional Tibetan prayer beads and ensuring that horns and bones do not come from buffaloes that have been sacrificed.The store also conducts weekly carving workshops on Sundays, where visitors can hone their skills carving horns with traditional tools.<h2>Lahana Paper Crafts</h2><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fa19c7e80680e04fd1ajpeg.jpg" alt="" width="193" height="257"> PHOTOS: LAHANA PAPERPaper makes up 9% of Kathmandu’s household waste and 23% of commercial waste. Although discarded in landfills, much of this is actually recyclable.Co-Founder Ramita Maharjan first got the idea for Lahana Paper Crafts while an undergrad at Kathmandu University. She learnt to turn discarded paper into baskets and jewellery, and today, the company employs women and reduces paper waste in the city.At Lahana, newspapers, magazines, school books, invitation cards, calendars, brochures and comic books are transformed into colourful earrings, necklaces, bracelets, pens, even laundry baskets. Discarded paper is gathered and shredded into strips, and rolls of paper are turned into ‘beads’ and attached to metal pieces, or woven into baskets.The work is done by local women, who sit in a circle chatting away as their nimble fingers skilfully weave rolls of paper around waste baskets or cut up old magazines and newspapers faster than a machine. Maharjan makes sure that the women are paid well and given meals and transportation fees.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fa49c7e80680e04fd1bjpeg.jpg" alt="" width="1242" height="1191"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fa79c7e80680e04fd1cjpeg.jpg" alt="" width="1242" height="1164">Like any other upcycling business, Lahana Paper Crafts also faces difficulties in convincing customers to buy its products. Many in Kathmandu still doubt the durability of the products, even though they are sturdy. Besides, it is the thought of being less wasteful that counts.Today, Lahana has buyers from all over Nepal and even abroad. Maharjan also holds workshops to train people interested in making paper accessories.She adds, “Our products are becoming more popular because they are handicrafts and they help manage paper waste.”<h2>Taalo</h2>When clothing items like saris, t-shirts, kurtas and shawls are made, unused fabric is just thrown away. Sujhan Ghimire set up Taalo to repurpose these scraps into wearable fashion items. He designs all the products himself and has curated a line of brightly coloured ties and bow-ties, scrunchies, headbands and scarves, all within the Rs120-200 price range.From silks to chiffons and Lycra to cotton, Taalo’s products are made from a variety of available and usable fabric.To reduce fabric waste, the business has also partnered with textile factories, clothes manufacturers and even tailors to upcycle and recycle their scrap.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4faa9c7e80680e04fd1djpeg.jpg" alt="" width="758" height="1132">PHOTO: ABHILASHA SHRESTHAAt first, Ghimire found it hard to convince consumers to buy his products. Many were sceptical about upcycling and believed the products were made from used clothes. After an awareness campaign to explain that the fabrics were never worn, sales boomed.Now in its second year of operations, Taalo has a consumer base that runs from teenagers to environmentally-conscious adults. The company’s popularity is also a result of growing consumer consciousness among Kathmandu citizens, who see a lot of trash lying about. People are becoming more aware of sustainable alternatives to products that they want to buy.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fac9c7e80680e04fd1ejpeg.jpg" alt="" width="1000" height="1334">PHOTO: TAALOGhimire’s venture is not only environmentally conscious, but also socially aware. The <a href="http://archive.nepalitimes.com/news.php?id=12487#.XTBm__IzbIU" target="_blank" rel="noopener">Kamlari </a>women from Nepalganj who manufacture Taalo’s products are paid an extra Rs2 for every product that they make, in addition to their daily wages.“People are becoming more aware about what they are spending money on and where the products come from,” Ghimire explains. “At Taalo, they can buy things they want knowing that they are helping both women from underprivileged backgrounds and the environment.”Ghimire says he now wants to expand Taalo’s upscaled product line to include bracelets and even backpacks.<h2>Tatwa</h2>In the last fiscal year, Nepal imported 10 million bottles of alcohol. While some of them are recycled, many cannot be rebottled in Nepal and end up as shards of glass on the banks of rivers and around <a href="http://archive.nepalitimes.com/article/nation/recycle-reuse-reduce-garbage-kathmandu,1279" target="_blank" rel="noopener">landfill sites</a>.Doko Recyclers has been collecting garbage house-to-house in Kathmandu to covert organic waste into fertiliser and recycle other material. Now, it has launched a new brand for upcycled products called Tatwa, which takes unrecyclable imported beer, wine and liquor bottles and converts them into candle holders, drinking glasses, tumblers, glass containers and even toothpick holders. Tatwa has so far repurposed over 6,000 imported bottles collected from households, restaurants and hotels around the country.Discarded bottles are first thoroughly cleaned and sterilised before being cut down by industrial machines. Then comes the time-consuming, labour-intensive sanding and finishing phase to give the products a smooth texture. With Tatwa’s minimalistic and logoless designs, the finished products barely resemble the alcohol bottles they once were.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4faf9c7e80680e04fd1fjpeg.jpg" alt="" width="4142" height="3100"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fb29c7e80680e04fd20jpeg.jpg" alt="" width="1444" height="960"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fb59c7e80680e04fd21jpeg.jpg" alt="" width="1000" height="1500">Says Tatwa’s Shivani Saria, “We rethink each item considered to be waste, where it comes from, what its source element is and how a thoughtful recovery of those items would mean valuing the environment and understanding waste from a new perspective.”Tatwa means ‘element’ in Nepali, and Saria says the venture is all about focusing on the importance of understanding waste as a resource that has lost utility in its present form. Beyond blue and green-hued glass products, Tatwa is also working on items like metal straws, bamboo toothbrushes and reusable cloth bags. It hopes to create an entire range of sustainable upcycled products to replace objects of daily use.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fb89c7e80680e04fd22jpeg.jpg" alt="" width="1000" height="750">PHOTOS: TATWASaria says, “Recycling in Nepal is a new industry and there are not many recycling facilities, which is why we have to explore options in upcycling, turning non-recyclable and difficult to recycle <a href="http://archive.nepalitimes.com/article/nation/reusing-waste,1280" target="_blank" rel="noopener">waste </a>items into products that can re-enter the market. With upcycling, we reduce waste that would otherwise end up in the landfill with creative business ventures that also generate jobs.”<h2>Dhaasoo</h2>When Dhaasoo was established in 2015, no one in Kathmandu really knew what upcycling was. Four years later, Dhaasoo has changed the game for reusable utilities and home decor.Dhaasoo is Bollywood movie slang that roughly translates to ‘daami’ in Nepali or ‘awesome’ in English. Founder Nitesh Sharma wanted an attention-grabbing name to draw customers to a new concept. It worked.From glass bottles to cans, car parts and even cars, Dhaasoo has upcycled and sold them all. It has upcycled hookahs, lamps, planters, book shelves and even a desk made from an Eco Sport car.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fba9c7e80680e04fd23jpeg.jpg" alt="" width="562" height="562"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fbc9c7e80680e04fd24jpeg.jpg" alt="" width="1080" height="1080">Dhaasoo works on one project a day, taking requests for customised products or selling in-house designs. Customers either arrive with a product concept in mind and guide the designers, or they simply ask the company to create something new. Many of the products are therefore literally ‘priceless’.“Our products don’t have price tags because everything is made to order,” Sharma explains. “We never know what the customer will request and what it will cost.”But while Dhaasoo is becoming popular, it is not what you would call mass market. Sharma still struggles to make people understand that just because a product is upcycled it is not always cheaper, as a lot of work goes into repurposing those materials.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fbf9c7e80680e04fd25jpeg.jpg" alt="" width="758" height="611">PHOTOS: DHAASOO<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131144/636a4fc29c7e80680e04fd26jpeg.jpg" alt="" width="2554" height="1937">Read also: <a href="http://archive.nepalitimes.com/article/Nepali-Times-Buzz/Kathmandu-waste-management-problem-solution,1416" target="_blank" rel="noopener">Waste should not be wasted</a>, Bhrikuti Rai<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/business/return-to-nature/" target="_blank" rel="noopener">Return to nature</a>, Nepali Times<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/plastic-money/" target="_blank" rel="noopener">Plastic money</a>, Samuel Johns<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="http://archive.nepalitimes.com/article/nation/making-money-from-garbage-in-kathmandu,2055" target="_blank" rel="noopener">Rupees from rubbish</a>, Sahina Shrestha

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Upscaling Upcycling

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

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

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Not poor, but not rich

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Flouting rules caused Saurya tragedy