<figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100124/63bfd2809c7e80680e0d3027jpeg.jpg" alt=""/><figcaption>Illegal construction in Khula Manch as seen in this photo from May 2020. All photos: GOPEN RAI</figcaption></figure>Over the centuries, as Kathmandu expanded, the vast open space of Tundikhel that was once on the fringes of the old town has become the heart of the new city.The name comes from the Newa Tinkhya, a ‘khya’ means large open space on the outskirts of town set aside for social and cultural events. As dynasties came and went, Nepal’s rulers used the public space for their own convenience, and <a href="https://www.nepalitimes.com/opinion/let-tundikhel-be-what-tundikhel-was/" target="_blank" rel="noopener noreferrer"> </a><a href="http://archive.nepalitimes.com/news.php?id=5876#.Y4qyrS2B3ow" target="_blank" rel="noopener noreferrer">Tundikhel</a> went from a place for festivals, to supposedly being the largest military parade ground in Asia, and started being occupied piecemeal by the Army.Today, not even 15% of Tundikhel’s original expanse is open to the public. It is fragmented into sections under either institutional and/or military control. After the 2015 earthquake, even the area with public access has mounds of debris and is fenced off to park tipper trucks.In the latest instance of blatant encroachment, Kathmandu Metropolitan City (KMC) under its <a href="https://www.nepalitimes.com/latest/making-kathmandu-great-again/" target="_blank" rel="noopener noreferrer">new mayor Balen Shah</a> has revived the idea of turning Khula Manch in Tundikhel into a parking facility.The area behind the Army pavilion with its Panchayat-era open air theatre has been the site for historical events like the People’s Movements of 1990 and 2006, and political rallies. After the earthquake it housed a tent city for survivors.Earlier this month, the 10th executive meeting of KMC set aside a budget to prepare a detailed project report for a three-storey underground parking in Khula Manch. <figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100124/63bfd2849c7e80680e0d3028jpeg.jpg" alt=""><figcaption> </figcaption></figure>Activists and experts are up in arms, saying the decision was taken without proper homework and consultation, and would threaten one of the last remaining <a href="https://www.nepalitimes.com/here-now/kathmandu-loses-its-open-spaces/" target="_blank" rel="noopener noreferrer">open public spaces in Kathmandu</a>.“The authorities have never understood the essence of Tundikhel,” says activist Ganapati Lal Shrestha of <a href="https://www.nepalitimes.com/opinion/let-tundikhel-be-what-tundikhel-was/" target="_blank" rel="noopener noreferrer">Occupy Tundikhel</a>, a citizen-led movement to reclaim encroached open spaces. “We had hoped that at least the newly elected local representatives would understand its importance, but even they have not.”The KMC has not divulged details, but activists are concerned that an underground parking will be detrimental to Kathmadu’s ecology and culture.“Underground parking will disturb the aquifer and water flow in the hiti around the area,” says Shrestha. “If it is about managing traffic, the basement of the commercial buildings which the Mayor previously cleared, and new parking facilities would be enough. Why target Tundikhel? And they should have consulted local stakeholders.” Kathmandu’s historic heart does not have much space left for new development. The plan should have been to use and improve what already exists.“Traffic management in the city core has been a challenge for KMC, and adding parking space makes sense. But from an ecological point of view, underground parking would impact the environment. How much are you willing to compromise on that front is a political decision,” says land and water management engineer Padma Sundar Joshi.Like other open spaces in Kathmandu Valley, Tundikhel plays an important role in the <a href="https://archive.nepalitimes.com/article/nation/water-table-of-kathmandu-valley-falling-fast-recharge-to-replenish,4100" target="_blank" rel="noopener noreferrer">groundwater recharge system</a>  While surface water is replenished every monsoon, deep aquifers need to be recharged. “Underground parking can help in traffic management but there has to be a proper design and it should be carried out only after conducting a geological study,” says Joshi. “If the new mayor does not follow due process and consult the public, how is he any different from the previous mayors?” KMC spokesperson Nabin Manandhar admits that an economic feasibility study and geological investigation has not been conducted. <figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100124/63bfd2899c7e80680e0d3029jpeg.jpg" alt=""><figcaption> </figcaption></figure>Apart from the ecological impact, Khula Manch is also culturally important. To its northwest is Dui Maju, the goddess of grain which is considered the unseen energy linked to Goddess Taleju.According to Uddhab Karmacharya, the priest of Taleju temple, Dui Maju is always established where the goddess Taleju Bhawani exists. A special worship for Dui Maju takes place in April to coincide with special puja at Hanuman Dhoka. “The state cannot do whatever it likes, but they need to understand the importance of the space for Dui Maju and work to preserve it,” says Karmacharya. “They are turning Kathmandu into concrete with no regard for heritage conservation. They should leave Khula Manch alone.” This is not the first time the KMC has tried to turn the place into a parking lot. A feasibility study was conducted in 2016 for underground parking coverinf 23,133 sq m for 2,000 light vehicles.That year, the KMC started work on the 17-storey Kathmandu View Tower across the road, and moved the bus park from there to Khula Manch. After the bus park moved out, the area became a dumping site for construction material and temporary rooms for contractors. The KMC only acted to clear the area in 2019 after a public outcry by activists and heritage conservationists.The plot belonging to Dui Maju was leased for five years by the Guthi Sansthan to a certain Amrita Bhattarai who was supposed to upkeep the holy site. Instead, she leased the prime real estate to Marin Thakur International which sublet it to vendors. After widespread public protests in 2019, then Deputy Mayor Hari Prabha Khadgi padlocked the gates and announced that the city would take charge of the upkeep and cleanliness of the religious site.Urban Planner and Former VC of National Planning Commission Jagadish C Pokharel says adding underground parking will not ease <a href="https://www.nepalitimes.com/opinion/cars-vs-people-in-kathmandu/" target="_blank" rel="noopener noreferrer">congestion in Kathmandu’s core</a>.“Underground parking is not a good idea in Kathmandu. We must keep in mind the soil condition and seismic aspects, and also how it will impact the water table,” says Pokharel.Concentrated parking there will affect the traffic in the surrounding roads, and it will need other infrastructure to ease traffic flow in and out.“The wiser route to go”, says Pokharel “is to decentralise traffic and study pocket parking areas above-ground with earthquake resistant technology.” <h2>Fragments of Tundikhel</h2> <figure><img width="780" height="1044" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100124/63bfd28d9c7e80680e0d302ajpeg.jpg" alt=""><figcaption> </figcaption></figure>The first mention of Tundikhel was in a 1709 scripture engraved in Taleju Bhawani temple by Queen Bhuwan Laxmi. This was during the Malla period, when Tinkhyo (Tundikhel) was a vast open space set aside by Kathmandu's rulers for social and cultural events. The Italian Jesuit Ippolito Desderi who visited Kathmandu in 1721 in his chronicles mentions a two- mile long plain. In the 1850s, <a href="https://www.nepalitimes.com/opinion/250-years-of-nepals-history-through-art/" target="_blank" rel="noopener noreferrer">Henry Ambrose Oldfield</a>, the British resident surgeon in Kathmandu, wrote in his book Sketches of Nepal that Tundikhel originally stretched from where the stadium is today to Rani Pokhari in the north. He estimated that it measured 2-3 miles in length, and 300 yards in width. Over the centuries, rulers as far back as <a href="https://www.nepalitimes.com/banner/no-time-like-the-past/" target="_blank" rel="noopener noreferrer">Pratap Malla</a> divided it up for their own convenience. Today only 15% of the space is open to the public. In 1671, King Pratap Malla constructed <a href="https://www.nepalitimes.com/banner/building-back-rani-pokhari-even-better/" target="_blank" rel="noopener noreferrer">Rani Pokhari</a> on the northern part of Tundikhel. In the 1800s and early 1900s the Rana Regime used Tundikhel mostly for military parades and the pronouncements of edicts. When Bhimsen Thapa built a palace for himself in Lagan Tole south-west of Tundikhel, it brought the army even closer to Tundikhel. Barracks were constructed, and a canon foundry went up on the south-western side. Before Jang Bahadur, it used to be Chhauni that military drills were held. Once he returned from England, he turned Tundikhel into a parade ground for the Nepali army. There were two trees that stood at the centre of Tundikhel for many years, and one of them was a Chakala sima (खरीबोट in Nepal) around which a marble platform was later built. The other tree was called Yaka sima, the lone tree. Both are now gone. Major proclamations were made by the Rana rulers from the platform. In 1885, Bir Shumshere proclaimed himself prime minister from there, an in 1924, Chandra Shumshere announced the emancipation of the slave. In 1945, the end of World War 2 in which 20,000 Nepali soldiers fighting for the British Army were killed in action, was announced in the same place. In 1956, the southern part of Tundikhel was turned into a stadium for sporting events to mark the coronation of King Mahendra. In 1960, Sahid Gate was constructed with a road dividing Tundikhel into two halves. The Nepal Army then built a permanent pavilion for parades, and this Panchayat era structure is still used and is fenced off from the public. In 1962, Tundikhel was further fragmented to build Ratna Park dedicated to Queen Ratna and in 1973 Khula Manch was added with an open-air theatre. <h2>The demon of Tinkhya</h2> Tundikhel is steeped in folklore in which demons and deities once inhabited its open spaces <figure><img width="1500" height="983" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100124/63bfd2939c7e80680e0d302bjpeg.jpg" alt=""><figcaption> </figcaption></figure>One of the more popular stories about Tundikhel begin in the monastery in Itumbaha.Keshchandra came from an affluent family, but was addicted to gambling. Over time he frittered away his posessions until he had no money even to buy food. He went to his sister’s home in Bhagawan Bahal where his sister gave him food in a plate made of solid gold.After eating the food, he gambles away the golden plate. A few days later he goes to his sister’s house again. This time she serves him food in silverware. Keshchandra once again gambles it away.The next time he goes to his sister, she serves him food on the floor. Humiliated and chastised, Keshchandra picks up the food food in a piece of cloth and goes on a pilgrimage to Gosaikunda.A few days into his journey, he becomes hungry and opens the cloth bundle. But the food is mouldy and he goes to sleep on an empty stomach. While Keshchandra is asleep, birds feast on the food. A voice comes from the heavens, ordering the birds to compensate Keshchandra for the food. <figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100124/63bfd2989c7e80680e0d302cjpeg.jpg" alt=""><figcaption> </figcaption></figure>The birds offer him droppings which turn into gold flakes. The shrewd Keshchandra pleads with Gurumapa to help him take the gold home, calling the demon his paju (mother’s brother).After much persuasion Gurumapa agrees, but on one condition, Keshchandra must feed him. Keshchandra permits him to eat any child in Kathmandu who cries. The two make their way to Itumbaha, where Gurumapa lived on the top floor of the northern wing of the monastery complex.Gurumapa proceeded to eat disobedient children, terrorising Kathmandu. Mothers would warn their children that if they were disobedient and cried, the Gurumapa would gobble them up.Soon, the demon had devoured most of the children in the town. Keshchandra was not bothered, until one day his own son cried and Gurumapa ate him up as well.Bereft with grief Keshchandra banishes Gurumapa to the open fields of Tinkhya, present day Tundikhel, in return for a feast of rice and buffalo meat.It is said that Gurumapa lived under the yaka sima, the lone tree in Tundikhel. And to this day, every year, in keeping with the deal made in Kathmandu's mythical past, a feast of rice and meat is laid out for him.As told by Amrit Man Shakya, priest of Keshchandrakrit Paarawat Mahavihar.

Sahina Shrestha

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Giving Tundikhel back to the people

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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Nepal’s bubble economy

Flouting rules caused Saurya tragedy