After the <a href="https://archive.nepalitimes.com/news.php?id=10616#.YV7B7tVBypp">decade-long Maoist conflict</a> ended in 2006, ex-guerrilla commanders and local governments here saw great potential for <a href="https://archive.nepalitimes.com/news.php?id=15759#.YV6VzNVBypo">‘war tourism’</a> in the revolutionary heartland.These craggy and remote mountains of mid-western Nepal were where the Maoists launched their armed struggle in February 1996, and many obscure villages like <a href="https://archive.nepalitimes.com/article/nation/the-spark-that-lit-the-Maoist-revolution,2870">Holeri, Khara and Gam</a> became household words because of the famous battle that raged there.More than 15 years after the war ended, the former guerrillas have been in and out of government many times and have earmarked a budget every year to take the region ‘<a href="https://archive.nepalitimes.com/issue/340/Nation/13344#.YV6Xs9VBypo">from Maoism to tourism’</a>. The idea is to use the historical memory of the conflict to honour the sacrifices of those who died in the insurgency, <a href="https://archive.nepalitimes.com/news.php?id=15759#.YV7BkNVBypo">generate income from trekking tourism</a>, and create local jobs. In the past 15 years, the central government alone has spent Rs500 million to promote ‘war tourism’. But the money has mostly been doled out to the cadre of the Maoist Centre party, which is once again a member of the coalition government in Kathmandu now.<a href="https://archive.nepalitimes.com/news.php?id=14230#.YV7BftVBypo">Rolpa today</a> is as neglected as ever, former guerrilla commanders who are in government have not done much to provide health and education, or lift the living standards of the people in whose name they fought a war of liberation.An example of the enormous waste of money is a safe house in Rolpa in which Maoist Supreme Commander Prachanda (Pushpa Kamal Dahal) once sought shelter in 2001 during the conflict. In 2019, the local infrastructure initiative spent Rs10 million to renovate this house ostensibly to turn it into a museum. The mud and thatch two-storey house belongs to the brother of Maoist leader Jayapuri Gharti, and another of her brothers was made the chair of the project. The money was used to purchase the house and build a metal structure to shelter the shelter from the elements.“All that money was spent for nothing,” says Anil KC, a Maoist from the Biplav faction. “They brought some journalists here and took some pictures. I don’t think any tourists have come this way.”   Of the 17,000 people who were killed in the conflict, nearly 1,000 were from <a href="https://archive.nepalitimes.com/news.php?id=6187#.YV6i09VBypo">Rolpa district</a>. And 35 of the 1,380 people still listed as missing are also from the district in which the Maoists launched their armed struggle on 13 February 1996 with an attack on the <a href="https://www.nepalitimes.com/editorial/end-of-war-is-not-peace/">Holeri police post.</a> <figure><img width="512" height="384" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d181f9c7e80680e0ac7a5jpeg.jpg" alt=""/><figcaption>A functionless cement welcome gate erected at enormous cost in 2016 in Thawang, the village that was a stronghold of the Maoists during the conflict. Photos: MAHESH NEUPANE </figcaption></figure>Right after the conflict ended, the Ministry of Peace in Kathmandu allocated Rs1.1 million to build a ‘martyrs gate’ in Holeri that would also <a href="https://archive.nepalitimes.com/news.php?id=5571#.YV6jbtVBypo">commemorate the first Maoist attack</a>. There is no sign of the gate today.“There was a gate here, but since so much of the money was embezzled during its construction, those involved demolished it, saying they needed to widen a road,” says the mayor of Runtogadi Balaram Buda. In 2011, the district administration allocated Rs 17 million for nine projects to develop trekking infrastructure in Rolpa. After the 2017 election, municipal, provincial and federal governments have paid out more money to build rest houses, repair trails and construct view towers along the paths that the guerrillas used.   Similarly, the Peace Ministry had doled out Rs1.86 million seven years ago to construct a memorial to Maoist commander Khim Thapa in Sulichaur. It was never built.  <figure><img width="512" height="384" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d18219c7e80680e0ac7a6jpeg.jpg" alt=""><figcaption> </figcaption></figure>“I remember before I was elected, some bulldozers were levelling the site, but I have no idea why the park was never built,” says ward chair Ganj Chhetri.In April 2001, 44 Maoists were killed in a fierce battle in Pategumchal of Rolpa. Seven years ago, the Ministry of Peace allocated Rs1.55 million to build a memorial column at the site of the battle.A cement shed and latrine were built, but they are not usable. After pressure from local people, a committee headed by Nar Bahadur Pun finally built a makeshift gate.The village of Gam of Rolpa district made national headlines in 2002 after <a href="https://archive.nepalitimes.com/news.php?id=6167#.YV6jXNVBypo">a fierce battle that killed 35 Maoists</a> and left 106 police and civil servants dead. There is a ‘martyrs’ pillar’ to commemorate the battle, but it looks abandoned. “All they did was steal the money meant for those who died, they just built this to show they did something,” says local Deu Gharti Magar.The municipality got another Rs3.2 million to build a ‘martyrs’ memorial peace park’ under the chairmanship of Maoist Centre leader Ramesh Buda. It was also never built. Local Maoist leaders are uncomfortable when asked about where all the money went.Another Rs3.2 million was given to a committee to build a martyrs’ memorial park in Jankot. Some of it was used to buy the land, but nothing was built, and it looks like the rest of the money has vanished. <figure><img width="512" height="384" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d18239c7e80680e0ac7a7jpeg.jpg" alt=""><figcaption> </figcaption></figure>Despite questions about how building martyrs’ gates and pillars will help promote ‘war tourism’, budget outlays have continued to local committees for projects that lack any utility. And even the money set aside to build those memorials is misused, or simply stolen.In Dubi Danda of Rolpa, Rs2.5 million was given between 2011-2015 to build a park, but all that was done was construct a makeshift shed and the site levelled to make a helipad. It is the same story in Gangadev municipality – Rs3.2 million was given to a local committee that hired a bulldozer to clear the slope, and nothing was built.  In 1999, police captured 11 members of a Maoist cultural troupe in Bhawang, executed them and burnt the bodies. The Peace Ministry allocated Rs2.5 million to build a memorial for them, but today there is just a shed ringed with barbed wire at the site where the guerrillas’ bodies were set alight. <figure><img width="512" height="384" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d18259c7e80680e0ac7a8jpeg.jpg" alt=""><figcaption> </figcaption></figure>In numerous other places, money has been given to local Maoist cadres to build parks, but aside from a memorial in Thawang, either nothing was ever built or whatever was constructed has no tangible value to the public. Altogether Rs12 million was given for park projects in Iribang, Gajul and Thawang. “They have exploited our grief and bereavement to enrich themselves,” says Dev Bahadur Oli, whose brother Sundar was killed by the security forces in 2002. “The money is just a handout to the party cadre to rent dozers, it is not transparent at all.”Rolpa ranks 67th out of Nepal’s 77 districts in the Human Development Index (HDI). The district needs better schools and more hospitals, roads and bridges need to be upgraded, and people who lost their jobs during the pandemic need help. Yet, all three levels of government keep wasting money on physical monuments that have no public service function – even if they are built. Khem Buda Magar, who headed the now-defunct District Peace Committee, says it is not just the misuse of state resources to build so-called parks and memorials, but such projects have failed to honour those who died or were disappeared, and their relatives feel they are also forgotten.   Rolpa’s elected representatives see much potential in trekking as tourism rebounds after the Covid-19 pandemic. In fact, all local governments have put trekking tourism top on the list of priorities. In the 2018-19 fiscal year, Madi, Paribartan and Thawang municipality spent altogether Rs4.5 million for so-called ‘tourism development’. In addition, Lumbini Province in this year’s budget allocated Rs20 million for tourism infrastructure in Thawang. <figure><img width="347" height="462" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d18279c7e80680e0ac7a9jpeg.jpg" alt=""><figcaption> </figcaption></figure>Even the Ministry of Tourism and Civil Aviation under the federal government has granted Rs7.5 million for the ‘Guerrilla Trekking Trail’ along the Jaljala mountain. Of this, only a 1.8km path has been built by a local committee in Jelbang.Rs4 million was also given to Thawang for a ‘Yarsa Trekking Trail’ that follows the paths used by yarsagumba pickers. The municipality only built a 2.5km trail with the money, but it is not used much, says Thawang resident Sri Kumari Roka.“It is a trail to nowhere, why should anyone walk on it?” she asks.  <figure><img width="512" height="288" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d18289c7e80680e0ac7aajpeg.jpg" alt=""><figcaption> </figcaption></figure>Six of Rolpa’s local governments set aside Rs7.4 million last fiscal year for ‘war tourism’, and Lumbini Province allocated Rs5 million for the purpose.The whole town of Jelbang was supposed to be turned into a ‘model village’ to honour the 73 Maoists who were killed there in 2001, by helping their relatives. The Peace Ministry even granted Rs2.8 million for the purpose. But it was all spent on road repairs, and the ward chair says that was a joint decision.“The money that came to build model villages ended up giving some Maoist leaders and cadre a model lifestyle,” says local resident Bharat Roka mockingly.A former Maoist camp supervised by the United Nations Mission in Nepal (UNMIN) in Triveni of Rolpa is being turned into a museum at a cost of Rs9 million. The project is headed by a local leader of the Maoist Centre Amar Dangi, who himself is related to Lumbini Province Chief Minister Kul Prasad KC.Another building in Thawang for a ‘Martyr Foundation’ was allocated Rs6.5 million, but it had been lying in its abandoned state until it was converted last year into an isolation centre for Covid-19 patients. <figure><img width="512" height="358" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d182a9c7e80680e0ac7abjpeg.jpg" alt=""><figcaption> </figcaption></figure><figure><img width="334" height="512" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d182b9c7e80680e0ac7acjpeg.jpg" alt=""><figcaption> </figcaption></figure>Much of the rest of the money allocated for ‘war tourism’ is now being spent on building concrete view towers on mountain tops in Rolpa. Critics have questioned why mountain tops that are already very high need to be a few metres higher with these wasteful symbols. One such mountain is the 2,055m high Chuche Peak on top of which the local municipality is building a 10-floor 115m view tower at a cost of Rs48 million. Another view tower is sprouting near Holeri, the cradle of the Maoist revolution.All this construction is happening in a district where there are 200 government schools with nearly 70,000 students, but very few teachers. At Sunchahari municipality there are 5,000 students, the school buildings are rudimentary, and there is not a single secondary school teacher. The doctor-patient ratio in Rolpa is 1:25,000, and families have to walk for days just to reach a health post even for simple treatments for relatives.  Yet, all this does not seem to concern any of the three levels of government that have spent Rs30 million just on 90 <a href="https://archive.nepalitimes.com/news.php?id=15759#.YV7BkNVBypo">temples in the district.</a>One of the more useful projects has been the establishment of ethnic museums, with ones for Gurung, Magar and Dalit peoples. The Gurung Museum has exhibits and a homestay.  <figure><img width="512" height="243" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161124/636d182c9c7e80680e0ac7adjpeg.jpg" alt=""><figcaption> </figcaption></figure>Erstwhile Finance Minister Barsha Man Pun, who was once a guerrilla commander, inaugurated an ‘Information Centre’ and an ‘indigenous museum’ for the war tourism project 12km from the district capital of Libang. No one is using the building, and it is falling apart. The war tourism initiative was launched without any study or business plan. It has not been promoted adequately, and has just been an excuse to distribute money to Maoist cadre, says Amar Singh Pun, a former minister from Rolpa.He adds: “This has been a colossal waste of money, a pretext for cash handouts to party loyalists.” This report was prepared by Mahesh Neupane for <a href="https://www.hamropatro.com/date-converter">the Centre for Investigative Journalism Nepal</a>. The Nepali original can be found <a href="https://cijnepal.org.np/cij-10/">here.</a>

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Nepal’s ‘war tourism’ is a scam

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

Visit Nepal in the monsoon

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

Not poor, but not rich

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

Nepal’s bubble economy

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

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Walking, working, worshipping in Patan