It is that time of the year again. The last-minute construction spree is underway to make up for chronic underspending of capital expenditure, right ahead of the new budget to be presented in Parliament on 29 May. The paradox is that while the government faces a severe cash crunch due to falling revenue, it spent only one-third of the development budget in the last 10 months of the fiscal year.&nbsp; The new parties in Parliament like the RSP have been trying to shake things up and urge multi-partisan consultations before the budget, but given the obsolete structure and leadership of the parties, not much is expected to change. But there is a strong argument for tax reform since the government faces a major challenge in balancing revenue with expenditure. The previous government’s ban on luxury items to augment depleting foreign reserves post-pandemic and increased bank interest led to the decline of real estate transactions resulting directly in a drop in revenue. But what makes matters worse is that the government has been profligate in spending beyond its means. Salaries, allowances, administrative expenses, grants and loans have all gone up. The government collected Rs756 billion in revenue in the last 10 months against the target of Rs1.4 trillion whereas its expenditure has exceeded Rs1.04 trillion.&nbsp; Read also: <a href="https://www.nepalitimes.com/editorial/institutionalised-inequality">Institutionalised inequality</a>, Editorial Taxation is the primary source of income for any government. Contrary to what the wealthiest Nepalis think, the government is not run with their tax money but by what ordinary citizens pay in taxes. &nbsp;While tax evasion concentrates the wealth within the already privileged, the tax the poor pay is not proportional to their earnings. &nbsp; Nepal’s liberal economic policy since 1990 was expected to alleviate the income gap with trickle down effect, but the economic disparity in society is more stark than ever. A 2020 report Equality for Prosperity showed that while the wealthiest 20% of Nepalis own 56.2% of wealth, the poor 20% have only 4.1%. This economic gap is likely to have widened with the current crisis.&nbsp; This income gap is not just in Nepal. Worldwide, a skewed tax system is blamed for rising inequality. A new Oxfam report points out that two-thirds of the wealth that has increased globally after the Covid-19 pandemic is in the hands of the richest 1%. It recommends tax reforms based on wealth accumulation. “Because the tax system is not progressive in Nepal, wealth is piling up in the hands of the rich, while the income of the poor is not increasing,” explains economist Dilliraj Khanal. “We don't have a system of taxing the rich because of policy weakness and dominance of middlemen.”&nbsp; Read also: <a href="https://www.nepalitimes.com/opinion/nepals-care-economy">Nepal's care economy</a>, Bina Pradhan  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230526050528_6fe0c49de563e6fb210c25501e835186d93ecd57b2f63f8ff8154dca49daeee7.png" data-media-id="editor_2" data-image-id="20230526050528_6fe0c49de563e6fb210c25501e835186d93ecd57b2f63f8ff8154dca49daeee7" data-rendition-name="original" width="741" height="541" loading="lazy" alt="Rich-poor gap graph"> </figure>  Who pays taxes? Two-thirds of the government's annual revenue is collected not from corporations and industry, but from various taxes and revenue paid by the general public. The share of tax on corporate profit is in fact very small.&nbsp; In fiscal year 2021/22, the government collected a total of Rs989.62 billion in revenue. Of this, the income tax paid by businesses from the profits earned through private companies is only 5%. So while income tax did bring in Rs229 billion which is 24% of total revenue collected, this amount is largely from the income tax paid by ordinary citizens on their personal income. The tax paid from the profits of private companies is only Rs47.5 billion. When adding public limited companies (issued shares to the general public) and other types of companies, corporate income tax comes to only about Rs114 billion,which is just 11% of the government’s annual revenue.&nbsp; The government collected Rs314 billion from VAT last year, and this made up about one-third of total government revenue. Similarly, Rs241 billion was collected as customs duty and Rs155 billion as excise. “Society with unequal income and wealth, but equal taxes, burdens the poor and favours the rich, it is a regressive tax system that makes it difficult for the poor to survive,” says Khanal. For example, VAT is the same 13% for all Nepalis – rich and poor. &nbsp; “In essence, five-star hotels in Kathmandu and the poor are both taxed equally for LPG fuel,” he adds. “From a social justice standpoint, taxes must be based on income.” Read also: <a href="https://www.nepalitimes.com/here-now/ground-reality-of-landlessness-in-nepal/" target="_blank">Ground reality of landlessness in Nepal</a>, Rabi Giri Taxation expert Roop Khadka disagrees, saying it is impractical to have a different VAT rate for rich and poor, and even if it was introduced it would be impossible to enforce. Instead, Khadka favours revoking VAT exemption on goods and services consumed by the upper classes, which are worth nearly Rs100 billion per year. Tax evasion by the rich is another problem that needs to be tightened, and collusion between business and politicians means that the government itself abets tax evasion. Real estate speculation has helped select groups in Nepal to become immensely rich immediately, but the government collects a bare minimum in tax from profits made in land transactions. &nbsp; A real estate sale within five years is required to pay 7% of its profit. If the transition happens within 10 years, only 5% of the profit is taxed. This means most of the astronomical profits made in real estate sales in the past years have gone into the pockets of brokers and large landowners. On the other hand, the 60th report of the Auditor General's Office says many evade tax by showing less than the actual value of the property. The VAT bill scandal 10 years ago also revealed the widespread tax evasion by the commercial sector. The politics of patronage means that businesses are now colluding with politicians and bureaucrats to loot the treasury. The Tax Settlement Commission decided to collect Rs9.54 billion from businesses that have not paid tax for a long time, but the Auditor General's Office later revealed that the decision was made in cahoots with the businesses themselves who actually needed to pay Rs30.52 billion. The most egregious and blatant wrongdoing was by former Finance Minister Janardhan Sharma who was making backroom deals with select business groups importing steel rods and electric vehicles so their products got customised tax breaks in the budget last year. The deal cost Sharma his ministership but the unholy nexus between politicians and business continues with impunity.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">State-sponsored economic crisis</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230526050528_60a9385914649170d0496b8864bcb751477820b43554c68bec524f6e2412d39b.jpg" data-media-id="editor_5" data-image-id="20230526050528_60a9385914649170d0496b8864bcb751477820b43554c68bec524f6e2412d39b" data-rendition-name="original" width="6124" height="4082" loading="lazy" alt="Kathmandu labourer NT"> <figcaption>Photo: SUMAN NEPALI</figcaption> </figure>  Alternative to the wealth tax In this state, the only sector keeping Nepal’s economy afloat is the estimated $9 billion Nepalis abroad send home every year. Still, Nepal’s debt has reached 43% of GDP, a sharp rise from 28% a decade ago. This will have a direct impact on the tax system. Sooner or later, the government will raise taxes. But for whom?&nbsp; If the status quo continues, and the poor are subjected to more taxes the income gap will widen further, inviting social unrest. Taxation relative to the size of the economy is about 22% in Nepal, one of the highest in South Asia. But for every Rs100 the government receives as revenue, only Rs23 is collected through income tax. The rest is made up of common citizens paying for the consumption of goods and services.&nbsp; All over the world, different levels of income are distinguished and income tax exemption is given to the lowest which is known as a basic exemption. Welfare states also have a weighted system of taxes of the richest that ensures socio-economic equality. But even though there is a flat tax on salary and allowances, windfall profits including from real estate transactions are not taxed properly, leading to a consolidation of wealth among certain groups. Read also: <a href="https://www.nepalitimes.com/banner/nepals-great-income-divide">Nepal's great income divide</a> Experts have proposed wealth-based taxation to reduce the disparity between rich and poor. Economist Keshab Acharya says that the government should levy an inheritance tax on ancestral property to children as is done in the US, Japan and Europe. This encourages entrepreneurship and inspires the new generation to find creative ways to earn money. But the historical distribution of land in Nepal was largely unfair where families close to the ruling class were granted ownership exempt from tax. These assets have been handed down through generations and ownership of a large part of it is still limited to certain families.&nbsp; Historian Mahesh Chandra Regmi in his book Land Ownership in Nepal states that before 1951, more than one-third of the total arable land had been handed down intergenerationally in that manner. An inheritance tax will also reduce corruption because the mentality that wealth should be passed on to children will be weakened if such a tax is implemented. Meanwhile, land prices in Kathmandu skyrocketed thanks to the government. Since the state has spent on infrastructure that led to the rise in value of property, it should get a share of the profits “The government should get the benefit of increased property valuation in the form of taxes which will increase the spending purse for the welfare of the poor,” explains Khanal. Read also: <a href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank">Some are more equal than others</a>, Anil Chitrakar

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Nepal’s tax system widens rich-poor gap

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114121112/637222e29c7e80680e0c031ejpeg.jpg" alt="" width="1086" height="724"/><figcaption>Charikot Hospital. Photo: NYAYA HEALTH NEPAL</figcaption></figure>Nepal’s medical industrial complex has modernised healthcare in the country, but it has also pushed treatment out of reach of most citizens.Collusion between politicians and medical magnates has made it so expensive to become a doctor that it has set off a chain reaction to make hospital treatment unaffordable.Meanwhile, government hospitals are <a href="https://www.nepalitimes.com/here-now/at-the-covid-19-frontlines-in-rural-nepal/">under-funded, under-staffed and under-motivated</a>. Most medical personnel in district hospitals and health posts moonlight in private clinics, and patient treatment is substandard.Desperate families have to sell property, jewelry and other assets <a href="https://www.nepalitimes.com/banner/in-a-healthy-state/">to afford private treatment</a>, pushing even some middle-class families below the poverty line.Read more: <a href="https://www.nepalitimes.com/banner/in-a-healthy-state/">In a healthy state</a>, Nepali TimesBut there are notable examples of government hospitals that are running well because of various models of partnership with non-profits, foundations and charities. They prove that affordable high quality healthcare is possible, and those hospitals need not be so expensive to run.There is <a href="https://archive.nepalitimes.com/news.php?id=18362#.YrQjS-xByrc">Dhulikhel Hospital</a> which has a tiny registration fee, treatment is low cost, an insurance scheme pays for most treatment, and patients are charged according to their capacity to pay. Despite being a government hospital, Dhulikhel has upheld a consistently high standard of care and treatment.United Mission to Nepal has run a hospital in Tansen for over 60 years, a community hospital in Okhaldhunga, and was till recently managing Patan Hospital, providing high quality care at low cost to patients.Other public-private partnership institutions that could be models to be replicated across Nepal include:<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114121112/637222e59c7e80680e0c031fjpeg.jpg" alt="" width="1500" height="1000"><figcaption> </figcaption></figure><h3>Bayalpata Hospital</h3>After <a href="https://www.nepalitimes.com/opinion/is-free-health-care-possible-in-nepal/">Bayalpata Hospital</a> was established in Achham 20 years ago, for many years it did not have a single doctor. Treatment was so poor that even emergency cases had to be taken on a grueling 12 hour drive down to Dhangadi.In those days HIV tagged along with the migrant workers returning from India, and there was a full-blown AIDS and TB epidemic in Achham and other district in Far Western Nepal. The mortality rate, already very high among women and children, soared.In 2009, Nepali and American medical students inspired by the community health model of <a href="https://www.nepalitimes.com/latest/paul-farmer-on-my-mind/">Paul Farmer</a> set up Nyaya Health Nepal (formerly Possible) taking over  Bayalpata under a public-private partnership with the government.Since then, Bayalpata Hospital has upgraded its facilities (left) and <a href="https://www.nepalitimes.com/banner/state-of-the-art-rural-hospital/">treated nearly 1.5 million patients for free</a>, some of them for complicated caesarian and orthopedic surgeries.Read also: <a href="https://www.nepalitimes.com/opinion/is-free-health-care-possible-in-nepal/">Is free health care possible in Nepal?</a> S P KalauneeUp to 100,000 patients from Achham and surrounding districts come to Bayalpata because they get free treatment there, and many families have saved themselves from sinking into poverty.Bayalpata also runs a network of community health centres with an Electronic Health Record (EHR) system that digitally keeps track of all patients in the catchment area. The presence of just this one hospital has improved the health parameters of surrounding districts, bringing down the maternal and child mortality rates. Achham once had the highest maternal mortality rate in Nepal, today institutional deliveries make up 90% of total deliveries, and very few women die at childbirth.“We have a simple objective: to show that providing free and high quality treatment to the most underserved area of the country is possible at a very low cost,” explains Srijana Devkota of Nyaya Health Nepal.Once <a href="https://archive.nepalitimes.com/article/nation/Nation-Crowdfund-globally-act-locally,490">fully funded by international foundations</a> to run hospitals in Bayalpata and Charikot, NHN now provides free medical treatment in Achham for just Rs200 million a year, of which half now comes from the Sudurpaschim Province and local municipality.+977 - 4100517<a href="https://www.nyayahealthnepal.org/">https://www.nyayahealthnepal.org/</a><figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114121112/637222e89c7e80680e0c0320jpeg.jpg" alt="" width="750" height="401"><figcaption> </figcaption></figure><h3>Spinal Injury Rehabilitation Centre</h3>The <a href="https://www.facebook.com/SpinalNepal/">Spinal Injury Rehabilitation Centre</a> (SIRC) in Banepa is a public-private partnership  providing treatment and rehabilitation to people with spinal injuries. It was started by journalist and civil rights activist Kanak Mani Dixit after his miraculous survival and recovery in a trekking accident in 2000 along the Annapurna Circuit that damaged his spinal cord.SIRC now <a href="https://www.nepalitimes.com/here-now/injured-use-internet-to-reach-physiotherapists/">helps rehabilitate up to 100 spinally injured patients</a> a year, and the numbers are going up every year due to injuries sustained in highway accidents and falls from trees and cliffs. The facility was located in Banepa because of its proximity to highways and nearby trauma centres. The hospital has also been providing community treatment and tele-rehabilitation services for follow-ups.Read also: <a href="https://www.nepalitimes.com/editorial/poor-health-makes-nepalis-poorer/">POOR HEALTH MAKES NEPALIS POORER</a>, EditorialThe hospital has medical officers, urologists, physiotherapists, occupational therapists, nursing care, prosthetics, orthotics, psychologists and consultants. Those who cannot afford to pay are still treated for free, others are charged the same rate as Bir Hospital.“Because patients often have to stay for more than five months, it may be difficult for them to afford the cost, so we charge them according to their capacity to pay,” says SIRC’s Raju Dhakal.SIRC’s annual running cost is Rs50 million, of which most comes from grants by non-profits and other fund-raising activities. The government also chips in with a budget for the physical construction and equipment as well as occasional allocations to cover budget shortfalls.infosirc@wlink.com.np, spinalnepal@gmail.com<a href="https://www.sirc.org.np/">https://www.sirc.org.np/</a><h3>Charikot Primary Health Centre</h3>The 2015 earthquake damaged <a href="https://www.nepalitimes.com/latest/unique-hospital-handover-in-dolakha/">Charikot Primary Health Centre</a> along with 98% of the medical facilities in Dolakha district. But the disaster was a blessing in disguise for the Charikot centre. It was rebuilt and upgraded to a full-scale 50-bed hospital and managed first by Médecins Sans Frontières and then by the non-profit Nyaya Health Nepal (NHN). Residents of Dolakha did not have to make expensive journeys to Kathmandu because medical treatment was available for free at Charikot.Read also: <a href="https://www.nepalitimes.com/opinion/dangers-of-privatising-health-insurance-in-nepal/">Dangers of privatising health insurance in Nepal</a>, Gaj B Gurung and Sushil KoiralaIn 2020, NHN handed over management of the hospital to Bagmati Province and Bhimeshwor Municipality which now run the facility with low cost treatment for up to 300 patients a day. The Charikot experiment has been hailed as a model for successful transfer by a private non-profit to the local government, and it has been running well despite the presence of two private hospitals in Charikot.“It has been a seamless handover from Nyaya Health to the government, and the level of care and treatment is the same,” says chief physician Binod Dangal. “We perform caesarean sections, orthopedics, telemedicine, free check-ups for the elderly, children and pregnant women, mental health counselling, and chronic illness monitoring.”+977 49 421125<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114121112/637222ea9c7e80680e0c0321jpeg.jpg" alt="" width="1080" height="608"><figcaption> </figcaption></figure><h3>Sagarmatha Chaudhary Eye Hospital</h3>For the past 30 years, the <a href="http://archive.nepalitimes.com/news.php?id=10071#.YrQlROxByrc">Sagarmatha Chaudhary Eye Hospital</a> in Lahan of Siraha district has been providing the cheapest cataract surgery in the world for just Rs1,200 per operation.Thirty years ago when the hospital started, it had only 12 beds. It now treats 470,000 people every year with patients coming in from as far away as southern India and Bangladesh, and they pay the same amount as Nepalis. Just in the last three years, the eye hospital has treated 321,000 foreign nationals.“It is possible to provide the services at an affordable cost because we are a non-profit, and have an economy of scale,” explains Abhishek Roshan of Sagarmatha Chaudhary Eye Hospital.Read also: <a href="https://archive.nepalitimes.com/article/editorial/health-tip-editorial,4032">Health tip</a>, EditorialThe hospital has <a href="http://archive.nepalitimes.com/news.php?id=10071#.YrQlROxByrc">also set up 15 eye care centres throughout the district, and takes treatment directly to the people</a> so they do not have to make the journey to Lahan. It has a separate department for paediatric services, care for newborn babies with vision problems. In 2021 alone, it performed 1,170 eye surgeries on children.Apart from providing treatment of retina, cornea, glaucoma, oculoplasty, the hospital also serves as an international research centre, collaborating with institutions like The London School of Hygiene and Tropical Medicine.The hospital subsidises its eye treatment for patients with revenue from its agribusiness ventures. A part of the hospital’s land is dedicated to fish farming, and an orchard for litchi and mangoes, as well as a bamboo grove.“Income from those ventures help us keep the cost of treatment down,” says Roshan. The hospital is also supported by Christian Blind Mission (CBM), the European Commission and Arvis.+977-33- 560080https://www.erec-p.org/sagarmathaRead more: <a href="https://archive.nepalitimes.com/article/nation/national-health-insurance-not-as-easy,4028">A national health insurance scheme is not as easy as it looks</a>, Sonia Awale

Taking wealth out of health

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101152/636a26e49c7e80680e043a3ejpeg.jpg" alt="" width="800" height="1178"/><figcaption>Diwakar Chettri</figcaption></figure>Whatever the political ambitions of the Maoist leaders, their justification for taking up arms was the inequality historically embedded in Nepali society. The rebels lit the spark on terrain that was tinder dry with disparities. Nepal would have gone up in flames sooner or later, the Maoists just had their timing right.The tragedy, of course, is that in an allegory of Animal Farm 13 years after the war, the Maoist leaders people elected to government forgot what they fought for, and Nepal’s income and wealth gap have grown even wider. As our review of a recent report shows, Nepal’s poor are <a href="https://archive.nepalitimes.com/article/editorial/Nepal-%20Multidimensional-Poverty-Index,4115" target="_blank" rel="noopener">trapped in poverty</a> while the few rich have prospered.The report by HAMI, South Asian Alliance for Poverty Eradication and Oxfam paints an alarming picture of <a href="http://archive.nepalitimes.com/news.php?id=17298" target="_blank" rel="noopener">deprivation</a>  and disparity in Nepal: the average income of the richest 10% of Nepalis is more than three times that of the poorest 40%. Worse, the richest 10% own 26 times the wealth of the poorest 10%.Read also:<a style="background-color: #ffffff; outline: 0px; font-weight: bold; letter-spacing: 0.01em; font-size: 15px;" href="https://www.nepalitimes.com/?p=21837&amp;preview=true" target="_blank" rel="noopener">Nepal's great income divide</a>, Ramesh Kumar<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank" rel="noopener">Some are more equal than others</a>, Anil Chitrakar<a href="https://www.nepalitimes.com/opinion/gadfly-opinion/removing-poverty-with-jobs/" target="_blank" rel="noopener">Removing poverty with jobs</a>, David Seddon<a style="background-color: #ffffff; outline: 0px; font-weight: bold; letter-spacing: 0.01em; font-size: 15px;" href="https://www.nepalitimes.com/banner/its-a-rich-mans-world/" target="_blank" rel="noopener">It's a rich man's world</a>, Ramesh KumarEconomic inequality is most evident in agriculture in which 66% of Nepalis still depend. The wealthiest 7% of households own 31% of the agricultural land, and many landless are tenant farmers at the mercy of landowners. Social discrimination multiplies the misery: 81% women are landless, as are 44% of Dalits in the Tarai.Nepal’s <a href="http://archive.nepalitimes.com/news.php?id=15026#.XGzGkOQza70" target="_blank" rel="noopener">wealthiest man</a> has a net worth of $1.6 billion and is the 1,561 richest in the Forbes list. His wealth grew by $200 million last year. A history of feudalism, a rent-seeking state and neoliberal economic policies have concentrated Nepal’s wealth in the hands of a dominant elite which has made policies and laws to perpetuate its hold on it. Rulers and hangers-on have deliberately kept the poor out of reach of new opportunities, depriving them of a chance of a better life.Such disparity also gives the movers and shakers an unfair advantage in a democracy because they can bend the system to keep getting elected, which then deprive the underserved even more. Politicians, bureaucrats and businesses can carry on with <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/editorial/red-rice/" target="_blank" rel="noopener">business-as-usual</a> with no accountability, full impunity and no fear of retribution from a <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/editorial/bulldozing-democracy-2/" target="_blank" rel="noopener">rigged system</a>.The government’s failure to deliver on basic services like health and education have driven the private sector to fill the gap. But consequent over-commericalisation and lack of regulation have put quality schooling and medical care out of reach of the poor. The government’s reaction has been to back a populist call for nationalisation to cover up its own delivery failure.Inequality is taking its toll on the physical and mental development of children. <a style="background-color: #ffffff; letter-spacing: 0.01em;" href="http://archive.nepalitimes.com/article/nation/the-face-of-hunger-debt-malnutrition,3604" target="_blank" rel="noopener">Malnutrition</a> begins at a very young age: 36% of Nepali children under five are stunted, 27% are underweight, and 10% suffer from wasting due to lack of adequate food. There is no greater proof of chronic governance dysfunction than this: the apathy and failure of the state to protect its most vulnerable.No society or nation can have totally equal income or wealth distribution. But there must be a certain equilibrium so that all citizens can attain a basic quality of life and earn a standard, minimum income.But inequality is so bad that the 8 million Nepalis who live in poverty have shorter lifespans. A poor Nepali child is three times more likely to die before age 5 than a rich child. The poor and excluded receive unequal care at government hospitals.What is most tragic is that there is minimal recognition or commitment from successive governments to redress this injustice. Nepal ranks 138, which is nearly at the bottom of a list of 157 countries, for its Commitment to Reducing Inequality. Rampant <a href="http://archive.nepalitimes.com/article/from-nepali-press/poor-of-kathmandu,2153" target="_blank" rel="noopener">poverty and extreme inequality</a> build frustration among suffering citizens, increasing the chances of social instability, and possibly renewed conflict. After a revolution to liberate the poor from poverty ended up killing 17,000 of Nepal’s poorest people, the gap between the rich and poor has actually widened.The way countries try to compensate for the inequality inherent in free market capitalism is through progressive land reform and taxation, by spending on a social safety net, and through  government investment in affordable, quality health care and education. There must be minimum wages for even those working in the informal sector, because that is where majority of Nepalis are engaged. All this would lay the foundation for a more equitable society, where the poor may not be immediately guaranteed greater income but all citizens would have a level playing field.We have seen the current government make tentative moves to address some of these issues, but they are too little and too half-hearted. The chasm between the rich and poor is so wide that it will take more than the hollow populism of the government's ‘Prosperous Nepal and Happy Nepalis’ slogan for prosperity and happiness in our lifetime.10 Years ago this weekThis passage from the Editorial in Nepali Times #439 of 19-26 Feburary, 2009 about how the still Royal Nepal Army was trying to reassert itself warns of danger to the civilian chain of command. Excerpt:The Nepal Army's 'recommendations' to the CA Committee on Protection of the National Interest has raised hackles. While it is the fundamental right of every citizen to respond to the CA's call for suggestions, an instrument of state is expected to abide by operational norms of proper procedure. The NA brass has clearly overstepped its limits by bypassing the executive to present its case directly before the legislature. Under normal circumstances, an organ of state has to access parliament through the concerned ministry. But even more alarming is the tone of the content. A civilian chain of command means the army shouldn't have a political position of its own other than that of the government of the day.

Mind the Gap

The winter air pollution season started early this year with emissions, Diwali firecrackers and crop residue burning making the air unbreathable across north India. Much of the pollution was transboundary, with prevailing winds carrying the suspended particulates from Pakistan, across India to Nepal and beyond. All this pollution and domestic emissions killed 41,300 in Nepal in 2023, and 85% of all deaths were because of noncommunicable diseases such as heart and lung disease, lung cancer, diabetes, and dementia, according to the State of Global Air (SoGA) 2025 report released Thursday. With the onset of winter, Kathmandu Valley’s own emissions are trapped in a surface inversion layer and as in previous years will have some of the worst air quality in the world.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251023131016_7c42a4e8b0dce01dfeeaaf89dbb10dbfa036b41163f3ebada88c7ce17dbded49.png" data-media-id="editor_0" data-image-id="20251023131016_7c42a4e8b0dce01dfeeaaf89dbb10dbfa036b41163f3ebada88c7ce17dbded49" data-rendition-name="original" width="921" height="850" loading="lazy" alt="Air pollution killing season starts early NT"> </figure>  The SoGa report says air pollution has now become the leading risk factor for deaths in Nepal, ahead of tobacco and high blood pressure. Interestingly, while the health impacts due to environmental risk factors such as unsafe water and sanitation have reduced significantly since 2000, the opposite is true for ambient PM2.5 (particles smaller than 2.5 microns). Globally, 7.9 million deaths were attributable to air pollution– about 1 in 8 deaths – in 2023. Of this total, 4.9 million deaths were attributable to PM2.5 exposure, 2.8 million were from household air pollution, and 470,000 were from ozone. Similarly, dementia attributable to air pollution resulted in 626,000 deaths and 40 million healthy years of life lost. And 95% of air pollution attributable deaths in adults over the age of 60 are due to noncommunicable diseases. The burden of noncommunicable diseases in relation to air pollution is rising worldwide and in Nepal. The SoGA report shows that nearly nine of ten global air pollution deaths are from chronic ailments, and half of all respiratory disease deaths are attributable to air pollution.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251023131020_8577f464b4a73007de5dd018b8ac91dae3a9c732dbb81a44b6aa5a0ced7df3df.png" data-media-id="editor_1" data-image-id="20251023131020_8577f464b4a73007de5dd018b8ac91dae3a9c732dbb81a44b6aa5a0ced7df3df" data-rendition-name="original" width="1080" height="1080" loading="lazy" alt="Air pollution killing season starts early NT"> </figure>  In Nepal, air pollution is responsible for three out of four COPD deaths, one out of three heart deaths and one out of five diabetes deaths. More than one third of lower respiratory infection deaths were due to air pollution. “The data presented in the State of Global Air report highlight the significant impacts of poor air quality on the health and well-being of billions of people around the world, especially those living in Asia and Africa,” says Pallavi Pant of the Boston-based Health Effects Institute (HEI) that released the report in collaboration with the Institute for Health Metrics and Evaluation and the NCD Alliance. She adds: “Growing momentum on air quality management across those hard-hit locations, including expansion of air quality monitoring, adoption of air quality regulations, and sector-specific interventions are yielding improvements for those most impacted.” Low- and middle-income countries stand to gain most by reducing air pollution, with particularly strong impacts on children, older populations, and people with pre-existing health conditions. Indeed, of the 41,300 air pollution deaths in 2023 in Nepal, 31,600 were in adults over the age of 60 years and 3,500 in children below five years. Death rate for air pollution in Nepal, which is 178 per 100,000, is more than 10 times higher than high-income countries, which is at 17 per 100,000.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251023131020_604e852aed4ffde0dc7d1df72fcd3e73d904136dfb1bb2407e53b7445f3ef72c.png" data-media-id="editor_2" data-image-id="20251023131020_604e852aed4ffde0dc7d1df72fcd3e73d904136dfb1bb2407e53b7445f3ef72c" data-rendition-name="original" width="1078" height="423" loading="lazy" alt="Air pollution killing season starts early NT"> </figure>  “Win-win solutions for air pollution and NCDs exist, with added benefits for climate, physical activity, nutrition, and many other global development priorities,” says Alison Cox, Policy and Advocacy Director at the Geneva-based NCD Alliance. “These policies are effective and deliver a strong return on investment - for the sake of our people and the planet we need to implement them faster.” Fine particle pollution (ambient PM2.5) is the largest driver of air pollution’s burden of disease worldwide as kit attributed to 4.9 million deaths and 124 million healthy years of life lost in 2023. Vehicles, power plants, factories, and homes, as well as agricultural and industrial activities, waste burning and wildfires are some of the biggest sources of pollutants. South Asia is among the regions of the world with the highest exposures to ambient PM2.5 , while more than 36% of people around the world live in areas where PM2.5 levels do not meet even the least stringent interim target. As per the report, 78% of Nepal’s 30 million population lives in areas where annual PM2.5 exposure exceeds the least stringent WHO Air Quality Interim Target of 35 µg/m3. Meanwhile, exposure to household air pollution due to the use of solid fuels for cooking remains an important driver for the disease burden in the country. “Ongoing efforts to meet global development goals are not achievable without directly addressing air pollution,” says Maria Neira, Commissioner of Our Common Air. “Countries and cities must focus their efforts toward reducing air pollution emissions, including household air pollution, which has particularly severe impacts on young children and older people across Asia and Africa.”

Air pollution killing season starts early

This year, the <a href="https://nepalitimes.com/opinion/quo-vadis-un-80-9vthn7mg">United Nations is marking its 80th anniversary</a> and it is being celebrated with special events across the world to commemorate its establishment on 24 October 1945. It has also been 75 years since the first UN adviser, the Swiss geologist Toni Hagen, was sent to Nepal to explore development opportunities. In 1950, there were no roads and Hagen walked on foot across the length and breadth of Nepal’s mountains, valleys and plains. This year also marks the 60th anniversary of the United Nations Development Program (UNDP) in Nepal, and much of Hagen’s work laid the basis for the UN’s involvement in education, health, and connectivity in Nepal’s future development. Despite frequent changes in government and political system, Nepal has made remarkable progress. The poverty rate has gone down by half in the past 30 years to 20.27% of the population. Much of it has to do with remittances from Nepalis working overseas, but it is also a result of the Nepal government’s investment in education, health care and social welfare.&nbsp; There have been special initiatives like the Prime Minister’s Employment Program that have provided jobs to nearly 800,000 people in the country’s 743 municipalities — especially in those areas with lower Human Development Index (HDI) like the far-west and the Tarai.&nbsp; This year’s HDI report by UNDP shows that Nepal’s score had risen to 0.622, whereas it was only 0.404 in 1990. In the past 33 years, the average lifespan of Nepalis has risen by 15.6 years to 70.4 years, whereas it was only 54.8 in 1990. However, the country’s HDI ranking is still 145 among the world’s 193 countries. “Yes, there has been significant improvement in living standards in the past 60 years, road connectivity has improved, the maternal mortality rate has gone down dramatically, almost everyone has phones, there are schools,” says Saru Joshi of the thinktank Nepal Policy Institute. But, she adds: “It is still difficult to get citizenship papers, especially in the name of the mother, and this has excluded many women from banking services, inheritance. After all our progress in physical infrastructure, Nepal now needs to prioritise inclusive social development.”&nbsp; Some of this is also happening. Eighteen years ago, Nabaraj Subedi, 49, of a village in Baglung decided not to join his peers &nbsp;fleeing the Maoist conflict to find work overseas. He invested Rs500,000 to buy a diesel generator and start a small furniture business.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071044_eeef308e19a73de507a425b2c6afc47269884549cf4c8fac07ca9a4898c8e031.jpg" data-media-id="editor_1" data-image-id="20251024071044_eeef308e19a73de507a425b2c6afc47269884549cf4c8fac07ca9a4898c8e031" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Nawaraj Subedi"> <figcaption>Nawaraj Subedi, 49, proprietor of Tarakhola Furniture Factory. </figcaption> </figure>  Today, with the installation of the 380 kilowatt small hydroelectric plant, he does not need to depend on his unreliable generator to power his equipment anymore. There is now a road connecting his village, and Subedi has generated local jobs, opened a sales branch in the city, and gets orders from as far away as Pokhara and Chitwan. “My costs have gone down drastically because of the electricity, and sales have gone up because of the road connecting my furniture to markets. My business has expanded,” Subedi says. Back in 1960 in a report he prepared for the Nepal government on behalf of the United Nations, Toni Hagen had emphasised just this: investing in electricity generation and connectivity to uplift the remote rural areas of Nepal.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024081024_188ab121dc3cf2816ee71a72cb3687493eda37ab99ecc04802d647c8c9b4cd2d.jpg" data-media-id="editor_2" data-image-id="20251024081024_188ab121dc3cf2816ee71a72cb3687493eda37ab99ecc04802d647c8c9b4cd2d" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Tarakhola Furniture Factory"> <figcaption>Subedi's staff at the Tarakhola Furniture Factory.</figcaption> </figure>  Subedi’s furniture factory gets its electricity from the nearby Tarakhola Hydropower, a company set up eight years ago with financial and technical support from UNDP’s Renewable Energy for Rural Livelihood (RERL) project. &nbsp; “The project completely transformed living standards in this village,” says municipality chair Dhan Bahadur BK. “It has helped create jobs locally, there is now money to invest in education and healthcare. Households can pay their electricity fees electronically through smart billing.”&nbsp; After working with the government on rural electrification, UNDP is focussed on using that power for local employment creation. A women’s group, for example, has bought an electric-powered potato processing machine that can produce chips.&nbsp; “We are 12 of us mothers, daughters, daughters-in-law who process, package and market the potato that we grow ourselves, and it has raised our income,” says Sukmaya Roka, 57, who chairs the group.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071044_70b22418699178bcdd0abb0aa308796980ecd29634bcda6ff113a7624e709751.jpg" data-media-id="editor_3" data-image-id="20251024071044_70b22418699178bcdd0abb0aa308796980ecd29634bcda6ff113a7624e709751" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Sukamaya Roka"> <figcaption>Sukamaya Roka, 57, chair of Sipa Aalu Chips Utpadan Samuha from Tarakhola Rural Municipality, Baglung. </figcaption> </figure>  Today, 6.1 million households in Nepal (92.2% of total) have electricity in their homes, up from 17.9% 30 years ago. Access to electricity has not just brought lights to homes, but improved everything from productivity, quality of education, healthcare and phone connectivity.&nbsp; “To see what electricity and roads can do, just look at our municipality,” says chair Dhan Bahadur BK, “citizens have become more self-reliant, more aware of the outside world.”&nbsp; NETTLES INTO CASH&nbsp; Just a little bit of training, resource backup and local empowerment can uplift the living standards of Nepalis. The progress made in harvesting abundantly-available allo (nettles) and turning it into household products is an example. When a landslide swept away his home and farm in a flood 40 years ago, Buddhi Purja of Parbat became destitute. But he took part in a government training program supported by UNDP and Australia to harvest the wild nettles that grew on mountain slopes and turn the fabric into bags.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071048_56c440c478dffbc13911369b6f4133baf658cc3667773cdb44b7c40e006463ce.jpg" data-media-id="editor_4" data-image-id="20251024071048_56c440c478dffbc13911369b6f4133baf658cc3667773cdb44b7c40e006463ce" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Rhitu Saugat Handicraft"> <figcaption>A worker at Rhitu Saugat Handicraft making a bag out of nettles.</figcaption> </figure>  “After the landslide, we had to go hungry if we did not get a day job,” Purja recalls, “but after this training we have found that we can turn nettles into cash.” His allo bags are now hanging in tourist shops in Pokhara Lakeside and Thamel.&nbsp; The idea that nettles can be processed into useful fabric has not spread across the country, and new ecologically conscious consumers in Europe and elsewhere now import Made in Nepal nettle products.&nbsp; Purja started out with an investment of Rs500,000, and had a Rs20 million business that employed 25 workers. The Covid crisis in 2020 affected the sales, but Purja has recovered from it, sent his daughter off to study abroad, and is thinking of diversifying his product range.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251024071044_ab6d15abcbb9a643e12a384f4bc488b7e210a8c95303fbe1b2f77716d26eede9.jpg" data-media-id="editor_5" data-image-id="20251024071044_ab6d15abcbb9a643e12a384f4bc488b7e210a8c95303fbe1b2f77716d26eede9" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Buddi Purja"> <figcaption>Buddi Purja, proprietor of Rhitu Saugat Handicraft in Pokhara.</figcaption> </figure>  While UNDP’s project has made successful businessmen out of people like Purja, nationwide it has created 187,000 jobs in rural medium-scale industries. Much of what has worked in Nepal has been at the community level with decentralised projects like these that use the entrepreneurship of people like Buddhi Purja, Navaraj Subedi, and Sukmaya Roka. It is tantalising to imagine how much more progress Nepal would have made if their work could be replicated nationside and upscaled to the state-level.

Think locally, invest locally

Nepal needs to enact and enforce animal law

Public anxiety about immigration has become a powerful political currency across many liberal democracies. In Australia, as elsewhere, legitimate concerns about housing and economic fairness can be, and increasingly are exploited by anti-democratic actors who frame migration not as a policy issue but as a cultural threat.&nbsp;
When these narratives move from online spaces to public rallies, they do more than divide opinion; they erode the social trust and pluralism on which democracy depends. Understanding how populist and far-right movements weaponise migration debates is crucial to recognising the early challenging signs of liberal democracy.
Immigration has become one of the most politically charged issues in Australia, not only because of the numbers but because of its entanglement with cost-of-living pressures, housing shortages, and rent spikes.&nbsp;
The latest Household, Income and Labour Dynamics in Australia (HILDA) <a href="https://www.unimelb.edu.au/newsroom/news/2025/september/how-we-live-latest-hilda-data-gives-insight-into-a-changing-australia">data</a> shows rising household financial stress as Australian households spending more on rent and income tax. These changes likely reflect a mix of economic and policy factors but create a lot of room for people to hold inaccurate and occasionally contradictory attitudes on these issues.&nbsp;
While net overseas migration has started to decline from its post-pandemic peak, public concern remains high, amplified by populist rhetoric. Some surveys have <a href="https://www.theguardian.com/australia-news/2025/feb/04/australians-want-less-migration-but-oppose-cutting-international-student-numbers-study-finds">revealed</a> a nuanced picture: most Australians want lower migration overall but oppose cutting international student numbers, and support targeted skilled migration to address workforce gaps.&nbsp;
As former Home Affairs Minister Clare O’Neil <a href="https://minister.homeaffairs.gov.au/ClareONeil/Pages/how-australia-broke-its-migration-system.aspx">argued</a> in 2023, Australia’s migration system is “broken and un-strategic”, not delivering for business, for migrants, or for the larger population. This is a situation that frustrates both sides of the debate and makes immigration an easy political flashpoint.
The recent <a href="https://marchforaustralia.org/">March for Australia</a> rallies turned these anxieties into street-level mobilisation. Tens of thousands <a href="https://www.bbc.com/news/articles/czjmre371l1o">protested</a> at what they called ‘mass immigration’, while far-right groups seized the opportunity to inject xenophobic slogans and calls for ‘remigration’ into the public space. These demonstrations were not only about visa caps or housing and jobs; they became performances of who is entitled to belong.&nbsp;
When immigration is framed not as a policy question but as a cultural test of Australianness, it risks shrinking the demos, the very community that democracy is meant to represent.
What made the March for Australia so striking was not only its size but its composition. Recent investigative reporting <a href="https://www.theage.com.au/politics/victoria/don-t-mention-hitler-and-you-re-sweet-the-great-march-for-australia-deception-20250909-p5mtlc.html">revealed</a> that neo-Nazi groups were not merely present at the March for Australia rallies but played a role in covertly organising them. They amplified messaging online, coordinated attendance, and sought to mask their involvement to broaden appeal.&nbsp;
This highlights that democratic erosion is rarely spontaneous; it requires actors who deliberately exploit social grievances, mistrust, and polarisation to mobilise anger for their anti-democratic ends. The banners reading ‘<a href="https://www.theguardian.com/commentisfree/2025/sep/01/how-do-i-feel-safe-after-march-for-australia-anti-immigration-protest-ntwnfb">Stop Immigration</a>’ revealed that public hostility towards migrants, <a href="https://www.afr.com/politics/federal/pressure-mounts-for-price-to-apologise-to-indian-australians-20250908-p5mt7x">particularly</a> from the Indo-Pacific, is growing.
For many migrants, these displays are more than conceptual debates about white national identity. They are experienced emotionally. Writing shortly after the rallies, Melbourne-based writer Jafrin Kabir <a href="https://www.theguardian.com/commentisfree/2025/sep/01/how-do-i-feel-safe-after-march-for-australia-anti-immigration-protest-ntwnfb">reflected</a> that she had never felt so foreign on Australian soil. She pays taxes and inflated rents, contributes skills in the national interest, cheers for the Tillies and calls Melbourne “home”, yet suddenly felt unsafe because of the origin and colour of her skin.&nbsp;
Similarly, Chinese national interviewed by media outlet <a href="https://www.scmp.com/news/china/diplomacy/article/3325127/i-feel-insecure-chinese-nationals-australia-blindsided-anti-immigration-marches">reported</a> cancelling weekend plans and feeling “blindsided” by the scale of the marches.
Scapegoating migrants especially in times of economic stress is an age-old phenomenon and is not just limited to Australia. Across the democratic world, from the United States to the UK and parts of Europe, hostility toward migrants and minorities has become a route for anti-democratic forces. Populist actors often <a href="https://www.theguardian.com/australia-news/2025/mar/27/peter-dutton-keeps-blaming-migration-for-the-housing-crisis-but-can-it-really-be-that-simple">use</a> cultural anxiety and demographic change to justify illiberal and undemocratic measures, claiming to restore order while actually dismantling checks and balances.
By analysing democratic decay, scholars like Lydia Khalil at the Lowy Institute, <a href="https://interactives.lowyinstitute.org/features/democratic-erosion/">argue</a> that democracies rarely break down at once. Instead, they incrementally weaken through vicious cycles: declining trust in institutions, entrenched division based on hate, the normalisation of political violence, and the bit by bit removal of norms and guardrails.&nbsp;
Though some of the conditions are present in Australia to be exploited by anti-democratic actors, for example, almost two-thirds of Australians believe their leaders intentionally mislead them, according to the <a href="https://www.edelman.com/au/trust/2025/trust-barometer">2025 Edelman Trust Barometer</a>, &nbsp;but their presence is not determinative.
Australia’s democratic guardrails remain strong: independent courts, transparent elections run by the AEC, and a free press continue to hold power to account. Federalism and active civil society further diffuse power and create space for contestation.&nbsp;
But if public trust continues to erode and social divisions deepen, these safeguards will come under strain. Early recognition and action are crucial to ensure that today’s street-level hostilities do not translate into institutional regression.
Preventing such outcome requires a socially embedded understanding of migration, an understanding that goes beyond simplistic optimistic and pessimistic views. Policy makers should go beyond Push-Pull models, functionalist and neoclassical and historical-structural theories.&nbsp;
Consulting the work done by <a href="https://www.guilford.com/books/The-Age-of-Migration/Haas-Castles-Miller/9781462542895#:~:text=International%20Population%20Movements%20in%20the%20Modern%20World,-Hein%20de%20Haas">Hein de Haas</a> et-el, migration should be conceptualised as an intrinsic part of broader processes of development, social transformation and globalisation rather than a 'problem to be solved'. We need more nuanced views that have an eye for the complexity of migration processes and the diversity of its causes and impacts.
Sohail Akhtar is a Melbourne- based researcher focusing on governance, public policy, and migration. He contributes to Lowy Institute Sydney.
This article was issued by the Toda Peace Institute and is being republished from <a href="https://toda.org/global-outlook/2025/is-street-level-hostility-a-challenge-to-liberal-democracy-reflections-from-australia.html">the original</a> with their permission.