Submit your Article

In Soru Rural Municipality of Mugu district, women have multiple responsibilities. Most of the village men have gone to the proverbial ‘Kala Pahad’ (India) or other countries in search of jobs. So women here have to handle not just their families but other traditionally ‘male’ responsibilities as well.

Take construction. Women are working as construction workers in a number of local projects like the 1,100-meter irrigation canal from Majhgatta to Ekal Katiya of Soru-9, and another 1,100-meter canal from Bhuwane Khola to Naidhunga of Khatyang-2. Of the 484 laborers in the two projects, 330 are women.

“Men are out of the country. Even if they return, they won’t work as construction laborers,” says Gorikala Kami of Soru-9. “Development projects in the village are mostly in the hands of women these days.”

“This kind of out-of-home work gives us a unique outlet,” says Kami. “It pays as well.” The project office pays them through a bank, so women now have their own bank accounts. It helps them save money, and keeps them from being cheated by contractors, as happened when they used to get their wages in cash. The World Food Program is funding both the projects.

“As male members are away, many development projects in the village are unfinished,” says Ramdevi Yogi of Soru-9. “We women will finish what they started”. 

Kamal Dev Bhattarai and Arun Poudel talk to economist Posh Raj Pandey, who is also the chairman of South Asia Watch on Trade, Economics and Environment (SAWTEE), about the impact of the global novel coronavirus outbreak on Nepal’s economy, with the focus on its impact on remittances.

How do you assess the impact of the coronavirus pandemic on the country’s economy?

Let’s first discuss the structure of our economy. The contribution of service sector in it is very high, which is mainly about people-to-people contact and movement. So, we see a higher impact of coronavirus in this sector. In manufacturing, there is comparably lesser impact but if there is a break in value-chains, it will also be affected. In our economy, the contribution of agriculture is about 27-28 percent, whereas the contribution of social and government service stands at around 4.5 percent. This means a third of the economy is insulated and would not be directly hit by coronavirus. There will be impact only in the remaining two-thirds.

How will the two-thirds of the economy that is vulnerable to coronavirus be affected?

There can be both direct and indirect, as well as positive and negative, impacts. The worrying factor is that the value-chain of the industrial sector is breaking down as we import intermediate and raw materials from other countries. This could result in less production and affect the country’s overall export. Similarly, the high flow of remittances boosts retail and wholesale trades. If remittances die down, health and education sectors could also be affected.

Next, the coronavirus scare is affecting our tourism. Basically, there are two components in tourism: hotels and restaurants, and travel and transport. These sectors are directly affected because movement of people is restricted. Similarly, there will be a direct impact in the construction sector. Big government projects will be hit.

What kind of positive economic impacts could the coronavirus pandemic have?

Due to the coronavirus outbreak, global oil price has come down. Despite some fluctuations, the price is on a downward trend. It would benefit our economy as we import a lot of oil. Similarly, concentration of our raw material resources in China was never a good thing. The world might now think of diversifying on raw materials and intermediate or final products. If the private sector and the government can come up with a calculated strategy, it also gives us an opportunity. On the negative site, as I said earlier, there is going to be a huge impact on remittance sector.

Remittances are considered the backbone of the Nepali economy. Will they be severely reduced?

The infection is spreading fast in Gulf countries and Malaysia, Nepal’s major labor destinations. Some countries have already blocked the entry of Nepali workers. Even India has said it will require Nepali travelers to be tested at the airport. This will restrict the flow of migrant workers as these countries are providing jobs to our unemployed people. Second, the remittances that Nepali workers send home have helped generate income and boost the economy. Remittances constitute one fourth of the country’s GDP, and if there are any ups and downs, our economy will be directly affected. Additionally, if economic activities slow down in those labor destination countries, they will ask for fewer workers. It will not only impact new recruitments, but also displace current workers. Can we generate employment at home for all those people?

Is there a way out of this potential economic crisis?

We are more or less without options. We have long been saying that sending workers abroad is only a transitional measure. And yet the government has been promoting it. We will not be able to manage the workforce if our workers return from those countries. We will be option-less because we cannot generate enough jobs for them at home. But even if we create some jobs, we cannot give the returning workers the wages they expect.

What could be the political and social fallouts of that?

Obviously, there would be big social and political impacts. It could result in political instability. There are also chances of social unrest and increase of crimes. It could also affect our social stability.

Will the national economy collapse if remittances stop coming, as some fear?

We have adopted flawed parameters of economic success. For example, the success of the finance minister is measured on the basis of the revenue and foreign aid he helps generate. It should rather be measured on how the money is spent. The finance minister takes pride in the revenue generated
but nobody cares where the revenue comes from. In the past decade, 47 to 58 percent of the revenue was collected from customs, which is import-based. Remittance money created demand here but we do not have enough supply. So the country had to import more, which in turn raised more revenue. So, more the remittances, more the imports and greater the revenue.

If the finance minister’s success were measured in terms of revenue from excise duty, which means more tax on goods produced at home, it would be better. Right now, the finance minister is complacent. The government thinks it need not work with the private sector. Even the Nepal Rastra Bank governor is happy because foreign reserves are in a healthy state due to remittances. Nobody cares about the huge import-export gap. Earlier, there was equilibrium between the country’s trade balance and inflow of remittances. So in a way the trade imbalance was compensated by remittances. In the past 3-4 years, the situation has worsened. Remittances have failed to make up for the deficit.

Does it mean remittances are decreasing or is the trade imbalance swelling?

The size of trade deficit has increased. Over the years, the gap between trade imbalance and remittances has continued to increase. Even in current circumstances, pressure is gradually building and remittances are not going to sustain the demand for foreign exchange. So, if remittances go down, we have to take foreign aid even to buy medicine, gasoline and food grains. Our economy will be captive to international financial institutions.

Compared to other countries in the region how dependent are we on remittances?

Obviously, India and Bangladesh get far more remittances than us. But in relation to the share of remittance to the country’s economy, we stand in the top three position globally. Except for some central Asian countries that send migrant workers to Russia, Nepal has the highest dependency on remittances. So we are in a very vulnerable situation. Regionally, we are the most vulnerable. When we talk about India, lower remittances will only have a local and limited impact. For example, it could affect the state of Kerela, not Delhi or other states. In our case, the whole economy will be affected. In Bangladesh, remittance contributes to just 5-6 percent to the national economy; in our case it was 25 percent last year.

What happens if we cannot find an alternative to remittance?

If we do not seek options immediately, our economy could crumble anytime. 

Province 1: Isolation beds have been set aside in BP Koirala Institute of Health Sciences, Nobel Medical Academy, Koshi Hospital, and Birat Medical College. Health desks have been set up at Biratnagar airport and Rani (Jogbani), Bhadrapur, Kakadvitta, and Pashupatinagar border points. 

Province 2: Health desks with 2-3 health workers each have been opened in eight districts of the province. There is no monitoring at 22 entry points from India. 

Bagmati Province: The Tribhuvan International Airport has the largest health desk of the country. Rasuwagadhi border point has a desk with three health workers. Isolation beds are set aside in different hospitals.

Gandaki Province: Thirty isolation beds are set aside at Charak Hospital. Preparation is underway to open wards at Gandaki Medical College, Manipal Hospital, and few other hospitals. Pokhara and Jomsom Airports have health desks. 

Province 5: Ten different hospitals have assigned 3-5 beds each for isolation. Health desks have been set up at Maheshpur, Sunauli-Belhiya, Krishna Nagar, and Rupaidiya entry points and Nepalgunj aiport. 

Karnali Province: Health desks have been opened at Babai along Ratna Highway, Hilsa of Humla, Kapurkot of Salyan, and Surkhet airport. Each has four health workers. Three beds are set aside at Karnali Hospital.

Sudur Paschim Province: Ten health desks have been opened at 10 entry points in Darchula, Baitadi, and Kanchanpur districts. These are staffed with 2-4 health workers each. 

1.    The central lab at Sukraraj Tropical & Infectious Disease Hospital in Kathmandu is the only facility in Nepal to test COVID-19 infection. 

2.    Government has suspended visa-on-arrival for citizens from China, Iran, Italy, Korea, Japan, France, Germany, and Spain. Visitors from these countries also need to produce latest health certificate to come and they can enter the country only through the Tribhuvan International Airport. 

3.    International travelers are individually scrutinized at the TIA.

4.    Health Minister Bhanu Bhakta Dhakal has asked people to ‘self-quarantine’ as per WHO recommendation, stating that the government cannot manage enough quarantine facilities for everyone. 

5.    Government has assigned 155 isolated beds in the Kathmandu Valley in 36 different hospitals, coordinated by seven ‘hub’ hospitals: Tribhuvan Army Hospital, TU Teaching Hospital, Bhaktapur Hospital, Bir Hospital, Civil Hospital, Patan Hospital, and Dhulikhel Hospital.

6.    Cabinet has met four times on infection preparedness since the outbreak in Wuhan (till we went to press). An all-party meeting was also held. 

7.    A government focal body headed by deputy prime minister has been formed. Ministers for home affairs, education, health, tourism, industry, and finance are members.

8.    In the provinces, a body chaired by the concerned chief minister or their representative will work as the focal body. Local elected officials will work as coordinators at local levels.

9.    People have been asked to avoid mass meetings, conferences, and celebrations involving crowds

10.    There are total 31,592 health professionals across Nepal under the Health Ministry, in addition to 52,000 women health workers. 

This photo feature is the outcome of the five-day intensive startup workshop organized by acclaimed photographers and educators Philip Blenkinsop and Christopher Morris on February 17-21.

A total of 18 photography students from Norway, China, Bangladesh and Nepal had gathered in Kathmandu for the International Storytelling Workshop 2020. As part of the curriculum, all 18 students roamed the streets of Kathmandu, taking pictures for the special workshop.

This is a 40-day advanced visual storytelling workshop for advanced level photography and photojournalism students and professionals.

This exchange program is divided into three parts: a five-day start-up photography workshop, fieldwork, and the editing workshop in Dhaka, Bangladesh.

Organized with the collaboration of the Oslo Metropolitan University (Norway), Pathshala South Asian Media Academy (Bangladesh), VII Academy (the US), and photo.circle (Nepal), the program opens up a unique space for young photographers to learn and practice under close mentorship.

People generally prefer private schools to public ones. But this does not apply to one public school in Bhojpur. The Janasewa Basic School at Bhojpur Municipality-7 is these days drawing more students compared to rival private schools in the vicinity.

Wanting their children to learn English, parents often send them to private schools that supposedly teach them ‘better in English medium’. Many private schools even advertise themselves as ‘English only’ zones. As the public schools don’t place such emphasis on teaching English, parents tend to shun them, and these schools are often neglected. The quality of education on offer is thus generally poor. Parents are willing to pay much more to private schools.

In the case of Janasewa though parents are enrolling their children in the school even by withdrawing them from private schools. This year, 52 new students were enrolled. The school is being developed as the district’s model government school. It uses teaching style and curriculum that are similar to those of private schools. Better exam results also naturally attract parents and guardians.

“They teach the same way boarding [private] schools teach. They use English medium. Results are good too,” says Tulasi Poudel, a parent. “It saves us from the high cost of boarding [private] schools.”

“Low-income people like us would be greatly relieved if all public schools had such good standards,” he adds. “We could then give English education to our children, and they would excel in studies.”

Apart from English medium, other important features of this school are: regular classes, good discipline, regularity of teachers and students, focus on classroom activities, and teacher-student engagement. Parents say the school offers them quality education at minimal cost.

Many public schools in the district were merged or closed down in recent years due to their poor teacher quality and their inability to attract good students. Not Janasewa; even relatively better-off parents send their wards here. As per school records, its alumni have done well in higher studies too.

“Although it is a public school, we offer the standard of private schools. We also offer scholarships and boarding facilities,” says teacher Sikshika Shrestha. “Our students are disciplined and both our teachers and students value the importance of time and learning.”

According to Headmaster Thir Bahadur Shrestha, teachers in other public schools are often more involved in politics rather on teaching. “This is why the quality of education in public schools is in a decline. These teachers are better qualified and better trained than their private school counterparts. The problem is that they don’t like working.”

The district has 341 basic and 69 secondary-level public schools where 61,240 students are enrolled. Among other things, lack of designated subject teachers and teachers’ frequent absence ail most.

A ruling party taskforce has recommended substantial amendment of MCC accord. Is this possible?

Officially, we are yet to get the taskforce document. Based on media reports of the comments made by leaders, what I can say is that the comments are not substantial. You have to understand that the amendment process is long and difficult. Among other things, it has been said that the MCC compact violates Nepal’s constitution, which is not true. A communique to this effect has already been exchanged. We are not sure if the taskforce got that communique. There are other communiques, too, over other points. Some of the MCC points can be clarified if they are unclear. If there is a need for further clarification, an exchange of letters would be the shortest route.

Do you think the opposition to the MCC is ideological? Many ruling party leaders continue to see the US and all projects under it as ‘imperialist’. 

I don’t think so. What I would say is that some people have spoken against it on ideological grounds based on fake news and disinformation about the MCC. There are apparently around 500 websites disseminating fake news about the MCC compact. They say there is the MCC in Iraq and Afghanistan, which is wrong. There is no MCC project in the countries with American troops. The contents of fringe online media and social media show some bias. But mainstream political leaders are mostly in favor of maintaining cordial ties with the US.

How do you tackle the persistent perception that the MCC is part of US military strategy?

There are two issues here. First, as the MCC is time-bound, we do not have time to wait for such perceptions to die down. Once we start building the power transmission lines, towers and sub-stations, people will see our actual work. Seeing is believing. When people see the work, they will know that it is not military. As soon as parliamentary ratification and other conditions are met, we will go for speedy implementation. People will gradually understand what the MCC is all about. Similarly, not everyone can understand the 78-page long MCC compact document that was prepared by lawyers. These are international-standard documents and adhere to international norms. Unfortunately, some people are commenting on it without even reading the document or properly understanding the terms and conditions.

What are the important deadlines related to the MCC compact?

We have to understand that nothing lasts forever. We have fixed 30 June 2020 as the date of the accord’s entry into force. If we fail to meet that deadline, there will be credibility issue. So, June 30 is a critical date. Nepal government has dispatched a letter assuring that the compact will come into force after June 30. Non-compliance means violation of this commitment.

There could be further discussions, but it is beyond my jurisdiction to say what will happen after that date. But at the current rate, we could miss the deadline. The fiscal year of US government ends September-October. If the MCC is not endorsed before that, there will be uncertainty.

Even if the MCC and Nepal government agree on deadline extension, the US Congress can transfer unspent money to other heads. They could also withdraw the unspent budget. So it is a risky path. As it is, we have already lost five months, which in turn has greatly affected the morale of our staff.

Again, given the limited time, is there a chance of substantial changes in the compact?

It would not be difficult to explain some points through letters of clarification. For a substantial change, it should first land at the MCC board that includes the US Secretary of State. It would be difficult to justify the amendment to him because the compact was signed after sufficient discussion between the two sides. So it is better to finalize it through clarification letters.

There are also questions in Nepal about the need for parliamentary ratification of the MCC compact.

The rationale behind parliamentary ratification is to give legal status to the compact. There could be legal obstacles, and problems could arise, for instance while felling trees. Domestic procurement laws could be attracted. But we do not work as per the procurement law of Nepal. We follow MCC procurement guidelines. Therefore, the compact should be given the status of law for smooth project implementation. In case of conflict, the compact is implemented in line with section 7.1 of the agreement. On the interpretation of this provision, legal opinion was sought. Nepal government settled for a parliamentary approval through simple majority after legal consultations.  

Many people including senior NCP leaders are of the view that the US should clarify that the MCC is not a part of the Indo-Pacific Strategy.

It is up to the American government to say whether it is part of the IPS. What I have been repeatedly saying that the IPS is not an alliance. It is rather related to US foreign policy that covers areas from Indian Ocean to Pacific Ocean. It is about democracy, development, and defense. It is a policy document. In some policies we could align with the US and we can be partners. We can object to other policies that are not appropriate for us. We have that right. Nepal follows Panchasheel and America has its own policy. We the have power and capacity to pick and choose. So does it matter if it is a part of the IPS?  If China says tomorrow that everything that comes from China is under BRI, what would be our position? What will we do if the Indians say something similar?

The country should choose which path to pursue. The compact document has not mentioned anything about the IPS, so I do not understand what type of amendment we seek. Let us just follow what is written in the official documents that we have signed. We have to look at our relation with the US in the past 70 years.  We have to take decisions in a rational way.

Sri Lanka recently decided to reject a similar MCC grant. This has also fueled suspicions here.

Nepal and Sri Lanka have distinct political histories. From 2007-2009, Sri Lanka faced an ethnic civil war. Thousands of people were killed. There was international objection over extrajudicial and civilian killings. The UN and western governments took strong positions. They dragged many top Lankan army officials into war crimes. If you have followed recent news out of Sri Lanka, this had a direct bearing on the proposed MCC grant.

The MCC in Sri Lanka is related to road improvement and land management. Land management was aimed at digitalizing data and adopting new methodology. A section of people portrayed it as a data secrecy issue and termed it objectionable. However, the Sri Lankan government has not taken a firm decision that it would not receive the MCC grant. The current government is a transitional one as parliamentary election is due in December. The cases of Sri Lanka and Nepal are entirely different, and the position of Nepali leaders is not akin to those of Sri Lankans.

If there is no parliamentary approval, what could be the implications?

On the part of Nepal, there would be serious damage as the Nepal Electricity Authority has signed several Power Purchase Agreements (PPA) that are contingent on the construction of the Gorakhpur-Butwal transmission line under the MCC compact. The PPAs will be affected if the transmission line is not built. The proposed transmission line under the MCC can carry up to 3,000 MW electricity. The power sector in Nepal will take years to recover if this is not implemented. 

Next, the World Bank, JICA, Asian Development Bank and other international organizations visit our office and consult us about the transmission line. They synchronize their transmission lines accordingly. If the compact is not endorsed, it will affect their projects as well. It will give a message that doing projects in Nepal is difficult. It will be a big setback for the country as well as all foreign companies that are investing in Nepal’s hydropower. It would be difficult for us to even convene investment summits.

Nepal and the US have a 70-year history of cooperation. The US was the first country to support Nepal’s bid for UN membership. The MCC compact entails the biggest grant the US has provided to Nepal. It took more than five years to sign the project. I think no country should reject this. It is already signed, the design is ready, the office is already there, and the staff is working. It is not good to create disputes now.

Visit Nepal 2020 kicked off with the unveiling of the oversized yetis, the much-reviled campaign logo. No sooner had the year started, coronavirus hit China, from which Nepal expected at least 500,000 tourists this year. The number of Chinese tourists soon collapsed. With much of the world now under the grip of the dreaded virus, Nepal’s signature tourism campaign has been called off. The hospitality sector that had borrowed heavily in anticipation of the Visit Nepal tourist bump has been walloped: average hotel occupancy is barely 15 percent. Restaurants are deserted in the fear of corona contagion. Travel in and outside the country has slowed to a trickle, wrecking aviation.
As if that were not enough, the re-appointment of Yubaraj Khatiwada as minister of finance, despite his dismal performance in the past two years, has sapped any remaining confidence of businessmen and investors. The stock-market that witnessed an exuberant rise when the news of his exit surfaced has since the confirmation of his re-appointment seen a bloodbath. There are more signs of trouble for Nepal. India’s GDP growth is now under-6 percent. Even without the corona epidemic, the Chinese economy was similarly slowing, and corona has firmly put on the skids. The Oli government, which had been banking on developing Nepal as a ‘vibrant economic bridge’ between these two giants, seems to have run out of ideas.

It’s easy to panic in this situation. In fact, not one thing seems to be going right for the economy. Yet this is precisely when calm is needed. Khatiwada has always been a critic of ‘laissez faire’ capitalism, and a strong advocate of greater state involvement in the economy. That would not necessarily be bad for a country in Nepal’s stage of development. It has indeed become vital to secure the interests of the poor from crony capitalists. Yet Khatiwada seems to believe that most private actors are crooks and only by wielding a stick can they be brought in line.

Instead of supporting the economy and setting the foundation for a welfare state, in line with the government’s commitment, his measures have demotivated businessmen and entrepreneurs and scared away investors. Khatiwada has a second chance to redeem himself. The monetary policy is far too tight for these troubling times. How will he lay the foundation of a functioning welfare state if he doesn’t have any money to work with? Surely, he doesn’t believe the government can achieve its ambitious economic goals without the help of the private sector. In fact, right now Nepal needs all the help it can get, from all legitimate sources in and outside the country.