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The formal signing of a Mem­orandum of Cooperation (MoC) between Nepal and Japan this week on labor migra­tion has opened doors for Nepali workers to be employed in Japan. Thus far South Korea has been an attractive destination for skilled and semi-skilled Nepali work­ers. The opening of the Japanese market will help close the gap between the population entering the workforce and the number of jobs created at home. It is also significant in that it will expose our workforce to additional skills and best practices that can be transferred back to Nepal.

Understandably, there has been some criticism of this lat­est MoC—particularly on the eve of the second Nepal Investment Summit. Many find the govern­ment’s approach contradictory. On the one hand, it wants to bring in billions of dollars in foreign investment, but on the other, it is actively encouraging its skilled population to go abroad.

Faulty reasoning

According to this line rea­soning, if the plans to attract billions of dollars in investment are to materialize, Nepal needs to produce a skilled workforce to underpin a foreign invest­ment-fueled growth.

While this looks like a valid argument on the surface, it misses several points. One, an increase in investment flows does not hap­pen in one go; most likely it will happen gradually over several years. Two, investments such as in hydropower and infrastruc­ture, which will absorb a large portion of the money flow, do not necessarily create many jobs and often require international-lev­el technical know-how. Three, the argument that exporting workforce eats into a country’s ability to develop is not entirely true. In fact, returning migrants bring in lots of expertise just by being exposed to a differ­ent work environment.

Exposure to Japan’s sophisti­cated and efficient work environ­ment can only be a positive thing. Besides being a win-win solution for Japan’s problem of a shrinking workforce and for the migrant workers’ families, Nepal will also benefit. If there are opportunities back home, many will choose to return. After all, there is no place like home.

Is Nepal capable though?

But doubts remain about the Nepal government’s ability to timely meet its end of the obliga­tion under the MoC. Since this is a government-to-government (G2G) arrangement, there are fears that Nepal will be too slow to set up a system to send workers. Nepal is the only South Asian nation to be selected as a source coun­try, but there are other countries competing from South East Asia. Tokyo plans to take approximate­ly 70,000 workers a year for the next five years.

In early 2011, Nepal botched a similar opportunity when our bureaucracy sat on a request from Japan that would have created a potential export industry. In the aftermath of the earthquake and tsunami in March 2011, Japan faced severe shortages of food supplies as the twin disaster caused disruptions to its supply chains. To address the issue of food insecurity over the long run, Tokyo approached several countries to produce specific food products for its population. For a developed country, Japan already has a very low food self-sufficien­cy level. Several estimates suggest that less than 40 percent of food consumed by its population is produced domestically.

Tokyo had reportedly sub­mitted a proposal to Nepal to grow food in the Dang Valley for the Japanese population. Because there was no response for several weeks, Japan report­edly took the proposal to anoth­er East Asian country, given the urgency of the matter.

Another opportunity came up in early 2017 when Qatar approached Nepal for vegetable, spices and other supplies in the wake of a blockade imposed by its Gulf neighbors. While there was discussion between the private sector and government officials in Nepal, it did not result in any sig­nificant increase in Nepali exports to the Gulf nation. One reason was the lack of harmonization of food quality standards in Nepal in tune with global practices.

Not a long-term solution

This clearly shows that Nepal’s private sector can benefit from more insight and exposure from countries that are globally com­petitive in terms of production and services. One way to bring this expertise is by bringing in more FDI and the attendant know-how. Another way is to give more of our people opportunity to work abroad in skilled sectors.

Clearly exporting our workforce is not a long-term solution, but in the short to medium term, this approach provides tangible bene­fits to all the parties involved—pro­vided there is no exploitation and the working conditions are right.

Chandra Kant (CK) Raut’s sudden entry into main­stream politics was as dra­matic as it gets. It also proved to be a massive public relations vic­tory for a government struggling to control the media narrative on completing its first year in office.

But even on substance, this is a solid undertaking and sends a clear message to all dissent­ing groups that the government is keen on resolving differences through dialogue.

Bringing a secessionist group into the mainstream fold from the cold requires the appearance of some serious concessions from both sides. In that spirit, the deal is intentionally ambiguous so that both parties can sign up despite continuing differences. Negotiators and diplomats rely on ambiguities all the time to advance negotiations. It is rare to have even a joint communiqué between friendly governments without varying interpretations, let alone peace agreements. All agreements between the Maoists and the State in the past, includ­ing the Comprehensive Peace Agreement, are replete with ambi­guities. The 22-point agreement between Madhesi Janaadhikar Forum and the government in August 2007 followed a similar pattern.

For the Oli government, this is a first step in a peace process with a secessionist group. This was clear in Prime Minister KP Sharma Oli’s speech—in which he compared Raut to Pushpa Kamal Dahal ‘Prachanda.’

Those within the ruling party and outside who are jumping the gun on the wording of the agree­ment fail to recognize the impor­tance of this development. They also fail to see the agreement in its entirety. The first point clearly confines the agreement within the current constitutional framework. But that Raut has interpreted the agreement as a concession from the government is also logical.

Anything short of the text of the agreement—whose ambiguity has allowed Raut to claim victo­ry—would have looked like sur­render. This would have created a legitimacy crisis for Raut himself within his fold. The prospect of some other secessionist leader labeling Raut a sell-out and tak­ing on the helm of his erstwhile outfit would then be a real possi­bility. That would have defeated the whole purpose of the agree­ment: to neutralize the threat of a secessionist movement.

Prudent first step

The government needs to be congratulated for recognizing the threat CK Raut’s movement posed to the integrity of the Nepali state in the long run. This agreement is a prudent first step towards neutralizing that risk. For all the hubris the government has shown in other areas, this is one area it has acted wisely. Often, a strong majority in the parliament can delude governments into thinking that that they can bulldoze their way around. History clearly shows that dissent cannot be dealt with force and finding a democratic and constitutional framework to resolve differences is critical to the endurance of a state.

However, the success of this peace process with Raut’s outfit hinges on the sincerity of both the sides.

Raut could very well use this moratorium on state crackdown and freedom to engage in open politics to further burnish his secessionist credentials. As the Maoists did in the past, this could be a strategic retreat. During the reception gathering for Raut in Janakpur airport on March 10, his supporters carried placards calling for Free Madhes. Many in Kathmandu see this as a sign of Raut reneging on the agreement. I think it is too early to conclude anything at this stage. After taking such huge risks, both the govern­ment and Raut need to be given some breathing space.

The government also needs to go easy on its plans, if any, to bring Raut into the government, unless it wants to risk strengthen­ing the hands of hardliners within Raut’s movement. This is assum­ing that he would even accept a government offer. There are speculations that the government intends to nominate Raut to the National Assembly and make him a minister. If true, that would be premature and unwise. It may also encourage other copycats to take a similar route to power.

 Less than three weeks after Puspha Kamal Dahal ‘Pra­chanda’ warned that a ‘new Maoist force could emerge with devastating consequences for the country if the peace process was not honestly implemented,’ Kathmandu Valley was rocked by the explosion of an improvised bomb that took the life of one person and injured two others. The explosion brought back trag­ic and painful memories of the 10-year-long civil war. Many see a connection between the two (more on this a little later).The attack on Ncell, a large and symbolic foreign direct invest­ment in the telecom sector, also comes several weeks before the Investment Summit aimed at attracting more foreign investors. The attack sends wrong messages on so many levels. It harms the country’s attempt to tell the world that Nepal has begun a new chap­ter and is open for business. More damagingly, it indicates another cycle of political or even state fail­ure—underscoring Nepal’s fragili­ty, whatever politicians say about a strong government.

The Maoists of all stripes have identical positions on transitional justice

Even before the Netra Bikram Chand Biplab-led Maoists took responsibility, it was an open secret. It had all the telltale signs of a strategy right out of the Maoist playbook. But that knowl­edge raises more questions than it answers.

Why now? What is the trigger? Why target Ncell in particular, even though there have been oth­er instances of attack against Indi­an investments?

The question of timing goes to the heart of Prachanda’s state­ment on Venezuela last month. The ensuing spat between him and the prime minister saw a hardening of stance of former and current Maoists. It all boils down to how the government plans to handle the transitional justice issue, the pressure from the inter­national community and the fear of Prachanda and the current and former Maoists.

Whatever their differences, all Maoists of all stripes, including Baburam Bhattarai and Biplab, have identical positions on transi­tional justice: None of them wants to be labeled as a perpetrator of grave rights violations and face punishment, even though such a punishment may only be symbol­ic—a road the prime minister and his team appear inclined to take. While the government is report­edly planning to set up a special court to deal with all war-era cas­es and mete out symbolic punish­ments, Prachanda wants all such cases withdrawn and symbolic justice meted out to a select few the former Maoists are willing to give up as a sacrifice.

Complicated between comrades

The relationship between Pra­chanda, Home Minister Ram Bahadur Thapa Badal, Biplab and Mohan Baidya, the Maoist ideologue and mentor, is com­plex. Clearly Baidya and Biplab are unhappy with Prachanda and Badal. But to suggest that their relationship is one of pure hos­tility would be naïve. On the sur­face, Badal has cracked down on Biplab’s factions by arresting key leaders with deliberate publicity. But he has also quietly released them using a low profile govern­ment talks team led by Parlia­mentarian Som Prasad Pandey. In recent days, the new Maoists have broken off contact with the talk team.

One wonders why a former Maoist commander and current Home Minister—who used the state crackdown as a recruitment tool during his rebellion days—would allow his former comrade to use the same playbook. Those who argue Badal does not realize he is repeating the mistake of for­mer Home Minister Khum Baha­dur Khadka do not fully appre­ciate the advantage of having an armed faction on the outside for the Maoist half of the NCP. The merger between CPN-UML and the Maoists was one of conve­nience. If the Maoist half prevails, they are likely to come out with a larger faction than they went in with. Perhaps that is why they have asked the Election Commis­sion not to give their former party name and symbol to anyone.

This raises the question: Are Prachanda and his team keep­ing Biplab-led faction outside the big NCP tent for a particular pur­pose? While it is difficult to rule out these sequences of events as purely coincidental, one hopes our leaders, both ruling and in the opposition, including the armed factions, would not subject the country to another vicious cycle of violence and instability.

Soon after Nancy Powell arrived in Kathmandu in the first week of August 2007 as the new US ambassador to Nepal, she reportedly had an awkward run-in with a Maoist leader. This was only months after the Com­prehensive Peace Agreement was signed in November 2006. The US State Department had still not removed CPN-Maoists from its ‘terror list’ the party was first enlisted in November 2002—fol­lowing the murders of two US Embassy guards. In her first weeks in Kathman­du, Powell was invited to a gath­ering in another western diplo­mat’s house. When she arrived, she walked past several guests shaking their hands. One of them happened to be Barshaman Pun, the current Minister of Energy and a former Maoist commander. As Powell was shaking hands with Pun, an American diplomat whis­pered to her that Pun was a Maoist leader. She reportedly withdrew her hand in shock and confusion. This story was the talk of the town back then.

The two sides have had a com­plicated relationship. While after 2001 the then Bush administra­tion divided the world into a binary system of ‘with us or against us’ around the ‘war on terror’, not everything fitted so neatly into this construct. The Maoists for their part railed hard against the Americans—calling them imperialists. But privately they sought a relation­ship. The leaked American diplo­matic cables by Wikileaks in 2011 show the range of the Maoists’ rapprochement efforts.

Baburam Bhattarai sent a series of letters to the US Embassy in Kathmandu in 2003. The embassy regarded Bhattarai as the party’s ‘most authoritative wordsmith’ and forwarded his missives to the State Department.

This was also the same period when the US complained about the Maoist attempts to isolate them diplomatically in Kathman­du, and accused other Western diplomats of playing into the Maoist strategy.

“The Maoists obviously are try­ing to apply this [divide and rule] tried-and-true method to split the international community’s potential opposition to their movement. Some of our col­leagues in Kathmandu, unfortu­nately, seem all too willing to be taken in,” Michael E Malinows­ki, the then US Ambassador wrote in a cable in 2003. “In practical terms, this has translat­ed into the Maoists’ singling out US-sponsored aid programs for ‘non-cooperation’.”

The arrival of Nancy Powell also signaled a departure from the policy pursued by her two con­troversial predecessors. But it was not until early 2008—following the results of the first Constituent Assembly elections, after which the Maoists emerged as the single largest party—that the US would publicly acknowledge meeting Maoist leaders. But it would take the US another four years before it would officially remove the party from the terror list.

The US-Maoist relationship has come a long way since. Prachan­da has travelled to the US several times. But have the relations been reset to early 2002 conditions under the new administration?

Spooked by Wangzhou?

The relation between the two sides has taken an unprecedented turn with the spat over Venezuela. There are several theories as to why Prachanda issued the state­ment. Was it aimed at his party’s co-chair and the prime minister; was it as a result of Venezuelan lobbying; or was it because tran­sitional justice issues spooked him? Many point to the recent statement by the United Nations and western diplomats as a trigger for the statement on Venezuela.

All these factors could have played a role. Dahal and the Mao­ist half of the ruling NCP are con­cerned by the sudden ‘aggres­sive’ US foreign policy posture in the past several months, in what seems like a pattern against communist governments—and one that has striking resemblance in terms of intensity to ‘Bush’s war on terror’: the escalation of trade war with China, the arrest of Huawei’s Chief Financial Officer (CFO) Meng Wangzhou, and the American hardline on Venezuela.

The Maoist leadership rightly feels that the invisible sword of transitional justice continues to hang over their head and that their enemies are out there to get them. They fear they may be arrested when they least expect it—similar to the fate of Huawei’s CFO Wangzhou. Is the US also try­ing to get the Maoists for the mur­der of the two embassy guards?

By publicly issuing a state­ment and railing against the US, Prachanda may be hoping to cre­ate a narrative that the former Maoists are martyrs not perpe­trators—if they are arrested on international soil.

On Jan 25, co-chairman of the ruling Nepal Communist Party Pushpa Kamal Dahal seemed to have gotten nostalgic for his revolutionary past and decided to call out the ‘imperi­alist’ forces for their designs on Venezuela. A statement signed by Dahal under his revolutionary nom de guerre denounced the US and its allies for ‘intervening in the internal affairs of the Bolivar­ian republic.’Dahal’s statement reportedly caught key officials off guard. Prime Minister KP Sharma Oli, who was returning from Davos after making an investment pitch, had to feign ignorance, while the Ministry of Foreign Affairs (MoFA) officials were left scrambling for an answer after the US Embassy sought a response on whether Dahal’s statement was Nepal’s official position.

Stuck in a time warp

This comes only weeks after high-level dialogue between Nepal and the US in DC, the first in nearly two decades. The dialogue was expected to provide impe­tus, at least from Nepal’s side, to its effort to secure more funding from the US for its development needs. Instead, Nepal felt unilat­erally sucked into the American Indo-Pacific strategy. In recent years, the US has increased its funding for Nepal under the Mil­lennium Corporation Challenge, and the kind of reciprocity the US expects from this government has put Nepal in a bind. Nepal cannot go against China, nor can it entirely oppose the US moves. Perhaps that was the reason for Nepal’s hot and cold approach to the BIMSTEC military exercis­es. While Kathmandu eventually pulled out of it, it laid bare the big leverage the US has over different actors in Nepal.

After years of prioritizing rela­tions with India and China, par­ticularly between 2006 and 2016, Nepal has finally begun to see that the world is bigger than just the neighborhood. But given the reactive, rather than proactive, nature of our engagement, this newfound wisdom has not neces­sarily translated into benefits for Nepal. This is largely due to the absence of clarity, capacity and cohesion within Nepal’s strategic community. The foreign minis­try officials, with all due respect, seem stuck in a time warp. There has been no investment in the training of the MoFA cadres in line with the rapidly changing diplomatic landscape. As a result, career diplomats at the MoFA have been unable and unwilling to temper the instincts of succes­sive foreign ministers. Nor have they been able to coordinate and control whimsical prouncements by political leaders on sensitive geopolitical topics.

It is a clear sign of this dys­function that the MoFA wasn’t involved in clearing Dahal’s state­ment on such a sensitive issue. There is no doubt a protocol in place for such matters, but not the required competence and willingness to enforce it.

Repeat inevitable

More worrisome is that the lob­bying by Venezuelan diplomats, as reported in The Kathmandu Post, seems to have gone unno­ticed by the foreign ministry offi­cials. This also, perhaps, speaks volumes about how uninformed our officials are about contempo­rary issues. When big powers are on opposite sides of an equation, it is only logical to assume that both would try to rope in other states for support and small states like Nepal are particularly vulner­able. A robust MoFA desk on Latin America would have maintained a risk log and would have proactive­ly held briefings for key political leaders on the dangers of taking sides in the evolving crisis in Ven­ezuela. Given that Nepal has no shortage of left-leaning parties, a repeat of this kind of faux pas is inevitable.

We can ill afford this level of dysfunction at our diplomatic nerve center as winds of a sec­ond cold war blow. As the recent incident involving Huawei shows, the US-China rivalry can quick­ly take an ugly turn—forcingcountries such as Canada to pay a disproportionate price of this conflict between the giants. While Canada as a G-7 country has the ability to endure such a crisis, poor countries like Nepal will not be so lucky if they do not pay attention.

This is not the first time this dysfunction has left the Nepal gov­ernment scrambling to form an official position on a geopolitical issue—and given the lack of inter­nal coherence and under-invest­ment in the MoFA, it is unlikely to be the last.

On Nov 15, 2018, Madan Khar­el, the then newly appoint­ed Executive Chair of the Nepal Airlines Corporation (NAC), held a press conference flanked by his deputies, including Manag­ing Director Sugat Raj Kansakar. The press conference was called to address the White Paper issued by the NAC management on the national flag carrier’s financial health and long-term plans.The media basically carried the pronouncements verbatim. No critical questions were asked and there was no effort to even check the math presented in the event. The message that came out the press conference was clear: The NAC is on the brink of bankruptcy and the government would have to inject cash to bail it out.

The timing of the press confer­ence, which came hot on the heels of reportedly advanced discus­sions with Ethiopian Airlines for a strategic partnership, was also suspect. To be fair, the Tourism Ministry itself has recommended that the government inject Rs 20 billion as part of its plan to restructure the NAC. While the NAC’s financial health isn’t great, it does earn significant revenue from ground handling alone—about Rs 3.5 billion annually, the same as the total annual repay­ments on its four Airbus loans. That is a significant cushion.

The optics of the press con­ference has hurt both the NAC’s attempts to find a strategic part­ner and its branding efforts among customers. Who would want to invest in a company that is about to file for bankruptcy? Even if that was not the intention, that has been the effect. The airlines business, like any other, revolves around managing perceptions. Would passengers want to fly in an airline if its management is openly talking about its potential bankruptcy? Even on a good day, the NAC is known for delaying or cancelling flights, or worse, grounding its fleet.

This week the NAC has told its creditors it cannot service its quarterly installments

An open secret

This week the NAC has told its creditors it cannot service its quarterly installments due for Jan­uary and has asked for an exten­sion. This despite no significant reduction in its total earnings in December-January. Is this another stunt to kill two birds with one stone: force the government to inject cash while deterring any potential strategic partner?

There are plenty of reasons to doubt the NAC management’s willingness to bring in a strategic partner; a new partner means a change in the management philosophy and style. Would the current appointees really give up their lucrative perch? A perch that provides them with all kinds of perks and privi­leges without corresponding expectations and certification of a good performance. Even without bringing in a strategic partner, what plagues the NAC is an open secret: mismanagement.

Two core issues

The national flag carrier’s administrators, most of whom are political appointees, have been unable and unwilling to do what is required of them to make the corporation profitable. There are two core issues: overstaff­ing and mismanagement of the fleet and flight schedules. Even if laying off excessive staff is polit­ically touchy given how union­ized government entities are, the NAC should still make profits just by flying the four new Airbus­es 18 hours each. And there is the additional cushion from the ground handling business. This combined with a strict fleet main­tenance regime would address its perennial image problem by ensuring minimum delays or can­cellations—thus increasing its mar­ket share. The NAC flies in such profitable destinations that there is no reason its flight occupancy should be at 50 percent, other than its image problem of being extremely unreliable.

For both potential partners and customers, the press conference perpetuated that perception, albeit in different ways: for inves­tors, it amplified the risk factors and for customers, it gave them another reason not to fly with the airline. Increasingly, the NAC’s problems appear more like inter­nal sabotage than just corruption and incompetence.

In 71 years of bilateral relations, this was only the fifth official high-level engagement between the US and Nepal—not including the ones at the undersecretary and assistant secretary of state levels. Why then is America sud­denly giving importance to its relations with Nepal?

Make America great again

For cues, one needs to look at the churning inside the US gov­ernment since the inauguration of Donald J Trump as the 45th President in January 2017.

President Trump’s sloganeer­ing under the broad theme of ‘Make America Great Again’ (MAGA) may appear crude given his mercurial nature. But there is lot more sophistication there than meets the eye. While Trump is the salesperson (to his base), there are several architects behind this major reordering of American economic, security, for­eign and environmental policies, among others.

On the economic front, the trade and tariff war with China and even with US allies is what Steve Bannon, Trump’s former chief strategist, describes as an effort to reorder the global supply chain to make it Ameri­ca-centric again. Bannon, a for­mer navy officer and investment banker, argues that America has a limited window of opportunity before China becomes too power­ful to be confronted on economic terms. Bannon may have left the White House, but there are oth­ers in the US administration who share his worldview.

With the elevation of Mike Pompeo as Secretary of State straight from the CIA, American security and for­eign policies appear to be morphing into one. Pompeo, a former hawkish Congressman from Kansas, is the first former CIA director to take charge of the State Department. Histor­ically, the next career stop for former CIA chiefs is either the Pentagon or the National Security Council. That is because, at the heart of America’s decision-mak­ing process, there used to be an imaginary line between security hawks and doves—giving com­peting but useful inputs to the President for the best course of action. (Ex CIA Director Walter Bedel Smith did become Under­secretary of State in 1953 and a few were appointed ambassadors at a later stage, but none became the chief diplomat).

These are not just personnel changes in America; these are major changes in terms of world- view. Empires and big powers need well-defined enemies to ensure internal coherence. Trump’s team has decided that China, not Russia, is their next strategic rival, and that current efforts to contain Beijing have been inadequate. Even the ‘civi­lizational risk’ posed by Islamic terrorism seems to have been downgraded under Trump’s pres­idency, as demonstrated by the decision to pull out troops from Syria and Afghanistan.

Nepal’s challenges

America also appears to have decided that it will no lon­ger outsource its initiatives to its allies or proxies but rather take direct charge—in large part due to the fact that the allies are no longer in lockstep with the new American approach. Japan, India and South Korea have been undergoing their own rapprochement with China. This means the wish of Nepali officials and strategic thinkers, who have been urging the US to stop looking at Nepal through an Indian lens, might just come true. But this isn’t without risk—particularly against the backdrop of Nepal seeking to court both China and the US. Yes we need to diversify our relations, but we also need to attain internal coherence and clarity on what our national interests are. Subse­quently, we also need to build our negotiating capacity.

As winds of a new cold war blow, Nepal has to understand the changes within the US to avoid being caught in the crossfire and misled by false expectations. America, under Trump, wants to retain its preeminent status, with­out necessarily wanting to bear the cost it entails—as indicated by its continued demands from NATO and other allies to pay their ‘fair’ share.

On a foggy December morn­ing, mix crews of Chinese and Nepali nationals are working on the foundation of what will be the terminal building of the new regional international airport in Pokhara. “Foundation­al level work of taxiway, apron and the hangar have almost been completed,” says June Zhu, site manager of the construction com­pany, China CAMC Engineering, a state-owned enterprise. “I am happy to report 20 percent work is complete.”

Over three hundred Nepali and Chinese crew are working 12-hour shifts

Being built with the state-of-the-art technology, once com­plete, this airport would include features such as modern board­ing bridges instead of shuttle buses that the TIA currently uses to transfer passengers from boarding area to the airplane. It will also feature Instrument Landing System (ILS), including a localizer, to assist in safe landing of the incoming airplanes even during bad weather. The Tribhu­van International Airport is yet to have ILS localizer and some experts have wondered if the March 12 US-Bangla plane crash that killed 52 passengers could have been avoided if the system had been in place.

An eight-storey air traffic con­trol tower is being constructed with wide area multilateration (WAM) technology. In a mountain­ous terrain like ours, WAM has more advantage where the line of sight can be blocked by natural barriers. Given that Pokhara sees heavy rainfall, the runway will have concrete pavement, instead of asphalt. Concrete pavements are durable and have lower main­tenance costs over time, accord­ing to engineers.

The project is being financed through a soft loan from China EXIM bank. Of the $215.96 million loan, 25 percent will be interest-free.

Over three hundred Nepali and Chinese crew are working 12-hour shifts. “We will increase the work­force, if we need to,” says Zhu, the site manager. “We would like to hand it over to the government before the June 2021 deadline.”

Both the federal and provincial governments as well as the private sector are pinning their hope on timely completion of this nation­al pride project. In fact Gandaki Province’s whole growth strategy appears dependent on bringing two million tourists by 2022—and about half of them are expected to come through this airport. Once complete, this regional interna­tional airport will handle one mil­lion tourists annually.

A hotel construction spree is underway in Pokhara and sur­rounding areas, leading to a glut in rooms. Hoteliers report average annual occupancy of 45 percent.

The provincial government has begun lobbying other provinces for their consent to declare Pokha­ra as tourism capital of Nepal.

While agriculture and hydro­power are other pillars of the economy, they seem dependent on increased arrivals and tour­ist consumption. The provincial government is bringing a policy to incentivize use of local agri­cultural produces in hospitality sector so that tourism dollars are spread to other areas of the econ­omy. They are also encouraging resort and hotel owners to start their own farms with an aim of doubling agricultural output.

It is true that the provincial gov­ernment does not have adequate policy and institutional mecha­nisms to effectively translate these ideas into action (only 30 percent of the available 2,000 public ser­vice vacancies have been filled). But it is only a matter of time before they do.

Given the natural endowments, human capital and provincial leadership, Gandaki is poised to be the model among seven provinces. Tourism earnings will play a key role in all these; and the state-of-the-art airport infra­structure sits at the center of that growth strategy.