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Technology and time have modernized even the most sacred of rituals. For many Hindus, the electric crematorium has now replaced the traditional funeral pyre, offering a cleaner and more pleasant experience in the process.

In sharp contrast, another tradition remains resolutely untouched by technology and the passage of time. Located in the heart of Kathmandu, the manufacturing unit of Singha Durbar Vaidyakhana Vikas Samiti (SDVKVS), a government-owned entity, continues to bellow thick-black-pungent smoke as it produces ayurvedic and herbal formations.

Located in a dense urban locality beside Singha Durbar, Vaidyakhana’s manufacturing unit employs traditional mud-baked cook stoves fed by firewood. When Vaidyakhana states that “medical formulas at SDVKVS are an inherited legacy from the ancients who were pioneers of ayurvedic knowledge and practices,” maybe they misunderstood the traditional cook stoves as part of the inherited legacy. Vaidyakhana should be a modern-day museum, not a four-century-old production facility.

Vaidyakhana claims that its medicines and concoctions make people healthier. Maybe they do. But its production process is also slowly killing those that live around the facility.

Every year the kitchens of Vaidyakhana emit large volumes of smoke that is hazardous to inhabitants of the area, especially young children and the elderly. In the winter months, the soot hangs in the fog, turning the already bad air to almost toxic. The chimney (there are no smokestacks) are of short height, which conveniently hides the facility from public view but also dramatically concentrates pollution within a small radius.

How is it that a pungent smoke bellowing production facility still reliant on technology from four-centuries ago and directly impairing the health of those that live in the area is still allowed to operate in a dense urban locality? The story of the black smoke that spews from the chimneys of Vaidyakhana is a despairing tale of apathy, inequality, and vested interest.

For many years, residents around Vaidyakhana have filed complaints with local authorities, and Vaidyakhana’s management. These complaints have multiplied over the years, particularly as the density of people living in the area has increased. But these complaints have been met largely by disdain. How dare anyone complain against the “inherited legacy” of four centuries?

These complaints have also been easy to ignore because those most affected consist largely of poorer, lower middleclass or transitory residents (like students). They lack the ability to organize, mobilize or rope in other outside support. Most of their complaints have consisted of letters or brief meetings without the ability to follow up or draw attention to the issue.

The smoke bellowing from the chimneys of Vaidyakhana is an illustration of the fact that localized pollution is disproportionately borne by the poorest without the means to build pressure for corrective action. If all the vehicles in Kathmandu were replaced with electric ones, would that be environmental justice for those living under Vaidyakhana’s toxic umbrella? 

The kitchen and manufacturing facilities are a picture of a stunning travel back in time. The factory lacks any mechanised equipment, health and safety records are extremely poor and the production processes still relies on traditional inefficient methods. Vaidyakhana is a classic government-owned enterprise that has outlived its utility. It is hard to imagine the institution ever being profitable. More importantly, it is ironic that with such poor health and safety standards, and a production process that is poisoning its neighbours, Vaidyakhana is producing concoctions that is aiming to enhance the health of its customers. Really, who are we fooling?

Vaidyakhana is an opaque institution. It offers very little information about itself or its products. Its website is barely functional and expresses an air of complete and thorough indifference. Why does such a relic, doing more disservice than good, continue to receive government patronage and pollute with impunity? Greed.

The term “inherited legacy” is nothing more than a euphuism for vested interest. The land where the manufacturing unit is located is several times more valuable than the factory. A complex set of long-held contracts for raw materials granted invariably to the same set of contractors drives the incentives. Judging from the smoke and soot that it emits, even the firewood that they use is third rate.

Toxic smoke cannot be the only exhibition of how we are utilizing “four centuries of experience in the science of ayurveda and herbal formation.” Nepal needs cleaner, safer, and modern facilities to take advantage of its “inherited legacy.”   

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A new draft rule requiring all Nepali women under 40 years to get written consent from their family and local government office for travelling abroad is so absurd that when I first learned about it, I was convinced it was fake news.

Then protestors poured onto the streets. Domestic and international mainstream media began reporting on it. The whole thing felt like a bad dream, but it was totally real!

The draft rules were so outlandish and extraordinarily absurd that it even led The Guardian, a leading British daily, to insert the word “ridiculous” in the headline for the story. Clearly, even the editors couldn’t hold back on judging Nepal’s draft rule despite violating their own norms for reporting the news neutrally.

Immigration officials have been quick to respond that these rules are only a draft, and, if enacted, would apply only to vulnerable women.

Where do such absurd and outrageous rules, even if just a draft, come from? The story in this story isn’t just in the ridiculousness of the draft rules but the darker realities lurking below them.

Long before, women travelling abroad were routinely subjected to humiliating questions about why and with whom they were travelling, or how they could afford to do so. Things were already ‘ridiculous’ a long time ago. The draft rules, if enacted, will make the informal formal, plus a whole lot more draconian.

Through the proposed rules, the government was attempting to respond to Nepal’s human trafficking crisis. The National Human Rights Commission estimated that in 2018 approximately 35,000 people, which included 15,000 women and 5,000 girls, were trafficked primarily for the purpose of sexual exploitation, forced labor and organ removal.

Although human traffickers typically target girls and women from rural areas with limited economic opportunities, recent studies indicate that it has now spread to all districts. A few years ago, only half the districts appeared to have been affected.

Human trafficking isn’t limited to females. In Nepal’s case, male and transnational labor are an equally large group of trafficking victims, exacerbated in part by the rigid rules for outbound labor and the absence of safeguards.   

The 2020 trafficking report by the United States found that Nepal had made significant efforts to meet the minimum standards for the elimination of trafficking. It had, for instance, recently ratified the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons and previously the UN Anti-Trafficking-in-Persons Bureau Protocol. But Nepal still needs to do significantly more on building its institutional, legal, and law-enforcement capabilities to profile trafficking, enhance prevention, prosecution, and protection. Nepal remains far from meeting the minimum standards for the elimination of trafficking.      

Many Nepali non-governmental organizations work alongside the government, supplementing efforts on prevention, identification, rescue, and prosecution, in addition to providing victims with shelter and reintegration support. Working out of makeshift tin sheds in border crossings, often without adequate financial support, the commitment of these NGOs is an example of civil participation in the national effort to end human trafficking.

But Nepal’s civil society must also do more to deepen its engagement in reducing both internal and transnational human trafficking.

At its core, human trafficking emerges from the failure to provide Nepali men and women adequate and meaningful economic opportunities. While government policy and intervention are critical to addressing these challenges, there is an important role for civilian society in building and mobilizing the pressure for change.

The failure to provide opportunities, particularly for vulnerable communities, to the extent that it forces or tricks someone into being trafficked, is more a statement about our social failure than the government’s. Our economy thrives solely, and only, because we force millions of our men and women to sell their labor—and often their bodies—overseas: could there be any bigger national shame?

The “ridiculous” tragedy in the draft rules is that it unfairly requires written consent for overseas travel only from women. The real tragedy was that it didn’t require that from all Nepalis. It should have asked all Nepalis—men, women, old, young, everyone—to have written consent from families and local government for overseas travel.

As civil society we must all do more to acknowledge the deepening crisis of human trafficking. Absurd rules are not the answer. A meaning answer will only come when each one of us feels a direct sense of responsibility every time a Nepali becomes a victim of human trafficking.  

Views are personal

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A week ago, news broke that Nepal Electricity Authority (NEA), our monopoly state-owned electric utility, had lost its bid to sell electricity in India under a competitive tender.

For decades Nepali planners and development partners have been pushing the idea that Nepal’s fortunes lay in exploiting its abundant hydro power and exporting electricity to India. It was the stuff that dreams are made of, and on which our government had staked its plans to build some 10,000 MW of hydro power plants within the next decade.

The promise of hydro-power exports was so tantalizing that it even made the US Ambassador to Nepal, His Excellency Randy William Berry, famously remark in an op-ed in October 2019, “that is why the MCC [Millennium Challenge Corporation] project focuses on constructing lines that will bring Nepal’s power to the consumers who will pay Nepal good money for it. It is a simple fact of geography and economics that means India.”

The facts of geography and economics do not entirely support a case for hydro-electricity exports from Nepal to India. Nepal’s power is simply too expensive for India’s power market. NEA’s failed bid could be the first indicator of that harsh reality.

The authority’s price offer was approximately 30 percent higher than the winning bid, and that too, while already offering its power at a discount. India’s power prices are expected to decline in the future with increased renewable energy, efficiency introduced by power trading, continued excess capacity in its system and next generation reforms (such as retail deregulation). Nepal’s cost of power, on the other hand, will only increase.

Unless Nepal’s electricity carries with it a whiff of fresh Himalayan air, it is unclear why Bangladesh will travel all the way to Nepal for electricity purchases when cheaper, just as clean electricity is available across the border in India.

The case for Nepali hydro-power exports has always been built on imaginary assumptions. News that NEA had failed in its bid should have at least forced a reconsideration of that view. Instead, nothing of the sort happened.

Nepali energy planners offered no course correction. Stock prices of hydro power in Nepal remained steady. Developers of new hydro power plants continued to remain positive. In fact, the story barely made the news.

Those who believed in the promise of Nepali hydro power exports simply ignored the news. Those who did not believe, simply carried on saying “I told you so.”

Maybe it is important not to overreact to the loss. After all, it was the authority’s first ever bid for electricity export to India. The bid was for a small volume. With time, experience, and larger volumes, perhaps the NEA will be able to break into the Indian electricity market.

But we must assess this loss, no matter how insignificant it may be.

First, Nepal’s electricity strategy needs a stronger scientific and analytical basis. It would be wrong to bet the energy future of an entire nation on perceptions of geography and economics. But it would be tragic to get that bet wrong. Our strategic course must be more calculated, weighing the objectives, risks, and outcomes more carefully.

Second, Nepal’s energy sector needs greater diversity of thought. Though small, its energy sector is complex, operating under resource constraints and geo-political challenges. We need all minds, and the full diversity of resources, to work in tandem. Nepali planners must actively solicit and integrate a diversity of thought in their planning process, while also seeking to harness the full range of new energy technologies.

Third, the fundamentals for Nepal’s power sector have now changed for good. We must begin to plan for an alternative future, where Indian imports are our primary supply source. If Nepalis can receive cheaper electricity from India, why produce it here? After all, we import just about everything now—why not electricity too?

Fourth, if Nepal intends to be meaningfully competitive in Indian power market, it can’t do so by hiding in a cave up in the mountains. It needs a bolder strategy for success, a deeper understanding of Indian power markets, and a willingness to engage. Nepal must establish a trading company in India and demonstrate that it has the courage to compete.

Fifth, competition begins at home. The authority can’t be afraid of competing at home, while believing it can compete abroad. That’s a bit like showing up for the football world cup never having played a match before.      

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Only a few years ago Nepal was regarded as a textbook example of a successful transition to a communist rule. With the peace agreement following the Maoist insurgency, a new constitution for a federal republic, and unification between the two largest communist blocks, Nepal appeared poised for a long era of communist rule. Though the communists of Nepal adopted a wide range of banners—Marxists, Leninists, Maoists—a new kind of communism was taking shape.

A few years later, and Nepal’s experiment with communism is now in a disarray. The marriage between the two largest communist blocks—the United Marxist Leninists and the Maoists Center—has disintegrated. Each group accuses the other of being capitalist bourgeois, which in communist lexicon is the worst possible curse you could hurl at fellow comrades.

So, what went wrong? How did communism in Nepal go from hot to ice cold in just a few short years?

First, perhaps there were too many heroes. From the outside at least, the disintegration of communists in Nepal looks like nothing more than personal squabbling. There is a reason, perhaps, that Marx, Lenin, and Mao didn’t all happily coexist in the same country at the same time. Similarly, maybe so many strands of communism—and so many egos—cannot coexist in Nepal.

Second, we are discovering that the peace agreement that ended the Maoist insurgency and ushered in a new constitution, wasn’t a peace agreement after all. It was a stalemate in which neither side won, and both sides claimed victory. A central principle of the peace agreement was to establish truth, reconciliation, and justice for conflict victims. Without that resolution, the peace agreement is meaningless and undermines the legitimacy of the constitution and the State.

Without truth, reconciliation, and justice for conflict victims, the stalemate is a constant source of strife among Nepali communists. It offers a basis for those who believe in continued struggle (armed or otherwise). For those who have entered the mainstream, it is an easy threat—at slight discord, there is an insinuation of a return to conflict. Others dangle the threat of reprisal against those in the conflict. In the process, the peace stalemate offers the communists of Nepal a bargaining chip that they can tug and pull for their purpose.

Third, and perhaps the most understated reason for the failure of communism in Nepal, is their taking to centralized planning and development without the capability to deliver on it. Once at the helm, Nepal’s communists changed from being “enablers” to “providers.” Maybe they felt, the only way they could address the unleashed aspirations of Nepalis was to develop, design and implement large projects that were centrally planned and led.  

This is where the communists failed most spectacularly. Across time and different political regimes, Nepal has always lacked the systems, human resources, and financial capabilities to design, develop and deliver centrally-led development projects. Nepal’s greatest development successes have always come from decentralized community and local projects. Community forests, community schools, health, local infrastructure, or energy—Nepal’s potential lies in empowering local communities to take charge of their own destiny and enabling them to deliver on their own aspirations.

Once in power, however, the communists forgot the essence of their own strength—the fact that their uprising had been successful in part because they promised to empower local communities. They transformed from enablers to providers. Instead of forcing genuine decentralization that would enable locally-led development, the communists fell to the trap of promising larger, bigger, and even more ambitious projects from the center. Large projects got all the headlines, generated international financing, and fanned political egos but without the systems, capacity, and human and financial resources, these centrally-led projects simply failed in the same way that centrally-led project had failed under previous regimes.

The Nepal Communist Party’s electoral slogan of “Prosperous Nepal, Happy Nepali” exhibits their transformation from enabler to provider. The slogan creates the perception, and the expectation, that the State alone can deliver a prosperous Nepal, and Nepalis will be beneficiaries of that prosperity. It is a good slogan for a lazy country.  

A prosperous Nepal needs empowered Nepalis who can then take charge of their own destiny. For that, Nepal’s communists must return to their roots or drop the tag altogether.

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A federal structure with central, provincial, and local governments was to be the core basis of a new Nepal. But although it was meant to devolve decision-making to the local level, federalism has been one of the most disappointing and unrealized aspect of Nepal’s political transition. Instead of genuine devolution, federalism is emerging as a top-down conduit for managing disbursements to the local level.

Authority remains vested in the center. The constitution does devolve authority and responsibility to provinces and local entities. In practice, however, they are being structured to manage government disbursements and expenditures. Without meaningful emphasis on building revenue sources for local governments, federalism in Nepal will remain an empty promise.

Several promising new acts, such as the Local Government Operations Act 2074, delegate spheres of authority but do little to fiscally empower provinces and local entities to deliver on their responsibilities. Local governments remain entirely dependent on the center’s generosity.

Federalism in Nepal was a direct result of the Maoist movement. During constitution-making, the Maoist leadership strategically protected the space for federalism. Recognizing that federalism would be a contested issue, they drew the debate towards provinces—how many should there be, their names and geography.

While that debate on provinces raged, Nepal’s constitution quietly established 753 highly empowered local entities. These local entities, more than provincial authorities, represent the genuine basis for federalism in Nepal. The constitution combined federalism with decentralization, returning Nepal to its original state with many diverse and different entities before a king had unified them under one central authority.

Why is that Nepal’s vision of federalism and decentralization confined to paper, lacking the thrust to translate its principles into practice? Because the Maoist uprising only provided the political movement to establish a federal decentralized structure. An economic revolution is needed to realize it.  

The fight for genuine federalism represents the next phase in Nepal’s political transition—an economic revolution that will dismantle the concentration of wealth at the center, paving the way for genuine fiscal federalism and decentralization. Whether the Maoists will reinvent themselves to lead this charge, or a new alignment of forces will emerge, is hard to say.

Kathmandu, where the wealth and authority are most concentrated, is the battle ground. Much like the capture of Kathmandu was the final piece in the unification of Nepal centuries ago, the dismantling of Kathmandu’s economic stranglehold is now the final piece in the genuine decentralization of Nepal.

For evidence, start by looking at land prices in Kathmandu. Fuelled by access to cash, debt financing, lack of alternative investments, and short-term speculative transactions, Kathmandu’s economy sits on a giant asset bubble. Return on housing or commercial assets are a miniscule fraction of the underlying land value.

To visualize Kathmandu’s asset bubble, contrast the hustle and bustle of everyday life in the city with the quietness that prevails during Dashain and Tihar. Kathmandu is deserted then not because everyone is quietly celebrating at home. It is because most have left Kathmandu to celebrate the holidays with their families in other cities, towns, and villages around Nepal.

What would Kathmandu’s land and real estate asset prices be if the situation during Dashain and Tihar were normal everyday life? This is what genuine federalism would do to Kathmandu—suck out the pressure on land and burst its asset bubble.

The federal capital’s economy thrives by sucking in remittances, export earnings and foreign aid, before turning them around to fuel consumption across Nepal. As a trading, financial and administrative hub, it has very little productive capacity of its own—unlike other towns and cities in Nepal that draw in resources from surrounding areas and add some value.

Unlike other towns and cities, Kathmandu’s value comes entirely from its administrative positioning as the central hub through which everything must pass. That value is now under threat. Genuine federalism will erode Kathmandu’s unchallenged administrative position as the hub through which all earnings and consumption must pass.

Why does genuine federalism in Nepal require an economic revolution? Because genuine federalism will burst Kathmandu’s asset bubble. The impact will be felt largely by Kathmandu’s wealthy asset owners, though the economic fallout may be broader. At the same time, wealthy asset owners have too much at stake to let the asset bubble burst.

The parties to the conflict have now taken their positions. Nepal’s economic revolution is brewing.

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At 2 am on a cold January morning earlier this year, Prime Minister KP Oli woke abruptly in my fictional world drenched in sweat, heartbeat racing, and fists clenched. It wasn’t just that he was not well or that he had been briefed of a potentially deadly virus.

That morning, the prime minister was startled by a sudden realization of the two deadliest mistakes of his life. First, from some 50 years ago: Oli, then only a young firebrand communist, had led the Jhapa Revolt, beheading landowners. Second, three years ago on election-eve: Oli forged an electoral alliance with the Communist Party of Nepal (Maoist Centre), merged the two parties and secured an unprecedented mandate.

That cold morning, the prime minister awoke to a premonition of how the two greatest errors of his life would collide. It unfolded 12 months later, on Sunday, when in defiance of comrades in his own party, he recommended dissolution of a democratically elected parliament (the President complied), and called fresh election, earning himself the moniker of an authoritarian.

From revolution-provocateur beheading landlords to authoritarian-provocateur debasing the constitution, Prime Minister Oli has exhibited through his life and politics what all of us Nepalis have become. For his courage in reflecting our collective cowardice, Prime Minister Oli is my pick for the person of the year.

The odds were always against Oli. He was a rare survivor of the Jhapa Revolt. Most others were summarily rounded up and executed in a forest. He spent 14 years in prison, often in solitary confinement, peddling poems he had written in return for a few favors. Beyond his idealistic youth, his achievements are a story of endurance built on the philosophy of political expediency where the end justifies the means.

This philosophy of political expediency was in display when he responded in a 10-page letter to the charges levelled against him by party’s co-chair. In it, he documents how Prachanda, the co-chair, himself defied the constitution by disrupting the elections when Prachanda’s daughter was losing (party workers tore the ballots during the count, the results were annulled, and a fresh election ordered, which she won). Political expediency required the prime minister to simply ignore such a blatant violation of an election—the core of democracy—simply because the partnership was important at the time. The end justified the means.

The greatest tragedy of Nepal’s democracy was that one party won such an overwhelming majority. A coalition government would have been better, and offered more political stability, in establishing the institutions necessary for Nepal’s young democracy. Oli had put aside many years of bitterness and criticism about the Maoists when he announced the electoral alliance and subsequent merger of the two parties. It was simply political expediency, for he knew, just as almost everyone guessed, the combined party would return with a resounding victory. The end justified the means.

When Prime Minister Oli first took office in 2015, he immediately proclaimed five other revolutionaries of the Jhapa Revolution as national martyrs. Every year, around February, Nepal Communist Party gathers to remember the martyrs of the Maoist uprising and the previous armed movements, like the Jhapa uprising. No one pauses to remember the victims of the conflict.

Almost 50 years after the beheading of landowners, the families of those victims are still waiting for justice and closure. Approximately 2,500 complaints of disappearance and 63,000 cases from the Maoist-era conflict are pending at the Commission of Investigation on Enforced Disappeared Persons and the Truth and Reconciliation Commission.

Today, the prime minister’s decision to dissolve parliament is being debated in terms of democratic principles. But can there really be a discussion about democratic principles when thousands of families whose loved ones were killed, tortured, kidnapped, and displaced are still waiting for the justice they were promised? Our constitution and political progress have been written in blood. We have a peace accord but are still at war with each other.

The tragedy of this political turmoil is not that a stable government has fallen. The tragedy is that we, ordinary Nepalis, have simply forgotten the victims who suffered the abuses of conflict. Parliament may fall, a new one may arise. But Nepali democracy is meaningless unless the blood that drips on our consciousness is cleaned—not by the State but by us, the people of Nepal.

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Nepal must seek to feed India and Bangladesh, rather than merely fuel them (through electricity supply). A new, committed emphasis in Nepal’s agriculture has the potential to absorb the projected surge in electricity generation and create broad-based economic growth.

In a 2019 Asian Development Bank (ADB) publication—“Dysfunctional Horticulture Value Chains and the Need for Modern Marketing Infrastructure: The Case of Nepal”—Siddiq and Basher estimated that reducing Nepal’s post-harvest losses of fruits and vegetables by around 75 percent would yield annual savings of approximately $675 million. It will take approximately 3,000 MW of hydro power export to produce comparable annual earnings.

Around 80 percent of the country’s population lives in rural areas and is agriculture-dependent. This means that enhanced agricultural incomes from reductions in post-harvest losses could touch the lives of some 22 million Nepalis. Hydro-export based earnings, on the other hand, would touch maybe a few thousand directly employed in the industry.

Today, Nepal has just under 1,500 MW of hydropower capacity; and has an aspirational plan to add another 15,000 MW within the next decade. It has spent the past 15 years pursuing India to open its electricity markets, leading to a historic power trade agreement in September 2014. In the years since, Nepal has spent approximately $550 million in electricity imports from India and expects to export electricity worth approximately $10 million this year. Over the same time, some $4 billion of our agricultural products rotted away.

Nepal must, of course, harness its great hydro potential. Seeking opportunities for electricity exports to India and Bangladesh is, no doubt, necessary for that. But we cannot rely on the stars twinkling in distant skies alone. The great bounty of hydropower generation must also spill over to enhance our competitive position in agriculture and get our economy roaring again. 

Nepal’s agriculture is a story of great promise overwhelmed by insurmountable constraints. Governments have tried, pouring in billions of dollars into a wide range of programs. Over the years, however, the constraints have only deepened and hardened. 

Suddenly now, however, the promise of abundant electricity supply, in combination with other socio-economic factors, has opened an unprecedented opportunity to radically transform agriculture.

First, Nepal’s agriculture is ready for massive mechanization. In fruits and vegetables, for instance, where Nepal holds the greatest competitive advantage in exports, there is a need for investments in post-harvest management, storage, and distribution. These require cold-storage networks, refrigerated transport, and supply chain, not to mention the mechanization of upstream activities in agricultural methods. Unlike before, Nepal is now well-positioned for mechanization as outbound migration has reduced labor availability. Faced with acute labor shortages, Nepal’s farmlands now welcome mechanization. Investments in mechanization are only possible if there is a promise of abundant and reliable electricity supply. 

Second, digital technologies offer opportunities to aggregate and scale Nepal’s agricultural production in ways not possible before. Distributed small farm holdings, each producing a little, was a core challenge. Digital technologies can help overcome that challenge, aggregating production by eliminating information asymmetry, connecting buyers and sellers, relaying information, and facilitating trade. Advances and access to digital technologies like blockchains, information platforms, data and analytics now make it possible to be as competitive with one apple tree as with a thousand. Such digitization can only be enabled if there is an underlying belief in our agricultural prospects, and a promise of abundant and reliable electricity supply. 

Third, for a country with such abundant water resources, Nepal’s agriculture is hopelessly parched, dependent almost entirely on rain. Every inch of Nepal’s agricultural land could be irrigated to enhance the predictability and competitiveness of our production. There is enough water to get around, and now abundant and reliable electricity to push water to the fields where it is needed.

To embark on this vision, the government must overhaul its approach to agriculture. One way perhaps may be to focus primarily in establishing agricultural standards and testing so that aggregation, management, transport, commerce, and export are enabled, while letting the private sector take the lead in establishing supply chains, digitization, aggregation and market creation.

But if I were the agriculture minister, an easier place to start may be to call the Minister of Energy, Water Resources, and Irrigation, and say, “Hello Comrade, how much electricity can you produce? I’ll buy it all.”

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The United States offered Nepal $500 million in grants for the construction of transmission lines and strategic roads through the Millennium Challenge Corporation (MCC). It was meant to be a transformative deal: a grant large enough to unlock in one stroke the most important chokepoints in Nepal’s power sector.

Instead, the MCC project got mired in a debilitating national debate, forcing the government to delay its discussion in parliament. Why did a transformative deal evoke such a fierce public debate?        

Many have attributed this to Nepal’s usual political squabbling or some geopolitical machination. But such simplistic explanations cloud other meaningful reflections.

No matter how the government comes out on the MCC, there is plenty to learn from the debate itself.

The debate showed that political power in Nepal is more diffuse than is believed.

The public debate only flared up late in the process, as the compact was to be presented in parliament. The debate’s speed and intensity surprised many.

Prior to the start of the debate, public communications around the compact were sparse. The collective set of public comments by handlers, both in the MCC and the government, presents an illuminating picture of presumptuous arrogance: the old presumption that if you convince five people at the top, everyone else will follow.

Nepal has changed. Welcome to the cacophony (or inconveniences) of democracy.

In the 12 months since the start of the debate on MCC, Nepal has borrowed approximately $500 million—equivalent to what the MCC offered—from the World Bank and Asian Development Bank. Why should these borrowing not be subject to the same level of transparency, discourse, and parliamentary approval? Who will be held accountable if these loans prove unproductive?   

Where the debate will lead us is unclear, but the discourse itself is critical to establishing accountability.  

The debate exhibited that the promised benefits (for example employment, income, economic growth) from building thousands of megawatts worth of hydro power plants are either not tangible enough or the public doesn’t believe it.

By the time the debate had started, load-shedding had ended and the benefits of MCC projects centred entirely on illustrating the economic gains from new power plants. These benefits were estimated and presented.

Against the promise of so much benefit, opposition to the MCC centered on perceived loss of sovereignty. Why was it that so many Nepalis were drawn to arguments about the perceived loss of sovereignty despite the opportunities for economic benefits from building new power plants? Because, not many in Nepal believe in these economic benefits.

Nepalis care for electricity and having adequate supply. But the idea that building many new power plants will lead to tremendous growth just didn’t resonate enough. Why? Perhaps because, thus far in Nepal, the process of building hydro plants has benefited only a small group.     

The tragedy for the MCC is that load-shedding ended three years too early. If the MCC project had arrived in parliament earlier in the load-shedding era, and had it argued for an end of power cuts, the compact would have passed immediately. End of load-shedding—highly tangible, we all felt its pain. Prosperity from building new hydro plants—too abstract and hypothetical, which only a few have enjoyed so far.

The debate also highlighted the need for Nepal to establish centers that could serve as sources for credible neutral information.

The MCC compact with Nepal was an innovative design but also a complex structure, clearly new for Nepal at many levels. It required an act of parliament, a bilateral agreement with a third country, an odd inclusion of a small investment in “strategic roads” within a project on the power sector, and raised questions about Nepal’s ability to compete in Indian power markets.

There was enough in the agreement for everyone with a point of view. This was exactly what happened as the debate exploded. The discourse spun out of control, feeding a frenzy from the absurd to the fantastical.

Where should ordinary Nepalis turn to for reliable and credible information while in the midst of a scorching debate? To answer that question, those in authority must first acknowledge that ordinary Nepalis have a right to know, and second, that their views matter.        

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