Submit your Article

A few weeks ago, farmers from Chitwan staged a demonstration by dumping their vegetables on the streets in protest of the government's inability to establish a viable market for their agricultural products. Soon after, farmers in Ilam followed the suit, this time dumping eggs and chicken on the streets. While consumers in cities like Kathmandu complain about high prices, farmers often claim that middlemen hold too much power. The problem of market imbalance is not limited to Nepal's agricultural sector; it also extends to other small industries, where producers face undue use of market power by middlemen and retailers, resulting in increasing prices for consumers. Since cooperatives have been used globally to tip the scale when unfair market practices hurt either producers or consumers, Nepal can also promote cooperatives as a way to improve competition and ensure the sustainability of businesses. A cooperative is a member-owned business established with the primary goal of serving its members. In this business model, the consumers of a cooperative's products and services are mostly its owners. The primary focus of the cooperative is service to its members, but like any other business, they must strive for profitability. Such profit is shared among members or used as a reserve to offer future products at lower rates. As a result, cooperatives have been globally adopted as a way for producers and consumers to protect themselves from the influence of middlemen and monopolistic businesses, and as a means for people to help themselves when other businesses don’t find it profitable to do so. While in Nepal, the term "cooperative" is often associated with savings and credit services, cooperatives around the world also work in areas of production, marketing, distribution, etc. Membership of a cooperative is open for everyone and can be obtained or relinquished at will. Unlike profit-making businesses, every member, regardless of their financial contribution, is entitled to a single vote in matters concerning the cooperative. The members elect a board of directors for governing a cooperative. In terms of operation, cooperative businesses may appear similar to privately-owned businesses, but they retain elements of democracy and prioritize collective benefit. Although cooperatives are not a perfect business model, they provide a unique and valuable alternative that helps to counteract some of the undesirable aspects of capitalism. Recognizing this potential, the Constitution of Nepal has placed heavy emphasis on co-operatives as a means for attaining economic growth. However, co-operatives are not immune to challenges. They face intense competition from corporate businesses, which have more streamlined management. The co-operative model also may be difficult to implement in ventures that require significant capital investments. Additionally, the democratic structure of co-operatives, in which every member has an equal vote, can lead to power struggles and politics within the organization. And just like any other business model, the success of a co-operative also depends on a number of other internal and external factors. And although co-operatives can play a role in mitigating some of the negative impacts of capitalism, they are not a replacement for capitalism as a whole. At first glance, co-operatives often tend to be associated with rural economies and small-scale industries. However, this assumption is far from the truth, as co-operatives have proved to be successful in large and complex businesses as well. A prime example is Amul, a brand that started as a co-operative society of farmers of two villages in Gujarat, India, in response to the exploitative practices of middlemen, in 1946. Today, it is jointly controlled by 3.6 million milk producers in Gujarat and has an annual turnover of approximately$7 billion. Another successful co-operative is IFFCO, which has an annual revenue of approximately $3.5 billion and produces and sells fertilizers in India. Established in 1967 by farmers with support from the Indian government, IFFCO operates multiple fertilizer plants throughout India to provide affordable and high-quality fertilizers to farmers. In the United States, co-operatives offer affordable healthcare and energy supply to their members. One notable example is Hoosier Energy, which was established in 1949 by farmers in Indiana to power their homes and farms. Hoosier Energy is a generation and transmission cooperative that supplies electricity to its member co-ops, which then supply electricity to consumers. Electric cooperatives came into existence in the US when the investor-owned utilities were either unwilling to serve in remote areas due to a lack of profitability or where residents sought more affordable options. Mondragon Corporation, founded in 1956 as a small workshop producing paraffin heaters in Basque, Spain, has grown into the world's largest worker-owned multipurpose co-operative. With operations in finance, retail, manufacturing, and education, it demonstrates the versatility and success of the co-operative model. Even the beloved football club, Barcelona, operates as a co-operative institution. Recently, some co-operatives in Nepal have experienced a severe liquidity crisis, raising doubts about the overall stability and sustainability of the co-operative sector in the country. But cooperatives still hold potential for the country and can play a crucial role in promoting economic democracy. They can also be a valuable tool for advancing aspirations of social democracy enshrined in the Constitution of Nepal. Some cooperatives operating in Nepal have already proved exemplary in terms of production and marketing of products of rural areas. With some additional effort, Nepal can use the same model to derive more value to the producers. Co-operatives also have potential in terms of creating a platform for member consumers to source goods and services by negotiating prices and terms directly with producers. In this regard, they can serve as an efficient alternative to not just profit-oriented retailers but also certain government corporations. In Nepal, the co-operatives model also holds prospects in various other industries such as electricity, telecommunication, sports and recreation, transportation, health and insurance, in terms of increasing the competitiveness of the sector and making them more consumer-focused. Historically, successful co-operatives have emerged when individuals have prioritized communal benefits over personal gains. However, the government also has an important role to play in protecting and promoting those co-operatives. In India, the significance of co-operatives had been acknowledged early on, and the success of organizations like Amul and IFFCO can be attributed to government ownership and backing. The recent creation of the Ministry of Cooperation in India further demonstrates the country's commitment to using co-operatives for its development. The Government of Nepal should learn from India's experience in incorporating co-operatives into its economic development plans. In Nepal, a significant portion of the population does not understand the business model and benefits of co-operatives. In fact, the topic is even overlooked in academic curriculums. To address this gap, co-operatives should be incorporated into curriculums, so that new generations can understand and embrace this model for solving common problems. Additionally, taking steps to raise public awareness on co-operatives can encourage people to choose this model as a means of addressing their shared challenges. Last but not the least, the role of regulators for co-operatives is also crucial in promoting knowledge about co-operatives, resolving conflicts, ensuring good governance, and facilitating access to government benefits and incentives. The author is an MBA and a student of Law

At a time when there is a huge flight of capital from the country in the form of education bills for the study abroad of Nepali students, Nepal is also earning foreign currency from international students who're coming to study in the Himalayan nation. The latest macroeconomic report published by the Nepal Rastra Bank (NRB) shows there has been a huge growth in foreign currency income through foreign students coming to Nepal in this fiscal year. The central bank data shows the country earned Rs 1.52 billion in the first half of FY 2022/23 from foreign students, an increment of a whopping 102 percent from Rs 754.2 million in the same period of the last fiscal year. Nepal earned Rs 1.51 billion from foreign students studying in the country in FY 2021/22. According to NRB, such earning was Rs 1.04 billion in FY 2020/21 and Rs 2.23 billion in FY 2019/20. The forex earnings from education declined in the last two fiscal years due to the Covid-19 pandemic as foreign students could not come to Nepal. However, with the easing of international travel, there has been a surge in the number of foreign students studying in the country lately. Apart from subjects such as history and language, the majority of foreign students come to Nepal for medical education. According to the Medical Education Commission, 265 foreign students were enrolled in medical colleges in the last fiscal year. According to the commission, students from Bhutan, Sri Lanka, India, Pakistan, and other countries come to Nepal for medical education. Currently, about 500 foreign students are studying at different medical colleges in Nepal. Similarly, foreigners also come to study language, history, law, and other subjects. However, government entities do not have integrated data on the number of foreign students studying in Nepal. When foreign students study in Nepal, a large amount of money is spent on educational fees, housing expenses, etc. Education experts say that if the standard of the country's education system is improved, Nepal can attract more foreign students as well as earn more foreign currency. While there has been growth in the foreign exchange earnings from international students coming to Nepal, the country is spending a much higher amount to pay the bills of Nepali students who're studying abroad. As more Nepalis have been going abroad to study in recent years, more money is going outside the country for the purpose. The NRB report shows Nepalis have spent Rs 35.35 billion in the first six months of the current fiscal year for foreign education. Such spending amounted to Rs 67.70 billion for education abroad in the last fiscal year 2021/22 which had surged due to the suppressed number of outgoing Nepali students in the previous two fiscal years due to Covid-related restrictions. In FY 2020/21 and FY 2019/20, spending for education decreased to Rs 24.95 billion and Rs 25.81 billion, according to NRB.

The Nepal Electricity Authority (NEA) is planning to study if the high-volume transmission of electricity through the Dhalkebar-Muzaffarpur transmission line would cause any voltage-related problems in Nepal after the Indian side raised concerns on the matter. At a time when Nepal has been requesting India to allow Nepal to sell an extra 681MW of electricity in the upcoming monsoon season due to the surplus energy production in the country, the Indian side has pointed out the possible weakness in Nepal’s power transmission infrastructure. During the meeting of the joint technical team on energy cooperation held about two weeks ago, the Indian side warned about the possible voltage problem while transmitting a big load at the same time through this cross-border line. “We've told them that we will conduct a study on the issue,” said an official of NEA. “There will be a study on whether infrastructure could be improved by adding capacitors and condensers.” According to the official, the infrastructure should be able to sustain the flow of a high quantity of power loads at the same time. “We have been seeing the problem of low voltage power supply in the Tarai region during the hot climate when demand for power grows,” the official said. The infrastructure shortcomings on the Nepal side have been pointed out at a time Nepal is desperate to export more power in the upcoming wet season which will begin in June. Currently, India has allowed Nepal to sell 452MW of electricity generated by 10 hydropower projects in the Indian power market. According to an official of the Ministry of Energy, Water Resources and Irrigation (MoEWRI), Nepal has requested India to allow exports of 681MW of extra electricity during the meeting between Deputy Prime Minister and Energy Minister Rajendra Prasad Lingden and Indian Foreign Secretary Vinaya Mohan Kwatra on Tuesday. The Dhalkebar-Muzaffarpur Cross Border Transmission Line is the only 400kv capacity cross-border line, which can transport around 1,000MW. Currently, there are other 11 cross-border transmission lines with capacities of 33kV and 132kV, and the lines can transfer electricity between 5MW and 125MW only, according to a white paper on energy issued by MoEWRI in May 2018. Nepal and India will be discussing improving the infrastructure of the Dhalkebar-Muzaffarpur transmission line on the Nepali side during the 10th meeting of the joint secretary-level Joint Working Group and secretary-level Joint Steering Committee on energy scheduled to be held on February 17-18 in New Delhi, India. “As the recommendation of the joint technical team should be endorsed by the Joint Steering Committee, we are taking this issue to this meeting,” the NEA official said. Nepal has been facing problems to transfer electricity from one location of the country to another due to poor transmission infrastructure. Even though Nepal has been importing electricity from India during the dry season, it has failed to transport the imported electricity to the Birgunj area due to the lack of high-capacity power line and the NEA has been imposing load shedding there for the industrial consumers for the last two months. Likewise, there is also no high-capacity cross-border transmission line between the two countries except the Dhalkebar-Muzaffarpur transmission line. ‘That’s why we are proposing with India to develop two more cross-border transmission lines in the upcoming meeting,” said a senior MoEWRI official. Nepal will request India for developing 400kV Inaruwa (Duhabi)-Purnia and 400kV New Lamki (Dodhara)-Bareli cross-border transmission lines. “There will also be a discussion on improving the capacity of low capacity cross border power lines too,” the MoEWRI official said.

Indian Foreign Secretary Vinay Mohan Kwatra held marathon meetings with Nepali leaders and ministers during his two-day official visit to Kathmandu. As this was the first high-level visit from India following the formation of a new government in Nepal under Prime Minister Pushpa Kamal Dahal, Kwatra wanted to know first-hand the latest political situation in Nepal, including the upcoming election of the president. While officials from both Nepal and India have not mentioned anything about Kwatra’s message to the Nepali leaders, a senior NC leader said India is concerned about the upcoming presidential election in Nepal. The leader said India is also in favor of the NC and CPN (Maoist Center) coming together once again. A government source said although India is trying to stay neutral on the issue of Nepal’s presidential election, it does prefer a non-UML candidate. India in recent years has tried its best to keep out from the political affairs of Nepal. After Nepal promulgated a new constitution in 2015, India, for a couple of years, pressed Nepal’s major political parties to address the demands of Madhes-based parties. It also imposed an undeclared border blockade, only to see the move backfire in the form of rising anti-Indian sentiments among Nepali public, and parties like the UML cashing in on this feeling to win elections and take a pro-China approach. Indian officials say they have taken a policy of working with whichever party comes to power. Political analyst Vijaya Kanta Karna said the main purpose of Kwatra’s visit is to convey the message that India is ready to work with the new government led by Prime Minister Dahal. The visit, he added, also has a geopolitical significance because it came on the heels of a series of high-level visits from the US and China. Despite India’s so called hands-off approach on Nepal, India’s preference is not hidden. It wanted the continuation of the NC-led five-party coalition following the Nov 20 general election. During his stay in Nepal, Indian Foreign Secretary Kwatra met, among others, President Bidya Devi Bhandari, Prime Minister and Maoist Chairman Dahal, NC President Sher Bahadur Deuba, UML Chairman KP Sharma Oli, and CPN (Unified Socialist) Chairman Madhav Kumar Nepal. Kwatra also set the tone for PM Dahal’s India visit, which is likely to take place after the presidential election scheduled for March 9. He tentatively discussed the possible agenda for Dahal’s visit. Kwatra also held an official meeting with his Nepali counterpart Bharat Raj Paudyal and reviewed various aspects of bilateral relations, including connectivity, trade and transit, power sector cooperation, agriculture, and education. India has stepped up connectivity projects in Nepal. The Ministry of Foreign Affairs said the two sides reviewed with satisfaction the progress made in connectivity projects such as railways, transmission lines, bridges and integrated checkposts. Nepal and India also discussed the early conclusion of the renewed transit treaty, review of the trade treaty, and convening of the inter-governmental committee on Trade (IGC) at an early date. Power trade between two countries also prominently figured in the bilateral talks. The ministry said the two sides expressed commitment to allowing the export of power from Nepal to India on a long-term basis by utilizing all products of the exchange market. Technical issues regarding the upgrading of cross-border transmission lines and early approval of the four proposed transmission line projects were also discussed. Foreign Secretary Paudyal also reiterated Nepal’s request for additional air-entry routes as well as early concurrence of the near-border flight operation of Gautam Buddha International Airport. As for boundary disputes between the two countries, including in Susta and Kalapani, there was no substantial discussion. The ministry said the two secretaries discussed boundary matters, where they exchanged views on completing the boundary works in the remaining segments through an established bilateral mechanism.