Importance of digitizing Nepal’s supply chain

Nepal’s logistic sector needs to work towards transforming supply chains through digital platforms and technologies. Despite the rapid advancement of the global supply chain, we continue to rely on traditional methods. The World Bank has been suggesting the government on the agenda of digitalization, but a lack of coordination among government stakeholders has been obstructing the move. The integrated border management system (IBMS) from the World Bank will help streamline the border issues as well as help proper planning from the transit point until the logistic centers and electrical cargo tracking (ETCS) system of ADB with some amendments would help in the transit and domestic flow of goods. The trade facilitation and cross-border paperless trade agendas have been pending for a very long time with little to no activities. Further, involving freight forwarders in the Nepal National Single Window (NNAW) is pending .

The bilateral and regional agreements are all being executed in a very traditional manner, without incorporating modern automation and digitalization mechanisms to ease business and increase traceability, predictability, and accountability to facilitate and meet global supply chain demands.

The customers demand and expect faster, more transparent, and personalized service. To meet their expectations, we need to utilize digital platforms to enhance the customer experience through better tracking, faster delivery, and improved communication to ensure seamless integration of data across different systems and platforms associated with government and private sector service providers. This demands developing data formats and communication between actors in trade facilitation. Another significant challenge is adopting new technologies, scaling them throughout the supply chain through pilot projects in controlled environments before scaling, and making sure these components are simple to integrate and adapt.Protecting sensitive supply chain data from cyber threats is another important and burning issue. Implementing cybersecurity measures, such as encryption, multi-factor authentication, and regular audits, can overcome this by ensuring the accuracy, consistency, and timeliness of data across the supply chain. Data governance policies, as well as the use of data validation tools to maintain high data quality and implement digital signatures, could be useful methods.

The cost factor associated with implementing new digital technologies is high. Still, there is a need to do a cost-benefit analysis and seek cost-effective solutions or phased implementation approaches to manage cost factors. Implementing automation through digitalization has proven successful in many countries, as it helps monitor the flow of goods, documents, money, data, and information among all those associated with the supply chain.

It is essential to change the mindset and adapt to change management by motivating the workforce through proper training, enhancing their digital knowledge, and addressing cultural and operational changes within organizations such as the Departments of Customs and Commerce, as well as both private and government logistic service providers.

Therefore, developing comprehensive training programs and change management strategies to help employees adapt to new technologies is a must, as is setting fixed regulations and standards across different actors and government support agencies to ensure compliance through regular audits. Another challenge is balancing digital transformation with sustainable practices to lessen environmental impacts through monitoring and evaluation. Other precautions include integrating new digital technologies with existing systems using middleware solutions and gradual transition strategies to avoid disrupting operations.

The transition to digitalization in the supply chain requires many issues to be addressed. Some issues require a strategic approach, leveraging the latest digital tools and technologies while ensuring alignment with overall business objectives and maintaining flexibility to adapt to future changes. Implementing IoT devices, real-time tracking, and advanced analytics to monitor and optimize supply chain performance will enable real-time visibility for analytics purposes while also easing the process of doing domestic and international trade.

Editorial: Another turn of the wheel

The frequent change of governments has been an usual phenomenon in Nepal. The country has not been able to see political stability even after promulgating the new constitution and holding two periodic elections. Although Pushpa Kamal Dahal has been at the helm of government since the November 2022 elections, despite his party finishing a distant third in the parliamentary polls, he has reshuffled cabinet 18 times by changing his coalition partners. In this scenario, the recent agreement between the two largest parties in the House of Representatives, Nepali Congress (NC) and CPN-UML, to form a coalition government offers some hope for a more stable future. 

The 2015 constitution, which has been hailed by Nepali leaders as among the best in the world, has contributed to political instability. No single party has been able to secure a clear majority, leading to a series of fragile coalition governments. The agreement between the two major parties to form a consensus government by bringing other parties on board, however, signals a shift toward more stable governance. This agreement, which covers issues ranging from constitution amendments to the formation of a lasting government at both center and provinces, has raised optimism among Nepalis who have long yearned for political stability and economic progress.

The new government has some pressing issues to deal with. The two parties have pledged to form a committee to amend the constitution. The amendments should address all the issues that are hindering implementation of federalism. The coalition must work toward amending the constitution to address existing barriers and create a more effective governance structure. Completing the peace process through appropriate transitional laws is crucial for national reconciliation and stability. It has been one of the major contentious issues for the three major parties in parliament. Likewise, improving administrative efficiency and public services should be a top priority to restore public trust in the government. Once the political situation becomes stable, it is expected to spur economic activities and create jobs, which is essential to address the growing discontent among the people, particularly the youth.

The new coalition must rise above personal and party interests. This union of two largest parties in the country is not only crucial for domestic progress but also to present a strong front against increasing external influences that threaten Nepal's sovereignty. The success of this coalition could be the turning point that the country has long awaited, paving the way for sustainable development and renewed hope for the people.


 

The Week That Was

Dear readers,

 

This week, the political landscape was dominated by a crucial agreement between the Nepali Congress (NC) and CPN-UML. These two parties have pledged to ensure much-needed political stability and to amend the 2015 Constitution to address certain “flawed provisions.” We covered this agreement from multiple angles, including a long-form article titled “The Story Behind the Formation of a New Coalition,” which explains how and why the two parties came together. We appreciate our readers’ enthusiastic response to this story. Additionally, we published a commentary titled “Can the NC-UML Alliance Bring Stability?” which questions the longevity of the to be formed government, given the parties’ past difficulties in working together.

The full text of the agreement signed by NC leader Sher Bahadur Deuba and CPN-UML leader KP Sharma Oli has not yet been made public. With the UML pulling out its support, the Pushpa Kamal Dahal government has been relegated to the minority, but he is refusing to step down. Dahal may use constitutional provisions that allow him to face parliament within 30 days. 

Meanwhile, there are widespread concerns about the contents of the proposed constitutional amendments by NC and UML, particularly among Madhes-based parties and other groups advocating for identity politics. There are also questions about which external forces may be influencing these political developments. Speculations abound, but no definitive answers are available. Rumors suggest that Dahal’s refusal to resign might be influenced by external advice, allowing time for preparations to continue the current coalition with Deuba as prime minister. Attempts to find clues in Indian and Chinese media were inconclusive.

The agreement between Deuba and Oli has been endorsed by both parties, but it has caused some dissatisfaction as well. NC General Secretary Gagan Kumar Thapa was initially opposed but has since accepted the agreement. Similarly, there are reservations within UML, but both Deuba and Oli have a strong grip on their parties, making significant disruptions unlikely.

In another development, the Rastriya Swatantra Party (RSP), which emerged from the 2022 national election, is facing an internal crisis. Party Chairman Rabi Lamichhane and General Secretary Mukul Dhakal are at odds, with Lamichhane expelling Dhakal for allegedly violating party discipline. Dhakal’s symbolic protest at a party meeting, where he taped his mouth to give a message that there is no freedom of expression in the party, highlights the issue of intra-party democracy, a common issue in all political parties of Nepal.

Now onto some positives. Despite these political challenges, there has been progress in concluding the transitional justice process. The NC, UML, and the Maoist Center have formed a cross-party mechanism to address remaining contentious issues of the constitution. This team consisting of Ramedh Lekhak from NC, Mahesh Bartaula from UML, and Janardhan Sharma from the Maoist party has already started its work. The transitional justice process, initiated on the basis of the Comprehensive Peace Agreement, 2006, remains incomplete, but there are plans to endorse an amendment bill in the ongoing Parliament. However, new political developments could delay this process further.

China’s Belt and Road Initiative (BRI) continued to draw attention this week. Congress leaders reiterated their position against taking loans under the BRI, which does not offer grant provisions. Additionally, Parliament has formed panels to investigate alleged corruption in the construction of Pokhara and Bhairahawa International Airports. Meanwhile, the Nepal government has published a concept note on the use of Artificial Intelligence (AI) and needs to accelerate efforts to regulate AI, a topic that still lacks widespread understanding in Nepal.

This week, the infamous fake Bhutanese refugee scandal once again made national headlines with the arrest of Bechain Jha and Pratik Thapa, the son of former home minister Ram Bahadur Thapa. This marks a significant step in the investigation involving former ministers, their relatives and senior government officials. Cooperative scandals also made headlines this week, with police arresting many cooperative owners based on public complaints. A probe panel has been set up to investigate these cases. Home Minister Lamichhane has assured to investigate all past high-profile corruption cases. But the latest political alliance between NC and UML means Lamichhane’s days as home minister are numbered.

This week, CPN (Unified Socialist) led by former prime minister Madhav Kumar Nepal held its generation convention. The convention unanimously elected Nepal as party chairman and Ghana Shyam Bhushal as general secretary. The same set of leaders have returned as party office-bearers. Bhushal’s attempt to displace Nepal has turned futile. The NC-UML agreement at the center has started to impact the provincial government. For instance, UML has withdrawn the support to the Sudurpaschim government. 

 

I will be back with more updates next week. Wishing you all a happy weekend!


 

RSP suppresses freedom of expression

Rastriya Swatantra Party (RSP) has decided to discuss the issue of Mukul Dhakal, general secretary of the party, gagging himself at the recently-held central committee meeting of the party. RSP decided to discuss the matter in its official meeting hours after it hit the headlines, much to the discomfort of the party.

Dhakal had sought a live telecast while presenting the review report at the central committee meeting. However, as most of the party members reportedly opposed his demand, Dhakal protested by taping his mouth over the violation of the right to expression. 

The party’s secretariat meeting held on Tuesday had decided to allow Dhakal to present the report. But later Rabi Lamichhane nixed the decision, after which joint general secretary Kabindra Burlakoti presented the report.

The RSP’s disciplinary committee has sought clarification from Dhakal for leaking the report to the media.

Dhakal had prepared the report after traveling across 39 districts and interacting with party leaders and cadres in 39 districts as per an RSP directives in the wake of a poor showing by the party’s candidate Milan Limbu in the recent by-elections held in Ilam-2. The idea behind the order was to catch the pulse of the electorate.    

Dhakal’s report has concluded that RSP cannot become a national party if it does not mend ways. 

The report has recommended the party to move forward with independent elected representatives such as Balen Shah and Gopi Hamal to improve its prospects in the next elections.