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Rajesh Kumar Agrawal, the president of the Confederation of Nepalese Industries (CNI), has been involved in Nepal’s manufacturing sector since 1992. As the executive director of RMC Group, he oversees a diverse portfolio of products spanning cement, steel, and food industries. With 30 years of experience in the business, Agrawal has developed a profound understanding of financial management, ensuring the company’s financial stability and consistent profitability over the years. Kamal Dev Bhattarai and Pratik Ghimire of ApEx spoke to Agrawal about the state of the country’s economy and more. Excerpts:

What situation is our economy currently in?

Our economy is still going through a difficult situation. The official data shows improvements in some areas such as foreign exchange reserves, banks are loaded with cash, interest rates are going down among others. However, on the other side, we see that our exports are not increasing, in fact, they are decreasing gradually over the past three years and the government’s revenue is not increasing. Although some data shows an increase in revenue, we still need to conduct analysis to ascertain the actual situation. According to the statistics of the Gross Domestic Product (GDP) of the last three quarters, there is not a visible improvement. Last year’s projected GDP was 3.87 which is mainly due to the contribution of the energy sector. Production and manufacturing sectors are still in the negative growth—they are not doing very well. Due to a low aggregate demand, the economy is not able to take off. 

However, I don’t see low exports as the most alarming economic concern for us because production needs to increase first in order to see a growth in exports. Production itself is low in our economy right now. The sector’s contribution in our GDP is decreasing. In such a situation, how can our exports increase? In some sectors, exports are increasing such as IT. But for production and manufacture based products, exports will only increase following an increase in production. Therefore, the CNI sees a push in production as the main goal rather than an increase in exports. Unless we are self-sufficient in the production of any good, there is no possibility of exports. For example, we used to import cement. After the government’s support, the production of cement within the country increased and we became self-sufficient. Since the last two years, we have been exporting cement as well. Therefore, low exports are not the major issue of concern, the main problems currently at hand are decreased productions and increased imports.

Post covid, countries in Asia and worldwide seem to be improving their aggregate demands. Why is it that Nepal has not seen any improvement whatsoever?

The main reason is policy-induced slowness in the economy. The pandemic was an unimaginable period that no one had anticipated. However, after that, the policies we adopted have caused the situation we are currently in. There is no other reason or any external shock. For example, the policy to reduce demand and increase interest rate was introduced in order to influence currency rate. The rate, however, was influenced entirely by our exports and was out of our control. Our decision to introduce such a strong policy resulted in an increased amount of imports, which put pressure on our foreign currency rates. Then, we moved towards a policy to ban imports. This caused panic in the economy. We had to take a loan from an international organization, which had its own set of terms and conditions. To fulfill those terms, we introduced some new policies. 

Loans in the private sector increased. We introduced policies to reduce these loans. Then, there was a boost in the real estate industry. We focused on controlling the prices. Then the share market boomed, and our focus shifted on controlling that increase. All these controlling policies continue to have effects on our current economy and we still bear consequences. The CNI believes that we are experiencing a policy-induced slowness. And the policies that were adopted due to whatever reasons at the time should have been reversed after a year. Some policies were reversed to some level in the last year but it happened too late. Therefore, its consequences still occur and will remain for quite some time.

The policies that we adopted for our imports out of panic are the biggest blunder that happened in the last five years, is that true?

That is not the only reason. It has not caused a major effect in the internal production sector because the policies were to ban import of luxurious goods. The main effects the policy had was on a sentimental level among the citizens. It generated fear regarding the future of the economy, affected government’s revenue, and gave rise to illegal business. The policy we took to lower demand and increase interest rates and to reduce loans in the private sector made major impacts. All the policies we adopted acted as a brake to our economy. If we slowed down gradually at a slower rate, the economy would absorb better. We could have increased interest rates by 0.25 or 0.5 percent as internationally advised, but we adopted a drastic two percent increase even when the situation did not favor. Policies were changed so fast that the economy was unable to keep up. All these controlling policies had an effect on cooperatives as well. We were unable to revive the cooperative sector—which is so closely connected to the general public and small businesses—even after reversing these policies. 

The restrictions implemented from Nepal Rastra Bank (NRB) at that time on the real estate business should be relaxed. The cap on investments in the share market could be removed to send a positive message. NRB has issued a working capital guideline for the loans in the private sector which has caused major effects in the production sector. NRB’s direct lending is 40 percent which is being misused in agriculture and energy industries. Asset classification guidelines have also been issued which is not efficient for group businesses. 

Apart from that, another need is to increase demand. However, the government does not have sufficient funds for that. Contractors are not being paid. A suggestion is to issue 10-year bonds for these contractors equal to the amount to be paid and 90 percent of the bond can be withdrawn from the bank. The government should immediately form a committee to limit projects and focus the budget on projects of greater importance rather than coming up with plans with insufficient budgets. It will take a great deal of time to improve the economy if we don’t take a focused approach for things.

To what extent does our political situation affect the economy?

The political environment definitely affects the economy. Our major problem is the frequent government change. The government is changing every six months. Many tactical decisions require the government’s initiation to move forward. With frequent government change, policies cannot be implemented in such short time periods. How can ministers make decisions when they are not even sure how long they will be in the position for? 

Political stability is of extreme importance because policies drive everything in an economy. There are still some old laws that need to be rectified. With the rapid change occurring worldwide, laws have to be updated accordingly. For this, a stable government and a stable bureaucracy is of extreme importance. There are three years left till the next election. A lot can be done in these three years. Everyone has now understood that for the economy to be stable, current problems need to be dealt with differently. Without political stability, we cannot escape these issues.

There has been growing concern about corruption and criminal activities within government and law enforcement sectors. This has caused an increasing sense of insecurity among businesspeople and has contributed to capital flight. How do you view this?

There are a lot of reasons for this. Firstly, if someone has committed any crime or misdemeanor, it has to be investigated, even if it is from two years ago or ten years ago. However, the old laws that I talked of before have been creating a big problem. If someone is proven guilty, they have to be punished. But right now, even people that have not been proven guilty are being put in jail. We are not asking to release the guilty. But a respected businessperson is not going to run away and there is no reason to put them in jail to be investigated. This is what we at the CNI feel. For this, we have appealed for the provision of an anticipatory bail. 

Some bankers were also convicted some time ago for signatures while issuing loans. While making so many decisions at once, some might go wrong. We have to analyze whether misdemeanors are done intentionally or not. Maybe some government officials could have made mistakes? Investigations are important. But putting someone in jail first, then moving towards investigations is not the way to go. If you see a possibility of the person running away, then sure, it is right to capture them. But if someone is willing to show up when called upon, it is not right to put them in jail before proven guilty.

The CNI suggests that financial penalties should be issued for financial crimes—jails are not the only solution. For example, if there is a tax evasion of 100m and if the person agrees to negotiate and pay the amount, then it’s done. Using the country’s resources to investigate further for like ten years into the case is useless if the person is willing to accept, negotiate and pay.

The kind of investments and support that we are looking for from the international community seems to be falling. FDI seems to be declining. What seems to be the problem?

Ultimately, when the economy is flourishing, there are opportunities, that is when investments come. Currently, our domestic investors themselves are not willing to invest. How can we expect foreign investment? Currently businesses are only able to operate at 30-40 percent capacity. How can new investments be driven under such circumstances? 

Visa might be causing some trouble at the moment for foreign investors because it is only issued for a year and there are some complications for visa issuance to investors’ families. Apart from that, there is no major issue in terms of our laws in attracting FDI. It is simply that the economy needs improvement and the investors need  to see opportunities. Such as in hydropower, opportunities can be seen, like exporting 10,000 MW. Tourism is also seeing some small investments but no major ones, perhaps because there are two international airports but they are not able to operate. Policies also need to be right.

According to your personal forecast, what is the future outlook for our economy?

We see the future as bright. Because we are in so many problems, there are as many possibilities. Chaos creates opportunities. Therefore, there are a lot of opportunities here. As I said before, political stability, bureaucratic stability, and policies need improvement. After that, there should be no problems. There are so many opportunities in infrastructures, and hydropower. There is so much untapped potential in the tourism sector. We have a big market with our neighboring countries which creates huge possibilities for production and trade. Education sector also has a lot of opportunities. If we can establish good universities and modernize our education system, we can develop the sector. Health tourism also has a lot of potential because healthcare is affordable here. In agriculture as well, there are opportunities. We need to go into commercial farming. If the policies can be fixed, there is a lot of scope in many sectors in Nepal. 

Every year, the academic results of SEE/SLC, graduate and postgraduate studies bring a momentous problem for the state as a significant percentage of students fail the exams.

While around 50 percent of students fail SEE exams every year, university exams also do not yield satisfactory results, indicating that there are holes in our education system that need fixing.

Stakeholders are well aware of some of the reasons behind poor results at school and university levels—political interference, poor management, infrastructure, pedagogy, etc—and they can give hours-long lectures on these reasons.

Apart from visible issues, there are other issues also behind poor results. One of the most important factors behind a poor result at the individual level is the “lack of interest” on the part of the student in studies. 

On the contrary, if the student devotes time in studies, chances of him/her getting good results are quite high.

Our education system and society give high priority to education and for them, getting an academic degree is very important regardless of the individual’s interest (or lack thereof) in the endeavor. 

This mindset of the society and the state, which undermines the lack of individuals’ interest in studies, is mainly to blame for poor results year after year after year. 

This mindset ignores the fact that the individual interested in his/her chosen field, whether it’s education or some other sector, will surely put in extra efforts to get the best result. 

It’s a given that someone who wants to be an ace sportsperson will give it all to his/her chosen sport instead of burning the midnight oil for an academic degree. 

For example. football is life’s true calling for Ronaldo. Imagine what will happen if he is not allowed to play football. 

But this does not mean that getting an education is not important. Even those individuals who have no interest in studies would do well to get an education, a state-prescribed education at least, given the importance of education in this day and age. After completing basic education (my opinion is that it should be made mandatory), the individuals can follow their passion and make their dreams come true. 

The main premise of this writeup is based on my observation of students’ behavior in the Kathmandu Valley. Early in the morning, I see myriad students donning uniforms heading to their respective educational institutions. On the surface, it seems they all are marching with the same purpose but their body language reveals otherwise. 

It is not difficult to observe that each student has their own sets of dreams, desires and aspirations; even those with basic knowledge of psychology can read this much.

Some of these students look fresh and energetic, indicating that they want to study and do something significant in academia. 

Some others, through gestures and facial expressions, give the impression that they have no desire to study, that their hearts lie in other fields like music and sports.

They are physically present in the classroom, not mentally. They are taking classes because their parents want them to study at all costs, even at the expense of their chosen fields.

This is a sheer waste of time and resources, and this lack of interest in studies is one of the major reasons behind poor academic results.

As part of this study, I even asked some students “How do you feel while going to school?”

Their responses matched with my reading of their body language.

Parents, teachers and the government are focusing only on imparting education by taking it as the only means to get success in life, ignoring the dreams, aspirations and aptitude of the individuals concerned. On their part, these students are trying to make their parents happy by obeying them physically, though their hearts lie elsewhere.

Given this context, parents, teachers and state authorities should encourage students to pursue their dreams instead of forcing their will onto them. This way, our society will, in all likelihood, get Ronaldo, Mahabir Pun and many other wonders. 

On Dec 5, Nepal and China signed the Framework for Belt and Road Cooperation (FBRC) during Prime Minister KP Sharma Oli’s visit to China. While both sides have refrained from disclosing the agreement’s full details, the government has repeatedly emphasized that Nepal is not obligated to take loans under the Belt and Road Initiative (BRI). However, this assurance has not fully dispelled concerns, as the exact modalities of financing remain unclear.

Under the agreement, Nepal’s Ministry of Foreign Affairs and China’s National Development and Reform Commission will act as the implementing agencies. It has been clarified that the BRI is not a bilateral treaty; rather, it will be governed by the laws of each participating country. Additionally, Nepal retains the option to collaborate with third countries in implementing the projects listed under the BRI.

The agreement refers to “aid financing,” a term that has sparked diverse interpretations. The ruling coalition insists that loans are not part of the arrangement, but the absence of concrete definitions leaves room for ambiguity. It is also unclear how this framework differs from the 2017 BRI agreement. Officials have revealed that 10 projects have been shortlisted under the BRI, ending years of speculation about its implementation in Nepal.

Chinese state news agency Xinhua offered some insights, citing the National Development and Reform Commission (NDRC). According to Xinhua, the agreement emphasizes the principles of planning together, building together, and benefiting together. It seeks to enhance cooperation in critical areas, including the economy, transportation, trade, and industrial development. The NDRC hailed the agreement as a step toward deepening political trust between Nepal and China and fostering high-quality Belt and Road collaboration.

In an interview with CGTN, Prime Minister Oli described the FBRC as a comprehensive umbrella agreement that encompasses diverse sectors such as infrastructure, culture, health, and education. He highlighted its potential to align Nepal’s development strategy with China’s, calling the agreement a significant milestone in bilateral cooperation.

Officials involved in the negotiations stated that the FBRC reflects Nepal’s proposals, with minimal changes from China. A previous draft implementation plan sent by China in 2020 had stalled due to Nepal’s indecision. In 2023, the Pushpa Kamal Dahal-led government came close to signing the plan, but the effort was abandoned at the last moment. Ahead of Oli’s visit, the Nepalese government formed a task force to revise the document, which ultimately produced the FBRC.

Semanta Dahal, a task force member, explained in an Onlinekhabar article that the Chinese draft resembled a broad agreement rather than a focused implementation plan. The FBRC, on the other hand, prioritizes economic and project development cooperation, retaining only the already-listed projects under the BRI. Dahal noted that a dedicated mechanism for future BRI discussions would be established soon.

The FBRC identifies 10 projects, providing clarity after years of uncertainty surrounding BRI’s implementation in Nepal. These projects include the Tokha-Chhare tunnel, the Hilsa-Simikot road, the Kimathanka-Khandbari road and bridge, the Keyrung-Kathmandu trans-border railway, Amargadhi City Hall, a 220kV transmission line, Madan Bhandari University, Kathmandu Scientific Center and Science Museum, the China-Nepal Industrial Park in Damak, and the Jhapa Sports and Athletics Complex.

Of these, the railway and tunnel projects are long-term endeavors requiring at least a decade to commence. Feasibility studies for these projects are underway with Chinese assistance. Negotiations for road projects are in progress, while the construction of the transmission line depends on a power trade agreement between the two countries. The remaining projects are relatively small, reinforcing Nepal’s cautious approach to avoid taking on large-scale loans under the BRI.

China has established mechanisms like the Silk Road Fund (SRF) and the Asian Infrastructure Investment Bank (AIIB) to support BRI initiatives. By mid-2023, the SRF had committed $22bn across 75 projects, while the AIIB, with 106 members, had approved $43.6bn for 227 projects globally. These initiatives span transport, energy, public health, and other sectors, promoting connectivity and sustainable development.

In recent years, China has shifted its focus toward smaller development projects that promise immediate returns. This approach reflects a growing reluctance to fund large infrastructure projects that lack financial viability. Consequently, Nepal and China have avoided selecting major projects under the BRI, except for the railway and tunnel.

The FBRC represents a cautious yet significant step in Nepal-China relations. While it marks progress in operationalizing the BRI, questions remain about financing and execution. The agreement signals Nepal’s intent to address its development needs without over-relying on debt. With ten projects identified and mechanisms for future negotiations in place, the FBRC lays the groundwork for collaboration, even as it underscores the challenges of aligning development ambitions with financial realities.

Sabin Karki, also known as Sabin Beest, is famous for his love for dance and artistic expression. His journey has been shaped by his passion for movement, creativity, and a deep desire to inspire. A dancer, choreographer, and filmmaker, Karki has paved his own path in the entertainment industry, constantly breaking barriers and pushing boundaries. His story is not just about mastering the art of dance but about embracing challenges, defying expectations, and ultimately finding success on his own terms.

Karki’s interest in dance began at an early age, when he was introduced to it through a school program. A group of students were participating in a dance event at their school. Karki, at the time, was not particularly skilled in dancing. When he took to the stage, his performance was less than graceful, and Karki felt humiliated. But it made him want to improve. When another opportunity came his way, he gave it his all. Karki was recognized as one of the best dancers in his school. This marked the beginning of his transformation. 

He was clear that he didn’t want a traditional nine to five job. “The thought was a nightmare,” he says. The idea of working in a conventional office setting didn’t appeal to him. Instead, he wanted to explore the creative side of life and forge a career that allowed him to do what he loved. Karki started by creating cover videos, which allowed him to practice and showcase his talent. 

However, the turning point came when he received his first significant offer, a chance to choreograph a song for the ‘Fantastic Wonderful’ song. Although the project didn’t work out as he had hoped, the opportunity helped him gain visibility and opened doors for future ventures.

‘Viral Vaidiyo’, a renowned figure in Nepal’s music and dance scene, approached Karki after parting ways with The Cartoonz Crew. This collaboration signaled the next phase of his career, where he began to solidify his place in the dance industry. 

Karki sees dance as a form of expression that goes beyond physical movement—it has become a way of storytelling and connecting with others. He acknowledges the multiple roles he takes on in his work. In solo performances, he focuses on his personal practice, perfecting his craft independently.  

However, when working in a group, coordination becomes crucial as each member brings his/her own challenges to the table. One of the most difficult aspects of his work is the pre-production phase, where the story for the performance must be created, and he must figure out how to direct the group effectively. 

The dynamic of group dancing adds complexity, as he must not only ensure that the overall performance looks cohesive but also consider how to make the dance movements appear visually appealing. “While dancing in a group requires careful synchronization, directing involves a deeper level of thought about how to best frame and present the dance for maximum impact,” he says. 

He has also developed a keen interest in filmmaking. This passion was fostered during the early days of the internet, when he became an ‘internet freak’ who constantly sought knowledge about technology and the digital world. Karki’s interest in technology and video creation led him to start his own production page, Beest Production.

Beest Production began as a simple project where he and his crew created videos and choreographies. Over time, however, it grew into a fully-fledged creative platform where he could explore his passion for both dance and filmmaking. The process of creating and directing music videos became a natural extension of his dance career, and Karki found himself merging his love for storytelling with his ability to choreograph. 

For Karki, dance is more than just movement—it’s a form of communication. When creating music videos, storytelling is essential. While dance is the primary focus of the videos, he emphasizes the importance of weaving a narrative that resonates with the audience. “In a music video, there is a big importance of dance,” he says, “but the story also plays a crucial role.” This combination of dance and storytelling is what sets Karki’s work apart from others in the industry.

Karki also notes the importance of competition in the dance scene. He believes there should be more opportunities for dancers to compete and showcase their talents, as well as greater involvement from sponsors and corporate houses to support the industry. However, he acknowledges that the current state of the dance scene in Nepal is much better than before. He recalls a time when girls were not allowed to dance, and if they did, they were often labeled as ‘bar dancers.’ “We have also changed the perception of dancing,” he says.

His recently released music video Bhavya Rap was created with the intention of spreading good energy rather than delivering a deep, meaningful message. He says, “The lyrics were designed to focus on rhymes and rhythm, with no specific meaning behind them.”  However, he notes that many listeners began to search for deeper meaning in the rap, which was not the original purpose. 

He emphasizes that not every piece of music or art needs to have a profound meaning. Sometimes, the good vibes and positive energy that come from the music are just as valuable, and they can resonate with listeners in a way that transcends deeper interpretations.  

Moving forward, Karki continues to be driven by his love for dance, filmmaking, and creativity. He emphasizes the importance of building one’s own genre and staying true to one’s passion. “Pride and ego are harmful,” he says. “Focus on your craft and dance your own way.” 

As he works on upcoming projects, including a new music video that will be released in the next two months, he is not only focused on his own success but also on inspiring the next generation of dancers and creators in Nepal.

What started as a simple desire to improve his dance moves has now blossomed into a successful career in dance and filmmaking, and his story continues to inspire countless individuals who dare to dream big and work hard to make those dreams a reality.