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Inflation and economic crises are two connected phenomena that can have a big impact on the economy. Inflation stunts the purchasing power of consumers, meaning transactions decline, and when goods and services are no longer bought or sold, the economy slows down. It affects consumers as well as business owners. As Nepal grapples with economic downturn, Evana Manandhar of ApEx talked with three business owners to know how they are faring during these trying times.

Ajab Prasad Gupta, 38

Inflation and the economic crisis have significantly affected my life. The rising prices of goods and services have made it harder for me to purchase the inventory I need for my business. For instance, the cost of raw materials and ingredients I use for my street food business has gone up, squeezing my profit margins. Moreover, many potential customers are feeling the pinch of the economic crisis, and they have less disposable income to spend on street food and other non-essential items. This has led to a decline in sales, making it challenging for small business owners like me to make ends meet. I’ve had to adapt by offering smaller portions or searching for cheaper suppliers, but it's been tough maintaining a steady income.

Ramila Manandhar, 45

The impact of the ongoing economic crisis has been felt by all, and my business is no exception. One of the most significant hurdles has been the sharp decline in demand and sales, leading to a noticeable dip in profits. Customers have been cautious with their spending, and the uncertainty surrounding the pandemic has made it difficult to predict market trends accurately.

Another critical issue we’ve faced is a decline in the quality of some suppliers, products, or services. The disruptions, first caused by the Covid-19 pandemic and now by the Russia-Ukraine war, have led to inconsistencies in the supply chain, affecting the overall quality and reliability of our products and services. Maintaining a high level of quality has become a constant struggle. While navigating these unprecedented challenges has been far from easy, it has also been an opportunity for growth and adaptation. The experience gained during these trying times has equipped my business with resilience and resourcefulness that will serve us well in the future.

Dinesh Shresthacharya, 53

Inflation and the economic crisis have had a significant impact on my life. The rising costs of goods and services have made it more expensive to restock my store, eroding my profit margins. Moreover, customers who are feeling the financial strain due to the economic crisis are spending less on non-essential items, leading to a decline in sales. On a personal level, the increased cost of living has made it challenging to manage my household expenses, including rent and utilities. It’s a constant struggle to adapt to these economic challenges and maintain a stable business while ensuring my own financial stability. Additionally, the uncertainty stemming from the economic crisis and inflation has made long-term planning for my business and personal life increasingly difficult. It’s challenging to predict how the market will evolve or when economic conditions might improve. This instability has created a sense of anxiety and stress, affecting both my work and personal well-being.

Electric vehicles are a new rage all over the world where fossil fuel-run vehicles are rapidly becoming a thing of the past. Given ever-increasing petroleum prices and a large carbon footprint that the conventional vehicles leave behind, not to mention increasing costs of running a fossil fuel-based economy, Nepal is also not immune from this switch to the EVs.
Against this backdrop, SERES—an EV brand born in the USA, mastered in China, proven in Europe—has entered Nepal, where a couple of other brands already have their presence.

Devendra Gautam of ApEx had a free-wheeling conversation with Jeevan Jung Shahi, director of LRR Group, the authorized distributors of SERES for Nepal.   

SERES took part in the NADA Auto Show 2023. How was SERES’ performance? What word best describes the customers’ response?

The customer response was absolutely fantastic, there was an incredible crowd and they were crazy about SERES. NADA Auto 2023 was an incredible success for SERES, with an outstanding booking of almost 334 units. 

Any special feature that you think gives SERES EVs an edge over competitors? 

The 190mm ground clearance is a feature that is really unmatched, this is really one of the many features exclusive to SERES in the SUV EV segment. 

Nepal’s roads are rough and climatic conditions quite challenging. Do you expect a smooth journey ahead for SERES, EVs in particular? 

Navigating challenging road conditions and extreme climates can be a significant hurdle for electric vehicles in Nepal, but I expect that with SERES' design and durability, these obstacles can be overcome. SERES manufacturers design their vehicles to withstand rough road conditions and challenging climates, incorporating features such as reinforced suspensions and a higher ground clearance of 190mm in SERES. These enhancements, along with all-wheel-drive systems, can greatly enhance a vehicle's ability to handle uneven and rough terrain. 

The national economy is not so healthy. Do you still think this was the right time to enter the Nepali market? 

Entering a new market, especially one facing economic challenges like the Nepali market does now, requires careful consideration and a well-thought-out strategy. It’s time for EVs globally, a boom time in EV technology. So, this was the perfect time for LRR GROUP in EV Automobiles to enter the Nepali market.

What is the price range of SERES EVs? What special features do they entail? What financing options are available? What about-after sales services?

The price range of SERES EVs can vary depending on the model and features. Currently, we have two models in the market: One is the comfort variant, and the other is the premium variant, priced at Rs 5m and Rs 5.3m, respectively. The premium variant offers additional features like a panoramic sunroof, 360-degree camera, wireless charger, sunglass holder, and front auto-heated seats.

Certainly, customers can avail themselves of EMI options with a 20 percent down payment over a span of seven years, at a competitive 10.49 percent interest rate on SERES vehicles.

LRR Motors is committed to providing roadside assistance and mobile service options. I want to assure the SERES family that we will deliver the best after-sales services, including maintenance, warranty coverage, and support for SERES vehicle owners.

Nepal’s petroleum addiction seems to be getting worse. A country with formidable hydropower potential imports petroleum products from a monopoly market through South Asia’s first cross-border petroleum pipeline, the Motihari-Amlekhgunj pipeline. Plans are underway to extend the pipeline to Chitwan and then to Kathmandu. Another cross-border project--the Siliguri-Charali pipeline is also on the cards. Given such a scenario, how friendly are government policies vis-a-vis the EVs?

Yes, there is a 69-km cross-border petroleum pipeline project, running from the state-run Indian Oil's terminal in Motihahari in north Bihar to Nepal Oil Corporation’s Amlekhgunj depot. The project was initially scheduled for completion in 2020 but is still in progress. We hope that once this project is finished, it will significantly improve the situation compared to today.

Like many countries, Nepal faces environmental challenges, including air pollution and climate change. Promoting EVs aligns with efforts to reduce carbon emissions and combat pollution. Nepal possesses significant hydropower potential, making it an ideal source of electricity for EVs. Reducing reliance on petroleum imports through the development of EV infrastructure can enhance energy security.

Expanding EV infrastructure such as charging stations constitutes a key component of government policies aimed at supporting EV adoption. Plans to extend petroleum pipelines may not necessarily conflict with EV policies if the government considers EVs as a complement to traditional transportation.

Does Nepal have adequate infra to switch at least partially to a transport system that is EV-driven?

Nepal has made efforts to develop the infrastructure necessary to support EVs, but it is still in the early stages of development. The extent of EV infrastructure in Nepal can vary by region, and it's important to note that progress may have occurred since that time. To assess the current state of EV infrastructure in Nepal and its adequacy for a partial transition to an EV-driven transport system, it is advisable to check with local authorities, electric utilities and EV industry stakeholders for the most up-to-date information. The development of EV infrastructure is often an ongoing process, and governments and private sector entities may continue to invest in this area to facilitate the adoption of electric mobility solutions. 

The government has started setting up charging stations for electric vehicles, primarily in urban areas like Kathmandu. However, the number of charging stations is relatively limited compared to the demand. Nepal’s significant hydropower potential can serve as a source of clean energy for EVs, making it an ideal candidate for a transition to electric mobility. Spreading awareness among consumers about the benefits of EVs and addressing concerns like range anxiety are essential for a successful transition.

Does the LRR Group have some dreams and a long-term vision for our country? Dreams like developing indigenous EVs in Nepal itself, together with young minds, innovators, engineering/technical institutions, investors and the government? 

Yes, we have dreams for our country and a vision. LRR Group is still striving to contribute to government efforts and policies as an electric vehicle (EV) business in a proactive way to support the growth of the EV industry and promote sustainable transportation. 

Box

Here are several ways through which your EV business can contribute to government initiatives: 

Advocacy and lobbying

Join or support industry associations or groups dedicated to electric vehicles. These organizations often advocate for policies that benefit the EV industry.

Collaborate with these associations to collectively engage with government officials and policymakers to voice your concerns and offer insights. 

Policy recommendations

Develop well-researched policy recommendations that can support the growth of the EV market. These recommendations can cover areas such as incentives, charging infrastructure, emissions standards, and tax policies.

Present these recommendations before relevant government agencies, legislators, and policymakers. 

Education and outreach

Organize events, workshops, and seminars to educate government officials, the public, and potential customers.

Nearly six months after coming to power, Prime Minister Pushpa Kamal Dahal embarked on his first diplomatic tour in May, with New Delhi as his inaugural stop. 

In July, Dahal visited Italy to attend the United Nations Food Summit, and in the second week of this month, Dahal flew to New York to participate in the 78th General Assembly of the United Nations. There, he rubbed shoulders with the giants of global politics, including the likes of US Secretary of State Antony Blinken.

After attending the UN gathering, he jetted off to Beijing for an official visit to Nepal’s northern neighbor. This visit was a significant milestone for Nepal, marking the continuation of a delicate balancing act—maintaining strong ties with three major global powers: India, China, and the United States.

Remarkably, during his visits to New Delhi and Beijing, Dahal deftly steered clear of contentious issues that had historically strained relationships. Instead, he pivoted towards economic collaboration and development partnerships. In India, topics like the Eminent Persons Group (EPG) report, border disputes and Agnipath Scheme were set aside. Similarly, in Beijing, projects under the Belt and Road Initiative (BRI), China’s new map, Global Security Initiative, and Global Civilizational Initiative were put on the back burner.

Dahal’s strategic focus on development and cooperation was evident. He sought support from all three global powers to expedite Nepal's transitional justice process—a top priority for his government. The international community, particularly Western nations led by the United States, has been urging Nepal to conclude this process promptly.

At the United Nations General Assembly, Dahal highlighted Nepal's transformation from an era of armed conflict to an inclusive and nationally driven peace process over the past 15 years. He made it abundantly clear that transitional justice was the linchpin of his administration's agenda, appealing to the world for support.

However, India and China have not laid out their positions regarding Nepal’s transitional justice process, though New Delhi briefly raised this issue in the UN Human Rights Council in 2015. International community and the UN are concerned mainly on the issue of serious human rights violations on which they believe there should not be blanket amnesty.

Dahal’s Beijing trip was mainly focused on the development and security fronts. While concrete progress on the Belt and Road Initiative remained elusive, Dahal assured senior Chinese leaders of Nepal’s commitment to their core interests, including acknowledging the One-China principle and firmly opposing Taiwan independence and Tibet independence movement. 

With an ever growing geopolitical tension between China and the Western world, Beijing is more concerned about its security interests in Kathmandu than ever. As security gained prominence, China sought bilateral legal treaties with Nepal, including a Mutual Legal Treaty and Extradition Treaty, although Nepal remained non-committal.

The implementation of the Belt and Road Initiative remained a focal point for Beijing. Despite seven years since the initial agreement, the two countries are still working to finalize its implementation plan, with some provisions, particularly those related to security, causing contention. The Global Security Initiative (GSI) and Global Civilizational Initiative (GCI), on which China is seeking Nepal’s endorsement, also remain the topics of debate. However, Nepal showed support for the Global Development Initiative (GDI), as it is implemented through UN agencies and doesn't raise security concerns.

In the realm of energy cooperation, Dahal’s visit to China achieved modest progress. Both countries agreed to enhance cooperation in energy, particularly in hydropower development and cross-border transmission lines. They also announced plans to construct a 220 KV cross-border power transmission line.

Before his visit to China, Dahal had expressed a desire to strike a power trade deal, but the necessary infrastructure is yet to be built. Of late, China has been expressing its concerns regarding India’s “monopoly” in Nepal’s hydropower sector, where the interests of India, China, and the United States collide. 

During Dahal’s visit to New Delhi, a significant development unfolded, with the Indian cabinet deciding to purchase 10,000 MW of electricity from Nepal, creating opportunities for regional energy trade and development. But India’s policy bars Chinese companies from selling the power in the Indian market. 

In his dealings with the United States, Dahal maintained a cautious approach. He refrained from engaging with the State Partnership Program and Indo-Pacific Strategy, instead focusing on the implementation of the Millennium Challenge Corporation (MCC) agreement. The MCC, which came into effect in August with a five-year deadline, encountered hurdles, but Dahal was committed to resolving them. The declarative interpretation, a component of the MCC’s parliamentary approval, remains a point of concern.

The United States, on its part, demonstrated a commitment to expanding its engagement with Nepal through increased development assistance. The USAID pledged $2m to support Nepal’s economic stabilization, job creation, investment mobilization, and democratic progress. Earlier USAID had decided to provide a $6.9m budget for the next five years. The new support was announced during the USAID’s Democracy Delivers event on the sidelines of the UN General Assembly in the presence of US Secretary of State Antony Blinken and USAID Administrator Samantha Power.

Strengthening democracy and combating corruption in Nepal were top priorities for the United States, while Dahal’s objective is seeking Washington’s support to conclude Nepal’s transitional justice.

Above all, Dahal’s key diplomatic priority is to maintain cordial relations with New Delhi to secure his political standing. Hence, he approached his visit to Beijing cautiously, not wanting to upset India by signing deals on BRI, energy trade and other issues. Of late, Dahal has also maintained a good relationship with India’s ruling Bharatiya Janata Party.

Graduation from Least Developed Country (LDC) to Middle-Income Country (MIC) status is another pressing issue on Nepal's international agenda. Nepal sought support from the international community to finalize its LDC graduation strategy, raising this matter during discussions in Beijing, New Delhi, and the United Nations General Assembly. In his address to the UN assembly Dahal affirmed Nepal's commitment to a smooth, sustainable, and irreversible transition to MIC status by 2026. 

Nepal’s key international agenda

Transitional justice: Government has tabled a bill related to transitional justice and seeking the support of the international community to conclude the process.

PM Dahal is of the view that the new bill addresses the concerns of the victims, strike a right balance between peace, justice and reparation, and to make the transitional justice process broadly owned by the society. Considering the concerns of the international community, PM Dahal has said that there would not be blanket amnesty. 

LDC graduation: Nepal is graduating from LDC status by 2025 and expressing commitment with the international community to make the graduation smooth, sustainable and irreversible. Nepal is in the process of finalizing the smooth transition strategy of graduation. Nepal is seeking international support in this process. 

Climate Change: Climate Change has emerged as one of the major agenda of Nepal’s foreign policy conduct. Addressing the UN assembly, PM said : Climate vulnerable mountainous countries like Nepal have been bearing the severe brunt of climate change. The Himalayas are the source of freshwater for over two billion people. Global warming has induced rapid receding of ice in our Himalayas, Dahal said,  It has not only eroded the health of our mountains but also endangered the lives and livelihoods of millions of people living downstream.

‘A country is dead if it is full of anarchy’.

The quote above is not a self-invented nugget of wisdom. It is the reply from Yudhishthir to one of the many questions from a Yakshya, a semi-divine protector of a pond brimming with water located in the middle of a forest. 

Close by the pond, Yudhishthir finds four of his younger brothers (Bhim, Arjun, Nakul and Sahadev), out in the woods turn by turn as per his instructions to quench their thirst, lying unconscious. Apparently, better senses prevail over Yudhishthir. He somehow suppresses an acute thirst and is patient enough to answer Yakshya’s questions, a far better alternative than facing the archer’s wrath like his brothers, who, it turns out later, tried to head straight into the pond to sate themselves instead of heeding the protector’s warning and bothering to answer his questions. 

Yakshya fires many no-nonsense questions at Yudhishthir and the latter answers them all very wisely. 

The quote in the beginning of this piece is part of Yudhishthir’s answer to one of the questions about death. The full reply from Yudhishthir, considered a manifestation of Yamaraj, the god of death, goes: A person facing extreme poverty might be considered dead; a country is dead if it is full of anarchy.

The Q & A session, detailed in the Mahabharat, has a happy ending. Pleased with Yudhishthir’s wisdom, the Yakshya ultimately brings the fallen Pandavs to life and they all get to quench their thirst to their hearts’ content. 

The Yudhishthir-Yakshya Q & A session is long over, but it is quite relevant even in the federal secular democratic republic of Nepal of this day and age. 

At present, Nepal seems to be in the midst of an ever-lasting turmoil. Kathmandu (its nerve centers like Maitighar Mandala the vicinity in particular, which lie quite close to the seats of the three organs of the state) has been the hotbed of protests of all sorts. Recent days have seen protests demanding amended citizenship provisions, justice for loan-shark victims, teachers’ protests against the government’s indifference toward their demands and a days-long stand to make Kathmandu Metropolitan City fulfill the demands of street vendors.   

Even as a myriad groups continue to show their respective strengths on the streets and bring the Nepali state to its knees, the latter appears too helpless to deal with multiple crises gripping the country. The economy is not in the pink of health. The rule of law has become a chimera. There is a growing feeling in the society that influential people can get away with grave crimes in this country.

The transitional justice process is not making much headway. People are losing faith over the government’s ability to curb corruption by bringing high-profile corruption cases to their logical conclusion. 

Anarchy reigns supreme and the country is on sickbed. The onus is on the government to bring the country back to health before it’s too late.