Submit your Article

Time is so powerful. Just a few months ago, USAID was spending millions of dollars to combat the growing spread of misinformation and disinformation across the globe. Now, it has become a victim of disinformation, not only in Nepal but across the world. US President Donald J Trump and Elon Musk have emerged as key figures spreading such misinformation.

The support provided by USAID over the past seven decades comes from American taxpayers, as often highlighted in banners stating “From the American People”. Therefore, the Trump administration’s decision to investigate corruption, misuse and irregularities in spending is imperative. However, some statements made by Trump and Musk have fostered a perception, particularly in the Global South, that accepting American support equates to committing treason.

In Nepal’s context, Trump’s statement that allocating money for Nepal’s fiscal federalism is “a fraud”, combined with Musk’s branding of USAID as “a criminal organization”, has cast all US support to Nepal in a negative light. Organizations and individuals working with USAID are being trolled on social media, overshadowing the significant contributions USAID has made in Nepal over seven decades in improving quality of life, establishing a robust health system, modernizing agriculture and increasing access to education, among others.

Nepal’s conservative forces, who have long claimed that the political changes in 2008 were part of a “foreign agenda”, have now found a new narrative to attack republicanism, secularism, federalism and inclusion. They argue that political parties acted on behalf of the US to implement these agendas. Social media, which has become more influential than traditional media in terms of reach and impact, is being used to propagate the idea that USAID support was used as an instrument to remove the monarchy, establish federalism and secularism and even promote religious conversion.

This has created a false impression among ordinary people that USAID came to Nepal only recently. Many are unaware—or pretend to be unaware—that the monarchy itself laid the groundwork for USAID’s footprint in Nepal in the late 1950s. During the Cold War, the US sought to prevent the influence of the Communist Party of China and the rise of communist movements in Nepal. King Mahendra, on his part, sought to legitimize his Panchayat regime through development initiatives. Thus, for two primary reasons—to counter Chinese influence and to legitimize his rule—King Mahendra embraced the US support which was channeled through USAID.

Development cooperation between Nepal and the US dates back to 1951, when the US supported Nepal through its Point Four Program. On 23 Jan 1951, the two countries signed their first bilateral aid agreement. Key priorities of US assistance during the 1950s included building roads, establishing telephone exchanges, eliminating malaria from the Tarai region and enabling agricultural development. In 1959, the US supported the development of a telecommunications system that provided Kathmandu with 1,000 telephone lines and the country’s first automatic exchange. The first US-supported road in Nepal was the 87-kilometer link between Bharatpur and Hetauda, part of the Rapti Development Program. Similarly, the construction of the Hetauda-Kathmandu ropeway began in 1959.

In the 1960s, when King Mahendra was consolidating the Panchayat system, there was a huge surge in US aid to Nepal. US President Dwight Eisenhower’s unexpected pledge of $15m to King Mahendra in April 1960 marked a turning point in US involvement in Nepal’s development. USAID pursued programs in agriculture, health, education and industrial development. After King Mahendra dissolved parliament and banned political parties in 1960, US aid was directed toward the successful implementation of his Panchayat system. The US supported the construction of administrative structures across the country, viewing the Panchayat system as a potential vehicle for mobilizing Nepal’s human resources and fostering economic, social and democratic political development.

“The most important role in strengthening the Panchayat system in Nepal was played by US economic aid. On the ideological front—in propagating the democratic values of the system—the role of US Peace Corps volunteers and embassy officials was noteworthy,” writes SD Muni in his book “Nepal’s Foreign Policy”.

On his part, King Mahendra sought both economic and technical support to sustain his rule. During the Panchayat regime, King Mahendra’s key agendas, including land reform, were backed by the US. After the political changes in 1990, USAID programs reflected broader US support for democratic governance and free markets. In the 1990s, the US emphasized the need for sound economic policies: competitive markets operating with minimal government regulations. This shows the priority of support changes with regime change.

Following years of political instability, Nepal drafted a new constitution in 2015, laying the foundation for stability and development. After the constitution’s promulgation, US assistance to Nepal has focused on consolidating gains in peace and security, furthering democratic transition, supporting the delivery of essential social services, scaling up proven health interventions, reducing extreme poverty, and addressing food insecurity and climate change challenges.

The Trump administration has said that it is reviewing all USAID spending. The administration has already cut millions from the budget allocated to Nepal. It remains uncertain how US support to Nepal will evolve in the future and how Nepal will negotiate with Washington. There is no doubt that Nepal should have reduced its dependence on foreign aid decades ago; instead, this dependence continues to grow. At this critical juncture, Nepal desperately needs foreign assistance, particularly in health, education and agriculture sectors. 

That said, not all USAID activities in Nepal have been beneficial; they have also had negative effects on society, including in politics and culture. Like Trump’s efforts in the US, Nepal should not hesitate to review how USAID funds have been spent. Politicians and government officials have reservations about USAID’s spending in Nepal but often refrain from speaking publicly about it. Former Finance Minister Prakash Saran Mahat recently said that the US government channels assistance to Nepal primarily through INGOs and their chosen NGOs, leaving the Nepali government with little control over how USAID resources are spent. This is a serious issue that warrants greater scrutiny.

For a long time, there have been debates about the spending of NGOs and INGOs and their negative repercussions on Nepali society. These concerns are genuine, and government agencies should closely monitor such activities. However, rejecting all foreign assistance at this time would be detrimental to the country’s economy. It is high time the government reviewed past spending, and identified areas where the US support is needed, and determined where it is not.

The government should begin preparations after broader consultations to present its position to the new US administration. One year from now, after Nepal graduates from the Least Developed Country (LDC) category, it will face numerous challenges. Even after graduation, Nepal will need continued support from major countries, including the US. Therefore, instead of exploiting the current controversy for political or vested interests, Nepal must address the situation with maturity. It is also a positive step if Trump initiates the process of investigation on how money allocated to USAID has been spent everywhere.

Of late, business incubation support in Nepal’s startup ecosystem has received widespread attention from various sectors. This trend involves startup networks, national and international development agencies, government bodies at all levels, industry associations and other stakeholders. These groups are collectively striving to cultivate entrepreneurial mindsets among young people through initiatives such as startup festivals, competitions, pitch sessions, seed funding opportunities and the like. These initiatives are helping early-stage ventures receive timely support to navigate the risks and challenges of producing market-fit products. 

However, there is a notable absence of academia in the startup ecosystem in this evolving startup landscape, especially in the business incubation support stage, which raises significant concerns. Fostering critical thinking and innovation has traditionally been a core function of academia, yet it seems to struggle to take the lead in the incubation and ideation domain. This prompts reflection on whether the division of responsibilities within this ecosystem is being approached effectively. 

Unintentionally, these practices can lead to blurred roles and responsibilities, creating confusion rather than effectively leveraging individual areas of expertise. Academia’s role should focus on helping students develop critical thinking skills, identify problems and guide them toward the ideation stage. Once ideas are incubated, the industry, development agencies and government bodies can step in to accelerate these concepts, each contributing their unique perspectives and resources. 

Academia in Nepal often lacks a proactive stance toward incubation support programs—some might even label it “non-reactive.” Academic leadership usually appears disconnected from Nepal’s startup ecosystem, yet boldly claims that their educational programs will shape the entrepreneurs of tomorrow. This disconnect highlights an urgent need for academic leadership to rethink and realign their approach to actively contribute to the startup ecosystem. However, does this lack of unawareness and inactivity justify academia relinquishing half of its responsibilities to other entities? In a landscape where NGOs, INGOs and development agencies are leading research efforts and the industry is taking charge of incubation support, one might wonder: where does this leave academia, and how can it assert its relevance in this evolving context? 

Some academicians believe there is a lack of clear distinction between incubation and acceleration, leading to confusion regarding the division of roles. They further suggest that academia should focus less on directly participating in the incubation stage and instead prioritize creating and disseminating knowledge. The primary reason all sectors are heavily engaged in the incubation stage is their desire to build their own pipelines of potential startups for future investment. Accelerators and investors face challenges in finding viable startups to invest in, prompting them to intervene directly at the incubation stage. For example, academic institutions could conduct research to assess whether industry involvement in incubating startups contributes to scalability, evaluate existing policies and analyze their impacts on the startup ecosystem. 

Other academics offer a contrasting perspective that the active involvement of non-academic actors in the incubation stage stems from a lack of trust in the quality of academia’s work and the students it produces. This trust gap reflects a significant disconnect between industry and academia, with industry stepping in due to concerns over the preparedness and capabilities of graduates. 

A thriving entrepreneurial ecosystem, particularly for startups, can only emerge when all actors play to their strengths, understand their roles, adopt a collaborative mindset and share resources with the collective goal of uplifting one another. Currently in Nepal, everyone is competing for the same opportunities without realizing that they are all competing for a single, finite pie rather than working together to expand it. This raises a critical question regarding whether the enthusiastic yet uncoordinated scrambling of activities creates genuine, meaningful and long-lasting impact, or are these efforts merely excuses for allocating CSR budgets and safeguarding established funding networks? 

A leading example of academia and industry collaboration in this domain in our region is from IIT Madras, India, which has successfully created a collaboration model between academia and industry through its incubation cell. This initiative effectively connects research, innovation and entrepreneurship, fostering a sustainable startup ecosystem within South Asia. The model at IIT Madras promotes innovation through dedicated research labs, specialized entrepreneurial courses and programs such as the Nirmaan pre-incubation program, which helps students and researchers refine their ideas, develop prototypes and prepare them for the market. Building on the initial incubation support, the IIT Madras incubation cell partners with industry leaders to offer startups access to funding, mentorship and state-of-the-art facilities. The cell supports ventures across various sectors, including clean energy, healthcare and deep tech. As a result, over 240 startups have been nurtured and raised approximately $145m in funding. Success stories like Ather Energy (an electric scooter company) and Detect Technologies (industrial safety solutions) highlight the program’s impact. The ecosystem has generated over 4,000 jobs, contributing significantly to regional economic growth and social development. 

As a way forward, academic institutions can collaborate with key actors in the startup ecosystem—such as accelerators, government agencies and industry—to co-design a framework that ensures seamless collaboration and value transfer. For instance, academic institutions can actively generate startup ideas, leveraging faculty expertise and internal resources to mentor and refine these concepts. This approach  will also help the industry save valuable time and resources during the incubation support stage. Once the ideas are pitched, accelerators/industries can further develop them using their specialized resources. If the ideas fail to meet real-world market standards, the industry can step into the academic space to provide upskilling and capacity-building opportunities for academia while guiding students on advancing. 

This collaborative framework will not only foster synergy among all stakeholders but also advance the value exchange framework between industry and academia.

The principle of the separation of powers is a fundamental principle in the structure of modern democratic governance. It divides governmental powers into three branches: the executive, the legislature and the judiciary. The idea behind this separation is to prevent any single branch from accumulating too much power, ensuring a system of checks and balances that maintains democratic integrity and upholds the rule of law. In theory, each branch operates independently and acts as a counterbalance to the others, safeguarding individual freedoms and preventing authoritarian rule.

In the context of Nepal, the separation of powers has faced significant challenges in the post-republic era, particularly after the abolition of the monarchy in 2008. While the country formally transitioned into a republic, the violation of the principle of separation of powers has led to institutional weaknesses and the erosion of democratic values. This article explores the significance of the separation of powers in a democratic system, examines instances of its violation in Nepal’s post-republic era and highlights the consequences for the nation’s democratic health.

Importance of separation of powers

The separation of powers plays a crucial role in preventing the abuse of power by ensuring that no single entity has control over all aspects of governance. By dividing authority among different branches of government, each one serves as a check on the others, protecting citizens’ rights and preventing any one branch from becoming too dominant.

This system also promotes accountability. When power is shared, the legislature can scrutinize the actions of the executive, and the judiciary ensures that laws are applied fairly and impartially. This encourages transparency and makes those in power answerable to the public.

One of the most important aspects of the separation of powers is its role in safeguarding individual freedoms. The judiciary acts as a guardian of constitutional rights, ensuring that neither the executive nor the legislature can infringe upon fundamental freedoms. This protection helps to maintain a free and just society.

Moreover, the separation of powers contributes to the stability of governance. By distributing power among different branches, it helps counterbalance fluctuations or the concentration of power in any one area. This balance prevents instability and ensures that the government remains fair and resilient, even during times of political change.

Violation unabated

Nepal, after the declaration of the republic in 2008, adopted a democratic framework based on the principle of the separation of powers. However, the country’s post-monarchical era has seen numerous violations of this principle, which have had serious repercussions on the health of Nepalese democracy.

Executive overreach, legislative subjugation

One of the primary violations in Nepal’s recent history involves the dominance of the executive branch over the legislature. Since the reemergence of the parliamentary party system in Nepal in 1990, the House of Representatives has been dissolved six times. The fifth dissolution occurred on 20 Dec 2020, when Prime Minister KP Sharma Oli, acting on the recommendation of his cabinet, advised President Bidya Devi Bhandari to dissolve the House. President Bhandari accepted the recommendation the same day and announced that elections would be held in two phases: 30 April and 10 May 2021.

However, on 23 Feb 2021, the Supreme Court ruled that the dissolution of the House of Representatives was unconstitutional and ordered its reinstatement. The court issued a mandamus, directing that the House be convened within 13 days. As a result of the ruling, a session of the House was held on 7 March 2021.

In the sixth instance, on 22 May 2021, Prime Minister Oli again recommended to President Bhandari the dissolution of the House and the scheduling of mid-term elections for 12 Nov and 19 Nov 2021. The President accepted the recommendation, and the House of Representatives was dissolved once again, with the election dates announced accordingly.

Impeachment

In Feb 2021, Nepal’s ruling parties filed an impeachment motion against Chief Justice Cholendra Shumsher Rana, making him the second chief justice in the country’s history to face such a motion, following Sushila Karki in 2017. At the time, the Nepali Congress, the CPN (Maoist Center) and CPN (Unified Socialist) supported the motion against Rana, with Sher Bahadur Deuba as prime minister. The motion against Karki, filed in 2017, was led by Congress lawmaker Min Bahadur Bishwakarma, while the current motion against Rana was proposed by key figures from the ruling parties.

Karki’s impeachment led to her suspension and Gopal Parajuli temporarily taking over, with Rana later staying the motion. After Parajuli’s resignation, Rana became chief justice in 2019. Now, almost five years later, Rana faces his own impeachment motion, primarily due to accusations of corruption, misconduct and failure to perform his duties.

Consequences

When one branch of government begins encroaching on the others, it weakens the very foundation of democratic institutions. The independence and effectiveness of these institutions are compromised, leading to a loss of public trust in the democratic process. Over time, this erosion of faith increases the risk of authoritarianism taking root.

In Nepal, the manipulation of the separation of powers has contributed to political instability. Political parties often use state institutions to consolidate their own power, which has led to ongoing factionalism and conflict. This pattern is evident in the frequent changes in government leadership and the breakdown of the political system, leaving the country in a state of uncertainty.

For the people of Nepal, this constant political drama has led to growing disillusionment. The disregard for constitutional principles has made citizens skeptical of the political process, which in turn has resulted in lower voter participation. This disillusionment weakens the democratic process and erodes public support for democratic governance.

The lack of independence in the judiciary has further exacerbated this situation. When the legal system is not allowed to operate free from political influence, citizens lose confidence in it. Corruption, bias and the absence of fair justice create a culture of impunity, where political interests subvert the rule of law and undermine justice for all.

Conclusion

The separation of powers is essential in maintaining a healthy and functioning democracy. It ensures that power is not concentrated in the hands of one branch of government and that each branch can check the excesses of the others. Nepal’s post-republic era has been marked by several violations of this principle, leading to political instability, diminished trust in democratic institutions and public disillusionment with governance.

To restore the integrity of Nepal’s democracy, it is crucial to uphold the separation of powers and strengthen the independence of each branch of the state. Without this, the nation risks further undermining its democratic progress and succumbing to authoritarian tendencies. Only through respect for the separation of powers can Nepal ensure a more accountable, transparent and vibrant democracy for future generations.

Agriculture is one of the most important sectors in Nepal, contributing 23.95 percent to the nation’s GDP and providing jobs to more than 60 percent of the population. However, the sector faces several problems, mainly food security, attributed to the high usage of imported fertilizers, most of which are urea. In fiscal year 2024-25, Nepal plans to import around 550,000 tons of chemical fertilizers, with urea constituting a bulk. Moreover, the Nepal government has allocated a budget Rs 27.95bn as subsidy to ensure a steady supply of fertilizers to the farmers. Hence, the government bears nearly two-thirds of the fertilizer price to help alleviate the pressure on farmers. However, constant supply breaks and bad distribution channels threaten food production in Nepal, necessitating the construction of a urea manufacturing plant to boost food security.

JICA study report 1984

Nepal’s attempt at local production of fertilizer began in 1984, when Japan International Cooperation Agency (JICA) conducted a feasibility study on the production of 275 TPD green urea plants in Nepal. The primary focus was to produce green hydrogen via water electrolysis, one of the percussors for urea. However, Nepal’s hydropower capacity was only 156 MW at that time, making electricity per unit price very high. The study concluded that the water electrolysis method was only feasible if the electricity price was reduced by 40 percent, and hence the idea was abandoned.

IBN report 2015

The Infrastructure Development Corporation, Karnataka (IDeCK) and the Institution of Agricultural Technologists (IAT), along with Shah Consultant International Limited, Nepal, under the Office of Investment Board Nepal (OIBN) conducted the 2015 feasibility study on 700 kT/year urea plant, which became the second major attempt to develop a urea fertilizer plant in Nepal since the 1984 JICA study. The study evaluated Nepal’s escalating fertilizer import situation as price instabilities and supply chain breakdowns endangered national food security. The analysis assessed three production methods: electrolysis, coal gasification and natural gas steam reforming for hydrogen production. The study concluded that using natural gas as feedstock made the urea plant feasible. The research team recommended that Nepal should import natural gas from Jagdishpur (India) through pipelines followed by plant construction on a 400-acre site in Dhalkebar Dhanusha as the country lacks natural gas extraction capabilities. The evaluation showed that a natural gas-based plant costs $665m, coal gasification totalled $953m and electrolysis reached $1,305m. The research base considered that the government of Nepal would import natural gas at a fixed price from India for smooth operations of the urea plant. 

IBN comparative report 2021

The Investment Board Nepal (IBN) has prepared a report that examines two urea production methods, including natural gas-based and water electrolysis-based (green hydrogen) systems. The analysis for 701,250 T/year urea demonstrates that natural gas-based manufacturing meets financial criteria through cost-effective capital investments totaling $665m and production expenses amounting to $278 per ton. However, this process requires a 108-km gas pipeline from India. The risks associated with Indian natural gas imports become substantial due to two factors: India will deplete its gas reserves by 2040, and gas produced in the country will increase in price to double its current levels until then. This creates long-term supply uncertainty coupled with high costs. The water electrolysis process is environmentally friendly yet remains uncommercial because it comes with billion-dollar capital expenses ($1.3bn) and produces hydrogen at $656 per ton, requiring 450 MW of daily electrical power and CO₂ capture from cement facilities. According to the report, Dhalkebar stands out as the optimal location because of its existing infrastructure, and the authors endorse establishing a public-private funding partnership. The future development of green ammonia through water electrolysis requires subsidized electricity costs to become viable. The research demonstrates that local fertilizer production would decrease Nepal’s dependence on imported materials and subsidy programs, yet essential infrastructure development and supportive policies need implementation.

KU feasibility report 2022

The Green Hydrogen Lab at Kathmandu University evaluated the possibility of generating 200 kT/year of green urea in 2022 and submitted its findings to the Ministry of Agriculture and Livestock Development. The feasibility study primarily focused on the surplus hydroelectricity in Nepal, which serves as the key benefit for local green hydrogen production through water electrolysis, thus ensuring the proposed urea plant operates independently from Indian natural gas imports. The study promoted domestic renewable-based solutions for urea production as it recognized the risks and price instability of importing natural gas along with the difficulties of managing border pipelines. The use of green hydrogen instead of fossil fuels in plant operations would make Nepal a pioneer in sustainable industrial development through substantial carbon emission reduction. The research demonstrated how green urea production qualifies as carbon credit material suitable for international offset programs. The new income source generated from green hydrogen operations would increase project profitability, thus attracting foreign investment. The report advocates for government incentives, policy backing, and public-private partnership (PPP) to realize the successful deployment of the green urea plant that will strengthen Nepal’s food security, energy independence and climate commitments.

GGGI report 2024

In 2024, the Global Green Growth Institute (GGGI) Nepal performed extensive research on green fertilizer production in Nepal by creating Di-Ammonium Phosphate (DAP) and Urea from green hydrogen. Researchers analyzed renewable energy integration into hydrogen production by obtaining 100 MW from the Nepal Electricity Authority (NEA). The study focused on the production of 103,950 T/year green urea and 264,000 T/year DAP. WindPower Nepal and Hydrovert Services led the project forward by performing a Pre-FEED study to evaluate the technical aspects, economic viability and infrastructural requirements for building a green hydrogen-based fertilizer plant. The study assessed the Bhalu Chira site’s characteristics by examining its ability to accommodate the proposed facility through assessments of land resources and logistical and accessibility factors. The total capital cost of the green urea plant was calculated to be $284.88m, and the capital cost of DAP was around $268.26m. Green hydrogen utilization within the project will improve Nepal's food production independence alongside carbon footprint reduction initiatives. The research findings will create a base for upcoming green fertilizer industry policy decisions and investment decisions in Nepal.

Hariharpurgadhi pre-feasibility study 2024

In 2024, Hariharpurgadhi rural municipality (Sindhuli district) signed a Memorandum of Understanding (MoU) with Kathmandu University to conduct a pre-feasibility assessment of a 200 kT/year green urea production facility. The project's central point involved extracting carbon dioxide from cement factories in Hetauda before transporting it through a constructed pipeline to the urea production facility. The research demonstrated pipeline transport of CO₂ was not economical because of substantial construction expenses and complex transportation requirements. The pre-feasibility study recommended the construction of a cement industry along with the green urea plant at Hariharpurgadhi as the solution to maintain a continuous carbon dioxide supply for urea synthesis. The project could develop a sustainable industrial cycle through this combined strategy to convert cement-based CO₂ emissions into synthesized ammonia using green hydrogen. The research demonstrated that the proposed solution could help Nepal decrease its dependence on imported fertilizers and advance carbon capture and utilization (CCU) practices that support a sustainable agricultural sector.

Conclusion

A green urea plant establishment in Nepal will produce lasting advantages since the government has to allocate billions of rupees for agricultural sector fertilizer subsidies every year. The domestic production of urea from green hydrogen combined with local carbon dioxide supplies enables Nepal to decrease expensive import costs while establishing independent fertilizer availability. The stable fertilizer prices, along with prompt distribution, will help farmers decrease expenses while improving their productivity levels. National food security will be enhanced through this project because it delivers dependable fertilizer supplies that produce elevated crop harvests and safeguard against worldwide supply chain interruptions. The initiative allows Nepal to develop carbon credits from green hydrogen and industrial emission capture activities, supporting domestic climate goals and accessing international carbon financing. Further, Nepal could generate carbon credits that can be traded internationally, creating an additional revenue stream. Establishing a green urea plant will lead to employment opportunities at various stages, including construction, plant operation and maintenance, stimulating economic growth in the region. Moreover, a circular economy practice in Nepal can develop when setting up a cement sector alongside the urea plant to convert its CO₂ emissions into valuable products instead of atmospheric release. These strategic developments will empower Nepal’s agricultural activities while decreasing government financial burdens and realizing sustainable growth through new industrial development alongside environmental management.