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The US Indo-Pacific Strategy (IPS) was a hotly debated topic in political and diplomatic circles from 2019 to 2022, though discussions have subsided somewhat since then. In Nepal, discourse on the IPS has been dominated by its security and strategic components, with support for this initiative often viewed as joining the US-led military alliance.

In a veiled reference to IPS, Nepali leaders often say that Nepal cannot and should not join any military alliances as it goes against the country’s long-standing commitment to the non-alignment policy. Bolstering Indo-Pacific security is a key part of the IPS which faced stiff opposition in Nepal after the country was mentioned in the 2019 Indo-Pacific Strategy Report by the US Department of Defense.

Additionally, some US documents claimed that Nepal had joined the State Partnership Program (SPP), prompting Nepal to reportedly request for removal from the SPP. Some SPP documents, however, still include Nepal. Nepali leaders also briefly put off the Millennium Challenge Corporation (MCC) project, stating that it was part of the IPS. Discussions on the IPS in Nepal are framed around these two issues, but the strategy encompasses much more.

For the US and international strategic community, the 2022 Indo-Pacific Strategy unveiled by the Biden administration serves as the guiding document on IPS and its execution. The Trump administration had placed the military component as the central pillar of the strategy which landed it in controversy. So, the Biden administration introduced a new Indo-Pacific Strategy (IPS), which has now entered its third year of implementation. US officials are currently occupied with compiling progress reports on a country-by-country basis. Contrary to the Trump administration’s confrontational approach toward China, the Biden administration’s IPS adopts a different stance. It consists of five pillars: promoting a free and open Indo-Pacific, fostering connections within and beyond the region, driving Indo-Pacific prosperity, enhancing Indo-Pacific security, and building regional resilience to 21st-century transnational threats.  Biden’s IPS focuses more on economic cooperation, capacity building of regional partners, and the view that US resources alone are insufficient. 

A frequently asked question in Nepal is whether the country is already a part of the IPS. This is a tricky question and the answer can be both yes and no. Those who view the IPS solely through the prism of security and military cooperation say Nepal is not involved. However, considering all components of the strategy and its implementation, Nepal can be seen as a part of the IPS. US officials and experts have often clarified that the IPS is an overarching framework outlining how the US, as a superpower, envisions the Indo-Pacific region. Nepal, being the landlocked country situated between India and China, is a high priority in the region. US officials have stated in documents that ‘Nepal can play a vital role in the Indo-Pacific region’ and that Nepal is ‘a valued partner in the Indo-Pacific’.

The broader context suggests Nepal is indeed a high priority for the US within its overarching Indo-Pacific policy. In recent years, the US has stepped up diplomatic engagements with Nepal through high-level visits. These visits have focused on increasing US development assistance to Nepal, attracting private investment, promoting democracy and human rights, curbing corruption, and boosting collaboration across sectors. At the same time, the IMF, World Bank and other financial institutions have also intensified their engagements with Nepal. The MCC compact is a case in point.

Looking at how the IPS is being implemented in Nepal through various US agencies like USAID, there are investments “to strengthen democratic institutions for good governance and human rights; foster sustainable, inclusive, transparent economic growth; and improve resilience to health and climate threats” which is the thrust of IPS.

Let’s consider some specific cases now. The first pillar of the IPS is a free and open Indo-Pacific. Targeting the first pillar, the US has been supporting Nepal across domains like governance, democratic values, security and stability. This includes working with Nepal’s media, civil society and key institutions to build capacity, as well as security cooperation with Nepali forces on disaster preparedness, humanitarian assistance, border security, and more.

US agencies are actively engaged in Nepal across other pillars of the IPS. The US closely coordinates with allies and partners, recognizing its resources alone are insufficient for the region's challenges. Hence, allies like Japan, South Korea, India, Australia, and the UK are also expanding their presence and investments aligned with their own Indo-Pacific outlooks.

While the IPS has many facets, discussions and understanding in Nepal have been narrow. Obviously, there are challenges in dealing with the strategic initiatives, but time has come to make an understanding and position about what IPS means to Nepal. In the lack of an official government position, politicians and bureaucrats face difficulties addressing IPS-related issues and projects, particularly with the US.

As Nepal desperately seeks investment across sectors, the US and its partners are exploring opportunities, alongside emerging economies eyeing Nepal. Rather than shying away or viewing the IPS solely as a military strategy, there is a need for open dialogue to build an accurate understanding. The IPS involves US engagement with Nepal on clean energy, climate change, disaster preparedness and facilitating regional power trading agreements. On energy cooperation, the US is working closely with south Asian countries including India, Bangladesh, Bhutan and Nepal. The US also played a vital role in facilitating a regional power trading agreement in South Asia. Regarding climate change, the US partners with various organizations in Nepal, particularly targeting youth engagement—an area where Nepal can greatly benefit as it already faces impacts from climate-induced disasters. Another associated issue is preparedness for disaster response and relief operations. 

There is a need to build an understanding of the IPS to provide clear thoughts and ideas on how to address these challenges. Better comprehension of the multifaceted IPS can offer Nepal significant benefits. However, there are inherent risks if Nepal fails to develop a uniform and consensus-based position on it.

Hydropower, driven by the force of flowing water, stands as a renewable energy source critical for Nepal's energy security and global sustainability efforts. Nepal holds a ‘great’ potential for hydropower generation, but realizing this potential comes with its set of challenges, including infrastructural limitations, regional disparities, and the need for strategic planning and international collaboration.

Intertwined with its political history, Nepal's economic journey reflects periods of stagnation and resilience. Emerging from political transformations since the 1960s, Nepal has witnessed shifts in economic policies, trade relations, and investment climates. Despite facing challenges such as political instability and limited infrastructural development, recent years have seen a surge in foreign direct investment (FDI), signaling growing confidence in Nepal's economic prospects.

While sectors like tourism and remittance play crucial roles in Nepal's economy, the hydropower industry is emerging as a cornerstone for sustainable growth. With untapped rivers and a growing expertise in hydropower development, Nepal has the potential to reduce its reliance on imported fuels and bolster energy independence.

Progress and challenges

The landscape of Nepal's hydropower sector reflects both progress and challenges. With initiatives like the Arun-III project, the nation has made strides in expanding its energy infrastructure. However, disparities in project distribution across regions highlight the need for equitable development strategies. While the Eastern region boasts a higher concentration of operational projects, the Mid and Far-western regions lag behind, indicating the need for targeted investment and development efforts.

According to recent data from the Department of Electricity Development, Nepal currently has 142 hydropower projects integrated into the national grid, with a combined production capacity of 2603.46 MW. These projects are distributed across various districts, with Ilam standing out with 16 projects, while Dolakha leads in power generation capacity, followed by Lamjung. However, there is a notable concentration of operational projects in the Eastern region compared to the Western region. 

At present, as per information sourced from the Department of Energy Development (DOED), a total of 244 projects have obtained construction licenses, collectively possessing the potential to generate 8758.04 MW. This appears promising, aligning with market demand and the prospects for cross-border electricity trade. Notably, the Eastern and Western regions maintain prominence in the number of projects under construction. Myagdi leads with 24 projects holding a potential capacity of 797.43 MW, followed closely by Taplejung with 23 projects contributing to a cumulative capacity of 1189.9 MW. In terms of capacity, Sankhuwasaba emerges as the frontrunner, boasting a potential capacity of 1244.94 MW across 16 projects currently licensed for construction. On a positive note, Kalikot, a district in mid-western Nepal, secures the third position with a capacity of 888 MW derived from four projects.

Upon categorizing all the projects, it becomes evident that those with a capacity exceeding 100 MW are predominant, constituting a total of 3967 MW. Projects falling within the 50-100 MW range collectively contribute 1848.729 MW. Specifically, Taplejung and Myagdi each house five projects within the 50-100 MW range. Conversely, Rasuwa and Taplejung accommodate four and three projects, respectively, possessing installed capacities surpassing 100 MW. Overall, the outlook is comforting, characterized by a significant number of sizable projects in the developmental pipeline.

Total power generation capacity from existing projects of Independent Power Producers (IPPs) and Nepal Electricity Authority (NEA) is a significant contributor to Nepal's energy landscape. As of recent data, IPPs significantly outpace NEA-led projects in meeting national demand. While IPP-led projects exhibit minimal import gaps, grid interruptions pose challenges, especially during high-demand periods. However, the combined efforts of IPPs and NEA contribute to the overall energy generation capacity of Nepal, laying the foundation for economic growth and development.

Addressing the energy gap

Operational projects in Nepal's energy sector are struggling to meet peak demand, necessitating imports from neighboring India. Analysis of the fiscal year 2079-80 data reveals a concerning decline in power generation during the driest period, from Mangsir/Poush to Baisakh/Jestha. To mitigate this shortfall, imports from India spike at approximately 680 MW during Chaitra and Baisakh. However, it's worth noting that exports are more prevalent during the wet season, highlighting seasonal fluctuations in energy demand and supply.

A closer examination of the energy table indicates a widening gap between energy requirement and availability in the wet season, offering an opportunity for revenue-generating exports. Conversely, in the dry season, import costs escalate as available power diminishes, posing economic challenges for Nepal's energy sector.

The predominant cause of this gap can be attributed to the reliance on run-of-river projects, where generation hinges on river water, making it susceptible to changes from global warming and unplanned development. Addressing this requires a firm power supply throughout the year to optimize cross-border energy export returns.

Independent Power Producers (IPPs) significantly outpace NEA-led projects in meeting national demand, yet grid interruptions remain a challenge, especially during high-demand periods like winter. Unplanned grid distribution, compounded by urbanization, exacerbates this issue. Transmission losses peak during the wet-min load season at 4.22 percent for 132KV and above, dropping to 3.57 percent during the dry-peak load season.

Addressing interruptions is paramount for ensuring reliable energy sources, particularly for the potential growth of the yet inactive industrial sector, crucial for leveraging national resources. However, without consistent supply security from NEA, the market may stagnate, impacting the economy and missing out on the benefits of increased power generation.

Solely focusing on exports is deemed economically shortsighted. Enhancing energy consumption capacity and replacing outdated fossil fuel dependencies from kitchens to industries are crucial steps. Future supply prospects appear promising, with potential three-fold increases from new mega projects being considered by stakeholders. This underscores the importance of strategic planning and collaborative efforts in ensuring Nepal's sustainable and resilient energy future.

Toward a sustainable future

Nepal's energy independence and sustainable development journey requires concerted efforts from government agencies, private sector stakeholders and international partners. While cross-border energy trade agreements signify progress, a broader strategy encompassing domestic consumption, alternative energy sources and infrastructure development is imperative for long-term sustainability.

As Nepal navigates its energy landscape, leveraging its hydropower potential while addressing challenges, the nation stands at a critical juncture in shaping its energy future. With strategic planning, innovative solutions and collaborative efforts, Nepal can realize its vision of a sustainable, resilient and prosperous energy sector.

Understanding road safety involves more than just following traffic rules; it signifies a profound commitment to saving lives, protecting families, supporting economic growth, and achieving Sustainable Development Goals (SDGs). This broader perspective emphasizes the positive impact that prioritizing road safety can have on the society as a whole. The sobering reality, highlighted by the World Health Organization’s Global Status Report on Road Safety 2023, indicates a slight decrease in annual road traffic deaths to 1.19m. This suggests that ongoing efforts to enhance road safety are yielding results, emphasizing the potential for significant reductions in fatalities through the application of proven measures. Notably, road crashes stand as the primary cause of death among children and young adults aged five to 29, with vulnerable road users constituting more than half of global road traffic fatalities.

Despite endeavors to improve road safety, the toll of mobility remains disproportionately high, particularly among pedestrians, cyclists, and motorcyclists in low and middle-income countries (LMICs). Road crashes not only pose a human tragedy and a major public health concern but also impose substantial socioeconomic burdens, especially on impoverished communities. Collective economic costs of road traffic fatalities and injuries in LMICs range from two to six percent of the gross domestic product (GDP). In response to this pressing reality, the UN General Assembly initiated the Decade of Action for Road Safety 2021-2030, urging governments, organizations and individuals to prioritize road safety measures.

Toward safer roads

Through awareness drives and policy reforms, Nepal is striving to cultivate a more responsible and conscientious approach to road usage. In 2022, the Ministry of Physical Infrastructure and Transport published a 

‘Nepal Road Safety Action Plan (2021-2030)’, reflecting concerted efforts to address road safety issues. Activities of the Kathmandu Valley Traffic Police Office like the ‘Traffic Awareness Special Campaign-2081’ exemplify this commitment. The focal ministry of road safety is the Ministry of Physical Infrastructure and Transport, which collaborates with various ministries such as the Ministry of Home Affairs, Ministry of Education, Science, and Technology, and the Ministry of Health and Population. Among them, the home ministry has played a pivotal role in spearheading enforcement initiatives to enhance road safety. The ‘Traffic Awareness Special Campaign-2081’, launched in April, aimed to cultivate a more civilized road culture through heightened awareness among the public. Furthermore, the ministry has announced plans for special operations geared toward enhancing the reliability and safety of public transportation.

Helmet safety and beyond

Helmet use is mandatory for both riders and pillion riders according to the Vehicle and Transport Management Act 2049 BS. Ensuring road safety involves various elements, but prioritizing low-cost, high-yield enforcement measures is crucial. Among these interventions, helmet safety stands out as paramount, especially considering that motorcycles account for over 80 percent of vehicles and pose the highest risk on the roads. The importance of wearing helmets, particularly for bikers and pillion-riders, cannot be overstated. Head trauma remains a leading cause of death in motorcycle accidents, yet quality helmets can significantly reduce the risk of fatalities by over six times and decrease the likelihood of brain injuries by up to 74 percent.

The dedication of Nepal Police in enforcing helmet safety regulations is admirable, despite resource constraints. However, effective enforcement requires strong support from various stakeholders, including the home ministry, health ministry, civil society organizations, professional networks and development partners.

Global efforts

Road safety is not solely a concern for Nepal; it’s a global imperative. According to WHO, the majority of road traffic fatalities occur in low- and middle-income countries, with the highest fatality rates observed among low-income countries, at 21 deaths per 100,000 population. This underscores the urgent need for international cooperation and solidarity. Road crashes have caused immense loss of human lives and hindered economic growth and sustainable development in Nepal. The number of casualties from road crashes has surged from 1,131 in 2008 to 2,789 in 2018, marking a staggering increase of 146.6 percent. The economic toll of road traffic injuries, with treatment costs and loss of productivity, amounts to an estimated three percent of annual GDP for many countries.

For instance, Nepal can draw valuable lessons from Thailand’s approach to post-crash care management. Under the Ministry of Interior’s National Directing Center for Road Safety, alongside the Ministry of Public Health and other road safety foundations, Thailand has implemented key activities to reduce its fatality burden, including leadership and networking, data integration and policy advocacy, and strengthening post-crash response.

Key change agents

The state of road safety in Nepal faces numerous challenges, with one of the primary issues being the limited capacity of the National Road Safety Council (NRSC) to serve as the lead agency for road safety, crucial for implementing the National Road Safety Action Plan (NRSAP 2021-2030). NRSC serves as the central coordinating body with the aim of reducing accidents and promoting safer roads nationwide. Its primary function is to foster coordination among various agencies and spearhead the implementation of safety measures. Also, the Road Safety Society Nepal, is dedicated to fostering a safe driving culture across the country. As a national nonprofit organization, it plays a vital role in facilitating the development of effective road safety practices through a range of initiatives. However, there is a pressing need for further innovative and participatory engagements to amplify its impact.

Encouragingly, private sector entities like Pathao and InDrive, tech startups revolutionizing transportation in Nepal, have begun integrating helmet safety into their policies and services. While these efforts are worthy, there is room for improvement. These companies have the opportunity to lead by example and prioritize passenger safety, particularly through the consistent use of helmets.

Views are personal

To promote the flow of vehicular traffic between member-states, the Bangladesh, Bhutan, India, and Nepal (BBIN) Motor Vehicle Agreement (MVA) was signed in 2015. Although experts had hoped to stimulate an increase in commercial and personal vehicular traffic across borders, it failed to make any noteworthy impact. 

So, what went wrong?

Despite various studies and stakeholder consultancies conducted by donor agencies like the World Bank and Asian Development Bank, the initiative failed to achieve anything significant. Bhutan ultimately backed out of the agreement, fearing possible displacement of local MSMEs in the trucking industry, endeavoring to fight for its small business owners. They also cited environmental concerns as another prime reason behind the move even as Bangladesh pushed on, developing a fruitful trade relationship with India. India has been asking Nepal to revisit the transit and bilateral agreement, but the latter seems unsure how to go about it.

ADB attempted to assist Nepali ministries by drafting suitable protocols and advocating cooperation between them and observed that the Ministry of Industry, Commerce and Supplies (MoICS), and the Foreign Ministry needed to cooperate better with the Ministry of Physical Infrastructure and Transport (MoPIT). General opinion among related personnel is that the MoICS should have precedent over matters related to bilateral and regional agreements, and that MoPIT was erroneously designated authority over these matters. This atmosphere of resentment failed to forge the collective political will necessary to motivate the ministries to cooperate and coordinate.

Recent studies on the transport industry of Bhutan and Nepal show that donor agencies attempt to woo and advocate only to higher-level stakeholders by disregarding stakeholders at the ground level and leaving the gap in their understanding unaddressed. This allows us to understand what went “wrong”: Being influenced by wrong examples of the tracking and tracing of end-to-end movements along the logistic chain and wrong advocacy with wrong stakeholders resulted in the pitfalls experienced. 

So, the way forward should be to begin from the ground level to raise awareness among stakeholders, and I believe that following steps can “grease the wheels” to make a real difference.

Firstly, various members of the government need to collectively decide on the appropriate ministry responsible, which will then implement a ground-up stakeholder consultancy approach. This approach should be informed by the expertise of relevant logistics actors and at least inform, if not incorporate, donor agencies to prevent redundancies and confusion among stakeholders. Donor agencies and relevant Nepali ministries should cultivate amicable working relationships to generate a collective political will that appropriately advocates for the modality so that all member-states understand how it might be mutually beneficial to them.

Secondly, undertaking several trade-related activities along highways to benefit citizens living close to them while addressing businesses/entrepreneurs, social safeguards, climate change, gender, disability issues and disaster prevention will help them adapt to the new economic ecosystem and better understand and enhance their monetary potential.

The benefits of carrying out local outreach in conjunction with BBIN MVA are manifold and have the potential to make a significant impact at the grassroots. At local marketplaces along highways connecting member-states, citizens can sell their goods and services, promoting economic opportunities for local businesses and entrepreneurs if they are provided support in identifying the nature of business, communicating policies and regulations as well as standards, or even providing suggestions to aspiring businesspeople and linking them to real traders (retailers, wholesalers, et cetera.)

Skill development centers along highways will provide training and employment opportunities for residents, including vocational training in trades such as driving, mechanics, carpentry, agriculture and hospitality.

Health and safety protocols will help protect workers and residents from accidents, occupational hazards, and exposure to pollutants during road construction. Placing disaster preparedness and response centers along highways with emergency supplies, communication systems, and trained personnel will ensure swift and effective responses to road accidents, landslides, floods and other disasters.

Community resilience techniques offered to communities along highways will provide knowledge to residents on disaster preparedness, risk reduction strategies and response, empowering them to take proactive measures to protect themselves and their communities by engaging with local communities, indigenous groups, and other stakeholders throughout the road construction process to solicit their input, address concerns, and ensure transparency and accountability.

Providing gender-inclusive business support services along highways, including access to finance, training and mentorship programs tailored to the specific needs of women entrepreneurs and specific business owners will foster an environment of economic agency and inclusiveness.

The social safety aspect is crucial, and it should include implementation of social safety nets and support programs for vulnerable populations living close to highways, including access to healthcare, education, housing, and social assistance. By integrating these social safety nets along trade routes, stakeholders can minimize adverse social impacts, enhance community resilience and promote sustainable development in the areas affected by natural calamities. Each of these methods has advantages, challenges, and potential applications depending on various factors like population density, type of topography and industries around the community. Introducing technologies that help with environmental impact mitigation and help reduce greenhouse gas emissions will increase awareness and ensure greater accessibility to mitigate climate change.

Generating tourism in Bhutan, Nepal and Bangladesh by encouraging community-based tourism initiatives along highways, where residents can offer homestays, guided tours, and cultural experiences, generating income while preserving and showcasing local traditions and heritage will be yet another way to help drive economic and social progress. Green infrastructure projects along highways, such as tree planting, rain gardens and natural drainage systems, mitigate climate change impacts, enhance biodiversity and improve resilience to disasters like floods and landslides.

We can achieve these benefits by implementing BBIN MVA, especially to support MSMEs by providing and linking activities under different trade infrastructure along with construction of roads and other trade-related infrastructure. Connectivity through different means and modes of transport like inland waterways and trains can further enhance the economy of the BBIN initiative by connecting trade and social issues for a better livelihood.

The author is trade consultant and advisor at Nepal Freight Forwarders Association. Views are personal