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Competitiveness and competence of Nepal’s IT services industry have grown tremendously in the past few years with the country exporting IT services worth $515.4m in 2022.

A new report by Institute for Integrated Development Studies (IIDS) on the Nepali IT industry shows IIT service exports accounted for 1.4 percent of the country’s GDP and 5.5 percent of the foreign exchange reserves.

The report shows Nepal is gradually making strides in IT service exports, especially through an increment in software development and digital services through offshore outsourcing.

The report titled ‘Unleashing IT: Advancing Nepal’s Digital Economy’ says IT services exports witnessed a whopping 64.2 percent growth in 2022. “Both IT companies and freelancers experienced substantial growth, with IT companies recording an 80.5 percent increase in service exports and freelancers achieving a growth of 55.2 percent,” says the report.

The report, the first of its kind to map the Nepali IT services export industry throws many interesting facts. There is significant involvement of youth in the IT sector, with 83.5 percent of freelancers working in the IT sector falling within the age bracket of 20-29.

Among the IT companies operating in Nepal, 75.3 percent are solely registered within the country, while 24.7 percent are registered both in Nepal and abroad. The primary areas of export services provided by Nepali IT companies include programming, coding, design, software development, and testing. A significant majority (78 percent) of the companies receive project-based work, although they express a desire for long-term assignments despite currently taking on monthly or hourly task-based work. Around 58.3 percent of the companies frequently receive export services work, with approximately 28.4 percent experiencing no operational issues. However, 12.3 percent of the companies only receive occasional assignments.

In terms of clients, 77.8 percent of IT companies receive assignments from the United States, followed by Europe, the United Kingdom, and Australia. However, there has been a shift in the trend in recent times, with more companies working with countries in Asia and the Middle East, such as the United Arab Emirates, Bahrain, Bangladesh, Bhutan, Indonesia, Japan, the Republic of Korea, Malaysia, Singapore, and Thailand.

Approximately 44.4 percent of the companies have been co-founded as private limited companies, while others operate in partnerships with international companies or as sole proprietorships in certain cases. Among the partnerships, 87.5 percent exclusively involve Nepali partners, 3.1 percent foreign partners, 6.3 percent both Nepali and foreign partners, and 3.1 percent involve both Nepali and Non-Resident Nepalis (NRN) partners.

“The surge in IT services exports has contributed to the economy and created employment opportunities for IT professionals,” says the report. There are over 106 IT export services companies and 14,728 IT freelancers in software development and technology and 51,781 Information Technology Enabled Services  (ITeS) freelancers engaged in exporting IT services through various digital platforms.

With growing prospects for exports, there has been a promising growth trend in both revenue and investment in the IT industry.  The revenue growth signifies that a high number of companies are successfully offering IT services to international clients, resulting in a higher influx of foreign exchange into the country.

On average, the yearly salary for IT workers in Nepal is $2,810 (Rs 365,300) at the entry-level, $6,395 (Rs 831,350) for the mid-level, and $15,322 (Rs 19,91,860) for the senior-level. Currently, the estimated number of jobs generated by IT service export companies is 7,228 and there are 66,509 online freelancers.

The report shows a gender divide in the number of hired employees. There is a stark gender disparity in terms of hiring regular and full-time staff, favoring men over women. As per the report, 84 percent of the employees (both full-time managerial and technical staff) are men while the remaining 16 percent are women.

According to Dr Amrita Sharma who led the study, reliable supply of electricity and internet connection are major challenges in Nepal. “With the growing demand for IT services, strengthening IT infrastructure should be the keen focus,” said Sharma.

The number of data centers in the country must be increased to secure data storage and management as well as enable remote access to data, disaster recovery, and energy efficiency.

According to the report, in order to boost the growth of Nepal’s IT sector, it is essential to provide the industry with adequate financial support across three major areas—research and development, investment support to start-ups and scaling up successful companies, and the creation of efficient payment systems. The lack of funding for early-stage financing and company incubation has hindered the growth of IT startups. “As many startups are struggling, early-stage funding is crucial,” said Sharma.

In Nepal, the IT sector, according to the report, presents an opportunity for contributing to steady economic growth in the digital era. “Unlike such sectors as tourism, hydropower, and agriculture, which could face challenges due to geographical limitations and competition from neighboring manufacturing hubs, IT service exports can thrive with fewer challenges,” says the report. 

Political instability, widespread corruption, cumbersome bureaucracy, and inconsistent implementation of laws have discouraged potential investment in Nepal, said a new US report.

While government authorities including the Prime Minister have been talking about simplifying the foreign direct investment (FDI) regime, a new report by the US Department of State has raised serious questions about the investment climate environment in Nepal.

The 2023 Investment Climate Statements released by the State Department says despite considerable potential—particularly in the energy, tourism, information, and communication technology (ICT), infrastructure, and agriculture sectors—political instability, widespread corruption, cumbersome bureaucracy, and inconsistent implementation of laws and regulations have deterred potential investment in Nepal.

The report has also questioned the government of Nepal’s commitment to implement the policies into meaningful practices. “While the Government of Nepal (GoN) publicly states its keenness to attract foreign investment, this has yet to translate into meaningful practices,” says the report.

The US government report has identified Nepal as an investment destination for those who're willing to accept the inherent risks and unpredictability of doing business in the country and who possess the resilience to invest with a long-term mindset.

While the report lauds the government’s efforts to bring some investment-friendly laws and regulations in recent years, it says significant barriers to investment still remain.

Corruption, laws limiting the operations of foreign banks, lingering challenges in the repatriation of profits, and controlled currency exchange facilities have undermined foreign investment in the country. The prohibition of FDI in certain sectors as well as a minimum foreign investment threshold of Rs 20m ($154,000), and the government’s monopoly over certain sectors of the economy (such as electricity transmission and petroleum distribution) are other factors that have dented foreign investment potential in Nepal.

Political uncertainty is a continuing challenge for foreign (as well as domestic) investors, according to the report. “Nepal’s ruling parties have spent much of their energy over the last years on internal political power struggles instead of governance,” says the report.

The US report has said what economists and business community members in Nepal have been saying for years. According to them, the political environment is one of the factors that affect the overall investment climate including FDI.

For a long time, Nepal has remained among the countries that receive the lowest FDI in the world. Despite many talks on attracting foreign investments in the country, the country has failed to attract foreign investors as targeted. At less than one percent of GDP, Nepal’s current levels of FDI are the lowest among similar economies.

FDI pledges in the country dropped by 22.2 percent in FY 2022/23. FDI commitments totaled Rs 38.457bn in FY 2022/23 compared to Rs 49.431bn in FY 2021/22.

The other factor deterring foreign investors from putting money in Nepal, according to the report, is a lack of understanding of international business standards and practices among the political and bureaucratic class. “A legal and regulatory regime that is not quite aligned with international practices also impedes, hinder, and frustrate foreign investors,” says the report. “Elements of Nepal’s tax regime, in particular, may be inconsistent with international practices and could trip up foreign investors.”

Immigration laws and visa policies for foreign workers are cumbersome.  Inefficient government bureaucratic processes, a high rate of turnover among civil servants, and corruption exacerbate the difficulties for foreigners seeking to work in Nepal.

While the US still features among the top 10 foreign investors in Nepal, the US FDI in Nepal, compared to other countries such as India, and China, is less, accounting for about 2.9 percent of the total FDI stock.  

Economists say it is necessary to improve the existing policy and structural system to bring more foreign investment into Nepal. According to them, while the immediate reason for the decline in FDI might be the global recession and domestic political situation, there are structural and procedural obstacles in Nepal that discourage investors.

Despite introducing a one-door system in the Investment Board Nepal and Industry Department, FDI has not come in as expected. “It has failed to facilitate FDI so far because it has failed to become a complete one-stop service center,” the economist said.

In the second week of March, Prime Minister Pushpa Kamal Dahal had said that the government is seriously working on further simplifying the procedures, fully operationalizing the one-stop service, and developing necessary rules for the automatic approval of foreign direct investments (FDIs) applications.

Of late, the government has eased procedures related to FDI. The Department of Industry (DoI), the government agency responsible for providing services to foreign investors, has developed a mechanism to approve foreign direct investments (FDIs) through the online channel. The mechanism that allows the department to approve FDI worth Rs 100m automatically has come into implementation from Jestha 1.

Citing the complaints about the higher threshold for FDI, the government in November last year lowered the threshold to Rs 20m from Rs 50m. 

Every year, the US State Department comes up with its annual reports on different thematic issues of the countries with which it has diplomatic relations. Such annual reports provide insights into how the US views other countries. 

In this article, we present the major highlights of the key US reports such as 2023 Investment Climate Statements, Trafficking in Person’s Report, International Religious Freedom Reports and Country Reports on Human Rights Practices.

This week, the US State Department published its Investment Climate Statements. According to the report, hydropower, agriculture, tourism, ICT sector and infrastructure have significant commercial potential for investors. Nepal has an estimated 40,000 megawatts of commercially-viable hydropower electricity generation potential, which could become a major source of income through electricity exports, the report says.

The report recognizes that Nepal has established some investment-friendly laws and regulations in recent years, but significant barriers to investment remain. One of them is corruption which is impeding the investment climate in Nepal. The report states that political uncertainty is a continuing challenge for foreign as well as domestic investors.

Nepal’s ruling parties have spent much of their energy over the last years on internal political power struggles instead of governance, the report says.

The report further states that there is a lack of understanding of international business standards and practices among the political and bureaucratic class, and a legal and regulatory regime that is not quite aligned with international practices also impede, hinder and frustrate foreign investors. 

The Investment Climate Statements also raises questions about the role of trade unions. “Trade unions, each typically affiliated with parties or even factions within a political party, and unpredictable general strikes can create business risks, although this problem, once common, has diminished in recent years.”

The US report also questions the role of the Commission for Investigation of Abuse of Authority (CIAA), the national anti-corruption body. It says: “The 2015 constitution empowers the CIAA to conduct investigation of any abuse of authority committed through corruption by any persons holding public office. In practice, according to the report, the CIAA arrests and investigations tend to focus on lower-level government bureaucrats.”

According to the 2022 Corruption Perception Index released by Transparency International (TI), Nepal ranked 110th among 180 countries, placing it in the range of “highly corrupt” countries. In Jan 2018, local media reported that the CIAA is drafting a bill to replace the Prevention of Corruption Act, with the goal of making the new law compatible with the UN Convention against Corruption that Nepal signed in 2011. But the private sector is opposing some of the provisions of the draft. Nepal is not a member of the OECD Anti-Bribery Convention.

While anti-corruption laws extend to family members of officials and to political parties, the report says, there are no laws and regulations that are specifically designed to counter conflict-of-interest in awarding contracts of government procurements.  

A few months back, the US came up with its International Religious Freedom Report which raised issues that Christian groups continued to report difficulties operating as non-governmental organizations and multiple religiously affiliated organizations reported increased challenges renewing or registering their organizations. Christian groups said they continued to face difficulties buying or using land for burials, especially within the Kathmandu Valley, the report mentions.

It also speaks about the growing influence of India’s Bharatiya Janata Party in Nepal. The report cited Nepali civil society leaders as saying that the influence from India’s ruling party, the Hindu nationalist BJP, and other Hindu groups in India continue to pressure politicians in Nepal, particularly, the pro-Hindu, Rastriya Prajatantra Party, to support reversion to the Hindu state.

The report drew criticisms for its baseless accusation that BJP provided money to Nepali leaders for the Hindu cause. There were reports that the government sought clarification from the US side on the issue but it was never made public.

The US also has significant concerns over the religious freedom of the Tibetan community in Nepal, although the report does mention that there has been some improvement when it comes to the rights of the Tibetan community. The report cites Tibetan community leaders highlighting an increased ability to celebrate some religious and cultural holidays without police interference.

In June this year, the US came up with the Trafficking in Person’s Report which states that Nepal does not fully meet the minimum standards for the elimination of trafficking, but is making significant efforts to do so.

In its Country Reports on Terrorism, the US has raised questions regarding the security situation in Nepal’s international airport as well as the open border that it shares with India. A more significant threat is non-Nepali international terrorist groups using Nepal as a transit/staging point for soft targets, the report says. Because of the open border with India and insufficient security protocols at the country’s sole functioning international airport in Kathmandu, the report says, it could be used as a transit or staging point for international terrorists.

In its Country Reports on Human Rights Practices, the US has provided its perspective on various aspects of human rights in Nepal. On transitional justice, the report says the government and judiciary did not significantly address most conflict-era human rights and humanitarian law abuses committed by the Nepal Army, Armed Police Force, police and Maoists. The country’s two transitional justice mechanisms—Commission of Enforced Disappeared Persons and Truth and Reconciliation Commission—are not fully independent.

Centre for Social Inclusion and Federalism (CESIF) organized a national seminar to launch its publication – China’s Emergence in Nepal’s Infrastructure: Status, Issues and Challenges and shared key findings of the report for wider civic engagement and discussion.

The book, authored by noted author Amish Raj Mulmi, senior journalist, Anil Giri, co-founder of The Araniko Project Raunab Singh Khatri, CESIF’s Research and Program Coordinator Arpan Gelal and CESIF’s researcher Milan Acharya was launched at the Square Hotel today, reads a statement issued by the CESIF.

The book launch was followed by the discussion on the theme, ‘China’s Emergence in Nepal’s Infrastructure: Status, Issues and Challenges.’

The seminar brought together distinguished panelists—former Economic Development advisor to the Prime Minister of Nepal and (Ret.) Secretary of the Government of Nepal Lal Shanker Ghimire, former Urban Secretary of the Government of Nepal Deependra Nath Sharma, Director of the Center for Governance and Academic Affairs at IIDS Dr Sucheta Pyakuryal, former senior External Affairs Officer at the World Bank, Rajib Upadhya.

The panel was moderated by Research Advisor at CESIF Ajaya Bhadra Khanal.

The discussion brought into account the nexus of corruption that Chinese infrastructure projects had built, their inclination towards party-to-party relations, especially the left political forces, and the need for Nepal’s political and bureaucratic front to work together upon its negotiation techniques, the statement reads.

Vijay Kant Karna, Executive Chair at CESIF, began the seminar by extending his welcome remarks.

“Realizing the lack of comprehensive research on China's involvement in Nepal's infrastructure sector, CESIF conducted research on the said topic, the report of which we are launching today. The report is expected to provide insights into the patterns of Chinese engagement in Nepal's infrastructure. The report also discusses the nexus between the local agents of Chinese contractors and Nepali decision makers,” said Karna.

Author Amish Raj Mulmi presented key findings and analysis of the book.

Mulmi discussed the mechanisms of the Chinese infrastructure engagement in Nepal, and then provided a succinct comparison of the infrastructural investment by China, India and Japan in Nepal, in which he commended Japan’s debt relief practices.

Lal Shanker Ghimire began the discussion by talking about how all aid comes with strings attached.

He reflected that infrastructural funding is no different and must be viewed from that same lens.

Ghimire further said that a lack of proper negotiation has led to some of the unfair deals. This lack of negotiation stems from inferiority complex and lower bargaining capacity of Nepali bureaucrats.

Similarly, Dr Sucheta Pyakuryal mentioned that Nepal is not in a scary position given the status of economic indicators.

However, the political dimension is a thing to reflect upon.

Nepal, as a country, is weak, and thus, commercial projects tend to make a weak state weaker. Therefore, we need to look upon the knots and bolts of our government while dealing with the funded infrastructure projects,’ said Dr Pyakuryal, the statement further reads.

Likewise, Dr Rajib Upadyay provided his opinion on how resources are finite now.

‘The era of cheap money is now over. In particular because of three reasons: firstly, the West is heading towards recession. Secondly, rising global tensions has brought geopolitics into the economic discourse. Thirdly, the defense budget is increasing amongst NATO countries,’ he reflected.

Deependra Nath Sharma, reflected upon the lack of a definite institution to oversee infrastructural governance.

He said that the national planning commission needs to involve itself more. Especially, when projects do not complete in the intended period, there is blame game, and cost overrun, among others.

Sharma opined, ‘There is also a Public Procurement Monitoring office, but is barely monitoring anything. It provides suggestions on dispute, but doesn’t monitor, per se.’ Thus, there is clearly an institutional gap.

Moderator Ajaya Bhadra Khanal summarized the discussion by reflecting that there exists a plethora of aspects of infrastructural development and that Nepal needs to prioritize its national interest while negotiating for infrastructural development deals.

The seminar ended with vibrant participation from audiences for the question-and-answer segment. The event hosted noted diplomats, journalists, former bureaucrats, academicians, former military officials, and researchers.

Centre for Social Inclusion and Federalism (CESIF) Nepal is a not-for- profit, autonomous and independent private research institution serving the public interest, with significant independence from any interest group. Our mission is to help the government create a democratic, secure and just society by making informed and transparent decisions about policies and practices.

Along with government-to-government relationships, the Communist Party of China and India’s ruling Bharatiya Janata Party are competing to cultivate ties with Nepal’s political parties. Keeping their ideological positions at a bay, they are reaching out to all major parties in Nepal.  

High-level delegations from both the CPC and BJP are visiting Kathmandu, while leaders from various political parties in Nepal are also flying to China and India, with more party-to-party level exchange of visits on the cards. 

Political analysts say both New Delhi and Beijing are making a departure from their traditional policy of backing only specific parties and leaders and building ties with all political forces in Nepal, considering the political instability in the country.

The spectacular emergence of the recently formed Rastriya Swatantra Party and the resurgence of Rastriya Prajatantra Party—both of which are challenging the three traditional parties, Nepali Congress, CPN-UML and CPN (Maoist Center)—have also forced China and India to recalibrate their approach. 

The CPC has realized that by fostering and nurturing Nepal’s leftist forces is not going to secure China’s interests.  The BJP, which has been in power in India since a decade, also wants to achieve its agendas including Hindutva ideology in Nepal by roping in all political parties. For them, a favorable government in Kathmandu is not enough; they want the overall political environment of Nepal to be on their side.  

Political analyst Lokraj Baral says both the BJP and CPC are adopting “a realistic approach” in building ties with Nepal’s political parties. 

“There is no ideological foundation in such relationships because both sides want to appease each other to enhance their power.” 

Baral says the CPC is still more partial toward Nepali communist parties, even though it has increased its engagements with other political forces.

This week, Yuan Jiajun, member of the political bureau of CPC visited Nepal at the invitation of the ruling Maoist Center. During his stay, Jiajun met leaders from across the political spectrum. As Prime Minister Pushpa Kamal Dahal was out of the country, the Chinese leader held a virtual meeting with him. 

While the Chinese leader was in Kathmandu, a five-member delegation led by Phampha Bhushal of the Maoist party flew to India at the invitation of the BJP. The ties between the BJP and Maoist are only just evolving. Sources say lately, India's ruling party has also been approaching the UML.  

As for the Nepali Congress, it has always been close to India. Last year, the BJP had invited a group of leaders from the Congress party, which was led by Prakash Sharan Mahat. Former prime minister and Congress president, Sher Bahadur Deuba, had also visited the BJP headquarters in India before holding bilateral talks with Indian Prime Minister Narendra Modi. 

The engagement between China’s CPC and Nepal’s Maoist party has been there for a long time. During the insurgency period, Beijing largely supported Nepal’s monarchy, but it took no time to reach out to the Maoists, led by Prime Minister Dahal, after the party came to power following the fall of monarchy. Ideological proximity between the CPC and Maoist party brought them together. In the past six months, at least two Maoist delegations including one led by former speaker Agni Sapkota have visited China.  

Since the Maoist party is in power right now, Prime Minister Dahal is making utmost effort to strike a balance between India and China. He needs the support of both the CPC and BJP to stay in power.

But scores of Maoist leaders believe that they should step up engagement with China to reap the benefit from its economic development.

They are of the view that Nepal should immediately implement the Belt and Road Initiative (BRI) and other agreements reached between the two countries. Through cooperation with Nepal’s political parties, China wants to replicate its development model in Nepal, not export its political ideology, say some experts. 

Due to increased interactions, Nepali leaders too have started appreciating China’s development and its model.

During his talks with Nepali leaders, Chinese leader Jiajun said that China is willing to deepen practical cooperation under the BRI with Nepal, and deeply and solidly promote the strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity between two countries.

China’s Xinhua news agency reported that the CPC is willing to strengthen exchanges and mutual learning with Nepali political parties to boost the development of China-Nepal relations. Jiajun told Nepali leaders that China is willing to enhance cooperation and exchanges with Nepal in agriculture, poverty reduction and education to enrich the relationship between the two countries through subnational exchanges.

Tanka Karki, former Nepali ambassador to China, says it is normal to build party-to-party relationships and there is nothing harmful about it. “Both countries want to enhance people-to-people relationship and political parties remain a key instrument of it.”

The relationship between Nepal’s Maoist party and the BJP is a new one. In July last year, as a party chair, Dahal visited the BJP headquarters in New Delhi and held talks with BJP President JP Nadda. After one year, BJP hosted the Maoists delegation in its party office for what they call to strengthen party-to-party relationship.

Perhaps, it is the result of cordial ties between the BJP and Nepal’s political parties, many Nepali politicians including Prime Minister Dahal are talking about protecting and promoting Hindu religion and culture.  

Not only India and China, the US, the UK and the EU countries are also trying to enhance their influence among Nepal’s political parties through bilateral exchanges and visits. They are mainly close with parliamentarians to influence the law-making process in Nepal.  

Political analyst Chandra Dev Bhatta says India and China’s increased engagements between the political parties of Nepal, can certainly be helpful to enhance relations at the political level which can also percolate at the peoples level.

“This is also particularly important when diametrically opposite political parties in terms of ideology are in power on both sides— BJP in India and Maoist Centre in Nepal. It will help resolve contentious issues between the two countries,” he says. “But if such engagements are done merely for other interests either to stay in power or to create a comfortable regime, they could backfire and damage the relations.”

A grant agreement of more than Rs 10.5 billion has been signed between Nepal and the European Union (EU) for two different programs.

At a program organized at the Finance Ministry, Singha Durbar, on Friday, two separate financing agreements - a grant agreement of 50 million pound sterling (equivalent to Rs. 7.38 billion) for 'Quality Education for All' to support the School Education Sector Plan - SESP, and a grant agreement of 22 million pound sterling (equivalent to Rs. 3.25 billion) for the 'Local Adaptation to Climate Change' initiative - were signed.

'Quality Education for All' will support the implementation of the government's School Education Sector Plan in a sector-wide approach (SWAp) supported by eight development partners, including the EU. The overall objective of this support is to contribute to a well-educated and skilled society in Nepal which is able to play an active role in the social and economic development of the country.

On the occasion, Finance Secretary Arjun Prasad Pokharel said, "l am hopeful that the support of SESP with the help in increasing equitable access and improving the quality of education, which are crucial for human capital development."

"Nepal is making sincere efforts to balance the development and climate action. I appreciate the support of the EU to plan and develop measures for Disaster Risk Reduction and to focus on increased human and financial capacities in order to enable the selected local levels and communities to manage their natural resources in regards to adaptation to climate change. I would like to thank the European Union for its continued support in the socio-economic development endeavors of Nepal", stated Pokharel.

Similarly, EU Commissioner for international Partnerships, Jutta Urpilainen said, "The European Union is proud to continue our 20 year support to Nepal in education. Supporting quality education is one of our core commitments in our cooperation."

 "We are heartened by the government's commitment to support quality education and are happy to be a close partner", stated EU Ambassador to Nepal, Nona Deprez.

The European Union and Finland, as team Europe, will continue to work with local and provincial governments in Sudurpaschim and Karnali so they are empowered to make the most of their natural resources sustainable." said Nona Deprez, EU Ambassador to Nepal.

'Local Adaptation to Climate Change' is initiated with an overall objective to improve the sustainability and conservation of natural resources to notably increase their climate resilience in Sudurpaschim and Karnali provinces, reads a press release issued by the Finance Ministry.

Their figures are impressive! Our neighbors China and India are the second and fifth largest economies in the world. Boasting $17.96trn of GDP (World Bank data) with more than 95 percent of its 1.41bn population employed, China could soon conquer the world economically. India may not be too far as it has a present GDP of $3.39trn and has nearly the same population as China. Goldman Sachs Research predicts it could become the world’s second largest economy by 2075.

Lying next to these economic giants, we Nepalis continue to brag about our heritage and culture. If someone said Mount Everest is not in Nepal or that Gautam Buddha was not born in Nepal, it will boil our blood. We can be divided on many fronts but nationalism and national sovereignty brings us all together. We are extremely proud of our history. We were never colonized although our next door neighbor, 22 times larger than us, was! And, we do not like to compare ourselves with them for what they have achieved economically.

Although Nepal is slowly rising from the category of Least Developed Countries to Emerging/Developing category, we have not progressed significantly to catch up with the rising economies, and thus I believe it is time for us to use our nationalistic sentiments to boost our economy. Although the traditional concept of economic nationalism opposes global trade, in this column, I am mostly referring to the literal meaning of economic nationalism.

Let’s take a look at our economic context: Our GDP stands at $40.83bn, of which around 30 percent is said to be contributed by remittances; unemployment rate among the active labor force is around 11 percent. On top of that, our workforce is shrinking with thousands of youths migrating for work and education every day. There are questions and counter-questions on migration. We are getting remittance in return, higher education and better exposure make our people competitive. On the flip side, most of them who go for higher education do not return. And to those who return after getting foreign exposure, what policies are there to ensure they stay here? Lately, media have reported on how difficult it is for Nepali graduates with foreign degrees to get the ‘equivalency’ done, which limits their prospects for getting jobs in the country. Important to note here is also the probability of Nepal’s aging population outnumbering the youth population, which is not healthy for the economy.

Our policymakers have forgotten to highlight nationalism in all of this. Just asking the Nepali population living abroad to return home is not attractive enough for those who have settled in places where jobs of any kind are available, and the countries function in speed and system. It is high time to embed nationalism in the economy, not just to produce skilled forces to work in the international market but to attract them and retain them in the country instead.

Make in Nepal!

India’s Make in India movement has made strides. They have supportive policies to encourage Indian businesses to flourish. They have liberal policies to encourage Foreign Direct Investment as well. Poverty in India has gone down massively—from almost 60 percent of the population living under $2.15 a day in the 1970s to 10 percent in 2019 as per the World Bank data. China’s figures are staggering: More than 70 percent of its population lived below the poverty line in the 1990s by the same measure, which has now come down to 0.1 percent in 2019. Nepal has also made improvements. As per the Multidimensional Poverty Headcount Ratio, 17.4 percent of Nepal’s population was poor in 2019, which was a significant decrease from 39.1 percent in 2011. However, Nepal still faces challenges to create jobs. Different governments at different times created or revised policies to promote employment and encourage the labor force for access to employment. But the everyday crowd of outbound youths at the Tribhuvan International Airport, buildings with billboards for foreign education, and decreasing enrolment for higher studies in Nepali colleges and universities have become our new reality. This could be reversed if we worked on it aggressively. Good examples set by our neighbors can be used for our motivation.

Decent pay instead of labor contracts

When Nepal and the United Kingdom signed an agreement opening doors for Nepali nurses to work in the UK, I was both happy and sad. Happy as there’s a wide income gap between doctors and nurses in Nepal and the prospect for Nepali nurses looked good. On the other hand, it hit me hard as we were unable to keep the skilled resource for us. Furthermore, we do not have the required numbers of doctors and nurses in the country. Nurses in most hospitals and health institutions are underpaid although the cost for studying nursing programs is high. The government should instead focus on ensuring better pay for the nurses so that they can serve in their own country. Where does nationalism stand when signing such labor agreements? Both sides know that the nurses will not return to Nepal. Whose loss is it then?

Looking forward

It’s a good sign that Nepal has started selling electricity to India. The cross-border transmission lines will surely help Nepal reap benefits. However, our ultra-nationalist sentiments were stirred when the Millennium Challenge Corporation Compact was being discussed. Disinformation rose to peak with the rumors of the American Army ready to camp in Nepal indefinitely. Thankfully, the clouds of misinformation cleared and we are building transmission lines jointly with the American support. It’s a good reminder to challenge our shortsightedness and welcome investments or grants from our friends that will benefit our economy.

China is predicted to be the world’s largest economy by 2030 and India to be the second largest economy by 2075. We are geographically located in such an important region. Our policymakers must utilize the strength of our friendship with these countries to strengthen our economy, to create jobs, to produce commodities of comparative advantage, and to invite foreign investment for economic prosperity. We need economic nationalism, literally, to catch up with these aggressively rising economies.

The author is a communications professional

Sending Nepali nurses to the United Kingdom will worsen Nepali medical sector, affecting the health services, health experts have warned.  

The shortages of nurses in the country will have an adverse effect in the health sector as patients will face delays in emergency departments and in other health services. 

 Critical care will be affected and there will be scarcity of nurses to take care of patients after surgery. Also it increases the workload of the nurses and makes them fatigued.  

Nepal and the United Kingdom though have signed a bilateral agreement on health partnership opening the door for Nepali nurses to work in the UK. 

There are already international concerns over the UK’s plan to take nurses from developing countries. The International Council of Nurses (ICN), said that such wealthy nations recruiting nursing staff from some of the world’s most fragile health systems was extremely hard to justify and perhaps should be stopped entirely. 

The ratio of nurses to the British population is around 80 to 10,000 while in Nepal it is nearer 20. The government run hospitals where there are a large number of the patients are facing an acute shortage of nurses. 

Consider this case. Recently 245 nurses have been appointed in Bir Hospital and 50 nurses have been appointed to work in federal governmental hospitals. These newly appointed numbers however are still insufficient to deliver quality health care to patients.  The ICN has said seven or eight wealthy countries—notably Britain, the United States, and Canada—were driving around 80 percent of international nurse migration, to try to address their domestic shortages.

Situation of nurses in the country 

The country is already facing an acute shortage of nurses. The shortage of nurses affects health care services, posing a threat to patient’s lives. It affects patient satisfaction rate, increases medication errors and makes them fatigued. 

One nurse should serve only six patients in a general ward, four in a pediatric unit, and one in an intensive care unit with a ventilator, according to the government. It is also ideal to have at least two nurses for a single operation table and during delivery.

Nepal produces around 5,000 nurses per year and this number is insufficient to the country. The number of nurses in the health centers in the rural areas are lesser than the urban areas.  According to Nepal Nursing Council there are 1,352 specialist nurses, 73,889 nurses, 51 midwives, 37,236 auxiliary nurse midwives and 848 foreign nurses registered with the council.

The World Health Organization estimates that at least 2.5 medical staff (physicians, nurses and midwives) per 1,000 people are needed to provide adequate coverage with primary care interventions as per its World Health Report 2006.

There is a need for 70,000 nurses in the country itself. 

The country however has not been able to meet the WHO estimates. Nepal is currently on the red list of countries according to the Code of Practice. The Code of Practice for the ethical international recruitment of health and social care personnel bans active recruitment from countries with the greatest workforce shortages unless there is a government-to-government agreement in place.

“When the government is not concerned about the shortage of nurses in the country and is sending the human resources to foreign countries it’s a shameful situation,” said Sarala KC, president of Nepal Nursing Council.

She said that this decision will be counterproductive as it affects the health care system. “Its effect will be seen in the citizens as they will not be able to get healthcare. When there is a shortage of the nurses the hospitals will be closed,” KC added. 

Who is eligible? 

Though the two governments are still working to prepare an implementation protocol Nepali citizen aged between 20 and 45 and who have completed either Staff Nurse, Bachelor’s Degree in Nursing Bachelor of Science in Nursing (BSc), or Bachelor of Nursing (BN), or Master’s Degree in Nursing, holds an active professional license from the Nepal Nursing Council plus at least two years of experience in a registered hospital in Nepal is eligible for the application. The applicants can fill up an online application on the Department of Foreign Employment’s website. 

Details on the recruitment process, the initiation date for the application process, as well as other related information will be posted on the Ministry’s website. The ICN has said that international recruitment focused largely on experienced, specialized nurses, rather than the “myth” that only newly-qualified nurses were being targeted.

“That creates a serious deficit in expertise in countries that cannot afford to lose their more experienced nurses. That has really been a serious concern,” ICN president Pamela Cipriano, had said during a press conference organized by the UN correspondents association in Geneva. 

British ambassador to Nepal Nicola Pollitt after signing the agreement on 22 Aug last year had then tweeted that the deal will benefit the health sectors of both countries.  Successful Nepali nurses will not need to pay anything for the recruitment and will enjoy the same benefits as British nurses, Pollitt, she had said.

The medical experts however are of the view that sending the Nepali nurses will worsen the condition of the already ill health sector. They say that the number of nurses is already decreasing in the country as the number of nursing colleges and the number of students joining nursing education is declining. “We must increase the number of nursing students if we are to run the medical sector,” said KC. 

Over 250,000 medical resource needed 

The Medical Education Commission (MEC), a national regulatory body for medical education in Nepal estimated that more than 250,000 human resources related to the medical sector will be necessary in the country till the fiscal year 2030/31. The projection has been made on the basis of a study based on fiscal year 2020/21. 

The commission has said that a total of 358,938 human resources including female health volunteers and office assistants in both the government and private health institutions would be needed across the country. It has also said that there is a demand of 257,091 doctors and health workers in the Nepali medical sector. 

“The number of human resources are projected on the basis of the retirement and migration of the health practitioners along with the construction of health institutions in the country,” said Dr Shree Krishna Giri, vice-chair of the commission. 

The governments of Nepal and Japan have signed a Memorandum of Understanding (MoU) in regard with the implementation of the phase III of the 'The Project for Human Resource Development Scholarship by Japanese Grant Aid (JDS)' program. 

Finance Secretary Arjun Prasad Pokhrel and Japan's ambassador to Nepal Kikuta Yutaka signed and exchanged the MoU on behalf of their respective sides amidst a program at the Ministry of Finance today.

As per the agreement, the Government of Japan is to provide Rs 385 million to Nepal for the implementation of the scholarship program in 2023 and 2024 AD. The facility is targeted at the civil service employees to pursue the Master's and Ph.D. degrees.

Nepal has been receiving these kinds of financial support for human resource development from Japan since 2015.

So far, 100 civil service employees have been benefited by the Japan-funded scholarship scheme.