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Bidya Devi Bhandari served as the President of Nepal from 2015 to 2023, becoming the country’s first female head of state. She takes pride in being the first president associated with Nepal’s communist movement. After completing her tenure, she has not been actively involved in national politics. In an interview with Kamal Dev Bhattarai and Akhanda Bhandari, she discussed her presidential tenure and future plans. Excerpts:

What was your presidential experience like?

Serving the country through the highest position has been a source of great joy and satisfaction. I hope that, like me, sons and daughters of ordinary Nepali people also get opportunities to serve their country. I prefer not to compare myself with the monarchy and the king because it is a different system.  

Even in advanced democracies, very few women have had the opportunity to become president. Do you think our democracy is progressing?

I believe our democracy is already quite advanced. Occasionally, the actions of those in top positions might give a different impression, but our public opinion consistently supports democracy. As for the opportunity I got, multiple factors played a role. I do not believe I became president solely because I am a woman. Given the current state of our society, a woman holding the highest office is undoubtedly a positive development. Other equally important factors should also be considered. Within the context of Nepal’s communist movement, I am a member of the Madan Bhandari family and have been following his political legacy since his tragic death. 

The eighth General Convention of the CPN-UML has recognized people’s multiparty democracy as the party’s guiding principle, which is a new dimension from a Marxist perspective reflecting current realities. In this context, I have always been a visible figure within the party. It is equally important to note that I am the first democratically-elected female president, who is part of Nepal’s communist movement. The broader society also acknowledged and accepted me as a suitable candidate for the presidency. The intra-party dynamics at the time also played a significant role, and the party’s decision was the result of various factors.

Some senior leaders are reluctant to become president, thinking that it means retiring from active politics. Your thoughts?

The position of the head of the state is highly prestigious and respected. A president can contribute significantly, but not in isolation. With a competent team and a determined president, much can be achieved for the people and the country.

Any major misses as the head of the state?

During my tenure, I did everything in my capacity as the president. Many achievements depend on the type of government in power. A good relationship between the presidential office and the government is essential for progress in areas like expanding Nepal’s international relations, amplifying the people’s voices and contributing to the preservation of cultural, civilizational and linguistic heritages. With proper support, a sense of national unity and pride can be enhanced.

Do you think there’s a need to amend certain constitutional provisions regarding the powers of the president and the prime minister?

I do not think that the constitution is ambiguous. We need to implement it effectively, that’s all. As per Article 81 of the constitution, there is a requirement for the prime minister to brief the head of the state on certain issues, both national and international. It is the responsibility of the prime minister to formally inform the president about contemporary issues as well as cabinet decisions and bills before presenting the latter in the Parliament. The constitution has envisaged that the head of the state can raise concerns. The president cannot dictate the prime minister, he or she can only offer advice and if there is coordination, there would not be any gap. 

If these provisions are diligently followed, the president can express concerns and provide suggestions. Once I  wrote a letter to the prime minister to remind him of these key constitutional provisions, particularly focusing on Article 81. Proper implementation of these provisions would eliminate trust deficit, if any, between the president and prime minister.

Can you please share your stance on the Citizenship Bill?

I would like to pose a question to everyone: What role should I have played in this matter? I took steps for the sake of the country and constitution.  This is a new constitution. The issues I have identified in the citizenship bill are linked with the history of Nepal. 

The constitution is for the nation, and we should not weaken the country in the name of implementing it. Citizenship should be viewed from a national perspective, not through the lenses of ethnicity and geography. It is essential to consider the historical context, as the Citizenship Act is directly tied to our sovereignty, national identity and nationalism. We must also acknowledge the reality of open borders and the flow of immigrants. 

While we may provide refuge on humanitarian grounds, we cannot accommodate refugees on a large scale. We need a sustainable solution, and the laws related to citizenship should not be subjected to frequent changes. I have not favored any specific group but have acted in the interest of the country. All political leaders agreed with this at individual meetings. I am very much clear in my position that the constitution cannot be implemented in a way that would affect the country. I am ready to defend my position everywhere, including in the court of law.

What are your future plans?

Looking back, I have completed all tasks entrusted to me. I introduced new visions while serving as a Minister for Population and Environment for seven months. Later, I took on the responsibility of the Ministry of Defense, and fulfilled that role. As the head of the state, I contributed to the country with utmost integrity. In terms of my contribution to my party, I first ran for election in 1991 after working in different capacities. As a legislator, I worked in various areas, including women’s empowerment and worked diligently to ensure 33 percent representation for women in state apparatuses. Having shouldered all the responsibilities assigned to me, I don’t believe I should re-enter active politics at this stage.

But there are reports suggesting that you might return to active party politics.

Friends have been asking me about this, offering their suggestions, and I am listening to them. I believe that vibrant political parties are essential for our nation and democracy. However, I have not made up my mind about returning to active politics. When I became the president, there were certain speculations and these days also, I hear similar things. Friends air their concerns with me and I listen to them with patience.  

Are you considering taking a leadership role in the party?

To be honest, I have not made a decision regarding a return to active politics at the moment. The question of who succeeds KP Sharma Oli within the CPN-UML is an internal matter of the party. It is premature to discuss leadership after Oli, as we still have a long way to go before the convention. Working to acquire power for oneself as the leader after Oli is not the right approach. I suggest my UML colleagues to focus on strengthening the party rather than hankering for power for individual gains. The time to discuss the future leadership of the CPN-UML has not come.

If all your friends in the party ask you to take on a leadership role, what will your position be?

If the discussion takes place within the party, and if there are unanimous decisions, it would be a different matter to consider. I have not given it any thought, though I am aware that there is much talk about it outside. It is not a priority issue now. Instead, all parties should ponder over national problems and issues.

How do you view the current state of the country?

We are practicing democracy, but some wrong practices have taken root. For instance, the trend of forming pre-election alliances against one party is not a healthy and good practice. I urge political parties to amend their current approach to politics for good. First, you have to build your party and assess popular support, and then, based on that, your party moves ahead from the grassroots to the center. Cooperation and coordination among the parties is a good practice, but it should not be targeted against a particular party with the aim of isolating it. The largest party should not resort to electoral alliances before the elections. This is not national politics in a true sense; it is power-centric politics that goes beyond the boundaries of our imagination. I suggest that all political parties correct such flawed approaches.

How do you see the emergence of new parties in national politics?

I do not want to comment much on the new political parties; there are no such distinctions between big and small parties. Even a single individual holds importance in politics. Parties need to nurture them continuously.

Your take on the current economic crisis?

As the head of the state, I frequently advised the government to pay attention to the economy in dire straits. I encouraged all governments to focus on increasing internal production capacity, addressing trade imbalances and striving for self-reliance. Though an agricultural country, we continue to import agricultural products, our trade deficit is growing, and the trade balance remains skewed. It is concerning that our youth are seeking employment abroad. I have urged all governments to take measures to improve the country’s education system.

Any parting suggestion/comment? 

The practice of nurturing near and dear ones at the expense of deserving people must be stopped. Our focus must be on public welfare and peace. Politicians and the government should pay attention to these matters. 

Nepal faced a five-run defeat at the hands of Oman in the ongoing ICC T20 World Cup Asia Qualifier at Kirtipur-based Tribhuvan University Cricket Ground on Thursday.  

With this victory, Oman became the winner of Group 'A' while Nepal first runner-up.

Chasing the target of 146 set by Oman, Nepal were restricted to 140-9.  

For Nepal, Bibek Yadav scored highest 39 runs off 24 balls while Kushal Bhurtel 26, Karan KC 15 and Sandeep Jora 12. 

Oman's Bilal Khan took three wickets while Aqib Ilyas, Shakeel Ahmad and Mehran Khan claimed two wickets each. Likewise, captain Zeeshan Maqsood claimed one wicket. 

Earlier, invited into bat first after losing the toss, Oman scored 145 in allotted 20 overs at the loss of nine wickets.

For Oman, Zeeshan Maqsood made 32 runs off 26 balls. Similarly, Naseem Khusi scored 25, Pratik Athavale 24, Shakeel Ahmad 22 and Ayaan Khan 18.

For Nepal, Karan KC took three wickets while Sompal Kami and Sandeep Lamichhane claimed two wickets each. Likewise, Gulshan Jha and Avinash Bohora took one wicket each.

Nepal will play against the UAE, the winner of Group 'B' in the semifinals on Friday.

“Human rights are not negotiable items that companies and governments are permitted to eliminate by contract.” 

That’s a quote from Andrea Shemberg, a former legal adviser to Amnesty International UK. 

Here’s one more, from Maximilien Robespierre, “Any law which violates the indefeasible rights of man is in essence unjust and tyrannical, it is no law.” 

There is virtually no aspect of our work that does not have a human rights dimension. Whether we are talking about peace and security, development, humanitarian action, the struggle against terrorism, climate change, none of these challenges can be addressed by ignoring human rights.

We know that the French Declaration of Rights of Man and of the Citizen (1789) was the first document, which referred to social, economic and cultural rights, rights to education, work, property and social protection.

In 1941, the Atlantic Charter was declared, which made way for an International Bill of Rights (1942-45) and the Universal Declaration of Human Rights (UDHR) on 10 Dec 1948. 

Article 25.1 of UDHR states:

“Everyone has the right to a standard of living adequate for health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social service and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” 

The International Commission on  Civil and Political Rights (ICCPR), 1976  and International  Commission on Economical, Social and Cultural Rights 1976 oblige signatory nations to ensure human rights and so does UDHR. 

Nepal is also a party to international human rights conventions, covenants and protocols.

Worryingly, appointments made to the National Human Rights Commission, the constitutional rights watchdog, have failed to meet national and international standards, including those outlined in the Paris Principles. 

After conducting a review for two consecutive years, a Ganhri Subcommittee on accreditation (SCA) in October last year recommended downgrading NHRC to the “B’’ category. Notably, one of the commissioners is requesting the government to amend the relevant Act and give NHRC more authority in line with the Paris Principles to avoid this action. The rights watchdog, caught in deep sleep for long, seems to have woken up and has begun blaming the state for failing to defend its appointments. A statement from the appointees reads, “Our appointments alone are not responsible for the downgrading. The government’s failure to strongly defend the appointments before the United Nations Human Rights Committee is primarily responsible for the Ganhri action. 

A bad carpenter quarrels with his tools.

Let’s go back a little bit to understand the crisis better. 

The Constitutional Council under the then Prime Minister KP Sharma Oli had  nominated chairpersons and members at various constitutional bodies, including the NHRC, on the basis of the Constitutional Council Act revised through an ordinance on 15 Dec 2020. The then President, Bidya Devi Bhandari, subsequently appointed the chair and four commissioners at the NHRC on 3 Feb 2021 on the government’s recommendations. 

Even during the reign of King Gyanendra, NHRC was not in such a sorry state. The SCA is bound to review the commission’s present status following complaints from several human rights bodies, chiefly over the appointments of NHRC officials. 

In the reviews conducted in 2021 and 2022 also, the Ganhri commission had recommended downgrading NHRC, pointing at the unconstitutional appointment process. NHRC’s ‘inability’ to safeguard minority rights did not help either. Add to it all half-a-dozen writ petitions challenging the ordinance and the appointment process that are sub-judice in the Supreme Court as well as civil society organizations’ dissatisfaction with the working process of NHRC.

Against this backdrop, who will come to the rescue of the constitutional rights body? 

The author is a former member of NHRC

Nepal got off to a blistering start by stunning Singapore by eight wickets in the ongoing ICC Men’s T20 World Cup Asia Qualifier Final held at TU Cricket Ground in Kirtipur on Monday.

Chasing the target of 146 runs, Nepal scored 147 runs in 16.3 overs losing two wickets.

Kushal Bhurtel scored 74 runs off 48 balls and captain Rohit Paudel scored unbeaten 35 runs off 24 balls. Similarly, Asif Sheikh contributed 26 runs off 27 balls.

Electing to bat first after winning the toss, Singapore made 145 runs losing all the wickets in allotted 20 overs.

Opener Rohan Rangarajan scored highest 46 runs off 30 balls for Singapore.

Likewise, Aryaveer Chaudhry successfully managed to score 37 runs off 26 balls.

Similarly, Manpreet Singh made 24 runs and Akshay Puri contributed unbeaten 13 runs while other players failed to score in double digits.

Abinash Bohara took three wickets for Nepal while Sandeep Lamichhane, Karan KC and Gulsan Jha claimed two wickets each.

A long festive season is around the corner. Marigolds, chrysanthemums, makhmali (gomphrena globosa) and a myriad other flowers are in full bloom, as if in celebration. The air is full of our very own Mangal Dhun and Malshree. The kites flying high in the sky and crops ready for harvest in our fertile fields also seem to be suggesting us all to not worry too much. 

But our hearts are not as full of joy as they used to be in the midst of festivities, with several factors seeking to eat into our peace, bliss and happiness. Rising market prices have become a killjoy with the absence of the state in the market giving black marketers a free rein.  

 Apart from the utter lack of the rule of law in the market, the wounds from the recent killing of 10 Nepali students in attacks in Israel are still raw. 

As a peace-loving nation, which itself has been a victim of violence and terror, our prayers are for peace and tranquility all over the world. As a country that has been contributing to United Nations peacekeeping operations around the world, including in the restive Mideast, Nepal, the birthplace and tapobhumi (the place of meditation) of Gautam Buddha and numerous other enlightened souls like Rishis, Maharshis and Munis, should do its utmost for the cessation of hostilities. 

On the domestic front, the government should do far more than it has been doing to curb the literal exodus of hundreds of Nepalis to foreign shores every day, At the heart of this alarming brain and muscle drain is a growing feeling among the most productive age group, the youths, that the country is heading toward a dark abyss, thanks to a rudderless political leadership and a bureaucracy that has failed to act as the permanent government, by and large. 

Instead of taking concrete measures to stop this drain, the government itself seems to be aiding and abetting this exodus, driven by the lure of remittances, without giving a hoot about the multi-faceted negative impacts of this drain on Nepal. 

Learning lessons from the tragedies in Israel, Afghanistan and Iraq and high death rates of Nepalis working in subhuman conditions around the world, the government needs to adopt policies that create jobs and a favorable environment for doing business in the country. Only then will Nepal be able to get a population dividend, ushering the country in an era of peace, progress and prosperity.   

On their part, the youths would do well to stop searching for the proverbial land where milk and honey flows. The youths should realize that their motherland/fatherland needs them the most, especially at a time when it has been facing serious crises. They should ask themselves as to why they cannot make a living in Nepal even when lakhs of people from the neighborhood have been doing exactly the same.   

They should never forget that this country is too precious to be left to a bunch of rulers, who have their petty interests at heart, at the expense of the greater good of the country.  

Let Goddess Durga inspire us to reclaim our country and our destiny.   

Prime Minister Pushpa Kamal Dahal’s recent visit to China has significant implications for Nepal’s foreign policy. This visit comes at a crucial time, coinciding with the Asian Games, and highlights Nepal’s evolving foreign policy and its intricate relationship with its northern neighbor. Due to the internal conflicts and a political opportunity resulting from the dissolution of the Parliament in July 2021, Dahal transitioned an alliance with the then NCP leader KP Sharma Oli to the Nepali Congress, signaling a noteworthy shift in Nepal’s political landscape, with far-reaching implications for foreign policy. Both domestic and international factors drive this realignment. It raises questions about Nepal’s relationships with major global players, particularly China and India, as well as its standing in the global arena and the geopolitics of South Asia.

A complex relationship

Dynamic shifts and fluctuations have marked a complex relationship between Dahal and China. At the outset of his first term as prime minister in 2008, Dahal established a strong alliance with Beijing, marked by reciprocal support. However, the course of their engagement has been far from steady. In the lead-up to the 2022 elections, Dahal formed an electoral alliance with Prime Minister KP Sharma Oli-led NCP to consolidate political power. Unfortunately, this alliance proved short-lived and ultimately resulted in a dramatic political split, strained Dahal’s relations with Oli and China, which had firmly supported the Oli-led government. This nuanced history illustrates the intricacies of Dahal’s interactions with China, showcasing the challenges and fluctuations in their relationship over the years.

A balancing act

Dahal’s recent move toward a closer alignment with the United States and India signifies Nepal’s deliberate pursuit of a balanced foreign relations strategy. His choice of India as his first official visit during his third tenure as prime minister earlier in the year demonstrates a clear intent to strengthen ties with that country. However, this diplomatic realignment is driven by the imperative to adapt to evolving global dynamics and safeguard Nepal’s sovereignty, given the complex interests of its more powerful neighbors. Rooted in Nepal’s enduring struggle for independence and its aspirations on the global stage, this commitment to a delicate equilibrium reflects the nation’s historical context. As a landlocked nation located between regional giants, Nepal’s leaders face the ongoing challenge of skillfully managing these relationships to protect their country’s interests and secure its continued independence in the international arena.

Chinese interests

China’s interests in Nepal are multifaceted and rooted in its broader geopolitical objectives. One key aspect is Nepal’s adherence to the one-China policy, which aligns with China’s core interests regarding Taiwan and Tibet. This alignment is crucial for China’s territorial integrity. Additionally, China seeks Nepal’s support in international diplomacy, development and security initiatives. Furthermore, Nepal’s involvement in the Belt and Road Initiative (BRI) theoretically offers China a pathway to expand its regional economic influence and infrastructure.  However, the nine BRI projects signed in Nepal have yet to materialize, partly due to uncertainties surrounding their funding modalities. Strengthening connectivity with Nepal is a strategic avenue for China to extend its influence into South Asia, bolstering its regional presence.

Lastly, China’s ambition to cultivate a trusted and ‘strategic’ relationship with Nepal, as articulated by President Xi Jinping during his visit to Nepal in 2019, has remained a blueprint to direct China’s engagements in Nepal. Nevertheless, Nepal faces the challenge of balancing these multifaceted interests while safeguarding its sovereignty and national interests, demanding adept negotiation skills and a nuanced approach to harmonize democratic principles with its stance on the one-China policy, reflecting a delicate nature of Nepal’s relationship with its influential northern neighbor.

A ceremonial visit

While presented as an effort to strengthen Nepal-China relations, Dahal’s recent visit to China appeared more ceremonial than substantive. Despite engaging with high-ranking Chinese officials, including President Xi Jinping, and signing 12 agreements, the visit faced limited diplomatic expectations. There was widespread anticipation for Dahal to advocate Nepal’s national interests, particularly concerning the recent contentious Chinese map affecting Nepali territory. The joint statement of the visit primarily consisted of diplomatic pleasantries and reaffirmations of historical ties, with Nepal restating its commitment to the one-China policy but failing to secure reciprocal assurances regarding its concerns. While there were some encouraging elements in the agreements, such as border point reopenings and cooperation in sectors like the BRI, connectivity networks and renewable energy projects, the absence of a much-awaited Project Implementation Plan Agreement and the failure to convert the loan for Pokhara International Airport into a grant were notable misses for Nepal. While potentially financially challenging, Dahal’s commitment to exploring the feasibility of the Jilong/Keyrung-Kathmandu Cross-Border Railway was a notable development.

Dahal’s prioritization of the Global Development Initiative (GDI) over Global Security Initiative (GSI) and Global Civilization Initiative (GCI) underscores Nepal’s cautious and balanced approach to international security matters. This stance reflects Nepal’s commitment to avoiding entanglement in major power rivalries and safeguarding its sovereignty. Nepal aims to maintain stability in a volatile region by emphasizing development over security, in line with its historical stance of neutrality and non-alignment. The visit ultimately became a standard bilateral exchange; ambitious agreements hold promise, but their impact on the ground level has been limited, reflecting their token nature. 

The way forward

As Prime Minister Dahal’s visit to China marks a pivotal moment for Nepal’s foreign policy, the nation stands at a critical juncture, given its evolving political landscape and changing alliances with regional and international powers. Navigating this landscape requires strategic diplomacy to safeguard Nepal’s sovereignty. Success hinges on the effective execution of agreements and carefully evaluating their implications, shaping Nepal’s foreign policy trajectory to align with its national interests and global aspirations while fostering confidence-building measures with China.

The author is a recent graduate with a Master’s degree in International Relations from South Asian University, New Delhi and is a junior researcher at the Centre for Social Inclusion and Federalism in Lalitpur, Nepal

Nepal are taking on the UAE in their first match of the T20 International Triangular Series at the Mulpani Cricket Ground in Kathmandu this afternoon.

Nepal and the UAE have so far faced each other five times. In the race, Nepal won two matches and the UAE three.  

The Nepali team led by captain Rohit Kumar Poudel comprises Ashif Sheikh, Kushal Bhurtel, Deependra Singh Airee, Saneep Jora, Gulshan Jha, Sompal Kami, Karan KC, Pratish GC, Lalit Narayan Rajbamshi, Abhinash Bohora, Bibek Yadav, Sagar Dhakal, Binod Bhandari, Lokesh Bam, Surya Tamang and Shyam (Mausam) Dhakal.

Nepal has received remittance of Rs 228 billion in the first two months of the current Fiscal Year 2023/24.

According to the country's Current Economic and Financial Situation report based on the statistics until the 17th of September, 2023, unveiled by Nepal Rastra Bank today, the remittance inflow increased by 22.1 percent in this period and reached Rs 228 billion and 370 million.

The remittance inflow during the corresponding period last year had increased by 19.8 percent. In terms of US dollar, the remittance inflow grew by 17.7 percent to reach 1 billion 730 million US dollars.

The number of Nepalis taking a labour permit for foreign employment until September 17, 2023 of the current fiscal year beginning July 17 has decreased by 28.3 percent and remained 74,455.

Similarly, the number of Nepalis renewing their work permit for foreign employment was 32,004, a decrease of 18.3 percent. In the previous fiscal year, this number had increased by 70.6 percent, the NRB stated in the report.

Nepal has a short history of democratic practice that started about seven decades ago, only to be punctuated by authoritarianism. What’s more, a report from the Economic Intelligence Unit (EIU) points at the existence of a “hybrid form of democracy” in Nepal. This hybrid strain, which foreign agencies have made mention of, is perhaps a pointer toward coups that have taken place and the absence of ‘genuine’ democracy even during what can largely be described as the ‘democratic era’. 

A rational democracy contains multiple features, which are lacking in our democracy. 

For example, democracy in a developed country is not bound by the clan and cluster of the citizen. In such a polity, the citizens have a full-fledged authority over the resources with government agencies acting as accelerating forces that keep a close watch on democratic forces and practices. Every eager citizen assumes that democratic practice carries a long-term value. Economic powerhouses are also an independent parallel influence to institutionalize democracy. Demography, democracy and demonstration are also crucial for a proper democratic practice.

Democratic pathways

Multi-polar practice of development entails a tranquil mechanism as it presumes the system as a long-run phenomenon that sprints systematic carryover of the entire nation. Rational development in a real democracy carries the lingered value that leads to overall systematic reformation, which is lacking in least developed countries. Systematic uplifting of democratic practice leads the nation ultimately to smooth pathways for formal and accurate systematic changes that we are likely to ask for.

Continuous political volatility, impunity, messy policies, unregulated economic activities, intra-party polarization and regional strain are the key factors that are likely to have an inverse impact on the sound development of democracy. Sound democracy needs a playful practice of social justice and social equity. Parallel practice of adjustment over the government and development of morality among the general civilians seems to be a petty smart notion for democratic reformation.

Ready for a shift?

In this era of rampant social modification and development, everyone may not have equally profound faith in terms of democratic institutionalization. On the contrary, he/she tries to clutch the aspirations of the masses for overall social progress. But they go pear-shaped to remember their backgrounds and the system under which they are performing. This is a general trauma. So, gradual eradication of illiteracy among the citizenry is also a goal that we are trying to achieve.

By 2026, Nepal is likely to ‘graduate’ to a developing nation from a ‘poor nation’ and the government is making preparations for this progressive shift. Many of the socio-cultural aspects, literal aspects, economic indicators and other normative values are still in rapid progress to achieve this. But the core living standards, health access of distant populace and political transition have not made much headway. Amid this scenario, a question arises: Are we really ready for this shift?

Liberating space

Institutionalization of a democratic system that delivers is the minimum requirement of the Nepali people. This way, we can enhance the general economic system and democratic perspective dynamically. 

Disordered democratic systems lacking crystal-clear roadmaps can invite a high-degreed curse rather than boon for the state. In least developed countries (LDCs) like Nepal, where democracy is not yet institutionalized, a culture of impunity is likely to take root. Switching up for the sound, adamant and progressive democracy is a vital prerequisite for us. The holistic theme of democracy is crucial not only to accelerate societal progress but also to boost up economic reformation, which is a prior need and demand of every state.

Digital democracy

Now-a-days, we are positioning our nose for classical adherence to liberalization, but can't keep our fingers ahead for the digital taxonomy of democracy moving and seeking a rampant platform for further limelight. It quests ahead for digital technology, maximization of digital tools, social media platform, online advocacy forums and more. In this digital era, many individuals can develop advocacy forums and can mushroom in no time. This is also a prerequisite for developing a digital democracy, which may later take the form of e-democracy where anyone can poll and manifest their opinion via individual democratic platforms.

Concurrently, new arrivals in the political system of Nepal are in the line to develop a quiet, liberal and democratic play station to ponder into the system of the country, and are also successful catching the aspiration of civilians. 

The Embassy of Germany in Kathmandu celebrated 65 years of diplomatic relations between Nepal and Germany amidst the presence of over 400 guests at Hotel Hyatt in Kathmandu on Thursday.

National Assembly Chairman Ganesh Prasad Timilsina presided over the event as chief guest.

Officials of various ministries, leaders of political parties, heads of Kathmandu-based diplomatic missions, civil society members, Human Rights advocates, businesspersons, media persons and people from various walks of life were present in the program.

In his welcome speech, German Ambassador to Nepal Thomas Prinz said, “We are celebrating 65 years of bilateral relations between Nepal and Germany. 65 years of friendship and solidarity. We have been standing with Nepal in difficult times, be it the civil war, the 2015 earthquake or the Covid-19 pandemic. We welcome the huge progress Nepal has made and continue our support.” He also conveyed his condolences to the victims of the terrorist attacks in Israel, reads a statement issued by the Federal Republic of Germany in Kathmandu.

Margin lending by banks and financial institutions in Nepal experienced a significant decline over the past two years. However, it appears that investors, who were previously anticipating the central bank to relax restrictions on such loans, are now motivated to avail these loans. In the first month of the current fiscal year, ending in mid-August, margin loans of banks and financial institutions surged by 19.26 percent compared to the same period in the previous fiscal year, reaching Rs 76.53bn. Such loans stood at Rs 64.07bn at mid-Aug 2022. Margin loans refers to loans provided by banks by accepting shares listed on the Nepal Stock Exchange (Nepse) as collateral.

The total margin loans amounted to Rs 50.40bn in the fiscal year 2019/20. It, however, grew by a whopping 110.84 percent to reach Rs 106.28bn in mid-Aug 2021. Concerned by investment of over Rs 100bn in margin loans, the central bank imposed restrictions on such loans. As a result, such loans fell by 24.25 percent to Rs 80.50bn by mid-July 2022, further declining to Rs 64bn in the following month. However, margin loans have started to recover after the central bank eased restrictions on such loans.

The central bank initially restricted margin lending as it viewed share investment as an unproductive sector. The NRB took the decision after margin loans of banks exceeded Rs 1bn. The central bank first put a cap on margin loans at Rs 40m per investor per bank and Rs 120m in total. The introduction of the new margin lending provision had an immediate impact on the market, causing the Nepal Stock Exchange (NEPSE) index to plummet, reaching as low as 1,818 points from the all-time high of 3,198 points. The lower limit of Rs 40m was removed a year later, enabling individuals to borrow up to Rs 120m from a single bank.

Recently, the central bank further relaxed margin lending rules, permitting banks to invest up to Rs 150m for individuals and Rs 200m for institutional investors. However, investors, who had been advocating for the complete removal of lending caps, have not shown much enthusiasm as reflected in the low transaction volume on the stock exchange. Nabil Bank, Global IME Bank, and Nepal Bank Ltd are the largest providers of margin loans in the country. Until the first month of the current fiscal year, ending in mid-August, Nabil Bank had extended Rs 9.68bn in margin loans, while Global IME and Nepal Bank Ltd had invested Rs 6.28bn and Rs 4.09bn, respectively.

However, eight commercial banks have reported declines in margin loans. Rastriya Banijya Bank Ltd, Citizens Bank International, Sanima Bank, NMB Bank, Agricultural Development Bank, NIC Asia, Machhapuchchhre Bank, and Nepal SBI Bank have all observed a decline in their margin loans. While Standard Chartered Bank does not issue margin loans, other commercial banks have seen increases in their margin loans. Banks have extended margin loans from a minimum of Rs 24m to as high as Rs 9bn. Margin loans issued by development have increased by 21.28 percent to Rs 13.85bn as of mid-Aug 2023 compared to the same period in the previous fiscal year. In contrast, Class ‘C’ financial institutions have witnessed a decrease in their investments in margin loans. The total margin loans of finance companies have fallen by 4.17 percent to Rs 3.65bn in the first month of the current fiscal year compared to the same period in the previous fiscal year.

Nepal crushed Iran by 274 runs in the ACC U-19 Premier Cup in Malaysia on Thursday.

Chasing the target of 354 runs, Iran were bowled out for a paltry total of 79 runs.

Electing to bat first after winning the toss, Nepal made 353 runs in 40.1 overs losing all the wickets.

Captain Dev Khanal scored a century of 60 balls hitting 12 fours and four sixes. Similarly, Deepak Bohara contributed 65 runs of 59 balls with five fours and two sixes.

Likewise, Deepak Prasad Dumre made 69 runs, Dipesh Kandel 29, Akash Chand 19, Hemanta Dhami 23 and Subash Bhandari 18.

The recent economic meltdown in Nepal began after the outbreak of Covid-19. The Russia-Ukraine war has made it worse. Amid questionable claims about the economic recovery, the government has not been doing much to address this crisis even as both imports and exports decline, taking a toll on revenue collection. 

In the name of doing something, the government is taking huge loans to cover up the expenses, causing a surge in debt from both internal and external sources. 

Worryingly, most of this debt services the unproductive sector while the masses remain deprived of daily necessities as if rampant corruption at every level of polity were not enough. 

Due to declining demands, industrial production has suffered as overall negative growth of the business and industries sector shows. While some of the businesses and industries have been operating at a loss, most of them have shut down. The meltdown in the productive sector, which employs a large number of people, means a steep rise in unemployment. 

Loss of jobs reduces people’s incomes and purchasing power goes down with it. Consumers do not even have money to buy the daily necessities, which means a decline in the demand for consumer goods. 

Banks, grappling with a liquidity crisis, are unable to provide loans to business, manufacturing, real estate and auto sectors. Construction works are getting delayed. Government revenue collection is declining and not enough even to meet the regular expenditure.

Meanwhile, the cost of manufacturing goods is going up, possibly due to a rise in the cost of labor and raw materials. When the price of a commodity increases, its demand falls. At the time of falling demands, businesses and industries cannot sell their products by lowering their prices. If they do so, they have to bear huge losses. In a similar manner, a shortage of goods in the market can push their prices up. 

When consumers cut expenses, the revenue of business and manufacturing establishments dips, negatively affecting production and productivity. Such a scenario can cause inflation, which Nepal is facing already. While banks are raising interest rates, business establishments are not taking loans. This means that recession has set in.

The consumer price index (CPI) is rising with prices hitting a new high as latest data from the Nepal Rastra Bank (NRB) show. In the fiscal year 2021/22, , CPI stood at 6.32 percent, while it climbed to 7.74 percent in FY 2022/23. 

Data from the central bank suggest that both export and import have been declining over the years. The imports stood at Rs 19bn and Rs 16bn in FY 2021/22 and 2022/23 respectively, while the export figures in both the fiscals were almost the same. These declining figures also mean that the trade deficit has gone down. In the FY 2021/22, trade deficit was Rs 17bn it came down to Rs 14bn in FY 2022/23, narrowed down by Rs 3bn. 

A deficit balance of payment in FY 2021/22 by Rs 3bn has been turned into surplus by the same amount in FY 2022/23. Evidently, the foreign exchange reserve has increased from Rs 12bn in 2021/22 to Rs 15bn in 2022/23. Export and import are the major sources of government revenues. Plummeting government revenues can affect the government’s capacity to spend, taking a toll on development activities. This means a government has to take loans even to cover daily or monthly expenses.

Nepal is not self-reliant even in food production. It has to import on a large scale to feed its citizens. India has banned the export of paddy in recent days. The government is in a rush to request India to supply rice to Nepal even as millions of hectares of farmlands remain barren both in the hills and the Tarai Madhes, mainly due to the absence of irrigation facilities and a shortfall of human resources, among other factors. With farmlands lying fallow, the share of the farm sector to GDP has been declining over the years. Improvement in the agri sector is a must also for sustainable development.

Industrial activities are melting down. Agriculture activities are also on a downward trend and so are business activities. Clearly, the Nepali economy is unwell. 

 Which sector has been playing an active role even in this grim scenario to keep the economy afloat? 

There is only one sector, which has stood as a source of livelihoods for the Nepali people and that is the foreign employment sector. A large number of Nepali youths are migrating in search of livelihood of late. They are sending increasing amounts of money to their families living in Nepal. In FY 2021/22, Nepal received Rs 10.7bn in remittances, while in the FY 2022/23, it received a whopping Rs 12.2bn, an increase of 21.2 percent. This proves that remittance is a major source of foreign exchange and livelihood for the Nepali people.

Nepal and Germany have signed a Joint Declaration of Intent (JDoI) on the Skilled Labor Migration and Knowledge Exchange at the Federal Ministry of Labor and Social Affairs of Germany on Tuesday, the Embassy of Nepal in Berlin, Germany, stated in a press release, shared by the Ministry of Foreign Affairs here today.

Ambassador of Nepal to Germany Ram Kaji Khadka and Michael van der Cammen, Director, International Affairs, German Federal Employment Agency, signed the JDoI on behalf of their respective governments in the presence of Minister for Labor, Employment and Social Security Sharat Singh Bhandari and Leonie Gebers, State Secretary (Deputy Minister) of Federal Ministry of Labour and Social Affairs of Germany.

The singing of the JDoI was preceded by a bilateral meeting between the high-level Nepali delegation led by Minister Bhandari and the high-level German delegation led by the State Secretary (Deputy Minister) Gebers.

On the occasion, the leaders of the two delegations shared views, primarily, on the agenda of Nepal-Germany bilateral relations, skilled labor migration, Nepal's commitment to legal migration, workers' welfare and social security, German language and vocational training, and circular migration.

During the meeting, the two leaders expressed happiness over the growing relations between the two countries in recent years and stated that the signing of the JDoI would be the first step in the roadmap towards fair and legal labor migration from Nepal to Germany.

Minister Bhandari also expressed Nepal's willingness to collaborate with the friendly Government of Germany in all sectors of mutual benefits.

State Secretary Gebers also stated that the signing of the JDoI would open the way forward for institutional arrangement in immigrating Nepali skilled workers as per the need of the German job market. She also highlighted the positive sides of the recent German Skilled Immigration Act which has eased the process of recruiting foreign skilled workers in Germany.

The Nepali delegation led by Minister Bhandari included Secretary at the Ministry of Labour, Employment and Social Security, Kewal Prasad Bhandari, the Ambassador of Nepal to Germany, and other officials from the Ministry of Labor, Employment and Social Security, Ministry of Foreign Affairs and Embassy of Nepal, Berlin.

The German delegation led by Gebers included the high-level officials from the Federal Ministry of Labour and Social Affairs, Federal Employment Agency and other relevant Departments of Germany.

Meanwhile, on October 9, 2023, the Nepali delegation held discussions with the delegation of International Labor Organization (ILO) Berlin Bureau led by Dr Annette Niederfranke, Director at the Embassy of Nepal, Berlin. During the meeting, various labor-related issues including welfare of workers, measures against the exploitation and trafficking of workers, inclusive foreign employment and reintegration of migrant workers in the country of origin were discussed.

In the afternoon, the Nepali delegation participated in an interaction program with the Nepali diaspora living in Germany organized by the Embassy.

The Nepali delegation is holding a meeting with the representatives of private sectors of Germany today.

The delegation is scheduled to leave Germany for Nepal tomorrow.

The World Bank has projected that Nepal's economy is poised to achieve a growth rate of 3.9 percent in the fiscal year 2024. This marks a notable improvement compared to the previous fiscal year, FY 2023, when the country’s economic expansion was limited, registering only a 1.9 percent growth rate.

The World Bank’s optimistic report comes amid a deep economic crisis that the country is facing. Releasing its Nepal Development Update-October 2023 on Tuesday, the World Bank has said that Nepal’s economy is expected to rebound to 3.9 percent in FY 2024 owing to the impact of the lifting of import restrictions, a strong rebound in tourism, and the gradual loosening of monetary policy. The economic growth in FY 2025, will be five percent, according to the World Bank.

In its report, the World Bank says that the impact of lifting the final import restriction measures in January 2023 and the gradual loosening of monetary policy are expected to support growth in the industrial and services sectors. “Sub-sectors that suffered the brunt of the import restrictions and monetary policy tightening in FY 2023, including wholesale and retail trade, construction, and manufacturing, are expected to gradually recover over the forecast period,” reads the report.

While wholesale and retail trade are expected to benefit from the lifting of import restrictions and boost service sector growth, the report says, agricultural sector growth is expected to slow in 2024 due to the impact of the lumpy skin disease on livestock and a decline in rice production.

According to the report, strong energy sector growth helped to avoid an industrial contraction, since manufacturing and construction outputs shrank. Hydroelectric generation increased significantly for the second year in row and added close to 500 megawatts of hydroelectric power to the national grid, the report says, Nepal nevertheless remains a net energy importer.

The top financial body further states that slow credit growth and import restrictions contributed to a reduction in private investment on the demand side. Lower capital expenditure and revenue underperformance drove lower public investment. As a result, total investment decreased by more than 10 percent, a sharper reduction than in 2020. Private consumption remained robust, owing to strong remittance inflows.

Inflation is gradually increasing and a new report says that it is likely to go up.  Average consumer price inflation reached a seven-year peak in 2023. Average inflation amounted to 7.8 percent, above the central bank’s seven percent policy ceiling, driven by both food and non-food prices. Key drivers of food prices, which increased by 6.9 percent, included supply side shocks such as India’s wheat and rice export restrictions, and domestic policy changes including the removal of VAT exemptions on multiple basic food items and price support to producers of rice paddies, milk, and wheat, the report says.

Non-food prices rose by 8.5 percent, driven by higher housing and utility prices, and an increase in the consultation fee of medical doctors in May 2023, the report states, the decline in edible oil prices from February 2023 onwards, reflecting global price reductions, had an offsetting effect on prices. The persistence of high inflation impedes policies to stimulate growth. Particularly, Nepal’s vulnerability to external shocks implies a difficult trade-off between policies that boost growth and those that contain inflation, according to the report.

Agricultural output remained resilient and expanded by 2.7 percent. Rice paddy production supported the sectoral growth and increased by 6.9 percent, reflecting a good summer monsoon and improved seed varieties (Figures 1 and 2). However, a lumpy skin disease has affected livestock as of early April 2023, infecting more than 1m and killing close to 50,000. The resulting lower dairy product and meat production could negatively affect agricultural output growth. Updated statistics will be released by the National Statistics Office in April 2024.

Manufacturing and construction shrank by two percent and 2.6 percent, respectively. The decline was partly due to lower production of key construction materials (cement, basic iron, and steel) and vegetable oils in the first half of FY 2023. Higher frequency indicators suggest that the decline continued in the second half of FY 2023. Lower demand resulting from the elevated prices of manufactured goods and construction materials further weighed on industrial output, which increased by a meager 0.6 percent.

Sluggish wholesale and retail trade slowed the pace of services sector growth. Authorities estimate that the services sector expanded by 2.3 percent in this year, the slowest pace since 2020. Growth of the wholesale and retail trade sub-services sector declined 0.5 percent due to high inflation and lower goods imports.

Looser monetary policy and the lifting of import restrictions imply an increase in goods imports over the medium-term, the report states, policies to contain credit growth and lower one-off imports, including of Covid-19 vaccines, are expected to keep imports below its 2022 historic high. Near-record migration of Nepali workers should be reflected in strong medium-term remittance inflows which, however, are not expected to balance the goods and services trade deficit. Consequently, the current account deficit is expected to widen to 3.7 percent of GDP in 2025, and 4.6 percent of GDP in 2025. 

Revenues are expected to increase in line with higher goods imports, given that taxation focuses heavily on trade. The 2024 budget envisions lower federal spending on capital investment and fiscal transfers to subnational governments, yet higher debt servicing costs. Overall, the recovery of revenues is expected to reduce the fiscal deficit to 3.5 percent in 2024 and 3.3 percent in 2025. Together with the rebound in growth, tighter fiscal policy is expected to keep the overall public debt burden contained at around 41 percent of GDP in 2024 and 2025.

In the external sector, the current account deficit narrowed to a six-year low in 2023, driven by lower imports and higher remittances. The current account deficit fell from 12.6 percent of GDP in 2022 to 1.3 percent of GDP this year.  The reduction occurred through lower imports of goods and services, which fell from 42.6 percent of GDP in 2022 to 34.5 percent of GDP in 2023. Exports on the other hand remained stable, and remittances rebounded strongly. Foreign reserves ended 2023 at a comfortable level of 10 months of concurrent import cover, above the policy floor of 7 months of import cover.

Official remittance inflows surged to a five-year high in this year. Remittance inflows climbed from 20.4 percent of GDP in 2022 to 22.7 percent of GDP.  Nepal’s dependence on the export of workers and remittance inflows increased sharply over the past two decades. Goods and services exports have fallen significantly since the early 2000s as a percentage of GDP.

In FY23, total exports amounted to 6.9 percent of GDP, only one-third of what the average South Asian middle-income country exports. Not surprisingly, the 2019 World Economic Forum Global Competitiveness Index ranked Nepal 108th out of 141 countries.30 Net foreign direct investment (FDI) has also underperformed. Remittance inflows on the other hand increased to 22.7 percent of GDP in FY23, are the main source of foreign currency, and the main driver of private consumption and economic growth.

According to the bank, the near-record migration of Nepali workers should be reflected in strong medium-term remittance inflows which, however, are not expected to balance the goods and services trade deficit. “Consequently, the current account deficit is expected to widen to 3.7 percent of GDP in FY 2024, and 4.6 percent of GDP in FY 2025,” reads the report.

However, there are multiple risks to the outlook including an erratic monsoon, which could dampen agricultural growth; a renewed spike in commodity prices or continued food export bans by India which would raise prices; and higher inflation which could keep policy rates elevated, increase domestic debt servicing costs, and drag on growth. 

“Amid challenges, Nepal is leading the way towards operationalizing its green, resilient, and inclusive development vision to shape the country’s long-term economic recovery,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka. “Improved external competitiveness is key to driving this recovery and enabling Nepal to compete in export markets, in terms of both prices and quality. This requires an emphasis on reforms to help increase domestic productivity and reduce the inflation differential with Nepal’s trading partners.”

 Major points

• Nepal’s export performance has continuously declined.
• Real appreciation of exchange rate and productivity deficit negatively affected exports.
• The budgetary process needs further strengthening to better support planning.
• Increasing domestic productivity and containing domestic inflation key to improving external competitiveness.
• Credit growth to the private sector slowed owing to policy measures taken to help correct the external imbalances.
• Fiscal space diminished further with the contraction of revenues.
• Economic activity is expected to gradually gain momentum. 
• The current account deficit is expected to increase moderately.
• A rebound in revenues should reduce the fiscal deficit and contain public debt.
• Prudent policies to stimulate growth and contain downside risks are key.

Recommendations

• Changing the current tax model by shifting taxation away from the border and reducing high import tariffs
• Improving the implementation of fiscal federalism which would facilitate effective investments in infrastructure and services
• Simplifying and streamlining processes to attract more FDI which would create significant knowledge and spillover effects.
• In addition, containing domestic inflation would reduce the inflation differential with trading partners. This would help avoid further real appreciation of the exchange rate.

A government survey shows that the stock of Foreign Direct Investment in Nepal increased by 16 percent to Rs 264.3bn at the end of the fiscal year 2021/22. Paid-up capital is the major component in FDI stock as it accounts for 53.7 percent of total FDI stock, whereas the reserves and loans in total FDI stock accounts for 31.7 percent and 14.6 percent respectively, the report says. 

The Survey Report on Foreign Direct Investment in Nepal published by Nepal Rastra Bank states that Nepal has received foreign investment from 57 different countries as of mid-July 2022.  In terms of total FDI stock, India takes top position with Rs.88.6bn followed by China (Rs 33.4bn), Ireland (Rs 20.9bn), Singapore (Rs 16.1bn), and Saint Kitts and Nevis (Rs 15.1bn).

Industrial sector accounts for 62.6 percent of total FDI stock. Of which, the electricity, gas, steam and air conditioning sector constitutes 32.8 percent and manufacturing sector 29.5 percent of total FDI stock. About 37.3 percent of total FDI stock is in the service sector. Of which, the financial and insurance services sector constitute 25.6 percent, accommodation and food services sector 5.3 percent, and information and communication sector 4.8 percent of the total FDI stock.

The electricity, gas, steam and air conditioning sector, particularly hydropower, in Nepal has been a preferred sector for FDI in recent years, the report says. A latest survey shows that 32.8 percent of FDI stock and 41.8 percent of total paid-up capital is in this sector. Moreover, the hydropower sector has also attracted other sources of external financing such as foreign loans in addition to FDI; the electricity, gas, steam and air conditioning sector accounts for 41.4 percent outstanding foreign loan at the end of the FY 2021/22, the report says.

Nepal has initiated institutional and legal reforms in recent decades with the aim of promoting FDI to complement the resource gap in capital formation. Gradual liberalization of FDI inflows in various sectors has been encouraged by creating an investment-friendly environment and prioritizing foreign investment-related reforms. There are several legal frameworks for guiding and encouraging FDI in Nepal:

• Foreign Investment Policy, 2015
• Foreign Investment and Technology Transfer Act, 2019 (FITTA)
• Public-Private Partnership and Investment Act, 2019
• Industrial Enterprises Act, 2020, e) Institutional reforms such as the establishment of One Stop Service Center to facilitate foreign investment
• Nepal Rastra Bank Foreign Investment and Foreign Loan Management Bylaw, 2021 (Second Amendment)

The World Investment Report 2023 published by UNCTAD shows that global FDI inflow decreased 12.4 percent to $1,294.7bn in 2022 from $1,478.1 in 2021. The Russia-Ukraine war, high food and energy prices, fears of a recession, and debt pressures resulted in the decline of FDI inflows around the world.

FDI inflows to Asia decreased 0.05 percent from $662.1bn in 2021 to $661.8bn in 2022. The region remains the largest recipient of FDI, accounting for 51.1 percent of global FDI (UNCTAD, 2023). However, the inflows are highly concentrated among its largest recipients: China ($189.1bn), Singapore ($141.2bn), and Hong Kong-China ($117.7bn).

In contrast to the global trend, FDI inflows to South Asia increased nine percent to $55.9bn in 2022. FDI in India, the largest FDI recipient of the sub-region, increased by 10.3 percent with inflows of $49.4bn in 2022. In 2021/22, Rs 15.7bn was approved for dividend repatriation by companies with foreign investment. The highest dividend repatriation approval was for the manufacturing sector followed by the information and communication sector.

According to the report, as of mid-July 2022, the outstanding foreign loans (excluding direct loans from foreign direct investors) of FDI companies stood at Rs.68.7bn. Such loans were Rs 40.7bn a year ago. The companies in the hydropower sector have utilized more foreign loans as the outstanding loan of this sector stood at Rs 28.4bn in mid-July 2022.