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Prime Minister Pushpa Kamal Dahal has said Nepal is a suitable destination for investment, calling upon the investors from across the globe to seize the opportunity and be benefitted from this.

The Prime Minister said this while inaugurating the Nepal Investment Summit 2024 here today.

On the occasion, the PM asserted that there are immense opportunities for investment in Nepal and it is a potential country for investment from legal, geographical and strategic perspective as well.

Stating that Nepal is fully committed to a liberal economic policy, he reassured that an investment-friendly environment has been created in the country.

The Prime Minister said Nepal is continuously moving ahead towards creating a friendly environment for the investors, industrialists, entrepreneurs and innovators. In this connection, he added, eight various laws related to business and investment have been reformed.

President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Chandra Prasad Dhakal has urged investors from around the world to seize the opportunity and invest in Nepal's burgeoning economy.

Addressing the Third Nepal Investment Summit 2024, he emphasized the country's colossal untapped sectors and its potential as an investment destination.

Dhakal highlighted Nepal's strategic location between the economic powerhouses of China and India, underscoring its significance as a gateway to vast markets.

He emphasized the abundant opportunities across various sectors, including tourism, infrastructure, energy, agriculture, technology, and ICT.

The FNCCI President particularly spotlighted the immense potential in renewable energy, citing recent agreements for power trade with India and Bangladesh as indicators of Nepal's capability in hydropower generation and regional trade.

He also underscored the need for modern infrastructure in tourism, agriculture, and technology sectors to harness Nepal's rich cultural heritage, natural beauty, and young, dynamic workforce.

Moreover, Dhakal emphasized the importance of investing in technical education to bridge the gap between demand and supply of skilled human resources, thereby boosting both domestic employment and remittance inflows.

He commended the government's efforts in implementing business-friendly policies and initiatives to facilitate foreign investment, including recent amendments and bilateral investment agreements.

Highlighting FNCCI's role in boosting investor confidence through international business summits in New Delhi, Beijing, and Dubai, Dhakal assured continuous support and commitment from the Nepali private sector for joint ventures in all potential sectors.

He shared his belief in Nepal's emerging growth story and encouraged forging partnerships to chart a path towards sustainable development and prosperity.

India, the world's largest democracy, is busy holding the 18th Lok Sabha elections which will conclude on June 1. The global community is closely watching the outcomes of these elections. With its burgeoning population having surpassed China's, India is on track to claim the mantle of the world's third-largest economy by 2030. As a key player in the Indo-Pacific region and a torchbearer for the Global South, India's policies, both domestic and foreign, resonate far beyond its borders.

The significance of India's elections reverberates throughout the region. While there are widespread projections that the ruling Bharatiya Janata Party (BJP) will win a third consecutive term, with Prime Minister Narendra Modi continuing in office, opposition parties are expected to strengthen their position compared to the 2019 elections.

The election outcomes in India are of particular significance for South Asian nations including Nepal, where India wields deep political, economic and military influence. In 2014, upon assuming power with a resounding victory, Prime Minister Narendra Modi reinvigorated the 'Neighborhood First' policy, although he failed to achieve the expected outcomes. 

To demonstrate the BJP government's priority for neighbors, he invited the heads of state and government from South Asian countries to attend his swearing-in ceremony. When re-elected in 2019, Modi continued the 'Neighborhood First' policy by inviting BIMSTEC (Bay of Bengal Initiative for Multi-Pectoral Technical and Economic Cooperation) member countries to his swearing-in ceremony. If re-elected for a third term, the BJP government is likely to maintain the 'Neighborhood First' policy, although India has been focusing more on regions beyond South Asia in recent years. 

Despite occasional highs and lows, the trajectory of Nepal-India relations points toward a positive outlook, poised to weather the complexities of shared history and future aspirations.

Over the past decade, under Modi's leadership, Nepal-India relations have witnessed many highs and lows. However, the relationship is moving in a positive direction, which should continue even after the elections.

Crucial issues such as the 1950 Peace and Friendship Treaty and boundary disputes remain on the diplomatic agenda, albeit the two countries approach them with varying degrees of emphasis. Nevertheless, the two neighbors recognize the imperative of fostering trust and stability to navigate these challenges successfully. A notable shift in India's approach to the internal affairs of its neighbors signals a promising era of cooperation built on mutual respect and understanding.

The BJP government has changed its approach on how to view the internal political affairs of South Asian countries which has helped to build an environment trust.

One encouraging signal is that economic collaboration has emerged as a cornerstone of bilateral relations, with a growing focus on development partnerships and infrastructure projects. Despite changes in political leadership, the momentum in bilateral engagements remains steady, underpinning a commitment to sustained progress and prosperity.

Over the past three decades, India has faced charges of not completing development projects for extended periods. However, several bilateral projects are now making progress, ultimately helping to build an environment of trust. Recent visits by Nepali leaders to New Delhi and Indian leaders to Kathmandu have focused on enhancing economic and development partnerships. The energy cooperation agreement between Nepal and India has paved the way for regional energy cooperation, with Nepal positioned as a clean energy provider to the region. 

As India's economy continues to rise and rise, and major multinational companies shift their industries to India, Nepal, which shares an open border, should get the opportunities. India could become a destination not only for unskilled Nepali workforce but also for highly skilled professionals in sectors such as education, health, IT, banking, and others, which have not received much discussion. Both Nepal and India should seriously consider these issues and clearly outline their plans to derive economic benefits from India's rising economy. These matters should be taken seriously regardless of which party comes to power.

Amid robust economic collaboration between two countries, over the past few years, Nepal is witnessing a debate about the growing ideological influence of BJP in Nepal. In recent years, there has been a perception among Nepali leaders and the public that the BJP and its affiliates are pushing for a Hindu agenda in Nepal. It is often said that they are suggesting (sometimes pressuring) Nepali leaders to scrap secularism and go for the Hindu state. There are also reports that various organizations linked with the BJP are active in Nepal with their Hindu agenda. 

While Nepal's top leaders are aware of those issues, they have not spoken publicly. However, they want to discuss those issues with Indian leaders. BJP leaders should be mindful that such efforts could again strain the bilateral relationship, which has reached a new level after sustained efforts from both sides. It would be worthwhile to recall India's approach to the demands of Madhes-based parties, mainly after 2017, which helped enhance the bilateral relations.

Many Nepali politicians and analysts view the growing activities of Hindu organizations as an attempt to overturn the 2015 constitution. This suspicion among Nepali politicians obviously does not help enhance the bilateral relationship. There should be frank and open discussions between the two sides, not only on these issues but also on other issues of mutual concern. 

India's relationship with global powers also affects its South Asia policy. The India-US strategic partnership is likely to be enhanced, but there are divergent views on several bilateral and global issues, including the Russia-Ukraine war. The India-China relationship is unlikely to improve for at least the next few years. As I have highlighted in my previous columns, Nepal's approach should be not to engage in the big-power rivalry but to focus on economic development.

The future of Nepal-India relations hinges not on fleeting political interests but on a shared commitment to long-term prosperity and mutual respect. By prioritizing economic and developmental collaboration, both nations can chart a course toward a brighter, more interconnected future.

In 2023, Nepal experienced its second-warmest year on record. Previously, the hottest year on record for Nepal was 1981. The average maximum temperature for 2023 was 27.9 degrees Celsius, an increase of 0.6 degrees Celsius from the previous normal annual maximum temperature.

Global trends indicate that worldwide temperatures have surpassed the 1.5 degrees Celsius threshold across an entire year for the first time, with March 2024 breaking new temperature records. 

Nepal is not exempt from this trend. Several meteorological stations recorded unprecedented high temperatures, reflecting the severity of the heat waves experienced in 2023.

Experts suggest that 2024 could become the hottest year on record, with heat waves already occurring early in the year. 

Weather expert Ngamindra Dahal notes that the record could be broken because intense heat waves have already started. “If a place experiences a temperature of 40 degrees Celsius for an hour, it’s manageable, but the concern arises when such high temperatures persist throughout the day,” he explains.

March 2024 was the warmest March ever recorded globally. It was also the 10th month in a row that was the hottest on record, itself an ongoing record-breaking streak.

The primary cause of the exceptional heat was human-caused greenhouse gas emissions. Other factors pushing up temperatures include El Niño, the natural climate pattern that warms the surface waters in the eastern Pacific Ocean.

The European Union’s Copernicus Climate Change Service (C3S) said that March averaged 14.14 degrees Celsius, exceeding the previous record from 2016 by a 10th of a degree. The month was also 1.68 degrees Celsius hotter than an average March between the years 1850-1900, the reference period for the pre-industrial era.

The Ministry of Health and Population has urged the public to take preventive measures against the heat wave. The effects of heat waves include fast heartbeat, breathing complications, low blood pressure level, sweating, severe headache, and dizziness. 

Nepal and Qatar have reached to an agreement and understanding to collaborate in the art and culture, education, communication, youth and sports, legal assistance, and the industry and commerce sectors.

These agreements and MoUs were signed today on the occasion of the state visit of Emir of Qatar, Sheikh Tamim Bin Hamad Al Thani, said Amrit Bahadur Rai, spokesperson at the Ministry of Foreign Affairs.

The two countries signed the Memorandum of Understanding (MoU) on collaboration in the area of art and culture, exchange of news between the official news agencies of Nepal and Qatar, and exchange of cooperation in the education sector.

The agreements and MoUs were signed in the presence of the Qatari Emir and Prime Minister Pushpa Kamal Dahal following bilateral talks between them at the Soaltee Hotel today.

The Agreement signed today is on Cooperation and Exchange of News between National News Agency, Nepal (RSS) and Qatar News Agency (QNA).

The MoUs signed include: the Memorandum of Understanding  for cooperation in the fields of culture and arts between the Ministry of Culture, Tourism and Civil Aviation of Nepal and the Ministry of Culture of the State of Qatar; the Memorandum of Understanding for cooperation in the field of education, higher education and scientific research between the Government of Nepal and the Government of  the State of Qatar; the Memorandum of Understanding on cooperation in the field of youth and sports between the Government of Nepal and the Government of the State of Qatar; the Memorandum of Understanding for cooperation between the Office of the Attorney General of Nepal and the Public Prosecution of the State of Qatar and the Memorandum of Understanding  on cooperation in the field of diplomatic training and education between the Institute of Foreign Affairs (IFA) of the Government of Nepal and The Diplomatic Institute of the Ministry of Foreign Affairs of the State of Qatar.

Prime Minister Pushpa Kamal Dahal has stressed the need to remain alert with the new challenges emerging in the health sector.

In his address to the first convocation ceremony of the Patan Academy of Health Sciences today, PM Dahal instructed the agencies concerned to pay special attention to resolve the problems seen in the health sector.

"The Academy should develop more infrastructure to overcome and manage any challenges that may arise in the health sector", he said, laying special emphasis on making the hospital services more quality and effective.

On the occasion, the Prime Minister underlined the need to produce skilled and socially responsible doctors for quality health care in rural areas, according to the PM's personal secretariat.

Underscoring the need to expand access to health services to the rural areas, PM Dahal cited COVID-19 pandemic situation to note the general public of Nepal can get universal health care services only if the public health institutions are effective and efficient.

The government has placed high priority on developing the capacity of all public hospitals, the PM said, instructing the Academy to take further initiative to provide specialized health services, including access to health services to all, quality of service as well as identifying social, cultural and environmental factors affecting public health in the community.

PM Dahal also took the opportunity to appreciate the Academy's recent initiatives of launching health insurance and community-based service delivery in collaboration with local governments.

The Prime Minister highlighted the urgency for establishing an integrated institute of health sciences and removal of duplication in medical education and health services for the management, operation and regulation of all medical and health sciences related institutions in the country.

"Attention should be paid to enhancing capacity of all health institutions to provide basic and quality health services to all citizens", he said, informing the government was making necessary ground works towards developing Nepal as a hub of medical education. 

Following the recent general elections, minor political parties entered the arena with the aim of securing a role in governance, capitalizing on the current electoral framework where no single party can secure a parliamentary majority. Despite initial anticipation of an ideological shift when the Maoist party engaged in the peace process and formed an alliance with the CPN-UML, the coalition fell short of such expectations. Nepali politics is viewed by analysts as being at a critical juncture due to governmental instability, rampant corruption and policy dilemmas. While Nepali people hoped for a lean and efficient administration under democracy, political entities in Nepal failed to deliver on this promise. Instead, the existing governmental structure appeared more bureaucratic and financially burdensome to Nepali taxpayers. Nepal witnessed one of its weakest coalition governments in recent memory, with governing partnerships shifting thrice within a year, reminiscent of past ruthless practices and corrupt leadership.

Even purportedly new political entities became entangled, directly or indirectly, in this murky landscape. Nepali people must understand that a new political party does not inherently equate to moral or ethical integrity. Without ethical leadership, genuine renewal cannot occur. The proliferation of new political parties poses a challenge to Nepal’s democracy and the establishment of a stable governance framework. Hence, analysts must scrutinize emerging trends, including the involvement of Rastriya Swatantra Party (RSP) in Nepal’s current government.

Analysts assert that RSP emerged from popular sentiments and crowd-driven notions rather than a coherent political ideology. When a political entity originates from populism, it may lack a clear political agenda, principles and policies. Parties’ lack of principles can undermine democracy, as voters may struggle to access accurate information to make informed choices. Furthermore, in the absence of political principles, a party risks becoming the personal domain of its leader, sidelining the interests and agendas of others. Populist ideas have the potential to conceal decision-making processes and mislead the public. Without a solid political ideology, populist agendas may clash with the nation's established plans and policies, resulting in misguided policy decisions. Populist leaders often adhere strictly to their scripted agendas, sidelining other parties from meaningful discussions.

Under CPN (Maoist Center) Chair Pushpa Kamal Dahal-led ruling alliance, RSP has emerged as a significant political force, bearing substantial responsibility and accountability to the Nepali people. However, numerous uncertainties linger regarding the RSP and its leadership. Establishing a political party necessitates several key components: a clear political ideology, organizational structure, committed party members and integrity. Regrettably, RSP lacks all four elements. A robust political ideology serves as the cornerstone of a democratic political party, providing the framework for policy formulation. The absence of such an ideology and principles has downgraded RSP to a populist entity born from popular sentiment rather than sound political doctrine. In a democracy, people reserve the right to inspect their political leaders, and governments and political parties must remain answerable to the people. However, RSP has been quick to silence dissent and avoid pertinent inquiries, raising concerns about its commitment to transparency and accountability.

RSP lacks a robust political infrastructure, functioning more as a non-profit organization where social activists deflect blame onto others without assuming responsibility themselves. Examination of their core leadership reveals a predominance of individuals from elite backgrounds or higher economic layers, primarily residing in urban centers. RSP primarily focuses its activities on urban politics, capitalizing on the ability to amass crowds. The party’s president, Rabi Lamichhane, signals from a media background, using his platform to criticize the government and spread misinformation rather than addressing genuine issues. Lamichhane has adopted a quasi-superhero persona, presenting himself as capable of resolving all challenges through seemingly magical means. Despite his involvement in numerous controversies and disputes within Nepali media and politics, no conclusive resolution has been reached under legal frameworks. Major political parties have exploited Lamichhane for their gains, not bothering to address controversies surrounding him.

Nepal’s major political parties have diligently instructed their members on political ideology and beliefs, yet RSP has faltered in establishing a coherent political ideology and grassroots organization. Instead, RSP relies on amassing followers from the masses without implementing any effective control mechanism. It’s common knowledge that unguided crowds can turn toward chaos and pose a threat to democracy by disregarding laws and regulations. Therefore, RSP must evolve into a responsible democratic political entity, addressing unanswered questions and being accountable to the public. The rise of populism and crowd-driven politics worldwide over the past decade, exemplified by movements like the Mega Republicans in America and radical Hindu nationalists in India, poses a significant risk to democratic institutions and norms. Any embrace of nationalist radicalism could jeopardize Nepal’s overall development and its democratic foundation.

Integrity stands as a crucial pillar for the advancement of democracy. Unfortunately, all political parties in Nepal have fallen short of maintaining integrity to some extent, leading to results of large-scale corruption and conflicts of interest. Despite positioning itself as a viable political alternative, RSP cannot afford to emulate the shortcomings of established parties. Instead, it must exemplify honesty, moral integrity and ethical standards. Regrettably, RSP’s president, Lamichhane, has repeatedly failed to demonstrate honesty and ethical conduct, particularly in relation to an illegal passport case and a cooperative fraud. Moreover, his selection of ministries directly linked to these controversies highlights a clear conflict of interest, further underscoring his lack of integrity. Various incidents involving RSP leaders in controversial situations have been concealed by the party, weakening trust among the people and worsening damage to Nepal’s democratic fabric. When those claiming to offer an alternative view regard themselves as above scrutiny and disregard pertinent questions, public trust is undermined, leading to further harm to Nepal’s democracy.

The prevailing challenges to democracy around the world encompass populism, crowd-centric politics and leaders who undermine established institutions while advocating against traditional governance. Populist figures prioritize personal interests and political gains, deflecting blame onto others for every issue. In the Nepali context, most populist leaders prioritize attaining power rather than fostering long-term economic agendas and developmental strategies. The surge of crowd-centric politics stems from the failures of conventional political parties, which have either failed to address or neglected the people’s priorities. Regardless of the underlying reasons, populism presents a significant danger to democracy and governance, underscoring the importance of responsible political entities and leadership dedicated to nurturing liberal democratic values and fostering trust within society. Crowd-centric organizations can’t serve as a sustainable solution for Nepal’s long-term development. Instead, there is an urgent need to establish a streamlined government alongside an effective electoral system.

The opinions expressed in this article are the author's sole responsibility and do not reflect the views of any organization with which the author is professionally affiliated

The government has decided to endorse various memorandums of understanding (MoUs) to be signed between the Government of Nepal and the Government of Qatar.

The MoUs are going to be signed during the two-day state visit of the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, 

At the invitation of President Ram  Chandra Paudel, the Emir of Qatar, Al Thani, is visiting Nepal on April 23 and 24. Accordingly, the council of ministers meeting today decided to give a public holiday on April 23.

According to Minister for Communications and Information Technology Rekha Sharma, the Cabinet also decided to approve the state visit program of the Emir of Qatar and for the Prime Minister to lead the talks with the Qatari side.

The memorandum of understanding is being signed on cooperation between Nepal and Qatar in the field of youth and sports, and in the field of education and scientific research.

Government Spokesperson Sharma informed that the Cabinet meeting decided to accept 9.91 million Swiss francs from the Swiss government for the implementation of the trekking-based tourism development project in Koshi Province and 9.8 million US dollars from the Korea International Cooperation Agency (KOICA) for Pokhara Metropolitan City.

Similarly, the meeting approved the preliminary agenda of the 12th meeting of the Nepal-China Tibet Trade Facilitation Committee to be held in Kathmandu on April 27 and 28 and decided to form a talks team under the coordination of the joint secretary of Ministry of Industry, Commerce and Supplies to participate in the meeting.

Sharing the decisions of the April 18 Cabinet meeting, Government Spokesperson Sharma said that the government decided that the Central Post Office, Postal Directorate and District Post Offices will operate on public holidays as well. Likewise, Assistant Auditor General Baikuntha Bahadur Adhikari has been promoted to the post of Deputy Auditor General and Murari Prasad Kharel has been appointed as the Secretary of the National Human Rights Commission.

In my previous column, I discussed how chronic political instability is affecting the conduct of our foreign policy. Here, I delve into how foreign powers, big and small alike, influence Nepal’s foreign policy. We often criticize our politicians for their lack of maturity and consistency. In most foreign policy discourses, I often hear this question: Who will believe us (read our politicians)? It is a reality that our politicians are neither serious nor have they realized their weaknesses. But it would be unjust to solely blame our politicians without considering other aspects like how foreign powers are behaving with us. Nepal’s key priorities are economic prosperity and social development. For a long time, we have been mobilizing our foreign policy to achieve these goals.

From Prithivi Narayan Shah to the current set of leaders, all have realized that Nepal is situated between India and China, understanding the difficulties of being caught between two global powerhouses. For a long time, our Rana rulers tried to live in isolation out of fear that opening up could threaten their regime. Nevertheless, they still endeavored to serve both their personal interests and national interests. After the 1950s, Nepal began diversifying its economic, security, development and trade policies or looking beyond its immediate neighbors. Let’s consider the current situation. We are conducting our foreign policy in accordance with the 2015 constitution.

Article 51 of the constitution states: “Safeguarding the freedom, sovereignty, territorial integrity, nationality, independence, and dignity of Nepal, the rights of the Nepalis, border security, economic well-being, and prosperity shall be the basic elements of the national interests of Nepal.” Nepal places economic diplomacy at the forefront of its engagement with the wider international community. We need money and technology to accelerate social development and economic prosperity. Lately, we have been vocal about our reluctance to take on significant loans, preferring grants for infrastructure development. Our stated position is that we will not align with any strategic or military blocs.

Nepal takes a neutral position in regional and international conflicts, consistently advocating for their resolution through peaceful means, with some exceptions resulting from adventurous policies of our politicians. Nepal believes in non-interference in each other’s internal affairs, non-aggression, and the peaceful settlement of disputes. For instance, Nepal opposed the Russian attack on Ukraine while maintaining a neutral stance on other issues. Many argue that this stance contradicts Nepal’s non-alignment policy, but it aligns with our stated policy. If one sovereign country attacks another, Nepal cannot remain neutral and opposes such actions but avoids taking sides.

Our message is clear: we do not wish to be embroiled in big power rivalries, and we urge major powers not to involve us in their geopolitical games. Currently, amid the Middle East crisis, we maintain the same policy. If not a zone of peace, we aspire to become a zone of investment. We have a straightforward message for major powers: we understand and protect your security and other legitimate concerns, but only a prosperous and strong Nepal can effectively address those issues, so invest in our country. Of course, challenges such as corruption and bureaucratic red tape exist, but the investment climate in Nepal is comparatively favorable, and we have big markets like India and China in close proximity. Despite getting huge support from major countries in Nepal’s social and economic development, the country is starting to feel the heat of geopolitical tensions. As these tensions escalate, there is a fear among our politicians that major powers may pull Nepal into their orbit through economic assistance. As major powers roll out strategic initiatives one after another, there are concerns that Nepal may become ensnared in a geopolitical ambush. Not only politicians, but senior bureaucrats also find themselves in awkward positions as they consolidate all bilateral issues under one strategic basket. And, there is a lack of understanding among politicians and bureaucrats about these issues, and there have been no efforts to educate them.

By closely monitoring negotiations between our leaders and major powers, we can see that our leaders are facing pressure. Whenever they engage in talks with their counterparts, they struggle to avoid committing to strategic projects outright. Since they cannot outright reject them out of fear for their regime’s stability, they attempt to reassure that Nepal could consider such initiatives after thorough study and consensus at home. Due to such apprehensions, our politicians are even hesitant to accept pure development projects without strings attached. Similarly, diplomats in Kathmandu bypass the due process in dealing with Nepal. Instead of going through the Ministry of Foreign Affairs, foreign countries tend to approach political leaders and certain ministries directly seeking their consent. For example, the Ministry of Foreign Affairs may be unaware of a host of initiatives proposed by major powers. If there is institutional memory, foreign countries cannot complain about policy inconsistency or lack of ownership across governments. If all proposals go through the Ministry of Foreign Affairs, which remains unaffected by changes in government, it ensures policy continuity to some extent.

Our stance remains that, due to our geopolitical location and other factors, we cannot align with major powers. Whether termed neutral, non-aligned or otherwise, our bottom line is clear: we seek engagement solely on economic terms. If major powers engage with Nepal in this manner, frequent changes in government may not pose significant difficulties. Therefore, support and invest in Nepal, so that we can safeguard the security and other legitimate interests of our friends. If major powers attempt to turn Nepal into a battleground for their conflicts, it will be detrimental not only to the Nepali people but also to the major powers. We understand that our neighboring countries, both near and distant, desire to see a stable and prosperous Nepal, as it serves their interests. My request to all: we aspire to grow with you as a sovereign and peaceful country. As I mentioned in my previous opinion piece, major countries should not favor one party over another or play them against each other. Instead, they should adopt a Nepal-centric policy with the economy at the forefront. Moreover, major parties should collaborate to formulate a common position on the issues mentioned above. We want to declare Nepal as a Zone of Investment.

The third Round of Foreign Office Consultations (FOC) between Nepal and Bangladesh was held in Kathmandu on Wednesday. Foreign Secretary Sewa Lamsal led the Nepali delegation while Foreign Secretary (Senior Secretary) Masud Bin Momen led the Bangladeshi delegation.   

The two sides discussed regional issues of mutual interest, underscoring the need to revitalize SAARC and strengthen BIMSTEC for the promotion of regional cooperation. They agreed to cooperate at various multilateral forums, especially at the UN, for pursuing common interests, especially in the areas of LDC graduation, poverty alleviation, climate change, and safety and security of migrant workers.

They discussed all major issues of mutual interest and agreed to promote cooperation encompassing all sectors, especially trade and commerce, transit and connectivity, power and energy, tourism, culture and education, the Ministry of Foreign Affairs stated in a press release.

Both foreign secretaries emphasized the operationalization of the BBIN MVA framework to contribute to the individual country’s economy not only by expanding trade and connectivity, but also by creating more opportunities to promote people-to-people contacts.

Foreign Secretary Lamsal highlighted the need to tap full potential in economic, cultural and educational sectors through a meaningful collaborative partnership between the two neighbors by involving their private sectors. 

Nepal would like to enhance trade and investment cooperation with Bangladesh, Lamsal said and asked Bangladesh to explore investment opportunities in Nepal, including in the hydropower sector. Furthermore, she requested the Government of Bangladesh to eliminate the Other Duties and Charges (ODCs) levied on Nepali products being exported to Bangladesh. Lamsal also emphasized the exchange of visits at different levels.

Foreign Secretary Momen stressed the need for an early conclusion of a power agreement between Bangladesh, India and Nepal to enable his country to import power from Nepal. He thanked the Government of Nepal for allocating land for the construction of a monastery in Lumbini, expressing hope that it would turn out to be a milestone in bilateral relations.

Despite  political and policy uncertainty, the Nepal government’s decision to organize the ‘Third Investment  Conference’ (TIC) on April 28-29 to attract foreign investment is a welcome step. Major issues/obstacles to such investment remain unaddressed amid a change of guard at Singhadurbar, including the ascension of a new finance minister. To make TIC successful is indeed a major challenge, but it is heartening to find the new finance minister committed to the cause. This article will analyze major issues related to investment and prescribe practical solutions expected to play a crucial role in making the conference successful.

A paltry FDI 

Investment, which helps to produce and reproduce goods and services, plays a pivotal role in national economic development. Despite different kinds of investment like public/private, domestic/foreign investment, the focus of this article is on private and foreign investment, especially foreign direct investment (FDI). For rapid economic development and growth, Nepal needs at least Rs 500bn in annual additional investment. Domestic investment alone will not be enough to fill this gap, so FDI is necessary.

Due to the lack of a conducive investment climate, ratio of real fixed investment (total fixed capital formation) to GDP has plunged from 34 percent (which should be around 60 percent, ideally) to 25 percent in a five-year period, whereas the share of total fixed investment of the private sector has gone down from 28 percent to 25 percent. Over the last 30 years (up to the fiscal 2023-24), FDI amounted to Rs 265bn with the average annual increment of a paltry Rs 8.5bn, marked by a receding flow in recent years. In terms of global FDI flow, Nepal’s position is pitiable, registering a 66 percent decline last year and standing shakily at the 6th position in South Asia, as the NRB Survey Report on FDI Flows in South Asia, 2021-22 shows. It is quite discouraging to note that FDI outflow is greater than its inflow.

Policy uncertainty and inconsistency is a major hindrance to both domestic as well as FDI. 

For example, the current government under Maoist leader Prime Minister Dahal is venturing into an undesirable sector by allowing the Nepali Army to run the already-privatized Hetauda Textile Factory, undermining the private sector (TPS) that contributes around 80 percent to the national economy. All this comes even as foreign investors remain quite afraid of pro-socialist provisions of the current constitution, including on the labor rights front. 

Capital flight

Worryingly, the private sector is diverting investment to a low-risk, high-profit trading sector at the expense of the industrial sector. This is not an overnight development, though. For several years, this sector had been urging the government to create a conducive environment for industrial investment in Nepal by amending relevant laws and enacting more than two dozen acts/regulations, to little avail. Instances of strikes and donation terror—the practice of seeking donations by flexing muscles—have gone down, but strong labor laws are still spoiling the investment climate. 

Notwithstanding a one-door policy on investment, there practically are three doors—the line ministry, the subordinate department and the Investment Board. Then there are infrastructural problems like load-shedding in the industrial sector, local communities’ grievances/concerns and political problems that create hurdles in the establishment of industries/factories. All these factors are also discouraging Nepali investors and triggering huge capital flight, formally and informally.  In such a situation, how can Nepal attract foreign investment?

A great dilemma

Globally, the control regime has become obsolete, thanks to a liberal economic policy adopted in the late 80s and 90s. Our neighbors—communist China and democratic India—adopted liberal economic policies and entered an era of economic growth and prosperity. In the case of Nepal and several other developing countries, some problems have appeared in the execution of liberal economic policy due to a higher degree of liberalization than their respective regulatory/supervisory capacities.  In our case, major leftwing parties have not so far committed to the liberal policy adopted 30 years ago, the need for FDI and a stronger role of the private sector for economic development. This is a great dilemma.

The author is an economist

The third round of Nepal-Bangladesh Foreign Office Consultations is taking place in Kathmandu on April 17.

Foreign Secretary of Bangladesh Masud Bin Momen is arriving today on a three-day official visit to Nepal in that connection, reads a statement issued by the Ministry of Foreign Affairs.

Foreign Secretary Sewa Lamsal will lead the Nepali delegation consisting of officials of various ministries of the Government of Nepal at the consultations.

 The two delegations will discuss wide-ranging areas of cooperation between Nepal and Bangladesh.

The Foreign Secretary of Bangladesh is also scheduled to pay a courtesy call on Deputy Prime Minister and Minister for Foreign Affairs, Narayan Kaji Shrestha during his visit.

Foreign Secretary Masud will leave Kathmandu for Dhaka on April 18, the Ministry said.

Banks are flush with loanable funds, but they are not seeing demand for loans. As a result, the Nepal Rastra Bank (NRB) has been mopping up excess liquidity from the banking system through different monetary instruments.

According to the central bank, banks and financial institutions (BFIs) have a lending capacity of over Rs 850 billion at present. However, BFIs are not able to invest. On the other hand, an unruly group has gone after the banking and financial sector unchallenged. The government seems helpless against such groups. Recent arrests of bankers on suspicion of irregularities have unleashed a situation of fear and terror in the banking and financial sector.

That is why, bankers say, despite excess cash, there has been no investment. No wonder bankers are saying there is no environment for investment in the country. Stakeholders say that unless the government takes action against the groups spreading anarchy by saying 'loans need not be repaid' and 'if you protest, loans will be waived', the situation in the banking sector will not improve.

Banks hesitant to invest

 Bankers say the servicing of loans by borrowers has been affected after unruly groups started a campaign against banks. The banking and financial sector has been facing this problem for about a year now. On the other hand, the overall economy has shrunk recently. Most businesses are in a slump as there is no demand in the market. There has been no demand for loans from banks. In such a situation, bankers say that with unruly activities getting support to destabilize the banking sector, they have to hesitate even to lend.

However, the government has not taken any action against those spreading anarchy against banks. Protests are also being organized in the name of victims of microfinance. Some bankers feel that the state has been supporting those agitating against microfinance instead of controlling them.

The Nepal Rastra Bank has set a maximum credit-to-deposit ratio (CCD ratio) of 90% for banks. The current CCD ratio of banks is only 80.02%. While deposits have been increasing daily, lending has not increased proportionately, resulting in an accumulation of cash in the system.

According to the Nepal Bankers' Association, there has been no demand creation in the market. Interest rates have declined, but there are no new borrowers. Commercial banks, development banks, and finance companies have collected deposits of Rs. 6.17 trillion and disbursed loans of Rs 5.09 trillion.

Sunil KC, president of the Nepal Bankers' Association, cites protests against banks, arrests, and unnecessary detentions of bankers as reasons for the inability to disburse loans. “Additionally, imports have declined compared to the previous year, and most industries have not been operating at full capacity. Public construction projects have also been sluggish due to a lack of funds. For these reasons, there has been no demand for loans," KC said. "As soon as money stops flowing into the construction sector, many other sectors will be affected. These are the reasons why overall loan demand has declined." Banks' non-performing loans have also increased compared to previous levels, said KC, who is also the CEO of NMB Bank.

Tightening policies

Bankers say the central bank is not relaxing certain policies because of the conditions set by the International Monetary Fund (IMF). The IMF granted Nepal concessional loans worth $395.9 million under its Extended Credit Facility (ECF). Officials, who were alarmed at depleting foreign exchange reserves and increasing current account deficit due to high imports, agreed to accept the IMF’s conditional loan which extends until February 2025. Bringing reforms to the financial system and public finance management, including amending the law to make Nepal Rastra Bank autonomous, preparing a blueprint to prevent misuse of loans, conducting external audits of 10 big commercial banks are some of the conditions set by the IMF.

The government implemented some reform measures, but it dragged its feet on the implementation of some other conditions set by the IMF. The then finance minister, however, expressed commitment to implement all reforms in October last year after the IMF withheld the third installment of its loan.

NRB’s directives on loan classification, the new provision of a six-month wait for non-performing loans to be upgraded, and the guidelines on working capital loans were met with opposition from the private sector. Private sector bodies like FNCCI and CNI have urged the government to clear IMF loans at the earliest.

NRB's requirement of raising capital reserve by 0.5 percentage points to 9% by mid-June will decrease bank's capacity to lend by around Rs 25 billion, according to bankers. Likewise, further shrinking of spread rate to 4% has hit profitability of banks.

As Nepal is soon going to approach the milestone of graduating from the list of Least Developed Countries (LDCs), there is an urgency to develop a comprehensive foreign policy that goes beyond the traditional approach of the so-called “yam between two boulders”.

Frankly speaking, I always struggled to understand the intrinsic meaning of the reasoning behind it.

Why should a nation like Nepal that, objectively speaking, is not a tiny geographical spot on the global map, reduce itself to a binary thinking that is dictated by an over reference towards India and China?

Perhaps in the past, this thinking could have been justified.

In the realm of geopolitics and international relations, there is no room for naïveté and it is impossible for a country like Nepal not to take into consideration the strategic interest of its two gigantic neighbors.

But this isn’t the last time that Nepal forged its own strategic interests beyond those of China, India or the United States of America.

But what would take for Nepal to be able to formulate a future forward, confident foreign policy?

The spirit of amity and cooperation with all the nations is a key pillar of the country’s foreign policy.

Together with the successful (though not fully completed) transition from the civil conflict, and the creation of a federal democracy, this internationalist attitude, should represent the “north star” of Nepal’s foreign policy.

Moreover, Nepal’s incredible diversity in cultures and traditions, magnificent landscapes and cordial nature of its people could also help its ways to project itself to the world.

But how to concretely leverage these sacrosanct principles and unique endowed features of the country rhetoric?

Nepal will soon do away with the “least” developed nation label that, from the marketing and branding point of view, has been disastrous, especially if you want to bring in international investors.

This development will require a reset in the way foreign policy is framed because, between now and the next few years, Nepal will have a unique opportunity to rebrand itself and not only in terms of being an attractive investment destination.

Perhaps, reminding ourselves that foreign policy is a mirror of national politics and the way of governing a nation, could be a way to start a reflection on the links between national and foreign policies.

If national politics changes for the better and becomes more transparent and effective, then the foreign policy of the nation can, consequently, also get more strategic and ambitious so that, finally, Nepal could get rid of “yam between two boulders” thinking.

Foreign policy should be instrumental in this phase of national development but a lot will depend on how politicians perform and behave at home.

The country is trying to turn from being a net recipient of international aid to being a net recipient of foreign investments.

A vision, albeit not yet perfect, is being formulated in this regard.

There is an overarching aspiration to attract business even though, for this to happen, it might mean doing away with some convenient “double standards” like the existing limitations in the shares that a foreign investor can own.

In addition, being successful at attracting investments won’t only depend on running a successful summit or in putting in place better rules that incentivise investors.

Instead, what will count will be creating a favorable investor climate thanks to better policies that enhance good governance in the realm of the economy, including serious interventions in the fight against cartels and corruption.

In addition, unless the country manages its delivery of services better, especially in the field of education and health, it will hardly succeed at becoming an investors’ magnet.

For example, there have been discussions about Nepal becoming a medical or educational hub.

Knowing the quality of the expertise and knowhow within the country, I am confident that it is possible.

There are already enough best practices and the more the country attracts back its citizens who had decided to emigrate in places like Australia and the USA, the better.

It would be even conceivable to imagine, in the near future, “Nepal Educational Expos” around the world with the best national educational institutions attracting students, starting from continents that the country has never, so far, even remotely imagined engaging with.

But can Nepal become such a hub without the right foundations?

Fixing its foundations, improving its education system at the grassroots and raising the current level of public education would be instrumental in promoting a “whole of nation” approach rather than few best practices amid a sea of mediocrity or worse.

What about starting to think about the first ever investment-focused mission of a Nepali Prime Minister to emerging nations in Central Asia or even to Africa and Latin America?

An official state delegation could discuss bilateral cooperation, including investments and the selling of some of the country’s unique proposition, tourism and of course its education and health institutions.

A substantial effort at enhancing good governance would, consequently, also be instrumental in propelling a foreign policy capable of shaping a new narrative.

The story of a country with many imperfections and unsolved challenges but also a nation that is ambitious and attempting at building a more just and developed society that can attract high human capital investments rather than low-cost manufacturing.

Good governance could also enable and facilitate innovative policy and contributions that Nepal can offer to the world, all ideas that its diplomacy could amplify and promote.

If you read the speeches of every single Prime Minister in the international forums, it is always the same leitmotif, starting from the usual (though correct) story that the country is among the most at risk of climate warming.

It is not that Nepal must stop bringing forward its legitimate grievances but it can do this differently with practical propositions, from adaptation to climate financing.

These are just some examples where Nepal could contribute not as a “bagger” but as promoter of solutions to some of the key global challenges.

But we need a non-partisan foreign policy vision of at least five years, a very pragmatic document that does not waste time in pleasing the neighborhood or other super powers but rather is purposefully fit to serve the nation’s new development aspirations.

Formulating this vision document will compel the policy-makers to truly align national priorities with its foreign policy ones.

This would help Nepal start thinking and not only in terms of foreign policy, from the perspective of being a middle-income nation even if it is, at the moment, just an aspiring one.

But it remains essential to fix the governance first.

The nation needs to really turn its mediocre at the best governance into a “good” one so that it can be in a position to truly assert its own interests, no matter what others might expect from it.

This is a real chance for Nepal to reach the point of thinking beyond what its powerful neighbors want and need from it.

Otherwise, we will continue to read about this absurd but sadly true story that Nepal is just a “yam between two boulders”.

The author is the co-founder of ENGAGE and The Good Leadership. Views are personal

Nepal defeated Hong Kong by eight wickets in their third match under the ACC Men’s Premier Cup on Monday.

In the match held at Al-Amerat Cricket Ground in Oman, Nepal achieved the target of 115 runs set by Hong Kong in 12. 2 overs.

Asif Sheikh scored highest 40 runs for Nepal while Kushal Bhurtel returned to pavilion scoring 32 runs.

Anshuman Rath scored highest 34 runs for Hong Kong, wicketkeeper Zeeshan Ali contributed 14 runs and captain Nizakat Khan and Ehsan Khan made 12 and 11 runs respectively. Other batters failed to score in double digits.

Abhinas Bohara claimed three wickets, Dipendra Singh Aire and Lalit Rajbansi took two wickets each and Karan KC picked one wicket.

The match was reduced to 18 overs due to the rain.

This is Nepal’s third consecutive victory.

Nepal defeated Malaysia by five wickets in the first match and Qatar by 32 runs in the second match.

The Asian Development Bank (ADB) projects Nepal’s economy to grow by 3.6 percent (at market prices) in fiscal year 2024. During the press conference held today to unveil the Asian Development Outlook (ADO) April 2024, a flagship publication of the ADB, it was revealed that Nepal’s economy is expected to rebound from an estimated growth of 1.9 percent in fiscal year 2023.

Arnaud Cauchois, ADB Country Director for Nepal, noted, “A gradual relaxation of monetary policy, combined with improved consumer and investor confidence, is anticipated to spur economic activity in 2024. Moreover, industry is forecasted to experience faster growth compared to fiscal year 2023, driven by increased government capital spending in the latter half of the fiscal year and the commissioning of additional hydroelectric power by the end of fiscal year 2024.”

The service sector is also expected to witness accelerated growth as credit controls ease, interest rates decrease, and tourism revenues expand. Agriculture growth may see a slight uptick from 2.7 percent in fiscal year 2023 to 2.8 percent, though a record rice harvest is offset by a shortfall in winter crops and other agricultural production due to deficient rainfall this winter season, as outlined in the ADB press release.

The report forecasts annual average inflation to drop to 6.5 percent in fiscal year 2024 from 7.7 percent in fiscal year 2023, driven by subdued oil prices and a decline in inflation in India, Nepal’s main import source. “External risks remain relatively contained. The current account deficit may return after registering a surplus in the first half of fiscal year 2024,” clarified the ADB.

According to the ADO, the trade deficit contracted by 4.7 percent year-on-year in the first six months of fiscal year 2024, while workers’ remittances expanded by 22.6 percent year-on-year, resulting in a current account surplus of $1.2bn. However, with higher imports and stable remittance inflows expected in the remainder of the fiscal year, the 2024 current account deficit is forecasted at 0.7 percent of gross domestic product.

ADB Principal Economist for Nepal, Jan Hansen, highlighted potential downside risks to the economic outlook in fiscal year 2024, including a global economic downturn affecting Nepal’s tourism and remittance receipts. “Any intensified geopolitical turmoil could disrupt supply chains, push up global inflation, and tighten global financial conditions. This may necessitate a tightening of domestic monetary policy, potentially undermining investment and consumption, and dragging down growth,” stated the press release. Hansen reaffirmed ADB’s commitment to supporting a prosperous and inclusive Nepal.

Established in 1966 and owned by 68 members, with 49 from the region, the ADB is dedicated to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while continuing efforts to eradicate extreme poverty.