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Dear readers,

We start this week’s update on a tragic note. We are talking about the tragic Saurya plane crash at Kathmandu’s Tribhuvan International Airport (TIA) on Wednesday that killed 18 out of 19 passengers on board.

At this time of tragedy, our thoughts are with the friends and families of the deceased. We also wish for a speedy recovery of the pilot who survived the disaster.  

Wednesday’s incident at the TIA has once again highlighted concerns over Nepal’s aviation safety. Once again questions are being raised about the oversight role of the Civil Aviation Authority of Nepal (CAAN) and the airlines. 

Recently, there has been an increase in technical errors, emergency landings, and other issues with domestic airlines, leading to a growing sense of insecurity among the public. People are now questioning the safety of both air and land travel, especially in light of recent plane crashes and major bus accidents.

These tragedies negatively impact Nepal’s international image and could further harm the tourism industry, which is just beginning to recover from the severe effects of Covid-19. The international community is closely monitoring these incidents as Nepal seeks permission from the European Commission for Nepali planes to fly over the European airspace.

This week, the monsoon continued to wreak havoc across the country, causing loss of lives and property. Already, monsoon rains have claimed over 130 lives and caused property damage worth billions.

Now onto politics. This week, Prime Minister KP Sharma Oli secured a two-third majority in a crucial floor test at the House of Representatives. However, it remains to be seen if he can maintain this support for long. After becoming prime minister, Oli faced tough questions from lawmakers, which we covered in detail. He also made public a much-anticipated seven-point agreement reached with Nepali Congress (NC) President Sher Bahadur Deuba, which has not yet been released.

Within the NC, Oli’s primary coalition partner, internal dissatisfaction is growing over the selection of ministerial candidates for provincial and federal positions. Senior leaders Shekhar Koirala and Gagan Thapa have accused Deuba of favoring his close associates. While this discontent may not escalate significantly, the NC leadership should address these concerns to prevent potential spillover effects on the coalition government. Deuba, who has total control over party structures, should be more accommodating and provide space for marginalized groups. The same goes for Prime Minister Oli; he should address intra-party concerns rather than suppressing dissenting voices.

Outside Kathmandu, following the formation of the NC-UML coalition at the center, new chief ministers are being appointed in the provinces. Provincial governments are becoming unstable due to a frequent change of guard at the Center, but our political parties seem least bothered about it.

Meanwhile, former prime minister and CPN (Maoist Center) Chairman Pushpa Kamal Dahal, who was ousted from power, is busy with internal party meetings, emphasizing the positive aspects of his government's tenure. He claims he was ousted after corruption scandals were uncovered and has urged party members to focus on rebuilding the party's organizational base. Since losing power, Dahal has not spoken in the Parliament.

In another story this week, a cross-party committee formed to address war-era human rights issues has made some progress, but it is unclear what top politicians think about the TRC Bill pending in Parliament. With the Maoists out of power, significant progress on the TRC seems unlikely.

On the economic front, with the new government in place, attention is on Finance Minister Bishnu Prasad Poudel to revive the country's economy. Prime Minister Oli has appointed former Finance Minister and Governor Yubaraj Khatiwada as his economic advisor, delaying the unveiling of the much-awaited monetary policy. Concerns remain about whether Poudel and Khatiwada will coordinate effectively on economic issues. The public expects good coordination between the Ministry of Finance, the Prime Minister’s Office, and Nepal Rastra Bank.

Also this week, Minister for Foreign Affairs Arzu Rana Deuba outlined the government’s foreign policy priorities. It is unclear if she is consulting with the prime minister on these matters, but she has discussed China’s Belt and Road Initiative (BRI), stating it cannot proceed without wider government and public discussions. The BRI has been under discussion since Nepal signed the framework agreement in 2017, with the debate polarized between pro-BRI and anti-BRI forces in Kathmandu. China and Western countries are investing in narratives for and against the BRI, respectively, dividing politicians.

Another notable story this week concerned Deputy Speaker of the House of Representatives Indira Rana Magar. Magar faced public scrutiny after a letter surfaced in which she had written to the US Embassy in Kathmandu to facilitate the visa process for people with no official connection to her.

Some parliamentarians have accused Magar of misusing her position and trying to “traffick” people into the US, and have called for her resignation to facilitate the investigation. Magar’s party, Rastriya Swatantra Party (RSP), has defended her, stating that the letter was written last year to request the US embassy to schedule an early date for visa interviews, and that there was no ill-intention.

RSP has also claimed that their detractors are using the old letter to smear Magar and the party. However, the moral question remains, as Magar did use her official letterhead of the Deputy Speaker for her correspondence with the US embassy.

That’s all for this week. Have a great weekend!

The officials of the Finance Ministry on Tuesday briefed Finance Minister Bishnu Prasad Poudel about the country’s economic challenges and the measures to resolve those issues.

“Mainly, there are 46 challenges in Nepal’s economy in the observation of the Finance Ministry. Steps are required in 29 sectors to overcome those challenges,” according to a press note issued by the Ministry. 

The ministry’s secretaries and joint secretaries had briefed the minister about the country’s economic status and the ideas to troubleshoot them, according to the ministry.  

In response, Minister Poudel has directed to move ahead by prioritizing the challenges to resolve them. 

The slow growth rate in the economic sector in comparison to the availability of resources; limited growth rate in savings, consumption and investment; poor investment in the productive sector and a sea gap in the import-export ratio have been mentioned as the key challenges of the economy. 

Likewise, unstable and slow economic growth, massive financing gap and limited gross domestic savings and massive internal migration resulting in a decreasing trend of population in mountain, hilly and rural areas have also been identified as challenges of Nepal’s economy. 

Limited contribution of the productive sector in economic growth, limited economic growth rate, poor productivity and the decreasing trend of the industrial sector’s contributions to the country’s economy are also equally alarming as stated by the ministry. 

Similarly, import-based revenue system, poor status of export, massive trade deficit, marginal growth in revenue collection and expenditure, ineffectiveness in capital expenditure, rising debts and massive financial liability for loan repayment have been mentioned as the country’s economic major challenges. 

The ministry has suggested reforms in 29 sectors to resolve the crisis country’s economy is facing. 

According to the ministry, reforms should be achieved by ensuring effective public expenditure along with prioritization, improving capacity to increase capital expenditure, giving emphasis on fiscal strengthening, prioritizing production-based revenue, promoting effective use of debts, reducing financing risks, giving momentum to economic growth by creating a conducive environment for investment growth and investing more on the productive sector.  

The ministry has also explored ideas for accelerating the current economic slowdown. They include clearing the internal obstacles to bring in FDI, stressing the construction of hydropower projects and transmission lines, developing quality road networks, aligning the rural roads with agricultural production and marketing, promoting effectiveness of capital expenditure and applying austerity measures in administrative costs.   

Similarly, the ministry has said government investment should be centered around economic infrastructure development while foreign grants and concessional loans should be mobilized in national priority projects and funds related to climate change should be mobilized.   

Likewise, other measures suggested for solution include maintaining the government’s reserve fund, discouraging non-budgetary demand, ensuring loan disbursement in the productive sector and controlling bad debts. 

The ministry’s officials have asked to apply relaxed monetary tools to reduce the costs of fiscal tools while maintaining stability, providing project-based loans for SMEs, ensuring effective regulations of the fiscal sector and developing a second layer regulatory mechanism to regulate the cooperative sector. 

Other ideas include encouraging the use of remittance in the productive sector, making migration work and devising some policy and legal reforms to increase the inflow of foreign investment in the country.

The Indian government’s budget for the Ministry of External Affairs for the fiscal year 2024/25 has increased allocations for Nepal and Sri Lanka while reducing support for other neighboring countries. Nepal stands out as a major beneficiary, poised to receive InRs 7bn, a substantial increase of InRs 1.5bn from the previous year’s revised budget of InRs 6.5bn. 

Sri Lanka’s allocation has also risen significantly to InRs 2.45bn, an increase of InRs 0.95bn from the previous year’s InRs 1.5bn. This boost is crucial for Sri Lanka’s ongoing economic recovery, supported by India’s previous $4bn aid. 

Afghanistan and the Maldives maintain their allocations at InRs 2bn and InRs 4bn, respectively. Afghanistan’s allocation remains stable despite last year’s revised budget of InRs 2.2bn. 

The Maldives saw a notable increase in its revised budget to InRs 7.7bn, indicating ongoing support for infrastructure projects. 

Meanwhile, Bhutan and Myanmar have seen reductions in their aid. Bhutan’s allocation decreased by InRs 3.3bn—yet it still receives the largest share at InRs 20.68bn. Myanmar’s allocation dropped by InRs 1.5bn to InRs 2.5bn, compared to last year’s InRs 4bn, with InRs 3.7bn utilized. Bangladesh’s allocation decreased by InRs 0.8bn to InRs 1.2bn, with only InRs 1.3bn of the previous year’s InRs 2bn utilized. 

Similarly, Iran’s Chabahar port project continues to receive a steady allocation of InRs 1bn, unchanged for the past three years, highlighting its strategic importance for India as a gateway to Afghanistan and Central Asia, bypassing Pakistan.

Indian Finance Minister Nirmala Sitharaman presented the first full-fledged budget of the Prime Minister Narendra Modi-led coalition government on Tuesday. From India Inc to the middle class and job seekers, everyone has high hopes for this budget. Additionally, some policy interventions could significantly boost the country’s economic growth and tackle the growing unemployment issue.

Ahead of the budget, Prime Minister Modi asserted that this budget will lay the foundation of ‘Viksit Bharat’ (Developed India). He also said that this is an important budget for ‘Amrit Kaal’, which means ‘great leap’, and could propel India forward on all fronts.

Nepal has established diplomatic relations with the Republic of Kiribati today.

With this, the number of countries with which Nepal has diplomatic relations has reached 183.

Kiribati (pronounced Kiribas), which is located in the central Pacific Ocean, gained independence on 12 July 1979 from Britain. It has a total land area of 811 square kilometers with a population of over 120,000 people.

Kiribati became a member of the United Nations on 14 September 1999. Both Nepal and Kiribati are members of G77 and China and the Least Developed Countries.

Ambassador and Permanent Representative of Nepal to the United Nations Lok Bahadur Thapa and Ambassador and Permanent Representative of the Republic of Kiribati to the United Nations Teburoro Tito signed a Joint Communiqué to this effect in a brief ceremony held at the Permanent Mission of Nepal in New York, today.

They also signed a joint letter informing the Secretary-General of the United Nations about the establishment of diplomatic relations between the two countries.

On the occasion, both the Ambassadors exchanged views on various matters of common interest to strengthen bilateral cooperation in national and international forums, especially at the UN forums for the mutual benefit of the two countries, including the issues of least developed countries, according to a statement issued today by the Permanent Mission of Nepal to the United Nations based in New York, USA.

A total of 108 people have died due to monsoon-induced disaster including floods, landslides and inundation in different parts of the country.

According to the Nepal police headquarters, the death toll since the monsoon began on June 10 to July 14 has reached 108.

Among the deceased, two died in Kathmandu valley, 19 in Koshi Province, five in Madhesh Province, nine in Bagmati, 38 in Gandaki, 23 in Lumbini, four in Karnali Province and eight people in Sudurpaschim Province.

Similarly, 119 people were injured in the incident including eight in Kathmandu valley, 31 in Koshi, nine in Madhes, seven in Bagmati, 28 in Gandaki, nine in Lumbini, 16 in Karnali and 11 in Sudurpaschim Province.

According to Nepal police, 53 people, who were affected by the floods and landslides, have been rescued while six people are still missing. During the period, a total of 182 houses were inundated due to floods. Similarly, 203 houses, 75 sheds, 41 bridges, one school and two government offices were damaged.

A total of 516 cattle heads perished while 3,552 families were displaced from their homes due to the disaster.

On July 9, the Executive Board of the International Monetary Fund (IMF) completed the fourth review under the four‑year Extended Credit Facility (ECF) for Nepal, allowing the authorities to withdraw the equivalent of approximately $41.3m. This brings the total disbursements under the ECF for budget support thus far to about $247.7m.

The ECF arrangement for Nepal was approved by the Executive Board on 12 Jan 2022, for 180 percent of quota, or about $371.6m. Nepal has made good progress with the implementation of the program, which has helped mitigate the impact of the pandemic and global shocks on economic activity, protect vulnerable groups, and preserve macroeconomic and financial stability. The program is also helping to catalyze additional financing from Nepal’s development partners.

The economy continues to face challenges as growth, projected around three percent in FY2023/24, remains below potential in the context of subdued domestic demand and post‑pandemic balance sheet repairs. Economic activity is expected to pick up, with growth reaching 4.9 percent in FY2024/25, supported by stronger domestic demand. The cautiously accommodative monetary policy stance, planned increase in capital expenditure in the FY2024/25 budget, additional hydropower generation, and a continued increase in tourist arrivals are expected to boost domestic demand and growth. Inflation is expected to remain within the Nepal Rastra Bank’s (NRB) target ceiling of 5.5 percent.

Domestic risks dominate the outlook. Failure to raise the execution rate of capital projects would deprive the economy of much-needed stimulus and weigh on growth. Fragile political stability could disrupt policy continuity and reform implementation. Intensification of financial sector vulnerabilities, such as a further rise in NPLs or more failures of cooperative lenders, could endanger banking system soundness. Externally, high commodity prices could slow the recovery in energy-intensive sectors. Nepal remains vulnerable to natural disasters.

Nepal’s economic reforms progress

Bo Li, deputy managing director and acting chair

Nepal has made significant strides in its economic reform agenda. Decisive actions in monetary policy, bank regulation, and phasing out Covid-19 support policies played a major role in overcoming urgent balance of payments pressure in FY2021/22. Reserves continue to rise without the need for distortive import restrictions. Fiscal discipline was maintained in FY2022/23 and so far in FY2023/24, despite revenue shortfalls. Bank supervision and regulation have improved with the implementation of new supervisory information systems, the Working Capital Loan Guidelines, and Asset Classification Regulations. Nepal’s medium-term outlook remains favorable as strategic investments in infrastructure, particularly in the energy sector, are expected to support potential growth.

With growth below potential, executing the planned increase in capital spending, as envisaged in the FY2024/25 budget, while maintaining fiscal discipline through domestic revenue mobilization and rationalization of current spending, remains critical to boosting growth and preserving medium-term fiscal sustainability. Strengthening public investment management will support the needed boost to capital spending. Enhancing fiscal transparency will help contain fiscal risks and further strengthen medium-term fiscal sustainability.

As monetary policy transmission is still weak in the context of balance sheet repair, a cautious and data-dependent monetary policy remains appropriate to preserve price and external stability. Continuing to strengthen Nepal’s financial system remains a top priority. Financial policy should remain vigilant and focused on building regulatory frameworks that promote sustainable credit growth while proactively addressing emerging vulnerabilities in the savings and credit cooperatives sector. Maintaining recent reforms regarding lending practices and asset classification is important as preparations for the loan portfolio review of the ten largest banks continue.

Nepal’s commitment to strengthening its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework is commendable. Amendments to a set of fifteen laws, including those on money laundering, have been recently enacted, and secondary legislation is under preparation to bring Nepal’s AML/CFT legal framework in line with international standards. It remains critical to ensure the effectiveness of the new legal framework. Reforms to implement the 2021 IMF Safeguards Assessment recommendations regarding the NRB Act and NRB audit are a priority.

Continued progress on the structural front remains necessary to foster investment and more inclusive growth. This includes improving the business climate, building human capital, and continuing to enhance social safety nets, particularly aiming for the full execution of the child grant budget, followed by an expansion of the program to all districts in Nepal.

Nepal’s farm sector needs a shot or two in the arm in view of changing weather patterns amid a deepening climate crisis and forgotten yet effective traditional agricultural practices. 

For revitalization of this sector, every farmer needs to know what crops (traditional, modern, cash crops, etc) can grow well in their land. It is the duty of every local government to make sure that the farmers know this.   

Who among these farmers want to opt for subsistence farming? Who wants to go for commercial farming and who prefers surplus farming?

Relevant authorities should take a call on this because the needs of these separate groups of farmers are quite different.    

Subsistence farmers need nothing, surplus farmers need guaranteed markets at their doorsteps whereas commercial farmers need guaranteed connections of national markets and knowledge to preserve their productions in a variety of ways. 

It is the duty of Palikas (rural municipalities) to lease the parcels of land to the poor people interested in farming or sell it to them by accepting payment in installments.  

Farmers also need to bear in mind that our ancestors switched to new crops in keeping with changing climatic conditions, including the availability of water. They need to realize that food patterns have been changing over generations and time has perhaps come yet again to change our food habits in keeping with a changing climate.  

In this regard, we can take a leaf from Vedic ancestors, who taught us to blend science and intellect and sustain it culturally.  For example, they taught us how to tap into the cosmic energy to rejuvenate ourselves. Planting Tulasi, Pipal and Sami was their way of ensuring a steady supply of pure oxygen and antioxidants.

Let us learn about sustainable development goals (SDGs) from our religious texts and cultural practices, and unlearn from the past efforts of government as well as non-government organizations (GOs/NGOs), if we are to indeed give sustainable development a boost in our soil. 

Commission-oriented practices of politicians and businesspersons, in particular, have led to soaring imports of substandard foodstuffs of inferior quality, making the Nepali farmers reluctant to cultivate crops. So, we must make it loud and clear to our neighbors that these food imports have made our people lazy, and increased health hazards.

Our import-oriented economy throws ample light on the country’s crop production scenario. Politicians least bothered about crop yields, a labor-intensive farming system, unethical business and trade practices, and consumption-oriented mindsets are responsible for inviting this situation. 

To overcome this scenario, let us make a matrix of our food demands, our production, the gaps, crops that we must grow, and local governments that can grow these crops.  This matrix will help to move ahead with crop production plans.  

Commitment requires continuity—in saying and doing—something, which can be done by developing all political parties’ consensual intent, programs, funding mechanisms and an accountable implementing agency, which will remain there regardless of who comes to power. But none of the rulers and potential rulers are heading in that direction, pointing at the absence of their commitment to the cause. 

Summing up, the Nepalis possess a number of indigenous skills to fill up their stomachs.  

Ignoring this heritage, we followed westernization in the name of modernization in the farm sector as well. So, let’s first learn to differentiate between the two and go for modernization of what we have. Secondly, our developmentalists adapted the deficiency thesis. Let’s follow an efficiency thesis to enable poor people for a self-sustaining economy.  Thirdly, let us encourage industrialists and businesspersons to establish organic industries.  Fourth, we exhausted our land by using chemical fertilizers and pesticides, sidelined the local and indigenous wisdom, and replaced indigenous crops. Let’s move ahead by learning lessons from these mistakes. Fifth, we became consumers and inhuman businesspersons to feed long grain rice and poisonous vegetables, poultries and pigs laced with chemicals. Let’s reflect on this moniya culture (money is supreme) and work for human and nature- friendly productions.

In the last week of June, three people died and 16 others fell ill after consuming wild mushroom curry in Makwanpur district in Bagmati Province. These incidents are common during the monsoon season as people lack knowledge about wild mushrooms. The district security personnel of Makwanpur advised against eating wild mushrooms. However, this is not a solution. We need more awareness about our wild edible species.

According to available data, wild mushrooms in Nepal belong to 108 families, 357 genera, and 1,291 species. Among these, there are 159 edible mushrooms, 74 medicinal mushrooms, and 100 poisonous mushrooms.

Nepal’s traditional diet, rich in fresh, locally sourced ingredients, promotes health and well-being through nutrient-dense foods like lentils, vegetables, and whole grains, along with probiotic-rich fermented items. However, the growing trend of adopting Western dietary habits, often involving processed and packaged foods, raises concerns about losing the benefits of our own nutritious foods. It’s crucial to question if these new habits truly improve our health or if they compromise it by increasing the risk of chronic diseases and environmental impact. Supporting our traditional foods fosters better health, sustainability, and cultural heritage.

Foraging, the practice of searching for and collecting wild food resources, has a deep-rooted culture in Nepal. Seasonal foraging yields a diverse array of wild edibles such as ferns, fiddlehead ferns, wild asparagus, and yarsagumba (a medicinal fungus). Every season brings a new bounty of fruits and vegetables, mostly organic and naturally provided by Mother Nature. Many believe that consuming wild, seasonal foods can greatly enhance health, reducing the need for medical visits.

Foraging is practiced globally, with foragers in the UK harvesting wild garlic and dill, which can evoke nostalgia for similar Nepali herbs like chyapi. It’s said that foraging for your own food limits your carbon footprint and helps to maintain the natural landscape. Done correctly, it reconnects us to nature while limiting our impact on our natural surroundings. Humans need to be an active part of changing the environment—even on this small scale.

Foraging should be modest, carried out with an understanding of the plants, fungi, and the delicate balance of biodiversity within different habitats. This practice needs to be done by someone thoughtful, informed, with knowledge of the local area.

The practice of foraging yarsagumba is not sustainable, and the local governments and protected areas authorities are charging people to reduce this unsustainable way of foraging. Sustainable foraging is crucial to ensure that future generations can also experience and benefit from these natural resources. It involves mindful collection practices that do not deplete the ecosystem, ensuring plants and fungi can continue to thrive.

In Nepal, foraged produce includes:

Ferns and fiddlehead ferns: Popular in many Nepali dishes, rich in vitamins and minerals.

 Wild asparagus (Kurilo): Known for its medicinal properties and high nutrient content.

 Yarsagumba: A rare and valuable fungus used in traditional medicine for its purported health benefits.

Wild berries and fruits: Various types are collected seasonally, providing essential vitamins and antioxidants.

Emphasizing foraging within our diets supports health, maintains biodiversity, and preserves cultural practices. Practicing sustainable foraging ensures these natural treasures remain available for future generations.

Edible and medicinal plants in Nepal

·  Githa (Dioscorea bulbifera): Often foraged during the monsoon season.

·  Bhyakur (Dioscorea deltoidea): Typically available in the monsoon season.

·  Tarul (Dioscorea alata): Harvested in the winter, especially around Maghe Sankranti.

·  Taro (Colocasia esculenta): Available during the monsoon and early autumn.

·  Chiuri Fruit (Diploknema butyracea): Collected in late summer to early autumn.

·  Kaphal (Myrica esculenta): Found in mid to high altitudes, foraged in late spring to early summer.

·  Wild Lemon (Bimiro): Available during the monsoon season.

·  Wild Strawberries: Found in hilly regions, available in late spring to early summer.

·  Amala (Phyllanthus emblica): Available in winter.

·  Chutro (Berberis asiatica): Collected in the autumn.

·  Siltimur (Zanthoxylum armatum): Foraged in the monsoon season.

·  Timur (Zanthoxylum armatum): Available in late summer to early autumn.

·  Kurilo (Asparagus racemosus): Found in spring.

·  Ban Lasun (Allium wallichii): Available in the monsoon season.

·  Wild Mushrooms: Collected during the monsoon season.

·  Ausadi: the mother of fermenting ingredients. Ausadi, a mixture of wild herbs and roots, plays a crucial role in the fermentation process for making traditional liquors across various communities in Nepal. This tradition is deeply rooted in cultural practices and is passed down through generations. Each region might have its own unique blend of herbs, contributing to the distinct flavors of their homemade liquors. This practice showcases the rich biodiversity of Nepal and the knowledge of local flora.

These foraged plants and fruits not only provide food but also have significant medicinal and cultural importance. They reflect the deep connection between the people of Nepal and their natural environment, highlighting sustainable living practices that have been maintained for centuries.

The author is UK-based R&D chef

The Bangladesh Power Development Board (BPDB) has sent a letter to the Nepal Electricity Authority (NEA) to sign an agreement for the sale and purchase of 40 MW electricity produced in Nepal.

The BPDP sent the letter for the agreement, sharing that the tender submitted by the NEA for the sale of 40 MW power for six months during the rainy season was approved by the concerned body, according to the NEA.

In accordance with the provision in the law, a trilateral agreement was signed between Bangladesh, India and Nepal on January 1, 2024 for the sale of 40 MW electricity produced in Nepal. 

The NEA had called for tender for the purchase of power for five years as per this.  Sharing that the tender was approved by the concerned body by evaluating the documents related to tender, the BPDP informed the NEA about the approval of the tender. 

The NEA has to send written notice about the approval of the tender within seven working days after that the BPDP would provide a draft of the agreement regarding sale of the power to the NEA. 

An agreement should be signed within 28 days after receiving the draft. An agreement would be signed between NEA, NTPC Vidyut Vyapar Nigam (VVN), India and BPDP.

NEA Executive Director Kulman Ghising said works have been started to export power to Bangladesh from this monsoon season by completing all the remaining processes.

"Since all the three agencies agreed on the draft of the trilateral power trading agreement, the pact would be signed soon. After this, we will send a list of the projects to the Central Power Authority of India for its approval for exporting power to Bangladesh," NEA Executive Director Ghising said.

According to Ghising, they are sending to the concerned authorities of India proposals for exporting electricity to Bangladesh for which approval has already been taken, as it would take time to get approval when proposals for power export from new projects are sent.

Minister for Energy, Water Resources and Irrigation Shakti Bahadur Basnet has directed the NEA leadership before this to finalize the process required for selling power to Bangladesh. Minister Basnet is also the Chairman of the NEA Board of Directors.

NEA has made preparations for exporting to Bangladesh the power produced from the projects constructed with Indian grant, and the electricity generated from the 25-Megawatt Trishuli and the 22-Megawatts Chilime hydropower project constructed by its subsidiary company.

NEA will sell 40 megawatts of power to Bangladesh in the six months (June 15 to November 15) every year at the rate of 6.40 US dollars per unit.

The NEA will receive the price of the electricity to be exported to Bangladesh via the inter-country Dhalkebar-Muzafarpur 400 kV transmission line at the Muzaffarpur point, India. This transmission line is the first inter-country transmission line between Nepal and India. This means, the electricity meter of the power exported to Bangladesh would be installed at Muzaffarpur. It is stated that NEA will itself bear the cost of the technical leakage occurring on the transmission line from Dhalkebar to Muzaffarpur.

The electricity exported from Nepal will reach Bangladesh from Muzaffarpur via the Baharampur (India)-Bhermara (Bangladesh) 400 kV transmission line of India.

Nepal’s logistic sector needs to work towards transforming supply chains through digital platforms and technologies. Despite the rapid advancement of the global supply chain, we continue to rely on traditional methods. The World Bank has been suggesting the government on the agenda of digitalization, but a lack of coordination among government stakeholders has been obstructing the move. The integrated border management system (IBMS) from the World Bank will help streamline the border issues as well as help proper planning from the transit point until the logistic centers and electrical cargo tracking (ETCS) system of ADB with some amendments would help in the transit and domestic flow of goods. The trade facilitation and cross-border paperless trade agendas have been pending for a very long time with little to no activities. Further, involving freight forwarders in the Nepal National Single Window (NNAW) is pending .

The bilateral and regional agreements are all being executed in a very traditional manner, without incorporating modern automation and digitalization mechanisms to ease business and increase traceability, predictability, and accountability to facilitate and meet global supply chain demands.

The customers demand and expect faster, more transparent, and personalized service. To meet their expectations, we need to utilize digital platforms to enhance the customer experience through better tracking, faster delivery, and improved communication to ensure seamless integration of data across different systems and platforms associated with government and private sector service providers. This demands developing data formats and communication between actors in trade facilitation. Another significant challenge is adopting new technologies, scaling them throughout the supply chain through pilot projects in controlled environments before scaling, and making sure these components are simple to integrate and adapt.Protecting sensitive supply chain data from cyber threats is another important and burning issue. Implementing cybersecurity measures, such as encryption, multi-factor authentication, and regular audits, can overcome this by ensuring the accuracy, consistency, and timeliness of data across the supply chain. Data governance policies, as well as the use of data validation tools to maintain high data quality and implement digital signatures, could be useful methods.

The cost factor associated with implementing new digital technologies is high. Still, there is a need to do a cost-benefit analysis and seek cost-effective solutions or phased implementation approaches to manage cost factors. Implementing automation through digitalization has proven successful in many countries, as it helps monitor the flow of goods, documents, money, data, and information among all those associated with the supply chain.

It is essential to change the mindset and adapt to change management by motivating the workforce through proper training, enhancing their digital knowledge, and addressing cultural and operational changes within organizations such as the Departments of Customs and Commerce, as well as both private and government logistic service providers.

Therefore, developing comprehensive training programs and change management strategies to help employees adapt to new technologies is a must, as is setting fixed regulations and standards across different actors and government support agencies to ensure compliance through regular audits. Another challenge is balancing digital transformation with sustainable practices to lessen environmental impacts through monitoring and evaluation. Other precautions include integrating new digital technologies with existing systems using middleware solutions and gradual transition strategies to avoid disrupting operations.

The transition to digitalization in the supply chain requires many issues to be addressed. Some issues require a strategic approach, leveraging the latest digital tools and technologies while ensuring alignment with overall business objectives and maintaining flexibility to adapt to future changes. Implementing IoT devices, real-time tracking, and advanced analytics to monitor and optimize supply chain performance will enable real-time visibility for analytics purposes while also easing the process of doing domestic and international trade.

The frequent change of governments has been an usual phenomenon in Nepal. The country has not been able to see political stability even after promulgating the new constitution and holding two periodic elections. Although Pushpa Kamal Dahal has been at the helm of government since the November 2022 elections, despite his party finishing a distant third in the parliamentary polls, he has reshuffled cabinet 18 times by changing his coalition partners. In this scenario, the recent agreement between the two largest parties in the House of Representatives, Nepali Congress (NC) and CPN-UML, to form a coalition government offers some hope for a more stable future. 

The 2015 constitution, which has been hailed by Nepali leaders as among the best in the world, has contributed to political instability. No single party has been able to secure a clear majority, leading to a series of fragile coalition governments. The agreement between the two major parties to form a consensus government by bringing other parties on board, however, signals a shift toward more stable governance. This agreement, which covers issues ranging from constitution amendments to the formation of a lasting government at both center and provinces, has raised optimism among Nepalis who have long yearned for political stability and economic progress.

The new government has some pressing issues to deal with. The two parties have pledged to form a committee to amend the constitution. The amendments should address all the issues that are hindering implementation of federalism. The coalition must work toward amending the constitution to address existing barriers and create a more effective governance structure. Completing the peace process through appropriate transitional laws is crucial for national reconciliation and stability. It has been one of the major contentious issues for the three major parties in parliament. Likewise, improving administrative efficiency and public services should be a top priority to restore public trust in the government. Once the political situation becomes stable, it is expected to spur economic activities and create jobs, which is essential to address the growing discontent among the people, particularly the youth.

The new coalition must rise above personal and party interests. This union of two largest parties in the country is not only crucial for domestic progress but also to present a strong front against increasing external influences that threaten Nepal's sovereignty. The success of this coalition could be the turning point that the country has long awaited, paving the way for sustainable development and renewed hope for the people.

Like the rest of the world, Nepal faces numerous crises such as rising temperatures, wildfires, lack of drinking water malnutrition and a range of flood and drought occurrences. Records kept at the National Disaster Risk Reduction and Management Authority show that 1,434 incidents of fire and forest fire were recorded in April-May, a period characterized by the highest number of fire incidents, causing 27 deaths and leaving 86 people injured. 

Additionally, cancer patients have been increasing by the day due to factors like improper use of chemicals and fertilizers. 

On one hand, farmers cannot transplant paddy due to lack of rainfall, while on the other, heavy rains destroy rice crops ready for harvest. Apart from rising temperatures, other factors like high input costs, wild animals on rampage, climate change and unfair share in agricultural products exert pressure on farmers to abandon farming. In order to deal with these contemporary crises, we need to increase our comparative advantage in production systems with the main focus on agroecology.

Agroecology

Agroecology is agriculture integrated with ecology. A production system in harmony with nature, it transcends the traditional practices of tillage, planting, cultivation, harvesting and marketing. Agroecology, according to Stephen R Gliessman, is not just limited to farming practices but deals with the whole chain of interactions among crops, soil organisms and insect pests, their natural enemies as well as environmental conditions and management decisions.

In conventional agricultural systems, there exists a clear distinction between agriculture and nature. In such systems, inorganic fertilizers and pesticides added into soil for increased productivity put microorganisms like bacteria and earthworms at risk, decreasing soil’s ability to rejuvenate. Soil scientist Claude Bourguignon however argues that soil, despite being life’s basis, is simply a substratum. Increased reliance on fossil fuels for agricultural operations and other efforts toward commercialization and modernization of the farm sector disrupts the natural rhythm of production. Furthermore, market forces through liberalization or trade also affect food agriculture dynamics.

Put together, agriculture, forestry and other land use amount to 22 percent of total greenhouse gas emissions with transportation adding a further 15 percent, according to some studies. It is an established fact that the production-centric traditional agricultural systems contribute enormously to greenhouse gas emissions and have low adaptive capacity to climate change.

Nepal is going through its hottest summer on record along with increased forest fires. A contrasting scenario is where severe droughts in winter have resulted in massive crop failure while the highest ever recorded rainfall has led to flood causing a significant loss of matured crops. Water shortage has gotten worse in the Tarai region with depletion of groundwater resources. 

Incidents of landslides and floods have been rising and our study indicates that 80 percent of Nepal’s population is vulnerable to climate-induced hazards. Notably, Climate Risk Indexes (CRI) identifies Nepal as the 10th most affected country worldwide with marginalized communities, women and farmers forming a group highly susceptible to climate change impacts.

Commercialization

Subsistence agriculture constitutes a significant feature of our production system, with the exchange of surplus being a major characteristic. The key features of subsistence agriculture include mixed farming, proper integration of livestock, agriculture and forests as well as growing for consumption. Our traditional agricultural practices were diverse, exchange-based and synergetic. However, the introduction of monoculture, chemicals, pesticides and corporate-controlled seeds in the name of commercialization, production and development has made the entire agricultural system more vulnerable to climate change. Increased production costs resulting from this practice has forced small-scale farmers to leave farming altogether, exacerbating food insecurity.

Despite constitutional provisions on sustainable agricultural practices and on the integration of Sustainable Development Goals (SDGs) into the government’s policies and programs, our main policy documents, including annual plans, policies and budgets prioritize chemicals-based farming practices instead of incorporating agroecology into climate adaptation and tourism development or supporting farmers to stay on their farms.

The policies and programs for the fiscal year 2024-25, presented recently in the Parliament, list “increase in power generation and creation of a more conducive environment for investment” as some of the major achievements of the incumbent government. The focus, at least on paper, is also on delivery of fertilizers and seeds on time, and on expanding irrigation services. 

The policy document of the government pledges to increase agricultural investments, attain food self-sufficiency in vegetables and main staple crops, provide insurance coverage for agri-products, apart from promising minimum support price (MSP), farmer cards and emphasizing a productivity-centered modern industrial agriculture, but these pledges are “old wine in a new bottle”.

This document does not seem to bother much about agroecology, which is about promoting organic farming, biodiversity protection, natural farming and indigenous crops. 

It supports organic agriculture and indigenous crop production only for business purposes, which goes against the principle of agroecology. Additionally, there is a provision to provide quality chemical fertilizers for sustainable soil quality management, a practice akin to administering poison to a patient.

Summing up, agroecology can help solve several problems plaguing the farm sector like food insecurity, climate crisis, desertion of farmers due to increased cost of production, increasing import of foodgrains and agricultural goods, decrease in soil fertility due to input-intensive agriculture and increased use of chemical fertilizers. Let this fact dawn on our leaders, policymakers and bureaucrats before it’s too late.

Indian Ambassador to Nepal Naveen Srivastava and Lomanthang Rural
Municipality Chairman Tasi Nharbu Gurung laid a foundation stone for the construction of dormitory building for Lowo Nyiphug Namdrol Norbuling Monastic Schoo.

The dormitory is being built with the Government of India’s financial assistance at the project cost of Rs 41.40 million under ‘Nepal-India Development Cooperation’.

Political representatives, government officials, social workers, representatives of the Monastic school management were also present on this occasion, reads a statement issued by the Indian Embassy in Kathmandu. 

The Government of India grant under ‘Nepal-India Development Cooperation’ is being utilized for the construction of two floors dormitory building with other facilities for this Monastic school.

The project is taken up as a High Impact Community Development Project (HICDP), under an agreement between the Government of India and Government of Nepal.

This project is being implemented through Lomanthang Rural Municipality, Mustang. The project is an important example of the robust development partnership between India and Nepal, according to the statement.

Chairman, Lomanthang Rural Municipality and Chairman, Lowo Nyiphug Namdrol Norbuling Monastic School and political representatives in their remarks appreciated the continued developmental support of the Government of India in upliftment of the people of Nepal in priority sectors.      

The new building would be useful in providing better education and accommodation facilities to the students of Lowo Nyiphug Namdrol Norbuling Monastic School in Lomanthang Rural Municipality, Mustang and would create an improved environment for learning as well as contribute to the development of the education and religious care and helping in preserving their culture and tradition in this region. 

Since 2003, the Government of India has taken up over 551 HICDPs in Nepal in various sectors and has completed 490 projects.

Amongst these, 59 projects are in Gandaki Province in various sectors, including         17 projects in Mustang.

In addition to these,the Government of India has gifted 1009 ambulances and 300 school buses to various hospitals, health posts and educational institutions in Nepal.  

Amongst these, 119 ambulances and 40 school buses have been gifted in Gandaki Province, including 11 ambulances and five school buses provided in Mustang district. 

As close neighbours, India and Nepal share wide-ranging and multi-sectoral cooperation.

 The implementation of HICDPs reflects the continued support of the Government of India in bolstering the efforts of the Government of Nepal in upliftment of its people, augmenting infrastructure in the field of priority sectors.  
 

Dear Readers,

This week has seen significant developments on both the domestic and international fronts that deserve your attention. 

Nepal and China hosted a foreign-secretary level meeting in Kathmandu to discuss bilateral issues. Although no major breakthroughs were achieved, Chinese Vice Foreign Minister Sun Weidong’s visit marked a significant diplomatic engagement. During his stay, he met with Nepal’s top leaders, including President Ram Chandra Paudel.

There were speculations that Nepal and China might sign a Belt and Road Initiative (BRI) implementation plan during this visit. However, this did not materialize. It is possible that progress could be made during Chinese Foreign Minister Wang Yi’s visit to Nepal, which is expected to take place very soon. China was keen on finalizing the agreement during Prime Minister Pushpa Kamal Dahal’s visit to Nepal last year. But Dahal was not interested.

Speaking in the Parliament, Prime Minister Dahal outlined Nepal’s position on BRI, which almost all major parties agree with. He said Nepal prefers grants over loans and, if loans are necessary, they should be concessional with interest rates not exceeding 1.5 percent. He also stated that Nepal seeks loans from China on terms similar to those from the World Bank and the Asian Development Bank. This sentiment mirrors the position of former Prime Minister Sher Bahadur Deuba during his discussion with Chinese Foreign Minister Wang Yi in 2022. To date, CPN-UML Chairperson and Prime Minister KP Sharma Oli has not publicly detailed his views on the BRI.

We have an in-depth analysis of Prime Minister Dahal’s parliamentary address under the heading ‘PM Faces Tough Questions in Parliament’. For more details, please visit our website.  A delegation led by CPN-UML leader Bishnu Rimal visited Beijing this week—latest in the series of Nepali leaders visiting China. China’s influence in Kathmandu has increased considerably in recent times. Our feature titled ‘China’s Growing Clout in Kathmandu’ explores how China’s engagement with Nepal extends beyond the BRI.

During his parliamentary session, Prime Minister Dahal also addressed questions about issues related to India and the Russia-Ukraine war, among other topics. Deputy Prime Minister and Foreign Affairs Minister Narayan Kaji Shrestha attended the Asia Cooperation Dialogue in Iran, where he reaffirmed Nepal’s strong commitment to regional cooperation and multilateralism, a core foreign policy priority since the Panchayat era.

Last week, Bangladeshi Prime Minister Sheikh Hasina paid an official visit to India, although she had been to New Delhi a few days ago to attend Indian Prime Minister Narendra Modi’s inauguration. Along with bilateral discussions, the two leaders addressed sub-regional and regional issues, including power trade between Nepal, India and Bangladesh. Our detailed coverage of these topics is available online under the headline ‘A Landmark in Sub-Regional Energy Cooperation’. 

After the foreign secretary-level meeting with China, Nepal is now preparing for a similar foreign-secretary-level meeting with India. These annual meetings review the full spectrum of bilateral relations.

On the domestic front, political dynamics continue to be a topic of discussion. Speculation about the stability of the current government persists, with reports indicating ongoing talks between the Nepali Congress (NC) and the UML to explore potential new government formations. Our sister publication, Annapurna Post, recently published pieces advocating for the formation of a national consensus government.

Former President Bidya Devi Bhandari returned to the political spotlight amid rumors of her renewing her UML membership. However, in a recent interview, Bhandari clarified that she has not applied for membership and that the UML has not approached her. We have analyzed this development under the heading ‘Is Bhandari Planning a Return to UML?’, concluding that while her return to active politics is possible, it is not imminent.

The government has recommended ambassadors for eight countries, with the UML selecting former bureaucrats for its quota.

Meanwhile, the Rastriya Swatantra Party (RSP) remains in the political limelight. Its General Secretary Mukul Dhakal has come up with a report describing the party as being in ‘serious illness’ and in need of a ‘major surgery’ to maintain its status as a national party. This report, which is said to be based on feedback from over 3,000 cadres across 38 districts, has given rise to significant debate within the party. Dhakal, a vocal critic of the current government and an adversary of RSP President Rabi Lamichhane, insists that RSP ministers must justify their stay in the government. There is a section in the RSP which believes the lust for power could affect its very base.

A parliamentary panel investigating the financial status of around 29 cooperatives has expedited its work. Media reports suggest that the panel is preparing to question Home Minister Rabi Lamichhane regarding his alleged involvement in the misappropriation of cooperative funds.

I will be back with more updates next week. Wishing you all a happy weekend!

Prime Minister Pushpa Kamal Dahal has clarified that the government is determined that all territories east of Kali (Mahakali) river including Limpiyadhura, Kalapani and Lipu pass belong to Nepal.

Responding to queries raised by lawmakers during the discussion on headings of Foreign Ministry under the Appropriation Bill, 2081 in today's meeting of the House of Representatives, Prime Minister Dahal reminded that as per the Nepal-India Sugauli Treaty, 1816, these territories belong to Nepal and a political map incorporating these territories was published.

He further said that during the meeting with his Indian counterpart in the course of India visit, an understanding was reached to revise and update the existing treaties and agreements including the 1950 India-Nepal Treaty of Peace and Friendship as well as to resolve border-related issues through diplomatic channels. 

A letter has been sent to the Indian side through diplomatic channels for the seventh meeting of the Border Working Group related to Nepal-India Border as per the commitment made in the seventh meeting of Nepal-India Joint Commission to complete the works in the remaining section of Nepal-India border, explained the PM. The seventh meeting of the commission was held on January 2.

Stating that border problems surfaced between Nepal-China are resolved through bilateral talks and consensus, he mentioned that a consensus was forged during the meeting between the two ministers of Nepal and China in course of Nepal visit of State Councilor and Foreign Minister of China, Wang Yi, to forward activities related to Nepal-China Joint Border Monitoring, through mutual consultation.

The Prime Minister stressed, "I want to make it clear that the Government of Nepal does not have any policy to give permission to Nepali citizens for recruitment in foreign army except some friendly nations according to past agreements."

Stating that the Gurkha recruitment in the British Army took place by the 1947's trilateral agreement, he said the government has realized the need to negotiate with the UK government based on a national consensus to make the treaty compatible with time.

He apprised the House that the government is in regular touch with the Nepali Embassy in Moscow and the Embassy of Russian Federation in Kathmandu to take updates on Nepali citizens killed in the Russia-Ukraine war and those held captive.

"On this matter, I also informed the House about the conversation between the Deputy Prime Minister and Minister for Foreign Affairs and the Russian Federation's foreign affairs minister on the telephone."

A task force has been formed to give submissions for systematizing the travel of Nepali in Russia.  Similarly, diplomatic talks with the Ukraine government are underway regarding those Nepalis held in captives, he added.

He also utilized the rostrum that in the case of one Bipin Joshi from Nepal who disappeared following the attack of Hamas in Israel in October last year, the governments of Israel, mediator Qatar, and Egypt, a close neighbor of both parties, have been urged for the release of Joshi. Both official and unofficial meetings have been utilized to advocate and appeal for the safe release of Joshi, according to him.

Nepali missions abroad have been established on the criteria of proximity, the size of the Nepali populace in the respective country, the status of bilateral trade, tourism and economic relations, and political and economic, and strategic importance among others, he said before the House.

The Department of Passport continues to make efforts to make the service delivery system prompt and civic-friendly, the Prime Minister said, adding that it is required to make the passport service more accessible, systematic, and simpler.

"Considering the convenience of Nepali abroad, the passport and consular services are further enriched technically.  Arrangements are in place to operate a mobile service camp to collect passport applications and the distribution in those countries when Nepal has no embassies," he said.

The government is working to strengthen the Institute of Foreign Affairs (IFA) as an institute for studying, researching, promoting, and publishing matters about foreign affairs, and diplomatic issues along with the management of training for staff from the diplomatic field.

Deputy Prime Minister and Minister for Foreign Affairs Narayan Kaji Shrestha has reiterated Nepal’s stronger commitment to regional cooperation and multilateralism and stressed the need to implement the ACD vision 2030 as well as ACD Blueprint 2021-2030.

The DPM and Foreign Affairs Minister made this reiteration in his address to the 19th Ministerial Meeting of the Asia Cooperation Dialogue (ACD) held in Tehran, the Islamic Republic of Iran, on Monday, the Ministry of Foreign Affairs stated in a press release. 

On the occasion, he restated Nepal’s stronger commitment to regional cooperation and multilateralism and stressed the need to implement the ACD vision 2030 as well as ACD Blueprint 2021-2030 for achieving shared objectives of growth, sustainability and prosperity including SDGs 2030. He further stated that the ACD has evolved as an Asia-wide regional forum for open and consultative dialogues on pressing issues impacting the region and beyond.

In addition, DPM Shrestha highlighted challenges posed by Covid-19, climate change, global economic recession, rising conflicts and geopolitical rivalry. He also underlined the importance of collective vision, unity, solidarity and mutual collaboration for a more integrated, resilient and prosperous Asia.

The Ministerial Meeting adopted the documents, namely, Guiding Principles for the Functioning of Asia Cooperation Dialogue Secretariat, and ACD Rules of Procedures which provide a framework of cooperation among ACD Members and an important basis for institutional strengthening of ACD Secretariat.

On the sidelines of the ACD Ministerial Meeting,  DPM and Foreign Minister Shrestha held bilateral meetings with Dr Ali Bagheri, Acting Foreign Minister of Iran; U Than Swe, Deputy Prime Minister and Minister of Foreign Affairs of Myanmar; Dr Abdullatif  bin Rashid Alzayani, Minister of Foreign affairs of the Kingdom of Bahrain; Abdullah Ali Al-Yahya, Minister of Foreign Affairs of the State of Kuwait; Walid bin Abdul Karim Al Khraiji, Vice Minister for Foreign Affairs of the Kingdom of Saudi Arabia; Andrei Rudenko, Deputy Minister of Foreign Affairs of the Russian Federation; and discussed on various matters of mutual interests including pressing regional and global issues.

As a member of the Asia Cooperation Dialogue (ACD) since 2016, Nepal has been engaging with other Asian Member States with a view to promoting various areas of mutual benefits and complementarities.

DPM Shrestha also attended an interaction program organized at the Honorary Consulate General of Nepal in Tehran with Nepali Diasporas in the evening on Monday and committed to providing effective and timely consular services to them through relevant agencies of the Government of Nepal including through Shahram Shantiaee, Honorary Consul General of Nepal in Tehran.  

The Deputy Prime Minister and Minister for Foreign Affairs left Tehran for Kathmandu in the evening of 24 June 2024.