– SAGOON BHETWAL

The opinion piece originally appeared in The Kathmandu Post on 12 March 2023. Please read the original article here.

Research institutions in Nepal have constantly been pushing for inclusive development. Their push for evidence-based policymaking can shed light on social challenges and also guide us to create interventions to benefit marginalised communities. However, most Nepali research institutions promoting inclusive governance, human development and social justice do not reflect the diversity of Nepali society.

We can find that practices of mentoring/ advising had been carried out earlier by rulers in the country. While high-caste Brahmins led such practices, advisory bodies such as Panchakachari, Dharmiksava, and Vardarisava were formed during the Lichhavi and Malla dynasties. Likewise, pandit groups were such advisors during the Rana and Shah dynasty. These groups would advise the rulers based on Hindu philosophies and texts such as Manusmriti. Caste duties were performed based on their advice and mentoring. However, the legacy of such practices is still continuing through established research institutions. Be it governmental or private/non-governmental institutions, their composition predominantly consists of the upper caste and class.

Except for Samsodhan Mandal, which was established in 1952, private and non-governmental research organisations were established after the political change of 1990. In a study carried out in 2000, titled Nepal Ka Jatiya Prashna: Samajik Banaut Ra Sajhedariko Sambhawana, Govind Neupane analysed the ethnicity in the academic and administrative units of the Tribhuvan University (TU). He presented the institution as a Khas Sansthan based on its composition.

Later, in 2002, Krishna Hachhetu studied the social profile of researchers and professors affiliated with TU. He looked into the History, Political Science, Economics, Sociology and Anthropology departments, and research institutions under TU, including the Centre for Nepal and South Asian Studies (CNAS) and the Centre for Economic Development and Administration (CEDA). According to the study, only 11 percent among the 157 members of that organisation were women. Among them, 88 percent were Brahmin and Chhetri, 26 percent were Newar, and 5 percent other hill tribes. Similarly, there were only 8 percent Terai Madheshis, none of whom were Dalits. (Krishna Hachhetu, CNAS, Vol. 29 (1), P. 49-95, 2002). In the same way, Kiran Gautam analysed the caste profile of the initial committee of the Nepal Pragya Pratisthan from 2012 to 2072. The leadership of the Pratisthan consisted of 63 percent Brahmin-Chhetri, 20 percent Newar, 6 percent Madheshi, 5 percent Rai-Limbu, 2 percent Gurung and Magar, and 1 percent Thakali and Dalits. Another government body active in knowledge production is the Policy Research Institute, holding 73 percent Brahmin Chhetri, 15 percent Newars and 12 percent Dalits. Similarly, Madheshi, Gurung, and Jirel have one percent representation each and Tamang two percent (Himal Monthly, Sharwan, 2079 BS). The studies mentioned above show that the diversity of Nepali society is not seen in our knowledge-production institutions, especially those led by the government. The gap in social inclusion remains the same in non-governmental research institutions.

I have analysed the team composition of the leading 15 non-governmental research institutions in Nepal, which consisted of their board members, advisors, staff, interns and volunteers. Be it an institute with nine members or another with 50 members, the inclusion of Dalit team members lingered at just one individual (with the exception of two institutions). To great disappointment, around 10 such institutes did not even have a single individual from the Dalit community. Similarly, the inclusion of women in these institutions is equally disappointing. Only 6 of the 15 institutions had 50 or higher percentage of women members as directors and research staff. This exclusion of Dalits and marginalised communities in non-governmental research institutions raises two major concerns. First, our research sphere has become exclusive to the upper and privileged caste/ class. Despite changing societal context, the composition portrays that knowledge production is still meant to be led by a certain few. Such exclusions based on knowledge also determine who gets to hold power. As Michel Foucault has said, “The exercise of power perpetually creates knowledge and, conversely, knowledge constantly induces effects of power”. Therefore, it is not just about representation—a matter of acknowledging existence. Rather, our research institutions need to become inclusive to indeed welcome the presence and perspectives of Dalits and produce knowledge with their contribution and leadership. Second, the knowledge we produce is biased when we speak from our perspective and speak for the community rather than speaking with the community. The chances are high that issues of Dalits won’t be taken as a matter of urgency when nobody is in the team to put it forward. This is evident with the inadequate research on the status of the Dalit community. And even if a matter arises, the narrative can be flawed when based on assumptions rather than experiences.

Under the caste system, Brahmins were put at the top of the hierarchy and were endorsed as intellectuals. This rigid system prohibited producing knowledge and disseminating spheres to the bottom-level people and the people outside the system. But what’s the worth of our research institutions if they don’t represent the people we advocate for and become exclusive to a privileged few? Therefore, we can urge that the exclusive nature of research institutions is deliberately created to support the caste system for dehumanising Dalits through producing single narratives. The contribution of research institutions is undoubtedly significant and needs to be fostered. But such contributions can be questioned if their producing members and production are not representative of the diverse community that our policies will later impact. It is of utmost importance to be based on evidence that relays people’s status and lived experiences as we plan and carry out our development initiatives. As we identify our policy agendas, we should be able to prioritise the needs of marginalised communities that comprise a significant proportion of our population and who have historically, socially, and systematically suffered the most. This should also reflect in the composition of the institutions we create.

Research institutions create discourse about centring the most marginalised while making policies and uplifting them. But sadly, we have already fallen back because of their inability to ensure inclusion in the team they work with for such purposes. So, let’s start by questioning our institutions while we continue questioning our development priorities.

– SANTOSH Sharma Poudel

The column originally appeared in The Diplomat on 6 March 2023. Please read the original article here.

On February 27, the Khadga Prasad Sharma Oli-led Communist Party of Nepal-United Marxist Leninist (CPN-UML) withdrew its support for the Pushpa Kamal Dahal-led government. The CPN-UML ministers resigned en masse, bringing down the curtain on the seven-party coalition government that was formed in Nepal barely two months ago.

To start with, this was a coalition of strange bedfellows, with parties with opposing agendas and ideologies coming together. Their lust for power was their common agenda.

Prime Minister Dahal will likely continue to lead the next government with the support of the Sher Bahadur Deuba-led Nepali Congress (NC) and six smaller parties. This marks a return to the pre-poll alliance of 2022.

Differences over the election of the new president, scheduled for March 9, provided the immediate cause for the downfall of the coalition government. In a power-sharing agreement between Dahal and Oli, the former had agreed to support the CPN-UML’s presidential candidate. However, Dahal reneged and decided to support the NC’s candidate instead.

The president is the ceremonial head of state, who is to perform all functions “on the recommendation and with the consent of the council of ministers.” However, the presidency has effectively become a permanent, untouchable veto-wielding power. Elected for five years by an electoral college, the president can only be impeached by a two-thirds majority of the Parliament, a number beyond the current fractured coalitions in Nepal. Therefore, current President Bidhya Devi Bhandari faced no consequence for approving the dissolution of the parliament twice, despite the Supreme Court reinstating parliament both times, and holding off approval of the citizenship bill despite a constitutional mandate.

Oli is miffed at Dahal’s intransigence. He knew he would control all the government strings if the president was his lieutenant. He headed the largest party in the coalition by a mile; his party leads both houses of parliament and the commissioners of many constitutional committees are his acolytes. Dahal, though the prime minister, would have been a lame duck.

That was obvious to Dahal too.

Dahal was able to play the NC and CPN-UML to remain at the center of Nepali politics despite his party winning only 29 of 275 seats in the federal parliament. That the NC voted to support his government earlier this year, despite Dahal ditching it at the last minute during government formation, did not go unnoticed.

Sources close to Dahal argue that he was taken aback after Oli showed no remorse for his attempts to dissolve the Parliament twice in 2020 and 2021 during the parliamentary address.

Dahal and Oli do not share a cordial personal relationship. Oli’s CPN-UML and Dahal’s Communist Party of Nepal-Maoist Center (CPN-MC) merged to form a powerful Nepal Communist Party in 2018, with the two as co-chairs. However, the union barely lasted for two years because of the rift between the two leaders. They clashed in the public domain, attacking each other personally.

Their coming together after the 2022 elections to form a government was instrumental and not a rekindling of their relationship. Dahal’s interest in being the prime minister and Oli’s interest in breaking the NC and CPN-MC coalition led to their partnership. However, the coalition shattered as soon as interests diverged again.

Meanwhile, Deuba maintained a dignified silence and did not criticize Dahal even after the Maoist leader “betrayed” him to form the government with Oli’s support.

After pulling out support, the CPN-UML has insinuated that Dahal came under “foreign influence.” CPN-UML General Secretary Shankar Pokharel said that “external powers did not prefer the current government [of which CPN-UML was a part], and were potentially instrumental in the government change.” India and the United States were especially active this time, he observed, noting that “the [foreign] power centers did not want the CPN-UML to dominate the government.”

Visits by India’s Foreign Secretary Vinay Mohan Kwatra and four retired army generals in February and the flurry of visits by U.S. officials lend some credence to the allegations. The U.S. Central Intelligence Agency (CIA) chief had also requested to visit Nepal, but the Nepali government felt it was not an appropriate time.

According to some analysts, India prefers a “controlled chaos” in Nepal. A strong and unified government in Nepal is not seen by officials in the Indian Ministry of External Affairs or its embassy in Nepal to be in India’s interest.

Additionally, the India-Nepal relationship was at its lowest ebb during Oli’s reign (2018-21) over the territorial dispute between the two countries. Although India and the U.S. are much closer than they were in the past, especially when it comes to China, New Delhi is concerned about increased and direct U.S. engagement in Nepal because it undercuts Indian influence in Nepal.

Nepal’s increased geostrategic importance and the implementation of the Millennium Challenge Corporation (MCC), a $500 million grant for infrastructure projects, has led to the increased U.S. presence. With the NC set to join the government, it brings into power the coalition that ratified the MCC in February last year.

There is no denying the role of external powers, but it would be foolhardy to discount the role of the personal vested interests of key Nepali leaders in Nepal’s current political instability. The lust for power is the main reason why Dahal left his electoral alliance partner, the NC, and formed a government with the support of the CPN-UML. It explains why Oli assured Deuba that he would not support Dahal for prime minister till the last moment, only to do a volte-face. These are merely the results of instrumentality where the only currency is power. Because the leaders do not want to spell this out publicly, they hide behind blaming “hidden interests” and “external powers” for the political instability.

– निश्चल ढुङ्गेल

यो लेख १७ मार्च २०२३ को नयाँ पत्रिकामा प्रकाशित भएको थियो। मूल लेख यहाँ पढ्नुहोस्

बदलिँदो आर्थिक र राजनीतिक परिस्थितिका कारण आधुनिक विश्वव्यापीकरण इकोसिस्टम प्रणालीले सार्वजनिक ऋण बढाएको छ । सरकारले स्वदेशी वा विदेशबाट ऋण लिने अवस्थालाई सार्वजनिक ऋण भनिन्छ । आर्थिक जटिलता र महामारीका कारण हालै सरकारी खर्च राजस्व आर्जन गर्ने क्षमताभन्दा छिटो बढेको छ । ब्याजदर वृद्धि हुँदै गर्दा बढ्दो ऋणले विकासोन्मुख राष्ट्रको सरकारी बजेटलाई असर गर्छ, जसले गर्दा यस्ता अर्थतन्त्रमा लगानी गर्नुपर्छ ।

आर्थिक र राजनीतिक परिस्थिति सन्तुलन र सार्वजनिक ऋण व्यवस्थापन एकसाथ जान्छ । मुख्य ऋणदाताबीच सहमति हुन नसक्दा श्रीलंका आर्थिक र सामाजिक कठिनाइबाट गुज्रिरहेको छ । तसर्थ, श्रीलंका भूराजनीतिक विचारको चपेटामा पर्दा सार्वभौम ऋण पुनर्संरचना हुन सकेको छैन ।

श्रीलंकाको सार्वजनिक ऋण कुल गार्हस्थ्य उत्पादन (जिडिपी) अनुपात २०१८–२१ बीच ९१ बाट ११९ प्रतिशत बढेको थियो । यस्तै, सार्वजनिक ऋण जिडिपी अनुपात २०२२ मा १२२ प्रतिशत थियो । यसमध्ये जिडिपीको ७० प्रतिशत विदेशी मुद्रामा निहित छ ।

श्रीलंकाको संकट बाह्य आर्थिक झट्का र नीतिगत गलत कदमको संयोजनले भएको हो । उसले लिएको सार्वजनिक ऋण न्यून प्रतिफलका पूर्वाधार आयोजनामा लगानी गर्दा सदुपयोग हुन सकेन । सार्वजनिक ऋण सन्तुलनमा नराख्दा, थप ऋण व्यवस्थापन गर्न देश कसरी भूराजनीतिक विचारको जटिलतामा फस्न सक्छ भन्ने ज्वलन्त उदाहरण श्रीलंका हो । नेपाल र श्रीलंकाको सार्वजनिक ऋणको अवस्था फरक भए पनि नेपालले केही पाठ भने सिक्न जरुरी छ ।

नेपालले सन् १९५१ मा बजेट ल्याउन थालेको थियो र बजेट अभ्यास सुरु भएको ११ वर्षपछि ऋण लिन थालेको थियो । हाम्रो सार्वजनिक ऋणको इतिहास धेरै पुरानो छैन । सरकारले सन् १९६२ मा स्वदेशी ऋण लिन थालेको थियो भने वैदेशिक ऋण सन् १९६३ मा मात्रै स्वीकृत भएको थियो । भूकम्पपछि संघीय सरकारमा परिणत भएपछि नेपालको सार्वजनिक ऋण विगत केही वर्षदेखि बढेर आर्थिक वर्ष सन् २०१९–२० मा कुल जिडिपीको ४२.२ प्रतिशत पुगेको छ ।

 आव २०१६–१७ मा सार्वजनिक ऋण जिडिपीको २५ प्रतिशत थियो भने २०१९–२० मा भएको उल्लेखनीय सार्वजनिक ऋण वृद्धिका लागि कोभिड महामारीको प्रभाव र प्रतिक्रिया जिम्मेवार छन् । आव २०२०–२१ मा नेपालको ऋण जिडिपी अनुपात ३९ प्रतिशत छ ।

नेपालले बहुपक्षीय संस्था र विदेशी मुलुकबाट सहुलियतपूर्ण विदेशी सहायता (अनुदान वा लामो चुक्ता अवधिको २ प्रतिशतभन्दा कम ऋण) मा पहुँच भएका कारण नेपालले उच्च ब्याजदरमा ठूला व्यावसायिक वैदेशिक ऋण लिने आवश्यकता कम छ । विश्व बैंकका अनुसार नेपालको ऋण संकट जोखिम बाह्य र कुल ऋण दुवैमा न्यून छ । अन्तर्राष्ट्रिय विकास सहयोग नीति (२०१९) ले नेपाललाई वैदेशिक व्यावसायिक ऋण लिन अनुमति दिएको भए पनि नेपालले यो अवसरलाई सदुपयोग गर्न सकेको छैन । नेपालले उच्च ब्याजदरमा ठूला व्यावसायिक वैदेशिक ऋण लिँदा होसियार हुनुपर्छ । 

उच्च ब्याजको व्यावसायिक ऋणले प्रभावकारी प्रतिफल दिन्छ कि दिँदैन भन्ने विश्लेषण गर्नुपर्छ । ताराप्रसाद उपाध्याय र टोनिक पुनले सन् १९७८–२०२० सम्मको तथ्यांक प्रयोग गरी गरेको नेपालको आर्थिक वृद्धिमा सार्वजनिक ऋण प्रभावको अध्ययनले नेपालको सार्वजनिक ऋणको स्तर र देशको आर्थिक विस्तारबीच कुनै स्पष्ट सम्बन्ध नभएको संकेत गर्छ । राजस्वका सीमित स्रोतका कारण सरकारी राजस्वभन्दा सरकारी खर्च द्रुत गतिमा बढेको छ । 

सरकारले मुख्यतया कमजोर क्षेत्रका लागि ऋण लिएको छ । राजस्व अभावले अघिल्लो ऋण तिर्न र अर्काे ऋण लिन बाध्य पारेको छ । हालको पुँजी ऋणको केही रकम सेयर बजार र जग्गामा छ । अपर्याप्त आन्तरिक स्रोत परिचालन, अत्यधिक वित्तीय घाटा, निर्यात–आयातको असन्तुलन र राजस्व र खर्चको अन्तरका कारण वैदेशिक ऋण झनै बढेको छ । तसर्थ, केही लेखकले दिगो आर्थिक वृद्धि र लगानीलाई हतोत्साहित गर्नुको सट्टा प्रोत्साहन गर्ने सम्भावना रहेसम्म घाटा वित्तपोषणलाई ध्यानमा राख्नुहुँदैन भनी तर्क गर्छन् । यसबाहेक, ऋण चुक्ता गर्ने क्षमतामा कुनै सुधार हुन सकेको छैन, अझै बाँकी रहेको सार्वजनिक ऋणको कुल रकम र ब्याजमा वृद्धि भएको छ ।

विदेशी मुद्रा सञ्चितिको आधारमा देशको ऋण अवस्थाको विश्लेषण गर्नु पनि महत्वपूर्ण छ । अमेरिकी डलरको तुलनामा नेपाली रुपैयाँ कमजोर हुँदा स्थानीय मुद्रामा नेपालको ऋण दायित्व बढेको छ । विदेशी मुद्रा सञ्चिति घट्दै गएको र विदेशी ऋणदाताबाट सरकारी उधारो बढिरहेका वेला विदेशी मुद्रा ऋण भुुक्तानी अझ चुनौतीपूर्ण हुन सक्छ ।

नेपालको प्रत्यक्ष वैदेशिक लगानी (एफडिआई) जिडिपीको ०.५ प्रतिशत दक्षिण एसियामा सबैभन्दा कम हो । एफडिआई थ्रेसहोल्ड एनपिआर दुई करोडमा घटाउँदा एफडिआईको प्रवाहमा थप कमी आउँछ । थप पुँजी प्रवाह प्रतिबन्धले जिडिपीमा नकारात्मक प्रभाव पार्न सक्छ, तर एफडिआईले राष्ट्रको ऋण नबढाउने र विदेशी मुद्रा सञ्चितिमा तनाव कम गर्ने अतिरिक्त लाभ प्रदान गर्दछ । 

सरकारले लामो समयदेखि ढिलाइ भएको एफडिआईमा सुधार ल्याउनुपर्छ । जस्तै, नियामक स्वीकृति प्रक्रियालाई सरल बनाउने, जसले विदेशी मुद्रा प्रवाह निम्त्याउने र विकासलाई बढावा दिन पुँजी र प्रविधिको स्थानान्तरणलाई प्रोत्साहित गर्ने । सरकारले अहिले मुलुकको विदेशी मुद्रा सञ्चिति बढाउन विभिन्न प्रयास गरिरहेको छ ।

बढ्दो ऋण रोक्न नयाँ पारित सार्वजनिक ऋण व्यवस्थापन ऐनले जिडिपीको एकतिहाइमा बाह्य ऋणको सीमा तोकेको छ । यो उपाय सरकारलाई लापरबाहीपूर्वक ऋण लिनबाट रोक्न र भविष्यमा थप पैसा उधारो गर्न समय तालिकामा ऋण तिर्न उत्प्रेरित गर्नका लागि हो । नेपालले विदेशी मुद्रा सञ्चिति घट्न नदिन विलासिताका सामानको आयातमा प्रतिबन्ध लगाउने विभिन्न उपाय पनि ल्यायो र विदेशी मुद्रा सञ्चिति बढेपछि प्रतिबन्ध हटायो । यी अन्तर्निहित विशेषताले हालको विश्वव्यापी उथलपुथलको बढ्दो मूल्य, रेमिट्यान्समा प्रभाव र फराकिलो व्यापार असन्तुलनप्रति नेपालले कस्तो प्रतिक्रिया देखाउँछ भन्ने कुरालाई निरन्तरता दिनेछ ।

आव ०७९/८० माघ मसान्तको पहिलो ६ महिनाको राजस्व संकलन गत वर्षको तुलनामा १५ प्रतिशतले घटेको छ । प्रक्षेपणअनुसार राजस्व उठाउन नसक्दा अर्थ मन्त्रालयले संघीय सरकारको बजेट २० प्रतिशतले घटाएको छ ।पारिश्रमिक, निवृत्तिभरण, सामाजिक सुरक्षा र रासायनिक मल र विपद् व्यवस्थापनमा दिइने अनुदानको बढ्दो दायित्वले सरकारको चालू खर्चमा बाधा पुगेको छ । स्वदेशी तथा अन्तर्राष्ट्रिय ऋणको ब्याज सरकारले तिर्नुपर्छ । अमेरिकी डलरको तुलनामा नेपाली रुपैयाँको अवमूल्यनले वैदेशिक ऋण तिर्न महँगो साबित हुनेछ ।

चालू आर्थिक वर्षको बजेटमार्फत ८ प्रतिशत आर्थिक वृद्धि हासिल गर्ने लक्ष्य लिएको सरकारले ४.५ प्रतिशत मात्रै पुग्ने बताएको छ । चालू आवमा लिएको महत्वाकांक्षी लक्ष्य पूरा नहुने देखिएको छ । बाह्य क्षेत्रको दबाब र आर्थिक चुनौतीलाई बेवास्ता गरी निर्धारण गरिएका यस्ता लक्ष्यले सरकारलाई संसद्प्रति वित्तीय जवाफदेही बनाउँदैन । सरकारले विगत सात महिनामा सिद्धान्तविपरीत थप रकम परिचालन गरेको छ । अर्थ मन्त्रालयको विज्ञप्तिअनुसार मंसिरमा भएको संघीय र प्रदेशको निर्वाचनलाई लक्षित गरी असोजमा रकम वितरण गरिएको उल्लेख छ । 

अर्थ मन्त्रालयले जारी गरेको विवरणअनुसार पछिल्लो सात महिनामा ८५ अर्ब ६० करोडभन्दा बढी बजेट सिद्धान्तविपरीत परिचालन भएको छ । बजेट जनप्रतिनिधिमूलक सर्वाेच्च संस्था संसद्बाट पारित गरिन्छ । सरकारले गर्ने आय–व्ययको हरहिसाब संसद्ले अनुमोदन गरेपछि मात्रै निर्धारण हुन्छ । देश विकासको नारा लगाउँदै सरकारमा बस्ने राजनीतिक नेतृत्वले चुनावमा मतदाता रिझाउने गरी पैसा बाँड्न ढुकुटी दोहन गर्नु कत्तिको जायज छ ?

नेपालका राज्य संस्थामा ‘चेक एन्ड ब्यालेन्स’ समस्या भइरहेका छन् । सुशासनका लागि उत्कृष्ट नेतृत्वको अलावा पारदर्शिता, जवाफदेहिता, चेक एन्ड ब्यालेन्स आवश्यक छ । सरकारले ०२३ मा कर छली रोक्न र आफ्नो राजस्वको आधारलाई फराकिलो बनाउन, सार्वजनिक उधारोका लागि देशको आवश्यकता बढाउन संघर्ष गर्नेछ । नयाँ सरकार आएसँगै वित्तीय र मौद्रिक नीतिलाई ‘सिंक्रोनाइज’ गर्दै उत्पादनशील क्षेत्रमा लगानी बढाउन तरलता अभावलाई कम गर्नुपर्छ । 

संरचनात्मक अवरोध सम्बोधन

पूर्वउपलब्धिको निर्माण र संरचनात्मक अवरोधलाई सम्बोधन गर्नाले विकासलाई गति दिन, निजी लगानी आकर्षित गर्न, उत्पादकत्व बढाउन र अल्पविकसित देशको स्थितिबाट सफलतापूर्वक उत्तीर्ण हुन र सन् २०२६ सम्म निम्नमध्यम आयको स्थिति हासिल गर्न जलवायु अनुकूलता विकास गर्न मद्दत गर्नेछ । आर्थिक वृद्धिका लागि नेपालको योजना र कसरी व्यापार, पूर्वाधार, विनिमय दर र अन्य आर्थिक नीतिले आर्थिक विकासमा सहयोग पु‍¥याउँछ भन्ने अझै स्पष्ट छैन ।

व्यापार र प्रत्यक्ष वैदेशिक लगानीलाई प्रोत्साहन गर्ने वातावरण, वित्तीय क्षेत्रको वृद्धि, मानव पुँजी निर्माण र सुशासन अभिवृद्धि गरी विकासको सम्भावना बढाउनुपर्छ । राष्ट्रले ऋण लिएको रकम उत्पादनशील क्षेत्रमा उपयोग गरी सरकारको ऋण न्यूनीकरणमा सहयोग गर्ने कार्यक्रम बनाउनुपर्छ । नेपालले सन् २०२६ मा एलडिसी समूहबाट बाहिरिने योजना बनाएकाले ऋण चुक्ता गर्न उच्च दक्षता स्तर भएका उत्पादक क्षेत्रमा लगानी गरेर दिगो अर्थतन्त्र निर्माण गर्न ऋण लिएको रकमको लामो समयमा चुक्ता गर्ने अवधिसहित कम ब्याजदरको फाइदा उठाउनु महत्वपूर्ण हुन्छ ।

– SAGOON BHETWAL

The opinion piece originally appeared in the Online Khabar on 9 March 2023. Please read the original article here.

The 2006 Comprehensive Peace Accord (CPA) formally ended Nepal’s decade-long Maoist insurgency (1996-2006). As transitional justice mechanisms follow such a post-conflict scenario to properly address the cases of human rights violations that happen during the conflict with the aim to foster peace, two bodies were established to facilitate transitional justice in Nepal, namely the Truth and Reconciliation Commission (TRC) and Commission of Investigation on Enforced Disappeared Persons (CIEDP).

But 17 years down the line, promises of transitional justice in Nepal largely failed with almost all sides involved in the process dissatisfied. A recent lawsuit filed against Prime Minister Pushpa Kamal Dahal can be considered the epitome of dissatisfaction, which paints an uncertain picture of the future.

Transitional justice in Nepal: Principle and practice

According to the Office of the Nations High Commissioner for Human Rights (OHCHR), “Transitional justice consists of both judicial and non-judicial mechanisms, including truth-seeking, prosecution initiatives, reparations, and various measures to prevent the recurrence of new violations”.

Accordingly, to facilitate transitional justice in Nepal, a few years after the CPA, the first Constituent Assembly passed and the President approved legislation known as The Enforced Disappearances Enquiry, Truth and Reconciliation Act 2014 (TRC Act).

However, the TRC Act has been a major controversy since the beginning, keeping transitional justice in Nepal in constant uncertainty. The Supreme Court of Nepal in the Suman Adhikari vs Government of Nepal case in 2015 stated that the act was against the constitution and also against existing international obligations. Even more baffling was the government’s review petition for the 2015 decision, which the Supreme Court rejected on April 27, 2020.

Recent responses

Fast forward to 2022, the discussion around the amendment of the act and transitional justice in Nepal as a whole, yet again, came forward without much optimism.

The Ministry of Law,  Justice, and Parliamentary Affairs tabled a bill in the parliament on July 15, 2022, to amend the existing TRC Act but it remained widely criticised. The division of human rights violations into two categories in the bill (human rights violations and grave human rights violations) was called out for not considering war crimes and crimes against humanity as grave human rights violations, and rather, creating a possible pathway for amnesties.

The National Human Rights Commission then provided a 12-point suggestion and asked that the categorisation of these crimes should be based on the existing international humanitarian laws and instruments. The bill has now already turned null and void with the expiry of the then House of Representatives (HoR) on September 22, 2022.

But this case has been evident to show how transitional justice in Nepal’s case – in the true sense and in accordance with international law – has not been a matter of priority. With the war-era cases coming to the front by different parties again, the issue is in the limelight today again.

On March 5, 2023, nine political parties issued a statement to showcase their commitment to ensuring transitional justice. They have also assured that bill(s) related to transitional justice will be tabled in the federal parliament in the ongoing session. While they have mentioned that the bill(s) will be in compliance with previous Supreme Court orders, one shall not be surprised if it still creates loopholes to foster impunity.

Transitional justice in Nepal has now become of interest also because a writ petition against the incumbent Prime Minister Pushpa Kamal Dahal in relation to conflict-era crimes has been filed in the Supreme Court. These political developments have sparked a little hope but also scepticism amongst people as to what political give and take might be making their way in between. However, there is still no certainty as to when justice will finally be ensured.

Persistent failure

Alongside such legal developments, it has also been disappointing to witness the failure of the institutions formed for transitional justice in Nepal. Clause 5.2.5 of the CPA states, “Both sides agree to set up a high-level TRC through a mutual agreement in order to investigate truths about people seriously violating human rights and involved in crimes against humanity, and to create an environment of reconciliations in the society”. The Truth and Reconciliation Commission (TRC) and the Commission of Investigation on Enforced Disappeared Persons  (CEIDP) were hence established in February 2015.

But the trust in the established mechanisms and institutions to achieve transitional justice in Nepal eroded when such independent commissions failed to fulfil their due functions. The tenures of these commissions – once established in 2015 – were set for two years but they have been receiving multiple extensions with revisions in the existing act. In a similar manner, the government on July 15, 2022, extended the term of both commissions by three more months, which again, expired on October 17, 2022. The commissions have since then remained non-functioning as no leadership appointments have been made.

The Maoist insurgency resulted in the deaths and disappearances of thousands of innocent people and many still await to see those who committed wartime atrocities to be punished. The CPA had promised to release the details of missing or killed people, but families are still seeking the whereabouts of their dear ones. Multiple governments have disregarded the urgency of the issue and have been unable to address the concerns of the victims and families. Sexual violence survivors still live with the trauma despite being promised special protection for their rights.

A cycle of impunity in such ways has followed the war which has also been repeatedly questioned by the international community. In 2022, Amnesty International, Human Rights Watch, and the International Commission of Jurists collectively called out the prioritisation of justice for conflict victims. Samantha Power, administrator of the United States Agency for International Development (USAID), during her visit to Nepal last month also urged the government to deliver promises of transitional justice.

The CPN-Maoist Centre, Nepali Congress and CPN-UML have led the government but made no substantive efforts to move forward with transitional justice in Nepal. Rather, the current government led by the wartime leader Pushpa Kamal Dahal declared February 13 a public holiday to mark People’s War Day. How can one mark it as a happy occasion when no respect has been paid to the rule of law and no significant effort taken to deliver justice?

An extension of the term is not the solution

The only step taken towards transitional justice in Nepal so far is for the extension of the transitional justice commissions. These commissions have received thousands of complaints but not even a single one remains resolved to date. Section 42.1 of the TRC Act states that the government can take steps to remove any difficulty that may arise in the implementation of the act. Yet, the constant failure to amend the act in line with international law and maintain the transparent and efficient functioning of the commissions has stalled transitional justice in Nepal.

Amid all this, Nepal has remained inattentive to the physical and mental exhaustion of victims as they wait for justice and peace. Moving forward, it is also important to focus on non-judicial mechanisms including reconciliation and trauma healing to provide justice, address the causes of violence, and transform relations.

– निश्चल ढुङ्गेल

यो लेख १६ फेब्रुअरी २०२३ मा प्रकाशित भएको थियो। मूल लेख यहाँ पढ्नुहोस्

जलवायु परिवर्तनमा नवीकरणीय ऊर्जाले गति लिइरहँदा विश्वको ध्यान नवीकरणीय ऊर्जा स्रोतलाई दोब्बर बनाउनेतर्फ केन्द्रित छ । सन् १९६५ मा ९४१ टेरावाट घन्टाबाट सन् २०२१ मा ७,९३१ टेरावाट घन्टामा नवीकरणीय स्रोतको उत्पादनमा उल्लेखनीय वृद्धि भयो । यस सन्दर्भमा धेरै नदी र खोला भएको नेपाल दक्षिण एसियाका लागि ऊर्जा सुरक्षाको आधारशिला बन्न सक्छ । देशको अप्रयुक्त जलविद्युत्ले भविष्यको ऊर्जा आपूर्तिमा महत्वपूर्ण भूमिका खेल्न सक्छ । साथै, भारत र बंगलादेशको कार्बन फुटप्रिन्टलाई पनि कम गर्न सक्छ ।

ऊर्जा विकासको मार्गचित्र कार्यान्वयन गर्न नेपालले ऊर्जा तथा जलस्रोत दशक (२०१८–२८) घोषणा गरेको छ । नेपाल अहिले विद्युत् उत्पादनमा आत्मनिर्भर छ । सन् २०१३ मा ४,२५८ गिगावाटबाट ०२२ मा ११,०६४ गिगावाट उत्पादनका साथ उल्लेखनीय वृद्धि भएको छ । अरुण चौथो (क्षमता ४९०.२ मेगावाट), पश्चिम सेती (७५० मेगावाट), अरुण तेस्रो (९०० मेगावाट) र तल्लो अरुण (७६९ मेगावाट) प्रमुख जलविद्युत् आयोजना हुन्, जसले सन् २०३० देखि०३५ सम्म वितरण सुरु गर्नेछन् । ऊर्जा उत्पादन र निर्यातमा वृद्धि र ऊर्जा आयात घटेको छ । हामीले यो अतिरिक्त ऊर्जा कहाँ प्रयोग गर्ने ?

आदर्श जवाफ यो परम्परागत वा गैरनवीकरणीय ऊर्जा प्रतिस्थापन गर्न प्रयोग हुनेछ । भारतले दक्षिण एसियामा व्यापार विस्तार गर्ने लक्ष्य राखेको इन्डियन इनर्जी एक्सचेन्जमा सहभागी हुने नेपाल दक्षिण एसियाकै पहिलो देश बनेको छ । आज देशको कुल आयातको १४.१ प्रतिशत पेट्रोलियम पदार्थको हुन्छ । यसलाई विद्युत्ले सजिलै प्रतिस्थापन गर्न सकिन्छ । नेपालको जलविद्युत्ले दक्षिण एसियाको एकतिहाइ भागलाई गैरनवीकरणीयबाट नवीकरणीय ऊर्जा उपभोगमा परिणत गर्न सक्छ । यसो गर्दा सन् ०४० सम्म विश्वभर हुने कुल हरितगृह ग्यास उत्सर्जनको झन्डै ३.५ प्रतिशत घट्नेछ ।

नयाँ विद्युत् ऐन कहिले पारित होला ? :  डेढ दशक बितिसक्दा पनि नेपाल सरकारले नयाँ विद्युत् ऐन ल्याउन सकेको छैन । कानुन निर्माणमा भएको ढिलासुस्तीले देशको ऊर्जा क्षेत्रको अपेक्षित विकासमा बाधा पु¥याएको छ । अहिले विद्युत् ऐन–१९९२ संशोधन गर्ने विधेयक राष्ट्रिय सभाको कार्यक्षेत्रमा छ । विद्युत् ऐन–१९९२ लाई संशोधन गर्ने विधेयकमा विद्यमान विद्युत् ऐनलाई परिमार्जन र एकीकृत गर्ने परिकल्पना गरिएको छ ।

निजी क्षेत्रलाई देशभित्र र बाहिर विद्युत्को व्यापार गर्न लाइसेन्स दिने प्रावधान राखेको छ । तर, विधेयक संसद्मा टुंगो लाग्न सकेको छैन । सम्बन्धित ऐन नहुँदा नेपाल विद्युत् प्राधिकरणले नयाँ विद्युत् खरिद सम्झौता गर्न नसकेको, निजी क्षेत्रले विद्युत् व्यापारको स्वीकृति लिन नसकेको र मुलुकले विद्युत् बजार विस्तार गर्न दुवै पक्ष असफल भएको छ । देशको ऊर्जा क्षेत्रमा रहेका विद्यमान समस्या समाधानका लागि नयाँ सरकारले प्रभावकारी भूमिका खेल्न अपरिहार्य छ ।

हाइड्रोजन ऊर्जाको उत्कृष्ट उपयोग :  नेपालले जलविद्युत् र हाइड्रोजन ऊर्जाको उपयोग गर्नतिर ध्यान दिनुपर्छ, जुन ऊर्जा व्यापारमा तुलनात्मक लाभ छ । हरित हाइड्रोजन पानीलाई हाइड्रोजन र अक्सिजनमा विभाजन गरी नवीकरणीय ऊर्जा र इलेक्ट्रोलाइजर भनिने प्रविधि प्रयोग गरेर उत्पादन गरिन्छ । जलविद्युत्को रूपमा नवीकरणीय ऊर्जाको प्रचुर मात्रामा भएकाले नेपाल हाइड्रोजन उत्पादनका लागि अनुकूल अवस्थामा छ ।

सार्वजनिक र निजी निकायबाट प्राप्त प्रतिवेदनअनुसार नेपालमा सन् २०३० सम्म कम्तीमा १० हजार मेगावाट जलविद्युत्को माग  हुनेछ । ०४० सम्म कुल क्षमता ३९ हजार मेगावाट हुने अपेक्षा गरिएको छ । यसरी, अतिरिक्त जलविद्युत्लाई प्रतिस्पर्धी मूल्यमा हरित हाइड्रोजन उत्पादन गर्नका लागि च्यानल गर्न सकिन्छ । ०५० सम्ममा हरित हाइड्रोजन उत्पादनको लागत प्रतिकिलोग्राम एक डलरभन्दा कम हुने अनुमान गरिएको छ ।

अतिरिक्त स्रोतको उपयोग गर्नुका साथै हरित हाइड्रोजनलाई इन्धनको प्राथमिक स्रोतको रूपमा प्रयोग गर्दा नेपालले आफ्नो आर्थिक विकासको कथालाई परिवर्तन गर्न अनुमति दिनेछ । किनकि, हरित हाइड्रोजनको व्यावसायिक प्रयोगले रासायनिक उद्योग, यातायात, ऊर्जा–सघन उद्योगहरू (फलाम र स्टिल) का साथै आवासीयजस्ता विभिन्न क्षेत्रलाई समेट्छ । यद्यपि, सम्बन्धित क्षेत्रमा हरित हाइड्रोजन ल्याउनुअघि पूर्वाधार र प्राविधिक बाधालाई ध्यान दिनु आवश्यक छ । युरियालगायत अमोनियममा आधारित मल उत्पादन गर्न रासायनिक उद्योगमा हरियो हाइड्रोजन प्रयोग गर्न सकिन्छ ।

आपूर्तिभन्दा तीन गुणा माग बढेसँगै नेपालमा रासायनिक मलको अभाव दीर्घकालीन समस्या बनेकाले आगामी दिनमा हरियो हाइड्रोजनको व्युत्पन्न रूपमा रासायनिक मल उत्पादनमा केन्द्रित हुनुपर्छ । उदाहरणका लागि तीन हजार मेगावाटको अतिरिक्त जलविद्युत्बाट करिब २१ लाख ५० हजार टन हरियो युरिया उत्पादन गर्न सकिन्छ ।

नेपालले आर्थिक वर्ष २०२१–२२ मा एक लाख ८० हजार टन अमोनियममा आधारित रासायनिक मल आयात गरेको थियो, जसमा ६० प्रतिशत युरिया हो । तसर्थ, रासायनिक उद्योगमा हरियो हाइड्रोजनको तत्काल प्रयोगले रासायनिक मलको बहुप्रतीक्षित स्वदेशी उत्पादनको थालनी गर्नेछ । साथै, नेपाल सरकारमाथिको वित्तीय भार पनि घटाउनेछ । सन् २०२१ मा सरकारले मल अनुदान कार्यक्रमका लागि १५ अर्ब रुपैयाँ विनियोजन गरेको थियो ।

हरियो हाइड्रोजनको आवासीय प्रयोग, विशेषगरी तताउन र खाना पकाउन दीर्घकालीन सम्भावना छ । आवश्यक टेक्नोलोजी अझै प्रारम्भिक चरणमा छ । हाइड्रोजनलाई घरेलु प्रयोगार्थ सम्भावित इन्धनका रूपमा परीक्षण गर्ने परियोजना विश्वव्यापी रूपमा सञ्चालनमा छन् । नेपालले पनि विश्वव्यापी प्राविधिक विकासका आधारमा घरेलु प्रयोगका लागि इन्धनको स्रोतको रूपमा हरित हाइड्रोजन प्रयोग गर्न सक्छ । प्राविधिक अवरोधबाहेक, हालको पूर्वाधार, आवासीय भवनहरू जस्तै, हाइड्रोजन अत्यधिक ज्वलनशील इन्धन भएकाले सुरक्षा चिन्ताको कारणले हाइड्रोजन प्रयोगलाई समर्थन गरिँदैन ।

जलवायु वित्त :  जलवायु परिवर्तनका प्राथमिकता र रणनीति सरकारी योजना र बजेट प्रक्रियामा समावेश भए पनि प्रत्यक्ष सरकारी लगानी निकै कम छ । कानुनी र व्यावहारिक अवरोधले प्रत्यक्ष वैदेशिक लगानी, निजी क्षेत्रको लगानी र द्विपक्षीय एवं बहुपक्षीय सहयोगमा असर पार्छ । 

आर्थिक वर्ष २०२०–२१ को मार्चसम्म ऊर्जासँग सम्बन्धित उद्योगले ५९.७ प्रतिशत लगानी प्रतिबद्धता पाए पनि वास्तविक लगानी ३५ प्रतिशत मात्रै आएको छ । जीवन्त ऊर्जा क्षेत्रमा थप विदेशी लगानी भित्र्याउन कानुनी अवरोधहरू खुकुलो पार्दै अनुकूल वातावरण सिर्जना गर्न आवश्यक छ ।

जलवायु उद्देश्य पूरा गर्न वित्तीय आवश्यकता ठूलो छ । हाल प्राथमिक जलवायु कोष सरकार, बहुपक्षीय कोष एजेन्सी र साना निजी क्षेत्रको योगदानबाट आउँछ । जलवायु बजेट २०१७–०१८ मा ३.७५ बिलियन डलरबाट २०२१–०२२ मा ४.६६ बिलियन पुगेको छ । सन् २०१० देखि नेपालले जलवायु परिवर्तनसम्बन्धी संयुक्त राष्ट्र फ्रेमवर्क कन्भेन्सनबाट मात्रै अन्तर्राष्ट्रिय जलवायु कोषमा  ३० करोड डलरभन्दा बढी प्राप्त गरेको छ ।

पछिल्लो तथ्यांकअनुसार सन् २०१५–०२० को बीचमा नेपालले अन्तर्राष्ट्रिय विकास बैंकबाट जलवायु वित्तमा २.५९ अर्ब डलर प्राप्त गरेको छ, जसमा सन् २०२० मा १.२ अर्ब डलर (समन तथा अनुकूलन कोषबाहेक) हुन आउँछ । अधिकांश स्वदेशी बैंकले स्थानीय मुद्रा ऋणमा जलविद्युत् आयोजनालाई वित्तपोषण गर्छन् । तर, ठूलो मात्रामा ऋण दिने उनीहरूको क्षमता सीमित छ । 

नेपालको ऊर्जा क्षेत्रमा सन् २०१० देखि २०१७ सम्म वार्षिक औसतमा ५२ करोड ७० लाख डलरको लगानी आएको थियो । ऊर्जा उत्पादन क्षेत्रले धेरैजसो रकम (७० प्रतिशतभन्दा बढी) प्राप्त गरेको छ । यसमध्ये लगभग सबै जलविद्युत् आयोजनामा गएको छ । जलविद्युत् उत्पादनमा लगानीका आधारमा स्थानीय स्वतन्त्र ऊर्जा उत्पादक र नेपाल विद्युत् प्राधिकरण क्रमशः दोस्रो र तेस्रो मा पर्दछन् । सन् २०१८–२०४० को अवधिमा विद्युत् क्षेत्रमा कुल २९ देखि ४६ अर्ब डलर लगानी आवश्यक पर्ने अपेक्षा गरिएको छ । ठूलो रकम भए पनि वार्षिक आवश्यकता पूरा गर्न अपर्याप्त छ ।

ऊर्जामा लगानी :  यसबाहेक, निर्यातकेन्द्रित जलविद्युत् परियोजना वार्षिक रूपमा ०.५–१.० अर्ब डलरको वृद्धिशील लगानी चाहिन्छ । धेरै आशावादी अनुमानअन्तर्गत पनि वित्तीय क्षेत्रका क्षमता सीमित छन् र थप लगानी आवश्यक छ । निर्यातमुखी परियोजनाको अन्तर्निहित अर्थशास्त्र र ऊर्जा वाणिज्यका लागि ठोस संस्थागत र नियामक वातावरणको सृजनाले राष्ट्रिय अर्थतन्त्रमा योगदान पु‍र्‍याउन लगानीको सफलता निर्धारण गर्नेछ । विकास साझेदार पहिले नै बोर्डमा छन् ।  विश्व बैंक, मिलेनियम च्यालेन्ज कोअपरेसन कम्प्याक्टका साथै भारत र चीन पनि ऊर्जा लगानीमा आकर्षित नभएका होइनन् ।

सरकारले  ऊर्जा लगानीमा गति बढाउनुपर्छ र अन्तर्राष्ट्रिय समुदायबाट थप समर्थन प्राप्त गर्नुपर्छ । साथै, अन्तर्राष्ट्रिय समुदायले यस क्षेत्रको दीर्घकालीन जलवायु लक्ष्यमा योगदान पु‍र्‍याउन सक्ने नेपालको अप्रयुक्त ऊर्जा क्षमतालाई बुझ्न जरुरी छ । आगामी वर्षमा लगातार बढ्दो विद्युत् उत्पादनको उपभोग गर्न घरेलु खपत (औद्योगिक र घरायसी) मात्र पर्याप्त हुनेछैन ।

भारत र बंगलादेशले विशेष गरी क्षेत्रीय ऊर्जा जडानलाई छलफल, प्रतिबद्धता र सहकार्यको केन्द्रमा ल्याएर यस क्षेत्रलाई ऊर्जा गरिबीबाट बाहिर निकाल्न र वातावरणीय उद्धारतर्फ औंल्याउने नेपालको प्रचुर ऊर्जा क्षमतामा चासो राखेको देखिन्छ । तसर्थ, नेपाल सरकारले ऊर्जा व्यापारलाई ध्यानमा राखी यसलाई बढावा दिनुपर्ने देखिन्छ । 

– NISCHAL DHUNGEL

The opinion piece originally appeared in The Kathmandu Post on 21 February 2023. Please read the original article here.

The Nepal Rastra Bank (NRB), the central bank of Nepal, took an accommodating policy stance during the pandemic to support households and businesses. The average inflation rate in fiscal year (FY) 2020/21 stood at 3.6 percent and doubled to 6.32 percent in FY 2021/22. For the first six months of the current FY 2022/23, it stands at 7.2 percent. Inflation has significantly increased due to the detrimental effect of the supply chain post-Covid19 pandemic and the Russia-Ukraine war. Rising inflation raised the cost of fuel and raw materials, causing production costs to skyrocket. As a result, the output capacities of both small and large-scale industries have decreased. The government imposed an import ban to safeguard the diminishing foreign exchange reserves, but it lifted the ban recently as the demand for goods and services increased amidst economic recovery.

These factors contributed to the first half of the current fiscal year’s revenue collection falling short of expectations. The revenue collection for the first six months of mid-January 2023 decreased by 15 percent compared to last year. The Finance Ministry reduced the federal government’s budget by 20 percent because of its inability to generate revenue as projected. The increased liabilities for wages, pension, social security, and subsidies for chemical fertiliser and disaster management have strained ongoing government expenses. The government needs to pay the interest on international and domestic loans. The depreciation of the Nepali rupee versus the US dollar will prove expensive to re-pay foreign loans.

World Bank and IMF support

The International Monetary Fund (IMF) approved $395.9 million as part of the Extended Credit Facility (ECF) Arrangement for Nepal. The ECF provides financial support to nations with a persistent balance of payments issues. This arrangement would help the government lessen the pandemic’s effects on people’s health and economic activity, safeguard vulnerable populations, maintain macroeconomic and financial stability, and promote long-term growth and poverty reduction. The program will encourage significant funding from Nepal’s development partners and help reduce funding shortfalls. These actions supported a subsequent credit boom by cutting loan rates early in the pandemic. To aid Nepal’s tenacious recovery from the Covid-19 pandemic and promote sustainable growth, the World Bank approved a $150 million development policy credit. The Nepal Programmatic Fiscal Policy for Growth, Recovery, and Resilience Initiative, funded by the World Bank, will work to enhance the country’s institutions and laws, especially those governing debt management, public capital investment, and tax and customs systems.

Effect of monetary policy

At the beginning of FY22, NRB monetary policy aimed to strike a balance between tightening needed for economic and financial stability and assistance for the nascent economic recovery. The NRB’s main policy targets are maintaining the policy floor of foreign exchange reserves covering seven months of imports and setting the inflation ceiling at 7 percent for the year FY 2022/23. The goal of monetary policy is to limit total credit to the private sector by 12.6 percent and total money supply by 12 percent for FY 2022/23. NRB raised the cash reserve ratio (CRR) from 3 percent to 4 percent. As a result of the credit boom, imports peaked in the first half of FY22, and foreign exchange reserves declined. The NRB increased its policy repo rate targeting both credit demand and supply. A change in monetary policy was in response to worries about faster-than-expected credit expansion, the growing import bill, dwindling reserves, and rising inflation as loan growth soared beyond estimates in the first half of FY22. To bring down inflation and discourage credit lending, the NRB increased the interest rates. The weightage average interest rate for inter-bank rose from 4.76 percent in mid-January 2021 to 7.48 percent in mid-January 2022. Similarly, weightage average interest rates for lending increased from 9.44 percent in mid-January 2021 to 12.79 percent in mid-January 2022.

A credit constraint occurred as the additional liquidity injections weren’t enough to make up for the drop in loanable funds. By the end of FY22, private sector credit had fully returned to FY21 levels as a proportion of GDP due to the higher lending interest rates offered by commercial banks to borrowers, which increased from 8.5 percent to 11.6 percent between mid-July 2021 and mid-July 2022. Credit to the private sector stabilised at comparatively higher prices, falling from 102 percent of GDP at the end of FY21 to 101.5 percent of GDP at the end of FY22. The NRB injected a total of Rs3094.76 billion in liquidity until mid-January 2023. NRB provided Rs318.09 billion through a repo, Rs83.85 billion through an outright buy auction, and Rs2692.83 billion through a standing liquidity facility (SLF).

The NRB introduced a merger and acquisition policy with the aim of strengthening financial stability. After the mergers of the commercial banks, the number of commercial banks decreased from 27 in mid-July to 22 in mid-January 2023. Micro-finance institutions decreased from 70 in mid-July to 64 until mid-January 2023. The central bank of Nepal mandates that banks maintaining higher paid-up capital help reduce the number of banks and financial institutions. Bank and financial institutions’ (BFIs) private sector credit increased by Rs137.33 billion (3 percent) during the first six months of FY 2022/23 compared to a growth of Rs492.63 billion (12.1 percent) during the same time last year. Out of the total outstanding credit held by BFIs until mid-January 2023, 67.2 percent went to real estate and 12.2 percent to current assets (such as goods used in agriculture and non-agriculture).

BFI soundness

Despite liquidity restrictions, indicators of BFI soundness were high. The average capital-to-risk-weighted assets ratio, which measures the sufficiency of bank capital, remained more elevated than the legal requirement of 11 percent. After massive credit expansion, NRB raised interest rates which is also the byproduct of the misuse of loans. In addition, due to the lengthening of loan repayment schedules as part of the central bank’s response to Covid-19, the overall number of BFIs’ nonperforming loans (NPL), defined as loans that are past due by 90 days or more, also marginally decreased. As of mid-July 2022, commercial banks had an NPL ratio of 1.3 percent, development banks had an NPL ratio of 1.5 percent, and finance businesses had an NPL ratio of 7 percent. Even though these numbers are encouraging, some swift forbearance measures should be in place to assess the asset quality in the banking sector. Banks are issuing fresh disbursements to reduce the level of nonperforming assets.

Nevertheless, given the adverse economic effects of Covid-19, the IMF should closely monitor the system to ensure NPLs are accurately measured and that all banks’ provisioning and capital are still sufficient. The NRB should improve the regulatory environment to offer precise restructuring guidance to address BFI assets and loan quality. NRB issued Working Capital Loan Guideline 2079, which mandates banks to issue working capital loans secured by the current assets. Credit Policy Guidelines of the licensed institution shall clearly mention the margin and adequacy of the existing assets required for the security. Hence, the NRB should encourage banks to monitor borrowers’ creditworthiness continuously and establish asset categorisation and reclassification criteria that accurately evaluate banks’ asset quality. Lastly, Nepal should facilitate bank financing to productive businesses, invest in infrastructure and education, and adopt digital technology and research and development.

January marks a mixed bag for South Asia. While some countries are recovering economically from the Covid-19 pandemic, others continue to suffer. Man-made disasters such as terrorism and Taliban’s restriction on women’s education continues.

Protests in Bangladesh, Pakistan, and Sri Lanka, government change in Nepal, and the economy returning to normalcy in the aftermath of the Covid-19 pandemic but cautious over the surge in cases in China and border disputes dominated the headlines in South Asia in December 2022.

• Nepal gets a new government
• China ends Covid-19 ‘zero tolerance’ policy
• Opposition protests reach a crescendo in Dhaka
• India and Pakistan lob accusations at each other at the UN
• China and India clash along the LAC

– ANKUR SHRESTHA

The opinion piece originally appeared in the February 2023 Issue of New Business Age Magazine. Please read the original article here.

Since the third generation of the Nepal Trade Integration Strategy (NTIS 2016) was introduced, Nepal and its trade policies have undergone significant changes. First, from 2017 onwards, the country formally adopted a federal structure with seven provinces. Second, for two years in a row (2020-2021), Nepal put all of its efforts into managing the COVID-19 pandemic. The pandemic disrupted Nepal’s domestic and international trade in major ways.

Third, Nepal has seen massive fluctuations in the country’s balance of payments in recent years. One of our regional neighbours, Sri Lanka, declared bankruptcy, igniting policy debates in Nepal as to whether we would run aground into the same problems. Despite this, Nepal’s foreign reserves are growing and will last for at least ten months. However, what is worrying is that our trade deficits are also rising to the same levels as during the pre-pandemic phase of 2020.

Nepal suffers from a considerable trade deficit with its biggest trade partners. For example, in the last fiscal year (FY) 2021/22, with India, our largest trade partner, Nepal’s import-export ratio stood at 8:1. With China, our second largest partner, it stood at a massive 327:1. This trend is worrying and shows the need for Nepal to improve its trade balance with its immediate trade partners. Despite opening up more border points with China, if Nepal does not take significant steps to promote exports, it is very likely that Nepal’s current trade deficit with China would further widen in the years to come. Nepal is also graduating to a developing country from a Least Developing Country (LDC) by 2026, and its trade advantages will decrease even further. As a result, bilateral trade treaties will also become essential for Nepal to retain its trade advantages.

Therefore, the Ministry of Industry, Commerce, and Supplies and the Ministry of Finance, together with other related ministries and departments, have been working tirelessly to create a new trade strategy and related industrial policies to promote trade. Examining where the country missed out with the NTIS and what impact it had on the country’s trade situation is necessary. Furthermore, it is also essential to understand the consumer benefits that trade provides and move towards decreasing the tariff and non-tariff barriers of trade. Policies that increase tariffs and implement protectionist measures to promote non-competitive industries will only burden consumers through higher costs of goods.

Nepal Trade Integration Strategy
The Nepal Trade Integration Strategy 2016 (NTIS 2016) was an updated version of NTIS 2010 and its predecessor, Nepal Trade and Competitiveness Study (NTCS) 2004. It was developed together with the complementary Trade Policy 2015. The NTIS 2016 recognized potential for product and value chain development in three priority export sectors: Agro and forest products, Craft and manufacturing products, and the Services sector. Under these, it identified 12 potential export sectors which are: 1. Large Cardamom, 2. Ginger, 3. Tea, 4. Medicinal and Aromatic Plants (MAPs), 5. Fabrics, Textiles, Yarn, and Rope, 6. Leather, 7. Footwear, 8. Chyangra Pashmina, 9. Knotted Carpets, 10. Skilled and Semi-Skilled Professionals at Various Categories (Remittance-Generating Sectors), 11. IT Services and Business Process Outsourcing, and 12. Tourism.

Export of NTIS goods
Data across the years since the fiscal year (FY) 2015/16 shows that Nepal has seen a slight increase in the identified export goods under the NTIS 2016, however, their percentage contributions to total exports have decreased significantly. For example, in FY 2015/16, NTIS goods made up 47.26% of the total exports, but it significantly reduced to 23.39% as of FY 2021/22. While the values of NTIS exports have increased slightly from Rs 33.2 billion to Rs 46.79 billion across this period, total exports reached Rs 200 billion from Rs 70 billion.

Specifically, in the last FY 2021/22, the list of goods identified under NTIS 2016 only made up less than 25% of the country’s total exports. Focusing on FY 2021/22, out of the total export value of Rs 200 billion, soya bean was the top export with Rs 48.12 billion of exports, this makes up 24.06% of our total exports. Products in the NTIS list, such as carpets, came in fifth contributing Rs 9.57 billion, while woven fabrics and cardamom came in sixth and seventh contributing Rs 5.66 billion and Rs 4.81 billion respectively. Other NTIS goods came further down the list. Even after adding all the NTIS goods exports, it falls short by Rs 1.33 billion. This provides evidence of either our incapability to understand the changes throughout the years in Nepal’s export capabilities or the mindset of Nepal’s traders.

– SANTOSH Sharma Poudel

The column originally appeared in The Diplomat on 8 February 2023. Please read the original article here.

On February 6, the Rastriya Swatantra Party (RSP) decided to quit the coalition government led by Communist Party of Nepal-Maoist Center (CPN-MC) supremo Pushpa Kamal Dahal. The party lasted barely a month in the government.

Its leader, Rabi Lamichhane, decided to quit the government after Dahal refused to give the Home Ministry portfolio to the party. However, the party has not withdrawn support for the government, leaving the door open for rejoining the ruling coalition in the future.

This is a dramatic change in course for the six-month-old party.

The RSP had a rapid ascent to power as it emerged as the fourth largest party, winning 20 seats (out of 275) in the November 2022 elections. It landed four ministries, including the Home Ministry, in the power-sharing agreement among the seven-party ruling coalition formed after that.

Lamichhane became the deputy prime minister and home minister. His ascent was unprecedented in Nepali political history. On his return to Nepal in 2016, he hosted a popular talk show on television and then launched his own television company.

However, Lamichhane’s appointment as the home minister was controversial to start with. The investigation about his citizenship and passport was ongoing. Lamichhane had taken American citizenship in 2014, rendering his Nepali citizenship invalid. He left his American citizenship in 2018 and was eligible for Nepali citizenship, yet he did not go through the due process. In between, he also had a Nepali passport issued using the “invalid” citizenship certificate. Ironically, the Home Ministry is responsible for carrying out those investigations.

On January 27, Nepal’s Supreme Court ruled that Lamichhane did not hold a valid citizenship certificate and scrapped his status as a member of parliament and president of RSP. A day after the verdict, he followed due process, acquired the Nepali citizenship certificate, and returned as the RSP president.

After the court’s verdict, Dahal decided to keep the Home Ministry portfolio to himself and refused to give it to Lamichhane, who was ineligible because he was no longer a parliament member, or any other parliamentarian from the RSP.

After the decision to leave the government, RSP organized a press conference where Lamichhane had an outburst, to put it mildly. In an hour-and-half rant, he went after the media in a rage. He accused the media – specifically Kantipur Media Group – of targeting him by headlining his citizenship front and center and held them responsible for his ouster from the government. He even threatened the media that he would incite his supporters to “punish” media houses if they dared write “wrong” news about him.

Lamichhane is in his own league when it comes to hogging the limelight. His outburst is also not out of character. Nepali media and opinion makers have roundly criticized him for the outburst. However, his supporters have stood firmly in support of “exposing” the reality of Nepali media.

RSP’s quitting of the government has an immediate impact on Nepali politics.

First, RSP and its leaders were the dark horses in Nepali politics. Despite their performance in the election, people did not know where the party stood ideologically or how they would participate in governance. People voted in droves for the party expecting it to be the alternative to the establishment, which was corrupt and cared only about gaining power.

While a month is not enough to judge the party, it has hardly shown itself to be different from the others.

Second, RSP was billed as a coalition of independents. Nevertheless, the recent development shows that the party is Lamichhane, and Lamichhane is the party. There were dissenting voices on whether RSP should quit the government. However, Lamichhane hardly engaged his party officials and issued a diktat that the party would withdraw from the ruling coalition.

Third, RSP’s quitting of the government has increased the trust deficit between the CPN-MC and Khadga Prasad Oli-led Communist Party of Nepal-Unified Marxist Leninist (CPN-UML), the two major parties in the ruling coalition. Dahal and Oli shared a contentious relationship before this, and their differences started to increase with the apparent closeness between Dahal and Sher Bahadur Deuba of the Nepali Congress (NC), despite Dahal ditching Deuba to form a coalition government with Oli.

Dahal has kept Deuba close in order to limit Oli’s influence in the coalition, whereas Deuba is eying Dahal’s support in electing an NC candidate for the upcoming presidential election. In the longer term, Deuba would like to break the Dahal-Oli partnership to gain power, just like Oli broke the Dahal-Deuba partnership.

With presidential elections coming up, the CPN-UML has come out supporting RSP, even trivializing the court’s verdict about Lamichhane’s citizenship. Two other coalition partners have yet to join the government. RSP’s exit means only four parties from the original seven-party coalition are participating in the government.

The longer-term implications are more concerning than the short-term impact on coalition dynamics.

Lamichhane’s outburst is an ominous sign in Nepali politics. He was a populist and was known to play to the crowd. He emerged in the political scene riding the anti-establishment wave. Now, he is discrediting Nepal’s chaotic but relatively free media. In doing so, he has lumped the media in with the corrupt establishment, and projected himself as the one who can challenge the status quo.

His tantrum on February 6 played differently to audiences. His supporters saw a leader willing to take on the powerful elements of the “swamp” and challenge the establishment. Meanwhile, his speech gave enough ammunition to his detractors about his political priorities and temperament. The gap between his supporters and detractors has widened as a result and will continue to grow.

Lamichhane’s rant also carried concerning signs. He played the victim that the establishment was trying to corner. He alleged that he had been targeted relentlessly because some elements of the establishment would be “exposed” if he continued as the home minister. By projecting himself as the only one who can challenge the establishment, he is building a personality cult.

He dared some members of the “swamp” to contest him in elections or shut up. He attacked the media for reporting on his citizenship and insinuated that they were not to be trusted. These are Trumpian tactics, and indeed his politics is shaped by Donald Trump’s success in 2016 in the United States.

This is not to suggest that Lamichhane will walk the Trumpian way. For a start, Nepal has a parliamentary system. Even populists such as Oli have found it challenging to have a singular hold on the Nepali political structure. However, expect the anti-establishment voices to be louder and politics more divisive as voters turn into followers and distrust the establishment or the media.