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Tag: Nepali Economy

OP-EDs and Columns

Why Nepal Needs to Debate the Role of Its Army


The column originally appeared in The Diplomat on 31 July 2023. Please read the original article here.

Nepal is engaged in a fierce debate about rightsizing its army.

Statements by two members of parliament ignited the debate. On June 20, parliamentarian Swarnim Waglé warned that Nepal is headed to a disaster if the “difficult” decision of rightsizing the military is not taken. Citing the reduction of troops in Sri Lanka in the wake of the economic crisis, the Rashtriya Swatantra Party MP said that Nepal did not need 90,000 troops.

Ten days later, former Foreign Minister Bimala Rai Poudyal questioned the utility of a large troop force during peacetime. She argued that the risk of a physical attack on Nepal from the neighboring countries was low and pointed out that even if they did attack, the Nepali Army could not win against them.

The statements triggered a furor on social and traditional media. Following criticism from the public and senior retired military personnel, the two clarified or toned down their statements. Waglé conceded that “whatever is done should be done with the consent of the security agencies.” Similarly, Poudyal explained that she was merely “seeking an answer from the government and defense minister whether we need the current size of Nepal Army.”

Defense Minister Purna Bahadur Khadka has clarified that there is no plan to reduce the army’s size.

The argument for downsizing the military is often based on the economic costs of maintaining the 96,000-strong force, although Poudyal denied making such an argument.

Nepal allocated 58.84 billion Nepali rupees ($450 million), accounting for 3.5 percent of the total government expenditure for 2023-24.

As the graph below shows, the military budget, as a proportion of government expenditure, increased significantly since 2001, when the Nepal Army was mobilized to counter the Maoist insurgency. It reached its peak in 2005 and has declined consistently since. Nepal’s military expenditure, whether measured as a proportion of government expenditure or GDP, is below the world average. Thus, there is little economic rationale for downsizing the budget of the defense agency or troop size to cut costs.

However, the Nepal Army spends 90 percent of its allocated budget on recurrent expenditure and only 9.6 percent on capital expenditure. This is more worrying, for it means that the Nepal Army is investing less in the future. Any downsizing of the military, without reducing the overall budget, would free a larger share of the budget for the military to invest in modern technologies for the future.

The size of the army also becomes an issue because of the expanding footprint of the military into non-core areas, such as the construction of infrastructure and even business ventures. As a result, the army has become sluggish regarding combat readiness and deployment.

Hence, the debate is not about merely downsizing to cut costs but professionalizing the military.

The more pertinent question raised by Poudyal relates to the overall “utility” of the military. Citing repeated instances of border encroachment, she alleged that the army has failed in its primary role: to protect Nepal’s sovereignty and territorial integrity. Poudyal pointed out that Nepal’s army would not be able to withstand any war with neighboring countries.

Given China and India’s relative size and power, such an assumption may sound logical. Nevertheless, analyzing the role of the military in such stark terms is a gross misunderstanding and reductive. The military’s role is not just to win wars but to thwart such attacks before they happen and defend the territory if attacked.

A look at what is unfolding in Ukraine, where a relatively more minor force has been able to withstand attacks from a larger and wealthier country, gives a broader understanding of the role of the military.

Issues including the nature and the role of the military should be debated. However, ensuring that such debate is proper and not disparaging to the force that is ultimately responsible for the nation’s security is also essential.

Equally concerning is the nature of the backlash received by the parliamentarians and the defensiveness of the army.

Poudyal’s social media was flooded with comments about her being a sellout, an agent of a foreign country, or taking up the issue to weaken the military.

As a parliamentarian in a country where the army operates under civilian rule, she has every right and responsibility to debate the military’s size and role. Such debate is overdue. The size of Nepal’s military almost doubled during the Maoist insurgency, increasing from 45,000 to 96,000 now. Now that the domestic political context has changed, as have the regional and global dynamics, there should be a corresponding debate on the role and security strategy of the country.

Therefore, the defensiveness of the military force is worrying.

In March, Army Chief General Prabhu Ram Sharma dismissed the calls for downsizing by “self-proclaimed academics, experts, and security experts working in non-governmental organizations and international non-governmental organizations.” He called them “outsiders” working at the behest of foreign powers. Now, the military has responded quietly, saying that the government determines the army’s size based on the needs.

However, retired military officials have taken up the mantle of counterpunch.

Former Army Chief General Gaurav S.J.B. Rana slammed the calls for downsizing the military as “undeveloped” and “unschooled opinion.” Stating that the military is a valuable asset of the state to be cherished, Rana insisted that the “process to determine the size, composition, and capabilities of the military is best left to the military professionals, under the stewardship of the government.”

Meanwhile, another retired army chief, General Binoj Basnyat, called for doing away with the costly federal system, among others, to bring in enough resources required for national development.

Besides, both Rana and Basnyat point out that the military remains the most trusted institution in the country and, thus, should not be questioned.

As per a survey, 91.2 percent of Nepali people trusted the military, compared to 44 percent who trusted political parties. Therefore, they argue that the army is a far more responsible actor and absolved of any public debate.

Their comments imply that the Nepal Army should not be questioned. Indeed, parliamentarians are also cautious when talking about the military. Poudyal said that she was discouraged by senior leaders of different parties from talking about the military issues a few days after her statement caused public fury.

In saying that, there are commonalities between those seeking a debate on the army’s role and those defensive about any discussion. Both understand that regional and global geopolitical currents are changing rapidly; a war between two countries, seen as unlikely over the past few decades, has become a reality today.

Such geopolitical changes have thrust Nepal into the center of regional and global geopolitical tussles. Together with the changed domestic security context, a discussion of security strategy and the military’s corresponding size, shape, and form is much needed. The Nepali military of 2005 will not be able to meet the challenges of today.

However, when civilian leaders debate the size and role of the military, the military understands it as “downsizing,” making it defensive.

Therefore, the first step is bridging the trust gap between the civilian and military leadership. Then both sides can sit together and rationally chart the way appropriate for the current and future needs of the country and reform the military as per need.

OP-EDs and Columns

Monitoring monetary policy


The opinion piece originally appeared in The Kathmandu Post on 26 July 2023. Please read the original article here.

Almost two months after the Government of Nepal unveiled its fiscal policy for 2023-24, which includes a budget of Rs1.75 trillion, the Nepal Rastra Bank (NRB), on July 23, released its monetary policy for the same fiscal year. The policy aims to support economic recovery, control inflation, stabilise interest rates and ensure credit demand. Nepal experienced a recession until the second quarter of the last fiscal year, leading to a projected annual economic growth of 1.86 percent. Despite the sluggish growth in the past year, the combination of the budget and the recent monetary policy aims to achieve an ambitious growth rate of 6 percent for the current fiscal year.

Monetary indicators

The NRB plans to control inflation by maintaining an accommodative monetary policy. The overall year-on-year consumer price inflation decreased from 8.56 percent in mid-June 2022 to 6.83 percent in mid-June 2023. Despite making profits, the Nepal Oil Corporation (NOC) has decided not to reduce the prices of petroleum products, owing to its outstanding debt. This adds to the burden on consumers, as the high petroleum product costs in Nepal significantly contribute to escalating inflation. In this context, the new monetary policy aims to maintain inflation at 6.5 percent. While the NRB is cautiously optimistic about the inflation trajectory, it remains vigilant about the potential risks that could impact price stability in the future.

The NRB aims to maintain seven months of forex reserves to cover goods and services imports in 2023-24. Based on imports during the 11 months of 2022-23, the banking sector’s forex reserves cover 11.2 months of merchandise imports and 9.6 months of both merchandise and services imports. An import ban was initially implemented to protect dwindling forex reserves, leading to an 11.5 percent increase in reserves when the ban ended. The International Monetary Fund attributes the improvement in forex reserves to monetary policy normalisation. However, import restrictions alone do not address the underlying causes of external pressures, such as persistently high global commodity prices expected in 2023 and robust domestic demand.

Policy rates

The NRB has lowered the policy rate by 50 basis points to 6.5 percent. The policy rate represents the interest rate the NRB charges to commercial banks for overnight loans. Lowering the policy rate is aimed at making borrowing more affordable for businesses and consumers and stimulating economic activity. The bank rate, however, remains unchanged at 7.5 percent. As of November of the fiscal year 2022-23, the average inter-bank rate of banks and financial institutions stood at 6.69 percent, compared to 7 percent a year earlier. Several factors, including the recent decline in inflation, influenced the NRB’s decision. To ensure credit demand, the NRB plans to provide liquidity to banks and financial institutions, reduce the policy rate and increase the lending capacity of banks.

The capital adequacy indicators in Nepal show positive signs for the health of the banking sector as they remain above the minimum requirements. The total average capital-to-risk weighted assets ratio stands at 13.1 percent, surpassing the regulatory minimum of 11 percent. The maximum threshold of 100 percent capital-to-risk weighted assets ratio will be raised to Rs5 million from Rs2.5 million. The deposit collection rate has been lowered to 4.5 percent from 5.5 percent. The Cash Reserve Ratio (CRR) is set at 4 percent, requiring banks to hold that portion of their total deposits as cash reserves with the NRB. The statutory liquidity ratio (SLR) is set at 12 percent for commercial banks, while development banks and finance companies have an SLR of 10 percent. These reserve ratios are essential tools used by the NRB to regulate the money supply, stabilise the financial system and manage inflation by controlling the lending capacity of banks.

On-going concerns

NRB Governor Maha Prasad Adhikari stated that the real sector’s growth has not kept up with the rapid credit flow directed towards it. An abrupt slowdown in the share market and the real estate sector caused a credit surge and subsequent bust, impacting borrowers’ ability to meet loan and interest obligations and negatively affecting manufacturing, construction and trade. The IMF has expressed concern over significant credit fluctuations in Nepal’s financial sector, suggesting that excessive credit expansion and high borrowing rates have reduced borrower repayment capacity. To address the credit concern, the monetary policy states that the NRB will provide clear guidance on loan restructuring and rescheduling for hard-hit sectors and small and medium enterprises facing cash flow crises.

The non-performing loan (NPL) ratio in Nepal, at 2.6 percent, is notably lower than the average NPL ratio of 7.5 percent observed in emerging markets. This suggests that the overall asset quality in the banking sector is considered satisfactory. However, some measures such as classifying overdue loans as “standard” could mask the actual asset quality, and the NPL ratio might be artificially lower. The NRB aims to ensure that banks’ loan classification correctly reflects the asset quality of the banking system and will review the loan classification policy, implement Nepal Financial Reporting Standards (NFRS 9) and the expected credit loss model (ECL). Furthermore, the NRB will review the directed lending guidelines and credit concentration to guide BFIs to concentrate on credit management rather than credit creation.

Commendable step

The NRB has taken steps to decrease the number of microfinance institutions through mergers and acquisitions. As of mid-June 2023, 63 microfinance financial institutions are currently in operation. The NRB is committed to establishing a dedicated regulatory body for the cooperative sector, as outlined in the 2023-24 budget. The lack of regulation has resulted in the collapse of cooperatives and increased instances of fraudulent activities. It is necessary to establish a dedicated regulatory body to tackle these issues effectively. The NRB will also implement a centralised “Know Your Customer” (KYC) system, introduce Macro Stress Testing Framework, improve regulatory capacity, enhance the quality of supervision, and upgrade data and regulatory systems to improve its autonomy and accountability framework.

The NRB disclosed its intention to conduct research on the Central Bank Digital Currency (CBDC) in its monetary policy for the fiscal year 2021-22. The central bank has successfully prepared the concept report titled “Central Bank Digital Currency (CBDC): Identifying Suitable Policy Goals and Design for Nepal” to explore the implementation of the CBDC. On the digitalisation front, the NRB recently amended a digital payment licensing policy that will allow non-business businesses like hotels and travel to establish their digital payment system. Moreover, Nepal also inked an agreement with India, China and Sri Lanka for cross-border digital payment. These developments on the digital front facilitate smooth digital payment services inside and outside the country.

The NRB’s monetary policy presents several positive measures, and its effectiveness in implementing these measures will be crucial. Increased foreign reserves due to higher remittances and lower interest rates are gradually making the country’s economy vibrant. Lower interest rates can encourage borrowing and investment, potentially impacting consumer spending, business expansion and overall economic growth. The central bank appears mindful of the potential adverse effects of higher interest rates on economic recovery while remaining committed to keeping inflation in check. However, taming inflation will require a coordinated approach between monetary and fiscal policies.

OP-EDs and Columns

Economic lessons from Rwanda


The opinion piece originally appeared in The Kathmandu Post on 4 July 2023. Please read the original article here.

A small landlocked country in East Africa, Rwanda has been on a remarkable transformational journey. Despite its chequered history, marked by the devastating genocide against Tutsi minorities in 1994, Rwanda has made significant strides in managing its debt burden, achieving impressive economic growth. The landlocked African republic also has some important lessons for Nepal, which endured a Maoist insurgency and decades-long political instability, on debt management and economic development.

Debt trajectory

One crucial factor contributing to Rwanda’s progress is its focus on reducing its debt burden. The country’s eligibility for the Highly Indebted Poor Countries (HIPC) Initiative in 2001 was a turning point. Rwanda received significant debt relief of $1.2 billion, providing a much-needed breathing space for development. The Multilateral Debt Relief Initiative (MDRI) further eased the burden by providing an additional $1.8 billion in debt relief.

Rwanda has reduced its debt-to-GDP ratio from over 100 percent in 1995 to 64 percent in 2022. The Covid-19 crisis led to a sharp increase in the fiscal deficit in 2020 due to revenue shortfalls and increased spending to address the crisis. Total nominal external debt to GDP stood at 75.7 percent at the end of 2021, of which external public and publicly guaranteed (PPG) debt accounted for 54.5 percent of GDP, resulting in the present value of PPG’s external debt to GDP ratio of 34.9 percent. While the increase in external PPG debt is concerning, debt management is done through loans in concessional terms with relatively low-interest rates and careful prioritisation and selection of capital-intensive projects.

However, the debt-to-GDP ratio is expected to continue rising due to the pressure of financing infrastructure development and social programmes, posing risks related to concessional financing availability, US monetary policy tightening, US dollar appreciation, and trade term shocks. As per the International Monetary Fund (IMF), Rwanda’s debt situation remains sustainable, with a moderate external and overall public debt distress risk.

Nepal’s debt trajectory

Nepal’s debt-to-GDP ratio declined from 64 percent in 2000 to 22.3 percent in 2015. As of mid-April 2023, the country’s overall outstanding debt stood at 38.3 percent of GDP, a significant increase from the debt-to-GDP ratio of 25 percent in 2016-17. The debt-to-GDP ratio has been rising due to the pandemic, the transition to federalism, the 2015 earthquake and the depreciation of the Nepali rupee. The fiscal deficit in the first half of 2023 increased the public debt-to-GDP ratio from an estimated 35.6 percent in 2022 to 38.3 percent in 2023. Total nominal external debt to GDP stood at 25.9 percent at the end of 2021, of which external PPG debt accounted for 21.8 percent, resulting in the present value of PPG’s external debt to GDP ratio of 13.1 percent.

Nepal’s external debt is lower than Rwanda’s but is growing faster. It is also more heavily concentrated on concessional terms. Domestic public debt (from 10.1 percent of GDP in FY 2015-16 to 22.2 percent in FY 2020-21) has increased faster than the external debt (from 14.9 to 21.8 percent of GDP) during the same period. Interest rates on domestic loans have also increased due to the government’s increased borrowing, which has crowded out private borrowers. The joint World Bank and IMF Debt Sustainability Analysis found that the risk of Nepal’s overall debt distress and risk of external debt distress is low, and its debt-carrying capacity is still strong. However, there are risks to Nepal’s debt sustainability, including a slowdown in economic growth, a decline in foreign aid and investment, an increase in interest rates, and a depreciation of the Nepalese rupee. Nepal can learn from Rwanda’s experience managing a high debt-to-GDP ratio while maintaining a rapidly growing economy.

Structural reforms

Rwanda’s implementation of structural reforms and debt relief resulted in remarkable economic growth, with an average annual GDP growth rate of 8 percent between 2000 and 2020. Between 2000 to 2022, Rwanda underwent significant structural changes, leading to a transformative shift in its economic landscape. During this time, there was a decline in the proportion of Rwanda’s GDP contributed by agriculture, forestry and fishing, dropping from 31.2 percent to 24.9 percent. Meanwhile, the industrial sector, which encompasses construction, increased its contribution from 16.8 percent to 21.2 percent. Moreover, there was a significant growth in the percentage of GDP represented by exports of goods and services, rising from 5.4 percent to 22.5 percent.

Rwanda’s key exports, such as coffee and tea, are predominantly sold in major markets such as the United States and Europe for coffee, Middle Eastern countries, and Pakistan for tea. Nepal can draw valuable lessons from Rwanda’s experience, particularly in implementing structural reforms, prioritising sectors for development, and determining essential export products.

Rwanda has made strides in developing e-government services by leveraging its existing technologies. In particular, the country implemented a comprehensive “one-stop” e-government initiative called “Irembo” in April 2014. Operating as a single portal, Irembo integrates 96 basic government services such as birth registration, business registration, tax filing and returns, and school enrollment, enabling around 9 million internet subscribers to access these services conveniently. Rwanda’s e-government systems have been acknowledged by the World Bank as a leading performer on the business reform index, enhancing the country’s appeal to investors. These advancements have streamlined administrative processes and fostered a culture of innovation and digital inclusion within the country.

Nepal can take inspiration from Rwanda’s success in developing e-government services, leveraging existing technologies to streamline administrative processes and enhance digital inclusion, ultimately attracting investors and fostering innovation.

Attracting FDI

Rwanda’s commitment to economic liberalisation and attracting foreign investment has driven its economic growth. Foreign direct investment (FDI) inflows increased from $100 million in 2008 to $398 million in 2022. Much of Rwanda’s foreign direct investment (FDI) is focused on specific sectors. Specifically, the energy sector represents 45 percent of all recorded investments, while manufacturing comprises 30 percent. Special economic zones offering tax breaks and incentives have further encouraged investment.

For instance, in 2000, the installed capacity of power plants in Rwanda was only 44 megawatts. Over the past two decades, the government has attracted significant FDI in the energy sector, which has helped increase the installed capacity to 225 megawatts. This has led to a substantial increase in electricity generation, and the electricity access rate has increased from 4.8 percent of the population in 2005 to 49 percent in 2022. By identifying sectors with growth potential and actively promoting investment in those areas, Rwanda has been able to drive economic expansion and create opportunities for job creation and technological advancements.

Despite both countries being landlocked and import-dependent, Rwanda has shown a way of achieving impressive economic growth while Nepal lags behind. Nepal should leverage the advantage of lower interest rates as envisaged in Nepal’s Medium Term Debt Management Strategy (MTDS) and implement structural reforms to reduce corruption, strengthen public financial management and improve the business climate. Enhancing the business environment, promoting digital platforms and establishing centralised investment-related services can attract foreign investment and boost economic growth. Nepal should address the rising debt burden by increasing tax revenue, reducing spending on non-essential items, and carefully prioritising and selecting projects.

OP-EDs and Columns

आर्थिक संकटको अन्तर्राष्ट्रिय परिदृश्य र नेपाल

– निश्चल ढुङ्गेल

यो लेख बैशाख १४, २०८० को नयाँ पत्रिका (१६औँ वार्षिकोत्सव विशेषांक) मा प्रकाशित भएको थियो। मूल लेख यहाँ पढ्नुहोस्

विश्व अर्थतन्त्र वस्तु, सेवा, पुँजी, मानिस, डाटा र विचारको विश्वव्यापी प्रवाहद्वारा अन्तर्सम्बन्धित छ । वस्तु र सेवाहरूको प्रवाहमा ग्लोबल भ्यालु चेन (विश्वव्यापी मूल्य शृंखला) निर्माण गरिएका छन् । ग्लोबल भ्यालु चेनले अन्तर्राष्ट्रिय उत्पादन साझेदारीलाई जनाउँछ, जहाँ उत्पादनलाई विभिन्न देशमा गरिएका गतिविधि र कार्यमा विभाजन गरिन्छ । हालैका विश्वव्यापी घटना (जस्तै : ऊर्जा संकट, चिप्स अभाव) ले ग्लोबल भ्यालु चेनमा तनाव सिर्जना गरेका थिए । विश्वव्यापीकरण विस्तारको अवधिमा, सस्ता वस्तु र कम श्रम लागतले मुद्रास्फीतिलाई नियन्त्रणमा राख्न मद्दत गथ्र्याे, तर अब यो प्रवृत्ति उल्टिन थालेको छ । युक्रेन युद्धलाई लिएर राष्ट्रहरूले रुससँग सम्बन्ध तोडेपछि तेल र ग्यासको मूल्य एकाएक बढ्यो । आपूर्ति शृंखला पुनर्निर्माण गर्दा व्यवसायले राजनीतिक तनावलाई तौलिरहेका छन् । नीति निर्माता र बजार दुवै महामारीको अस्थायी साइड इफेक्ट भनेर सोचिएको मुद्रास्फीति अनपेक्षित रूपमा बढेको देखेर छक्क परेका छन् ।

अन्तर्राष्ट्रिय मुद्राकोष (आइएमएफ)को ‘विश्व आर्थिक परिदृश्य’ प्रतिवेदनले विश्वव्यापी आर्थिक वृद्धि सन् २०२२ मा ३.४ प्रतिशत (अनुमानित) रहँदै सन् २०२३ मा २.९ प्रतिशत र २०२४ मा ३.१ प्रतिशतमा झर्ने अनुमान गरेको छ । २०२३ को पूर्वानुमान अक्टोबर २०२२ ‘विश्व आर्थिक परिदृश्य’मा गरिएभन्दा ०.२ प्रतिशत बिन्दु बढी तर ऐतिहासिक (२०००/१९) औसत ३.८ प्रतिशतभन्दा कम छ ।

तीन दशकमा प्रगति र समृद्धिलाई सशक्त बनाउने लगभग सबै आर्थिक शक्ति अहिले क्षयीकरणमा छन् । फलस्वरूप २०२२–३० बीचको औसत विश्वव्यापी सम्भावित कुल गार्हस्थ्य उत्पादन (जिडिपी) वृद्धि शताब्दीको पहिलो दशकको तुलनामा करिब एकतिहाइले घटेर वार्षिक २.२५ रहने अनुमान गरिएको छ । विश्वव्यापी वित्तीय संकट वा मन्दीको अवस्थामा यी गिरावट तीव्र हुनेछन् ।

विश्व अर्थतन्त्रमा माग र उत्पादनमा सबलतासँगै धेरै देशमा मुद्रास्फीति विस्तारै घट्ने क्रममा देखिन्छ । अमेरिकी र अन्य देशका केन्द्रीय बैंकहरूले कसिलो वित्तीय नीति अनुसरण जारी राखेका छन् । मुद्रास्फीतिसँग लड्न उन्नत, विकासशील र उदीयमान सबै देशका केन्द्रीय बैंकहरूले ब्याजदर बढाइरहेका छन् । सन् २०२३ को सुरुवातमा आर्थिक गतिविधिमा सुधार हुनुको एक प्रमुख कारक ऊर्जा र खाद्य मूल्यमा गिरावट आउनु हो । महामारीपछि वस्तुको माग क्रमशः बढ्नु र विश्वव्यापी आपूर्ति शृंखलाका अवरोध कम भएकाले अधिकांश देशमा वस्तुको मूल्य र मुद्रास्फीति घट्न थालेको छ । तर, श्रम बजारको लागतले मुद्रास्फीतिमा दबाब परेको देखिन्छ । स्फीतिको स्तर अझै युद्धपूर्वको भन्दा उच्च भए पनि यसले व्यवसाय र घरपरिवारको क्रयशक्ति बढाउँदै छ । विश्वव्यापी मुद्रास्फीति सन् २०२२ मा ८.८ प्रतिशतबाट सन् २०२३ मा ६.६ प्रतिशत र २०२४ मा ४.३ प्रतिशत हाराहारीमा रहने अपेक्षा गरिएको छ । अझै पनि विश्वव्यापी मुद्रास्फीति महामारीपूर्व (२०१७–१९) को स्तर ३.५ प्रतिशतभन्दा उच्च नै हो । चीनमा कोभिड–१९ महामारीको पछिल्लो लहरले सन् २०२२ को वृद्धिलाई कम गरे पनि आर्थिक गतिविधि सुरु गरेसँगै रिकभरी अपेक्षा गरिएभन्दा तीव्र बनेको छ । यसले विश्वव्यापी आर्थिक गतिविधिमा सकारात्मक प्रभाव पार्दै आपूर्ति शृंखलामाथिको दबाब कम गर्ने र अन्तर्राष्ट्रिय पर्यटनलाई बढावा दिनेछ ।

सकारात्मक पक्ष के भने धेरै अर्थतन्त्रमा कृत्रिम मागबाट बलियो वृद्धि वा मुद्रास्फीतिमा तीव्र गिरावट सम्भव छ । नकारात्मक पक्ष चीनमा गम्भीर स्वास्थ्य परिणामहरूले पुनर्बहालीलाई रोक्न सक्छ । युक्रेनमा रुसको युद्ध लम्बिँदा ऋण संकट अझ खराब बन्न सक्छ ।

कोभिड– १९ महामारीको प्रभाव विश्वव्यापी रूपमा कायमै रहेको समयमा युक्रेन युद्धले खाद्य र ऊर्जा बजार अवरुद्ध ग¥यो जसकारण विकासोन्मुख देशहरूमा खाद्य असुरक्षा र कुपोषणमा वृद्धि भयो । यसैबीच, जलवायु संकटले धेरै देशमा असर पर्न थालेको छ । डढेलो, बाढी, आँधी र तुफानहरूले ठूलो मानवीय र आर्थिक क्षति गरिरहेका छन् ।

आइएमएफले विकसित अर्थतन्त्रमा ब्याजदर वृद्धिले उदीयमान बजार र विकासोन्मुख देशहरूको वित्तीय अवस्थालाई असर पार्न थालेको उल्लेख गरेको छ । विशेषगरी अमेरिकाको बढ्दो ब्याजदरबाट मध्यम र न्यून आय भएका देशले थुप्रै दुष्प्रभाव साक्षात्कार गर्नुपर्नेछ । उनीहरूले पुँजी पलायन, ऋण संकट र मुद्रा अवमूल्यनजस्ता समस्या भोग्नुपर्नेछ । ब्याजदरमा तीव्र वृद्धिले विकसित देशहरू विशेषगरी अमेरिकामा ठूलो पुँजी प्रवाह हुन थालेको छ भने विकासोन्मुख देशहरूबाट पुँजी बाहिरिने क्रम बढेको छ । आर्थिक विस्तारका क्रममा देशको ऋण बढ्ने गर्छ । विशेषगरी विकासोन्मुख देशहरू तब ‘ऋण पासो’मा फस्न पुग्छन् जब उत्पादकत्व र ऋण सन्तुलनमा रहँदैन । यस्तो परिस्थितिमा विकसित अर्थतन्त्रमा ब्याजदर वृद्धि विकासोन्मुख अर्थतन्त्रका लागि घातकसिद्ध हुन सक्छ । उदाहरणका लागि सन् १९८० को प्रारम्भमा अमेरिकी केन्द्रीय बैंक (फेड)को ब्याजदर वृद्धिले संयुक्त राज्यमा दोहोरो अंकको मुद्रास्फीतिलाई घटायो, तर धेरै देशमा त्यसको नराम्रो असर प¥यो । विशेषगरी ल्याटिन अमेरिकी देशहरूमा ऋण डिफल्ट भयो । बेरोजगारी र गरिबी बढ्यो । जिडिपीमा ठूलो गिरावट आयो । यसैले त्यो अवधिलाई ‘हराएको दशक (लस्ट डिकेट)’ भन्ने गरिन्छ । ल्याटिन अमेरिकी देशहरू सुस्त र असमान पुनरुत्थानबाट गुज्रिएका थिए । अफ्रिकाका ऋणग्रस्त देशहरूले पनि ल्याटिन अमेरिकै नियति भोग्नुप¥यो । आइएमएफका अनुसार हाल लगभग कम आय भएका १५ प्रतिशत देशहरू ऋण संकटमा छन् र अन्य ४५ प्रतिशतले उच्च ऋण जोखिमको सामना गरिरहेका छन् ।

विशेषगरी अमेरिका र युरोपमा बैंकिङ प्रणालीमा थप उथलपुथलको सम्भावनाले आर्थिक गतिविधिमा असर पर्ने जोखिम छ । बैंक अफ अमेरिकाका अर्थशास्त्री डेभिड हौनरका अनुसार वित्तीय अस्थिरताले उदीयमान बजारमा पर्ने मुख्य असर दुई प्रकारका छन् । सकारात्मक असर, वित्तीय अस्थिरताले मुद्रास्फीति र ब्याजदर घटाउन मद्दत गर्न सक्छ । नकारात्मक असरमा उदीयमान देशहरूले बजारमा पहुँच प्राप्त गर्न कठिन हुन्छ ।

कोभिड– १९ महामारी, रुस–युक्रेन द्वन्द्व र अमेरिका र चीनबीचको बढ्दो तनावका कारण कतिपयले संसार डिग्लोबलाइज भइरहेको अनुमान गर्न थालेका छन् । अमेरिकाका दुई ठूला भूराजनीतिक प्रतिद्वन्द्वी चीन र रुस डलरको प्रभुत्वलाई सन्तुलनमा राख्न चाहन्छन् । रुसले रेन्मिन्बीलाई आफ्नो विदेशी विनिमय सञ्चिति, वैदेशिक व्यापार र केही बैंकिङ सेवामा मुख्य मुद्राका रूपमा अपनाएको छ । पश्चिमी प्रतिबन्धको सामना गर्न ऊ चीनतर्फ अग्रसर भएको छ । भर्खरै भारतले रुसलगायत थुप्रै देशसँगको व्यापारमा भारुको भुक्तानी संयन्त्र ल्याउने घोषणा गरेको छ । सन् २०२२ मा विश्वव्यापी विदेशी मुद्रा सञ्चितिमा डलरको हिस्सा ५५ प्रतिशत रहेको थियो । यसले वासिङटनलाई अतुलनीय आर्थिक र राजनीतिक शक्ति प्रदान गरेको छ । विश्व डिग्लोबलाइज भइरहेको संकेत देखिए पनि अमेरिकी डलरले लामो समयदेखि विश्वबजारमा महŒवपूर्ण भूमिका खेलिरहेको छ र यो कायम नै रहनेछ ।

घरेलु आर्थिक परिदृश्य : चुनौती र अवसर
नेपाल सरकारले आगामी आर्थिक वर्ष ०८०/८१ मा ६ प्रतिशतको वृद्धि प्रक्षेपण गरेको छ । गत आर्थिक वर्षमा नेपालको वृद्धिदर ५.८४ प्रतिशत थियो । विश्व बैंक र एसियाली विकास बैंक दुवैले सन २०२३ का लागि नेपालको आर्थिक वृद्धिदर ४.१ प्रतिशतमा संशोधन गरेका छन् । नेपालको प्रमुख आर्थिक परिसूचकमा केही सुधार आएको छ । यसले वित्तीय घाटालाई बिस्तारै घटाउँदै लगेको छ । जिडिपीमा कृषिको योगदान एकतिहाइबाट घटेर २२–२३ प्रतिशतमा पुगेको छ भने सेवा क्षेत्रको अर्थतन्त्रमा ६१ प्रतिशत र उद्योगको योगदान १३ प्रतिशत छ । औद्योगिक क्षेत्र सुस्त हुनुको मुख्य कारण निर्माण क्षेत्रको कमजोर वृद्धि नै हो । चालू आर्थिक वर्षको पहिलो त्रैमासमा मुलुकको कुल गार्हस्थ्य उत्पादनमा झन्डै सात प्रतिशत योगदान दिने निर्माण क्षेत्र २४ प्रतिशतले ऋणात्मक भएको केन्द्रीय तथ्यांक विभागले जनाएको छ । निर्माण क्षेत्रले विभिन्न समस्या भोगिरहेको छ । निर्माण सामग्रीको मूल्यमा उल्लेखनीय वृद्धि भएको छ ।

मुद्रास्फीति पनि उच्च रहने अनुमान गरिएको छ । मौद्रिक नीतिले मुद्रास्फीति सात प्रतिशतभित्रै सीमित लक्ष्य राखे पनि त्यो लक्ष्यभन्दा माथि नै छ । उपभोक्ता मूल्यस्फीति गत वर्षको ६.२४ प्रतिशतको तुलनामा सन २०२३ को फेब्रुअरीमा ७.८८ प्रतिशत रहेको छ । रुस–युक्रेन युद्धको असर नेपालजस्तो आयातमुखी अर्थतन्त्रमा बढी परेको छ । त्यसैले राष्ट्र बैंकले माग घटाउन ब्याजदर बढायो । बढ्दो ब्याज र घट्दो मागको गुणात्मक असरले बैंकको असुलीमै मार पर्न गयो । नीतिगत निर्णयले अन्योल बढ्नुका साथै व्यापारमा पनि कमी आएको देखिन्छ ।

आयात–निर्यातका साथै समग्र व्यापार घाटा कम भएको छ । चालू आर्थिक वर्षको पहिलो सात महिनामा व्यापार घाटा १८.७ प्रतिशतले घटेको देखिन्छ । आयात प्रतिबन्ध र सुस्त वृद्धिले पहिलो अर्धवार्षिकमा राजस्वमा नकारात्मक योगदान दिएको छ । २०२१/२२ मा लगाइएको आयात प्रतिबन्ध (जुन २०२२/२३ मा हटाइयो) ले चालू खाता घाटा कम गर्न र विदेशी विनिमय सञ्चितिलाई स्थिर राख्न त मद्दत ग¥यो । तर, यस नीतिको अनपेक्षित परिणामस्वरूप वित्तीय राजस्वमा ठूलो गिरावट आयो । २०२२/२३ को पहिलो ६ महिनामा आयात घट्दा वृद्धि सुस्तियो । यसबीच, रेमिट्यान्स आम्दानी २७.५ प्रतिशतले बढेको छ, जसले बाह्य क्षेत्रलाई स्थिर बनाउन मद्दत गरेको छ । पछिल्लो समय नेपालले मासिक एक खर्बभन्दा बढी रेमिट्यान्स भिœयाइरहेको छ । वैदेशिक रोजगारीमा जाने कामदारको संख्या बढेसँगै रेमिट्यान्स बढ्ने अपेक्षा गरिएको छ ।

पर्यटक आगमन पनि कोभिडपूर्वको स्तरमा पुग्न थालेको छ । यस वर्ष निजी क्षेत्रको आम्दानी घटेको र कर्पाेरेट कर पनि घट्दै गएकाले राजस्व बढाउन चुनौतीपूर्ण छ । यस वर्ष आयातबाट राजस्व बढ्ने कुनै संकेत छैन । नेपालको वित्तीय सुशासन निजी र सार्वजनिक दुवै क्षेत्रमा कमजोर भएको छ । देशको व्यापार घाटा बढ्दै गएको अवस्थामा बैंकिङ क्षेत्रको लगानी अनुत्पादक क्षेत्रमा गरिए देशले सोचेजस्तो आर्थिक प्रगति गर्न सक्दैन ।

आर्थिक जटिलता र महामारीका कारण हालै नेपालको सरकारी साधारण खर्च राजस्व आर्जन क्षमताभन्दा छिटो बढेको छ । नेपालले चालू आर्थिक वर्षमा निकै ठूलो राजस्व अभावको सामना गरिरहेको छ । अर्थ मन्त्रालय र महालेखानियन्त्रक कार्यालयका अनुसार चालू आर्थिक वर्षको पहिलो सात महिना (२०२२ को मध्यदेखि २०२३ मार्चसम्म)मा राजस्व परिचालन लक्ष्यको ४० प्रतिशत मात्रै रहेको छ । आव २०१६/१७ मा सार्वजनिक ऋण जिडिपीको २५ प्रतिशत थियो भने २०१९/२० मा उल्लेखनीय सार्वजनिक ऋण वृद्धिका लागि कोभिड महामारीको प्रभाव र त्योसँग जुझ्न अपनाइएका प्रक्रिया जिम्मेवार छन् । ०२०/२१ मा नेपालको ऋण जिडिपी अनुपात ३९ प्रतिशत पुग्यो ।

राजस्व आम्दानी घट्दा नेपाल सरकारलाई ऋण तिर्न र नयाँ ऋण लिन कठिन भएको छ । वैदेशिक सहायता अनुदान घटिरहेको अवस्था छ । आइएमएफले नेपालका लागि विस्तारित ऋण सुविधाअन्तर्गत ३९ करोड ५९ लाख डलर स्वीकृत गरेको थियो । हालैमा आइएमएफको बोर्डले विस्तारित ऋण सुविधालाई औपचारिक रूपमा अनुमोदन गरेको छ । कोभिड– १९ महामारीबाट नेपालको दृढ पुनरुत्थान र दिगो विकासलाई प्रवद्र्धन गर्न विश्व बैंकले १५ करोड डलरको विकास नीति ऋण स्वीकृत गरेको थियो । ब्याजदरमा वृद्धि हुँदै गर्दा बढ्दो ऋणले राष्ट्रको सरकारी बजेटलाई असर गर्छ ।

विदेशी विनिमय सञ्चितिको आधारमा देशको ऋणको अवस्थालाई विश्लेषण गर्नु पनि महŒवपूर्ण हुन्छ । अमेरिकी डलरको तुलनामा नेपाली रुपैयाँ कमजोर हुँदा स्थानीय मुद्रामा नेपालको ऋण दायित्व बढेको छ । अपर्याप्त आन्तरिक स्रोत परिचालन, अत्यधिक वित्तीय घाटा, निर्यात–आयात असन्तुलन, राजस्व र खर्चको अन्तरका कारण वैदेशिक ऋण थप बढेको हो । 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 आउन सकेको छैन । कुल सार्वजनिक ऋणराशि र ब्याजमा वृद्धि भएको छ । अमेरिकी डलरको तुलनामा नेपाली रुपैयाँको अवमूल्यनले वैदेशिक ऋण महँगो साबित हुनेछ ।

नेपालले विदेशी मुद्रा सञ्चिति घट्न नदिन विलासिताका सामानको आयातमा प्रतिबन्ध लगाउनेजस्ता विभिन्न उपाय पनि अपनायो । विदेशी मुद्रा सञ्चिति बढेपछि प्रतिबन्ध हटाएको छ । अमेरिकी डलरको सट्टा भारत–बंगलादेशको व्यापारमा भारतीय रुपैयाँको प्रयोग परीक्षणको चरणमा छ । केही विषयमा द्विपक्षीय निर्णय गरेपछि मात्रै दुवै देशमा रुपैयाँको कारोबार सुरु होला । भारत नेपालको ठूलो व्यापारिक साझेदार हो र यो नीतिबाट नेपालले पनि ठूलो राहत पाउनेछ । यसले नेपाली मुद्राको अवमूल्यन कम बनाउन मद्दत गर्न सक्छ ।

निराशाजनक पक्ष के भने अर्थ मन्त्रालयले जारी गरेको विवरणअनुसार पछिल्लो सात महिनामा ८५ अर्ब ६० करोडभन्दा बढी बजेट सिद्धान्तविपरीत परिचालन भएको छ । राष्ट्रको सार्वजनिक ऋण बढ्ने क्रममा रहेको अवस्थामा सिद्धान्तविपरीत बजेट परिचालन गर्नु कत्ति जायज हुन्छ ? यसको जवाफ देश विकास गर्छु भनेर चुनिई आएका जिम्मेवार जनप्रतिनिधिले संसद्बाट जनतालाई पारदर्शी र जवाफदेही भएर अवगत गराउनुपर्छ ।

नेपालको प्रत्यक्ष वैदेशिक लगानी (एफडिआई) जिडिपीको ०.५ प्रतिशत छ, जुन दक्षिण एसियामा सबैभन्दा कम हो । एफडिआई थ्रेसहोल्ड एनपिआर दुई करोडमा घटाउँदा एफडिआईको प्रवाहमा थप कमी आउनेछ । पुँजी प्रवाहमा प्रतिबन्धले जिडिपीमा नकारात्मक प्रभाव पार्न सक्छ । सरकारले लामो समयदेखि थाती रहेको एफडिआईको सुधार गर्नुपर्छ । नियामक स्वीकृति प्रक्रियालाई सरल बनाउदाँ विदेशी मुद्रा प्रवाह बढ्नेछ । पुँजी र प्रविधिको आप्रवाहलाई प्रोत्साहित गर्नेछ ।

मौद्रिक नीतिले बैंकिङ र निजी क्षेत्रलाई वर्तमान वातावरणमा ऋण प्रयोग गर्दा बढी सावधानी र जवाफदेहिता अपनाउन निर्देशन दिनुपर्छ । तीन दशकसम्म कर्जा वृद्धि उच्च भए पनि आर्थिक वृद्धिदर ४.४ प्रतिशत मात्रै रह्यो । यसले हाम्रो कर्जा वृद्धि नीतिले आर्थिक वृद्धिमा सकारात्मक प्रभाव पार्न नसकेको देखाउँछ । आगामी दशकमा आर्थिक वृद्धिलाई प्रत्यक्ष रूपमा सहयोग गर्ने क्षेत्रमा ऋण प्रवाह केन्द्रित हुनुपर्छ । कर्जाको वृद्धि पनि निक्षेप वृद्धिसँग मिल्दो हुनुपर्छ । बैंकको चर्काे ब्याजविरुद्ध आन्दोलन चल्न थालेको छ र मिटरब्याजपीडित काठमाडौंमै आएर धर्ना दिने स्थिति राम्रो संकेत होइन ।

आइएमएफले नेपाल राष्ट्र बैंकले दिएको कर्जाको गुणस्तर शंकास्पद भएकाले देशका केही ठूला वाणिज्य बैंकलाई अन्तर्राष्ट्रिय लेखापरीक्षण संस्थाबाट लेखापरीक्षण गराउन आग्रह गरेको छ । कागजमा नेपालका बैंक तथा वित्तीय संस्थाको निष्क्रिय कर्जा (एनपिएल) अनुपात सहज छ । पुस मसान्तसम्ममा नेपाली बैंक तथा वित्तीय संस्थाको औसत निष्क्रिय कर्जा अनुपात २.७३ प्रतिशत मात्र रहेको केन्द्रीय बैंकले जनाएको छ । क, ख र ग वर्गका बैंक तथा वित्तीय संस्थामध्ये वित्त कम्पनीको खराब कर्जा (७.८२ प्रतिशत) अनुपात सबैभन्दा धेरै रहेको छ । वाणिज्य बैंक र विकास बैंकको खराब कर्जा अनुपात क्रमशः २.४९ र २.८२ प्रतिशत रहेको छ । आइएमएफले बैंक तथा वित्तीय संस्थाको वित्तीय स्वास्थ्यको वास्तविक तस्बिर जाँच्न गरेको पहल एकदम ठीक हो ।

नेपाल एउटा यस्तो राष्ट्र हो, जसलाई संरचनात्मक परिवर्तनको नितान्त आवश्यकता छ । समस्या मौलिक भएकाले संरचनात्मक सुधार नै छोटो र दीर्घकालीन जवाफ खोज्ने एक मात्र उपाय हो । भुक्तानी सन्तुलन कायम गरी बाह्य क्षेत्रमाथिको दबाब कम गर्न ऋण विस्तार र क्षेत्रगत वितरणको व्यवस्थापन, अत्यधिक आयात घटाउने र औपचारिक माध्यमबाट रेमिट्यान्स आप्रवाहमा सुधार गर्न आवश्यक छ । नयाँ जनगणनाअनुसार १५ देखि ५९ वर्षसम्मको सक्रिय उमेर समूह बढेको छ जुन कुल जनसंख्याको ६१.९६ प्रतिशत रहेको छ । जनसांख्यिक लाभांश पूर्ण रूपमा प्राप्त गर्न नेपाली युवाको सीपमा लगानी आवश्यक छ । हामीले नेपालको श्रमशक्तिलाई कृषि र गैरकृषि क्षेत्रबीच सन्तुलन कायम गर्दै उत्पादनशील क्षेत्रमा कसरी परिचालन गर्ने ? यो अहिलेको ज्वलन्त प्रश्न हो । विशेषगरी आर्थिक रूपमा सक्रिय जनसंख्यालाई रोजगारीको ग्यारेन्टी सरकारहरूको मूल मन्त्र हुनुपर्छ । रोजगारीको ग्यारेन्टी भनेको अर्थतन्त्रको उत्पादनशील क्षेत्रमा रोजगारी प्रवद्र्धन गर्न सरकारले अपनाउन सक्ने संरचनात्मक स्थिरता दिने वित्तीय नीति हो । नेपाली श्रम बजारले धेरै वर्षदेखि उच्च अनैच्छिक बेरोजगारी सामना गरिरहेको छ, जसलाई कोभिड– १९ महामारीले निस्सन्देह बढाएको छ ।

सरकारले यो वर्ष कर छली रोक्न र आफ्नो राजस्वको आधारलाई फराकिलो बनाउन संघर्ष गर्नुपर्नेछ  । अपेक्षितभन्दा उच्च मुद्रास्फीतिले घरायसी क्रयशक्ति घटाउने र आर्थिक वृद्धि घट्ने अनुमान गरिएको छ । नयाँ अर्थमन्त्रीले वित्तीय र मौद्रिक नीतिलाई ‘सिंक्रोनाइज’ गर्दै उत्पादनशील क्षेत्रमा लगानी बढाउन तरलता अभावलाई कम गर्नुपर्छ । व्यापार र प्रत्यक्ष वैदेशिक लगानीलाई प्रोत्साहन गर्ने वातावरण बनाउनुपर्छ । वित्तीय क्षेत्रको वृद्धि, मानव पुँजी निर्माण र सुशासन अभिवृद्धिमार्फत 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 उत्पादक क्षेत्रमा लगानी गरेर दिगो अर्थतन्त्र निर्माण गर्नुपर्छ । यसका लागि लामो अवधि र न्यून ब्याजदरका ऋणबाट फाइदा उठाउनुपर्छ ।

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Women’s Economic Participation in Nepal: Insights from Nepal’s 2021 Census

– BIJAY Khadka

In Nepal, the role of women in the economy has undergone a significant transformation in the past four decades. Census data from different years shows that the participation of women in the labor force has increased and the gender gap in labor force participation has decreased.

According to the most recent census of 2021, 72 percent of men over the age of ten are economically active, which means that they were either employed or seeking employment. The figure, on the other hand,  stands at 60.4 percent for women. While the gender gap in economic activity is persistent, results from the previous censuses show that the economic participation of women has undergone a significant increase over time. Between 1971 and 2021, the percentage of the female population over the age of ten who are economically active has increased from 29.2 to 60.4 percent.

Source: Nepal Economic Census 2018 and National Census 2021

One of the major reasons for the increase in women’s economic activity in Nepal is education. Over the years, there has been a significant improvement in women’s education in the country. In 1981, only 9.15 percent of Nepali women were literate, which increased to 34.8 percent in 2001 and further to 48.8 percent in 2011. It now stands at  69.4 percent in 2021. The increase in literacy rates has resulted in more women joining the labor force.

Another reason for the increase in women’s economic activity is the growth of the service sector in Nepal. According to the 2021 Census, the service sector has become the second largest employer for females in the country with approximately 309,944 females employed following agriculture, forestry & fishery.  The service sector includes jobs in fields such as hospitality, tourism, healthcare, education, and information technology. There has hence been the creation of additional employment opportunities across varying skills making them more accessible to women.

There is still a big difference between men and women when it comes to jobs. Only 24.5 percent of employers are female, out of the total employees 36.2 percent of them were females. Females make up less than one-third of government jobs. But in financial corporations, around  44.9 percent of the workers are female. Of those that participated in household work as an economic activity, 51.0 percent were females.

The census has also considered work that is not typically considered economic activities. Female involvement is found to be significantly higher in such activities. For instance, of the population involved in family care, 77.4 percent were females. Likewise, 87.4 percent of females who were not economically active during the 12 months preceding the survey, cited household chores as the main reason.

Despite the increase in women’s economic activity, there are still significant barriers to their participation in the labor force. One of the primary barriers is social norms and cultural expectations. Women in Nepal are still expected to prioritise their household responsibilities and care work over their professional pursuits. This expectation often makes it challenging for women to pursue their careers.

Furthermore, there are still significant barriers to women’s education in Nepal, particularly in rural areas. They are often expected to drop out of school early to help with household chores, and there are inadequate resources to support their education. Out of total “female students” graduates that completed graduation level or equivalent only 41.4 percent were “from rural municipalities, whereas 29.8 percent of females reported having completed postgraduate or equivalent from the rural municipalities.

In conclusion, the census data from the past four decades indicates that women’s economic activity in Nepal has increased significantly. However, the gender gap in labor force participation continues to persist. To achieve gender equality in the workforce, it is crucial to address the barriers to women’s education and employment, including social norms and cultural expectations. Empowering women through education and skills development can result in significant improvements in women’s economic participation and their contribution to the country’s economic growth.

This blog is a part of NIPoRe’s blog series on Women’s History Month 2023

The Explainer - NIPoRe Blog

Trail Bridge and Women Empowerment


Trail bridges affect the mobility and socioeconomic conditions of Nepalis, most significantly across the country’s rural areas. Currently, there are over 7,500 trail bridges in Nepal benefitting approximately 14 million people, almost half of the country’s entire population.

As per some analysis, Nepal still needs 2,400 new trail bridges to ensure that all citizens have quick and easy access to basic services like education, health, and markets within an hour’s detour. Post Bridge Building Assessments 2015 reveals that women predominantly use the bridges for household tasks, including gathering fuelwood and fodder. But, there have been delays in the construction process of trail bridges owing to rugged terrain, bureaucratic impediments, and limited financial and technical resources. This affects the lives of many Nepalis, particularly of the women who live across the country’s rural parts. It leads to a disproportionate impact on women, limiting their ability to access essential services, economic opportunities, and safety. Nepali women still lag behind the rest of the countrymen in terms of socioeconomic growth and human development aspects. This issue needs more attention from the key stakeholders, including the Government of Nepal, the private sector, development partners, media, and civil society among others.

In one of NIPoRe’s ongoing projects, we have been working with our partners and researchers to assess the socioeconomic impacts of trail bridges on the lives of local communities across 77 districts of Nepal. Being a part of the research team, I had an opportunity to witness the struggles and challenges that women in Nepal’s rural areas face on daily basis. For example, during my field visit to various remote areas across some of the districts situated across all three geographic areas (Terai, Hill, and Mountain), I could see the rural women carrying heavy loads on their backs along with their kids while crossing rivers and walking along unsafe modes of transportation (phadkey).

During the focus group discussions (FGDs), the women participants shared their experiences of how delays in the construction of a trail bridge impact their lives and limit access to essential services, markets, education, healthcare, and social mobility. For example, women expressed facing challenges in accessing markets and ward offices, which have severely limited their ability to take advantage of all available opportunities. In addition, due to the delays, they were forced to remain absent from major programs and training which mostly have been held on the other side of the rivers.  On top of that, women are obliged to take a detour of about two hours to reach another forest to collect fodders and fuelwood during the monsoon season.

The lack of trail bridges has also limited women’s easy access to locally available healthcare services. A member of a women’s group (Aama Samuha) from Sabhapokhari Rural Municipality of Sankhuwasabha District shared that, pregnant women walk long distances or rely on unsafe modes of transportation (phadkey) to reach the nearest health post, leading to numerous complications during pregnancy and childbirth. 

The FGDs with the local health management committee (HMC) reiterated that the dangerous river crossing posed difficulties for female community health volunteers (FCHVs) administering important health services across Nepal’s villages such as vaccination programs, family planning, and health education. Women’s stories like these are relatable for most communities across rural parts of the country.

In the meantime, these voices are from areas where the construction of at least one trail bridge has started but are yet to be completed. Despite the difficulties that these women face (due to the absence of a bridge) they are hopeful and eagerly anticipating the construction’s completion. They believe completion of construction would bring positive changes to their lives and the whole community.

Various studies show that the trail bridge construction provides women with economic opportunities through wage labor. Almost one-third of the individuals participating in trail bridge construction are women. It improved access to healthcare, markets, and jobs once the trail bridge is completed. Moreover, women are involved in planning and decision-making for trail bridge construction. At least 50% women representation is mandatory in the user committee and at least one woman should be in a leadership position (i.e., as committee chair, secretary, or treasurer). Several case studies demonstrate how the trail bridge program is empowering women’s full participation and leadership. Hence, prioritizing the construction of these trail bridges on time can go a long way in mitigating the negative impact on the well-being and livelihoods of rural women in Nepal.

This blog is a part of NIPoRe’s blog series on Women’s History Month 2023.

OP-EDs and Columns

Organised Street Vending


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

On January 10, 2023, Kathmandu Metropolitan City (KMC) announced that it would be illegal to conduct informal businesses, such as hawking and vending, on the streets of Kathmandu. KMC will now be able to seize products from street vendors if caught. The decision came after years of conflict between KMC and street vendors, with the city attempting to remove street vendors while workers resisted. Under former KMC Mayor Bidya Sundar Shakya, street vending was restricted in inner city areas, including Indrawchowk, New Road, and Sundhara, and over 100 police officers were involved in detaining several vendors. Shakya’s successor, Balendra Shah, has continued these restrictions more strictly since his election in May 2022, with KMC aiming to clear city pavements and regularly dispatching metropolis police who seize or destroy goods and intimidate street workers. Their treatment of street vendors has ranged from hostility to brutality.

To provide further context, Balendra Shah has a civil engineering background and a capitalist vision for development, prioritising wider roads and bigger buildings. The ban on street vending aims to clear the pavements and widen the roads for pedestrians, citing sustainable urban management. However, this short-sighted approach, although the intention may be good, harms working-class individuals, especially women and those from low-income families. Over 20,000 street vendors now face loss of employment and increased risk of poverty. Even though street businesses contribute to the economy, providing affordable goods, and being integral to the urban landscape, they have been shunned for decades. In contrast, countries like Thailand and India have enacted laws to manage traffic and protect street vendors simultaneously. The KMC should follow suit by drawing on policies from these countries to balance the needs of street vendors and pedestrians.

The Lore of Street Vending
The vibrant city life of old Kathmandu, characterised by street vendors selling fruits and vegetables and farmers carrying their kharpans – a pair of baskets slung on a pole and carried across the shoulders; has been immortalised in Newa folklore, including the story of ‘Dhon Cholecha.’ Street vending is an age-old profession that has faced prejudice for generations. However, street vendors contribute to the economy of cities, provide essential goods to locals, and offer accessible trade opportunities for working-class individuals.

Historically, street vendors have faced negative perceptions and prejudices. For example, in 1933, the city council of Amsterdam restricted street vendors after years of disdain towards them. Street traders were viewed as unhygienic people who distorted the aesthetics of the city. They were accused of creating unfair competition for formal businesses. These vendors, often from poor and marginalised groups, however, added value to Amsterdam by providing affordable goods but were boycotted from joining guilds with other formal businesses. This stigma against street vendors was also prevalent in other parts of the world, as Edward Said, the author of Orientalism, famously critiqued Westerners who travelled to the Middle East in the 1800s and viewed vendors selling goods as barbaric and uncivilised.

Despite the prevalent contempt towards street vending globally, it is undeniably core to urban life. Vending provides jobs for working-class individuals, affordable goods to locals and economic benefits to the state. Firstly, the informal sector is characterised by the ease of entry into the trade and the small-scale nature of the business where skills from formal settings are not a requirement. Naturally, this becomes accessible for many, especially if one lacks formal education and does not have a lot of seed capital. As for the locals, they can receive affordable and fresh goods from street vendors. Such convenience is often viewed as a perk of city life. Furthermore, people engaging in the profession generate a sizable income as well. Bagmati Province alone makes an annual average profit per engaged person of Rs 103,305 from informal sectors. This profit recirculates in the economy when vendors buy supplies from the market. Hence, indefinitely banning street traders negatively affects several stakeholders.

The Implications
The ban primarily affects vendors who are often daily wage earners. The KMC has not proposed any alternative plans to provide employment for the workers following the ban. Over 20,000 individuals, especially women involved in the trade, have been impacted. Vendors either have to operate in fear or are rendered unemployed for the time being. Some of their testimonies are well-documented by major publications. Moreover, 90.5% of the female workforce in Nepal are engaged in informal sectors, compared to 81.1% of working men, so they are affected disproportionately.

When it comes to employability in the formal sector, it’s important to note that many people don’t engage in it due to the lack of opportunities available. In fact, 84.6% of Nepalis are employed informally across all sectors. Therefore, attempting to completely eradicate street vending, a system that many rely on, is futile. Street vending provides job opportunities and helps to alleviate poverty. While the ban may not entirely prevent people from working in this profession, it will likely lead to an increase in police brutality towards vendors and deprive people of their livelihoods. Article 6 of the International Covenant on Economic, Social, and Cultural Rights (ICESCR), a UN treaty ratified by Nepal, outlines the government’s responsibility to create job opportunities through technical and vocational support. As such, the KMC’s decision to neither allow informal jobs nor provide job alternatives in the formal sector is a violation of the ICESCR treaty.

Way Forward
Given the importance of street vending for working-class individuals and its cultural significance in a metropolis like Kathmandu, it should not be completely eliminated. While ensuring pedestrian safety and comfort is important, the current law, if implemented, would lead to impoverishment for many working-class families. Instead, the focus should be on managing traffic between pedestrians and vendors. Countries like Thailand and India have laws that regulate and protect street vendors. Thailand’s Public Cleanliness and Orderliness Act B.E. 2535 (1992) allows for vendors in designated areas, while Bangkok has guidelines for street vending that prioritise hygiene and cleanliness. India’s Street Vendors Bill (2009) requires a town vending committee, which includes street vendors and women. This committee has a registration process and regulations on vending hours and locations. The execution and success of these laws are debatable, but the KMC should learn from these efforts to incorporate street vending in Kathmandu. Specific locations and hours can be designated for vendors, and hygiene regulations can be developed in collaboration with street vendors. The KMC should also listen to the concerns of street vendors and work towards a system that benefits both vendors and pedestrians. At the very least, the city should show empathy towards street workers. 

OP-EDs and Columns

सार्वजनिक ऋण परिचालनमा श्रीलंकाबाट सिक्नुपर्ने पाठ

– 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 ।

OP-EDs and Columns

Conceptualising a New Trade Strategy


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.

NCIThe Explainer - NIPoRe Blog

Needs for Modernization of Nepal’s Agriculture Sector



Nepal, since time immemorial, has been regarded as an agricultural country. From most politicians’ speeches to our class textbooks, our idea of the Nepali economy has revolved around agriculture. Historically, that was true; in the late 1980s, it was the livelihood for more than 90 percent of the population – although only approximately 20 percent of the total land area was cultivable – and accounted for, on average, about 60 percent of the GDP and approximately 75 percent of exports – the numbers of drastically reduced as of today.

Evolving Trends

While some reports still claim that more than 66 percent of the total population is still engaged in agriculture, the contribution to GDP is declining each year compared to other key non-agriculture sectors. In the last ten years alone, it has declined from 32.7 percent of the total GDP to 23.9 percent in the previous fiscal year, FY 2021/22. Meanwhile, the contribution of the service sector has increased immensely, reaching 61.8 percent in the last fiscal year.

If one travels across Nepal’s villages, this decline in agricultural sector becomes even obvious. Most arable lands in the country remain empty, with workers traveling to foreign countries in search of better employment opportunities. The annual increase in remittances sent back reinforces this new economic reality. The villages are left chiefly with young kids and the older people who depend on remittances to sustain their livelihoods. Meanwhile, agriculture is still being done largely for sustenance rather than for commercial purposes, painting a bleak picture of the country’s agricultural endeavors. It is not remiss that out of our top five exports in the last fiscal year, namely soybean oil, palm oil, carpets, woven fabrics, and cardamom, only cardamom is commercially farmed, with other top exports being imported and exported again, with little value-added within Nepal. Interestingly, cardamom only contributes 2.4 percent of our total export value, while our top export, soybean oil, contributes 24.1 percent.

Some Experiences from the Field

This is not to say that efforts are not being made or commercial farming is not being done. Local levels were primarily found to be proactive in this regard as well. In particular, our interviews (done as a part of NIPoRe-ALIGN research collaboration) with the local government chairs and mayors showed that many local levels had focused on agriculture to raise its population’s economic standards. In the Sisne Rural Municipality of Salyan, for example, the local government had made efforts to separate different zones of the municipality into various agricultural sectors. The local government assigned different zones to plant different types of vegetables and fruits depending on land conditions and weather to increase productivity. The lands were found to be productive for fruits such as kiwi and oranges. Similarly, in Ichhyakamana Municipality of Chitwan, the local government brought a provision to distribute NPR 5 for each plant planted by the locals to encourage farming. Additionally, the local government also offered subsidies for buying cows or buffalos. Similar efforts by local governments can be seen throughout the country. Development partners and the federal government have also encouraged farming by regularly training farmers and distributing much-needed seeds and fertilizers.

However, efforts many times look to be wasted. Various issues come to light in conversations with agricultural experts who have worked as consultants in this field for decades. Experts whom we met during our field visits (of NIPoRe-ALIGN research collaboration works) claim that distributing only seeds without proper technical know-how of crop cycles, crop placements, and timely fertilizer inputs has led to smaller harvests with less domestic consumption and export market potential. The distributed seeds are of high quality, but inadequate understanding of timely fertilizing techniques leads to low-quality outputs that are not marketable. Farmers who have contributed many years to grow oranges, for example, then can harvest it only for two-three cycles before the trees stop bearing fruits. This leads to frustrations among the farmers, who then move on to look for better alternative opportunities in other sectors or migrate to foreign countries, as is the case in Nepal. Training for farmers also seems to be provided most of the time to fill quota numbers. Any attendee of most trainings gets monetary incentives to join in. This causes training recipients to join just because of the incentives rather than actually learning the necessary techniques helpful for them. 

Rooms for Improvements

What, then, must be done to change this? At the policy level, the government has been proactive in giving out subsidies and creating tariffs to promote Nepali agricultural products. However, in reality, an assessment seems necessary to analyze who the subsidies are going to and who benefits from these tariffs. Additionally, the government needs to proactively work with local farmers in breaking the syndicate systems that have been established to get farming output to the markets. Nepali news platforms are rife with intermediaries cheating farmers of their hard-earned money and paying them drops compared to what the goods are sold in the market for. Strict quality control mechanisms are also needed if we want to be export-oriented. Quality testing facilities must be made available in major production centers so farmers can access them easily. This will serve to ensure quality goods come to domestic as well as foreign consumers. Nepal also needs to identify what products are viable to be grown in different parts of the country and determine which products have a competitive advantage. Focusing on specific products and actively working on ensuring storage facilities, testing mechanisms, and meeting international standards for those will be easier for a developing country like Nepal. The government can expand the list of identified goods as we develop our agricultural ecosystem and set better product standards. The Nepal Trade Integration Strategy 2016 was a good idea in regard to this. However, it needs to be immediately and regularly updated, keeping in mind our international export market, the value of our products, and the capabilities of upscaling our farmers.

And lastly, a provincial agriculture and trade policy seems instantly necessary to coordinate local efforts. Unfortunately, the trade data of our country still has not been able to shift to the provinces levels. With us not knowing the origin of our export products, we only have a disaggregated idea of which province is better at growing which products. Historically, some products have been raised in certain areas of the country, like tea in the eastern region, but focusing on different products means production data at local levels is a must. This will help direct our limited resources to build specific infrastructure and facilities for particular regions to increase the country’s overall export. Negotiations and identification of export markets, meanwhile, are also vital. Nepal has two large markets as its neighbors that have relatively fewer quality controls than, for example, the European Union. This means our diplomatic focus on export negotiations can be with these two large markets while we continue to improve the quality of our products and look toward other markets.