Nefport 48 – Remittance Special

NEFPORT ISSUE 48 – MARCH 2022

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Nepal Factsheet 1

Province 1

2 Madhesh Province 3 Bagmati Province 4 Gandaki Province

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5 Lumbini Province 6 Karnali Province 7 Sudurpashchim Province

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KEY ECONOMIC INDICATORS GDP (Preliminary estimate for 2020/21)** GNI (PPP) ****

USD 35.5 billion USD 4,060

GDP growth rate (forecast)*** Inflation **

3.9% 5.65%

Gross Capital Formation (% of GDP) (2020/21)**

30.8%

Agriculture Sector *****

20.20%

HDI *

0.602

Industry Sector *****

19.60%

Rank *

142

Service Sector (2020) *****

* HDI figure from Human Development Report of the UNDP -2020 ** Based on NRB’s current Macroeconomic and Financial Situation of Nepal based on six months data of 2021-22 *** 2021/22 forecast based on World Bank Global Economic Prospects Report January 2022 **** 2020 figure based on World Bank Data ***** Based on Ministry of Finance Economic Survey 2020/21

60.2%

Contents NEPAL FACTSHEET 2 EDITORIAL 5

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GENERAL OVERVIEW 6 Political Overview

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International Economy

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2

MACROECONOMIC OVERVIEW

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SECTORAL REVIEW 27

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Agriculture and Livestock 28 Education 32 Energy and Environment 35 Health

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Infrastructure and Real Estate 45 Information and Communication Technology 46 Tourism 49

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MARKET REVIEW 51 Financial Market

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Capital Market 57

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SPECIAL SECTION: REMITTANCE SPECIAL 59 ENDNOTES 72

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Issue 48: March 2022 Publisher: Nepal Economic Forum Website: www.nepaleconomicforum.org P.O Box 7025, Krishna Galli, Lalitpur – 3 Nepal Phone: +977 1 554-8400 Email: info@nepaleconomicforum.org Contributors: Aarya Rijal Adhrit Shrestha Namuna Shrestha Nasala Maharjan Pragati Karki Sakshee Singh Sneha Shrestha Sugam Nanda Bajracharya External Contributors: Aarya Rijal, Fellow at Nepal Economic Forum Giuseppe Savino, Senior Distinguished Fellow at Nepal Economic Forum Nasala Maharjan, Aspiring Beed at Beed Management Suman Pokharel, Chief Executive Officer at IME Limited Design & Layout: Thuprai Solutions support@thuprai.com This issue of nefport takes into account news updates from 1st December 2021 to 15 March 2022.

The USD conversion rate for this issue is NPR 120.06 to a dollar, the quarterly average for this issue.

Reproduction is authorised provided the source is acknowledged.

The views and opinions expressed in the article/publication are those of the author(s) and do not necessarily reflect the official opinion of Nepal Economic Forum. Neither the organisation nor any person acting on their behalf may be held responsible for the use which may be made of the information contained therein.

Executive Board Members: Alpa B. Shakya Chandni Singh Shayasta Tuladhar Sudip Bhaju Sujeev Shakya Advisory Board: Arnico Panday Kul Chandra Gautam Mahendra Krishna Shrestha Prativa Pandey Shraddha Gautam Sneh Rajbhandari Senior Distinguished Fellows: Bibhakar Shakya Giuseppe Savino Suman Basnet Senior Fellows: Apekshya Shah Ashraya Dixit Diva Shrestha Mark Perrin

NEFPORT ISSUE 48 – MARCH 2022

Editorial Election hustles have begun in Nepal, as political parties prepare for the second local level elections since the country was declared a federal republic. With the conclusion of the general conventions of all the major political parties, the new leaderships have ramped up their activities for the local elections that are scheduled to be held on the 13th of May. Similarly, 19 new members were elected to the National Assembly in the elections held in January. Several ordinances were passed in this session of the lower house whereby the ratification of the MCC Compact Nepal garnered a high level of political and public attention with tensions running high as huge protests broke out on the streets. The compact was endorsed with an “interpretative declaration” attached to the agreement.

With the ongoing liquidity crunch and the local level elections, it has been a challenging quarter for the Nepali economy. Declining inflow of remittances, shortage of loanable funds in banks and financial institutions, and the inability to receive the pledged value of foreign assistance have strained the economy. The central bank has introduced measures such as allowing banks to raise their interest rates for a few months, importers are required to deposit 100% of the margin amount on import of selected products before applying for a letter of credit. Additionally, significant adjustments are being made in the rates of standing liquidity facility, repo and deposit collection.

These actions are expected to limit the outflow of foreign currency and are expected to ease the liquidity crunch. Similarly, the current account deficit in the first half of the current fiscal year is already higher than the whole of last fiscal year leading to a negative balance of payments and declining levels of foreign reserves.

External shocks to the economy, such as the ongoing Russia-Ukraine war will aggravate the current situation as the USD to NPR exchange rates are bound to increase and the inflation will soar as a result of rising oil prices. Both these factors will further deplete the foreign currency reserves of Nepal unless there is a steep increase in remittance inflows. Hence, this issue of nefport is focused on highlighting the importance of remittance to Nepal’s economy. It covers the trends and patterns that have developed over the years in the migration and remittance inflows. In addition, it covers the findings from one of the studies that Nepal Economic Forum is conducting on remittance. We would like to thank the contributors to our special section, Aarya Rijal, Giuseppe Savino, Nasala Maharjan, and Suman Pokharel for their valuable contributions to this edition of nefport.

We are pleased to let you know that after months in the works, we launched the new NEF logo, branding, and website last quarter. The new look of NEF is a step towards recalibrating and repackaging our core ideas, focus areas, and research. We are also continuously striving to recalibrate nefport and for this edition, we have added factsheets to each sector for our readers and redesigned the internal layout of nefport. We are delighted to let you know that we will be publishing the 50th issue of nefport on September 2022. If you have any suggestions or collaboration proposals for that, please feel free to reach out to us at info@nepaleconomicforum.org.

Sujeev Shakya Chair, Nepal Economic Forum

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General Overview

NEFPORT ISSUE 48 – MARCH 2022

Political Overview Nepali politics in the last quarter experienced monumental events. All the major political parties of Nepal concluded their general conventions and elected their new leadership. Similarly, the dates for the local level elections were announced by the government amidst pressure from the ruling parties to postpone the polls. Likewise, several ordinances were endorsed by the parliament despite obstructions from the main opposition Communist Party of Nepal- United Marxists Leninists (CPN-UML). Furthermore, after five years of being disputed, the Millennium Corporate Challenge (MCC) Nepal Compact was finally ratified through the parliament.

EXECUTIVE UPDATES Nepal continues to be listed among the corrupt nations Nepal has failed to make substantive progress in controlling corruption in the last year, according to Transparency International. The Corruption Perceptions Index released by the Transparency International on January 25, 2022, shows that Nepal’s position in the corruption index has not improved at all as it ranks 117th out of 180 countries. Nepal was in the same rank during the tenure of the erstwhile KP Sharma Oli’s government last year. While Nepal received 33 points out of 100, implying that corruption is rampant in Nepal.

Bhutan on the other hand, stands

as the least corrupt country in South Asia scoring 68 out of 100. India and the Maldives scored 40 points, securing the 84th and 85th positions respectively. Bangladesh with just 26 points stands at the 146th rank in the list becoming the most corrupt nation in the South Asian region.4 Nepal urges Russia and concerned parties to exercise restraint With Russia approaching Ukraine as part of its military operations on February 24, 2022, the Nepal Government urged the concerned parties to exercise maximum restraint so that the tensions do not escalate further. Issuing a statement, the Ministry of Foreign Affairs stated

FACTSHEET

Index

Rank

Score

Economic Freedom Index 2021

148

49.71

Fragile States Index 2021

51

82.22

Corruption Index 2022

117

333

that the Nepal Government had been closely following the developments in Ukraine. The statement highlighted that as a member of the United Nations, Nepal viewed that the principles of sovereignty and territorial integrity as enshrined in the United Nations Charter are sacrosanct and must be fully respected by all member states. It further opposed Russia's recognition of Ukraine's Donetsk and Luhansk regions as independent entities, stating that it was contrary to the provisions of the United Nations Charter.

Through the statement, Nepal also opposed any use of force against a sovereign country in any circumstance, and stated that it believed in a peaceful resolution of disputes through diplomacy and dialogue.5

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LEGISLATIVE UPDATES Lower House endorses ordinances amid the CPN-UML’s protest Despite obstructions from the CPN-UML, the House of Representatives (HoR) held a meeting on December 21, 2021. The meeting passed two ordinances, the 'Ordinance to Amend Some Acts Against Sexual Violence-2078' and the 'Ordinance to Amend Some Acts Related to Criminal Offenses and Criminal Procedure-2078'.

Likewise, on December 22, 2021, the ‘Nepal Police and Provincial Police (Operation, Supervision, and Coordination) (First Amendment) Ordinance 2078’, the ‘Acid and Other Hazardous Chemicals (Regulation) Ordinance 2078’, the ‘Social Security (First Amendment) ordinance 2078’ and the Railway Ordinance 2078’ were approved by majority.6 The MCC Compact was finally ratified by the parliament The House of Representatives on February 27, 2022, ratified the Millennium Challenge Corporation (MCC) Nepal Compact with a majority. The endorsement was possible after the CPN-Maoist Centre, the CPN-Unified Socialists, and the Janata Samajbadi Party (JSP), who were previously against the endorsement, decided to vote for the USD 500 million American grant agreement. The main opposition, CPN-UML refrained from participating in the voting.7 The MCC compact that was registered in the parliament in July 2019 was tabled for deliberations on February 20,

2022, amidst the hindrance created by the main opposition CPN-UML. Speaker Agni Sapkota, who had remained reluctant to allow the tabling, softened his position, following an agreement in the ruling alliance.8 While the CPN-Maoist Centre and CPN-Unified Socialist earlier stood against the ratification of the MCC agreement, they reached a deal on endorsing the compact with an “interpretative declaration” attached.

due on May 13, 2022.10 Although Chief Justice Rana had been under controversy for the past several months for his alleged involvement in the appointment of Gajendra Hamal as Minister of Industry, Commerce, and Supply, the ruling alliance refrained from taking any action, until now. Its impact on the stability of the Judiciary and the local elections is yet to be seen.

JUDICIARY UPDATES

CPN-UML forms Standing Committee and politburo and finalizes departmental chiefs

Impeachment motion registered against Chief Justice Rana As many as 98 lawmakers from the three ruling parties – the Nepali Congress, the CPNMaoist Centre, and the CPNUnified Socialist registered an impeachment motion against Chief Justice Cholendra SJB Rana in the Parliament Secretariat.

Support of 181 lawmakers in the 271-strong parliament is needed for the motion to get through.9 While the Nepal Bar Association has welcomed the impeachment motion, main opposition CPNUML has objected to the move, as it came at a time when the writ petition against Speaker Agni Sapkota filed by the CPNUML was scheduled to take place. The opposition has also accused the ruling alliance for trying to delay the local elections by creating judiciary instability.

The ruling party’s sudden move to file an impeachment motion against the Chief Justice, while numerous cases are pending at the Supreme Court has led many to believe that the move is targeted towards deferring the local elections which are

POLITICAL PARTIES UPDATES

The main opposition CPN-UML has constituted a 99-member politburo. A central committee meeting held on December 12, 2021, formed the politburo including 19 office bearers and 80 other leaders. Meanwhile, the same meeting also formed a 45-member standing committee including the 19 office bearers as proposed by Chair KP Sharma Oli. Ghanashyam Bhusal, Guru Baral, Devraj Ghimire, Bhim Acharya, Lal Babu Pandit, Khagaraj Adhikari, Kiran Gurung, Kashi Nath, Raghuji Panta, Bhanubhakta Dhakal, Mani Thapa, Sherdhan Rai, Krishna Gopal Shrestha, Agni Kharel, Prabhu Sah, Rajan Bhattarai, Sita Poudel, Brinda Pandey, Gorakh Bogati, Karna Bahadur Thapa, Rajendra Gautam, Tham Maya Thapa, Sher Bahadur Tamang, Shivamaya Tumbahanfe and Hikmat Karki were appointed as members of CPN-UML’s Standing Committee. Similarly, The CPN-UML also finalized the names of the party’s departmental heads during the two-day central committee. The party decided to appoint Pradeep Gyawali as the head of the School Departmental

NEFPORT ISSUE 48 – MARCH 2022

and Prithvi Subba Gurung as the head of the Publicity Department.

Likewise, Khagaraj Adhikari was appointed as the head of the Organizational Department and Yogesh Bhattarai as head of the Health and Population Department.

Ishwar Pokharel was made the Chief of Policy Research Academy.

Similarly, Yubaraj Gyawali was given the responsibility of coordinating local levels, provinces, and the federal center, Asta Laxmi Shakya, Ram Bahadur Thapa, Bishnu Poudel, Surendra Pandey, and Bishnu Rimal were given the responsibility of the Political Coordination Department, the National Security Department, the Party Organization Inspection Department, the Parliamentary Affairs Department, State Affairs Department, and the Accounts Department respectively. Bhishma Adhikari has been assigned the task of an Office Secretary. Among the office bearers, Chairman KP Sharma Oli and General Secretary Shankar Pokharel will look after the party.

Sher Bahadur Deuba re-elected as the Nepali Congress President Prime Minister Sher Bahadur Deuba was re-elected as the President of the Nepali Congress.

He defeated Dr. Shekhar Koirala by a margin of 878 votes in the second round of voting held on December 15, 2021. Deuba received 2,733 votes, while Koirala managed to secure just 1,855 votes. The second round of voting was held as none among the five candidates for the presidential position could secure more than 50% votes in the first round.

Deuba received the highest number of votes in the first round of voting as well but was unable

to secure the 51% requisite. Of the 4,743 voters, only 4,623 cast their votes in the second round.

Deuba registered a comfortable victory over Koirala after Prakash Man Singh, Bimalendra Nidhi, and Kalyan Gurung who contested for the party president post in the first round announced their support for him. Deuba is the only non-Koirala to become the party president of the Nepali Congress for a second term.

General convention of CPNMaoist Center concluded The eighth general convention of CPN- Maoist Centre concluded on January 2, 2022, electing 236 central members including 111 from the open category and 125 from the inclusive category, with Pushpa Kamal Dahal being unanimously re-elected as the party chairperson.11 The ruling coalition party had held only one general convention in 2013 after it joined the peace process, following the 2006 Comprehensive Peace Agreement.12 As many as 1,631 delegates from across the country, including 148 nominated by party Chairperson Dahal, participated in the convention that aimed to elect new leadership in addition to discussing the party ideology.

The representatives endorsed a political report “Nepali Path to Socialism in the 21st Century”, presented by Dahal. Likewise, the representatives also endorsed the names of the central committee members proposed by him during the convention.13 Subsequently, the central committee meeting of the Maoist Centre elected 15 office bearers with one chair, seven vice-chairs, one senior vicechair, one general secretary, one deputy general secretary, three

secretaries, and a treasurer. 14 Political parties protest against the tabling of the MCC agreement On February 20, 2022, the government tabled the MCC Nepal compact in the parliament for ratification amidst the continued obstructions from the main opposition, CPN-UML, as well as protests from the ruling CPNMaoist Center. Tensions were high as huge protests broke out on the streets, with the student wings of two coalition partners CPNMaoist Center and CPN-Unified Socialists clashing with the police.15 The Business Advisory Committee of the House decided to start the theoretical deliberations on the MCC agreement from February 24, but the House meeting was deferred until February 25 at the request of the government.

However, the House meeting was deferred once again until February 27, after the ruling coalition failed to decide on the endorsement of the MCC compact.16

ELECTION UPDATES National Assembly elections concluded The National Assembly Elections to elect 19 members of the upper house concluded on January 26, 2022. Voting for the 19 vacant posts of National Assembly members took place in eight polling stations and 14 centers in all seven provinces of the country from 9 AM to 3 PM. 43 candidates from 12 political parties filed their candidacy. The five ruling parties jointly contested for the National Assembly elections, with Nepali Congress contesting for six seats, and CPN-Maoist Centre and CPN-

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Unified Socialist for five seats each. Likewise, Janata Samajbadi Party (JSP) contested for two seats while Rastriya Janamorcha for one seat. The main opposition CPN-UML contested for all 19 positions. The candidates from the five-party ruling alliance scored a victory in 18 of the 19 seats while the CPN-UML won one seat in Province 1. The CPNUML continues to be the largest party in the National Assembly despite losing its seven seats in the National Assembly election.

Local elections to be held on 13 May 2022 The Cabinet, on February 7, 2022, decided to hold the local level elections across the country in a single phase on May 13, 2022. Before this, the Election Commission (EC) and the government agreed to

hold the polls on May 18. The ruling coalition was in favor of postponing the local elections by at least six months and holding elections for all three tiers of the government in a single go. However, widespread criticisms forced the five-party coalition to announce the polls for May 2022.18 Local level election preparations underway Election Commission (EC) has expedited preparations for the polls. The EC needs to finalize the voters’ list, manage equipment and materials, manage the registration of political parties, launch voter education programs, appoint election officers, establish election offices as well as implement the election code of conduct.19 According to the EC, 17.9 million voters have been estimated to cast their votes in the upcoming

elections and a projected 2.47 million voters have been added since the previous local level elections.20 The EC on February 17, 2022, called the parties registered with it to apply for their participation in the local elections. Additionally, the EC set a deadline for February 27 for all parties vying for the election on May 13. The commission has validated the six largest parties as “national parties” and has awarded them their electoral symbol. The other parties are to receive their election symbols after the commission ascertains the number of the parties participating in the local elections. Similarly, The EC has sought NPR 8.952 billion (USD 74.56 million) from the government to hold the local polls.

A total of NPR 8.14 billion (USD 67.80 million) was spent in the 2017 local elections.21

Outlook The indecision surrounding the ratification of the MCC Nepal compact by the parliament ultimately passed with its majority approval. Despite the CPN-Maoist Center and the CPNUnified Socialists advocating against the endorsement of the US grant, and igniting violent protests against the grant, the two ruling parties were obligated to give in. Had the two parties decided not to support the ratification, the coalition would have broken. With the local elections due next quarter and the federal elections due late this year, the Maoists and the Unified Socialists may need the alliance to stay intact for them to have a chance in securing wins in the upcoming elections. It may be difficult for CPN-Maoist Center, and CPN-Unified Socialists to garner support from the public since the public opinion of the two parties might have been tarnished due to their stances on the MCC issue. Following the MCC controversy, the political parties will now focus on the upcoming local polls. The continuous obstructions from the main opposition CPN-UML and the indifference of the major political parties have made the parliament inactive. Since the political parties would most likely be busy preparing for the local elections, it would likely still be ineffective in the next quarter.

NEFPORT ISSUE 48 – MARCH 2022

International Economy

FACTSHEET Growth Forecast

4.4%22 Food Index Price

The global economy has been slowly recovering from COVID-19 with countries like USA and Europe slowly easing restrictions and learning to live with the virus. As countries are opening borders and lifting restrictions, World Travel and Tourism Council (WTTC) has predicted that global travel and tourism sector would recover this year. Moreover, United Nations Conference on Trade and Development (UNCTAD) has predicted the global trade to recover to the pre- pandemic level. Despite the global recovery of tourism and trade sector the threats to global economic still looms with persisting supply chain crisis, rise fin food prices and the ongoing conflict between Russia and Ukraine leading to increase energy prices subsequently causing rise in global inflation This can lead to further reduction of global economic growth forecast of International Monetary Fund (IMF) from 4.4%.

GLOBAL EVENTS UPDATES Omicron's threat to the global economy runs through China Omicron, the new COVID-19 variant has led to an increase in cases. The usual flow of the business has been interrupted as infected working people needed medical treatment and required to quarantine. Although the direct impact of the variant has been observed to be short-lived and meek compared to the other variants. Even though the threats of the pandemic are still looming, the USA and many countries in Europe have eased restrictions and are learning to live with the virus.24 Nevertheless, China is still following

its zero-COVID-19 strategy which requires rigid restrictions every time an outbreak occurs.25 This strategy will have a direct impact on the ongoing global supply crisis, as China is the leading supplier of intermediate goods. World Trade Organization (WTO) estimates that China sold intermediate goods worth USD 382 billion in the third quarter of 2021.26 Thus, the implementation of China's zero-COVID strategy would further put pressure on the supply chains causing a dent in the global economy.

135.723

between Russia and Ukraine has directly impacted energy prices.27 Russia is the second-largest exporter of crude oil and the world’s top producer of natural gas. The conflict has led to a rise in the oil prices. The UK and several western allies have threatened sanctions on Russia after it recognized the breakaway rebel region in Ukraine’s east as independent states. Such sanctions would bring a fall in Russia’s supply of crude or natural gas that can impact the global economy.28 Not only would the conflict impact the price of gas and oil, it would also create a hindrance to the flow of grains out of the Black Sea region, as four of the major exporters of grains – Ukraine, Russia, Kazakhstan, and Romania use ports in the Black Sea to ship grains. Sanctions or military actions taken by the western allies can directly impact the prices of food. Ukraine was projected to be the world’s third-largest exporter of corn in 2021/22, and fourthlargest wheat exporter. Similarly, Russia is the world’s top wheat exporter any action taken against Russia will fuel food inflation.29 World food prices rising

Impact of Russia- Ukraine conflict on prices The

ongoing

border

tension

World food price has grown by 28% in 2021, and Food and Agriculture Organization (FAO) recorded food

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index price at 135.7 points, a record high in a decade.30 The likelihood of the stabilization of food prices is small due to factors like the rise in the cost of input price, uncertain climatic conditions, and ongoing pandemics. The input, such as fertilizers has witnessed a rise in prices due to an increase in the energy prices resulting in uncertainty over the yield prospects for next year’s harvest.

The climatic change that brought drought in South America and floods in Malaysia has disrupted the oilseed market.31 Furthermore, the Omicron variant has caused disruptions and delays in the supply of wheat harvest from the southern hemisphere. All these factors combined highlight that the chance of a stable market conditions in 2022 is uncertain.

Owing to this, the low-income nation that are heavily dependent on imports will be at higher risk of food inflation.

in reviving the local economy with the help of Digital Nomad Visas.

Digital nomad visa can help the global economy

Supply crunch fueling inflation risks

Global tourism contributes more than USD 1.1 trillion, which was heavily impacted by COVID-19.

Though the recovery has been slow, the easing of restrictions and with more people vaccinated, tourism has been improving. For a steady recovery of the industry, Digital Nomad Visa is the perfect solution. Digital Nomad visa is provided through exclusive programs which the governments have created that will permit the visitor to work remotely while living away from their country of permanent residence. Countries that rely heavily on tourism are gradually opening borders that is attracting more international visitors, who can potentially assist

The supply breakdown was triggered by the sharp rise in demand resulting from countries wanting to get their economies back to normal. The persisting restriction of pandemic interrupted activity which further disrupted the supply chain. The supply crunch has been causing a rise in prices and is hindering the recovery of the global economy. The supply chain breakdown has caused inflation and reduced household spending power which slows economic rebound, as warned by IMF. Inflation in the UK has reached 5.5%, which is an all-time high in 30 years, consequently leading to a slow economic growth.34

A new type of lifestyle has emerged ever since the pandemic.

Those who follow this new lifestyle are called digital nomads and they are people who worked remotely, usually involved in freelance work, blogging, or entrepreneurship endeavors. The remote workers only require a computer and Wi-Fi to perform their job which makes it easy for them to work from any part of the world. The Digital Nomad Visa would allow flexibility to remote workers to work from various desired destinations, while contributing to the economy of the countries of destination.32 Currently, the European countries like Georgia, Croatia, the Czech Republic, Iceland, Germany, Norway, Portugal, Malta, Hungary, and Romania have the facility of digital nomad visas.33

KEY HIGHLIGHTS OF INTERNATIONAL ECONOMIC REPORTS IMF cuts global economic growth forecast World Economic Outlook published

by IMF in October, 2021 forecasted the global economy to grow at 4.9% in 2022.35 Later on, January 2022, IMF reduced the global growth forecast by half a percentage point lower than previously estimated.

The global growth rate is now estimated at 4.4% in 2022 due to the disruptions in the economic recovery caused by the new COVID-19 variant, supply chain crunch, and market volatility.36 The forecast indicates a decline in the world's two biggest economies, US and China. The US economy is growing at 4% this year which is 1.2 % lower than the previous forecast, which is caused by the Federal Reserve proceeding to eliminate its monetary stimulus, amid supply chain disruptions. The growth reflects the exclusion of Biden’s Build Back Better fiscal policy package due to its failure to pass the original bill.

Similarly, China’s economic growth is anticipated at 4.8%, 0.8% point lower than previously from earlier estimated triggered by the country’s zero-Covid policy and heavily indebted real estate sector. 37 Travel and tourism to contribute USD 8.6 trillion to the global economy in 2022 The travel and tourism sector has suffered significantly in the last two years. Before the outbreak of COVID-19, travel and tourism sector contributed nearly USD 9.2 trillion to the global economy which dropped by USD 4.5 trillion

NEFPORT ISSUE 48 – MARCH 2022

in 2020 alone.38 A research report published by the WTTC suggests the global travel and tourism sector can generate USD 8.6 trillion as the government continues to re-open and restrictions are lifted, boosting the economic recovery globally.39 The report also states 58 million new jobs can be created if global vaccination continues at the same pace. A total of 330 million jobs will be provided by the sector which is only 1% below the pre-pandemic level and 221.5% more than 2020. Therefore, to achieve the pre-pandemic level government worldwide should continue to vaccinate most of its population, including booster shots, while enabling fully vaccinated travelers to travel freely without having to test before leaving or upon arrival. 40 Global trade recovered to a pre-

pandemic level but the growth is expected to slow Global trade rose by 13% higher the pre-pandemic level and reached USD 28.5 trillion in 2021. Such growth momentum was triggered by the rise in commodity prices, strong revival of demand through the economic stimulus package, and lifting of pandemic restriction.

As a result, in the fourth quarter of 2021 trade-in service recovered to a pre-pandemic level and reached a record high of USD 5.8 trillion.

The fourth quarter of 2021 also saw the exports among poorer nations exceeding richer nations by 30%.

Although regional trade growth was strong in the last quarter of 2021, trade growth was lower in North America, Europe, and East Asia.41 UNCTAD predicts trade growth will slow down in the first quarter

in 2022 and gradually normalize throughout the year due to a decrease in the previous year's economic drivers.42 The slowdown is also likely to be caused by the global supply chain crunch.

Despite various attempts made by shipping businesses to increase reliability and risk management, amid supply constraints and rising transport costs resulting from semiconductor shortage and increasing energy prices has not resolved the global supply crunch.

The new trading agreement like Regional Comprehensive Economic Partnership and African Continental Free Trade Area is believed to impact the global trade patterns. Such agreements will increase trade among the members and divert trade from he non-member countries.

Outlook The conflict between Russia and Ukraine will further worsen global inflation in the upcoming quarter.

With the ongoing conflict an additional increase in energy prices is predicted. To safeguard world and national economies from inflation, countries should collectively move towards alternative source of energy and reduce dependency on imported energy.

The rise in energy will further dent growth prospects, prompting a lower growth forecast for the year.

With investors looking for safe havens, price of gold is expected to increase. Based on Bloomberg Economic shock model, if the crude oil prices reach USD 100 it would elevate inflation by 0.5% point in the Europe and USA in the coming quarter. The rise in oil prices will also feed the global supply crunch as without fuel export and import of goods globally becomes inconvenient. The recovery from the supply crisis will become more difficult.

The conflict will also arise in food prices in North Africa and Turkey. Ukraine and Russia are considered “the breadbasket of Europe” as they export a quarter of the world’s wheat and half of its sunflower products. In last year 40% of Ukraine’s wheat and corn were exported to the Middle East or Africa.

The dispute would create food inflation. Moreover, Russia is also the biggest fertilizer exporter which will also increase the input cost for agricultural production further increasing food prices globally.

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Macroeconomic Overview

NEFPORT ISSUE 48 – MARCH 2022

Macroeconomic Overview The review period depicts a gloomy picture of the Nepali economy. Some of the most notable sources of foreign currency income for Nepal have not performed well in the last quarter. The inflow of remittances has decreased by 5.5% resulting in further depletion of foreign currency reserves and imbalanced trade volume. However, the foreign direct investment sector received increased investment commitments and registered strong growth, with a 48.1% increase than in the corresponding period of the previous FY. Notably, the commitments must be translated and realized in the form of actual amount inflows and project completion to witness real growth.

Gross Domestic Product (GDP) The six months data ending mid-January 2022 of FY 2021/22 was published by the Nepal Rastra Bank (NRB) as ‘Current Macroeconomic and Financial Situation’ on February 16, 2022.

Figure 1 GDP at current prices over the years (in NPR billion) Source: Current Macroeconomic and Financial Situation Table, 2021/22 [Note: 2020/21 (P) represents preliminary data of 2020/21 released

by Nepal Rastra Bank (NRB)]

FACTSHEET Particulars

Amount/Percentage

GDP at current prices

NPR 4266.3 billion

Year-on-year CPI

5.65%

Food and beverage CPI

4.92%

Non-food and service

6.23%

Net Foreign Direct Investment

NPR 11.34 billion

Foreign Grants

NPR 6.85 billion

Foreign Loans

NPR 103.99 billion

Remittance inflows

NPR 468.45 billion

Gross foreign exchange reserves

NPR 1165.80 billion

Total Domestic Debt

NPR 777.3 billion

Government expenditure

NPR 506.70 billion

Government revenue

NPR 542.05 billion

Total exports

NPR 118.85 billion

According to the report, the GDP at current prices stands at NPR 4266.3 billion (USD 35.82 billion) for the FY 2020/21.43 Figure 1 represents the change in GDP over the last ten years.

Total imports

NPR 999.34 billion

Total trade balance

(NPR 880.5 billion)

Total Foreign Trade

NPR 1118.19 billion

In FY 2020, the growth rate was

Balance of Payment (NPR 241.23 billion)

Current Account (NPR 354.07 billion)

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Figure 2 Year-onyear Consumer Price Inflation (CPI) index of first six months over three consecutive FY (in percentage) Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

a negative 1.9%, which created almost all the economic sectors to weaken. After the economy loosened, the Nepali economy is gradually bouncing back to preCOVID levels. In line with this, the World Bank has forecasted the economy to grow by 3.9% in 2021 and 5.1% in 2022, as per their South Asia Economic Focus (Spring 2021 edition).

Inflation The average inflation rate is measured by the Consumer Price Inflation (CPI). As per the data released by NRB, the year-on-year CPI stood at 5.65% in the first six months of FY 2021/22 compared to 3.56% in the corresponding period of the previous FY 2020/21.45 This suggests that inflation is rising

Particularly, the monthly consumer price inflation reached 7.11% in December 2021 from 5.32% in November 2021, representing the highest figure in 64 months.46 The lower inflation of 3.56% in the previous FY can be linked to lower

demands caused by pandemicinduced lockdowns, which led to the closure of markets.

A series of changes that have occurred in the CPI index over three consecutive corresponding periods has been shown in Figure 2.

Consumption of goods and services The Consumer Price Index is a measurement to calculate the weighted average of price of a basket of consumer goods and services.47 The basket of goods refers to a fixed set of consumer products and services whose prices are evaluated regularly.48 Table 1 below shows the pattern of consumption over a series of three

6.23

5.67 Dec/Jan 2021

2.99

Nov/Dec 2021

Dec/Jan 2021

Food and beverage

Dec/Jan 2020

4.92

4.27 Nov/Dec 2021

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

at an alarming rate, however, the headline inflation figure alone does not explain which prices are changing, in what direction and by how much, for what causes, or even to what effect. Due to this, treating inflation because of just excess demand driven by money supply increase is riskier than ever, as it will contribute to a lack of responsiveness to the cost-of-living crisis and weaken much-needed investments in social safety nets and green infrastructure.

8.25

Figure 3 Food and Non-food Consumer Price Index over three consecutive periods (in percentage) Dec/Jan 2020

16

Non-food and service

NEFPORT ISSUE 48 – MARCH 2022

consecutive periods.

The changes in the consumer price index during the review period have been attributed to the rise in food and beverage inflation from 4.27% in December/January of FY 2020/21 to 4.92% in December/ January of FY 2021/22. Within food and beverage, the price of ghee and oil, transportation, alcoholic drinks, tobacco products, and pulses and legumes sub-groups rose 21.22%, 14.07%, 11.37%, 10.48%, and 9.22%, respectively on a yearon-year basis. Likewise, the review period also witnessed an increase in the non-food and service inflation, represented by a rise from 2.99% to 6.23% in December/ January of FY 2021/22.

The variations in figures of both food and non-food sectors show how prices do not move in lockstep, and rather vary widely across sectors.

However, the effects of such rising prices are primarily borne by lowincome households because their budgets are highly inelastic. It is because their consumption cannot be easily substituted or deferred to a later date.49

given the military invasion in Ukraine by Russia, globally, markets are expected to undergo some changes and high petroleum costs in the coming days. Additionally, experts from this sector believe that since the local elections in Nepal are scheduled to be held on May 2022 i.e., within the current fiscal year, political parties and their candidates will be spending heavily to win the elections.50 The total estimated budget for local elections is NPR 39 billion (USD 0.324 billion), which can be broken down into NPR 12 billion (USD 0.099 billion) for the Election Commission and the rest of the amount for security forces deployment.51 In contrast to the estimated spending, only NPR 10 billion (USD 0.083 billion) has been allocated in the budget of the FY 2021/22 for election. Since there will be increasing spending, it suggests that it can create more demand for goods and services, and all of this can collectively further cause inflation and prices to rise in Nepal.

FINANCE STATUS Investments

Besides, some of the reasons behind such an increment in inflation and consumer prices can be attributed to supply chain disturbances, high petroleum prices, rising transportation fares, and shipping charges. Moreover, Figure 4 Net foreign direct investments in Nepal of three consecutive FY (in NPR billion) Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-January 2022)

In the review period, the net foreign direct investment (FDI) increased by 48.1% to reach NPR 11.34 billion (USD 0.094 billion) in the midmonth ending January in FY 2021/22 in comparison to a 37.2%

decrease in the corresponding period of the previous FY 2020/21.52 Such an increment in FDI is due to the increase in investment pledges of NPR 30.56 billion (USD 0.254 billion) on 129 projects as per the Department of Industry (DoI). Among the list of foreign investment pledges, DoI reported that China invested the most heavily in 107 projects, amounting to NPR 23.37 billion (USD 0.194 billion).53 Besides, the effect of the second wave of COVID-19 has subsided in this review period, which could have been reflected in the increase of FDI as well.

On the other hand, non-resident Nepalis (NRNs) from different parts of the world are increasingly interested in investing in their home country, Nepal, and have been demanding a separate investment policy for them. In line with this, the government is considering reviewing some longstanding issues related to capital (that stands at NPR 50 million (USD 0.41 million) threshold at present), approval from the central bank, policies, and others. If these issues are resolved, then the investment environment of Nepal can be better suited to attract and retain much more FDI inflows.

The graph below depicts the change in net foreign direct investments in Nepal in three consecutive FY.

17

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DOCKING NEPAL’S ECONOMIC ANALYSIS

FOREIGN AID Bilateral and Multilateral Aid British Ambassador lends assistance to Gandaki Province The Government of the United Kingdom (UK) has continuously provided support and assistance for climate change adaptation, promotion of small industry and livelihood, health, tourism, and good governance. In line with this, British Ambassador Nicola Pollitt extended her continued support and expressed that the government would continue its efforts to climate change adaptation.54 She especially praised Pokhara city of Nepal and, overall, vowed to further strengthen the two countries' relations.

German Ambassador lends assistance to Nepal’s Ministry of Health and Population The German Ambassador to Nepal, Dr. Stephen Rusek, provided the Ministry of Health and Population (MoHP) a package of 4,142,250 vaccine doses manufactured by Moderna and Johnson.55 These vaccines were provided under the COVAX facility as way to support towards Nepal’s efforts in curbing the COVID-19 pandemic.

International Monetary Fund (IMF) provides extended credit to Nepal The International Monetary Fund (IMF) approved USD 395.9 million (NPR 47.53 million) extended credit facility to Nepal to help with its COVID-19 response program in alignment with the Government of Nepal's 3R Plan - Relief, Restructuring, and Resilience.56 The

credit facility includes mitigating the pandemic’s impact on health and economic activity, protecting vulnerable groups, maintaining macroeconomic and financial stability, and promoting long-term growth and poverty reduction. The credit facility, over 38 months, will include immediate disbursement of USD 110 million specifically for budget financing.

recovering from the third wave of COVID-19 with the Omicron variant, such a system where the walk-in-coolers are transportable and easily installable, as well as the refrigerators will help tackle storage issues given Nepal’s electricity problem are of extreme worry.

Israel donates syringes for COVID-19 vaccines to Nepal

The Government of Nepal signed a concessional loan agreement with the World Bank (WB) of NPR 2.14 billion (USD 0.017 billion) in the presence of the Finance Secretary of Nepal and Country Director of World Bank (WB). The loan is specifically targeted towards the COVID-19 Emergency Response and Health Systems Preparedness (CERHSP) Project.59 The objective of the CERHSP project, as well as the loan assistance, falls under the same jurisdiction i.e., to prevent, identify and respond to the threats of COVID-19. There is a need for expanding vaccination drive in Nepal along with administration of safe as well as effective vaccines are the need of the hour for the age group of five years. Due to this, the loan amount should be used by Nepal to expedite its vaccination efforts to cover its child population.

Given the ongoing COVID-19 pandemic and its toll on Nepal, the Government of Nepal needs support and assistance from its bilateral and multilateral partners after it puts its vaccination drive on hold due to a lack of syringes.

In line with this, the Government of Israel provided over half a million syringes to support the COVID-19 vaccination program in Nepal.57 The Israeli Embassy expects the syringes to be used to inoculate the unvaccinated population in Nepal and believes that this is an act of solidarity between the two friendly nations.

Project/Program-specific Aid The Japanese Government assists to strengthen the vaccine cold chain system The government of Japan provided grant assistance to strengthen the vaccine cold chain system in Nepal through the United Nations Children’s Fund (UNCDF).58 This assistance included nine walk-incoolers, 38 solar-driven vaccine refrigerators, 1,109 long-range vaccine carriers, and 53 cold boxes as supportive equipment for the cold chain system. Since Nepal is undergoing and still

World Bank and Nepal sign loan for CERHSP Project

Likewise, the other additional funding required for the CERHSP project will be provided by the Department of Health Services (DoHS), under the guidance of the Ministry of Health and Population (MoHP).

Grants and Concessional Loans Japan and Nepal sign loan assistance The Japan International Cooperation

NEFPORT ISSUE 48 – MARCH 2022

Agency (JICA) provided a ‘policy loan’ of NPR 10.39 billion (USD 0.086 billion) for the economic development and resilience of Nepal. On January 5, 2022, the cabinet of Nepal hosted a meeting to accept loan aid.60 The Government of Japan is urging the government to spend the fund to build resilient societies in Nepal over 40 years’ repayment and 10 years’ grace period with 0.01% interest annually. 61 Likewise, the policy loan is also expected to improve the domestic/ local industrial base in Nepal and provide social security for the poor and vulnerable through financial assistance.

The Government of Nepal receives pledges for foreign loans and grants As per the Ministry of Finance (MoF), Nepal has received NPR 110.85 billion (USD 0.92 billion) of foreign assistance commitment in the first six months of the current FY 2021/22, which dropped by NPR 76.50 billion (USD 0.63 billion) than the previous corresponding period. The commitment amount includes 93.82% for foreign loans and 6.18% grants. The

Figure 5 Remittance inflows over the last three consecutive years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

depletion of such pledges has put the Government of Nepal in a critical position where they need to not only manage the finances and expenditure related to local elections, infrastructure development, but also support its COVID-19 control initiatives.62 Earlier this year, the government had aimed to raise NPR 353 billion (USD 2.94 billion) in foreign assistance, but the pledged amount covers only 32% of the total amount targeted. Hence, the government altered the targets in its mid-term review of Monetary Policy by reducing the grant amount to NPR 50 billion (USD 0.41 billion) from NPR 59.92 billion (USD 0.499 billion) and reducing foreign loans to NPR 206.46 billion (USD 1.71 billion) from NPR 293.09 billion (USD 2.44 billion).63

Remittance Remittance inflows and Migrant workers

January of FY 2021/22, the remittance inflows decreased by 5.5% to stand at NPR 468.45 billion (USD 3.91 billion), against an increase of 11.1% in the corresponding period of the previous FY 2020/21.64 The Economic Research Department at the central bank believes that one of the major reasons behind such a decrease in remittance inflows is the recent trend in workers purchasing gold with their earnings, instead of sending money back home.

For instance, in December 2021, the officials at the Tribhuvan International Airport (TIA) reported that they had seized 21 kg of gold brought in the form of jewelry, which exceeded the threshold set by the government of 50 grams per person.65 On the other hand, the Department of Customs (DoC) believes that the migrant workers are being used as bait by gold racketeers to avoid paying tax and selling the gold bought by them informally at higher prices in India.

Decrease in remittance inflows During the review period depicting six months’ data ending mid-

Likewise, NRB also believed that the other causes for the fall in remittances are migrant workers’

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DOCKING NEPAL’S ECONOMIC ANALYSIS

rising interest and investment in virtual currencies and hundi.66 The change in remittance inflows over the last three months of three consecutive FY has been presented in Figure 4.

Large shares of migrant workers opt for low-skilled occupations The Department of Foreign Employment (DoFE) published a skills distribution of Nepali male and female migrant workers by mode of obtaining labor of approval in the review period. The report contained the information on skillwise occupation distribution for the FY 2020/21 (i.e., July 16, 2020, to July 15, 2021). As per the list, Table 2 summarizes the skill-wise details of the migrant workers.

From the list, it is evident that most migrants opt for low-skilled occupations. This is particularly because low-skilled occupational categories are in bulk demand and more lucrative to recruitment agencies whereas the higherskilled works are more selective and, hence, catered to individual applicants.67 If the male and female migrant workers are provided with

Table 1 Skill-wise list of migrant workers

Year

Increase in the number of migrant workers applying for foreign employment According to the six months data ending mid-January of FY 2021/22 from the Current Macroeconomic and Financial Situation report of NRB, the number of Nepali migrant workers taking labor permit approval for foreign employment has risen to 167,513 against a decrease of 89% in the previous corresponding period.

Likewise, the number of Nepali workers taking approval for renewed entry (labor permit renewals) into their foreign employment has also increased significantly by 298.1% to reach 130,212 against a decrease of 75.5% in the same period of the previous FY. 69 Occupation High-skilled

2018/19

2020/21 Source: Department of Foreign Employment

education and skills training early on, they will likely be able to navigate the recruitment system independently without relying on agencies. Moreover, the literacy rate of females stands at 59.72%, representing a significant growth of 22.3% whereas the literacy rate of males stands at 78.59% indicating a growth of 9.61%.68 With the growing literacy rate, most migrants are increasingly interested in highskilled work. Due to these reasons, high-skilled work can be on the rise in the coming days.

Male migrants 191

A trilogy released portraying woes of migrant workers Kesang Tseten, a writer-turnedfilmmaker, who wanted to get to the heart of migrant workers’ journeys into the Gulf states, created a trilogy of films about Nepali migrant workers and their woes more than a decade ago. The films include ‘In Search of the Riyal’ released in 2009, ‘The Desert Eats Us’ in 2010, and ‘Saving Dolma’ in 2010.70 These films collate stories of migrant workers who have undergone hard working environments, survival, and exploitation in the Gulf states to pursue the migrant dream.

These films were premiered online on December 10, 2021, at the 19th Kathmandu International Mountain Film Festival (KIMFF) 2021 and stands as one of the 40 films selected for the international competition at KIMFF.71 The recognition that the films are getting serves as proof that Nepalis’ migration aspiration is far from unpopular.

Destination countries Job losses in India The COVID-19 pandemic hit the labor market the hardest as there were numerous travel bans put across the world, including India – Female migrants

Total migrants

19

210

Professional

731

56

787

Semi-skilled

39326

3458

42784

Skilled

170453

9148

179601

Low-skilled

266003

19442

285445

High-skilled

55

6

61

Professional

226

20

246

Semi-skilled

14427

1156

15583

Skilled

65869

4557

70426

Low-skilled

74665

5717

80382

NEFPORT ISSUE 48 – MARCH 2022

Nepal’s largest labor destination, where many Nepali migrant workers travel undocumented because of the open border.

Although the effects of coronavirus seem to have subsided in the review period, there were reported cases of increasing job losses faced by Nepali workers in India.72 After escalating unemployment problems due to an increase of omicron cases in India, thousands of migrant workers began coming home to Nepal through various border posts in Sudurpashchim Province during January. As per the Trinagar-Gauriphanta border point officials, at least 1000 people enter Nepal daily.73 Such an increase in the number of entrants also poses a health risk for Nepal and requires immediate control actions to be taken by the government.

Plans and programs targeted towards migrant workers Health insurance for migrant workers’ families The Government of Nepal initiated a process of incorporating Nepali migrant workers’ families in the health insurance policy. This process was initiated by the Health

Figure 6 Gross Foreign Exchange Reserves over the last three consecutive years (in NPR billion)

mid-jan mid-Dec

Following MoLESS’s approval, every migrant worker seeking foreign employment will be required to submit the updated identity cards of family members when applying for a labor permit. Post this, the board, in collaboration with DoFE, will decide for the family members to be included in the process of obtaining a work visa.

According to the procedure, Nepali migrant employees must renew their family members’ health insurance coverage a month before it expires. The board sent a letter to all province offices and district offices directing them to offer necessary support, facilitate and coordinate the integration of Nepali migrant workers’ families.

mid-Oct

mid-Aug 1000.0

Government Reserves According to the Current Macroeconomic and Financial Situation of six months ending midJanuary 2022, the gross foreign exchange reserves stood at NPR 1165.80 billion (USD 9.71 billion). This depicts a 16.7% decrease from NPR 1399 billion (USD 11.65 billion) in midJuly 2021.75 Out of the total reserves, the reserves held by the central bank, NRB, decreased 18.4% to NPR 1015.59 billion (USD 8.45 billion) whereas reserves held by BFIs decreased 2.7% to NPR 150.21 billion (USD 1.25 billion) in mid-January 2022. As per the central bank, the available foreign exchange reserves in the first quarter of the current FY 2021/22 are enough to fund imports for 7.8 months, which is a little over NRB’s target of seven months.76 The drop in the remittance inflows during the review period as well as the increase in imports have altogether depleted the foreign exchange reserves. It, further, harms the government’s capacity to buy more from abroad and creates an unfavorable investment environment for potential international investors because of dividend repatriation concerns.

1165.8

1493.8

1096.0 1214

1474.3

1088.3 1244.8

mid-Nov

mid-Sept

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

Insurance Board of Nepal to provide easy and seamless access to health care for the family members of Nepali migrant workers. In line with this objective, according to the Health Insurance Act of 2017, the Board has approved the ‘Procedure to include the family members of Nepali migrant workers in health insurance policy – 2021’.74 However, the Ministry of Labour, Employment and Social Security (MoLESS) is yet to approve it.

1506.1

1103.1 1319.3

1470.3

1087.7 1307

1433.7

1078.9 1353.8 1064.6 1100.0

1200.0

1300.0

1400.0

Foreign Exchange Reserves (in NPR billion) 2021/22

2020/21

2019/20

1436.7 1500.0

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Table 2 Government debt over the midmonth of last two years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-January 2022)

The trend of the reserves over the last three years has been depicted in Figure 5.

Government Debt The total outstanding domestic debt accumulated by the Government of Nepal can be divided into treasury bills, development bonds, citizen saving bonds, foreign employment bonds, and others through Nepal Rastra Bank (NRB), commercial banks, development banks, finance companies, and others. In total, the total domestic debt stands at NPR

Figure 7 Total domestic debt over the last two years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

2020/21

Particulars

Mid-Jul

2021/22

Mid-Jan

Mid-Jul

Mid-Jan

Total Domestic Debt

613.21

664.21

800.32

777.32

Nepal Rastra Banks

66.83

63.87

56.79

78.83

Commercial Banks

491.38

544.49

651.64

618.61

Development Banks

31.39

32.40

56.76

52.98

Finance Companies

12.62

11.83

22.44

14.59

Others

10.99

11.63

12.69

12.31

777.3 billion (USD 6.47 billion) in mid-January 2022 in comparison to NPR 664.2 billion (USD 5.53 billion) in mid-January 2021.77 This indicates a surge of 17.02% in the government debt in a year and is suggestive of the vulnerable financial condition that the country is in as the debt amounts have been rising gradually over the years along with their shares to the country’s GDP. Table 3 represents the government debt status over the last two years.

Government Spending (Expenditure and Revenue)

According to the Financial Comptroller General Office (FCGO), the total government expenditure and revenue during the six months of the current FY 2021/22 amounted to NPR 506.70 billion (USD 4.22 billion) and NPR 542.05 billion (USD 4.51 billion).78 The expenditure and revenue witnessed an increase of 21.9% and 28.38%, respectively in comparison to the corresponding period of the previous FY. This shows that the government expenditure has been soaring at a decreasing rate, and the revenue collection has also comparatively strengthened.

NEFPORT ISSUE 48 – MARCH 2022

Foreign Trade Scenario

Top Imports and Exports

In terms of foreign trade scenario, the total foreign trade reached NPR 1118.19 billion (USD 9.31 billion) in the first six months of the FY 2021/22 (ending mid-January 2022) in comparison to NPR 722.04 billion (USD 6.01 billion) in the same period of the previous year, indicating an increase by 54.9%. The most significant trade for Nepal is with its neighboring countries – India, and China i.e., 45.1% and 51.2%,

According to the Current Macroeconomic and Financial Situation ending mid-January 2022, the merchandise exports increased by 95.5% to reach NPR 118.85 billion (USD 0.98 billion) in comparison to an increase of 6.1% in the corresponding period of the previous FY 2020/21.

Elaborating this, the exports to India and other countries rose by 121.8%, and 27.2%

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

Sep-Oct

79.3

78.1

93.3 22.4

7.6

12.3

5.9

1.7

0.9 Current Expenditure

Aug-Sep

75.3 86.5

89.1

83.8 9.6

Government Expenditure

Jul-Aug

Figure 8 Government Spending (expenditures and revenue) during six months of FY 2021/22 (in NPR billion)

47

49.0

53 10.5

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-January 2022)

Likewise, according to the same report, the merchandise imports increased by 51.1% to reach NPR 999.34 billion (USD 8.32 billion) against a decrease of 4.8% in the corresponding period of the

127.9

119.7

79.4

99.5

Table 3 Government Spending (expenditures and revenue) during mid-months of FY 2021/22 (in NPR billion)

respectively. Contrastingly, the exports to China decreased by 10.2% whereas they increased by 19.4% in the previous review period. With this, India’s share in total imports reached 71.6% of the total imports in the review period, against 75.4% in the previous period. Overall, the top five export commodities were soyabean oil (28.8%), palm oil (26.9%), polyester yarn and threads (3.8%), woolen carpet (3.7%), and jute goods (3.3%).

129.7

Trade Status

respectively. Likewise, the share of export and import in the total foreign trade scenario is 10.6% and 89.4% respectively, indicating Nepal’s heavy dependency on imports rather than exports.

144.6

The Table 4 given below is a breakdown of the first six months’ expenditure and revenue of the current FY.

Capital Expenditure

Oct-Nov

Nov-Dec

Revenue

Dec-Jan 2022

23

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Figure 9 Total foreign trade over six months of last three years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

previous FY 2020/21. In the case of imports, the imports from India, China, and other countries increased significantly by 37.5%, 51.5%, and 98.2% respectively.

With this, India’s share in total imports reached 66.4% of the total imports in the review period, which is the highest, against 63.1% in the previous period. Overall, the top five imports were petroleum products (13.2%), transport equipment and parts (7.7%), machinery parts (4.6%), medicine (4.2%), and crude soyabean oil (3.7%).

The increase in imports can be attributed to the growing demand for foreign goods amidst

Figure 10 Total Imports and Exports of the first six months ending mid-Oct over the last three FY (in NPR billion) Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

a recovering economy since the COVID-19 cases were seen subsiding in the review period.

The amount of imports, as stated above worth NPR 999.34 billion (USD 8.32 billion) is one-fourth of the country’s GDP and close to the remittance inflows NPR 961.05 billion (USD 8.004 billion) in the FY 2019/20 ending mid-July 2020.79 Such a surge in imports, particularly at a time when the inflation rate is also increasing, poses serious threat to the economy and calls for the government to prepare import policies that can discourage the import of certain goods (such as agricultural goods that can be produced domestically) and put

more emphasis on building foreign exchange reserves. However, with the extended credit by IMF, there are available funds in Nepal, but they must be utilized in a way of promoting domestic industries and exports.

Balance of Trade Based on the Current Macroeconomic and Financial Situation (ending mid-January 2022) of FY 2021/22, the total trade balance witnessed a 46.6% increase in the first six months of FY 2021/22 in comparison to a decrease of 5.8% in the corresponding period of the

NEFPORT ISSUE 48 – MARCH 2022

Figure 11 Total trade balance ending of first six months over the last three years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

previous fiscal year. However, despite the increase, the total trade balance figure stands at a negative NPR of 880.5 billion (USD 7.33 billion) because of higher imports than exports. The trade balance of the last three years (six months) is presented in Figure 10.

Balance of Payment As of the first six months of FY 2021/22 (ending mid-January 2022), the current account remained at a deficit of NPR 354.07 billion (USD 2.94 billion) compared to a deficit of NPR 51.68 billion (USD 0.43 billion) in the corresponding period of the

EXCHANGE RATE FLUCTUATIONS Nepali currency visa-a-vis the USD appreciated by 0.94% in midJanuary 2022 as of current FY 2021/22, against an appreciation of 2.87% in the corresponding period of the previous FY 2020/21.82 The appreciation of the USD coming against the Nepali Rupee can cause the shipping costs to Nepal high, which can further exacerbate the weakening financial situation of the nation.

The rising costs can also result

mid-Aug -100.00

Source: Current Macroeconomic and Financial Situation of Nepal (ending midJanuary 2022)

and hints towards a possible decline in the next review period.

50.00 (in NPR billion)

Figure 12 Balance of payment trend (of first six months) over the last three FY (in NPR billion)

previous FY 2020/21.80 Likewise, the balance of payments (BOP) registered a deficit of NPR 241.23 billion (USD 2.009 billion) in the review period, whereas there was a surplus of NPR 124.92 billion (USD 1.04 billion) in the same period of last year. 81 This is in line with the last review period’s BOP status and it indicates that the BOP is in a weakening condition in comparison to the previous year, as clearly depicted by a deficit against surplus.

Decreasing remittances in the review period, causing the foreign currency to deplete and current liquidity pressure in the financial market of Nepal is causing extra pressure

mid-Sept

mid-Oct mid-Nov mid-Dec

-250.00

mid-jan

2019/20

2020/21

2021/22

25

26

DOCKING NEPAL’S ECONOMIC ANALYSIS

in hindrances in importing raw materials as well as lead to slow consumption in the market.

Contrastingly, the fluctuation in the exchange rate led to an exchange gain of NPR 16.47 billion (USD 0.13 billion) in the current quarter.83 As a result, the outstanding debt position decreased slightly.

GOLD/SILVER UPDATES According to the Current Macroeconomic and Financial Situation ending mid-January 2022, the price of gold decreased by 1.9% to USD 1822.95 per ounce (NPR 218,863.4 per ounce) in comparison to USD 1858.85 per ounce (NPR 223,173.5 per ounce)

in the previous review period.

Likewise, only Nepali commercial banks are permitted to import gold, and the daily maximum has been set at 20 kg.84 However, there is a growing demand for gold in the market and as a result, banks, and financial institutions (BFIs) are finding it hard to meet the demand.

Outlook The macroeconomic situation throughout the review period was perplexing, with dwindling remittances, rising imports and a balance of payment deficit. For a remittance-dependent country like Nepal, there is a dire need for policies that can not only encourage workers to go abroad, but also send home remittances through formal channels, keep records, and maintain a check-and-balance.

Moreover, it is critical to formulate import policies that discourage the import of goods that can be produced domestically, such as agricultural produces, and focus on strengthening the competency of domestic industries to promote and encourage exports. It can be concluded, that if the appropriate strategies are not taken timely, there is a strong probability that the prosperity of the nation will be mutilated.

Similarly, pledges of foreign direct investment must be accompanied by intent and policies for more projects to be funded. In sectors where Nepal lacks experience, such as railways, rivers, and other infrastructure, increased investment is required.

3 NEFPORT ISSUE 48 – MARCH 2022

Sectoral Review

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Agriculture and Livestock The unseasonal October rainfall early this year has affected the production level of paddy. The rainfall has caused a drop in paddy output, and it is predicted a decrease of 9.04% in paddy yield year-on-year The two-months delay in setting support price for sugarcane has also decreased sugarcane output by 50%. The agriculture sector output will further be impacted by shortage of fertilizers. The shortage was initial caused by importer appointed by the government who were being reluctant to purchase it at increased international prices and sell it at lower contracted price. Furthermore, Nepal’s government delay in signing deal to import fertilize through government of India, has added fuel to the ongoing fertilizer fiasco. In terms of export and import of agricultural products, tea export has dropped by 33.4% due to policy change by Nepal’s major tea importer nation, India. The import of maize has been gradually increasing and in the first four month of the fiscal year, Nepal has imported 196,045 metric tons of maize.

PRODUCTION UPDATES Paddy production shrinks Paddy harvest has suffered due to the unseasonal October rainfall this fiscal year. It is predicted that the harvest will decrease to 5.13 million tons which is an all-time low in five years.86 The Ministry of Agriculture and Livestock Development’s preliminary paddy output report released on January, suggested a drop of 8.74% in paddy output by the end of mid-July 2022.87 The report also highlighted that the paddy yield is predicted to drop by 9.09% year-on-year.88 In the previous fiscal year, 5.62 million tons of paddy were harvested which is one of the

highest recorded quantity.89 Similar, predictions were made for this year because the conditions such as monsoon rain, availability of fertilizers and farm workers were favorable during plantation season. However, the October rainfall severely damaged paddy harvests and only Gandaki Province had a growth in harvest out of the seven provinces.

FACTSHEET85 % Change in Food & Beverage Consumer Price Index Hilly region in the first 6 months

5.34%

% Change in Food & Beverage Consumer Price Index Himalayan region in the first 6 months

5.22%

% Change in Food & Beverage Consumer Price Index Terai region in the first 6 months

6.15%

% Change in Food & Beverage Consumer Price Index Kathmandu Valley in the first 6 months

5.28%

Soyabean Oil 34270 million Palm Oil NPR 31975.5 Top five agriculture commodities exported in last six month (by value)

Cardamom NPR 2273.7 million Tea NPR 1847 million Crude Soyabean Oil NPR 36588.9 million

Top four agriculture commodities imported in last six month (by value)

INPUT UPDATES

Crude Palm Oil NPR 27491.8 million Rice/Paddy NPR 26954.8 million Vegetables NPR 10406.6 million

Severe fertilizer crisis The scarcity of fertilizers has been a serious issue in the country, as more farmers are commercializing their farming practices resulting in an increasing demand for fertilizers.

Juice NPR 2582.1 million

Biannual changes in outstanding credit of banks and financial institutions to the agriculture sector

13%

NEFPORT ISSUE 48 – MARCH 2022

The government is trying to sign a deal with the Government of India to import chemical fertilizer. However, due to a delay in setting of meeting between the two governments, the demand for chemical fertilizer in Nepal may not be achieved.

Due to this, shortage of fertilizers seems imminent this year. If the five-year deal is signed between the governments, it will allow Nepal to access at least 150,000 tons of farm nutrients within a month of signing the deal and in long term farmers do not have to face shortage of fertilizer each year. 90 The scarcity of fertilizers has led to a rise in the price of fertilizer to an all-time high, making the ongoing fertilizer fiasco even worse. The government annually allocates NPR 12 billion (USD 99.5 million) for chemical fertilizer, however, due to rising prices in the international market the cost rose to NPR 45 billion (USD 373.13 million). Although, the new government has allocated an additional NPR 3 billion (USD 24.87 million) for financing, it is still insufficient.91 The shortage of fertilizer and the rising demand has led to illegal imports. USAID report on regional trade in seed, fertilizer, and strategic grains has estimated that 70% of fertilizer consumed in Nepal are illegally imported.92 Not only that, but Nepal also faces a shortage of fertilizer each year due to various factors such as: long procurement process, low inventories, ineffective supply channels, inadequate policies and shifting foreign prices.93

MARKET UPDATES Ginger market crashing Ginger, a high value crop for Nepali farmers is facing a crisis due to uncertain market and fluctuating

prices of ginger.94 This has led to a widespread concern among ginger growers as the price has dropped.95 98% of the ginger produced in Nepal is exported to India but with the rise in India’s own production of ginger, the demand for Nepali ginger has fallen leading to ginger market crash in Nepal.96 The decrease in demand for Nepali ginger is impacting its production and export.97 To add to that, travel restrictions during the lockdown imposed to curb the spread of COVID-19 impaired the supply chain between the Indian traders and the producers. Due to this, farmers were forced to sell at lower prices, and some were even forced to leave their ginger crop unattended in the fields due to a lack of buyers.

The production in key ginger producing area in Nepal such as Palpa has plunged by 95%.98 Farmers are switching to other crops due to limited market access.

Nepali ginger is unable to get better prices due to its unrefined, raw, and dirty look.99 Thus, there is a need for commercializing Nepali ginger with the help of proper policy that not only assists its production and price setting but also for its export.

EXPORT AND IMPORTS OF AGRO-COMMODITIES UPDATES Import dependency on maize seed increasing Maize is the second major crop produced in Nepal, with an annual production around 2,200,000 metric tons.100 Maize can be processed and used to produce various food items such as dhindo, roti etc. along with it can also be used as animal feed. An increase in the imports has been noted of

such crucial crops seed. Nepal in the first four months of the current fiscal year, imported 196,045 metric tons of maize seeds costing NPR 6.919 billion (USD 57.371 million).101 The import trend of maize seed has been on the rise in the country, which suggests country's reliance on one of its major products.

The absence of coordination among the three-tier government for the production of hybrid maize seed at local and community level has led to import dependency of maize seeds. Earlier Nepal Agricultural Research Council (NARC) was in charge to produce hybrid seeds at the private and community level.

Since the introduction of federalism, production of hybrid seeds at community level declined and reached almost zero due to failure of collaboration and coordination in the three-level government.102 Export of tea plunges The export of tea plummeted by 33.4% compared to the same period during the last fiscal year.103 Nepal's tea export had been growing despite the pandemic as the output drop in key tea growing areas like India and Sri Lanka. However, with regulations introduced by the Tea Board of India that restricted importing cheap tea resulted in a decrease in the export of tea in Nepal.104 Nepal’s tea is similar in quality with Indian Darjeeling tea but costs half the price which has decreased the production of Indian tea. Hence, Indian policymakers in a quest to encourage domestic production restricted the import of cheap tea. Due to Nepal-India free trade agreement it is difficult to directly ban Nepali tea, hence India has adopted a policy that indirectly discourages importers to purchase tea from Nepal. Consequently,

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the export of Nepali tea has fallen by one-third in the first half of this fiscal year.105

FOOD AND BEVERAGE PRICES (CPI AND WPI) UPDATES Food and Beverage prices Nepal Rastra Bank’s monthly macroeconomic report showed that the food and beverage inflation has increased from 4.79% in the first four month of the current fiscal year to 4.92% in the first six month of current fiscal year.106 As most of goods in Nepal are imported, with the hike in price of shipping and air freight, the cost of import rose causing higher inflation of food and beverage.107 The price of ghee and oil rose by 21.22%, similarly pulses and legumes rose by 9.22% year-on-year basis.108

LIVESTOCK HEALTH UPDATES Bird flu control regulation The federal government has introduced the Bird Flu Control Regulation, 2022. 109 According to the regulation’s provision, a coordination committee with 11 members led by the Director General of the Department of Livestock Services has been formed. The purpose of coordination committee is the formulation of plans and standards to prevent and manage bird flu. With the focus on identifying disease and controlling it, the coordination committee must develop surveillance, emergency disease investigations along with diagnosis and control rooms. The committee, in case of disease, must impose ban on the sale, distribution, storage, and transportation of poultry birds. It is also responsible for the destruction of products in infected areas and circulate disease related

information and communicate and coordinate among all three level of government. At the district level a 10-member Bird Flu Control Committee headed for the Chief District Officer in each district.

The control committee oversees strategies for disease prevention, control, and relief distribution. The committee is also responsible for plan of action, utilizing resources for control and prevention at district level and coordinating district level government agencies and stakeholders.

Additionally, the Act states the responsibility of Veterinary Services Expert Centre for the prevention of bird flu through checks and surveillance on a regular basis based on its area. The center also monitors sample collection from habitat, farm, hatchery, market, and wetland areas. The regulation is focused on prevention of bird flu and upon sample collection, if the test result came positive in a radius of 3 km, for that area will be declared bird fluaffected zone for a specific period by the Department of Agriculture and Livestock Development. This is followed by destroying diseased poultry birds, products, feed, and other production inputs along with sterilizing the area. The regulation also stipulates provision for providing relief to people whose poultry birds and products were destroyed.110

Government Policies and Programs Government increases the support price for sugarcane The government began setting floor prices of sugarcane in 2018 to end the constant conflict between sugarcane farmers and sugar producers.111 This year, the

government has set minimum support price of NPR 590 (USD 4.89) per quintal, including subsidy of NPR 70 (USD 0.58) per quintal.112 The minimum support price has been increased by 8.39% and set by calculating the cost of production, transportation and ensuring profit for farmers. The farmers faced a two-month delay by the government to set minimum price. This has caused sugarcane output to drop by 50%, as per to the Federation of Sugarcane Producers Association. Farmers have suffered significant losses due to delays in receiving payment for their crops and the annual release of the minimum support price causing the decreased level of output.113 Karnali to provide allowance to 150 shepherds Shepherds in the Jumla region would be paid allowance by Jumla’s Veterinary Hospital and Livestock Service Office to promote sheep husbandry in the region.114 284 farmers are registered at the service office for sheep husbandry and around 265 shepherds have applied for the allowance. The initiative was started to promote sheep husbandry in the region by providing the shepherd with NPR 18000 (USD 149.25) annually as allowance. The office has started accepting applications from the shepherds, out of which 150 shepherds will be selected.115 The selection process will be based on the field of study provided by the employees deployed in the field.

These deployed employees will confirm whether the applicants are real shepherds or not and create a report and based on this report’s proper analysis allowance distribution process will begin.

NEFPORT ISSUE 48 – MARCH 2022

Nutrition/ Food Security Cultivation of Boro paddy starts in Jhapa In Jhapa, a new species of paddy has been introduced called Boro paddy that can be cultivated three times a year with proper irrigation facilities.116 This new species of paddy must be planted in the second week of Mangsir and can be harvested in 90 to 95 days (about 3 months). Farmers have started new plantations without completing the harvest of previously grown paddy.

The Boro paddy has been cultivated on 8 katthas117 of land.118 The new species of paddy will be helpful in food security as paddy previously only cultivated twice a year. With the new species of paddy, it can help in the growth of paddy supply.

Prime Minister’s Agriculture ModernizationProject Implementation Unit has been using various paddy farming techniques in Jhapa and farmers are being more inclined towards new variety of Boro paddy. 119

The project has also provided support for expansion in the region through sustainable infrastructure, production and productivity condition, mechanization, processing, and marketing condition of Paddy Super zone area.

New developments Rise in farmer’s income with cold stores construction In Panini Rural Municipality, previously farmers were forced to sell fruits as soon as they were harvested due to lack of cold store facilities.

With the construction of storage facilities, it has allowed farmers to store fruits for a longer period and sell them during off seasons. This has doubled their income as fruit prices rise in off season. The rural municipality constructed the cold storage facility with an investment of NPR 20 million (USD 165.837 thousand) and has handed it over to a group of orange farmers called Shiva Shakti Farmers’ Group. The cold storage facility is used by about

two dozen farmers of Panini, Simle, Khidim and Pokharathok to store their oranges in the facility. Most farmers in the rural municipality have started using an intercropping farming system that is used to grow two or more crops in the same field at the same time. The farming system has allowed farmers to cultivate potatoes, cauliflowers, radish, beans including sweet potato, yam, ginger, turmeric, and spice crops in the orange grove. Additionally, these food items can be sold for higher prices in the off season after keeping them in cold stores. The construction of cold store facilities has directly benefited farmers and encouraged other municipalities to build cold stores. Malarani Rural Municipality has built four cold stores with an investment NPR 10.29 million (USD 85.323 thousand) with two cold stores having a capacity of 100 tons and the remaining two stores having a capacity of 20 tons. The cold stores were constructed with the aim of creating self-employment through engaging unemployed youth in agricultural enterprises.

Outlook The government’s initiative like Prime Minister’s Modernization Project that focuses on bringing new development in the agriculture sector will help improve production. The new development of paddy species by this program provides opportunity for farmers to boost their income through increase in the quantity of harvest. There is a need for such program in Nepal as it will promote production within the country and help the country to be self-reliant in term of agriculture. Self-reliance will reduce the burden of the country’s trade deficit.

The boost in production of agricultural products can be brought through availability of chemical fertilizer on time. The scarcity of fertilizer can heavily impact the country’s output level. Thus, there is a need for government to be proactive and solve the reoccurring problem of the fertilizer scarcity.

One of the proactive moves would be signing long term deals with other government to import fertilizer before plantation season to ensure its availability.

The expansion of export market for Nepali farmers is crucial as Nepal heavily depends upon Indian market demand. A change in policy and production of agricultural goods in Indian market can directly impact the earnings of farmers.

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Education The education sector of Nepal was gravely impacted due to the third wave of the COVID-19 induced restrictions during the review period. Schools and colleges that were instructed to stop physical classes and move online in the onset of the new omicron variant have now resumed in-person classes. In the review period, the Ministry of Education, Science and Technology (MoEST) introduced an ‘Education Sector Plan’ program which aims to enhance the quality of school education. Similarly, the government is preparing to start the new academic session after the local level elections are concluded.

PROGRAMS Community School selected for Presidential Reform Program: The Ministry of Education, Science and Technology (MoEST) has decided to provide 4,157 community schools from across the country with funds for the construction of school buildings and establishment of ICT labs, under the President's Educational Reform Program. According to the Minister of Education, Science and Technology, Devendra Paudel, the program would help in the management of proper physical infrastructure and ICT in schools across the country.

The President Educational Reform Program for the current year had been allocated a budget of NPR 7.85 billion (USD 0.065 billion). Additionally, 13,473 schools from 737 local levels had applied for funding under the initiative. Out of the total schools selected, 976 schools would receive funding of NPR 3.6 million (USD 0.030 million) for the construction of a four-room building and 966 schools would receive funding of NPR 1.8 million (USD 0.015 million) for the construction of a two-room building.

Similarly, 2,106 schools would receive

NPR 650,000 (USD 5,413.95) under the ICT lab management program, while 109 schools would receive NPR 706.90 million (USD 5.89 million) for the management of new technical schools.126 The Ministry of Education to make significant investment on education sector: The Ministry of Education, Science and Technology (MoEST) has come up with a formidable “Education Sector Plan” (ESP) program geared towards enhancing the quality of education, especially in public school. The Education Sector Plan (ESP) with a total budget of NPR 953.43 billion (USD 7.94 billion) will be rolled out from the new fiscal year beginning in July 2022. Despite being a decadelong program, budgeting is currently only underway for five years. The Education Sector Plan (ESP) will replace the ongoing School Sector Development Plan (SSDP), which was launched in the fiscal year 2016-17. The SSDP aims to improve the equity, quality, efficiency, governance, and management of the education sector. Likewise, it focuses on capacity and knowledge

FACTSHEET Net Enrollment RateBasic level (Grade 1-8)

94.70%122 Net Dropout rate (Basic Level)

24.70%123 Literacy Rate (15 years+)

58%124 No. of Schools

35,674125

enhancement of both students and teachers by developing relevant teaching and learning methods and materials that ensures quality development.

However, this program largely failed to achieve its stated goals. The Education Sector Plan would be coming into implementation starting FY 2022/23. The implementation of the ESP requires close coordination between federal, state, and local governments. However, all three levels of government are in dispute as to which school is under whose jurisdiction. All 753 local governments have demanded for them to be allowed to run schools under their jurisdiction. While the federal government is reluctant to mandate the demand, education is also on the federal and local government's list of competing rights. As per Bal Chandra Luitel, a professor at the Kathmandu University, the jurisdiction dispute could be resolved by formulating a Federal Education Act.127 New academic session to begin after local level election: The government is preparing to start classes of the new academic

NEFPORT ISSUE 48 – MARCH 2022

session after the local level elections due on May 13, 2022. Devendra Poudel, the Minister of Education, Science and Technology (MoEST) would be taking a decision on this, following consultations with the stakeholders of public and private schools. The classes for the current course will continue until mid-April 2022 and the ministry plans to conduct exams, publish results, and conduct new intakes from mid-April to mid-May 2022. 128

CURRICULUM Buddha’s message and Buddhist philosophy in curriculum: President Bidya Devi Bhandari has encouraged all stakeholders of the Lumbini Buddhist University to help incorporate Buddha's teachings and Buddhist philosophy in school and university curricula. As per President Bhandari, the University's multidimensionality would be enhanced if Buddha's lessons and education were linked to the current environment for practical application in the educational system, curriculum, and teaching. To reduce the growing trend of student migration, the educational quality should be improved via increased investment in higher education, noting that a big number of Nepali students are studying overseas.

According to the President, it is important that we excavate and promote archaeological and cultural heritages linked to Buddha and Buddhist education across the country, particularly in Kapilbastu, Rupandehi, and Nawalparasi. 129 Madrasa Education in government’s curriculum: Devendra Poudel, the Minister of Education, Science, and Technology (MoEST), has committed to incorporate madrasa education in

the government's curriculum. The ministry plans to undertake more conversations with authorities and stakeholders on the topic of madrasa education. Under, the Madrasa education, there will be modules of cultural education to the Muslim community in the traditional style.. For this to happen, stakeholders need to come up with a concrete proposal. Even though inclusion is a priority subject in Nepal's Constitution, it has not been completely implemented due to a lack of efficient delivery by the bureaucracy and other stakeholders.

130

The results of Grade 12 exams released by the National Examination Board: The results of the Grade 12 exams, which took place from September 15 to 24, 2021 have been published by the National Examination Board (NEB). According to the NEB, 7,063 students received A-plus grades, while 48,239 students have received A grades.

Similarly, 70,001 students received B-plus, 99,537 students received a B grade and 75,088 students received C-plus. Likewise, the results of 46 examinees were canceled. A total of 374,000 examinees from across the country appeared for the exams. This year's examination was postponed from February to April owing to the outbreak of COVID-19. 131 Province governments to administer SEE examinations: According to Dr. Mahashram Sharma, Chairperson of the National Examination Board (NEB), a draft is being developed to delegate the obligation of organizing the SEE examinations to the provincial governments. Currently, Nepal does not have any legislative provision to hand over the responsibility of

conducting the SEE examinations to the provincial governments.

The board decided to give the province governments the full responsibility of conducting and managing the SEE examinations by amending the National Examinations Board Regulation 2076 BS. Seven SEE examination operation and administration committees would be constituted, one in each of the seven provinces, to conduct and oversee the examination in their respective provinces. The SEE exam which would run from April 22 to May 3, 2022, would be conducted and administered under the new system.

Similarly, the results of each of the 7 provinces would also be published separately.132 This year, 2,000 centers and more than 11,000 schools will be hosting the SEE examinations.

The Board estimates that around 500,000 students woulde appearing for the SEE exam. 133

KEY DEVELOPMENT Bharatpur Metropolis makes concrete progress in educational improvement: Bharatpur Metropolitan City (BMC) has made significant progress in terms of educational reforms. According to the Bharatpur Mayor, Renu Dahal, the city is in the forefront, in terms of educational development and reform. The city has positioned itself as an example by establishing an autistic school, mobilizing youth volunteer instructors by creating teaching positions, and conducting an open competition for full scholarship, among other things. The city has begun providing students from community schools in the city with NPR 10,000 (USD 83.29) per year to pursue higher level technical education. Similarly, the city plans to organize volunteer instructors to fill the current human resource

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shortfall in community schools.

Around 6,000 children have enrolled in community schools this year. The learning achievement of primary school children, which was 56.47% in 2018, rose to 62% in 2020. Along with the improvement of the instructional quality of the community schools, the total literacy rate in the city has also risen to 98.5%. The tangible progress in educational improvement in city can be attributed to the expansion of internet facility accessible to all schools, ICT training imparted to teachers to increase competence, and addition in infrastructure in community schools. 134 Modern library to be built in Jamal: The Ministry of Education, Science, and Technology (MoEST) plans to build the Nepal National Library in Jamal. The library opened a tender for the construction of the library building. A controversy arose when the Council of Ministers handed over 8 ropanies of Tribhuvan University’s (TU) land in Jamal to the National Library for its management. Initially, TU had a business plan to develop a shopping center on the property.

This dispute ended after the 126 government transferred ownership of the land to the library. According to head of the Nepal National Library Dasharath Mishra, the cost of the proposed seven-story modern building for the library has been estimated at NPR 740 million (USD 6.16 million). The government has already started the process of preparing and passing the map for the building. The library building is expected to be completed in two years according to the government's plans. 135 Student organizations demand action against medical colleges for refusal of government -imposed fee caps: Student organizations affiliated to various political parties demanded action against medical colleges that charged fees higher than the amount set by the Medical Education Commission.

The students demanded that all private medical institutions including Manipal Medical College, CMC Medical College, and Kist Medical College be prosecuted for collecting fees that were higher

than those set by the government.

The students demanded that the colleges withdraw their decisions to charge exorbitant tuition fees.136 Students from Kathmandu Medical College (KMC) in Bhaktapur and Nobel Medical College in Biratnagar have also been protesting against the colleges for charging tuition fees higher than those determined by the Medical Education Commission.

The two medical institutions have also made it mandatory for students to stay in hostels operated by the institutions themselves. Dr. Sunil Sharma, the General Secretary of the Association of Private Medical & Dental Colleges of Nepal, and the Chairperson of Kathmandu Medical College and Nobel Medical College, argues that the students were required to stay in the colleges’ dormitory since it was built to the government's specifications.

Moreover, college officials’ reason that the medical commission failed to determine the fees in a scientific manner. The medical college owners have been refusing to follow the commission’s ceilings, further fueling protests by the students.137

Outlook The COVID-19 pandemic has severely affected the education sector. Nepali academia has been facing problems due to lack of adequate sustainable infrastructure and online education systems including skilled human resources. In addition, limited internet facilities in remote and rural areas have added to the challenges for digital academic activities. Digital learning has not been effective enough in Nepal, as it has been seen that performance of students has declined drastically over the past two years. This protracted disruption in learning might have long term consequences for Nepal’s education sector. The government needs to develop a well-designed platform with a fair and effective way of assessment. The irregularities and rescheduling of the examination are hampering the students’ careers with future at stake. Meanwhile, the encouragement and commitment towards the inclusion of Buddhist Philosophy and Madrasa education in Nepal’s curriculum would have positive impact on promotion of multidimensionality and multiculturality of universities. This might help bring a new dimension in Nepal’s education sector vis-a-vis attract foreign students. The MoEST’s introduction of the Education Sector Plan despite the failure of two earlier development plans also highlight the lack of political will among the decision makers and the tradition of making plans without analyzing the ground realities. The budget allocated by the government for the education sector plan for new fiscal year might go to waste if adequate strategies are not formulated and implemented. Therefore, the government needs to focus on rigorous research and study before implementing any educational plan.

NEFPORT ISSUE 48 – MARCH 2022

Energy and Environment

FACTSHEET

Total Petroleum Product Imports (Six months 2021/22)

NPR 132.37 billion (USD 1.1 billion) 138

The review period witnessed notable developments in the Energy and Environment sectors of Nepal. The Department of Electricity Development (DoED) started work on carrying out the feasibility studies of the 4 projects that would add 1371.85 MW of hydroelectricity capacity to Nepal’s energy production capacity. Similarly, Nepal has proposed exporting 853 MWs of electricity to India during the peak production periods. However, despite the increase in the installed capacity of hydropower projects, the decrease in hydroelectricity production from Run of River projects during the winter has led to the increase of electricity imports from India. The development in renewable energy has also kickstarted in the review period, with several solar power projects in the pipeline, along with the government’s decision to purchase solar energy through competitive bidding.

Similarly, the government seems to be interested in exploring Nepal’s hydrogen energy prospects. Another remarkable development in this review period is the entry of the private sector in energy trade, with the first private power trade deal being signed between Nepal and India. Nevertheless, the review period saw fuel prices reach record highs.

POLLUTION AND EMISSIONS Bharatpur Metropolitan City receives support from South Korea for waste management The Bharatpur Metropolitan City received financial and technical assistance from the Republic of Korea for the management of waste in the city. An agreement to build a modern and scientific landfill site at a cost of NPR 1.25 billion (USD 10.41 million) was reached. The landfill would cover 9.9 hectares of land in the Jaldevi

Community Forest and would be able to manage 100 tons of waste daily. As per Renu Dahal, Mayor of Bharatpur, a master plan has been prepared after a detailed study for waste management.

The agreement would be signed by the Ministry of Federal Affairs and General Administration after all procedures are completed.145 Medical waste management center set up in Birgunj To mitigate the hazards caused by

health careless

Peak Energy Demand (2021)

1482 MW 139

Total Energy Generated

2013.11 MW 140

Total Hydropower generated

1936.52 MW 141

Total Solar Energy generated

20.18 MW 142

% Of households with access to electricity (2021)

85% 143

Number of permits/licenses issued for energy generation

237 144

disposal of medical waste, the Birgunj Metropolitan City has constructed the Green Hospital Waste Management Center. The city spent a total of NPR 62.2 million (USD 0.52 million) to set up the waste management center.

Despite being the medical hub for all the central Terai districts, Birgunj has had no provision for the disposal of medical waste until now. Most hospitals in the city had been failing to safely segregate and dispose the medical waste, inviting major health risks for health sanitation

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workers and the general public.

As per the metropolitan city officials, as much as 4.7 tons of medical waste is generated daily in Birgunj, with 2.7 tons being toxic. The establishment of the Medical Waste Management Center would help in safely segregating, decomposing, and recycling such waste. The city has also purchased two mini trucks for the collection of medical waste.146

PROJECTS AND PROGRAMS Government to build 4 hydel projects with a total capacity of 1,371.85 MW The Department of Electricity Development (DoED) is carrying out feasibility studies for 4 hydroelectricity projects with a cumulative capacity of 1,371.85 MW.147 The department plans to construct the Mugu-Karnali Hydroelectricity Project (111.5 MW), the Lower Badigad Reservoir Hydropower Project (350 MW), the Kaligandaki-2 Reservoir Hydropower Project (503 MW), and the Humla-Karnali Cascade Hydropower Project (229.77 MW).

In this regard, the DoED through a public notice on January 23, 2022, called for letters of intent from 22 shortlisted companies.

These companies would have to complete the environmental impact assessment and the feasibility study in the next four years.

Government Committee suggests formulating a legal framework for Hydrogen Energy Production & Regulation A Committee formed to study the usage of hydrogen energy

submitted a report to the Minister of Energy, Pampha Bhusal suggesting that Nepal should move ahead with preparing a legal framework for the production and regulation of green hydrogen energy.

The report highlighted that formulation of specific policies, strategies, and roadmaps while making necessary changes to the existing laws were required along with creating a framework for special laws on hydrogen energy. Similarly, the report suggested that a roadmap with short-term, medium-term, and long-term plans needed to be created to produce green hydrogen energy in Nepal. As per the report, the first phase would involve the formulation of a policy. Commercialization of green hydrogen production and use would fall in the second phase and displaying of Nepal's presence in the international hydrogen energy market would be the third phase.148

HYDROPOWER National Hydro Power Company to acquire Sunkoshi Hydropower Ltd. National Hydro Power Company (NHPC) is preparing to acquire Sunkoshi Hydropower Ltd. NHPC holds over 97% stake in the Sunkoshi Hydropower Ltd. As per Kumar Pandey, Chairperson of NHPC, the necessary processes for the acquisition have been initiated, and both companies have formed their merger committees. The merger process is expected to be endorsed through the AGM of NHPC with a swap ratio of 1:0.25.149 The Sunkoshi Hydropower Company was established to build the 4.5

MW Lower Indrawati hydropower project. However, the license of the project was scrapped due to technical problems and the project has now been allotted to NHPC. Nepal urges India to buy 853 MW of electricity produced by 8 projects Nepal sent a proposal to India for the purchase of 853 MW of electricity generated by 8 hydropower projects in Nepal.

Nepal sought approval to sell electricity on the Indian Energy Exchange (IEX) under the day-ahead market during the rainy season. So far, two Nepali hydropower projects have been approved to sell electricity in the Indian market.

The Nepal Electricity Authority (NEA) as requested approval to sell electricity from the Upper Tamakoshi (456 MW), the Kaligandaki (144 MW), the Marshyangdi (69 MW), the MidMarshyangdi (70 MW), the Upper Bhotekhoshi (45 MW), and the Chamelia (30MW) hydropower projects. The NEA is also planning to send proposals for the Likhu project, projects of the Tamakoshi Corridor, and some private sector hydropower projects. 150

TRADITIONAL ENERGY Fuel prices hit a record high The state-owned Nepal Oil Corporation (NOC), yet again hiked the prices of petrol, diesel, and kerosene, resulting in the prices reaching an all-time high.

The NOC increased the prices of fuel four times since January 2022. As of February 21, 2022, the price of petrol has reached

NEFPORT ISSUE 48 – MARCH 2022

NPR 145 (USD 1.21) per liter, while the prices of diesel and kerosene have reached NPR 128 (USD 1.07) per liter. The petrol prices had earlier been increased from NPR 136 (USD 1.13) to NPR 139 (USD 1.16) on January 20, 2022, and to NPR 142 (USD 1.18) on February 2, 2022.151 Similarly, prices of diesel and kerosene had been increased from NPR 122 (USD 1.02) to NPR 125 (USD 1.04) on February 2, 2022. Likewise, the price of aviation fuel was hiked to NPR 116 (USD 0.97) per liter for domestic flights and USD 1095 per kiloliter for international flights from NPR 106 (USD 0.88) per liter and USDD 995 per kiloliter, respectively as of February 2, 2022. 152

RENEWABLE ENERGY Nepal Electricity Authority to purchase solar energy through competitive bidding Nepal Electricity Authority (NEA) has decided to carry out power purchase agreements (PPA) with solar-based power projects to purchase solar energy through competitive bidding. The NEA plans on signing PPAs with the projects that offer the lowest rate.

The power utility in June 2018 decided to purchase electricity from solar plants at NPR 7.30 per unit for three years. As the three-year term has expired, the authority decided to go for competitive bidding. A committee has been formed to determine the base rate, which would be the maximum rate of the PPA. 153 IBN allows Central Electronics to conduct a feasibility study of a 350 MW solar energy project The 49th board meeting of the

Investment Board Nepal (IBN) has approved Central Electronics Limited to conduct a feasibility study for the production of 350 MW of solar energy. The IBN approved the study to generate 125 MW in Dipayal Silgadhi Municipality of Doti district, and 225 MW in Amargadhi Municipality of Dadeldhura district. The project is estimated to cost around NPR 23 billion.

Similarly, the meeting also decided to approve the Inception Report submitted by SJVN Limited India to develop the Lower Arun Hydropower Project. 154

to bear the rest of the 10% of the cost. Solar mini-grid projects with a capacity of up to 100 KW developed either on publicprivate partnership, cooperative or community models would receive subsidies of up to 60% of the total cost. Likewise, subsidies of up to NPR 45,500 per household in the Himalayan region, NPR 39,000 per household in the hilly region, and NPR 28,800 per household in the Terai region would be provided for biogas production. 155

Government to provide up to 90% subsidy on the production of renewable energy in areas deprived of connectivity to the national grid

First private power trade deal signed between Nepal and India

Through the new Renewable Energy Subsidy Policy 2022, the Government of Nepal has decided to provide subsidies on energy consumption for targeted regions deprived of the national grid connectivity, people suffering from natural disasters, and low energy using households.

The new policy states that local institutions that produce and distribute electricity of up to 1,000 KW through micro and small hydropower projects would be eligible to receive up to 90% of the total cost as a subsidy.

Similarly, solar-powered drinking water projects run by local consumer committees would also be receiving up to 90% subsidy. The federal government would be subsidizing up to 70% of the energy subsidy costs, while sub-national government or related institutions would bear up to 20% of the subsidy cost. The end-users would have

NEW DEVELOPMENTS

Nepal Power Exchange Limited and India’s Manikaran Power Limited signed an MoU to trade energy during the Nepal Power Market Summit 2022 held on January 10, 2022, in Kathmandu. This has ended the monopoly of the state-owned Nepal Electricity Authority in Nepal’s energy trade. The Nepal Power Exchange Limited is a company promoted by the members of the Independent Power Producers’ Association of Nepal (IPPAN). As per private sector representatives, the private sector’s entry into energy trade would encourage investments in the energy industry while increasing power exports to countries like India and Bangladesh. This would aid in narrowing Nepal’s trade deficit as well. Likewise, with the production capacity steadily increasing year after year, the engagement of the private sector in the energy trade would help minimize wastage of electricity during peak production periods. 156

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Bangladesh to buy power from Nepal As per the Confederation of Nepalese Industries (CNI), Nasrul Hamid, Bangladeshi State Minister for Power, Energy, and Mineral Resources assured that Bangladesh would be buying electricity from Nepal starting 2022. Hamid remarked during his interaction with the delegation of the CNI in Dhaka. According to Hamid, Bangladesh has initiated work on signing a long-term power purchase agreement (PPA) with the Nepali private sector. Electricity generated in Nepal is being wasted due to the lack of adequate storage

infrastructure and transmission lines to connect to internal and external markets. Hamid stated that the infrastructure required to import electricity from Nepal would be strengthened and construction of a dedicated transmission line would also be commenced. Bangladesh aims to purchase 3500 MW of electricity from Nepal by 2026. 157 Electricity import from India increases to 468 MW Owing to the surge in demand with a drop in temperature and reduction in domestic production, Nepal’s import of electricity from India has reached 468 MW,

up from 367 MW a month ago.

According to Nepal Electricity Authority (NEA), the peak hour demand has reached 1,710 MW, compared to the maximum demand of 1,474.79 MW, during the winter of last year. A month ago, the demand stood at 1,619 MW. At present, the domestic production capacity stands at around 2,000 MW. However, only 757 MW is being generated due to a fall in the flow of water in rivers.

Of the total generation, NEA is generating 291 MW, while 143 MW is being generated by NEA subsidiaries and 323 MW is being supplied by the Independent Power Producers. 158

Outlook The future of the energy sector looks promising, particularly in the hydropower and other renewable energy sectors. The demand for electricity has been growing, standing at around 1500 MW on average and reaching 1,619 MW during the winters. Despite a surplus production of energy during the peak production periods, the hydropower generation during the dry season stands at only 757 MW, which compels the country to import energy from India. The increasing imports and prices of petroleum products is a matter of grave concern for Nepal, as it not only burdens the Balance of Payments (BoPs), but also risks hyperinflation. The numerous hydropower and solar projects coming up would help increase capacity in the future. Harnessing the country’s solar energy potential and integrating it into the national grid would help ensure stability and reliability of Nepal’s energy sector.

NEFPORT ISSUE 48 – MARCH 2022

Health

FACTSHEET Average Life expectancy

71.06 years in 2020159

The review period witnessed the third wave of the COVID-19 pandemic, recording an all-time high with 11,352 new cases in a day. In light of the third wave, the government has ramped up administration of booster doses and reduced PCR fees.

Mismanagement of vaccines, which has led to waste, remains a challenge. The government has taken several steps to make health services more accessible to the general public.

Mandatory vaccine cards boosted vaccination drive The vaccination rate increased across Kathmandu Valley after the government announced that vaccine cards were mandatory to avail public services and enter public places such as hotels, restaurants, movie theatres, and airports from 21 January 2022.166 The government also removed the need for an identity card to avail vaccines as thousands of people who could not produce a citizenship certificate, passport, or voter identity had been deprived of their right to vaccination.167 Booster shots administered The Ministry of Health and Population (MoHP) started administering booster shots to people who were above the age of 60 years, frontline workers, and immune-compromised people from 28 January 2022. With the government’s target of 40% of the population being vaccinated reached, the booster shots are being administered in stages.168 Mismanagement of

COVID-19 vaccines Over 56 thousand doses of COVID-19 vaccines supplied to districts and local levels were expired or damaged due to improper management. 25,562 doses of Moderna, 19,049 doses of AstraZeneca/Covishield, 7,023 doses of Vero Cell, 5,195 doses of Janssen, and 79 doses of PfizerBioNTech vaccine were wasted. 169 Along with the poor handling of vaccines, demand for vaccines by local authorities and supply of vaccines by district authorities are conducted without taking the storage capacity of the local authorities into account.170 Furthermore, record of approximately 1.5 million doses of vaccine provided to the public is missing due to inadequate record-keeping of vaccines.171 Fees for PCR test reduced On 19 January 2022, the Government of Nepal has reduced the fee for the RT-PCR COVID test to NPR 800 (USD 6.67) from NPR 1000 (USD 8.33) at government testing centers for asymptomatic people, while the symptomatic patients can

Crude Death Rate 6.3 per 1000 people in 2020160 Infant Mortality Rate 23.59 per 1000 live births in 2020161 Maternal Mortality Ratio 186 per 100000 live births in 2017162 Total Fertility Rate 1.845 live births per woman in 2020163 Access to safe drinking water 17.57% of the population in 2020164 Number of Physicians 0.8 per 1000 people in 2019165 be tested free of cost. Private testing facilities can now only charge NPR 1500 (USD 12.49), which was reduced from NPR 2000 (USD 16.66). Both private and government hospitals were unaware of this decision as the government did not send circulars to health institutions before the announcement, which lead to confusion and delay in implementation of reduced PCR fees. 172 Ongoing trials for “lifechanging” treatment of leprosy Anandaban Leprosy Hospital is conducting a year-long trial, led

by Birmingham University, and funded by National Institute for

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DOCKING NEPAL’S ECONOMIC ANALYSIS

1.18 million doses

Figure 13 Vaccines received by Nepal by type

3.44 million doses

0.66 million doses

2.10 million doses

0.69 million doses

3.65 million doses

3.53 million doses

4.00 million doses

(Source: The Kathmandu Post, 2022)

United Kingdom

France

Italy

Verocell (purchased)

AstraZeneca (donated)

Moderna (purchased)

Moderna (COVAX)

Covishield (COVAX)

Health Research, involving 130 adults for a new treatment for skin wounds caused by leprosy. The trial involves using the patient’s blood to make an artificial scab that mimics the body’s natural healing process to cover leprosy ulcers. Leprosy affects 3,200 new people every year in Nepal and the treatment is expected to have enormous potential. This treatment is also expected to help millions living with diabetes who have an increased risk of amputation. 173 Government to provide grants to drug rehabilitation centers To ensure basic health services to every citizen, the Ministry of Home Affairs is preparing to provide grants to rehabilitation centers for the treatment of drug users. The grant, however, shall not be available to those rehabilitation centers which have received a grant within a year and have been established for less than 2 years. 16

rehabilitation centers have submitted a proposal so far, and 3 applications were selected.

The grant can be utilized by the centers for conducting training for the skill development of drug users undergoing treatment. 174 Uptake of health insurance low Despite the introduction of health insurance in all 77 districts, only 4.9 million people, which represents 19% of the population have enrolled to the service. Out of those, 39% of the insurance holders have availed the services, while 25% of insurance holders have not renewed their insurance. The low uptake of health insurance can be attributed to lack of knowledge on benefits of insurance among people. Due to the shortage of permanent staffs of the Insurance board in hospitals, there is also a delay in patients receiving their claims which further discourages the uptake of insurance. 175

Increase witnessed in both the import and export of medicines The import of medicines has increased by 236% in the second quarter of the current fiscal year, compared to the first quarter of the current fiscal year. Nepal imported NPR 42.22 billion (USD 351.66 million) worth of medicines in the first 6 months of the current fiscal year, which represents a 174.6% increase from the corresponding period in the last fiscal year. The export of Ayurvedic Medicine has increased by 86% in the second quarter of the current fiscal year, compared to the first quarter of the current fiscal year. Nepal exported NPR 899 million (USD 7.49 million) worth of Ayurvedic medicine in the first 6 months of the current fiscal year. 176 Nepal faces a shortage of paracetamol Paracetamol, a drug used to

NEFPORT ISSUE 48 – MARCH 2022

reduce fever and pain, is in high demand as the country faces the third wave of COVID-19.

Nepal is facing a shortage of paracetamol in private and government hospitals within the

Kathmandu Valley177 as well as in rural areas such as Mugu178, Ramechhap179, and Humla180.

Despite the Supreme Court ordering the government to make special arrangements for

immediate distribution of the medicine, the government has failed to coordinate with local and provincial governments to address the shortage.181

Outlook The recent developments in the health sector have improved the health care services in the country. With over 50% of the population fully vaccinated, severe COVID-19 cases and associated complications will decrease, reducing the strain on healthcare providers who have been facing a shortage of human resources since the start of the pandemic. The vaccination rate is expected to increase with the removal of identification card requirement and additional doses of vaccine being available. A lack of proper record keeping of vaccines received and administered could lead to inaccurate estimation of vaccine needs in the country, leaving the marginalized groups more vulnerable to COVID-19 complications. The reduction of fees for PCR tests and grants for rehabilitation centers are a welcome initiative. While the quality and status of healthcare has seen an improvement compared to the previous quarter, Nepal has a long way to in terms of policies to make health services more affordable in the country.

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Infrastructure and Real Estate

FACTSHEET182 Local road network constructed Length of road

33,528 km 63,577 km

No. of Infrastructure

1

Development Bank

The review period witnessed a variety of developments in the electricity, aviation, infrastructure, and real estate sectors. Several new projects have been introduced and planned to move Nepal towards improved infrastructure, better connectivity, and sustainable future. For instance, Nepal is working to shift to Electric Vehicles (EVs) by producing more electricity to lower its carbon footprint. New infrastructural developments are being planned to include the first flyover in Nepal.

While another major infrastructural project has just been completed: the Gautam Buddha International airport. Additionally, Nepal is set to receive its largest ever infrastructure grant with Millennium Challenge Corporation now being ratified. With numerous projects in the pipeline, it is crucial overcome infrastructural challenges to avoid delays and overbearing costs.

FDI received for infrastructure Tax on infrastructure service utility and

The Millennium Challenge Corporation (MCC) Compact has finally been ratified by the House of Representatives of the Federal Parliament of Nepal, eleven years after its inception in Nepal. Following extensive political polarization and subsequent discussions, the ruling alliance parties finally came to an agreement to proceed with the deal.184 Under the MCC pact, electricity transmission lines and three substations will be built to improve Nepal’s electricity supply and facilitate a power trade. In addition to that, roads will be rehabilitated and maintained

through 300km of strategic road networks. While the compact has been ratified, construction of the projects will take another ten months since conditions linked to compensation and land acquisition under the project are yet to be met. 185 Operation of Gautam Buddha International Airport The Gautam Buddha International Airport is now the country's second-largest airport, it will help to reduce air traffic in Kathmandu once operational. Calibration flights took place starting Feb 18 and international flights will begin operating at Gautam Buddha

NPR 2518.60

vehicles (NPR. In 10 million) Road maintenance and upgradation tax (NPR. In 10

NPR 667.16

million) Road construction and maintenance tax (NPR. In 10

NPR 473.68

million) Infrastructure tax (NPR. In 10 million) Global Competitiveness Index 2019 Prosperity Index 2020

MCC ratified

NPR 38.67 billion

projects

Infrastructure Development Tax* Road maintenance charge** Road improvement charge** Real estate loan extended by BFIs

NPR 1340.65 51.57 Index points/Rank 108 50.45 NPR 10 per litre NPR 4 per litre NPR 2 per litre 8%

Contribution of real estate activities to

5.53%

GDP Growth Contribution of real estate sector to

9.40%

Gross Value Added * Infrastructure development tax is collected for infrastructure development at customs point from petrol and diesel imported into Nepal at NPR 10 per litre **Road maintenance and improvement charges are collected for maintenance and improvement of roads at NPR 4 and NPR 2 per litre of petrol and diesel imported into Nepal 183

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International Airport in Bhairahawa on April 14, 2022, according to Minister for Culture, Tourism, and Civil Aviation Prem Bahadur Ale. 186 Minister Ale stated that it will be easier for residents if foreign planes begin to operate from the airport as residents would not need to Kathmandu to fly internationally.

The airport will also make it easier for international visitors to fly into Lumbini for Buddhist pilgrimage purposes. Ale stated that talks for a direct flight route to the airport are now underway with India, and that the Indian counterpart is similarly enthusiastic about the proposal.

Karnali real estate price hikes higher than Bagmati According to a study performed

by Nepal Rastra Bank (NRB), the largest increase in real estate prices is in Karnali, which has surpassed Bagmati Province.

In the first nine months of FY 2020/2021, real estate prices increased by an average of 23.88% in Karnali Province and 5.95% in Bagmati Province. However, the study only looked at two districts from each of the seven provinces and looked at 20 locations in each district. According to the data from the Land Revenue Office, following Karnali, the real estate prices increased by 17.42% in Madhesh Province, 14.45% in Lumbini, 14.20% in Province 1, 11.83% in Gandaki, and 6.35% in the Sudurpashchim province. 187 Residents can now install their own EVs charging units Nepal Electricity Authority (NEA) has enabled EV owners to install separate charging devices in their homes after passing of the Electricity Distribution Bylaw

2022.188 Electric vehicle owners can now maintain additional electric equipment at their homes or offices to charge their vehicles as NEA has decided to enable residents to upgrade their electricity supply.

The bylaw includes provisions to encourage the development of infrastructure for electric vehicle charging. In addition to individual residents, the authority will also allow any private companies to establish charging stations in office buildings and public spaces. The transformers for the charging station with a capacity of 200 kVA will be provided by NEA to the service providers. 189 Infrastructure for Nishan Kalikadham and Yankbarak Pokhari in Panchthar is being built At Yankbarak Rural Municipality-4 in Taplejung district, infrastructure for the expansion of Nishan Kalikadham and Yankbarak Pokhari (pond) has commenced.

The project after completion will attract more visitors and will be a place for locals to spend their time. The project is expected to cost around NPR 69 million (USD 559 thousand), with the Ministry of Culture, Tourism and Civil Aviation contributing 70% and the Rural Municipality providing 30% for the project.190 The project will include the expansion and construction of structures for Nishan Kalikadham and Yankbarak Pokhari. The project will also include the development of a children's park, a resting area, a fishpond, sprouts, a selfie spot, a garden, and a major entrance. The project is set to be completed by 2024.

First Flyover in Kathmandu Ashish Samanantar JV of Samantar Nirman Sewa PVT Ltd. has been awarded the construction contract for a fourlane flyover at Gwarko, Lalitpur by the government. The Department of Roads' Quality, Research and Development Center announced on January 19, 2022, that the company has been granted the construction project, which will be finished in the next two years.

The contract was provided by the Department of Revenue for a sum of NPR 176.88 million (USD 1.48 million). According to the contract, the building company must prepare a design in four months and complete the construction in twenty months. The 455-meter flyover will connect the B & B Hospital area to Balkumari of the Lalitpur length of the valley ring road via Gwarko Chowk. 191 Four new hydro projects commissioned The Department of Electricity Development is conducting feasibility studies for four hydroelectric projects totaling 1,371.85 megawatts. The MuguKarnali Hydroelectricity Project (111.5 MW), Lower Badigad Reservoir Hydropower Project (350 MW), Kaligandaki-2 Reservoir Hydropower Project (503 MW), and Humla-Karnali Cascade Hydropower Project (229.77 MW) are among the projects planned by the department. 192

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Outlook Nepal, currently a Least Developed Country (LDC), is aiming to achieve its goal of becoming a middle-income developing country by 2026. However, vulnerable to unstable politics and natural disasters such as earthquakes have hindered several projects. As observed in the past, economic development and inclusive growth cannot take place without an infrastructure base. For Nepal to be able to grow economically, the private sector and the government must work together to develop a strong infrastructural base. Common infrastructure bottlenecks such as distorted land policies and delayed decision making from the government side needs to be resolved to accelerate pace for infrastructural development. Furthermore, with the aim to lower its carbon footprint by producing more electricity and shifting towards EVs is a move towards a sustainable future for Nepal.

As highlighted earlier, the development of the aviation sector is underway, with Gautam Buddha International Airport gearing to open, and Nijgadh and Pokhara airports under construction. The MCC pact will have a major role in helping to maximize Nepal’s energy output and transforming transportation hence the timely construction of MCC projects is crucial. The infrastructure and real estate in Nepal are developing in Nepal with several projects from both the private sector and the government being built. The projects commissioned by the government look promising and it is important to overcome infrastructural challegnges to ensure these projects are completed.

NEFPORT ISSUE 48 – MARCH 2022

Information and Communication Technology

FACTSHEET Tele density

138.94% Internet data subscribers

36.05 million Internet Penetration

To harmonize the Information and Communication sector of Nepal with the international best practices, the regulators, Nepal Telecommunications Authority and Nepal Rastra Bank made several attempts to introduce features like Mobile Number Portability, digital lending, interoperability etc. During the review period, the market for telecommunications grew by 1.96% and the Internet Service Providers (ISPs) market grew by 5.35% in Mid- February 2022 compared to MidOctober 2021. The market shares held by ISPs and telecom providers remained relatively constant. With the internet penetration increasing, the review period saw the private sector improving their services to take advantage of a growing telecommunications market.

Techminds Network Pvt. Ltd. 3.7%

Figure 14 Market Share of ISPs based on number of subscribers

Web Surfer Nepal Communication System Pvt. Ltd. 3.9%

Others 14.3%

119.49% Average download speed of mobile internet connection

18.42 Mbps194 ICT goods import as a % of total import

4.4% FDI approved in ICT sector

NPR 3.01 billion195 Total Digital Payment Transaction

NPR 5.41 trillion on mid-Dec to mid-Jan

Worldlink Communications Pvt. Ltd. 29.9%

Classic Tech Pvt. Ltd. 10.3% (Source: NTA MIS Report Mangsir 2078 (mid-January to midFebruary 2022))

Vianet Communications Pvt. Ltd. 8.4%

Subisu Cablenet Pvt. Ltd. 13.1%

Nepal Doorsanchar Company Ltd. 16.4%

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Figure 15 Market Share of Telephone Operators

(Source: NTA MIS Report Mangsir 2078 (mid-January to midFebruary 2022))

Figure 16 Growth Trend of Voice and Data Services

(Source: NTA MIS Report Mangsir 2078 (mid-January to midFebruary 2022))

Free Broadband in more than 15 thousand locations across Nepal The Rural Telecommunications Development Fund (RTDF) of Nepal Telecommunications Authority (NTA) has expanded free broadband services in 15,393 locations with 589 locations

remaining.

The broadband project aims to provide 20 Mbps internet connection in government offices, schools, and colleges. The RTDF project uses separate ISPs to connect these locations to the internet. NTA covers the installation costs and the cost of internet service for 2

years, after which these locations are required to pay the ISPs.196 NTA to implement Mobile Number Portability NTA has started the process to launch Mobile Number Portability (MNP) feature after it

NEFPORT ISSUE 48 – MARCH 2022

did not receive any suggestion from telecom operators on draft Mobile Number Portability Rules 2078 (2021). The MNP feature allows phone users to switch between mobile network carriers without changing their original phone number.

The implementation of MNP will be through a third-party service provider responsible for maintaining and implementing the service through Number Portability House.196 Internet service of Nepal Telecom to be upgraded Nepal Telecommunications Corporation (NTC) has upgraded their international bandwidth capacity to 120 Gbps which will decrease lag and increase consistency on the internet for the users. NTC also upgraded its Akamai CDN’s bandwidth capacity to 600 Gbps which will quicken loading time for Facebook, Google, and Tiktok.

The core routers of NTC in Kathmandu, Butwal, Pokhara, and Hetauda has been upgraded to 100 Gbps. The network provider has also set up local cache servers for Netflix and Cloudfare.197 The Ministry of Communications and Information Technology (MoCIT) has been directed to submit an action plan to improve the internet service provided by NTC.198 Digitalization at government offices The Department of Customs has installed Automated System for Customs Data (ASYCUDA) World, a web-based customs management system, at all major border crossings of Nepal.

The system supports paperless submission and processing where customs declaration can be submitted online. The system also allows clients to open bank accounts and make online payments.199 The Department of Food Technology and Quality Control, Plant Quarantine and Pesticide Management Centre, and Department of Livestock Services have also integrated their services into the system. 200 The Department of Foreign Employment has also started issuing labor permits through an online system only to ensure a fast and transparent service.201 NRB allows digital lending The digital lending guidelines issued by the NRB allows salary, professional, and entrepreneurial account holders to borrow up to NPR 500,000 (USD 4165) and up to NPR 200,000 (USD 1665.84) to other accounts from their banks or e-wallet over the internet for a period of 3 years.

Banks and Financial Institutions (BFIs) can enter into agreement with payment service providers such as digital wallets to act as their agent for digital lending.

The payment service providers should clearly state the name of BFIs before lending to customers without promoting a particular BFI. Processing of loan application and collection of interest and principal should be automated.

Additionally, BFIs should bear the fees charged by payment service providers, instead of the payment service providers charging such fees from customers.202 NRB enforces interoperability Nepal Rastra Bank (NRB) has

directed digital payment service providers to be interoperable within the next six months.

Interoperability allows users of one digital payment platform to make payments to users of other platforms without switching.

This interoperability applies to digital wallets, mobile banking apps, and Quick Response (QR) codes. The retail payment system operators are prohibited to create rules that prevents the other payment systems to access them.203 Worldlink Invests in Khalti Internet Service Provider (ISP) Worldlink has invested in the digital wallet Khalti. With Worldlink’s internet coverage in all 77 districts and Khalti’s 2 million active users, this partnership aims to expand digital financial services to rural areas and facilitate online payment. This investment has resulted in Worldlink owning 40% of Khalti.204 Smart Cell’s License to be revoked Citing failure to pay the first installment of NPR 590 million (USD 4.92 million) to NTA by 14 January 2022, NTA is preparing to revoke Smart Cell’s license.

NTA had decided to revoke Smart Cell’s license two years ago when it failed to pay its dues, but the operator was ordered to pay its dues in five installments totaling NPR 3.58 billion (USD 29.82 million) and a license renewal fee of NPR 1.25 billion (USD 10.42 million). Despite multiple extension on payment deadlines, Smart Cell has been unable to clear its dues.205

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Increase in Import and Export of ICT The import of telecommunications equipment and parts has increased by 62.8% in the second quarter of the current fiscal year, compared to the first quarter of the current fiscal year. Nepal

imported NPR 33.07 billion (USD 275.45 million) worth of telecommunications equipment and parts in the first 6 months of the current fiscal year, which represents a 32% increase from the corresponding period in last fiscal year. The import of computer and parts has increased by 82% in

the second quarter of the current fiscal year, compared to the first quarter of the current fiscal year.

Nepal imported NPR 11 billion (USD 91.62 million) worth of computer and parts in the first 6 months of the current fiscal year.206

Outlook The review period paints an optimistic picture of the future of digitalization in Nepal. The free internet service provided to government offices, schools, and colleges are an important step however, substantial plans for financing the cost of internet after the two years must be laid out to ensure smooth continuity of the digitization process. Similarly, the introduction of Mobile Number Portability will encourage healthy competition among telecom providers to improve and innovate their services, as several people refrain from switching carriers to prevent the inconvenience of a phone number change. To ensure that the consumers can enjoy the benefits of interoperability without paying a hefty price, the technological and operational costs associated with interoperability of digital financial service providers needs to be subsidized. Additional support is required to aid smaller digital payment companies who need an environment to innovate and find their niche in the market instead of replicating the models of well-established brands. Furthermore, Nepal Doorsanchar Company Ltd. improving their internet will improve the overall quality of internet in the country and aid in the country’s digitization process as it occupies a market share of 16% among ISPs.

NEFPORT ISSUE 48 – MARCH 2022

Tourism

FACTSHEET

The tourism sector in Nepal is gradually recovering ever since the COVID-19 restrictions were eased which has resulted in a growth in tourist arrivals. The pandemic hit the Nepali economy hard and the tourism sector was badly impacted by the outbreak of the virus. The influx of tourists to Kanchenjunga region, which is one of the most popular trekking destinations in Nepal was closed off due to the pandemic. As Nepal anticipates more tourists, several tourism development projects are in the imminent or have been opened. Policies have been enacted to help tourism enterprises by refinancing their loans and domestic fares for foreign tourists have been discounted to attract more foreign tourists for domestic travel.

Tourist arrival The number of tourist arrivals in 2021 has decreased by 34.4% compared to 2020. A total of 150,962 tourists visited Nepal in 2021.208 The decrease in tourist arrivals can be attributed to the pandemic, and it further declined when it entered its third wave.

Nepal entered its third wave in January and recorded more than 10,000, its highest number of cases in a single day on January 18.209 The government extended the ban on public gatherings and closed gyms, restaurants, bars, and movie theaters. There was a constant increase in tourist arrivals from May to November in 2021 but it declined in December 2021 amidst the spread of Omicron variant. Arrivals dropped further from 24,679 in December 2021 to 16,975 due to the third wave hitting Nepal. As cases have dropped since the third wave, tourist arrivals are increasing again with February 2022 welcoming

19,766 tourists. The figure is much higher than the 9,146 tourists that arrived during February last year. The recent numbers are still far below the pre-pandemic levels of 100,000 tourist arrivals in the spring season before the pandemic began.210 Domestic arrival lounge in the Tribhuvan International Airport to be expanded Prem Bahadur Ale, the Minister of Culture, Tourism, and Civil Aviation, has administered the appropriate authorities to expand the arrival lounge at the domestic terminal of Tribhuvan International Airport (TIA).

Minister Ale urged TIA officials to expand the arrival lounge at the domestic terminal of TIA due to the growing number of travelers and the risk of COVID-19.211 A lounge will be constructed at a wider space to accommodate the influx of passengers.

Tourist arrivals 2020

230,085

Tourist arrivals by air

183130

Tourist arrivals by land

46955

Revenue from tourism in 2020

USD 217,007,000

Average per day spending of tourists 2020

USD 65

Purpose of Visit 2020 Trekking & Mountaineering

35,893

Pilgrimage

28,530

Holiday/Pleasure

139,202

Others

26,460

Top visiting country

India

Discount on airfare and accommodation for foreign travelers To attract more foreign tourists, the Tourism Revitalization Steering Committee has signed a deal with Buddha Airlines Pvt Ltd. and Yeti Airlines to provide a discount on airfare to foreign tourists on domestic flights.212 Due to the policy before the introduction of the discount, foreigners flying by plane within Nepal were paying roughly twice the price that Nepalis paid.

Similarly, to revitalize the tourism sector, the Hotel Association of Nepal (HAN) decided to offer international tourists a discount of up to 20% on hotel rooms.213 The hospitality sector has suffered major losses and such initiatives by the government and HAN are steps in the right direction to recover the foreign tourists in Nepal.

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Negative impact of COVID-19 persists in the Kanchenjunga region Due to the COVID-19 pandemic, tourist arrivals in the Kanchenjunga region of Taplejung have declined dramatically in the last two years with only a few tourists visiting the area during this time. In the first season of the current fiscal year, five mountaineers, including four Nepalis, successfully scaled Kanchenjunga Mountain.

According to the Kanchenjunga Conservation Area Management Council, only 43 tourists visited the region in fiscal year 2077-78 BS (2020-21), while 141 tourists have visited so far in fiscal year 2021/22.

The council office highlighted that a total of 5,427 tourists visited the area over the last decade, including 806 in the current fiscal year (2018-19).214 Casino royalty dues increased After authorities ramped up measures to act against casinos delaying payment of their debts, the government has recovered NPR 764.50 million (USD 6.4

million) in royalty dues from the casinos. 17 casinos have paid the amount to the authorities, reported to the Department of Tourism (DoT).215 Six casinos have yet to pay the government, which accounts for NPR 1.11 billion (USD 9.3 million) in royalties.

First cable car opens in Pokhara On February 18, 2022, a new cable car service that connects Phewa Lake to Sarangkot Hill opened in Pokhara.216 The Annapurna Cable Car connects Pokhara's two most well-known tourist sites, with the objective of becoming a major tourist destination. The cable car transports passengers from Sadibagar, on the side of the Phewa Lake to Sarangkot Hill, which covers 2.3 kilometers.

The cable car has a capacity of 1,500 passengers per hour with 18 cable cars in the system. Out of the 18, seventeen cable cars are meant to transport eight passengers each, while one cable car delivers goods. In the future, 18 more gondolas will be be installed to service more passengers. The stations at the two points of the cable car also

have restaurants, parking space, gardens, and other facilities. The total cost of construction for the project was NPR 2 billion (USD 16.7 million). The Annapurna Cable Car Company has set a price of NPR 700 (USD 5.8) for Nepalis, NPR 800 (USD 6.7) for tourists from SAARC countries, and NPR 900 (USD 7.5) for tourists from other countries. Senior citizens and people with disabilities will receive a 50% discount.217 Tourism enterprises to receive the largest refinance loan from BFIs As of mid-January 2022, Banks, and Financial Institutions (BFIs) have authorized refinance loans worth NPR 106.8 billion (USD 891 million) to a total of 24,267 businesses.

According to NRB statistics 43 banks and financial institutions (BFIs) approved the refinancing of these loans.218 A total of 52.15% of the total sum was granted for companies based solely in Bagmati Province. Tourism enterprises will receive the largest refinance loan of all, worth NPR 6.79 billion (USD 56.6 million) accounting for 49.89% of the total credit. 219

Outlook Like all sectors of the economy, the tourism sector has been badly impacted by the pandemic.

While 2021 has had lower tourists compared to 2020, the tourist arrivals have been on a gradual rise since May 2021. With the spread of the omicron variant, Nepal entered its third COVID-19 wave surpassing record daily cases in January 2022. The gradual drop in cases since February 2022 led to an increased in tourist arrival that supported the recovery from the third wave. As restrictions have eased, the sector is recovering but the tourist arrivals are still far below the pre-pandemic levels.

Provided Nepal prepares an action plan to respond to another outbreak of the virus, the tourist arrivals will continue to rise. The government has introduced policies to ease the burden of tourism businesses affected by the pandemic and help them recover. The pandemic has prompted many investors to retract from investing in tourism businesses. However, investors see huge potential of a bounce back for the tourism industry with numerous exciting upcoming tourism projects and hotels in the pipeline.

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Market Review

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Financial Market

FACTSHEET220

CPI

Fiscal Year (FY) 2021/22 is a part of the economic recovery from COVID-19 as the operating profit and net profit of commercial banks have been showing an upward trend against the previous few quarters. After the second wave of COVID-19, banks have performed well with a provision of lower interest rates during the period. The loans and advances of all the banks increased, implying that the investments in the economy are further increasing. However, the liquidity crunch has been the highlight of the first six months of 2021/2022. With banks now having shortages of loanable funds, policies and amendments have been put in place to bring the balance back in the economy. However, the new provisions by the central bank to limit imports and outflow of foreign currency are expected to ease the liquidity crunch.

First Quarter Performance Analysis of Commercial Banks As per the unaudited annual results of commercial banks of FY 2021/22, as shown in Table 5, the operating profit of commercial banks increased by 9.06%, while the net profit also grew by 3.87%.

In the first six months of the FY 2021/22, Global IME Bank bagged the highest net profit of NPR 2.66 billion (USD 22.16 million), followed

by NIC Asia and Nabil Bank, both booking over NPR 2 billion each.

Agriculture Development Bank registered the lowest net profit of NPR 485.38 million. Civil Bank and Century Commercial Bank had a whopping increase of 148.42% and 54.77% in their net profits. When we look at reserves and surplus, Nepal Bank held the highest amount of reserves of NPR

17.47 billion (USD 142.76 million) followed by Rastriya Banijya Bank and Nabil Bank with NPR 15.85 billion (USD 130.02 million) and NPR 15.59 billion (USD 129.85 million), respectively. 11 banks fared more than the reserves and surplus industry average of NPR 7.69 billion (USD 64.05 million).

The deposits from customers saw a 3.94% rise compared to the corresponding period last year with the highest deposits being made at NIC Asia Bank, Global IME Bank and Rastriya Banijya Bank with NPR 295 billion (USD 2.46 billion), NPR 272 billion (USD 2.27 billion) and NPR 243 billion (USD 2.02 billion), respectively. Nepal Bangladesh Bank recorded the lowest deposits from customers with NPR 80.71 billion. However, Sunrise Bank had the highest increase in deposits of 21.43%.

NIC Asia Bank holds the highest

5.65% Total Deposits at BFIs

3.8%

Gross foreign exchange reserves

USD 9.89 billion

Buying Exchange Rate (per USD)

NPR 117.92

Weighted Average 91-day Treasury Bills Rate

5.07%

loan and advances portfolio of 261.93 billion followed by Global IME Bank and Nabil Bank at NPR 256.43 billion and NPR 251.21 billion, respectively. Nepal Bangladesh Bank had the lowest credit disbursement of NPR 74.91 billion, while Standard Chartered Bank saw a 21.95% fall in its loans and advances.

Also, during the review period average Non-Performing Loans (NPL) stood at 1.50% as compared to 1.58% during the same period previous year.

Furthermore, average cost of funds was 6.08% against 5.51% in the corresponding period previous year. Similarly, the average base rate stood at 8.18% during the review period, the highest being 9.74% of Civil Bank followed by NIC Asia Bank at 9.44%.

9,429,454.00

12,968,725.73

9,493,577.89

10,085,399.74

9,467,340.00

10,623,994.07

11,139,678.01

11,564,005.37

10,257,155.58

14,711,183.33

11,551,345.00

12,524,426.84

23,795,753.00

14,200,974.01

18,656,322.80

10,118,892.81

18,366,706.00

12,708,704.00

16,120,461.45

8,643,661.00

9,553,909.00

9,681,519.08

Standard Chartered bank

Himalayan Bank

Nepal SBI Bank

Nepal Bangladesh Bank

Everest Bank

Bank of Kathmandu

NCC Bank

NIC Asia Bank

Machhapuchchhre Bank

Kumari Bank

Laxmi Bank

Siddhartha Bank

Global IME Bank

Citizens Bank International

Prime Commercial Bank

Sunrise Bank

NMB Bank

Prabhu Bank

Mega Bank

Civil Bank

Century Commercial Bank

Sanima Bank

2nd QTR

3.46

3.13

12.30

174,288,784.64

195,434,267.42

163,109,490.82

135,893,214.88

85,208,505.00

83,427,478.00

143,605,570.84

142,332,648.00

172,145,113.00

120,390,362.43

154,394,296.40

127,571,106.98

256,425,466.00

176,881,957.04

126,184,824.00

155,962,076.52

131,990,726.60

261,923,033.78

113,482,263.73

103,587,856.49

142,646,031.00

74,908,196.22

108,713,752.85

150,678,016.95

76,104,669.00

165,164,420.00

215,206,195.00

2nd QTR

FY 21/22

150,598,355.82

177,870,982.10

135,420,466.42

119,071,400.72

78,078,290.00

79,037,697.00

137,355,431.01

135,117,774.00

151,014,124.00

100,490,657.08

135,383,783.81

118,912,042.29

228,651,427.00

158,579,235.01

105,213,372.00

137,897,925.00

113,572,009.94

248,770,354.08

94,582,167.69

93,808,156.14

127,687,225.00

68,686,150.94

96,951,274.54

126,048,134.67

62,408,699.00

156,816,677.00

198,021,418.00

2nd QTR

FY 20/21

Loans and Advances

3.94 3,957,660,323.58 3,536,045,230.26

162,814,930.68 (3.27)

263,836,765.85 (8.06)

359,433,808.40 207,736,380.67 4,117,662,381.02 3,961,724,648.05

162,813,383.87

3,955,457.34 186.37

93,496,628.00 (1.39)

88,634,877.00

136,893,588.41

Total

157,491,860.51

10.46

21.43

3.11

0.32

1.29

4.35

14.14

9.59

4.47

2.76

12.63

164,850,500.00 (0.76)

164,489,286.00

106,432,370.62

154,139,514.07

140,638,411.48

268,433,792.00

180,924,009.32

114,605,492.00

145,838,231.01

131,617,964.62

287,024,798.91

106,667,152.59

18,620,627.76

242,565,352.61

3.12

103,413,430.20 (0.37)

160,220,257.00

13,940,359.10

10,432,753.22

6.27

17.37

87,127,871.37 (7.36)

106,238,466.85

141,021,074.86

87,564,220.00 (1.46)

Agriculture Dev. Bank

15,846,649.31

4.06

% Change

174,557,704.00 (0.50)

Rastriya Banijya Bank

182,840,958.51

11,327,377.33

92,198,312.00

91,698,217.00

141,184,094.53

163,598,778.00

181,700,648.00

129,242,988.45

158,930,952.53

141,086,005.18

271,901,611.00

188,798,429.61

130,814,652.00

159,821,637.18

137,495,624.97

294,940,872.91

120,133,976.18

103,031,083.30

165,217,641.00

80,710,971.41

112,897,058.18

165,512,621.65

86,288,283.00

173,677,635.00

223,474,470.00

2nd QTR

232,554,739.00

FY 20/21

FY 21/22

14,405,904.83

17,469,662.63

3,787,246.04

9,034,430.00

2,540,638.00

3,713,183.77

4,830,682.00

6,759,399.00

5,240,690.41

5,952,291.60

4,718,909.82

10,701,344.00

8,071,069.62

4,490,609.00

4,267,355.19

2,864,415.22

11,550,884.17

3,833,892.84

5,842,717.22

8,304,931.00

9,004,821.20

5,571,279.35

7,398,500.07

5,825,886.00

14,093,529.00

15,588,611.00

Reserve & Surplus

Deposit

Nepal Bank

Public Sector Banks

18,307,541.00

Nepal Investment Bank

Paid-up Capital

18,496,187.00

Bank

Nabil Bank

(in 000)

2nd QTR

FY 21/22

933,268.67

732,294.00

51.55

7.66

48.69

3.27

8.60

% Change

25.63

12.59

32.08

(9.22)

(7.07)

45.93

13.57

70.32

64.92

5.38

10.59

69.11 (0.34)

1,894,751.19

2,415,595.64

485,378.20

1,919,505.72

1,417,058.84

1,077,068.52

722,164.00

504,001.00

1,399,912.02

1,262,010.00

1,711,519.00

745,544.61

1,678,589.95

551,949.81

2,663,384.00

1,577,313.80

817,398.00

951,738.18

1,010,830.47

2,402,066.31

900,543.50

719,319.42

838,920.00

811,152.20

782,781.12

743,450.90

1,086,770.00

1,624,324.00

2,181,420.00

2nd QTR

FY 21/22

52.04

13.80

49.36

2.38

8.20

25.92

16.57

46.67

(7.43)

53.49

15.04

71.68

1.27

6.04

7.32

4.93

1.34

54.77

461,469.40

3.87

5.18

3,423,628.30 (43.93)

1,350,423.10

1,062,796.44

466,599.00

202,884.00 148.42

1,304,471.56

1,518,684.00 (16.90)

1,613,973.00

949,412.15 (21.47)

1,813,329.81

359,602.28

2,315,118.00

918,740.15

807,115.00

1,216,558.48 (21.77)

802,774.41

2,060,537.51

614,004.14

1.53

961,904.00 (12.79) 708,511.02

NPL (%)

"Cost of Fund (LCY)"

Base Rate (%)

1.50

2.08

3.06

1.91

0.31

1.31

0.94

1.05

1.23

1.49

1.41

0.78

2.42

1.13

0.37

0.76

1.06

9.57

0.47

1.33

0.82

0.26

2.39

0.14

0.72

0.44

2.06

1.11

1.58

2.37

4.23

2.88

0.58

1.67

1.70

1.71

2.06

2.38

1.06

1.08

0.99

1.72

1.91

0.88

1.04

0.76

0.43

2.42

1.52

0.19

1.92

0.19

2.13

1.54

2.75

0.60

6.08

4.96

4.43

5.52

6.41

6.82

6.80

5.47

6.16

5.78

6.76

7.29

6.38

6.16

6.59

4.93

5.82

6.78

7.06

7.21

6.45

5.98

5.87

5.45

6.98

4.30

5.84

6.03

2.34

0.24

1.15

1.74

1.24

1.84

1.42

1.35

1.28

1.04

1.19

1.15

0.29

1.62

1.24

1.14

1.95

1.25

0.87

5.51

0.57

5.97 (1.01)

3.29

3.57

5.16

5.95

6.87 (0.07)

5.87 (0.40)

5.01

5.49

5.14

6.05

7.94 (1.56)

5.12

5.40

7.21 (2.28)

7.50 (1.68)

5.54

5.22

5.79

5.10

4.70

7.36 (1.49)

5.85 (0.40)

4.64

4.06

4.69

4.29

2nd QTR 2nd QTR 2nd QTR 2nd QTR

8.18

7.12

6.60

6.92

8.08

7.91

9.74

8.77

8.68

8.58

8.94

8.98

8.25

7.99

8.58

7.24

7.92

8.79

9.44

9.15

8.45

7.62

8.00

8.95

8.75

6.83

7.21

7.39

2nd QTR

% % FY 21/22 FY 20/21 FY 21/22 FY 20/21 FY 21/22 Change Change

941,255.99 (13.82)

514,859.96

653,268.00

727,639.00

1,586,609.00

2,016,023.00

2nd QTR

FY 20/21

Net Profit

9.06 32,586,113.56 31,372,190.68

9.88

2.98

2,046,222.86 (20.08)

1,505,636.95

634,452.00

269,758.00 171.46

1,828,451.59

2,146,962.00 (12.99)

2,299,321.00

1,356,303.07 (21.59)

2,593,071.14

1,162,090.95

3,237,666.00

1,339,183.53

686,334.00

1,740,523.52 (21.35)

1,155,142.90

3,038,108.88

856,012.43

1,028,040.08

1,373,958.00 (12.74)

1,339,052.66 (21.33)

733,158.46

986,484.03

1,044,110.00

2,331,310.00

2,868,577.00

2nd QTR

FY 20/21

11.92 7,887,978.11 43,910,277.87

15.73 2,081,872.54

9.87 2,487,575.47

20.45 1,635,336.67

14.13 1,500,577.32

9.13 1,072,922.00

5.55

4.55 2,022,063.13

5.34 1,868,120.00

13.99 2,422,987.00

19.80 1,063,497.05

14.04 2,409,747.34

7.28 1,695,875.78

12.15 3,676,914.00

11.54 2,280,851.82

19.93 1,131,908.00

13.10 1,368,850.67

16.22 1,451,260.49

5.29 3,420,555.02

19.98 1,130,610.01

10.43

11.72 1,198,980.00

9.06 1,053,365.89

12.13 1,111,108.51

19.54 1,062,089.74

21.95 1,552,528.00

5.32 2,407,430.00

8.68 3,115,389.00

% Change

Operating Profit

Table 4 Second quarter results of commercial banks - unaudited as of FY 2021-22 (in NPR Thousands)

54

DOCKING NEPAL’S ECONOMIC ANALYSIS

KEY INDICATORS Some of the key macroeconomic indicators as per the macroeconomic and financial situation report based on the semi-annual data of the FY 2021/22 published by the Nepal Rastra Bank (NRB) are highlighted below: Consumer Price Inflation In the review period, the consumer price inflation in the third month of 2021/2022 was 5.65% compared to 3.56% in the corresponding period last year.

The food and beverage inflation stood at 4.92% compared to the 5.50% inflation last year. Similarly, the non-food and service inflation stood at 6.23% compared to the 4.72% inflation last year.

Trade The three months of 2021/22 saw a 95.5% increase in merchandise exports, which is significantly higher than the 6.1% increase in the corresponding period of the previous year. India was the most popular country for exports, with a 121.8% increase, whereas exports to China decreased by 10.2%. The review period saw an increase in the export of products such as soyabean oil, palm oil, oil cakes, juice, woolen carpets.

Similarly, merchandise imports increased by 51.1% to NRP 999.34 billion compared to a 4.8% decrease in the previous year.

Petroleum products, medicine, crude palm oil, transport equipment, vehicle, and other parts, and crude soyabean oil were the main imports for the leading importing countries like India and China, from whom the

imports increased by 37.5% and 51.5%, respectively.

However, the trade deficit also saw an increase of 46.6% to NPR 880.49 billion in the second quarter of 2021/2022.

The export-import ratio rose to 11.9% compared to 9.2% in the corresponding period of the previous year.

Remittances The flow of remittances fell by 5.5% to NPR 468.45 billion compared to a 11.1% increase in the same period last year. This is an impact of the decrease of 4.9% in the net transfer compared to the 8.9% increase in the same period last year.

However, the Nepali workers taking approvals for foreign employment increased to 167,513 during the review period, compared to an 89% decrease in the same period last year. This significant change can be attributed to ease of travel restrictions implemented by foreign countries due to COVID-19.

The deposits of banks and financial institutions amounted NPR 179 billion in the first six months of the FY 2021/22.

Similarly, private sector credit from BFIs increased 12.1%, compared to a growth of 11.4% in the previous year. Private sector credit from commercial banks, development banks and finance companies increased 11.8%, 12.7% and 21.7%, respectively.

Loans of BFIs to agriculture sector, industrial sector, transportation, communication and public sectors, wholesale and retail sector, and service sector all increased by 13.0%, 11.9%, 8.5%, 12.7%, 5.1%, respectively.

In terms of credit exposure, the term loan extended by BFIs increased by 10.0%, overdraft loan increased by 21.1% and demand and working capital loan increased by 10.9%. In addition, real estate loan, which include residential personal loans, increased by 12.8%, while the trust receipt (import) decreased by 14.2% and margin nature loans decreased by 6.2%.

Deposit and Credit Mobilization Liquidity Management The deposits at Banks and Financial Institutions (BFIs) increased by 3.8%, as compared to an increase of 9.2% in the corresponding period of previous year. Of total deposits, the share of demand, saving and fixed deposits stood at 8.5%, 33.6% and 49.2%, respectively. As of mid-January 2022, the share of institutional deposits in total deposit of BFIs stood at 39.2%, whereas last year it was 42.5% in the same period.

In the review year, the central bank i.e., Nepal Rastra Bank (NRB) mopped up NPR 60 billions of which NPR 28.35 billion was through reverse repo auction and NPR 31.65 billion through deposit collection. In the previous year, it was NPR 242.34 billion liquidity, of which NPR 89.54 billion was through reverse repo, and NPR 151.80 billion through deposit collection auction.

Additionally,

NRB

injected

a

NEFPORT ISSUE 48 – MARCH 2022

liquidity of NPR 80.26 billion through the net sale of USD 667.4 billion from foreign exchange market. Liquidity of NPR 251.02 billion was injected through the net purchase of USD 2.12 billion in the previous year.

Foreign Exchange Reserves and Adequacy In the review period, gross foreign exchange reserve stood at NPR 1165.80 billion (USD 9.71 billion), decreasing by 16.7% in mid-January 2022 from NPR 1399.03 (USD 11.65 billion) in midJuly 2021. Of the total foreign exchange reserves, reserves held by NRB fell by 18.4% to NPR 1015.59 billion in mid-January 2022 from NPR 1244.63 billion in mid-July 2021. Reserves held by BFIs other than NRB decreased by 2.7% to NPR 150.1 billion in mid-January 2022 from NPR 154.39 billion in mid-July 2021.

The Indian currency’s share in total reserves stood at 24.5% in mid-January 2022.

Based on imports of six months of FY 2021/22, the foreign exchange holdings of the banking sector are sufficient to cover the imports of prospective merchandise for 7.2 months, and merchandise and service imports for 6.6 months.

The ratio of reserves-to-GDP, reserve-to-imports and reserveto-M2 were estimated to be 27.3%, 54.8% and 22.0%, respectively in mid-January 2022.

Federal Government Expenditure and Revenue During the review period, the total expenditure of the federal government was NPR 506.70 billion, while the revenue mobilization

stood at Rs. 542.05 billion.

Money Supply In the review period, broad money (M2) increased by 2.8%, which is a 9.6% growth compared to the same period last year. In addition, M2 grew by 14.3% on a year-onyear basis in the first six months of 2021/22.

Interest Rates The weighted average 91-day Treasury Bill Rate remained at 5.07% in mid-January 2022, as against 0.87% in the corresponding month a year ago.

Furthermore, in mid-January 2022, the weighted average inter-bank transaction rate among commercial banks stood at 4.76%, as against 0.14% a year ago. The average inter-bank rate of BFIs which was considered as operating target of the monetary policy, stood 4.77% in the review month.

In addition, the average base rate of commercial banks stood at 8.42% in the six months of 2021/22 from 7.18% a year ago.

Weighted average deposit rate and lending rate of commercial banks stood at 6.37% and 9.44%, respectively in mid-January 2021/22, as compared to 5.0% and 9.09%, respectively a year ago in the same review period.

Balance of Payments The current account registered a deficit of NPR 354.07 billion (USD 2.95 billion) in the review period, compared to the current account deficit of NPR 51.68 billion (USD 430.45 million) last year in the corresponding period. The overall

BOP remained at a deficit of NPR 241.23 billion (USD 2.01 billion), as compared to a surplus of NPR 124.92 billion (USD 1.04 billion) in the previous year.

KEY DEVELOPMENTS Some of the key developments that transpired in the financial market are as follows: Banks and Financial Institutions (BFIs) Raise Interest Rates NRB has instructed BFIs to increase the interest rates for the month of Falgun. This is expected to help the liquidity scenario of the country by attracting more deposits and easing up the liquidity crisis. Commercial Banks have raised their highest interest offering on deposits by one percentage point.221 BFIs instructed to submit unclaimed deposit NRB has instructed BFIs to submit deposits unclaimed for 20 years or longer to the Central Bank’s Banking Development Fund. The Central Bank will refund the sum, without interest for the period in which the sum remained in the Unclaimed Deposit account, if the depositor presents all related documents to the central bank.

Otherwise, the sum from the Unclaimed Deposit will be used for banking development in the nation.222 NRB’s New Policies for Imports NRB has also introduced provisions to restrict import and ease the liquidity crunch.

Importers now need to deposit 100% of the margin amount

55

Deposit

56

DOCKING NEPAL’S ECONOMIC ANALYSIS

on import of products before applying for a letter of credit.

Such products include sugar and confectionaries, clove, mineral water, alcoholic beverage, vinegar, energy drinks, cigarette and tobacco products, perfume, cosmetics, wooden items, footwear, cement, ceramic items, marble, umbrella, gold, and silver.223 Similarly, importers now need to deposit 50% of

their cost in margin to import automobiles. This is a significant increase as compared to earlier, when importers had to maintain only up to 15% as the cash margin on selected goods to apply for a letter of credit account.224 Amendments to the Unified Directive

lender of the last resort facility by the BFIs, has been increased from 5% to 7%. The standing liquidity facility has been increased from 5% to 7% and the deposit collection rate has been increased from 2% to 4%.

Similarly, the repo rate has been increased from 3.5% to 5.5%.225

The bank rate, which is used for

Outlook In the second quarter of FY 2021/22, the liquidity crunch that the domestic banking system has been facing, the decrease in remittances, and the widening balance of payments deficits have been on the forefront of the problems. The fall in remittances was observed because of the increase in use of illegal channels such as Hundi to send remittance as compared to the lockdown period. The new directive that has led to an increase in the margin amount on import of some goods before the importers get the letter of credit is expected to curb the total import. This decrease in imports will also help the country narrow the gap in balance of payment deficits. Similarly, the increase in interest rates by BFIs is expected to make borrowing expensive, encouraging deposit and further easing the liquidity crisis. Moreover, the first six months of the review period saw a positive leap forward in terms of digitalization in the banking landscape of Nepal. The number of branches of financial institutions increased by 5% from 10,683 in mid-July 2021 to 11,215 by mid-January 2022, and the population per branch decreased from 2,844 to 2,709. This indicates expanding financial access because of expansion of branches of banks and financial institutions. As a result, this will contribute towards the digitization, as well as financial literacy in the country.

NEFPORT ISSUE 48 – MARCH 2022

Capital Market During the review period, the central bank has introduced several directives which has further aggravated the dwindling market. The secondary market has been on a bearish trend since the new monetary policy for the Fiscal Year 2021/22 has been unveiled. Moreover, the increasing interest rate has also led to a downfall in the Nepal Stock Exchange (NEPSE) index and has impacted investors’ confidence.

Secondary Market: During the review period, the NEPSE index decreased by 0.88%, closing at 2610.58 points. The total market capitalization at the end of the

review period amounted to NPR 3697.60 billion (USD 30.80 billion), while the total floated market capitalization reached NPR 1284.15 billion (USD 10.69 billion). The most

significant decrease was seen by the finance sub-index (11.40%), followed by the Development Bank sub-index (9.79%) and Hotels and Tourism sub-index (6.69%).

1-Dec-21

28-Feb-22

% Change

2633.65

2610.58

(0.88)

Commercial Bank

1763.02

1678.45

(4.80)

Development Bank

4944.97

4460.85

(9.79)

Hydropower

3024.76

3213.56

6.24

Finance

2483.01

2199.94

(11.40)

Non-Life Insurance

11752.21

11679.61

(0.62)

2081.11

2288.48

9.96

NEPSE Index Sub-Indices

Table 5 Key indicators.

Source: Nepal Stock Exchange (NEPSE)

Others Hotels & Tourism

3160.62

2949.11

(6.69)

Microfinance

5072.15

4994.30

(1.53)

Mutual Fund

15.32

15.56

1.57

13967.69

13824.66

(1.02)

6170.30

6330.61

2.60

Life Insurance Manufacturing & Processing

Figure 17.

NEPSE Movement Index

Source: Nepal Stock Exchange (NEPSE)

57

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Primary Market226: During the review period, Initial Public Offerings (IPO) of multiple companies were approved. IPO of Balephi Hydropower, Green Ventures Ltd., NESDO Sambridha Laghubitta Bittiya Sanstha Limited, Jalpa Samudayik Laghubitta Bittiya Sanstha Ltd, Rastra Utthan Laghubitta Bittiya Sanstha Ltd., and Emerging Nepal Limited were approved by Securities Board of Nepal (SEBON).

Some new IPO issues have been added by SEBON in the pipeline as well. They comprise of hydropower and microfinance institutions. Some of them are Swetganga Hydropower and Construction Ltd., People's Power Ltd., Rasuwagadhi Hydropower Company Ltd., and Asian Hydropower Ltd.

KEY DEVELOPMENTS Some of the key developments that transpired in the financial market are as follows: SEBON Approved IPO Proposals of Six Companies SEBON had halted the approval of IPOs since October 2021 after the Chairman of SEBON had been found guilty of illegally obtaining shares and acting under power centers. SEBON has now appointed a new Chairman, Mr. Ramesh Hamal. Additionally, SEBON has recently approved IPO proposals of six companies.

The six companies are Balephi Hydropower Ltd, Green Ventures Ltd., NESDO Samridha Laghubitta Bittiya sanstha Limited, Jalpa Samudayik Laghubitta Bittiya Sanstha Ltd., Rastra Utthan Laghubitta Bittiya Sanstha Ltd., and Emerging Nepal Limited

Investment. These six companies will raise a total of 1,266,229,000 from the public issue.227 Amendments Directive

to

the

Unified

The amended version of the Unified Directive 2021-22 has increased the risk weight of margin lending for personal overdraft loans, personal hire purchase/personal auto loans, and real estate loans for land acquisition and development, and lending against shares from 100% to 150%. Banks and Financial Institutions (BFIs) are supposed to implement this directive from Mid-July 2022.

Similarly, shareholders with more 1% or more institutional shares of a BFIs will now need approval from Nepal Rastra Bank (NRB) to buy or sell institutional shares of any other BFI.228

Outlook During the review period, the banking system continued to face the liquidity crisis as the Balance of Payment (BOP) deficit widened, and the inflow of remittances decreased. The market also saw a correction during the review period, shaking up investors’ confidence. The increase in risk weight on margin lending against personal overdraft loans, personal hire purchase/personal auto loans, and land acquisition and development from 100% to 150% might lower unproductive sector lending and ease the liquidity crunch. A 50% increase in risk weight on lending against shares might detract investors from the secondary market and further shake up investors’ confidence. However, as the government has appointed a new SEBON Chairman, IPOs in SEBON’s pipeline may start getting approved, keeping the investors optimistic.

5 NEFPORT ISSUE 48 – MARCH 2022

Special Section Remittance

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Understanding Remittance in Nepal Nepalis have moved away from home for decades, seeking better educational or employment opportunities. In this respect, international migration for foreign employment started about 200 years ago but was only institutionalized after the introduction of the Foreign Employment Act in 1985.229 Although the Nepali economy has drastically changed since then, the political and economic growth areas are still bound by instability, which has collectively made foreign employment a forced choice for many migrant workers, especially in the rural settings of Nepal.

Since migrant workers stand as key economic agents of the country, the remittances that they send home are an important source of revenue and capital formation, keeping the economy afloat.

Having said that, Nepal is one of the highest remittances recipient countries in the world. Prior to the outbreak of the COVID-19 pandemic, inflow of remittances inflows to Nepal were growing robustly with a compound annual growth rate (CGAR) of 7.10% in NPR value (CGAR of 5.9% in terms of USD value). With a remittance inflow of USD 8.1 billion in 2016, it was even ranked 23rd among the remittance-receiving countries in the world. A year before the onset of the pandemic in FY 2018/19, remittance to Nepal increased by a whopping 7.80% to USD 7.79 billion (NPR 935.2 billion).

However, when the pandemic hit and travel restrictions were laid out across the world, predictions regarding the future of international migration and remittances in Nepal were highly pessimistic.

For instance, the World Bank projected that the flow of remittances to Nepal would decline by 20% in 2020230, and the Asian Development Bank (ADB) predicted that under its worst-case scenario231, it would drop by 28.7% in 2020, which would be the worst for any Asian economy.

Likewise, NRB projected a decline by 15% in 2020.

However, contrary to such predictions, remarkably, flow of remittances to Nepal remained steady despite the suspension of issuance of work permits by the Department of Foreign Employment (DoFE) between March to June 2020 and fall in the number of outbound migrants by 20.6% in FY 2019/20 and 62.8% in FY 2020/21.232 Logically, the decline in the number of Nepali workers leaving the country should have led to a decrease in remittances, however, remittances have increased from USD 4.93 billion (NPR 591.89 billion) in 2012/13 to USD 7.79 billion (NPR 935.2 billion) in 2018/19.

Despite the pessimistic estimation of the steep downfall of remittances to Nepal, the actual remittance flow towards Nepal remained strong and resilient during FY 2019/20 and FY 2020/21.

In FY 2019/20, remittance to Nepal, marginally dropped 3.30% in USD terms to reach USD 7.53 billion (NPR 904 billion).233 Likewise, in FY 2020/21, remittance to Nepal rebounded strongly by an impressive 8.20% increase in USD terms to reach USD 8.15 billion (NPR 961 billion)234, the highest remittance that Nepal has ever received so far.

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Figure 18 Remittance inflows to Nepal (In USD billion)

Source: Nepal Rastra Bank (NRB), *Data of first six months of FY

Figure 19 Number of labor permits issued and remittance inflows to Nepal (FY 2000/01 FY 2020/21)

Source: Department of Foreign Employment (Labor permits), Nepal Rastra Bank (Remittance inflows) Note: Labor permits include data without renewal numbers

Extracted from a study conducted by beed Management, commissioned by FCDO, titled – “Remittances in Nepal during COVID-19, resilient or slow crash?”

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Remittances in Nepal – Its Current Usage and Potential Avenues for Productive Investments Aarya Rijal

Fellow, Nepal Economic Forum

Remittance is an important factor that contributes to Nepal’s economic development.

Remittances contribute towards raising the standard of living of the households that receive them, which further has a direct positive impact on the country’s economy through investment and capital formation. According to the Nepal Living Standard Survey conducted by CBS Nepal in FY 2010/11, 55.8% of households received remittances, with an average remittance received

Figure 20 Remittance Usage, Nepal Rastra Bank Survey (2014/15)

Source: Nepal Rastra Bank Survey (2014/15)

accounting for NPR 80,436 (USD 653.21).1 Remittances accounted for 30.9% of total household income among recipients. Therefore, it is critical to comprehend the distribution of remittances by use.

The Government of Nepal wants remittances to be used in productive sectors such as investments and entrepreneurships.

According to the National Planning Commission’s 15th year plan235,

one of the objectives of the government is to contribute towards achieving rapid economic growth and increasing domestic employment opportunities by using remittance income in productive sectors.

The government aims to increase investment in productive sectors through the optimum saving of remittance income.

Change in Remittance Usage According to the Nepal Living

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Figure 21 Remittance Usage, Nepal Living Standard Survey (2010/11)

Source: Nepal Living Standard Survey (2014/15)

Standard Survey (2010/11) report, 78.9% of the total remittances received by households were utilized for daily consumption, 7.1% was used to repay loans, 3.5% was used for education, 4.5% was used for household assets, and only 0.6% of the total remittances was saved. However, a survey conducted by the Nepal Rastra Bank (NRB) in 2014/15 highlights a slight difference in numbers. The proportion of remittances used for consumption since 2010/11 report has decreased by around 55%. As per the NRB report, households were using a higher share of their remittances for loans repayment and for savings.

Evidently, remittance receiving households used 25.3% of the total remittances received to repay loans, 23.9% was used for consumption of daily necessities such as food and clothes, 9.7% on education and health, 3.5% on social activities, 3% on household assets, 1.1% on investment on productive sectors (trade/

business), while 28% of the total remittance was saved.236 Although the government claims that the remittances sent by Nepali workers are primarily used for consumption, an unproductive sector, a comparison of the Nepal Living Standard Survey and the NRB report shows that pattern has changed.

Stages of Remittance Usage Dr. Ganesh Gurung, a remittance expert, argues that the government and stakeholders must understand why remittances are primarily used for consumption rather than in the productive sector. Dr. Gurung highlights that the main reason a worker migrates is because their basic needs haven’t been met in their home country. The first priority for a migrant worker would be to improve their family’s standard of living of their family, instead of establishing a factory or investing in the productive sector.

According to Dr. Gurung, migrant workers send back remittances for a variety of reasons, which he says may be broken down into stages. In the first stage, workers send back money to pay off their debts. In the second stage, they may use their earnings to provide better food, clothing, and housing for their family. Third, they may use the remittance money to purchase household appliances that will make their lives easier, as well as for buying basic consumption items such as TVs, computers, and mobile phones. After these needs are fulfilled, the migrant workers use their remittance to help their friends and family get jobs abroad. According to Dr. Gurung, in the fourth and fifth stages, migrant workers consider buying land near the city to build a house or invest in other channels. It takes a migrant worker four to five years to reach the stage where they start considering investing their earnings.

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Contribution of Remittances for Deposit and Credit Mobilization Digitalization, financial access, and literacy have increased in Nepal. This has increased inflow of remittances through digital platforms, leading to an increase in remittances being routed towards bank accounts.

The retention of remittances in such bank accounts has hence increased. At the end of 2011, the total deposit of commercial banks of Nepal was NPR 754.54 billion,237 while in mid-January 2022, the total deposits reached NPR 4325.58 billion,238 an increase of 473%. The major sources of foreign currency in Nepal are remittances, FDI, and tourism. Out of this, remittances accounted for 24.8% of the GDP in 2021, while tourism contributed only 3%239 and FDI contributed roughly 4.7%.240 Similarly, according to remittance industry stakeholders, while almost 95% of the remittance of the country were previously being cashed out, a large percentage of it is now being deposited.

Therefore, the increase in total deposits of commercial banks can be attributed towards the increase in remittances. These deposits are used by banks to lend to the productive sector.

Hence, it is safe to argue that remittances are not being used just for consumption; they are also helping fund investments in the productive sector.

The shift from cashing out remittances to depositing them in bank accounts may be attributed to digitalization and the upskilling of Nepali migrants in their countries of destination. Many migrants have

become established migrants and achieved better social status compared to when they first arrived as low-skilled labor migrants. Many Nepali foreign migrants have now broken the four to five stages cycle mentioned by Ganesh Gurung and are able to send more of their earnings back and invest. Currently, migrants who have passed the stages of paying off their debt or spending to increase their living standard either invest in real estate or deposit their savings in a bank account. Return on bank deposits are subject to market conditions, which is highly volatile and hence are relatively risky. Therefore, the government and the private sector should introduce more attractive investment avenues that migrant workers can directly invest in.

WAY FORWARD As a big stock of Nepali workers have graduated from the stages outlined above, a significant stock of Nepali migrants and diaspora are looking for good investment avenues within Nepal. To create an environment conducive for investment, the Government of Nepal (GoN) and the private sector can study best practices from the South Asian region and develop longterm savings-retirement and social security schemes. For instance, the government can also issue development bonds like the one provided by the Government of Bangladesh.

The Central Bank of Bangladesh provides Wage Earner Development Bond (WEDB) for Bangladeshis living abroad.

In addition to fixed interest rate, WEDB offers incentives

such as tax exemption on the principal and interest amount and loan facilities, among others.241 Another example of an attractive investment avenue is the Sri Lanka Development Bond (SLDB), a US Dollars denominated bond issued by the Government of Sri Lanka.

SLDB returns are tax free, have a higher interest rate than that of a standard deposit, and do not have exchange rate risks.

While the Government of Nepal currently offers foreign employment bonds for nonresident Nepali citizens working in foreign countries, these bonds have constantly been undersubscribed.

Hence, Nepal can learn from Sri Lanka and Bangladesh on ways to introduce attractive investment instruments and to make the existing bonds attractive.

Similarly, it will be beneficial if the government organizes awareness and training programs to encourage migrants to save and invest, as well as educate them on the financial instruments available to them to maximize their savings.

Additionally, the government should encourage the private sector to introduce incentives and financial instruments that remitters can invest in. Currently, due to the provision made by NRB, Banks and Financial Institutions (BFIs) provide an additional 1% interest rate on the deposits that come from remittances through formal channels. However, since this is a temporary provision, BFIs could explore introducing innovative investment avenues to encourage long-term savings and investments from remittance

NEFPORT ISSUE 48 – MARCH 2022

account holders. To outweigh the risks of market volatility, BFIs can introduce risk-free deposit accounts.

Furthermore, the private sector can explore the financial instruments offered in other countries and introduce similar instruments conducive to the needs of Nepali migrants.

For instance, Apex Bank in India has introduced Foreign Currency Non-Resident Bank (FCNR(B)) account, which is a foreign currency denominated account that offers tax-free and fully retriable principal and interest amounts. BFIs in Nepal can look into introducing a similar account with innovative credit products to remittance account holders’ families without need for additional collateral. Moreover, to potentially foster the habit of savings among migrants, BFIs can also introduce recurring deposit accounts

that allow migrants to deposit a small amount every month for a fixed number of numbers and earn interest on the outstanding balance each month.

Furthermore, BFIs can consider introducing long term investment/saving avenues such as Long-Term Negotiable Certificate of Deposit (LTNCD).

For instance, in Philippines, LTNCD is offered as a negotiable instrument that can be sold in the secondary market.242 This instrument offers tax-exempt high returns. Moreover, the government can work with the private sector to encourage migrant workers to invest in the primary and secondary markets of the country. Currently, the Government of Nepal is exploring to allocate a certain quota for Nepali migrant workers in every sale of IPO shares. Additional

incentives can be provided by allowing migrant workers to open special bank accounts for investments. For example, banks in Bangladesh offer non-resident investor’s Taka account (NITA), a non-interest-bearing current account, for non-resident Bangladeshi investors. Migrants can use the balances in their NITA account to buy Bangladeshi shares and securities, and the balances in these accounts are freely transferable to the foreign currency account of the same person and remittable abroad in equivalent foreign exchange.243 These initiatives by the BFIs in Nepal will encourage longterm savings and investments from migrants, which will gradually have an impact on the inflow of remittances through formal channels and direct investment of remittances in the productive sector.

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South Asia Migration and COVID-19, picking up the pieces Giuseppe Savino

Senior Distinguished Fellow, Nepal Economic Forum On March 11, 2000, the World Health Organization declared the 2019 coronavirus disease (COVID-19) outbreak a pandemic.

The virus took the world by surprise, and countries were under-prepared to deal with a crisis of this scale. In the absence of immediate treatment, as a first response, governments-imposed restrictions on local mobility (lockdowns and curfews) along with the closure of their borders to contain the spread of the virus, crippling global and regional mobility. Since the outbreak, it became apparent that poor and vulnerable countries would be the hardest hit.257 Because of the COVID-19 pandemic, South Asian countries were confronted with a potential disruption of the domestic health system and economy and the potential loss of billions of dollars in remittances due to the expected drop for foreign labour demand in

the countries of destination.

Since the majority of labour migrants from the South Asian region migrate to the Gulf Cooperation Council (GCC) countries (Table 1), the looming unforeseen economic downturn in the Gulf was expected to have a disastrous impact on the migrants’ income and consequently on the number of remittances sent to their countries of origin. In the case of Nepal, remittances accounted for 23.51% of the GDP in 2020 (Table 2) and were a substantial contribution to the local economy and socio-economic development. This is also true for other South Asian countries.

The worst-case scenario was averted The COVID-19 driven economic downturn did materialize but was, apparently, relatively short.

Country of origin Table 6 Migrants choosing to migrate to the GCC 258

Though global economic growth fell sharply during the second quarter of 2020, it recovered and became positive since the third quarter of the same year.260 Similarly, the GCC economies after a contraction of 4.9% in 2020, grew by 2.3% in 2021 and are expected to grow by 5.1% in 2022.261 According to the IMF, in 2020, the pandemic reduced the global economic growth by an annual rate of -3.2%,262 which was partially compensated by an economic growth of 5.5% in 2021.263 This rate was stronger than expected for South Asia with a growth of 6.8%.264 Moreover, the international migrant stock in 2020 reached 280,598,105 million, an increase of 13.16% since 2015, and of 3.3% since 2019 (271,642,105 million).265While, the number of migrants from South Asia increased by 11% to 42,068,932 million from 37,897,481 million in 2015.

Migration to GCC Year

Percentage

Sri-Lanka

2017

85.10%

Nepal

2017

65.00%

Bangladesh

2017

72.00%

India

2017

66.00%

Pakistan

2019

96.00%

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South Asia remittances (USD million) Country Table 7 Remittances expressed as a percentage of the Gross national Product (GDP)259

Year 2019

Year 2020

As % of GDP

Increase in %

Year 2020

Year 2020

Nepal

8,249.50

8,101.57

23.51%

-1.79%

Pakistan

22,245.00

26,105.00

9.93%

17.35%

Sri Lanka

6,748.70

7,140.00

8.85%

5.80%

Bangladesh

18,363.86

21,749.70

6.61%

18.44%

Afghanistan

828.57

788.92

4.12%

-4.79%

Bhutan

56.66

83.39

3.33%

47.18%

India

83,332.08

83,149.00

3.07%

-0.22%

Maldives

4.22

4.22

0.11%

0.00%

Remittance’s resiliency In 2020, inward flow of remittances increased significantly despite the COVID-19 outbreak. The World Bank had projected that in 2020 the flow of remittances sent to Low and Middle Income Countries (LMICs) would decline by 20% as a consequence of the COVID-19 pandemic.266 However, defying predictions remittances to LMICs declined by a mere 1.6% in 2020.267 While for the same year, remittances to South Asia increased by 5.2% and are projected to have increased by 7.3% in 2021.268 The increase in remittances to South Asia was driven by Bangladesh and Pakistan. Both countries showed strong gains in remittances inflow in 2020 with an increase of 18.4% and 17.4%, respectively.

Meanwhile, India and Nepal reported only minor decreases.269 Knomad suggested that this unexpected resilience was partially attributable to a shift from informal to formal remittance channels. The greater use of digital money transfer mechanism and governments’

remittance supportive policies has made recording inflows of remittance easier. According to the Global System for Mobile Communications (GSMA), in 2020 more than USD 1 billion international remittances were sent and received per month and processed via mobile money, equivalent to a year-on-year increase of 65%.270 In addition, other mitigating factors such as the rapid global economy (partial) recovery, and fiscal and monetary policies implemented in the major destination countries also plaid a major role.

Post-COVID-19 and South Asia migration’s challenges The pandemic highlighted yet again the risks that South Asia labour migration incurs because of its high geographic concentration in the Gulf region. Moreover, the increase in remittances during the pandemic established that migrants keep substantial savings abroad that are mobilized in time of crisis, and which are not accounted for by the existing measurement methods.

Eventually, the world will recover from the pandemic, but South Asia will still have to address other systemic factors that shape its migration policies.

Demand and supply of skilled and unskilled foreign workers from the region will be influenced by nationalization policies of the workforce in the GCC in general (KSA Nitaqat).271 Migrant sending countries will have to address the existing mismatch between skill demand and supply since many migrants from South Asia are still unskilled or semi-skilled and don’t speak English. Another influencing element is the growing competition from African workers migrating to the Gulf who are well-educated, speak English and accept comparatively lower wages.272 273 A closer look at the inflow of remittances during the pandemic seem to show that the market for unskilled workers will be dominated by Pakistan and Bangladesh, while semiskilled and skilled migrants from India, Sri-Lanka and Nepal will be exposed to fierce competition from other migrant sending countries outside South Asia.

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Female Labor Migration in Nepal Nasala Maharjan

Aspiring beed, beed Management Ltd. From time immemorial, Nepali households have had at least one member away from home for work or education, depicting a pattern of migration in the country. The trend of migration, particularly for foreign employment, can be traced back to 200 years ago in case of Nepal but it was only institutionalized after the introduction of the Foreign Employment Act in 1985.244 Women have been a part of the migration labor force for foreign employment since decades, but they constitute a significantly lower percentage than the male counterparts. According to the Department of Foreign Employment (DoFE), out of 640,981 labor migrants leaving the country for foreign employment in 2015/16, only 4.98% were female whereas it increased to 6.87% in 2020/21

Figure 22 Trend in obtaining labor approvals (Disaggregated by gender)

Source: Nepal Labor Migration Report 2020

out of 166,698 total migrants.245 Contrastingly, the share of male migrants has consistently been reported as above 90%. This depicts that there is a significant difference and, evidently, foreign labor migration is heavily gendered in the case of Nepal.

Owing to the open border that Nepal shares with India and its close socio-cultural ties, India has been the most preferred labor destination for Nepalis.

Historically, female migration from Nepal was linked to crossborder marriages to India or the resettlement of entire families to Northeast India, Burma, and Bhutan.246 While such a pattern of migration to India is still common and mostly undocumented, many women also started migrating independently for employment in foreign destinations.

In 1980s, Nepali women began to travel to Southeast and East Asia.

After the People’s movement of 1990, female migration as international laborers, primarily domestic workers, and caregivers, picked up. By the 1990s, their migration was concentrated in the domestic and service sectors in Hong Kong and Japan. In the 2000s, countries in the Arab States began attracting more Nepali female migrants and by 2007, an estimated 80% were undertaking domestic and service work.

Other female migrants worked in hotels, restaurants, catering, manufacturing, medical services, and beauty parlors both within Asia and abroad.

The number of labor permits1 received by female migrants surged from 3.41% in 2009/10 to 8.5% in

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Figure 23 Trend in obtaining labor approval renewals (Disaggregated by gender)

Source: Nepal Migration Report 2020

2018/19.247 However, after the onset of the COVID-19 pandemic and the subsequent travel bans, its effects were seen in the following fiscal year with comparatively lesser number of migrants applying for foreign employment. It is also supported through the data that shows 58.16% decrease in labor renewals by female migrant workers in 2020/21 in comparison to 9.45% increase in 2018/19 prior to the pandemic.248 In more recent times, UAE, Qatar, Saudi Arabia, Kuwait, and Cyprus are the top five countries where 77% of total female migrants of Nepal go for employment.

Moreover, over 50% of Nepali female migrants hail from districts of Provinces 1 and 3 such as Jhapa, Sindhupalchok, Makwanpur, Morang, Kathmandu, Kavrepalanchok, Ilam, Nuwakot, Sunsari, and Chitwan.

Reasons for female migration Generally, it is believed that the trend in ‘feminization of poverty’ has led to the trend in ‘feminization of migration of work’ as the brunt of poverty ultimately falls upon the female members

of the house due to deep-rooted patriarchy.249 As a result, there has been an increasing feminization of labor migration in most underdeveloped and developing countries, including Nepal.

Moreover, female migrants in Nepal are also motivated to migrate due to pressures of marriage, lack of economic prospects and terrible living conditions.250 Male members of Nepali families are typically provided with formal education and skills training. After marriage, either male members or older women of the family make decisions about purchases, daily expenses, and buying or selling assets, limiting newlywed females’ authority.

Women are, instead, obliged to juggle domestic tasks with other responsibilities like farming. There are also additional push factors for women to seek employment abroad such as marital issues, gender discrimination, improving children’s future, and servicing debts at home. This implies that the decision to migrate among most female migrants is influenced by household

economic concerns.

Likewise, migration also allows women to escape social conventions and stigmas that they find oppressive. There are rising cases of women who are divorced, widowed, or separated who feel a stronger need to go abroad.

High-skilled vs. low-skilled jobs for female migrants Most female migrant workers are engaged in low-skilled occupational category because they are in bulk demand and are more lucrative to recruitment agencies whereas high-skilled works are more selective. In 2020/21, out of the 6.87% female migrants, 49.9% were involved in low-skilled occupations whereas only 0.05% opted for high-skilled jobs. If the female migrant workers are provided with education and skills training early on, they will likely be able to navigate the recruitment system independently without relying on agencies. By doing this, high-skilled work can be on the rise. Moreover, females

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who already have a higher level of mobility prior to migration, such as those engaged in employment or membership of a community organization, have larger confidence levels to move abroad for employment opportunities independently.

At present, most Nepali women are increasingly interested in high skilled jobs. Due to this, the government has been trying to make high-paying and secure jobs accessible for women as alternatives to care-giving jobs.

For instance, it is initiating a process to send 10,000 nurses to the United Kingdom for alternative employment opportunities amid concerns of exploitation in the Gulf and Malaysia.251 With more of such instances, the engagement of Nepali female workers on high-skilled occupations can be expected to increase in the coming days. With their engagement in high-skilled jobs, they will be able to remit more money home.

Contribution in remittances and a window of empowerment According to National Living Standard Survey (NLSS) 2004/5, women migrants contributed 11% to the remittance of the country.

Another study conducted in 2008 stated that more than 78,000 women, working in 65 countries excluding India, sent remittances amounting between NPR 9 billion to NPR 11 billion per year, forming 10.7% of the total remittances.252 Though their wages are typically lower, female migrants are more likely to send home a higher proportion of their earnings more frequently. The remittances are more likely to be spent on health,

children’s education, family, and community development in Nepal, indicating that women migrants focus on improving the social and financial status of their families and societies.

This is also depicted by the data shown by the study conducted in 2008 that showed 72.78% of the households were able to combat poverty and increase their family income due to female labor migrants.253 In recent times, even though all the sectors were affected

by COVID-19 pandemic, the remittance inflows increased. As of mid-March, of FY 2020/21, the total remittance inflows reached NPR 642.14 billion, depicting an 8.6% increase from FY 2019/20.254 However, the latest figures on remittance contribution by female migrant workers specifically are hard to track.

Irrespective of the number of female migrants and their contribution to remittances, migration has the potential to rearrange gender relations and power chains by allowing people to enhance their economic wellbeing.255 This also offers scope for women’s empowerment. As a result of economic advancement, women gain power, agency, security, and self-confidence.

For instance, drawing from a study256 conducted among a small group of Nepali women migrating to South Korea, they were able to contribute between USD 600 to USD 1000 per month to their families. As a result, their families’ living standards had risen significantly and the women experienced an increased ambition to build a more prosperous life. Moreover,

they were able to obtain decision-making power because of their financial independence and felt that their perspectives were valued more. This, further, instilled confidence in them.

The women’s newly earned confidence mirrored in their mobility, as they were no longer required to seek permission to leave their houses even for a few hours in Nepal and could now go to different destinations on their own.

Overall, Nepal has witnessed a surge in female migrants for foreign employment. However, the relocation for females is bound by difficulties starting from their homes, their country, to the country of transit and the country of employment. Since women wish to be a part of a more positive migration experience that can help them achieve their economic and personal goals, the government of Nepal must be actively engaged in creating enabling environment.

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Migration and Inflow of Remittances to Nepal Suman Pokharel

Chief Executive Officer, IME Ltd. Remittances account for a significant portion of Nepal's economic growth. Although the inflow of remittances increased significantly after first wave of COVID-19 in the fiscal year 2020-2021, it has since declined.

Therefore, it is not only important to understand the trends of migration and remittances, but also to discuss the steps the Government of Nepal can take to incentivize Nepali foreign migrants to send back remittances to Nepal through formal channels.

leaving the country for foreign migration is more financially and technologically aware, which has changed the behavior of these workers sending back remittance.

We have also observed a changing trend in the use of received remittances. In the past, almost 95% of the funds returned to the country were received, but deposits in the accounts and mobile wallets increased. These developments can also be attributed to financial penetration and financial literacy in rural areas.

Changing trend in remittance and migrants

Steps the government can take

Trends in migration and remittances have changed in the last few years in Nepal. While a lot of blue-collar migrants leave the country to go to GCC countries and Malaysia, white-collar migration has significantly increased over the last few years. Broadly speaking, high skilled jobs are in demand, and Nepali migrants travel overseas for better opportunities outside the country. With the increasing trends for diversity and inclusion policies, many businesses in these destination countries including Europe, Japan, Korea, and other developed countries are seeking to hire skilled Nepali migrant workers.

Consequently, the composition of blue-collar and white-collar migrant workers is bound to change soon. Similarly, the new generation of Nepali migrant workers that are

Remittance through informal channels is still prevalent in most of the countries, which is a matter of national interest and a problem the government is trying to address. The main issue right now is the lack of incentive for the migrant workers to send back money formally. As a result, the government should offer financial rewards and incentives for migrant workers to use official channels.

For example, the government can reduce the cost of returning remittances by reducing existing fees, giving cash incentives in their remittance, and offering tax breaks while using remittances for investments.

Moreover, a national framework is necessary to guide migrant workers at every stage, from their departure from the country to their

return. As remittance cannot be viewed in isolation, it is important to examine the migration ecosystem at large. For instance, there are a lot of hurdles for migrant workers trying to leave the country- many need to spend a lot of money in the process of leaving, thus increasing the cost of migration. Similarly, integration of returnee migrant workers is also a big challenge where they find it difficult to adapt to the society in changing social dynamics. Therefore, a national framework should guide migrant workers throughout the process for encouraging the safe migration and remittance.

Forecast In future years, digital remittances are expected to grow. This is due to increasing financial penetration in rural regions along with increased financial and digital literacy along with better access to the internet and mobile services. As a result, we expect substantial growth for digital remittance in the coming days which will lead to a decrease in the cost of remittances and make remittance transactions more seamless. Finally, with the departure of more skilled workers, the composition of white-collar and blue-collar workers should change leading to more remittance inflow to the country.

71

72

DOCKING NEPAL’S ECONOMIC ANALYSIS

Endnotes 1

https://www.heritage.org/index/country/nepal

2

https://fragilestatesindex.org/global-data/

3

4

5

7

8

https://www.transparency.org/en/cpi/2021?gclid=CjwKCAiAyP yQBhB6EiwAFUuaktmt1-5UVpRco1WyHfONrow6vDmCSr5-_ n1cTbNhSkXf6lVy0h2_mhoCdPEQAvD_BwE “Nepal’s position in corruption index remains unchanged”, January 26, 2022, The Kathmandu Post. https://kathmandupost.com/national/2022/01/26/nepal-s-position-in-corruption-index-remains-unchanged “Nepal urges all parties concerned to exercise maximum restraint not to escalate tension in Ukraine”, February 24, 2022, The Annapurna Express. https://theannapurnaexpress.com/news/nepal-urgesall-parties-concerned-to-not-escalate-tension-in-ukraine-4575 “House approves four ordinances amid UML's obstruction”, December 22, 2021, My Republica. https://myrepublica.nagariknetwork.com/ news/house-approves-four-ordinances-amid-uml-s-obstruction/ “Parliament ratifies MCC compact after years of delay”, February 27, 2022. The Kathmandu Post. https://kathmandupost.com/national/2022/02/27/nepal-parliament-ratifies-mcc-compact “Government tables MCC compact in Parliament”, February 20, 2022, The Kathmandu Post. https://kathmandupost.com/national/2022/02/20/government-tables-mcc-compact-in-parliament

17

“UML the main sufferer yet a winner in National Assembly elections”, January 27, 2022, The Kathmandu Post. https://kathmandupost.com/ national/2022/01/27/uml-the-main-sufferer-yet-a-winner-in-national-assembly-elections

18

“Nepal local elections on May 13, 2022”, February 7, 2022, Online Khabar. https://english.onlinekhabar.com/nepal-local-elections-may-13-2022.html

19

“Election Commission steps up election preparations”, February 13, 2022, Khabarhub. https://english.khabarhub.com/2022/13/237129/

20

“2.5 million voters added in five years “, February 13, 2022, My Republica. https://myrepublica.nagariknetwork.com/news/2-5-millionvoters-added-in-five-years/

21

“EC Calls for Registering Political Parties for Local Election by Feb 27”, February 16, 2022, The Rising Nepal. https://risingnepaldaily.com/ mustread/ec-calls-for-regitering-political-parties-for-local-election-by-feb-27

22

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23

https://www.fao.org/worldfoodsituation/foodpricesindex/en

9

“Impeachment Motion Filed against Chief Justice Rana”, February 13, 2022, The Kathmandu Post. https://kathmandupost.com/national/2022/02/13/impeachment-motion-filed-against-chief-justicerana

24

Paul Hannon, “Omicron’s Threat to the Global Economy Runs Through China, The Wall Street Journal, February 15, 2022, https://www.bangkokpost.com/business/2264235/omicrons-threat-to-the-globaleconomy-runs-through-china

10

“Oli accuses ruling alliance of registering impeachment motion against Rana to defer local level election”, February 14, 2022, My Republica. https://myrepublica.nagariknetwork.com/news/ oli-accuses-ruling-alliance-of-registering-impeachment-motion-against-rana-to-defer-local-level-election/

25

Bingqin Li, “China clings to COVID-19 zero”, East ASIA FORUM, February 27, 2022, https://www.eastasiaforum.org/2022/02/27/chinaclings-to-covid-19-zero/

26

“Information note on trade in intermediate goods: third quarter 2021”, World Trade Organization, Economic Research and Statistics Division, https://www.wto.org/english/res_e/statis_e/miwi_e/info_ note_2021q3_e.pdf

27

Weizhen Tan, “Oil prices surge as Russia- Ukraine crisis escalates”, CNBC, February 21, 2022, https://www.cnbc.com/2022/02/22/oilprices-jump-as-tensions-between-russia-and-ukraine-escalate. html

28

“Ukraine-Russia tensions: Oil surges on supply fears”, BBC NEWS, February 22, 2022, https://www.bbc.com/news/business-60473233

29

Karin Strohecker, “How a Russia- Ukraine conflict might hit global markets”, REUTERS, February 19, 2022, https://www.reuters.com/ markets/europe/how-russia-ukraine-conflict-might-hit-globalmarkets-2022-02-19/

30

“FAO Food Price Index rebounded in January”, Food and Agricultural Organization, February 03, 2022, https://www.fao.org/worldfoodsituation/foodpricesindex/en

31

“World food prices hit 10 years high in 2021”, January6 2022, https:// www.reuters.com/markets/europe/world-food-prices-hit-10-yearpeak-2021-2022-01-06/

32

Lakisha Brooks, “How Digital Nomad Visas Can Help the Global Economy”, HR Exchange Network, February 14, 2022, https://www.hrexchangenetwork.com/dei/columns/how-digital-nomad-visas-can-

11

12

13

14

15

16

Shirish B Pradhan, “Prachanda unanimously re-elected CPN-Maoist Centre chairman”, January 3, 2022, The Print. https://theprint. in/world/prachanda-unanimously-re-elected-cpn-maoist-centre-chairman/794480/ “As Maoists hold national convention, focus remains on managing leaders”, December 27, 2021, The Kathmandu Post. https://kathmandupost.com/politics/2021/12/27/as-maoists-hold-national-convention-focus-remains-on-managing-leaders “8th General Convention of CPN (Maoist Center) Concludes Electing 236 CC Members”, January 2, 2022. The Rising Nepal. https://risingnepaldaily.com/main-news/8th-general-convention-of-cpn-maoist-center-concludes-electing-236-cc-members “Maoist Center calls Central Committee meeting to pick central office-bearers “, January 9, 2022, My Republica. https://myrepublica. nagariknetwork.com/news/123579/ “Coalition partners’ student wings protest against MCC”, February 18, 2022. The Kathmandu Post. https://kathmandupost.com/ visual-stories/2022/02/18/coalition-partners-student-wings-protest-against-mcc “HoR meeting deferred for Feb 27”, February 25, 2022, My Republica. https://myrepublica.nagariknetwork.com/news/hor-meeting-deferred-for-feb-27/?categoryId=81

NEFPORT ISSUE 48 – MARCH 2022

help-the-global-economy 33

Alex Ledsom, EU Travel: The Newest European Country Launching a Digital Nomad Visa”, Forbes, February 2, 2022, https://www.forbes. com/sites/alexledsom/2022/02/02/the-new-large-eu-country-offering-a-digital-nomad-visa/?sh=c8f96be6c431

34

Entrenched supply crunch stoking inflation risks throttling global economy, IMF warns, CITY A.M., February 2022, https://www.cityam. com/entrenched-supply-crunch-stoking-inflation-risks-throttlingglobal-economy-imf-warns/

35

“World Economic Outlook, Recovery During Pandemic”، International Monetary Fund, October, 2021, https://www.imf.org/en/Publications/ WEO/Issues/2021/10/12/world-economic-outlook-october-2021

36

“IMF cuts world growth forecast due to omicron, other woes”, The Economic Times, January 25, 2022, https://economictimes.indiatimes.com/news/international/business/imf-cuts-world-growthforecast-due-to-omicron-other-woes/articleshow/89122716.cms?from=mdr

37

Karen Gilchrist, “IMF cuts 2022 global growth forecast as U.S., China recovery wanes”, CNBC, January 25, 2022, https://www.cnbc. com/2022/01/25/imf-cuts-global-growth-outlook-for-2022-usand-china-recovery-wanes.html

38

39

40

41

42

43

“WTTC research reveals global Travel and sector suffered a loss of almost US$4.5 trillion in 2020 due to the impact of COVID- 19”, World Travel Tourism Council, March 25, 2021, https://wttc.org/News-Article/Global-TandT-sector-suffered-a-loss-of-almost-US4-trillionin-2020 “Travel & Tourism could grow to $8.6 trillion in 2022, says WTTC”, World Travel Tourism Council, February 02, 2022, https://wttc.org/ News-Article/Travel-and-Tourism-could-grow-to-8-point-6-trillion-USD-in-2022-say-WTTC “WTTC Expects Travel & Tourism to Contribute With $8.6 Trillion to Global Economy in 2022”, schegenvisainfo news, February 3, 2022, https://www.schengenvisainfo.com/news/wttc-expects-travel-tourism-to-contribute-with-8-6-trillion-to-global-economyin-2022/ “Global trade expected to slow, after record high of $28.5 trillion in 2021”, UN News, February 17, 2022, https://news.un.org/en/story/2022/02/1112182 “Global trade hits record high of $28.5 trillion in 2021, but likely to be subdued in 2022”, UNCTAD, February 17, 2022, https://unctad. org/news/global-trade-hits-record-high-285-trillion-2021-likelybe-subdued-2022#:~:text=The%20UNCTAD%20report%20indicates%20that,last%20three%20months%20of%202021.

‘Current Macroeconomic and Financial Situation (based on three months’ data ending mid-October 2021/22)’, Nepal Rastra Bank, February 9, 2022. Retrieved from- https://www.nrb.org. np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/

44

‘South Asia Economic Focus’, The World Bank, Spring 2021. Retrieved from- https://openknowledge.worldbank.org/bitstream/handle/10986/35274/9781464817007.pdf?sequence=5&isAllowed=y

45

‘Current Macroeconomic and Financial Situation (based on three months’ data ending mid-October 2021/22)’, Nepal Rastra Bank, February 9, 2022. Retrieved from- https://www.nrb.org. np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/

46

IANS, ‘Rising inflation, COVID-19 making people more vulnerable in Nepal’, Business Standard, January 23, 2022. Retrieved fromhttps://www.business-standard.com/article/international/ rising-inflation-covid-19-making-people-more-vulnerable-in-ne-

pal-122012300151_1.html 47

‘Consumer Price Index (CPI) Definition and Formula’, Investopedia, accessed on August 19, 2021. Retrieved from- https://www.investopedia.com/terms/c/consumerpriceindex.asp#:~:text=The%20Consumer%20Price%20Index%20(CPI,of%20goods%20and%20averaging%20them.

48

Banton, Caroline. ‘Basket of Goods’, Investopedia, accessed on November 26, 2021. Retrieved from- https://www.investopedia.com/ terms/b/basket_of_goods.asp#:~:text=What%20Is%20a%20Basket%20of,basis%2C%20often%20monthly%20or%20annually.&text=A%20basket%20of%20goods%20is,consumer%20price%20 index%20(CPI).

49

Barmes, David. ‘7 ways policymakers should respond to the costof-living crisis’, Open Democracy, February 1, 2022. Retrieved fromhttps://www.opendemocracy.net/en/oureconomy/how-policymakers-should-respond-to-cost-of-living-crisis/?utm_source=ourEconomy%20Newsletter%20-%20SEGMENT&utm_medium=email&utm_campaign=ourEconomy%27s%20newsletter%20is%20 back%21&_kx=153Rzj3znA6tUFVZBSKRg57nY8GtDD7xZPwlwSSlIkc%3D.YjCYwm

50

IANS, ‘Rising inflation, COVID-19 making people more vulnerable in Nepal’, Business Standard, January 23, 2022. Retrieved fromhttps://www.business-standard.com/article/international/ rising-inflation-covid-19-making-people-more-vulnerable-in-nepal-122012300151_1.html

51

‘Nepal Governance Weekly- Nepal Balancing Elections and Economic Downturn’, CIVacts, Issue 4, February 11, 2022. Retrieved from- https:// civacts.org/wp-content/uploads/2022/02/Governance-Weekly-4. pdf

52

‘Current Macroeconomic and Financial Situation (based on three months’ data ending mid-October 2021/22)’, Nepal Rastra Bank, February 9, 2022. Retrieved from- https://www.nrb.org. np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/

53

Prasain, Krishna. ‘Foreign Direct investment pledges up 30 percent over last year’s commitments’, The Kathmandu Post, February 3, 2022.

Retrieved from- https://kathmandupost.com/money/2022/02/03/ foreign-investment-pledges-up-30-percent-over-last-year

54

‘British Ambassador Pollitt vows to extend assistance to Gandaki Province’, Khabar hub, February 22, 2022. Retrieved from- https://english.khabarhub.com/2022/22/238402/ ‘Germany hands over more than 4.1m doses of COVID-19 vaccine’, The Himalayan Times, December 16, 2021. Retrieved from- https:// thehimalayantimes.com/kathmandu/germany-hands-over-morethan-41m-doses-of-covid-19-vaccine

55

56

‘IMF approves $395.9 million credit for Nepal’, The Kathmandu Post, January 14, 2022. Retrieved from- https://kathmandupost.com/money/2022/01/14/imf-approves-395-9-million-credit-for-nepal

57

‘Israel donates half million syringes for COVID-19 vaccines to Nepal’, The Kathmandu Post, February 1, 2022. Retrieved from-https://kathmandupost.com/health/2022/02/01/israel-donates-half-millionsyringes-for-covid-19-vaccines-to-nepal

58

‘Japan provides aid to Nepal to strengthen vaccine cold chain system’, The Kathmandu Post, January 31, 2022. Retrieved from- https:// kathmandupost.com/health/2022/01/31/japan-provides-aid-to-nepal-to-strengthen-vaccine-cold-chain-system

59

‘Nepal, World Bank sign Rs 2.14 billion loan agreement for COVID-19 emergency response and health system preparedness’, myRepublica, February 25, 2022. Retrieved from- https://myrepublica.nagariknetwork.com/news/nepal-world-bank-sign-rs-2-14-billion-loanagreement-for-covid-19-emergency-response-and-health-system-preparedness/

73

74

DOCKING NEPAL’S ECONOMIC ANALYSIS

60

‘Government to accept Rs. 10.39 billion loan assistance of Japan’, Khabarhub, January 6, 2022. Retrieved from- https://english.khabarhub.com/2022/06/230874/

76

61

‘Japan extends Rs. 10.39 billion in loan to Nepal for building resilient societies’, Online Khabar, January 26, 2022. Retrieved from- https:// english.onlinekhabar.com/japan-loan-resilient-societies.html#:~:text=The%20Japan%20International%20Cooperation%20Agency,for%20Economic%20Growth%20and%20Resilience.

77

Ibid

78

Ibid

62

63

64

65

66

67

‘Nepal receives foreign assistance commitment worth only around Rs. 110.85 billion during mid-July and mid-January’, myRepublica, February 17, 2022. Retrieved from- https://myrepublica.nagariknetwork.com/news/nepal-receives-foreign-assistance-commitmentworth-only-around-rs-110-85-billion-during-mid-july-and-midjanuary/ ‘Monetary Policy 2078-79: Mid Term Review’, Nepal Rastra Bank, February 17, 2022. Retrieved from- https://www.nrb.org.np/ofg/monetary-policy-2078-79-mid-term-review/ ‘Current Macroeconomic and Financial Situation (based on three months’ data ending mid-October 2021/22)’, Nepal Rastra Bank, February 9, 2022. Retrieved from- https://www.nrb.org. np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/ Shrestha, Prithvi Man. ‘Falling remittance inflows linked to ‘illegal’ gold imports’, The Kathmandu Post, December 15, 2021. Retrieved fromhttps://bit.ly/3DZHcrA Hundi is an informal system for transferring money, most prevalent in South Asia, in which local agents disperse or collect money or products on behalf of friends, family or other agents without legal protection or oversight, assuming that all remaining obligations will be settled through future transactions.

Ibid

68

‘Literacy rate, adult female and adult male’, UNESCO Institute for Statistics, September 2021. Retrieved from- https://data.worldbank. org/indicator/SE.ADT.LITR.FE.ZS?locations=NP

69

‘Current Macroeconomic and Financial Situation (based on three months’ data ending mid-October 2021/22)’, Nepal Rastra Bank, February 9, 2022. Retrieved from- https://www.nrb.org. np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/

79

‘The Riyalists – KIMFF Virtual Festival 2021’, December 10, 2021. Retrieved from- https://festival.kimff.org/the-riyalists/

71

Tandukar, Shranup. ‘Into the migrant woes’, The Kathmandu Post, December 14, 2021. Retrieved from- https://kathmandupost.com/ art-culture/2021/12/14/into-the-migrant-woes

72

Budhhair, Mohan. ‘Workers return home after losing jobs in India’, The Kathmandu Post, January 16, 2022. Retrieved from- https://kathmandupost.com/sudurpaschim-province/2022/01/16/workers-return-home-after-losing-jobs-in-india

73

74

Ibid

81

Ibid

82

Ibid

83

Exchange rate for the 18 October 2021 is $1= NPR 120.72 and for the 14 January 2022 is $1= NPR 118.52 resulting to an exchange gain of NPR 2.20. [Extracted from the PDMO report]

84

Shrestha, Prithvi Man. ‘Falling remittance inflows linked to ‘illegal’ gold imports’, The Kathmandu Post, December 15, 2021. Retrieved fromhttps://bit.ly/3DZHcrA

85

https://www.nrb.org.np/contents/uploads/2022/02/Current-Macroeconomic-and-Financial-Situation-English-Based-on-Six-Months-data-of-2021.22.pdf

86

Sangam Prasain, “It’s paddy that will put further pressure in the economy”, January 2, 2022, https://kathmandupost.com/money/2022/01/02/it-s-paddy-that-will-put-further-pressure-oneconomy

87

“Paddy’s production Conjecture related press release”, Ministry of Agriculture and Livestock Development, December 31, 2021, https:// s3-ap-southeast-1.amazonaws.com/prod-gov-agriculture/server-assets/notice-1641115636126-d03c7.pdf

“Paddy’s production Conjecture related press release”, Ministry of Agriculture and Livestock Development, December 28, 2020, https:// s3-ap-southeast-1.amazonaws.com/prod-gov-agriculture/server-assets/notice-1609146241326-476ef.pdf

90

Sangam Prasain, “Severe fertiliser crisis looms as government continues to fumble”, February 22, 2022, https://kathmandupost.com/ money/2022/02/22/severe-fertiliser-crisis-looms-as-government-continues-to-fumble#:~:text=Sources%20say%20that%20 government%20will,proposed%20local%20elections%20in%20May.

91

Sangam Prasain, “Government allocates record Rs 15 billion to ensure fertilizer supply”, The Kathmandu Post, September 20, 2021, https://kathmandupost.com/money/2021/09/20/government-allocates-record-rs15-billion-to-ensure-fertiliser-supply

92

Regional Trade in Seed, Fertilizer, and Strategic Grains: A Review of the Legal, Regulatory, and Institutional Constraints to Growth Across South Asia, USAID, April 2014, https://cuts-citee.org/pdf/EAT_SouthAsia_Report_041514_web.pdf

93

94 75

‘Current Macroeconomic and Financial Situation (based on three months’ data ending mid-October 2021/22)’, Nepal Rastra Bank, February 9, 2022. Retrieved from- https://www.nrb.org. np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/

ibid

89

Ibid ‘Health insurance on cards for migrant workers’ families’, The Himalayan Times, January 22, 2022. Retrieved from- https://thehimalayantimes.com/nepal/health-insurance-on-cards-for-migrant-workersfamilies

Prasain, Sangam & Shrestha, Prithvi Man. ‘Country’s imports hit Rs.1 trillion mark in the first half of the fiscal year’, The Kathmandu Post, January 24, 2022. Retrieved from- https://kathmandupost.com/national/2022/01/24/country-s-imports-hit-rs1-trillion-mark-in-thefirst-half-of-the-fiscal-year

80

88

70

Shrestha, Prithvi Man. ‘Falling remittance inflows linked to ‘illegal’ gold imports’, The Kathmandu Post, December 15, 2021. Retrieved fromhttps://bit.ly/3DZHcrA

95

ibid Madhav Aryal, “Ginger Farmers face hard times after market crashes”, February 15, 2022, https://kathmandupost.com/money/2022/02/15/ ginger-farmers-face-hard-times-after-market-crashes. ibid

NEFPORT ISSUE 48 – MARCH 2022

96

97

Ginger Trade Routes to SAARC countries, Ministry of Industry, Commerce and Supplies, 2019/2020, http://www.tepc.gov.np/projects/ tepc/assets/upload/fck_upload/Report%20on%20Logistics%20 Study%20Ginger.pdf Pushpa Raj Joshi, “Farmers leave ginger in fields due to lack of fair price”, December 4, 2021, https://myrepublica.nagariknetwork.com/ news/farmers-leave-ginger-in-fields-due-to-lack-of-fair-price/

boro-paddy-starts-in-jhapa 117

1 kattha = 0.0338 hectare

118

ibid

119

ibid

120 98

99

100

ibid “Value Chain Analysis of Ginger subsector in Nepal”, ANSAB, July 2011, https://www.ansab.org.np/storage/product/hvap-vca-reportsginger-1579689954.pdf “Dependency on maize seeds increasing: seeds worth around Rs 7 billion imported in four months”, Khabarhub, December 31, 2021, https://english.khabarhub.com/2021/31/229750/

Birendra KC, “Farmer incomes soar after construction of cold stores”, February 4, 2022. Retrieved https://kathmandupost.com/money/2022/02/04/farmer-incomes-soar-after-construction-of-coldstores

121

ibid

22

Economic Survey 2020/21

123

Ibid

101

ibid

124

ibid

102

ibid

125

ibid

103

“Current macroeconomic and Financial Situation- Tables (Based on Six Months data of 2021/22), February 9, 2022, https://www.nrb. org.np/red/current-macroeconomic-and-financial-situation-tables-based-on-six-months-data-of-2021-22/

126

‘4157 Community School selected for President’s reform Programme’. The Rising Nepal, February 16, 2022. Retrieved from: https:// risingnepaldaily.com/nation/4157-community-schools-selected-for-presidents-reform-programme

104

Sutanuka Ghosal, “Tea Board cracks down on import of cheap teas to India from Kenya and Nepal”, November 15, 2021, https://economictimes.indiatimes.com/news/economy/foreign-trade/tea-boardcracks-down-on-import-of-cheap-teas-to-india-from-kenyaand-nepal/articleshow/87720709.cms?from=mdr

127

Ghimire, Binod. ‘New school reform plan set for rollout despite two previous flops. The Kathmandu Post, January 20, 2022. Retrieved from: https://kathmandupost.com/national/2022/01/20/newschool-reform-plan-set-for-rollout-despite-two-previous-flops

128 105

Krishana Parsain, “Tea exports plunge by a third in the first half of the fiscal year”, The Kathmandu Post, February 7, 2022, https://kathmandupost.com/money/2022/02/07/tea-exports-plunge-by-athird-in-the-first-half-of-the-fiscal-year

‘New academic session to begin after local polls. Khabarhub, February 15, 2022. Retrieved from: https://english.khabarhub. com/2022/15/237286/

129

‘President Bhandari calls to include Buddhist Philosophy, Buddha’s message in curriculum’. Khabarhub, December 2, 2021. Retrieved from: https://english.khabarhub.com/2021/02/223920/

130

‘Madras education to be concluded in government curriculum’.

Khabarhub, December 7,2021. Retrieved from: https://english.khabarhub.com/2021/07/224725/

131

‘NEB publishes results of class 12’. Khabarhub, December 2, 2021. Retrieved from: https://english.khabarhub.com/2021/03/223970/

132

Rauniyar, Ruby. ‘SEE result of seven provinces will be published at different times: Chairperson Sharma’. myRebulica, February 22, 2022.

Retrieved from: https://myrepublica.nagariknetwork.com/news/seeresults-of-seven-provinces-will-be-published-at-different-timeschairperson-sharma/

133

‘Preparation underway to allow province government to conduct SEE exams: NEB Chairperson Sharma’. myRepublica, February 10, 2022.

Retrieved from: https://myrepublica.nagariknetwork.com/news/process-underway-to-allow-province-govts-to-conduct-see-examsneb-chairperson-sharma/

134

‘Bharatpur metropolis makes tangible results in educational reforms.

Khabarhub, January 6, 2022. Retrieved from: https://english.khabarhub.com/2022/06/230782/

135

Rauniyar, Rubi. ‘Seven- story modern library to be built in jamal’. myRepublica, January 26, 2022. Retrieved from: https://myrepublica.nagariknetwork.com/news/seven-story-modern-library-to-bebuilt-in-jamal/

136

‘Student organizations demand action against colleges that charge higher fees. myRepublica, December 16, 2021. Retrieved from: https:// myrepublica.nagariknetwork.com/news/student-organizations-demand-action-against-colleges-that-charge-higher-fees/

106

107

108

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109

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110

“Government issues Bird Flu Control Regulation”, The Himalayan Times, February 06, 2022, https://thehimalayantimes.com/nepal/ government-issues-bird-flu-control-regulation

111

“Sugarcane price up 8 percent to Rs 590 per quintal”, The Kathmandu Post, January 7, 2022, https://kathmandupost.com/money/2022/01/06/sugarcane-price-up-8-percent-to-rs590-perquintal

112

ibid

113

ibid

114

115

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75

76

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Nepal Electricity Authority-Annual Report 2020/21

140

Department of Electricity Development (January 2022)

141

ibid

142

ibid

143

Nepal Electricity Authority-Annual Report 2020/21

144

Department of Electricity Development (January 2022)

146

147

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148

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149

“National Hydro Power (NHPC) Proposes 19.5% Dividend, 50% Right Shares, and Unveils Acquisition of Sunkoshi Hydropower”, February 14, 2022, ShareSansar. https://www.sharesansar.com/ newsdetail/national-hydro-power-nhpc-proposes-195-dividend-50-right-shares-and-unveils-acquisition-of-sunkoshi-hydropower-2022-02-14

150

156

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157

“Bangladesh seeks to purchase electricity produced by Nepal’s private sector”, December 15, 2021, My Republica. https://myrepublica.nagariknetwork.com/news/bangladesh-seeks-to-purchase-electricity-produced-by-nepal-s-private-sector/#:~:text=%E2%80%9CWe%20will%20be%20purchasing%20Nepali,produced%20in%20the%20rainy%20season.

158

“Electricity import from India increases to 468 MW”, February 3, 2022, My Republica. https://myrepublica.nagariknetwork.com/news/ electricity-import-from-india-increases-to-468-mw/

NRB Current macroeconomic and financial situation six month data 2021/22

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159

Data.unicef.org

160

https://knoema.com/atlas/Nepal/Death-rate

161

Data.unicef.org

162

Data.unicef.org

163

Data.unicef.org

164

https://data.worldbank.org/indicator/SH.H2O.SMDW.ZS?locations=NP

165

https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?locations=NP

166

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167

Arjun Poudel, “ID card no more needed to get Covid-19 vaccine”, The Kathmandu Post. 14 February 2022. Retrieved from: https://tkpo. st/3Ly9AGg

168

Arjun Poudel, “Government mulls giving booster shots to people over 50 in big cities and densely populated areas”, The Kathmandu Post. 4 February 2022. Retrieved from: https://tkpo.st/3gonFb6

169

Arjun Poudel, “Vaccine mishandling led to wastage of over 50,000 doses: Report”, The Kathmandu Post. 16 February 2022. Retrieved from: https://tkpo.st/3v0grSW

170

Arjun Poudel, “Vaccine mishandling led to wastage of over 50,000 doses: Report”, The Kathmandu Post. 16 February 2022. Retrieved from: https://tkpo.st/3v0grSW

171

“Up to 1.5 million vaccine doses missing, claims health secretary”, The Himalayan Times. 19 January 2022. Retrieved from: https://thehimalayantimes.com/nepal/up-to-15-million-vaccine-doses-missing-claims-health-secretary

151

“Petrol Prices Details”, February 21, 2022, Nepal Oil Corporation Limited. http://noc.org.np/petrol

152

“Fuel prices reach record high in Nepal”, February 2, 2022, Online Khabar. https://english.onlinekhabar.com/fuel-prices-record-high-nepal.html

153

“Electricity authority decides to buy solar power through competitive bidding citing falling prices”, January 25, 2022, The Kathmandu Times. https://kathmandupost.com/national/2022/01/25/electricity-authority-decides-to-buy-solar-power-through-competitive-bidding-citing-falling-prices

172

Anup Ojha, “Government slashes PCR test fees but most labs yet to implement new rates”, The Kathmandu Post. 21 January 2022.

Retrieved from: https://kathmandupost.com/health/2022/01/21/ government-slashes-pcr-test-fees-but-most-labs-yet-to-implement-new-rates

154

“IBN Allows India's CEL To Conduct Feasibility Of 350MW Solar Projects”, February 10, 2022, The Rising Nepal. https://risingnepaldaily.com/business/ibn-allows-indias-cel-to-conduct-feasibility-of-350mw-solar-projects

173

Saeed Kamali Dehghan, “Nepal Hospital trials ‘life-changing’ treatment for leprosy wounds”, The Guardian. 20 January 2022. Retrieved from: https://www.theguardian.com/global-development/2022/ jan/20/nepal-hospital-trials-life-changing-treatment-for-leprosy-wounds

155

“Govt to Provide Subsidy Up to 90 Percent in Renewable Energy Production for Targeted Groups”, February 20, 2022, Urja Khabar. https://

174

“Drug rehabilitation centres to receive government grant”, The Hi-

NEFPORT ISSUE 48 – MARCH 2022

malayan Times. 17 December 2021. Retrieved from: https://thehimalayantimes.com/nepal/drug-rehabilitation-centres-to-receive-government-grant 175

Bunu Tharu, “स्वास्थय् बिमा देशभर विस्तार हुदँ ा पनि बढेन आकर्षण”, Kantipur, 24 December 2021. Retrieved from: https://ekantipur.com/heal th/2021/12/24/164034930024333931.html

176

Current Macroeconomic and Financial Situation, Nepal Rastra Bank

177

“Cetamol shortage starts to grip Kathmandu Valley”, The Annapurna Express, 21 January 2022. Retrieved from: https://theannapurnaexpress.com/news/cetamol-shortage-starts-to-grip-kathmandu-valley-4034

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179

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191

Republica. “Govt Awards Construction Contract of Flyover in Gwarko, Lalitpur.” My Republica. My Republica, January 20, 2022. https:// myrepublica.nagariknetwork.com/news/govt-awards-constructioncontract-of-flyover-in-gwarko-lalitpur/.

192

Republica. “Govt to Build 4 Hydel Projects with Capacity Totaling 1,371.85 MW.” My Republica. My Republica, January 25, 2022. https:// myrepublica.nagariknetwork.com/news/govt-to-build-4-hydelprojects-with-capacity-totaling-1-371-85-mw/.

193

https://datareportal.com/reports/digital-2021-nepal

194

Department of Industry statistics

Raj Bahadur Shahi, “Acute shortage of essential medicines at government health centres in Mugu”, The Kathmandu Post, 6 December 2021. Retrieved from: https://bit.ly/3EtyNOk

195

Dinesh, “NTA’s Free Broadband Service Reaches 15 Thousand Centers”, Nepali Telecom. 15 January 2022. Retrieved from: https://www. nepalitelecom.com/nta-free-broadband-internet-service

“Ramechhap reeling under paracetamol crunch”, The Himalayan Times, 21 January 2022. Retrieved from: https://thehimalayantimes. com/nepal/ramechhap-reeling-under-paracetamol-crunch

196

“NTA to Implement Mobile Number Portability Soon in Nepal”, Nepali Telecom. 30 January 2022. Retrieved from: https://www.nepalitelecom.com/mobile-number-portability-nepal

197

“NTC Upgrades International Bandwidth Capacity to 120 Gbps for Smooth Internet”, Nepali Telecom. 3 January 2022. Retrieved from: https://www.nepalitelecom.com/2022/01/ntc-upgrades-international-internet-bandwidth-120-gbps.html

198

“Parliamentary committee directs govt to submit action plan to improve quality and access of internet service within 30 days”, MyRepublica. 3 January 2022. Retrieved from: https://myrepublica. nagariknetwork.com/news/parliamentary-committee-directs-govtto-submit-action-plan-to-improve-quality-and-access-of-internet-service-within-30-days/

199

“Nepal’s customs offices go ‘cashless’ and ‘paperless’ from today”, MyRepublica. 26 January 2022. Retrieved from: https://myrepublica. nagariknetwork.com/news/nepal-s-customs-offices-go-cashlessand-paperless-from-today/

“Humla health facility reeling under shortage of medicines”, The Himalayan Times, 2 January 2022. Retrieved from: https://thehimalayantimes.com/nepal/humla-health-facility-reeling-under-shortage-of-medicines “Government urged to implement SC orders to ensure public health”, The Himalayan Times, 9 February 2022. Retrieved from: https://thehimalayantimes.com/kathmandu/government-urged-to-implementsc-orders-to-ensure-public-health

182

“Economic Survey 2020/21 - Mof.gov.np.” Accessed March 8, 2022. https://mof.gov.np/uploads/document/file/1633341980_Economic%20Survey%20(Engslish)%202020-21.pdf.

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“Nepal Budget Statement Highlights and Tax Rates for FY 2077-78 (2020-21).” T.R. Upadhya & Co. Accessed March 8, 2022. http://pkf. trunco.com.np/publication/detail.php?id=181.

184

Online, THT. “MCC Ratified by House of Representatives, at Last.”

The Himalayan Times. himalayantimes, February 27, 2022. https:// thehimalayantimes.com/nepal/mcc-ratified-by-house-ofrepresentatives-at-last.

200

“Nepal customs to go paperless with single-window electronic portal”, OnlineKhabar, 26 January 2022. Retrieved from: https://english.onlinekhabar.com/nepal-customs-to-go-paperless-with-single-window-electronic-portal.html

185

Lamsal, Himal. “Door for Implementation of MCC Projects Is Open Now: MCA-Nepal.” My Republica. My Republica, March 2, 2022. https:// myrepublica.nagariknetwork.com/news/door-for-implementationof-mcc-projects-is-open-now-mca-nepal/.

201

“DoFE starts issuing labor permits online from today”, MyRepublica.

16 January 2022. Retrieved from: https://myrepublica.nagariknetwork.com/news/dofe-starts-issuing-labor-permits-online-fromtoday/

186

Republica. “International Flight from Gautam Buddha International Airport Will Begin from April 14: Minister Ale.” My Republica. My Republica. Accessed February 23, 2022. https://myrepublica.nagariknetwork.com/news/international-flight-from-gautam-buddha-international-airport-will-begin-from-april-14-minister-ale/.

202

187

Republica. “Karnali Ahead in Real Estate Price Hike.” My Republica. My Republica. Accessed February 23, 2022. https://myrepublica.nagariknetwork.com/news/karnali-ahead-in-real-estate-price-hike/.

188

Republica. “Residents Can Install Evs Charging Units for Their Personal Use: NEA.” My Republica. My Republica, January 20, 2022. https:// myrepublica.nagariknetwork.com/news/residents-can-install-evscharging-units-for-their-personal-use-nea/.

189

Republica. “Residents Can Install Evs Charging Units for Their Personal Use: NEA.” My Republica. My Republica, January 20, 2022. https:// myrepublica.nagariknetwork.com/news/residents-can-install-evscharging-units-for-their-personal-use-nea/.

विद्युतीय माध्यमबाट प्रवाह हुने कर्जा Digital Lending सम्बन्धी मार्गदर्शन-२०७८, Nepal Rastra Bank. Retrieved from: https://www.nrb.org.np/contents/uploads/2022/02/%E0%A4%B5%E0%A4%BF%E0%A4%A6%E0%A5 %8D%E0%A4%AF%E0%A5%81%E0%A4%A4%E0%A5%80%E0% A4%AF-%E0%A4%AE%E0%A4%BE%E0%A4%A7%E0%A5%8D%E 0%A4%AF%E0%A4%AE%E0%A4%AC%E0%A4%BE%E0%A4%9F% E 0 % A4 % A A % E 0 % A5 % 8 D % E 0 % A4 % B 0 % E 0 % A4 % B 5 % E 0 % A4 % B E % E 0 % A4 % B9 - % E 0 % A4 % B9 % E 0 % A5 % 81 % E 0 % A4 % A8 % E 0 % A5 % 87- % E 0 % A4 % 9 5 % E 0 % A4 % B 0 % E 0 % A5%8D%E0%A4%9C%E0%A4%BE-Digital-Lending-%E0%A4 %B8%E0%A4%AE%E0%A5%8D%E0%A4%AC%E0%A4%A8 %E0%A5%8D%E0%A4%A7%E0%A5%80-%E0%A4%AE%E0 % A4% B E % E 0 % A4% B 0 % E 0 % A5 % 8 D % E 0 % A4% 97 % E 0 % A4 %A6%E0%A4%B0%E0%A5%8D%E0%A4%B6%E0%A4%A8%E0%A5%A8%E0%A5%A6%E0%A5%AD%E0%A5%AE.pdf

203

Circular 04/078/79, “भुकत् ानी प्रणालीको अन्तर आवद्धता (Interoperability) तथा पहुचँ (Access) सम्बन्धी”, Nepal Rastra Bank, 4 February 2022. Retrieved from: https://www.nrb.org.np/contents/uploads/2022/02/Circular_04_78-79.pdf

204

Dinesh, “Worldlink Invests in Khalti to Take Financial Services to Rural

190

Republica. “Construction of Infrastructures for Nishan Kalikadham, Yankbarak Pokhari in Panchthar Begins.” My Republica. My Republica, March 5, 2022.

77

78

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Areas”, Nepali Telecom. 12 December 2021. Retrieved from: https:// www.nepalitelecom.com/2021/12/worldlink-invests-in-khalti-totake-financial-services-to-rural-areas.html 205

“NTA Prepares to Revoke Smart Cell’s License”, Nepali Telecom. 17 January 2022. Retrieved from: https://www.nepalitelecom.com/ntarevoke-smart-cell-license

206

Current Macroeconomic and Financial Situation, Nepal Rastra Bank

207

Nepal Tourism Statistics 2020. Government of Nepal Ministry of Culture, Tourism & Civil Aviation, https://www.tourism.gov.np/files/publication_files/316.pdf.

208

“Foreign Arrivals in Nepal down Nearly 35 PCT in 2021.” Xinhua.

Accessed February 24, 2022. http://www.xinhuanet.com/ asiapacific/20220103/1324cb24302a43d5a76d668df322951c/c. html.

209

Al Jazeera. “Nepal: Covid Cases May Double as Infections Hit Record.”

Coronavirus pandemic News | Al Jazeera. Al Jazeera, January 19, 2022. https://www.aljazeera.com/news/2022/1/19/nepal-covidcases-may-double-infections-hit-record-level.

210

Service, Himalayan News. “Nearly 20,000 Tourists Arrived in February.” The Himalayan Times. himalayantimes, March 4, 2022. https://thehimalayantimes.com/business/nearly20000-tourists-arrived-in-february?fbclid=IwAR3nEA5XH-6v_ g2RCVPIammTUIn9hr0u4EhqsgyVh3WIyLBHSjbQanlYeZ8.

211

Republica. “Minister Ale Directs to Expand Arrival Lounge of Domestic Terminal at Tia.” My Republica. My Republica. Accessed February 24, 2022. https://myrepublica.nagariknetwork.com/news/minister-aledirects-to-expand-arrival-lounge-of-domestic-terminal-at-tia/.

212

Republica. “Agreement Inked for Equal Airfare for Foreigners and Nepalis.” My Republica. My Republica. Accessed February 24, 2022. https://myrepublica.nagariknetwork.com/news/agreement-inkedfor-equal-airfare-for-foreigners-and-nepalis/.

213

Republica. “Agreement Inked for Equal Airfare for Foreigners and Nepalis.” My Republica. My Republica. Accessed February 24, 2022. https://myrepublica.nagariknetwork.com/news/agreement-inkedfor-equal-airfare-for-foreigners-and-nepalis/.

214

Republica. “Covid-19 Hits Tourist Flow to Kanchenjunga Region.”

My Republica. My Republica. Accessed February 24, 2022. https:// myrepublica.nagariknetwork.com/news/covid-19-hits-influx-oftourists-to-kanchenjunga-region/.

215

216

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Republica. “Govt Collects Rs 764.50 million in Royalty Dues from Casinos, Six Casinos Yet to Pay Rs 1.11 billion.” My Republica. My Republica, February 21, 2022. https://myrepublica.nagariknetwork. com/news/govt-collects-rs-764-50-million-in-royalty-dues-fromcasinos-six-casinos-yet-to-pay-rs-1-11-billion/.

“Thenepalweekly.” The Nepal Weekly, February 22, 2022. https:// thenepalweekly.com/2022/02/22/9596/.

“Thenepalweekly.” The Nepal Weekly, February 22, 2022. https:// thenepalweekly.com/2022/02/22/9596/.

www.nrb.org.np/contents/uploads/2022/02/Current-Macroeconomic-and-Financial-Situation-English-Based-on-Six-Months-data-of-2021.22.pdf 221

https://www.sharesansar.com/newsdetail/banks-and-financial-institutions-raise-interest-rates-for-falgun-2022-02-13

222

https://www.nrb.org.np/contents/uploads/2022/01/%E0%A4 %B8%E0%A5%82%E0%A4%9A%E0%A4%A8%E0%A4%BE%E0%A4%A8%E0%A4%82-%E0%A5%A6%E0%A5%AC-%E0%A4 %A6%E0%A4%BE%E0%A4%B5%E0%A5%80-%E0%A4%A8%E0%A4%AA%E0%A4%B0%E0%A5%87%E0%A4%95%E0%A4%BE%E0%A4%A8%E0%A4%BF%E0%A4%95%E0%A5%8D%E0%A4%B7 %E0%A5%87%E0%A4%AA-%E0%A4%B8%E0%A4%AE%E0%A5%8D %E0%A4%AC%E0%A4%A8%E0%A5%8D%E0%A4%A7%E0%A4%95 %E0%A4%BE-1.pdf

223

https://www.nrb.org.np/contents/uploads/2021/12/Circular-15.pdf

224

https://myrepublica.nagariknetwork.com/news/nrb-tightensnoose-on-import-of-luxury-items-amid-declining-foreign-currency-reserves/

225

https://thehimalayantimes.com/business/nrb-amends-unified-directive-for-bfis

226

227

https://www.sharesansar.com/newsdetail/ipo-proposals-of-six-companies-finally-approved-by-sebon-2022-01-24

228

https://thehimalayantimes.com/business/nrb-amends-unified-directive-for-bfis

229

Sapkota, Kanhaiya. ‘Women in foreign employment: Its impact on the left behind family members in Tanahun district, Nepal’, The Geographical Journal of Nepal, Central Department of Geography, Tribhuvan University, Vol. 3, 69-90, March 2020. Retrieved fromhttp://doi.org/10.3126/gjn.v13i0.28153

230

‘World Bank predicts sharpest decline of remittances in recent history’, The World Bank, Press Release, 22 April 2020. Retrieved fromhttps://www.worldbank.org/en/news/press-release/2020/04/22/ world-bank-predicts-sharpest-decline-of-remittances-in-recent-history

231

ADB’s worst-case scenario assumed that domestic outbreak control and resumption of economic activities would take a year and that the economic impact of COVID-19 would persist throughout the year and dissipate halfway in the last 3 months of the outbreak.

232

Department of Foreign Employment, Annual data of 2020/21

233

‘Economic Survey 2020/21’, Ministry of Finance, Nepal.

234

Ibid

235

https://npc.gov.np/images/category/15th_plan_English_Version.pdf

236

https://www.nrb.org.np/contents/uploads/2020/04/Study_Report s-%E0%A4%A8%E0%A5%87%E0%A4%AA%E0%A4%BE%E0%A4% B2%E0%A4%AE%E0%A4%BE_%E0%A4%B5%E0%A4%BF%E0%A4 %AA%E0%A5%8D%E0%A4%B0%E0%A5%87%E0%A4%B7%E0%A4 %A3_%E0%A4%86%E0%A4%AA%E0%A5%8D%E0%A4%B0%E0%A 4%B5%E0%A4%BE%E0%A4%B9%E0%A4%95%E0%A5%8B_%E0%A 4%B8%E0%A5%8D%E0%A4%A5%E0%A4%BF%E0%A4%A4%E0%A 4%BF-new.pdf

218

Republica. “BFIS Approves Refinance Loans of Rs 106.8 billion as of Mid-January.” My Republica. My Republica. Accessed February 24, 2022. https://myrepublica.nagariknetwork.com/news/bfisapproves-refinance-loans-of-rs-106-8-billion-as-of-mid-january/.

219

Republica. “BFIS Approves Refinance Loans of Rs 106.8 billion as of Mid-January.” My Republica. My Republica. Accessed February 24, 2022. https://myrepublica.nagariknetwork.com/news/bfisapproves-refinance-loans-of-rs-106-8-billion-as-of-mid-january/.

NRB, Current Macroeconomic and Financial Situation of Nepal, Based on Six Months Data Ending Mid-January, 2021/22) https://

220

https://www.sebon.gov.np/ipo-pipeline

237

Banking and Financial Statistics, Mid-Dec 2011

238

Banking and Financial Statistics, Mid-Jan 2022

239

https://www.nrb.org.np/contents/uploads/2019/12/NRB_Economic_Review-Vol_23-2_October_20112_Tourism_and_Economic_

NEFPORT ISSUE 48 – MARCH 2022

Growth_in_NepalBishnu-Prasad-Gautam-Ph.D.pdf 240

https://www.nrb.org.np/contents/uploads/2021/09/FDI-2019-20_ September-2021.pdf

241

https://www.tblbd.com/international-banking/Wage-Earners-development-bond#:~:text=Wage%20Earner%20Development%20 Bond%20(WEDB,guarantees%20a%20fixed%20interest%20rate.

WEOUpdateJune2020#:~:text=A%20Crisis%20Like%20No%20 Other%2C%20An%20Uncertain%20Recovery,-Read%20full%20 report&text=Global%20growth%20is%20projected%20at,Economic%20Outlook%20(WEO)%20forecast.&text=For%20economies%20struggling%20to%20control,an%20additional%20toll%20 on%20activity.

262

GCC outlook: Growth to accelerate in 2022. http://www. emiratesnbdresearch.com/research/article/?a=gcc-outlook-growth-to-accelerate-in-2022-2510

263

IMF latest world economic outlook growth projections. https://www. imf.org/en/Publications/WEO/Issues/2021/10/12/world-economic-outlook-october-2021

264

Global Growth to Slow through 2023, Adding to Risk of ‘Hard Landing’ in Developing Economies. January 11, 2022. https://www.worldbank. org/en/news/press-release/2022/01/11/global-recovery-economics-debt-commodity-inequality#:~:text=Global%20growth%20 is%20expected%20to,is%20unwound%20across%20the%20world.

South Asia: Regional overview. https://thedocs.worldbank.org/en/ doc/600223300a3685fe68016a484ee867fb-0350012021/related/ Global-Economic-Prospects-June-2021-Regional-Overview-SAR. pdf

265

UNDESA, International migrant stock 2020. https://www.ilo.org/islamabad/areasofwork/labour-migration/lang--en/index.htm https:// www.un.org/development/desa/pd/content/international-migrant-stock

266

Knomad, Remittances in Crisis, how to keep them flowing, last visited January 2022 https://www.knomad.org/covid-19-remittances-callto-action/

267

World Bank Group, Knomad. Resilience, Covid-19 Crisis through a migration lens, Migration and development Brief 34 https://www.knomad.org/sites/default/files/2021-05/Migration%20and%20Development%20Brief%2034_1.pdf

268

World Bank Group, Knomad. Recovery, Covid-19 Crisis through a migration lens, Migration and development Brief 35 Pg. 13 Last visited January 2022 https://www.knomad.org/sites/default/files/2021-11/ Migration_Brief%2035_1.pdf

269

Resilience COVID-19 Crisis Through a Migration Lens Migration and Development Brief 34 May 2021 https://www.knomad.org/data/remittances

270

GSMA, State of the Industry Report on Mobile Money 2021, last visited December 2020. https://www.gsma.com/mobilefordevelopment/ wp-content/uploads/2021/03/GSMA_State-of-the-Industry-Report-on-Mobile-Money-2021_Full-report.pdf

271

https://www.arabnews.com/node/1863481/saudi-arabia

Ibid World Bank, Covid -19 is hitting the poor countries the hardest. January 28, 2021. https://blogs.worldbank.org/voices/covid-19-hittingpoor-countries-hardest-heres-how-world-banks-ida-steppingsupport

272

Out of Africa, The influx of African migrants to the UAE. https:// w w w. k a s . d e /d o c u m e n t s / 2 8 6 2 9 8/8 6 6 8 2 2 2 / Po l i c y + Re port+No+31.+21-08-25-+Out+of+Africa+The+Influx+of+African+Migrants+to+the+UAE.pdf/83d332cb-c5d4-98e4-b22d-c4eb48c6d81c?version=1.0&t=1629993331232

258

Sri-Lanka, http://www.slbfe.lk/page.php?LID=1&MID=232.

Nepal, https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---ipec/ documents/publication/wcms_814432.pdf , Bangladesh http://www. old.bmet.gov.bd/BMET/stattisticalDataAction , India http://mea.gov. in/images/attach/NRIs-and-PIOs_1.pdf , Pakistan,

273

Africa labour migration to the GCC states. https://www.ituc-africa. org/IMG/pdf/ituc-africa_study-africa_labour_migration_to_the_ gcc_states.pdf

259

Migrant remittance inflows (US$ million) Knomad https://www.knomad.org/data/remittances for the year 2020 our year of concern

260

IMF, A Crisis Like No Other, An Uncertain Recovery, June 2020. World Economic outlook update

261

https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/

242

https://www.securitybank.com/personal/investments/fixed-income-securities/ltncd/#:~:text=Overview,flexibility%20of%20a%20 negotiable%20instrument.

243

https://www.nrbbankbd.com/wp-content/uploads/2020/08/Howto-Open-Bank-Account-from-Abroad.pdf

244

Sapkota, Kanhaiya. ‘Women in foreign employment: Its impact on the left behind family members in Tanahun district, Nepal’, The Geographical Journal of Nepal, Central Department of Geography, Tribhuvan University, Vol. 3, 69-90, March 2020. Retrieved fromhttp://doi.org/10.3126/gjn.v13i0.28153

245

246

247

248

Department of Foreign Employment, 2015 - 2021 Bhattarai, Raju. ‘International migration, multi-local livelihoods and human security: Perspectives from Europe, Asia and Africa’, Institute of Social Studies, The Netherlands, 30 and 31 August 2007.

Nepal Labor Migration Report 2020, Ministry of Labor, Employment and Social Security, 2020. Retrieved from- https://moless.gov.np/ wp-content/uploads/2020/03/Migration-Report-2020-English.pdf Ibid

249

Bhadra, Chandra. ‘International labor migration of Nepalese women: The impact of their remittances on poverty reduction’, Asia-Pacific Research and Training Network on Trade Working Paper Series, No 44, September 2007 (Rev. Jan 2008). Retrieved from- https://www. unescap.org/sites/default/files/AWP%20No.%2044.pdf

250

Lopamudra Ray Saraswati, Vartika Sharma, and Avina Sarna. ‘Female migrants in India’, New Delhi: Population Council, July 2015. Retrieved from- https://bit.ly/30uN2na

251

Republica. (n.d.). Govt initiating to send 10,000 nurses to the UK. My Republica.

252

Ibid

253

Ibid

254

Ibid

255

Ibid

256 257

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DOCKING NEPAL’S ECONOMIC ANALYSIS

NEF Profile Nepal Economic Forum (NEF) is a premier private sector-led economic policy and research organization that seeks to redefine the economic development discourse in Nepal. Founded in 2009 as a not-for-profit organization under the beed (www. beed.global) umbrella, NEF is a thought center that strives to positively transform Nepal’s economic and development policies by strengthening the Nepali economy through various activities to promote an efficient and inclusive private sector. NEF has been featured in the list of Top Think Tanks in Southeast Asia and the Pacific in the Global Go-To Think Tank Index Reports 2016 through 2020.

NEF BROADLY WORKS UNDER THE FOLLOWING AREAS: Business Policy Research Center (BPRC) consolidates NEF’s activities into a hub that takes a holistic approach to the issues; generates dialogue between the public and private sectors on economic growth concerns, and acts as a platform for information dissemination.

NEF produced the following products as part of BPRC in 2021:

Himalayan Circular Economy Forum (HICEF) HiCEF is a platform to ideate research, initiate policy dialogues and disseminate information relating to the circular economy and the Himalayas.

Center for Digital Transformation Center for Digital Transformation is an incubation program that addresses cross-cutting themes related to digital adoption and revolution in emerging and frontier markets of Asia and Africa.

Global Nepali Network Global Nepali Network is a platform to connect Nepalis around the world regardless of their citizenship.

Renewable Energy Center Renewable Energy Center is an incubation program that engages multiple stakeholders to articulate discourse that will shape nationallevel energy policies.

Nepal and the World Nepal and the World (NAW) will study Nepal's foreign policy and diplomacy.

Center for Private Sector Development The Center for Private Sector Development (CPSD) will focus on private sector-led development by supporting the growth of small and medium enterprises.

NEFPORT ISSUE 48 – MARCH 2022

Nepal Economic Forum has been engaged in the discourse of federalism in Nepal since 2009. NEF has engaged in multiple policy discourses, conducted assessments and produced publications on Doing Business in Nepal against the backdrop of federalism. Hence, through the Doing Business in Federated Nepal (DBFN) vertical, NEF shall continue to engage itself in fostering a conducive business environment in the federated structure, supporting local businesses and empowering local bodies in governance. For this, NEF intends to open national chapters in each of the seven provinces of Nepal to promote localized efforts.

NEF operates in domain of Development Consulting (devCon) in conjunction with beed management. It works with a variety of bilateral, multilateral, national and international institutions in the areas of policy research, economic analysis, value chain analysis, enterprise development, sectorial studies and public private dialogue.

We are striving to ensure financial sustainability for NEF to complement the support it currently receives from beed management and the Open Society Foundations. If you are interested to support NEF, please do get in touch with info@nepaleconomicforum.org

www.linkedin.com/company/nepal-economic-forum @NEFNepal https://www.youtube.com/channel/UCP5RNfvnTKSuSrZO4gqGpJw @nepaleconomicforum @nepaleconomicforum https://medium.com/@nepal-economic-forum

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