Nefport 58 - Harnessing the Demographic Dividend

Nepal Factsheet

1

Koshi Province

2 Madhesh Province 3 Bagmati Province 4 Gandaki Province

7

6

5 Lumbini Province 6 Karnali Province 7 Sudurpashchim Province

4

5

3 2

1

KEY ECONOMIC INDICATORS Gross Domestic Product (GDP)*

NPR 5.7 trillion (USD 40,46 billion)

Gross National Income Growth Rate*

GDP Growth Rate*

3.9%

7.0%

Inflation (y-o-y)*

3.57%

Gross Capital Formulation (% of GDP)*

30.5%

Agriculture Sector (% of GDP)****

24.1%

Human Development Index (HDI) Value**

0.601

Industry Sector (% of GDP)****

13.00%

146

Service Sector (% of GDP)****

62.9%

HDI Country Rank**

* Current Macro-Economic and Financial Situation of Nepal, Annual Data (FY 2023/24 AD (2080/81 BS)) ** Human Development Report by United Nations Development Program (2023)

Contents NEPAL FACTSHEET 2 EDITORIAL 5

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GENERAL OVERVIEW 6 Political Overview

7

International Economy

12

2

MACROECONOMIC OVERVIEW 15

3

SECTORAL REVIEW 26 Agriculture and Livestock 27 Education 31 Energy and Environment 35 Health 40 Information and Communication Technology 44 Infrastructure and Real Estate 48 Tourism 51

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MARKET REVIEW 55 Financial Market

56

Capital Market 64

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SPECIAL SECTION: DECODING THE CREATIVE INDUSTRY 68 OTHER WORKS BY NEPAL ECONOMIC FORUM 78 ENDNOTES

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Issue 58: October 2024 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: Anushka Shrestha Bibhuti Kharel Chandani Thapa Demin Kakshapati Mahotsav Pradhan Nasala Prajapati Prakriti Shree Adhikari Pransu Khakurel Sachi Aryal Sagar Jung Karki Sanjit Tuladhar Sukeerti Shreshta Suyasha Shakya Peer Reviewers: Arya Awale Rojesh Bhakta Shrestha Sujeev Shakya Special Section – Authors: Won Young Hong, United Nations Population Fund (UNFPA) Representative to Nepal Charlie Scotchbrook, Intern, Nepal Economic Forum Ashish Lamichhane, Programme Analyst, UNFPA Nepal Design & Layout: Thuprai Solutions support@thuprai.com Coordinators: Sukeerti Shrestha and Chandani Thapa Cover Design: NEF Team Editor: Suyasha Shakya This issue of Nefport takes into account news updates from 1 June to 31 August.

The USD conversion rate for this issue is NPR 133.47 to a dollar, the quarterly average for this issue.

Reproduction is authorized 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 organization 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 Shayasta Tuladhar Sudip Bhaju Sujeev Shakya Advisory Board: Elisabeth von Capeller Francois-Xavier Leger Giuseppe Savino Kenichi Yokoyama Kul Chandra Gautam Mahendra Krishna Shrestha Prativa Pandey Saloni Sethia Shraddha Gautam Sneh Rajbhandari Senior Fellows: Aman Pant Apekshya Shah Bibek Raj Kandel Bibhakar Shakya Sijan Thapa Suman Basnet

NEFPORT ISSUE 57 – JULY 2024

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Editorial During the review period (June 1 to August 31, 2024), Nepal experienced yet another shift in political leadership with incumbent Prime Minister Pushpa Kamal Dahal being voted out and a new coalition government led by CPN-UML’s K.P. Oli taking charge. The expected alternation of leadership until the 2027 general election between Oli and Sher Bahadur Deuba, from the Nepali Congress, further reinforced the notion of Nepal's political leadership being a rotation between three powerful figureheads. However, having been accustomed to turmoil, Nepal passed some key legislations during this quarter. A highlight was the authentication of the Enforced Disappearances Enquiry, Truth and Reconciliation Commission Act in August 2024. This Act marks a significant milestone in Nepal’s peace process as it stands as a homegrown solution driven by Nepalis, without the need for international mediators. However, the questions regarding the actual implementation of the Act remain as this is only the beginning of the peace process.

On the macroeconomic scale, the central bank released its annual data for FY 2023/24 AD (2080/81 BS) which garnered positive reactions. This positive reaction was reflected in the upwards movement of the capital market that occurred despite the continued vacancy of the seat for the chairman of the Securities Board of Nepal (SEBON). Besides this, a standout statistic in the annual review was that the gross foreign reserves grew by 32.6% to NPR 2.04 trillion (USD 15.29 billion) as compared the previous fiscal year. Tourism, remittance, and USD appreciation heavily contributed to this uptick despite the plethora of instability and corruption scandals. Remittance, in particular, reached a record-high yet again, bringing NPR 1.44 trillion (USD 10.82 billion) into the country in FY 2023/24 AD (2080/81 BS) with over 700,000 Nepalis going abroad for employment.

With around 600,000 young people entering the labor market annually and only 60,000 jobs available domestically, migration has become a critical outlet for employment. This has, in turn, provided Nepal with significant economic benefits, such as remittances which contribute greatly to household incomes and forex reserves. Further, with Nepal having entered its demographic dividend window, there are heightened expectations for increased investments in human capital and socio-economic development, leveraging a more productive workforce. To fully capitalize on this opportunity, it is essential to focus on skilling and supporting Nepalis working abroad. Supporting the working-age population, while adapting migration policies, is key to maximizing the benefits of this demographic shift before the window closes in 2048.

NEFPort 58, titled ‘Harnessing the Demographic Dividend,’ attempts to dive into Nepal’s distinct demographic position, and explore potential prospects, challenges, and possible ways forward to mobilize the opportunity.

This edition looks into the important role the current demographic shift plays in various sectors, with each sectoral overview having a tailored case study regarding the same. Similarly, our special section for this edition features an article on exploring the declining fertility and changing family needs from Won Young Hong, the UNFPA Country Representative for Nepal. The other article in the special section is by Ashish Lamichhane, a Programme Analyst at UNFPA Nepal and Charlie Scotchbrook, an intern at Nepal Economic Forum, where they analyze the opportunities and challenges to leverage Nepal’s demographic dividend for socio-economic growth. We would like to express our gratitude to everyone who has contributed voluntarily, as well as to our readers and patrons who have supported and engaged with us throughout our journey.

We are working continuously on recalibrating our NEFPorts to make them more useful to our readers. Please feel free to write to us at info@nepaleconomicforum.org or to any of our social media handles for any further comments or feedback.

Sujeev Shakya

Chair, Nepal Economic Forum

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General Overview

NEFPORT ISSUE 57 – JULY 2024

Political Overview

FACTSHEET

In the continued saga of political turmoil this past quarter, a coalition between the largest parties, the CPN-UML and Nepali Congress (NC), led to the ousting of former Prime Minister Pushpa Kamal Dahal on July 12, who was subsequently replaced by Prime Minister K.P. Sharma Oli. Additionally, the passage of the Truth and Reconciliation Commission bill was enacted into law following in the House of Representatives and the National Assembly addressing war-era human rights violations. Along with these developments in this quarter, evolving bilateral ties with India and the U.S, illustrates Nepal's dynamic political landscape and to bolster its international partnerships.

Lastly, a step towards the greater inclusion of the LGBTQ+ community, the Supreme Court ruled to allow individuals to officially change their gender according to their selfidentification.

Particulars

Nepal’s Rank / Status

Score

Democracy Index 20231

98

4.60

Freedom in the World Index 20242

Partly Free

62

Press Freedom Index 20243

74/180

60.52

Economic Freedom Index 20244

130/184

52.1

Fragile States Index 20245

57/179

78.0

Corruption Perception Index6

108/180

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LEGISLATIVE UPDATES

constitution and boosting the Nepali economy.8 A new cabinet formed under the new coalition with 22 ministers appointed from the coalition parties- NC, CPNUML, JSP and LSP – as shown in Table 1.9

Coalition Forms New Cabinet with K.P. Oli as the Prime Minister On July 2, 2024, the Nepali Congress and Communist Party of Nepal (Unified Marxist Leninist), the two biggest parties, came together to form the government for the first time in almost a decade. Following the coalition, Pushpa Kamal Dahal

lost the parliamentary vote of confidence paving the way for KP Sharma Oli to be appointed as the Prime Minister of Nepal for the fourth time.7 With the new coalition, Oli secured the support of 166 lawmakers, well above the required 138 votes. According to the agreement between the two parties, Nepali Congress and CPN-UML would be heading the government on a rotational basis with the main agenda of ensuring political stability, amending the

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Table 1. List of Council of Ministers Name

K.P. Sharma Oli

Post

Party

Communist Party of Nepal - Unified Marxist-Leninist

Prime Minister

Deputy Prime Minister Prakash Man Singh

Deputy Prime Minister and Minister of Urban Nepali Congress Development

Bishnu Paudel

Deputy PM and Minister of Finance

CPN-UML

Manbir Rai

Minister of Defense

CPN -UML

Prithvi Subba Gurung

Minister of Communications and Information CPN -UML Technology

Bidya Bhattarai

Minister of Education

CPN-UML

Damodar Bhandari

Minister of Industry, Commerce and Supplies

CPN-UML

Raj Kumar Gupta

Minister of Federal Administration

CPN-UML

Balaram Adhikari

Minister of Land Management and Cooperatives

CPN-UML

Devendra Dahal

Minister of Physical Infrastructure and Transport

CPN-UML

Ramesh Lekhak

Minister of Home Affairs

Nepali Congress

Arzu Rana Deuba

Minister of Foreign Affairs

Nepali Congress

Teju Lal Chaudary

Minister of Youth and Sports

Nepali Congress

Ajay Chaurasiya

Minister of Law, Justice and Parliamentary Nepali Congress Affairs

Deepak Khadka

Minister of Energy, Water Resources and Nepali Congress Irrigation

Ain Bahadur Shahi

Minister of Forest and Environment

Nepali Congress

Badri Pandey

Minister of Culture, Tourism and Civil Aviation

Nepali Congress

Pradip Paudel

Minister of Health and Population

Nepali Congress

Ram Nath Adhikari

Minister of Development

Pradeep Yadav

Minister of Drinking Water

Janata (JSP)

Samajwadi

Party

Nawal Kishore Sah Sudi

Minister of Women, Children and Senior Citizens

Janata (JSP)

Samajwadi

Party

Sharat Singh Bhandari

Minister of Labor, Employment and Social Security

Loktantrik Party (LSP)

Ministers

Affairs

Agriculture

and

and

General

Livestock

Nepali Congress

Samajabadi

Source: Office of the Prime Minister and Council of Ministers, Government of Nepal, July 15, 2024

NEFPORT ISSUE 57 – JULY 2024

Dispute Arises between Road Department and KMC On May 25, 2024, the Kathmandu Metropolitan City (KMC) began narrowing the road by 1.5 meters on both sides in the New Road area to make the pavements more walkable.10 However, shortly after work commenced, the Road Division of Kathmandu, under the Department of Roads, intervened by filling in the dug-up road.

They cited the lack of necessary permissions and Mayor Balendra Shah's failure to respond to multiple summons regarding his actions.11 In response, the KMC filed a writ petition at the Patan High Court on June 9, 2024, seeking approval for the road expansion.12 On July 14, 2024, the Patan High Court issued an interim order in favor of the KMC, allowing the expansion work to resume.13 However, KMC encountered another obstacle when local residents, led by Ward-22 Chairman Chinikaji Maharjan, protested, claiming that the road widening would negatively impact their businesses.14 Unlike its previous confrontation with the Department of Roads, KMC opted for a more conciliatory approach, halting the expansion until November 17, 2024, in accordance with an agreement reached with local stakeholders.

As part of this agreement, a study committee was to be formed to assess the necessary work in the New Road area, with the committee’s findings serving as the basis for future decisions.15 Lila Devi Gadtaula Serves as Nepal's First Female Chief Secretary for 35 Days Lila Devi Gadtaula’s appointment

as Nepal’s first female Chief Secretary, on July 25, 2024, marked a notable moment in the history of Nepal’s civil service.16 However, this moment was cut short as she served in this position for only 35 days, contrary to a typical three-year term, due to reaching the retirement age.17 In a career spanning nearly three decades, Gadtaula was previously appointed as a Secretary in 2020 and then as the Acting Chief Secretary on July 25, following Chief Secretary Baikuntha Arya’s suspension amidst a corruption case.

Aviation Safety Sparks Debate Due to Multiple Air Crashes This past quarter witnessed two tragic air crashes within a month, with the crash of a Saurya Airlines plane on July 24 and an Air Dynasty helicopter on August 7 leading to 18 and 5 casualties respectively.18 These incidents, marking yet another grim reminder of the issues of air safety in Nepal, resulted in the re-intensified scrutiny of the industry – particularly of the Civil Aviation Authority of Nepal (CAAN) and its Director General, Pradeep Adhikari, who has witnessed eight air crashes in his tenure so far.19 In the wake of these tragedies, some MPs have called for Adhikari’s resignation, as well as the removal of the Minister of Culture, Tourism, and Civil Aviation, Badri Pandey.20 Meanwhile, the bill to separate CAAN’s dual role as a regulator and service provider, as recommended by the International Civil Aviation Organization (ICAO), remains stalled in the Parliament.21 The recent accidents have also intensified concerns regarding

Nepal’s continued placement on the European Union’s (EU’s) aviation blacklist, which prevents Nepali airlines to operate in the EU’s airspace.22

JUDICIAL UPDATES President Ram Chandra Paudel authenticates the Transitional Justice Bill Nepal's President Ram Chandra Paudel authenticated the amended Enforced Disappearances Enquiry, Truth and Reconciliation Commission Act on August 29, 2024, under Article 113(2) of the Constitution.23 The House passed it on August 14, and the National Assembly unanimously endorsed it on August 22.24 After the Supreme Court struck down the bill in 2015, citing requirement for necessary provisions, the bill languished for almost a decade as successive governments failed to make any serious reparation to the bill. A tripartite agreement between Nepali Congress Party, CPNUML and CPN (Maoist Center) on August 7, 2024 ended longstanding political differences, allowing Parliament to pass the bill. Following the last bill on March 19, 2023, which failed to adequately consult victims, the tripartite agreement facilitated a more inclusive and victimfriendly approach. The bill sets the criteria for reducing penalties for perpetrators, excluding serious sexual violence, and ensures reparations for disqualified Maoist combatants and affected families. 25 The international community praised this development as a significant step in Nepal's journey towards peace and reconciliation.26 However, while

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welcoming several progressive provisions in the bill, a group of victims, human right activists and organizations demanded for changes in some of the provisions in the bill, which went unheard.27 Despite the bill’s passage, questions remain about implementation and whether the victims’ complaints will be adequately addressed.28 Nepal Supreme Court Upholds Transgender Rights Nepal’s Supreme Court affirmed the right of individuals to change their gender based on self-identification, allowing transgender men and women to officially amend their gender on legal documents.29 The court’s decision came in response to a writ petition filed by Rukshana Kapali against the government on November 6, 2023.30 Kapali, a transgender woman, was denied a registration number for her Bachelors of Arts exam by Tribhuvan University and Pokhara University due to discrepancies in her academic certificates. Her name and gender on her School Leaving Certificate and Higher Secondary Certificate did not match, and as a result, she was denied the opportunity to take the exams.31 The ruling is a landmark step in securing the rights of the LGBTQ+ community setting precedent for trans rights. However, this ruling applies to Kapali only, as other transgender people in Nepal would have to petition the court individually to have their genders recognized.32 The activists continue to advocate for a government directive allowing people to self-identify their gender legally.33

BILATERAL AND MULTILATERAL UPDATES Indian Foreign Secretary Vikram Misri Visits Nepal

Indian Foreign Secretary Vikram Misri was on a two-day visit to Nepal on August 11 and 12, 2024.

After being appointed as the new Foreign Secretary of India, succeeding Vinay Kwatra on July 15, 2024, Misri’s visit was in line with tradition of inaugural diplomatic missions to the neighboring countries after assuming the office.34 Discussions centered on economic cooperation, enhancing air connectivity, and advancing India-funded projects in Nepal.35 Key topics included setting up a lab at the NepalIndia border for monitoring produce quality, expediting the Pancheshwar Multipurpose Project, and constructing bridges over the Mahakali River.36 During the visit, Misri also inaugurated the new Nepal Bhasa Parishad building in Naradevi constructed through India’s post-earthquake reconstruction grant.37 While controversial issues, such as the border map dispute, were agreed to be resolved through diplomatic channels, the coalition of Nepal’s largest political parties is anticipated to create a favorable environment for advancing 38 bilateral cooperation.

the visit was upgraded to an official one following an invitation from Indian Foreign Minister S. Jaishankar.40 During her stay, Deuba met with Prime Minister Narendra Modi, S. Jaishankar, and BJP's Chief of Foreign Affairs, Dr. Vijay Chauthaiwale, with whom she shared a rakhi tradition from 2021.41 A major highlight of the meeting was India's agreement to import nearly 1,000 MW of electricity from Nepal, advancing the Long Term Power Trade Agreement.. Discussions also covered bilateral projects in infrastructure, power, and new cooperation areas like sports.42 Deuba extended an invitation to Prime Minister Narendra Modi on behalf of Nepal’s Prime Minister KP Sharma Oli, signaling a shift from past practices, as Oli seeks to host Modi in Nepal before making a visit to India himself.43 While Deuba’s predecessor, Narayan Kaji Shrestha, focused on trade, investment, and infrastructure during his visit to China, Deuba’s visit centered more on reinforcing traditional ties and enhancing bilateral cooperation with India.44 Despite recent turbulence in Nepal-India relations over the past decade, Deuba’s visit to India was portrayed positively as a new stepping to the bilateral ties between the countries.45

Newly Appointed Foreign Minister Deuba Visits Delhi in First International Visit

US Deputy Secretary Pledges USD 100 Million (NPR 13.3 billion) Foreign Military Finance Package for Nepal

Nepal's newly appointed Foreign Minister, Arzu Rana Deuba, visited India from August 19 to 22, 2024, marking her first international trip since assuming office.39 Initially planned as a private medical check-up by Deuba,

On August 16, 2024, the United States’ Deputy Secretary of State Richard Verma met with Prime Minister KP Sharma Oli and Minister of Foreign Affairs Arzu Rana Deuba in Kathmandu to discuss economic development,

NEFPORT ISSUE 57 – JULY 2024

women’s empowerment, energy, and bilateral ties.46 Verma highlighted the commitment of USD 100 million (NPR 13.3 billion) Foreign Military Finance package , which includes helicopters, training, and support equipment to enhance the Nepali Army's disaster response capabilities, pending Congressional review and fund availability.47 Additionally, the U.S. committed to donating two M28 Skytrucks, following a request

by Nepal’s Chief of Army Staff, Prabhuram Sharma, during his visit to the U.S.48 The discussions also touched on ongoing cooperation in sustainable development projects like the Millennium Challenge Compact.

Verma further met with women entrepreneurs to show U.S. support for women’s economic

empowerment.49

PROVINCIAL UPDATES Changes in the Provincial Government Following changes in the central government led by Prime Minister K.P. Oli, similar shifts occurred in the provincial governments.

In Sudurpaschim Province, Kamal Bahadur Shah, the Nepali Congress leader in the provincial assembly, was appointed Chief Minister, replacing Dirgha Bahadur Sodari of the CPN (Unified Socialist).50 Sodari resigned ahead of a confidence vote after his government lost its majority due to the CPN-UML’s withdrawal of support. Shah gained majority backing with 18 seats from the Nepali Congress and 11 from the CPN-UML.51

Meanwhile, Chet Narayan Acharya of the CPN-UML, after 30 days in office, successfully secured a vote of confidence with 70 out of 87 votes.52 In Karnali Province, Chief Minister Yamlal Kandel of the CPN-UML also passed the confidence vote, receiving 23 of 37 votes.53 Similarly, Bahadur Singh Lama Tamang, Chief Minister of Bagmati Province from the Nepali Congress, passed the floor test with 64 out of 102 votes cast.54

Outlook KP Sharma Oli’s appointment as Prime Minister following the formation of a new coalition government marked a major political shift in Nepal this past quarter. This coalition, led by Prime Minister KP Sharma Oli, signals a break from a decade-long separation between the two largest political parties. Their leadership and focus on constitutional amendments and economic growth underscore the government’s ambition for long-term stability. Alongside this central political restructuring, provincial governments also experienced leadership changes, reflecting the alignment with national political shifts.

Additionally, notable judicial updates, such as the Supreme Court’s affirmation of transgender rights and the passage of the Transitional Justice Bill, demonstrate efforts towards inclusive governance.

However, challenges remain, including air safety concerns following recent aviation accidents, and delayed legislative reforms like the separation of Nepal’s Civil Aviation Authority roles.

Beyond the central and provincial political maneuvers, domestic disputes and reforms continue to shape Nepal's governance. The ongoing challenges, including a jurisdiction dispute between the Road Division Office and Kathmandu Metropolitan City over road management, which highlights issues with urban planning and inter-agency coordination. On the broader international relation’s stage, Nepal's international relations have seen key developments, particularly with, India and the United States. These diplomatic activities reflect Nepal's strategy to balance relations with its key international partners while addressing both economic and security concerns.

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International Economy In the review period of June to August 2024, the World Bank and International Monetary Fund released their revised growth projections for 2024 with expectations of stabilization in the growth rate. However, both reports highlighted growth in emerging and developing economies to be at risk of various factors, including external ones like conflicts such as the escalating Ukraine-Russia and the Israel-Palestine wars. Intergovernmental organizations have recognized the pressing need of conflict resolution to encourage economic stability and continued to show support for Ukraine and Palestine respectively. In South Asia Bangladesh saw the ousting of its long-standing prime minister, Sheikh Hasina and the formation of an interim government led by Nobel Laureate Yunus.

It added to existing issues of supply chain and trade challenges, and also created an uncertain political dynamic. Meanwhile, the UK experienced a political shift, with the Labour Party, led by Keir Starmer, taking power after 14 years of Conservative rule, marking a shift in the Western political landscape amid rising conservatism elsewhere.

ECONOMIC UPDATES World Economic Outlook Predicts Stable Growth The International Monetary Fund's July 2024 World Economic Outlook Update maintained global growth projections at 3.2% for 2024 and 3.3% for 2025.60 With output gaps gradually closing, advanced economies showed more aligned growth averaging at 1.7% for 2024.61 It highlighted the contributions of emerging Asian

economies, especially China and India, in driving global growth, though China's pace is projected to slow by 2029.62 On the other hand, emerging markets and developing economies saw a growth forecast of 4.3%. The report, similar to the April 2024 update, projected a slowed down global inflation at 5.9% in 2024.63 While energy and food prices decreased to pre-pandemic levels, overall inflation remains relatively high.

FACTSHEET

Global GDP Growth in 2024 (expected)

3.2%55

Global Inflation in 2024 (expected)

5.9%56

World Population

8.1 billion57

Food Price Index

120.858 (July 2024)

Global Public Debt

USD 315 trillion59 (Q1 of 2024)

Widening Income Gap and High Interest Rates Threaten Growth in Developing Economies The World Bank’s Global Economic Prospects report, released in June 2024, predicted global growth stabilizing at 2.6% in 2024, with higher growth in developing economies at 4% and low-income economies at 5%.64 However, this growth could be overshadowed by a widening income gap between developing

NEFPORT ISSUE 57 – JULY 2024

and advanced economies.

Nearly half of the developing economies have been expected to experience this, which is the highest share since the 1990s.65 Another key challenge for developing economies in 2024 and 2025 that the report highlighted was the possibility of high interest loans, averaging at around 4% over the period.

With global inflation forecasted to moderate to 3.5% in 2024 and 2.9% in 2025, central banks are expected to delay interest rate cuts, which could unfavorably lead to tighter global financial conditions and further shrink public investment.66 Asian Development Bank Predicts 5% Growth Rate for 2024 The Asian Development Bank’s (ADB) July 2024 Asian Development Outlook revised the growth forecast for developing economies in Asia and the Pacific slightly upwards to 5.0% for 2024, maintaining a 4.9% forecast for 2025.67 This adjustment reflected strong domestic demand and export growth, particularly in the first quarter of 2024. East Asia’s growth forecast was also raised to 4.6%, driven by strong semiconductor exports and the artificial intelligence (AI) boom.68 Meanwhile, South Asia was projected to grow steadily at 6.3% in 2024 – the highest rate in the region.69 While the forecasts were generally positive, ADB found that the region would still be vulnerable to geopolitical tensions, market uncertainties, and climate risks such as La Niña1.

1 climate pattern characterized by cooler-than-average sea surface temperatures in the central and eastern Pacific Ocean,

GLOBAL EVENTS UPDATE Key Highlights from the 50th G7 Summit Italy hosted the 50th Group of Seven (G7) summit from June 13 to 15, 2024, attended by leaders from Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.70 The following are the key outcomes of the summit: •

The G7 leaders, along with the European Union, agreed to use proceeds from frozen Russian assets to provide Ukraine with USD 50 billion (NPR 6.67 trillion) in loans to support its war with Russia.71

•

They agreed to launch an action plan on using AI in productive settings and strengthen coordinators for related risk management and standards.72

•

Leaders reaffirmed their commitment to the goals of the 28th United Nations Climate Change Conference (COP28), aiming to triple renewable energy capacity and double global energy efficiency by 2030.73

•

The Apulia Food Systems Initiative was launched with the aim of ensuring people’s access to nutritious food, and building resilient and sustainable agriculture systems.74

•

The Energy for Growth in Africa Initiative was launched to develop clean energy infrastructure on the continent, in collaboration with African partners.75

2024 NATO Summit Saw Increased Defense Spending and Ukraine Support The North Atlantic Treaty Organization (NATO) Summit 2024, held in Washington DC, US from July 9 to 11, 2024, saw the attendance of 32 Allies.76 A key discussion point of the summit was the RussiaUkraine war, with the Alliance showing support to Ukraine by coordinating equipment and training, and announcing a minimum baseline funding of EUR 40 billion (NPR 5.74 trillion).77 Allies also welcomed news of increased defense spending with a record 23 Allies having met or exceeded the commitment to spend at least 2% of the Gross Domestic Product on defense.78 It is a stark increase from having only three Allies who met the threshold in 2014.79 Furthermore, to bolster collective defense, this year’s summit also highlighted cyber defense as a topic. Select NATO Partners shared best practices and lessons in cyber threat protection for national infrastructure in the NATO Cyber Defense Pledge Conference for the first time.80 Moreover, Allies also agreed to establish the NATO Integrated Cyber Defense Centre to enhance cyber protection and modernize defense mechanisms.81

GLOBAL POLITICS Sheikh Hasina Ousted after 20 Years Amid Protests across Bangladesh On August 5, 2024, Sheikh Hasina, who had served as Bangladesh's Prime Minister for 20 years, was

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forced to step down and flee the country following widespread protests that erupted over the government's handling of preferential job allocations.82 Initially peaceful, the protests escalated dramatically after the government deployed anti-riot police, resulting in the deaths of nearly 400 people.83 84-yearold Nobel laureate, Muhammad Yunus, has been appointed to lead an interim government focused on restoring law and order.84 The sudden upheaval is expected to have far-reaching implications for regional stability, particularly in terms of Bangladesh’s foreign relations. India, which has enjoyed a close relationship with Hasina’s government, is likely concerned about how these changes will affect bilateral ties.

Center-Left Labour Party Becomes Victorious in United Kingdom Elections The

United

Kingdom’s

(UK)

center-left Labour Party won in its 2024 general elections, bringing Keir Starmer to power and bringing end to a 14-year-long conservative government.85 It also marked the first time the Labour Party held office since 2005, symbolizing a significant shift in the UK’s political landscape, especially during a time when far-right political parties have been gaining popularity among voters in major European economies such as France, Germany, and Italy.86 Starmer’s victory is seen as a response to growing dissatisfaction with the Conservative government’s handling of key issues such as the economy, public services, and Brexit fallout.87 Accordingly, Starmer’s government is expected to focus on rebuilding public trust by investing in healthcare, education, and economic reform, while also strengthening the UK's international relationships postBrexit, especially with the aim of

boosting trade and investment.88 Donald Trump Shot in the Ear in Failed Assassination Attempt On July 13, 2024, former President Donald Trump survived an assassination attempt during a campaign rally in Butler, Pennsylvania.89 The gunman, 20-year-old Thomas Crooks, opened fire at the rally killing one spectator and injuring several others.90 Trump suffered a minor injury in the ear, which the Federal Bureau of Investigation confirmed was from a bullet, ‘whether whole or fragmented into smaller pieces,’ fired from Crooks’ rifle.91 The shooter was killed by a member of the Secret Service sniper team.92 The incident raised scrutiny of security protocols and concerns about rising political violence, especially against major candidates, as the presidential elections (November 2024) grow closer.

Outlook The growth rate is expected to stabilize for the first time in three years, signifying a potential turning point following the volatility brought on by the pandemic and supply chain disruptions. However, it does not automatically translate into robust growth for economies as vulnerabilities stemming from high borrowing costs and the changing geo-political landscape remain prominent. Similar to the past few quarters, political conflicts will continue to spill over into third economies through disrupted trade routes and inflationary pressures. Another consequence of such conflicts is a rise in refugee movement, particularly to the global West. As right-wing parties gain influence in many Western nations, stricter migration policies could exacerbate international tensions. The growing polarity between political ideologies, and the change in the public’s choices in recent years, could further add on to challenges of coordinating conflict resolution and aid activities. This evolving political landscape presents opportunities for new leaders to recalibrate the global power balance and forge new alliances. These dynamics reflect the complexity of modern conflicts, underscoring the critical need for coordinated international collaboration to maintain stability and safeguard economic resilience in a rapidly interdependent world.

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Macroeconomic Overview

NEFPORT ISSUE 57 – JULY 2024

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Macroeconomic Overview During this review period, from June to August 2024, Nepal's macroeconomic landscape built on the trends observed in the previous quarter. Remittance inflows surged further to USD 5.52 billion (NPR 733.22 billion), contributing to record-high foreign exchange reserves of NPR 1.81 trillion (USD 13.64 billion). Likewise, net Foreign Direct Investment (FDI) showed positive growth rising to NPR 8.40 billion (USD 629.35 million) from NPR 6.17 billion (USD 462.27 million) in the previous fiscal year. Additionally, the Nepal Rastra Bank's accommodative monetary policy for FY 2024/25 AD (2081/82 BS) aimed to balance liquidity in the banking system while spurring economic growth. However, foreign trade dipped slightly to NPR 1.74 trillion (USD 13.03 billion) driven by declining imports and stagnant exports. Notably, trade with China surged by 34.2%, primarily due to the increasing import of Chinese electric vehicles.

Gross Domestic Product (GDP)

According to the Nepal Rastra Bank (NRB)’s ‘Current Macroeconomic and Financial Situation’ report, Nepal's Gross Domestic Product (GDP) at current prices increased to NPR 5.7 trillion (USD 42.89 billion) in FY 2023/24 AD (2080/81 BS) from NPR 5.34 trillion (USD 40.21 billion) in the previous FY 2022/23 AD (2079/80 BS).94 The services sector led the sectoral

contribution at 63.9%, followed by agriculture at 24.1%, and industry at 13%. While the economic growth for FY 2023/24 AD (2079/80) was estimated at 3.87% by the National Statistics Office (NSO), the budget and monetary policy for FY 2024/25 AD (2081/82 BS) has targeted an economic growth of 6% for this fiscal year.

FACTSHEET93 Particulars GDP at current prices

Amount/ Percentage NPR 5.7 trillion (USD 42.87 billion)

Year-on-year CPI

3.57%

Food and Beverage CPI

6.47%

Non-food and Service CPI

4.64%

Net Foreign Direct Investment

NPR 8.40 billion (USD 62.93 million)

Remittance inflows

NPR 1.44 trillion (USD 10.82 billion)

Gross foreign exchange reserves

NPR 2.04 trillion (USD 15.29 billion)

Total Domestic Debt

NPR 1.18 trillion (USD 8.8 billion)

Total External Debt

NPR 1.25 trillion (USD 9.38 billion)

Government expenditure

NPR 1.41 trillion (USD 10.54 billion)

Government revenue

NPR 1.05 trillion (USD 7.93 billion)

Total exports

Total imports

NPR 152.38 billion (USD 1.14 billion) NPR 1.59 trillion (USD 11.93 billion)

Total trade balance

NPR -1.44 trillion (USD -10.79 billion)

Current Account

NPR 221.34 billion (USD 1.65 billion)

Balance of Payment

NPR 502.49 billion (USD 3.76 billion)

NEFPORT ISSUE 57 – JULY 2024

Figure 1. GDP in Current Prices over the Last Five Years (in NPR trillion) Current Macroeconomic and Financial Situation of Nepal (based on annual data, FY 2023/24 AD (2080/81 BS))95

Inflation Nepal’s year-on-year consumer price inflation declined to 3.57% in mid-July 2024 from 7.44% in the previous year. Similarly, the annual average consumer price inflation declined to 5.44% in FY 2023/24 AD (2080/81 BS) from 7.74% in the previous year. In the food and beverage category, prices surged for spices (26.40%), pulses and legumes (9.96%), and sugar products (9.87%), whereas prices declined for ghee and oil (-10.99%). In the non-food

items category, prices hiked for miscellaneous goods and services (+11.38%) and recreation and culture (+10.96%) whereas declined for transportation costs (-0.82%).

The regional breakdown shows inflation at 6.86% in the mountain areas, 5.99% in Kathmandu Valley, 5.78% in the Hill, and 4.82% in the Terai regions. Inflation in Nepal and India followed similar trends, with both countries posting inflation rates of around 3.57% and 3.54% by mid-July 2024. Looking

ahead, the Asian Development Bank (ADB) projects inflation to rise to 5.5% in 2024 and 6% in 2025. The World Bank offers a similar forecast, expecting inflation to reach 6.8% in 2024, before gradually declining to 6% in 2025 and 5.5% by 2026. Key factors driving this inflationary trend include soaring vegetable prices, India’s export bans on essentials like wheat and rice, higher transportation costs due to global energy price hikes, and rising housing and utility prices.

Table 2. Consumer Price Index over three consecutive Years (in percentage) Headings

FY 2021/22 AD (2078/79 BS)

Consumer Price Inflation

6.32

Food and Beverage

5.69

Non-food and service

6.83

FY 2022/23 AD (2079/80 BS)

7.74 6.62 8.62

FY 2023/24 AD (2080/81 BS)

5.44 6.47 4.64

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-months data, FY 2023/24 AD (2080/81 BS) to FY 2022/23 AD (2079/80 BS)96

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Monetary Policy Highlights for FY 2023/24 AD (2081/82 BS) Nepal Rastra Bank’s monetary policy for the fiscal year 2082/82 BS (2024/25 AD) focuses on meeting national goals such as 6% economic growth, 5% inflation rate, adequate liquidity, and incentivizing investment.97 Similar to global monetary and fiscal policy trends, this year's expansionary monetary policy shows a departure from the restrictive policies adopted during the pandemic. Rising remittances and low demand for imports have boosted the foreign reserves to a surplus, exceeding its target of the reserve support imports for up to seven months.98 NRB has eased import restrictions to collect revenue through its taxes to cushion the treasury.

Addressing liquidity concerns are the change of the Interest Rate Corridor from 6.5% to 7%, and policy rates from 5.5% to 5% encourage credit demand.99 This is complemented by the increased Regulatory Retail Portfolio from NPR 20 million (USD 149,846.40) to NPR 25

Figure 2. Gross Foreign Exchange Reserves in Mid-April of the Last Seven Consecutive Years (in NPR trillion) Source: Current Macroeconomic and Financial Situation of Nepal (based on ninemonths data, FY 2023/24 AD (2080/81 BS) to FY 2018/19 AD (2075/76 BS))103

million (USD 187,308) to support retail investment. The previous loan limit of NPR 10 million (USD 74,923.20) for MSMEs will be reviewed alongside special provisions for agriculture businesses and an incentivized environment for startups.100 Blacklisting rules were loosened for companies, especially those in the construction industry, and payment deadlines were extended until December 2024. Joint ventures are also encouraged, and venture capital and private equity firms are shielded from blacklisting.

Similarly, to comply with international standards, the monetary policy for reviewed the Capital Adequacy Framework and allowed depositors to reclaim up to NPR 0.5 million (USD 3746.16) from blocked cooperative funds.101 In addition to reviewing interest rates and introducing loan rescheduling for borrowers experiencing financial hardship, it promotes microfinance mergers.

Cash for additional lending and investment is made available by reducing the provision for good

loans from 1.20% to 1.10% as well.102

GOVERNMENT FIGURES Government Reserves Nepal's gross foreign exchange reserves increased by 32.6% to NPR 2.04 trillion (USD 15.27 billion) in mid-July 2024 from NPR 1.54 trillion (USD 11.71 billion) in mid-July 2023. Reserves held by the NRB alone surged by 37.4%, reaching NPR 1.85 trillion (USD 13.86 billion), while those held by banks and financial institutions (BFIs) slightly decreased by 0.5% amounting to NPR 192.55 billion (USD 1.44 billion). These reserves are projected to cover 15.6 months of merchandise imports and 13 months of both merchandise and services imports. The ratios of reserves to GDP, imports, and M2 money supply improved to 35.8%, 108.6%, and 29.3%, respectively, compared to 28.8%, 83%, and 25% in the previous year. This substantial growth in foreign exchange reserves notably strengthened Nepal’s economic stability in the past quarter.

NEFPORT ISSUE 57 – JULY 2024

Government Debt In the fiscal year 2023/24 AD (2080/81 BS), the Government of Nepal raised NPR 234.42 billion (USD 1.79 billion) through domestic debt and made principal repayments totaling NPR 182.62 billion (USD 1.38 billion). This resulted in a net domestic debt mobilization of NPR 51.80 billion (USD 400 million), accounting for 0.9% of

the country’s GDP. Additionally, the government secured external loans amounting to NPR 123.61 billion (USD 940 million). As of mid-July 2024, the total outstanding public debt reached NPR 2.43 trillion (USD 18.13 billion) from NPR 2.29 trillion (USD 17.22 billion) in FY 2022/23 AD (2079/80 BS). Of this amount, foreign debt stood at NPR 1.25 trillion (USD 9.36 billion), while domestic debt was recorded at

Particulars

Table 3. Outstanding Domestic Debt as of midJuly in the last three years (in NPR billion) Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-months data, FY 2023/24 AD (2080/81 BS) to FY 2022/23 AD (2079/80 BS)104

Government Spending According to the Financial Comptroller General Office (FCGO), the Government of Nepal’s total expenditure in the fiscal year 2023/24 AD (2080/81 BS) amounted to NPR 1.4 trillion (USD 10.55 billion) from NPR 1.42 trillion (USD 10.64 billion) in the previous year. The total federal expenditure can be broken down into three categories: recurrent expenditure of NPR 951.64

NPR 1.18 trillion (USD 8.77 billion).

The ratio of total outstanding public debt to GDP stood at 42.65% in FY 2023/24 AD (2080/81 BS), which is a similar level to 42.99% in FY 2022/23 AD (2079/80 BS) and 40.30% in FY 2021/22 AD (2078/79 BS).

Domestic Debt (in NPR billion) 2021

2022

2023

Total Domestic Debt

984.28

1125.18

1176.98

a. Nepal Rastra Bank

51.58

74.20

20.39

b. Commercial Banks

828.83

891.50

1016.28

c. Development Banks

68.98

91.54

92.24

d. Finance Companies

22.18

20.02

22.48

e. Others

12.69

47.89

25.58

billion (USD 7.15 billion), capital expenditure of NPR 191.75 billion (USD 1.44 billion), and financing expenditure of NPR 264.63 billion (USD 1.98 billion). Compared to the previous year, the recurrent expenditure decreased from NPR 1.01 trillion (USD 7.66 billion), capital expenditure increased from NPR 233.70 billion (USD 1.78 billion), and financing expenditure decreased from NPR 190.11 billion (USD 1.45 billion). On the revenue

side, the government’s total revenue collection increased to NPR 1.05 trillion (USD 7.89 billion) from NPR 957.35 billion (USD 7.19 billion) in the preceding year.

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Particulars

Table 4. Government Expenditure and Revenue in the First Nine Months of the Last Two FYs (in NPR billion) Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-months data, FY 2023/24 AD (2080/81 BS) to FY 2022/23 AD (2079/80 BS)105

FINANCE STATUS Investments In FY 2023/24 AD (2080/81 BS), the net Foreign Direct Investment (FDI) increased to NPR 8.40 billion (USD 62.93 million) from NPR

FY 2022/23 AD (2079/80 BS)

FY 2023/24 AD (2080/81 BS)

Recurrent expenditure

706.77

644.03

Capital expenditure

107.24

97.38

Financial management

129.04

167.99

Total Expenditure

943.05

909.39

Tax revenue

616.12

671.12

Non-tax revenue

67.69

76.93

Total revenue

683.81

748.04

6.17 billion (USD 46.22 million) in the previous FY 2022/23 AD (2079/80 BS).106 According to the Department of Industries (DoI), 359 projects of foreign investment were registered in FY 2023/24 AD (2080/81 BS) compared to 327 projects in

the previous FY 2022/23 AD (2079/80 BS).107 The foreign investments created 20,146 jobs in Nepal. 108

from numerous agencies, notably USAID, and JICA. USAID has maintained its position as one of the top contributors since the last quarter. As per the Ministry of Finance (MOF)’s aid management system, JICA and USAID populate

the aid disbursement charts for this review period. International Monetary Fund (IMF) remains the top contributor due to its newly renewed USD 41.6 million (NPR 5.55 billion) deal for the extended credit facility.

Figure 3. Net Foreign Direct Investment until mid-July (annual data) Source: Current Macroeconomic and Financial Situation, Annual data for FY 2023/24 AD (2080/81 BS)109

FOREIGN ASSISTANCE Aid Disbursements from Donor Agencies For the review period, Nepal has experienced aid disbursement

NEFPORT ISSUE 57 – JULY 2024

Figure 4. Aid disbursement for JuneAugust 2024 Source: Ministry of Finance, Aid Management Information System

BILATERAL AND MULTILATERAL AID Grant and Concessional Loans Government and World Bank Sign USD 100 million Deal for Infrastructural Development To improve the connectivity, resilience, efficiency, and safety of Nepal’s roads in the local and provincial road network, the International Development Association (IDA) granted Nepal a concessional loan of USD 100 million (NPR 13.34 billion).110 Phase 1 of this project will build 3000 km of roads and contribute to Nepal’s federalism agenda by empowering connectivity within local and provincial levels.111 REMITTANCE AND MIGRATION Surge Witnessed in Remittances and Record Foreign Exchange Reserves

During the fiscal year 2023/24 AD (2080/81 BS), remittance inflows surged by 25.3% to USD 5.52 billion (NPR 733.22 billion) compared to USD 4.50 billion (NPR 585.07 billion) during the same review period in FY 2022/23 AD (2079/80 BS).112 This surge was driven by a higher volume of migrant workers totaling 343,405 individuals, and a stronger US dollar against the Nepali rupee, with the NPR depreciating by 0.91% against the US dollar.113 This increase has greatly contributed to the country's gross foreign exchange reserves, which reached a record NPR 1.81 trillion (USD 13.64 billion), with central bank reserves at NPR 1.60 trillion (USD 12.05 billion) and reserves held by banks and financial institutions at NPR 216.35 billion (USD 1.63 billion).114 As a result, the banking sector's foreign exchange reserves are sufficient to cover prospective

merchandise and services imports for about 12 months.115 Top Ten Labor Destinations In FY 2023/24 AD (2080/81 BS), over 460,000 Nepali migrant workers sought employment abroad, which marks a decrease from the previous year's figure of over 497,000. The Gulf region remains the primary destination for Nepali migrant workers, with notable increases in labor influx to the United Arab Emirates (121.5%) and Saudi Arabia (31.0%).

On the other hand, Malaysia witnessed a sharp decline of 62.9% in the number of Nepali workers, dropping from 219,359 to 81,382. Emerging labor markets in East Asia also displayed interesting trends. Notably, Japan saw a 79.8% rise in the number of Nepali workers while South Korea experienced a decrease of 36.3%.

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Figure 5. Workers' Remittances and Gross Foreign Exchange Reserves Source: Current Macroeconomic and Financial Situation of Nepal from FY 2019/20 AD (2075/76 BS) to FY 2023/24 AD (2080/81 BS) (first six months data)116

Table 5. Top 10 Labor Destinations of Nepali Migrant Workers of the Last Three FYs Percent Change

Annual Data S.N.

Country

FY 2021/22 AD (2078/79 BS)

FY 2022/23 AD (2079/80 BS)

FY 2023/24 AD (2080/81 BS)

FY 2022/23 AD (2079/80 BS)

FY 2023/24 AD (2080/81 BS)

1

UAE

53846

59153

131026

9.9

121.5

2

Malaysia

25770

219359

81382

-

-62.9

3

Saudi Arabia

125374

55791

73095

-55.5

31.0

4

Qatar

76822

40517

40932

-47.3

1.0

5

Kuwait

22786

31411

28776

37.9

-8.4

6

South Korea

4253

20139

12837

373.5

-36.3

7

Romania

6423

13137

12700

104.5

-3.3

8

Japan

2478

5839

10500

135.6

79.8

9

Maldives

2735

3994

5958

46.0

49.2

10

Cyprus

3222

4275

5930

32.7

38.7

354660

497704

460103

40.3

-7.6

Total

Source: Current Macroeconomic and Financial Situation of Nepal FY 2021/22 AD (2078/79 BS) to FY 2023/24 AD (2080/81 BS) (annual data)117

NEFPORT ISSUE 57 – JULY 2024

TRADE STATUS Foreign Trade Scenario During FY 2023/24 AD (2080/81 BS), Nepal's total foreign trade slightly declined to NPR 1.74 trillion (USD 13.03 billion) from NPR 1.76 trillion (USD 13.31 billion) in FY 2022/23 AD (2079/80 BS). The reduction in overall trade is a result of the decline

in both imports and exports.118 Imports continue to substantially overtake exports, with imports amounting to NPR 1.59 trillion (USD 11.19 billion), while exports amounting to only NPR 152.38 billion (USD 1.14 billion).119 In terms of trading partners, India remains Nepal's largest trading partner, making up 63.01% of total trade, followed by China

with 17.3% and other countries with 19.7%.120 The total foreign trade with the northern neighbor witnessed a surge of 34.2% compared to the previous FY 2022/23 AD (2079/80 BS).121 The growing import of Chinese EVs primarily catalyzed the rise in trade volume with China.122

Figure 6. Total Annual Foreign Trade for the Past Three FYs Source: Current Macroeconomic and Financial Situation, Annual data for FY 2023/24 AD (2080/81 BS)123

Top Imports and Exports Continuing the trend in the past quarter, petroleum products were the leading import commodity accounting for 18.9% of total imports, followed by machinery and parts (4.9%), transport equipment and vehicle parts (4.9%), medicine (2.9%), and sponge iron (2.4%) during the FY 2023/24 AD (2080/81 BS).124 In terms of exports, the top five commodities were zinc sheets (7.8%), polyester yarn and thread (7.4%), woolen carpets (6.9%), juice (5.7%), and cardamom (5.2%) respectively.125 The largest growth in terms of the top imports was in transportation equipment (26.2%) while in exports it was zinc sheets (53.9%) and juice (30.6%).126 On the other hand,

crude soybean oil (62.3%), coil sheets (44.1%), and gold (40.9%) witnessed the largest decline in imports while palm oil (69.1%), handicrafts (16.3%) and noodles (14.4%) witnessed a huge decline in exports.127 Balance of Trade Nepal continues to face a considerable trade deficit on a yearly basis. As presented in Figure 7, in the FY 2023/24 AD (2080/81 BS), the trade deficit stood at NPR -1.44 trillion (USD -10.79 billion), compared to NPR -1,454.59 billion (USD -10.89 billion) in previous FY 2022/23 AD (2079/80 BS).128 The volume of exports has been stagnant and has actually diminished in the last three fiscal years.

Meanwhile, the export-toimport ratio of 9.6% indicates the subpar performance of exports compared to the bulging imports.129 According to the Department of Customs (DoC), Nepal, registered a trade deficit with 135 out of its 169 trading partners.130 The share of the trade deficit with India remained comparatively stable at 62% in FY 2023/24 AD (2080/81 BS) compared to 63.3% in the previous FY 2022/23 AD (2079/80 BS).131 On the other hand, the share of the trade deficit with China amplified to 20.6% in FY 2023/24 (2080/81 BS) compared to the previous FY 2022/23 AD (2079/80 BS).132 In terms of trade deficit with other countries, there was a decline to 17.4% in FY 2023/24 (2080/81

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Figure 7. Total imports, exports, and trade balance during the first nine months of the last five FYs Source: Current Macroeconomic and Financial Situation, Annual data for FY 2023/24 AD (2080/81 BS)135

BS) from 21.5% in the previous FY 2022/23 AD (2079/80 BS).133 Gold/ Silver Updates According to the Federation of

Nepal Gold and Silver Dealers’ Association, the price of standard gold (24K) was NPR 152,600 (USD 1143.32) for 11 grams as of late August 2024.134 This was the

maximum price of gold recorded in this quarter.

for the US dollar was NPR 133.36 in mid-July 2024, compared to NPR 131.17 in mid-July 2023.138 Out of the total foreign exchange reserves, those held by the central bank rose by 37.4 percent,

reaching NPR 1.85 trillion (USD 13.84 billion) in mid-July 2024, up from NPR 1.35 trillion (USD 10.08 billion) in mid-July 2023.139

Figure 8. Gold Import over the Last Four Fiscal Years (in NPR billion) Source: Current Macroeconomic and Financial Situation, Annual data for FY 2023/24 AD (2080/81 BS)136

Exchange Rate The Nepali currency depreciated by 1.64% against the US dollar from mid-July 2023 to mid-July 2024.137 The buying exchange rate

NEFPORT ISSUE 57 – JULY 2024

Figure 9. Average Selling Rate of USD in NPR over the Last Six Fiscal Years Source: Current Macroeconomic and Financial Situation, Annual data for FY 2023/24 AD (2080/81 BS)140

Outlook Looking ahead, Nepal’s monetary policy for FY 2024/25 AD (2081/82 BS) is expected to remain accommodative while maintaining liquidity in the banking system and controlling inflation targeted at 5.5%. However, rising import costs due to currency depreciation could pose inflationary pressures. The policy builds onto the expansionary budget that prioritizes economic reforms to achieve 6% economic growth. Its effectiveness will largely depend on the timely implementation of fiscal measures, which has been a historically weak point in terms of capital expenditure.

The continued rise in FDI presents opportunities for infrastructure and social development.

Furthermore, sustained remittance inflows will support foreign exchange reserves by providing a buffer against external shocks. However, the economy remains vulnerable to global economic volatility, particularly in currency fluctuations and the persistent trade deficit. Without substantial improvements in domestic production and export competitiveness, Nepal's growth trajectory will remain reliant on external inflows.

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Sectoral Review

NEFPORT ISSUE 57 – JULY 2024

Agriculture and Livestock Nepal’s agriculture sector experienced growth and difficult developments this quarter, which spanned from June to August 2024.

Inflation varied across agricultural produce, with the highest price increases observed in coarse rice, apples. Similar to the last quarter, imports were dominated by rice, edible oil, and crude soybean oil, whereas exports featured jute, cardamom, and palm oil. On the production front, favorable monsoon rains and a new Minimum Support Price (MSP) for paddy provided relief to farmers, and some districts began shifting towards lucrative cashew cultivation and agriculture modernization initiatives. However, challenges remain, including delayed payments to dairy farmers and a strike by agriculture technicians.

PRODUCTION UPDATES Record-Breaking Paddy Plantation Achieved High rainfall this monsoon led to a significant increase in paddy plantation, with plantation in 98% of the paddy fields being completed by the end of July.160 Paddy is typically planted in July and harvested in October each year and is heavily dependent on the monsoon rain.161 While plantation rate was slow at the beginning of June, the plantation rate accelerated by the end of July. By 30 July 2024, paddy plantated across Nepal’s provinces were: 54.2% in Sudurpashchim, 25.5% in Madhesh, 49.7% in Gandaki, 47.5% in Karnali, 44.4% in Lumbini, 40.2% in Bagmati, and 34.4% in Koshi.162 Favorable monsoon with consistent and abundant rainfall greatly benefited the crops, accelerating the pace of planting that set a record

FACTSHEET Particulars

Amount/ Percentage

Agriculture sector’s contribution to GDP

24.0%141

Growth rate for agriculture

3.05%142

Food and Beverage CPI 2023/2024

5.8%143

Year-on-year price increase of coarse rice

19.1%144

Year-on-year price increase of medium-grain rice

7.0%145

Year-on-year price increase of potatoes

15.8%146

Year-on-year price increase of apple

14.3%147

Year-on-year price increase of fish

9.0%148

Year-on-year price increase of chickpeas

7.9%149

Year-on-year price increase of meat (chicken)

7.3%150

Year-on-year price decrease of carrots

-15.7%151

Year-on-year price decrease of soybean oil

-11.2%152

Year-on-year price decrease of mustard oil

-11.1%153

Top 3 agricultural commodities imports (based on eleven months’ data ending in mid-June 2024)

Top 3 agricultural commodities exports (based on eleven months’ data ending in mid-June 2024)

Rice/paddy: NPR 21.0 billion (USD 157.3 million)154 Edible oil: NPR 15.9 billion (USD 119.1 million)155 Crude soybean oil: NPR 13.0 billion (USD 97.4 million)156 Juice: NPR 7.91 billion (USD 59.2 million)157 Cardamom: NPR 7.47 billion (USD 56.0 million)158 Palm oil: NPR 6.32 billion (USD 47.4 million)159

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this year for the fastest paddy transplanting rate in decades.163 Farmers Opt for Cashews as Cash Crops Morang district is experiencing a notable shift towards the cultivation of lucrative cash crops, particularly cashews, as well as crops like dragon fruit, grapes, and avocado due to their high market demand and profitability.164 The local governments of Pathari Sanischare and Urlabari municipalities actively supported this transition through targeted agricultural programs, such as the "one ward, one production" initiative, which encourages production and innovation in farming practices.165 In Urlabari, the agriculture branch distributed 150 cashew seedlings to farmers in the first year of production.166 This shift not only helps farmers diversify, it also potentially reduces Nepal's reliance on cashew imports from countries like India and Vietnam, which amounted to NPR 58.2 million (USD 347,600) in just the first month of FY 2023/24 AD (2080/81 BS).167

LIVESTOCK UPDATE Nepal Dairy Farmers Protest Unpaid Dues and Demand Fair Milk Pricing In the most recent development of the ongoing tussle between dairy farmers and the Dairy Development Corporation (DDC), farmers once again protested at the DDC headquarters in Lainchaur, Kathmandu, on July 19, 2024.168 The protesters demanded the immediate payment of overdue dues totaling NPR 2.5 billion (USD 18.8 million) and called for a revision

of milk prices to ensure fair compensation for their produce, arguing that current rates fail to cover their costs.169 The protest resulted in the arrest of over 40 farmers.170

inconsistent between 1999 and 2022 AD, leading to challenges in ensuring that farmers received fair compensation for their crops.176 The implementation has been consistent since 2023.177

These unpaid dues have been accumulating for seven months, placing severe financial strain on the farmers. This protest follows a previous demonstration on February 22, 2024, when farmers poured milk on the streets to express their frustration with delayed payments.171 The DDC has long faced criticism for its delayed payments and inadequate pricing structures, sparking widespread discontent within Nepal’s dairy industry.

Government Launches Product Modernization Project

GOVERNMENT PLANS/ PROGRAMS UPDATE Government Announces Increased Minimum Support Price for Paddy In early July, the government announced the minimum support price (MSP) for paddy, setting the price for common paddy at NPR 35.80 (USD 0.27) per kilogram and for mota dhan (small paddy grain) at NPR 34.10 (USD 0.25) per kilogram.172 This marked a 6.50% increase in the MSP for common paddy and a 6.64% increase for mota dhan compared to the previous year.173 The MSP serves as a safety net for farmers, protecting them from sharp declines in market prices and encouraging them to cultivate paddy each year.174 Setting this price during the paddy season is essential to prevent farmers from being forced to sell their harvest at low rates.175 Although the MSP has been a long-standing policy, its implementation was

The government launched Agriculture Modernization Project in Nepal this quarter, designating Sankhuwasabha and Bhojpur as super zones to enhance cash crop and fruit production using advanced technologies.178 Over the next six years, these districts will focus on cultivating cardamom and oranges, with 2,313 hectares dedicated to cardamom and 687 hectares to orange production.179 This initiative will involve 10 local municipalities in Sankhuwasabha and 6 in Bhojpur, aiming to boost agricultural productivity and support local economies through modernized farming practices.180 The budget allocated for Sankhuwasabha for FY 2024/25 AD (2081/82 BS) for Cardamom is NPR 14.1 million (USD 105,645) and for Orange is NPR 4.2 million (USD 31,470), as shown in the table below.

NEFPORT ISSUE 57 – JULY 2024

Table 6. Cardamom and Orange Budget Allocation for Sankhuwasabha181 Particulars

Amount allocated Cardamom

Constructing irrigation infrastructure

NPR 7 million (USD 52,450)

Construction and installation of modern furnaces

NPR 4.6 million (USD 34,465)

Establishing primary crop processing industry

NPR 2.5 million (USD 18,730) Orange

mini moisture storage for oranges

NPR 2.1 million (USD 15,735)

expansion of orange crop zone

NPR 2.1 million (USD 15,735)

KEY DEVELOPMENTS Agriculture Technicians Resume Strike Against Government In June 2024, agricultural technicians in Nepal suspended their strike after the newly appointed Minister for Agriculture and Livestock Development, Ramnath Adhikari, provided a

written commitment to address their concerns within 15 days.182 However, by the end of July, after the government's failure to meet the agreed-upon deadline and due to a lack of cooperation from the Ministry of Finance and the Ministry of Federal Affairs and General Administration, the technicians resumed their strike on July 31.183 By August 2024, the strike continued, with

approximately 300 technicians nationwide halting their work and staging a sit-in protest at the ministry's entrance.184 Their demands included better pay, improved working conditions, and more robust government support for agricultural modernization projects.185

Outlook This quarter, there was rise in the cultivation of high-demand crops like cashews, dragon fruit, and other lucrative varieties reflects farmers' adaptive strategies in response to market trends.

This shift was supported by government programs aimed at supporting agricultural innovation, such as the Agriculture Modernization Project, which promises to enhance productivity through advanced technologies and targeted support in super zones. While these initiatives are beneficial for diversifying farmers' income sources and reducing reliance on imports, farmers growing staple foods may face increased competition for land and funding, potentially threatening food security if not managed carefully. On the production front, the record-breaking paddy plantation achieved this quarter sets a positive foundation for the next quarter, as these crops will be harvested in October. Despite the positive developments in production, persistent challenges remain, particularly in the dairy sector. The recurring protests by dairy farmers over unpaid dues highlight systemic issues that could undermine the overall stability of the dairy economy. If these grievances are not addressed, they could lead to reduced production capacity and long-term economic strain on the sector. Looking forward, while the focus on cash crops and government initiatives may drive growth, it is crucial for policymakers to ensure that all agricultural subsectors, including dairy, receive adequate support.

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DOCKING NEPAL’S ECONOMIC ANALYSIS

DEMOGRAPHIC DIVIDEND IN THE AGRICULTURE SECTOR Harnessing Nepal’s Demographic Dividend Amid Migration Challenges The Netherlands serves as a compelling example of how advanced agricultural technology can transform the agricultural sector, despite a minimal percentage of the population engaged in farming. With only about 2% of its population in agriculture, the Netherlands has become one of the world’s largest agricultural exporters.186 Their technological edge has positioned them as one of the world's largest agricultural exporters. Nepal does not have the advanced agricultural technology to substitute its decline in population engaging in agriculture.187 The declining rural population poses risks to the sector's labor force, making it imperative for Nepal to modernize agriculture through innovation and technology.188

For Nepal, which faces significant demographic challenges, these lessons are crucial. Over 60% of the population falls within the working-age category, and with 67% relying on agriculture for their livelihoods, the potential for growth should be significant.189 However, the high internal and external migration of approximately 2.2 million Nepalese living abroad poses significant challenges.190 The reliance on remittances has led to a deteriorating working attitude, a decline in attracting youth to agriculture, and created gendered effects that pressure women to engage in agricultural work.191 Further, Nepal does not have the advanced agricultural technology to substitute its decline in population engaging in agriculture.192 The declining rural population poses risks to the sector's labor force, making it imperative for Nepal to modernize agriculture through innovation and technology. By modernizing agriculture through innovation and technology, Nepal can address these challenges.

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Education During the review period, from June 1 to August 31, 2024, Nepal's education sector struggled, with poor Secondary Education Examination (SEE) results highlighting the prevalent challenges in Nepal’s education system.

Additionally, the quick turnover of Education Minister Sumana Shrestha, just four months after the previous appointment, also accentuated the political instability affecting the sector. Amid these struggles, the longstanding debate over converting private schools into trusts reignited as lawmakers revisited the School Education Bill which has been pending in the House of Representative for over a year. Despite the problems faced by the sector, government bodies such as those of the Karnali Province and Kathmandu Metropolitan City are progressing ahead with infrastructure upgrades and educational reforms, aiming to improve the quality of education in their regions.

KEY DEVELOPMENTS SEE Results Expose Deepening Crisis in Nepal’s Education System As per the results of the Secondary Education Examination (SEE), published on June 27, 2024, only 47.87% of the examinees (222,472 out of 464,785 students) managed to secure a GPA of 1.6 or higher, the minimum required to advance to Grade 11.

Among the successful students, 31,209 achieved a GPA of 3.60 or above, which is the highest grade.

Additionally, 68,256 students achieved a GPA between 3.20 and 3.60.198 Compared to the previous year, when 484, 939 students appeared for the exam, 22,475 students achieved a

GPA between 3.60 and 4, while 55,069 scored between 3.20 and 3.60. Additionally, around 50% of the students were categorized as having failed. This year, the percentage of students failing to meet the required GPA increased to 52.13%, up from last year’s 50%.199 The remaining 52.13% (242,313 students) were categorized as "non-graded," meaning they failed to meet the minimum requirements of obtaining a GPA of at least 1.60 needed to progress to Grade 11. However, they were given the opportunity to retake their exams through supplementary examinations.200 Supplementary exams were held from August 7 to 14, 2024, for all the students who were either ‘non-graded’ or absent during the regular

FACTSHEET

Indicators

Mean years of schooling193

5.1

Net enrolment rate at secondary level (class 9–12)194

57.9%

Retention rate up to grade 12195

37.2%

Literacy rate (5 years and above)196

76.2%

Ratio of gender equality (female/ male based on the secondary net enrolment rate)197

0.93

examinations. While this provided an immediate solution, it raises a critical question about the challenges within our educational system. This stopgap measure highlights the urgent need for long-term solutions to address the systemic deficiencies plaguing the education sector.201 The SEE results have highlighted issues within Nepal's education system, particularly in subjects like Mathematics, Science, and English, where the highest failure rates were recorded.202 Many schools operate with outdated curriculum and teaching methods that fail to engage students effectively. Education Minister Bidhya Bhattarai has emphasized the need for curriculum reforms and pointed out that addressing inadequate infrastructure,

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DOCKING NEPAL’S ECONOMIC ANALYSIS

lack of resources, and political interference are the critical factors necessary for improving educational outcomes.203 Lawmakers Revive Push to Convert Private Schools into Trusts with Fixed Deadline In 2019, the High-level Education Commission recommended that private schools in Nepal be converted into trusts within 10 years, but the report was never made public by the thengovernment led by KP Sharma Oli, due to objections from private school operators.204 However, in September 2023, the previous government reintroduced this proposal as a part of the School Education Bill which would allow private schools to voluntarily decide whether to convert into trusts, rather than imposing a mandatory deadline.205 However, in more recent discussions within the Education, Health, and Information Technology Committee of the House of Representatives on July 19, 2024, have seen lawmakers from all parties pushing for a fixed timeline, with many advocating for allowing private schools a maximum of 12 years to turn their schools into trusts. Lawmaker Gokul from the ruling CPN-UML emphasized the need to allow school investors sufficient time to recover their investments before such conversions. Madhav Sapkota , a Maoist member of the committee, also stressed the importance of setting a clear deadline for the transition of private commercial schools into service-oriented institutions. 206 Karnali Ministry of Social Development Accelerates

School Educational Infrastructure Program The Karnali Province's Ministry of Social Development launched the 'School Educational Infrastructure Program' to enhance education across 79 local bodies in ten districts, which was first introduced in the provincial budget for the fiscal year 2078/79. With a significant budget allocated toward districts like Kalikot and Dailekh, the initiative prioritizes building durable school infrastructure in remote regions, aiming to address the pressing need for improved educational facilities.

The program has already made progress in Jumla, Rukum West, Dolpa, Surkhet, and other districts, with new buildings either completed or under construction. So far, 11 school buildings have been constructed in 11 municipalities of Salyan, with one school building each in seven municipalities of Jajarkot and 4 municipalities of Mugu, respectively. Additionally, the construction of 11 four-room buildings has commenced in the municipalities of Dailekh. The program's success is evident in the timely completion of school buildings across various municipalities, improving educational access and quality in these underserved regions.207 Education Minister Announces Refunds for Ineligible Medical Entrance Exam Applicants On July 31, 2024, the newly appointed Minister for Science, Technology, and Education, Bidya Bhattarai, assured aspiring Medicine students via her facebook page addressing the concerns of these students that

the fees for the Medical Education Commission’s entrance exams will be refunded to those who were unable to give the test.208 This decision was made in response to the challenges faced by students who paid the fees and registered for the medical entrance exams before receiving their Class 12 results, only to later find out that they had failed in their final exams. According to the Medical Education Commission, only students who passed their exams were allowed to take the entrance exams. In response, the minister announced that the Medical Education Commission will handle the refund process for these affected students.209

PLANS AND PROGRAMS KMC Introduces Plans to Restructure Primary Education System Along with Other Inclusive Educational Initiatives As part of the Kathmandu Metropolitan City’s (KMC) policies and programs for FY 2024/25 AD (2081/82 BS) at the 15th Municipal Assembly on June 14, 2024 many new plans and initiatives were introduced.

One of them is the restructuring of its primary education system by dividing it into two distinct levels.210 The plan was presented

by Mayor of KMC, Balendra Shah, as part of the KMC’s policies and programs for FY 2024/25 AD (2081/82 BS) at the 15th Municipal Assembly on June 14, 2024.211 He proposed the establishment of two levels of primary education instead of a single level Early Childhood Development (ECD) concept, integrating Grade 1 into the primary system starting from the 2024/25 academic session.212 This initiative is part of a broader

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strategy to align public schools more closely with the successful three-tier pre-primary education structure of Nursery, lower KG and upper KG, found in private institutions.213 Along with this reform in the education system, KMC also introduced several initiatives focused on enhancing student well-being and school infrastructure, including a day meal program with a structured diet plan.214 As a part of this plan, schools with fewer than 200 students will benefit from a central kitchen arrangement.215 Also, the metropolis is also taking steps to support students with autism by planning to establish a special school.216 Further initiatives include the introduction of inclusive learning environments for students with disabilities, the distribution of scholarships through a unified system, and the establishment of a Skill and Training Academy in Kathmandu to regulate

and certify educational and career counseling services.217 Additionally, plans to launch a School Improvement Project targeting enhancements based on the physical and financial assessments of community schools was also announced.218 Continuous Assessment System Implemented in Kailali Public Schools Some public schools in Kailali, including those in Tikapur, Joshipur, Janki, and Lamkichuha municipalities, started implementing a continuous assessment system for students in grades 1 to 3.219 Starting this academic year of 2081 BS, these municipalities have shifted from traditional exams with question papers to continuous assessment methods for evaluating young students, reserving the traditional exam format only for students in grade 4 and above.220 As part of this method, teachers regularly evaluate students' understanding

and skills through various tasks such as daily class performance, participation, and progress throughout the academic yearall related to the curriculum.221 Education officers from these municipalities emphasized that this shift aims to improve the quality of education by focusing on continuous student development rather than isolated exam results.222 In order to ensure uniform and accountable assessment practices, the municipalities have also provided schools with a manual outlining the standards for continuous assessment.223 While some schools may still conduct internal exams for engagement, these assessments will not impact the final grades.

Instead, the final results will rely solely on the continuous assessment model, ensuring a more inclusive approach to student development.224

Outlook The recent developments in Nepal’s education sector showcased persistent challenges and emerging opportunities this past quarter. The high failure rates in SEE yet again highlighted the systemic issues the sector faces, such as a lack of qualified teachers and ineffective assessment practices, indicating an urgent need for reforms in the sector. And, on a positive note, some level of this reform was seen in proactive initiatives and plans taken by local governments in the past quarter, such as Karnali’s school infrastructure program, Kathmandu’s restructuring of primary education, and Kailali’s adoption of continuous assessment methods-all of which signaled a promising shift towards enhancing educational quality and accessibility. Additionally, the long-standing debate to convert private schools into trusts reflected a broader ambition to democratize education.

Education Minister Bidhya Bhattarai’s commitment to prioritize the School Education Bill offers hope for significant improvements in the education sector. However, the effectiveness of these plans is yet to be seen, as experts believe that there must be a careful balancing of these reforms with the need for quality education.

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DEMOGRAPHIC DIVIDEND IN THE EDUCATION SECTOR India's Demographic Dividend and Education: Lessons for Nepal India’s demographic dividend offers a significant opportunity for economic growth, driven by the effective education of its large youth population. With over 65% of the population under the age of 35, the demand for education has surged, prompting the government to prioritize educational reforms and increase investments.225 Thus, India has focused on key initiatives like the Right of Children to Free and Compulsory Education (RTE) Act. The RTE Act, implemented in 2009, mandates free and compulsory education for children aged 6 to 14.226 The Act’s most notable achievement has been nearly 100% school enrollment rates. By 2018, total enrollment stood at an impressive 97.2%, especially benefiting rural areas where access to education was limited led to higher school enrollment, particularly in rural areas, where access to education had historically been limited.227 To support this Act, India rapidly expanded its educational infrastructures. By 2018, 66.4% of schools had usable girls' toilets, and the proportion of schools with boundary walls rose to 64.4%.228 Despite these advances, the Act faces challenges in sustaining educational quality and addressing teacher shortages, which have been critical in achieving meaningful learning outcomes.229 These hurdles demonstrate that while the RTE has been successful in expanding access, ensuring consistent quality remains an ongoing effort.

In summary, India's demographic dividend has acted as a catalyst for educational reforms and expansion, contributing to broader economic and social benefits. Nepal, with a similar demographic profile, can draw valuable lessons from India’s experience. By prioritizing education accessibility like the RTE Act, especially in remote and underserved regions, Nepal can ensure that all children receive a basic education while also maintaining the quality. Additionally, a recent analysis by the International Institute for Applied Systems Analysis (IIASA) suggests that the demographic dividend is fundamentally an education dividend, as economic achievements are closely linked to educational attainment, highlighting the vital role of education in driving economic growth and reinforcing the need for strategic investment in education to maximize the benefits of a young and growing population. 230

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Energy and Environment This quarter, from June to August, saw significant improvements in the energy sector in Nepal. The quarter witnessed the reporting of a wider reach in terms of access to electricity as reported by Nepal Electricity Authority (NEA) and highlighted through Nepal’s growing energy equity as per the Trilemma Index, 2024. To add on to this progress, Nepali parliament also moved towards ensuring cleaner energy source through commitments with international platforms like International Solar Alliance and partnerships with the Indian Renewable Energy Development Agency. However, particularly due to the havoc caused by monsoon-induced disasters on energy infrastructure and more, there were potential setbacks in achieving desired outputs. Furthermore, the progress made in the last quarter in terms of energy trade partnerships between Nepal and Bangladesh was disputed due to political unrest, disrupting the trade agreement for an indefinite period.

ENVIRONMENT AND CLIMATE CONCERNS Extreme Rainfall Induces Multiple Disasters Heavy rainfall triggered flash floods and landslides across Nepal, showing an increasing trend in recent years.243 Nepal recorded an above-average rainfall in 20 major rainfall measuring stations this year, marking rainfall of 539 millimeters in a period of one month – from June 10 and July 9.244 This induced a series of disasters all over the country, leading to loss of lives, disappearance and damages in roads affecting

vehicular movements throughout monsoon.245 Some of the heaviest rainfall recorded this monsoon included the record-breaking rains of 600 mm at Kanchanpur district in Nepal on July 8, 2024, which is the highest record in the past 78 years.246 This recordbreaking rainfall at Kanchanpur led to severe flooding between July 8, 2024 and July 10, 2024 that caused 4 Deaths and 1 individual reported to be missing.247 The Department of Hydrology and Meteorology has confirmed this rainfall to be highest since 1946 surpassing the records of rainfall in Hetauda (516.2mm) in 2017 and Tistung Rain Center in July, 1993.248 Around 305 families

FACTSHEET

FY 2023/24 AD (2080/81 BS) Annual Data Total Import of Petroleum Products FY 2080/81BS (2023/24 AD)

NPR. 309.99 Billion (USD. 2.32 Billion)231

National Peak Demand

1929 MegaWatt232

Total Peak Demand

2633 MegaWatt 233

Hydropower Generation Capacity

3157 MegaWatt234

Increase in Hydropower Production

473 MegaWatt 235

Power Generation in Solar Energy

205 MegaWatt 236

Population Receiving Access to Electricity from National Grid

99%237

Total Domestic Electricity Consumption

10,253 Gwh238

Transmission Line Construction

6,508 circuit km239

Per Capita Electricity Consumption

369.58 kWh240

Proportion in Change of Precipitation Rate in Monsoon

(+)35-45%241

Proportion in Change in Temperatures in Monsoon

(+)35-45%242

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DOCKING NEPAL’S ECONOMIC ANALYSIS

were affected by landslides, 300 from heavy rainfall and 355 have been impacted by floods across the country between July 13, 2024 and August 13, 2024.249

By August 2024, the rainfall led in displacements of over 4,000 families across the country with over 170 deaths. 250 The death toll was recorded highest with 54 deaths in Gandaki Province followed by 33 in Lumbini, 34 in Bagmati, 25 in Koshi, 10 in Sudurpaschim, 8 in Karnali and 6 in Madhesh province.251 Glacial Lake Outbursts in Thame Ignite Climate Change Concerns Flash floods struck Thame on August 16, 2024.252 This was the result of Glacial Lake Outburst Floods (GLOFs), which is the technical term for “sudden release of water from a glacial lake due to failure of natural dam formed by ice or moraine resulting in downstream flooding that can cause extensive damage to life and property.”253 With the occurrence of 24 incidents of GLOFs and 47 active glacial lakes in Nepal, this is striking concerns in terms of potentials and implications from future GLOFs in fronts of climate change and their social implications.254 This was evident as GLOFs led in the displacement of 135 households living in the riverside of the Thame River.255 The Department of Hydrology and Meteorology (DHM) attributes the GLOFs leading to the Thame’s devastating flash floods to climate change and the rising temperatures.256 With International Center for Integrated Mountain Development’s (ICIMOD’s) recent findings on reduction of glacial mass by 65%, there remains

greater potentials on incidence of GLOFs, posed by increasing global warming and climate change in upcoming years. 257

HYDROPOWER Arun III Hydropower Project Reaches Key Milestone with Tunnel Completion This quarter, the Arun III Hydropower Project reached a major milestone with the completion of its 11.8 km main tunnel in Sankhuwasabha district.258 Former Prime Minister Pushpa Kamal Dahal marked the achievement with a ceremonial visit to the dam site on June 5, 2024. With this recent progress, the project, led by India’s Sutlej Jal Vidyut Nigam (SJVN), is 74% complete in terms of production and 38% in terms of transmission line progress. If all goes according to the plan, the project is expected to commence power generation by June 2025.259 The project has the potential to produce up to 3.92 billion units of electricity annually thus adding 900 megawatts of electricity into the national grid.260 As per the project agreement, Nepal will receive 21% of the total power generated at no cost.

Additionally, local families will benefit from receiving up to 30 units of electricity free of charge each month. After 25 years of operation, the project will be fully transferred to the Government of Nepal.261 IREDA Invests in 900 MW Hydropower Project The Indian Renewable Energy Development Agency (IREDA), an Indian Public Sector Enterprise providing financial assistance and other services to projects

associated with renewable sources of energy and energy efficiency, has announced an NPR 4.64 billion (USD 34.76 million) investment in Nepal’s 900 MW Upper Karnali Hydroelectric 262 Power Project. This investment gives IREDA up to a 10% stake in GMR Upper Karnali Hydro Power Limited and Karnali Transmission Company Pvt. Ltd. The investment is contingent on approvals from the Indian government and other regulatory bodies in June, 2024.263 The collaboration with SJVN Limited aims to bolster renewable energy infrastructure and regional energy security.

RENEWABLE ENERGY Bridging Hydropower and Solar for Nepal's Sustainable Energy The study report titled ‘Integrated Development of Hydro and Solar Energy for Energy Security, Affordability, and Sustainability in Nepal’ was released in June 2024. It was co-implemented by the Renewable Energy Promotion Centre (RPEC) and the Promotion of Solar Technology for Economic Development (POSTED), a project supported by the German development agency GIZ. 264 RPEC, a key body promoting renewable energy initiatives in Nepal, worked to assess how integrating hydropower with solar energy could enhance Nepal’s energy security. The major findings of the report emphasized the importance of diversifying energy sources to mitigate the risks of overreliance on hydropower, particularly in light of fluctuating river water levels. The study advocated for policy reforms and increased investments to develop a more resilient and sustainable energy

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NEFPORT ISSUE 57 – JULY 2024

mix, combining solar and hydro resources to ensure affordability and long-term energy security.265 Nepali Parliament Ratifies International Solar Alliance On June 6, 2024, the Parliament of Nepal ratified the International Solar Alliance (ISA) after a proposal presented by the former Minister of Energy, Water Resources and Irrigation Shakti Bahadur Basnet was approved by a majority vote.266 ISA was created through the joint efforts of India and France at the 21st Conference of Party (COP-21) to the United Nations Framework Conference on Climate Change (UNFCCC) held in Paris in 2015.267 It seeks to develop as well as deploy costeffective energy technologies by promoting solar technologies in Low Developed Countries (LDCs) and Small Islands Developing States (SIDS).268 By joining the ISA, Nepal can access financial and technical support to expand its solar infrastructure, reduce dependency on hydropower, and enhance energy security. This will help Nepal harness its abundant solar potential, reduce fossil fuel imports, and achieve its clean energy targets.269

NON-RENEWABLE ENERGY Nepal to Invest in Major LPG Pipeline Project with India The Government of Nepal plans to invest NPR 15 billion (USD 112.38 million) in constructing a Liquified Petroleum Gas (LPG) pipeline that will transport gas from Motihari, India, to Sarlahi, Nepal, similar to the existing diesel pipeline from Motihari to Amlekhganj, undertaken

by Indian Oil that involves developing a state-of-the-art

terminal at Amlekhgunj, Nepal for optimal utilization of India’s first transnational oil pipeline.270 The initiative came to light following Industrial Minister Damodar Bhandari’s visit to India for the BIMSTEC summit on August 6, where discussions regarding energy cooperation took place.

The Indian Oil Corporation will subsidize approximately NPR 8 billion (USD 59.9 million) for the pipeline construction, while the Nepal Oil Corporation (NOC) will oversee the development of storage facilities. A detailed project report (DPR) is in progress, and an engineering survey completed in FY 2022/23 AD (2079/80 BS) suggests that this project could save Nepal around NPR 6 billion (USD 44.95 million) annually in LPG transportation costs.271

KEY DEVELOPMENTS

Humla yet to be connected to the national grid.274 In the last eight years however, the increase in production capacity to 3,157 MW and the doubling of electricity transmission lines to 6,507 circuit kilometers can be considered as key highlights in the electrification project.275 The yearly progression of the electrification data portrays

a

significant increase from 90% just three years ago in FY 2020/21 AD (2077/78 BS) as seen in Figure 10.276 NEA's Managing Director, Kul Man Ghising, highlighted the Authority's success in doubling its customer base to nearly 6 million in eight years from the fiscal year 2015/16 to 2023/24.

This

expansion

has

resulted

in a surge in annual electricity

NEA Claims 99% Electrification Across Nepal

consumption

With the completed electrification of 539 local levels out of 753 local levels and partial illumination of 196 local levels, Nepal Electric Authority (NEA) claims 99% of population having access to electricity facilities in their electrification data-2081 BS (2024 AD).272 Provincial data portray that Madhesh Province has a 100% electrification followed by the provinces of Bagmati (99.97%), Koshi (99.3 percent), Lumbini (98.49%), Sudurpaschim (86.58%) and Karnali (74.38%).273 Although electrification remains to be growing exponentially, it is worth noting that a quarter of local levels (28 percent) remain to receive a full-fledged electricity supply., with 18 local levels in

electricity in FY 2015/16. The per

to

10.23

billion

units from 3.72 billion units of capita energy consumption has increased to 400 units from 131 units in these eight years. As a result, Nepal transitioned from being an electricity importer to an exporter, earning NPR 17.7 billion (USD 132.61 million) with 1.94 billion units of exports in the last fiscal year of 2022/23.277

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Figure 10. Percentage of Electrification in Nepal Source: Nepal Electricity Authority, August 2024278

NEA's Advanced Data Center Enhances Power Distribution in Nepal On June 28, the Nepal Electricity Authority (NEA) inaugurated Nepal’s first advanced power distribution control and data center in Kathmandu.279 The center, built with an NPR 1.4 billion (USD 10.49 million) investment, aims to digitize NEA’s service delivery through automation under the Digital NEA program with technical support from the Norwegian government and a concessional loan from the Asian Development Bank (ADB). Yantai Dongfang Wisdom Electric Co. Ltd., a Chinese company specializing in smart grid technologies and electrical equipment, constructed this facility in November 2021 after signing the contract in July 2021.280 This three-story building integrates advanced systems for monitoring and controlling power distribution across the Kathmandu Valley, including robust data management, and emergency power backups. 281

Nepal Reports Fastest Growth in Ensuring Energy Equity Nepal ranked 109th in the Trilemma Index in 2024, as per the World Energy Trilemma Report-2024 published by World Energy Council, ranked based on energy security, energy equity and energy sustainability.282 Regionally, Nepal is placed in the 23rd Position in Asia.283 Among the three criteria, Nepal is noted to be the top improver in ensuring energy equity as per the scores in 2023, against the 2003 score in ensuring energy equity through increased access to affordable energy, nuanced consideration of interplay in price, cost, value, financial as well as social implications of change in the dimensions, and increased short-term costs of a shifts to renewable energy.284 This portrays equitable access to cleaner energy sources in Nepal, presenting positive outlook in energy equity and other two criteria where with Nepal progressing towards positive results in ensuring both energy

security and sustainability. The report further highlights the effectiveness of Alternative Energy Promotion initiatives undertaken by Nepal to support clean energy initiatives as well as environmental sustainability.285 NEA Submits 100,000-Page Report on Power Bills Amid Conflict with Industrialists On August 9, the Nepal Electricity Authority (NEA) submitted a 100,000-page report to the Public Accounts Committee (PAC), detailing electricity bills, Time of Day (TOD) meter data, and discounts for industries using dedicated feeders and trunk lines.286 NEA was compelled to do this following a growing conflict with industrialists over electricity charges during the load-shedding period.

The conflict arose after industrialists accused NEA of overcharging for electricity used during load-shedding, prompting the PAC to demand detailed billing data.287 NEA is seeking to recover NPR 6.60 billion (USD 49.45 million) from 61 companies, but

NEFPORT ISSUE 57 – JULY 2024

controversy escalated after it disconnected power to six firms.

While the NEA claims this amount is owed, the PAC declared that

the total due is NPR 21.88 billion (USD 163.93 million). However, a dispute resolution commission later recommended a reduced

amount of NPR 6.41 billion (USD 48.03 million) plus a 25% fine for unpaid tariffs from 2016 to 2018 AD. 288

Outlook The upcoming quarter for Nepal will mark a mix of challenges and progress in the purview of the energy and environment sectors. While Nepal’s commitment to promoting clean energy sources with investments in hydropower and commitment to solar alliance caters to its dedication towards promoting sustainable energy solutions, the disasters may hinder progress by disrupting energy infrastructure. Particularly as Nepal faces implications to climate change, the melting of the glaciers throughout Nepal and weaking of moraines remain to have greater risks across the Himalaya, have significant implications on lives, properties and hydropower and promote climateinduced migration. The revenue and supply chains in this sector could also be disrupted due to NEA’s controversy regarding the power bills to the industries. Nepal particularly witnesses the potential for economic progress through the utilization of strong regional collaboration and rise in investments in alternative energy sources. As Nepal navigates these challenges, resilience and adaptation measures will be crucial along with regulatory and policy reforms aimed at accelerating energy integration.

DEMOGRAPHIC DIVIDEND IN THE ENERGY AND ENVIRONMENT SECTOR Philippines’ Transition to Greener Energy with Growing Demographic Dividend The growing population and economy of the Philippines has led to a greater demand for energy.289 The Philippines heavily relies on non-renewable fossil fuels for energy, accompanying 75 percent of the energy generation.290 The pressing concern of the growing population and the implications of climate change has led Philippines to focus on reducing their dependency on fossil fuels for energy, leading to the promulgation of the Philippine Green Jobs Act of 2016.291 The Act is primarily intended to promote new jobs that has originally been replaced by the shift to decarbonized and climate resilient businesses, mechanization and use of AI in repetitive jobs.292 The primary benefits that can be generated from this initiative remains to be creation of new job opportunities, increased investment in green sector, promotion of sustainable development, increased business competitiveness and reduction of government cost to build the human capital by stimulation of private investments.293 A key highlight here remains the reduction of energy and decarbonization of the economy, that remain beneficial particularly to environmental end, eventually lowering pollution and contributing towards climate change adaptation. 294 The commitment, particularly with derivation of a policy to promote environmental sustainability through reliance on cleaner energy and encouraging the growing economically independent population to green jobs, remains to be exemplary in terms of utilizing the growing population with that of cleaner energy. This not only helps in meeting the demand of energy for the growing population but also reduces the pressing implications of the increasing carbon footprint due to population growth. The current trends in adopting greener and cleaner energy in Nepal can be considered as an asset, also portraying its direction towards promoting sustainable energy to its growing population. The case of Filipino transition to greener energy sources, therefore, can be particularly exemplary for Nepal, a country with demographic dividend at current times in terms of utilizing population for ensuring cleaner energy.

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Health

FACTSHEET

During the review period, from June 1 to August 31, 2024, Nepal’s health sector faced a series of challenges with a surge in dengue and cholera cases, particularly in the Kathmandu Valley. These outbreaks exposed critical gaps in the public health infrastructure, aggravated by issues such as poor water quality and seasonal flooding.

Additionally, a poliovirus strain was detected, prompting swift action through vaccine campaigns in the valley.

Despite these challenges, the sector also achieved notable milestones with the introduction of robotic surgery at the Baidya and Banskota (B&B) Hospital, marking a major advancement in medical technology in Nepal. Public health initiatives like the Safe Delivery App were also introduced, and mental health training for healthcare workers was expanded, reflecting a proactive approach by the government in improving overall healthcare outcomes.

HEALTH RISKS 5,000 Plus Dengue Cases Reported Across Nepal According to the Epidemiology and Disease Control Division (EDCD), a total of 5,589 dengue cases were reported across the 75 districts of Nepal between January 1 to August 28, 2024.301 Experts warned that the actual number of cases could be much higher than this, as over 80% of dengue cases are asymptomatic.302 Out of the reported cases, three deaths were recorded during the outbreak.303 In an effort to combat the spread of dengue, the

Ministry of Health and Population (MoHP), through the EDCD, published procedures to prevent and control dengue on August 16, 2024.304 It also called for Rapid Response Teams to collaborate with the local and provincial governments of dengue-affected areas to conduct control activities, including seeking and destroying mosquito nests and breeding areas. The World Health Organization (WHO) supported this campaign by providing the EDCD with 66 high-quality hand-compression sprayers and spare parts, which are essential for indoor residual spraying – a method involving

Health Indicators Average life expectancy (at birth)295

71.3

Fertility rate (per woman)296

1.9

Infant mortality rate (per 1,000 live births)297

28

Neonatal mortality rate (per 1,000 live births)298

21

Number of total health facilities299

7,858

Healthcare workers300

102,686

the application of long-lasting chemical insecticides to indoor surfaces .305 Over 60 Cases of Cholera Reported Across Five Districts According to the EDCD, a total of 67 cases of cholera were detected nationwide as of August 24, 2024.306 Lalitpur was the most affected district with 47 reported cases, followed by Kathmandu with nine cases.307 Besides these, the other affected districts were Makwanpur, Pyuthan and Kailali. However, this data may not capture the true extent of the outbreak, as intensive active cholera surveillance is only

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conducted in the three districts of the Kathmandu Valley and Kailali.308 The rise in cholera cases was attributed to primarily two things. Firstly, the heavy monsoon rainfall increased the risk of waterborne diseases by contaminating drinking water sources.309 Additionally, despite dangerous microbes being frequently detected in water samples, many local units had suspended testing of drinking water before the monsoon season started, due to a lack of funds.310 Poor Quality Control in Food Raises Concerns In FY 2023/24 AD (2080/81 BS), the Department of Food Technology and Quality Control filed cases against 38 industries for producing substandard products due to the poor regulation of food hygiene and quality.311 These cases were based on sample tests collected from 77 industries.312 However, Nepal’s testing facilities are not very robust as they lack the resources to conduct specific lab tests, often depending on India for the same. An instance of this is the delay in lab tests of the Indian spice brands MDH and Everest, which were reported to contain ethylene oxide — a human carcinogen.313 Due to a lack of facilities, in early-June, Nepal had approached India with a request to provide chemicals and methods for testing but did not hear back. Moreover, besides issues in testing, experts have raised serious concerns regarding the implementation of such food hygiene and quality control as, in spite of being banned on May 18, the aforementioned spice brands are still available in the market.314

IMPORTANT DEVELOPMENTS B&B Hospital Launches Nepal’s First Surgical Robotic System On August 16, 2024, the Baidya & Banskota (B&B) Hospital successfully launched Nepal's first robotic surgery, expanding the availability of advanced surgical care in Nepal.315 The hospital began installing the SSi Mantra Surgical Robotic System, India’s first indigenous surgical robotic system, in July, completing the process by August 3, 2024.316 The installation and implementation of this technology were made possible through the hospital’s partnership with the creator of SSi Mantra, SS Innovations — an Indian company that has been at the forefront of developing cost-effective, versatile robotic surgical systems tailored for emerging markets.317 The SSi Mantra, in particular, is designed to be accessible while offering high-end technology that supports a wide range of surgical procedures such as cardiothoracic, urological, gynecological, and general surgery.318 The specialty of this technology is that it allows for highly precise and minimally invasive surgeries with enhanced precision and reduced recovery time.319

PLANS AND PROGRAMS Campaign Launched After Polio Discovered in Kathmandu’s Sewage According to the MoHP’s announcement, a highly contagious poliovirus strain — the Type-3 poliovirus — was discovered in Kathmandu's sewage, following the laboratory

confirmation received on July 13, 2024.320 The sewage samples were collected from the intersection of the Tukucha and Bagmati rivers on May 26, 2024.321 In response to the discovery, a four-day vaccination campaign was conducted by the Immunisation Section at the Family Welfare Division with the support of United Nations Children’s Fund (UNICEF) and the World Health Organisation (WHO) from July 24 to July 27 across the three districts of the Kathmandu Valley.322 The campaign specifically targeted children under five, administering an additional dose of oral polio vaccine and achieving an impressive 104% coverage rate by deploying health workers and female community health volunteers to homes, as well as public spaces like the schools, bus parks, and entry points to ensure that no eligible children would miss the vaccine.323 However, while the coverage rate was commended, health experts emphasized that it is important to conduct post-campaign surveys to verify the effectiveness of the immunization drive and to ensure that all vulnerable populations are adequately covered.324 Nepal Launches Safe Delivery App to Improve Maternal Health In July 2024, the Family Welfare Division of the Department of Health Services, under the MoHP, launched the Nepali version of the Safe Delivery App with support from the United Nations Population Fund (UNFPA) and the Maternity Foundation (MF).325 This mobile application, developed by the Maternity Foundation, in collaboration with

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the University of Copenhagen, is designed to provide midwives, nurses, and other healthcare providers with visual, clinical, and practical guidance on managing common childbirth complications, particularly in remote and resource-limited settings.326 The Safe Delivery App offers a comprehensive range of features, including easyto-follow instructional videos, essential medical checklists, and guidelines on managing emergency situations during childbirth.327 With over 435,000 healthcare professionals in more than 70 countries having already benefited from the Safe Delivery App, Nepal is the latest country to introduce and launch their own version of this app in the Nepali language.328 The app was developed during the COVID-19 pandemic and was first launched in April 8, 2020 by MF. 329 Maternity Foundation is a global organization with roots in Denmark that has been working since 2005 to build midwifery knowledge and provide lifesaving digital health solutions

in low-resource settings. 330 With its Safe Delivery App, the foundation aims to prevent maternal and neonatal mortality rates, particularly in low-resource areas. 331 Plans to Increase Training on Mental Health Screening for Health Workers Since the past quarter, Nepal has been intensifying its efforts to improve mental health care by expanding mental health screening and training programs for healthcare workers. In July 2024, the Paropakar Maternity and Women’s Hospital in Kathmandu advocated for training on mental health screening for not just doctors but all healthcare workers like nurses, midwives, and paramedics, recognizing their crucial roles in early detection and intervention of mental health issues like depression and anxiety.332 This initiative is crucial given the concerning findings from a National Statistics Office report on maternal mortality published in 2023, which revealed that 6% of maternal deaths were due to

self-harm, with many occurring during pregnancy.333 This initiative has shown progress with MoHP starting outpatient care services along with inpatient screening for mental health at the maternity hospital and also successfully diagnosing a new mother with postnatal depression after her baby was admitted to the neonatal intensive care unit.334 Similarly, to address mental health issues in children and adolescents, the government has planned to train around 150 health workers within FY 2024/25 AD (FY 2080/81 BS).335 This decision stems from growing concerns over the increasing rates of mental health issues among younger populations.336 These screenings aim to identify mental health conditions early, enabling timely and effective interventions that could significantly improve the long-term health outcomes for these groups.

Outlook Nepal is increasingly leveraging technology to enhance health services, as exemplified by B&B Hospital’s adoption of a surgical robotic system and the government’s launch of the Safe Delivery App for maternal health. With Nepal’s expanding technology sector, these innovations pave the way for greater collaborations in healthcare, which can enhance patient care and, if implemented inclusively, can help bridge healthcare gaps. Additionally, besides the use of technology, mental health trainings to medical professionals working with vulnerable demographics is a step towards ensuring more compassionate and informed care for better health outcomes. This progress is timely, as recent quarters have seen a rising incidence of mental health issues, underscoring the importance of continued advancements in this sector.

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However, the Nepali health sector continues to grapple with fundamental challenges such as gaps in implementation and monitoring, which has contributed to the annual surge in cholera and dengue cases. The persistence of these endemic infections coupled with recent concerns about vaccination gaps — underscored by the discovery of a Type-3 poliovirus strain in Kathmandu's sewage — necessitates a proactive approach to healthcare investments which includes targeted research and development, and robust surveillance systems. For example, improving waste management and drainage systems to prevent endemic outbreaks, along with effective risk mapping and outbreak prediction, could be key initial steps to help mitigate the current situation and prevent future health crises.

DEMOGRAPHIC DIVIDEND IN THE HEALTH SECTOR Balancing Demographic Dividend and Fertility Nepal is currently experiencing a gradual decline in fertility rates, from 2.5 in 2011 to 2.1 in 2022, driven by factors like outmigration, rising living costs, and increased use of family planning.337 As the proportion of the dependent population decreases, Nepal is poised to experience a demographic shift, with a higher proportion of people entering the working age. This demographic dividend is expected to peak in 2051, with 69.4% of the population being of working age.338 While this trend may bring economic opportunities as more of the population enters the workforce, the ongoing decline could eventually lead to an aging population and a growing proportion of dependents. To counter this, it is important to strategically target investments to benefit young people and strengthen social security nets.

It is important to design socio-economic initiatives that address the various factors discouraging couples from having children, focusing not just on financial incentives but also on work-life balance and career continuity, especially for women.339 Since the bulk of caregiving responsibilities, which are generally unpaid or underpaid, traditionally fall on women, it is crucial to formulate gender-sensitive policies that address the disproportionate burden of being the primary care-giver and its economic implications.340 Failure to do so in a timely manner risks exacerbating the decline in fertility, as women may find it increasingly difficult to reconcile their social, financial and professional goals with the demands of child-rearing.

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Information and Communication Technology This quarter, Nepal’s ICT sector has shown significant digital growth, with internet penetration exceeding 144%. The government, through the revised Digital Nepal Framework, has set an ambitious target of exporting NPR 30 billion (USD 225 million) worth of IT services to drive job creation and economic transformation. This goal is set looking at the estimated GDP of 4.9% for FY 2023/24 AD (2080/81 BS). However, achieving this potential growth is challenging due to issues such as telecommunication service disruptions, a rise in cybercrimes, and operating system outages, underscoring the urgent need for improved digital infrastructure.. This can be exemplified

by Ncell’s, a leading mobile service provider in Nepal’s, operational disruptions on August 12 due to technical issues.

Figure 11. Market Share of Telephone Operators (based on SIM card subscriptions) Source: Nepal Telecommunications Authority, Telecommunication Indicators, Chaitra 2080 (March 14 to April 12, 2024)351

FACTSHEET Indicators Number of fixed phone users341

354,070

Number of smartphone users342

34.87 million

Broadband internet subscriptions343

42.34 million

Number of Internet Service Providers344

12.96 million

Internet penetration (based on subscription) (March 14– April 12, 2024) 345

144.56%

Number of transactions from e-wallets (May- June 2024)346

32.5 million

Total amount transacted through e-wallets (May- June 2024)347

NPR 29.35 billion (USD 219.9 million)

Number of transactions from QR-based payments (May- June 2024)348

19.8 million

Total amount of QR-based payments (May-June-July 2024)349

NPR 53.88 billion (USD 403.6 million)

ICT goods import (based on data of the first eleven months of FY 2023/24 AD (2080/81 BS) 350

NPR 71.94 billion (USD 539.11 million)

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Figure 12. Market Share of Internet Service Providers (ISPs) in Nepal Source: Nepal Telecommunications Authority, Telecommunication Indicators, Chaitra 2080 (March 14 to April 12, 2024352

Figure 13. Broadband Service Technologies and User Distribution in Nepal Telecom Services Source: Nepal Telecommunications Authority, Telecommunication Indicators, Chaitra 2080 (March 14 to April 12, 2024353

KEY DEVELOPMENTS Ncell Confronts Double Trouble: Service Halt and License Renewal Delays Ncell faced multiple challenges that put its operations at risk this quarter. Cellphone users in Nepal encountered problems accessing Ncell services on the afternoon of August 12, 2024.354 Those on the Ncell network experienced disruptions in phone calls, messages, and internet

services.355 The company was swift in acknowledging the issue, releasing a statement on their Facebook channel on the same day at 3:48 pm, stating that the problem was due to a technical issue and that they were working to resolve it as soon as possible.356 Although the service was restore by the evening, the exact cause for the disruption is still under investigation.357 Ncell must pay NPR 16 billion for the license renewal fee and an

additional NPR 3 billion as a late fee by FY 30 August 2024, or the license will be automatically canceled.358 If the payment is not made within the deadline, the NTA has the authority to revoke Ncell's license.359 Adding to the complexity, the government and the NTA have been cautious about providing any special facilities or exemptions to Ncell, especially as the company that has been operating for two decades and earning significant revenue.360

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According to the law, if Ncell fails to pay the required amount within the stipulated time, all of Ncell's assets could be transferred to government ownership after FY Bhadra 2086 BS as per the Telecommunications Act, 2053.361 Adding to Ncell's woes, Tata Communications stopped providing bandwidth via India to Ncell from June 17, 2024, due to Ncell's failure to clear over a billion rupees in unpaid frequency usage fees.362 This failure led the NTA to withhold the facility for foreign currency exchange needed for paying the Indian company.363 Although Ncell has made alternative arrangements to ensure continued internet services, the costs for other bandwidth sources are rising.364 Ncell officials have indicated that the issue is unrelated to ongoing court cases but hinges on overdue payments for frequencies purchased through auction.365 Nepal’s Cyber Bureau Warns Public of Increasing Cyber Crime On August 18, 2024, the Cyber Bureau of Nepal issued a public notice warning of the rising incidence of cybercrime on digital platforms.366 This warning followed the data from Nepal’s Cyber Bureau highlighting a dramatic increase in cybercrime during the fiscal year FY 2023/24 AD (2080/81 BS), with cases more than doubling from 9,013 to 19,730.367 The surge underscores Nepal's lack of preparedness to address escalating cyber threats, with hacking and online fraud being the most prevalent crimes, while the Cyber Bureau remains

critically under-resourced, lacking updated tools and sufficient personnel despite the growing number of cases. 368 The Bureau has urged for updated legislation, better training, and advanced technology to safeguard the country's digital security.369 Digital Nepal Conclave 2024 Discusses Amendment to the Digital Nepal Framework The Digital Nepal Conclave 2024, convened by the ICT Foundation Nepal, took place on July 7, 2024, outlining ambitious plans to position Nepal as an ICT hub.370 The initiative aims to export IT services worth NPR 30 billion (USD 225 million) within the next decade and create 1.5 million jobs in the sector.371 Of these, 500,000 jobs are expected to be directly generated at IT workstations across the country, while an additional one million jobs will be created indirectly.372 Digital Nepal Conclave 2024 served as a continuation of discussions to amend the Ministry of Communication and Information Technology’s Digital Nepal Framework, which serves as a blueprint for guiding digital initiatives in Nepal.373 It sought to foster effective dialogue among various stakeholders with expertise in digitalization and development.374 The event featured panel sessions, thematic presentations, talks, and audience feedback to integrate digital advancements into Nepal's growth strategy.375 Microsoft Outage Impacts Nepal On July 31, 2024, a widespread Microsoft outage disrupted daily

activities globally, affecting 8.5 billion Windows devices of both individuals and businesses.376 The outage impacted several of Microsoft's core services, including Azure, Office 365, and Teams.377 In Nepal as well, Nepal Clearing House Limited (NCHL), which facilitates payments and settlements, reported issues with some of its systems, while other users subscribed to these services expressed frustration over the inability to access them.378 The root cause of the outage was traced to a faulty update from CrowdStrike, designed to enhance cybersecurity by preventing potential attacks.379 CrowdStrike is a cybersecurity company that protects organization systems and data from hackers and online intruders.380 Despite efforts to roll back the problematic update, computers that had already installed it continued to experience issues.381

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Outlook In the upcoming quarter, Nepal, like many other countries, may benefit from prioritizing the enhancement of its cybersecurity infrastructure, especially in light of recent incidents such as the Microsoft outage and the surge in cybercrime. To address these challenges, it might be helpful for the government to consider investing in advanced cybersecurity tools, raising public awareness, and updating legislation to better respond to emerging threats. Additionally, as Nepal seeks to establish itself as an ICT hub, there are significant opportunities for job creation and economic growth. This effort could be supported by focusing on skill development and upgrading infrastructure.

DEMOGRAPHIC DIVIDEND IN THE INFORMATION AND COMMUNICATION TECHNOLOGY SECTOR Youth-Driven Growth: Nepal’s ICT Services Nepal’s ICT sector has surged, driven by its young population, with 84% of IT service freelancers aged 20-29. This demographic dividend has fueled the growth of tech startups, freelancing, and innovation.382 Notable companies like F1Soft International and Fusemachines exemplify the trend.

F1Soft International, founded in 2004 by young entrepreneurs, has revolutionized Nepal’s fintech sector.383 Its subsidiary, eSewa, the first online payment gateway in Nepal, launched in 2009, now serves over 8 million registered users, showing younger generation’s adoption of digital finance.384 Similarly, Fusemachines, founded by a young Nepali entrepreneur, made waves in AI, becoming the first Nepali-origin company to be listed on the New York Stock Exchange (NASDAQ).385 Through partnerships with organizations like Daayitwa, it enhances youth engagement in AI and digital transformation, shaping the future of tech in Nepal.386 Nepal can take valuable lessons from India's success in STEM education, the Digital India initiative, and IT hubs like Bangalore. Digital India, launched in 2015, aims to digitally empower the nation and drive economic growth, contributing an estimated USD 355-435 billion to GDP by 2025. India’s technology sector, generating over USD 250 billion in revenue and employing 5.43 million people, has grown rapidly, with Bangalore emerging as a global tech hub, hosting 30% of Indian startups and attracting venture capital. Nepal, with its youthful demographics’ vigor, can adopt similar strategies to boost its ICT sector for innovation and economic growth.

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Infrastructure and Real Estate From June to August Nepal made significant quarter in infrastructure development compared to the previous qauarter. For instance, Government of Nepal and Millenium Challenge Account Nepal (MCA-N) signed contracts for all three substations as compared to signing only one contract in the last quarter. Additionally, in terms of infrastructural planning, the beginning of primary work at the Dodhara-Chandani Dry Port were notable highlights during this period. Apart from this, the completion of the third largest substation in Nepal based on Gas Insulated Switchgear at Hetauda, the resumed construction of the Gautam Buddha International Cricket Stadium, and the breakthrough of the last tunnel of the Kathmandu-Terai Expressway.

KEY DEVELOPMENTS Millenium Challenge AccountNepal Signs Contracts for all Three Substations The Millennium Challenge Corporation (MCC) Nepal Compact is a USD 500 million (NPR 66.73 billion) infrastructural development partnership between the U.S. government’s Millennium Challenge Corporation and the Government of Nepal. The compact aims to ensure electricity accessibility by adding power to the national economy and creating jobs as well as reducing poverty.387 MCA Nepal signed the contract for the construction of all three substations of 400 kVs under this commitment.388 The projects have to be completed

within a year following the launch of the compact.389 As per the agreement, the three substations will be constructed in Nawalparasi, Nuwakot, and Tanahun districts.390 The Damauli station will work as a critical point of connection for power flow with the Ratamate, Lekhnath, and New Butwal substations.391

Dodhara-Chandani Dry Port Construction Work Begins Primary work for the construction of the Dodhara-Chandani Dry Port have begun in June 2024.

With the target of beginning construction work in the next FY 2024/25 AD (FY 2081/82 BS), the technical team has been mobilized to prepare an environmental management

FACTSHEET

FY 2023/24 AD (2081/82 BS) up to August, 2024

Total Length of Road

34,267 km

New Roads Constructed

28 km

Total Number of Bridges Constructed

67

Construction of Railways

62 km

plan based on the Environmental Assessment.392 The construction of the dry port will stretch over 25 hectares in the DodharaChandani Municipality in Kanchanpur as per the detailed project report published by the Ministry of Industry, Commerce, and Supplies.393 The dry port environmental management a plan prepared by a technical team in collaboration with Shuklaphanta National Park aimed to reduce tree felling and land use.394 Construction Resumes at Gautam Buddha International Cricket Stadium The construction of the Gautam Buddha International Cricket Stadium, halted in March 2020, resumed on August 11, 2024.395

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Originally led by the famous comedy-duo Sitaram Kattel and Kunjana Ghimire, through their institution, the Dhurmus-Suntali Foundation, the project was paused for a significant amount of time citing lack of funds.396 The ownership of the project was then transitioned to the Bharatpur Metropolitan City, which will fund 30% of the project and seek 70% of funding from the Bagmati Provincial Government.397 The construction process has been contractually implemented by Himalayan-Kalinchowk-BBI JV, a construction company that is set to complete the project for NPR 682.64 million (USD 5.12 million)

by January 2026.398 Transmission Networks Expand to 6,507 circuit km According to the Nepal Electricity Authority’s (NEA’s) report for FY 2080/81 BS (FY 2023/24 AD), there has been a notable rise in the installation of transmission lines across the country.399 With lines now covering a total of 6507 circuit km, the length of transmission lines has doubled as compared to FY 2015/16 AD (2072/73 BS).400 The current production capacity of the country is 3,157 Megawatt (MW) with an additional production of 2,300 MW on the line.401 With the increase in transmission lines, Nepal aims to facilitate the export up to 20,000 MW of electricity by 2035.402 Similarly, the capacity of grid substations in the country has reached 13,050 MegaVolt Amperes, which is six-fold the capacity as compared to FY 2015/16 AD (2072/73 BS).403

Nepal Partners with the World Bank on USD 100 Million Project to Enhance Provincial and Local Roads On August 5, 2024, the Government of Nepal signed an agreement with the World Bank seeking the financing of USD 100 million (NPR 13.35 billion) in concessional loans from the International Development Association (IDA) – the Bank’s fund for the poorest countries.404 The agreement seeks to improve the connectivity, efficiency, resilience, and safety of Nepal’s provincial and local road network and strengthen the government’s capacity to manage it.405 The partnership will undertake the ambitious Provincial and Local Roads Improvement Program (PLRIP)-Phase 1 of the government, aiming to construct and maintain around 3,000 km of all-weather resilient and safe roads and bridges in three of Nepal’s seven provinces and four local areas.406 Overall, the initiative aims to strengthen the institutional, managerial and technical capacities of provincial and local governments to plan, design, construct, and maintain road and bridge infrastructure alongside improving service delivery.407 Inauguration of Nepal’s Third Largest Substation On June 14, 2024, Former Prime Minister Pushpa Kamal Dahal unveiled Nepal’s third-largest substation of 400kV based on Gas-Insulated Systems (GIS) in Thanabharyang-11, Hetauda submetropolitan city, Makwanpur, in a ceremony organized by

the Nepal Electricity Authority (NEA).408 Construction of this substation marks the completion of all three 400kV substations – Inaruwa, Hetauda, and Dhalkebar – started under the Nepal Electric Development Decade invested in jointly by NEA and the Government of Nepal, with further support through concessional loans from the World Bank.409 The 400kV substation, along with two others of 220kV and 132kV capacities, was constructed as part of the Nepal-India Electricity Transmission project.410 These additions have increased the infrastructure's capacity to transmit 4,000 MW of electricity, bolstering Nepal's domestic power supply and enhancing electricity trade with India.411 The substation will also be connected to the 400 kV double circuit transmission line from Ratamate, Nuwakot under the US-funded Millennium Challenge Corporation.412 Four Tunnels of the Kathmandu-Terai Expressway Witness Breakthroughs The Kathmandu-Terai Expressway is a national pride project that started in August 2017 and is expected to be completed in 2027. By August 5, 2024, four tunnels of the Kathmandu-Terai Expressway achieved breakthroughs.413 The breakthrough in the 1,691 meters Dhedre Tunnel in Makwanpur marks the completion of fourth tunnel in the expressway marks the completion of 35.38% of the Expressway project.414 The first tunnel breakthrough of this expressway was achieved on

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May 17, 2024, at the Lendanda site in Makwanpur.415 Similarly, the second tunnel underwent a breakthrough on May 24, 2024, at Dhedre Tunnel Site extending into Bakariya Rural Municipality.416 The third tunnel achieved a breakthrough at Lendada in Bakaiya and Gadhi Rural Municipalities of Makwanpur district on July 4, 2024.417

Enhanced Transactions

Real

Estate

This quarter, the real estate sector witnessed a slight improvement as compared to the last FY 2079/80 BS (2022/23 AD). This was noticeable by the proportion of the transactions undertaken throughout the country in the sector alongside the capital gain tax, collected by the Department

of Land Management (DOLM).

With over 46,000 real estate transactions undertaken in the first month of this fiscal year only in the Kathmandu Valley, the transactions have portrayed to an increase in real estate transactions.418

Outlook The progress anticipated in infrastructural projects through partnerships for the Millennium Challenge Account and Provincial and Local Roads Improvement Programs is expected to endorse the government’s commitment to enhancing prospects for infrastructural development using partnership models, particularly in overall infrastructural growth. Additionally, the expansion of transmission networks and the completion of key milestones in the Kathmandu-Terai Madhesh Expressway will potentially improve connectivity and advance infrastructural development.

Furthermore, the initiation of national projects like Dodhara-Chandani dry port and the resumption of construction of the Gautam Buddha International Cricket Stadium is expected to be boost infrastructural development in the coming years. However, the government must ensure timely completion of these major infrastructural projects.

DEMOGRAPHIC DIVIDEND IN THE INFRASTRUCTURE AND REAL ESTATE China’s Demographic Dividend and Infrastructural Development China is a successful example of a country that utilized its demographic dividend in promoting infrastructural development. The growing share of the working-age population in China, especially in the past forty years, increased labor supply in the market.419 Consequently, China made significant progress in the economic landscape, particularly in manufacturing, through the development of factories that led to its leading position in the export market.420 This consequently led to greater demands, particularly at the ends of urban infrastructure, leading to labor migration from rural to urban fronts during China’s globalization in the 1980s421 This also led to the mechanization of agriculture and promotion of urban centers, through urban infrastructural development.422 As a result, over the years, China’s urbanization rate has been 64% and is expected to reach 80% in 2050.423 The urbanization and physical infrastructural development were attributed to the demographic dividend. This shift from rural to urban areas raised demand for improved infrastructure in cities. Therefore, countries can leverage their young workforce for labor-intensive infrastructure and real estate projects, boosting connectivity and economic growth.

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Tourism

FACTSHEET

Similar to the past quarter, this review period, spanning from June 1, 2024 to August 31, 2024, saw positive developments in the Nepali tourism sector. Despite the off-season, which led to a decrease in overall tourist arrivals compared to the previous quarter, June still saw a record-breaking number of tourists despite the ongoing monsoons. To sustain this momentum, several events were organized, including the International Tourism Fair and promotional activities in China and Dhaka, all aimed at boosting Nepal's tourism sector. Additionally, to add to the plans and policies introduced in the budget released in the previous quarter, the government promulgated multiple initiatives including: subsidies to promote the usage of the Bhairahawa and Pokhara airports; the opening of the Kakarvitta border to third-country tourists; and the start of integrated check-in services for Indian tourists at the Belahiya border.

TOURIST ARRIVALS Record-High Tourists Arrivals Documented in FY 2023/24 AD (2080/81 BS) According to the ‘Current Macroeconomic and Financial Situation of Nepal’ annual data published by the Nepal Rastra Bank (NRB) for FY 2023/24 AD (2080/81 BS), Nepal recorded 1.1 million tourists in the past fiscal year, as compared to 862,992 tourists in FY 2022/23 AD (2079/80 BS).431 This is the first time since the onset of the COVID-19 pandemic in 2020 that tourist numbers have surpassed the one-million milestone. The surge in visitors also led to a record-high income for the tourism sector. In the first 11 months of FY 2023/24 AD (2080/81 BS), the central

bank reported earnings of NPR 76.55 billion (USD 573.5 million) - from 1.2 million tourists.432 The amount surpasses the FY 2018/19 AD (2075/76 BS) record of NPR 75.37 billion (USD 564.7 million). The increased revenue was partly attributed to the change in exchange rate, which made Nepal a more affordable travel destination.433 Additionally, the rise of tourists was also ascribed to the increase in chain hotels, easier payment systems such as that with India, and a greater coverage of Nepal’s tourism potential in international publications such as the New York Times.434 Tourist Influx Persists Despite Off-Season As per the annual data released by the NRB for FY 2023/24 AD

No. of tourist arrivals (June 2024 – August 2024)424

214,054 % of FDI commitment in the tourism sector (up to mid-June of the FY 2023/24 AD)425

49% The average length of stay of a tourist (2023)426

13.2 days Total revenue from tourism (2023)427

USD 548 million (NPR 73 billion) Average spending per tourist per day (2023)428

USD 41 (NPR 5,474.3) Number of registered hotels (star) (2023)429

182 Number of registered travel agencies (2023)430

4,845

(2080/81 BS), Nepal welcomed a total of 76,736 and 64,599 tourists in the off-season months of June and July 2024, While the respectively.435 numbers for June 2024 increased by only 6.21% as compared to June 2023, it surpassed the record of 74,883 tourists in June 2019.436 Meanwhile, the arrivals in July 2024 increased by 11.91% as

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compared to July 2023 but they fell short of the record 73,281 arrivals set in July 2018.437 These two months typically record the lowest tourist numbers in a year due monsoon-related natural disasters, such as floods and landslides, which complicate travel across the country. The fact that, despite this, tourist numbers are increasing and crossing pre-pandemic levels has led to experts in the field being hopeful for the future.

Increased Tourist Inflow in Chitwan National Park Raises Conservation Concerns In FY 2023/24 AD (2080/81 BS), Chitwan National Park recorded the arrival of 306,837 tourists – a 2.48% increase as compared to FY 2022/23 AD (2079/80 BS).438 Of this, nearly 58% were domestic tourists.439 This rise in visitors was positively attributed by some to the Bharatpur Metropolitan City’s initiative, ‘Visit Bharatpur 2024’.440 Home to various endangered species, tigers, one-horned rhinos, elephants, gharials, and birds, Chitwan National Park was Nepal’s first national park, established in 1973.

Since its establishment, locals in the area have been highly dependent on the tourism that it attracts for their income and survival. Thus, the rise in tourist numbers has been considered a boon to the community, especially after the tourism drought that occurred due to the pandemic. However, the increase has raised grave concerns regarding the conservation of the many animals that live within the park. Conservationists worry that if tourist numbers keep rising without proper management, the protected area would be

at risk of habitat degradation, biodiversity loss, disease transmission, increased humanwildlife interaction and more.

PROGRAMS, EVENTS, AND CAMPAIGNS Kathmandu Hosts International Tourism Fair 2024 From June 14 to 15, 2024, Summit Events, with support from the Nepal Tourism Board and Kathmandu Metropolitan City (KMC) hosted the Nepal International Tourism Fair at the Bhrikutimandap Exhibition Hall.441 With the aim of promoting Nepali tourism internationally, the event included 128 stalls featuring a wide range of tourism offerings, ranging from adventure sports to cultural heritage, as well as group discussions on tourism promotion.442 Additionally, it welcomed 150 hosted buyers from 16 countries, including India and Malaysia.443 The fair, inaugurated by Former Minister for Culture, Tourism, and Civil Aviation Hit Bahadur Tamang, and addressed by KMC’s Deputy Mayor Sunita Dangol and National Tourism Board (NTB) Vice Chair Ram Prasad Sapkota, was considered to be a success with over 3,500 visitors.444 Following this, the event organizers announced plans of the next edition of the fair on May 30 and 31, 2025.

NTB, HAN Hosts Events in China and Bangladesh to Promote Tourism in Nepal This past quarter, multiple events were held in neighboring countries to promote tourism in Nepal. On June 6, 2024, the Consulate General of Nepal in Chengdu, China, along with the

NTB and the Hotel Association of Nepal (HAN) jointly organized the ‘Nepal Promotion and Sales Mission 2024’ in an event in the Jinjiang Hotel in Chengdu.445 With the aim of attracting more Chinese tourists to Nepal and providing networking opportunities to Nepali hotel entrepreneurs, the event witnessed the participation of more than 220 people including Chinese government stakeholders, the China Association in Travel Services, as well as Nepali delegations of hoteliers. A major highlight of the event was the signing of a Memorandum of Understanding (MoU) between HAN and the Sichuan Association of Travel Agencies on cooperation and exchanges.

Similarly, in Dhaka on July 5, 2024, the Nepali Embassy in Bangladesh, NTB, and HAN organized the ‘Nepal Tourism Promotion Program’ under the theme “Next Door Nepal: Your Ultimate Travel Destination”.446 This event was also a businessto-business networking session and was attended by over 150 participants including government officials, travel agencies, tour operators, hotels, airlines, and more. During the event, HAN signed five separate MoUs on cooperation and collaboration with multiple Bangladeshi associations working in the tourism field.

Additionally, the Bangladeshi Mount Everest summiteers Nishat Mazumder and Babar Ali were also facilitated at the function. Notably, these events come amidst concerns that the government’s plan to celebrate 2023-33 AD as the tourism decade is unimplemented,

NEFPORT ISSUE 57 – JULY 2024

with some stakeholders even suggesting that the plan be postponed by two years to begin in 2025.447

POLICIES AND REGULATIONS Government to Provide Subsidies to Encourage Full Operation of Bhairahawa and Pokhara Airport According to an action plan by the Ministry of Culture, Tourism and Civil Aviation approved by the Council of Ministers on August 12, 2024, the Government of Nepal is set to introduce a package with multiple facilities and discounts to encourage flight operators to operate in the Gautam Buddha International Airport (GBIA) in Bhairahawa and the Pokhara Regional International Airport (PRIA).448 This plan was prepared according to suggestions from a working group created under the former Pushpa Kamal Dahalled government. As per the plan, the fees charged for landing, parking, and navigation services for international airlines will be waived for five years at both airports.

Additionally, Nepal Oil Corporation will provide a discount on aviation fuel for international flights from these airports, while the government will provide concessions on tickets and ground handling till August 2026.449 Further, new foreigners arriving by flights landing in these airports will be given full exemption on visa fees. Lastly, the government also decided to provide exemptions on VAT and other taxes. This decision comes in light of the fact that, despite its inauguration two years ago in 2022, GBIA has not yet

hosted international flights for a significant period. Meanwhile, PRIA has never operated any international commercial flights, except for specifically chartered ones.

Third-Country Tourists Enter through Kakarvitta Border after Four-Year Closure On August 1, 2024, the Kakarvitta border, a transit point along the Nepal-India border in Jhapa district, was opened to thirdcountry tourists after four years.450 The Government of India had initially imposed restrictions on December 20, 2021 barring the entry or exit of third-country tourists across the border citing health safety concerns.451 According to multiple sources, the decision was attributed to Home Minister Ramesh Lekhak’s push to open the border by ensuring health vigilance in an agreement with India.452 Following the success of Home Minister Lekhak’s initiative, just 12 days after the opening of the border point to external tourists, 78 tourists from third countries had crossed the border to go to India while 114 tourists had entered Nepal. This move has particularly led to some relief on the part of tourism entrepreneurs who has been concerned over the extended closure of the border point.

Integrated Service Checkpoint Initiated for Indian Tourists in Belahiya The district administration at Belahiya – the southwest border point between Nepal and India – launched an integrated service checkpoint for Indian tourists on July 10, 2024.453 With this initiative,

Indian tourists, who don’t require passports to enter Nepal and can drive across the open border, will now not be subjected to lengthy customs queues to enter Nepal.

According to the newly initiated system, Nepal Police as well as the customs officials will jointly conduct security checks in order to issue a security clearance card for such tourists.454 Previously, Indian tourists driving across the border would have to go through multiple repeated checks. With the new checkpoint, all checks will be conducted at the same time, thereby greatly reducing the hassle they had to face.

This is particularly important as Belahiya is the gateway to Lumbini and receives nearly 80% of overland foreign tourists.455

KEY DEVELOPMENTS China Announces 2025 as Visit Nepal Year During a meeting on June 25, 2024, between the Ministries of Foreign Affairs of Nepal and China, Chinese Vice Minister of Foreign Affairs Sun Weidong announced that 2025 will be promoted as Visit Nepal Year.456 According to the press release issued following the meeting between the Chinese delegation led by Vice Minister Weidong and the Nepali delegation led by Foreign Secretary Sewa Lamsal, the move comes considering 2025 marking the 70th anniversary of the establishment of diplomatic relations between the two countries. This recent initiative has mostly been seen as yet another move in China’s tourism diplomacy, similar to its decision of granting Nepalis visafree status on April 28, 2024.457

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Multiple Nepali Hotels Gain International Certifications This past quarter witnessed multiple hotels in Nepal gaining international certifications to attract a greater volume and quality of tourists. One of them is Barahi Jungle Lodge, which became Nepal’s first hotel to receive a certification under the World Travel and Tourism Council (WTTC) Hotel Sustainability Basics Program.458 The certificate, acquired on August 17, recognizes hotels that excel in sustainability by implementing certain criteria related to energy efficiency,

planet-friendly operations, and community support.459 Barahi Jungle Lodge gained the certification through its efforts to reduce energy consumption, eliminate of single-use plastics, and the actively support local communities.460 With this certificate, the lodge will be able to benefit from better positioning, networking, benchmarking, and promotion opportunities.

Similarly, on June 14, 2024, Varnabas Museum Hotel in Kathmandu became the first Nepali hotel to join the Small Luxury Hotels of the World

(SLH) collection.461 Following the personal visit, verification, and vetting of the hotel by the SLH secretariat, Varnabas became part of this network that hosts 570 hotels in more than 90 countries – all “anti-chain and anti-same.”462 With this move, the hotel can now attract thousands of SLH loyalty club members who can, in turn, gain access to exclusive perks and rewards by staying at Varnabas.463

Outlook As mentioned in the introduction, this past quarter saw multiple developments to promote tourism in Nepal – be it through the events conducted or the policies promulgated by the government or China’s announcement of 2025 as the Visit Nepal Year. However, concerns raised by conservationists regarding Chitwan National Park highlight that this surge in tourism also presents challenges. While tourism is vital for the livelihoods of millions of Nepalis and should be actively encouraged, it is crucial to prioritize the conservation and preservation of Nepal's rich biodiversity and cultural heritage. Attracting high volumes of tourists benefits the economy, but for long-term sustainability, we must explore innovative strategies that enhance the environmental and cultural integrity of our tourism sector in the long-term.

DEMOGRAPHIC DIVIDEND IN THE TOURISM SECTOR Capitalizing on Developed Countries’ Increased Automation of the Tourism Sector Over the past few decades, there has been a massive change in the demographics of developed countries with reproduction rates going well below the population replacement levels despite migration.464 This decline has prompted a major transformation in the tourism sector, where automation has emerged as a potential solution to address the challenges posed by these demographic shifts.465 Already, many hotels across the world such as the Mint House in New York City and Yotel in Singapore have automated multiple parts of their operation including the checkin and check-out process, thereby requiring very little staff to operate.466 Such automation also makes it cheaper for tourists as a whole. Thus, with an increase in automation, tourism in developed countries is moving away from the human touch which is making this human touch a luxury.467 Nepal, with its demographic dividend, can greatly capitalize on this. By emphasizing the human aspect of tourism services, it can better serve high-quality tourists seeking authentic experiences that involve meaningful interactions with locals rather than relying on automated solutions.

4 NEFPORT ISSUE 57 – JULY 2024

Market Review

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DOCKING NEPAL’S ECONOMIC ANALYSIS

Financial Market During the review period, based on annual data of FY 2023/24 AD (2080/81 BS), Nepal's Balance of Payments (BoP) remained at a surplus, which is a significant improvement as compared to the same period in FY 2022/23 AD (2079/80 BS). However, the challenge of slow credit growth to the private sector persisted from the previous quarter, which is evident in the surplus loanable funds accumulated by Banks and Financial Institutions (BFIs). On the other hand, to stimulate economic growth and innovation, the monetary policy for the year was published. The policy seeks to encourage BFIs to increase lending by simplifying loan access to productive sectors and innovative projects. Additionally, Nepal Rastra Bank (NRB) reduced the counter-cyclical buffer to 0%, enabling banks to expand their lending activities.

Third Quarter Performance Analysis of Commercial Banks469 As per the unaudited fourth quarterly results of commercial banks for FY 2023/24 AD (2080/81 BS), the operating profit of commercial banks decreased by 3.56%, while the net profit fell by 6.83% compared to the same period in FY 2022/23 AD (2079/80 BS).

In the fourth quarter of FY 2023/24 AD (2080/81 BS), Nabil Bank had the highest net profit of NPR 7.06 billion (USD 52.91 million), followed by Global IME Bank and Nepal Investment Mega Bank (NIMB) with a net profit of NPR 6.02 billion (USD 45.10 million) and NPR 5.20 billion (USD 38.96 million) respectively.

Additionally, compared to the

same period in FY 2022/23 AD (2079/80 BS), Prime Commercial Bank and Prabhu Bank witnessed a notable increase of 66.77% and 58.60% in their net profits, amounting to NPR 3.77 billion (USD 28.94 million) and NPR 4.48 billion (USD 33.56 million) respectively. On the other hand, Machhapuchchhre Bank registered the lowest net profit of NPR 1.25 billion (USD 9.37 million).

In terms of reserves and surplus, Rastriya Banijya Bank held the highest amount of reserves of NPR 36.78 billion (USD 275.53 million) followed by Nepal Investment Mega Bank (NIMB) and Nabil Bank with NPR 30.57 billion (USD 229.02 million) and NPR 28.65 billion (USD 214.70 million), respectively. In total, eight banks fared better than the reserves and surplus industry

Factsheet468 Consumer Price Index (mid-July 2024)

3.57% Gross Foreign Exchange Reserve (mid-July 2024)

NPR 2.04 trillion (USD 15.27 billion) Buying Exchange Rate per USD (mid-July 2024)

NPR 133.35 Weighted Average 91-day Treasury Bill Rate (mid-July 2024)

3.00% Weighted Average Interbank Transaction Rate (mid-July 2024)

2.99% Weighted Average Deposit Rate (mid-July 2024)

5.77% Weighted Average Lending Rate (mid-July 2024)

9.93% Average Base Rate of Commercial Banks (mid-July 2024)

8.00%

average of NPR 16.05 billion (USD 120.12 million).

Overall, according to the annual data of FY 2023/24 AD (2080/81 BS),

deposits

at

commercial

10,500,152.28

11,767,904.00

14,917,566.92

11,621,357.27

Nepal SBI Bank

Everest Bank

NIC Asia Bank

Machhapuchchhre Bank

10,464,081.00

19,402,575.72

13,581,525.41

18,366,706.00

23,542,490.00

Prime Commercial Bank

Sanima Bank

NMB Bank

Prabhu Bank

18,884,386.08

Agriculture Dev. Bank

15,604,982.06

36,781,948.83

22,384,598.10

11,668,220.00

10,327,056.21

6,740,838.25

379,020,465.83 320,998,563.07

15,637,377.05

Rastriya Banijya Bank

Total

14,694,022.93

Nepal Bank

Public Sector Banks

5,969,676.42

14,200,974.01

Citizens Bank International

13,210,447.04

23,754,556.00

14,089,980.19

36,128,770.00

Global IME Bank

16,288,987.00

14,664,375.69

5,175,696.83

17,555,509.69

12,258,290.00

7,857,513.94

22,439,030.01

8,631,045.00

30,568,127.00

28,653,584.00

Reserve & Surplus (Reserves)

Siddhartha Bank

23,187,155.00

21,656,615.63

Himalayan Bank

26,225,861.34

9,429,454.00

Standard Chartered Bank

Laxmi Sunrise Bank

34,128,595.00

Nepal Investment Mega Bank

Kumari Bank

27,056,997.00

Paid-up Capital (Share Capital)

Nabil Bank

Bank

5,665,481,107.92

243,589,840.86

429,187,763.75

283,083,745.21

305,012,852.00

223,942,592.00

197,197,071.12

211,244,583.57

189,216,730.07

487,462,540.00

241,329,082.02

328,931,512.00

333,111,322.49

157,941,820.25

354,511,846.30

232,316,604.00

175,514,855.97

293,899,590.31

112,483,887.00

403,416,956.00

5,004,274,707.24

199,486,613.57

321,654,940.22

244,548,889.23

289,090,927.00

210,304,687.00

175,643,046.81

174,058,036.67

168,842,139.61

426,325,446.00

223,654,669.69

296,243,475.00

316,047,054.53

154,179,631.82

311,367,922.42

197,929,061.00

150,828,378.99

275,310,993.68

117,500,875.00

354,414,420.00

396,843,499.00

4th QTR

4th QTR

462,085,913.00

FY 22/23

FY 23/24

Deposit

13.21

22.11

33.43

15.76

5.51

6.48

12.27

21.36

12.07

14.34

7.90

11.03

5.40

2.44

13.86

17.37

16.37

6.75

(4.27)

13.83

16.44

% Change

4,350,135,744.07

201,765,881.93

248,911,586.08

197,039,988.47

225,190,159.00

194,338,841.00

159,491,304.92

181,514,113.72

153,329,163.72

369,458,044.00

195,321,030.76

250,365,316.00

273,201,068.59

127,106,705.17

272,099,342.71

179,647,698.00

125,991,030.61

232,718,879.39

81,142,342.00

307,525,649.00

373,977,599.00

4th QTR

FY 23/24

4,120,251,894.51

171,699,191.79

227,308,982.42

178,888,687.24

238,210,516.00

189,323,077.00

145,397,936.59

154,475,391.78

140,401,519.47

356,394,700.00

184,045,677.92

253,695,732.00

270,573,596.16

126,465,910.40

262,098,740.71

160,210,055.00

116,723,024.49

230,126,786.54

77,857,560.00

303,655,955.00

332,698,854.00

4th QTR

FY 22/23

Loans and Advances

5.58

17.51

9.50

10.15

(5.47)

2.65

9.69

17.50

9.21

3.67

6.13

(1.31)

0.97

0.51

3.82

12.13

7.94

1.13

4.22

1.27

12.41

% Change

(in 000)

97,809,566.37

5,294,601.89

5,207,478.82

2,809,117.38

7,055,045.00

3,506,078.00

3,441,235.46

5,694,932.87

2,077,811.44

8,743,811.00

4,369,102.34

4,454,981.00

3,903,699.44

1,952,735.51

3,018,161.17

5,603,292.00

2,852,205.95

5,161,712.10

4,746,506.00

8,070,208.00

9,846,851.00

4th QTR

FY 23/24

101,423,649.23

4,544,214.35

4,962,248.72

4,408,281.66

4,207,705.00

4,944,173.00

3,780,656.03

3,406,739.72

3,072,700.72

10,368,893.00

4,685,792.49

3,422,754.00

3,032,133.17

2,698,335.35

6,827,332.94

4,847,051.00

3,197,276.27

5,491,193.81

5,048,400.00

7,461,758.00

11,016,010.00

4th QTR

FY 22/23

(3.56)

16.51

4.94

(36.28)

67.67

(29.09)

(8.98)

67.17

(32.38)

(15.67)

(6.76)

30.16

28.74

(27.63)

(55.79)

15.60

(10.79)

(6.00)

(5.98)

8.15

(10.61)

% Change

Operating Profit (Up to this Quarter)

Q4 Analysis of Commercial Banks (2023-24)

3,099,337.08

3,595,127.81

3,411,526.80

2,825,249.00

3,410,499.00

2,619,216.64

2,263,154.09

2,214,425.23

7,253,455.00

3,190,111.74

2,261,889.00

1,957,107.46

1,851,156.89

4,651,338.48

3,393,154.00

2,241,642.86

3,266,167.78

3,525,417.00

4,296,622.00

7,527,149.00

4th QTR

FY 22/23

64,153,092.68 68,853,746.86

3,655,662.64

3,398,212.61

1,656,831.83

4,480,810.00

2,336,599.00

2,381,941.43

3,774,302.81

1,342,466.56

6,016,216.00

3,015,535.65

3,034,539.00

2,308,212.41

1,250,167.53

1,381,869.72

3,700,648.00

2,013,721.35

2,838,049.14

3,308,954.00

5,198,320.00

7,060,033.00

4th QTR

FY 23/24

(6.83)

17.95

(5.48)

(51.43)

58.60

(31.49)

(9.06)

66.77

(39.38)

(17.06)

(5.47)

34.16

17.94

(32.47)

(70.29)

9.06

(10.17)

(13.11)

(6.14)

20.99

(6.21)

% Change

Net Profit (Profit of the Period)

3.54

3.44

3.65

3.28

4.78

3.27

1.73

4.67

4.07

4.37

2.22

4.72

4.95

3.63

3.41

0.71

2.00

4.91

2.14

4.95

3.85

2.84

2.48

3.77

2.85

4.16

2.72

1.30

4.23

3.19

3.08

2.01

2.81

4.77

2.12

0.80

0.79

2.43

4.57

1.17

4.35

3.20

6.09

5.88

4.89

5.36

5.77

7.31

6.13

7.03

6.32

6.21

5.95

6.11

6.74

5.87

6.96

5.64

7.12

6.86

3.84

5.87

5.86

7.83

7.51

6.11

6.97

7.83

7.34

8.27

8.67

8.34

8.18

7.82

8.38

8.50

8.07

7.67

7.75

8.20

8.61

6.91

7.71

7.81

4th QTR

(1.75)

(1.63)

(1.22)

(1.61)

(2.06)

(0.03)

(2.14)

(1.64)

(2.02)

(1.97)

(1.87)

(2.27)

(1.76)

(2.20)

(0.71)

(2.11)

(1.08)

(1.75)

(3.07)

(1.84)

(1.95)

4th QTR

4th QTR

4th QTR

% FY FY FY Change 22/23 23/24 22/23

Cost of Fund (LCY)

FY 23/24

NPL (%)

8.08

8.09

6.71

7.97

8.02

8.42

7.83

8.49

8.26

8.09

8.11

8.52

8.89

8.26

9.19

7.29

8.30

9.08

6.60

7.82

7.63

4th QTR

FY 23/24

Base Rate (%)

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DOCKING NEPAL’S ECONOMIC ANALYSIS

banks grew by 13.21%, compared to the corresponding period in FY 2022/23 AD (2079/80 BS). The highest deposits were mobilized by Global IME Bank, Nabil Bank and Rastriya Banijya Bank with NPR 487.46 billion (USD 3.65 billion), NPR 462.09 billion (USD 3.46 billion), and NPR 429.19 billion (USD 3.32 billion), respectively. Whereas, Standard Chartered Bank recorded the lowest deposits from customers, totalling to only NPR 112.48 billion (USD 842.18 million). Contrarily, compared to the same period in the previous FY 2022/23 AD (2079/80 BS), Rastriya Banijya Bank recorded the highest increase in deposits in commercial banks of 33.43% according to the annual data of FY 2023/24 AD (2080/81 BS), amounting to NPR 429.19 billion (USD 3.22 million).

In terms of credit growth, the total credit growth of commercial banks increased by 5.58%, compared to the same period in the previous FY 2022/23 AD (2079/80 BS). Among the

Figure 14. Deposit Mix at Banks and Financial Institutions by mid-July (Percentage Share) Source: Current Macroeconomic and Financial Situation based on annual data, Nepal Rastra Bank, FY 2023/24 AD (2080/81 BS)471

commercial banks, Nabil Bank held the highest loan and advances portfolio of NPR 373.98 billion (USD 2.80 billion) followed

by Global IME Bank and Nepal Investment Mega Bank (NIMB) at NPR 369.46 billion (USD 2.77 billion) and NPR 307.53 billion (USD 2.30 billion) respectively.

Meanwhile, Standard Chartered Bank had the lowest credit disbursement of NPR 81.14 billion (USD 607.37 million).

Bank had the lowest base rate at 6.60%.

Lastly, the average percentage of Non-Performing Loans (NPLs) of commercial banks stood at 3.54% as compared to 2.84% in the same period in FY 2022/23 AD (2079/80 BS). Furthermore, the average cost of funds was 6.09% against the 7.83% in the same period in the previous financial year. Similarly, the average base rate stood at 8.08%, during the review period, as compared to the 10.14% in the same period in FY 2022/23 AD (2079/80 BS). The highest base rate was that of NIC Asia Bank at 9.19% followed by Himalayan Bank at 9.08%. On the other hand, Standard Chartered

Deposit and Credit Mobilization

KEY INDICATORS Some of the key macroeconomic indicators as per the Current Macroeconomic and Financial Situation report published by NRB are highlighted below.470 These are based on the annual data of FY 2023/24 AD (2080/81 BS) ending in mid-July of 2024 AD.

The deposits at BFIs grew by 13% in the review period as compared to 12.3% in the same period last FY 2022/23 AD (2079/80 BS). Among the total number of deposits, demand deposits, saving deposits and fixed deposits accounted for 5.8%, 30.3%, and 56.4% respectively. These proportions have experienced a slight change compared to a year ago when the respective shares were 7.7%, 26.6%, and 58.9%.

NEFPORT ISSUE 57 – JULY 2024

Similarly, in the review period, credit provided to the private sector by BFIs witnessed a rise of 5.8%, compared to the corresponding period last year.

This increase contrasts with the annual data of FY 2022/23 AD (2079/80 BS), where credit grew by 3.8%.

Additionally, BFIs witnessed an increase in outstanding loans to

various sectors. The industrial production sector witnessed a rise of 8.8%, the agricultural sector experienced a growth of 0.9%, while the transportation, communication, and public sectors observed a substantial growth of 16.7% in outstanding loans, compared to FY 2022/23 AD (2079/80 BS). Moreover, as compared to the same period in the previous fiscal year,

outstanding loans to the service industry increased by 6.2%, while loans to the wholesale and retail trade sector experienced an increase of 1.5%.

injected a total liquidity of NPR 3.52 trillion (USD 26.38 billion) based on turnover. This liquidity injection consisted of NPR 1.20 billion (USD 9 million) through the Standing Liquidity Facility (SLF) and NPR 803.56 billion (USD 6.03 billion) through the Overnight Liquidity Facility (OLF). In the same period last FY 2022/23 AD (2079/80 BS), NPR 5.41 trillion (USD 40.53 billion) net amount of liquidity was injected through various instruments of open market operations including SLF. Thus, compared to the last financial year, the net amount of liquidity injected decreased by NPR 1.89 trillion (USD 14.18 billion) in this past financial year.

Moreover, NRB injected liquidity amounting to NPR 783.47 billion (USD 5.88 billion) through the net purchase of USD 5.89 billion (NPR 44.16 million) from the foreign exchange market. In comparison, in the corresponding period of the previous year, a liquidity of NPR 712.50 billion (USD 5.34 billion) was injected through the net purchase of USD 5.45 billion (NPR 40.79 million).

Figure 15. Sectorwise Outstanding Credit of Banks and Financial Institutions (Amount in NPR in billion) Source: Current Macroeconomic and Financial Situation based on annual data, Nepal Rastra Bank, FY 2023/24 AD (2080/81 BS)472

BFIs also experienced changes in the extension of various types of loans. Term loans witnessed an increase of 22.2%, while real estate loans, including residential personal home loans, witnessed a growth of 9.6%, margin nature loans increased by 18.1%, and trust receipt loans for imports increased by 12.6% compared to last FY 2022/23 AD (2079/80 BS). However, overdraft loans decreased by 46.3%, hire purchase loans decreased by 22% and working capital loans decreased by 17.6%.

Liquidity Management According to the annual data of FY 2023/24 AD (2080/81 BS), NRB

Additionally, NRB purchased Indian currency (INR) equivalent to NPR 535.07 billion (USD 4.01 billion) through the sale of USD 4.02 billion (NPR 536.55 billion), according to the annual data of FY 2023/24 AD (2079/80 BS). Comparatively, in the

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DOCKING NEPAL’S ECONOMIC ANALYSIS

corresponding period last year, INR equivalent to NPR 596.37 billion (USD 4.47 billion) was purchased through the sale of USD 4.56 billion (NPR 608.62 billion).

Foreign Exchange Reserves and Adequacy According to the annual data of

FY 2023/24 AD (2080/81 BS), the total value of foreign exchange reserves rose by 32.6% to NPR 2.04 trillion (USD 15.29 billion) in mid-July 2024, compared to NPR 1.54 trillion (USD 11.54 billion) in mid-July 2023. However, the reserves held by BFIs, excluding the NRB, decreased by 0.5% to NPR 192.55 billion (USD 1.44

billion) in mid-July 2024 from NPR 193.59 billion (USD 1.45 billion) in mid-July 2023. Within this, the proportion of Indian currency in the total reserves amounted to 22.5% as of mid-July 2024.

FY 2022/23 AD (2079/80 BS) (Mid-July)

FY 2023/24 AD (2080/81 BS) (Mid-July)

In NPR

1.54 trillion

2.04 trillion

In USD

11.71 billion

15.27 billion

Reserve-to-GDP

28.8%

35.8%

Reserve-to-Imports

83.0%

108.6%

Reserve-to-M2

25.0%

29.3%

Total Foreign Reserve

Ratios

Table 7. Foreign Exchange Adequacy Indicators Source: Current Macroeconomic and Financial Situation based on annual data, Nepal Rastra Bank, 2023/24 AD (2080/81 BS)473

Additionally, based on the imports up to the fourth quarter of FY 2023/24 AD (2080/81 BS), the foreign exchange reserves of the banking sector have been deemed sufficient to cover approximately 15.6 months of prospective merchandise imports and 13 months of both merchandise and services imports.

Interest Rates The weighted average rate for the 91-day treasury bills remained steady at 3% as of mid-July 2024 AD, compared to 6.35% in the corresponding month of

FY 2022/23 AD (2079/80 BS).

Meanwhile, the weighted average inter-bank transaction rate among commercial banks, which was 3.14% a year ago, decreased to 2.99% as of mid-July 2024 AD. In the same period, the average base rate of commercial banks experienced a decrease, falling from 10.03% a year ago to 8.00%.

Furthermore, the weighted average deposit rate and lending rate of commercial banks as of mid-July 2024 AD stood at 5.77% and 9.93% respectively.

Comparatively, these rates were 7.86% and 12.30% respectively a year ago.

Balance of Payment According to the annual data of FY 2023/24 AD (2080/81 BS), ending in mid-July 2024 AD, the BoP was at a surplus of NPR 502.49 billion (USD 3.77 billion), which witnessed a percentage increase of 75.81% compared to the corresponding period of the previous year, where the BoP was at a surplus of NPR 285.82 billion (USD 2.14 billion).

KEY DEVELOPMENTS BFIs Accumulate Surplus Loanable Funds In the past quarter, with the

NEFPORT ISSUE 57 – JULY 2024

publishing of Nepal Rastra Bank’s (NRB) annual data, it was found that BFIs in the country accumulated loanable funds amounting to NPR 793 billion (USD 5.87 billion), due to a lack of demand for credit, during the first 11 months of FY 2023/24 AD (2080/81 BS). Despite sufficient capital, BFIs have struggled to issue loans, resulting in a significantly lower credit-deposit ratio of 79.18% - well below the NRB’s ceiling of 90%.474 Although NRB aimed for an 11.5% increase in private sector lending in FY 2023/24 AD (2080/81 BS), only 4.7% was achieved. BFIs collected deposits totalling NPR 6.335 trillion (USD 47.47 billion), while only NPR 5.149 trillion (USD 38.57 billion) was loaned out.475 House of Representatives Approves Key Amendments to BAFIA On June 6, 2024, the House of Representatives approved the Banks and Financial Institutions Bill, marking the first amendment to the Banks and Financial Institutions Act (BAFIA) of 2017.476 The bill, tabled in March after receiving Cabinet approval in February, aims to strengthen the regulation of the financial market. Key provisions include introducing an age limit of 70 years for board members of BFIs; limiting board members to two terms; and requiring them to have a master’s degree with at least five years of experience.477 The bill also reduced individual shareholding limits in BFIs to 1% and, for the first time, defines the collateral as any asset provided as security for a loan. Additionally, it grants conditional validation to digital currencies, with the central bank authorized to issue

and regulate them through licensed digital banks. Finally, according to the amendments, microfinance institutions are now required to allocate 40% of their primary shares to borrowers.478 Commercial Banks Reduce Bad Debt and Improve Capital Adequacy Nepal's commercial banks successfully reduced their bad debt ratio by 3.34% in the final quarter of FY 2023/24 AD (2080/81 BS).479 According to NRB, the bad debt ratio, which had risen to 3.89% by midApril, decreased to 3.76% by mid-July. Bankers attributed this improvement to a focus on recovering non-performing loans (NPLs) rather than issuing new loans, and borrowers making payments before the fiscal year ended. Despite economic challenges and a slowdown in lending, the banks' recovery efforts led to this positive outcome.480 NRB categorizes NPLs into sub-standard, doubtful, and bad loans, requiring different levels of provisioning.

The decline in bad debt was also supported by a flexible loan repayment policy introduced in the monetary policy, which extended repayment deadlines and allowed banks to waive blacklisting for borrowers who cleared overdue amounts.481 Also, commercial banks improved their capital adequacy ratios during the same period, with all but one bank meeting the required threshold. The Capital Adequacy Framework mandates banks to maintain a ratio of 11.5%, including 9% from core capital.

This improvement in capital adequacy has eased previous lending constraints, allowing for

greater financial stability.482 NRB Eases Lending Rules by Reducing Counter-Cyclical Buffer to 0% This past quarter, NRB issued a new circular aimed at enhancing the lending capacity of banks by setting the counter-cyclical buffer at 0% for FY 2024/25 AD (2081/82 BS).483 The countercyclical buffer is extra capital that banks must hold during economic booms to prevent excessive lending.

During downturns, the buffer is reduced or removed, allowing banks to continue lending, which supports the economy during tough times.484 This recent change allows banks to increase their lending activities by maintaining a Capital Adequacy Ratio (CAR) of 11% and a Tier 1 Capital (CCAR) of 8%. Banks such as NIC Asia, Nabil, Kumari, and Kamana Sewa, which were facing constraints in Tier 1 Capital, will benefit significantly from this adjustment, enabling them to extend more loans.485 By allowing banks to use their deposits more efficiently, this regulation is expected to reduce operational costs and potentially lead to lower interest rates. Previously, the counter-cyclical buffer was set at 0.5%, limiting the lending capacity of some banks despite having sufficient deposits.

The new policy is expected to hopefully empower banks to support economic growth more effectively by expanding their lending capabilities.486 Surge in Bank Cheque Bouncing Reflects Rising Financial Fraud and Economic Strain Bank cheque bouncing cases

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have surged significantly in Nepal, reflecting increased financial fraud and the economic slowdown following the pandemic. According to the Nepal Police, 7,762 cheque bouncing complaints were registered in the first 10 months of FY 2023/24 AD (2080/81 BS), nearly four times higher than the 1,997 complaints recorded in the FY 2020/21 AD (2077/78 BS).487 The Kathmandu Valley Police Office reported that most cases involved amounts ranging from NPR 50,000 (USD 375) to NPR 10 million (USD 75,000). Out of the 7,762 complaints, 4,773 cases were taken to court. Common issues leading to cheque bounces include unmatched signatures, dormant accounts, loan sharking, and undisclosed income sources.488 Cheque bouncing is

one of the 12 categorized banking offenses under Nepal’s law, which allows police intervention and asset freezing when a cheque is dishonored three times within six months.489 The Credit Information Bureau reported that between mid-July 2023 and mid-May 2024, 40,034 individuals were blacklisted for banking offenses, with 70% of these cases related to cheque bouncing. However, despite such actions, the implementation of the law against cheque bouncing is yet to reach the optimum level, with many cases either going unreported or the culprits not getting caught.490

its monetary policy for FY 2024/25 AD (2081/82 BS), aimed at ensuring sufficient liquidity for borrowing and lending while encouraging investment in productive sectors. To support the flow of credit to these sectors and maintain financial stability, the policy eases loan access for individuals working abroad with foreign permits and provides provisions for securing loans using agricultural products as collateral. Additionally, it includes targeted measures to promote entrepreneurship by offering aspiring entrepreneurs simplified access to loans.

Monetary Policy for FY 2024/25 AD (2081/82 BS) Unveiled 491 On July 26, 2024, NRB unveiled

Key Highlights of Monetary Policy for FY 2024/25 AD (2081/82 BS)492

Key Highlights from the Monetary Policy

The estimated inflation rate set by NRB for FY 2024/25 AD (2081/82 BS) is at 5%, with an economic growth target of 6%.

The upper limit of the bank rate within the interest rate corridor has been reduced from 7% to 6.5%, while the policy rate has been adjusted from 5.5% to 5%.

The deposit collection rate, which serves as the lower limit of the interest rate corridor, remains unchanged at 3%.

The existing provision related to the compulsory cash ratio and authorized liquidity ratio that the banks and financial institutions have to retain has been continued.

The provision of the existing 1.20% credit loss that has to be made on good loans has been reduced and maintained at 1.10%.

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The limit for the Regulatory Retail Portfolio (RRP) has been increased from NPR 20 million (USD 149,846) to a maximum of NPR 25 million. (USD 187,308)

To address issues in the cooperative sector, the policy includes a provision for the government to refund up to NPR 500,000 (USD 3,746) to saver members of cooperatives, secured against assets owned by the cooperative's proprietor or their family members.

The new policy simplifies the process of obtaining loans against mortgages of agricultural products.

Additionally, the policy facilitates easier access to collateral-free loans for individuals working abroad with labor permits, based on remittance guarantees. This initiative aims to encourage banks and financial institutions to lend to innovative projects.

Outlook Nepal's financial sector is currently negotiating a difficult environment characterized by increased banking institution liquidity, shifting regulations, and unpredictability in the economy. There is still a low demand for credit despite the abundance of loanable money, which is indicative of a sluggish private sector. In the banking industry, regulatory reforms are being implemented to improve stability and governance, while steps to loosen lending restrictions are anticipated to bolster financial expansion. Nonetheless, an increase in financial misconduct cases, like checks bouncing, highlights the underlying economic strain and the necessity of being vigilant in upholding financial integrity.

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Capital Market

FACTSHEET

During the review period, from June 2, 2024 to August 30, 2024, the overall secondary market points surged significantly by 32%, peaking at 3000.81 points on August 15, 2024. This dramatic increase was driven by a combination of factors, including heightened investor interest, favorable market conditions, political shifts, and the influx of new capital into the stock market. The consistent rise in daily trading volumes with the highest turnover in history, reflected the growing confidence of investors in the market's potential for returns. However, losing traction at the end of the review period, the NEPSE index fell to 2749.57 points on August 29, 2024, majorly due to increased selling pressure and incoming of correction in the market.

Index

02-June-2024

Indicator

Data

NEPSE Index (mid-July, in points)493

2240.41

Stock market capitalization (mid-July)494

NPR 3.55 trillion (USD 26.60 billion)

Number of companies listed at NEPSE (midJuly)495

270

29-August2024

% Change

Main Indices NEPSE

2,083.04

2,749.57

32.00%

Sensitive

371.65

489.79

31.79%

Float Index

141.39

189.66

34.14%

1,131.72

1,559.76

37.82%

Development Banking

4,063.93

5,436.27

33.77%

Finance

2,195.63

3,559.94

62.14%

Microfinance

4,380.72

5,107.24

16.58%

Hydropower

2,517.01

3,419.34

35.85%

Hotels and Tourism

5,365.89

7,155.68

33.35%

Manufacturing and Processing

6,586.55

7,295.83

10.77%

Life Insurance

10,170.74

13,486.03

32.60%

Non-Life Insurance

10,645.97

13,108.97

23.14%

Trading

2,929.59

3,772.09

28.76%

Mutual Funds

18.82

21.97

16.74%

Investment

75.87

109.87

44.81%

1,652.02

2,079.44

25.87%

Sub-Indices Banking

Table 12. Key Market Indicators Source: Nepal Stock Exchange496

Others

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Secondary Market During the review period from June 2, 2024, to August 30, 2024, the NEPSE index closed at 2749.57 points, reflecting an increase of 666.53 points (32%), thereby showing a bullish trend in the quarter with a peak on August 15, 2024, at 3000.81 points.

Within this, the total market capitalization at the end of the

review period was NPR 4.36 trillion (USD 32.67 billion).497 Among the main indices, the float index rose the most (34.14%) and among sub-indices, all the sectors witnessed significant increase in the quarter. Among other indices, the ‘Finance’ and ‘Investment’ sector reported the maximum yield with a staggering rise of 62.14% and 44.81% respectively.

Likewise, the Banking (37.82%),

Hydropower (35.85%) and Development Banking (33.77%) sectors were other sectors which showed higher growth in the review period. Figure 16 shows the daily changes of NEPSE index during the review period.

dematerialization and centralized record-keeping of securities, aimed at enhancing market efficiency.499 The bill also formally recognizes derivative products, defining them as financial instruments like forwards, futures, options, or swaps, thus paving the way for their regulation in Nepal's financial markets.500 Also, the bill introduces the concept of "specialized investment funds," officially recognizing private equity, venture capital, and hedge funds, which could encourage market diversification. Further, the proposed changes include

removing certain representatives from SEBON's Board of Directors, reflecting a shift towards greater independence.501 New provisions for margin trading and granting SEBON authority to access banking transaction records are also included, enhancing transparency and regulatory clarity. Lastly, the bill proposes imposing a two-year employment restriction for former SEBON officials, barring them from working with listed companies or SEBON-licensed institutions, except for governmentappointed positions.502

Figure 16. NEPSE Movement Over the Review Period Source: Nepal Stock Exchange (NEPSE)498

KEY DEVELOPMENTS Key Reforms and Modernization in Nepal's Securities Market Proposed in New Amendment Bill In the past quarter, the ‘Securities Related (First Amendment) Bill, 2081’ was introduced in Nepal's House of Representatives with the proposal of significant updates to the Securities Act, 2063, to modernize and expand the legal framework governing securities.

Key amendments include the introduction of central depository services, enabling the electronic

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CIAA Raids NEPSE Over Insider Trading Allegations Amid Market Surge On August 12, 2024, the Commission for the Investigation of Abuse of Authority (CIAA) raided the Nepal Stock Exchange (NEPSE) office, suspecting insider trading activities involving NEPSE staff.503 The CIAA took action after receiving complaints that NEPSE employees were allegedly trading stocks under the names of family members and friends.

During the raid, the authority seized documents and mobile phones for further investigation.

Insider trading, where sensitive information is leaked to gain unfair market advantages, has been a growing concern in Nepal's only stock exchange.504 This came amidst the stock market seeing a significant surge, with the index nearing record highs and daily turnover exceeding NPR 20 billion (USD 149.87 million). This sharp rise in stock prices, particularly for companies with poor financial performance, raised suspicions of market manipulation.505 NEPSE Hits Record High Transaction Volumes In the past quarter, the Nepal Stock Exchange (NEPSE) surged in share transaction volume, marking its highest levels in history. On August 15, 2024, NEPSE recorded its highestever turnover, reaching NPR 29.95 billion (USD 224.4 million) in a single trading day.506 This dramatic increase was driven by a combination of factors, including heightened investor interest, favorable market conditions, and the influx of new capital

into the stock market. Daily trading volumes consistently surpassed NPR 20 billion (USD 149.87 million) in the month of August 2024, which reflected the growing confidence of investors in the market.507 The NEPSE index itself saw a substantial rise, approaching record highs as more investors participate in the market. This surge was partly attributed to the bullish trend in the secondary market, where the demand for shares outpaced supply, pushing up prices and volumes. However, this rapid growth also raised concerns about market sustainability and the potential for speculative bubbles, especially as some companies with weaker financial fundamentals experience sharp increases in their stock prices.

Nepal Collects NPR 4.85 Billion (USD 36.64 million) in Capital Gains Tax Amid Market Recovery The Government of Nepal collected NPR 4.85 billion (USD 36.64 million) in capital gains tax (CGT) from share trading in the first 11 months of the fiscal year 2023/24 AD (2080/81 BS), according to CDS and Clearing Limited (CDSC).508 This tax revenue was generated from trading in the secondary market between mid-July 2023 and mid-June 2024, despite a generally sluggish stock market performance due to low investor confidence. The highest CGT revenue of NPR 972 million (USD 7.28 million) was recorded between mid-January 2024 and mid-February 2024, while the lowest, NPR 84.15 million (USD 630,553), was collected between

mid-October 2023 and midNovember 2023.509 Despite the overall slow pace, the market showed signs of recovery in recent months, spurred by Nepal Rastra Bank's more flexible margin lending policies introduced during the half-year review of the monetary policy. By midFebruary 2024, the government had already collected NPR 2.86 billion (USD 21.43 million) in CGT, with an additional NPR 1.99 billion (USD 14.90 million) collected in the following four months.510 According to the current rules, individual investors are taxed at 5% or 7.5% CGT depending on how long they hold shares before selling, with short-term investors paying the higher rate. Institutional investors are required to pay a 10% tax on their capital gains.511 Issuance of Primary Shares Resume On June 23, 2024, the Securities Board of Nepal (SEBON) granted approval to Himalayan Urja Bikas Company (HUBC) to issue right shares512, marking the first such approval since the tenure of SEBON's Chairman, Ramesh Kumar Hamal, ended on January 5, 2024.513 The delay in approvals was caused by the government's inability to appoint a new SEBON chairperson following Hamal's retirement, which resulted in a backlog of critical decisions, including the issuance of primary shares. This delay is also thought to be connected to concerns over licensing a new stock exchange platform.

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Outlook The capital market is poised for significant growth, driven by key reforms and modernization efforts outlined in the "Securities Related (First Amendment) Bill, 2081," which introduces electronic dematerialization, formal recognition of derivative products, and specialized investment funds.

These changes, along with enhanced regulatory independence and new margin trading provisions, are expected to improve market efficiency and attract diverse investors. However, concerns over insider trading, highlighted by recent CIAA raids on NEPSE, and the rapid surge in trading volumes raise fears of speculative bubbles and market manipulation. While record-breaking transaction volumes and increased capital gains tax revenue signal a robust market recovery, the sustainability of this growth depends on effective regulatory enforcement and the credibility of oversight mechanisms. Thus, as primary share issuances resume, the market shows promise but faces risks related to investor confidence, market integrity, and volatility.

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5

Special Section Harnessing the Demographic Dividend

Introduction Nepal stands at a pivotal moment where its population structure offers a rare opportunity - the "demographic dividend." This window opens when the proportion of working-age people surpasses that of dependents.

For Nepal, that moment arrived in 2021 when 64.6% of its population became aged between 15 and 64 years old.514 With population aging already on the horizon, the demographic window is projected to close by 2048.515 How Nepal navigates this limited window of opportunity and prepares for the rapid aging of society will shape generations to come.

These demographic shifts are rooted in deeper socioeconomic dynamics. Nepal’s fertility rate declined to 2.1 in 2022, driven primarily by rising levels of education and increasing household wealth.516 Both internal and external migration continue to reshape households as evident by remittances amounting to nearly 25.3% of Nepal’s GDP as of FY 2023/24 AD (2080/81 BS).517 Meanwhile, the economy remains largely dependent on consumption, which accounts for 92.6% of GDP.518 Looking ahead, Nepal’s upcoming graduation from Least Developed Country (LDC) status in 2026 could open the door for attracting greater investment.

However, as the saying goes, “demography is not destiny.” Capitalizing on the demographic dividend requires immediate targeted action and bold structural reforms. National priorities should focus not only on leveraging the current workforce but also on building a resilient economy capable of supporting an aging population in the future. Time-sensitive policies are required to enable productive employment opportunities, invest in physical and human capital, and boost the domestic economy. In particular, this calls for creating decent jobs in the formal sector while reducing import-based consumption.

This special section of NEFPort 58, "Harnessing the Demographic Dividend," provides a comprehensive analysis of the factors that could unlock Nepal’s demographic potential. With the United Nations Population Fund (UNFPA) as a knowledge partner, the articles examine challenges, opportunities, and international best practices in the context of Nepal. The first article by Won Young Hong, UNFPA’s Country Representative for Nepal, discusses strategies for building a family-friendly society through support systems, including lessons from Japan and Norway. The second article by Ashish Lamichhane, Programme Analyst at UNFPA Nepal, and Charlie Scotchbrook, Intern at Nepal Economic Forum, delves into the opportunities and challenges Nepal faces in leveraging its demographic dividend for long-term socio-economic growth. Ultimately, this discourse underscores the critical need for timely interventions that will allow Nepal to make the most of its demographic dividend while ensuring no one is left behind.

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Promoting a Family-Friendly Environment for Sustainable Population Dynamics Won Young Hong United Nations Population Fund (UNFPA) Country Representative for Nepal Nepal has a sizeable working-age population between the ages of 15 and 64 that represents 65% of the total population. This population dynamic has the potential to transform the economy in what economists call a demographic dividend. This concept refers to the potential economic benefits when a country's working-age population, defined globally as people aged between 15 and 64 years, outnumbers the nonworking-age population.

According to the UN estimates, although the share of the workingage population will continue to rise in the next two decades, the share of the population aged 15 to 24 will gradually

Figure 17. Total Fertility Rate (1996 to 2022) Source: Nepal Demographic and Health Survey

decline with an increase in the population aged 65 and above.

This shift can impact the window for a demographic dividend in the absence of relevant policies supporting education, health, and opportunity that support societies navigate this demographic transition to positive end outcomes. As the proportion of the working age population is forecast to peak at 70% in 2048, followed by a gradual decline, the window of opportunity in parallel 519 diminishes.

These projections also point to another associated population trend that relates to population ageing. As the share of the

working-age population gradually declines, the proportion of the elderly population aged 65 and above increases. Nepal will reach this position in 2024, with the elderly population representing a 7% share of the overall population and “aged status” by 2058 with 14% share. This phenomenon is compounded by the overseas migration of youths as well as declining fertility rates that have dropped from 4.6 children per woman in 1996 to 2.1 in 2022, as shown in Figure 17.520

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A Policy Challenge of Our Times This trend of ageing populations and declining fertility is impacting a growing number of countries where the growth of the proportion of elderly is outstripping the number of births and younger generations. This is now a common population trend across the globe, not only in the OECD countries, as has historically been the case since the 1960s.521 Today, approximately 50% of the global population lives in countries where fertility levels have fallen below the replacement threshold.522 These countries all have important policy choices to make.

These policy decisions must consider the impact of these changes on a range of government services, the economy, and public finances that are far-reaching as population dynamics shift. They also need to be grounded in the assumption that there are a range of issues in deciding when to have a child, including financial security, the costs involved, career development for women, child care support, and the overall family policy environment.

As women increasingly become a key part of the workforce and society’s priorities change, fertility becomes an ever more important public policy discussion. This can too often focus on trying to stimulate growth in birth rates by drawing on top-down incentives such as tax breaks for families with children rather than utilizing the full range of evidence-based socio-economic tools at our disposal. These generally have resulted in more successful outcomes by creating a womenfriendly social environment and guaranteeing the rights of women

and girls. That being said, no single country has managed to reverse this trend fully through government intervention, despite a variety of initiatives being introduced. There are many lessons to be learnt.

the changing fertility rates is to ensure gender equality and empower young people in both spaces - public and private. There continues to be an unequal sharing of work in raising children between men and women.

Creating a fairer and more equal environment for raising children as well as domestic work would start to break down these inequalities.

There needs to be more investment in parental leave for both men and women, and childcare costs need to be affordable for all families.

Because historically women have largely been responsible for family life, even modern workplaces are not designed in a way to accommodate the family life of women and men with children. Flexible working hours and familyfriendly workplaces are all too rare, apart from in small pockets of the world.

Professional life and family life need to coexist, not compete with one another. A range of financial support and social protection provided by the government for young people is also crucial for them to be able to start a family comfortably in Nepal, especially in urban areas, due to rising living costs.

Three Main Pillars to Prepare for Transitions What do we know about how best to manage this transition in our populations? Learning from case studies across the world, there are three main policy approaches for a successful transition: 1.

2.

It is crucial to recognize that, as societies, families, and individuals, including men and women, change, it is important that policies at all levels are able to flexibly respond to the diverse needs of the lives of families and individuals. Shifts in how women and men participate in public and private spheres of life and the economy impact decisions about family life in profound ways.

As women have increased access to education and opportunity, decisions about having a family are more often balanced with other considerations.

Societies evolve and change rapidly, and we need to analyse and anticipate these changes to respond quickly when they occur so that policies are timely and anticipate future trends in population rather than being reactive. It is vital to be prepared for the future in terms of population dynamics.

The most effective way to deal with concerns about

3.

Any approach needs to be evidence-based. Today, in this age of digital innovation, population data is available at unprecedented levels.

Nepal is no exception.

To be able to make good decisions for the future of the population, evidence needs to be available for

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those making decisions to make informed choices on where and how to invest financial and other resources to manage the transition to a different population dynamic that promotes rights-based decisions around fertility rather than producing rarefied policies from a top-down position that have negative outcomes, especially for women.

Concluding Remarks There is no universal solution to the issue of declining fertility.

Effective policies, however, look at the issue broadly and support individuals, families

and parenthood rather than focusing narrowly on fertility and childbirth. This underscores the importance of investing public spending in the health, education, and well-being of families to create a family- and childfriendly society. It is important for modern family policies to remain non-coercive and fully support individual sexual reproductive rights, allowing people to make informed reproductive decisions and provide adequate supports to help the decision. Coercive or restrictive policies are neither sustainable nor the goal.

Preparing for the future now, guaranteeing every individual’s access to universal access to

sexual reproductive health and rights making gender equality a reality, and using evidence are, however, keys to managing a successful transition to the changes we are witnessing in population dynamics across the globe.

NEFPORT ISSUE 57 – JULY 2024

Will Nepal be able to propel its socio-economic growth before the population ages?

By Charlie Scotchbrook Intern, Nepal Economic Forum Demographic dividend is the potential economic growth driven by a shift in a country’s age structure. It typically occurs when the portion of the workingage population, defined globally as people aged 15 to 64 years, is greater than that of the nonDemographic working-age.523 dividends are often a result of a decline in both mortality and fertility rates.524 A smaller dependent population and a larger workforce allows an economy to allocate more resources to other

Figure 18. Crude death rate in Nepal (1961-2021) Source: United Nations Population Fund Nepal

Ashish Lamichhane Programme Analyst, UNFPA Nepal

areas, potentially accelerating the country's socio-economic development. Take Singapore for example, a success story where the demographic dividend helped drive the country’s development, making it the international finance center it is today.525 In Nepal’s case, as seen in Figure 18, crude death rates have decreased from 13.3 deaths per 1000 people in 1991 to 6.8 in 2021, and child mortality rates

have reduced from 43 in 1996 to 5 in 2022. Moreover, fertility rates have also fallen from 4.6 births per woman in 1996 to 2.1 in 2022. These combining factors have led to a significant shift in the country’s population structure as observed in Figure 19. Nepal’s demographic dividend is predicted to increasingly open, with 67% share of the working age population in 2030 reflecting over two thirds of the population.

However, at the same time, the country is already seeing the

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beginning of population aging.

The demographic dividend presents both an opportunity and a challenge. Nepal has the potential to accelerate its socioeconomic development, but this

Figure 19. Population pyramid of Nepal by five-year age group (2011 and 2021) Source: United Nations Population Fund Nepal

Figure 20. Percent of the dependent population in Nepal against percent of the working age population Source: United Nations Population Fund Nepal

is not guaranteed as something automatic. It must successfully navigate several opportunities and risks. Key among these is supporting the working-age population by providing robust

employment opportunities and adapting migration policies to maximize the benefits of this demographic shift.

NEFPORT ISSUE 57 – JULY 2024

Economic Challenges in Nepal Nepal faces several economic challenges; these are especially common in rural areas, where multidimensional poverty rates are significantly higher526 than those in urban regions as shown in Figure 21. Financial instability affects communities across the country for various reasons. Government revenue has hit an eight-year low in the first half of 2024, thereby demonstrating economic turbulence. Furthermore, Nepal's economy is heavily dominated by the service sector, making up 62.5% of the country's GDP in the fiscal year 2023/24 AD (2080/81 BS). In comparison, agriculture

contributes 24.1%, and industry only 13.4%. Despite the large share of services in the economy, high unemployment rates persist. Moreover, a significant share of Nepal's economy is driven by consumption. Its high consumption-to-GDP ratio of 92.6% suggests that the majority of Nepal's GDP is tied to consumption, as opposed to savings or investment. This complicates the economic landscape in Nepal making it more vulnerable. Little focus on investment in productive areas like infrastructure or education miss opportunities for longerterm economic growth.

linked to Nepal's ability to fully leverage its demographic dividend. As the country’s large working-age population ages, the window of opportunity to benefit from this demographic shift is narrowing. Without sufficient domestic employment and investment opportunities, Nepal risks missing the potential gains that could come from its youthful population. The country must develop a coordinated strategy to create an economic environment which is necessary to maximize the benefits of its demographic changes before the opportunity is lost.

These challenges are closely

Figure 21. Poverty in Nepal separated by province Source: United Nations Population Fund Nepal

Migration Nepal's economic challenges have played a significant role in shaping the demographic landscape today, with high levels of migration being a key consequence. Both internal and external migration, particularly among younger generations, has accelerated due to the search for better job prospects and economic stability. According to the 2021 census, 7.5% of Nepalis currently live abroad, representing about one in four

households.527 The same census report discovered that of those who have migrated, 81.28% are male and 18.72% are female and most of these people were between the ages of 25-30.528 The net migration rate is 4.44 per 1,000 people,529 and remittances now account for a substantial portion of Nepal’s GDP, equaling 25.3% in FY 2023/24 AD (2080/81 BS),530 underscoring the country's reliance on foreign income.

Recent legislation allowing nonresident Nepalis to invest in shares, stocks, and debentures

is a positive step, enabling migrants who have acquired foreign citizenship to contribute to Nepal's development.

However, it is important that Nepal does not become dependent on remittances as having such a high remittance-to-GDP ratio risks exposing Nepal's economy to external shocks. Despite this, over recent years it has been these remittances which have provided financial relief to many households, lifting many families out of poverty. The national

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poverty rate dropped from 42% in 1995 to 20.27% in 2023, according to the Nepal Living Standards Survey IV, 2022/23 AD (2079/80 BS)531. Yet, despite the potential for remittances to improve Nepal's economy, this is not always the case. Often remittances are not invested in productive ventures or capital formation therefore missing an opportunity to strengthen the economy.

Internally, migration levels are

also high. Migration from rural and mountainous regions to urban centers has fueled rapid, often unplanned urbanization, contributing to the rise of slums in major cities. This trend reflects a broader challenge: insufficient investment in the working-age population continues to drive high migration levels both within and outside the country. To fully realize its demographic dividend, Nepal must address the causes and impacts of migration and redirect resources toward long-

term economic development.

Investing in areas such as quality education, vocational training, or strengthening the capacity of MSMEs is crucial. By doing so, the country can help ensure its demographic transition means lasting prosperity, rather than letting it become a missed opportunity.

this strategy involves managing migration and remittances. India, for instance, has set an example within the region. Policy in India regarding remittances and migration has ensured it stays connected with its diaspora, particularly by encouraging them to invest in the country. Initiatives including the Pravasi Bharatiya Bima Yojana (PBBY)532 and the India Development Foundation of Overseas Indians (IDF-OI)533, have helped direct remittances towards productive investments which support infrastructure

development and social welfare schemes.

The government has also focused on improving education and employment opportunities across the country, reducing the need for people to migrate for work.

Figure 22. Intercensal population change at Palika level (2011-2021) Source: United Nations Population Fund Nepal

Way Forward While Nepal’s demographic dividend offers an opportunity for economic growth, it is not infinite. This window will inevitably close as the current workingage population transitions into an ageing, aged, and eventually super-aged population, making the need for sustainable social and economic protection even more important. To make the most of this demographic shift, Nepal must act now to build a sustainable foundation for longterm development. A key part of

While remittances have provided a financial safety net in Nepal for years, over-reliance on these external funds poses significant risks, especially as migrants settle permanently in host countries and eventually their ties to Nepal become weaker. To reduce dependence on remittances,

NEFPORT ISSUE 57 – JULY 2024

Nepal must invest in its domestic economy, ensuring that those who remain in the country are able to actively contribute especially while the window of demographic dividends is open. Early investment in the working-age population is critical—encouraging savings

and capital formation will help secure economic stability for future generations. At the same time, strengthening local financial systems and creating stable, well-paying jobs will provide more opportunities for the youth to thrive within Nepal, reducing the push factors that

lead to migration. By building a comprehensive strategy, Nepal can harness the full potential of its demographic dividend and set the stage for resilient and inclusive economic growth.

77

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80

DOCKING NEPAL’S ECONOMIC ANALYSIS

Endnotes 1 “Democracy Index 2023: Age of Conflict,” Economist Intelligence Unit, 2024. https://www.eiu. com/n/campaigns/democracy-index-2023/ 2 “Nepal: Freedom in the World 2024 Country Report,” Freedom House, Accessed on: August 22, 2024. https://freedomhouse.org/country/nepal/freedomworld/2024 3 “Press Freedom Index - Asia-Pacific: Nepal,” Reporters Without Borders, Accessed on August 22, 2024. https://rsf.org/en/country/nepal 4 “Index of Economic Freedom: Economic Freedom Country Profile: Nepal,” The Heritage Foundation, October 2023. https://www.heritage.org/ index/pages/country-pages/nepal 5 “Fragile States Index 2024,” The Fund for Peace, Accessed on August 22, 2024. https:// fragilestatesindex.org/global-data/ 6 “2023 Corruption Perceptions Index,” Transparency International, Accessed on August 22, 2024. https://www.transparency.org/en/cpi/2023 7 Purushottam Poudel, “Oli becomes prime minister for fourth time, swearing-in today”, The Kathmandu Post ,July 14, 2024 https://kathmandupost. com/national/2024/07/14/president-appoints-kpsharma-oli-prime-minister.

8 Observers cast doubt over the longevity of Congress-UML coalition, The Kathmandu Post, July 14,2024, https://kathmandupost.com/politics/2024/07/14/ observers-cast-doubt-over-the-longevity-ofcongress-uml-coalition 9 “Prime Minister Oli forms 22-member Cabinet” The Kathmandu Post, July 15, 2024 https:// kathmandupost.com/national/2024/07/15/primeminister-oli-forms-22-member-cabinet.

10 Kathmandu Road Division Office starts blacktopping road demolished by KMC in New Road (With Photos), myRepublica, June 3, 2024, https://myrepublica.nagariknetwork.com/news/ kathmandu-road-division-office-starts-blacktoppingroad-demolished-by-kmc-in-new-road/ 11 Kathmandu Road Division Office summons KMC mayor Balen to appear within three days, myRepublica , June 2, 2024 https://myrepublica.nagariknetwork.com/news/ kathmandu-road-division-summons-kmc-mayorbalen-to-appear-within-three-days/

12 High court allows KMC to expand pavements in New Road, myRepublica, July 15, 2024, https://myrepublica.nagariknetwork.com/news/highcourt-allows-kmc-to-expand-pavements-in-new-road/ 13

Ibid

14 KMC and locals clash over footpath expansion in New Road , khabarhub, July 19, 2024 https://english.khabarhub.com/2024/19/366160/ 15 Why did Mayor Balen step back in the New Road footpath expansion ‘battle’?, myRepublica, July 23, 2024, https://myrepublica.nagariknetwork.com/news/why-didmayor-balen-step-back-in-the-new-road-battle/ 16 Lila Devi Gadtaula becomes first female chief secretary” Setopati, June 31, 2024 https://en.setopati. com/political/163426.

17

Ibid

18 Unsafe skies: Yet another air crash kills five, The Kathmandu Post, August 8, 2024, https://kathmandupost.com/money/2024/08/08/ unsafe-skies-yet-another-air-crash-kills-five 19 Lawmakers draw attention towards air crash investigation, question CAAN’s role, myRepublica, July 28, 2024, https://myrepublica.nagariknetwork.com/news/ lawmakers-draw-attention-towards-air-crashinvestigation-question-caan-s-role/ Ibid 20

Ibid

21

Ibid

22 European Commission extends its decade-long ban on Nepali airlines, The Kathmandu Post, December 1, 2023, https://kathmandupost.com/money/2023/12/01/ european-commission-extends-its-decade-long-banon-nepali-airlines 23 President Paudel authenticates transitional justice bill, The Kathmandu Post, August 29, 2024, https://kathmandupost.com/national/2024/08/29/ president-paudel-authenticates-transitional-justice-bill 24

Ibid

25

Ibid

26

10 countries welcome authentication

NEFPORT ISSUE 57 – JULY 2024

of Transitional Justice Bill by Nepal President, ANI News,August 29, 2024, https://www.aninews. in/news/world/asia/10-countries-welcomeauthentication-of-transitional-justice-bill-by-nepalpresident20240829212528/ 27

Ibid

28 Nepal’s Transitional Justice: Bringing Closure to Conflict, Nepal Economic Forum, August 20,2024 https://nepaleconomicforum.org/nepals-transitionaljustice-bringing-closure-to-conflict/ 29 Bal Krishna Sah, “SC rules in favour of gender change”, The Himalayan Times, July 29, 2024 https:// thehimalayantimes.com/nepal/sc-rules-in-favour-ofgender-change 30

Ibid

31

Ibid

32 Nepal Supreme Court affirms transgender woman's identity in historic ruling, GCNews, August 1, 2024, https://gcn.ie/nepal-supreme-court-transgenderwoman/ 33

Ibid

34 Misri’s strategic visit to Nepal, The Annapurna Express, August 11, 2024, Misri’s strategic visit to Nepal (theannapurnaexpress. com) 35 “Foreign Secretary Vikram Misri meets Nepal's top leadership; discusses ways to strengthen bilateral ties”, The Economic Times, August 12, 2024, https:// economictimes.indiatimes.com/news/india/foreignsecretary-vikram-misri-meets-nepals-top-leadershipdiscusses-ways-to-strengthen-bilateral-ties/ articleshow/112464246.cms?from=mdr 36

Ibid.

37 Misri’s strategic visit to Nepal, The Annapurna Express, August 11, 2024,

44 Nepal will benefit from BRI agreement with China: DPM Shrestha, myRepublica, July 2, 2023, https:// myrepublica.nagariknetwork.com/news/nepal-willbenefit-from-bri-agreement-with-china-dpm-shrestha/ 45 Rana’s southern sojourn, The Kathmandu Post, August 26, 2024 Rana’s southern sojourn (kathmandupost.com) 46 Deputy Secretary Verma’s Meetings with the Government of Nepal in Kathmandu, Nepal, August 16, 2024 https://www.state.gov/deputy-secretaryvermas-meetings-with-the-government-of-nepal-inkathmandu-nepal/ 47

Ibid

48 US pledges support to buy two helicopters for Nepali Army to enhance its disaster response capacity, MyRepublica, August 17, 2024,https://myrepublica. nagariknetwork.com/news/us-pledges-support-tobuy-two-helicopters-for-nepali-army-to-enhance-itsdisaster-response-capacity/ 49

Ibid

50 Arjun Shah, “Congress lawmaker Shah becomes Sudurpaschim chief minister”, The Kathmandu Post, August 4, 2024, https://kathmandupost.com/ national/2024/08/04/congress-lawmaker-shahbecomes-sudurpaschim-chief-minister.

51

Ibid

52 “Lumbini Chief Minister Acharya wins vote of confidence” Setopati, August 20, 2024, https:// en.setopati.com/political/163547 53 “Karnali CM Kandel wins vote of confidence”, Setopati, August 5, 2024, https://en.setopati.com/ political/163481 54 “Bagmati Chief Minister Lama wins vote of confidence”, Setopati, July 30, 2024, https://en.setopati. com/political/163450

Misri’s strategic visit to Nepal (theannapurnaexpress. com)

55 “World Economic Outlook Update,” International Monetary Fund, July 2024. https://www. imf.org/en/Publications/WEO/Issues/2024/07/16/worldeconomic-outlook-update-july-2024

38

56

Ibid

39 Rana’s southern sojourn, The Kathmandu Post, August 26, 2024 Rana’s southern sojourn (kathmandupost.com) 40

Ibid

41 Nepal foreign minister arrives in New Delhi on a five-day visit to India, The Times of India, August 18,2024 https://timesofindia.indiatimes.com/india/nepal-foreignminister-arrives-in-new-delhi-on-a-five-day-visit-toindia/articleshow/112608068.cms 42

Ibid

43

Ibid

Ibid

57 “World Population Clock: 8.1 Billion People (LIVE, 2024).” n.d. Worldometer. Accessed September 23, 2024. https://www.worldometers.info/world-population/ 58 “FAO Food Price Index broadly unchanged in July,” Food and Agriculture Organization of the United Nations. August 2, 2024. https://www.fao.org/newsroom/ detail/fao-food-price-index-broadly-unchanged-injuly/en 59 “IIF Global Debt Monitor,” Institute of International Finance, May 2024. https://elements. visualcapitalist.com/wp-content/uploads/2024/07/ global_debt_monitor_may2024_vf.pdf

81

82

DOCKING NEPAL’S ECONOMIC ANALYSIS

60 “World Economic Outlook Update,” International Monetary Fund, July 2024. https://www. imf.org/en/Publications/WEO/Issues/2024/07/16/worldeconomic-outlook-update-july-2024?cid=bl-comWEOET2024004 61

Ibid.

62 Pierre-Olivier Gourinchas, “Global Growth Steady Amid Slowing Disinflation and Rising Policy Uncertainty,” International Monetary Fund, July 16, 2024. https://www.imf.org/en/Publications/WEO/ Issues/2024/07/16/world-economic-outlook-updatejuly-2024?cid=bl-com-WEOET2024004 63

Ibid.

64 “Global Economic Prospects,” World Bank, June 2024. https://openknowledge.worldbank.org/server/ api/core/bitstreams/6feb9566-e973-4706-a4e1b3b82a1a758d/content 65

Ibid.

66

Ibid.

67 “Asian Development Outlook (ADO) July 2024: Steady Growth, Slowing Inflation,” Asian Development Bank, July 2024. https://www.adb.org/publications/asiandevelopment-outlook-july-2024 68

Ibid.

69

Ibid.

70 “Ceasefire push, war aid talks on cards as G7 summit begins today in Italy,” Business Standard, June 13, 2024. https://www.business-standard.com/worldnews/ceasefire-push-war-aid-talks-on-cards-as-g7summit-begins-today-in-italy-124061300048_1.html 71 “Explainer: What is the G7's $50 billion loan plan for Ukraine?,” Reuters, June 14, 2024. https://www. reuters.com/world/europe/what-is-g7s-50-billion-loanplan-ukraine-2024-06-14/ 72 David Elliot, “G7 Summit talking points: From Ukraine and Gaza to the impact of AI,” World Economic Forum, June 18, 2024. https://www.weforum.org/ agenda/2024/06/g7-italy-summit-key-talking-points/ 73

Ibid.

74 Angelo Amante, “G7 leaders launch initiative for global food security,” Reuters, June 14, 2024. https:// www.reuters.com/world/g7-leaders-launch-initiativeglobal-food-security-2024-06-14/ 75 “G7 Leaders’ Statement on Energy for Growth in Africa,” European Council, June 14, 2024. https://www.consilium.europa.eu/en/press/pressreleases/2024/06/14/g7-leaders-statement-on-energyfor-growth-in-africa/ 76 “FACT SHEET: The 2024 NATO Summit in Washington,” US Embassy, July 10, 2024. https:// cl.usembassy.gov/fact-sheet-the-2024-nato-summitin-washington/

77

Ibid.

78

Ibid.

79 “2024 NATO Summit: Marking 75 years of the Alliance,” North Atlantic Treaty Organization, Accessed on: September 25, 2024. https://www.nato.int/cps/en/ natohq/226799.htm 80

Ibid.

81 “Cyber defence,” North Atlantic Treaty Organization, July 30, 2024. https://www.nato.int/cps/en/ natohq/topics_78170.htm 82 What happened to Bangladesh? August 2024.

The Manila Times. Accessed on August 22nd 2024. https://www.manilatimes.net/2024/08/20/opinion/ columns/what-happened-to-bangladesh/1964992 83

Ibid

84 Bangladesh’s interim government focused on improving law and order situation, says new security adviser. The Hindu. August 19th 2024. https://www. thehindu.com/news/international/bangladeshs-interimgovernment-focused-on-improving-law-and-ordersituation-says-new-security-adviser/article68542654. ece 85 Lauren Frayer and Fatima Al-Kassab, “Britain swings to the center-left in a historic U.K. election landslide,” NPR, July 5, 2024. https://www.npr. org/2024/07/05/g-s1-8456/uk-labour-party-win-keirstarmer 86 Willen Marx, “Takeaways from the European parliamentary elections,” NPR, June 10, 2024. https:// www.npr.org/2024/06/10/nx-s1-4998253/europeanunion-eu-parliament-elections-takeaways 87 Adam Taylor, William Booth, Arthur Galocha and Samuel Granados, “How 14 years of Conservative government have changed Britain,” The Washington Post, July 5, 2024. https://www.washingtonpost.com./ world/2024/07/03/britain-conservative-tory-legacyelection/ 88 Ellen Ioanes, “What the Labour Party’s big win in the UK will actually mean,” Vox, July 5, 2024. https:// www.vox.com/world-politics/358985/uk-labour-keirstarmer-tories-migration-politics-elections-july-4rishi-sunak-boris-johnson 89 Matt Lavietes, “What we know about the Trump assassination attempt and the shooter,” NBC News, July 14, 2024. https://www.nbcnews.com/news/us-news/ trump-injury-shooting-incident-pennsylvania-rallywhat-we-know-rcna161745 90

Ibid.

91 Jill Colvin, Eric Tucker, Bernard Condon, and Jim Mustian, “FBI says Trump was indeed struck by bullet during assassination attempt,” AP News, July 27, 2024. https://apnews.com/article/trumpbullet-shrapnel-ronny-jackson-christopher-wraycb780b9d1a078f0be4191682e75101cf

92 Haley Willis, Aric Toler, Davis A. Fahrenthold, and Adam Goldman, “Gunman at Trump Rally Was Often a Step Ahead of the Secret Service,” The Washington Post, July 28, 2024. https://www.nytimes.com/2024/07/28/us/ politics/trump-shooting-thomas-crooks-secret-service. html 93 “Current Macroeconomic and Financial Situation Table Based on Nine Months of Data”, Nepal Rastra Bank, https://www.nrb.org.np/category/currentmacroeconomic-situation/?department=red&fy=208081&subcategory=nine-months

119

Ibid

120

Ibid

121

Ibid

122 Prasain, Krishana, “Nepal’s economy has slowed down. Electric vehicle sales haven’t”, The Kathmandu Post, https://kathmandupost.com/money/2024/07/02/ nepal-s-economy-has-slowed-down-electric-vehiclesales-haven-t 123

Ibid

94

Ibid

124

Ibid

95

Ibid

125

Ibid

96

Ibid

126

Ibid

127

Ibid

128

Ibid

129

Ibid

97 “Monetary Policy for 2024/25”, Nepal Rastra Bank, https://www.nrb.org.np/contents/ uploads/2024/08/Monetary-Policy-in-Englishfor-2024-25.pdf 98

Ibid

99

Ibid

100

Ibid

101

Ibid

102

Ibid

103

Ibid

104

Ibid

134 “Federation of Nepal Gold and Silver Dealer’s Association”, https://www.fenegosida.org/

105

Ibid

135

Ibid

106

Ibid

136

Ibid

137

Ibid

138

Ibid

139

Ibid

140

Ibid

107 “Foreign investments in Nepal 2024 (Policies, Procedures, Promotions & Investment Trends)”, Department of Industries (DoI), https://www.doind.gov. np/uploads/notices/Notices-2024071721491758.pdf 108

Ibid

109

Ibid

110 World Bank Group (2024), “Nepal: Government, World Bank sign US$100 Million Project to Improve Provincial and Local Roads.” World Bank Group. https://www.worldbank.org/en/news/pressrelease/2024/08/05/nepal-government-world-banksign-us-100-million-project-to-improve-provincialand-local-roads 111

Ibid

112

Ibid

113

Ibid

114

Ibid

115

Ibid

116

Ibid

117

Ibid

118

Ibid

130 “Foreign Trade Statistics 2080/81”, Department of Customs, https://customs.gov.np/storage/DoC/ Statistics/FTS_2080_81.xlsx 131

Ibid

132

Ibid

133

Ibid

141 “Economic Survey 2080/81”, Ministry of Finance, 2024. https://www.mof.gov.np/site/publicationdetail/3357 142

Ibid

143 “Situation Report on Nepal’s Agrifood Systems,” Feed the Future, July 2024. https://csisa.org/ wp-content/uploads/sites/2/2024/08/240801-CSISASIT-REP-JUL.pdf 144

Ibid

145

Ibid

146

Ibid

147

Ibid

148

Ibid

149

Ibid

150

Ibid

151

Ibid

84

DOCKING NEPAL’S ECONOMIC ANALYSIS

152

Ibid

153

Ibid

154 Current Macroeconomic and Financial Situation, Nepal Rastra Bank, 2024. https://www.nrb.org. np/category/current-macroeconomic-situation/?depart ment=red&fy=2080-81&subcategory=eleven-months

dairy-farmers-unhappy-with-one-sided-paymentdeal#:~:text=However%2C%20the%20National%20 Peasants'%20Coalition,of%20National%20Peasants'%20 Coalition%20Nepal.

155

Ibid

172 “Minority rule raises minimum support price for paddy,” The Kathmandu Post, July 9, 2024. https:// kathmandupost.com/money/2024/07/09/minority-ruleraises-minimum-support-price-for-paddy

156

Ibid

173

Ibid.

157

Ibid

174

Ibid.

158

Ibid

175

Ibid.

159

Ibid

176

Ibid.

177

Ibid.

160 Sangam Prasain, “Swift transplantation raises hope for bumper paddy yield,” The Kathmandu Post, August 1, 2024. https://kathmandupost.com/ money/2024/07/31/fastest-transplantation-rate-sowshope-for-bumper-paddy-harvest 161 “Feasts and festivities as Nepal celebrates rice planting festival,” Al Jazeera, July 3, 2024. https://www. aljazeera.com/gallery/2023/7/3/feasts-and-festivitiesas-nepal-celebrates-rice-planting-festival 162 Laxman Kalfe, “Paddy plantation complete in 40% of cultivable land,” The Rising Nepal, July 9, 2024. https://risingnepaldaily.com/ news/45515#:~:text=According%20to%20the%20 statistics%20of,(July%207%2C%202024).

163 “Minority rule raises minimum support price for paddy,” The Kathmandu Post, July 9, 2024. https:// kathmandupost.com/money/2024/07/09/minority-ruleraises-minimum-support-price-for-paddy; Sangam Prasain, “Swift transplantation raises hope for bumper paddy yield,” The Kathmandu Post, August 1, 2024. https://kathmandupost.com/money/2024/07/31/fastesttransplantation-rate-sows-hope-for-bumper-paddyharvest 164 “Farmers attracted towards commercial cashew farming.” My Republica, July 15, 2024. https:// myrepublica.nagariknetwork.com/news/farmersattracted-towards-commercial-cashew-farming/ 165

Ibid.

166

Ibid.

167

Ibid.

168 Rastriya Samachar Samiti, “Dairy farmers demand overdue payment with DDC,” The Himalayan Times, July 19, 2024. https://thehimalayantimes.com/ nepal/dairy-farmers-demand-overdue-payment-withddc 169

Ibid.

170

Ibid.

171 “Dairy farmers unhappy with ‘one-sided’ payment deal,” The Kathmandu Post, March 4, 2024. https://kathmandupost.com/money/2024/03/04/

178 “Super zone programme to increase agro products,” Radio Nepal, August 17, 2024. https:// onlineradionepal.gov.np/en/2024/08/17/386974.html 179 “Agricultural modernization project launched in Nepal,” Fresh Plaza, August 19, 2024. https://www. freshplaza.com/asia/article/9650551/agriculturalmodernization-project-launched-in-nepal/ 180 “Super zone programme to increase agro products,” Radio Nepal, August 17, 2024. https:// onlineradionepal.gov.np/en/2024/08/17/386974.html 181 “Super zone programme to increase agro products,” Radio Nepal, August 17, 2024. https:// onlineradionepal.gov.np/en/2024/08/17/386974.html; “Agricultural modernization project launched in Nepal,” Fresh Plaza, August 19, 2024. https://www.freshplaza. com/asia/article/9650551/agricultural-modernizationproject-launched-in-nepal/ 182 “Agricultural technicians to resume their strike after govt fails to meet their demands within the deadline,” My Republica, July 31, 2024. https:// myrepublica.nagariknetwork.com/archive/157982/ Agricultural-technicians-to-resume-their-strike-aftergovt-fails-to-meet-their-demands-within-the-deadline 183

Ibid.

184

Ibid.

185

Ibid.

186 “Netherlands – Employment in Agriculture (% of total employment)”, August, 2024. https:// tradingeconomics.com/netherlands/employment-inagriculture-percent-of-total-employment-wb-data. html#:~:text=Employment%20in%20agriculture%20 (%25%20of%20total%20employment)%20(modeled%20 ILO%20estimate,compiled%20from%20officially%20 recognized%20sources; “Prospects for Agriculture Sector in the Netherlands,” Netherlands Ministry of Agriculture, Nature and Food Quality, 2020. chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https:// edepot.wur.nl/52757 187 “Retain youth for agriculture development,” The Rising Nepal, September 15, 2024. https://

NEFPORT ISSUE 57 – JULY 2024

risingnepaldaily.com/news/32448 188 “Retain youth for agriculture development,” The Rising Nepal, September 15, 2024. https:// risingnepaldaily.com/news/32448 189 “Future-proofing Nepal’s population strategy,” Nepali Times, July 14, 2024. https://nepal.unfpa.org/ en/news/future-proofing-nepals-population-strategy; “National population and housing census 2021,” National Statics Office, February 2022. https://censusnepal.cbs. gov.np/Home/Details?tpid=5&dcid=3479c092-77494ba6-9369-45486cd67f30&tfsid=17 190 “National population and housing census 2021,” National Statics Office, February 2022. https://censusnepal.cbs.gov.np/Home/ Details?tpid=5&dcid=3479c092-7749-4ba6-936945486cd67f30&tfsid=17 191 https://www.nepjol.info/index.php/rupantaran/ article/view/65205/49492 192

Ibid.

193 “आर्​्थथिक सर्वेक्षण २०८०/८१.” Ministry of Finance, Government of Nepal. May 26, 2024. https://www.mof. gov.np/site/publication-detail/3357.

205 Issue of converting private schools into trusts resurfaces, The Kathmandu Post, July 19, 2024, https://kathmandupost.com/national/2024/07/19/issueof-converting-private-schools-into-trusts-resurfaces 206

Ibid

207

Ibid

208 “The Fees of Those Who Fail to Participate in the Medical Education Commission Exam Will Be Refunded: Education Minister Bhattarai.” Kantipur Daily, August 14, 2024. https://ekantipur.com/en/ Education/2024/08/14/the-fees-of-those-who-fail-toparticipate-in-the-medical-education-commissionexam-will-be-refunded-education-ministerbhattarai-15-05.html.

209

Ibid

210 “KMC to Restructure Primary Education into Two Levels.” My Republica, June 15, 2024. https:// myrepublica.nagariknetwork.com/news/kmc-torestructure-primary-education-into-two-levels/.

211

Ibid

212

Ibid

194

Ibid

213

Ibid

195

Ibid

214

Ibid

196

Ibid

215

Ibid

197

Ibid

216

Ibid

217

Ibid

218

Ibid

198 SEE Results Show Significant Student Underperformance," The Kathmandu Post, June 28, 2024, https://kathmandupost.com/national/2024/06/28/seeresults-show-significant-student-underperformance.

199 Did the SEE Result Genuinely Improve This Year? My Republica, August 13, 2023, https:// myrepublica.nagariknetwork.com/news/did-the-seeresult-genuinely-improve-this-year/.

200

Ibid

201 SEE supplementary exam begins today, Rising Nepal Daily, August 7, 2024, SEE supplementary exam begins today (risingnepaldaily. com) 202 SEE results expose education crisis, declining student performance, Khabarhub, July 1, 2024, https:// english.khabarhub.com/2024/01/363031/ 203 Minister Bhattarai Announces Upcoming Introduction of Integrated Higher Secondary Education Bill," Khabarhub, August 28, 2024, https://english.khabarhub.com/2024/28/390430/.

204 Ghimire, Binod. “Student Unions One on Converting Private Schools into Trusts.” The Kathmandu Post, January 15, 2024. https://kathmandupost. com/national/2024/01/15/student-unions-one-onconverting-private-schools-into-trusts.

219 “अब कक्षा ४ माथिको मात्र परीक्षा.” Edupatra, August 13, 2024. https://edupatra.com/news/now-onlyexam-for-class-4-above/.

220

Ibid

221 Baniya, Nakul. “Enhancing Learning through Continuous Assessment System.” UNESCO, August 2019. https://neqmap.bangkok.unesco.org/wp-content/ uploads/2019/08/Enhancing-Learning-ThroughContinuous-Assessment-System-Nepal.pdf.

222 “अब कक्षा ४ माथिको मात्र परीक्षा..” Edupatra, August 13, 2024. https://edupatra.com/news/now-onlyexam-for-class-4-above/.

223

Ibid

224

Ibid

“Economic Survey 2024: 65% of the Population under 35, yet Many Lack Skills for a Modern Economy.” Business Today, July 22, 2024. https://www. businesstoday.in/union-budget/story/budget-2024economic-survey-2024-65-of-the-populationunder-35-yet-many-lack-skills-for-a-moderneconomy-438086-2024-07-22.

225

Assessing the impact of right to education act, March 2016. https://assets.kpmg.com/content/dam/ 226

85

86

DOCKING NEPAL’S ECONOMIC ANALYSIS

kpmg/pdf/2016/03/Assessing-the-impact-of-Right-toEducation-Act.pdf.

Bhowmick, Nilanjana. “10 Years of Right to Education: A Progress Report.” Reader’s Digest India - Articles on Health, True Stories, Humor, Personality, Opinion, Facts, Fiction, Interview, August 26, 2019. https://www.readersdigest.in/features/story-right-toeducation-a-progress-report-125002#:~:text=The%20 most%20important%20achievement%20of%20 the%20RTE%20has,implemented%20in%20 2010%2C%20India%20managed%20to%20improve%20 infrastructure.

227

environment/2024/07/17/above-average-rainfallrecorded-in-first-four-weeks-of-monsoon 245 “Floods, landslips cause havoc across country”. The Kathmandu Post, July 7, 2024. https:// kathmandupost.com/national/2024/07/07/floodslandslips-cause-havoc-across-country 246 “Record rains hit Nepal’s Kanchanpur”.

The Watchers, July 10, 2024. https://watchers. news/2024/07/10/record-rains-hit-nepalskanchanpur/#:~:text=Kanchanpur%20district%20in%20 Nepal%20experienced,mm%20(23.62%20inch)%20mark.

247

Ibid Ibid

228

Ibid

248

229

Ibid

249 “Nepal Disaster Risk Reduction Portal”.

Government of Nepal. Accessed on August 13, 2024. http://drrportal.gov.np/summary

“Demographic Changes of Nepal: Trends and Policy Implications” National Planning Commission, March 2017. https://www.npc.gov.np/images/category/ Demographic_Dividend_Report_May_2017_final_for_ circulation1.pdf.

230

231 ‘Current Macroeconomic and Financial Situation (Annual Data-2023/24)’, Nepal Rastra Bank, August 18, 2024. https://www.nrb.org.np/category/ current-macroeconomic-situation/?department=red& fy=2080-81&subcategory=annual 232

https://www.nea.org.np/

233

Ibid

234 ‘Annual Report, 2023/24’, Nepal Electricity Authority, August 21, 2024. https://www.nea.org.np/ annual_report 235

Ibid

236

Ibid

237

Ibid

238

Ibid

239

Ibid

240 ‘Energy Sector Synopsis Report-2024’, Water and Energy Commission Secretariat, August 21, 2024. http://wecs.gov.np/source/ESR_2024.pdf 241 ‘National Seasonal Outlook for Monsoon Season: June-September, 2024’, Department of Hydrology and Meterology, Accessed on August 21, 2024. https://www.dhm.gov.np/uploads/dhm/climateService/ Monsoon_Season_Outlook_updated_2024.pdf 242

Ibid

243 “Fourteen killed in Nepal as monsoon rains cause flooding in South Asia”. Aljazeera, July 7, 2024. https://www.aljazeera.com/gallery/2024/7/7/fourteenkilled-in-nepal-as-monsoon-rains-cause-flooding-insouth-asia 244 “Above-average rainfall recorded in the first four weeks of monsoon”. The Kathmandu Post, July 17, 2024. https://kathmandupost.com/climate-

250 “170 killed in rain incidents since June.” The Kathmandu Post, August 9, 2024. https://kathmandupost. com/national/2024/08/09/170-dead-in-monsooninduced-disasters-so-far 251

Ibid

252 Shakya, Suyasha. “The Thame Flood: A Window into the Himalayan Climate Crisis.” Nepal Economic Forum, August 26, 2024. https://nepaleconomicforum. org/the-thame-flood-a-window-into-the-himalayanclimate-crisis/ 253 “Glacial Lake Outburst Floods”. ICIMOD, Accessed on September 25, 2024. https://www.icimod. org/mountain/glacial-lake-outburst-flood/ 254 “Bursting Out”, The Kathmandu Post, August 19, 2024. https://kathmandupost.com/editorial/2024/08/19/ bursting-out 255 “Aerial Inspections ties Thame flood to Glacial Lake Outburst.” The Kathmandu Post, August 18, 2024. https://kathmandupost.com/climateenvironment/2024/08/18/aerial-inspection-ties-thameflood-to-glacial-lake-outburst 256

Ibid

257

Ibid

258 “Arun 3rd Hydropower Project Makes Major Tunnel Breakthrough”, Nepal Energy Forum, June 4, 2024. http://www.nepalenergyforum.com/arun-3rdhydropower-project-makes-major-tunnelbreakthrough/ 259 “Nepal Prioritizes Energy Sector with Progress on Arun-3 Hydropower Project”, Nepal Energy Forum, June 5, 2024. http://www.nepalenergyforum.com/nepal-prioritizesenergy-sector-with-progress-on-arun-3-hydropowerproject-pen_spark/ 260 “SJVN's 900 MW project in Nepal to start power generation from 2025: CMD”, Economic Times,

NEFPORT ISSUE 57 – JULY 2024

June 5, 2024. https://energy.economictimes.indiatimes.com/news/ power/sjvns-900-mw-project-in-nepal-to-startpower-generation-from-2025-cmd/110718731 261 “Main tunnel of 900MW Arun III Hydropower Project achieves breakthrough”, My Republica, June 4, 2024. https://myrepublica.nagariknetwork.com/news/maintunnel-of-900mw-arun-iii-hydropower-projectachieves-breakthrough/ 262 “IREDA to invest Rs 290 cr in Nepal 900 MW hydro projects”, Bio Energy Times, July 18, 2024. https://bioenergytimes.com/ireda-to-invest-rs-290-crin-nepal-900-mw-hydro-projects/ 263 “IREDA to invest in 900MW hydropower project in Nepal”, Water Power Magazine, July 19, 2024. https://www.waterpowermagazine.com/news/ireda-toinvest-in-900mw-hydropower-project-in-nepal/ 264

Ibid.

265 “Integrated development of hydropower and solar energy stressed”, The Rising Nepal, June 13, 2024.

272 “539 local levels, out of 753, fully electrified, 99% citizens have access to power:NEA”. The Rising Nepal Online, August 20, 2024. https://risingnepaldaily. com/news/47724 273 “28 percent of local levels are yet to receive full-fledged electricity supply”. My Republica, August 20, 2024. https://myrepublica.nagariknetwork.com/ news/28-percent-of-local-levels-are-yet-to-receivefull-fledged-electricity-supply/ 274

Ibid

275

Ibid

276 “NEA Claims 99% Electrification, Nepal on the Brink of Power Surplus”, Nepal Energy Forum, August 10, 2024. http://www.nepalenergyforum.com/nea-claims-99electrification-nepal-on-the-brink-of-power-surplus/ 277

Ibid.

“Nepal Electricity Authority’s Achievement”, Nepal Electricity Authority, Accessed on August 21, 2024.

278

https://risingnepaldaily.com/news/44384

279 “Nepal’s First State-of-the-Art Distribution System Control and Data Center in Operation”, Urja Khabar, June 30, 2024.https://www.urjakhabar.com/en/ news/3006394979

266 “HoR endorses proposal seeking ratification of ISA Framework Agreement”. The Republica, June 6, 2024. https://myrepublica.nagariknetwork.com/news/ hor-endorses-proposal-seeking-ratification-of-isaframework-agreement/#/recommeneded

280 “Minister Basnet Inaugurated State-of-the-Art Control and Data Center”, Nepal Energy Forum, June 30, 2024.http://www.nepalenergyforum.com/nepalelectricity-authority-unveils-state-of-the-art-controland-data-center/

267 “Nepal Parliament approves ratification for Framework Agreement related to International Solar Alliance”. Press Trust of India. https://www.ptinews.com/ story/national/nepal-parliament-approves-ratificationfor-framework-agreement-related-to-internationalsolar-alliance/1567487

281 “NEA Unveils Cutting-Edge Data Center: Nepal’s Leap into Digital Modernity”, Nepal Energy Forum, June 12, 2024.

268

Ibid

269 “Nepal Parliament approves ratification for Framework Agreement related to International Solar Alliance”. The Times of India, June 8, 2024. https:// timesofindia.indiatimes.com/world/south-asia/nepalparliament-approves-ratification-for-frameworkagreement-related-to-international-solar-alliance/ articleshow/110819158.cms 270 “Notable Pipeline Projects under Implementation”, Indian Oil, Accessed on August 22, 2024. https://iocl.com/projects-under-implementation 271 Mark Iden, “New Products Pipeline Being Considered Between India and Nepal”, Pipeline Technology Journal, August 28, 2020. https://www. pipeline-journal.net/news/new-products-pipelinebeing-considered-between-india-and-nepal

http://www.nepalenergyforum.com/nea-unveils-cuttingedge-data-center-nepals-leap-into-digital-modernity/ 282 World Energy Trilemma, 2024: Evolving with Resilience and Justice. World Energy Council, April 15, 2024. https://www.worldenergy.org/assets/ downloads/World_Energy_Trilemma_2024_Full_Report. pdf?v=1717662800 283

Ibid

284

Ibid

285

Ibid

286 “PAC Receives 100,000-Page Proposal from NEA on Dedicated Feeders and Trunk Lines”, Nepal Energy Forum, August 9, 2024. http://www.nepalenergyforum.com/pac-receives100000-page-proposal-from-nea-on-dedicatedfeeders-and-trunk-lines/ 287 “Lawmakers Call for Investigation into PAC Chair Pokharel’s Alleged Meeting with NEA Tariff Defaulter”, Nepal Energy Forum, July 31, 2024.

87

88

DOCKING NEPAL’S ECONOMIC ANALYSIS

http://www.nepalenergyforum.com/lawmakers-callfor-investigation-into-pac-chair-pokharels-allegedmeeting-with-nea-tariff-defaulter/ 288 “PAC Receives 100,000-Page Proposal from NEA on Dedicated Feeders and Trunk Lines”, Nepal Energy Forum, August 9, 2024. http://www.nepalenergyforum.com/pac-receives100000-page-proposal-from-nea-on-dedicatedfeeders-and-trunk-lines/ 289 Saculsan, Phoebe Grace, and Akihisa Mori.

"Why developing countries go through an unsustainable energy transition pathway? The case of the Philippines from a political economic perspective." Journal of Sustainability Research 2, no. 2 (2020). https://repository. kulib.kyoto-u.ac.jp/dspace/bitstream/2433/252759/1/ jsr20200012.pdf 290

Ibid

291 Abrigo, Michael Ralph M., Danica Aisa P. Ortiz, Aniceto C. Orbeta, and Gilberto M. Llanto. Greening the Philippine employment projections model: New estimates and policy options. No. 2021-26. PIDS Discussion Paper Series, 2021.https://www.econstor.eu/ bitstream/10419/256861/1/pidsdps2126.pdf 292 “Philippine Green Jobs Act of 2016”,United Nations Framework Convention on Climate Change, July 18, 2023 https://unfccc.int/sites/default/files/resource/ SCFForum_S5_Lapiz_CCC.pdf 293

Ibid

294

Ibis

295 Ministry of Finance. “आर्​्थथिक सर्वेक्षण २०८०/८१” Government of Nepal. May 26, 2024. https://www.mof. gov.np/site/publication-detail/3357

304 Ministry of Health and Population, “डे​ेंगी रोकथाम तथा नियन्तत्रण का लागि लामखुट्​्टटे को प्रजनन ् स्​्थल तथा लार्​्भभाप्​्ययूपा खोज तथा नष्​्ट गर्ने कार्​्यविधि,” Government of Nepal, August 16, 2024. https://edcd.gov.np/resource-detail/ dengue-prevention-and-control-sop 305 “WHO hands over high-quality handcompression sprayers and spare parts to curb potential dengue outbreaks,” World Health Organization, August 8, 2024. https://www.who.int/nepal/news/detail/0808-2024-who-hands-over-high-quality-handcompression-sprayers-and-spare-parts-to-curbpotential-dengue-outbreaks 306 “Dengue, cholera infection in all districts except Humla and Mustang,” Radio Nepal, August 24, 2024. https://onlineradionepal.gov.np/en/2024/08/24/387505. html 307

Ibid.

308 Poudel, Arjun. “Cholera outbreaks being reported only from districts with active surveillance,” The Kathmandu Post, August 1, 2024. https://kathmandupost. com/health/2024/08/01/cholera-outbreaks-beingreported-only-from-districts-with-active-surveillance 309 “Monsoon rains spike risk of water and vectorborne illnesses in most districts,” The Kathmandu Post, August 3, 2024. https://kathmandupost.com/ health/2024/08/03/monsoon-rains-spike-risk-ofwater-and-vector-borne-illnesses-in-most-districts 310 Paudel, Arjun. “Cholera outbreak confirmed in three more places in Valley. Officials fear widespread outbreak,” The Kathmandu Post, July 30, 2024. https:// kathmandupost.com/health/2024/07/30/choleraoutbreak-confirmed-in-three-more-places-in-valleyofficials-fear-widespread-outbreak

297 Ministry of Finance. “Economic Survey (English Version) 2022/23” Government of Nepal. March 13, 2024. https://www.mof.gov.np/site/publication-detail/3344

311 “Cases filed against 38 industries for selling substandard food items,” myRepublica, July 25, 2024. https://myrepublica.nagariknetwork.com/news/casesfiled-against-38-industries-for-selling-substandardfood-items

298

312

296

Ibid

Ibid

299 Ministry of Finance. “आर्​्थथिक सर्वेक्षण २०८०/८१” Government of Nepal. May 26, 2024. https://www.mof. gov.np/site/publication-detail/3357 300

Ibid

301 Ministry of Health and Population, “#7 Seventh Bi-weekly situation update on Dengue and Cholera,” Government of Nepal, August 28, 2024. https://edcd.gov. np/news/7-seventh-bi-weekly-situation-update-ondengue-and-cholera 302 Poudel, Arjun, “Counting cases alone won’t defeat dengue, warn doctors,” The Kathmandu Post, August 6, 2024. https://kathmandupost.com/ health/2024/08/06/counting-cases-alone-won-tdefeat-dengue-warn-doctors 303

Ibid.

Ibid.

313 “Nepal delays lab test of Indian spice brands MDH and Everest,” The Kathmandu Post, June 2, 2024. https://kathmandupost.com/money/2024/06/02/nepaldelays-lab-test-of-indian-spice-brands-mdh-andeverest 314

Ibid.

315 ललितपरु . “नेपालको चिकित्​्ससा क्षेत्रमा ऐतिहासिक उपलब्​्धधि : बी एण्​्ड बी अस्​्पतालमा रोबोटिक शल्​्यक्रिया सुरु.”

Nagarik News, August 13, 2024. https://nagariknews. nagariknetwork.com/health/1445132-1723535003.html.

316

Ibid

317 “Nepal’s First Robotic Surgery System Installed at B&B Hospital.” The Indian Practitioner, July 1, 2024. https://theindianpractitioner.com/nepals-first-roboticsurgery-system-installed-at-bb-hospital/.

NEFPORT ISSUE 57 – JULY 2024

318 “SS Innovations’ SSI Mantra Surgical Robotic System Used to Perform 100 Cardiac Surgeries, Signaling Market Expansion.” Business Insider, May 21, 2024. https://markets.businessinsider.com/news/stocks/ ss-innovations-ssi-mantra-surgical-robotic-systemused-to-perform-100-cardiac-surgeries-signalingmarket-expansion-1033406846#:~:text=Supporting%20advanced%2C%20affordable%2C%20and%20 accessible%20robotic%20surgery%2C%20the,and%20 neck%2C%20gynecology%2C%20urology%2C%20 general%20surgery%20and%20more.

319

Ibid

320 Poudel, Arjun. “Highly Contagious Poliovirus Found in Kathmandu Sewage.” The Kathmandu Post, July 19, 2024. https://kathmandupost.com/health/2024/07/19/ highly-contagious-poliovirus-found-in-kathmandusewage#:~:text=%E2%80%9CWe%20got%20a%20 confirmation%20report,Kathmandu%5D%20on%20 May%2026.%E2%80%9D. 321

Ibid

322

Ibid

323 Poudel, Arjun. “Valley Polio Drive Hits 104% Coverage, but Experts Warn of Gaps.” The Kathmandu Post, July 31, 2024. https://kathmandupost.com/ health/2024/07/31/valley-polio-drive-hits-104coverage-but-experts-warn-of-gaps.

324

Ibid

325 “Family Welfare Division Launches Safe Delivery App in Collaboration with UNFPA and Maternity Foundation in Nepal.” My Republica, July 9, 2024. https:// myrepublica.nagariknetwork.com/news/family-welfaredivision-launches-safe-delivery-app-in-collaborationwith-unfpa-and-maternity-foundation-in-nepal/.

326 “Safe Delivery App.” Laerdal Global Health.

Accessed August 27, 2024. https://laerdalglobalhealth. com/Resources/COVID19res/safe-delivery-app/.

327 “Family Welfare Division Launches Safe Delivery App in Collaboration with UNFPA and ​Maternity Foundation in ​​Nepal. .” Maternity Foundation, July 8, 2024. https://www.maternity.dk/launch_of_nepali_ sda/#:~:text=Family%20Welfare%20Division%2C%20 Department%20of,application%20that%20supports%20 midwives%20and.

328

Ibid

329 Telmer, Sebastian. “Safe Delivery App Launches Digital Response to COVID-19.” Visikon, April 8, 2020. https://visikon.com/safe-delivery-app-launches-digitalresponse-to-covid-19/.

330 “About Maternity Foundation.” Maternity Foundation, n.d. https://www.maternity.dk/aboutmaternity/.

331

Ibid

332 “Maternity Hospital Pushes for Mental Health Screening Training for All Healthcare Workers.” The

Kathmandu Post, July 2, 2024. https://kathmandupost. com/national/2024/07/02/maternity-hospitalpushes-for-mental-health-screening-training-for-allhealthcare-workers 333 “A Report on Maternal Mortality.” National Statistics Office, 2023. https://mohp.gov.np/uploads/ Resources/Nepal Maternal Mortality Report 2021.pdf.

334 Poudel, Arjun. “Maternity Hospital Starts Screening Pregnant Women, New Mums for Mental Health Issues.” The Kathmandu Post, August 24, 2024. https://kathmandupost.com/health/2024/08/24/ maternity-hospital-starts-screening-pregnant-womennew-mums-for-mental-health-issues.

335 “Children and Adolescents to Be Screened for Mental Health Conditions.” The Kathmandu Post, August 8, 2024. https://kathmandupost.com/ health/2024/08/08/children-and-adolescents-to-bescreened-for-mental-health-conditions.

336

Ibid

337 Hon, Won Young, “Future-proofing Nepal’s population strategy,” Nepali Times, July 14, 2024. https:// nepalitimes.com/here-now/future-proofing-nepal-spopulation-strategy 338

Ibid.

339 Plser, Karlna, “Cash Can’t Fix Japan’s Fertility Crisis: Women’s role in society has evolved, but Kishida’s policies haven’t kept up.” Foreign Policy, October 23, 2023. https://foreignpolicy.com/2023/10/23/japankishida-economy-speech-women-birth-fertility-ratepopulation-demographics/ 340 Whiting, Kate, “Could these old and new ideas be the future of social care for the elderly?” World Economic Forum, August 3, 2023. https://www.weforum. org/agenda/2023/08/elderly-social-care-dementiavillages/ 341 “Telecommunication Indicators. 14 March-12 April, 2024,” Nepal Telecommunications Authority, May 29, 2024. https://nta.gov.np/uploads/contents/MIS%20 Report_2080%20Chaitra.pdf 342

Ibid.

343

Ibid.

344

Ibid.

345

Ibid.

346 Nepal Rastra Bank, “Current Macroeconomic and Financial Situation of Nepal (Based on elevenmonths data ending mid-June 2023/24),” Government of Nepal, May 2024. https://www.nrb.org.np/category/ current-macroeconomic-situation/?department=red& fy=2080-81&subcategory=nine-months 347

Ibid.

348

Ibid.

349

Ibid.

89

90

DOCKING NEPAL’S ECONOMIC ANALYSIS

350

Ibid.

“Telecommunication Indicators.

18 September-17 October, 2023,” Nepal Telecommunications Authority, April 29, 2024. https:// nta.gov.np/uploads/contents/MIS%20Report_2080%20 Chaitra.pdf 351

352

Ibid.

353

Ibid.

354 Mina Aryal, “Ncell Services Disrupted by Fibre Cut, Services Restored,” August 12, 2024. https:// ictframe.com/ncell-services-disrupted-by-fibre-cutservices-restored/ 355

Ibid.

356 “दे शभर एनसेलको नेटवर्​्क डाउन,” Nepal Press, August 12, 2024. https://www.nepalpress. com/2024/08/12/498439/ 357 Mina Aryal, “Ncell Services Disrupted by Fibre Cut, Services Restored,” August 12, 2024. https:// ictframe.com/ncell-services-disrupted-by-fibrecut-services-restored/; “दे शभर एनसेलको नेटवर्​्क डाउन,” Nepal Press, August 12, 2024. https://www.nepalpress. com/2024/08/12/498439/ 358

Ibid.

359

Ibid.

360

Ibid.

361

Ibid.

362 “Frequency arrears dispute: Tata halts Ncell’s internet bandwidth,” July 03, 2024. https://english. khabarhub.com/2024/03/363785/ 363

Ibid.

364

Ibid.

365

Ibid.

366 Aarati Ray, “Cybercrime cases spike in Nepal,” The Kathmandu Post, August 21, 2024. https:// kathmandupost.com/national/2024/08/21/cybercrimecases-spike-in-nepal 367

Ibid.

368

Ibid.

369

Ibid.

370 “Nepal to export IT services worth Rs 30 billion and create 1.5 million jobs in 10 years: PM Dahal,” Radio Nepal, 7 June, 2024. https://onlineradionepal.gov.np/ en/2024/06/07/380255.html 371

Ibid.

372 “Minister Sharma insists on cooperation to achieve IT Decade goals,” Radio Nepal, July 7, 2024. https://onlineradionepal.gov.np/en/2024/06/07/380286. html 373

“About,” Digital Nepal Conclave 2024, accessed

August 21, 2024. https://digitalconclave.org/aboutthe-event/; “2019 Digital Nepal Framework,” Ministry of Communication and Information Technology, 2019. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/ https://drc.gov.np/storage/backend/pages/resources/ others/lp6S0TBu0kqwXB7V90hB9aodF4v6qTLGzUvN7M. pdf 374 “About,” Digital Nepal Conclave 2024, accessed August 21, 2024. https://digitalconclave.org/about-theevent/ 375

Ibid.

376 “Tech outage at Microsoft sparks alarm over rapid dematerialization,” Fiscal Nepal, August 2, 2024. https://www.fiscalnepal.com/2024/08/02/17435/ tech-outage-at-microsoft-sparks-alarm-over-rapiddematerialization/; Navraj Thapa, “CrowdStrike update disrupts millions of Windows devices: What’s next for Nepal,” My Republica, July 23, 2024. https://myrepublica. nagariknetwork.com/news/crowdstrike-updatedisrupts-millions-of-windows-devices-what-s-nextfor-nepal/ 377 “Tech outage at Microsoft sparks alarm over rapid dematerialization,” Fiscal Nepal, August 2, 2024. https://www.fiscalnepal.com/2024/08/02/17435/ tech-outage-at-microsoft-sparks-alarm-over-rapiddematerialization/ 378 “Microsoft's cloud service outage affects service delivery around the world,” Kantipur, July 19, 2024. https://ekantipur.com/en/business/2024/07/19/ microsofts-service-outages-affect-service-deliveryaround-the-world-45-35.html; “नेपालमा पनि दे खियो माइक्रोसफ्​्टको समस्​्यया, क्​्ललियरिङ हाउसका कम्​्प्ययुटर डाउन,” Baahra Khabar, July 19, 2024. https://baahrakhari.com/ detail/427321 379 Adam Santariano, et. al., “Chaos and Confusion: Tech Outage Causes Disruptions Worldwide,” July 19, 2024. https://www.nytimes.com/2024/07/19/business/ microsoft-outage-cause-azure-crowdstrike.html 380

Ibid.

381 Andrew Griffin, “What caused the Microsoft IT outage that broke flights, banks and trains across the world,” Yahoo News, July 20, 2024. https:// ca.news.yahoo.com/causing-microsoft-outagebroke-flights-091312661.html?guccounter=1&guce_ er=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_ referrer_sig=AQAAACKWoGwAJiWk9b3UBO7e E6fyYBCK-jVzat_y-8ojw9ZcCzOJeClGl9zov7Cv TocxbSh56npgHEuAVvCNAOPnfS8QZe70q8f4v KlRRgcrJSEmbNlHHvVNx00wrqi2c-XF1gvZ6fzLq5mcDIgYY94QWeqmikRmmoU1UVqiqhXe5W6T 382 Unleashing IT: Advancing Nepal’s Digital Economy, Institute for Integrated Development Studies (IIDS), July 2023. https://www.iids.org.np/images/ publications/15c4487b777dcf3239cd6af6dd15c2c1.pdf 383

Pranaya SJB Rana, Biswas Dhakal: Nepal’s way

NEFPORT ISSUE 57 – JULY 2024

of doing things needs to change, The Kathmandu Post, August 2019. https://kathmandupost.com/sciencetechnology/2019/08/10/biswas-dhakal-nepal-s-way-ofdoing-things-needs-to-change 384

eSewa, Blogs, Accessed on August 22, 2024.

https://blog.esewa.com.np/best-digital-wallet-of-nepal/ 385 Dinesh, AI Firm Fusemachines to list on NASDAQ Stock Exchange, Nepali Telecom, January 25, 2024. https://www.nepalitelecom.com/ai-firm-fusemachinesnasdaq-stock-exchange# 386 Fusemachines, Love Your Data, Thrive with AI: Spotlight on AI Products & Solutions, LinkedIn, February 20, 2024. https://www.linkedin.com/pulse/love-your-data-thriveai-spotlight-products-solutions-fusemachines-eowlf/ 387

Ibid

388 “MCA-Nepal completes signing of All three 400 kV Substations”. Millennium Challenge Account Nepal, Accessed on August 14, 2024. https://mcanp.org/ en/news/mca-nepal-signs-second-400kv-substationconstruction-contract/ 389 “Millennium Challenge Account-Nepal signs all three 400 kV substation contracts”. The Kathmandu Post, July 31, 2024. https://kathmandupost.com/ national/2024/07/31/millennium-challenge-accountnepal-signs-all-three-400kv-substations 390 “MCA-Nepal signs contracts for three substations of 400KV.” The Annapurna Express, July 31, 2024. https://theannapurnaexpress.com/story/49939/ 391

Ibid

392 “Dodhara-Chandani Dry Port Construction: Primary work Begins”. My Republica, June 13, 2024. https://myrepublica.nagariknetwork.com/news/dodharachandani-dry-port-construction-primary-work-begins/ 393

Ibid

394

Ibid

395 “Construction of Gautam Buddha International Cricket Stadium resumes” My Republica, August 11, 2024. https://myrepublica.nagariknetwork.com/news/ construction-of-gautam-buddha-intl-cricket-stadiumresumes/ 396 “Contract awarded for Gautam Buddha International Cricket Stadium Construction.” My Republica, June 28, 2024. https://myrepublica. nagariknetwork.com/news/contract-awarded-forgautam-buddha-int-l-cricket-stadium-construction/ 397 “Construction begins on Gautam Buddha International Cricket Stadium in Chitwan”, Khabarhub, August 11, 2024. https://english.khabarhub.

com/2024/11/376480/ 398

Ibid

399 “Nepal’s transmission lines doubled to 6,507 circuit km in eight years”. My Republica, August 14, 2024. https://myrepublica.nagariknetwork.com/news/nepal-stransmission-lines-doubled-to-6-507-circuit-km-ineight-years/ 400

Ibid

401

Ibid

402

Ibid

403

Ibid

404 “Nepal: Government, World Bank sign US$100 Million Project to Improve Provincial and Local Roads”.

Ministry of Finance, August 5, 2024. https://mof.gov.np/ uploads/document/file/1722844869_Nepal%20WB%20. pdf 405

Ibid

406 Anthony Davis. “Nepal embarks on US$100 m Road Improvement Project with World Bank Support.”

Highways Today. https://highways.today/2024/08/06/ nepal-100m-world-bank/ 407

ibid

408 “PM Dahal inaugurates 3rd Largest 400 kV Hetauda Substation”. June 14, 2024, Nepal Khabar. https://en.nepalkhabar.com/news/detail/9722/ 409

ibid

410

Ibid

411

Ibid

412 “Nepal’s third largest 400 kV substation completed in Hetauda.” June 14, 2024, My Republica. https://myrepublica.nagariknetwork.com/news/nepals-third-largest-400-kv-substation-completed-inhetauda/ 413 “Kathmandu-Tarai Expressway achieves fourth tunnel breakthrough.” August 5, 2024, The Kathmandu Post. https://kathmandupost.com/national/2024/08/05/ kathmandu-tarai-expressway-achieves-fourth-tunnelbreakthrough 414

ibid

415 “Kathmandu-Terai expressway achieves another tunnel breakthrough”. July 4, 2024, The Kathmandu Post. https://myrepublica.nagariknetwork. com/news/kathmandu-terai-madhesh-expresswayachieves-break-through/?categoryId=blog 416

ibid

417

ibid

418 “Kathmandu Valley records over 46,000 real estate transactions in FY 2023/24”. August 1, 2024, My Republica. https://myrepublica.nagariknetwork.com/

91

92

DOCKING NEPAL’S ECONOMIC ANALYSIS

news/dolma-recorded-over-46-000-real-estatetransactions-in-last-fy-2023-24/ 419 Xin Meng. "China’s 40 Years Demographic Dividend and Labor Supply: The Quantity Myth." IZA Discussion Paper Series, no. 16207, June 2023. https:// www.iza.org/publications/dp/16207 420 Xiauanmin, Li, & Qi Xijja. “China’s demographic dividend persists to underpin economy despite shrinking workforce.” Global Times, May 11, 2021. https:// www.globaltimes.cn/page/202105/1223198.shtml 421 Xiao, Wei, and Guochang Zhao. "Agricultural land and rural-urban migration in China: A new pattern."

Land Use Policy 74 (2018): 142-150.

422 Singh, Teshu. "Demographic dividend in China."

The Challenge Ahead, 2012.

423 “Fred Hu: The Demographic dividend has not disappeared and the encouragement of childbirth cannot go astray”. Primavera, March 24, 2023. https:// www.primavera-capital.com/thought-leadership/fredhu-the-demographic-dividend-has-not-disappearedand-the-encouragement-of-childbirth-cannot-goastray/ 424 “Nepal Visitor Arrivals”, CEIC, Accessed September 27, 2024. https://www.ceicdata.com/en/indicator/nepal/visitorarrivals 425 “Tourism sector attracts nearly half of Nepal’s FDI in 2023-24”, Fiscal Nepal, June 19, 2024. https://www.fiscalnepal.com/2024/06/19/16935/tourismsector-attracts-nearly-half-of-nepals-fdi-in-2023-24/ 426 “Nepal Tourism Statistics 2023”, Ministry of Culture, Tourism and Civil Aviation, Government of Nepal, March 2024.

427

Ibid.

428

Ibid.

429

Ibid.

430

Ibid.

431 “Current Macroeconomic and Financial Situation of Nepal.” Ministry of Finance, August 18, 2024. https://www.nrb.org.np/contents/uploads/2022/08/ Current-Macroeconomic-and-Financial-SituationEnglish-Based-on-Annual-data-of-2021.22-1.pdf.

432 Prasain, Sangam. “Tourism Earnings Hit Record High.” The Kathmandu Post, July 14, 2024. https:// kathmandupost.com/money/2024/07/14/tourismearnings-hit-record-high.

433

Ibid

434

Ibid

435 “Current Macroeconomic and Financial Situation of Nepal.” Ministry of Finance, August 18, 2024. https://www.nrb.org.np/contents/uploads/2022/08/ Current-Macroeconomic-and-Financial-Situation-

English-Based-on-Annual-data-of-2021.22-1.pdf.

436

Ibid

437

Ibid

438 Rastriya Samachar Samiti. “Chitwan National Park Sees Increase in Tourist Arrivals Last Fiscal Year.” The Himalayan Times, July 30, 2024. https:// thehimalayantimes.com/nepal/chitwan-national-parksees-increase-in-tourist-arrivals-last-fiscal-year.

439 Paudel, Ramesh Kumar. “Wildlife Draws Record Tourists, Alarms Conservationists.” The Kathmandu Post, July 22, 2024. https://kathmandupost. com/money/2024/07/22/wildlife-draws-recordtourists-alarms-conservationists#:~:text=The%20 number%20of%20tourists%20visiting,is%20the%20 highest%2Dever%20footfall.

440

Ibid

441 “International Tourism Fair Concludes, Attracting over 5,000 Visitors.” Khabarhub, June 16, 2024. https://english.khabarhub.com/2024/16/361200/.

442 “Highlights of Nepal’s largest tourism expo.”

Nepal International Tourism Expo. https://nitenepal.com/ blog-details/highlights-of-nepals-largest-tourismexpo-nite 443

Ibid

444

Ibid

445 “Press Release.” Ministry of Foreign Affairs Nepal, June 7, 2024. https://mofa.gov.np/wp-content/ uploads/2024/06/NNP-pdf.pdf.

446 “Press Release.” Nepal embassy Dhaka, July 5, 2024. https://www.facebook.com/share/p/ YXdm94TQRSARhVEf/.

447 Rai, Enika. “Govt’s Plan to Celebrate 2023 to 2033 as ‘tourism Decade’ Remains Unimplemented.”

My Republica, July 11, 2024. https://myrepublica. nagariknetwork.com/news/govt-s-plan-tocelebrate-years-2023-to-2033-tourism-decaderemains-unimplemented/#:~:text=09%3A46%20 PM-,Govt’s%20plan%20to%20celebrate%20 2023,as%20’Tourism%20decade’%20remains%20 unimplemented&text=TAPLEJUNG%2C%20July%20 10%3A%20Tourism%20entrepreneurs,to%20observe%20 it%20in%202023.

448 Kunwar, Suraj. “Concessions from Taxes to Visa Fees for International Flights to Pokhara and Bhairahawa.”

Kantipur Daily, August 16, 2024. https://ekantipur.com/ en/news/2024/08/16/concessions-from-taxes-tovisa-fees-for-international-flights-to-pokhara-andbhairahawa-09-50.html.

449 “Govt Takes Fresh Initiatives to Launch Regular Int’l Flights from Pria and Gbia.” My Republica, August 21, 2024. https://myrepublica.nagariknetwork.com/news/ govt-takes-fresh-initiatives-to-launch-regular-int-lflights-from-pria-and-gbia/.

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450 “Kakarvitta Border Point Opened for Tourists from Third-Country after Four Years.” My Republica, August 8, 2024. https://myrepublica.nagariknetwork. com/news/kakarvitta-border-point-opened-forthird-country-people/#:~:text=The%20transit%20 point%20along%20the,of%20the%20Immigration%20 Office%2C%20Kakarvitta.

451 “Third Country Tourists Resume Traveling to India via Nepali Border Posts.” My Republica, August 14, 2024. https://myrepublica.nagariknetwork.com/news/ third-country-tourists-resume-traveling-to-india-vianepali-border-posts/.

452

Ibid

453 Baduwal, Dipendra. “Integrated Check-in Service Begins for Indian Tourists.” The Kathmandu Post, July 18, 2014. https://kathmandupost.com/ money/2024/07/18/integrated-check-in-servicebegins-for-indian-tourists#:~:text=The%20new%20 facility%20opened%20last,Earlier%2C%20they%20 faced%20multiple%20checks.

454

Ibid

455

Ibid

456 “Press Release on the Sixteenth Meeting of Nepal-China Diplomatic Consultation Mechanism.”

Ministry of Foreign Affairs Nepal, July 28, 2024. https:// mofa.gov.np/press-release-on-the-sixteenth-meetingof-nepal-china-diplomatic-consultation-mechanism-3/.

457 Prasain, Sangam. “Beijing Bets on Tourism Diplomacy as Soft Power Tool.” The Kathmandu Post, June 27, 2024. https://kathmandupost.com/ money/2024/06/27/beijing-bets-on-tourismdiplomacy-as-soft-power-tool.

458 “Barahi Jungle Lodge Becomes Nepal’s First WTTC-Certified Hotel for Sustainability.”

The Kathmandu Post, August 17, 2024. https:// kathmandupost.com/money/2024/08/17/barahijungle-lodge-becomes-nepal-s-first-wttc-certifiedhotel-for-sustainability#:~:text=Barahi%20Jungle%20 Lodge%20has%20been,essential%20criteria%20for%20 responsible%20operations.

459 “Hotel Sustainability Basics SGS.” World Travel & Tourism Council. Accessed September 27, 2024. https://wttc.org/hotel-sustainability-basics-sgs.

460 “Barahi Jungle Lodge Becomes Nepal’s First WTTC-Certified Hotel for Sustainability.”

The Kathmandu Post, August 17, 2024. https:// kathmandupost.com/money/2024/08/17/barahijungle-lodge-becomes-nepal-s-first-wttc-certifiedhotel-for-sustainability#:~:text=Barahi%20Jungle%20 Lodge%20has%20been,essential%20criteria%20for%20 responsible%20operations.

461 “Varnabas Museum Hotel Joins Small Luxury Hotels of the World.” The Kathmandu Post, June 22, 2024. https://kathmandupost.com/money/2024/06/22/ varnabas-museum-hotel-joins-small-luxury-hotels-of-

the-world.

462 “About SLH.” About SLH | Small Luxury Hotels of the World | Small Luxury Hotels of the World. Accessed September 27, 2024. https://slh.com/about-slh.

463

Ibid

464 Webster, Craig, and Stanislav Ivanov.

“Demographic Change as a Driver for Tourism Automation.” JOURNAL OF TOURISM FUTURES, 2020. https://www.emerald.com/insight/content/doi/10.1108/ JTF-10-2019-0109/full/pdf?title=demographic-changeas-a-driver-for-tourism-automation.

465

Ibid

466 “6 Examples of Hotel Automation around the World.” WebBookingPro, February 7, 2024. https://www. webbookingpro.com/hotel-automation-examples/.

467 HCNME Digital Editor. “Human Touch Is the New Luxury.” Hotel & Catering, July 8, 2024. https:// hotelandcatering.com/interviews-features/humantouch-is-the-new-luxury.

468 “Nepal Rastra Bank, Current Macroeconomic and Financial Situation of Nepal Based on Nine Months data Ending Mid-April, 2023/24”, May 12, 2024. https://www.nrb.org.np/contents/uploads/2024/05/ Current-Macroeconomic-and-Financial-SituationEnglish-Based-on-Nine-Months-data-of-2023.24-1.pdf 469 “Nepse Alpha Earnings Scoreboard”, nepsealpha, accessed 14 May, 2024, https://nepsealpha.com 470 “Nepal Rastra Bank, Current Macroeconomic and Financial Situation of Nepal Based on Nine Months data Ending Mid-April, 2023/24”, May 12, 2024. https://www.nrb.org.np/contents/uploads/2024/05/ Current-Macroeconomic-and-Financial-SituationEnglish-Based-on-Nine-Months-data-of-2023.24-1.pdf 471

Ibid

472

Ibid

473

Ibid

474 “BFIs accumulate Rs 793 billion in loanable funds due to slow lending and excessive deposit collection”, 5 July, 2024 https://myrepublica.nagariknetwork.com/news/bfisaccumulate-rs-793-billion-in-loanable-funds-due-toslow-lending-and-excessive-deposit-collection/ 475

Ibid

476 “First amendment to BAFIA proposes legalizing digital currencies and establishing a digital bank”, 7 June, 2024 https://myrepublica.nagariknetwork.com/news/firstamendment-to-bafia-proposes-legalizing-digitalcurrencies-and-establishing-a-digital-bank/ 477

Ibid

93

94

DOCKING NEPAL’S ECONOMIC ANALYSIS

478

Ibid

479 “Bad debts of commercial banks fall to 3.76 percent as of the end of FY 2023/24”, 27 August 2024 https://myrepublica.nagariknetwork.com/mycity/ news/bad-debts-of-commercial-banks-fall-to-3-76percent-as-of-the-end-of-fy-2023-24 480

Ibid

481

Ibid

482

Ibid

483 “Circular no. 3 (A, B, C): Consolidated instructions issued by Nepal Rastra Bank to licensed institutions of "A", "B" and "C" categories, amended/ amended/added in 2080”, 27 August 2024 https://www.nrb.org.np/contents/uploads/2024/08/ Circular-3-for-ABC-final-merged.pdf 484

Ibid

485

Ibid

486

Ibid

487 “Cheque-bounce cases surge four-fold in four years”, 5 June 2024 https://myrepublica.nagariknetwork.com/news/chequebounce-cases-surge-four-fold-in-four-years/ 488

Ibid

489

Ibid

490

Ibid

491 “Ministry of Finance, Budget Speech of Fiscal Year 2024/25”, 28 May, 2024, https://www.mof.gov.np/uploads/document/ file/1717240542_बजेट%20वक्​्तव्​्य%20२०८१-८२.pdf 492

Ibid

493 “Current Macroeconomic and Situation (Based on Nine Months Data Ending Mid-April 2023)”, Nepal Rastra Bank, May 12, 2024. https://www.nrb.org.np/ contents/uploads/2024/05/Current-Macroeconomicand-Financial-Situation-English-Based-on-NineMonths-data-of-2023.24-1.pdf 494

Ibid

495

Ibid

496 “Datewise Indices”, Nepal Stock Exchange, May 30, 2024. https://www.nepalstock.com.np/indices 497 “Market Capitalization”, Nepal Stock Exchange, August 29, 2024. https://www.nepalstock.com.np/ marcap 498

Ibid

499 “A bill to amend the Securities Act, 2063”, August 20, 2024.

https://hr.parliament.gov.np/uploads/attachments/ j0vjym5dxxyeeyec.pdf 500

Ibid

501

Ibid

502

Ibid

503 “CIAA raids NEPSE office over suspected insider trading by employees”, August 15, 2024. https://myrepublica.nagariknetwork.com/news/ciaaraids-nepse-office-on-suspect-of-its-employeesbeing-involved-in-insider-trading-of-shares/ 504

Ibid

505

Ibid

506 “Market Summary, ShareSanasar”, month of August 2024. https://www.sharesansar.com/market-summary 507

Ibid

508 “CGT collection slumps due to low confidence among investors”, My Republica, June 18, 2024. https://myrepublica.nagariknetwork.com/news/cgtcollection-slumps-due-to-low-confidence-amonginvestors/ 509

Ibid

510

Ibid

511

Ibid

512 “SEBON permits issuance of primary shares after six months”, My Republica, June 23, 2024. https://myrepublica.nagariknetwork.com/news/sebonpermits-issuance-of-primary-shares-after-six-months/ 513 “Chairman of Nepal Securities Board Concludes Transformative Journey with Gratitude, ShareSansar, Jan 5, 2024. https://www.sharesansar.com/newsdetail/chairmanof-nepal-securities-board-concludes-transformativejourney-with-gratitude-2024-01-05 514 “Future-proofing Nepal’s population strategy,” United Nations Population Fund, July 14, 2024. https:// nepal.unfpa.org/en/news/future-proofing-nepalspopulation-strategy 515 National Planning Commission, 2017, Demographic Changes of Nepal: Trends and Policy Implications. https://www.npc.gov.np/images/category/ Demographic_Dividend_Report_May_2017_final_for_ circulation1.pdf 516 Ministry of Health and Population, New ERA, and ICF, 2022 Nepal DHS Summary Report, Kathmandu, Nepal: Ministry of Health and Population. https://www. dhsprogram.com/pubs/pdf/SR275/SR275.pdf 517 Nepal Rastra Bank, “Current Macro-Economic and Financial Situation,” 2023/24. https://www.nrb.org.

NEFPORT ISSUE 57 – JULY 2024

np/category/current-macroeconomic-situation/?depart ment=red&fy=2080-81 518

Ibid

519 United Nations. Population Division.

2024. World population prospects 2024. UN. 520 “Future-proofing Nepal’s population strategy,” United Nations Population Fund, 14 July 2024. https://nepal.unfpa.org/en/news/future-proofing-nepalspopulation-strategy.

521 OECD. 2024. Society at a Glance 2024: OECD Social Indicators. OECD. https://www.oecd.org/ en/publications/2024/06/society-at-a-glance2024_08001b73.html 522 Tomáš Sobotka, Anna Matysiak and Zuzanna Brzozowska, “Policy responses to low fertility: How effective are they?,” United Nations Population Fund, May 2019. https://www.unfpa.org/sites/default/files/pubpdf/Policy_responses_low_fertility_UNFPA_WP_Final_ corrections_7Feb2020_CLEAN.pdf 523 “Demographic Dividends,” United Nations Population Fund, July 30, 2024. Retrieved from- ​​ https://arabstates.unfpa.org/en/topics/demographicdividend-6 524

Ibid

525 “East Asian Economic Development: Two Demographic Dividends,” East-West Centre, 2005. Retrieved from- https://www.files.ethz.ch/ isn/99030/2005_06_East_Asian_Economic.pdf 526 Government of Nepal. National Planning Commission. 2017. Retrieved from- https://www.npc.gov. np/images/category/Demographic_Dividend_Report_ May_2017_final_for_circulation1.pdf 527

ibid

528

ibid

529 “Nepal net migration rate 1950-2024,” Macrotrends, Retrieved from- https://www.macrotrends. net/global-metrics/countries/NPL/nepal/net-migration 530 “Current Macro-Economic and Financial Situation,” Nepal Rastra Bank, 2023/24. Retrieved from https://www.nrb.org.np/category/currentmacroeconomic-situation/?department=red& fy=2080-81 531 Government of Nepal. Nepal Living Standards Survey 2022/23. Retrieved from- https://nepalindata. com/media/resources/items/0/b1707800524_89_pdf. pdf 532 High Comission of India. Pravasi Bhartiya Bima Yojana (PBBY). 2017. Retrieved from- https://www. hciseychelles.gov.in/pravasi-bhartiya-bima-yojana.php 533 Ministry of external affairs. India Development Foundation of Overseas Indians. 2008. Retrieved fromhttps://www.mea.gov.in/images/attach/IDF_Trifold_

Pamphlet_241016.pdf

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