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POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
NEPAL
                                                                       ECONOMIC
                                                                       FORUM
ISSUE 44 | MARCH 2021

                                     POLITICAL ECONOMY IN TRANSITION
 DOCKING NEPAL'S ECONOMIC ANALYSIS

                                            DOCKING NEPAL’S ECONOMIC ANALYSIS
                                                                 ISSUE 44 | MARCH 2021
POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
FACTSHEET                        NEPAL FACTSHEET

KEY ECONOMIC INDICATORS

 GDP (2021) ***                                              USD 30.6 billion   GDP growth rate (%)***                    0.2%

 GNI (PPP, 2021) ***                                               USD 3610     Inflation (y-o-y) ****                   4.05%

 Gross Capital Formation
 as of 2021, preliminary                                              50.2%     Agriculture sector (% share of GDP)**   27.65%
 estimate (% of GDP) ***

 HDI *                                                                 0.602    Industry sector (% share of GDP)**      14.27%

 Rank                                                                    142    Service sector (% share of GDP)**       58.08%

*HDI figure from Human Development Report of the UNDP-2020
** Based on Nepal Rastra Bank's 12 months data of 2019/20
*** Based on World Bank Data
****Based on 4 months' Data (2020/21)
POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
CONTENTS                    CONTENTS
                                 MARCH 2021 | ISSUE 44

     NEPAL FACTSHEET   1
     EDITORIAL   4

1   GENERAL OVERVIEW   5
    Political Overview      6
    International Economy   8

2   MACROECONOMIC OVERVIEW         10

3   SECTORAL REVIEW   13
    Agriculture   14
    Energy   16
    Infrastructure   17
    Telecommunications      20
    Real Estate   23
    Education   24
    Health   27
    Tourism   29
    Trade and Debt   31
    Foreign Aid   34
    Remittance   36
    Environment   39

4   MARKET REVIEW   40
    Financial Market 41
    Capital Market   45

5   SPECIAL SECTION: POLITICAL ECONOMY IN TRANSITION 48

    ENDNOTES   57
    NEF Profile   61
POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
Issue 44: March 2021         Executive Board Members:
    Publisher: Nepal Economic Forum          Alpa B. Shakya
Website: www.nepaleconomicforum.org          Chandni Singh
                                             Shayasta Tuladhar
 P.O Box 7025, Krishna Galli, Lalitpur —     Sudip Bhaju
                               3, Nepal      Sujeev Shakya
             Phone: +977 1 554-8400
 Email: info@nepaleconomicforum.org          Advisory Board:
                                             Arnico Panday
                      Contributors:          Kul Chandra Gautam
                    Nasala Maharjan          Mahendra Krishna Shrestha
                 Raju Dhan Tuladhar          Prativa Pandey
            Sugam Nanda Bajracharya          Shankar Sharma
                 Sambriddhi Acharya          Shraddha Gautam
                     Sampada Shah            Sneh Rajbhandari
                       Sarik Koirala
                  Tanushree Agrawal          Senior Distinguished Fellows:
                                             Bibhakar Shakya
                     Design & Layout:        Giuseppe Savino
                      Thuprai Solutions      Suman Basnet
                  support@thuprai.com
                                             Senior Fellows:
This issue of nefport takes into account     Apekshya Shah
news updates from November 16 2020           Ashraya Dixit
                   to February 16 2021.      Chandan Sapkota
                                             Diva Shrestha
The USD conversion rate for this issue       Mark Perrin
is NPR 117.73 to a dollar, the quarterly
                average for this issue.

   Reproduction is authorised provided
         the source is acknowledged.

  The views and opinions expressed in
 the article/publication are those of the
author(s) and do not necessarily reflect
 the official opinion of Nepal Economic
   Forum. Neither the organisation nor
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  be held responsible for the use which
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                           tained therein.
POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
EDITORIAL
We all have had an eventful quarter as globally we saw economies start to stop with the advent of new COVID-19
variants. In the case of Nepal, the political turbulence continues with the dissolution and reinstatement of the
parliament all in one quarter. It has been a year since the COVID-19 lockdown and restrictions began, and such
turmoil makes it unlikely that we will see a full recovery soon. Economic indicators again do not seem to reflect
ground reality, with bank deposits and the stock market continuing to swell. Contrary to multiple reports that
forecasted a dip, remittance continues to soar.

Work at the Nepal Economic Forum has continued with us making it into the Top 100 think tanks from
South and South East Asia and the Pacific Region in the annual list compiled by the Lauder Institute at the
University of Pennsylvania. Our family of the advisory board, senior distinguished fellows, and senior fellows
has grown with members added who bring in diverse experiences. Institutionally, we have consolidated the
Himalayan Circular Economy Forum (HiCEF) and the Renewable Energy Center (REC) while adding new
verticals including, Global Nepali Network (GNN), Centre For Private Sector Development (CPSD), Nepal
and the World (NAW) and Centre for Digital Transformation (CDT). Similarly, the work at Business Policy
Research Center (BPRC) and Doing Business in Federated Nepal (DBFN) is being redefined and restructured.
We are looking forward to exciting days ahead with our expanding family and new adaptive ways of working in
the days ahead.

For this issue of Nefport, we take a closer look at this political economy of transition, to take stock of current
events and analyze what they mean for Nepal’s development. We have framed the analyses by looking at the
current shifts in international politics which have also seen momentous shifts this quarter, starting with the
presidency of the United States.

We would like to thank our contributors –and especially Apekshya Shah (Assistant Professor, Department of
International Relations and Diplomacy, TU), Dr. Prashanth Parameswaran (Director of Research at Bower
Group Asia), and Lisa Hanon (Development Director, British Embassy, Kathmandu, Nepal) for their valuable
time to contribute to this edition of Nefport

We are working continuously on recalibrating this publication to make it more useful to our readers. We are
also ideating on how we can make the extensive data, research, and analysis from the past 11 years to make it
more accessible and useful. Please do provide us your comments and suggestions or click on our survey page.

Sujeev Shakya
Chair, Nepal Economic Forum
POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
1
   NEFPORT ISSUE 44 – MARCH 2021   5

        GENERAL
OVERVIEW
POLITICAL ECONOMY IN TRANSITION - DOCKING NEPAL'S ECONOMIC ANALYSIS ISSUE 44 | MARCH 2021 - Thuprai
6     DOCKING NEPAL’S ECONOMIC ANALYSIS

    POLITICAL     OVERVIEW
        POLITICAL OVERVIEW
    Due to the internal conflict within the ruling Nepal Communist Party (NCP), this review
    period saw dramatic turnovers in the political scenario of the country. President Bidya Devi
    Bhandari, on the recommendation of Prime Minister KP Sharma Oli dissolved the House
    of Representatives and announced the dates for mid-term elections. This move received
    widespread criticism and was deemed unconstitutional by several political leaders and as
    well as, civil society leaders.

    Following the dissolution of the lower house, cabinet members resigned, after which the
    government appointed officials to several Constitutional bodies, for which they were scrutinized
    again. Many political parties and civilians, especially the Dahal-Nepal led faction of the NCP
    led protests against the dissolution, while the Oli-led faction and his supporters organized
    mass gatherings and rallies in support of the Prime Minister.

    The Supreme Court of Nepal reinstated the House of Representatives (HoR) after conducting
    hearings on the 13 writ petitions filed against the PM’s decision for over a month.

    House of Representatives dissolved:      and deemed unconstitutional, as the      PM's move as unconstitutional. Those
    On 20 December, 2020, Prime              current Constitution of Nepal does       ministers who filed their resignations
    Minister KP Sharma Oli called for        not give the Prime Minister any          were closely affiliated to NCP co-
    the dissolution of Nepal’s parliament,   power to dissolve the Parliament. As     chair Pushpa Kamal Dahal and
    which was swiftly endorsed by            many as 13 writ petitions were filed     senior leader Madhav Kumar Nepal.
    President Bidya Devi Bhandari citing     against the PM’s decision.1 Several      Agriculture Minister Ghanshyam
    Article 76 (1) and (7), and Article 85   opposition political parties--Nepali     Bhusal, Energy Minister Barshaman
    of the Constitution. The President       Congress, Rastra Samajbadi Party,        Pun, Drinking Water Minister Bina
    also announced the dates for the new     Bibeksheel Sajha Party, as well as the   Magar, Culture and Tourism Minister
    elections which were to be held: on      Dahal-Nepal led NCP faction staged       Yogesh Kumar Bhattarai, Education
    30 April, 2021 and 10 May, 2021,         demonstrations and protests across       Minister Giriraj Mani Pokhrel, Forest
    a year ahead of schedule. The PM’s       the country ever since the dissolution   Minister Shakti Basnet, and Labour
    decision to dissolve the parliament      of the Parliament.                       Minister Rameshwor Ray Yadav
    came after the Dahal-Nepal faction                                                were few Cabinet members who
    of the Nepal Communist Party             Seven ministers resigned over            immediately resigned.2
    (NCP) planned to move a vote of no       parliament  dissolution: Seven
    confidence against him. The NCP          ministers from     PM KP Sharma          The Supreme Court reinstated the
    has seen a vertical split following      Oli’s cabinet     resigned following     Parliament: On 23 February, 2021,
    the decision of house dissolution.       the dissolution    of the House of       the Supreme Court of Nepal reinstated
    PM Oli’s move was widely criticized      Representatives     condemning the       the House of Representatives (HoR)
NEFPORT ISSUE 44 – MARCH 2021         7

that Prime Minister KP Oli had            December, 2020. However, these             began the hearing on the writ petition
dissolved on 20 December, 2020.           appointments     drew    widespread        and issued a show cause notice to the
A      five-member      constitutional    criticisms as the officials were           government seeking answers for the
bench comprising of Chief Justice         appointed bypassing parliamentary          appointments.5
Cholendra SJB Rana, and Justices          hearings, which is a mandatory
Bishwambhar Prasad Shrestha, Tej          process required by the constitution       NCP’s Oli and Dahal-Nepal led
Bahadur KC, Anil Kumar Sinha and          for appointments made by the               faction staged mass gatherings in
Sapana Pradhan Malla conducted            Constitutional Council.3                   the Capital: Ever since the dissolution
hearings on the 13 writ petitions filed                                              of the House of Representatives, 4
against the PM’s decision for over a      The House of Representatives               February, 2021, the Dahal-Nepal
month before giving the final verdict.    Speaker Agni Sapkota had sent back         faction called for a general strike
Subsequently,     the     government      the appointment recommendations            across Nepal, after the government
recommended the House session to          since they were received after the         administered oath to over 30 officials
be summoned on 7 March, 2021.             House was dissolved by the Prime           appointed to several constitutional
                                          Minister. Sapkota filed a writ petition    bodies unconstitutionally bypassing
Officials of Constitutional bodies        in the Supreme Court seeking               the lower house. The cadres of the
appointed by the Government: On           invalidation of the unconstitutional       Dahal-Nepal faction resorted to
3 February, 2021, the government          appointments. He also sought action        vandalism in several places during the
administered oath to officials for        against 39 dignitaries involved in         strike. Meanwhile, Prime Minister KP
different    constitutional  bodies       this appointment including Prime           Sharma Oli called for a rally of over
including the Commission for              Minister Oli, President Bhandari,          200,000 people in Durbar Marg, for
Investigation of Abuse of Authority       Chief Justice Cholendra SJB Rana,          the very next day as a show of power.
(CIAA) and the National Human             National Assembly Chairperson              The Dahal-Nepal faction, as a reply to
Rights Commission, as per the             Ganesh Prasad Timalsina and Chief          Oli’s power show organized another
recommendations made by the               Secretary Shankar Das Bairagi.4 The        mass rally on 10 February, 2021.6
Constitutional Council on 25              Supreme Court on 7 February, 2021

 “ OUTLOOK
  The conflict between the ageing leaders of NCP has led to the instability of the entire political system in the country.
  The country has fallen victim to the bickering of PM KP Oli and NCP chair Prachanda and their struggle for power.
  Although the Supreme Court issued its verdict against the Prime Minister’s decisions and reinstated the parliament,
  the struggle for power between KP Oli and Pushpa Kamal Dahal is still ongoing in full throttle. It is clear that the
  average Nepali person has had enough of this, even though these types of shows are not uncommon in Nepal. At
  a time when the economy and health system of the country has been crumbling due to the COVID-19 pandemic,
  and the risk of the spread of the virus still a matter of concern, the decision to gather thousands of people as a show
  of power makes is clear that both the Prime minister and the NCP co-chair have no regard to the lives of the people
  and are only interested in seizing power.
8     DOCKING NEPAL’S ECONOMIC ANALYSIS

    INTERNATIONAL     ECONOMY
       INTERNATIONAL ECONOMY
    As the inoculation campaign against COVID-19 start rolling out across the world, there is a
    renewed optimism among the global economies. India and China, in particular, are expected
    to experience the highest economic growth this year. China has now become the biggest
    receiver of new foreign investment, the spot which had been previously taken by the United
    States. Likewise, Vietnam is emerging as a strong competitor in the global market for semi-
    conductor manufacturing.

    Farmers protest in India: Six month       billion, respectively. Nevertheless,     towards the state. According to the
    since it began, the protest against       the US still holds the number one        deputy mayor of Moscow, the capital
    the recently proposed agricultural        position in destination in terms of      city with a population of 12.7 million,
    bill to remove price protection still     total FDI.8                              only 12,000 to 15,000 people are
    continues in Delhi. Farmers from                                                   getting vaccinated daily.11
    Punjab and Haryana have demanded          Countries start rolling out COVID
    the government rescind the new            vaccines: Among several vaccines         2021     growth     prospect:     The
    agricultural laws. While the Indian       that have been developed so far,         International Monetary Fund (IMF)
    government promises that these laws       the leading developers are Pfizer,       has painted an optimistic picture
    are imperative in reforming the sector    Moderna and Oxford. The former two       for the global economy this year. It
    through modernization and increased       have been given approval in the US,      forecasts increased growth owing
    investment, the farmers are convinced     the UK and Europe while Oxford/          to the combined effects of COVID
    that the state’s reform effort only       AstraZeneca has been approved only       vaccination and fiscal stimulus.
    serves the interests of corporations at   in the UK and Europe. In India,          Economic setbacks brought by the
    their expense. Their frustration also     Covishield and Covaxin have been         pandemic are expected to decline..
    stems from the fact that the farming      approved by the regulators, the former   India and China, in this regard, are
    unions and leaders were not informed      of which is the local name for the       likely to grow the most this year.
    or consulted about the new bill.7         Oxford/AstraZeneca vaccine. On the       Notwithstanding, employment across
                                              other hand, Covaxin was developed        the world has a rather bleak prospect
    China is now the biggest receiver         locally by Bharat Biotech.9 Two more     in 2021 and will not be able to
    of new FDI: China has overtaken the       vaccines developed by Janssen and        return to the pre-COVID level; the
    United States to become the largest       Novavax are still awaiting the green     pandemic has displaced 225 million
    recipient of Foreign Direct Investment    light from regulators upon the recent    jobs as per the ILO estimation.12
    (FDI). According to the UN figures,       result from “large-scale trials”.
    Chinese firms experienced a 4%                                                     Vietnam pushes for digital growth:
    increase in new FDI last year while       Likewise, China has introduced           The Communist Party seeks to drive
    the inflow into the US shrank by          Sinovac, CanSion and Sinopharm           tech innovation in the country partially
    almost half in the same period. The       vaccines which have been distributed     by strengthening the manufacturing
    amount China and the US each              to Asian and South American              of semi-conductors. Its target to raise
    brought in last year, as claimed by the   countries.10 Russia also has their own   the share of digital/tech contribution
    United Nations Conference on Trade        Sputnik V vaccine, however, relatively   to the nation’s GDP to 20% by 2025
    and Development (UNCTAD),                 few are taking the shots primarily       and 30% by 2030 aligns with the
    were USD 163 billion and USD 134          due to the distrust among the people     nation’s larger objective to graduate
NEFPORT ISSUE 44 – MARCH 2021     9

from the lower-middle-income status      to “diversify supply chains out of        the investment of USD 475 million.
by 2025 and become a developed           China” after the world witnessed          Furthermore, the Prime Minister is
nation by 2045. For Vietnam, the         the nation’s remarkable capacity to       intent on acquiring investment in
timing could not have been more apt      effectively contain the pandemic. In      semi-conductor manufacturing from
with international companies looking     fact, Intel, the US chipmaker, recently   Samsung, but this remains to be
into the country as a preferred choice   supplied its Vietnam branch with          decided.13

 “ OUTLOOK
  The pandemic has already brought a shift in investment patterns among world economies. As in the case of Vietnam,
  foreign investors/companies have started to diversify their resources to countries that have fared well amid the
  COVID pandemic. Furthermore, the arrival of vaccines has given an optimistic outlook for the economic recovery
  across the globe.
2
10   DOCKING NEPAL’S ECONOMIC ANALYSIS

                                          MACROECONOMIC
                                         OVERVIEW
NEFPORT ISSUE 44 – MARCH 2021       11

MACROECONOMIC    OVERVIEW
  MACROECONOMIC OVERVIEW
Inflation rate remained relatively moderate in the first six months of the fiscal year 2020/21.
While there was a massive decline in the number of workers applying for foreign employment
in the review period, remittance inflow nevertheless increased. Accordingly, there was a
substantial boost in Balance of Payment (BoP) surplus during this period.

Inflation: In the first half of the      Remittance: There was a 11.1%            (USD 11.91 billion). Nepal Rastra
fiscal year 2020/21, the year-on-year    increase in remittance inflow bringing   Bank held forex reserves of NPR
inflation remained at 3.56%. Last year   the amount to NPR 495.31 billion         1318.66 billion (USD 11.2 billion)
during the same period, the year-on-     (USD 4.21 billion). In the same          in mid-January 2021, an increase of
year consumer price inflation (CPI)      period last year, remittance inflow      7.5% from mid-July 2020. Reserves
stood at 6.82%. The price of food and    grew by a mere 0.6%. On the contrary,    of banks and financial institutions,
beverage increased by 4.27% and that     the number of institutional and          aside from NRB, contracted by 0.4%
of non-food and service increased by     individual Nepali workers applying       to NPR 175.09 billion (USD 1.49
2.99% when compared to last year’s       for employment abroad declined by        billion).
figures. On the other hand, the salary   77.6 % compared to the growth of
and wage rate increased by 1.72%         17.7% in the previous year. Likewise,    Government       revenue      and
in the review month as compared to       application for renewed entry went       expenditure: The total government
10.04% last year.                        down by 68.9% in this period.            revenue amounted to NPR 422.24
                                                                                  billion (USD 3.59 billion) in the
Import-export: In the first six months   Balance of Payment and forex             first half of the FY 2020/21 while
of the current fiscal year, the trade    reserves: There was a Balance of         the expenditure of the federal
deficit contracted by 5.8% to NPR        Payment (BoP) surplus of NPR             government during the same period
600.45 billion (USD 5.1 billion)         124.92 billion (USD 1.05 billion),       stood at NPR 415.75 billion (USD
with imports decreasing by 4.8% and      which is a 368.7% increase in the        3.53 billion) according to the
exports increasing by 6.1%. More         figure from the previous year. The       Financial Comptroller General Office
specifically, merchandise exports        current account deficit stood at NPR     (FCGO). Tax and non-tax revenues
increased 6.1% while imports of the      49.53 billion (USD 422.7 million),       each amounted to NPR 386.53
same went down by 4.8%. Despite          lower than last year’s amount of NPR     billion (USD 3.28 billion) and NPR
the overall increase in merchandise      79.65 billion (USD 699.4 million).       35.70 billion (USD 303.23 million)
exports, exports to China dwindled       Similarly, capital transfer and net      respectively. Moreover, the federal
by 50%. Accordingly, this period         FDI plunged by 8.1% and 37.2%            government mobilized the total
experienced relatively less export       respectively.                            domestic debt of NPR 57 billion
growth compared to the same period       Gross foreign exchange reserves, on      (USD 484.14 million): NPR 7 billion
from last fiscal year, during which      the other hand, increased by 6.6%        (USD 59.5 million) through treasury
there was a surge of 26.1%.              to NPR 1493.75 billion (USD 12.69        bills and NPR 50 billion (USD 424.69
                                         billion) from NPR 1401.84 billion        million) through development bonds.
12   DOCKING NEPAL’S ECONOMIC ANALYSIS

     “ OUTLOOK
     Although the trade deficit narrowed down to some extent, the export failed to grow as much as it did during the first
     six months of the previous fiscal year. BoP surplus, on the other hand, witnessed a massive surge in this period as the
     current account deficit contracted by some percentage points. The pandemic has brought a significant decline in the
     migration rate among the Nepali workers.
3
v

     NEFPORT ISSUE 44 – MARCH 2021   13

      SECTORAL
    REVIEW
14     DOCKING NEPAL’S ECONOMIC ANALYSIS

                       AGRICULTURE        AGRICULTURE
                                            AGRICULTURE

     The lifting of lockdown has stimulated exports of agriculture products as evidenced by the
     increased export revenue of the listed items in the first half of the fiscal year. Amid few
     developments taking place in this sector, local farmers have voiced their discontent against
     the government’s recent decision to allow FDI into the sector.

     Opening    up   the  agriculture         phase of the Nepal Agricultural          not do much to reduce the existing
     sector to FDI: The Government’s          Market Development Programme             trade deficit of the country.16
     recent decision to entirely open up      (NAMDP), under the Ministry of
     Nepal’s agriculture sector to foreign    Land Management, Agriculture and         Promoting Nepali tea in the global
     investment has been met with strong      Cooperative (MoLMAC) of Province         market: The government has recently
     resistance from small farmers and        1 along with the Swiss Agency for        rolled out the Sustainable Export
     farmers associations. While the          Development and Cooperation (SDC)        Promotion Project of Nepali Tea in an
     government has justified their move on   has begun. Also known as Sahaj, this     effort to strengthen the competence
     the grounds of enhanced productivity     four-year project aims to facilitate     of Nepali tea and facilitate its
     through increased investment and         the operations of agri-businesses in     integration into the global tea market.
     technology transfer, those opposing      the province by providing necessary      Accordingly, the project aims to
     are sceptical about such promises.       financial and technical support.         ameliorate the tea quality by ensuring
     They are convinced that the so-called    According to the program manager of      a sturdy supply chain linkage using
     productivity improvement through         SDC the second phase is expected to      a tracing mechanism. The 36-month
     foreign investment would not             “strengthen forward market linkages      long project is expected to benefit not
     translate into an increased income       and expand segments of vegetables,       just the tea producers but also its avid
     or even employment for the local         maize, cardamom and dairy value          consumers.17
     farmers. They are afraid that small      chains”.15
     farmers could be replaced by the                                                  Marijuana no longer a narcotic: The
     technology.                              Surge in agriculture exports: In the     United Nations has recently voted to
                                              first half of the current fiscal year,   decriminalize cannabis by removing
     Meanwhile, the proponents of FDI         export revenue of agriculture products   the narcotic label associated with the
     lament about the extreme lack of         grew by 15.46%. This has been            plant. Prior to this, in November, the
     investment in the agriculture sector     attributed to increased “shipments       European Union Court of Justice
     and its primitive characteristic. They   of cardamom, tea and medicinal           (ECJ) had also decided to remove
     are certain that without attracting      and aromatic plants to India”. These     cannabis from the list of narcotic
     foreign investment, the sector is        shipments saw increase not only in       drugs. Such turn of events have raised
     doomed to stay stagnant with no          quantity but also in value ever since    the possibility of exports of cannabis
     technological progress.14                the lockdown ended. However,             based products in Nepal.18
                                              according to the former commerce
     Agriculture      commercialization       secretary Purushottam Ojha, this
     efforts in Province 1: The second        increase is inconsequential and does
NEFPORT ISSUE 44 – MARCH 2021    15

“ OUTLOOK
There have been several efforts to commercialize Nepal’s agriculture sector and enhance its productivity. While
initiatives as such could strengthen the country’s comparative advantage in agriculture and bring in foreign
currency into the country, the state needs to be mindful of the implications the so-called reforms could have on
the local small-scale farmers. In this regard, the government must heed the suggestions/opinions of those who are
directly affected by certain policies before hastily implementing them.
16     DOCKING NEPAL’S ECONOMIC ANALYSIS

                                         ENERGY
                                          ENERGY   AGRICULTURE

     During the review period, meetings have been held to develop rules and guidelines for Nepali
     power producers to gain access to Indian markets, to strengthen and expand the power
     sector in the country, with an ambitious inter-continental pipeline project in the process, the
     energy sector has experienced positive changes, and Nepal now looks forward on building
     cleaner and sustainable sources of energy.

     Meeting held to strengthen the            investing in Nepal’s hydro and          (NOC) denies any loss although it
     power sector cooperation between          solar power projects, building more     had been informed that the pipeline
     India and Nepal by investing in           cross border transmission lines, and    was attacked. The corporation further
     Nepal’s power projects, developing        developing integrated power grids.      clarified that it has been getting diesel
     transmission lines, and integrated        The cooperation between the two         in the expected amount regularly and
     power grids: The 8th meeting between      parties set a positive example with     those responsible for the attack on
     the joint steering committee and joint    projects such as completion of South    the pipeline has been arrested by the
     working group of Nepal-India co-          Asia’s first cross-border 400 KV        Indian police.20
     operation in power sector was held        Muzaffarpur-Dhalkebar transmission
     virtually in the presence of the power    line, agreement on funding modality     NOC to construct country’s second
     secretaries of both the neighboring       for Gorakhpur-Butwal 400 KV             inter-continental pipeline project:
     countries. The meeting assisted           line for which the construction         The second inter-continental pipeline
     in developing suitable rules and          will commence soon, and the brisk       project in the country, Siliguri-
     guidelines for allowing Nepali power      progress on the 900MW Arun-III          Charaali petroleum pipeline is set
     producers access to Indian markets,       Hydro Electric Project19.               to begin soon. Out of the total 50
     development of energy banking                                                     km long pipeline, 15 km lies on the
     mechanism and development of cross-       NOC uninformed of the diesel theft      Nepali side and the remaining 35 km
     border high-voltage transmission lines.   that happened 100 kilometers away       in the Indian side. Once completed it
     The meeting also reviewed the progress    from Nepal: Indian daily newspaper,     will have the capacity to store 12,050
     of the SJVN Ltd-developed 900MW           Navbharat Times reported that           kiloliters petrol, 28,050 kiloliters
     Arun-III Hydro Electric Project in        over 1000 liters of diesel has been     diesel, 450 kiloliters kerosene and 250
     Nepal. The joint meeting further          stolen from Nawijung, Bihar around      kiloliters air fuel.21
     helped in strengthening and expanding     100 kilometers away from Nepal
     the power sector cooperation by           however, Nepal Oil Corporation

     “ OUTLOOK
       With approximately 1 GW of installed capacity, hydropower provides almost all of Nepal's domestic electricity
       generation on the grid. The economy is experiencing a rise in power demand. According to a research22, the installed
       capacity requirement will reach up to 18,000 MW by 2025 which is more than double of what Nepal is producing
       now (6012GWh).23 Along with this, the government must hold meetings/talks to amend the power sector
       cooperation with other neighboring countries (apart from India) for development of energy banking mechanism,
       development of cross-border high-voltage transmission lines.
NEFPORT ISSUE 44 – MARCH 2021         17

      INFRASTRUCTURE                 AGRICULTURE
                                 INFRASTRUCTURE
During the review period, the Nepal government has taken responsibilities of many
infrastructural and construction activities, to overcome the infrastructural gap highlighted by
the COVID-19 pandemic. The participation between all three tiers (federal, provincial and
local) of the government for various projects has also been highlighted. However, lack of co-
ordination in implementation of the infrastructure projects and subsequent disputes are still
evident and need to be overcome to bring effective results.

Ropeways to be constructed in               with a capacity to store 40,000            Supplies has also begun preparations
Bagmati: The Ministry of Physical           kiloliters of petrol at Charaali-based     to conduct a feasibility study for the
Infrastructure and Development is           23 bigha land, is set to begin soon.       dry port. The Indian government
set to construct ropeways in different      According to Manish Neupane,               has agreed to construct an Integrated
parts of the Bagmati Province               Chief of the Nepal Oil Corporation’s       Check Post (ICP) on the border,
(Province 3) to ease transportation         Charaali depot, the depot which            which will be connected to the dry
in the area. Minister Rameswar              will be constructed will have the          port by a railway line. The proposed
Phuyal and his team is soon to              capacity store 12,050 kiloliters of        dry port and ICP will be spread over
begin the study for the construction        petrol, 28,050 kiloliters of diesel,       280 bighas of land.26
of the ropeways and cableways in            450 kiloliters of kerosene and 250
Indrasarowar,      Makwanpur,        and    kiloliters of air fuel. The total budget   Second cross-border petroleum
Gosaikunda in Rasuwa and Dolakha.           for the construction is set at NPR 10      pipeline project to move ahead: In
According to the Minister, the              billion (USD 84.03 million) for a          January 2020, joint-secretaries of
ministry has been engaged in various        three-year period. The construction        Nepal-India Joint Working Group
discussion to develop detailed project      of this petroleum pipeline will be         held a meeting in New Delhi. The
reports for the ropeways and will           the second inter-continental pipeline      team made a decision to construct a
begin the work shortly. He believes         project in the country.25                  petroleum pipeline project at Nepal’s
that the increase in power production                                                  request with cooperation from the
in Nepal has provided a ground              A dry port in the far west to be           Indian side. Currently, the plan to
for them to promote electricity-            constructed: By considering Mumbai         develop the second cross-border
based transportation. Moreover, the         city in India as a transit point for       petroleum pipeline has moved a
ministry is also beginning the study        third country trade, Nepal has started     step closer after the agreement of
of feasibility for gravity ropeway that     to construct a dry port in Dodhara,        the delegation from the Indian Oil
may run without any energy supply.          Chandani on the western border             Corporation arrived in Nepal for field
Besides, the ministry also plans to carry   with India. This is the shortest route     study. The pipeline project has moved
another study to see if the Hetauda-        to the sea and is believed to provide      ahead taking into consideration the
Kathmandu ropeway, built 102 years          increased access to Nepal in terms of      demand for oil until 2034 as per the
ago during the premiership of Rana          increasing foreign trade and lowering      Executive director, Surendra Poudel,
Prime Minister Chandra Shumsher,            costs. The dry port is also considered     of Nepal Oil Corporation. After the
could start operations again.24             to be the first business gateway to        field study, a detailed project report
                                            India from Nepal’s far west.               will be prepared by the mid-April in
Petroleum pipeline to be constructed                                                   the coming year 2022.27
for Siliguri-Charaali area: The             Moreover, the Intermodal Transport
construction of infrastructure for          Development Committee under the            Obstruction in the infrastructure
Siliguri-Charaali petroleum pipeline,       Ministry of Industry, Commerce and         expansion works in Kathmandu: In
18     DOCKING NEPAL’S ECONOMIC ANALYSIS

     December 2019, the Department of            each lawmaker directly elected from         suggests that each project got NPR
     Roads confirmed that road expansion         the 165 electoral constituencies            1.44 million (USD 0.012 million) on
     work would begin from early 2020.           received NPR 60 million (USD 0.50           an average.29 Now that the dissolution
     However, even a year later, the project     million). However, the decision to          has been overturned by the Supreme
     is in limbo and the construction works      allow the lawmakers to mobilize the         Court, this can undergo some
     are obstructed. More specifically,          amounts drew instant criticism due          changes. However, it has not been
     the second phase of the Ring Road           to the outsized role of lawmakers           decided yet.
     expansion is indecisive due to ongoing      in determining projects and their
     disputes over Swayambhu's road              implementation. It also raises concern      Sustainable Development Goals
     shrine and property encroachment            over good governance in the country.        Assessment shows infrastructure
     along the 8.2 km road from Kalanki to                                                   development not enough: National
     Maharajgunj. The locals of these areas      Amid these criticisms, CIDP and             Planning Commission (NPC) has
     point out that they are not against         CDF were merged and renamed                 unveiled Nepal’s progress in attaining
     development, but they stand against         Local Infrastructure Development            Sustainable Development Goals
     the government for not exploring            Partnership Programme (LIDPP).              (SDGs). Under SDG 9:Industry,
     other alternatives to preserve the          Along with these changes, lawmakers         Innovation, Infrastructure, it has
     heritage and infrastructure that took       were also made responsible for              been assessed that the road density has
     years to build. These disputes have,        consulting local governments to             increased in Nepal, but is still low in
     thus, hindered the projects.28              select projects for the programme.          comparison to other countries, along
                                                 Beginning from early July 2020, the         with the infrastructural gap. The
     Controversy regarding the Local             federal government discontinued             report further states that the growth
     Infrastructure      Development             releasing resources for projects under      of industrial sector has remained slow
     Partnership Programme (LIDPP):              LIDPP and decided to invest the             in Nepal, and that there has been no
     The Federal Democratic Republic             unused funds under the programme            improvement in the industry’s share
     of Nepal releases two types of              for COVID-19 response instead.              in GDP. Moreover, as per the National
     funds to its Members of Parliament          However, after the dissolution of the       Planning Commission’s progress
     (MPs)- Constituency Infrastructure          House of Parliament on December             report, there is a clear lack of data base
     Development Programme (CIDP) and            2020, the KP Sharma Oli government          regarding many important indicators
     the Constituency Development Fund           released around NPR 6.56 billion            including industrial infrastructure
     (CDF). The funds were distributed for       (USD 55.71 million) for the highly          clean technologies, etc.
     the developmental projects, and power       controversial LIDPP to implement
     for its mobilization was handed over        over 4,552 projects in 164 out of 165
     to the MPs. During the FY 2019/20,          electoral constituencies. The decision

     “ OUTLOOK
       Infrastructural development is one of the pre-requisites of development in any country, and the same is the case in
       Nepal. However, even though the potential for development in Nepal through the investment in infrastructures has
       long been realized, it still faces many bottlenecks.

       In the early months of the fiscal year, many construction and infrastructural works were halted due to the COVID-19
       pandemic and its subsequent lockdowns. Despite all the hardships, the government has resumed its work in
       infrastructural development. However, according to a report published by National Planning Commission, the
       progress that should have been achieved in the sector is comparatively low. However, it should be noted that although
       there is the will to undertake the infrastructure projects, they are often paralyzed by political instability, poor decision-
       making, lack of data base and lack of capacity. For example, according to the list of projects compiled from the
       Annual Development Plans of the National Planning Commission, infrastructural projects have been ongoing for
NEFPORT ISSUE 44 – MARCH 2021      19

more than 11 years. One of the many instances is that out of the total 80 bridges in the Postal Highway Project of
the government, 78% of the work has been delayed due to design mistakes, political interference, weak contract
management and negligence.30 This has aggravated the situation of unbalanced development, created wastages and
has caused the sector to become dysfunctional.

Considering the strength and weaknesses in development projects, the way ahead for a strong infrastructure base
would be the participation from both the government and the private sector, as well as a strong legal and policy
foundation. Besides, it is also important to strengthen the local government to ensure monitoring and effective
implementation of the projects.
20     DOCKING NEPAL’S ECONOMIC ANALYSIS

       TELECOMMUNICATIONS
           TELECOMMUNICATIONS
     The strong consumer demand, and liberal reformist policies of the Government of Nepal
     have been instrumental in the rapid growth in the Nepal telecom sector. The Government
     has enabled easy market access to telecom equipment and a fair and proactive regulatory
     framework, that has ensured availability of telecom services to consumer at affordable prices.
     The Government has has introduced several reforms in the telecom sector and continues to
     be proactive in providing room for growth for telecom companies.

     Figure 1: Telecom Operators Market Share

                                                                         Source: Nepal Telecommunication Authority ‘MIS Report dated February 2021

     The     Nepal     Telecommunication    a total of 20.1 million subscribers           As shown in Figure 2, the internet
     Authority (NTA) recorded a decline     (GSM & CDMA), while Ncell had                 penetration is largely driven by mobile
     of 9% in the number of subscribers     15.7 million GSM subscribers.31               broadband services which accounts
     (fixed and mobile) from 42,878,367                                                   for approximately 60% of internet
     subscribers in mid-December 2019       Similarly, the growth in data/internet        penetration while fixed broadband
     to 38,856,331 subscribers by mid-      subscribers increased from 21.4               (wired & wireless) contributes to 22%
     December 2020. The tele-density        million in mid-December 2019 to               of internet penetration.
     of the country is currently at 128%    24.3 million in mid-December 2020,
     and 2.46% for mobile and fixed line    a growth of approximately 14%. The            Foreign currency recommendation:
     respectively. As shown in Figure 1,    internet penetration rate as of mid-          During   mid-November  and
     market leader Nepal Telecom recorded   December 2020 stands at 81.5%.                mid-December,   the   Nepal
NEFPORT ISSUE 44 – MARCH 2021                         21

Telecommunication          Authority    the company is set to launch the 4G           Telecommunication infrastructure
provided           recommendation       wireless home broadband service               sharing: The government’s long
amounting to approximately NPR          targeting potential customers who             term policy has been to bind the
56 million (USD 476,000) for            do not have access to its Fiber to the        telecom companies and mandate
payment of bandwidth and other          home (FTTH) and ADSL services.                them to share telecom infrastructure
service charges of different telecom    The technology allows subscribers to          to ensure better services. As per
operators and NPR 122 million           access internet services at NPR 900           the implementation, infrastructure
(USD 1 million) for payment of          (USD 8) per month using dongle or             sharing policy companies will no
telecommunication equipment.            router equipped with SIM cards.32             longer establish their own resources,
                                        Nepal Telecom is also on the path to          but will share infrastructures with
Nepal Telecom to launch 4G              testing 5G network during the current         one another. Nepal Telecom has been
wireless home broadband service:        fiscal year.                                  assigned with the responsibility of
Nepal Telecom has announced that                                                      setting up an infrastructure company

Figure 2: Growth trend of voice telephone and data service penetration

                                                                     Source: Nepal Telecommunication Authority ‘MIS Report dated February 2021

that will enable telecom and Internet   government is set to implement the            phone used inside the country, curb
Service Providers (ISPs) to share       Mobile Device Management System               circulation of unauthorized or stolen
infrastructure.                         (MDMS) in three months to control             phones and as well as raise more
                                        the grey phone in Nepali market.              revenues at the customs.
Implementation of Mobile Device         The government through the MDMS
Management      System:    The          system aims to keep track of every
22    DOCKING NEPAL’S ECONOMIC ANALYSIS

     “TheOUTLOOK
          buzz within the telecom sector is the launch of 5G network. However, the huge investment and clarity on
      the spectrum to use for 5G services is seen as a major hurdle for the launch of 5G services. As per the directive
      of Ministry of Communications and Information Technology (MOCIT) Nepal Telecom may have allotted 5G
      equipment within the current 4G expansion project to make provision for rolling out 5G services.

      The concept of telecommunication infrastructure sharing is expected to reduce capital flight as well reduce haywire
      establishment of towers, optic fiber and create business opportunity for incumbent operators. The policy is expected
      to reduce redundant infrastructures bring about uniformity in services and setup a level playing field for fair and
      healthy competition resulting in consumers accessing higher quality service at an affordable cost. However, sharing
      of infrastructure may be difficult as public procurement act may create major obstacles for private companies
      looking to upgrade technology thereby impacting service delivery.
NEFPORT ISSUE 44 – MARCH 2021          23

                     REAL
                       REALESTATE
                           ESTATE
The nationwide lockdown imposed by the government on 24 March, 2020, did not seem to
inflict strain on Kathmandu’s real estate market. Although the market underwent some major
shocks in the first few months into the pandemic, a gradual boom was noticed in the buying
and selling of houses and plots of land across the country. The government has come up with
rules to strengthen the land and renting policies.33

Boom in Kathmandu’s real estate           No dual ownership of land: The            standard regarding use of public
market: Kathmandu’s real estate           Ministry of Land Management, Co-          land to make the existing provisions
market has witnessed a boom amidst        operatives and Poverty Alleviation has    more systematic. As per the new
the pandemic. According to reports,       decided to end the dual ownership         standard, public land can be used
between mid-December to mid-              of land. The dual ownership of land       by government hospitals/health
January, 76,532 houses and plots          between the landowners and the            facilities and community schools for
of land were bought and sold across       tenants has been a long standing          30 years depending on the need. The
the country. The pandemic resulted        problem in the country. The               period may alter on the basis of its
in lack of other investment avenues       government will facilitate in resolving   rationality and any non-governmental
such as excess market liquidity, which    the dual land ownership if both the       organization or private sectors are not
has prompted banks to offer loans in      parties cannot reach an agreement.34      eligible.35
low interest rates. Lastly, the gradual
revival of the economy and consumers'     New standard for the use of
savings are few of the major reasons      public land issued: The Nepal
behind the increase in real estate.       government has introduced a new

“ OUTLOOK
  With the economic activities resuming to normalcy, it can be predicted that the real estate market will experience
  a boom in Kathmandu and areas adjacent to Kathmandu. The government has to come up with more policies to
  regulate the buying and selling of the assets.
24     DOCKING NEPAL’S ECONOMIC ANALYSIS

                               EDUCATION
                                 EDUCATION
     This review period witnessed some remarkable development in the education sector of the
     country. After nearly 10 months of closing down, schools and colleges across Nepal have
     finally resumed physical classes. The National Examination Board (NEB) also published the
     much-awaited results of 2077’s Grade 12 examinations. Likewise, the Supreme Court paved
     the way for the Ministry of Education, Science and Technology (MoEST) to implement a new
     curriculum for Grades 11 and 12 after months of indecision. Moreover, the National Education
     Commission report, that the government had been withholding from the public for two years
     was made public without government approval.

     Around USD 7 billion remitted abroad      Supreme Court issued a fresh directive,    MoEST itself, which finally made the
     as educational expenses: As the           to implement a new curriculum for          decision to incorporate mathematics
     global pandemic compelled countries       grades 11 and 12 of the National           as a compulsory subject that students
     to close their borders, number of         School Curriculum Framework 2076.          could choose instead of Social Studies
     students leaving abroad for education     Private school operators were hesitant     & Life Skills.39
     sharply declined. However, the money      to implement the new curriculum
     remitted for education expenses shot      developed by the Curriculum                Grade 12 Results Published: The
     up to almost USD 7 billion. As per        Development Committee (CDC)                National Examination Board (NEB)
     the Ministry of Education, Science        citing problems despite repeated           published the results for the Grade 12
     and Technology, the number of             directives from the MoEST. As per          examinations on 1 February, 2021.
     students applying for No Objection        the new curriculum, +2 students            Owing to the Covid-19 pandemic
     Letters (NOC) decreased by 35% in         would have to study six subjects           followed by the nationwide lockdown,
     the first four months of the current      in each grade with 3 compulsory            the examination which was originally
     fiscal year compared to the previous      subjects and 3 elective subjects out of    scheduled from 20 April, 2020 was
     year. The data from Nepal Rastra          80. Private school operators had filed     conducted from 24 November to 1
     Bank (NRB) showed that NPR 6.80           a writ against the implementation          December 2020. A total of 310,316
     billion (USD 57.76 million) was           of the new curriculum, after which         students appeared for the regular
     remitted for students studying abroad     the Supreme Court had halted               examinations from 4,105 higher
     as educational expenses, food, and        its implementation until further           secondary schools that were turned
     accommodation expenses in the first       decision.37 The dispute between the        into exam centers all over Nepal.40
     four months of the current fiscal         private schools and the government
     year. Students who went abroad for        created a lot of confusion as some         Government of Nepal gave approval
     higher education usually work to pay      institutions had started teaching the      for reopening of Schools across
     their tuition fees and living expenses,   new curriculum while others held on        the country: After 10 months of
     however due to the pandemic and           to the old curriculum. After months        online operation, the Covid-19
     loss of jobs it was found that Nepali     of indecisiveness, the Supreme Court       Crisis Management Committee
     parents had been remitting money          finally passed the verdict in support of   (CCMC) finally took the decision to
     from the home country to support          the new curriculum on 13 January,          allow schools across Nepal to resume
     their children.36                         2021.38 However, there were concerns       physical presence in classrooms and
                                               whether mathematics would be               schools. The schools will have to
     Supreme Court allowed new                 a mandatory subject or not. The            adopt appropriate health and safety
     curriculum for grades 11 and 12: The      Supreme Court left the decision to the     measures, and the District Covid-19
NEFPORT ISSUE 44 – MARCH 2021          25

Management Committee (DCCMC)             exam and books’ fees up to secondary         Commission public even after two
are given the authority to close the     level. Additionally, the rules mandate       years after it being submitted. The
institutions, if necessary.41 Earlier,   schools to make provisions for               report cost the government USD 20
the federal government had provided      providing mid-day meals, school              million to prepare and it was submitted
guidelines to resume classes. They       uniforms and other basic facilities          to PM KP Oli on 15 January, 2019. As
had also given the responsibilities      for differently abled, Dalits, and           per senior officials at the Ministry of
of reopening schools to the local        poor children. Similarly, the rules          Education, Science and Technology,
governments.42 With permission from      also require local levels to arrange         the ministry had refuted to make the
the local governments, many schools      residential facilities for those in need..   report public at the bidding of private
had already started resuming in-person   Local levels are also required to conduct    schools and education mafias, as the
classes since September last year.       three-month         literacy    programs     report made recommendations to
The Private and Boarding Schools’        such as—basic adult education or             convert all private schools into trusts
Organization (PABSON) warmly             traditional/non-formal          education    within the next 10 years.44 Regardless
welcomed the government’s decision,      through community learning centers.          of the government’s hesitation,
while the parent’s organization and      Provisions for offering scholarships         the commission, comprising of
health experts are not too keen about    as per the law is also drafted, which        educational experts, government
the decision as it might exponentially   will be managed by a five-member             officials, teachers, former education
shoot up COVID-19 infections.            scholarship management committee             ministers and other stakeholders made
                                         headed by the chief of the local             the 502-page long report public on 4
Compulsory and Free Education            government. In order to monitor              December, 2020. The publication was
Rules 2020 framed: The government        the implementation of the rules, an          financed by two NGOs, the National
published the ‘Compulsory and Free       eight-member monitoring committee            Campaign for Education and Global
Education Rules- 2020’ in the Nepal      would also be created, which would           Action Nepal. The ministry accused
Gazette aimed at implementing the        be led by a secretary at the Ministry of     the two organizations of violating its
constitutional provision of free and     Education, Science and Technology.43         copyright and sought for legal action
compulsory education. As per Nepal’s                                                  against them. The ministry also wrote
constitution, every citizen has the      Government refused to make                   to 16 donor agencies of the NGOs
right to receive compulsory and free     National Education Commission                including the UN, World Banks,
education from the state up to basic     Report public: According to officials        UK Aid and the British Council
level, comprising of grade 1 to 8 and    at the High-Level National Education         expressing its discontent over their
free education up to secondary level     Commission and the Ministry of               support to report the publication.45
comprising of grades 9 to 12. The        Education, the government of Nepal
recently published rules prohibit        allegedly hid the National Education
community schools from charging          Commission Report and refused
admission fees, monthly tuition fees,    to make recommendations of the

“ OUTLOOK
   The Education sector was one of the hardest hit sectors by the Covid-19 pandemic. Schools being shut for
   almost 10 months took a hefty toll on the students, particularly those coming from public schools. While
   private school students had the privilege of learning through online classes, majority of public-school students
   were left in dark as the both schools and students lacked proper resources. The government’s decision to allow
   schools across the country to resume physical classes was welcomed by most of the schools. However, health
   experts have warned that this decision could further accelerate the spread of the virus. While the government
   has ordered schools to maintain strict health protocols and has given local bodies the authority to oversee and
   monitor these schools, it is uncertain whether the schools have been following the required health and safety
   measures or not.
26   DOCKING NEPAL’S ECONOMIC ANALYSIS

     Meanwhile, the Oli government’s delay in publishing the High-Level National Education Commission’s report,
     and its strict actions against the organizations clearly shows the government’s deliberate attempt at hiding the
     report. The government’s hesitance in making the report public can therefore be seen as an indication that the
     private school cartels and political groups have a firm grasp on the government.
NEFPORT ISSUE 44 – MARCH 2021         27

                                      HEALTH
                                       HEALTH
The Government of Nepal has initiated the drive to acquire vaccines from India in addition
to sending requests for vaccine procurement to other countries. The procurement process
comes at a time when a new variant of the COVID-19 vaccine has been found in the United
Kingdom which prompted the government to ban entry for passengers from the country.
The sector has also been entangled by various challenging issues. One such instance is
healthcare workers demanding risk allowance in government run hospitals in the country in
addition to an alarming level of air pollution in the capital city of Kathmandu.

Government         initiates    vaccine   will be vaccinated through the           complained that the payment was
procurement: The Nepal government         COVAX program. The COVAX                 far less than what the government
has written to the Indian government      program has the world's largest and      had fixed. Medical doctors receive
requesting for the procurement of         most diverse portfolio of potential      salary from NPR 55,000 to 60,000
COVID-19 vaccines on December             COVID-19 vaccines. WHO has asked         (USD 467.17- 509.64) per month
2020. The government aims to              the Government of Nepal to prepare       in other public hospitals around the
inoculate around 20% of the Nepali        for vaccine rollout under COVAX in       country while the salary in BPKHS
population through these vaccines.46      the third trimester of 2021. Each dose   is only NPR 34,500( USD 293.04)
The government has requested the          of vaccine under the COVAX scheme        per month. Although the complaint
Indian counterparts to procure            is estimated to cost NPR 1,177(USD       was lodged time and again, their plea
adequate vaccines for Nepal while         9.9). The Government of Nepal has        to resolve the issue were neglected.49
India procures the jabs for their own     also expressed interest in procuring     A similar incident occurred in
population. Currently, there are five     one million doses of the Covidsheild     Kalaiya District Hospital too. The
vaccines against corona virus which       vaccine and 25 million doses of          hospital's doctors, nurses, health
are at various stages of human trials     Sputnik V vaccine from India and         workers and employees shut down
in India - Oxford AstraZeneca and         Russia respectively. 47 48               all services except the emergency
Bharat Biotech are in advanced                                                     ward. The health workers staged a
phase 3 trials. Besides India, the        Health workers express their             demonstration demanding COVID
Nepal government has also sent            discontent: Agitating doctors and        risk allowance. The employees at the
diplomatic notes to China, Russia,        medical officers started a protest       Kalaiya District Hospital took the
the United Kingdom and the United         on January 18, 2021 demanding            drastic step of boycotting their duty
States requesting for supplies of the     COVID risk allowance at BP Koirala       at the hospital after they did not
COVID-19 vaccine. At the present          Institute of Health Sciences, Dharan.    receive the allowance for the past 10
stage, 15 different vaccines from         The Medical Officers are seeking a       months.50
various countries and companies           salary on par with the eighth level
from all over the world are now in the    (NPR 38,784, USD 329.4) and a            Air quality in Kathmandu deteriorates
third phase trial. It has been reported   COVID allowance while residential        to hazardous levels: The air quality
that in Nepal, children under 15 years    doctors are demanding a risk             in Kathmandu reached hazardous
will not be vaccinated as the vaccines    allowance. The agitated workers had      levels on January 4, 2021, crossing
produced so far have not been tested      also warned of boycotting their duty     the 600 mark to briefly make it the
on those belonging to the age group.      at the emergency ward. The health        most polluted city in the world.
Of the remaining population, 20%          workers unsatisfied with their salary    The air-quality monitoring station
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