By Babbler
The continued rise in the trade deficit, the widening gap between imports and exports, increasing foreign debt, and the growing surplus of cash reserves in commercial banks all indicate that the country’s economic health is deteriorating.
Understandably, there is little demand for loans from investors, as the risk factor remains extremely high. Local entrepreneurs prefer trading businesses over investment in the manufacturing sector. While the national economy has largely survived on remittance inflows, the government has failed to channel remittance earnings into productive and development-oriented sectors.
A large portion of government revenue is spent on general administrative expenditures, primarily salaries and allowances. As a result, the government has been unable to allocate sufficient resources for infrastructure development. Even when funds are allocated, the government often fails to spend the targeted budget due to various structural and administrative obstacles.
Both the government’s fiscal policy and Nepal Rastra Bank’s monetary policy have failed to deliver the desired results. Despite this, authorities continue to claim that the country’s financial situation is satisfactory.
The market is experiencing a serious recession, yet the government has been unable to address or reverse this downturn. Ending the current recession requires strong political will and decisive action, but such commitment is noticeably absent among the present leadership.
Devalued Nepali Currency
Nepal’s currency is pegged to the Indian rupee. When foreign investors withdraw capital from the Indian market, India faces a shortage of foreign currency, causing the US dollar to appreciate significantly. This development directly affects the Nepali currency as well.
In addition, due to former US President Donald Trump’s trade wars and what many describe as an imperialistic economic approach, several developed countries have begun replacing US dollar reserves with gold. Consequently, gold prices have surged to record levels.
Nepalis are unable to identify viable investment opportunities due to flawed government policies. As a result, they are compelled to deposit their earnings—largely remittance income sent by relatives abroad—into commercial banks at very low interest rates. Ideally, bank interest rates should exceed the inflation rate. However, the opposite is true: bank interest rates remain below inflation. This means that money deposited in commercial banks is steadily losing its real value.
Administrative Hurdles
Mahabir Pun tendered his resignation from the post of Education Minister after being unable to work effectively due to persistent legal and administrative obstacles. In Nepal, numerous regulatory and legal barriers make it extremely difficult to conduct business. There appears to be a lack of courage among political leaders and civil servants to remove these hurdles and expedite decision-making.
Some entrepreneurs have expressed willingness to convert abandoned or outdated vehicles into electric vehicles. Although the government has already approved a policy allowing such conversions, the Department of Transport Management has refused to grant the necessary permissions.
Similarly, entrepreneurs who planned to assemble electric bikes in Nepal were forced to wait for years to obtain approval. Such delays discourage innovation and investment.
Political leaders frequently speak about attracting foreign direct investment, but this goal remains unrealistic unless administrative and legal barriers are removed.
A fundamental change in the mindset of both political leadership and the bureaucracy is essential. Even today, many state-owned enterprises in other countries operate profitably. For example, Thai Airways International, Singapore Airlines, and Qatar Airways are all fully government-owned yet commercially successful. In contrast, Nepal’s national flag carrier, Nepal Airlines Corporation, has largely become a center of corruption rather than a competitive business enterprise.
Excerpts from Social Media
Now it is clear why Balen’s wife prayed for his victory in a church, and why Balen does not advocate for the king and a Hindu state. The difference is simple: Christians are united in whom they vote for, while we are divided over whom to support.
–Shashank Ghimire
This election will not solve Nepal’s fundamental problems; instead, it will make them even more complicated. No party talks about what Nepal’s real problems are or how to solve them. It is merely a beauty contest centered on individuals.
–Dipak Gyawali
Let us focus not on imports, but on domestic production. Only when production increases will employment be created, a self-reliant economy be built, and the doors to prosperity opened.
–Kunti Pokharel
Religion does not mean dharma.
–Bharat Dahal
When the republic was introduced, public debt stood at three trillion rupees. Today, it has reached 28 trillion and 6 billion rupees. This is the result of maintaining the “white elephants” of federalism and providing them with extensive facilities. If the nation is to be saved, federalism must be abolished; there should be one constituency per district, ten ministries with ten ministers, and the National Assembly and District Coordination Committees must be scrapped.
–Narendra Bikram Chand
Had Girija, Sitaula, Madhav Nepal, Dahal, and Bhattarai not acted as puppets of external forces—or, in our context, the group that drafted the twelve-point agreement—Nepali politics would have remained within the independent and sovereign domain of the Nepali people themselves.
–Yuvraj Ghimire
If there is any country in the world with immense potential for the future, it is Nepal. Nepal’s location, which should have been a blessing, has instead become a curse. The main reason for this is the politicians themselves. What they have done since 1990 due to their incompetence has brought us to this situation today.
Bhimarjun Acharya
When foreign lenders refused to provide loans, Ethiopia demonstrated its determination by declaring, “We can stand on our own strength,” and went on to build Africa’s largest hydropower project.
A few months ago, Ethiopia successfully completed the Grand Ethiopian Renaissance Dam (GERD), the largest hydropower project in African history. Built on the Blue Nile River, the dam has the capacity to generate more than 5,150 megawatts of electricity and is regarded as a historic step toward making the country fully energy self-reliant.
The journey of this project was long and challenging. Construction began in 2011, and after fourteen years of relentless effort, the dam was inaugurated on September 9, 2025. Despite prolonged timelines, technical difficulties, and intense geopolitical pressure, Ethiopia succeeded in completing the project.
One of the greatest challenges during construction was mobilizing financial resources. The World Bank, the IMF, and other major international financial institutions refused to provide loans for the project. The primary reason was the Nile River dispute involving Egypt and Sudan. As Egypt exerted international pressure to halt the project, the possibility of foreign financing became almost nonexistent.
However, Ethiopia did not give up. The Commercial Bank of Ethiopia covered most of the project’s cost, while the remaining funds were raised through government-issued bonds and direct public contributions. By mobilizing domestic resources and avoiding dependence on foreign loans, Ethiopia successfully completed the dam.
GERD is expected to have a major positive impact on Ethiopia’s economy. It will significantly increase electricity generation capacity, extend electrification to rural areas, and contribute greatly to industrial development. Increased production will also open opportunities for electricity exports, boosting foreign currency earnings. The dam’s completion has the potential to establish Ethiopia as an energy hub in Africa.
GERD is not merely the story of a dam. It symbolizes national self-reliance, citizen participation, and long-term development. Completing such a massive mega-project using domestic resources, without relying on foreign debt, stands as a unique achievement in Ethiopia’s history. It has strengthened both the country’s energy independence and its regional role, and it signals a stronger economic and political position for Ethiopia in Africa in the future.
Even after foreign investors withdrew from the project, the Ethiopian government did not retreat. Instead, it turned the dam into a matter of national pride. Despite skepticism from foreign donors and nations, and repeated refusals to provide loans, Ethiopia remained firmly committed to completing the dam.
The government did not view the project merely as an electricity-generation initiative, but as a dream tied to national self-reliance, sovereignty, and the future. Determined to convey the message, “We can stand on our own strength,” Ethiopia remained steadfast. Despite international pressure, financial constraints, and political risks, the government did not take a single step back.
–Hamropan
India’s external intelligence agency, the Research and Analysis Wing (RAW), is more active in Nepal than anywhere else in the world.
Because of Nepal’s proximity to China and the 20-kilometer-wide “Chicken’s Neck”—the narrow corridor connecting mainland India to Bangladesh and to the so-called Seven Sisters states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim—this region is extremely sensitive for India. This corridor can effectively connect or sever India’s northeastern region. The combined area of these seven northeastern states is about 270,000 square kilometers, which is double the size of Nepal.
Siliguri, the starting point of India’s Chicken’s Neck, lies extremely close to Nepal’s border.
Given the growing Western infiltration currently visible in Nepal, it is natural for India to feel concerned. However, India’s role in pushing Nepal and its governance system into this situation cannot be overlooked.
At present, India is being forced to taste the bitter medicine it itself prepared for Nepal.
China is not angry with Nepal as a country, but is suspicious and irritated by the games being played inside Nepal.
The United States, acting like a monkey stealing bread while two cats fight, is simply pursuing its own interests.
This American policy is not a hastily cooked idea from Donald Trump’s mind. Leaders like Donald Trump come and go every four years. Long-term strategies are crafted by forces that may remain invisible while operating in plain sight.
The same force is also behind the current “Balen, Balen” euphoria being created in Nepal.
After the election, the possibility that the “blue jackal” may once again be cornered and sent to jail has not completely disappeared.
My role is to see the truth that the crowd fails to notice and say, “This is how it really is.”
Excerpted and translated by Sushma Shrestha.
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