Dr Ram Narayan Shrestha, an assistant professor at the School of Management, Kathmandu University, recently spoke to Bonik Barta, discussing the underlying drivers of regional political shifts, the aspirations of Nepal's youth, and the strategic necessity of enhancing trade and energy cooperation between Kathmandu and Dhaka. He also addresses the burgeoning crisis in the Middle East and its immediate repercussions on fuel prices and labour migration in the Himalayas. The interview was conducted by Sabidin Ibrahim.
Over the last couple of years, we have witnessed significant political transitions and regime changes in countries like Sri Lanka, Bangladesh, Nepal, and Pakistan. Do you believe economic factors like inflation, debt, and unemployment are the primary drivers of these shifts, or is there a broader pattern emerging?
It is true that there have been significant economic challenges across the region. We have seen widespread economic problems that have certainly played a role. However, in my opinion, economic hardship is not the only factor triggering this discontent. A fundamental issue is the lack of transparency in governance.
The population, particularly the youth, has experienced a gradual reduction in trust toward governance institutions over time. I can say for certain that this is the case in Nepal. Furthermore, we must acknowledge the role of social media. Whether it is used, misused, or disused, it has provided people with unprecedented access to information. This access has acted as a catalyst for the widespread changes we are seeing in the region. While economics is undeniably a driving force, it is part of a larger ecosystem involving institutional trust and information flow.
In the most recent elections in Nepal, we saw youth-driven political forces rise to greater prominence. Given their frustration with government performance and corruption, what are the core economic and social aspirations of Nepalese youth today?
This is a critical question, especially since a new Prime Minister will be taking the oath of office tomorrow. There is a widespread narrative among our youth that the government has failed to deliver essential services. While we see progress in physical infrastructure, the "real reflection" of that progress — the way youth actually experience governance — has not been achieved.
For example, despite the rise in technology, obtaining a driving license in Nepal can still take days, even though it should be possible in hours or minutes. Such inefficiency leads to deep dissatisfaction. Currently, the youth are looking at the scenario with optimism. They aspire for an environment where good governance prevails in both the economy and society. Their ultimate goal is inclusive economic growth and progress that benefits everyone.
With a new government underway, what should be the short-term to medium-term priorities to address these concerns?
The first priority must be to regain the trust of the people. The government needs to provide a sense of hope and prove through visible actions that it is moving in the right direction. In the short run, the focus should be on creating immediate, tangible results that demonstrate good governance.
Medium-term goals should focus on improving service delivery and addressing the structural issues in governance. Finally, the long-term focus of the newly forming government must remain on inclusive economic growth and sustainable development.
Nepal and Bangladesh share a very warm people-to-people relationship. Bangladeshis frequent the Himalayas, and there are deep cultural ties. How can we convert this relationship into more robust trade and commerce?
It is interesting that despite being so close geographically and culturally, our trade relationship has not reached its full potential. While tourism is a strong connector, trade remains in the shadow. To improve this, we must strengthen connections, particularly in sectors like generic medicine, where we already have a good foundation with Bangladesh.
The most vital step is increasing connectivity, specifically land connectivity. While we can work out new trade routes, it is essential to have the confidence of India for such bilateral arrangements to succeed. On a positive note, electricity trade from Nepal to Bangladesh has already been initiated, which serves as an excellent starting point for further exploration.
Beyond electricity, in which other sectors — such as hydropower, pharmaceuticals, or agriculture — can our two countries mutually benefit?
Hydropower is certainly the most promising area for expansion. Bangladesh represents a potential market for Nepal's hydroelectricity. Agriculture also offers a massive scope for cooperation.
However, achieving this is tricky because of the barriers we face, particularly in connectivity. If we can address these logistical concerns, it will definitely help increase the trade relationship between our two nations.
SAARC was once a vital platform for South Asian cooperation, but its impact has been limited over the last decade. How can SAARC become a meaningful platform for economic integration once again?
SAARC was originally envisioned to increase cooperation across culture, trade, and economic activities. Unfortunately, bilateral issues between member countries have hindered its ability to function properly.
As residents of South Asia, we must continue to push for regional cooperation and increase people-to-people dialogue. This is essential for trade connectivity. For instance, the South Asian Free Trade Agreement (SAFTA) exists, but it has not been able to work effectively due to logistical and paperwork constraints. We must keep the SAARC agenda alive and make our governments aware that this synergetic relationship will benefit us all.
The ongoing conflict in the Middle East, involving Iran, Israel, and the USA, has impacted global commerce. Countries like Nepal and Bangladesh, which depend heavily on remittances and energy imports, are particularly vulnerable. What specific problems is Nepal facing currently?
The immediate impact in Nepal has been a sharp rise in fuel prices. In just the last few days, prices have increased by 30 Nepali Rupees — roughly a 20 percent jump. This affects everything, even cooking fuel. To ease distribution, the government has even started distributing half-filled gas cylinders.
Furthermore, as an agricultural country, the flow of fertilisers and other essential inputs will be impacted if the crisis persists. Perhaps most critically, millions of Nepali citizens work in the Gulf region. Their employment, security, and lives are at risk due to this conflict. While I cannot yet predict the degree of the impact, it is certainly going to be very high for Nepal's economy.
How does Nepal face the challenge of sending capable manpower to the Middle East and global markets? How is the government addressing the need for training and protecting these workers?
Most labour migration from Nepal currently falls into the low-skill sector. Improving this has become a government priority. We have several programs implemented alongside development partners to provide skills to workers before they migrate.
We are also focused on increasing awareness so workers don't get cheated in the labour market. The government has introduced minimum recruitment fees and requires labour permits for those going abroad. Additionally, it is now compulsory for those with labour permits to register in Nepal’s Social Security Fund, which enhances their social safety net. Interestingly, the government has also created quotas in the capital market for migrant workers, allowing them to apply for initial public offerings (IPOs) while they are abroad.
Finally, for regional and global investors, what makes Nepal an attractive place? Which sectors offer the most lucrative opportunities?
Nepal is actively seeking investment across several key areas. Tourism is a major sector that is currently seeing significant investment. Clean energy, specifically hydropower, is another prime area for regional cooperation and global investment.
We are also looking toward the IT sector and the burgeoning digital economy. This is an area where we can have significant collaborations and expansion. Lastly, agriculture remains a vital area of cooperation. Nepal is very open to welcoming foreign direct investment (FDI) in agricultural development.
Transcription by: Mostak Ahmed