Flooding in Nepal: will the economy survive the deluge? As floods become more frequent and destructive, a study assesses the impact on agriculture and hydroelectric energy

A farmer covers himself from the rain in Nepal.

In Banke district along the West Rapti river basin in Nepal, farmers have noticed that floods are coming more often, and with greater intensity.Flooding has always been part of the annual cycle of life, but the past 40 years have seen 12 abnormally large floods that have eroded land and wiped out crops and buildings. Each major flood costs the average household the equivalent of $9,000 (£5,200).

In Nepal, where the average household annual income in 2011 was $2,700, these floods are a hug

e financial burden.

This story is replicated across Nepal. Between 1983 and 2010, every year floods have, on average, resulted in 283 deaths, 8,000 homes destroyed and 29,000 families affected, and dented Nepal's economy as a whole.

A recent study by the Nepali government and the Climate Development Knowledge Network (CDKN) has quantified the economic impact of these floods and other risk areas for today, and in the future. The study found that when both direct costs to infrastructure, as well as health and welfare impacts are considered, the total annual costs of these floods is, on average, $232m per year.

And the situation is expected to worsen. The climate in Nepal is already changing, with higher temperatures and more erratic rainfall patterns. The study, which used downscaled climate model simulation projections for Nepal, anticipates temperature increases of 3-5C by the end of the century.

The government's ambitious targets for economic growth, including graduating from least-developed to developed country status by 2022, is at serious risk, according to the study's findings. The agriculture and hydroelectricity sector are two of the major drivers of economic growth in Nepal, both of which will be significantly affected by climate change in the future.

Around three-quarters of Nepal's population relies on agriculture for income, and it contributes a third of the country's GDP. By the 2070s, climate change is projected to lead to a net decrease in crop productivity with resulting high economic costs that are estimated at $140m a year.

Hydroelectric plants provide roughly 90% of total electricity in the countryand are expected to be a key driver for achieving Nepal's economic growth targets. The government's 2030 Development Vision anticipates a structural shift in the economy away from agriculture towards electricity, gas and water, with hydropower exports being a critical sector. However, "run-of-river" plants, which are the most common type in Nepal, rely on predictable rainfall and river flows.

The study has calculated that the additional stress of climate change on hydroelectricity production is already costing the equivalent of 0.1% of GDP per year on average, and 0.3% in very dry years. Together with floods and the impact on agriculture, these three risk areas could cost Nepal the equivalent of 2-3% of current GDP a year by mid-century.

However, it is possible to adapt to the impacts of climate change, and prevent this loss of economic growth. Banke district residents have tried to adapt to the increased flooding. Those who can afford it have reinforced the foundations of their homes or raised them on plinths. Some have changed their farming patterns to grow crops that better withstand the water. But for many, if the situation continues to worsen, they will lose the ability to cope with the impacts of the floods. Some residents are already considering migrating from the area.

These adaptation actions also come with associated costs. A significant increase in investment beyond that forecast by the government is needed in these sectors to reduce the impacts of climate change. The study projected additional investment required between now and 2030 to mainstream adaptation into planned development activities. This came to an additional $500m in the hydroelectricity sector, $1.7bn in the agriculture sector and $209m for tackling water-induced disasters.

So then comes the crux of one of the key international debates – who should pay for the impact of climate change? Certainly the private sector will play a role, particularly for agriculture and electricity production. For example, there is a business case for a commercial farmer to invest in irrigation to ensure higher yields when rainfall becomes more erratic. But a significant burden will still fall on the Nepal government, which will also need to draw on international support.

Fortunately, in making the case for increased levels of international climate finance, the government now has the economic data to make a strong argument. Significant investment will be needed for adaptation and to prevent the stalling of economic growth in the country.

For those in Banke district who are uncertain of what the near future holds, questions about who is responsible and who should pay seem far away. It is learning how to survive and adapt that is the immediate concern.

Nepal workers pay terrible price in Qatar World Cup build-up

• A model of the Al Wakra football stadium is displayed during the tour by Fifa officials in Doha.

Kathmandu: A broken leg, a metal crutch and piles of paper testifying to his fight for justice: all reminders of Bhupendra Malla’s stint working for a Qatari construction firm, ahead of the 2022 World Cup.

As the 32-nation tournament gets under way in Brazil, Qatar has come under fire for allegedly bribing officials to secure 2022 hosting rights and over the abusive conditions endured by migrant workers like Malla.

Three years ago, Malla was desperate to leave his village in central Nepal.

Drowning in debt after a failed attempt to open a shop, the prospect of a job in the Gulf country that would clear his loans and fund the education of his three children seemed like his only way out.

“I could barely make ends meet, my father was a farmer but farming doesn’t pay and I needed to find another way to feed my family,” Malla told AFP in Kathmandu.

Like hundreds of others who leave the Himalayan nation every day in search of jobs, Malla headed for Qatar, where demand for labour has skyrocketed in the run-up to the World Cup.

The shock decision to award the hosting rights to the Gulf country triggered a massive construction boom and an exodus of Nepalese migrant workers to cope with the upsurge in related infrastructure projects.

The 32-year-old says he was one of a dozen men housed in a room measuring four by four metres and was paid no wages during his first four months in the country, sending him deeper into debt.

But his nightmare had only just begun.

• Nepalese former migrant worker Bhupendra Malla show injuries to his leg as he speaks during an interview with AFP in Kathmandu.

A month later, he nearly died when his legs were crushed in a workplace accident. After six operations, his employers refused to pay any compensation and confiscated his passport, unless he agreed to leave the country on their terms.

Malla took them to court, representing himself since he couldn’t afford a lawyer.

“I had a family to feed, I needed money, so I fought for two and a half years. During that time, I sometimes felt that I would just rot and die there,” he said.

The court ruled in his favour: he secured $33,000 (Dh121,212) in damages, got his passport back and a one-way ticket home to Kathmandu.

‘No choice’

Malla’s victory against his employers was a rare silver lining in a tale tainted by tragedy. Campaigners say many migrants in Qatar endure brutal conditions, with no relief in sight.

“They have to work 18-19 hours a day and then they do not get proper food, proper accommodation... and because of this fact their health goes down,” said Yubraj Nepal of the Kathmandu-based migrant rights group, Pravasi Nepali Co-ordination Committee.

Some pay the ultimate price, returning home in coffins, with documents listing “cardiac arrest” as the leading cause of death.

According to government data at least 360 Nepalese workers have died in Qatar in the last two years.

• In this photograph taken on January 14, 2014, Nepalese former migrant worker Bhupendra Malla crosses a road as he arrives ahead of an interview with AFP in Kathmandu.

The International Trade Union Confederation (ITUC) warned this month that as many as 4,000 migrant workers might be killed by the time the 2022 tournament kicks off.

But the spiralling figures have done little to dissuade others from seeking employment in the booming Gulf nation.

Scores of men line up every morning outside the Department of Foreign Employment in Kathmandu, waiting for work permits.

Many, like Lal Bahadur Sunar, work in Qatar and say they have little alternative.

“We have no choice, we have to go overseas. We can’t get good jobs, good money here,” Sunar told AFP.

Nepal’s government says it wants to resolve the problem but argues it can’t do much on its own.

“At the ground level, the responsibility lies with the local recruiting agency here and the employer over there,” Rabindra Mohan Bhattarai, former director-general of the Department of Foreign Employment, told AFP.

Since returning to Nepal, former migrant worker Malla hasn’t been able to find a job but says nothing could persuade him to return to Qatar.

“When I was stuck there, I thought I would die without seeing my wife’s and kids’ faces again... unless Qatar treats workers better I don’t think the World Cup should be held there.”

Relation of Nepal with China and evolution of SAARC

The evidences of the relation between Nepal and China from ancient times can be found in various mythologies. According to Buddhism Manjushree had chopped the hill of Chovar and made Kathmandu valley appropriate for residence. Lichhavi king Anshuverma has been found taking the policy of maintaining a very cordial relation with northern neighboring country China and India. 

The fact of Nepali princess Bhrikuti being married with the Tibetan king Tron-Shan Gampo can be found not only in the history of Nepal but also from the Tibetan sources. During same period before about seven hundred years a Nepalese artist named Araniko had gone to China and there he had made various magnificent arts and sculptures. However, the formal diplomatic relation of Nepal with China was established in 2012 BS (10August10, 1995). China is a good neighboring country situated in the northern side of Nepal.

China has assisted Nepal in the development of various sectors like transportation, industry, hydroelectricity health etc. Araniko Highway, Prithvi Highway, Syaprubesi-Rashugadi Highway, Ringroad of Kathmandu etc. are major highways that have been constructed with the aid of China. Similarly, industries like Banshbari Shoe Industry of Kathmandu, Harishiddi Brick and Tile Industry of Lalitpur and Bhrikuti Paper Industry of Nawalparasi are included in the major industries established with the Chinese aid. Among them Bansbari Shoe Industry has been closed already whereas other industries are running and privatized. Likewise, China has also supported Nepal for the construction of International Assembly Building of Baneshwor, City Hall of Bhrikuti Mandap, Civil Hospital of Minbhawan and Sunkosi Hydroelectricity Project.

Important facts related to the relation between Nepal and China:

• On August 1, 1955 AD, the diplomatic relation was established based on principals of panchaseel.

• On 25 April, 1960, Nepal and China signed an agreement to maintain the relation of good neighbor which was signed by the then prime minister of Nepal B.P Koirala and that of China Chau En-Lai.

• On October 5, 1961, an agreement was made by Nepal and China to systematize the border between these two countries.

• On 15 October, 1961, construction of Kodari Highway was inaugurated and completed in the year 1967.

• In 1976 Nepal had disarmed the Khampa rebels of Tibet.

• King Birendra of Nepal had visited China for ten times. These visits also contributed to make the relation between Nepal and China much cordial.

• Nepal has been always giving equal treatment towards the friendly country by favoring the One China Policy.

South Asian Association for Regional Cooperation (SAARC):

This regional organization was established after the Dhaka Manifesto was signed in the first SAARC (South Asian Association for Regional Cooperation) Summit held in December 8, 1985 in Dhaka, the capital city of Bangladesh. The founding members of this organization are Nepal, India, Bangladesh, Pakistan, Sri Lanka, Maldives and Bhutan. This organization was established with the goal to promote welfare of the people of South-Asian region by bringing economic development and social progress and cultural development in the region. The Dhaka Manifesto was signed by the then heads of the states or heads of the governments:

Objectives of SAARC:

(a) To enhance the welfare of South-Asian people and to uplift their living standards.

(b) To speed up economic development, social progress and cultural development of this region and to provide opportunity to realize the likelihood of dignified livelihood.

(c) To maintain and promote interdependency among the South-Asian countries.

(d) To contribute in increasing mutual trust and understanding and to evaluate each other’s problems.

(e) To increase mutual support actively in the economic, social, cultural, technological and scientific sectors.

(f) To expand support with other developing countries.

(g) To promote mutual cooperation regarding the issues of common interest in the international forums.

(h) To maintain a cooperative relation among the international and regional organizations having same types of objectives.

Principles of SAARC:

i. The structure of the organization shall be based upon the notion of mutual cooperation, equal sovereignty, regional indignity, political independence, non-interference to the internal issues of others and common welfare.

ii. Such cooperation instead of being competitor of bilateral or multilateral supportive for that.

iii. This type of cooperation would not be against bilateral or multilateral responsibilities.

SAARC related offices situated in Nepal:

(a) SAARC Secretariat

(b) SAARC Tuberculosis Centre

(c) SAARC Cultural Centre

(d) SAARC Leprosy Centre

(e) SAARC Information Centre

Seventeenth SAARC Summit:

The seventeenth SAARC Summit of Addu Island of Maldives inaugurated in Kartik 24, 2068 BS (November 10, 2011) was concluded in Kartik 25, by issuing a Manifesto with 20 points. In the very Summit it was declared that the upcoming eighteenth SAARC Summit would be organized in Nepal in the beginning of 2013 AD. However, it appears that due to the internal reasons of Nepal the eighteenth SAARC Summit may not be held in Nepal or may get postponed. ( It is being held in Kathmandu this November: ED).

Some important facts about SAARC:

• The SAARC Secretariat performs the administrative functions of SAARC.

• The logo of SAARC was designed by Sailendra Maharjan of Kirtipur, Nepal.

• India contributes the biggest part for the fund of SAARC.

• Yadavkanta Silwal is the first Nepalese to be the Secretary of SAARC.

• Since April 4, 2007 Afghanistan also has been member country of SAARC.

• Nepal, India, Bangladesh and Sri Lanka are the four countries to acknowledge Nepalese language as a national language.

• India, Pakistan, Afghanistan, Nepal, Bangladesh, Sri Lanka, Bhutan and Maldives are the SAARC countries subsequently in area from larger to smaller.

SAARC and Nepal:

The then king of Nepal Birendra had played important role in the establishment of SAARC. He thought that even the neighboring countries could be benefited by the utilization of enormous water resources of Nepal. He had also a view that these countries could mutually utilize means and resources available in other countries. With due respect to this opinion, SAARC was established with the objective to increase the mutual support among the countries of this region.

Since 1981 Nepal had been playing an active role from Foreign Affairs Secretary, Minister for Foreign Affairs to Head of the State level for the establishment of SAARC. Nepal has been involving in the high level commissions of SAARC, taking part actively in the formulation and documentation of its policies and programmes after the establishment of SAARC.

The Secretariat of South Asian Association for Regional Cooperation (SAARC) has been established in Nepal. One of the founders of SAARC, Nepal has been determined for the progress and development of this organization from the very beginning. The member countries of this organization allocate their turn one after another to organize the Summits. Therefore, third and eleventh Summits have been held in Nepal and the eighteenth SAARC Summit is to be held in Nepal in 2013 AD. ( It is 2014: Ed).

SAARC has been increasing mutual cooperation and support in various sectors like agriculture, health, family planning, transportation, post office, weather etc. and also giving emphasis in the areas such as welfare of women and children, to control drug abuse, cooperation against terrorism, according to its objectives. However, the internal conflict between big SAARC countries like India and Pakistan has been also affecting countries having impartial image like Nepal and this organization has not been successful to achieve all of its targeted goals. But, Nepal has been playing much more effective role than any other SAARC countries to achieve its goal. It has been possible only because of Nepal has adopted clear foreign policy.

It has been mentioned in the SAARC charter that SAARC was established with an expectation of peace, stability, unity and development in SAARC region following the principles of the charter of United Nations Organization, non-align movement, and especially, to respect sovereignty of others and non-interference in others internal issues and peaceful settlement of all the disputes. Similarly, it has also been mentioned in the SAARC charter that since it is very essential to establish peace, social justice, economic progress in the world, at least a good neighborhood can be established within the SAARC region by increasing mutual support and understanding. It is also written in the SAARC charter that head of the states all the SAARC countries would assemble once in a year to discuss upon the issues of mutual welfare and organize other meetings as per necessarily and form different commissions. However, established with such important goals, SAARC has not been found successful to accomplish remarkable works according to the purpose of its establishment.

Everest tragedy accelerates Sherpas' exodus from mountaineering as more seek jobs elsewhere

KATMANDU, Nepal —  

Cheddar Sherpa has scaled Mount Everest seven times while guiding Western climbers to the top of the world. He has narrowly escaped three avalanches and seen a dozen of his friends perish on the icy Himalayan slopes.

But an avalanche in April that swept 16 Sherpas to their deaths — the deadliest climbing accident on Everest — has shaken him. He's decided that the dangers of his job outweigh the financial benefits.

"I am 48 years old now and I thought I had least another five years of climbing left in me," Cheddar said. "But after the avalanche, I don't think I want to ever go back." He is not sure what he will do for a living now.

The April 18 disaster on the treacherous Khumbu Icefall, where a group of Sherpas were carrying clients' equipment up the mountain before the peak climbing season, has accelerated an exodus of Sherpas from the mountain-climbing business. The younger generation has become more educated and many are moving away to less grueling jobs in the capital Kathmandu or outside Nepal. Thousands have migrated to the United States and Europe.

"It used to be that almost every family had at least a few members who worked for mountaineering teams in the past but now things have changed. There are less numbers of Sherpa who are continuing the mountaineering tradition," said Ang Tshering, of the Nepal Mountaineering Association.

Since the April tragedy, which briefly led to a boycott by Sherpa guides, many have told Tshering they want to quit because of pressure from families worried about their safety.

But even before the accident, Sherpas — an ethnic group that many also use as a last name — have been drifting away from mountain work. Cheddar, for example, forbade his four sons from becoming guides and instead insisted they go to college. One is now an engineer.

"These people do not want their children to face the hardship they faced in mountaineering and hope to get them into better professions which are easier and safer," Tshering said.

Once yak herders and potato farmers in remote Himalayan villages, Sherpas began helping foreign climbers scale Nepal's peaks since the country opened up to Westerners in 1950.

One of the big draws of the job is its relatively good pay. In a country where the average annual income is just $700, a high-altitude Sherpa guide can make $7,000 during the three-month climbing season. Foreign climbers can pay $100,000 for a chance to summit Mount Everest.

Sherpas face enormous dangers to facilitate these high-paying visitors. They are first up the mountain. They break the snow, lay the ropes used by the climbers and carry the heaviest loads.

Beyond the brutal cold and lack of oxygen at higher elevations, they face the risk of avalanches and altitude sickness.

As their incomes have risen, many Sherpa families have left their rural homes, hoping for a more comfortable lifestyle in the city or abroad.

"I never wanted to become a mountaineer. I would probably die from altitude sickness if I even tried," said Karma Gyalzen, a 26-year-old Sherpa who works at a supermarket in Katmandu's tourist district.

While there are no estimates of how many Sherpas have left mountain-climbing jobs, census numbers show that the Sherpa population in Nepal has declined from 154,622 in 2001 to 112,946 in 2011. Those figures are disputed by Sherpas who say census officials did not reach all the villages and previously counted Sherpas as other ethnic groups.

Wealthier families have sent their children to foreign universities. In New York City alone, some 4,000 Sherpas work in restaurants, offices and driving taxis, according to Ang Chhiring of the New York-based United Sherpa Association.

"The number of Sherpas migrating to foreign countries has swollen in the recent years," said Bal Bahadur K.C., a lawmaker from Solukhumbu, a district where many Sherpas live.

The dwindling number involved in mountain-climbing has opened the way for other ethnic groups such as the Tamangs and Gurungs, many of them very poor, to take jobs as high altitude guides. Three of those killed in the April avalanche were not Sherpas.

Yet because of the trust and name recognition that Sherpas have earned over the decades, some members of other ethnic groups describe their jobs as "sherpas."

"For decades it was only the Sherpas who worked on the mountains," said Bishnu Gurung, 46, who has scaled Everest twice. "It has been only a few years since some of us from other ethnic groups have been able get a chance to guide mountaineers because there are not enough Sherpas now to meet the demand."

Nepal: Optimal Issues of Foreign Direct Investment (FDI) Policy 2014

In developing country like Nepal, FDI policy is highly misguided or influenced by certain lobbies or interest groups. FDI, though an effective tool of economic transformation for the developing countries, is falling to slope rather arising towards positive curve since past two decades.

In Nepal, different levels of study team have submitted their reports to enhance the investment in the country from various sectors. Likewise, GoN is also trying to create the favorable policies towards the investors and to make favorable economic regulations for the international donors, and corporate and individual investors.

# But unfortunately, the efforts made by GoN are not enough for the investors.  FDI should have fewer barriers to trade and few restrictions on operation of foreign companies because they have to move from their home country to the host country to expand their product and services, but to which the GoN has failed so far.

# On the other hand, FDI policy should maximize externalities factor while investing in the country. But, the proposed policy does not seem to be attentive enough for this type of benefit that the country might receive in the future.

# The Draft policy needs to segregate the area of absolute FDI and technology transfer sector to reduce the main regulatory ambiguity. The Draft is yet confusing to the prospective investors and they still fear that the bureaucratic mind set may misuse the interpretation of the provisions to make pipelines for their own benefits.

# Invested FDI products and services have to be identified in the policy and they must be compatible with the international markets. Without preparation of identified market and service, the host country as well as the investors, may not get the expected outcome. Therefore, it is highly recommended to link the domestic with the international market. Costa Rica, the country from South America can be taken as an excellent example which made a successful FDI in the country by linking with international market for the specified products.

# Providing incentives to FDI needs to be based on externalities in the host country. To provide successful FDI in Nepal, portions of incentives and subsidies must be based on 'award the objective methods' rather than the subjective outlines. GoN must take a risk of exempting the income tax of the investors to get their confidence, but this exemption should be provided only after the successful operation of the company within a country for a reasonable time period.

# Proposed Special Economic Zones (SEZ) in Nepal should have appropriate strategy and policy to attract FDI that could alleviate poverty, micro economic reform to reduce corruption, and exercises of experimental economic rules and regulatory framework which can serve the purpose. It would be better to clarify the national and international investors on SEZ beforehand that the experimental regulatory framework can be updated for the betterment of the trade and economic activities to the proposed zones. Likewise, investment friendly regulatory environment and legal framework should be developed in advance, that clearly outlines selection criteria (based on transparent objective method), and incentives and privileges of SEZ to investors, developers, operators and new entrants of the market players for that specific zone.

# FDI needs effective competition policy to ensure fairness and transparency for trade and development. It should also guarantee the investors that the competency would be awarded and FDI would be secured itself from anti-competitive practices. At the same time, it should also provide security to the small market players in the country as well as business assurance to the local public. In the meantime, FDI horizontal spillovers could be used to enhance trade related activities for SMEs. 

# Another important issue FDI policy need to address is Power Development Agreement (PDA) application proceedings. If Nepal Investment Board (IB) could not complete the task deliverance within the time frame mentioned in legally binding MoU, then the IB should provide compensation to the developers as per the agreement. After Power Development Agreement (PDA) and project operation, developers or investors should consider profit and risk sharing mechanisms to ensure investment climate within the country and to keep trust in between two parties. In absence of PDA, Power Trade Agreement (PTA) bilateral agreement can ensure the risk of investment through transmission manager for cross border transmission lines.

# On Human capital enhancement side, FDI should fulfill requirements of host countries. Externalities that the host country may get after FDI should be ensured by the policy rather than after legislation. Apart from tourism, Nepal may be benefitted from energy generation, advanced agricultural business or mining sector capacity enhancement, which could be highly productive in the long run.

# FDI should address social and environmental concerns to win the confidence of local public.  In most of the cases, FDI leads to good practices to help social and environmental up grade. Therefore, FDI policy must have mandatory provisions on these factors to ensure undisturbed direct investment environment.

Finally, it's up to the host country like Nepal to provide and create investment friendly environment. It is very important to facilitate micro-economic policies to ensure sound environment for foreign investors in the country. FDI discreetness and unsolicited proposals for developing projects should be discouraged to provide constructive and competitive environment for the investors either to a public or a private or the both sectors in Nepal.