Economy Of Nepal Research Articles

The role of agriculture in Nepal's economic development: Challenges, opportunities, and pathways for modernization.

Nepal's economy is primarily dependent on agriculture, which generates a significant amount of GDP and jobs, particularly in rural areas. Despite its importance, the business still faces challenges from low productivity, traditional methods, inadequate access to advanced technologies, and increasing climate change sensitivity. These problems prevent agriculture from realizing its full potential to advance economic development, reduce poverty, and provide food security. Modernization requires increasing productivity through mechanization, expanding infrastructure, and improving market accessibility. Finding a balance between these advancements and the need to protect rural jobs is therefore very important. Developing agro-industries, integrating value-added product, and empowering women and youth in agriculture are all essential approaches for inclusive growth. Since agriculture would free up labor and resources for other sectors, it is possible that agriculture also pushed Nepal's industrialization. The significance of strategic investments and reforms in the agriculture sector for Nepal's sustained economic growth and poverty eradication is emphasized in this article.

Effects of unemployment and inflation on the economy of Nepal

This is a longitudinal study for the period of 2010-2019 which examines the effect of inflation and unemployment on growth rate of Nepal. The economy of Nepal suffers from inflation and unemployment. In this paper, the impact of inflation and unemployment on growth rate in the two short-run and long-run phases was investigated and examined using Karl Pearson`s Co-efficient and Phillips Curve. The results of this model showed the significance and positive effect of inflation and unemployment on economic growth in short-run and negative effect on long-run. This paper found that policy maker should conscientiously focus on strategies to reduce and control inflation and unemployment. The planner could attempt to reduce and control over unemployment and inflation to get desired economic growth of Nepalese economy. From 2010 to 2019, Nepal's economy faced significant challenges and transformations. Understanding the interplay between inflation and unemployment during this period highlights the complexity of macroeconomic management in a developing country. Policy responses need to be multifaceted, considering both immediate economic pressures and long-term structural changes.

Women’s entrepreneurship in the informal economy: A socio-spatial perspective

What role does ‘space’ play in shaping entrepreneurial choices? Much of the western-centric evidence offers abstract models of spatial dynamics, reflecting socio-cultural assumptions about entrepreneurship and the need to fix ‘women’s deficits’, within formal representations of space. We problematize these views by focusing on the everyday realities of women involved in (informal) entrepreneurial activities in a developing country context, exploring their contradictions with the abstract representations of the informal economy and the development policy goals of reforming women’s work through formalization. Based on Lefebvre’s conceptualization of space to explore these contradictions, we draw on empirical data from entrepreneurs in the informal economy in Nepal, where the International Labour Organisation reports that almost 85% of the economically active population to be in informal employment. We offer an entrepreneurial narrative that focuses on women’s work on the maintenance of local attachments and connections, underpinned by reciprocity, moral obligation and indebtedness often appropriated or disrupted by development strategies. By placing emphasis on informal spatial dynamics, we provide empirical support for the limitations of a policy approach that renders women’s work invisible through its homogenizing economic focus, to contribute towards a richer theorization of entrepreneurial contexts.

Socio-cultural and Economic Status of Gurung women: A study of Birendranagar Municipality, Ward no. 1, Surkhet

Women and ethnicity are extremely important to Nepal's overall growth. Women and ethnicity play important roles in enhancing a nation's reputation abroad. The development of Nepal's economy is largely driven by women. It significantly influences Nepalese society and the economy. Women are revered as historical figures in the country. This study is conducted at Gurung community of Birendranagar Municipality Ward No. 1 Surkhet. The main objective of this study is to find out social, cultural and economic conditions and examining the changing pattern of social, cultural and economic situation of Gurung community. This research carried out a theoretical proportion of Gurung women in the situation of contemporary society of Nepal. This study had carried out to discover the demographic socio-cultural and economic profileand to suggest some remedial measures for their better economy. This study was conducted in a descriptive research design with purposive sampling. The information was gathered using both types of quantitative and qualitative data through households' survey, interview observation and questionnaires as tools together and generalization of the study. This study has also aimed to discover the major characteristics of Gurung women in contemporary society. Even though they have need to more empowerment providing by education, loan for business, and awareness program.

Expenditure of snakebite care and its impact on household economy in Nepal

Expenditure of snakebite care and its impact on household economy in Nepal

From Historical Context to Contemporary Realities: Illicit Capital Outflows from Nepal

This paper explores illicit capital outflows, explaining its multifaceted implications in underdeveloped countries like Nepal. The paper also highlights the historical dynamics adjacent to illicit financial transfers, including their causes, mechanisms, and repercussions. The paper examines the various facets of illicit capital outflows, corruption, and bad governance mechanisms in Nepal. It explores how modern technology and global financial structures facilitate these outflows, contributing to a drain of resources from Nepal. Moreover, the study delves into historical contexts where significant capital outflows occurred due to political transitions and exploitation of national treasuries. The paper also discusses contemporary instances of illicit financial activities, including illegal transactions through Currency Smuggling, Hundi, and the involvement of banks and business entities in illegal capital flights from Nepal to abroad. It emphasizes the challenges faced by regulatory bodies in curbing these illicit practices and their adverse impacts on economic development, revenue collection, and the formal economy in Nepal.

Socio-economic Impact of Foreign Employment and Remittance in Household Activities in Besishahar Municipality

Remittances from foreign employment have played an important role in the household economy in Nepal. This article aimed to explore the socio-economic impact of foreign employment and remittances on household activities in the Besishahar Municipality. Following the purposive sampling procedure, I selected 30 households for the cross-sectional survey and administered a questionnaire to collect data. In addition to this, 10 participants were selected for in-depth interviews to collect qualitative information. The findings of the study revealed that foreign employment has improved the socioeconomic condition of a family and brought changes in the source of income, children's education, settlement process, and prestige and status of family members in society. I have suggested using the remittance in productive activities such as self-employment, financial investment, etc. rather than investing in unproductive sectors like building a house or purchasing land in urban areas. The findings of the study may be useful in policy making at the local and federal levels in Nepal as a large number of young people migrate every day for foreign employment abroad. Policymakers should be aware of the management of safe labour migratory flows both to the countries of origin and destination. Its implication can be an effective strategy for adaptation as it generates financial and human capital that contributes to the sustainable alleviation of poverty.

Impact of Remittance on Educational Outcomes: Empirical Evidence from Nepal

The remittances are the treasure for irrigating Nepal's economy. Because emigration is increasing, per capita remittance is also increasing in Nepal. However, the question is signaling in its utilization for educational attainment. In this context, the study examines the impact of remittance on educational outcomes in Nepal. The study applied autoregressive distributed lag (ARDL) estimations, Granger causality, forecast error variance decomposition (FEVD) technique, and impulse response functions (IRFs), with time-series data spanning from 1981 to 2021. The overall findings revealed that remittance had a positive impact on educational outcomes in Nepal. In the short run, remittance was found to be crucial for secondary schooling; in the long run, remittance had a significant effect on tertiary schooling in Nepal. The FEVD confirmed that remittance might be the inevitable predictor of educational outcomes in Nepal. The Granger causality also found a unidirectional causality from remittance to educational outcomes. The policymakers and stakeholders, therefore, should focus on funneling remittance toward financing education as well as a productive sector to accelerate per capita GDP and on cropping the demographic dividend in the Nepali economy.

Empowering economic growth: A provincial case study of Nepal through the imperative role of agricultural commodity markets

Nepal is extremely diverse and located between China and India. Most of the essential requirements are managed through import. These import and local agriculture production meet the demands of people and helps in economy. This study is designed to analyze the role of local agricultural products in the economy of Nepal. A mixed research method was applied and three vital economic corridor-based Provinces were chosen for this study. The interview schedule through Questions, KII and FGD was planned and conducted during August-November 2023. The data further illustrated that the local production of maize, paddy, wheat and millets is seasonal and insufficient for a year and lasts only for a few months from own field, and relies on markets imported through India and China. Nepalese markets are following cash-based transactions and the Government monitoring is challenging to control and monitoring the markets due to the open border. The daily consumable agricultural products such as vegetables, legumes, meats, fruits have limited production and dependent on Indian and Chinese markets. However, local production fulfills the demands of farmers and citizens for few months, and that value contribution is huge in the Nepalese economy. The local production is meeting the requirements of the people for few seasons. Due to diversity demands differ region-wise. The local production enhancement is the ultimate way out, effort from all sector for production is required and comprehensive study targeting market mechanism are suggested.

The COVID-19 Pandemic Impact on the Remittances and Major Economic Factors of Nepal: A Retrospective Assessment

The COVID-19 epidemic has had a significant impact on Nepal, primarily due to the closure of businesses in key migrant labor destinations such as the Gulf countries, Malaysia, and South Korea. Remittances account for 26% of Nepal's GDP, but they have dropped significantly since COVID-19. This study examines the impact of a negative shock to remittances on macroeconomic variables and makes policy recommendations. The analysis finds that a drop in remittances correlates with slower growth in consumption (2.5%) and foreign exchange reserves (17.7%) over a 20-year period, using both quantitative and qualitative data. The result shows that the Nepalese migrant crisis, exacerbated by the economic downturn in destination countries, has led to a substantial decline in remittance inflows, causing a 15.33% monthly decrease. This poses a threat to Nepal's economy, affecting consumption, GDP growth, and key macroeconomic variables. The results thus emphasize the importance of immediate relief and bolstering economic recovery initiatives by investigating potential outcomes of the pandemic's impact on key economic indicators.

Unraveling the Effect of Remittance on Nepal's Agricultural GDP

The objective of this study is to analyze the impact of remittance on Nepal's agricultural GDP. It employed a causal-comparative research design to analyze the impact of remittance on Nepal's agricultural GDP based on panel data covering the periods from 2000 to 2022. Remittances play a major role in Nepal's economy, contributing significantly to its overall growth. Nepal is ranked fifth in the world when it comes to remittance as of percentage of GDP is 26.6 percent in 2023. The coefficient for remittance to GDP was -0.571, with a significant value of t—5.766 (p<0.001), indicating that remittances had a negative impact on the contribution of agriculture, forestry, and fishing to GDP. These findings show that an increase in remittance leads to a significant and consistent reduction in the proportion of GDP attributed to agriculture, forestry, and fishing. The remittance is the result of labour migration to the international labour market. If this trend continues, then Nepal is bound to face the acute shortage of labour in the near future and thereby reducing the use of arable land. This critical fact should also be taken into consideration by the Government authority and policymakers.

Distribution Nature of Foreign Exchange (FOREX) Rates in Nepal

The economy of Nepal is based on the inflow of remittances sent by the Nepalese who have gone abroad for foreign employment. The trend started after the start of the Maoist insurgency and has been going on due to a lack of employment opportunities within the nation. Other than remittance, tourism and a certain amount of foreign aid have been the sources of foreign exchange earnings for Nepal. These sources of FOREX have been able to maintain the balance of payments in Nepal. One unique feature of FOREX rates in Nepal is that the Nepalese rupee (NPR) is pegged with the Indian rupee (INR), the currency of the neighboring nation, India. The central bank of Nepal, Nepal Rastra Bank, publishes FOREX rates for 21 different countries on a daily basis, though exchange rates for 16 currencies have been publishing buying and selling rates for the past decade. Hence, the paper analyzed the distribution nature of 16 countries FOREX buying and selling rates and found that INR FOREX rates have no randomness as they are pegged. The most concerned currencies, like USD, SAR, QAR, and AED, were fitted with beta distribution capabilities to reflect the future trend of the exchange rate. At the same time, the GBP buying rate, JPY, and KRW buying and selling rates were best-fitted in general extreme value (GEV), reflecting the risky nature of currencies. The exchange rate distribution seems to be a concern to the exporter and importer, as the nature of the distribution could help to categorize the level of FOREX risk with a specific currency.

Expenditure on Human Capital and Economic Growth: Evidences form Nepal

Human capital expenditure is critical to utilizing and profiting from all of the country's resources. Economists have acknowledged that human capital improvement and usage are critical to a nation's economic prosperity. The research article investigates the relationship between human capital spending and Nepal's economic growth. The study analyzed data from 1985 to 2022 to investigate experimentally the relationship between Nepal's human capital spending and GDP. The study uses a variety of macroeconomic indicators, such as GDP as a measure of economic growth, capital expenditure on education, recurrent expenditure on education, health expenditure, higher education enrollment, and school enrollment. LNRGDP serves as both the explanatory variable and the dependent variable in the study's use of regression analysis. The Unit Root Test, OLS Estimation, Unit Root Residual and Error Correction Approach, and Econometric Analysis are all included. The results of the regression show that higher enrollment has a positive effect while capital expenditure on education has a negative impact on GDP. Spending on ongoing education, health, and school enrollment has no statistically significant effect on GDP. A long-term, positive correlation between the investment in human capital and economic growth is found by the cointegration test. According to the findings, funding higher education is essential for fostering Nepal's economy. In addition, the study highlights the significance of policymakers carefully considering resource allocation for education and human capital development in order to ensure the nation's sustainable growth

Co-producing a culturally sensitive storytelling intervention with Nepalese migrant workers

Abstract Background Labour migration is an increasingly important contributing factor to Nepal's economy; remittance from migrants abroad contribute to quarter of Nepal's gross domestic product. However, this income comes at a great cost; nearly 1,000 Nepalese migrant workers (NMWs) die every year in Gulf States and Malaysia. This interdisciplinary study informs the co-production of a culturally adaptive storytelling intervention to support the mental health and wellbeing of NMWs. Methods We focused on outgoing and returnee adult NMWs in the GCC countries. The study was conducted in Dhading district, Nepal and involved three different but interconnected phases; 1. a systematic review and a mixed methods study exploring health and wellbeing issues of NMWs (both studies already published, available online); 2. exploration, and analysis of Nepalese literature relevant to contemporary migration (n = 49); and 3. co-development of storytelling intervention working together with a co-production group (n = 12). Results Findings from phase one and two showed that NMWs suffer from various health and wellbeing issues (mental health, physical health including workplace hazard, abuse, and exploitation). Themes identified from the Nepalese literature centred around hopelessness, helplessness, and separation. Based on these findings, a culturally sensitive storytelling intervention was co-produced to support the mental health and wellbeing of NMWs in GCC countries. The intervention video includes an animated story centred around the struggles of an archetypal male migrant worker and their use of coping strategies for dealing with adversities. Conclusions Our study suggests that co-production of storytelling intervention provides shared spaces for migrant workers to engage, imagine and participate as communities. The process also helps to redistribute power and redress top-down modes of working that may undermine and devalue the stories of marginalised groups. Key messages • Co-production of storytelling intervention provides shared spaces to engage, imagine and participate as communities. • Co-production helps to redistribute power and redress top-down modes of working that may undermine and devalue the stories of marginalised groups.

Waste Management in Nepal: Characterization and Challenges to Promote a Circular Economy

In Nepal, the informal sector is responsible for treating 15% of household waste. It is the only alternative to landfilling and open disposal; however, the current waste management system does not acknowledge informal recyclers aggravating various challenges and vulnerabilities that the sector already faces. This study identifies and validates for the first time the challenges of the informal waste sector while providing a granular understanding of the actors that shape waste management in the region. The study uses primary data collected over a period of 6 months in Kathmandu and Lalitpur, the first and third most populated areas in Nepal. The methods considered were semi-structured interviews, questionnaires, and a co-creation workshop with formal and informal actors. A novel characterization of waste management actors was conducted to identify two profiles namely cyclists and scavengers and question the formality of the collection centres. Findings suggest that the price volatility of recycled materials and the lack of treatment and absence of regulatory capacity are among the main challenges in promoting a circular economy from the informal sector. The recommendations to overcome these challenges are a series of policy reforms, such as an extended responsibility producer scheme and the review of the tax on recycled material transport. The main policy implication from the finding reveals that circular economy is already being promoted by the informal sector — a responsibility that should fall under the remit of the regional and national governments. The study concludes that integration is not only necessary to improve the conditions of informal workers but essential to developing a circular economy in Nepal.

Contribution of Expenditure to Agriculture Growth in Nepal

Background: Among the different macroeconomic sectors, agriculture is critical to the expansion of Nepal's economy. Agriculture is the main strength for the development of trade and the service industry. Agriculture has become the backward linkage for trade and service. The contribution of expenditure is vital for the growth and agricultural development of Nepal. Objectives: The purpose of the study is to determine contribution of expenditure to the agricultural economic growth in Nepal. Methodology: The descriptive and causal research designs were used for the study. Annual time series from 1974/75-2020/21 was used as the data. The research used the Auto-Regressive Distributed Lag model (ARDL) approach of cointegrationa. Moreover, unit root test, bound test, residual diagnostics and normality test were used. Results: The empirical result indicates a short run good association between the agriculture labor force, gross fixed capital formation, capital expenditure and total food crops and long term collaboration between the agriculture labor force, gross fixed capital formation, total food crops and total cash crops. The disequilibrium is corrected in the one lag period with a speed of adjustment of 0.07 per cent. Conclusions: The study concludes that there is an association between government expenditure to agriculture growth of Nepal. So, government spending and agriculture expansion are associated in the long run. Implications: Government expenditure must increase to escalate the economic growth of agriculture, reflected via a source of economic growth in Nepal. Originality: The study is purely original and nowhere published yet. Likewise, no grants have been obtained during the period of investigation on this issue.

Commentary: Nepal's Balancing Act in the Middle East

Nepal was the first South Asian country to establish diplomatic relations with Israel in 1960, and other Middle Eastern countries followed suit in the late 1970s and early 1980s. Although Nepal and Israel have excellent bilateral relations, Nepal has yet to support Israel in multilateral forums, owing to a dilemma in maintaining balanced relations with other Middle Eastern countries. Because Middle Eastern countries are commonly identified by their reliance on labor imports, they have also become a labor destination for Nepal. With a high concentration of Nepali workers (77%), countries such as the UAE, Qatar, Cyprus, Bahrain, Israel, Saudi Arabia, and Kuwait have dominated Nepal's labor migration. Remittances from these countries are huge every year, and they have become the backbone of Nepal's economy. As a remittance-driven economy, labor export has always been a major tool of Nepal's economic diplomacy, which is frequently at the forefront of Nepal's foreign policy toward Middle Eastern nations. As a result, the paper argues for more determined action in the Middle East region, through which Nepal can develop its economic, investment, trade, and tourism interests by negotiating more advantageous relationships with Middle Eastern countries.

The impact of the COVID‐19 pandemic on the health and economy of Nepal

AbstractNepal experienced a devastating earthquake in 2015, sweeping political changes and restructuring of its healthcare system in the last decade. The economy is heavily dependent on tourism with an average of 1 million visitors per year prior to the pandemic. The country had just begun the ‘Visit Nepal 2020’ campaign when the government had to realign its economic activities and allocate resources to battling the impacts of the COVID‐19 pandemic. The tourism sector crashed with 18.7% of the population falling into poverty. The health system faced reeling pressure with interruptions of routine services while the government struggled to provide care to COVID‐19 patients. There was a shortage of 20,000 healthcare workers and derailment of important health services, such as antenatal care, institutional delivery of babies and tuberculosis diagnosis. To fund the COVID‐19 vaccination efforts, the government sought donations and loans from other countries. There were disruptions in schools and the education system which had challenges in the delivery of education through digital means due to limited internet services. The agriculture and the food production system also faced major disruptions leading to exorbitant inflation and an increase in the cost of living. The country opened to normal socio‐economic activities by May 2022 in an effort to reverse the impacts on various sectors of life in Nepal. We describe how Nepal, a resource‐constrained country handled the COVID‐19 pandemic.

Does Fiscal Deficit Cause Economic Growth? Evidence from Nepal

The fiscal deficit soared tremendously after Nepal endorsed economic liberalization aftermath of the 1990s democracy. The purpose of the paper is to investigate the effects of fiscal deficit in the economic growth of Nepal. Data from 1980 to 2019 were used to estimate the short- and long-run causal relations of fiscal deficit proxied by total government expenditure minus total government revenue as a percent of gross domestic product (GDP) and growth rate of real GDP as a proxy of economic growth along with other control variables. The autoregressive distributed lag (ARDL) error correction regression and vector error correction model (VECM) Granger causality have employed to meet the purpose of the study. The study reveals that there is short-run statistically significant negative relationship between Nepal's economic growth and the fiscal deficit of the previous year. However, both domestic and foreign loan and economic growth have positive and significant relations in short run. In contrast, the results reveal that there is positive but not significant relationship between the fiscal deficit and the economic growth of Nepal in long run. The Granger causality suggests that fiscal deficit does not Granger cause the economic growth of Nepal. However, economic growth does Granger causes the fiscal deficit in Nepal. Thus, the growth-driven fiscal deficit will be more effective in the economy of Nepal. Based on stylized facts, it will be necessary to redirect deficit financing into productive channels in order to enhance the sustainable economic growth.

Conservation by corruption: The hidden yet regulated economy in Nepal's community forest timber sector

Through the case of commercial timber production in Nepal's community forests, we uncover and explain how effective anti-corruption and harvest regulation have produced a kind of ‘allowed’ corruption that promotes forest conservation. An ethnographic study in four community forests and in-depth interviews of nearly 200 actors along the Sal (Shorea robusta) timber commodity chain showed that all actors participated in a highly organised form of collusive corruption. Anti-corruption officials call this practice “corruption without illegality” because it does not involve unauthorised harvest in community forests. Instead, it suppresses producer prices through legally required but rigged timber auctions that generate windfall profits, which sawmill owners share with upstream actors to ensure a steady supply of raw logs. Local-level timber brokers connect community forest user groups to sawmill owners. They also operate as stealth conveyers of unofficial payments to forestry officials and other upstream actors because they can camouflage such cash flows as transaction costs. Anti-corruption authorities enforce formal timber harvesting rules, which deters forestry officials from getting involved in overharvesting schemes. However, these same rules, plus some legal posturing, allow forestry officials to extract rents from legally harvested logs at minimum risk. This is hardly a coincidence because it enables the central administration to regulate difficult-to-control field-level forestry officials' behaviour without curtailing their access to informal incomes. Forest user groups lose out, but they could increase their timber income substantially by exercising their powers to decide whether or not to harvest timber. Elevating timber auction floor prices through state intervention is also feasible.