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When we talked about promoting tourism, it was that opportunity of being able to be at ITB Berlin or WTM London. It was about physically being there with brochures, like selling your wares at the weekend market or village haat. People swing by your stall; you try to sell your wares based on the promo materials you have, and then rely on them to be able to send you a group of tourists.

The digital world has brought about many disruptions. You can book your tickets, hotels, tours and everything you would like to do online. Portals like Trip Advisor give you reviews to decide which destinations to look out for, and which products and services. The world of Instagram and TikTok has allowed you to view destinations, products and services from people you believe in and created tremendous peer pressure. Then there are internet entertainment platforms like Netflix where you can, apart from movies and innumerable series, gain access to many high quality documentaries and other materials that can make you think about different destinations you have never dreamt about.

New dimension

The last decade has changed how people view travel and choose what and where they eat, drink or carry out leisure activities. The pandemic has also added a new dimension where people travelled virtually during times of lockdown and restricted movements, and made some bucket lists for physical trips. Of course, there are the influencers, anyone with a device who can show you a whole new world you have never imagined.

In Kathmandu, with diverse speakers at a Neftalk organised by the Nepal Economic Forum, we discussed what is happening to tourism in the digital era and explored the disruptions and opportunities. There are three things to look out for.

First, there are new mediums that drive people’s travel decisions. For instance, the success of 14 Peaks: Nothing Is Impossible, a Netflix production with Nims Purja climbing all 14 eight-thousanders, triggered the imagination of many people, which was reflected in tourist arrivals to Nepal. Globally, people who have watched local content are 2.4 times more likely to make the place their #1 travel destination. Similarly, the video around the visit of the Prince of Bahrain and a vlogger from Qatar during the pandemic has let people in the Middle East who thought of Europe and the United States as premium destinations start to think about Nepal. At a luxury hotel in Pokhara, I was asked by a couple from the United Arab Emirates as to why we do not have $1,500 a night hotels as there would be lots from their country who would be interested.

Second, domestic tourism, which has been the bread and butter of many destinations in Nepal, has just exploded due to digital mediums. We hardly saw any sustained campaigns from any agency to lure local tourists, but then vloggers posting their bike ride videos on YouTube, Instagram and now TikTok have changed the fate of Nepali domestic tourism. People like Sisan Bainya have taken production quality seriously, and people want to follow him to the places he and his team have been.

Imagine Nepal is capturing such imagination of Nepali travellers. With a diaspora population of over 5 million, excluding India, across 180 countries, we will see a considerable demand surge from Nepalis visiting for religious or social purposes or just embarking on pure fun! For the domestic tourists, with the easing of payments through digital platforms, it’s all digital. Be it finding a destination, making bookings, paying for it, writing reviews and then posting about your trip. With more women joining the workforce, nuclear families and the concept of holidays not being limited to playing cards and drinking will significantly increase domestic tourism growth.

Third, the biggest challenge for Nepal to manage would be to ensure tourism has sustainable growth. The littering of trekking trails with cans of alcoholic beverages, bottles of aerated drinks and many other packaging materials is a huge issue. Structures are mushrooming everywhere to house travellers without proper planning. Everest is a golden goose we are killing by selling it too cheap. We have to think of the destination as super high-end. With a fragile ecology and biodiversity, we need to conserve; we need to use the same digital platforms to spread messages on pushing sustainable tourism. We have the commitments we made at COP26 to remember and the government’s Green Resilient Inclusive Development Action Plan to bear in mind.

Virtual reality

Finally, we need to prepare for tourists who will want to get to Nepal without actually getting to Nepal. With virtual reality and augmented reality becoming the future, with the Metaverse becoming the future real estate, we need to be there. We need to exploit these platforms to attract more people coming in person. We need to create that buzz of a destination that people will yearn to visit as we are one of the most photogenic countries in the world.

For all this to be leveraged, we need it to be private sector-led and come out of the shells of cartels, and we need the government to continue to provide a legislative and regulatory environment that facilitates these developments rather than thinking of stifling them in the name of controls. In many countries, governments have relied on self-regulation as a governance model. This is mainly due to the unique features of online content. Technology allows an individual to make an informed decision about how, when and what content they consume. We have missed many previous waves of disruptions, this one, we should not.

Read the article on The Kathmandu Post: https://tkpo.st/3zAgvv9

Many surprises emerge in every nation’s history, and events can rarely be predicted during their course; people cannot say what change may happen in the next two to three years. If we think of 1988 or 1989, who would have thought that the people of Nepal would challenge the monarchy ruling under a partyless Panchayat system and move to a constitutional monarchy? Similarly, when we think of 2004 or 2005, who would have believed that a monarchy that ruled for 240 years would see an end? Like in many other countries, events in Nepal happen without the people expecting them. Whenever we feel we have lost hope, whether during the insurgency, an economic crisis or natural calamity, we spring back; we manage to spring surprises, and then another trajectory emerges.

The local elections in 2022 have been another event that will change Nepal’s future. They are a slap in the face of all the people who have been saying that federalism is not going to work in Nepal. The megalomaniacs in Kathmandu, be it the political parties or bureaucrats, have been taken by surprise. The voice of the people in a democracy is the ultimate decision-maker. This election and the results have provided many different pointers that we need to take positively.

Bitter pill

First, the way the people voted to elect their leaders has disrupted the status quo. They voted for independents; they voted looking at the candidates’ competencies rather than their allegiance to the political parties. Many senior party leaders had to swallow the bitter pill of their party’s candidate losing in the wards they voted in. It could be voter frustration against the party leaders who have been doing little but fighting within the party and against other parties, not on ideological or significant issues, but on petty matters. In a country where 70 percent of the population is below the age of 40, the old male leaders have been given a wake-up call or maybe a suggestion that they should hang their hats.

The second is that this election indeed demonstrated the power of social media. Gone are the days when the candidates and parties used to make speeches and host dinners and parties to woo voters. They made all sorts of promises that they could never keep. Things have taken a different turn with social media platforms entering people’s lives. You have to have messages that people understand. You cannot just use false data and other means to bluff your voters. Accountability has moved to a different level. Every individual who has a smartphone is a source of news who can share videos on various platforms or provide opinions that can go viral. The old generation of leaders and leaders of so-called new movements who thought social media were platforms for sycophants to sing the praises and share their divine statements could not fathom how much the platforms had transformed.

Third, it is about managing expectations. In a recent study on local economic development conducted by Beed Management, it emerged that people wanted to link up local governments with economic transformation, be it the creation of jobs, providing access to markets for their produce, helping them in their entrepreneurial journey or seeing some major projects come to their neighbourhood. The mood was also that they were disillusioned by how the political parties functioned. People vehemently opposed the sudden transformation in the behaviour of the political parties, becoming their ally when for years they remained aloof. Younger folks and women did not like this at all. Many of the candidates who won by surprise perhaps knew this gap and addressed it well with the voters.

Finally, all eyes are on Kathmandu not only because Balen Shah created an upset but with more details emerging from his planning process, it has provided hope to many aspiring leaders in Nepal. He has his work carved out, but in terms of basics—cleanliness, garbage management, misuse of building permits and getting rid of shabby structures—what he will be able to do in Kathmandu will hopefully be replicated across Nepal. There are just two things that can be taken as pointers.

It has given hope to many young Nepalis that one can fight an election and win it if you have the right strategy and work hard. One does not need to affiliate with any party. Like in the case of Sunita Dangol, the party found her, but it is very clear that she could have won irrespective of the political party. So hopefully, during the upcoming federal elections, we will see new aspirants who will dent the hopes of status quo propagators. The top leaders will see some able contenders, and perhaps an excellent time to make retirement plans!

Independent leaders

It would be a good starting point if the independent leaders could form a coalition with others and take on one issue to deal with, be it garbage or aesthetics. It is good that Balen Shah did away with khadas and one did not see him painted red. A start to ensuring a pleasing aesthetics of oneself. It is so difficult to believe that people who allow their faces to be painted ugly red and accept the wasteful tradition of khadas and garlands will actually keep the streets clean!

There is a rekindling of hope. We have more educated people than ever before, and people with more money than their ancestors could have ever dreamt of. So we need to work on small things that ensure a sense of civility, inculcate civic sense and lead by example.

Read the article on The Kathmandu Post: https://tkpo.st/3wZnPPc

The social media has been filled with expressions of frustration from people at the pace at which votes are being counted in Kathmandu. Journalist Ameet Dhakal shared his frustration on Twitter as to how it would take a month to complete the voting process in Kathmandu. This problem is an anticipated one like the serpentine queues at the passport office or the riots to get a driver’s licence or the chaos to get a vaccine certificate. Nepali management practices, including those of the private sector, are designed to create delays that will benefit a few. More days of counting means more allowances for the folks that are involved in the process. The excuse to not get to work as to be able to observe the counting is a big one. Now which boss will reprimand a political cadre as even junior ones with the right access?

For the thousands who just throng the counting centres, it is just a bit more fun as they are either waiting to apply for the diversity visa or look for that next opportunity to leave Nepal. So delays have been part of an ecosystem that we nurture, and anyone trying to bring about efficiency or productivity is shunted to useless departments. Despite recommendations from former election commissioners who saw through some of the teething problems encountered during elections, it is business as usual.

Candy Crush

I went back to look at my own piece five years ago in this paper where I discuss the need for tech-friendly polls. This time again, the registration of the candidates itself was an outdated one. Why can’t we make the process friendlier with candidates being able to file for candidacy electronically? After all, if we can move money with the press of a button, why do we have to go to the Election Commission office personally? This then brings us to the next topic of election symbols. Election symbols were an alternative when the literacy rate was 20 percent in 1960. With 70 percent literacy now, why can’t we move to an electronic system where the name of the person could be used. When I was inside the voting booth, I felt like I was playing Candy Crush on paper, a whole lot of symbols. If you are not among the ones who have made up your mind about whom to vote for, you surely will make a mess. Further, the ink used in the stamp pad was of such low quality that it smudged, which means chances of your vote going invalid becoming high.

Nepal’s elections are generally peaceful compared to the ones in other South Asian countries. When there are 22,000 polling booths, it is natural there will be disruptions in a few, even if we take a 0.1 percent disruption, then it could be 22 booths. But 99 percent goes peacefully with people willing to follow all sorts of nonsensical directives but adhere to the rules. Therefore, why don’t we take advantage of this and attempt to be the country that goes far ahead of electronic voting machines (EVM) and leverage the internet to take care of the entire gamut of registration of candidates, voter identification, voting and counting? This means it will also resolve the issue of ensuring that the 3-4 million Nepalis outside Nepal who have the right to vote will be able to do so. With 37 percent of information and communication technology (ICT) services being exported out of Nepal, the talent we have is global. These firms can be put in a competition to tie up with global companies who have already invested in deep facial recognition technology and biometrics to be able to develop the entire system. One can apply for a digital voter ID card like the vaccination card by uploading the required documents. If Nepalis have learnt how to apply for visas to hundreds of countries online, it is stupid to think this will not work.

Online bandwagon

We now have the choice of visiting a bank or doing a transaction online. Students during the pandemic completed education and examinations online, doctors have been doing diagnosis and treatment online. Many services have moved online. There should be a choice for people to either visit a voting centre or vote online. The voting centres need just a simple facial recognition software and biometrics centre to match the records in case people would like to visit them. Else, people can vote from home in Nepal or outside. The key is to ensure that your electronic credentials are genuine, and once they are used they cannot be used again. Further, since the records are electronic, people who voted via the internet will not be able to vote in person or vice-versa. It’s like a concert ticket, once scanned; you will not be able to use it again. I again go back to my conversation with a Nokia phone executive 15 years ago to create an $8 phone to be used as a one-time voting tool, and that could be upgraded to a phone and radio to use!

Many countries have been at the forefront of taking voting electronic. Estonia is one of them that successfully implemented internet-based voting with a good launch. If India could make EVM successful in such a large country and take it global, Nepal has also the chance to create an e-voting platform that it can take global.

Read the article on The Kathmandu Post: https://tkpo.st/39Rer75

Last week, at a social gathering, a person sipping expensive single malt whiskey was asking me how deep the economic crisis was. I just told him that if there was a real economic crisis or a big crisis looming, he would not be sipping whiskey here, but queuing for fuel or essential food items. In Nepal, negativity sells well when practically every conversation in the family or society revolves around talking ill about someone, society, ethnic groups, religious groups, caste, businesses or institutions. Therefore, it is nothing unnatural for people to talk about how the Nepali economy is coming to an end just this week or maybe the next. We are well reminded of “Nepal is a going to be a failed state” campaigners who built many houses and sent their children to expensive schools around the world selling the idea of a failed state. Perhaps, there is a whole new crop emerging who will make a fortune talking about an economic crisis. To add to this, there are following five reasons for the economic crisis story to spread like wildfire.

Why the story sells

First, the Sri Lankan crisis, which is completely different from Nepal, is being used to go on a full-fledged China bashing spree; and in India, it has become awkward if you are not blaming China for the Sri Lankan crisis. And why not lump Nepal with it too? Even Indian stringers for media outlets like the Nikkei Asia Review have done that. Further, WhatsApp University in India and Hindi channels are easier to quote in Nepal as many of the fake news spreaders in Nepal are well versed in Hindi and never read English language research reports that are published by the World Bank, International Monetary Fund or other international institutions. So, Nepalis don’t need to make much effort, just reshare the posts from India in Hindi or just put a Nepali translation and share. Media houses close to India’s federal government continue to make sensational news. News channels like Aaj Tak of the India Today group, known to spark #GoBackIndianMedia is back to its antics of selling the Nepal economic crisis story.

Second, there is not much research that happens in Nepal that is sponsored by the private sector as sponsoring events where booze flows like water and expensive entertainment takes priority to funding research institutions or building internal research teams. Banks average a billion dollar market capitalisation, but we do not hear of any deep analysis and research coming out. Therefore, C-Suite folks and board members depend on WhatsApp University and YouTube videos for telling the journalist what they think of the crisis, and they tend to amplify the crisis story also.

Third, there is a liquidity crisis in the formal sector that is regulated by the central bank, but there is money available in unregulated cooperatives and informal cooperatives. Many of these cooperatives have linkages with people in the formal banking industry, so they may recommend to you where to get higher rates for deposits or loans at steep interest rates. In a country where nearly a billion dollars in graft money gets accumulated each year, there is no issue of liquidity. It is only that the formal sector does not have money.

Fourth, in a country where trading rules and the business of arbitrage are protected by cartels in the guise of associations, people find a crisis something to rent seek on. Like how the vegetables in the market suddenly become costlier when news of a landslide comes in, it is important how you just spread the news of a crisis and fetch higher prices for the goods in one’s stock. Further, you can get government help to stop imports and ensure you have a gala time. So if you have a snack company that produces snacks with the same brand name as an Indian one, you can get the government (of course, you have to take care of the politicians) to ban their import as luxury items, and you can sell contraband at higher prices. Who says crisis is bad for business? It is just a good time to get rid of your stock at higher prices citing the crisis and ensure no new stocks arrive for some more time. Of course, after July 16, there is a new fiscal year and the rules will again change.

Finally, crisis is a good time to find scapegoats and fire people you do not like. The finance minister tried firing the governor of the central bank, but the Supreme Court made that not possible. In coalition politics in an election year, it is all about money. It’s about who can pay to get someone fired. And then you can ask the other group to pay more for not firing. It’s the best business to be in. And the all-party mechanism is very good in handling these win-win moments.

What’s ahead

The International Monetary Fund and the World Bank both have made their views clear on why it is not a crisis that is being projected. The Central Bureau of Statistics is telling us that Nepalis are making more money than in previous years. Formal remittances are picking up, but there is an equal amount of informal remittances that are now used to make payments at higher exchange rates as there are curbs on foreign exchange. In an election year, we are to see more populist programmes coming in, and we will see a surge in government spending in the last two months of the financial year like in earlier years as only 28 percent of the capital expenditure budget has been spent in the first nine months.

In an environment where banks collude in fixing exchange rates and interest rates, they are not indicative of the state of the economy like in other countries. As long as wedding and other social parties are happening, as long as people are spending money at eateries, as long as people are buying gold and jewellery, and as long as people are not abandoning construction projects, we need to understand that there is no economic crisis. 

Read the article on The Kathmandu Post: https://tkpo.st/3MLz2b4

I keep wondering when it will be possible to have a direct flight from Kathmandu to Pakyong that will help get to the Himalayan state of Sikkim without the arduous journey that includes crossing the land border at Kakarbhitta-Naxalbari in eastern Nepal. Cartels on both sides have ensured that well-built infrastructure of a new bridge and good roads are not to be used to provide rickshaws so that local vehicles can continue to fleece travellers. Of course, such cartels cannot exist without the protection and patronage of business organisations and politicians. The thought of crossing the border deters people on both sides, as the frontiers are treated as a point of extortion and control rather than facilitation. However, on both sides of the border, post-pandemic, internal movement between the two countries will perhaps rekindle tourism helping to benefit economies on either side.

Tourism destination

Sikkim is a beautiful Himalayan state where every Nepali will feel at home as they speak the same language, eat similar food and enjoy following familiar artists, writers and narratives. At Rachana Books, Gangtok’s independent bookstore, the conversations with fellow The Kathmandu Post columnist Amish Mulmi makes one feel talking about the issues of borders, connectivity and opportunities nothing different than our conversations in Nepal. Meeting and chatting up with stellar English language authors Prajwal Parajuly and Chetan Raj Shrestha or editors Anurag Basnet and Pema Wangchuk, one wonders how different it is to tell or edit a Himalayan story emerging from Nepal or Sikkim.

With the complicated geopolitics, it is a challenge for Nepal to balance itself in the new world order, but for a land that was just annexed less than 50 years ago, it is even more difficult. There has not been so much movement between Sikkim and Nepal as there used to be three decades ago. It is becoming more difficult for the younger generation on both sides to understand what it means to be a Nepali-speaking person from Nepal in Sikkim or a Sikkimese speaking Nepali. This matter complicates further as the nearby districts of Darjeeling and Kalimpong in West Bengal add another dimension where sub-identities within the broader identities are being promoted for political reasons to get away from the more significant uniqueness of the Nepali language that unifies everyone. Perhaps, this makes it very important to look at the more people-to-people movement to encourage people to engage with and understand each other. Therefore, it is crucial for people on both sides to think of how movement can be facilitated.

For people in Nepal, the government orders travel bans through restrictions on issuing dollars. The need to fulfil a long list of conditions before travelling outside Nepal makes people who want to travel look towards India. Therefore, Sikkim can be something that could be on the list of people wishing to travel. The government of Sikkim can recalibrate to get the required user-friendly and electronic paperwork. The travel form is easy to fill out, but there is no equivalent to fill to get the permits, especially those to go to some of the restricted areas like Nathula. Local tourism operators also find ridiculous the rule requiring an additional person to travel as a guide with a group, and see it more as tourist sponsored payment to the unemployment programme. It is also essential to ensure more compatibility in using digital payment platforms. Many establishments have not registered for taking international cards, leaving only digital payments. If the Indian Unified Payment Interface (UPI) platforms can be legally used in Nepal, it is important to have reciprocal arrangements like being able to use Nepal-based electronic payment platforms within the current guidelines of limits in India.

Linking up

There is much history to be revisited as the road link between Nepal and Sikkim opens, making driving into the state from Nepal possible without going through West Bengal. With the road linking Uttarey in West Sikkim and Chiwa Bhanjyang in Nepal getting closer to completion, the two former Himalayan kingdoms can connect directly.

Geopolitical winds are getting even more volatile after the Russian invasion of Ukraine. It becomes essential that traditional links be revived and strengthened. As the Bangladesh, Bhutan, India and Nepal (BBIN) sub-regional cooperation framework advances, more intra-regional linkages will develop. The dream of a Nepali flying freely into its Himalayan neighbour into Pakyong in Sikkim and then into Paro in Bhutan using fifth freedom rights would perhaps make this Himalayan citizen happy.

This also brings us back to building on the Himalayan Consensus’s foundation work. With Nepal not undertaking the Sagarmatha Dialogues, it’s only natural that Sikkim hosts the Kanchenjunga Dialogues to keep the discourse going. In Gangtok, Nepal and the Worldprogramme of the Nepal Economic Forum did announce a platform anchored in Gangtok to work to revive a historical relationship further and push re-introducing Sikkim and Nepal to the new generation. The core of every relationship is people-to-people exchanges based on which only bilateral relationships between countries can build. 

Read the article on The Kathmandu Post: https://tkpo.st/3vjsOZ2

It is always challenging to stay positive and forward-looking with all that is happening worldwide: The war in Ukraine, the political and economic crisis in Sri Lanka, and the liquidity crisis in Nepal. The dysfunctional Parliament, an impeachment motion against the chief justice of the Supreme Court surfacing once in a while, thoughts about the consequences of the neighbours abstaining from voting in a UN resolution where Nepal has voted against the Russian invasion of Ukraine, and the list goes on. But in Nepal, the most significant advantage is some fantastic stuff you can see around art, music and culture that helps you forget the challenges and lose yourself in appreciating good art, listening to good music and embarking on gastronomical journeys. The past month of March was all about such positivity as The Kathmandu Triennale provided a glimpse of where art has moved along with curation.

Planning an event at the end of a pandemic wave is not easy; one is not sure when a new variant will lockdown our lives. KT 2077 was such an event that the organisers were unsure how many people would risk visiting, and how possible it would be to have small events. This was an event that gave hope to many more event organisers. Thousands of people visited the multiple venues where great pieces of art, installations and multi-media art were put up. This was through the efforts of many volunteers and the tireless efforts of the curators led by Sangeeta Thapa, known for her untiring perseverance. This was also one of the events that interacted with the young TikTok and Instagram generations. It was interesting to see how the online space was flooded with photos, videos and other forms of interactions people had with the curated works. Perhaps, as the organisers would sit back and reflect on the event, they should be pleased about the response KT 2077 got.

Looking ahead

One of the most significant transformations we see in Nepal has been in art, culture, music and beyond that has brought up front many young artists from across the country. Nepal has also been a place where artists long to visit, with Kathmandu being the cosmopolitan capital of South Asia. Of course, there have been state intervention in stifling some of these as the government uses tools like making visas difficult for people who want to stay longer. But apart from that, there have been minor state interventions in banning or obstructing programmes as we see in some other South Asian countries. The restrictions on activities in some countries in South Asia have led to Nepal becoming a go-to place for young artists, filmmakers, writers and others who would like to indulge in creative pursuits. This is what Nepal needs to leverage. Like the Jaipur Literature Festival has been able to convert the city into a vibrant destination in a decade, Nepal has the opportunity to become a destination known for such events. Photo Kathmandu, Kathmandu Jazz Festival, Film South Asia, Kathmandu International Mountain Film Festival and many other events are already in people’s minds. Still, no harm in having more as long as it is done in a coordinated manner.

Post-pandemic, it is very clear that new segments of tourists are emerging, with growing interest, especially in the experiential ones. People who just want to go to experience rather than be product-driven like trekking, climbing or doing a jungle safari. Nepal is fortunate to be land-linked with India and China. Within a few hours’ flying distance; it connects with over half of humanity. Africa is already emerging as a future market potential in the younger segment as the continent will cross 2 billion people by the mid-2040s. Within the neighbourhood, there could be exploratory journeys by road as caravan travel revives that may bring hundreds of young people from India and China to experience Nepal during events.

The ecosystem

It is crucial for such events to succeed globally to have a good ecosystem. Kathmandu Valley, especially Patan, has now hundreds of rooms available on different booking sites like Airbnb. Restaurants, coffee shops and hangout places with the look and feel of global outlets are increasing rapidly. Of course, we need to work on our service delivery through better training and appreciation of people’s jobs. We see ride-hailing services make it easier for people to move around, and cycling through the city through bike rentals is possible. Google maps work well. Since every Nepali household has someone within their family or friends in different parts of the world, it is not like 30 years ago when Nepalis were unaware about places, countries and people. Social media platforms allow people to jump to places and seek information virtually. Nepal is still considered safe by tourists compared to many other South Asian countries, with a history of handling international tourists for over seven decades from a safety perspective.

It is always important to reflect when events like KT 2077 end in a roaring success. It opens opportunities to take it one notch up, and encourages others to think of more creative stuff.

Read the article on The Kathmandu Post: https://tkpo.st/3J6EF1m

Whenever the issue of remittances comes up, we either see headlines about a drastic drop in inflow or a meteoritic rise. But we all often forget that the data collected by Nepal Rastra Bank only includes remittances that come through formal channels. When we say formal channels, it generally means transferring money directly into banks or through different money transfer agencies. The amount that is being sent and what is received are both recorded. These records are then submitted to Nepal Rastra Bank, where the data is collated and released periodically. While data suggests remittances through formal channels accounts for $7 to $8 billion or Rs10 trillion, it could also be true that an equal amount of money is flowing through informal channels. The president of the Confederation of Banks and Financial Institutions indicated that the size of formal remittance to Nepal should be around Rs20 trillion (equivalent to $16.66 billion).

However, there is no way to understand how much is informal remittances. One could only do back-of-the-envelope calculations based on how much gold has potentially come to the market. A drop in remittances after air travel resumed means people can carry goods rather than money. When I was chatting with a returnee migrant last week, they talked about how they were apprehensive to send money back to Nepal now, as they think that the dollar to rupee exchange rate may hit one hundred and forty. He anticipates getting Rs150 for his dollar in the informal market.

Why informal channels?

A recent study conducted by Beed Management is in its final stages, clearly bringing out the big issue of informal remittances for which practically no data or studies are available. The study rooted in quantitative analysis of interviewing over 1,600 migrant workers and virtual focus group discussions in 10 countries revealed some interesting facts. The reasons attributed towards sending money by migrant workers through informal channels rather than formal channels are multi-fold, but can be grouped under four points.

First, there is lack of trust among migrants about formal channels. There is little trust in government, especially the way a migrant worker experiences the behaviour of government agencies before departure. They also trust private sector folks less as their only interaction has been the employment agencies. Second, compared to the previous generation of migrant workers who went abroad in the early 2000s, the current generation is more technology savvy. Still, financial literacy is poor among them like the earlier ones. While they use different apps and other tools on their phones, they are still wary of banking and transferring money over the phone.

Third, the data collection system requires marked improvement as a lot of data is mixed up. For instance, an individual working for an international organisation like the UN in Nepal would be receiving their salary from New York, and that gets counted as remittances. No wonder the source of remittances from the United States is so high! Finally, the cost of remittances still is high. In our conversations during the discussion groups, we learned that the costs of formal remittances are high and informal remittances give higher exchange rates; therefore, there is little incentive for people to move to formal channels. All these reasons ensure that informal remittances remain high.

What needs to be done?

The key is to develop an ecosystem that will incentivise people to send money through formal channels rather than informal ones. It is also important to build awareness and trust, and improve digital and financial literacy. With the Nepali economy being trade dominated and a mindset of profiting from arbitrage, it is impossible to control the world of informal channels like hundi; therefore, rather than controlling the mindset, we need to shift gears towards facilitating incentivising it.

For instance, when people send money through banking channels in Bangladesh and Pakistan, the government tops up a percentage or two on the remitted amount, which acts as a big incentive. Similarly, allowing people to open dollar accounts that they can use will serve as an incentive. But having provisions of a foreign exchange account with restrictions on how much one can use by limiting the per visit amount, credit card usage to $2,000 a year and so forth will not encourage remitters, especially the ever-increasing number of skilled and knowledge workers who are working outside Nepal and sending money back home.

Australia has a sizeable Nepali population remitting money back to Nepal. Still, due to these restrictions, people have indicated that they would not want to open accounts in Nepal. The government needs to focus on being a facilitator instead of a controller. Ensuring that Nepalis working in India can send money over digital platforms at the lowest cost can convert billions of dollars’ worth of remittances from informal to formal channels. With India, there is no hedging against currency risks, and the difference in informal exchange rates at the borders is marginal. People would love to use this facility for its convenience from a safety perspective.

Similarly, Nepali banks should be allowed to extend digital wallet facilities to work like Indian wallets for people with bank accounts in India can make it work in Nepal. Finally, allowing Nepalis to invest outside Nepal formally (which is already happening informally) will further incentivise people to invest rather than spend on consumption or non-productive assets like land and gold. For instance, a Nepali national opening a restaurant in Dubai can raise money for their venture and invest through a company registered in Nepal, bringing better profits and dividends back home.

The world of informal remittances just in bits and pieces is enormous, and further research and analysis are required, as by current trends, remittances to Nepal by 2035—formal and informal—would cross $100 billion.

Read the article on The Kathmandu Post: https://tkpo.st/3qmbYan

Last week, we read about the new guidelines that are being prepared to restrict Nepalis from travelling abroad apparently to save foreign exchange. The rules range from declaring income and cash to more stringent ones for women. While it is important to make rules that make the informal transfer of money through “hundi” illegal and impose strict curbs on human trafficking, they will not control either as it will give one more source of corruption money.

In the past, many embassies in Nepal required people to submit bank balance and asset details while submitting applications for visas. While in the early days, I was also doing this voluntarily as a chartered accountant to save friends and family members some money, later on, as the scams became more extensive, I stopped. There used to be classified advertisements in newspapers that openly advertised arranging the bank balance required for visa applications. With these scams hitting the roof, many embassies discontinued the practice. In Nepal, since law enforcement agencies are either easy to bribe or too late in understanding the loopholes, it is difficult to enforce such guidelines. If it is done now, to allow some leeway for fellows in government and party people to make some money in different scams to circumvent these rules, then we can say little.

Mindset is the key

Foreign travel in Nepal has always been associated with the privileged and a luxury. During the Rana days, one could not travel without getting sanctions from the rulers. Former United Nations official Kul Chandra Gautam, in his memoirs, narrates his horrific story of trying to get a passport for two years despite getting a scholarship from a United States university and there was a visa ready for him. Ordinary mortals were not allowed to travel, and those who travelled had to have some links with rulers and governments. Despite millions of Nepalis travelling abroad for work and pleasure, it is somehow considered still taboo. With practically every family having some relative or friend abroad, foreign travels became easier. Airfares plummeted, connections became more accessible and affordable. Visa restrictions in many countries for Nepalis went away. For instance, visa on arrival in Indonesia saw hundreds of thousands of Nepalis travel to Bali. A holiday in Bali or Bangkok is much cheaper than a holiday in Goa in India.

Further, social media has brought many places right in front of you on your phone; therefore, the desire to explore, of course, came to you if you had the money to do so. Banks with travel agencies started to finance holidays that one could pay in monthly instalments like buying a car or washing machine. Policymakers have not seen the major transformation in Nepali society and stick to the old ways of control.

In our culture, everyone talks about restrictions and control first rather than how you face a challenge. As soon there is a death in the family, many consultants will come up with a list of restrictions. What you cannot do, what you cannot eat, and when you cannot go outside the house. Foreign travel has also been culturally associated as a restriction. Everyone knows the story of Jung Bahadur having to go through a purification ritual after coming back from England. With a government and bureaucracy dominated by Hindus and the revival of conservative Hinduism in Nepal, foreign travel is associated with cultural pollution, so the subconscious mind does not infringe on any travel restriction.

Further, the restrictions are for people without connections. An industry of invitation providers will be created to provide invitations for connected people to travel. Many politicians and bureaucrats (current and former) will hardly be affected as their children are settled outside Nepal and are fence-sitting with s permanent residency, green card and other documents they hold. So, like getting a driver’s licence, passport, vaccination cards and other services from the government, the privileged will not get impacted.

Restrictions will backfire

Many young people have pondered whether Nepal is the correct zip code for pursuing global ambitions. Like people in India in the 1980s, where their dreams were throttled, decided to leave for greener pastures, young Nepalis who have global aspirations do not want to be based in a country where the government can be so stupid. Forget reversing brain drain; those contemplating returning will not come to a country where you have to run pillar to post to get your $250. There will undoubtedly be migration into countries that are seeking innovators and investment. Selling property in Nepal gives you enough money to start something in a country that welcomes you.

Small actions of authorities can have a long-term impact on citizens. While positive moves like getting passports from district offices and getting them in one day opened up foreign employment opportunities, rules of restriction can create a quiet movement of brain drain and capital flight that the government can never control. We hope these stupid rules planned will never see the light of the day like the crazy rules that restrict women’s movement in strict Islamic countries, but citizen pressure is essential. Perhaps it could start with a social media page naming people in decision-making positions that are part of such hypocritical rulemaking.

Read the article on The Kathmandu Post – https://tkpo.st/3KqNnJ8

The lesson from the pandemic is that Nepal needs to get to high-end tourism in a big way.

When you arrive at Kathmandu’s international airport, you can notice a change. A travelator has been installed after people complained about the three apartment-style elevators which created long queues. However, when I was using the travelator, I was warned by a friendly cop standing nearby that the brakes in most trolleys were not working, so it could be a safety hazard. The authorities never think about things like these as ministers and senior government officials hardly use the channels used by mere mortals, or they have their dozens of sycophants carrying stuff for them, so they never know what works or not. As far as people outside power is concerned, they hardly travel with their own money when work-related junkets dry up. 

Tourism, be it domestic or international, begins at airports. I have continuously written; with our socialistic instincts, we tend to make airports look and feel more like bus stops than the other way around. Nepal’s airports before the pandemic had the distinction of being labelled as one of the worst airports in the world. Hopefully, the authorities will feel less proud about this and want to change their attitude to get out of the world’s worst airports list. It is so perplexing to learn that Hamad International Airport in Doha, Qatar wins continuously major global awards. The airport is full of people from Nepal working there, yet the country from where these workers come has the worst airport. 

Domestic tourism

Nepali domestic tourism started to flourish after the end of the Maoist insurgency as people felt safer travelling in their own country. Lodging and eateries have sprung up all over the country. Pictures and videos on Instagram and Twitter provide an opportunity to discover places people have never heard of. Vloggers with cameras on their bikes offer a peek at the country’s diversity and how terrain, food, vegetation and landscape change. 

During the pandemic, as no foreign tourists were around, hotels started to recalibrate their products, menu and services to cater to domestic tourists. They also began to realise that the average spending of Nepali tourists is much higher than the low budget foreign travellers they were catering to. Lodge owners in Langtang and Annapurna region, who discriminated against Nepali travellers, now realised how they were stupid in the past giving preference to foreign tourists over Nepali tourists. 

This is very similar to how Thamel eateries became dependent on Nepali clients during the insurgency. They were hit by 9/11 and SARS travel restrictions that led to a drop in the arrival of foreign tourists. A country of 30 million is a big market. With women travelling solo or in groups more than ever before, 50 percent of the market that was never a segment say 15 years back is now a significant segment to cater to. Young women getting together to explore their country, go on treks and traverse the country is a new segment that entrepreneurs have not yet thought about. Nuclear families being bombarded by beautiful posts on social media is pushing people to explore like never before. 

Entrepreneurs wake up 

Nepal’s unique laws treating investments in hotels as a priority sector created a breed of real estate speculators who became tourism entrepreneurs overnight and now control industry and trade bodies. It was the easiest way to buy land and speculate on real estate. People who have never seen how a room is cleaned or how a dish is prepared in the kitchen suddenly started becoming the voices of the tourism industry. Regulations were flouted, be it health or safety. They do not mind guests making noise till the wee hours of the morning as long as they sell the booze. Pre-pandemic, there were many stories about how international tourists just left their hotels not being able to bear the noise domestic tourists were creating. They do not understand food safety, nor are they willing to look at cleanliness in the rooms. It’s just a landlord with a business card and rent-seeking on the property one has built. 

The key learning from the pandemic is that Nepal needs to get to high-end tourism in a big way as the real estate prices cannot justify having hotels to cater for $10-15 tourists who spend another $10. Domestic tourism is far more lucrative, so entrepreneurs need to explore newer destinations for high-end tourism spots by working with competing local bodies who want to have some of the best properties in their municipality or rural municipality. Studies have shown that tourism, rather than creating revenues, create many jobs essential in Nepal. 

However, high-end tourism requires bringing in world class players and global standards and practices. Concessions have to have exclusivity without crowding places with similar properties; environmental assessment cannot be a paper one can buy by paying someone under the table. The mindset of entrepreneurs has to be about investing a lot in their learning about products and services, travelling the world to experience such products and services, and hiring the best chains and people to manage it. Every crisis provides an opportunity to correct mistakes. I hope the problem the pandemic brought has taught us many lessons about what to do and what not to do. I hope we convert challenges into opportunities.

Read on the Kathmandu Post – https://kathmandupost.com/columns/2022/02/21/opportunity-to-recalibrate-tourism