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Apparently, most of the emergencies do not come with sirens blaring in a world in a state of perpetual flux, not even in a vital part of the rules-based international order protected by near-impregnable defenses. Even if they did, it is highly likely that our capable governments would appear ill-prepared when it comes to dealing with such contingencies. 

Barely two years after the 7 Oct 2023 attack on Israel that killed around 1200 people—including 10 Nepali students and saw the abduction of 250 others (including Bipin Joshi, a Nepali student)—this stark reality of our ill-preparedness in dealing with crisis situations, especially a swift rescue of Nepali nationals caught in adverse situations abroad, has come us a-haunting again. 

Escalating hostilities between arch-nemeses Iran and Israel have given rise to concerns over the safety and security of Nepali nationals in a restive Mideast—most of them migrant workers. According to some reports, Israel is home to 5000-7000 Nepali workers. Other than that, our government, in a typical fashion, does not have the exact number of Nepalis living in the restive region. 

Nothing out of the blue, right? 

In the wake of the renewed hostilities, the government is doing its bit to “ensure” the protection of Nepalis. Recently, Minister for Foreign Affairs, Arzu Rana Deuba, held a meeting with Israeli Ambassador to Nepal, Shmulik Arie Bass, where she asked the government of Israel to ensure their safety. The ambassador’s reply—that Nepalis in Israel were so far safe—must have provided a much-needed immediate relief to the government. 

Other than that, the government has directed Nepali ambassadors to Israel and Qatar, which is playing the role of a facilitator to de-escalate the Iran-Israel conflict, to remain vigilant regarding the safety of Nepali citizens in their respective regions.  

The government has also approached a number of countries to help with the rescue of stranded Nepalis, if they are planning to rescue their nationals anytime seen. 

That the government is not twiddling its thumbs in a crisis situation like this provides some relief. But these random activities also lay bare the lack of a credible plan for a swift rescue of Nepali nationals caught in crisis situations like wars, conflicts, natural disasters and domestic unrest abroad.

The sooner the government comes up with such a plan by allocating necessary means and resources, the better. 

But such a plan—and its execution—should not mark the end of the government’s responsibilities toward outmigrating Nepali nationals. In the long run, the government should channelize its energies on bringing to an end the exodus of Nepalis and tapping their boundless potentials for national progress and prosperity.

Two opposition parties, Rastriya Swatantra Party (RSP) and Rastriya Prajatantra Party (RPP), continue to disrupt Parliament proceedings, demanding resignation of Home Minister Ramesh Lekhak over his alleged involvement in a visit-visa scam. 

The main opposition, CPN (Maoist Center), which initially joined the opposition chorus for Lekhak’s resignation, however, has backtracked from its stance after signing a vague agreement with the ruling parties, Nepali Congress (NC) and CPN-UML. It is apparent the Maoist move is aimed at fostering better relations with the NC. Maoist leaders believe closer ties with the NC could eventually lead to a coalition shift.  For now, however, the NC-UML alliance remains stable without immediate threats.

Royalist forces are scrambling to revive their campaign to bring back monarchy and Hindu state. They are even considering replacing octogenarian leader Nava Raj Subedi, who was appointed by former King Gyanendra Shah but failed to galvanize the movement. Shah himself has remained silent after the royalist protests he backed stalled. Two senior RPP leaders, Rabindra Mishra and Dhawal Shumsher Rana—arrested for their alleged role in the violence that took place during the March 28 royalist protest— have been released on bail.

Prime Minister KP Sharma Oli and former President Bidya Devi Bhandari held a lengthy meeting to defuse their recent public spat. Senior UML leaders have urged both to avoid airing their differences openly. Bhandari’s growing political activity, including a recent visit to China where she met senior Chinese Communist Party officials, has reportedly unsettled Oli.

As Israel-Iran tensions escalate, concerns are growing for the safety of around 5,500 Nepali workers in Israel and two dozen in Iran. The government is preparing contingency plans for their evacuation if the situation worsens. Nepal lacks robust mechanisms for overseas rescues, and the Foreign Ministry is ill-equipped to handle such crises. Authorities are now compiling a list of those seeking repatriation from Israel.

This week, a UNFPA report revealed that despite a preference for larger families, Nepal’s fertility rate has dropped to two children per woman across all demographics. High living costs, job insecurity and unaffordable housing are key factors. Meanwhile, National Statistics Office data shows rapid demographic aging, with the 60+ population rising from 8.1 percent in 2011 to 10.3 percent in 2021. Policymakers have yet to address these long-term challenges.

The US government has yet to finalize its decision on the Millennium Challenge Corporation (MCC) Nepal Compact, despite the 90-day review period ending. Over 85 US aid programs to Nepal have already been cut. However, the US Embassy in Kathmandu clarified that an exception allows MCC implementation to continue pending the review’s outcome. Discontinuing the MCC could further damage America’s credibility in Nepal, where politicians risked their careers to endorse the controversial deal.

The 16th meeting of the Nepal-India Bilateral Consultative Group on Security Issues (BCGSI) is underway in Pune, focusing on defense cooperation and equipment procurement. Regular meetings signal normalized bilateral ties. Last year’s talks were held in Pokhara.

A Nepali Congress delegation, led by Bal Bahadur KC, visited China at the invitation of the International Department of the Communist Party of China Central Committee. According to the Chinese readout, Sun Haiyan, vice-minister of the party, said that CPC is willing to work with the NC and other major political parties in Nepal to implement the important consensus reached by the leaders of the two countries. KC said that Nepal attaches great importance to developing relations with China, always regards China as a good neighbor, good partner and firmly adheres to the one-China policy.

Nepal’s power trade is making progress one after another. With rising water levels in major rivers and accelerated snowmelt following the onset of the monsoon, power generation by hydropower projects in the country is gradually increasing, enabling the country to resume power exports to India and Bangladesh. 

According to Nepal Electricity Authority (NEA), daily exports have now reached 350 MW. Of this, 40 MW is being sent to Bangladesh via India, and the remaining is being exported to various Indian states including Haryana and Bihar. Since Sunday, NEA has been exporting 200 MW and 80 MW, respectively, to the Indian states of Haryana and Bihar. Additionally, it has been supplying up to 30 MW daily to the Indian power exchange market. 

Air pollution is the number one risk factor for death and disability in Nepal, according to a new report from the World Bank (WB). Tilted ‘Toward Clean Air in Nepal: Benefits, Pollution Sources and Solutions’, the report serves as a foundational assessment of air pollution in the country and the airshed of the Indo-Gangetic Plain and Himalayan Foothills (IGP-HF). The report also calls for cross-sectoral policies and cost-effective solutions to address pollution.

RSP Chairperson Rabi Lamichhane, who is currently in judicial custody, faced another case this week in connection with a cooperative fraud case at the Parsa district court. Lamichhane is currently being held at the Bhairahawa prison. The district attorney’s office, Parsa, has registered a case against 29 individuals, including Lamichhane, alleging embezzlement of Rs 1.324bn from the Sano Paila Savings and Loan Cooperative Society in Birgunj. Prosecutors claim Lamichhane is responsible for Rs 115m of the missing funds.

Nepal Rastra Bank has started preparations for the formulation of monetary policy for the fiscal year 2025-26. The newly-formed Monetary Policy Committee has an uphill task of focusing on global practices, the context of Nepal and the path that it should take in the coming days against the backdrop of permanent pegging of Nepali currency with Indian currency and the absence of good governance in the country.

What is a monetary policy? 

Before delving further, let’s begin with a key question: what is monetary policy?

Monetary policy is related to monetary or currency matters such as cash reserve ratio, statutory liquidity ratio, open market operations, repurchase obligations. It affects the money supply in the economy. 

Who drafts the monetary policy? The central bank of a country—the Nepal Rastra Bank in the case of our country. 

When talking about this policy, another related policy also comes to mind and that’s fiscal policy. This policy is used to monitor and influence the economy of a nation.

Fiscal policy is the “sister strategy” of monetary policy through which the central bank influences the money supply of the nation. Formulated by the Ministry of Finance, it deals with fiscal matters such as government revenue (tax policies, non-tax matters like disinvestment, debt collection, service charges, etc) and expenditure matters—grants, salaries, pensions, money spent on creating capital assets like roads, bridges and the like).

The twin policies deal with inflation (the rate of increase in prices over a given period of time). The main objectives of monetary policy are as follows:

To check inflation or deflation (increase and fall in prices, respectively) or price stability in the country, to safeguard the country’s gold reserves, exchange rate stability, elimination of cyclical fluctuations, achievement of full employment and accelerating economic growth, etc.

Dealing with inflation: A tight monetary policy that reduces money supply in the system—that is one way of dealing with escalating prices.

Dealing with devaluation: This is done by increasing money supply in the system, by adopting an easy money policy and a cheap money policy.

When the economy is devastated by a war or hampered by a recession, a dispute or disruption in the economic horizon is very beneficial. In such situations, a country may adopt a dear/cheap money policy.

There is also a distinct difficulty and confusion when it comes to grasping monetary policy. Some people tend to think that dear money means that its value is high in terms of goods and services i.e prices are low while some others think cheap money means that the value of money is low and prices have increased.

Which money policy is better: It all depends on the economic situation facing a country. Interest rate is an important tool for the implementation of an economic policy. There are times when an economic policy demands that the interest rate in the money market be kept low and sometimes it demands that the interest rate be kept high for fulfilling certain economic objectives.

After this discussion, we are now in a position where we can classify these two policies based on their respective uses. We can say that we can identify the time and reason i.e when and why we use one of these two policies.

A tight money policy is preferred when the balance of payments is heavy against the country or is in danger of remaining unfavorable and when there is reckless or unwise investment from industries/industrialists and when credit creation by the banks exceeds all prudent limits.

Limitations: Monetary policy has to face many difficulties, especially in underdeveloped countries like Nepal. The existence of a large non-monetized sector—one-third of the economy in underdeveloped countries—can seriously limit the scope of use of monetary weapons, but two-thirds of the economy provides a fairly large opportunity for monetary action. Moreover, in such countries, currency occupies a relatively more important place than bank deposits. 

With rising water levels in major rivers and accelerated snowmelt following the onset of the monsoon, power generation by hydropower projects in the country is gradually increasing, enabling the country to resume power exports to India and Bangladesh. 

According to Nepal Electricity Authority (NEA), daily exports have now reached 350 MW. Of this, 40 MW is being sent to Bangladesh via India, and the remaining is being exported to various Indian states including Haryana and Bihar. Since Sunday, NEA has been exporting 200 MW and 80 MW, respectively, to the Indian states of Haryana and Bihar. Additionally, it has been supplying up to 30 MW daily to the Indian power exchange market.

Nepal has received permission to export up to 940 MW in total—400 MW under a medium-term bilateral agreement and 540 MW through the Indian Energy Exchange (IEX). Although 125 MW is approved for export to Bihar, only 80 MW is currently being utilized. Similarly, exports to Haryana are expected to increase to the full 235 MW approval in the coming weeks.

NEA plans to resume export of the full 940 MW by the first week of July.

Electricity exports to Bangladesh resumed on Saturday night under a trilateral agreement between Nepal, India and Bangladesh. Nepal is now exporting 40 MW to Bangladesh via the Dhalkebar-Muzaffarpur 400 kV transmission line. The electricity is sourced from Trishuli and Chilime hydropower projects. NEA estimates this export will generate monthly revenue of Rs 250m for Nepal, or Rs 1.25bn over five months.

Nepal, India and Bangladesh signed a tripartite agreement for power exports to Bangladesh in October last year. To begin with, Nepal is exporting 40 MW. Bangladesh has expressed interest to develop a reservoir-type power plant in Nepal in partnership with Nepal for a long-term energy partnership.

Unlike Nepal-India energy trade, which is settled in Indian currency, Bangladesh is paying Nepal in US dollars. The cost per unit is 6.4 cents. Bangladesh also bears the transmission loss and costs incurred within India, while NEA covers the losses within Nepal.

In the first five months of 2024-25, Nepal exported electricity worth Rs 13.4bn to India.

Although Nepal has a total installed capacity of 3,602 MW, actual generation stands at around 2,300 MW right now. Domestic demand hovers around 1,900 MW.