Despite numerous complaints about the state of the country's economy from various sections of society, Nepal boasts several bright spots that offer hope for the future. Thanks to these bright spots, Nepal so far has avoided the economic conditions faced by its South Asian neighbours, Sri Lanka and Pakistan, in recent years. They provide a solid foundation for instilling hope among the population and developing other strengths in the economy.
One such bright spot is the power sector. Gone are the days of prolonged power cuts that lasted for nearly a decade and a half. Although some areas still report occasional power outages, the country has started exporting power during the rainy season and is expected to be power surplus even in the winter months in a year or two. Between mid-April 2022 and mid-April 2023, the country added 500 megawatts (MW) of electricity capacity to the system, and projects with a combined capacity of 3,200 MW are currently in various stages of development.
Second bright spot in the Nepali economy is the expansion of infrastructure, particularly the road network. All districts now have access to roads. Although many of these roads are not functional in all weather conditions, developing them into all-weather roads is not a difficult task as the most challenging part of road construction has already been completed. This has helped to alleviate a major problem in managing general supplies, benefiting not only the government and the general population but also businesses in reaching their customers with their products.
Third, Nepal is gradually becoming self-reliant in some industries, such as the cement industry. Almost all the raw materials for this industry are sourced domestically. Another example is the steel processing industry, which is based on imported raw materials. However, the country now has enough capacity to produce finished goods by processing imported or locally available sponge iron. Additionally, iron ore exploration has made significant progress, and mining is expected to start soon. Similarly, Nepal has regenerated enough forests to reach a stage of surplus in timber and other wood resources, although some necessary changes in laws and regulations are still pending.
Fourth, both domestic and foreign investors have demonstrated tangible hope in Nepal's future. Growing investments in setting up hotels and resorts of international standards and establishing tie-ups with renowned international brands are evidence of this fact.
Equally noteworthy is the fact that Nepal has weathered several crises over the last two decades with relative ease. The country demonstrated resilience during the global financial crisis of 2007-2009, and it quickly rebounded from the 2015 earthquakes. Moreover, Nepal's economy was not severely affected by the Covid-19 pandemic, and the country managed to recover quickly. Nepal is also still managing to withstand the effects of the Ukraine crisis.
Nepal undoubtedly faces several unique challenges that many other countries do not. There is uncertainty about political leadership and government policies. Another is the weak bureaucracy that follows the orders of politicians rather than the laws and rules. Over time, changes in rules and regulations have weakened the bureaucracy, which has not only impacted internal affairs but also external relations. Nonetheless, the country has made progress in various economic and social fronts. Healthcare service coverage has improved, resulting in a decline in the birth rate and the stabilisation of population growth to a manageable level.
The positive aspects mentioned earlier, despite these significant limitations, speak volumes about the internal strengths of Nepali society, which has remained harmonious despite occasional signs of communal strife. If the country continues to build on these bright spots, the Nepali people's dream of prosperity will not be far away.