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Home Southern Asia Nepal

Building Back Better: A Green Economic Recovery for Nepal

by Asia Today Team
September 29, 2026
in Nepal
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A Piece of Langtang Lirung Fell. So Did a Slice of Nepal’s Economy

Bhotekoshi Flood: Sectoral Impacts – Nepal Economic Forum


by

Sameer Khatiwada | September 29, 2026

NOTE: This NEFview is a throwback to July 2021, when the COVID-19 pandemic had crippled a lot of the world, Nepal included, and we had been asking how the nation may rebuild in a greener, extra sustainable means. The views expressed replicate that second and haven’t been up to date. As Nepal reckons with the devastating floods of 2026, we invite readers to revisit these concepts and replicate on how they may apply to the restoration we now face.

Nepal entered yet one more lockdown to forestall the unfold of the COVID-19 virus. With the stalled vaccination efforts, rise in Covid-19 circumstances and deaths, and general authorities response in disarray due to the political infighting, it’s onerous to see the sunshine on the finish of the tunnel. The financial impression of the pandemic has been extreme on Nepal’s economic system, and it continues to worsen. In actual fact, in accordance with the Asian Improvement Financial institution, Nepal’s economic system shrank by 1.9% in 2020. It’s anticipated to develop by 3.1% in 2021, however the forecast appears optimistic within the wake of one other lockdown. Job losses have been extreme. The Examine Committee established by the Nationwide Planning Fee, Nepal estimated that 1.6 million employees misplaced jobs on account of COVID-19 and 1.2 million entered poverty. In a rustic the place 3.5 million employees are employed overseas, this disruption to the home labor market on account of COVID-19 is a shock. An already dire labor market scenario has change into a lot worse, pushing folks additional to search for financial alternatives elsewhere or threat slipping into poverty.

We aren’t out of the woods but, however we must always begin fascinated by how we wish to rebuild our economic system and create jobs at residence. We should determine what sort of financial restoration we wish to promote in Nepal. Will we select measures that reinforce present financial buildings, or will probably be rebuilt in a sustainable method? Will this expertise of residing by means of COVID-19 pandemic present the impetus to develop with improved environmental outcomes?

As Nepal went into lockdown within the spring of 2020, shutting down transportation and financial actions, the air high quality improved enormously, and air pollution ranges had been down. Skies throughout the nation cleared. In Might 2020, Nepali Instances, an English weekly, shared footage of Mount Everest seen from Kathmandu valley. The mountain is 200 km away from the valley and most residents of Kathmandu had by no means seen the tallest peak on the earth from the town. The unintended consequence of the lockdown, clear air and decrease air pollution, got here as a reminder for valley residents of how stunning Nepal actually is, and why so many foreigners go to to get a glimpse of our mountains yearly.

From Switzerland to Malaysia and Thailand, international locations which are doing effectively are additionally those the place environmental sustainability has been a part of the financial agenda. Even in middle-income international locations comparable to Indonesia and the Philippines, efforts to protect the surroundings and create “inexperienced jobs” have been excessive on the governments’ agenda. The Philippines even has a regulation known as “Inexperienced Jobs Act,” which goals to advertise creation of sustainable jobs in sectors that protect the surroundings. Among the many coverage incentives are particular tax deductions and duty-free import of capital gear for corporations that create a “inexperienced economic system.” Estimates from the Worldwide Labor Group (ILO) counsel that 17% of whole employment (7 million jobs) is comprised of inexperienced jobs within the Philippines.

I’m presently based mostly in Geneva, Switzerland, and it by no means ceases to amaze me that I can swim just about anyplace in Lake Geneva. It is likely one of the largest lakes in Western Europe, and the Swiss have managed to maintain it clear regardless of all of the infrastructure and financial actions surrounding the lake. However it was not at all times like this. Within the Sixties, swimming in Lake Geneva was thought of harmful. The air pollution stage was so unhealthy that by Eighties there have been no fish left within the lake. However the canton of Geneva (considered one of its 26 states) determined to wash up the lake and restore its previous glory. Public insurance policies geared toward rising the economic system whereas preserving the surroundings took middle stage, and that has paid off handsomely. You can’t solely swim within the lake, however you get to get pleasure from filets de perche (native fish) in eating places throughout the town. It’s a main vacationer attraction and creates appreciable income for the town.

Kathmandu won’t be capable of obtain what Geneva did within the final 5 a long time, however it might intention to copy what Surabaya Metropolis, Indonesia did within the final 15 years. Surabaya’s “Clear and Inexperienced Initiative” elevated the proportion of inexperienced house within the metropolis by means of a community-based greening program. Once I visited Surabaya in 2019, I used to be amazed by the town and its city improvement. What was extra spectacular was that it was juxtaposed subsequent to Surabaya’s Particular Financial Zone and factories that export manufacturing merchandise. In actual fact, I used to be there to go to a prepare manufacturing plant to know their wants for a talented workforce. The plant I visited was producing trains for export to Bangladesh. Town of Surabaya has a thriving economic system that creates jobs for the town and the encircling areas, whereas the town itself has change into a mannequin “inexperienced metropolis.”

Manufacturing sector, which is usually thought of to be the engine of development, has remained stagnant in Nepal for the reason that Nineties. In the event you have a look at the broader industrial sector in Nepal, which incorporates building, then the sector has grown. However manufacturing sector itself, the place the merchandise are geared toward each home and export markets, has not grown a lot within the final twenty years. In actual fact, Nepal’s incapacity to create jobs and its out-migration within the final twenty years is intently tied to the decline of our manufacturing sector. We have to revive our manufacturing sector if Nepal goals to attain larger development, however we have to do that in a sustainable method. We would not have to observe within the footsteps of nations that contributed to environmental degradation whereas rising and creating jobs.

If the COVID-19 pandemic has taught us something, it’s that there’s a robust hyperlink between the surroundings and public well being. Current analysis has proven that each one identified pandemics, together with the present one, have been attributable to animal microbes that spillover to people. This occurs due to contact with wildlife in areas the place land-use change is prevalent. Speedy and unplanned urbanization, deforestation, and environmental degradation make Nepal vulnerable to future pandemics.

Revival efforts of Nepal’s manufacturing sector ought to concentrate on our area of interest export merchandise comparable to tea, herbs, specialty garment, and processed meals merchandise, with a concerted industrial coverage to assist these sectors. The nation ought to emphasize creating not simply any jobs however creating as many inexperienced jobs as potential. In accordance with ILO, inexperienced jobs cut back the environmental impression of enterprise and financial sectors; they embrace jobs that defend ecosystems and biodiversity; cut back power, supplies, and water consumption; de-carbonize the economic system; and decrease or keep away from technology of all types of waste and air pollution.

Nepal can introduce a public works program geared toward tackling local weather change, preserving our nationwide parks, cleansing our rivers and lakes, and creating inexperienced jobs. In actual fact, the present Prime Minister’s Employment Program (PMEP) may be was a “Inexperienced Jobs Program.” We are able to re-think the PMEP to create not solely low-skill labor intensive jobs, but in addition middle-skill and high-skill ones. Participation of the non-public sector in such a Inexperienced Jobs Program could be important for its success. Small and medium-size enterprises (SMEs) may be given particular choice with situations on job creation. Nepal’s wildlife conservation and forestry division must be given extra sources to rent extra employees and make use of extra employees on the bottom.

A latest World Financial institution Examine on the Kali Gandaki Watershed Challenge in Nepal confirmed that a big inexperienced public works program can create jobs throughout the skills-spectrum. Effectively-designed forest and watershed administration can also profit a spread of financial sectors, together with agriculture, hydropower, roads, water provide, and catastrophe threat administration. The price-benefit evaluation achieved by the World Financial institution confirmed that the advantages of this system far outweighed the prices. There may be proof that inexperienced public works packages can create fiscal multipliers a number of instances bigger than the funding itself.

Tourism is one other sector that has the potential to create a supply of inexperienced jobs in Nepal. Sustainable tourism is an attraction in lots of elements of the world. Two international locations the place I’ve discovered this to be achieved effectively are Colombia and New Zealand. Having travelled to each international locations, what stood out to me was how economically vibrant cities and communities may also be locations which are probably the most environment-friendly and sustainable. Medellin, Colombia has change into a mannequin metropolis for such improvement, the place giant corporations co-exist with a metropolis that’s inexperienced, and concrete house is designed to enhance high quality of life. In New Zealand, a big share of the workforce is devoted to working in public lands and parks to protect their surroundings. What extra, if you go “tramping” (i.e., mountaineering, however the New Zealand means), you could deliver again each trash you generate besides your bodily waste. Everybody follows that religiously; therefore, the parks and mountaineering trails are very well-preserved. It’s a stunning nation identical to Nepal, however it is usually one of the developed and eco-friendly international locations on the earth.

A large, nationwide Inexperienced Jobs Program could be a gamechanger for Nepal. Within the brief run, it should present the much-needed employment for Nepal’s youth and create earnings multipliers in numerous sectors. Jobs may be created in sectors comparable to waste administration and recycling, sustainable agriculture and meals manufacturing, sustainable forestry, manufacturing and provide chain administration, power provide and effectivity, and biodiversity and eco-system preservation. Within the medium to long term, it should generate larger revenues, particularly within the tourism sector, whereas attaining sustainable development for the broader economic system. We are able to take a web page from Bhutan’s “happiness index,” which has modified the broader world dialog round improvement and its targets and launched a mannequin of development that’s greener and extra sustainable. Nepal is already one of many leaders in world wildlife conservative efforts within the area and is finest positioned to leverage this expertise in direction of “inexperienced development” and a sustainable future.





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