Nepal faces a multitude of challenges in transitioning into a developing nation. These obstacles include political, economic, social, infrastructural, and environmental issues that hinder its graduation from the category of Least Developed Countries (LDCs). Let's discuss five key economic vulnerabilities that Nepal needs to address in order to advance towards becoming a middle-income economy. 1. Agricultural Dependency: The country's economy is largely dependent on agriculture, which is susceptible to natural disasters such as floods, droughts, and earthquakes. The reliance on subsistence agriculture exposes a large portion of the population to climate risks, low productivity, and limited market access. 2. Remittance Reliance: Nepal heavily relies on remittances from its citizens working abroad, which makes the economy vulnerable to fluctuations in global economic conditions and policies. Remittances from Nepali workers abroad account for over 25% of GDP, posing vulnerability t...

The recent population projection report serves as a wake-up call for us as we are at risk of losing the population dividend and balance. The fertility rate in Bagmati Province is approximately 1.3, meaning a couple has only one child, while in the Madhesh Province, it is 2.75, indicating about three children per couple. The overall average fertility rate in Nepal is around 1.9, which is less than 2. Population balance theory suggests that ten couples should have at least 21 children, but currently, we are only seeing 19. There are several reasons behind this trend, and I will highlight a few significant and relevant causes: 1. Nepalese working in the Middle East in hot desert conditions are significantly decreasing fertility rates both biologically and socially. 2. Delayed marriage is contributing to a decline in fertility rates. 3. The preference for having only one child is leading to couples being indifferent to having more children. It is particularly concerning when the first chil...

As a student studying economics and data science, I have been considering the increasing reliance on AI and machine learning and its impact on human dependence on digital technology. I am curious about how data centers handle their power requirements. There are around 4,000 data centers worldwide, with the China Telecom Data Center in Inner Mongolia being the largest at 10.7 million square feet. This massive facility plays a crucial role in China's growing digital economy, managing global operations. The data center boasts a total computing power of 6.7 EFLOPS, or 6.7 billion floating-point operations per second. Similarly, Meta Center, Google, Amazon, EdgeConneX, Microsoft Azure, Digital Realty, Equinix, Schneider Electric, Oracle, Iron Mountain, etc., are other notable bigshots in the industry. The International Energy Agency (IEA) predicts that electricity usage from data centers, artificial intelligence (AI), and the cryptocurrency industry may double by 2026. Data centers are ...

The short-term growth for FY 2024/25 is expected to remain modest at around 3-4%, contingent on a good agricultural harvest, sustained tourism growth, stable remittances, and the effectiveness of monetary easing. Inflation is projected to gradually ease but remain elevated. External sector risks persist. In the medium term, Nepal faces significant challenges in accelerating growth to 6-7%+ needed for meaningful development. This requires deep structural reforms: 1. Improving the Investment Climate: Ensuring political stability, policy predictability, reducing red tape, and strengthening contract enforcement. 2. Boosting Exports & Diversification: Enhancing competitiveness, exploring new markets, and promoting value addition. 3. Strengthening Public Financial Management: Improving revenue mobilization, prioritizing efficient capital spending, and managing debt sustainably. 4. Accelerating Hydropower & Infrastructure Development: Unlocking this potential is critical for energy se...

A government budget is a financial plan that outlines the revenues and expenditures of a government for a specific period. It is a crucial tool for managing a country's finances efficiently to achieve economic and social goals like promoting growth, reducing poverty, and providing public services. Monitoring and adjusting the budget as needed is essential for fiscal stability and sustainability.  In Nepal, the tradition of presenting an annual budget dates back to the 1950s, with the first budget presented in 1951 covering the period from March 1951 to February 1952. This change followed the overthrow of the Rana regime in February 1951. During this transitional phase without a legislature, the first budget was presented at the end of the year BS 2007 through Radio Nepal. The budget amount was Rs. 52,529,000, with a tax collection target of Rs. 30,619,000. The then Finance Minister, Subarna Shamsher, presented the budget as part of the council of ministers led by Prime Minister Mat...

The capitalist development model is the primary approach used by the "First World" based on modernist theory of comparative politics, which seeks to understand political systems within and across countries. According to this model, Third World governments are expected to provide financial assistance for private industry expansion, transitioning from agriculture to urban industrialization. The model calls for reduced government involvement post-transition to allow industries to grow freely, potentially leading to economic growth and improved living standards. The socialist model of development emerged in the 1960s as a response to capitalist models, based on the dependency theory. It advocates for the elimination of private property and a state-led economy to improve living conditions. While emphasizing industrialization and fair distribution of goods, the collapse of the Soviet Union in 1991 undermined the credibility and momentum of the socialist model of development.