The ecological bedrock of the economy in Nepal
The main engines that drive Nepal’s economy are tourism, agriculture, and remittances from overseas Nepali workers, along with tourists who visit to enjoy and explore Nepal’s majestic Himalayan terrain and biodiversity, also known as its “green gold.” There are also multiple rich cultural heritages to enjoy for those interested in Himalayan architecture, Buddhism, and Hinduism. The Himalayan terrain and its ecosystem are the true bedrock of the environment and economy in Nepal.
Much of Nepal’s industry and tourism-related crafts are concentrated in urban areas, particularly the Kathmandu Valley. Nepal’s urbanization has coincided with gross domestic product growth, much like in other areas around the world, helping to create jobs, reduce poverty, and improve living conditions. However, with urban jobs being primarily in the informal sector, and other than remittances from overseas, the Nepalese economy relies heavily on the tourism, hospitality, and heritage sectors.
Sustainable urban development in Nepal, therefore, is a complex interplay between the demands of a nature-based economy; the needs of a large, aging workforce with limited financial protections; and the protection of highly sensitive ecological zones from unnecessary urban expansion.
What does a sustainable city in Nepal look like? Since Nepal’s key economic resource is nature, a sustainable city must be built around nature. Planning Kathmandu to be like Hong Kong or Singapore may not work as these economies are fundamentally different.
Sketch: Ripin Kalra, 2020
Why are so many countries urbanizing right now?
Globally, low- and middle-income economy countries are urbanizing the fastest. There are multiple reasons for this, including:
- The lack of work opportunities in rural areas that provide a cash income.
- Overpopulation and poor yields from subsistence or farming.
- The expectation of getting a better standard of health and education services and more cultural opportunities.
However, simply migrating to a city by itself does not eliminate all problems for rural dwellers. There are many problems associated with rapid growth, such as unplanned housing (e.g., squatter settlements or shanty towns) and dealing with urban waste, pollution, and stress on infrastructure and city services. In Nepal in particular, finding informal housing sites that are safe from landslides, flooding, or earthquakes is difficult.
The fastest-rising cause of migration in South Asia, and specifically in Nepal, is climate change, as evidenced by the many rural communities that shelter in towns and cities after forest fires, floods, and landslides—all climate-related disasters. Climate change-driven migration to urban areas is expected to intensify over the coming decades.
How the COVID-19 virus impacts sustainable development in Nepal
In 2019, Nepal’s GDP was growing by 7%. And by 2023-24, the National Planning Commission forecasted a GDP growth rate of more than 10%. But due to pandemic-related travel restrictions, two of the three engines of Nepal’s economy—tourism and remittances—literally ground to a halt. In 2020, the GDP dropped to 1.8%. Tourism dropped to almost zero. A country-wide lockdown caused agricultural and industrial GDP to plummet, and remittances dropped to nearly 40%.
Additionally, COVID-19 caused the socio-economic gap to increase. Those working in the service industry and the informal sector who lost jobs or livelihoods also had an increased risk of contracting COVID-19. As a huge number of migrant workers returned, few job opportunities are available, unemployment rates have risen (World Bank, 2020), and the ICF program Nepal Urban Resilience Project (NURP) reports a rise in gender-based violence during the lockdown period and a need for municipalities to quickly ramp up health services.
In terms of loss of life from COVID-19, deaths from road accidents were higher in 2020 (see diagram) with floods, landslides, and fires continuing to stretch the capacity of towns and cities to deal with these hazards. Clearly, in the Nepali context, urban disaster management has assumed an even higher significance.
In April 2021, the ICF NURP team organized a municipal-to-municipal practice exchange dialogue (part of the Resilience Chhalphal series) on Urban Disaster Risk Reduction and Management and implemented a range of green infrastructure projects (e.g., freshwater pond restoration, river embankment protection, tree planting, cycle tracks, cold stores for agricultural produce). This provides short-term, additional income that will enable Nepalese to learn new skills and start looking ahead towards a green recovery from COVID-19.
Which buttons to press for sustainable urban development in Nepal
Clearly, urbanization is here to stay in Nepal for the foreseeable future, making demands on land and resources and requiring people to learn new skills in response to the multiple hazards the country is exposed to. The biggest lesson learned from the COVID-19 experience is that the economy is highly sensitive to shocks and stresses from pandemics and other disasters and it is in need of a thoughtful approach that will protect the ecology (the bedrock of the economy) and lead to a green post-pandemic recovery.
Under NURP, risk- and inclusion-sensitive land-use planning (RISLUP) is paying close attention to spatial growth for towns and cities in safe zones, specifically in vulnerable communities that are most in need of affordable sites for better and safer living conditions. Much of the economy will continue to depend on the restoration of water bodies (Butwal) and parks (Pokhara) under NURP that highlight the essential protection of the ecological resources of Nepal.
It is important to educate women and young people to carry out a range of income-generating green skills such as urban farming, electric vehicle maintenance, and data management. This will ensure urban communities of Nepal have a wider pool of skilled people than they currently have to service the urban areas and businesses of Nepal.
How do some of these efforts align with COP26 campaigns?
The 26th Session of the Conference of the Parties (COP 26) to the United Nations Framework Convention on Climate Change (UNFCCC) is scheduled for November 2021 in Glasgow, Scotland, with pre-COP26 events planned in Milan, Italy. Nepal’s engagement plan is to be active across five of the working areas named below. These categories align with the identification of municipality-to-municipality exchanges across areas of cooperation:
- Energy transitions: Increasing demand for clean energy powers industry, businesses, and households to support a sustainable urban transition.
- Transport transitions: Electric public vehicles and mass transit systems are critical for urban mobility and enable local economies to thrive.
- Nature-based solutions: Sustainable cities strengthen rural economies that create market linkages and protect conservation areas and mountainous regions.
- Adaptation and resilience: Ensure that development in cities and towns is risk-sensitive and protects communities from flooding and landslides, thanks to informal building practices.
- Finance: Significant investment is needed for cities to build sustainable infrastructure to serve the increasing population. International climate finance can support vital green infrastructure.