Tourism MSMEs in the Hindu Kush Himalayas

“I started earlier by mentioning the role of renewable energy in mountainous regions. I read a report on ‘Renewable energy and resilient enterprise development in the Hindu Kush Himalaya’ published by the International Centre for Integrated Mountain Development (ICIMOD). If I remember quite correctly, I’d like to share with you some important points it highlighted.

You know the Hindu Kush Himalayas (HKH) belt that touches on Afghanistan, Bangladesh, Bhutan, China, India, Myanmar, Nepal, and Pakistan; MSMEs in this region do not have the requisite capacity to absorb, adapt, or transform their value proposition in response to external shocks such as climate change or pandemics. However, tourism enterprises play a major role in job creation and contribute significantly to the region’s GDP. In Nepal, MSMEs account for 22% of the country’s GDP. Similarly, Bhutan’s MSME sector accounts for 90% of the total industry and generates 100,000 jobs in the country. In the Himalayan state of Uttarakhand in India, employment in MSMEs multiplied by seven times between 2000-01 and 2018-19. Therefore, there is a strong case for adopting recovery pathways for strengthening the resilience of tourism enterprises.

Although countries in the HKH region focus on large centralised energy infrastructures, extending electricity access in the mountain regions can prove uneconomical leading to insufficient access to quality and reliable energy for the local communities and entrepreneurs. This limits the operational environment of entrepreneurship and local development. Although the access to electricity in these countries can be satisfactory, the quality of electricity access in the rural and mountainous regions paints a different picture. For example, in the mountain states of India, the average daily hours of power supply is about 19.5 hours compared to 22 hours for states in the plains. Similarly, remote provinces in Nepal (mostly far-west) have electrification rates that vary between 30%-60%. To meet the energy demands of enterprises, distributed renewable energy-based technologies, such as solar mini-grids can play a major role.

The report mentions some cases of enterprises in India that reported zero expenditure on water and electricity after the adoption of solar power and the savings were diverted to manpower training. In Nepal, entrepreneurs found the use of solar energy cheaper compared to grid electricity and were positively influenced by its environmental benefits such as in terms of generation of less pollution and wastage. The tourism entrepreneurs adopted renewable energy (mostly solar) due to three factors: (i) lack of reliable energy from the grid, (ii) the high price of grid electricity, and (iii) prior exposure and knowledge regarding solar energy.”

Tashi topped up his glass of water.