Founder of EcoSystems Pvt Ltd

Moving Goods Through Nepal's Fragile Countryside
Stanford Business Magazine, May 2003
By David Sowerwine, MBA '72

We landed in Kathmandu in the December chill of 1991. I had been recruited as the business advisor in a U.S. Agency for International Development initiative to "kick-start" agribusiness activity in Nepal. That plan changed direction many times. Now 11 monsoons later, Nepal is still home to my wife, Haydi, and me, a place of ongoing adventure, challenge, learning, and satisfaction.

In the West contracts provide the framework necessary to encourage investment and resolve economic and social problems. In Nepal these rules are, at best, only at the discussion stage. Nepal is really a "low trust" country. Court decisions are ignored, and contracts are essentially unenforceable. A fellow foreign investor has had three Supreme Court decisions in his favor and has yet to collect from his former Nepali joint venture partners. The habits and mindset of a feudal society—authoritarian government, self-aggrandizement, and fatalism—block needed reforms. The resulting economic stagnation together with Nepal's exploding population—nearly a fivefold increase since the early 1950s—have brought deep and increasing poverty. Another consequence has been a confused Maoist revolutionary movement whose six years of violence may only now be transforming, we hope, into a reform movement.

Nonetheless, I have found many opportunities to get involved. In 1993 Nepali friends provided the necessary visas and asked us to stay to help address some of these issues. My corporate experience seemed relevant—Esso in the Far East, Dole/Castle & Cooke in Latin America, Raychem and small startups in the San Francisco Bay Area. Financially, we were lucky: The rent from two homes in Menlo Park was enough to cover living expenses and allowed us to hire good employees and start a Nepali business called EcoSystems Pvt. Ltd.

We made two false starts. At first we sought permission to build a network of video-based rural education centers, which stalled when we were informed by one of the bureaucracies that all tapes would have to be censored (conveniently by the very same bureaucrats, for a significant payment) and that our needed permit would not appear, since we had failed to do a proper Ganesh puja (god of wealth offering)—code for a bribe.

The second was an 18-month effort at the invitation of the government to organize a sanitary landfill for Kathmandu's solid waste that would be run as a private business. A Dutch environmental organization funded the engineering. This proposal also encountered unacceptable demands, such as employing all 800 employees of the bloated, moribund public solid waste corporation. The garbage is now being dumped along the holy Bagmati River.

The third attempt succeeded when we finally received government permission to design and build rural transport and energy products. Traditionally, the international banana companies elsewhere in the world have used so-called cableway transport systems to move banana stems from their plantations to the central packing plants. This standard technology, which we took as our starting point, resembles a rural monorail, except that the track is a tightly stretched wire instead of a rail, and the 4-ton trains of bananas are pulled by a person walking along a path beneath the wire.

We first adapted the cableway system to move people safely across rivers where the only alternatives are long walks up or downstream to a bridge, use of a 'tween that involves extremely dangerous hand-over-hand movement on a cable that normally is wound on convenient trees, or no crossing at all. We designed a safe carriage that rolls with pulleys on two wires (four for a big river). Schoolkids using our WireBridges can be seen at www.ecosystemsnepal.com. Gravity propels the passengers half way, and they pull on a climbing rope looped like a tenement clothesline for the rest of the trip. Our people-and-goods-movers now cross 21 rivers and, we estimate, have made more than 500,000 accident-free crossings. There is a long queue of villagers who are counting on us to find cofinancing so that they too can finally get their products to market, their kids to school, and their sick to a health post on our safe WireBridge. Stanford bridge sponsors are welcome.

In the meantime, we are refining another version of this system to become an inexpensive rural monorail. An international development agency whose mandate is to help with eco-friendly, pollution-free transportation is interested in financing a significant prototype within the Kathmandu Valley. If successful, it may evolve into a broad public transit network. There are tens of thousands of kilometers of reasonably level, beautiful river valleys in Nepal and a large swath of the Gangetic Plain where, for lack of an alternative, roads are being bulldozed or cut by hand. The fragile structure of the hills and poor construction techniques guarantee that these roads collapse, trigger landslides, consume arable land, are unusable in the monsoon, and generally are a dreadful environmental and economic choice. The WireRoad, as we call it, will be a kinder, gentler, cheaper solution.


Currently, around 70 percent of the Nepali people live without access to electricity. While Nepal has large potential for commercial hydropower, the cost of running wires is prohibitive for many areas. Reliable small, mini, and micro hydropower sites are becoming more common, but again will serve only a small part of the population. Solar power is expensive. Our energy-related project, still in an early stage, is to design and build hand- and pedal-driven generators ranging from 10 to 120 watts to provide reliable, inexpensive electricity for lighting, battery recharge, and other applications.

A Nepali partner is not required for a business license, so most of the foreign-owned firms are owned exclusively by their foreign entrepreneurs. Six years ago, facing the risk of losing a visa after having made our investments, some of us formed FIIN, the Forum of International Investors in Nepal (www.fiin.org) (renamed to Foundation for Foreign Investment in Nepal) to coach newcomers, resolve regulatory issues, and help HMG (His Majesty's Government) improve Nepal's investment climate. As a result of this effort, we now have secure visas and an excellent relationship with HMG and its key reformers.

Because of the six-year Maoist rebellion, the royal massacre of June 2001, and 9/11, tourism, a major source of income, has fallen off drastically. The recent announcement of a cease-fire has many hopeful that the necessary reforms by both HMG and the insurgents may radically improve the climate for change, restore the attraction of Nepal for tourists, and provide renewed hope for the suffering people and damaged economy. In spite of the past security threats, killings and bombings, which we know have had extremely negative reporting in the American press, we ourselves have never felt at personal risk, which is not to say that we have not been discouraged by what has been happening in this beautiful little country.

Additionally, building on the trust established through EcoSystems and FIIN, I have been coaching one of Nepal's district governments to shift the entire development process into a public-private partnership mode, where the public schools, health facilities, agricultural development, and other aspects of physical and social infrastructure would be contracted to private providers on performance-based agreements. In this scenario, the providers will be paid in accordance with their performance record. Several international donors will be needed to subsidize the public's obligations in this partnership during a transition period of 10 years while the local tax and income base is expanded to support the partnership's ongoing service costs.

Haydi and I are often asked by our California friends when we plan to move "home." We say that we hope to stay here as long as our work is rewarding, our health is good, and we can still stay connected with our families. When we think of the number of skilled people available to deal with regional social and environmental problems, we realize that the San Francisco Bay Area has so many and Nepal so few. There is something here for all of us who would try something new with our lives.