Lessons for Nepal’s Economy and Governance

The upheaval of September 8–9, 2025, marks a watershed moment in Nepal’s contemporary history. Sparked by a social media ban, it exploded into a nationwide Gen Z revolt demanding accountability, transparency and an end to entrenched corruption. The scale and intensity of the unrest revealed not only the impatience of a politically disillusioned generation but also the deep structural vulnerabilities of Nepali economy.

 

In just two days, government offices, private businesses and critical infrastructure suffered severe damage. Iconic institutions like Singha Durbar were set ablaze, hundreds of local government offices were vandalized and major private-sector establishments, including Bhat-Bhateni Superstore and the Hilton Kathmandu, incurred losses amounting to tens of billions of rupees. The immediate economic fallout was staggering: investor confidence collapsed, stock market tumbled and more than 15,000 private-sector jobs were disrupted during Dashain, traditionally the country’s busiest commercial season. The insurance sector now faces unprecedented claims, greater than those from earthquakes, floods or even the COVID-19 pandemic.

 

This destruction also offers an opportunity for reflection and reform. The protests exposed the entrenched nexus between politics and business—crony capitalism that has long tilted policy in favor of the powerful few. The methods may have been destructive, but the grievances are undeniable: a generation demanding fairness, meritocracy and transparent governance.

 

The interim government faces a twin challenge of immediate reconstruction and long-term systemic reform. Measures such as customs exemptions for rebuilding, concessional loans and payroll protection schemes may help stabilize businesses and safeguard employment. But sustainable recovery will depend on deeper change—structural reforms, digital governance and genuine accountability. These are the factors that will determine whether Nepal emerges stronger or simply returns to the status quo.

 

This revolt underscores how fragile both investor confidence and public trust truly are. If harnessed constructively, the unrest could serve as a turning point—breaking entrenched cronyism and paving the way for transparent governance, fair competition and inclusive economic growth. The road ahead demands courage, prudence and reform-minded leadership. The task is not only to rebuild what was lost but to ensure that the aspirations of a restless generation help shape a resilient and prosperous Nepal.

 

Madan Lamsal
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