<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413114/63722f869c7e80680e0c251ejpeg.jpg" alt="" width="800" height="466"/><figcaption>Nepal Rastra Bank Governor Maha Prasad Adhikari.</figcaption></figure>“We cannot allow the rich to get richer in Nepal. One corporate borrower received refinancing of Rs1.27 billion straight from state coffers, while Nepalis slid into poverty. Small businesses also suffered, but their loans are not being rescheduled.”That was none other than Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari in an unedited version of a talk show on Kantipur TV in 2020.Adhikari was sacked by Finance Minister Janardan Sharma earlier this year, and promptly reinstated by the Supreme Court. And it was scandal-ridden Sharma who had to himself resign this month.After the pandemic lockdowns hit in 2020, the NRB set in motion refinancing procedures to keep the economy afloat, disbursing Rs158 billion by mid-December last year. This was like printing new money, but there was no evidence that the cash bailouts helped prop up the economy.In his interview, Governor Adhikari was admitting that there are business entities in Nepal that are ‘too big to fail’, and that the central bank’s refinancing policy was being misused by corporates with political patronage.Read also: <a href="https://www.nepalitimes.com/banner/state-sponsored-economic-crisis-2/">State-sponsored economic crisis</a>, Ramesh KumarThe result is that instead of keeping businesses afloat during the pandemic, selective refinancing has driven up inflation, increased imports, and upped the value of private assets.Nepal’s budgets have always been populist, no matter the government of the day, but the monetary policy of central banks across the world are necessarily conservative because of the need to keep inflation in check.The role of a central bank like the NRB is to control inflation, maintain the external balance of payments, and the stability of the financial sector. But the NRB’s credit expansion policy has done the opposite by rescuing those who were never impacted by the pandemic at all.The NRB in fact massively expanded cheap loans in the past two years to jump-start the economy. This only served to increase the import and inflation. Indeed, loans of banks and financial institutions, which stood at Rs3.21 trillion in 2020, have now surpassed Rs4.7 trillion. There has been no commensurate growth in employment and manufacturing capacity.It could be that there was too much interference on NRB policy by politicians on behalf of their cronies, but at the end of the day if the central bank had taken a more restrained approach, Nepal’s trade and balance of payments deficits would not have been as high as it is now, and foreign exchange reserves would not have depleted as fast.Read also: <a href="https://www.nepalitimes.com/editorial/how-not-to-be-a-sri-lanka/" target="_blank" rel="noopener noreferrer">How not to be a Sri Lanka</a>, EditorialMoreover, a sharp rise in real estate and share prices aided by a 5% interest rate in refinancing, increased investment, availability of repo loans and permanent liquidity facilities has unfairly benefited only the top tier of Nepali businessmen, industrialists, as well as media tycoons.The credit inflow actually increased imports, as the country rebounded from the pandemic. Moreover, a study by economist Biswas Gauchan showed that a 1% increase in private sector credit increased inflation by 0.31% and imports by 0.7%.Nepal has registered an 8% annual increase in inflation over the last 40 years. The income of Nepalis may have increased, but it has been absorbed by soaring prices. This means it is the general public that is bearing the brunt even as a chosen few big businesses reap huge benefits from politically-motivated credit outlay in the guise of a pandemic rescue package.NRB officials blame the failure of their monetary policies on the fixed INR-NPR exchange rate, and say this puts Nepal at a disadvantage every time the Indian rupee weakens against the US dollar.But this alone does not absolve the central bank, which has (for whatever reason) been reluctant to adopt stricter monetary measures to control import and inflation.Read also: <a href="https://www.nepalitimes.com/opinion/how-nepal-can-avert-an-economic-crunch/">How Nepal can avert an economic crunch</a>, Kalpana KhanalEven as Nepal’s economic crisis deepens, businesses paradoxically continue to pressure banks for cheap loans so they can keep their profit margins.The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Sunday demanded the continuation of concessional loans extended during the pandemic. However, it is not the central bank’s job to save businessmen from a debt trap of their own making.It is much more important to save the country’s economy from shrinking forex reserves, widening trade deficit, and inflation.Governor Adhikari must know why the misuse of bank credit by those with political patronage has hurt the economy. Awareness of a problem is the first step in solving it.Read also: <a href="https://www.nepalitimes.com/here-now/economy-in-trouble-but-no-need-not-to-panic-yet/">“Economy in trouble but no need to panic yet”</a>, Nepali TimesRamesh Kumar

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Central role of the Central Bank

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101128/636a21709c7e80680e04173ejpeg.jpg" alt="" width="730" height="886"/>In 1991, India’s foreign exchange reserves almost emptied when the country’s balance of payments collapsed. The Central Bank eventually averted a full-blown crisis, but poverty in India increased in the years that followed. Manmohan Singh was finance minister, and he introduced dramatic economic reforms that unleashed India’s economy and has been the foundation of its growth.Today, Nepal is at the risk of facing the same crisis India experienced three decades ago. There is a net outflow of foreign exchange, as remittance income fails to keep pace with the growth in <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/" target="_blank" rel="noopener">imports, mainly petroleum. </a>Nepal’s foreign exchange reserves currently can sustain only 7 months and 26 days of imports, compared to 14 months and 3 days as recently as 2016. (See graph above) Nepal Rastra Bank also calculated that in the first four months of the fiscal year, Nepal’s balance of payments deficit stood at Rs57 billion and in just the last month it increased by Rs22 billion.“The current rate of increase in the balance of payments deficit will be a huge crisis in the future,” warns Bijaya Nath Bhattarai, an ex-governor of Nepal Rastra bank.Read also : <a href="http://archive.nepalitimes.com/news.php?id=18194#.XC73rFUzbIU" target="_blank" rel="noopener">Hydrocratic dreams</a>, Ratna Sansar Shrestha Nepal’s over-dependence on <a href="https://www.nepalitimes.com/banner/kleptocrats-of-kathmandu-and-kualalampur/" target="_blank" rel="noopener">remittance </a>is deepening the crisis. Among different sources of foreign exchange for a country such as investments, exports, or tourism, remittances from overseas workers is the most unreliable income source because it can easily be affected by political tension and conflicts. Nepal’s remittance income is also not ploughed into productive sectors, and is mostly used up in paying for imported consumer goods and energy.Some 65% of Nepal’s total import bill is paid through remittances, while exports constitute only 6% and investment only 17% of Nepal’s annual foreign exchange income that is used to pay for imports. But even with all these sources combined, Nepal cannot meet 12% of its import bill, which is what is leading to the balance of payment deficit. The country has been forced to dip into its foreign exchange reserves to meet the gap.In the first four months of the current fiscal year, Nepal imported goods worth approximately Rs400 billion while exports were only worth Rs29 billion. Even though this is a tremendous difference, finance minister <a href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener">Yuba Raj Khatiwada</a> admits that what worries him more is the gap in the service sector. Most of the current outflow is for energy and vehicle imports, while there is also a huge outflow due to <a href="https://www.nepalitimes.com/banner/migration-certificate/" target="_blank" rel="noopener">students</a>, medical patients and <a href="https://www.nepalitimes.com/banner/where-are-you-going-this-dasain/" target="_blank" rel="noopener">Nepalis vacationing abroad</a>. Nepali tourists spent Rs35 billion abroad in the four months of this fiscal year, but foreign tourists spent only Rs25 billion in Nepal during the same period.This deteriorating balance of payments deficit may compel the government to adopt a restrictive monetary policy, but economist Keshav Acharya explains that this will mean only two choices for the government: “Either the government must take foreign loans, or reduce imports to prevent the outflow of hard currency.”The easiest step would be to borrow, but ex-governor Bhattarai notes that adhering to the strict conditions of the donors might be very painful for Nepal as it has been for other countries. Moreover, the crisis may also lead to policies to stop Nepalis going abroad, and limit imports to only basic goods.The CEO of Nepal Rastra Bank Nar Bahadur Thapa says, “If the balance of payments deficit and growth of imports continues at the present rate, we may not be able to import even the goods needed for development projects.”It is accepted practice that an import-dependent country without a sustainable source of foreign currency needs to maintain foreign exchange reserves to handle at least six months of imports. But with Nepal’s total annual export meeting only 24 days of imports, Nepal Rastra Bank’s policy is to maintain foreign exchange reserves to last at least 8 months.If not, depleted reserves can put pressure on Nepali fixed <a href="https://www.nepalitimes.com/opinion/12-full-opinion/dollar-laxmi/" target="_blank" rel="noopener">exchange rate </a>with Indian currently at Rs160. If that happens, there will be ruinous capital flight to India, as has occurred in the past. Ex-governor Krishna Bahadur Mandandhar says that the government and the central bank still have time to remedy the situation by limiting imports of luxury items. But this could lead to an expansion in the black market.Earlier this year, when the government applied quantitative restrictions on the import of sugar, the price immediately shot up by Rs5 per kg. Worse, if there is a devaluation of the Nepali rupee it will raise inflation and that could lead the economy into a downward spiral.Experts advise that while the central bank needs to be free from political interference to stabilise the economy, the government and the central bank must coordinate their actions. In the longer-term, there is no other way but to attract investors by increasing the competitiveness of the Nepali economy and increase exports.

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Nepal living beyond its means

As dusk fell over Kathmandu, the thunderstorm continued unabated. It had been raining continuously for 18 hours, and the forecast said it would keep raining at least till 8am on Sunday. The Bagmati roared through Chobhar Gorge in awesome rapids – the only drainage outlet for the entire Kathmandu Valley. By evening, 120mm of rain had fallen in 18 hours, more than the average for the whole of October.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004161016_99ad9098124bec91da71ac42bbe889981fe64dda2dd3012b8bb289cf78ba4c54.jpg" data-media-id="editor_0" data-image-id="20251004161016_99ad9098124bec91da71ac42bbe889981fe64dda2dd3012b8bb289cf78ba4c54" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Kathmandu floods 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004161016_59b97f3a3b2af91d3876b298963b3e68395c8b388aba6d9972c9bde1f668608d.jpg" data-media-id="editor_1" data-image-id="20251004161016_59b97f3a3b2af91d3876b298963b3e68395c8b388aba6d9972c9bde1f668608d" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Kathmandu floods 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004161016_1715f4d6ff1ee87302b697d3c95df36486bea71ed279852ef606c8f5dc68439b.jpg" data-media-id="editor_2" data-image-id="20251004161016_1715f4d6ff1ee87302b697d3c95df36486bea71ed279852ef606c8f5dc68439b" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Kathmandu floods 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004161016_ecd3dec69270afbd5a5c71dfa71780b6f8982984a95f3fbb83f23ee594451224.jpg" data-media-id="editor_3" data-image-id="20251004161016_ecd3dec69270afbd5a5c71dfa71780b6f8982984a95f3fbb83f23ee594451224" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Kathmandu floods 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004161016_53e47ae222c9f4397bcdad6d8021a711a5671fd45373fb3df2ed5c6413d58359.jpg" data-media-id="editor_4" data-image-id="20251004161016_53e47ae222c9f4397bcdad6d8021a711a5671fd45373fb3df2ed5c6413d58359" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="Kathmandu floods 2025"> </figure>  Settlements along the banks of Bagmati and Vishnumati in Kathmandu have been evacuated and affected families will be temporarily sheltered in schools across the capital.&nbsp; Bagmati Province has set up a Unified Command Team for disaster management while the Home Ministry has instructed CDO and security personnel to be on duty 24/7.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004171048_7e5d10f8e0042190e54e6db6cddbd51ed9d6d9dbc0cdb087d7af3207c9eaa2d0.jpg" data-media-id="editor_5" data-image-id="20251004171048_7e5d10f8e0042190e54e6db6cddbd51ed9d6d9dbc0cdb087d7af3207c9eaa2d0" data-rendition-name="original" width="1600" height="888" loading="lazy" alt="heavy rain in Kathmandu"> <figcaption>Friday's satellite precipitation forecast for Sunday morning at 0600 showing heavy rainfall along the Chure Hills and Madhes Province south of Kathmandu. </figcaption> </figure>  The torrential rain has obstructed several highways as well as caused infrastructure damage, but no human casualties have been reported so far. Many had feared a repeat of the deadly flashfloods on 28 September 2024 in which 200 people were killed and half of Nepal's hydropower generation capacity siped out. The government has declared 5 and 6 October as a public holiday to prevent people from travelling during the Dasain festival, and to reduce risk. All highways in and out of Kathmandu closed till Monday. Flood-prone river corridor roads in Kathmandu have been closed after 6PM on Saturday. Meanwhile, all domestic flights were suspended from Kathmandu and other airports from 2PM Saturday, and most inbound international flights were diverted from 3PM onwards. Rerouted flights started arriving in kathmandu late Saturday as the core of the storm system moved east.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151056_bad029b05dbfda622986270a798edc6efcc2791ff34f53b9d1283554ac72c39a.jpg" data-media-id="editor_6" data-image-id="20251004151056_bad029b05dbfda622986270a798edc6efcc2791ff34f53b9d1283554ac72c39a" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rainfall in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151052_9e740929c7ef0899b0f397195695b873bba45b089bb1e11cf37dbe125d0cd60d.jpg" data-media-id="editor_7" data-image-id="20251004151052_9e740929c7ef0899b0f397195695b873bba45b089bb1e11cf37dbe125d0cd60d" data-rendition-name="original" width="2048" height="1363" loading="lazy" alt="heavy rain in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151056_2b75c2ea57df76dae1c470f0e460720b7d258868258789729e491ab93cb41ebd.jpg" data-media-id="editor_8" data-image-id="20251004151056_2b75c2ea57df76dae1c470f0e460720b7d258868258789729e491ab93cb41ebd" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rainfall in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151056_6c045ac30e50710bcf3ca7b6ca4ac9c45e8d8881ed39f522779c860b0d3f15c3.jpg" data-media-id="editor_9" data-image-id="20251004151056_6c045ac30e50710bcf3ca7b6ca4ac9c45e8d8881ed39f522779c860b0d3f15c3" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rainfall in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151052_9ef160b8403764495b86159661cc9a11d9d7d3b848686a631e5ec8cff0c4c38f.jpg" data-media-id="editor_10" data-image-id="20251004151052_9ef160b8403764495b86159661cc9a11d9d7d3b848686a631e5ec8cff0c4c38f" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rain in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151052_e5825bcc6666e5235d9db2d4854a19cd6536335ebaf4cd65413acc601ceee3b5.jpg" data-media-id="editor_11" data-image-id="20251004151052_e5825bcc6666e5235d9db2d4854a19cd6536335ebaf4cd65413acc601ceee3b5" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rain in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151056_097077400e96f571f4418cd7b57c082045d86dd9035c31c5acd7ede2bfc54349.jpg" data-media-id="editor_12" data-image-id="20251004151056_097077400e96f571f4418cd7b57c082045d86dd9035c31c5acd7ede2bfc54349" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rainfall in Kathmandu 2025"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004151056_30a4da8f384f6fe1a862e775124ae08ccf51c1db60e71e7e2d683e0f25f33546.jpg" data-media-id="editor_13" data-image-id="20251004151056_30a4da8f384f6fe1a862e775124ae08ccf51c1db60e71e7e2d683e0f25f33546" data-rendition-name="original" width="2048" height="1365" loading="lazy" alt="heavy rainfall in Kathmandu 2025"> </figure>  Madhes, Bagmati and Kosi provinces are the worst hit with Maheshpur in Rautahat district recording 270mm of rain as of 3PM on Saturday. Similarly, Gaur received 243.6mm, Kalaiya in Bara 200.6mm and Birganj 221.4mm. The Department of Meteorology did not blame climate change, but said the unusually heavy precipitation at a time when the monsoon is supposed to have ended was caused by the head-on collision between moisture-laden westerlies with the retreating monsoon.

More dark clouds over Nepal

Kathmandu: A Reader, the latest publication from Martin Chautari, is an anthology of anthropological essays exploring Kathmandu through various lenses across the 21st century. This compilation is edited by Benjamin Linder and attempts to bring modern discourses on Kathmandu and its urbanity together, in a single volume. The book is divided into three sections: the physical form of the city, the imprints it bears from past political upheavals, and the complexity in the lives of its people. The book examines these diverse aspects, leaving readers who have just witnessed the momentous events of September with anxiety, and perhaps a greater understanding of Kathmandu’s context. Urban planning expert Biresh Shah’s discourse on the Valley’s urban sprawl and its landmarks is insightful, but also prophetic when he warns about seismic risk.&nbsp; Jan Brunson’s chapter on female mobility in Kathmandu via scooters is more optimistic, suggesting small-scale, daily-life movements in Kathmandu transform the city for its various demographics — in this case young women.&nbsp; Linder himself contributes with a discourse on the toponymy of Thamel, close-reading Kathmandu’s tourist hub through the usage and understanding of its name over the ages. MYTHBUSTERS The book is a collage of pieces held together by a thread that runs through the chapters of a vibrant, bustling image of the Valley. One common theme is Linder’s attempt to expand on common understandings and urban myths about Kathmandu. Readers who have spent time in the city will relate to the many anecdotes. for example, Niels Gutschow bringing up the lack of open spaces, or Mark Liechty mentioning restaurants in Kathmandu being melting pots of cultures and castes.&nbsp; The essays here further extend these urban legends by giving historical and anthropological contexts. In-migration and the rise in land prices have led to shrinking open spaces, the creation of cosmopolitan food outlets, and even hubs for sex workers. The Bagmati cleanliness campaign extends to a past understanding of the Bagmati Civilisation. Urban myths become puzzles to be solved by connecting the various threads of discussion across the book. The sections in Kathmandu: A Reader are all by experts in their various fields and present a holistic, well-rounded picture. Yet, it is obvious there is still more ground to cover, more themes to explore — perhaps by more Nepali scholars.&nbsp; In his introduction, Linder admits that due to practical reasons, ‘many wonderful works were left on the cutting room floor’. That is a pity. Indeed, there could have been more discourse on the changing ethnic composition of Kathmandu. A close-read into the lives of people termed as ‘outsiders’ but forming a growing slice of the population would be important to also chart future trends. &nbsp; The religious importance of Kathmandu as a unique civilisational alloy forged by melding the Hindu and Buddhist faiths can be explored more too. One can imagine a future edition including an examination of the post-Covid era Kathmandu valley.&nbsp; This need to broaden the ethnographic literature on Kathmandu becomes more apparent because 11 out of the 15 essays here are written by non-Nepali scholars, including the entire section focusing on urban cultural politics. Linder explains in his introduction that this was largely due to the community of academics in Nepali urban studies being fairly small. Kathmandu: A Reader then becomes even more integral as a gateway for new authors looking to work in the space of urban research on the Valley — undergraduates in the humanities for future theses and research ideas.&nbsp; In a time when Kathmandu is littered with new exam coaching centres for medical and engineering students, an anthology like this helps remind young scholars that there is plenty of scope for qualitative research in the social sciences. Sabin Ninglekhu’s discourse on the sukumbasi and aesthetics in Kathmandu are reminders that stories and academic journeys can be inspired from one’s surroundings. Kathmandu: A Reader has a good balance between academic and lighter readings, and is almost encyclopaedic in nature. There is even content about Kathmandu’s gangsters and scooty girls — allowing readers to venture deeper into their milieu.&nbsp; Kshitiz Pratap Shah is a recent graduate in English from Ashoka University.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251002051016_c8ce28ecfd0dde4986023822b3d40360ead97d29b7f186f6494d8da67021c5a5.jpg" data-media-id="editor_0" data-image-id="20251002051016_c8ce28ecfd0dde4986023822b3d40360ead97d29b7f186f6494d8da67021c5a5" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Kathmanu a reader"> </figure>

A reader for Kathmandu

Following the <a href="https://nepalitimes.com/news/nepal-s-8-september-massacre">uprising of 8-9 September</a>, the Nepal Army commenced a series of consultations concerning the transition process, during which the potential reinstatement of the monarchy was reportedly under consideration.&nbsp; However, former King Gyanendra Shah declined to pursue this option without a consensus among the political parties. This information was conveyed by Madhav Kumar Nepal, a former Prime Minister and a notable critic of the monarchy, in a newspaper article. The former king, for his part, delivered his annual Dasain message to the nation on 28 September. He emphasised, among other points, that the younger generation constitutes the foundation of the nation’s future.&nbsp; ‘Only the patriotic spirit, energy, and innovative thinking inherent in them can guide the nation toward strength, prosperity, and self-reliance. Let us reflect upon ourselves in the mirror of our country,’ he said. ‘Our political endeavours have often focused on destruction. Now, our initiatives should aim not at ruin but at improvement.’ Seventeen years <a href="https://nepalitimes.com/news/the-ghost-of-monarchy-returns-to-haunt-nepal">after Nepal abolished its monarchy</a> and became a federal secular democratic republic, the monarchy still influences the country’s political scene, mainly because of the persistent weaknesses of democratic institutions. Throughout much of its modern history, Nepal’s political landscape was controlled by the monarchy. During the partyless Panchayat system (1960-1990), the palace was consistently criticised for its authoritarian rule. However, it presented itself as the defender of national unity and sovereignty, especially against Indian influence. The 1990 People’s Movement transitioned Nepal into a constitutional monarchy. However, this period was marred by persistent instability, including the outbreak of a Maoist insurgency in 1996 and a royal palace massacre five years later.&nbsp; By 2005, when <a href="https://nepalitimes.com/here-now/tell-me-what-the-common-man-is-thinking">the new king, Gyanendra</a>, assumed full control, detaining politicians and restricting press freedoms, the monarchy’s legitimacy was already under scrutiny. The mass movement of 2006 resulted in the end of royal rule, leading to the official abolition of the 240-year-old Shah dynasty in 2008. Supporters of a republic saw this as the outcome of years of activism. In contrast, royalists viewed it as the sudden dismantling of an institution they believed had united Nepal. The new political framework aimed to promote stability, prosperity, and inclusion. However, Nepal has seen over 14 different governments in 17 years. Divided by factionalism, political parties have often focused on overthrowing rivals instead of effective governance. Widespread corruption persists. Infrastructure projects frequently face delays. Millions of young Nepalis leave the country to find jobs, resulting in the loss of many of the nation’s most talented individuals. The common belief that politicians amass wealth while ordinary citizens struggle has caused deep disillusionment. This serious situation led <a href="https://nepalitimes.com/news/international-spotlight-on-nepal">Nepal’s Generation Z to protest</a> in the streets. Within this broader context, for many, the monarchy has reemerged as a symbol of stability. To some, the king signifies unity that goes beyond partisan divisions. To others, the last Hindu monarch represents cultural continuity amid secular and federalist upheavals. <a href="https://nepalitimes.com/news/nepal-s-deja-vu-on-black-friday">Royalist demonstrations in Kathmandu</a> have mobilised tens of thousands. However, electoral support remains limited. The leading pro-monarchy party, the Rastriya Prajatantra Party (RPP), secured merely about 6 percent of the vote in the 2022 elections.&nbsp; Major political parties remain steadfast in their commitment to republicanism, and Nepal’s younger, globally connected population broadly <a href="https://nepalitimes.com/opinion/a-new-dawn-for-democracy-in-nepal">identifies with democracy</a>, despite frustrations with its shortcomings. Remembrances of King Gyanendra’s authoritarian rule serve as strong reminders of why the monarchy was abolished. However, this memory is gradually being replaced by more recent events.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251002111020_c018307c7b7dda363d04be3d65f01d132c81c62bae7ed2aa1ea235a12719b251.jpg" data-media-id="editor_6" data-image-id="20251002111020_c018307c7b7dda363d04be3d65f01d132c81c62bae7ed2aa1ea235a12719b251" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="monarchy in Nepal"> <figcaption>Photo: SAROJ BAIZU</figcaption> </figure>  PUBLIC IMPATIENCE Amid dissatisfaction with political parties, a question has emerged about whether the country needs an institution that can enforce discipline. As a result, calls for the reinstatement of the king are not just about Mr Gyanendra Shah, but also reflect a broader desire for government that is stable, accountable, and respectful. The influence of the monarchy extends into regional affairs. <a href="https://nepalitimes.com/here-now/america-nepal-and-the-royal-coup-qedzifz9">During the Cold War</a>, the palace adeptly balanced relations between India and China, positioning itself as the guardian of Nepal’s sovereignty.&nbsp; It also carefully navigated pressures from the United States and the Soviet Union. Today, as Nepal faces pressures from New Delhi, Beijing and Washington, some royalists perceive the monarchy as a safeguard against external interference. The <a href="https://archive.nepalitimes.com/article/editorial/autopsy-of-a-blockade%20,2863">2015 blockade imposed by India</a> impacted Nepal’s economy and led the country to seek closer comprehensive relations with China. As a result, India has adopted a more cautious approach toward Nepal’s republican leadership.&nbsp; China is viewed as supportive of centralised authority, in contrast to Nepal’s democratic institutions. There are perceptions that the United States, previously supportive of the monarchy, may once again consider it a stable partner. Officially, India, China, the broader international community, and major donors continue to support <a href="https://nepalitimes.com/here-now/the-story-so-far">Nepal’s post-2006 political order</a>. At the same time, they observe ongoing discussions among Nepalis about the possibility of a constitutional monarchy within a democratic framework. Following the recent unrest, some Nepalis believe that restoring the monarchy could create uncertainty for India and China, given Nepal’s complex political landscape. Others suggest that worries about perceived Western influence on the interim government through international NGOs might trigger serious soul-searching in New Delhi and Beijing. Despite its limited mandate to hold elections on March 5, 2026, t<a href="https://nepalitimes.com/news/nepal-pm-set-to-expand-her-cabinet">he interim government</a>, led by former Chief Justice <a href="https://nepalitimes.com/news/madam-prime-minister-of-nepal">Sushila Karki</a>, has an opportunity to start rebuilding public trust. Although the new government continues to enjoy popularity, there is evident public impatience regarding its delays in investigating corruption and misconduct by the previous leadership, as well as the incidents of killings, looting, and arson during the protests.&nbsp; The nation has been further unsettled by whispers of an impending and potentially more significant political upheaval prior to the upcoming elections. Republicans believe that demonstrating the effectiveness of democracy is the best way to mitigate calls for a monarchy. However, if the leadership fails to address key issues such as corruption, unemployment, and institutional strengthening, it could further boost the monarchy’s influence – and potentially lead to its comeback. Sanjay Upadhya is the author oand analyst based in the Unoited States. Originally posted <a href="http://originally%20published%20at%20https//www.linkedin.com/pulse/why-monarchy-still-sways-nepals-republic-sanjay-upadhya-pe4xe" target="_blank">here.</a>

Why the monarchy still sways Nepal’s republic

One is an archipelago, the other is landlocked. But the Philippines and Nepal have a lot in common: both are disaster-prone, their economies dependent on overseas migrant workers, both went trhough Maoist insurrections that failed to replace a feudal order dominated by political dynasties. And both countries suffer from rampant corruption. Twelve days after <a href="https://nepalitimes.com/news/nepal-s-new-normal" target="_blank">deadly protests toppled Nepal’s government</a> tens of thousands of Filipinos, many of them youth, also poured out into the streets demanding transparency and better government. Cars were set on fire, and more than 200 people were arrested, nearly half of them minors. The ‘Trillion Peso March Against Corruption’ was fuelled by <a href="https://www.nytimes.com/2025/09/21/world/asia/manila-philippines-rally-protest.html" target="_blank">anger over embezzlement</a> by politicians and their <a href="https://pcij.org/2025/08/31/5-reveals-from-the-flood-control-data/" target="_blank">crony contractors</a> estimated to top $17 billion in flood control infrastructure that were either never completed, or non-existent.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025100411108_85daed60ed5599f53235312e5b33703244bbac8640dbaf5161f90e5abe83f7eb.png" data-media-id="editor_3" data-image-id="2025100411108_85daed60ed5599f53235312e5b33703244bbac8640dbaf5161f90e5abe83f7eb" data-rendition-name="original" width="2326" height="1366" loading="lazy" alt="Phillipines anti-corruption protests"> </figure>  “We learnt from Nepal and <a href="https://www.nytimes.com/2025/09/30/world/anime-protests-flag-moldova-nepal-indonesia-gaza.html" target="_blank">Indonesia</a> how to deploy social media as a tool to spread information, we are digital natives and well connected within the country and across borders,” said <a href="https://www.linkedin.com/in/yuri-lemana-68322b183/?originalSubdomain=ph" target="_blank">Yuri Lemana</a> of the <a href="https://www.facebook.com/FOIYouthPH/" target="_blank">Youth Alliance for Freedom of Information</a>, and a part of the GenZ protests.&nbsp; “The system has failed us, unemployment is on the rise, there are shrinking opportunities for youth, and we face environmental threats. There is a realisation that our future is at stake,” Lemana added. Online groups started highlighting bribery and kickbacks in July after President Ferdinand (Bongbong) Marcos Jr himself brought up corruption in the infrastructure budget in his annual address to the nation, and launched a probe.&nbsp; The protests gained traction after powerful visuals of <a href="https://nepalitimes.com/news/international-spotlight-on-nepal" target="_blank">rallies in Indonesia and Nepal</a> circulated on digital platforms. Filipino journalists also exposed the <a href="https://www.youtube.com/watch?v=-f0MFz3vmfE" target="_blank">high-flying lifestyle of contractors</a> involved in siphoning off the infrastructure budget.&nbsp; As in Nepal, the youth protests were joined in by various radical groups. In Manila they reportedly included supporters of ex-president Rodrigo Duterte who is currently on trial at the <a href="https://www.icc-cpi.int/philippines/duterte" target="_blank">International Criminal Court (ICC)</a> in the Hague for extrajudicial killings during his ‘war on drugs’ 2011-2019. Duterte still has a lot of support, especially in the Filipino diaspora, for being tough on crime. Duterte was allied with Marcos in the 2022 elections, and his daughter Sara Duterte is currently vice-president. But the two families had a massive falling out, and the Supreme Court annulled the Lower House’s attempt to impeach the vice-president. This week in Manila, a remarkably well-informed Grab driver replayed TikTok videos of Kathmandu’s burning Parliament building to a passenger from Nepal. After his garment factory was driven out of business by cheap Chinese imports, he started driving a ride-hailing cab and was livid with successive governments not providing opportunities to ordinary people like him. Traffic was gridlocked because of flooded streets, and the driver vented out his anger: “Look at this. The streets are always flooded because of corruption. We should have done here what you did in Nepal.” Even before the protests, Senate President Francis Escudero and House Speaker Martin Romualdez had both resigned over the 'Floodgate Scandal'. Romualdez is Marcos’ cousin and is now said to be in Madrid, where his every movement is being tracked by Filipino diaspora in social media posts. The Independent Commission for Infrastructure has issued subpoenas to probe corruption in flood control projects. As in Nepal and Indonesia, much of the anger was over the offspring of politicians extravagantly flaunting their ill-gotten wealth on Instagram and TikTok. In the Philippines, the outrage is also over political clans passing on electoral seats to offspring. The 21 September protests were centred around Rizal Park and the EDSA Intersection in Manila — both symbolic for previous people’s movements against the Spanish colonialists and the 1986 uprising against the dictatorship of Ferdinand Marcos (father of the present president). “People here had seen what happened in Nepal, and were asking why we weren’t as angry as people there? Why not show our anger, too?” said one reporter who covered the protests. But, he added: “Let’s not be naive. It may have started with youth anger, but there were also people who were paid to infiltrate and instigate. We were also wary that things should not get out of hand like in Nepal.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025100411104_2c02ece56d29b2d8222433572d75c2dcc9bc2f3425d277a0056f393b521eecd0.png" data-media-id="editor_10" data-image-id="2025100411104_2c02ece56d29b2d8222433572d75c2dcc9bc2f3425d277a0056f393b521eecd0" data-rendition-name="original" width="1550" height="996" loading="lazy" alt="Phillipines youth protests"> <figcaption>An Instagram post of the protests in Manila with a comment relating it to the Nepal unrest two weeks earlier.</figcaption> </figure>  Seventy percent of Filipinos are Millennials and GenZ of voting age, and they were impatient with a rigged electoral system. In a clear parallel to what happened in Kathmandu two weeks earlier, radical groups, political rivals, and the general public furious with the system all joined in the protests. Catholic priests, people from all generations and professions had participated in the EDSA Uprising against Marcos in 1986. This time, it was the youth who took the lead. Joseph Francisco Ortega of the <a href="https://www.facebook.com/nationalyouthcommission/" target="_blank">Philippine National Youth Commission</a> said he understands the frustration among the youth that fuelled the unrest. The discontent is also because despite there being young legislators, they are either party-affiliated or scions of political dynasties. “If we can convince young politicians to do the right thing, then we have won half the battle,” Ortega said. “If we want to rebuild quickly and for the long term, we have to change the system from within. There is a constructive way to do this, while exercising the right to non-violent protest.” CROSS-POLLINATION The <a href="https://www.youtube.com/watch?v=6w8monPKdrc" target="_blank">violence in Manila streets</a> on 21 September was nowhere near the scale of what happened in Kathmandu on 8-9 September, but both transcended GenZ to be an outlet for pan-generational rage much like 1986 in the Philippines.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251004111012_e9cf9abfa8e35f3c074506dfdf94a262b5b311da6863cc2ec7bc3458a983df71.jpg" data-media-id="editor_13" data-image-id="20251004111012_e9cf9abfa8e35f3c074506dfdf94a262b5b311da6863cc2ec7bc3458a983df71" data-rendition-name="original" width="6566" height="4377" loading="lazy" alt="Nepal GenZ protests"> <figcaption>Angry crowd trouched Parliament building among others during the 8-9 September GenZ protests in Nepal. Photo: AMIT MACHAMASI</figcaption> </figure>  “With due respect to the youth, it is not about age but about technology,” explained journalist Malou Mangahas of the <a href="https://www.facebook.com/R2KRN/" target="_blank">Right To Know, Right Now Coalition</a> who participated in the 1986 uprising against Marcos. “We were all young and angry once. We are older, but still angry, and demanding good governance, transparency and accountability.” Just like in Nepal, young Filipinos rallying against corruption were also wary of infiltration, and it was clear from the anti-Marcos graffiti who the instigators of violence were. The GenZ were mainly wearing white while the pro-Duterte crowd <a href="https://www.youtube.com/watch?v=6w8monPKdrc" target="_blank">are seen in videos</a> in black.&nbsp; The minors seem to have just joined in the melee from their street-side settlements. Rights groups have called for their release, accusing police of rough interrogation and ‘red-tagging’ as Communist provocateurs. Much of the transboundary cross-pollination of anti-government protests across Asia last month used gaming characters, memes, and anime personas like the manga cartoon One Piece flag depicting a grinning skull in a straw hat which became an icon of youth protests.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025100411100_2d09f075663678fe92d4e4dcc631ee6ad1aa8a99996f4c4a3649e4bf4d85132f.png" data-media-id="editor_16" data-image-id="2025100411100_2d09f075663678fe92d4e4dcc631ee6ad1aa8a99996f4c4a3649e4bf4d85132f" data-rendition-name="original" width="810" height="1208" loading="lazy" alt="One Piece"> <figcaption>The One Piece Flag flying during protests in Manila on 21 September. Photo:  CYBERNETICBOYLOL / WIKIPEDIA</figcaption> </figure>  Yuri Lemana adapted a saying of gaming character <a href="https://www.warhammer.com/en-WW/shop/mechanicum-archmagos-prime-2024?srsltid=AfmBOorpYg8Zk5G5WiPUS9SXTampX969gMw79sP7ZzkE1G6H5pICR4PW" target="_blank">Archmagos Cortiko</a> in <a href="https://start-warhammer.com/" target="_blank">Warhammer 40,000</a>: “Prayer has its power, but fury also has its uses. If the government tries to hide things from us, we will find a way. Fury will find a way.” Kunda Dixit is the Publisher of Nepali Times, and was a foreign correspondent based in Manila in the early 1990s.

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