Amidst the euphoria in Nepal about the RSP’s landslide victory, the party’s future government, possibly led by Balendra Shah will plunge headlong into an energy and economic crisis sparked by the war in West Asia.
Nepal gets all its diesel, petrol, gas and aviation fuel from India and lacks a strategic stockpile to buffer against shortages. The United States has unsanctioned Russian crude oil to India for one month, but India will only export refined petroleum products to Nepal after meeting its own domestic demand. As it is, India has only 10 days of stockpile of cooking gas and it is giving preference to household use. Energy experts say new oil and gas supplies from Russia and elsewhere will take another month to arrive at Indian ports.
“This conflict didn’t develop overnight, yet we did nothing to augment our reserves. Clearly, we didn’t manage procurement anticipating supply disruptions,” says economist Pushkar Bajracharya.
The conflict has escalated, seriously disrupting global petroleum supplies. Nearly 20% of the world’s oil and gas moves out of the Strait of Hormuz which is now blocked. The Persian Gulf makes up most of the oil and liquified natural gas supplied to Japan (75%), India (50%) and China (38%). Crude oil prices have nearly doubled to $100 a barrel this week.&nbsp;
“This crisis is only going to intensify, so in the short term, it means fuel prices will increase as will the cost of goods and services,” adds Bajracharya. “This doesn’t bode well for the new government, especially when people have such high expectations from it.”
Fuel stoppages from India have happened before, notably during the 2015 Blockade. But Nepal could be better placed this time to cushion the shock because of the proliferation of battery-operated vehicles, and electrification of household cooking to some extent.
“The increase in electric vehicles provides some relief, but it is not enough,” says energy economist and former Water Resources Minister Dipak Gyawali. “Most critical services still run on diesel, and they cannot be replaced overnight.”&nbsp;
Nepal’s expanding road network means diesel and petrol consumption is also increasing. If the war drags on, there will be a critical shortage of aviation fuel that could also hurt tourism at the start of the trekking and mountaineering season. There is already a nationwide shortage of cooking gas which is used by 62% of Nepali households. &nbsp;
The fuel crisis will have a knock-on effect on the economy which the RSP government will have to tackle on an emergency footing as soon as it comes into office.
The priority would be to cap fuel prices with subsidies, control hoarding, and in the longer term expedite the switch to electricity for transportation and cooking.&nbsp;
MONEY IN
The other impact will be on jobs in West Asia and remittances. Nearly half the $11 billion a year Nepalis send home every year comes from West Asian countries. Nepal’s hard currency reserves have hit a record high $21.09 billion, but that cash will be of no use if there is no fuel to buy.
A sharp drop in remittances due to the collapse of the economies of the Gulf states if the war is prolonged will have a multiplier impact particularly on Nepalis' household expenses and the country’s economy in general. This in turn will have a knock-on effect on investment, and affect the RSP government’s main agenda which is to create jobs at home.
The vicious cycle will then mean that more Nepalis will want to migrate for overseas jobs, but options in the Gulf may not be available.
The RSP’s ministers in government will have to come up with innovative ways to re-integrate Nepalis forced to return because they lose their jobs, or for safety reasons. There are nearly 2 million Nepalis across the UAE, Qatar, Kuwait and Saudi Arabia, and another 7,000 mainly women caregivers in Israel.
“Other than the impact on remittances and the economy, there could be the additional challenge of rescuing over 2 million Nepalis in West Asia if it comes to that,” says Bajracharya. “We don’t have the resources, and we will have to rely on India’s logistical help.”
The RSP’s main vote bank was among global Nepalis, who could not cast &nbsp;ballots themselves but influenced families and friends back home to choose the party. Social media was abuzz with slogans that promoted how choosing the RSP would bring their children back home from the Gulf.
“The RSP got a majority, and that’s a good thing but voters came together to oppose UML, NC and the Maoists. But there is no clear ideology or philosophy, so while their slogan to bring Nepalis back from the Gulf sounds nice, what would they come back to?” asks Gyawali.
The Nepali diaspora in the Gulf that influenced the electorate so effectively will now be looking at how the government it helped get to power in Kathmandu will help as war engulfs the region.&nbsp;
There is an almost unrealistically high expectation of the RSP, and the party may not even get the customary 100-day honeymoon period. The cabinet could be put together easily enough, but the bureaucracy, judiciary, police, and the Upper House are all populated by loyalists of the old parties.
Despite bad blood, the RSP will have to work together with all parties in the face of the crisis unleashed by the war. And Nepal’s politicised foreign policy must be galvanised to deal with the crisis.

Sonia Awale

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Rough road ahead for new Nepal rulers

The year started off uneventfully, but ended in tumult and uncertainty about the future. But there were tensions simmering under the surface.
In February, Nepal made it to the Financial Action Task Force <a href="https://nepalitimes.com/news/black-white-and-grey">(FATF) grey list</a> for failing to address money-laundering. The closure of the USAID <a href="https://nepalitimes.com/here-now/usnoaid">halted most health, climate and nutrition projects</a>. In the midst of it all, India and Pakistan went to war in May and although there was no nuclear fullout, it resulted in Trump and Modi falling out bigly.&nbsp;
On 28 March, <a href="https://nepalitimes.com/news/republicans-and-royalists-on-nepal-s-streets">a pro-monarchy rally in Kathmandu</a> led by loan defaulter Durga Prasai had been dispersed by riot police. Two people, including a tv reporter, were killed when his supporters resorted to arson and looting – a dress rehearsal for what was to come later in the year.&nbsp;
The monsoon brought its usual woes—this time <a href="https://nepalitimes.com/news/rasuwa-flood-likely-a-glof">a trans-boundary glacial overflow flood on the Bhote Kosi</a> that swept away the main trade route with China, and reminded us about climate risk.&nbsp;
In <a href="https://nepalitimes.com/opinion/comment/when-xi-meets-modi-and-oli">August Kathmandu’s chatterati were busy speculating </a>on whether Prime Minister K P Oli would get an official invitation to visit New Delhi. When that offer did not come, he made a controversial trip to attend the Victory Day Parade in Beijing on 3 September marking the 80th anniversary of Japan’s defeat in World War II.&nbsp;
He was in the illustrious company of Vladimir Putin, Xi Jinping and Kim Jong Un – and back in Kathmandu six days later he was out of a job. Oli had to be rescued by an Army helicopter just before protesters set fire to his official residence.&nbsp;
Throughout the year, the UML-NC coalition had been working on a <a href="https://nepalitimes.com/news/big-beautiful-bills">series of bills to limit freedom of speech </a>with an amendment to the Print and Publication Act, the Social Media Bill, the Counter-intelligence Bill and a move to replace Social Welfare Council. The spark that lit the fuse was the ban on 26 social media platforms on 5 September.&nbsp;
Inspired by recent youth-led anti-corruption protests in Indonesia, Nepal’s GenZ decided to rally. Nepal’s socio-political landscape was tinder-dry, and outrage over the killings added fuel to the conflagration.&nbsp;
When the GenZ called for a rally against corruption and poor governance on 8 September, no one (least the youthful protesters) could have imagined that it would spiral out of control like it did. Nineteen <a href="https://nepalitimes.com/news/nepal-s-8-september-massacre">demonstrators were massacred on 8 Septembe</a>r by APF gunmen using assault rifles.
The bloodshed was broadcast live and unfiltered on social media. The next day, with the youth still reeling from shock, anyone and everyone with a grievance <a href="https://nepalitimes.com/news/kathmandu-burns-despite-pm-resignation">went on a rampage of arson and looting</a>, targeting homes, government offices, schools and businesses. By the time the Nepal Army declared a curfew at 10PM on 9 September, much had been reduced to ashes.
The <a href="https://nepalitimes.com/news/madam-prime-minister-of-nepal">GenZ voted Sushila Karki in as prime minister</a>, but an outspoken faction is not happy with her. Adding to the distraction are UML and NC leaders who still cannot believe they have been toppled, and want to revive the House. Oli has been re-elected chair of the UML, and is not giving up and has convinced former NC coalition partner Sher Bahadur Deuba not to chicken out either.&nbsp;
But both parties have no choice but to go for elections, even though <a href="https://nepalitimes.com/news/establishmentarianism">they have not reformed their parties </a>to address the public outrage against their decades of misrule.
Prospects of elections in March were looking iffy until President Ram Chandra Paudel this week convened a meeting of the UML, NC and NCP for their first meeting with Karki. The RSP is talking to Kathmandu Mayor Balen Shah, and suddenly polls look possible. Whatever the outcome, 2026 will change the trajectory of Nepali politics with the dominance of the established parties challenged by new alternative forces.&nbsp;
But whether this will bring a new political culture of transparency, democracy and accountability, or degenerate into populism and despotism we will begin to see in 2026.

REWIND 2025

Double-taxation, profit repatriation and capital gains tax have always been a headache for foreign investors in dealing with rent-seeking that Nepal is infamous for.
When Dolma Impact Fund, the only international venture capital company in the country, applied last year for exemption from capital gains tax citing Nepal’s Double Taxation Avoidance Agreement (DTAA) with Mauritius, bureaucrats at the Finance Ministry gave it the runaround.&nbsp;
But the interim government’s Finance Minister Rameshore Khanal, himself a respected former bureaucrat, is someone who knows that international treaties take precedence over national law.&nbsp;
On 30 October he gave Dolma a strategic capital gains tax break, convinced that Nepal needed to restore investor confidence especially after videos of the arson, vandalism and looting of the Hilton and Hyatt hotels and businesses on 9 September went all over the world.&nbsp;
Dolma’s stakeholders include other investment funds in the UK, US, Japan, Netherlands, Finland, Austria, Sweden as well as the World Bank. Nepal needs investment for future large infrastructure projects, and to tap those funds it has to &nbsp;streamline its bureaucracy, increase transparency and adhere to international obligations.
The argument is that making it easier for Foreign Direct Investment (FDI) is a much more efficient way to spur the economy and create jobs than the government raising revenue mainly through taxation, since the chances of that money being leaked through corruption or wastage in Nepal is high.&nbsp;
After news of Finance Minister Khanal’s decision on 3 October exploded in the media, Prime Minister Sushila Karki inquired about it. Chief Secretary of the GoN Eaknarayan Aryal clarified that the decision was not in the minutes of the Cabinet.
TAXING TWICE
Critics like economist Pushkar Bajracharya argue that it is important for Nepal to have a consistent taxation policy for FDI, and apply it uniformly so it does not deter investors. The Dolma decision could encourage other offshore investors to demand similar treatment, hurting Nepal’s tax base.
“Besides, the evidence just isn’t strong that tax cuts lead to higher investment, or more jobs,” Bajracharya adds.
Nepal has double-taxation avoidance treaties with 11 countries, and there are reports of moves to end the DTAA with Mauritius signed in 1999. But just like with the Ncell’s capital gains row and the controversy over the US-funded Millennium Challenge Corporation (MCC) there has also been nationalist flag-waving in Nepal.&nbsp;
“We were raising a fund that could have brought $1 billion in for energy, and we had to stop it due to the reputational damage to Nepal by not upholding an international treaty,” Tim Gocher, CEO of Dolma, told Nepali Times on the phone from London.
Dolma claims that Nepal’s DTAA with Mauritius means profit arising from sale of shares should be taxed only in the resident state and not in Nepal, and also cited the Treaty Act 1990 which states that treaties signed by Nepal supersede domestic law in case they contradict each other.
Gocher said it makes sense for his fund to be based in Mauritius: “When you have investors from all over the world, you have to choose a domicile, and Mauritius is probably the most popular for development finance institutions due to strong governance, anti-money laundering laws and treaties with developing countries like Nepal.”&nbsp;
Nepali officials, however, see Dolma as a conduit company sourcing funds from outside Mauritius or Nepal and label it as possible ‘treaty shopping’. A similar case involving the sale of Ncell ownership went to the Supreme Court and all the way to the International Tribunal at The Hague, and both ruled against exemption to DTAA.
Officials argue that approving an exemption for Dolma would contradict that precedent. The Attorney General’s office cited Section 73 of the Income Tax Act of 2002 which states that to avoid double taxation, more than half of the company has to be owned by individuals residents of both Nepal and a foreign country.
Bureaucrats also seem to be wary about being hauled over the coals at the Commission for the Investigation of the Abuse of Authority (CIAA) if they agree to Dolma’s demands, even though there is a legal argument that the Nepal treat act stipulates that in case of disagreement international obligations take precedence over domestic laws..&nbsp;
“It was when the new government decided to uphold the treaty that the whole hoo-hah started,” said Gocher. “It is crystal clear, and the way international treaties are dealt with all over the world.”
Chief Secretary Acharya, who is retiring next week, seems to want to avoid being haunted by any whiff of controversy before he leaves, but also faces intense lobbying by the international community for Dolma’s exemption.&nbsp;
Dolma currently invests in companies such as Chirayu National Hospital, CloudFactory Holdings Limited, Foodmandu, FuseMachines, Rhododendron Biotech, Setikhola Hydropower, and Solar Farm Nepal.&nbsp;
Dolma has asked to be exempt from being taxed twice: in Nepal, where it invests, and in Mauritius, where it is based, and points to a law that says international treaties override domestic law in the case of a contradiction. Government officials point to the Ncell precedent saying it will be illegal. But the government is not giving in, due to the Ncell precedent and to prevent others in future asking for similar exemptions.&nbsp;
<a href="https://www.youtube.com/watch?v=uNdMuD_4yGw&amp;t=5s" target="_blank">Watch interview</a> on Nepali Times Studio with Tim Gocher.

Vishad Raj Onta

Double trouble with taxes

In the very first page of the first chapter of Nepal 2043: The Road to Prosperity are two maps. The first places Nepal right at the epicentre of Asia, and in the second the Kathmandu is at exactly the midpoint between Mumbai and Beijing. With his trademark optimism, author Sujeev Shakya says Nepal is not land-locked but land-linked to three billion people in China and India. We just need those two economic engines to pull us in the same direction. ‘With China and India becoming the two largest economies in the world in the next two decades … Nepal is the most valuable piece of real estate in the world,’ Shakya writes. For one thing, Nepal does not look beyond India and China for tourism — with the right policies it can attract millions of tourists just from those two countries. Nepal is set to graduate from a low- to a middle-income country by 2026 and to a high-income country in 2043 — hence the name of the book. The year 2043 in the Bikram Sambat calendar is also 2100 — a new Nepali century. The book delves into the past, present and future of Nepal and analyses enablers including hydropower, a fundamental transformation of which will drive the 2043 goal. The commoditisation of electricity will be the biggest transformation. Nepal can deploy ‘Cyber Gurkhas’ to attract foreign investors with the management of data centres with climate friendly renewable energy. Access to technology such as precision agriculture, a data-driven approach to farming to improve food production, reduce environmental impact and enhance profitability could be Nepal’s strategy into 2043 and beyond. ‘Earlier, we needed ploughs and strong hands in agriculture. Now, you need a computer and strong fingers,” Shakya writes, citing a neighbour’s son who inspects his crops from drone cameras. A farmer in an Ilam teashop tells the author he asks AI questions in Nepali, and it answers promptly. The biggest enabler of all is Nepal’s young demography with 62% of the population in the active 15-60 age bracket, while 28% are younger than 14. Nepal’s dependency ratio has dropped to the lowest in history with 100 Nepalis having to support 62 dependents. But this demographic dividend window is closing. Nepal’s total fertility rate declined from 2.62% in 1981 to 0.92% in 2021 — below replacement level. We have less than 30 years left to make the best use of the youth, many of whom are currently studying and working abroad. Nepal’s biggest resource, therefore, is its diaspora spread across the world who send home $20 billion a year. Migration is not just a necessity but an aspiration for many Nepalis, and they are an important source of contacts, investment and soft power. This young and educated group has taken advantage of connectivity and digitisation in all arenas of national life. TikTok and Instagram have become e-commerce platforms, or mobile app-riven digital services. Nepal’s software companies exported over $1 billion worth of IT products last year. Next we need a change in the bureaucratic mindset to eliminate paper and manual processes, which would also contribute to reducing corruption. Shakya comes up with many revelations: 81% of Nepalis live in houses they own, much higher than most other South Asian countries which means higher disposable income. Nepal has the highest tax-to-GDP ratio in South Asia. The banking sector is twice the size of Bangladesh despite Nepal having just one-fifth of its population. In 2021, 12.62% of the population had demat accounts in Nepal, while India had only 5.32%. For every five male investors, there are four women in Nepal while it is 10:1 in India. With such figures and prospects, how come Nepal just went through a violent uprising that took the shortest time to topple a democratically-elected government in modern history? One early chapter of 2043 is actually dedicated to how Nepalis have always thrived on chaos. When people faced up to 20 hours of power cuts a day, people worked around the load-shedding schedule, woke up at ungodly hours to cook and stock up on inverters. They did not put up a fight, or even protest. ''Generally, Nepalis are used to taking things lying down, and perhaps this also needs to change,' says Shakya, writing that line before last month’s uprising. ‘On the one hand, some of these issues speak volumes about the average Nepali’s patience and perhaps optimism that things will change in the long run. On the other hand, one is also forced to wonder how much longer they will be able to put up with unfavourable conditions if things don’t change.’ It does seem Nepali had enough with corruption, governance failure and political apathy to the concerns of ordinary people. The final chapter lists the non-negotiables to realise the 2043 Nepal Roadmap: democratic values and freedom of speech, a capitalist welfare state and socio-political transformation to tackle corruption and impunity. The book notes, ‘Countries transitioning to democratic rule experienced a 20% increase in GDP over a 25 year period compared to what they would have achieved under authoritarian regimes. After the end of the Shah rule in 2006, Nepal’s GDP rose from US$10 billion to US$44 billion by 2024.’ The government’s Vision 2030 document projects Nepal’s GDP at US$100 billion, and the Vision 2043 estimates that it will be a US$423 billion economy with a per capita of US$12,100. However, it will need more than optimism and practical action to make these projections real. China and India loom large throughout the book with examples of small city states like Singapore which have taken advantage of their strategic location. Despite the tension between India and China, the two will have to collaborate given the inherent advantages. China has replaced the United States as India’s biggest trading partner. Sujeev Shakya is a great admirer of former Singaporean diplomat and author Kishore Mahbubani, and he has written a blurb for the book. He quotes Mahbubani saying that for the past 2,000 years, apart from the last two hundred, Asian countries have dominated the world, and it is quite natural that the world’s economic centre is returning to Asia. And Nepal is strategically placed to make the most of it because of its location between two of the world’s fastest growing economies. We just have to get our politics right, and have a strategy for equitable growth in the new Nepali century.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251016091052_78b2d1495d59cd492a17693e0e770b65230c7cb749393ac6643f4676b73832ef.jpg" data-media-id="editor_0" data-image-id="20251016091052_78b2d1495d59cd492a17693e0e770b65230c7cb749393ac6643f4676b73832ef" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Sujeev Shakya book details NT"></figure>

Retrofitting Nepal for future shocks

Nepal is now a remittance-driven economy and <a href="https://nepalitimes.com/opinion/comment/nepal-is-not-a-country-of-villages-anymore">rural areas</a> are emptying due to <a href="https://nepalitimes.com/opinion/the-road-out-of-nepal">outmigration</a>, yet 62% of Nepal’s population still relies on farming and it contributes to a fourth of the country’s GDP.&nbsp; Successive governments have spent Rs107 billion in the past five years on agricultural subsidies, and banks have extended flexible loans worth Rs367 billion to farmers and <a href="https://nepalitimes.com/here-now/nepal-makes-farming-viable-again">agro-businesses </a>in the last decade. By 2024, loans from private financial institutions had grown eight-fold in ten years. &nbsp; All this was designed to increase farm productivity, stimulate the economy, create jobs in agriculture and reduce imports. Some of that has happened, but not commensurate with the money spent.&nbsp; Investment in the agricultural sector has increased by an average of 23.4% every year in the past ten years, but the average annual growth in farm production since 2015 is only 2.77%. In fact, agricultural productivity has actually dropped, and food imports (mainly from India) have soared.&nbsp; <div class="embed-block"><iframe title="Grants for farmers (in billion Rupees)" aria-label="Column Chart" id="datawrapper-chart-LX2LG" src="https://datawrapper.dwcdn.net/LX2LG/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="438" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}(); </script></div> The question then is: where did all that money go? Evidence points to the budget being leaked along the way with little of it reaching the intended beneficiary farmers. &nbsp; Nepal Rastra Bank data shows that commercial loans to commercial farms, tea estates, livestock farms and fisheries accounted for 4.5% of all loans, which in 2014 alone totaled Rs50.99 billion. The government had made it mandatory for banks and financial institutions to provide 15% of its loans to farmers and agro-businesses by 2027. &nbsp; By 2024, agricultural loans accounted for 8% of the total loans provided by commercial banks – of this 22% went to farming, 37% to livestock and 39% to agro-businesses. In recent years, concessional loans are also provided to farmers in which the government provides a 5% interest subsidy. For instance, if a bank issues an agricultural loan at 9% interest, the government will pay 5% of it. By mid-November last year, Rs100 billion worth of such subsidised loans had been approved.&nbsp; <div class="embed-block"><iframe title=" Nepal’s agricultural loans (in billion Rupees)" aria-label="Interactive area chart" id="datawrapper-chart-OSP0N" src="https://datawrapper.dwcdn.net/OSP0N/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="405" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}(); </script></div> The government has also provided outright grants to increase agricultural production. The Ministry of Agriculture and Livestock Development released data last week showing that grants worth Rs107 billion had been distributed in the last five years. &nbsp; Given such generous outlays, there should have been an improvement in food production by now. Yet Nepal produced a little over 9.5 million tons of cereal crops in the fiscal year 2014, and ten years later it had risen only slightly to 10.9 million tons.&nbsp; The improvements are restricted to pulses, fruits, and vegetables. In the last decade, the production of cash crops increased by 8.8%, other fruits by 4.6%, and vegetables by 2.5% annually. &nbsp; Meanwhile, <a href="https://nepalitimes.com/news/nepal-less-and-less-able-to-feed-itself">Nepal’s agricultural imports doubled</a> over the same period, from Rs130 billion in 2014 to almost Rs257 billion last year. The country imported about Rs46 billion worth of food, Rs28 billion worth of vegetables and Rs23 billion worth of fruits just last year.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250203090228_3c209bcad42b940e6222511d435b1995c34aca4afb76afb5559218758416bc22.jpg" data-media-id="editor_6" data-image-id="20250203090228_3c209bcad42b940e6222511d435b1995c34aca4afb76afb5559218758416bc22" data-rendition-name="original" width="937" height="625" loading="lazy" alt="Farm subsidies: money down the drain NT"> </figure>  Some of the support for the government’s agriculture programs has come from international donors, including the Project for Agriculture Commercialisation and Trade (PACT), Nepal Agriculture and Food Security Project (AFSP), Nepal Livestock Sector Innovation Project, High Mountain Agribusiness and Livelihood Improvement Project, and the Rural Enterprise and Economic Development (REED) Project.&nbsp; Despite this, agricultural production has not increased, and the quality of life of farmers has deteriorated to the point where many are abandoning agriculture altogether. Funds meant to uplift farmers are wasted on administrative work, consultant fees, training seminars and other purchases.&nbsp; Read also: <a href="https://nepalitimes.com/here-now/helping-farmers-who-help-themselves">Helping farmers who help themselves</a>, Benjamin Zimmerman The Agricultural Commercialisation and Trade Project for Nepal was launched in 2018, for which the World Bank provided a Rs2.06 billion grant and Rs2.92 billion loan. The Bank's own investigation showed that of the grants, a large proportion was pocketed by middlemen along the way. Another Rs810 million went to consultants for teaching farmers about agro-businesses, Rs680million to pay the salary and allowances for staff, Rs460 million was spent on buying vehicles and equipment, and Rs110 million for training seminars. Project officials also spent Rs40.8 million on foreign junkets. &nbsp; <div class="embed-block"><iframe title="Cereal crop production (in million metric tons) " aria-label="Column Chart" id="datawrapper-chart-Mlblc" src="https://datawrapper.dwcdn.net/Mlblc/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="389" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}(); </script></div> An audit report showed that 40% of the total funding was spent on administrative work. The Bank even sent a letter in 2020 to Yubaraj Khatiwada, who was finance minister then, alleging corruption and requesting action. Nothing was done about it. The Improved Seed for Farmers Program, a Rs3.28 billion project for six districts in western Nepal supported by the International Fund for Agricultural Development (IFAD) and other institutions, also had anomalies. An audit report records purchase of 178 motorcycles, 20 four-wheelers, more than 200 laptops and tablets, 49 desktop computers, as well as dozens of photocopy machines, printers, and cameras totalling more than Rs322.1 million.&nbsp; Another Rs203 million was spent on consulting services, Rs505.3 million on training seminars, and Rs597.1 million on salary and allowances for staff. &nbsp; “This is clear evidence of <a href="https://nepalitimes.com/news/aid-rarely-aids-agriculture-in-nepal">agro-washing</a>, agriculture is simply a front for other business dealings,” alleges Biswash Gauchan of the Institute for Integrated Development Studies (IIDS).&nbsp; <div class="embed-block"><iframe title="Nepal’s agricultural imports (in billion Rupees)" aria-label="Interactive line chart" id="datawrapper-chart-0FwSO" src="https://datawrapper.dwcdn.net/0FwSO/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="428" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}(); </script></div> An Auditor General’s report a few months ago cited examples of misuse of agricultural loans, and recommended that the government recover the low-interest government-administered agricultural subsidy with penalties. A similar study on agricultural loans by the Central Bank last year found that 14% of concessional loans given out by banks and financial institutions were being misused. In response, the Finance Ministry stopped administering Interest Subsidy Loans last year. Studies by other government agencies concluded that investment in agriculture in Nepal has been ineffective. Even a Ministry of Agriculture task force concluded six years ago that government farmer grants had ‘poured money down the drain’. The report found that the benefits went not to farmers and agro-businesses that needed help, but almost exclusively to those in collusion with higher-ups in charge of the grants. The funds, concluded the study, went towards the purchase of vehicles, luxury goods and other facilities rather than contributing to the agricultural sector.&nbsp; <div class="embed-block"><iframe title="Nepal’s annual economic growth and agricultural growth rate (in %)" aria-label="Interactive line chart" id="datawrapper-chart-hzgjW" src="https://datawrapper.dwcdn.net/hzgjW/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="495" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}(); </script></div> Former NRB executive director Nar Bahadur Thapa says the reason agricultural loans appear to be increasing while agricultural production has not risen is because the loans have been ostensibly taken for agriculture but poured into real estate speculation.&nbsp; “It is not enough just to pour money into the agriculture sector, government and financial schemes will only yield results when we create appropriate infrastructure and markets and facilitate trade,” says Hari Bahadur KC, chair of the committee set up by the Ministry of Agriculture to evaluate government subsidies. It is clear that the problem lies in dysfunction in the government’s delivery mechanism and corruption right up the line. The investment will not lead to increased productivity until the grants, loans, and subsidies stop lining the pockets of the wealthy and connected.&nbsp; “It is an open secret that the grants are being misused, but no one wants to own up to this fact and take moral responsibility,” says Uddhav Adhikari, former president of the National Farmers Group Federation (NGNF). “We need to strengthen monitoring to <a href="https://nepalitimes.com/news/save-farms-empower-farmers-nepal-citizens-appeal">ensure that subsidies are provided to small-scale agro-businesses and farmers</a>, and that they are utilised properly.” &nbsp; Read also: <a href="https://nepalitimes.com/here-now/back-to-the-land-in-the-cities">Back to the land in the cities</a>

Farm subsidies: money down the drain

From high school, Nepali students memorise that Nepal is an ‘agricultural country’, and that 80% of the population is engaged in farming.
While it is true that most Nepalis are still dependent on agriculture, the country’s economy is shifting to services. Seven in every ten families also depend on remittances for household income.&nbsp;
Agriculture now contributes less than 25% to Nepal’s economy, and this is down from 81% three decades ago. The number of Nepalis engaged in the service sector used to be only 16% at that time, and today it has gone up to 29%.&nbsp;
Nepal’s economy has been transformed in recent decades during which new professions, businesses and enterprises have flourished. The finance, information technology (IT), hospitality, trade and other sectors have expanded.&nbsp;
Meanwhile, the role of agriculture in Nepal’s economy has diminished.&nbsp;
The strength of a country's economy is measured by the total value of goods and services produced annually, its GDP. Economies are divided into three sectors of activity: agriculture and forestry, manufacturing and construction and the service sector, which includes IT, finance, insurance, real estate and tourism.
Economies move through a cycle of expansion from the primary to the secondary to the tertiary sectors. Many developed countries are considered to have advanced because of the industrial sector.&nbsp;
However, Nepal’s industrial sector has not grown in comparison to other nations. Indeed, while the industrial sector contributed 8% to the economy 50 years ago, it reached a peak of 21% some decades later, but at present has declined to 12.5%.
<div class="embed-block"><iframe src='https://flo.uri.sh/visualisation/18533507/embed' title='Interactive or visual content' class='flourish-embed-iframe' frameborder='0' scrolling='no' style='width:100%;height:600px;' sandbox='allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation'></iframe><div style='width:100%!;margin-top:4px!important;text-align:right!important;'><a class='flourish-credit' href='https://public.flourish.studio/visualisation/18533507/?utm_source=embed&utm_campaign=visualisation/18533507' target='_top' style='text-decoration:none!important'><img alt='Made with Flourish' src='https://public.flourish.studio/resources/made_with_flourish.svg' style='width:105px!important;height:16px!important;border:none!important;margin:0!important;'> </a></div></div>
Industry is supposed to enhance production and in the process create jobs. But Nepal’s weak industrial development is one of the factors that drove 690,000 Nepalis to go abroad last year.&nbsp;
The lack of industrial growth has meant that Nepal depends largely on the third service sector stage, which makes up almost two-thirds of the nation’s economy.
Nepal’s economic change has been brought about by a lack of meaningful growth in the agricultural and industrial sectors, as well as improvements in Nepal’s service sector.
“But this is only structural change, not a structural transformation needed for radical improvements to the economy,” says economist Dilli Raj Khanal. “For there to be such a transformation, we need to up our productivity in all sectors: agriculture, industry or service.”
The service sector also has inherent risks. While a small number of people involved in the service sector can increase production and add value to the economy, it may not create many jobs.
Moreover, because the service sector mostly involves educated, tech-savvy and business-minded people, its benefits are mostly limited to their circles, increasing socio-economic inequality.&nbsp;
“The service sector yields more products despite fewer people being engaged in it, meanwhile agricultural production is declining &nbsp;despite the involvement of a significant section of the population,” says Khanal. “We must thus find ways to increase both production and income in the agricultural sector.”
In the last three decades, the agricultural sector in Nepal has only grown at the rate of 2.9% annually, while the growth rate of the service sector during the same period has been 6.3%. So while the service sector is expanding, there has been no comparative increase in agricultural production, which in turn means that the income of Nepali farmers has not increased either. That further widens the gap between rich and poor.
<div class="embed-block"><iframe title="The shifting landscape of the economy" aria-label="Interactive area chart" id="datawrapper-chart-8wpWL" src="https://datawrapper.dwcdn.net/8wpWL/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="600" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}(); </script></div>
A 1% growth in the agricultural sector plays an equal role in reducing poverty as a 6% growth in the service sector. Says economist Biswo Poudel, professor at Kathmandu University: &nbsp;“Farmers directly benefit from agricultural reform, but an economy boosted by the service sector does not reach those communities.”
The average annual per capita income of Nepalis is $1,434 compared to $824 ten years ago. Despite this, the benefits have not been equally spread across communities. Those involved in the service industry, which has contributed to economic growth, have reaped the rewards. Farmers have just not enjoyed similar profits.&nbsp;
“As it is, there is little possibility for expansion in the agricultural sector because we can neither increase the arable land nor productivity,” notes Hem Raj Regmi at the National Statistics Office.
It is not that newer ventures have not been launched in the last decade. For instance, while the banking and insurance sector contributed less than 3% to Nepal’s economy 20 years ago, it now makes up 7% of the economy.
Similarly, the share of the administrative sector has gone from 2% to 10% in the last 2 decades. But the share of the manufacturing and industry in the economy has fallen below 5% as compared to 9% two decades ago.&nbsp;
Economist Poudel argues that increased agricultural production can lead to further economic growth in Nepal, provided there is an expansion of irrigation and transfer of agricultural technology.
There are almost 2.27 million hectares of irrigable land in Nepal, out of which 800,000 hectares do not have irrigation. Moreover, only one-third of the over 1.4 million hectares of land that have such facilities remain irrigated year-round. The rest are rain-fed fields.
“The greatest challenge Nepal faces is to create jobs in the agriculture sector as well as ensure a decent income,” says Regmi of the National Statistics Office.

Nepal economy shifts away from farming

For Prime Minister Pushpa Kamal Dahal the past week has been eventful in more ways than one. His Home Minister Rabi Lamichhane’s troubles is shaking the coalition, and there are rumours of the NC and the UML in talks. By-elections in Ilam and Bajhang are set to become a referendum on legacy parties.&nbsp;
In the midst of all this, there was the overnight state visit of the emir of Qatar which was so epic the government declared a national holiday. Qatar and Nepal signed a commerce agreement, and to sweeten the deal the emir was gifted two elephants.&nbsp;
The Qatari visit set the stage for the third Nepal Investment Summit on 28-29 April that will showcase 150 projects for potential investors, including schemes for hydropower, transport, tourism, and agriculture.
Previous investment summits in 2017 and 2019 pledged $13.5 billion and $17 billion respectively, of which not much ever materialised. This time, the investment climate is worse because of political instability, too few laws, and too much red tape. &nbsp;
“The state of Nepal’s economy, combined with bureaucratic hurdles and the challenges faced by foreign investors in land and resource acquisition, has made attracting FDI difficult,” says Pushkar Bajracharya, formerly of &nbsp;the National Planning Commission.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/comment/nepal-looks-at-alternative-investments">Nepal looks at alternative investments</a>, Siddhant Raj Pandey
The same woes from the last two investment summits persist. Nepal has had three coalition governments in the last two years, banks are flush with cash because no one is borrowing, &nbsp;and there is a mass exodus of skilled Nepalis.&nbsp;
“Lack of political stability results in policy instability,” explains economist Posh Raj Pandey. “This is why Nepal’s FDI has not lived up to commitments. Potential investors have decided that internal risk factors outweigh any business opportunities.”&nbsp;
Everyone went to sleep after the last investment summit, and there was little preparation for this hurriedly planned one. Nepal’s private sector has long urged the government to amend laws to improve the investment climate. The government did amend nine out of dozens of laws, but through ordinance on Tuesday. &nbsp;
“What kind of message are we sending to internationals when we amend laws through ordinance rather than Parliament?" asks Pandey. “Amendment will not inspire confidence unless they are put into practice, which we historically have not done.”
Read also: <a href="https://nepalitimes.com/editorial/invest-in-investment">Invest in investment</a>, Nepali Times
While some experts think ordinances speed things up, they admit most legal changes brought to address Nepal's investment environment have been ad hoc and limited to paper.
Forget foreign investors, even domestic businesses face obstacles and corruption. Nepal’s internet service providers (ISPs) and the Nepal Telecommunication Authority are on the warpath.&nbsp;
ISPs have been unable to pay Indian firms that provide &nbsp;bandwidth after the government refused to provide them with INR, citing unpaid royalties and taxes.
Such stonewalling is present in just about every sector, dissuading investors in IT, banking and the service industry. Most investors are in natural resource extraction, which has little value added.&nbsp;
Read also: <a href="https://nepalitimes.com/editorial/invest-in-investment">Invest in investment</a>, Nepali Times
This time the government is &nbsp;giving investors a shopping list that includes 18 hydropower projects and 19 transport schemes.&nbsp;
“While hydropower may create short-term jobs, efficiency-seeking investment in the manufacturing, agricultural, and other sectors will create more long-term opportunities for Nepalis, and will be in our best interest,” says Pandey. &nbsp;&nbsp;
Although the summit will have attendees from over 50 countries, most potential investors are from India and China.
“Current investment summits seem to be guided by India and China’s vested interest in Nepal rather than the market and economic possibilities here,” notes Bajracharya. However, Nepal can leverage its proximity to hitch its wagons to these two giant locomotives.&nbsp;
Adds Bajracharya “Our long-term prospects look good, because India and China are set to overtake the US as the world's biggest economies over the next few years, which will attract investors from elsewhere. Our immediate goal must be to first create a conducive investment climate. After that, investments will come.” &nbsp;
Read also: <a href="https://nepalitimes.com/opinion/killing-investment-in-nepal-in-10-easy-steps">Killing investment in Nepal in 10 easy steps</a>, Dibesh Karmacharya

Shristi Karki

Why invest in Nepal?

In the run-up to the third Nepal Investment Summit this weekend, there have been seminars, conferences and workshops where the discourse has revolved around the economy and the investment climate.
The consensus that Nepal needs foreign direct investments (FDI) to grow was repeated, and the familiar litany of reasons about why it has not been able to was discussed.&nbsp;
Policy advocates and regulators have understood that the lack of urgency is compounded by procedural inconsistencies, on top of the already deficient investment environment in the country.
It is a welcome change from what used to be flippantly accepting matters as given. There now seems to be a sense of urgency, with procedural inconsistencies and lack of harmonisation between various Acts and regulations openly discussed.&nbsp;
Government stakeholders also appear more willing to learn and attempt to be part of the solution. Whatever policy changes have been introduced in the past have been piecemeal and address the few rather than the entire industry. This left dual regulatory approaches aimed at similar players.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/killing-investment-in-nepal-in-10-easy-steps">Killing investment in Nepal in 10 easy steps</a>, Dibesh Karmacharya
This time, unlike in the past two Summits, the government seems to be committed to amending 9 Acts, a positive step towards showing commitment to change. However, the deadline to do so during the winter session of Parliament is over. The option mooted has been to have it passed through ordinance, a lesser appealing step; albeit, a positive one moving forward.&nbsp;
To attract FDI in a competitive global market means that Nepal has to demonstrate that it is serious about bringing in investments with a more consultative and collaborative approach with investors. A departure from procedural to a result-oriented focus is needed.&nbsp;
To put issues in perspective, Nepal needs US$20 billion in investments to meet the UN’s Sustainable Development Goals (SDG) targets by 2030. If net-zero decarbonisation targets are to be met by 2045, another US$7 billion will be required annually.&nbsp;
Looking at our investment history and poor government capital expenditure, the gap is long and wide. In fiscal year 2022-23 Nepal booked a lamentable ~$59 million in FDI (equity). Nepal is in fact the lowest market in South Asia for FDI with 0.3% of the regional average.&nbsp;
What is it that we can do to fill the gap?&nbsp;
First, we need to move away from the notion that Nepal only needs large investments. This has proven to be a mistake, and time series data have proven that smaller investments, in aggregate, make a larger impact on economies.&nbsp;
Read also: <a href="https://nepalitimes.com/news/poor-cash-rich-nepal">Poor cash-rich Nepal</a>, Sonia Awale
We talk about an ‘enabling environment’ but without the right tools. We place restrictions on interest on debt ceiling (SOFR +5.5), without risk premium adjustments, we do not have an active secondary market for bond trading, nor do we have a yield curve, an integral part of the bond market, which is inhibiting us from tapping into the trillion dollar green bond market.&nbsp;
In order to attract green financing, Nepal needs to develop its bond market. Sovereign risk rating has been mooted and was expected to be operationalised before the Investment Summit.&nbsp;
However, to be rated in an adverse economic environment could further deteriorate investment potential due to a lesser-than-expected rating.&nbsp;
Hedging is another instrument that needs further research on. A commercial bank last year showcased the first risk-hedging mechanism for an investment of $8 million. This can be the beginning to expand on its modality. &nbsp;
Subordinated debt instruments have been introduced, but on a special nod basis, this now needs to be institutionalised as it is the most applicable form of investment after equity in a market that has volatile forex reserves.&nbsp;
Read also: <a href="https://nepalitimes.com/editorial/invest-in-investment">Invest in investment</a>, Nepali Times
Viability Gap Funding has been introduced by multilateral development agencies implemented in solar installations. It is a tool to incentivise the private sector to invest in projects that are not financially lucrative initially, but have potential for profitability in the long run. This needs to be scaled up and replicated in sectors like infrastructure, where returns may not be immediate.
Moving forward, to attract FDI, Nepal needs to tap into the funds that are available for the growth of small and medium enterprises (SMEs) and climate change. Alternative investments such as Private Equity Venture Capital (PEVC) have been around in a structured manner in Nepal for nearly a decade now.
These funds have blended finance components and have attracted climate funding as well. PEVC is a new asset class and can address the issues of penetrating into SME financing by incorporating environment, social and governance issues into their investment process.&nbsp;
SMEs are the backbone of any economy, PEVC comes with the ability not only to scale up the enterprise with risk capital, but with the ability to bring technical knowhow to enhance not only the enterprise but also the entrepreneur.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/success-in-nepal-means-not-having-to-work">Success in Nepal means not having to work</a>, Anil Chitrakar
A differentiator from all other forms of financing available till date in Nepal. Blended finance is a way of de-risking investments, especially in frontier markets. Business Oxygen (BO2) is an example of blended finance with subordinated debt investments of IFC (World Bank Group) taking the lead and Climate Investment Funds along with FCDO as co-investors.&nbsp;
On a larger scale, the 216MW Upper Trisuli 1 is another example of blended finance with IFC, a Korean consortium and local investments. So far, we see that development finance Institutions have been taking the lead in Nepal as their risk appetite is greater than commercial investors and they are eager to help develop the financial markets.&nbsp;
In order to be sustainable, we need to step on this and attract commercial capital from all over the world. To do this there has to be political will to make that pivot.&nbsp;
Instead of being a means to an end, the two previous Investment Summits turned out to be intermittent and cosmetic, providing hardly any results. The third one’s success will depend on how the event will be implemented as a platform for continuous marketing for the country and facilitation for investors in future.&nbsp;
Nepal has outdone many countries in its macro-economic indicators, with sound forex reserves and a stellar history of debt payments to its creditors. This story needs to be propagated along with the drive for change to attract potential investors.
Read also: <a href="https://nepalitimes.com/opinion/comment/alternative-investments-to-attract-fdi">Alternative investments to attract FDI</a>, Siddhant Raj Pandey

Siddhant Raj Pandey

Nepal looks at alternative investments

Nepal is not poor, it is just poorly governed. At no time has this been more true than today.
<a href="https://nepalitimes.com/business/remittances-up-and-up">A spurt in remittances</a> and a slowdown in imports has meant that Nepal’s foreign exchange reserves have hit an all-time high of $14 billion. Just in the past seven months, diaspora dollars totalled $6.35 billion – a 21.6% increase over the same period last year. The trade deficit has declined, and the balance of payments situation is improving.
So why are we not celebrating? The problem is that while the macroeconomy is on a firm footing, the same statistics also point to a deep malaise within. Imports are down because purchasing power has declined, and banks are not lending, this means government revenue has also fallen drastically. Most remittance money is spent on household expenditure, much of it again to pay for imports.&nbsp;
All this means <a href="https://nepalitimes.com/opinion/killing-investment-in-nepal-in-10-easy-steps">investment</a> fell by 11% in 2023 after growing by nearly 4% the year before. Tighter financing conditions post-Covid and global factors following the Ukraine war have impacted both public and private investment.&nbsp;
“Nepal’s economy grew at 1.9% fiscal year 2023. Is that too low? Yes, very low. Are we in an economic crisis? No. But we are stuck in a situation where aggregate demand is low. Nepal is in a crisis of low economic growth,” says economist Sameer Khatiwada.
Indeed, banks have money to lend and borrowing rates have gone down, but there is no demand from the private sector because a large chunk of the middle class has<a href="https://nepalitimes.com/editorial/brain-drain-into-brain-gain"> left the country</a>.
And that is the irony: Nepalis are migrating abroad in droves, but fewer consumers back home means less economic activity, which in turn pushes more people out. Nearly a million young Nepalis left for jobs and study overseas last year. More than 400,000 left on work permits in the first seven months of this fiscal year. Some 3,000 leave every day.
The economy could pick up in 2024 and 2025, with increased demand, increased <a href="https://nepalitimes.com/news/blueprint-for-nepal-india-electricity-trade">hydropower</a> output, and rising tourist arrivals. But sustaining growth year-on-year relying solely on remittance and hydropower is not possible.&nbsp;
Remittances were the main reason for poverty reduction, raising living standards, improving access to health, nutrition and education. Nepal is set to graduate from LDC status by 2025.
Nepal’s economy is suffering a form of ‘Dutch Disease’ where high income from one source paradoxically keeps other sectors of the economy down. Remittance growth has increased savings, but there is nowhere to invest it except to speculate on the real estate bubble, which has burst.&nbsp;
Economist Khatiwada says we have to go beyond the symptoms to the disease: “Nepal is caught in a trap of low productive capacity, lack of competitiveness, lack of foreign investment and lack of business dynamism.”
So, what is the way out? Experts recommend more competition in the private sector and promoting industrialisation by leveraging areas where Nepal has a comparative advantage like the service sector, <a href="https://nepalitimes.com/news/it-is-it">information technology</a> and exports of high-value niche products.&nbsp;
“We were complaining when our foreign exchange reserves were low, and now we are complaining when reserves hit the roof. Our biggest problem is that we are sitting on all that money instead of investing it,” says Sujeev Shakya of the Nepal Economic Forum.&nbsp;
He adds: “We have to allow Nepali companies to invest outside, and reap the low-hanging fruits like energy and ICT. Nepal exported $900 million worth of software last year.”&nbsp;
If there was some hope the change in the coalition government last week would bring solutions, those have fizzled. Finance Minister Barsaman Pun is Prime Minister Dahal’s left-hand man and Dahal’s disagreement with former coalition partner Sher Bahadur Deuba of the Nepali Congress to sack its finance minister Prakash Sharan Mahat was one reason behind the Maoists switching to the UML.
Finance Minister Pun is already under a cloud for <a href="https://nepalitimes.com/editorial/skeletons-in-the-cabinet-k5x6py1v">his alleged involvement with a gold smuggling ring</a>, and he has reportedly been brought in with the express purpose of passing a budget that would be favourable to cronies. There are indications he will raise taxes on certain brands of electric vehicles, ostensibly to increase government revenue.&nbsp;
With the new government’s priorities so centred on personal and partisan gain, there is little time to solve the other crisis: underspending of the development budget. There is money for infrastructure and service delivery, we just cannot seem to spend it. Only 25% of the annual development budget has been spent in the past seven months of this fiscal year.
Delays in infrastructure and connectivity have further undermined economic growth and job creation.&nbsp;
Underspending is directly related to corruption. Public procurement is lubricated by kickbacks, and delays are caused by rival cronies with <a href="https://nepalitimes.com/editorial/need-and-greed">political patronage</a>. The focus is on low-cost bidder and not on the technical quality of bids. Contractors abandon half-finished projects by bribing officials.&nbsp;
In short, Nepal’s crisis of low economic activity is directly related to governance failure and lack of accountability of high elected officials. The new coalition has a chance to set things right at the third Nepal Investment Summit on 28-29 April in Kathmandu. But experts do not pin much hope on it. &nbsp;
“No matter how many laws and regulations we revise to make doing business easier in Nepal, unless we have better infrastructure we will not be able to attract foreign investors to Nepal. Second, soft infrastructure such as skills and quality of the workforce is also a critical ‘pull’ factor,” says Khatiwada.&nbsp;
Shakya takes a broader view: “It all really comes down to our mindset. We think of Nepal as a small, poor country but it is a potential $100 billion economy. We must have that imagination, must take risks, reform how we do business, break away from commission-oriented, rent-seeking approach.”

Poor cash-rich Nepal

This tipper truck (above) was washed down by a flash flood on the Sabha Khola on 19 June as the first monsoon squalls lashed eastern Nepal. It showed increasing risk to infrastructure projects from climate-induced extreme weather, especially on rivers with cascade hydropower projects.
But the spectacle of a truck lying half-submerged on its side was also emblematic of the sorry state of the Nepali state. The fake refugee scandal exposed corruption in high places and how it has hollowed out the country from within (Editorial). Impunity is so rife that a ruling party absolves its vanguard students for maiming university officials. Murderers go scot-free to keep the ruling coalition intact.
A populist mayor oversteps his brief to reclaim Nepal’s pre-1816 boundaries and concurrently declares war on Bollywood for a non-existent dialogue so as to distract public attention from failures to address more pressing everyday issues faced by citizens. He then weaponises social media to silence critics. Ultra-nationalism is the last resort of scoundrels.
Read also: <a href="https://www.nepalitimes.com/news/till-debt-do-us-part">Till debt do us part</a>, Ramesh Kumar
The truck is also symbolic of the shambolic state of the economy. Commentators cried wolf earlier this year warning that Nepal was going the way of Sri Lanka despite evidence to the contrary. In fact, Nepal’s macroeconomic state is now quite robust with foreign exchange reserves enough to pay for 11 months of imports, and remittance inflows hitting record levels. 
Reserves increased because of last year’s import curbs. But solving one crisis created a bigger one: reducing imports also brought down tax revenue. Without that revenue, the government has much less money for capital investment and most of the available cash is spent on recurrent expenditure.
Finance Minister Prakash Sharan Mahat’s budget is problematic at many levels, and even the NC’s coalition partners have sworn not to pass it because of perceived favouritism to some districts. He slashed the import tax on certain types of LPG cylinders to appease two gas companies, and raised taxes on electric public transport and cheaper battery vehicles. 
Read also: <a href="https://www.nepalitimes.com/here-now/nepal-s-tax-system-widens-rich-poor-gap">Nepal’s tax system widens rich-poor gap</a>, Ramesh Kumar
Prime Minister Pushpa Kamal Dahal in Delhi signed a deal for two new oil pipelines to import petroleum from India. The commitments Nepal’s rulers have made at climate conferences is just greenwash. 
But perhaps the most egregious item in the budget is a provision to retroactively tax FPOs and other profits from mergers, stock and property transactions. Banks and businesses are up in arms and have met the prime minister, finance minister and other officials saying it will kill foreign investment at a time when the economy is already a wreck.
“This does not happen anywhere else in the world,” said one banker who was in a delegation to meet officials, but did not want to be named. “The government is so desperate for revenue so it has money to splurge on wasteful things that it is taxing everything left, right and centre.”
Read also: <a href="https://www.nepalitimes.com/editorial/institutionalised-inequality">Institutionalised inequality</a>, Editorial
Finance Minister Mahat has refused to budge, saying the budget is written in stone, and reportedly told businesses which had gone to see him that they could always go to the courts to challenge it. 
With cooperatives folding, banks in crisis, and the government cash-strapped, one would have thought that Prime Minister Dahal’s government would be busy addressing the economic crisis. But by visiting shrines, his message seems to be: “Only Pashupatinath can protect us now.”
Read also: <a href="https://www.nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">State-sponsored economic crisis</a>, Ramesh Kumar

Kunda Dixit

State of the state

“Let's have another cup of tea,” <a href="https://nepalitimes.com/here-now/ujwal-thapa-s-light-shines-on-n0tfurod">Ujwal Thapa</a> of the alternative Bibeksheel Nepali party told the young activist Pukar Bam ten years ago. The two had 12 cups of tea that day, discussing ways to get Nepal out of its political deadend. Thapa contested the Constituent Assembly election in 2013 as an independent from Kathmandu, and formed Bibeksheel Nepali to galvanise youth impatient for change, fielding candidates in the first federal election in 2017. Ujwal Thapa was a political guru who was way ahead of his time, and his protégés were among the RSP’s winning candidates in last week’s election. Pukar Bam was a core member of Bibeksheel Nepali until its dissolution, and won the Kathmandu-4 seat this time. Other former Bibeksheel members who won the election from the RSP in Kathmandu include Ranju Neupane from Kathmandu-1, Sasmit Pokharel from Kathmandu-5, and Biraj Bhakta Shrestha in Kathmandu-8. As votes were counted and the results from Kathmandu began to come in, the candidates paid fulsome tribute to Ujwal Thapa’s mentorship and in inspiring idealistic youth to become a part of an alternative political force. Today, as RSP members of Parliament, they are no longer an alternative, but a part of Nepal’s new mainstream politics. Thapa returned to Nepal after finishing his undergraduate computer science degree in the US at the peak of the Maoist insurgency. His foray into politics began when he traveled to Nepal’s western mountains to train communities in mediation. After the war, he started a computer design company for young entrepreneurs entering the workforce. But he became frustrated with the inability of the second Constituent Assembly to promulgate the Constitution, and the power struggle between political parties played out in the streets that led to frequent shutdowns paralysing the country.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260313120348_d18647d53a3b2927328067c35b2e3e6eecf9aefe13f23384e73a2c17211cd9cb.jpg" data-media-id="editor_1" data-image-id="20260313120348_d18647d53a3b2927328067c35b2e3e6eecf9aefe13f23384e73a2c17211cd9cb" data-rendition-name="original" width="823" height="682" loading="lazy" alt="The RSP's activist DNA"><figcaption>Thapa with Pukar Bam, who was elected to Parliament last week from Kathmandu-4. Photo: PUKAR BAM / FACEBOOK</figcaption></figure>  PROTEST TO POLITICS Ujwal Thapa had had enough, and rallied people from across walks of life, leading peaceful, silent demonstrations proclaiming 'नेपाल खुल्ला छ' against prolonged, violent strikes. Citizens fed up with the main political parties organised to defy the shutdowns. Thapa’s activism and vision for a new Nepal drew disenchanted and previously apathetic youth into politics and to join the Bibeksheel Sajha Party in 2013. Thapa was the pioneer of alternative politics in Nepal, and was leading a youth force long before the GenZ became synonymous with Nepal’s September Storm. He mentored and guided social activists who are today influential youth leaders engaged in non-traditional politics. “Ujwal Thapa, with his entrepreneurial spirit, wanted to address people’s pain-points, and believed that activism was the starting point to alternative politics,” explains <a href="https://nepalitimes.com/opinion/nepal-loses-rare-purpose-driven-leader">Ashutosh Tiwari</a>, former member of Bibeksheel Sajha party. “He sought to build confidence, motivate, and build a community for young people, which drew a lot of people into Bibeksheel.” He adds: “ And while people might say that Bibeksheel never got big, that was never its point. Its function was to be an early talent incubator, which is what it did as evident by the result of this election.” Thapa died in 2021 of complications related to Covid-19, and Bibeksheel had two mergers with Rabindra Mishra’s Sajha Party before being permanently dissolved in 2021. But many of its idealistic members joined Rabi Lamichhane’s RSP, formed just four months before the 2022 federal election. Such was the groundswell of support for change that the RSP became the fourth-largest in Parliament. In 2017, Ranju Neupane (then Ranju Darshana) was the youngest mayoral candidate for Kathmandu at age 21, and contested the federal election in 2022. Pukar Bam himself lost the 2022 election in Kathmandu-1 as an independent.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260313120348_6302a9b534f57191d9a2cb2c31b31449873c6cc27d375344a248dd90847921dd.jpg" data-media-id="editor_3" data-image-id="20260313120348_6302a9b534f57191d9a2cb2c31b31449873c6cc27d375344a248dd90847921dd" data-rendition-name="original" width="1729" height="1365" loading="lazy" alt="The RSP's activist DNA"><figcaption>Photo: SOCIAL MEDIA</figcaption></figure>  Sashmit Pokharel also ran an unsuccessful campaign as an independent candidate in Kathmandu during the 2022 provincial election. Later, he was a member of the City Planning Commission under Balendra Shah when he was elected mayor of Kathmandu in 2022. Last week, the RSP swept the election with a supermajority of 182 seats in Parliament. Voters placed their trust in the party and its leaders to steer Nepal in a new direction after the youth unrest in September. In many ways, Nepal’s youth have decided, just as Ujwal Thapa once did, that enough is enough with corruption, malgovernance, nepotism and dynastic politics. In the <a href="https://nepalitimes.com/review/the-man-who-shook-our-minds">documentary</a> about his life, Dimag Ghochne Manche, released earlier this year, some RSP nominees who previously worked with and were mentored by Thapa spoke of the impact he had on their lives, career, and activism. Among them is Biraj Bhakta Shrestha, former minister of Youth and Sports who is now a second time RSP parliamentarian. “I tell everybody that if it hadn’t been for Ujwal Dai, I would not have gotten into politics,” he says in the film. It would be unfair to attribute all the success of the hard-fought campaigns entirely to Ujwal Thapa’s protégés and former coworkers. But his ethos and vision for Nepal was what inspired them, and will in the coming years be reflected in national politics through the young idealists he mentored. Says Ashutosh Tiwari: “There are many Bibeksheels outside of RSP in constant and open communication with their old friends who have been elected. They will be keeping the lawmakers in check so that they do no stray too far from the values that they grew up with.”

RSP’s activist DNA

It took the September GenZ firestorm and public anger against non-performing actors for a 35-year-old structural engineer and rapper Balendra (Balen) Shah to oust Nepal’s four-time prime minister and former revolutionary.
The UML’s KP Oli has been trounced by 50,000 votes in his home turf, an area where he has won many elections in his 55-year political career. It is the same story across Nepal, where established politicians are being rejected by voters.
A 'Balen Wave' has swept the country, dyeing it in the RSP’s Blue party colour. But the UML and NC particularly did this to themselves.&nbsp;
An apology and a retirement after the September protests would have saved Oli some dignity, and given the rebranded UML a tiny bit of hope and perhaps a few more electoral wins.&nbsp;
Maybe he could have been remembered fondly as the funny old guy who made one last fatal political error, but now he will be defined by this defeat. Maintaining control and legitimacy in his own party will be hard too.&nbsp;
Contrary to his past combativeness and blaming nefarious foreign conspiracies, Oli gracefully conceded on Saturday, congratulating 'Balen Babu' &nbsp;and wishing him 'a successful five years'.
Balendra Shah and his RSP knew what they were doing. As of Sunday, it has won 118 and leads in 7 other constituencies, a lot of them with similarly wide margins of victory. RSP candidates have even beaten well regarded candidates like Gagan Thapa of the NC and Kulman Ghising of Ujyalo Nepal.&nbsp;

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 <figcaption>Animation: ANUP TAMU</figcaption>
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Many including this paper questioned the RSP's strategy of choosing popular candidates over competence. But the point of an election is to win it, and there was a short campaign window to put it all together and the RSP pulled it off most successfully.&nbsp;
To be sure, the party should not get too much credit. Its manifesto was broad and bland, and no different than the other older parties.&nbsp;
A big part of the RSP ballots, maybe even most of it, were people voting against the old parties rather than for it. Many seemed to feel that this was coming, and perhaps even hoped for it.
There is also a sense of lingering cynicism. Nepal has had several revolutions and many new political starts and things always seem to end up in the same corrupt hopelessness. There is every possibility that the new RSP government will also go the same way.&nbsp;
The RSP is much bigger than Balendra Shah, although it was his popularity that made this victory possible. Its victory brings with it a sense of hope as all new things do.&nbsp;
<div class="embed-block"><iframe src="https://election-geo-dashboard.pages.dev/" width="100%" height="600" frameborder="0"> </iframe></div>
Not all party members who were elected are going to be as accountable or have integrity. Many of them have a chequered past, saw an opportunity in joining the RSP and took the risk.&nbsp;
What changed things were the events of September. Politicians saw firsthand that 'Power to the People' is not some abstract idea. Get too loose to it, forget that you are ruling and not serving, and you get booted out.&nbsp;
The interim Sushila Karki government deserve credit for delivering on its biggest mandate of holding the election in such a short time frame. The expectation at large was that the polls would be delayed or even scuttled.
In fact, a two-thirds RSP majority is a great opportunity to rethink the country’s political culture and institutionalise change. The point of the government in a democracy is to serve the people. Appointing non-political, competent people worked, at least in the short tenure of the interim government.&nbsp;
Adding layers of bureaucracy and committees and party politics along federal, provincial and local levels heaped resistance to the simple goal of making lives easier for the Nepali.&nbsp;
Nepal is getting a reboot, and the next few months will show whether the country is on the right track with its new generation government.

Balen takes Jhapa and Nepal

The Bell that rang in the new A daughter stands in her family's living room, frantically ringing an actual घण्टी at her father. He is a lifelong Nepali Congress (NC) voter. She tells him his party loyalty is as humiliating as a daughter eloping.&nbsp; He looks visibly defeated, and because of RSP’s landslide sweep in this election, he has no reply. She is not a party member. Nobody told her to do this.&nbsp; Multiply this actual family scene by hundreds of thousands of households across Nepal and you find the reason for the RSP tsunami. Children ringing bells at parents over dinner. Aunties shaking bells at legacy party candidates on their morning walks. Taxi drivers, lifelong UML supporters, cheerfully announcing they have switched.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026031014038_096f980a799b4f80118863174ed629680cc6c21b02e226a899ce1dc5268b4b72.png" data-media-id="editor_0" data-image-id="2026031014038_096f980a799b4f80118863174ed629680cc6c21b02e226a899ce1dc5268b4b72" data-rendition-name="original" width="364" height="662" loading="lazy" alt="RSP Flag prank"> </figure>  And overseas, Nepalis in Dubai and Doha, Sydney and Seattle, calling home to deliver just one instruction: “चुपचाप &nbsp;घण्टीमा छाप”।&nbsp; How did an election symbol like the Bell jump off a ballot paper and become weaponised for generational shame?&nbsp; The RSP's 2026 campaign is a case study in how a symbol becomes so participatory and instinctive, that citizens start campaigning on behalf of a party they never formally joined. It may look like a cult, but it is a phenomenon no political party in Nepal has ever pulled off. The ghost in the machine&nbsp; The 3-year-old RSP entered the 2026 race without the campaign infrastructure that legacy parties considered essential. It has no sister organisations, no vanguard student unions, no established cadre networks.&nbsp; In a country where ground reach and organisation wins elections, this looked like a fatal handicap. Established parties had spent decades building a top-down machinery: youth wings that mobilise on orders and unions within government. But it was all hollow and manufactured.&nbsp; That is why when the NC or UML posted a policy manifesto, it got barely 200 shares. When a 19-year-old posts an <a href="https://nepalitimes.com/here-now/spot-ai-generated-election-videos">AI video on TikTok </a>of Balendra Shah swinging a bell like a Kung Fu Hustle weapon, it gets 5 million views.&nbsp; The RSP’s very absence became its strategic advantage. Without a chain of command for content, every post felt peer-to-peer. Supporters built communities instead of following orders. Network effects took over: one person posts, three friends remix it, their followers adapt it for their own local context, and the message multiplies without a single directive from party headquarters. A TikTok from Kathmandu featuring Balendra Shah gets remixed by someone in Birganj who <a href="https://www.tiktok.com/@bhojpuriyasuppor0/video/7596686360111484178?q=bhojpuri%20dub%20balen&amp;t=1773115199365">dubs it in Bhojpuri</a>. A supporter in Pokhara takes the same “अबकि बार बालेन सरकार” audio and films it over footage of the city’s broken road.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026031014038_56090217f5b3482fad934c4f76fc872047571b3c86331a4eda1ac19ae389c2fc.jpg" data-media-id="editor_3" data-image-id="2026031014038_56090217f5b3482fad934c4f76fc872047571b3c86331a4eda1ac19ae389c2fc" data-rendition-name="original" width="375" height="646" loading="lazy" alt="Balen Bhojpuri remix"> </figure>  A Nepali worker in Dubai films himself shaking his phone at the camera, captioning it “I can't vote but my family can”. The content stays structurally the same (bell + emotion) but the surface changes every time. The format is the constant. The context is the variable. A single post multiplies into a thousand pieces of local content without anyone coordinating it. Legacy parties spent money on reach. RSP's strategy built reach for free, because participation itself was the product. The Bell, blazer and brand&nbsp; Run the sensory test. The UML's Sun symbol is only visual. You see it on a ballot, on a flag. You cannot hear a sun. You cannot perform a &nbsp;sun. Nobody walks into a room and ‘suns’ at an opponent.&nbsp; The NC’s Tree symbol is also only seen. It communicates nothing as a verb. Nobody ‘trees’ the father across the dinner table. Ujyalo Nepal's lightbulb was the most passive symbol of all, it just sits there being always on. The Bell had rare resonance as an election symbol. It is a verb (to ring), a sound (tintinnabulation), a physical action (shaking), and a metaphor (wake-up call). घण्टी is participatory by design. You do not just see it, you perform it.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260310140312_c5580164e1f11a8466f591c4d514420bb5313a34b559554db05364065486c3b7.png" data-media-id="editor_4" data-image-id="20260310140312_c5580164e1f11a8466f591c4d514420bb5313a34b559554db05364065486c3b7" data-rendition-name="original" width="368" height="654" loading="lazy" alt="Classroom ghanti NT"> </figure>  It works as a metaphor: wake up. It works as a taunt: we are coming (“हामी आयौँ”). It operates across sensory channels a meme can travel through. The other party symbols are logos. The घण्टी is a multimedia verb in active voice. Poets on the frontline Politics has always been about performance. Murray Edelman wrote decades ago that political actions are symbolic acts: what politicians do matters less than what their actions represent.&nbsp; Guy-Ernest Debord argued that spectacle replaces lived experience. But the stage has changed. The social media feed is the new stage, and the algorithm is the casting director. It does not select for policy depth, but for recognisability, emotional charge, and remix potential. Poets have always been at the frontlines of political rupture. The French Revolution had its pamphleteers. The Bolsheviks had Mayakovsky. The Black Panthers had Gil Scott-Heron. Nepal's own political history is full of writers who paid for their words with prison or exile.&nbsp; Rap is rhythm and poetry. Balen Shah did not cross from entertainment into politics, his art was always political. “सडकबालक" in 2012 was already a protest song. The diss tracks against corruption were manifestos set to beat.&nbsp; So, if घण्टी was the sound, Balen was the voice. Supporters rang Bells to perform, projecting their hopes on Balen. One is participatory (anyone can ring it), the other is aspirational (representing what you want the country to become). Together, they form a complete symbolic system: an action and an icon, a thing you do, and a person you believe in. Both are algorithm-native. The sunglasses are instantly recognisable in a thumbnail at any size. The bell sound action is identifiable within half a second of a video starting. The confrontational attitude generates the emotional charge that the algorithm rewards.&nbsp; Balen was already trained in the language of the algorithm: hooks, rhythm, timing, and audience retention. While legacy politicians are just now trying to learn the language of the algorithm, Balen grew up speaking it. The folk song brand kit: The slogans wrote themselves. While legacy politicians are just now trying to learn the language of the algorithm, Balen has grown up speaking it. The folk song brand kit The slogans wrote themselves. “चुपचाप &nbsp;घण्टीमा छाप” spread through tea shops and bus parks like a folk proverb. <a href="https://nepalitimes.com/here-now/nepal-s-ai-generated-election">AI-generated Mahabharat edits</a> positioned Balendra Shah as a warrior-hero fighting K P Oli in golden armour.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026031014038_cd7fbb8b4a97628757977b55d1244b192c233566dad268e894c7132d16cf180c.png" data-media-id="editor_6" data-image-id="2026031014038_cd7fbb8b4a97628757977b55d1244b192c233566dad268e894c7132d16cf180c" data-rendition-name="original" width="369" height="667" loading="lazy" alt="Ghanti Chhap NT"> </figure>  The entire package, partly by accident, partly by instinct, was built to be remixed. Every element is modular: the bell, the sunglasses, the slogan, the attitude. Take any piece and make your own version. Like a ‘Deusi re” song, the melody is fixed, everyone knows it, but anyone can change the words to fit their occasion and mood. It survives across generations precisely because no one controls it.&nbsp; The घण्टी ecosystem works the same way. The melody is fixed: the bell, the sound, the slogan, the sunglasses, the attitude. But the lyrics can be anyone’s. Shoot it in your neighborhood. Dub it in your language. Film your grandmother's reaction. Set it to your local context. That's why it spread faster than any IT cell could manufacture.&nbsp; The generational pincer The standard narrative is that digital movements stay digital, and that memes are a GenZ thing. RSP broke both assumptions. Its content operation executed a pincer movement across generations, capturing not just the youth vote but used youth as a delivery mechanism into households where no party organiser could reach. The Generational Pincer Flowchart Three vectors of pressure, all converging on the same target: the living room and the dinner table, where votes in Nepal are actually decided. Downward: children trolling parents by ringing bells at dinner, turning family meals into campaign arenas. A bell rings as a prank, then as a joke, then as a political statement. By the third night, it's not funny anymore. It's a conversation.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260310140316_446e465f60994532e53b1786368dd025e9ad99a387b4121493f8826c46921cb7.png" data-media-id="editor_7" data-image-id="20260310140316_446e465f60994532e53b1786368dd025e9ad99a387b4121493f8826c46921cb7" data-rendition-name="original" width="364" height="669" loading="lazy" alt="Ghanti prank"> </figure>  Lateral: the diaspora pipeline. Nepalis in Australia, the Gulf, Japan, could not vote, but they turned every Viber call home into a campaign touchpoint.&nbsp; Upward: the bell pressured power itself. No RSP organiser gets a meeting with a UML ward chairman or a NC MP. But those people go home. And at home, they have teenagers, nieces, nephews, and staff whose kids are on TikTok.&nbsp; A party boss's son rings a bell at dinner and asks uncomfortable questions. A NC donor's daughter shares RSP content on her Instagram story, visible to her father's entire social circle. No political structure, no matter how hierarchical, is sealed off from its own household. The bell did not need to breach the gates of Singha Durbar, it walked in through the kitchen window. The result crossed every demographic line analysts thought was fixed. Memes didn't just stay in the feed. They colonised the living room, the kitchen, the long-distance phone call, the taxi ride. Content nobody commissioned&nbsp; What the RSP's organic content looked less like a political campaign and more like a football fan club. People were not posting because they were told to. They were posting because they belonged. Trace the trends as they accumulated: <ul> <li>“<a href="https://www.tiktok.com/@rameshmahto065/video/7610784878174424338?q=chup%20chap%20ghanti%20chap&amp;t=1773115568686">चुपचाप &nbsp;घण्टीमा छाप</a>” started as a TikTok post, then showed up on motorcycle stickers, WhatsApp statuses, AI-remixed songs, and in tea-shop conversation as a folk proverb.</li> <li><a href="https://www.tiktok.com/@rajjimond_18/video/7612570510508969236?q=ma%20ta%20balen%20ko%20fan&amp;t=1773115129539">Original songs composed by supporters</a>, not the party, gained millions of views. People danced to them at rallies and in the streets. People at polling booths created TikToks to RSP anthems to show their support.</li> <li>AI spectacle videos of Balen as a Mahabharat hero, filmy dialogue, stylised Nepal flag. Slapstick clips hitting 200K+ likes and 5M views. All made by random accounts, none traceable to party infrastructure.</li> <li>Supporters built Bell apps and websites on their own. One site, <a href="https://ghanti.website">ghanti.website</a>, was registered by a random supporter in January. Open it on your phone, shake it side to side, and it rings. Within weeks, crowds of supporters were walking through neighborhoods shaking their phones in unison, producing a wall of digital bell sound.</li> <li>The intimate content. A husband-wife vlog filmed inside a car, casually discussing what a lawmaker should actually do. Just two people talking, and it resonated more than any campaign ad.</li> </ul> None of this was centrally coordinated. Parties across Nepal spent money on polished graphics that looked like professional advertisements. RSP supporters spent nothing and made content that felt like conversation. The algorithm doesn't reward production value, it rewards emotional resonance. And nothing resonated more than the feeling that you, personally, could participate in this movement without anyone's permission. Now what? The RSP has a supermajority. The Bell rang louder than anyone predicted. But a movement built on open-source energy now has to deliver closed-source results: budgets, legislation, diplomacy, institutional reform. Balen built his brand by bypassing institutions, Prime Minister Balendra Shah has to run them. He communicated through Facebook posts and rap lyrics. Now he needs to communicate with India, China, and multilateral lenders.&nbsp; His midnight F-bomb post, deleted within 30 minutes but screenshotted by thousands, showed both his appeal (unfiltered authenticity) and his risk (unfiltered impulsiveness). The question is not whether the bell rang loud enough. It obviously did. The question is what happens when the supporters who posted without being asked start expecting results they did not specify. When the meme energy that won living rooms has to translate into parliamentary committees.&nbsp; For decades, the promise of democracy was that people choose their leaders. What RSP's campaign revealed is something more uncomfortable: in the age of the algorithm and remixable content, people do not just choose their leaders.&nbsp; They build the campaign, write the slogans, produce the content, convert their own families, and then show up to vote for the movement they made with their own hands. The party becomes a container for energy it didn't create and can't fully control.&nbsp; That's either the most democratic thing that's ever happened in Nepal, or the most dangerous. It might be both.

Nobody ran the campaign. That is why it worked.

I was a new mother trying to protect my young family from Covid in 2020, and that was when I first noticed Jacinda Ardern’s leadership. Our own prime minister was spreading misinformation about the strong immune system of Nepalis and our herbal concoctions being antidotes.&nbsp; Later in 2024, Ardern showed up after the mass shooting at mosques in New Zealand with tears in her eyes, and the strong message: “They are us.” It was refreshing to see such empathetic leadership, especially as political news was dominated by elected authoritarians, while Nepal was held hostage by repeat prime ministers.&nbsp; Ardern’s book A Different Kind of Leadership should be essential reading for all Nepalis with political aspirations, especially the new generation that wants real change. The theme that repeats throughout the book is to be human before becoming a politician.&nbsp; The book is not just about Ardern showing up for her people as one of them, it is also about why she decided to show up the way she did, and what brought her to politics to begin with — resolve, a little bit of luck, and stepping up when she had to.&nbsp; Political ambition is not a bad thing. But stepping up to lead when the situation demands it, and knowing when it is time to leave, is what makes a leader. Ardern was given the opportunity to become her party’s deputy leader at a relatively young age, and her party leader resigned — two events uncommon in Nepali politics. Ardern mentions multiple times not thinking of herself as politician material because she has a thin skin, and she talks equally often of her feelings of being intimidated in political spaces, up until she accepted the position of party leader.&nbsp; But she was accountable at a time when we in Nepal were getting used to non-reactions and non-answers from the loud, confident men who played with power. Somehow, somewhere, not least because of the malestream ideas we have been fed about politics and politicians, we imagine that leadership should look a certain way. Strong, macho, loud, confident or even better, overconfident. We imagine that empathetic leadership is soft, is scared to make people angry, is ineffective.&nbsp; LOOKING AFTER PEOPLE Ardern’s leadership was effective. New Zealand had less Covid fatalities than most developed countries, and it went in and out of lockdown with relative ease. Ardern’s approval ratings were high at a very unstable time in politics globally. A significant portion of the chapters that talk about Ardern’s time in office also delve into her struggles being a working mother. But she does not consider herself a supermom who did it all. She portrays herself as simply a working mom, one with lots of support, and discusses how common it is for parents, especially mothers, to juggle work and family. She comes across as one of us. There is a section in the book where Ardern’s daughter asks her the question she has been dreading, and which many of us working moms also face, “Mummy, why do you have to work so much?” Ardern explains that she has a “very important job” and explains it to her three-and-half-year-old as “looking after people”.&nbsp; I put down the book when I reached that sentence. I want the next prime minister of my country to read this book, and then lead. I want the next prime minister of Nepal to think that he (all the top contenders for the job are men, page 9) is looking after people, making sure no Nepali child is undernourished, that people can make a living without risking their lives, hearing the concerns of citizens and solving them.&nbsp; I want him to lead like a woman, like Sushila Karki has been leading for the last six months, with quiet determination and integrity, and without fanfare. I want him to remember that leadership is just service, and that, like Maya Angelou wrote, ‘Your legacy is what you do every day.’ It is not loud speeches and the making of some imagined, glorified history. Karki was picked to lead us back during the black days of early September when the country was in flames. The very first video of her on 9 September, the day after young people and students had been shot by the government that was meant to protect them shows her angry and emotional, her voice shaking.&nbsp; It was Karki’s actions in those days of fragility that showed us, once again, that the leader we deserve gets emotional on our behalf, but also knows how to do the work. After five years of leading her country through a global pandemic, Ardern realised that she is exhausted, that she does not have enough in her anymore to keep leading New Zealand, and she steps down.&nbsp; Towards the end of the book, Ardern tells readers like herself, sensitive and self-doubting, that if we want to be leaders, we should channel our anxieties and sensitivities to humble ourselves, to read more and seek out advice, and prepare ourselves for the challenges. Nepal’s next prime minister has to have these qualities: humility, teamwork, diligence and accountability. Good intention, ambition, university degrees, professional achievements are not enough to change the country’s trajectory.&nbsp; And when they have completed the task, or when they know they cannot do it they must have the courage to step down like Jacinda Ardern.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260308010340_b1c2a873eb640e3f10ab912c368dc9271f12f60d600bf8d5db5d2c13422a317c.jpg" data-media-id="editor_0" data-image-id="20260308010340_b1c2a873eb640e3f10ab912c368dc9271f12f60d600bf8d5db5d2c13422a317c" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Jacinda book details"> </figure>  &nbsp;

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