Frustrated with revolving door <a href="https://nepalitimes.com/news/the-geopolitics-of-nepal-s-politics">politics</a> with the same <a href="https://nepalitimes.com/editorial/tried-tested-and-failed">tired, tested and failed </a>leaders, Nepal’s cybersphere is harking back to the good old days when we had strongmen rulers like <a href="https://nepalitimes.com/multimedia/jung-bahadur-s-destitute-descendants">Jang Bahadur Rana </a>or <a href="https://nepalitimes.com/news/king-mahendra-didn-t-pay-hunting-bill-in-us">King Mahendra</a>. The<a href="https://nepalitimes.com/here-now/inside-story-of-nepal-s-rana-dynasty"> century-long Rana oligarchy</a> ended 74 years ago this week, and the Shah kings airbrushed <a href="https://nepalitimes.com/here-now/the-insect-that-changed-nepal-s-history">Nepal’s history</a> to downplay their achievements and glorify their own dynasty. After <a href="https://nepalitimes.com/here-now/if-birendra-was-alive-nepal-could-still-be-a-monarchy">the monarchy</a> was abolished in 2008, <a href="https://nepalitimes.com/review/the-role-of-rituals-in-royalty">the Shah kings</a> were similarly vilified. But Nepali society is mature enough to realise that the truth is not all black and white. Jang Bahadur may have usurped power in a ruthless coup, but he was a geopolitical strategist way ahead of his time. Whatever you may say about King Mahendra’s efforts in quashing <a href="https://nepalitimes.com/news/is-democracy-too-expensive-for-nepal">democracy</a> and pushing a unitary state, he defended <a href="https://nepalitimes.com/opinion/guest-editorial/nepal-should-recognise-palestinian-sovereignty">Nepal’s sovereignty</a> and projected its international image right through the sensitive Cold War period. Jang Bahadur in England is a new Nepali language book by journalist Gajendra Budhathoki about the visit in 1850 by Nepal’s prime minister to England and France, the first by a South Asian potentate. He met Queen Victoria and by all accounts was able to establish Nepal’s presence on the world stage. Historians have long mulled why a devout Hindu like Jang Bahadur would want to break the taboo and cross the Black Waters. Budhathoki recounts the incident upon his arrival at Southampton on 2 May 1850, when British customs officials tried to check the belongings of the Nepali entourage. Furious, Jang Bahadur threatened to sail right back to France if they opened any of the bags. Jang had three main reasons for his trip. Essentially he was on a spy mission to assess <a href="https://nepalitimes.com/here-now/a-forgotten-gurkha-rebellion-e8z403ab">British military</a> might to decide if it was worthwhile for Nepal to try to militarily take back territory ceded to British India in the Sugauli Treaty of 1816. So, Jang asked his perplexed hosts to show him cannon factories, artillery and naval yards. He even visited Woolwich Arsenal (now the Royal Arsenal) not once, but three times.&nbsp; Read also: <a href="https://nepalitimes.com/here-now/looking-back-at-the-1923-nepal-britain-treaty">Looking back at the 1923 Nepal-Britain Treaty</a>, Santa Gaha Magar Suitably impressed, Jang decided to be Britain’s BFF, and even rode down to Lucknow with 3,200 Nepali troops to rescue the British from the Sepoy Mutiny of 1857. As a reward, the British gave back the Tarai districts of Banke, Bardia, Kailali, and Kanchanpur (Naya Muluk). This close relationship continued with Jang’s descendants right till the time the British left India in 1947. Jang Bahadur was also fed up with the Governor General Lord Dalhousie in Calcutta who tended to bully Nepal, and wanted to build direct contacts with his bosses in London. The British told him Dalhousie was their man in India, and Jang should deal with him. <a href="https://nepalitimes.com/banner/the-way-we-were">Jang’s visit to France</a> does not get as much attention in the book, but he was also trying to gauge France’s strength and to see if its military was more powerful than Britain’s. At that time, France was Britain’s main rival and was trying to make inroads in India. At the Louvre, Jang Bahadur was drawn to exhibits reflecting French military prowess. Later, when he met Louis Napoleon III, he asked if he could see a parade of 900,000 troops to assess France’s military might.&nbsp; Read also: <a href="https://nepalitimes.com/review/nepal-france-ties-in-photos">Nepal-France ties in photos</a>, Reeti KC Freshly returned from <a href="https://nepalitimes.com/here-now/a-long-way-to-europe">Europe</a>, an emboldened Jang Bahadur Rana led Nepal in a war against Tibet in 1855 which ended with the Treaty of Thapathali a year later. This was the third time Nepal and Tibet had fought, the first time being soon after <a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/Prithvi-Narayan-Shah-a-visionary-leader,1102">Prithvi Narayan Shah</a> in 1788.&nbsp; The Qing Dynasty came to the rescue of Tibet, and while both sides claimed victory, the Sino-Nepalese War ended essentially as a stalemate with the Treaty of Betrawati.&nbsp; All of this is detailed in Axel Michaels’ book, Nepal: A History from the Earliest Times to the Present which is a recent English translation of his German Kultur und Geschichte Nepals published in 2018.&nbsp; Michaels is a Professor of Classical Indology and Religious Studies at Heidelberg University, and writes that Nepal mattered little to China. Proof of this is that while both Nepal and Tibet agreed to accept the suzerainty of the Qing emperor following the war, Nepal managed to retain its autonomy but Beijing asserted its control over <a href="https://nepalitimes.com/business/himalaya-to-lhasa">Lhasa</a>. And despite a clause in the treaty which stated, ‘if a foreign power attacks Nepal, China shall support Nepal’, China never did so during the1814–16 war with the East India Company.&nbsp; This practice has continued to this day. Aside from token petroleum shipments, Beijing did not help out Nepal during the Indian Blockade of 2015. Even though Nepali leaders have tried to play India off against China, the two do not find Nepal important enough to fight over and prefer to leave it as a buffer state between them.&nbsp; In that sense, Britain also did not press home its victory after 1816 and left Nepal alone. The malarial jungles to the south, rugged Himalayan terrain and the lack of marketable products (except soldiers) may have persuaded the traders at the East Indian Company that it was not worth the effort. There is a lesson from history here for Nepal: the country must look out for itself, and this requires deft diplomacy to understand what our giant neighbours really want and leverage it for our gain. This may require strategies like the ones made by Jang Bahadur and King Mahendra after all. Michaels is not a fan of either the Rana or the Shah dynasties. He says that although the Rana era is characterised as ‘a century of tyranny’, the description holds true for the Shah period as well.&nbsp; Michaels does not mince his words about Gurkha recruitment into the British and Indian Armies (another legacy of the Sugauli Treaty). He calls the mercenaries ‘cheap labour’ and Pushpa Kamal Dahal ‘represents a continuation of the King-Brahmin alliance’. In fact, he goes at length to discuss how the Khas-Arya used ‘Hindu state’ to homogenise a country that couldn’t have been more diverse. But democracy has not served Nepal well either. Corruption, impunity and lack of transparency are rife. And so, Michaels asks if Nepal is a failed state. No it is not, but it is a fragile state. He leaves us with these parting words: ‘If Nepal succeeds in continuing down this road, preserving its ethnic and cultural diversity, leaving the ethnic populations with a certain degree of autonomy, while at the same time integrating them into political decision-making processes, and if it manages the reforms needed for land-ownership, labour, education, infrastructure, then the country can become a model for unity in diversity, even in the age of leveling globalisation.’&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250222070248_a32db0a1e39c4a3a5158af81bbcf927aeb96524bcbc6b41086a223685642b367.jpg" data-media-id="editor_17" data-image-id="20250222070248_a32db0a1e39c4a3a5158af81bbcf927aeb96524bcbc6b41086a223685642b367" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Jang Bahadur in England "> </figure>  &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250222070252_e2fa5309f10d36f963243c24ea06d7d354d3dfaf24c7ef283d70369fbeabd02e.jpg" data-media-id="editor_18" data-image-id="20250222070252_e2fa5309f10d36f963243c24ea06d7d354d3dfaf24c7ef283d70369fbeabd02e" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Nepal Book"> </figure>  &nbsp;

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Nepal is not a failed state, but it is a fragile one

Samsung Nepal has opened pre-orders for the Galaxy A57 5G and A37 5G. Both phones run Samsung’s One UI 8.5, featuring AI capabilities like voice transcription, Circle to Search, and photo editing. They feature a 50MP triple-camera system, a Super AMOLED display, and six years of OS and security updates.

Galaxy A series

The war in West Asia has exposed the fragility of the economic architecture Nepal has built on over two generations. If the conflict continues, growth across developing Asia will slow and prices will rise. For Nepal, this will be felt through higher living costs, weaker economic activity, and growing uncertainty for the millions of families who depend on remittances.&nbsp; Nepal now needs to structurally transform from exporting labour to investing in domestic job creation. &nbsp; The country's current path toward a knowledge economy has a blind spot. A <a href="https://iids.org.np/wp-content/uploads/2025/02/unleashing.pdf" target="_blank">report</a> by the Institute for Integrated Development Studies (IIDS) in Kathmandu shows that IT export companies alone generated 7,228 jobs and income for 66,509 freelancers.&nbsp; We are building digital labour export, not an economy that accumulates institutional knowledge. The Nepali Upwork developer and a migrant construction worker in the Gulf are engaged in the same economic activity, but with different tools. Nepal’s reliance on a <a href="https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=NP" target="_blank">remittance-driven economy,</a> means the country has failed to create enough <a href="https://www.worldbank.org/en/country/nepal/publication/unlocking-nepal-s-growth-potential" target="_blank">quality jobs</a> at home. For millions of young people, leaving the country is not a choice but a necessity to survive and support families back home. <a href="https://www.worldbank.org/en/country/nepal/publication/unlocking-nepal-s-growth-potential" target="_blank">Remittances</a> have no doubt helped reduce poverty. Thirty years ago, 55% of Nepal’s population lived on less than $2.15 a day, now it is 20% after the absolute poverty line was revised upwards. This progress has come at a cost — &nbsp;an economy that depends more on exporting workers than creating opportunities at home. This development reflects a deeper political failure to create meaningful jobs within the country. Since the democratic transition in 1991, Nepal’s leadership has largely recycled the same faces, with limited progress on job creation or industrial growth.&nbsp; Nepal cannot build a <a href="https://nipore.org/accelerating-nepals-startups/" target="_blank">knowledge economy</a> while its most ambitious people are outbound to Doha and Tokyo. We are also not just losing ‘labour’. We are losing the entrepreneurial risk tolerance of our youth.&nbsp; If the most ambitious 25-year-olds are abroad, who is left to support innovation and entrepreneurship? The same people who are working tirelessly abroad, are our biggest asset for development. Their work ethic and the know-how inurban renewal could well fit into the new RSP government’s mandate of 7% annual growth.&nbsp; The <a href="https://english.biznessnews.com/posts/-nepal%E2%80%99s-it-exports-cross-1-billion-" target="_blank">$1B milestone</a> of IT exports is a celebratory moment for Nepal. However, that cannot lead to a pathway to a $100 billion economy without innovation ecosystems that go beyond individual labour export. Companies like SecurityPal and industry associations such as NASIT have made significant efforts in building such an environment, recently championed by private sector leaders as a &nbsp;<a href="https://www.securitypalhq.com/blog/silicon-peaks" target="_blank">Silicon Peaks</a> model that emphasises a home growth tech cluster. The need to accelerate this transition is even more urgent with the escalating conflict in West Asia. &nbsp;The recent International Labour Organisation (ILO) <a href="https://www.ilo.org/sites/default/files/2026-03/Nepal%20LDC%20Graduation%20Employment%20Impacts%20Report.pdf" target="_blank">report</a> shows that LDC graduation is expected to adversely impact manufacturing with losses of $1 billion by 2030.&nbsp; If manufacturing takes such a large hit from losing trade preferences, then Nepal’s services and IT sectors need to structurally transform and shift from exporting individual talent to building firms. &nbsp; A generation’s frustration has finally forced a shift in Nepal’s political structure, handing the new government a clear mandate to fix failures. But the question still persists: what prevents Nepal from achieving sustained, productivity-driven growth? &nbsp;&nbsp; RSP is in the right place at the right time to put Nepal's economy on a firm footing. At the heart of Nepal’s economic underperformance lies a major development binding constraint: low returns to investment on projects.&nbsp; The government invests like a high-growth economy, with gross capital formation at around <a href="https://data.worldbank.org/indicator/NE.GDI.FTOT.ZS?locations=NP" target="_blank">25–30 percent of GDP</a>. Yet economic growth remains modest. The problem is not how much the country invests, but how little it gets in return. One way to see this is by looking at how much investment is required to generate growth.&nbsp; Nepal needs large amounts of capital to produce relatively small gains in output (graph, below). For instance, in 2024, the ICOR was 8.29, this suggests that Nepal had to invest more than 8 units of capital to produce a one unit of additional economic output.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260406040412_605dc527641d2ff2dc5723ed8bbec946898331d5538a55b9941e32a0725bf811.jpg" data-media-id="editor_9" data-image-id="20260406040412_605dc527641d2ff2dc5723ed8bbec946898331d5538a55b9941e32a0725bf811" data-rendition-name="original" width="1827" height="925" loading="lazy" alt="Economy graph"> <figcaption>Source: Author's calculation based on a Growth Diagnostic simulation</figcaption> </figure>  This reflects a deeper issue in how investment is allocated and executed. Capital is often locked in low-productivity sectors or diluted by delays, inefficiencies, and policy uncertainty.&nbsp; As a result, even high levels of investment fail to translate into sustained growth. Until investment shifts toward productive, firm-building activities, higher spending alone will not deliver results. &nbsp; To reverse this, the government must focus on raising the returns to investment by enabling firms to grow and compete. This requires a shift from managing scarcity to creating an environment where capital can generate consistent and predictable returns. A central priority should be given to attracting and retaining both domestic and foreign private investment. Investors do not just respond to direct incentives, but also to policy stability in the country. Nepal’s economy cannot sustain high growth if its human capital continues to leave the country.&nbsp; The goal should not simply be to create jobs, but to build companies that scale, innovate, and compete beyond Nepal. This requires supporting sectors with strong productivity potential and ensuring that firms can expand without being constrained by infrastructure gaps or regulatory friction. Finally, the state must improve the quality of its own investment. Public spending should focus on lowering the cost of doing business through reliable electricity, efficient logistics, and digital infrastructure.&nbsp; The GenZ movement took two days to bring change. The economic transformation of Nepal might take a generation. The RSP can accelerate this transition, but only if it focuses on building a better investment climate for business and not just feeding the global labour pool. Kailash Raj Pandey is an MPA/ID and MBA candidate at Harvard Kennedy School and MIT Sloan School of Management and a fellow at MIT Kuo Sharper Center for Innovation and Prosperity.&nbsp; Siddhartha Raymajhí is a policy researcher based in Kathmandu.

Creating a firm future for Nepal

Know your Ministers

Prime Minister Balendra Shah on Wednesday broke tradition and met with 17 foreign envoys collectively, a move that was a notable departure from how his predecessors operated.&nbsp;
Shah had already set himself apart by talking less, listening more, and delegating to trusted friends. But by meeting all ambassadors at one go in the presence of the Foreign Ministry, he signalled a paradigm shift in how he wants Nepal to be seen: no longer just balancing India and China, but as a country confident about its <a href="https://nepalitimes.com/opinion/guest-editorial/tripolar-contestation-over-nepal">strategic importance and place in the world</a>.
In just two weeks, the <a href="https://nepalitimes.com/news/rsp-dos-and-don-ts">RSP has sprung into action </a>on multiple fronts to implement its ambitious 100-point, 100-days action plan. It has taken short-term measures to mitigate the impact of the Gulf war, as well as medium- and long- term measures to streamline the bureaucracy. A few high-profile figures have been made examples of to drive the message home.
Earlier this week, the government recalled six politically appointed ambassadors, the most notable being long-serving Shankar Sharma from New Delhi. The Kathmandu District Court issued arrest warrants against former prime minister Sher Bahadur Deuba and his former foreign minister wife Arzu Rana on charges of money laundering and corruption.
Each ministry has been trying to clean up the accumulated rot from the past three decades: regulatory overhaul of microfinance, education, health and service delivery.&nbsp;
These actions widely disseminated campaign-style on YouTube and TikTok have made most Nepalis hopeful that the party they installed in power means business.
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BACKLASH
But such attempts to overhaul a long-entrenched political culture were bound to face backlash. In their impatience and enthusiasm to get things done, some of Prime Minister Shah’s ministers have over-reached.
It was common knowledge that government-paid advertising in the mainstream press was kickback-driven, but the PMO’s directive that official notices be published or broadcast only on state-run media has been denounced — especially as the media industry struggles to stay afloat.
More serious are some recent appointments by ministers of relatives and figures closely associated with the RSP to key positions. This has rankled because this party built its political plank on ending nepotism and graft.&nbsp;
News that Home Minister Sudan Gurung allegedly had not paid rent on leased land, which illegally encroached on the lake in Pokhara did not help. &nbsp;
Prime Minister Shah himself has come under scrutiny for appointing a kitchen cabinet full of male buddies from his time as Kathmandu mayor. To douse criticism he brought in as adviser investigative journalist Deepa Dahal, who has exposed corruption in high places of the previous coalitions.&nbsp;
Shah’s appointment of another political adviser Asim Shah to the head Constitution Amendment Task Force, is also seen as problematic. He is a filmmaker and former lawmaker, but does not have a background in constitutional law.&nbsp;
Even more controversial is the Cabinet’s decision to appoint RSP Chair Rabi Lamichhane’s legal counsel, Narayan Kandel, as Attorney General. Kandel used to be a UK permanent resident, and does not have as much experience practicing law in Nepal.&nbsp;
Kandel’s appointment drew flak and raised eyebrows, and with the pending legal cases against Lamichhane this appointment represents a flagrant conflict of interest.
Health Minister Nisha Mehta was also accused of favouritism after reappointing Junu Shrestha, wife of Labour Minister Dipak Kumar Shah, as member of the Health Insurance Board which had earlier suspended her. The Labour Minister’s rambling rant at the Board’s meeting on Tuesday has not helped the RSP’s image.&nbsp;
(UPDATE: On Thursday, Prime Minister Shah sacked the Labour Minister after the RSP found him in breach of the party's code of conduct and discipline. He served 14 days in the Cabinet, one of the shortest tenures for a minister in Nepal )
It is hard to know what <a href="https://nepalitimes.com/news/ball-in-balen-s-court">Balendra Shah is thinking</a>, and how Rabi Lamichhane is going to justify some of these moves. After all, making politics, governance, and bureaucracy a meritocracy has been the core tenet of the RSP, and it risks alienating its mainly youth base if these missteps persist.
But at least for now, most RSP supporters seem to be giving the party the benefit of doubt.

nepals-kings

Nepal is not a failed state, but it is a fragile one

Galaxy A series

Creating a firm future for Nepal

Know your Ministers

Nepal’s new government springs into action