KATHMANDU: The Gen-Z protests of September 8 and 9 led to the fall of the KP Sharma Oli-led government and the formation of an interim administration.
During this movement, approximately 72 people lost their lives, and damage worth billions of rupees was inflicted on public, private, and government infrastructure across the country.
Nepal has already been struggling for years to cover even its operating expenses through domestic revenue. In the aftermath of the recent destruction, the challenge of reconstruction has become even more daunting. At the same time, creating a conducive environment for private sector investment remains a pressing need.
In this context, Khabarhub spoke to Dr. Dipendra Bahadur Chhetri, former Governor of Nepal Rastra Bank, asking five key questions about the current economic situation and the way forward.
What kind of economic policy should the interim government adopt in the wake of widespread losses to public and private sectors due to the Gen-Z movement?
First and foremost, the government needs to focus on psychological recovery. The morale of the public, investors, entrepreneurs—and even the security agencies within the government machinery—has significantly declined.
Therefore, rebuilding confidence across all sectors is essential. Once morale is restored, people and institutions will begin to resume their responsibilities, creating a foundation for development, reconstruction, and growth.
As for the economic dimension, it’s unrealistic to think that we can rebuild everything using only our internal resources. In the past—after major crises like the Maoist conflict, the 2015 earthquake, and the COVID-19 pandemic—we received substantial bilateral and multilateral support. At those times, the world believed Nepal was ready to move forward.
However, what the recent events have shown is that our own people can so easily destroy what’s been painstakingly built. Institutions like Singha Durbar and the Supreme Court are national heritage sites. If we can’t protect them, how can we convince the international community to help us rebuild?
So, based on what you’ve said, is international aid now less likely—even if we ask for it?
Yes, it’s going to be much harder to secure aid now, and even if it comes, it won’t be in the amounts we need. The global landscape has changed. For example, the Trump administration’s tariff wars disrupted the global economy. Europe is dealing with tensions between Russia and NATO-affiliated countries. Meanwhile, India and China are locked in a regional power competition.
In such a world, donor countries can no longer afford to be as generous or accommodating as they once were. So we shouldn’t expect external aid to flow as easily as it did in the past.
Do you believe these political events will affect the country’s economic growth rate?
Absolutely. Even before this, there were reports of capital flight—industrialists and businesspeople setting up lives in Dubai, for instance. The events of just two days caused unimaginable losses. Now, not only has internal investment taken a hit, but attracting foreign investment will also be very difficult.
We already suffer from low domestic production, which has widened the trade deficit. On top of that, if domestic consumption doesn’t rise, how can trade increase?
That’s a major source of government revenue. Without a supportive environment for industrialists, even foreign investment laws won’t stop capital from flowing out. Frankly, I believe we’re falling into a deep economic hole.
Is there no silver lining? Can we not find hope amid the crisis?
There might be hope—if the interim government seriously reflects on past mistakes and genuinely commits to transparency and reform. That could help minimize some of the damage.
But I don’t believe corruption alone triggered this movement. Every party claims to oppose corruption. Every security institution says it follows a zero-tolerance policy. The public anger seems to be rooted in more than just corruption—it’s also about political instability and the role played by certain parties.
In the long run, if we can teach—through education and behavior—that Nepal is the land of the Buddha, and if we uphold those values, the world will believe in us. Otherwise, if we suffer massive destruction every 10 years and continue begging for help afterward, Nepal will remain trapped in a cycle of stagnation and dependency.
Finally, what role should political parties play in creating momentum for economic revival, especially when the interim government’s main task is to hold elections?
The key is whether political parties are willing to accept election results with humility. If that happens, it will mark a positive turning point. Of course, even developed nations struggle with this—look at the United States or Brazil. But unless our parties commit to respecting democratic outcomes, political instability will continue to stifle economic recovery.
It is still unclear how the political parties have interpreted this recent political shift. Given that some have already begun protesting, it seems they are still assessing whether this change has truly taken root among the people.
These parties have their own organizational strength, and if they choose to respond by saying, “We’ll show our strength in the elections,” it would contribute to a healthier democratic environment.
However, if they instead begin questioning the legitimacy or constitutionality of the new government before elections even take place, the country risks entering a cycle of political obstruction. In such a scenario, there’s a real danger that elections may not be held on time—something I believe would be deeply unfortunate.
