MANAGING BUSINESSES IN THE POST-UPRISING PERIOD

NEPAL IS AT A CROSSROADS OF NAVIGATING THE TASK OF RECONSTRUCTION AND REHABILITATION WORKS SUCCESSFULLY, AND ALSO MANAGING THE TRANSITION TO LDC GRADUATION IN NOVEMBER 2026. LOSSES OF MARKET ACCESS OPPORTUNITIES IN THE EUROPEAN COUNTRIES, AMERICA AND CANADA ARE LIKELY TO INCREASE THE VULNERABILITY OF NEPAL’S INTERNATIONAL TRADE.

The uprising of the Gen Z group on September 8 and 9 this year has brought tumultuous change in the Nepali political landscape. The unrest triggered by the ban imposed by the government on social media was the explosion of simmering discontent of youth over the corruption, nepotism, and mismanagement of the state of affairs pursued by the ruling political parties over the last several years. The movement toppled the ruling government, and an interim government was formed with the former Chief Justice at its helm.  The government is mandated to hold the election of the House of Representatives on March 5, 2026, and peacefully transfer the power to the elected government. Similarly, the interim government is to investigate corruption cases and assess the legitimacy of the wealth accumulated by party leaders and senior bureaucrats, and pursue legal action against them.

The uprising was a nightmare for the business communities in the country.  Several industries were vandalized by the mob, despite the Gen Z movement not having such a plan. It was said that the protest would be peaceful and disciplined. However, the government utterly failed to appraise the potential outcomes of the movement and take preemptive measures to cope with the situation. This resulted in the loss of more than six dozen lives and property, which is estimated to be worth several billion rupees. These include loss of public and private buildings, plant, machinery and equipment, furniture and furnishing, and transport vehicles, among others. The government of Nepal has begun the detailed assessment of losses and damages to all infrastructures and installations in the wake of widespread rampage. Such damages and destruction were inflicted on industries and infrastructures in major towns in the country, with its concentration on the Kathmandu valley.

The main public infrastructures that were destroyed were the Parliament Building, the Supreme Court, and the Central Secretariat of the government of Nepal. All three institutions of the state are thus rendered homeless, and their valuable documents and records were converted into ashes. There were indiscriminate attacks on some big hotels, resorts, and restaurants, which were providing excellent services to the tourists and visitors from within and outside the country. One dozen departmental stores, belonging to Bhatbhateni, were vandalized and looted, with a loss of jobs for almost six thousand youths. The primary estimate of the job losses on account of hotels and restaurants is around two thousand.  Industries such as the CG Digital Park, Chandragiri and the Maulakalika Cable Car were heavily damaged. The primary estimate of the losses of CG Park is accounted to be around three billion rupees. The details of all the damages and losses are yet to be ascertained. 

What lies ahead?

The primary task for the government lies in supporting the families of the victims who died and provide treatment to those injured during the uprising.  This should follow the development of a plan for the reconstruction of the damaged buildings and infrastructures, and bring them into the pre-existing condition. This requires a large sum of money, which primarily comes from the public sector. This will put pressure on the government budget, and several projects around the country may suffer due to the lack of funding. Similarly, the additional funding required for holding the election of the Parliament should be met from this year’s budget, which came up as the progeny of the uprising.  In view of this, the newly appointed Finance Minister has already announced plans to cancel and divert the budget earmarked for small-sized projects and those not included in the project bank. In the meantime, the neighboring countries and development partners have shown interest to support the government in carrying out the rehabilitation works and restoration of destroyed properties, as well as holding elections in a free and fair manner. Amid the resource constraints, the government needs to demonstrate its expertise and wisdom in mobilizing foreign assistance to carry out development works effectively. 

In the wake of damages inflicted on the industries and installations run by the private sector. This has, on one side, badly eroded the confidence of the potential domestic and foreign investors to channelize their resources into Nepal, while accelerating the exodus of unemployed youth to foreign countries on the other.  This may take several years to regain the lost confidence and improve the investment climate in the country.

Amid the chaotic situation in the country, business leaders have expressed their commitment and aspiration to revive their businesses and enterprises. The courage demonstrated by the business organizations to take up the challenges in the changing political and economic scenario of the country is praiseworthy. It should be the duty of the government to support the business with moral encouragement and concessional financing. Other measures could be: restructuring the loan repayment schedule, interest subsidy, rebate on electricity bill, and allowing accelerated depreciation of the plant and machinery. Similarly, the government may consider simplification of the rules and procedures in the registration and regulation of companies, an easy exit strategy, and a periodic tax break in order to give a breathing space to the industries.  

Rampant corruption is taking a toll on the lives and living of the common people, including the business communities. The major demand of the Gen Z activists is the control of widespread corruption, where the senior leaders of the so-called larger political parties are involved. The lavish lifestyle of the youngsters of these leaders, as displayed on social media, has also been a source of discontent among several young people who work day and night just barely making ends meet. Thus, the formation of a high-level judicial enquiry commission would be required to investigate various cases of corruption and bring the perpetrators to justice.

Good governance is the prerequisite for promoting the investment-enabling environment in the country.  Enhancing transparency, strengthening accountability, and promoting a people-centered delivery system are the cornerstones of the effectiveness of the government. The interim government formed after the Gen Z uprising should uphold the ethos of good governance and bring qualitative changes in the service delivery system. 

Nepal is at a crossroads of navigating the task of reconstruction and rehabilitation works successfully, and also managing the transition to LDC graduation in November 2026. Losses of market access opportunities in the European countries, America and Canada are likely to increase the vulnerability of Nepal’s international trade. Export products such as textiles and apparel, carpet, coffee, handicraft items, and hard cheese are likely to be affected in the new trading regime after graduation. Industries of these sectors need support and encouragement from the government.  

Conclusion

The civil unrest and riot-induced damages inflicted on the businesses and industries are heavy and will have long-lasting effects on the economy. The reforms introduced during the early 1990s were disrupted by a decade-long insurgency waged by the Maoist party. Another uprising during 2005-06 culminated in toppling the constitutional monarchy, and the country became a federal republic, followed by almost a decade-long interim arrangement in the country. Nepali people were longing for political stability and improvement of their lives and living after the promulgation of the Constitution of Nepal in 2015. Contrary to this, lack of employment opportunities persisted; corruption, nepotism, and deception prevailed, and the gap between rich and poor further widened, dashing the aspirations of the people.  

Amid sluggish economic growth and the gradual influx of investors into the service and manufacturing sectors, a faint glimmer was seen at the end of the tunnel. however, this is threatened by the recent unrest that caused significant damage to public and private property. the government of nepal now faces the challenge of balancing the legitimate demands of the gen z movement while simultaneously rebuilding the confidence of businesses to foster a healthier economic environment in the country. let us hope that the current interim government will be successful in steering the country in the right direction by improving the business ecosystem and also maintaining peace and stability by holding the election in a free and fair manner.