A Potential Future Revealed itself in the Present

Arup Baisya

The rise and fall of the left and revolutionaries in Nepal over the past two decades can be likened to characters from Greek mythology. The resigned Prime Minister, Mr Oli, along with his left-revolutionary predecessors, resembles Phaethon, the son of the Sun God, Helios. Phaethon claims the privilege of driving his father’s chariot, and after much insistence, the Sun God finally agrees. However, once in control, Phaethon loses his grip on the chariot. As a result, the sun veers off course, scorching the earth, killing countless beings, and threatening to incinerate the planet. In response, Zeus intervenes and strikes Phaethon with a thunderbolt. Similarly, the leftists and revolutionaries found themselves in control of the bourgeois state but ultimately lost control of it. In their efforts to preserve the state, the bourgeoisie risked harming the people. However, a popular uprising illuminated a path to save Nepal as a nation.

Following the conclusion of the second uprising in 2006, which enabled left-revolutionary leaders to take control of the Nepalese state, they became intensely focused on reconstructing civilisational democracy within a modern framework through the devolution of power. In doing so, they overlooked the fact that they were governing a bourgeois state.

During the Lichhavi period in Nepal, there was a certain degree of decentralisation in governance. According to Regmi (1996), the governance structure comprised three levels: the central government, village committees (Gram), and blocks (Tol). Local self-governance was practised at the village level, where a chief known as Talukdar Adhikari, or ‘Talaswami,’ was appointed. Before the unification of Nepal in 1769, the region was composed of various small principalities, each functioning autonomously. Following unification, these principalities were integrated, leading to a more centralized political system. However, the central government did not interfere with some local socio-cultural practices. For instance, the Kipat system allowed the Limbu community in the eastern hill region to maintain authority over their land. In contrast, the Rana regime, which ruled Nepal for 104 years, was largely autocratic and heavily emphasised centralisation, focusing on family control within the government.

Since 1990, various social and political movements in Nepal have advocated for state restructuring to address diversity and development at the local level of governance. Key movements include the Maoist insurgency (1996-2006), the Second People’s Movement (2006), and the Madhesh Movement (2007). Following the Second People’s Movement in 2006, Nepal adopted a federal political system as outlined in the Interim Constitution of 2007.

The Constitution of Nepal, ratified in 2015, grants specific powers and responsibilities to the federal government, the provinces, and local authorities, thereby establishing local governance. The development of this democratic constitution is seen as a significant achievement of leftist and revolutionary movements. Federalism was formally institutiona-lised in 2015 to embrace Nepal’s diversity and promote development in sub-national regions. The rationale for federalisation in Nepal can be understood from three perspectives: first, the nation’s social and cultural diversity; second, the need for inclusive development; and third, the importance of decentralisation, devolution of power, and autonomy (Sharma, 2014, p. 101). Under this federal political structure, governance in Nepal occurs at three levels: federal (central), provincial, and local.

The left remained oblivious to the fact that they were operating within a bourgeois state that is an integral part of the global exploitative capitalist system. This system can undermine any constitutional democracy, perpetuating and exacerbating exploitation for the sake of capitalist profit and accumulation. As a result, leftist leaders and their rank-and-file became accustomed to benefiting from state resources. The dominance of financial capital in the economy and bureaucratic control over state operations have eroded the achievements of constitutional democracy and the devolution of power.

The merger between the standing army and the people’s militia has preserved the standing army’s structure while effectively dissolving the people’s militia, thereby weakening public power in relation to the state. Since liberalisation began in 1984, the banking system has been left to market forces for course correction. The inevitable outcome of this scenario is an increase in inequality and a glaring display of wealth concentrated in the hands of a few, who continue to benefit from state resources.

An International Monetary Fund (IMF) team, led by Ms Sarwat Jahan, visited Kathmandu from May 26 to June 10, 2025. Following constructive discussions, Ms.Jahan issued a statement at the end of the mission: “The Nepali authorities and IMF staff reached a staff-level agreement on the policies and reforms necessary to complete the sixth review under the Extended Credit Facility (ECF). This agreement is subject to approval by the IMF’s Executive Board. Upon the completion of the Executive Board Review, Nepal would gain access to SDR 31.4 million (approximately US$ 42.7 million), bringing the total IMF financial support disbursed under the ECF to SDR 251.1 million (around US$ 331.8 million) out of a total of SDR 282.4 million.”

The IMF team conducted meetings with several key officials, including the Deputy Prime Minister and Finance Minister, Mr Bishnu Prasad Paudel; the Vice-Chairman of the National Planning Commission, Dr Shiva Raj Adhikari; and the Governor of the Nepal Rastra Bank, Dr Biswo Nath Poudel. Additionally, the team engaged with other senior government and central bank officials. The IMF representatives also met with stakeholders from the private sector, think tanks, and development partners.

Nepal’s debt burden is growing rapidly, with the public debt-to-GDP ratio reaching approximately 43.5% as of mid-June 2025, the highest level in 18 years. The country faces a significant challenge in balancing borrowing and repayment, as debt servicing now consumes a large portion of the national budget. Factors contributing to this rise include the depreciation of the Nepali rupee against the US dollar, increased borrowing for infrastructure projects and post-disaster recovery efforts, as well as slower-than-expected progress on capital projects.

The contribution of the agricultural sector to GDP is gradually declining. The contribution of this sector to GDP was 72 percent in FY 1976. Over the last 28 years, the annual average share of the agriculture sector in GDP has remained at 52 percent. The contribution of the non-agricultural sector to GDP is increasing. The share of the non-agricultural sector in GDP increased to 61 percent in FY 2003 from 28 percent in FY 1976.

The new constitutional state has not abandoned the export-led growth model; thus, the growth rate of imports is higher than that of exports, resulting in an increased negative trade balance and deepening the balance of payment crisis. The left-ruled state has not even considered imposing strong regulatory mechanisms on the financial sector to ensure that Banks are compelled to use their capital for local employment generation and reducing inequality. Instead, the manner in which monetary policy is conducted has a direct impact on the financial sector. After the full liberalisation of interest rates and the elimination of credit ceilings, the monetary policy stance has shifted from direct to indirect. Under the indirect monetary policy stance, there is no direct control on the price or interest, as well as on the volume of loans of commercial banks. Market behaviour is aligned through the use of indirect monetary policy instruments such as bank rate, cash reserve requirement, and open market operations.

The recent uprising associated with Gen Z (A bourgeois ill-defined terminology) in Nepal highlights deeper structural issues within the country. Nepal’s economic growth has relied heavily on remittances rather than on domestic investments that could create dignified jobs. In the fiscal year 2024/25, the Department of Foreign Employment issued 839,266 labour exit permits, reflecting a staggering level of out-migration for a nation of approximately 30 million people. Remittances accounted for around 33% of the GDP in 2024, which is among the highest ratios globally. These figures indicate a struggle for survival rather than genuine social progress; they represent a model that exports its youth to low-wage jobs while importing basic necessities and relies on patronage over productivity.

Similarly, there has been a significant rise in the number of migrant and platform workers throughout Nepal, particularly in Kathmandu and other cities. Many of these individuals are engaged in platform work and face various challenges, including job insecurity, financial exploitation, severe health risks (both physical and mental), occupational hazards, and social disruptions within Nepal. It can be tempting to frame this situation as merely a conflict over digital freedoms. However, this perspective lacks depth. For many Gen Z Nepalis, digital platforms serve not only as sources of entertainment but also as job portals, news channels, organising tools, and vital social connections. Shutting down these platforms–after years of economic stagnation–felt like a form of collective punishment.

This is why the ban sparked such a rapid response. With youth unemployment already high at 20.82% in 2024, frequent changes in government officials, and widespread corruption scandals, efforts to regulate the digital space appeared less like efforts to create order and more like acts of humiliation. The movement took a fast, horizontal, and cross-class form, bringing together students in uniform, unemployed graduates, gig workers, informal workers, and a broader disillusioned public who shared a common discontent with the government’s mismanagement.

The immediate trigger for the unrest was a regulatory decision: the government mandated that 26 major social media platforms must register locally and began blocking those that did not comply, including Facebook, YouTube, Instagram, WhatsApp, and X, among others. Crowds gathered at Parliament in response; the police responded with tear gas, rubber bullets, and, in some areas, live ammunition. By the evening of September 9, at least 19 people had lost their lives, and over 300 were injured. Faced with mounting pressure, the government lifted the ban on social media, and Prime Minister KP Sharma Oli resigned.

The grievance was not solely rooted in the digital realm. Protest signs and chants focused on issues of corruption, elite impunity, and the lack of a credible development plan. Kathmandu is on edge, not because of technology, but because a generation that grew up with the promise of democracy and opportunity is facing an economy and political system that continues to close doors at every turn.

The South Asian left often overlooks the role of the toiling masses in various uprisings that have occurred across different geographical areas. They also tend to neglect the students’ community from a class perspective, failing to recognise that while students may lack a class base, they do possess a class origin. Students may protest due to disillusionment and systemic anxiety, but true uprisings happen when the demands of the working masses transform into a collective desire in a moment of inspiration. In both Bangladesh and Nepal, student protests have galvanised the toiling masses to unite, leading to uprisings. In these cases, the leaders and the ruling parties faltered.

During the uprising in Bangladesh, the toiling masses were primarily rural and Masjid-centric, aligning themselves with the Madrassa-centric section of students. This alliance wreaked havoc on Hasina’s autocratic police state, as they attacked police stations, weakening one of the state’s coercive powers. If this dynamic had not developed, Hasina might have been able to suppress the student movement and avoid fleeing to India.

In this context, Jamaat may find it advantageous to expand its modern Islamic fundamentalist influence within Bangladesh’s politics by bridging the gap between the elite student class and the Masjid and Madrassa-centric toiling masses. However, the uprising has similarly created space for the left to promote their political ideology of radical societal change, driven by the once-subdued and now active toiling masses.

In Nepal, the combination of students and new urban workers conveyed a symbolic message of a future they may not fully grasp; they rejected both the current state of affairs and the past reactionary elements still exerting influence in the present. Foreign players connected to capital, including finance capital, IMF loans, and Chinese investments in infrastructure and mining, are likely to conspire with domestic reactionaries.

But it is puzzling why the left and revolutionaries should lament this situation instead of diligently working to construct an alternative vision in an objective landscape where workers and students are actively mobilising toward working-class emancipation and the seizure of power to dismantle financial and bureaucratic control of the state, thereby establishing people’s control.

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Frontier
Vol 58, No. 18, Oct 26 - Nov 1, 2025