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The Non-Resident Nepali Association (NRNA) was founded in 2003 during a turbulent period in Nepal’s history. Amid the Maoist insurgency and deepening political instability, a group of dedicated Nepalis living abroad came together in Kathmandu to create a global organization that would represent the interests of the diaspora and serve as a vital link to their homeland. 

The founding principles were centered on unity, inclusion and service. One of their first and most poignant demands was for dual citizenship—a legal recognition of the emotional and cultural ties that many Nepalis abroad continue to hold even after acquiring foreign citizenship. This request was more than a legal issue; it was about identity, belonging and the enduring connection to one’s roots.
Despite the strong start and noble intentions, the NRNA’s journey has not been without challenges. As Nepal transitioned from a monarchy to a republic and experienced various waves of political change, the NRNA too began to experience internal discord. Leadership rivalries, political interference and factionalism began to weaken the organization's unity.

Some leaders were perceived to be prioritizing personal gain over community service, eroding the trust and credibility the NRNA once commanded. Moreover, the Government of Nepal repeatedly failed to deliver on key promises—most notably the introduction of dual citizenship and diaspora-friendly investment policies. This lack of follow-through not only discouraged active participation from the diaspora but also deepened the divide between the homeland and its global citizens. 

I strongly emphasize that the time has come for sincere introspection. This is not a call to assign blame, but a collective appeal to revisit the founding ideals of the NRNA. Reform is no longer optional—it is essential. Without a structural and philosophical overhaul, the organization risks becoming irrelevant. To restore credibility and purpose, the NRNA must prioritize transparency, inclusiveness and democratic governance. The vision must be reignited, not just with words but with visible actions that rebuild public confidence and inspire the younger generation of diaspora Nepalis. 

A major critique raised is the overly broad and simplistic definition of the NRNA’s constituency—Nepalis who have lived abroad for more than 180 days. This definition fails to cultivate  the rich diversity within the diaspora community. 

From blue-collar migrant workers in the Gulf to settled professionals in Europe to business leaders and academics in the USA, the needs and aspirations of each group vary greatly. Trying to serve such a diverse population with a one-size-fits-all approach is ineffective. In this situation, I  recommend that the NRNA adopt a segmented approach by creating specialized committees and empowering local chapters to better represent their unique communities. Diversity should be seen not as a challenge, but as a strength that can be harnessed for broader impact. 

Dual citizenship remains one of the most important and emotionally resonant issues for the diaspora. Many who have taken foreign citizenship still feel a strong cultural and familial connection to Nepal. They wish to maintain this bond—not just symbolically, but legally and practically. 

These individuals are often highly educated, financially capable and deeply committed to contributing to Nepal’s growth through investment, mentorship, transformation of knowledge and innovation. However, current Nepali laws make their involvement complicated, with vague policies, unclear legal frameworks and the looming threat of double taxation. I argue that these individuals are not asking for special privileges but rather a framework that acknowledges their desire to contribute meaningfully to Nepal’s future. I would like to suggest long-term visas, clear legal protections for investments and the right to retire peacefully in Nepal as achievable and impactful policy measures. 

Concrete proposals for change 

Structural and governance reforms: Form an independent election commission to ensure fair and transparent leadership elections. Introduce term limits and eligibility criteria to prevent monopolization of leadership. Promote inclusiveness by creating dedicated roles and committees for women, youth, migrant workers and professionals. 

Decentralization: Give more authority to national coordination councils and NRNA chapters to address region-specific issues effectively.  Avoid overly centralized leadership, which often becomes detached from grassroots concerns. Decentralization will encourage innovation and ownership at all levels. 

Transparency and accountability: Publish financial reports regularly and conduct independent audits of projects and events. Establish formal systems for member feedback, grievances and dispute resolution to ensure internal democracy and trust. 

Cultural engagement: Support efforts to preserve the Nepali language, heritage and traditions among second-generation NRNs. Encourage educational and cultural exchange programs that allow younger generations to visit Nepal and understand their roots. 

Facilitate investment and return: Advocate for simplified investment policies and legal guarantees that attract diaspora entrepreneurs. Promote NRN-friendly residential areas, business zones and retirement homes that provide a welcoming environment for returning expatriates.

Forge global partnerships: Build strategic relationships with international organizations, think tanks, and universities. Leverage NRNA’s global presence to amplify Nepal’s voice on the world stage and open doors for collaboration and development aid. 

The NRNA was founded on the dream of unity and national contribution, and while its journey has encountered setbacks, the vision remains as relevant as ever. The Nepali diaspora is a treasure trove of knowledge, talent and resources. Reforming the NRNA to better serve this community is not just a strategic move—it is a necessity. If reformed with care and vision, the NRNA can once again become the vital bridge between Nepal and its global citizens, fostering not just emotional ties, but tangible progress for generations to come. 

On April 22, the tranquil Baisaran meadow near Pahalgam in Jammu and Kashmir was converted into a site of extraordinary catastrophe. Militants reportedly associated with The Resistance Front (TRF), a proxy of the Pakistan-based Lashkar-e-Taiba (LeT), executed a violent assault on the group of tourists, leading to the deaths of at least 26 (25 Indian nationals and one Nepali citizen) victims and injuries to more than 20.

This assault is among the most lethal strikes on civilians in the area since the 2008 Mumbai attacks. In the last 35 years of the Kashmir conflict, tourists were spared even in the height of militancy. This has changed now, it has been visible from the attack in Raesi, Jammu, last year, which took the lives of nine Hindu pilgrims. And so many other things have also changed in the course of the previous 24 hours in the South Asian geopolitical landscape. The attack coincided with four main events that happened recently. 

On the day of the attack, US Vice-president JD Vance was visiting India, interestingly on the same day Prime Minister of India Narendra Modi was in Jeddah meeting with the Saudi Prince and officials. Two other incidents that happened earlier but have a significant impact on the nature, psyche and politics of the attacks, extradition of Tahawwur Hussain Rana, a Pakistani-Canadian citizen who served in the Pakistani military for some time, from the USA to India. 

It reignited the old scars of the terrible 2008 Mumbai attacks, which were a paradigm shift in the global approach to fighting terrorism from South Asia. After a lengthy legal battle, Rana was extradited to India. The last but most significant event which had a colossal impact on the Pahalgam attack was Pakistan’s Army Chief Gen Asim Munir’s remarks on the ethnic two-nation theory between India and Pakistan, which is true for Pakistan but not for India because it is a civic democratic nation. He also referred to Kashmir as their ‘jugular vein’, provoking a load of religious sentiments just weeks before the attack, the clips of which are making rounds on social media. 

The preliminary intelligence findings from India suggest that five culprits, three from across the border and two locals, were involved in this heinous attack. India, in response, took a slew of diplomatic decisions, the most important of which is the suspension of the Indus Water Treaty of 1960, which survived three full-scale wars and many terror attacks perpetrated by Pakistan on Indian soil. 

Other than that, India has declared the defence attaches of Pakistan’s High Commission in New Delhi as persona non grata and given them a week to leave the country. Along with this, the newer development or any escalation from the Pakistani side may result in military retaliation. 

Consider this: in Feb 2025, Pakistan’s Prime Minister Shahbaz Sharif showed a desire to pursue dialogue with India as it is the only ‘way forward’. Even before that, Pakistan’s ruling party’s patron, Nawaz Sharif, has called for normalizing ties with India. India, meanwhile, has been firm in its approach of not indulging Pakistan unless it dismantles the terror apparatus of the country. India has also been successful in de-hyphenating its relations with Pakistan vis-à-vis global powers, as India and Pakistan are not seen through one lens. 

For India, in the current geostrategic setting, the only rival is China, which is mainly accurate. It has also been successful in creating new ties with Pakistan’s traditional Gulf partners. 

Comparatively, Pakistan’s situation is in the doldrums. Its economy is growing at a meagre 2-3 percent, one of the lowest in South Asia, with a volatile inflation, which went as high as 39 percent in 2023. It also has a very high debt-to-GDP ratio, which is why there needs to be multiple bailout packages from the IMF. Politically, Pakistan has always been in turmoil, where its most popular leader has won an election engineered by the Army, which has installed Shahbaz Sharif as Prime Minister of Pakistan. Still, the driving seat of power is, as usual, with the Army. 

For the longest time in Pakistan, the Army has maintained one of the most venerated positions and a symbol of national unity. It started slowly eroding when the failure of the state became apparent in the last two decades, the tenure of ex-Prime Minister Imran Khan, who was also the Army’s favourite at one point, was in the tussle. His removal prompted protests that echoed to many cantonments in Pakistan, where protesters attacked the army’s establishments. It was the most visible frustration of Pakistanis toward the venerated institution. Pakistan is also grappling with autonomy and secessionist movements in Balochistan, which has also caused forced disappearances of many ethnic Baloch who allege that the state has a direct involvement in these incidents. Islamabad has been rocked with protests by Baloch people.  

In addition to that, in March 2025, the Balochistan Liberation Army (BLA), an ethnonationalist militant organization, attacked the Jaffar Express, which runs from Quetta to Peshawar and hijacked it. The attacks caused the loss of 31 lives, including 18 soldiers who were travelling on that train. Other than that, after the Taliban came to power, Pakistan’s relations with its northern neighbour have been sour. There has been a condition of low-intensity conflict on the Durand line. Last year, the usually quiet western border of Pakistan with Iran also rocked when Iran launched a series of missile strikes on Pakistan. Paradoxically, for the previous few years, leaving few incidents, Pakistan’s border with India has been relatively peaceful, which has changed with sudden developments. 

It is in this context that General Asim Munir’s remarks and subsequent attack in Kashmir need to be read. Pakistan’s deep state knows that these attacks will have strong retaliation from India, which will help in fuelling nationalist fervor. Nevertheless, it also needs to be clarified that Pakistan’s reason to exist, the “two-nation theory”, which General Munir put so much emphasis on failing more than 50 years ago after the creation of Bangladesh.

It also needs to be noted that Gen Munir was supposed to retire this year, but last year, through an amendment, he extended the tenure of the Army chief for five years. It is a well-known fact that Pakistan’s army is the cause of many structural ailments in the country, and has to face the heat coming from society, causing a significant loss to its venerated position in the country.  Now, with this attack and retaliation from India, the Pakistani Army has tried to find some breathing space to run away from its structural problems. Still, this gamble can be a double-edged sword in a fast-changing situation. 

President Vladimir Putin has extended an official invitation to North Korean leader Kim Jong-un to attend a military parade in Moscow on May 9, a day marking the Soviet Union’s victory over Nazi Germany in World War II. The diplomatic reward offered by Russia for North Korea’s military involvement in the war in Ukraine has far surpassed expectations. 

North Korea’s military and diplomatic standing has changed significantly compared to its position prior to the war, before its arms transfers and troop support. In addition to receiving favorable treatment from Russia, North Korea is now capturing the attention of key European nations backing Ukraine. South Korea, Japan and China are increasingly anxious about the potential regional impact of North Korea’s growing leverage with Russia. 

Since the start of the second Trump administration—which this year has begun prioritizing short-term economic interests without distinguishing between allies and adversaries—North Korea’s leverage with Russia is inevitably set to grow even stronger. Notably, in contrast to the previous Biden administration, the Trump administration has remained silent on Russia’s invasion of Ukraine and is pushing for an end-of-war settlement that favors Russia. 

Trump has launched the most basic and straightforward realist strategy of balance of power—that is, an attempt to detach Russia from China, which is the United States’ primary hegemonic rival, and align it with the US. Whether this strategy will succeed remains uncertain, but Trump is now trying to draw Russia away from China in much the same way that former President Nixon had pulled China away from the Soviet Union in the 1970s. 

Putin, who combines authoritarian rule at home with a reckless yet experienced command of international politics, clearly understands Trump’s intentions and is looking to exploit them as much as possible in end-of-war negotiations. Trump is reportedly invited to the May 9 military parade, and naturally, Chinese President Xi Jinping has been invited too. We may even witness a surreal scene where Trump and Xi are seated on either side of Putin, with North Korean leader Kim Jong-un standing beside Trump, smiling, as they all watch the procession of Russia’s latest weapons. 

The prospect of the leader of North Korea—the world’s most internationally isolated pariah state—standing shoulder to shoulder with the heads of the US, China and Russia is extraordinary. Though unlikely, should it come to pass, it would deliver a profound shock not only to America’s allies in Europe and East Asia, but also to China. The mere discussion of such a scenario underscores that North Korea’s leverage over Russia has emerged as a key variable in the security dynamics of Europe and East Asia.

If Kim attends Russia’s Victory Day parade and stands alongside Xi on either side of Putin, it is worth thinking about what that would mean for China. Most importantly, it would mark China’s entry into a trilateral military and comprehensive alliance framework with Russia and North Korea—an alignment it has long avoided. The formation of such a trilateral structure would push established Western powers to increase their vigilance, containment efforts and pressure on China. 

Together with Russia and North Korea, China would undeniably be seen as a threat to the military, economic and technological security—that is, the converging securities—of the leading Western nations. While the Global South—developing countries—may not respond strongly, China would suffer a serious reputational blow by being branded a security threat to the developed world. 

China would also, in effect, be officially acknowledging North Korea’s leverage over Russia. In terms of international political and security dynamics, China and North Korea have long had aligned strategic interests, with North Korea lacking any viable patron state other than China—leaving it in a position of absolute disadvantage to China. 

However, Russia has now emerged, at least partially, as an alternative backer, introducing a significant new variable into the Sino-North Korean relationship that cannot be ignored. As part of its military cooperation with Russia, North Korea has been acquiring a range of advanced strategic weapon technologies from Moscow to strengthen its independent military capabilities. Russia has already formally recognized North Korea’s nuclear weapons and their delivery systems. 

For North Korea, this represents a diplomatic triumph—like rain after a long drought. But for China, it marks a serious blow to its national interests, and this new reality is expected to become more deeply entrenched in the coming years. To date, China has refrained from offering explicit support or endorsement of North Korea in the military domain, including its nuclear weapons program. In particular, Beijing has consistently maintained a cautious and reserved position regarding North Korea’s nuclear armament.

Then how should China respond to the deepening rapprochement between North Korea and Russia? Over the past two years, as Russia-North Korea ties have gained momentum, China has largely ignored the situation and remained unresponsive. To some extent, North Korea’s military support for Russia has brought indirect benefits to China, as Beijing itself has avoided providing military aid to Moscow. 

However, the outcome has been an increase in North Korea’s leverage over Russia. One possible course of action for China is to refrain from participating in the Russia–North Korea military cooperation and begin with a passive response, in order to avoid being drawn into a trilateral military alliance framework with Russia and North Korea. Trump is expected to pursue direct negotiations with North Korea this year. North Korea, in turn, will likely seek to make the most of its leverage over Russia during this process. 

Perhaps the first thing to watch is who will attend next month’s Russian military parade. Kim? Trump? Xi? From Japan and South Korea to France, Germany, the United Kingdom and Poland, all eyes are on which direction the shadow of China—looming behind Russia and North Korea—falls. The United States, of course, is watching as well.

The author is a professor of Political Science and International Studies at Yonsei University

Nepal’s governance and government crisis is epitomized by pervasive corruption, particularly within major infrastructure projects and public procurement systems. High-profile scandals such as the Teramox controversy, the Widebody aircraft procurement debacle, irregularities in the Sikta irrigation project and land scams involving Lalita Niwas, Balmandir (Naxal), and the Bansbari Leather Shoe Factory demonstrate deeply-entrenched graft within state institutions. These cases reflect systemic weaknesses in accountability, where political patronage and institutional lethargy shield high-level offenders from prosecution. 

The Financial Action Task Force’s (FATF) decision to place Nepal on its gray list underscores the state’s failure to implement adequate legal and structural reforms against money laundering and terrorist financing. As reported by the Economic  Times (3 March 2025), Nepal’s governance deficiencies marked by weak leadership, rampant corruption and fiscal mismanagement under Prime Minister KP Sharma Oli’s administration have exacerbated socio-economic vulnerabilities, further undermining public trust and economic stability. Notably, large-scale infrastructure projects, such as the Pokhara and Bhairahawa International Airports, have been marred by financial scandals. 

Despite its mandate, the Commission for the Investigation of Abuse of Authority (CIAA) has failed to hold powerful actors accountable, instead prioritizing minor infractions—a practice that reinforces a culture of impunity. The pervasiveness of corruption across government tiers has stifled development, crippled public service delivery and eroded administrative efficiency. Macroeconomic consequences include stagnant agricultural productivity, sluggish employment growth, declining tourism and diminished global competitiveness. 

The lack of robust oversight mechanisms has deepened governance paralysis, necessitating urgent institutional reforms to restore accountability, strengthen anti-corruption frameworks and rebuild public confidence in Nepal’s governance architecture.

Education sector

The education sector starkly illustrates this broader pattern of institutional failure. Recent weeks witnessed widespread teacher protests, with teachers marching from Maitighar to New Baneshwor demanding reforms aligned with Nepal’s federal framework and tangible improvements in educational quality. Despite repeated promises, successive political regimes have deprioritized educational development. This neglect has entrenched a branched education system of deteriorating public institutions on one side, and politically patronized private schools on the other. This failure is not merely a matter of policy oversight; it constitutes an existential threat to Nepal’s long-term development trajectory.

The central bank

One glaring example of Nepal’s institutional decay is the protracted failure to appoint a Governor, leaving the country’s central monetary regulator leaderless in contravention of the NRB Act. This statute explicitly mandates continuous leadership to safeguard monetary and financial stability. Yet political elites mainly from ruling parties have prioritized factional negotiations over institutional integrity, severely undermining the credibility and autonomy of the central bank. This leadership vacuum is symptomatic of a broader collapse in basic governance, extending the crisis well beyond corruption to a fundamental breakdown of institutional functionality. If left unaddressed, the erosion of the NRB’s authority could trigger long-term repercussions for monetary, financial stability and macroeconomic governance.

Farms, industry, tourism

Despite remaining an agrarian economy—where over 60 percent of the population relies on agriculture, which contributes 21.33 percent to GDP (NRB, 2024)—Nepal continues to face constrained agricultural productivity. In FY 2080-81 (2023-24), agricultural credit totaled Rs 347.84bn, yet output remains insufficient. Industrial capacity utilization is alarmingly low at 48.3 percent, even as industrial loans amount to Rs 1,580.10bn (NRB, 2025). Tourism remains a key sector, with 1.15m arrivals recorded in FY 2080-81 (2023-24), primarily from India (26.69 percent) and China (8.8 percent). However, the inclusion of Nepali diaspora holding foreign passports skews official data. While Chinese arrivals surged by 67.35 percent, and third-country visitors rose by 14.4 percent, the sustainability of this sector remains uncertain without accurate data and strategic planning.

Trade imbalance and fiscal risks

Nepal’s trade deficit is structurally unsustainable. Imports reached Rs 1,592.98bn, vastly outstripping exports of just Rs 152.36bn in FY 2023-24 (NRB, Feb 2025). Trade with India dominates (65 percent of volume), with imports from India at Rs 996.68bn compared to exports of Rs 103.18bn. Other key import sources include China (18.76 percent), the UAE (1.83 percent), and Ukraine (1.19 percent). Meanwhile, major export markets include the United States (11.36 percent), Germany (4.45 percent), and the United Kingdom (3.08 percent). Government expenditure patterns reveal further vulnerabilities. In FY 2022-23, consolidated spending rose by 11.1 percent to Rs 11,656.07bn, with current expenditures comprising 56.3 percent vastly outpacing capital investments. Debt servicing costs surged by 38.9 percent to Rs 196.23bn, pushing the federal deficit to 9.33 percent of GDP and the debt-to-GDP ratio to 46.75 percent by mid-April 2025, signaling mounting fiscal distress.

Labor drain and collapse of domestic opportunity

Chronic economic stagnation has fueled mass labor migration. In a single year, approximately 1.2m individuals, 661,125 men and 80,172 women sought foreign employment under formal permits. This exodus reflects a profound failure of domestic policy to generate employment or develop import-substituting industries. For instance, a young agricultural entrepreneur in Dang, cultivating capsicum and eggplant varieties on over two hectares of land, was forced to cease operations due to unsustainable competition from cheap, unregulated imports priced below Rs 20 per kilogram.

A national dairy survey reveals that local producers are increasingly uncompetitive against uncontrolled imports from porous borders, discouraging domestic investment. These examples point to systemic negligence of the government: Nepal possesses “immense” agricultural and industrial potential, yet policy inconsistencies, bureaucratic inefficiencies and pervasive rent-seeking have stifled productive initiative.

Entrepreneurial disincentives

Nepal’s seemingly comprehensive business regulatory regime is fundamentally undermined by flawed implementation. Regulatory bodies routinely impose opaque, obstructive barriers that actively deter entrepreneurial activity. Empirical evidence from a national survey of female-led MSMEs reveals that entrepreneurs face delays of six months to a year in accessing small business loans. Respondents likened banks to ‘institutionalized moneylenders’, citing predatory practices and bureaucratic obstruction. These structural barriers suppress innovation and perpetuate reliance on remittances. The federalization process has further exacerbated fiscal disparities. 

FCGO (Financial Comptroller General Office) data for FY 2022/23 shows provinces receiving just 10.8 percent (Rs 204.68bn) of total expenditure, while local governments account for 27.4 percent. Alarmingly, only 26.39 percent of provincial funds reach local bodies. Furthermore, 62.74 percent of local expenditure is recurrent, severely crowding out capital investment (37.16 percent). Instead of enabling autonomous governance, federalism has become an instrument for partisan patronage. Political interference has hollowed out subnational politics, converting them into appendages of central party structures rather than engines of localized development.

Patronage and rent-seeking

Public subsidies and incentives intended to support entrepreneurship have been systematically captured by connected political elites. Rather than promoting business growth, the pro-business policy framework has devolved into a rent-seeking regime, requiring illicit payments for access to government support. This corrupt system distorts market competition, disadvantages legitimate enterprises, and sustains Nepal’s import dependence and labor migration. The key political elite in Nepal have eschewed genuine labor, instead sustaining their opulent lifestyles through entrenched rent-seeking practices and earning through illicit transactions. This has eroded the nation’s work ethic and severely undermined its culture of entrepreneurship. 

These dynamics have yielded chronic underinvestment in capital expenditure, constrained productive capacity, failed import substitution and a sustained exodus of the working population. Without radical institutional reforms, Nepal’s economic trajectory will remain locked in this dysfunctional equilibrium. Necessary reforms include depoliticizing subnational politics, streamlining regulatory processes, allocating subsidies based on merit/performance, enhancing capital budgeting and enforcing fair trade protections.

Conclusion

Nepal’s economic stagnation is not the result of resource scarcity but of deep-rooted governance failures. Endemic corruption, bureaucratic inertia and institutionalized inefficiencies have crippled domestic production and eroded entrepreneurial confidence. The solution lies not in piecemeal policy adjustments, but in a transformative overhaul of the governance system anchored in accountability, transparency and institutional integrity. Also, it utterly requires the phasing out of recycled political elites. Only through such a systemic reconfiguration can Nepal hope to escape its current developmental storm and achieve a resilient, inclusive and self-sustaining economy. 

The author is a former chair of the Nepal Stock Exchange and was a PhD Research Fellow at the University of Basel