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In addition to highlighting the long-simmering generational resentment in the nation, the GenZ protests in Sept 2025 brought about one of the worst economic shocks in Nepal’s recent history. What started as youth-led protests against political stagnation, unemployment, and corruption swiftly descended into violence, resulting in dozens of fatalities, thousands of injuries, and an enormous financial loss. The actual question now is whether Nepal can withstand these shocks without spiralling into more severe cycles of instability. The protests’ financial toll is already apparent: direct damages totalling billions of rupees, a decline in investor confidence, a contraction in essential industries, and an increase in unemployment. These losses, if ignored, will worsen the very circumstances that pushed young Nepalis onto the streets, raising the possibility of future unrest.

The most apparent and agonizing toll is the human one. Over two thousand people were injured during the protests, and at least seventy-four people were killed nationwide, including protesters and security personnel. Public trust in the state’s ability to maintain law and order was broken and prison breakouts contributed to the growing sense of lawlessness. The less obvious but no less terrible tale of economic devastation, however, is hidden behind these headlines. According to estimates from economists, the collateral damage caused by the protests is approximately Rs 3trn, which is nearly half of the nation’s GDP and equal to the government’s budget for almost one and a half fiscal years. The foundation of Nepal’s economy, the tourism industry, has been especially severely affected. According to tourism officials, the industry lost approximately Rs 25bn during and immediately following the protests, as thousands of cancellations destroyed what was supposed to be a prosperous season. With reported losses exceeding Rs 25bn and damage exceeding Rs 8bn at the Hilton in Kathmandu alone, the hotel industry has been disproportionately affected. These numbers are more than just statistics; they reflect the closure of businesses, unpaid workers, and a decline in Nepal’s reputation as a safe and secure travel destination abroad. When order is restored, the effects won’t go away; damage to a tourism industry's reputation may persist for years, discouraging subsequent tourism and investment in associated infrastructure.

The entire private sector has also suffered greatly. An estimated 15,000 jobs were directly impacted, and businesses reported losses of about Rs 80bn. These new job losses run the risk of escalating the cycle of economic despair in a nation already beset by pervasive underemployment and a significant reliance on foreign migration for employment. In addition to undermining household incomes, unemployment increases outbound migration and strengthens Nepal's reliance on remittances from abroad. Due to business closures or reductions during the unrest, nearly 10,000 Nepalis reportedly lost their jobs within a short period. This weakens the very demographic advantage Nepal should use for development, exacerbating an already precarious situation where the young, skilled labour force sees greater prospects abroad than at home.

The losses extended beyond small businesses and the tourism sector. Due to increased consumer demand, the automobile industry, which has been one of the most dynamic in recent years, sustained damages totalling about Rs 15bn. Along with interrupted imports and supply chains, the destruction of showrooms and warehouses runs the risk of slowing down a market that was previously growing. Consumer confidence and purchasing power might take some time to recover, even with the reconstruction of physical infrastructure, particularly as inflationary pressures increase and household incomes remain stagnant. This illustrates how instability undermines long-term growth prospects: years of gradual progress in industries that reflect the burgeoning middle-class economy can be reversed by a single wave of violence.

The cumulative effect of these losses has negatively impacted the macroeconomic outlook for Nepal. The economy was expected to grow by 3.5 to 4 percent this fiscal year, but growth forecasts have since been drastically reduced; some economists now predict growth of less than one percent. Others note that if reconstruction is postponed or funded carelessly, Nepal might experience complete contraction. According to one estimate, the protests caused losses of $22.5bn, or nearly half of Nepal’s GDP. As a result, the GenZ protests would rank among the most severe economic shocks to South Asia during a period of peace in recent memory, in addition to being a disruptive episode. This magnitude of loss runs the risk of igniting a fiscal and monetary crisis for a nation still recuperating from the pandemic and having trouble managing its debt.

The state is already feeling the financial strain. The government has been forced to reallocate funds for increased security spending, emergency relief, and compensation for the families of the victims. The fiscal deficit has widened as a result of the collapse of tourism and commerce revenues. Nepal may have to borrow more money as a result of declining revenues and growing debt. However, borrowing now runs the risk of trapping the nation in a debt cycle, particularly if grants and concessional loans from outside partners are not forthcoming. The burden will only get worse if borrowing costs increase, especially if credit rating agencies reduce Nepal’s risk profile in reaction to political and economic unrest. A declining rupee and growing import prices could cause inflationary pressures that further reduce real incomes and exacerbate public annoyance.

A new generation of Nepalis has taken to the streets to vent their frustration because they are better educated, more globally connected, and more conscious of the shortcomings of the government. Disillusionment will increase if their complaints are only addressed through repression and short-term fixes rather than structural changes. That might undermine democratic stability by opening the door for frequent demonstrations or more extreme forms of mobilisation. Nepal runs the risk of becoming caught in a vicious cycle where protests erode the economy further, which in turn leads to more protests. Economic despair and political alienation are a volatile combination.

Consequently, Nepal cannot meet the challenge on its own. Being a landlocked nation sandwiched between two powerful countries, Nepal’s instability will unavoidably impact its neighbours, and it needs outside assistance to recover. India, Nepal’s closest neighbour and biggest trading partner, has a special obligation to provide concessional credit lines for reconstruction and investment in industries that create jobs. Targeted assistance in border areas, primarily through cross-border trade hubs and renewable energy projects, may be able to absorb some of the young people without jobs and lessen the pressures of migration. In order to guarantee the transparent use of reconstruction funds, India can simultaneously offer technical expertise in auditing and public finance.

Beijing must put community-sensitive projects that meet local needs ahead of purely strategic objectives if it hopes to be regarded as a reliable development partner. Coordination with Nepali stakeholders, grants rather than high-interest loans, and transparent funding will be essential. The time demands that multilateral organisations like the World Bank and Asian Development Bank reevaluate their priorities, allocating funds not only to infrastructure but also to rural development, youth employment, and governance reforms. Through direct investments in healthcare and education, development bonds backed by remittances, or emergency compensation funds for impacted families, Western donors and Nepal’s diaspora communities can also make a significant contribution.

Nepal’s recent history has taught us that crises rarely come to an end with a single incident. The monarchy was overthrown by the People's Movement of 2006, but federalism and ethnic grievances remained unresolved. Although it alienated important groups, the 2015 Constitution established a new order. The GenZ protests follow this pattern: if youth grievances are not addressed, today’s instability will only serve as the catalyst for tomorrow’s upheaval. Now, structural reform is required in addition to reconstruction. The bare minimum of stability requires the transparent rebuilding of damaged infrastructure, a youth-focused national employment mission, institutional reforms to fight corruption, and sincere communication with younger generations and civil society.

If these economic wounds are allowed to worsen, there is a risk that they will exacerbate disenchantment, accelerate migration, erode the fiscal system, and create the conditions for further upheavals. Nepal and its neighbours, who would unavoidably be affected, cannot afford such a course. It is now the duty of Nepali leaders and outside partners to take note of the possibility to not only restore what has been destroyed but also to establish the framework for a more resilient, inclusive, and stable order. The GenZ protests might be seen as a sign of long-term decline rather than a turning point towards reform in the absence of such a concerted and systemic response.

The author is a PhD Candidate at the School of International Studies, Jawaharlal Nehru University, New Delhi

Former Speaker of the House of Representatives, Krishna Bahadur Mahara, was arrested by the Central Investigation Bureau (CIB) of Nepal Police on Sunday. This marks the first high profile arrest from the new government. The arrest is linked to the 9-kilogram gold smuggling case dating back to Dec 2022, when a Chinese national, Li Hansong, arrived in Kathmandu from Fly Dubai flight FZ-0587 carrying two suitcases. Inside those suitcases were 73 vape packs containing a total of 730 vape pieces, which were later found to have concealed gold worth Rs 85.5m.

According to CIB’s investigation, the gold was smuggled and sold in collusion with customs officer Rewant Khadka and others. Mahara is accused of exerting pressure on customs officials to release the gold. His son, Rahul Mahara, had earlier been arrested and sent to jail in connection with the same case.

The suspicious suitcases had been seized by the Tribhuvan International Airport Customs Office after the discovery of the vapes. Li Hansong had left Kathmandu shortly after retrieving his passport, while the seized vapes remained in customs custody.

Following suspicions that the gold concealed in the vapes had been secretly replaced, the Customs Office formally requested the CIB to investigate in April 2023. After two months of investigation, CIB concluded that 9 kilograms of gold had been smuggled, filing a case against six people including customs officer Khadka.

A supplementary charge sheet was later filed, naming Belgian national of Chinese origin Dawa Chhiring, his driver Lokendra Paudel, Rahul Mahara, and Nima Gurung as accomplices. Krishna Bahadur Mahara’s arrest marks the third prosecution related to the case.

CIB had recently taken Mahara’s statement as part of its ongoing investigation. Call records reportedly showed continuous communication between Mahara, his son Rahul, and Chinese nationals Li Hansong.

Although Mahara had earlier been questioned, the case had not progressed due to alleged political protection.

Once known as an honest leader during the conflict era, Mahara’s political career has been marred by controversies since joining peaceful politics. He has previously faced allegations in multiple cases,  including the misuse of Rs 400m in funds meant for Maoist combatant management, irregularities in frequency distribution during his tenure as Minister for Information and Communications, and an infamous 2010 audio scandal in which he was allegedly heard seeking Rs 500m from a Chinese national to buy lawmakers’ support. None of those cases, however, led to prosecution.

Elected from Dang-2 in the 2017 general election, Mahara became Speaker but was forced to resign in 2019 after charges of sexual misconduct against a female employee at the Federal Parliament Secretariat. Though he was arrested and jailed, he was later acquitted by the District Court and the verdict was upheld by the Patan High Court.

Since then, Mahara has remained largely inactive in politics, limiting himself to party affairs. He was elected Vice-chairperson of the CPN (Maoist Centre) at its last General Convention and was also serving as the party’s spokesperson.

The interim government formed in the immediate aftermath of a youths-led movement on Sept 8-9 has an uphill task ahead: conducting elections within six months (of which one month has already elapsed), which is easier said than done. 

The state organs have suffered burns of varying degrees in the ensuing violence. Many police posts, tasked with maintaining law and order, have turned to ashes. For many police personnel, according to reports, even uniform has become a luxury, leave alone other amenities. At this point in time, the morale of the police force may not be exactly high as it has just survived a serious crisis, with burns and scars of various degrees and depths. 

What’s more, out of over 14, 000 inmates, who escaped from 28 prisons and juvenile detention centers across Nepal during the protests, nearly 5,700 individuals, including hardened criminals, are still on the run—with looted weapons—while 8,851 escapees, including 341 juvenile detainees, have voluntarily surrendered.  

Concerningly, the government does not seem as serious as it should be when it comes to conducting an operation for the search, arrest and disarming of the absconders. Is the government waiting for some auspicious date to conduct such an operation?  

Still, the government appears serious about conducting the elections within the stipulated timeframe (5 March 2026) and handing over the reins to an elected government. It has directed the Election Commission to make preparations for the polls and called Nepali missions abroad to garner support of host governments and organizations for the cause.     

Sounds great, but polls cannot take place in a vacuum. The democratic exercise is impossible without taking a shaken and stirred people into confidence, for which a semblance of order is necessary. In every democracy worth its name, polls are impossible without the participation of political parties. 

But the government seems to have forgotten—or undermined, deliberately or otherwise—to take the parties into confidence.  

Apart from issuing instructions to the EC and making logistical arrangements for the vote, the government should also reach out to the parties. 

On their part, the parties should not forget that only a popular vote can take the country out of this long and dark tunnel of anarchy. 

It’s time the government rallied the whole nation for polls by taking the parties and other stakeholders into confidence. Government instructions and directives sound great, but action should speak louder.

Nepal is facing a unique convergence of political, social, and environmental challenges, leaving a profound impact on the collective mental health of its population. This year’s World Mental Health Day theme, “Access to Services: Mental Health in Catastrophes and Emergencies,” could not be more relevant. The nation has witnessed historic youth mobilization through the GenZ revolution, alongside unprecedented floods and landslides that have caused widespread loss of life, displacement, and disruption. Both events illustrate the urgent need for robust, accessible, and integrated mental health services for all Nepalis.

The burden of suicide in Nepal

Mental health challenges in Nepal have long been a public health concern. According to Nepal Police statistics, in the last fiscal year 2024/25 alone, 7,055 people lost their lives to suicide, averaging roughly 20 deaths per day. On a population scale, this translates to approximately 24 deaths per 100,000 people due to suicide in a single year.
The National Mental Health Survey 2020 further highlights that 6.5 percent of adults and 3.9 percent of adolescents reported having suicidal thoughts, indicating widespread psychological distress across age groups. Suicide is particularly significant among women of reproductive age (15–49 years), where it is identified as the leading cause of death. These alarming statistics underscore the importance of addressing mental health not as an ancillary issue but as a core public health priority.
Nepal has recognized mental health as a fundamental human right. Article 35 of the Constitution guarantees basic health services as a fundamental right, ensuring that all citizens can access health care, including emergency services, without cost. The Public Health Service Act 2075, Section 3, and the Public Health Service Regulations 2077, Rule 3, explicitly include mental health services as part of basic health care, guaranteeing citizens the right to free access. Moreover, the Muluki Criminal Code 2074, Section 185, prohibits encouraging suicide, reinforcing a legal framework to protect vulnerable individuals.
In line with the Sustainable Development Goals, Nepal aims to reduce suicide mortality from 16.5 per 100,000 population to 4.7 per 100,000 by 2030. Achieving this target requires both systemic reforms and community-level interventions that combine prevention, treatment, and psychosocial support.

Political upheaval and mental health: The GenZ revolution

The GenZ revolution represents one of the most significant social movements in Nepal’s recent history. Youth activists, primarily aged 15 to 29, organized protests, awareness campaigns, and digital advocacy to demand accountability, transparency, and systemic change. While the movement energized public discourse and created a sense of agency among young people, it also generated significant psychological strain.
Prolonged participation in protests, exposure to conflict and police action, disrupted daily routines, and the pressure of balancing academic and professional responsibilities created a high-risk environment for stress, anxiety, depression, and trauma. Constant exposure to political tension through social media amplified mental health risks, leading to emotional exhaustion and increased vulnerability to long-term psychological effects.
The experiences of these young activists highlight a broader lesson: political emergencies function as psychological catastrophes. Individuals engaged in social movements often experience emotional distress comparable to those affected by natural disasters. Recognizing and responding to such mental health needs is essential for building a resilient society.

Natural disasters: Floods and landslides

Nepal’s geographic and climatic conditions have made it prone to natural disasters. In early Oct 2025, continuous heavy rainfall caused severe floods and landslides across the country. The affected areas included Ilam, Rautahat, Khotang, and parts of Kathmandu Valley. Over fifty lives were lost, and hundreds of families were displaced, highlighting the devastating human and psychological toll of environmental emergencies.
In Ilam, entire villages were swept away by mudslides. Rautahat and Khotang experienced flash floods that destroyed homes, farmlands, and critical infrastructure. In Kathmandu, waterlogged roads, blocked highways, and submerged bridges severely disrupted mobility and access to essential services. Major highways, including Araniko, BP, and Kanti, were cut off for several days, isolating communities and delaying emergency relief.
These events produced not only immediate physical damage but also long-lasting psychological distress. Families faced the loss of homes and livelihoods, children were separated from schools and routines, and communities experienced uncertainty and fear. Displacement to temporary shelters and constant exposure to danger created conditions conducive to anxiety, post-traumatic stress, depression, and suicidal ideation. The floods served as a stark reminder that natural disasters have profound emotional and mental health implications alongside physical devastation.

Intersecting crises and compounded risks

The intersection of political upheaval and environmental disasters has intensified mental health challenges in Nepal. Youth already experiencing stress from activism were simultaneously facing additional pressures from floods, landslides, and displacement. Disrupted education, interrupted employment, and cumulative stressors have created conditions conducive to long-term psychological disorders.
Emergencies of any kind disrupt daily life, create uncertainty, and reduce access to coping mechanisms. In Nepal, these compounded crises demonstrate how political, social, and environmental factors converge to exacerbate mental health vulnerabilities.

Challenges in mental health service access

Nepal’s mental health infrastructure faces significant limitations. There are fewer than 200 psychiatrists nationwide, and most are concentrated in urban areas, leaving rural and disaster-affected populations underserved. Psychologists, psychiatric nurses, and trained counselors are limited, and community-based psychosocial support programs are often inconsistent due to insufficient resources, staff shortages, and limited integration into emergency response systems.
Stigma further limits service utilization. Despite legal provisions and constitutional guarantees, many individuals avoid seeking help due to fear of social judgment or misunderstanding about mental health. In disaster situations, when access is most critical, these structural and social barriers can leave vulnerable populations without support.

Strategies to strengthen mental health resilience

Addressing Nepal’s mental health challenges requires a holistic and integrated approach across multiple levels. Expanding community-based services is essential, with schools, health posts, and community centers providing accessible mental health support, particularly in rural and disaster-prone areas. Frontline workers, including teachers, health professionals, and volunteers, should be trained in psychological first aid, trauma recognition, and referral systems to ensure timely and appropriate support. Mental health services must also be fully integrated into disaster response plans, guaranteeing that counseling, psychosocial support, and safe spaces are available alongside essential provisions such as food, shelter, and medical care. The use of digital platforms and tele-counseling can further extend reach, connecting isolated communities during floods, landslides, and other emergencies.
At the policy level, the government must prioritize mental health within disaster management frameworks and allocate adequate resources for sustainable, nationwide service delivery. Finally, public awareness campaigns are critical to reduce stigma, educate communities, and promote early intervention, ensuring that individuals seek help promptly and receive the support they need.

Conclusion: Building a resilient Nepal

Nepal in 2025 illustrates the intricate connections between political, social, and environmental crises and mental health outcomes. The experiences of youth during the GenZ revolution, combined with the trauma of floods and landslides, as well as persistent challenges related to suicide, emphasize the urgent need for comprehensive, accessible mental health care.
Mental health is not a secondary concern. It is a fundamental right, a public health priority, and a societal responsibility. Strengthening mental health systems, integrating services into disaster response, and ensuring universal access are essential steps toward protecting lives, empowering youth, and building a resilient society.
On this World Mental Health Day, Nepal has an opportunity to act decisively to safeguard mental well-being, honor constitutional and legal rights, and ensure that the mental health of all citizens is treated with the urgency and respect it deserves.