Balendra Shah, widely known as Balen, is a successful structural engineer who has emerged as one of Nepal’s youngest political leaders of the modern era. As Mayor of Kathmandu, he reshaped the city’s trajectory by restoring ancient architecture and advancing a vision for a cleaner, greener, and healthier urban environment. His initiatives in education and employment were equally transformative.
Through the Kathmandu Metropolitan City scholarship program, thousands of students continued their studies beyond the Secondary Education Examination (SEE), while job fairs connected citizens to meaningful work opportunities. His anti-corruption drive within KMC further strengthened public trust. These achievements elevated Balen to national prominence. From elderly residents in Jhapa to young children in Dang, Surkhet, and Kalikot, citizens flocked to his campaign rallies, signaling a generational shift in political enthusiasm. His landslide victory in Jhapa against UML leader Khadga Prasad Sharma Oli underscored his growing influence.
Rabi Lamichhane, Chair of the Rastriya Swatantra Party (RSP), has also advanced political reforms. Yet his decision to endorse Balen for Prime Minister reflects a profound act of statesmanship. By prioritizing national progress over personal ambition, Rabi positioned Balen as the face of a new governance model: one defined by efficiency, prosperity, and the principle of “less government, more governance”. Accordingly, Nepal must now bring forward and implement a new economic agenda. In the post-UN LDC graduation era, policies must be efficient, impactful, productivity and export driven. Only through such reforms can Nepal sustain growth, strengthen sovereignty, and meet the aspirations of its citizens
A case of bureaucratic resistance
A young agricultural graduate from Narayanpur of Dang, initiated Kesar (Saffron) cultivation at his house rooftop balcony with an initial investment of about Rs 4m, combining personal equity with loans from relatives and friends. His goal was to engage his son from going abroad, who had graduated in agriculture from a premier Indian institution, in building a model farm. The venture proved highly successful: saffron production thrived, demand was strong, and buyers, primarily hotels, readily procured Kesar.
Yet despite this success, the young entrepreneur struggled to expand. His repeated appeals to provincial government authorities and banks for subsidized loans were rejected. He sought financing from multiple sources to upgrade production and establish a model saffron farm in Dang, but his efforts were consistently thwarted by bureaucratic resistance. This case illustrates the frustration of talented young citizens committed to advancing productivity, production and innovation, only to be obstructed by a system that poisons innovation and service delivery.
Bureaucracy as the greatest obstacle
The greatest obstacle to the RSP-led government lies in Nepal’s lethargic bureaucracy. For decades, senior officials have enjoyed serving traditional political interests, enjoyed privileges while obstructed reform. A telling example occurred a couple of months ago when the sitting Finance Secretary dismissed the Health Minister’s concerns over health insurance funding; an essential service for vulnerable communities. Such resistance reflects a broader administrative culture designed to frustrate reformist agendas. To succeed, the Balen-led government must dismantle this culture of indifference and transform the bureaucracy into a service-oriented institution.
Security forces, courts, health workers, administrative staffs and corporate houses, etc. as gatekeepers must be reoriented toward delivering public goods rather than protecting traditional political interests. Only by overcoming these systemic barriers can the aspirations of Nepali citizens be realized, cementing Rabi-Balen as icons of a reformed nation.
The economic paradigm post LDC graduation
Nepal’s upcoming graduation date from UN Least Developed Country (LDC) status in November 2026 marks both a milestone and a challenge. While successive international programs like the Paris Declaration Action of Program (1990), the Brussels Program (2001-2010), the Istanbul Program (2011-2020), and the Doha Program of Action (2022-2031) etc.; promised preferential access and support, these opportunities rarely translated into sustained industrial and export led growth. ITC Geneva suggests Nepal could lose over four percent of export income due to tariff changes post-graduation.
Traditional sectors such as carpets and garments already face steep disadvantages, with production costs nearly 25 percent higher than competitors like Bangladesh. The current economic model, reliant on remittances and consumption, is unsustainable. Each year, more than half a million young Nepalis leave to work abroad, a stark indicator of systemic failure. To reverse this trend, the RSP government must pivot toward domestic production and export-led growth. Nepal’s fertile river basins and abundant hydroelectricity provide a foundation for industries such as agro-processing, dairy, fertilizer production, data centers, tourism, advancing bio energy like biochar production and manufacturing establishment. Rather than exporting energy cheaply, Nepal should harness it to power local industries and generate high-value goods for exporting regional and global markets.
Building a productivity system
Nepal’s survival after graduating from LDC status will hinge on productivity. Today, policy uncertainty, high tariffs, and inadequate connectivity networks inflate costs and discourage investment and productivity. Freight expenses alone add nearly 20 percent to production costs, eroding competitiveness. A productivity-centered agenda must therefore streamline regulations, strengthen connectivity across mountainous terrain, marginal river basins and ensure reliable electricity for services, processing, and storage.
Tourism and agriculture—forestry: two pillars of Nepal’s economy require urgent modernization. The tourism sector must prioritize value per worker through digital transformation, diversification of destinations, standardized services, and improved connectivity. Regions such as Kanchenjunga demand trail standardization and initiatives toward establishing a Man and Biosphere (MAB) reserve, capable of attracting higher-value international visitors. Agriculture, likewise, must integrate modern market infrastructure, logistics, and processing to move beyond subsistence farming and basic tour guiding.
This transition requires a sequenced agenda: first, strengthening extension service agencies and regulatory institutions; then enabling firms to adopt new technologies that can compete in regional and global markets. Ultimately, economic sovereignty depends on coordination among the Ministry of Finance, the Central Bank, and sectoral ministries. Traditional fiscal and monetary policies must be reframed, alongside a critical reassessment of three decades of liberal economic policy and the Sixteenth Five-Year Plan.
Federal ministries, often lethargic in their working style, must undergo reform. Policy frameworks should guide sectoral strategies, programs, and projects, while federal grants must empower subnational governments to foster innovation rather than perpetuate political patronage. If Nepal fails to transition from a remittance-dependent economy to a productive, export-led system, the overwhelming public mandate for change will be squandered. The path forward requires unified commitment to international standards and a resilient productivity agenda. Only then can Nepal sustain growth beyond the safety net of LDC status and achieve the economic sovereignty that has remained elusive for decades.
