In the span of just a few days, Nepal has been thrown into a maelstrom of political upheaval and social unrest, the likes of which the Himalayan nation has not seen since the end of its civil war nearly two decades ago. The chain of events that began with a youth-led protest against corruption and spiraled into violence has left the country’s capital, Kathmandu, and much of its government infrastructure in ruins, while the nation grapples with the daunting task of rebuilding both its physical and political landscape.
According to The Nation, the immediate spark for the turmoil was a near-total social media ban announced on September 5, 2025. This move, intended to quell rising dissent, instead galvanized a burgeoning youth movement known as “Gen Z.” Using VPNs and online platforms, these young activists called for a peaceful demonstration outside Parliament on September 8. The rally drew thousands, including schoolchildren, but was quickly infiltrated by more radical elements. The situation escalated when police fired live ammunition into the crowd, killing at least 20 protesters. The aftermath was a wave of outrage and destruction that swept across the country.
By September 9, the protests had morphed into widespread mayhem. Protesters stormed and occupied Nepal’s Parliament building, and arsonists set fire to key government structures, including the Parliament, the Prime Minister’s Office, and the Supreme Court. Homes of political leaders and ministers were also attacked and torched. As Republica reports, 27 buildings constructed for federal ministers and high officials in Bhainsepati, Lalitpur, were completely destroyed, just a month after officials moved in. Contact offices for province heads and chief ministers across all seven provinces were similarly damaged. The Nepal Army has since been deployed to secure these sites, but maintenance and repairs are on hold pending a full damage assessment.
The destruction extended far beyond the government’s core. Nepali Times details how at least 1,000 vehicles were torched and hundreds of government offices looted. The private sector was hit hard as well: the Hotel Association of Nepal estimates losses of Rs25 billion, with two dozen hotels—primarily in Kathmandu and Pokhara—damaged or destroyed. The Hilton Hotel alone suffered Rs8 billion in damages, and approximately 2,000 hospitality workers have lost their jobs. Major retail chains like Bhatbhateni were also targeted, with 21 of 28 outlets attacked and at least 12 completely destroyed by fire, putting 5,000 jobs at immediate risk. Corporate giants such as Chaudhary Group and Ncell, along with automobile showrooms, were not spared.
As the dust settled, the political fallout was immediate. Prime Minister KP Sharma Oli resigned amid the chaos. In his place, respected jurist Sushila Karki was sworn in as interim prime minister on September 15, making history as Nepal’s first woman to hold the office. Parliament was dissolved immediately after her appointment, with new elections called for March 5, 2026. The move, though controversial, brought a sense of relief to a nation teetering on the brink, as recounted by Kunda Dixit, founder of Nepali Times: “There was a great sense of relief when this was announced and with the swearing-in on TV.”
Yet, the challenges ahead are formidable. Many of Nepal’s public institutions—including the iconic Singha Durbar and the Supreme Court—were not insured, a costly oversight given the nation’s history of conflict and natural disasters. Economist Kalpana Khanal of the Policy Research Institute told Nepali Times, “The events of last week should be a lesson about the need for our public sector to be insured. We have to now decentralize risk and institutionalize risk diversification not just for the recovery and reconstruction, but for all future infrastructure projects.”
Finance Minister Rameshore Khanal, sworn in on September 15, wasted no time in setting priorities. His first order of business was to make a full inventory of the destruction and to redirect the national budget toward reconstruction, with an emphasis on job creation. “In order for our rebuilding efforts to be effective, we need to ensure that the budgetary process is redirected in a way that does not fragment the budget towards many projects as has been happening so far, but prioritizes important projects,” Khanal said. He has since formed a task force to identify and cut low-priority projects, aiming to marshal resources for the most urgent needs.
The economic toll is staggering. Experts estimate losses in the trillions, potentially exceeding those from Nepal’s devastating 2015 earthquake. The Nepal Stock Exchange (NEPSE) plunged 47.52 points before trading was suspended and is set to resume amid continued uncertainty. Insurance claims are expected to skyrocket, further impacting the share values of affected companies. The destruction of Land Revenue offices, Departments of Survey, and tax offices will also hamper revenue collection nationwide.
Internationally, the unrest has dealt a blow to Nepal’s already fragile investment climate. As economist Pushkar Bajracharya explained, “The protests last week were a reflection of the loss of trust of citizens towards the Nepali nation-state. The destruction of institutions and infrastructure has set Nepal back at least 10 years.” Foreign investors are wary, and the country’s imminent graduation from Least Developed Country (LDC) status in 2026 could mean a reduction in multilateral aid just when it is needed most. While remittances remain strong—Nepal Rastra Bank reports a $1.27 billion inflow in the first month of the fiscal year—the challenge is to channel these funds into productive investments that create jobs and foster long-term growth.
Despite the devastation, there are glimmers of hope. The Gen Z movement, though marred by violence, has injected new energy into Nepal’s democracy. Its roots lie in a deep-seated frustration with corruption, nepotism, and economic inequality, issues that have festered since the end of the Maoist insurgency in 2006. As Kunda Dixit observed, “What we underestimated… was how angry the people were, how they were losing patience, and that they were fed up with the system and wanted change. And it was triggered by social media.”
The youth movement’s original call was for transparency, accountability, and an end to the revolving door of political elites—values that resonate with a new generation of Nepalis. While the protests were infiltrated by radical groups, leading to much of the violence, many Gen Z activists have distanced themselves from the destruction, expressing regret and reaffirming their commitment to peaceful change.
As Nepal moves forward, the task will be not just to rebuild its government buildings and economic infrastructure, but to restore faith in its institutions and chart a new course for its democracy. The coming months—leading up to the March elections—will test the nation’s resilience, its leaders’ integrity, and the power of its youth to shape a more just and equitable future.
For now, Nepal stands at a crossroads, its scars still fresh but its hopes for renewal undimmed.
