The Economic Meltdown and Youth Exodus

 The Economic Meltdown and Youth Exodus

For millions of ordinary Nepalis, particularly those belonging to lower- and middle-income households, the promise of democracy has yet to translate into economic security or an improved quality of life. While political transformations have repeatedly reshaped the state, economic transformation has remained frustratingly elusive. Today, Nepal faces one of the most serious socio-economic crises in its modern history, characterized by rising living costs, limited employment opportunities, declining public confidence in state institutions, and an unprecedented exodus of its young and productive population.

The burden of this crisis falls most heavily on the economically vulnerable. Although inflation has moderated in recent years after peaking in 2022–23, the prices of food, housing, education, healthcare, and other essential commodities have risen far more rapidly than household incomes. For low-income families and daily wage earners, stagnant earnings combined with the rising cost of living have steadily eroded purchasing power. Many households now struggle to afford even the basic necessities of life, forcing them to reduce consumption, incur debt, or depend increasingly on remittances sent by family members working abroad.

The employment situation is equally alarming. According to the National Statistics Office, Nepal's unemployment rate increased from 11.4 percent in 2017–18 to 12.6 percent in 2022–23, while youth unemployment reached nearly 23 percent. Yet these figures reveal only part of the problem. A far larger number of Nepalis remain underemployed or trapped in low-paying informal occupations that fail to provide economic security or meaningful career prospects. Even university graduates and highly skilled professionals increasingly find themselves unable to secure employment commensurate with their education and abilities. According to professional bodies and various studies, a substantial proportion of Nepal's engineers, doctors, nurses, IT professionals, and other skilled workers have chosen to pursue careers overseas, reflecting the country's growing inability to retain its own human capital.

The inevitable consequence has been an unprecedented migration of Nepal's youth. On average, thousands of Nepalis receive labour approvals for foreign employment each week, while millions have migrated abroad over the past three decades, excluding those working in India. The 2021 National Population Census revealed that nearly one in four Nepalis was absent from the country, the overwhelming majority being of working age. Although the remittances they send home have become the backbone of Nepal's economy—contributing roughly one-quarter of the country's Gross Domestic Product—they also mask deeper structural weaknesses. Remittances sustain household consumption and support foreign exchange reserves, but they cannot substitute for productive domestic investment, industrial growth, technological innovation, or sustainable job creation.

Perhaps the most disturbing manifestation of this economic despair has been the willingness of some Nepali youth to undertake extraordinary risks simply to secure a livelihood. Hundreds have reportedly enlisted in the Russian military despite the ongoing war in Ukraine, with many losing their lives or remaining missing or imprisoned. Such tragic episodes illustrate not only the severity of Nepal's employment crisis but also the depth of hopelessness felt by many young people who see few meaningful opportunities within their own country.

Beyond economics lies an equally serious crisis of confidence. Years of political instability, weak governance, repeated corruption scandals, and the perceived inability of successive governments to deliver meaningful economic opportunities have significantly eroded public trust in the state and its institutions. A popular Nepali proverb—"Jun jogi aaye pani kanai chirekaa" ("Every ascetic has pierced ears")—captures the widespread public belief that regardless of who comes to power, little changes because the political system itself has become dysfunctional.

This erosion of trust has produced consequences extending far beyond temporary labour migration. Increasing numbers of young Nepalis no longer view foreign employment as a short-term economic necessity but as a permanent escape from a system in which they have lost confidence. Every year, well over one hundred thousand students obtain No Objection Certificates to pursue education abroad, and many eventually choose to settle permanently in their host countries. Likewise, countless migrant workers seek permanent residency and foreign citizenship whenever the opportunity arises, often relinquishing the citizenship of the country of their birth. This represents not merely a migration of labour but a migration of hope, ambition, talent, and confidence in Nepal's future.

Many citizens increasingly perceive that the state's institutions have been captured by a nexus of political patronage, bureaucratic inefficiency, and vested economic interests. High-profile scandals involving corruption, cooperative fraud, human trafficking, gold smuggling, public procurement irregularities, and the illegal occupation of public land have reinforced the perception that accountability is selective and that powerful individuals often remain beyond the reach of the law. Whether this perception is entirely accurate or not, its political consequences are undeniable. Public confidence in democratic institutions has steadily weakened, particularly among younger generations who increasingly question whether the existing political order is capable of delivering either justice or prosperity.

No nation can achieve sustained economic development when its most energetic, educated, and productive citizens lose faith in their country's future. Nepal's greatest challenge today is therefore not merely to increase economic growth but to restore hope. Rebuilding public trust will require more than ambitious slogans or periodic political change. It demands honest and visionary leadership, clean and accountable governance, employment-generating economic policies, a predictable investment climate, and institutions that reward merit rather than political patronage. Unless Nepal can convince its young people that they have a meaningful future in their own country, the continuing exodus of talent and aspiration will remain one of the greatest obstacles to national development.

( Excerpt from Reimagining Nepal: A New Path to National Renaissance by Kamal Thapa )