It is rare for Nepali economic activity to take center stage and make headlines in leading newspapers. This time, however, the high-level commission formed by the government in October 2024 captured widespread attention. Chaired by former Finance Secretary Rameshore Khanal, the commission was tasked with recommending measures for Nepal's economic transformation. Recently, I had the opportunity to speak with him about the reforms needed to achieve this goal. When news broke that the commission had presented its report to the finance minister, I was eager to learn more. The 447-page document, written in Nepali, demanded a significant investment of time to review, but my initial impressions were positive—encouraging me to share my first thoughts in this column.

As I went through the report, the list of signatories immediately caught my attention. I noticed that three individuals from the private sector had been added to the original team of five. This change is significant, as it signals a larger role for the private sector in driving reforms within a public framework. In my previous writings, I expressed concerns over how private sector interests can sometimes hinder reform efforts, particularly given their financial influence over politicians and political parties. I firmly believe that introducing greater transparency in the funding of political parties and elections could help transform private sector engagement into a meaningful source of learning and knowledge-sharing. Rather than serving as temporary platforms that shift with each election cycle, these discussions could evolve into lasting, impactful conversations.

Read the cover story of May 2025 issue of New Business Age Magazine:  Resetting the Economy  

Similarly, it is worth noting that the report is written entirely in Nepali, underscoring its originality and distancing it from the influence of "parachute consultants"—those who rarely venture beyond hotel rooms or Kathmandu's city limits. While the document has some shortcomings in integrating global perspectives, its approach effectively highlights local challenges. For instance, a parachute consultant might not even be aware of something as basic as the need to affix a stamp on a government document—an issue they would likely never encounter.

Moreover, the report has put forward bold recommendations, including the scrapping of outdated acts and regulations that hinder the proper functioning of the private sector, and addressing critical issues such as political party financing and outward investment from Nepal. These proposals are remarkable for their unconventional challenges to long-standing practices that have constrained broader economic development. They are noteworthy for their potential to drive significant change.

The report also outlines broad recommendations regarding the composition of government bureaucracies, with a key focus on addressing conflicts of interest. A classic example highlighted is the appointment of a businessperson to a government regulatory body such as the Securities Board of Nepal (SEBON), which inherently creates a conflict of interest. Additionally, the document has raised concerns about the confidentiality of private sector members serving on the Office of the Investment Board Nepal (OIBN), particularly given the circulation of feasibility reports and proposals submitted to the board.

The commission has acknowledged the economic transformation Nepal has undergone over the past two decades, citing developments such as increased bank credit and the growth of the stock exchange. At the same time, it has questioned why economic activity failed to expand in proportion to the flow of credit, clearly pointing to the concentration of investment in land. In private conversations, bank CEOs readily admit that a significant portion of Non-Performing Loans (NPLs) belongs to business groups with close political ties. At beed Management, we have produced confidential reports that substantiate this view. The fact that businesspeople supported a loan defaulter who promised political reforms through a change in the political system speaks volumes about the current state of Nepal’s business community. It is no surprise, then, that Nepal finds itself regularly facing greylisting.

Everything now hinges on implementation of the commission’s recommendations. Nepali politicians have historically struggled to carry out reforms that threaten their own interests. However, the timing could not be better for the current ruling coalition. It is worth considering someone like Rameshore Khanal, who led the committee, to be entrusted with overseeing implementation. His credibility earned him cooperation from many stakeholders during the study phase. The politicians currently in power cannot afford to ignore growing public discontent over corruption, nepotism and crony capitalism. This moment offers the older generation of seasoned politicians a chance to remain relevant in the next elections—by taking credit for meaningful reform. The role of development partners and friends of Nepal is equally crucial in effectively implementing the recommendations. Nepal already holds the record for the highest number of reports per capita; we do not need more outsiders flying in to produce additional documents or recreate models without fully understanding the local context. What is needed is targeted knowledge and expertise, not more funding. Implementation depends more on human capital than on financial resources. It requires a commitment to allowing Nepal to define its own path, with Nepali leaders having the confidence to steer the country toward a brighter future.

(Shakya leads beed Management, a Nepal based international management consulting and advisory firm founded in 2008. He also heads Nepal Economic Forum, a Kathmandu-based think tank.)

(This opinion article was originally published in  May 2025  issue of New Business Age Magazine.)