The Power of Nepal's Youth / South Asia Spring?

Aka, why you should give a frack about Nepal's revolution (or was it?)

On September 8th, protesters from around Nepal gathered to demonstrate against a government decision to ban social media platforms. The social media ban was the culmination of several restrictive Nepali government polices related to technology. In 2017, Nepal’s Rastra Bank (NRB) declared all transactions related to or regarding Bitcoin illegal, a move that was subsequently backed by the Nepali government; in 2022, NRB declared all activities related to cryptocurrency illegal. In 2019, the Nepali government began considering a now-infamous “Information Technology Bill.” The bill proposed to impose fines and even jail terms for any social media posts that “might pose a threat to the country’s sovereignty, security, unity, or harmony.”¹ (So Jimmy Kimmel shouldn’t restart his show in Nepal, in other words... #toosoon?)

Here’s a map of Nepal in case you need it to situation yourself. #noshame

This year, Nepal’s government pushed its efforts to control speech even further. In February, a new bill was introduced to require social media platforms to register with the government and enforce strict content moderation policies. On August 28th, the Nepali government gave social media platforms seven days to comply with the law. Most social media platforms (unsurprisingly) declined to do so and 26 were banned as of September 4th. From WhatsApp to WeChat, Facebook to Instagram, Nepalis suddenly found themselves cut off from the world and each other. (Interestingly, TikTok was not among the 26 platforms banned — because it was banned in 2023 and subsequently complied with the Nepali government’s demands in August 2024.)

The social media ban added fuel to the dumpster fire of an already grim socio-economic situation, especially from the perspective of Nepal’s youth.

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In 2006, widespread protests against Nepal’s monarchy eventually led to a revolution. Nepal formally began a transition to democracy in 2008, with the abolition of the monarchy and the establishment of a multi-party representative democracy. Democracy has many virtues, but there are few historical; examples of a sudden transition to democracy that are peaceful and stable. A new constitution was passed in 2015, but corruption in the country is pervasive — whether in the judicial system, the police, public services, and tax administration.² Youth unemployment in Nepal is almost 21 percent and 82 percent of Nepal’s workforce is employed informally.³ GDP per capita is a paltry ~$1,500 — that’s 33 percent less than the GDP per capita in Haiti. The value of the Nepali rupee relative to the U.S. dollar today is half what it was in 2010. Unsurprisingly, remittances play a major role in the Nepalese economy, to the tune of almost 26 percent of GDP, and reached a record high this year, growing 19 percent year-on-year.⁴

Nepal’s economic story over the last two decades is not all bad. For instance, in 2000, 81 percent of Nepalis did not have access to electricity.⁵ Today, just 6 percent of the population remains without access, and Nepal became a net electricity exporter for the first time in 2023/4.⁶ Nepal has “extraordinary” hydropower potential, to the tune of somewhere between 42,000-83,000 MW.⁷

Even with the huge growth in electricity production, corruption and incompetence has led to significant waste of Nepal’s power potential.⁸ Countries like Laos and neighboring Bhutan have similar resources and have used these resources to engage in electricity exports and crypto-mining.⁹ Moreover, just take a peak at a chart of Nepal’s GDP per capita. Yes, GDP per capita is lower than a basket-case country like Haiti - but look at the growth over the last 20 years. Sometimes revolutions happen because of desperation, but this seems more like a revolution from a young and growing population that a) has a taste of success and wants more, b) sees neighboring countries (via social media!) enjoying greater success due to better governance, and c) possesses an unquantifiable edge — human capital.

Case in point: The protests on Sept 8 were organized and attended by young people., aka “Gen Z.”

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A personal anecdote: I hosted a law and human rights graduate student based in Kathmandu for the podcast, and she told me she had come back to Nepal because she believed in its future and wanted to help build it — she could have easily gone somewhere else to pursue more clearcut opportunities, but she opted to focus her talents in a way that would help her country’s future (she also attended the protests on Sept 8). Unfortunately, the Sept 8 protests succumbed to violence. It is impossible to know who started it — the protests were clearly organized on non-violent principles, but when large groups of people gather to express disillusionment, even the most noble principles can be abandoned quickly. Or perhaps the Nepalese authorities started it. Whatever the case by me, at least 19 people were killed and more then 100 people were injured when police clashed with protesters around the country, and most notably around the parliament complex in Kathmandu.¹⁰ The next day, the violence worsened considerably. The parliament complex was torched; the finance minister was stripped naked and chased through a river;¹¹ the wife of a former Nepalese PM was burned alive in her home;¹² the overall death toll is at least 72 people as of this writing.¹³

Fire engulfs the Singha Durbar palace, whose grounds house government and parliament buildings. [Narendra Shrestha/EPA]

Nepal’s now erstwhile-Prime Minister, K.P Sharma Oli — quit amidst the turmoil. Former Supreme Court Justice Sushila Karki, a 73-year old woman, was subsequently named Nepal’s interim PM following talks between representatives of the protesters, the president and the army chief.¹⁴ She has been tasked with holding parliamentary elections by March 2026. She is an unlikely choice considering her age, but she has a history of fighting corruption in the government (in May 2017, the government tried to suspend her when she overturned the appointment of a new police chief; she “retired” as a result). Karki is clearly meant to be a caretaker — a stable pair of hands that will steer the ship of state while elections are organized in a manner that is transparent and fair. In her own words: “We have to work according to the thinking of the Gen Z generation. We will not stay here more than six months in any situation. We will complete our responsibilities and pledge to hand over to the next parliament and ministers.

Will that next parliament and those next ministers be any less corrupt than the ones that came before them? It is easier to overthrow a government than it is to root out systemic and longstanding bureaucratic corruption, especially in a country where the majority of the population’s primary experience has not been a democratic one. Karki has an unenviable task — she must restore order while making real strides against corruption, all while being a lame-duck leader who won’t be around for more than six months and who, at least presumably, will not resort to cracking skulls.

“The country’s limited productive sectors (such as banking, real estate, and large-scale import businesses) are still controlled by a small, wealthy elite that dominates both government and economy.”¹⁵ Gen Z has taken credit for / been credited with the government’s overthrow, but it was the Nepalese Army that contained the unrest and “emerged as the country’s last stable institution capable of negotiating with protest leaders and conferring legitimacy on any new government.”¹⁶

Nepal is not alone in experiencing significant political unrest in recent months. Indonesia is also seething with political disillusionment and President Prabowo, a rehabilitated former leader in the country’s military dictatorship, seems to be resorting to old habit as Indonesia’s military is taking a bigger role in government.¹⁷ Last August, Bangladesh’s former Prime Minister Sheikh Hasina fled the country after massive protests that focused on similar themes of corruption and were led by students and younger aspects of civil society. This has led some to speculate that there is a “South Asia Spring” emerging.¹⁸ Perhaps. But Nepal has much more in common with India, a fellow Hindu-majority state, than it does with Muslim-majority Indonesia and Bangladesh, so perhaps India’s recent political developments — namely, embrace of Hindu nationalism, attempts to make it easier to do business, even irredentist visions of a Greater Nepal — are more relevant. Then again, unlike almost all other states in the region, Nepal was also never formally colonized, in part due to its value as a buffer state between Imperial China and British India.

There are also larger macro-forces at work, of course. Nepal is still a buffer between CCP China and BJP India. The U.S. is withdrawing from the “Indo-Pacific” and its volatile tariff policy is creating uncertainty in global trade. A global return to nationalism and protectionism could hit Nepal’s remittance economy. Nepal’s inflation rate has trended downwards since peaking at ~6 percent last December — it was just ~1.7 percent in August, which is significantly below the 10 year average — could thing get worse in Nepal if inflation picks up? Or is Nepal reflecting China’s more deflationary picture? Or perhaps something else entirely?

Nepal inflation rate

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In any case, Nepal is an unexpected and interesting detour for this analyst. Literally none of my investment clients have asked me about Nepal, and the few consulting clients I retain are similarly uninterested. So too was the world — for a brief moment on Sept 9, the grisly pictures from Nepal were dominating the Western news cycle, but then Israel decided to bomb Doha to assassinate 8 Hamas leaders and Nepal was no longer relevant.

Indeed, the primary reason I focused time on Nepal was because, unbeknownst to me until this week, some of the people I have hired to take snips of my podcast to turn into YouTube video clips are themselves Nepalese and asked me if I planned to do a podcast episode on Nepal. When I let them know that the spirit was willing but my access to guests was weak, they supplied a guest who gave a tremendous first-person account of the political changes and who opened my eyes to why we should be paying much closer attention to Nepal.

It has lessons for the future for how a younger generation will react with a government it finds unsatisfactory; for how tech companies and states will clash over issues like freedom of speech and content moderation; for how great powers might (or might) take advantage of unexpected, grassroots political unrest in a country of strategic interest; and perhaps more that I have not yet considered.

I, personally will be watching the performance of the Nepalese rupee extremely closely, and whether the new Nepalese government is willing to unshackle Nepal’s hydropower power toward Bitcoin mining or data centers more broadly. Remember, this is a young, digitally-native, restless and ambitious population with extremely low levels of trust in its own government and which may embrace the sort of alternative store of value potential of Bitcoin, especially if trust in government continues to decline and/or the government takes a page out of Bhutan or El Salvador’s book. This is part of a general theme I am playing with writing a much longer and more in-depth essay on, namely, the rise of Bitcoin as a distinctly geopolitical force and whether/how to integrate Bitcoin into a geopolitical framework — something I think no one has really done, especially in an apolitical and analytically rigorous way, and something I think has become more and more pressing with each passing episode of the U.S. executive interfering with the Fed and short-sighted monetary policy. More to come on that soon.

But to close the loop: If my limited experience of Nepal’s youth is any indication, there is significant human capital (sitting on extremely cheap energy) waiting to be unleashed if Nepal’s government can get out of the way and if the political change we’ve seen in recent weeks is real, which would mean real potential opportunity in a country that is not on almost anyone’s radar in the West outside of Risk-style thinking about India-China great power balancing.

I have my doubts about whether we just witnessed real change in Nepal (my instinct is that it is more like Egypt during the Arab Spring — the leader was replaced by the system remains), but “Gen Z” in Nepal has already accomplished something remarkable, and a taste of success may increase the urgency of their demands. At the very least it demands our attention and a serious reconsideration of what is possible in a world that is changing so rapidly by the week.

1. https://thehimalayantimes.com/nepal/house-of-representatives-panel-passes-restrictive-it-bill

2. https://www.ganintegrity.com/country-profiles/nepal/

3. https://www.kten.com/news/nothing-here-lack-of-jobs-forces-young-nepalis-abroad/article_e7435b6e-752f-5fa4-a7cd-dd323f71f623.html and https://fred.stlouisfed.org/series/SLUEM1524ZSNPL

4. https://kathmandupost.com/money/2025/08/28/remittances-hit-all-time-high-as-nepalis-send-rs4-72-billion-daily

5. https://www.iea.org/countries/nepal

6. https://www.myrepublica.nagariknetwork.com/news/nepals-electricity-export-reaches-850-mw-this-season-45-63.html

7. https://www.nbr.org/publication/balanced-hydropower-development-in-nepal/

8. https://www.sciencedirect.com/science/article/pii/S2405844024071706#sec7

9. https://www.scmp.com/week-asia/health-environment/article/3325849/how-laos-plans-pay-its-dam-building-spree-cryptocurrency-mining

10. https://www.reuters.com/business/media-telecom/nineteen-killed-nepal-gen-z-protest-over-social-media-ban-corruption-2025-09-08/

11. https://www.chosun.com/english/world-en/2025/09/13/242HOMFAR5G2XPPJ74RNQJVTE4/

12. https://timesofindia.indiatimes.com/world/south-asia/nepal-violence-ex-pm-khanals-wife-dies-after-house-torched-president-urges-calm-dialogue/articleshow/123791004.cms

13. https://www.reuters.com/world/asia-pacific/death-toll-nepals-anti-corruption-protests-raised-72-2025-09-14/

14. https://www.reuters.com/world/asia-pacific/nepals-interim-pm-karki-vows-fix-failures-that-led-deadly-gen-z-protests-2025-09-19/

15. https://www.britannica.com/event/2025-Nepalese-Gen-Z-Protests

16. https://www.britannica.com/event/2025-Nepalese-Gen-Z-Protests

17. https://www.eiir.eu/international-law/international-law-democracy/indonesias-military-role-grows-bigger-in-the-government-a-threat-to-pro-democracy-movements/

18. https://www.opendemocracy.net/en/podcasts/in-solidarity-podcast/sri-lanka-bangladesh-nepal-south-asia-spring-in-solidarity-podcast-roman-gautam/

"You're fired!"

We might need to start treating U.S. economic data like Chinese economic data.

The Bureau of Labor Statistics released its monthly jobs report today. Non-farm payrolls rose by 73,000. Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.2 million, changed little in July. In fact, the unemployment rate has remained in a narrow range of 4.0 percent to 4.2 percent since May 2024. The bigger news was revisions to May and June data. In the words of the BLS, “Revisions for May and June were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000. With these revisions, employment in May and June combined is 258,000 lower than previously reported.” As a result, this is what a chart of month-over-month percentage change in nonfarm payroll employment looks like over the last two years:

The headline that most media ran with was, accounting for the downward revisions in May and June, that the data was the worse employment 3-month trend since the pandemic. My first instinct was to roll my eyes at such sensationalism. In Bloomberg’s words: “In the last three months, employment growth has averaged a paltry 35,000 — the worst since the pandemic.” There is a lot of difference between, “this could be a leading indicator the labor market might be weakening” and “OMG this is the worst data since the pandemic” but the former doesn’t drive clicks so that is what goes.

But then I noticed what Matthew Boesler saw in the BLS report: “Without gains in health-care employment last month, the US wouldn’t have added any jobs at all…Excluding health-care and social assistance jobs, US employers shed 53,000 positions in May and 45,000 in June.” That is pretty grim and suggests the economy is on a much weaker footing than the consensus view appreciates.

Never one to miss an opportunity to create a controversy, U.S. President Donald Trump weighed in via social media to suggest that the commissioner of the BLS, Erika McEntarfer, who was confirmed by the Senate in January 2024 by a vote of 86-8, with then-Senator JD Vance voting “yea,” had rigged the data and that she would be terminated immediately. The post in all its glory:

Here’s the part of this missive where I remind you that my focus is geopolitics. I’m not an economist, a macro-US expert, or an expert in the bureaucracy of how U.S. Labor Department agencies function. I got a 2 in AP Statistics in high school. (In my defense I spent most of my last semester of high school in Israel so I didn’t exactly try that hard but a 2 is a 2.) One reason I haven’t had to focus on the U.S. all that much in this context is that, relatively speaking, I could trust that the data coming out of places like the BLS was relatively clean. To the extent I need to roll up my sleeves and look at this sort of data, I have committed a lot more of my time sifting through “official” economic data from other countries, parsing what could plausibly true, what might obviously be bullshit, and what kind of anecdotal data I should be looking for to confirm or deny the spotty and unreliable coming out of places like, say, China’s National Bureau of Statistics.

Which is precisely why I think it’s important enough to take some time out of my Friday evening to analyze President Trumps’s decision to terminate McEntarfer with a simple “WTF.”

It’s not like the writing hasn’t been on the wall. President Trump has been (unsuccessfully) bullying Fed chairmen Jerome Powell to cut interest rates. He has sold access to himself, and by extension the White House, to the top 220 investors in $TRUMP memeshitcoin in May. Also, to be clear, it’s not like President Trump is the first to do things like this — anyone who studied high school U.S. history knows that the spoils have belonged to the victor since at least Andrew Jackson. And my partner at Bespoke, Rob Larity, came on the podcast a few weeks ago and talked in depth about previous moments of tension between fed chairs and presidents and how President Trump’s stance toward Powell, while more stylistically crude than his predecessors, isn’t much different in quality. I’m sure there are myriad examples of presidents, governors, congressmen, and others falsifying data for their political benefit.

To wit, someone on X replied to a post I did on this and said, “But...do Trump’s grievances have any merit? The stats from BLS seem to have limited credibility at the very least--by virtue of repeated corrections, and by legitimate critique from many frustrated economists.” To which I said: “Sure but this isn’t a ‘a transparent review of statistical methodology’ any more than I am a Swahili speaking chipmunk.” Another faithful follower chimed in, “Dirty little secret, they all fiddle with the numbers?” To which I got to reply, “Of course but this is moving from “fiddling” to a 20-min You Enjoy Myself Phish jam.” Which was a big moment for me, because I’ve been writing research and analysis for 15+ years and never found an opportunity to use a Phish metaphor in my writing and here, at last, was my chance. Y’all ought to see the Man Mulcahy, you know?

And yet…I cannot shake the feeling that yet another precedent has been broken. And this one matters more than others because it means we might need to start treating U.S. economic data like Chinese data. I’m exaggerating for effect…but only a little. This has already been on my mind because as a result of Elon Musk’s brief tenure in government, about 1/3 of inputs used to calculate the CPI (i.e. inflation) are no longer measured because of BLS staff shortages; they are now modeled via “historical correlation to other inputs” according to Ben Hunt. Firing a petty (sorry Erika) bureaucrat like McEntarfer because you don’t like the data is banana republic-type shit and underscores something I've been saying for the last few months: The quality of U.S. data is at risk of deteriorating significantly. If that comes to fruition, as it seems it is, there will be a material advantage for those with better intelligence/data than others in everything from investing to entrepreneurship to estate planning.

The last ~30 years has been a golden age for the internet. The extent to which people shared real, accurate information — the type of stuff it would have been impossible to get your hands on pre-internet — was nothing less than miraculous. But as mistrust and bad actors and hackers have proliferated, so has a counter reaction to protect data and personal sovereignty. And as Ben Thompson and others have covered better than I ever could, the rise of artificial intelligence and data-hungry LLMs scraping the web for data and producing more information and data than ever before has made the situation even more acute.

Personal anecdote: I used to be able to find stuff on Google pretty easily. Now? It is almost impossible to get inputs that are older than the last two years, even if you are a self-proclaimed search-wizard like yours truly, and that situation is likely only to get worse in the coming years.

Now imagine all that data out there is actually itself getting worse, and so all the AI out there is putting out information and analysis and content that is based on shitty data, creating an unending, undecipherable global commons of data slop. (I talked a little bit about this with Luke Gromen at the beginning of my most recent podcast episode.) Suddenly, having a network of humans or businesses or agents that can tell you how things are going in towns and cities across the United States or in other parts of the world becomes as valuable as it was before all of this information was (of course relatively but still) reliably at our fingertips. We are becoming more like Bladerunner everyday, this is how a company like Tyrell Corp becomes more powerful than a government. I’ve also been thinking a lot lately about a Frank Herbert quote from Dune: “Once men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them.” But I digress.

(Fun fact, I asked ChatGPT to edit this and it said the draft was 80% of the way there but I should get rid of the jokes because “breaks the emotional tension.” So I in turn ignored 100% of ChatGPT’s suggestions. Take that, AI!)

In this kind of emerging world, a place like the Bureau of Labor Statistics was an unappreciated refuge for this analyst and I would guess others, because the data, however imperfect, was consistent, reliable, and ultimately gathered and analyzed by competent, proficient, and (relatively again) apolitical bureaucrats. It’s been a crazy week — as every week has to be in a reality TV show, every episode needs a new crisis, a new villain, a chance for the hero to fix the situation, and President Trump is nothing if not a reality TV show star. Today’s episode was basically “You’re fired!” except instead of an apprentice its the commissioner of the BLS. As a result, that once secure refuge is gone and I for one will be much more skeptical of U.S. economic data than before and relying more heavily on anecdotal data from personal networks than what I’m seeing flash through on the BLS. There’s great opportunity in that, but something immeasurable has been lost.