NEPAL: GOVERNMENT FACES FUNDING UNCERTAINTY, POLITICAL PRESSURE AND INDUSTRY PUSHBACK

   Wed, 02 April 2025

The Donald Trump administration’s 90-day suspension of USAID operations, including the USD 500 million grant to Nepal, has halted the construction of important power projects in the country. This move may create opportunities for China to deepen its economic foothold, especially as Nepal advances its Belt and Road Initiative participation. Meanwhile, the recent return of former King Gyanendra Shah to Nepal has prompted large pro-monarchy demonstrations, unsettling the political elite, although a return to monarchical rule is highly unlikely in the short to medium term. Separately, the government’s proposed casino regulations, particularly the mandatory hotel ownership clause, reveal a disconnect between government priorities and industry interests.

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