Economic Instability and Capital Flight Risk in Nepal

It is an established rule of economics that capital, as much as it is dynamic in seeking returns, retreats even faster when it perceives insecurity. In other words, where there is policy stability and legal security, investment pours in; but where administrative fear, biased actions, and policy uncertainty prevail, capital is forced to flee to safer destinations.

This is precisely the scenario unfolding in Nepal's business circles today. Despite the long political transition, load shedding, policy ambiguity, and strikes, our entrepreneurs have a history of establishing industries, banking, and infrastructure by taking extraordinary risks. Without the courage of the private sector, it is easy to imagine the state of the country's production, revenue, and employment today. But ironically, the business community, established through such long struggles, now appears to be under the shadow of unprecedented doubt and fear.