With a reported participation of nearly 60 percent of delegates, the special general convention of the Nepali Congress opened at Bhrikuti Mandap in Kathmandu on January 11, 2026. Convened at the initiative of general secretaries Gagan Kumar Thapa and Bishwa Prakash Sharma, the gathering has generated considerable media attention and public anticipation. Whether the exercise proves to be merely a display of organisational strength or succeeds in initiating substantive reform—through statutory amendments, a recalibrated political outlook and a change of leadership—remains uncertain.

What appears more evident, however, is that the convention has already exposed the limits of party chair Sher Bahadur Deuba’s authority: Either he accommodates the demand for change, or risks being reduced to a symbol of an exhausted political order struggling to stay afloat. His apparent defiance reveals a leader under siege, masking insecurity behind a display of confidence.

The fate of Deuba is less a personal drama than a symptom of a deeper political malaise. Since sovereignty is its only significant resource that creates opportunities for rent-seeking, politics in Nepal has resembled a succession of enterprises—private, partnership, limited company and corporate entities—run by political entrepreneurs rather than being a collective expression of citizenship. Throughout this evolution, the Permanent Establishment of Nepal (PEON) has exercised control through different actors at different moments. The recent drift is towards political corporatism. Here, elite bargaining increasingly mirrors the power of the board of directors to appoint or dismiss a chief executive: Sometimes by calculation, sometimes by convenience, but always to serve the permanent establishment.

By the mid-1770s, King Prithvi Narayan had expanded the boundaries of the Gorkha principality through conquest and shifted its capital to the Kathmandu Valley. He treated the newly acquired state as the personal domain of the Shah family. Under the jiyu-dhan sarkar ko principle—where life and property belonged to the king—all resources, including the population, were considered assets of the monarch, to be mobilised or exploited at his discretion. The Divya Updesh attributed to the victorious Shah reads almost like a monarchical manual of running the state as a family enterprise.

After the Kot Massacre of 1846, the Shah family was compelled to relinquish absolute control and accept Jung Bahadur Kunwar—who later styled himself as Rana, disowning his Khas tribal roots to claim a royal lineage—as a power-sharing partner. The Shamsher branch of the Ranas seized the Shah–Rana family firm through a palace coup in 1885 but retained its ownership structure. Control shifted back to the Shahs in 1951, through a combination of popular uprising and decisive foreign intervention, though the experiment of transforming the state from family property into a modern polity lasted less than a decade. In 1960, King Mahendra staged a royal-military coup, and Nepal once again became the property of the Shahs with geopolitical rent in the form of foreign aid as its primary resource.

Centralised corporation

Once King Birendra was forced to restore the multiparty system in 1990, a fresh batch of political entrepreneurs took over day-to-day governance, even as he retained the instrument of last resort—the army—in his own hands. The machinery of the state, built over decades through careful screening by the palace secretariat, was left largely untouched. Crony capitalists of the earlier era learned to negotiate with novices of the parliamentary game, while the puppeteers of Narayanhiti Palace continued to move pawns on the political chessboard to prevent democracy from taking root in Nepali soil.

Paradoxical as it may seem, the PEON became even more powerful amid the perennial squabbling of post-1990 politicians. The trio that took turns after 2015 to run an ethnonational and majoritarian kleptocracy as a private limited company with a chosen group of political shareholders—Messrs Khadga Prasad Sharma Oli, Sher Bahadur Deuba and Pushpa Kamal Dahal—had cut their teeth in political corporatism during the decade of instability between 1996 and 2005. This period also witnessed the fluctuations in Deuba’s political fortunes, as he repeatedly served as the fall guy of the royal-military regime.

When persuaded to recommend the dissolution of parliament, even as the terms of local governments had been allowed to lapse—creating a political vacuum in the countryside—Deuba failed to see that he was being used to destroy his own party. He was dismissed as an incompetent prime minister in 2002, reappointed as a ‘useful idiot’ in 2004, and dismissed again, placed under house arrest, and later taken into custody on corruption charges in 2005, once his utility to the royal-military regime had expired. There is a reason he has mastered political opportunism and acquired immunity against public humiliation. The PEON needed fresh faces to run the corporate entity and re-establish its sovereign credibility, and only a self-coup would create the ground to dispense with discredited executives that had become toxic assets.

Hostile takeover

Whoever designed, planned and executed the Fall Protest of September 8, 2025, probably had a fair idea that it would turn into a full-fledged Chartreuse Revolt by the following day. The date—the ‘9/11’—carries a heavy historical weight: It is reminiscent of the CIA-backed coup in Chile in 1973, the attack upon the US in 2001 with hijacked civilian aircraft as weapons of destruction, and the massacre of Madheshis in 2015 by the forces of the ethnonational state.

To borrow from anarchist terminology: If the first day was the Propaganda of the Word—marked by slogans against ‘Nepo kid’ and corruption—the second day became the Propaganda of the Deed. It was a grim spectacle: The Presidential Palace, the Central Secretariat, the Parliament House, the Supreme Court and the offices of major media outlets burned in tandem. Across the country, private homes and commercial centres smouldered, with fire brigades nowhere to be seen. The constitutional regime that had remained dysfunctional for a decade completely collapsed, and the PEON asserted its power in the name of restoring order.

The extra-constitutional government put in place at the initiative of the Nepal Army is a stopgap arrangement, and scheduled elections must be staged to acquire a fresh mandate. Ethnonational chieftain Sharma Oli has retained his platform. Dahal maintains control over his diminished flock. The newfound coalition of jingoists and populists under the leadership of a discredited Rabi Lamichhane doesn’t appear to hold as much promise on the electoral battleground as imagined. The Madhesh-dependent parties—no matter whether united or divided—can only be an appendage in the ethnonational state.

For the permanent establishment, the takeover of the Nepali Congress is not a matter of preference but of necessity. Control over the sovereign enterprise cannot be sustained indefinitely through exhausted communists or discredited populists alone. Deuba’s removal is therefore less a reckoning with failure than a managerial decision to retire a liability and rebrand the organisation with fresher faces.

Perhaps reformation of the Nepali Congress is necessary, but unless this exercise also abandons the habit of treating federalism as administrative decentralisation, inclusion as discretionary concession and minority dignity as patronage, the refurbishment will remain cosmetic. As long as the state is imagined as the exclusive property of Khas-Arya custodians, every change of leadership will merely rearrange the boardroom—leaving the enterprise itself intact.