Leaders of the Gen Z movement cited high levels of corruption as one of their big motives for hitting the streets. The protests on Sept 8 and 9 were a success and as a result a new government is in place. The Post’s Biken K Dawadi sat down with the president of Transparency International Nepal, Madan Krishna Sharma, to discuss the situation of corruption in Nepal, the link between youths and corruption and the kind of corrections needed to curb corruption.

What are some salient indicators of corruption in Nepal?

The World Economic Forum projects that globally around five percent of GDP is lost to corruption. Since Nepal’s Corruption Perception Index (CPI) score of 34 in 2024 is way below the global average of 43, we can confidently say that over five percent of our GDP is lost to corruption.

Nepal’s GDP was projected to reach Rs61.07 trillion in 2024-025. This means, more than Rs3 trillion was lost to corruption in that year alone. The United Nations estimates that 2-5 percent of global GDP is lost to money laundering. This means that around Rs1.5 trillion was laundered from Nepal, much of which is speculated to land in offshore accounts of our political leaders. This is an estimate just for the last fiscal year. If we take account of the trend over the past two decades, we have lost tens of trillions of rupees to corruption.

How has the political instability in Nepal contributed to systemic corruption?

Nepal’s CPI score ranked it 107 among 180 countries in 2024. Political instability is the main reason for this high level of corruption. Our political system is such that no political party can secure a majority in the legislature, thereby promoting coalitions, and compromising political ethics and code of conduct.

Two parties that get votes with contrasting agendas form an opportunistic political alliance after elections. In this way, democracy is misused by the political parties. Such coalitions prioritise the interests of parties, groups and individuals over national interests when they form a government. The constitution perpetuates this problem by promoting frequent government changes. In addition, there is a sense of autocracy within the parties. Novel thoughts and young leaders are suppressed.

Do you also see a high level of government unaccountability?

Accountability is vital for good governance. But Nepal has failed to hold the governing individuals and parties to account. The problem starts with the nature of elections. The Election Commission (EC) set a spending cap of Rs450,000 for candidates for mayor’s position in municipalities. However, political leaders openly say that a candidate would need to spend Rs 100 million to win mayorship. And the EC maintains silence in response to such egregious statements.

Within political parties, the tendency of young leaders not to question the corruption of their top-rung leaders perpetuates unaccountability. Protesters discovered rooms full of cash in the residence of top leaders during the recent Gen Z movement. But how many young leaders have openly questioned the source of such wealth?

Now think of the lack of self-reflection in our leaders. The 15th five year plan set the goal of 10.3 percent annual GDP growth in 2023-024 but achieved 3.87 percent. When metrics suggest the inability to achieve set goals, the parties should reflect on their failure and resign. Instead, they keep misleading the public with hollow promises, deflecting blame.

Why have Nepal’s anti-corruption bodies, including the CIAA and the special court, failed to deter graft?

The main problem lies in the system of appointments at these bodies. The chief commissioner and commissioners of the CIAA are appointed by political parties. Judicial promotions are made with recommendation from the judicial council, which is again influenced by the ruling parties. These appointments and promotions are shared as spoils, which means that individuals with political ties, who will favor the political leaders, are appointed and promoted over capable ones.

The number of complaints registered at the anti-graft body rose by 28.7 percent, from 2022-023 (20,905) to 2023-024 (26,918), implying rising corruption and public dissatisfaction. The rate of cases registered at the special court stayed constant at 0.7 percent. In 2024-025, when 28,597 complaints were registered, the rate of case registration slowed to 0.4 percent (137). This suggests political protection for individuals and organisations favoured by the ruling parties. When the political class is confident of its ability to meddle with persecution of groups and individuals involved in corruption, the anti-graft bodies naturally fail to deter corruption.

Members of Gen Z who took to the streets cited high levels of corruption as one of their main gripes. How are youths impacted by corruption?

According to the 2021 census, Nepal’s youth population (16-40 years old) accounted for 42.56 percent of the total population. This is the segment most affected by persistent corruption. They seek, above all, decent healthcare and education in the country. However, these two sectors are among the least prioritised, with spending in both sectors well below the global average.

There are no limits to the potential of the youth, as long as they are given opportunities. They are independent, innovative and open-minded. But by making it costly to get education and access health facilities, the state has pushed the youth abroad. And even when they secure such opportunities, the political system creates hurdles for migration.

The Gen Z protest was not unanticipated. TI’s motto for the International Anti-corruption Day 2024 was “Uniting with Youth Against Corruption: Shaping Tomorrow's Integrity” and we warned the government of the possibility of such a reaction from the youth. But the government turned a deaf ear to our appeal, as also highlighted by Prime Minister KP Oli’s last-minute snub of the program on the anti-corruption day.

Does the wealth gap also contribute to the youth’s anger?

Nepali political leaders project themselves as not motivated by financial gains, claiming they lead simple middle-class lives. When the kids of such leaders show off their lavish lifestyles, the general public naturally cultivate resentment with the political class.

The business class relies heavily on trade to make their profits. The political class, in cahoots with the business class, relax import duties and other taxes to favour certain businesspeople. The general public, particularly the youth, observed the widening wealth gap perpetuated by such unethical practices.

Seeing such individuals get away with the explicit misuse of the political system added to the public resentment and triggered the protest.

With young protesters taking to platforms like Discord to organise, how does this use of technology change the dynamics of anti-corruption activism?

We are living in the age of rapidly evolving technological advancements. The youth learn the use of such technology quickly. The Gen Z uprising might have taken months and years in absence of the recent technological advancements, particularly social media platforms such as Discord. Technology facilitated the quick unity and coordinated mobilisation of protesters across the country in the first day of the movement. Not a single youth who wanted to take part was left behind due to lack of information regarding the protest.

With former Chief Justice Sushila Karki appointed as caretaker leader, what specific judicial reforms could this interim government prioritise to rebuild public trust and lay the groundwork for corruption control?

The main mandate of the interim government is to conduct fresh elections within six months. There are systemic problems in our elections that need to be addressed. The interim government, by issuing relevant ordinances, must make transparent and strict legal requirements to ensure corruption-free, independent and ethical elections. It also needs to root out the conflict of interest in our public servants during the elections. Individuals with tainted past must be barred from contesting.

We need to integrate our cultural values with the best practices relating to elections in the world. When looking for such practices, the government needs to focus on the election practices of countries with high CPI scores, preferably over the score of 70, to foster the spirit of anti-corruption.

How can the widespread public anger and distrust revealed by the Gen Z movement be harnessed to create a sustainable, legally-backed system of public oversight?

The Financial Action Task Force report that placed Nepal in the Grey List, highlighted major inadequacy in enforcement of laws, insufficiency in investigation of corruption and ineffectiveness of corruption prosecution. All of these weaknesses are the result of political influence. The political impunity and widespread corruption needs to be addressed in a sustainable manner.

Politics is service, but it is perceived as a profession or a business by Nepali leaders. We need to clean up politics. We need to form strict laws against corruption and ensure that they are enforced stringently. The individuals who break such laws must be prosecuted with punishments comparable with best practices in the world. This would act as a deterrent.

We need to keep our anti-graft bodies, CIAA and the special court, free from political influence. For this, we must adopt practices that would avoid the political appointment of commissioners at the CIAA and promotions in the special court. We also need to think of forming watchdogs that would critically analyse such appointments and promotions and point out any malpractice in the process.