IMAGE: SISAN BANIYA
WHEN PROTESTERS set fire to Singha Durbar last September, they were angry about corruption. They were also furious that the government had switched off Facebook. Nepal’s decision to suspend 26 social media platforms including YouTube and TikTok for “regulatory non-compliance” had inadvertently revealed a truth about the country’s economy: its youth no longer work for the state or for remittance-sending employers abroad. They work for the algorithm.
The creator economy in Nepal is now worth some $30m-40m a year, a figure that understates its importance. Over 50,000 Nepalis with more than 1,000 followers earn money by making videos, hawking products and building audiences. The top tier pulls in $18,000 a year, more than most doctors or engineers. For a country where youth unemployment stands at 23% and remittances from workers abroad make up a quarter of GDP, the ability to earn dollars without leaving Kathmandu is revolutionary. The government has noticed. It now collects data on digital earnings and levies a 2% tax on foreign platforms. That is progress. But Nepal’s rulers have a talent for making bad situations worse.
The draft Social Media Bill is a textbook example of regulatory overreach. Platforms must obtain two-year licences, appoint local complaint officers and police “indecent” content—a term left conveniently vague. Penalties include five years in prison. Officials insist this will bring order to digital chaos. In reality it risks strangling an industry that thrives on spontaneity and borderless reach. The September blackout, which lasted days, was a dry run. Creators lost income, brands pulled campaigns and e-commerce stalled. The protests that followed were led by Generation Z, for whom the digital shutdown was an existential threat.
The irony is that Nepal desperately needs what creators provide. Remittances, long the economy’s crutch, are unreliable. Labour migration to Gulf states is brutal and uncertain. Traditional sectors—agriculture and manufacturing—have stagnated. Digital services, by contrast, are growing at nearly 13% a year. The advertising market is shifting online: 34% of all ad spend is now digital, up from almost nothing a decade ago. Creators are not just entertainers. They are sales agents, as well as educators and trust-builders in a country where consumers are sceptical of online commerce. Brands have learned that a micro-influencer in Pokhara is more effective than a billboard in Kathmandu.
Yet the model is broken. Creators face CPM rates far below those in America or Europe, meaning they need millions of views to scrape by. Payment systems are clunky: international gateways like Stripe and PayPal remain inaccessible, forcing workarounds through foreign bank accounts or domestic wallets. Internet penetration is 56% nationally but drops to 20% in the mountains. Digital literacy—the ability to use tools meaningfully, not just scroll—is stuck at 31%. And the language problem looms large. Content in Nepali reaches 30m people; content in English reaches billions. Top creators must choose between loyalty and scale.
Nepal is not alone in grappling with these tensions. India has built digital payment rails that make commerce seamless. Nigeria recognises the creative sector as its second-largest employer. ASEAN countries have turned live shopping into a $100bn industry. Nepal could learn from all of them. Instead it veers between neglect and panic, banning platforms one month and courting them the next.
What should be done? First, scrap the vague content clauses in the Social Media Bill. Indecency and hate speech are not the same thing; collapsing them into one offence invites abuse. Second, incentivise formalisation without punishment. Offer tax breaks or social security to creators who register as businesses. Third, invest in infrastructure—fibre-optic cables alongside digital education that teaches intellectual property and business models. Fourth, open payment gateways. Nepali creators compete globally but are paid locally, a mismatch that limits growth.
The larger question is whether the government understands what it has. The creator economy is a rare bright spot in a stagnant landscape. It employs the young, earns foreign currency and requires no factories or roads. It is, in short, exactly the kind of industry a poor, mountainous, politically fragile country should nurture. Yet the instinct remains to control rather than enable, to see creators as threats rather than assets.
When the fires died down at Singha Durbar, the platforms came back online. The government had blinked. But the lesson—that digital livelihoods can be switched off by decree—lingers. Nepali creators are building something valuable from nothing: a virtual economy in a landlocked nation, a future without migration. The state’s job is to get out of the way. ■
