# Nepal's private sector fills the void left by USAID cuts

> After the U.S. slashed $329 million in aid, Nepal is pivoting to tech startups and foreign companies to drive economic growth.
- Title: Nepal's private sector fills the void left by USAID cuts
- Summary: After the U.S. slashed $329 million in aid, Nepal is pivoting to tech startups and foreign companies to drive economic growth. Nepal is replacing lost U.S…
- Keywords: nepal, usaid, elon musk, doge, humanitarian aid cuts, tech sector, kathmandu, private sector, gen z, balen shah, economic development, foreign investment
- Source: Fortune — https://fortune.com/2026/09/20/elon-musk-doge-usaid-nepal-private-sector-tech-hub-gen-z-revolution
- Author: Sasha Rogelberg
- Read time: 2 min
- Topics: nepal, usaid, elon musk, doge, humanitarian aid cuts, tech sector, kathmandu, private sector, gen z, balen shah, economic development, foreign investment
## DOGE slashes Nepal's aid
Elon Musk's Department of Government Efficiency gutted USAID, cutting an estimated $329 million in humanitarian funding to Nepal and eliminating about 30,000 jobs.
## Education programs wiped out
The cuts eliminated foundational educational support across all 48 districts, including early grade reading programs and teacher training that had been funded since 1951.
## From denial to action
Stuti Basnyet, who led USAID's Nepal office during the shutdown, faced the challenge of rebuilding services without the same funding. She pivoted to the private sector.

> How do you use all of the skills and the experience you've gained in different ways to create an environment where you still felt like you had dignity?
## Nepal's demographic advantage
More than 40% of Nepal's 30 million people are between 16 and 40 years old, creating a youth bulge of talent and labor ready to drive economic growth.
## Gen Z led political change
Violent protests by Gen Z demonstrators over social media bans and corruption led to a new government in March, with 36-year-old former rapper Balen Shah as Prime Minister.
## Aadyanta Advisory launches
Basnyet co-founded a strategic advisory firm that supported nearly 400 young Nepali innovators and founders in one year, jumpstarting the nation's industrial push.
## Silicon Peaks emerges
Kathmandu is becoming a tech hub, with companies like SecurityPal and about a dozen publicly traded U.S. firms establishing major operations in Nepal's capital.

> I wouldn't say Nepal is most people's first choice destination. But I think that that's changing.
## Hydropower fuels growth
Nepal runs on 99% hydropower and has over 100,000 megawatts of untapped potential, with only about 5,000 currently developed, offering massive energy advantages for tech companies.
## AmCham Nepal expands fast
The American Chamber of Commerce in Nepal grew from 42 members two years ago to 72 today, signaling growing U.S. business confidence in the country.
## IT exports surge
Nepal exported about $1 billion in information technology products in 2025, with the government targeting $20 billion over the next 10 years.
## Youth exodus remains urgent
About 1,500 young Nepalis leave the country for foreign work each day, driven by farming jobs that pay 67% less than the national average.
## Disaster tests new government
In August, flash floods from a collapsed glacier killed 1,300 and left 5,000 missing, with damages exceeding $2.56 billion, testing the new administration's response.
## Private sector steps in
Tech companies including Nvidia donated $10 million to disaster relief, while insurance and telecom firms contributed resources, showing private sector engagement in crisis response.
## USAID's absence is noticeable
After the 2015 earthquake, USAID deployed 128 people and eventually provided $64.5 million plus critical hospital and search-and-rescue infrastructure that private companies cannot replicate.

> USAID's absence is noticeable.
## Nepal's path forward
Basnyet argues Nepal must use domestic resources better, mobilize local capital, and engage business and diaspora networks while maintaining global cooperation to build self-sufficiency.

> I don't think the lesson is that Nepal should remain aid-dependent. It should not.
## Key takeaway

Nepal is replacing lost U.S. humanitarian aid with private sector investment and tech innovation, though the shift carries real risks for the country's most vulnerable.