Elon Musk’s DOGE swiped $329 million in humanitarian funding from Nepal, leaving a Gen Z tech revolution to transform the budding country’s economy

When the Department of Government Efficiency, helmed by Elon Musk, gutted the U.S. Agency for International Development (USAID), it included slashing an estimated $329 million in humanitarian aid to Nepal. Stuti Basnyet, who served as the acting program office director for USAID in Nepal since 2024, remembers the months following the cuts.

“Everyone went through denial first that this was even happening, to just deep grievance at how it was being done,” she told Fortune.

According to Basnyet, USAID’s closure led to an estimated 30,000 direct job losses in the country. Among a raft of slashed humanitarian aid projects was foundational educational opportunities in Nepal, including support for early grade reading in Nepal across all its 35 districts, teacher training, and reviewing and refunding educational materials. Basnyet was left with the puzzle of recreating those services and resources—and building new ones—without the same steady funds Nepal had received from the U.S. since 1951, when it became Nepal’s first bilateral aid donor.

“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, second life, all of the knowledge and relationships, within a really short period of time?” Basnyet said.

The answer lay in Nepal’s private sector. Though considered a lower-middle-income country with a GDP of $1,447⁩⁨ ranking 124th of 145 countries tracked by the Harvard Kennedy School Growth Lab, Nepal is ready to grow its economy. It’s sandwiched between the commerce giants of India and China, and with more than 40% of its population between the ages of 16 and 40, is experiencing a “youth bulge” of talent and labor.

And without USAID, the small country’s private sector is making strides toward building up Nepal’s economy. Nepalis, afterall, are no strangers to disruptions. A series of widespread Gen Z-led protests last year gave way to a new and young government, led by 36-year-old former rapper Balen Shah.

Last year, Basnyet co-founded Aadyanta Advisory, a Nepal-based strategic advisory firm, which over the course of one year supported nearly 400 young Nepali innovators and founders and helped jumpstart the nation’s industrial push. It’s one of several efforts to give a jolt to Nepal’s economy, many of which are in partnership with the U.S. embassy, which provides funding opportunities and policy advocacy to support the private sector.

Basnyet’s transition from public servant to private sector industrialist mirrors Nepal’s own economic shift.

“I’m still continuing to do the same work, which is basically advocating for locally led, globally connected economic development efforts, stronger partnerships, private........

© Fortune