Nepal’s New Government Faces a Stiff Test

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Nepal’s New Government Faces a Stiff Test

Dahal’s return to power could reset Nepal’s foreign policy – but first he’ll have to survive an unstable coalition and disgruntled electorate.

Nepal’s New Government Faces a Stiff Test

Nepal’s former prime minister Sher Bahadur Deuba, left, reacts as newly elected prime minister Pushpa Kamal Dahal, right, takes oath during a ceremony at the President House in in Kathmandu, Nepal, Monday, Dec. 26, 2022.

Credit: AP Photo/Niranjan Shrestha

The reality that Nepal’s democracy was in crisis had been made clear well in advance of the November 2022 elections. The protracted nature of negotiations that followed the closing of the polls on November 20, and the announcement of the results on December 14, once more emphasized that the old guard of the Nepali political scene favored personal ambition and a lust for power over the will of the electorate.

Nearly two weeks later, the outcome, which saw the reuniting of the two largest communist parties in Nepal for the first time since the Communist Party of Nepal (CPN) split in 2021, will have been greeted warmly by the Chinese Communist Party (CCP). This is in spite of any understandable concerns Beijing may have over the fragile nature of this new coalition. After all, Nepal has long stood as a case study demonstrating the limited extent to which the CCP can meddle in a foreign country’s internal affairs.

Nepali voters, on the other hand, will feel the most aggrieved at the sight of the new government. Following the election results, it was widely predicted that the then-incumbent prime minister, Sher Bahadur Deuba, would remain in his post, with his party, the Nepali Congress, set to form a similar coalition to the one that had ruled since 2021. However, this outcome required the cooperation of the CPN-Maoist Center and its leader, Pushpa Kamal Dahal. Despite his party winning just over a third of the Nepali Congress’ total seats, Dahal opted instead to hold the country hostage, demanding that he should lead any new government. As a result, talks between the Maoists and the Nepali Congress dragged on, eventually breaking down on December 25.

A day later, Dahal became prime minister, having unexpectedly reunited with the other major communist party, the CPN-Unified Marxist-Leninist (CPN-UML). Unlike Deuba, K. P. Sharma Oli, leader of the Marxist-Leninists, was willing to concede the position of prime minister in exchange for his and his party’s return to relevancy.

The decision could have a profoundly negative impact on an already disillusioned Nepali electorate. The Nepali Congress, despite winning the most seats and being the only major party not to lose any, now finds itself in opposition, whereas the country’s new prime minister hails from a party that won just 13 percent of the vote. Questions must also be asked about the potential role played by the CCP in this reunion, especially when considering the lengths that Chinese diplomats went to two years ago to avert the communists’ inevitable split.

In advance of the elections, the rise of new parties and fresh politicians appeared to be a sign of the public’s rejection for the old clique of Nepali lawmakers and established parties. Rabi Lamichhane was the personification of this sentiment. Once a hugely popular television presenter, Lamichhane formed the Rastriya Swatantra Party (RSP) just five months before the November elections, building support through claims that the triumvirate of Oli, Deuba, and Dahal had threatened Nepal’s democracy. The public showed their support for the principles Lamichhane advocated, rewarding his party with 20 seats and making it the fourth-largest in the country.

Yet with the promise of high-level roles in cabinet on the table, Lamichhane abandoned his anti-establishment rhetoric, offering valuable support to Dahal’s new coalition government. This betrayal of pre-election values was, however, short lived; Lamichhane has since been stripped of his cabinet post and seat in Nepal’s parliament following a dispute over his citizenship.

Dahal will now face a tough task in convincing the Nepali people that he is the right man to govern them for the next five years. Confidence in the political environment in Nepal has been on the decrease in recent years, with no one party able to see out a full term and with voter participation steadily declining at each election.

Fifteen years ago, Dahal had exclaimed that overthrowing the monarchy would place Nepal on a steady path to economic prosperity. Now, beginning his third stint as prime minister, Nepal is still desperately in search of that good fortune. The country’s unemployment figures make for grim reading, with a staggering number of disenfranchised Nepalis looking overseas for better employment opportunities. The Middle East has proven an attractive location for such ambitions in recent years, although many migrant workers that have made the trip have faced exploitation and abuse, with some even losing their lives.

Dahal and his fragile coalition will now face a substantial struggle to implement a successful economic policy with such a questionable mandate from the public.

The Wider Geopolitical Picture

Nepal’s new government will represent yet another significant shift in the interactions between the landlocked country and its two large neighbors. Since the last general election in 2017, two separate governments have sat in Kathmandu, both of which have pursued contrasting relations with New Delhi and Beijing. The CCP’s joy at the original unification of the Marxist-Leninists and the Maoists was followed up by a strengthening of ties between Nepal and China. The most significant development was Dahal, during a previous stint as premier, enlisting Nepal in China’s Belt and Road Initiative (BRI).

Equally, the CCP’s despair at the CPN’s subsequent split in 2021 proved justifiable. After all, the period that followed saw the Nepali Congress, led by the pro-India, pro-U.S. Prime Minister Deuba, take the reins from the now fragmented communists. Deuba’s regime sought closer relations with New Delhi and Washington over Beijing, neglecting the BRI in favor of U.S. backed grants. Lucrative hydroelectric projects, from sites previously controlled by China, were also awarded to an Indian firm.

Thus, when news emerged that the Nepali Congress had won the most seats from the November polls, there was a sense that India would be the happier of the two neighbors. However, this hinged on the resumption of the Nepali Congress and Maoist coalition, which didn’t pan out. Rather, on the anniversary of Mao Zedong’s birthday, Nepal’s communist reunification was complete, with the CCP even praising the “smooth” nature of the elections. That’s an ironic sentiment considering the outcome had been determined in private negotiations, rather than at the voting booths.

After the brief niceties, the CCP swiftly returned to business. A day after the new prime minister was officially sworn in, the Chinese embassy in Nepal took to Twitter to announce the arrival of an “expert team for the feasibility study and survey of [the] China-Nepal cross-border railway.” The infrastructure project, which would connect Nepal with China, through a 170-kilometer railway passing through Tibet, had been announced under the previous government in August of last year; however, it is unsurprising that the first real steps to begin the process of construction were taken just a day after a more China-focused regime had taken power. After all, the project would be funded by the CCP and incorporated as part of the BRI, which Deuba and the Nepali Congress had their concerns about.

China’s hope is to establish long-lasting physical connections between the two countries, which will ultimately be able to transcend changes of government in Kathmandu. With improved transportation connectivity, subsequent Nepali governments will be encouraged to deepen ties with China, even if such actions go against their own ideological worldview. This will mitigate against the likelihood of further CPN fracturing and the return of the more China-sceptic Nepali Congress.

In stark contrast to these developments, the Narendra Modi government in India may struggle to achieve similar bilateral successes with Dahal in power. Despite statements to the contrary, both New Delhi and Washington will no doubt be disappointed at the prospect of re-establishing ties with a leader that has previously branded India an “expansionist” force and the United States an “imperialist power.”

Similarly, the other key player in the new coalition – Oli, leader of the Marxist-Leninists – oversaw a significant straining in relations between India and Nepal in his last term in office, epitomized by the release of a map claiming Nepali sovereignty over 150 square miles of territory also claimed by India. The contrast between Dahal and Oli’s views on India compared to China suggest the next five years will see Nepal looking north far more often than it does south.

Moving Forward

In the short term, much to China’s disappointment, political instability in Nepal will likely persist, undoing the CCP’s hard work in encouraging the new government’s conception. The opportunistic nature of the current coalition does not bode well for its survival, especially considering that far stronger governments, with actual majorities, have been unable to complete a full term in office since 2008. The last split between Dahal and Oli was brought about not because of ideological differences, but rather personal discrepancies between senior members of the pairs’ parties. As previously, however, the CCP will be actively working to ensure that this fragile agreement remains in place long enough for Beijing to consolidate its own power in the country and usher in greater Chinese involvement in Nepal’s domestic and foreign affairs.

As for the United States, several high-level diplomats have visited Nepal in the first part of 2023, airing their grievances and seeking to remind the skeptical new Nepali government of the value of the two countries’ partnership.

Domestically, while the latest election saw the rise of younger, more independent political parties, such as the RSP, the fact that they were still forced into coalitions with the bigger, more established parties will no doubt be seen as a disappointment to many voters who saw an opportunity to move past the Deuba-Oli-Dahal dominance of the last decade. Although a defeat of the larger parties did not transpire in this election, there is a clear indication that the two major communist parties are on a downward spiral. In fact, the Marxist-Leninists and the Maoists, despite forming a government, hemorrhaged a total of 64 seats compared to 2017, with the Nepali Congress only gaining 24.

This is contrasted by the performance of two of the new parties, the RSP and the Janamat Party, who collectively won 26 seats, a solid foundation from which both can build momentum going forward into future elections. Members of both houses and the seven provincial assemblies will now turn their attention to the upcoming presidential election on March 9.