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The Return of the Left Alliance in Nepal Changes Regional Power Dynamics

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The Return of the Left Alliance in Nepal Changes Regional Power Dynamics

With the pro-India Nepali Congress out of the ruling coalition, and the China-friendly CPN-UML back in, Nepal’s diplomacy looks set to change.

The Return of the Left Alliance in Nepal Changes Regional Power Dynamics
Credit: Facebook/ Comrade Prachanda

The Left Alliance government is back in Nepal for the third time. The Maoist Center-led government broke ties with the Nepali Congress and has allied with its former arch-rival, the Communist Party of Nepal (Unified Marxist Leninist) or CPN-UML. The two other parties to join the coalition are the Madhdesh-based Janta Samajwadi Party and the debutant Swatantra Party, following an eight-point deal. It will be the third alliance government formed in Nepal since the National Assembly elections in November 2022. 

With a history of short-term governments in Nepal’s 15 years of democratic progression, the current reconfiguration is no surprise, and it will be no surprise if the Maoists get back again with the Nepali Congress in months and years to come. 

Power sharing, political discontent, ideological differences, underperformance, and pressure to restore Nepal to a Hindu state – a long list of reasons reportedly forced the Maoists to sever ties with the Nepali Congress. While the Nepali Congress expected the Maoist leader and current prime minister, Pushpa Kamal Dahal (also known by his nom de guerre, Prachanda) to leave the alliance, it did not expect an overnight turnaround. 

Power-sharing has been a thorn in the side of the Left Alliance in the past. Dahal and CPN-UML chief and former Prime Minister K.P. Sharma Oli, are both strong personalities who have previously clashed over who gets to occupy the prime minister’s post. Such disagreements led to the dissolution of a short-lived unity party formed by the merger of the Maoists and the CPN-UML.

There’s a strong possibility that Oli will once again vie for the prime minister’s position, given his history of ambition. With CPN-UML holding the largest share of legislative seats within the alliance – the CPN-UML accounts for 76 seats, compared to the Maoists’ 32) – Oli could potentially leverage this advantage to renegotiate the terms of engagement, a tactic he has employed in the past

The Maoists and the CPN-UML have been in talks on restoring their alliance for at least six months. What led the two leftists parties to officially patch up their differences at the current moment? 

Dahal reportedly conveyed to the Nepali Congress chair, former Prime Minister Sher Bahadur Deuba, that external pressure forced him to join hands with CPN-UML and form a new government.

If this assertion is true, China emerges as a plausible factor, given its historical inclination toward forging alliances with leftist parties in Nepal. This notion gains credence in light of China’s past efforts, such as its unsuccessful attempt in 2020 to mediate the conflict between Oli and Dahal.

On the other hand, India has enjoyed a comfortable working relationship with the Nepali Congress and the Maoists. Although Maoists were a challenging party for New Delhi to get along with when Dahal first gained the prime minister’s seat in 2008, the two have come a long way in working together. However, the CPN-UML has advocated closer ties with the northern neighbor China; Beijing suits both their ideological requirements and their ultra-nationalistic outlook – which is primarily anti-India. 

Amid the intense geostrategic maneuvers unfolding in the Himalayas between China and India, Nepal has emerged as a pivotal focal point for both Beijing and New Delhi. China views Nepal’s extensive border with its Tibet region as a critical security challenge, prompting Beijing to intensify efforts to strengthen its ties with Kathmandu under the Belt and Road Initiative (BRI). Conversely, India seeks to uphold its longstanding “special ties” with Nepal, highlighting the complex interplay of strategic interests in the region.

China significantly boosted its influence in Nepal after successfully persuading the Nepali government, then under Dahal’s leadership, to join the BRI in 2017. The deal marked a major diplomatic triumph for Beijing and a setback for New Delhi. However, despite discussions surrounding the BRI in the last eight years, little progress has been made in its actual implementation. The comeback of the Left Alliance will be tempered with overtures to China, matching Beijing’s desire to infuse life into a stagnant BRI. 

Beijing would like to replicate the Maldives-like diplomatic theatrics, where India is seen at a disadvantage, in Nepal. China will also want to infuse life into discussions on an extradition treaty with Nepal, which stands at the heart of Beijing’s wish to control and criminalize the activities of the Tibetan refugees in Nepal advocating and participating in the “Free Tibet” movement. 

Meanwhile, India faces challenges in aligning with the Left Alliance for two key reasons. First, the energy trade between Nepal and India has grown crucial over the past couple of years. However, India strictly purchases power generated through its own investments in Nepal, refusing any power produced with Chinese involvement. With the CPN-UML now in government, Nepal may seek alterations in this arrangement despite the benefits of power trade in reducing its trade deficit with India.

Second, India stands to lose the smooth cooperation it enjoyed with the recently dissolved Maoist-Congress coalition. During the dissolved government, the Nepali Congress held the Foreign Ministry, fostering a favorable equation for India. Just last month, Foreign Minister N.P. Saud visited India for the 9th Raisina Dialogue, engaging with top Indian officials, including his counterpart, S. Jaishankar.

As concerns arise for India regarding the Left Alliance, there is also potential for shifts in the partnership between Nepal and the United States, a significant development ally. Particularly, there may be a slowdown in the implementation of the Millennium Challenge Corporation (MCC) projects. Despite facing domestic and Chinese opposition, the Nepali Parliament finally approved a $500 million MCC grant from the United States in 2022, following a five-year delay. 

China perceives the MCC as a component of the U.S.-led Indo-Pacific strategy, countering its BRI. Hence Beijing aims to increase Chinese loans and subsidies to Nepal to enhance its influence.

To conclude, the re-emergence of Nepal’s Left Alliance signals a shift in power dynamics, impacting domestic politics and regional geopolitics. With China’s influence growing, Nepal’s foreign policy may tilt further toward Beijing, challenging India’s interests. This shift poses challenges for India, particularly in trade and diplomatic relations, while also affecting Nepal’s partnerships with other key players like the United States. The re-emergence of the Left Alliance underscores the complex interplay of ideology, geopolitics, and regional power dynamics in Nepal’s political landscape.