In yet another chapter of <a href="http://archive.nepalitimes.com/article/editorial/shadow-government-nepal,3838">Nepal’s promiscuous political love triangle</a> between the Nepali Congress (NC), Maoist Centre and UML, one leader has just dumped his partner to go off with his ex.
In the latest break-up -make-up political saga, the Maoists and the UML joined hands on Monday for the third time since 2017 to form a new left-led coalition.
The shotgun wedding between Prime Minister Pushpa Kamal Dahal’s Maoist Centre and UML Chair K P Oli means the <a href="https://nepalitimes.com/news/deuba-5-qh371fm4">NC’s Sher Bahadur Deuba</a> is now in the opposition, together with Madhav Nepal's CPN-Unified Socialist.
Dahal and Oli have revived their power-sharing deal to rotate the premiership for two years each till the next elections in 2027.&nbsp;
Besides the UML, the new coalition also includes Rabi Lamichhane’s Rastriya Swatantra Party (RSP) and Upendra Yadav’s Janata Samajwadi Party (JSP). CK Raut’s Janamat Party is also said to be in talks to join the government.&nbsp;
Although there had been simmering discontent between the NC and the Maoist for some weeks, few expected the breakup to happen so suddenly. The Maoists are a distant third largest party in Parliament, but were aggrieved by the <a href="https://nepalitimes.com/news/coalition-collision-mzle2ns5">NC’s General Committee meeting last week</a> in which members called for the party to go it alone, and <a href="https://nepalitimes.com/news/unconventional-convention">reminded the Maoists of their war atrocities</a>. Many NC delegates felt that as the largest party, it should not be letting the Maoists ride its coat-tails. But now the biggest party in Parliament is in the opposition.&nbsp;
Monday morning was marked by a flurry of meetings between Prime Minister Dahal and Oli, Lamichhane and Yadav.&nbsp;
Even as the new coalition swore in a small new Council of Ministers, Nepal’s public sphere gave a loud yawn on social media. The first phase of the new Cabinet will include three leaders each from the Maoists, UML, and RSP.
Most commentators ridiculed the three parties reshuffling the cards again to bring out the same persona, and that this change in government would not make any difference to the country’s economic and other crises.&nbsp;
UML Chief Whip and former Health Minister Padam Giri joined the Council of Ministers on Monday. The Maoist Centre sent former Youth and Sports Minister Hit Bahadur Tamang to the Cabinet. <a href="https://nepalitimes.com/news/conflicting-interests">RSP vice-chair Dol Prasad Aryal</a>, who was briefly Labour Minister under the previous alliance between the Maoists and the RSP, was also sworn in.&nbsp;
There is already a disagreement over the choice of Home Minister with both the UML and RSP laying claim. RSP’s Lamichhane insisted on the post he once held but <a href="https://nepalitimes.com/banner/the-rise-and-fall-of-rabi-lamichhane">had to give up because of the controversy over his American citizenship</a>. The RSP is the fourth largest in Parliament.
Dahal was appointed Prime Minister in December 2022 after breaking the five-party coalition led by his predecessor Sher Bahadur Deuba’s NC and with support from K P Oli’s UML.&nbsp;
Two months later, the Prime Minister got back together with NC and formed a new coalition government after forming a power-sharing deal between himself, Deuba, and CPN-Unified Socialist chair Madhav Kumar Nepal to divide up the premiership three ways for five years.&nbsp;
The partnership between Dahal and Deuba had already been fragile, but the straw that broke the camel’s back this time appears to have been the NC’s General Committee meeting in February, during which leaders of the dissident faction called for the party to forego political alliances with other parties in 2027, which Deuba agreed to.
The Maoists were already angered after the NC allied with the UML to elect Kedar Karki the Chief Minister of <a href="https://nepalitimes.com/editorial/kosi-now-kathmandu-next">Kosi Province</a> after Karki and other members of NC refused to back the Maoist candidate for the position.&nbsp;
This was compounded after the coalition’s Maoist candidate from Kosi Champa Karki lost the recent National Assembly election to the UML candidate. The party was also said to have been growing uneasy about the <a href="https://nepalitimes.com/news/unconventional-convention">increasing anti-secular sentiment within the NC</a>.
Dahal is said to have cited circumstances surrounding the Kosi and National Assembly elections as well as the discourse surrounding the NC-Maoist electoral partnership during the NC gathering as reasons for the breakup of the coalition.&nbsp;
Dahal’s newest political move might also have been a tactic to detract from criticism of <a href="https://nepalitimes.com/editorial/nepal-gets-gold-medal-for-corruption">his government’s underperformance as well as the numerous corruption scandals</a> that have marked his premiership in which the guilty have got away.&nbsp;
Various members of the Cabinet including Physical Infrastructure and Transport Minister Prakash Jwala of the Unified Socialist was implicated in the Balkumari riot, Health and Population Minister Mohan Basnet of the NC in the procurement of surveillance equipment Teramocs, as well as the Maoist Minister of Culture, Tourism and Civil Aviation Sudan Kirati in private contract agreement of Lumbini’s Ramgram.&nbsp;
Prime Minister Dahal told a program on Monday afternoon rather melodramatically: “The country will be in turmoil until the day I die … Maoists are not the kind to be content with continuity, rather, we thrive on disorganisation.”
As it stands, the new coalition will not only affect politics at home but also be consequential to Nepal’s relationships with giant neighbours India and China.&nbsp;
China has always wanted Nepal’s left parties to stick together, and the US-India bloc have opposed it. The just dissolved coalition of the Maoists-NC was said to be better suited to India’s interests.

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What just happened in Nepali politics?

<figure><img width="3600" height="1798" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230208140220/63e3a1989c7e80680e0d708cjpeg.jpg" alt=""/><figcaption>A meeting of council of ministers this week. Photo: RSS</figcaption></figure>Nepal’s President is a ceremonial post with only residual powers. Why then is there such a tug-o-war going on about who gets to replace President Bidya Devi Bhandari after her five-year term expires on 13 March?
Why are the supreme men of the three main parties acting as if the sky will fall if they do not get their candidate to be elected the next president?
Because they know how much the President’s constitutional power can be abused to do the bidding of the prime minister, as has happened repeatedly in the past four years. Bhandari’s candidacy for president was strongly backed by K P Oli when he was prime minister, and she quickly gave her stamp of approval when Parliament was dissolved <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/latest/nepal-pm-oli-goes-it-alone/" target="_blank" rel="noopener noreferrer">to stave off a challenge from Pushpa Kamal Dahal and Sher Bahadur Deuba.</a>
The move was stopped by the Supreme Court, and Deuba succeeded Oli as prime minister. But when he <a href="https://www.nepalitimes.com/latest/coalition-set-to-snub-president-bhandari/" target="_blank" rel="noopener noreferrer">tried to pass ordinances on the citizenship bill</a>, to allow parties to split, or give blanket pardon for war crimes, President Bhandari was not as prompt in signing them.   
After the November election, Oli pulled a fast one and got Dahal to defect from Deuba to <a href="https://www.nepalitimes.com/banner/left-led-coalition-upturns-nepal-politics/" target="_blank" rel="noopener noreferrer">form the 7-party coalition</a> which is currently in power. In return for letting Dahal have a first go at being prime minister, Oli secured a deal to have the posts of President and Speaker of the House of Representatives.
But such is the <a href="https://www.nepalitimes.com/editorial/nepals-political-economy/" target="_blank" rel="noopener noreferrer">level of mistrust between him and Oli</a>, that Dahal soon started having misgivings about letting the UML have so much power. And because of Oli’s past behaviour, Dahal and Deuba feared that giving the UML all three posts of president, prime minister and speaker would make Oli all-powerful after two-and-half years.
As per the agreement with the Maoists, the <a href="https://www.nepalitimes.com/latest/conflicting-interests/" target="_blank" rel="noopener noreferrer">UML already has its Devraj Ghimire as Speaker</a>, while the RSP got Indira Rana Magar in as Deputy Speaker. Now that a weighted electoral college of federal and provincial assembly members needs to elect a new President, the UML is in a collision course with the Maoists and NC.
The Election Commission has set the date for the election on 9 March, just two days before President Bhandari’s term is over. The NC says the election should be on 11 February, one month before the president steps down, as stipulated by the Constitution.
But more contentious than the date is whether the UML will maintain its support for the 7-party coalition if it does not get its candidate to be president.  
Dahal got Deuba to support the government<a href="https://www.nepalitimes.com/banner/nepals-illiberal-democracy/" target="_blank" rel="noopener noreferrer"> despite the NC being in the opposition</a>, reportedly with the assurance that a Congress nominee would get to be president. But Maoists and the NC combined do not have the numbers to do that. Having given his word to both the UML and the NC about the presidentship, Dahal is in a bind, and has said he is seeking “a national consensus” on a candidate.
This is where the high drama surrounding the Supreme Court verdict on 20 January about the RSP’s <a href="https://www.nepalitimes.com/banner/the-rise-and-fall-of-rabi-lamichhane/" target="_blank" rel="noopener noreferrer">Rabi Lamichhane’s citizenship</a> becomes critical. Lamichhane was forced to step down as Home Minister and Deputy Prime Minister, but this week applied and got back his citizenship, and was reinstated as party boss.
There is now a move to file a case against him for breach of the Citizenship Act, and make him ineligible to hold office, while Lamichhane with backing from the UML, is trying to regain his Home Minister post. The UML’s claim for presidentship would be bolstered by Lamichhane continuing to be a powerful member of the Cabinet, and Oli’s game plan is to keep the coalition intact.
The NC is likely to field Krishna Sitaula or Ram C Paudel as president, while <a href="https://www.nepalitimes.com/here-now/baburam-bhattarais-4-point-formula/" target="_blank" rel="noopener noreferrer">Baburam Bhattarai</a> could also be a candidate from the Maoist party when it unites with the Nepal Socialist Party and becomes the CPN-Socialist. Oli appears to want President Bhandari to continue for a second term, and failing that may put forward Subhas Nembang.
The post of president should not involve such political wheeling-dealing. Ideally it is the turn of a Janjati or Dalit candidate to represent the spirit of inclusion enshrined in the Constitution. But more importantly, it should be someone who is a respected a-political person – and there are plenty of  Nepalis to choose from.

An unceremonious President

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2023020814028/63e39f649c7e80680e0d6fecjpeg.jpg" alt="" width="1800" height="1041"/><figcaption>Photo: RSS</figcaption></figure>Prime Minister Pushpa Kamal Dahal is busy garnering <a href="https://www.nepalitimes.com/banner/left-led-coalition-upturns-nepal-politics/">support from parties left, right and centre</a> for the 10 January vote of confidence he has to prove in the Federal Parliament. On Wednesday, he met Madhav Kumar Nepal of the Unified Socialist (US) for the first time since he broke away from the Nepali Congress (NC) led coalition.With his Maoist Centre (MC) being only the third biggest party with a mere 32 seats in Parliament, Dahal has had to give away powerful ministries: Finance to Bishnu Paudel of the UML, and Home to Rabi Lamichhane of the Rastriya Swatantra Party (RSP).And with less than a week before the confidence vote, there will be more wheeling and dealing behind the scenes. There is already talk of adding two more deputy prime ministers to specifically appease the far-right Rastriya Prajatantra Party (RPP) and Janata Samajbadi party (JSP).The Constitution sets a limit of 25 ministers in the Cabinet. But Dahal has to balance the disparate demands from members of his coalition for posts. He will exceed that limit, and for that will have to split some ministries.Read also: <a href="https://www.nepalitimes.com/banner/oli-dahal-political-deja-vu/">Oli-Dahal political déjà vu</a>, Santa Gaha MagarDahal may be prime minister, but it is <a href="https://www.nepalitimes.com/banner/oli-dahal-political-deja-vu/">UML's K P Oli who is pulling the strings</a>. As the head of a high-level political committee, Oli will essentially be running a parallel government. And given the past bad blood between Oli and Dahal, there is every possibility of them falling out, and the coalition falling apart.The UML is the second largest party with 78 seats and has shrewdly gained the upper hand by playing the long game by agreeing to give Dahal the first go at premiership while bagging plum political positions for his party in the process.The committee Oli heads is an extension of this power-sharing deal between him and Dahal. The fact that the Prime Minister is the executive head of Nepal but will now have to adhere to a committee on high-level political decisions has essentially turned Dahal into a puppet of Oli’s making.But these power games have long stopped being of interest to the people. It was in fact the very frustration with political manipulation that voted <a href="https://www.nepalitimes.com/banner/for-whom-the-bell-tolls/">independent collective RSP</a> to be the fourth largest party in the 2022 elections.Read also: <a href="https://www.nepalitimes.com/banner/for-whom-the-bell-tolls/">For whom the bell tolls</a>, Shristi KarkiBut regardless of who is in the coalition or who has an upper hand, the biggest challenge for the new government in 2023 is to save Nepal from an impending economic collapse.As of 4 January, the total expenditure of the Nepal government in the current fiscal year stands at Rs517 billion against its revenue of Rs362 billion. Nepal is unable to support the government’s spending, and herein lies the biggest problem.The additional ministries in the new government and their staff will only add to <a href="https://www.nepalitimes.com/banner/nepals-energy-policy-in-2023-and-beyond/">unnecessary expenses in security, infrastructure, salary and other administrative costs</a>. Increased ministries and staff doesn’t guarantee better service delivery either.The appointment of Bishnu Paudel of the UML as  finance minister has made businesses hopeful, but there is only so much he can do to rectify the blunder made by his Maoist predecessor, Janardan Sharma. On Wednesday, Nepal Rastra Bank, acting  a directive from Paudel and Prime Minister Dahal has revised its new guidelines pertaining to current capital loans to spur investment.Nepal’s imports decreased by 20.17% in the last five months compared to the same time period last year owing to the central bank’s ban on luxury items following rapidly declining foreign exchange reserves. This helped increase the reserves but also reduced revenue from imports, which continues to be the government’s biggest source of income.Read also:<a href="https://www.nepalitimes.com/editorial/new-year-challenge-to-new-government/"> New year challenge to new government</a>, EditorialIn the meantime, Nepal’s export in the same time period decreased by 34.61% to Rs6.7 trillion and trade deficit by 18.77%. But reduced demand for goods and services can lead to a recession. Year-on-year inflation is also high at 8.08%. In response, banks have  increased interest on loans to reach more than 15% which has discouraged businesses from investing.Moreover, leakage in revenue and lack of economic activities as well as investment in unproductive sectors continue to pose formidable challenges to Nepal’s stagnant economy which is propped by remittance money sent home by Nepalis ioverseas.Those jobs have allowed the government to get away with not providing youth with enough employment opportunities at home. But remittance is an unsustainable source, especially as Nepal needs its workforce at home for agriculture, construction and manufacturing, among others.Nepal needs to reduce its nonessential spending, stop revenue leakage in VAT and others, expedite development projects and promote industries and manufacturing at home. All of this will need to be <a href="https://www.nepalitimes.com/editorial/new-year-challenge-to-new-government/">facilitated by reformed policymaking</a>, not just directives.Instead, planners bring about ad-hoc schemes like <a href="https://www.nepalitimes.com/latest/think-twice-about-bringing-your-mobile-to-nepal/">Mobile Device Management System</a> (MDMS) benefiting select businesses, further adding to the frustration of the common people and making service delivery even more difficult.Sonia Awale

Nepal's political economy

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20230112100136/63bfd4dd9c7e80680e0d30c2jpeg.jpg" alt="" width="667" height="1000"/><figcaption>Maoist chair Pushpa Kamal Dahal and CPN (UML) chair K P Oli are back in a coalition government, ousting Sher Bahadur Deuba and his Nepali Congress. Photo: GOPEN RAI</figcaption></figure>On Sunday, Maoist Chair Pushpa Kamal Dahal was <a href="https://www.nepalitimes.com/banner/left-led-coalition-upturns-nepal-politics/" target="_blank" rel="noopener noreferrer">appointed Nepal’s Prime Minister</a> by President Bidya Devi Bhandari with support from the UML, effectively putting an end to the very coalition government formed to oust the UML's KP Oli from power in 2021.Dahal finally has his coveted third term as Prime Minister, having last held the position in 2016. With support from seven political parties, his left-led alliance has a 169-majority in the House, even as it is <a href="https://www.nepalitimes.com/here-now/the-past-is-foretold-in-nepal-poll-results/" target="_blank" rel="noopener noreferrer">only the third-largest in Parliament</a> with 32 elected members.Until Saturday, a day before the President’s deadline to form a majority government ended, Dahal had maintained his commitment to the NC-led coalition. But the Maoist supremo did a dramatic U-turn when he and NC chair and prime minister <a href="https://www.nepalitimes.com/latest/deuba-5/" target="_blank" rel="noopener noreferrer">Sher Bahadur Deuba</a> failed to reach an agreement over which one of them would become PM first under the new government.Insiders said Dahal said he was going off to lunch and would return to continue the negotiations, but instead Deuba and other NC members heard he had gone to K P Oli's residence in Balkot to get his support.Dahal’s desire to become prime minister seems to have overruled everything else -- ideology, principles, and the 'liberation' of the people for which he waged a ruinous 10-year insurgency. As soon as Oli offered him the first stab at prime ministership on the condition of breaking away from the former alliance, all bets were off.“The best interests of the party and party leaders have become secondary to the Chairman’s personal interests,” says a Maoist official. “Breaking the alliance just so he could get to be Prime Minister was a shameful political act.”Had Dahal been a bit more patient, not only would he have been prime minister anyway in two years, his party's nominees would also have bagged the posts of President and House Speaker, not to mention plum ministerial positions over the next five years. Now, it will be Oli who will be pulling the strings on appointments even if Dahal is prime minister.A continued alliance with the NC would have benefited of many more of the Maoist rank and file. With this deal, only Dahal benefits. As of Monday morning, a Maoist Centre meeting has decided to appoint party vice-chair Narayan Kaji Shrestha deputy prime minister.While Dahal has bagged premiership at the expense of his own party, Oli — whose UML is the second-largest in Parliament after the November election — has shrewdly  gained the upperhand once again, playing the long game by agreeing to give Dahal the first go at leading the government while bagging plum political positions for his party in the process.Indeed, Dahal may be in the the prime minister's seat, but Oli is the one calling the shots.And with a left-led alliance now in power, Sher Bahadur Deuba have been out-maneuvered even though he has been considered to be a clever deal-maker, as evidenced by the five times he has been prime minister from the days of the monarchy in 1997.Just like Dahal, Deuba’s quest to lead the government for the sixth time left him unable to make an objective assessment of his and his party’s political future. Now, the NC which won only 23 FPTP seats in the election, finds itself in the opposition despite being the largest party in the House.The big loser in all this has been <a href="https://www.nepalitimes.com/here-now/making-up-is-hard-to-do/" target="_blank" rel="noopener noreferrer">Madhav Kumar Nepal</a> who split from the UML to back the Deuba-led coalition last year, and was angling for a senior appointments for his CPN (Unified Socialist). Dahal and Oli largely ignored Nepal as being a bit player, his clout diminished further by his party's power performance in elections.Nepal subsequently grew closer with Dahal, breaking from the UML to eventually launch his own political party. Now, his party after a poor show in the local as well as national polls finds itself without national recognition in Parliament or the backing of a multi-party alliance.Had Nepal not put his entire weight behind Dahal and focused on an election strategy and party expansion, perhaps CPN-US would not have missed the chance to become a national party.A secretariat meeting conducted after Dahal’s abrupt exit from the coalition meeting in Baluwatar and subsequent foray to Oli’s residence in Balkot on Sunday was unable to dispel the uncertainty regarding the future of the CPN-US.“After a serious discussion regarding recent political developments, we have decided to move forward in the best interests of the country, our people, and the party,” read its vague statement.The UML-Maoist alliance has also blindsided senior NC leader Ram Chandra Poudel, who had been banking on continuing the coalition with Dahal as Prime Minister so that he could become President, making his own backroom deals with Maoist and CPN-US leaders since before the election.In the aftermath of the election, as the top political leaders negotiated to form a government in the absence of a clear majority in parliament, there had been much discourse about how a more stable government could be formed through an <a href="https://www.nepalitimes.com/banner/back-to-the-future/" target="_blank" rel="noopener noreferrer">NC-UML alliance</a>. After all, such an alliance had been possible in 2013.The Maoists make up only 11% of the 275-member Parliament, so the appointment of Dahal as PM is contrary to the people’s mandate. It has brought into question why elections should even be held when the results have no bearing on who leads the government.But this is not the first time something of this nature has happened in Nepali politics. RPP leaders Lokendra Bahadur Chand and Surya Bahadur Thapa were both elevated to prime minister in 1997 by the UML and NC respectively after the parties that fought to restore multiparty democracy polarised Nepal's politics.as In the next 30 days, Dahal will have to obtain a vote of confidence from the House per Article 76(4) of Nepal’s constitution. So, there could still be some surprises. He will need support from all seven parties that were behind his bid to become prime minister, which means more murky wheeling and dealing.Dahal, whose idea of democracy was <a href="https://www.nepalitimes.com/latest/pushpa-kamal-dahal-is-still-prachanda/" target="_blank" rel="noopener noreferrer">rooted in the armed struggle</a>, does not have the best record with human rights, freedom of speech, and Nepal’s larger political process.But now, as prime minister, he needs to see beyond his personal ambition and keep the lines of communication between Baluwatar, Budhanilkantha and Balkot open. This will be in the best interest of Nepal’s democracy, federalism, and republicanism.

Oli-Dahal political déjà vu

<figure><img width="1200" height="1584" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161148/636d1dae9c7e80680e0af3cfjpeg.jpg" alt=""/><figcaption>Illustration: BHANU ACHARYA/NEPALI TIMES</figcaption></figure>During the 2017 elections, Baburam Bhattarai’s Naya Shakti Party propped up the Nepali Congress (NC) elsewhere across the country while seeking support in Gorkha, where Bhattarai himself would run, and Rasuwa where his party’s Prem Tamang was contesting.
But when it came time to register his candidacy, Tamang withdrew from the MP race and chose to run for state assembly instead, putting his support behind billionaire businessman Mohan Acharya, the bankroller of the NC.
Read also: <a href="https://www.nepalitimes.com/here-now/purchasing-power/" target="_blank" rel="noopener noreferrer">Purchasing power</a>, Ramesh Kumar
Acharya had registered his candidacy after convincing party chair and prime minister Sher Bahadur Deuba, presumably with money being exchanged, to let him run for office.
The construction <a href="https://archive.nepalitimes.com/article/nation/bulldozing-democracy-in-nepal,4184" target="_blank" rel="noopener noreferrer">contractor who spent a lot more money</a> while campaigning, would go on to win Rasuwa. A year later during an interview, Bhattarai himself accused his party colleague Tamang of selling out his candidacy to Acharya.
Acharya’s opponent was Janardhan Dhakal, another construction businessman who had the UML ticket. The race in Rasuwa was therefore a battle between who could spend more money. Both candidates hosted lavish parties, had extravagant motorcades, and distributed cash to buy vote banks.
What happened in Rasuwa in 2017 is a reflection of <a href="https://www.nepalitimes.com/latest/the-business-of-politics-in-nepal/" target="_blank" rel="noopener noreferrer">Nepal’s current electoral system</a> — competent candidates have no chance against powerful tycoons who have bought election tickets from party bosses.
Even as they spend extraordinary money to woo voters, Nepal’s political parties have failed to be transparent about their funding in official reports.
Donations from businesses are the primary source of funding for all political parties, and that is where the rot sets in.
However, the amount of financial support received from well-wishers, supporters and businesses are not broken down in the accounts of any of the parties. In fact, they are not mentioned at all.
Read also: <a href="https://www.nepalitimes.com/latest/is-democracy-too-expensive-for-nepal/" target="_blank" rel="noopener noreferrer">Is democracy too expensive for Nepal?</a>, Laxmi Basnet
The fact that all financial assistance is provided in cash and not through the banking system makes it easy for parties to circumvent institutions that oversee election management, even though The Political Parties Act 2017 stipulates that any transactions above Rs25,000 should go through the banking system along with the details of donors.
There is a similar lack of transparency when it comes to details about any fixed assets in the parties’ audit report. In many cases, private donors pick up the tabs for the renovation of party offices just to be above the board, like what the NC’s Umesh Shrestha did to get himself appointed minister by Prime Minister Deuba.
<a href="https://www.nepalitimes.com/here-now/the-business-of-politics-undermines-nepals-democracy/" target="_blank" style="font-size: 15px; letter-spacing: 0.01em;" rel="noopener noreferrer">Nepal’s politico-business nexus</a> began during the post-Panchayat era after the multiparty system encouraged collusion and quid pro quo. This co-dependency between business and politics became more embedded in subsequent elections.
“When political parties have to spend money to win elections, they start cultivating businessmen and then it is you scratch my back, I’ll scratch yours,” explains economist Keshav Acharya.
Over the years, watching from the sidelines was not enough, and Nepal’s rich directly entered politics as the country began its transition into a federal republic following the end of the Maoist conflict.
Former Finance Secretary Rameshore Khanal resigned in 2011 after Finance Minister Bharat Mohan Adhikari sought the counsel of <a href="https://www.nepalitimes.com/here-now/nepals-richest-man-in-the-pandora-papers/" target="_blank" rel="noopener noreferrer">industrialist Binod Chaudhary</a> during the budget formulation process. He says Nepal’s political parties are at present governed not by institutional systems but the will of individual leaders who mobilise money by helping businessmen launder theirs.
“This practice was introduced by Girija Prasad Koirala in the NC and has been continued by both UML Chairman K P Sharma Oli and Maoist Chairman Pushpa Kamal Dahal,” says Khanal.
Indeed, public sector enterprises like Harisidhi Brick and Bhrikuti Paper Factory were privatised under the first elected government led by Girija Prasad Koirala, and turned into prime real estate.
The Ministry of Finance refunded value-added tax (VAT) to entrepreneurs on consumer goods for almost a decade after 2008, essentially putting VAT paid by Nepali citizens into the pocket of businesses, prompting questions of policy irregularities by the IMF.
Similarly, other NC leaders like former finance minister Ram Sharan Mahat formed the Tax Commission in 2014 which gave tax cuts worth Rs21 billion to big businesses, the case related to which is still pending in the courts.
More recently, Finance Minister Janardan Sharma is alleged to have made policy changes to benefit special interests, like the Shanker Group, through a bill to replace the budget brought by the Oli government.
Of late, businesses have also been actively involved in the infighting within parties that has characterised recent Nepali politics.
The photo of NCP co-chairs K P Oli and Prachanda having lunch with <a href="https://www.nepalitimes.com/editorial/red-rice/" target="_blank" rel="noopener noreferrer">red rice at the home of business tycoon Durga Prasai</a> to discuss party unity went viral and prompted widespread ridicule.
The two leaders also held several discussions at the residence of construction contractor Sharada Prasad Adhikari who was untouchable because of his proximity to Dahal, as well as at homes of businessmen like Niraj Govind Shrestha and Ajeya Raj Sumargi. Sumargi often acts as a frontman for Dahal’s business dealings.
Businessmen like Capt Rameswar Thapa and Moti Dugar were actively involved in negotiations related to party unification between UML leaders K P Sharma Oli and Madhav Kumar Nepal, who often met at their private residences.
Similarly, Oli's name has been linked to the Yeti Group, and the <a href="https://www.nepalitimes.com/opinion/so-far-so-good/the-silent-skies/" target="_blank" rel="noopener noreferrer">death of its founder Ang Tsering Sherpa</a> in a helicopter crash in 2019 was a big blow to the former Prime Minister who had close personal dealings with him. Sherpa served as Oli’s fixer and was rewarded with coveted real estate and other deals for his conglomerate.
Entrepreneurs who transition into politics do so with the intention of influencing the state machinery to get business-related benefits. Moreover, interactions between business and politics are not limited to Nepali figures, as evidenced by the audiotape of Krishna Bahadur Mahara asking a Chinese businessman for Rs500 million on behalf of the Maoists during Constituent Assembly elections in 2013.
To be sure, politicians have always been making licensing and policies easier at the behest of banking, insurance, medical education, telecommunications, as well as in the stock market, allowing a select few to take advantage of the resulting decrease in competition.
Congress leader and former vice-chairman of the National Planning Commission Govinda Raj Pokhrel notes that money has become the lubricant in Nepali politics. In fact, voters themselves seem to seek out leaders who can take care of their financial interests.
“Unless we clean up our democratic system, our democracy is headed to the edge of a cliff,” he says.
<a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/Electoral-reform,1083" target="_blank" style="font-size: 15px; letter-spacing: 0.01em;" rel="noopener noreferrer">Former Election Commissioner chief Bhoj Raj Pokhrel</a>, in his recent article 'Political Finance Management: Opportunities for Electoral Reform' has proposed ideas for electoral reform, including the provision of grants to political parties to manage election-related expenses.
This proposal is not a new concept. Past governments have discussed this and former Finance Minister Prakash Chandra Lohani even made a related proposal in the 2004 budget.
UML leader Surendra Pandey argues that if political financing is to be made transparent, the government should provide financial support based on the votes received by each party.
Former Finance Secretary Rameshore Khanal argues that political parties should seek donations from Nepali citizens, which would consequently make them more accountable to the public.
Achyut Wagle, a professor of economics at Kathmandu University, notes that while government funding for parties is a viable option in an ideal democracy, it is questionable whether a country like Nepal can do it honestly.
Says Wagle: “It is more important to have transparency in political financing. Selling political positions for money has become the norm, and we need to ensure a democracy where businessmen cannot buy their way to power.”

The business of politics

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161144/636d1c609c7e80680e0af356jpeg.jpg" alt="" width="1800" height="1200"/><figcaption></figcaption></figure>K P <a href="https://www.nepalitimes.com/latest/oli-sweeps-uml-party-polls/" target="_blank" rel="noopener noreferrer">Oli’s re-election as leader</a> of his CPN-UML party has been portrayed by critics even within his own party as just the latest example of his authoritarian streak, but Nepal’s former prime minister has not done anything other party leaders have not done to consolidate internal power.Oli did try to get himself and his supporters appointed unopposed into leadership positions in the central membership and Central Committee. But after a rival faction led by Bhim Rawal pressed for a vote, he agreed and went on to win hands down.But had the <a href="https://www.nepalitimes.com/latest/unconventional-party-conventions/" target="_blank" rel="noopener noreferrer">much-delayed UML general convention</a> been pushed back only three months more, Oli would not have been allowed to stand for party chair since he would have crossed the age limit of 70 for executive positions.Oli, who has undergone two kidney transplants, will therefore be leading the country’s biggest party till 2025. But this is the trend in all of Nepal’s main parties which are led by elderly male politicians who have clung on to power by sidelining rivals and bending rules.Oli beat <a href="https://www.nepalitimes.com/here-now/making-up-is-hard-to-do/" target="_blank" rel="noopener noreferrer">his main rival Madhav Kumar Nepal</a> in the previous general convention seven years ago by a slim margin, and relations between the two were never good. When the UML united with the Maoists to form the Nepal Communist Party (NCP) after the electoral victory in 2018, things started to sour between Prime Minister Oli and  Maoist leader Pushpa Kamal Dahal, who found a convenient ally in Nepal.Cornered by the Nepal-Dahal faction, Oli used all the tricks in the book to stay on as both party chair and prime minister. But running out of trump cards, he dissolved the Lower House not once but twice, both times reinstated by the Supreme Court which also ruled earlier this year that the UML-Maoist party alliance was null and void.Nepal then <a href="https://www.nepalitimes.com/latest/nepals-post-breakup-politics/" target="_blank" rel="noopener noreferrer">split from the UML and set up his own Unified-Socialist party</a> and teamed up with the ruling five-party alliance with Dahal and Sher Bahadur Deuba of the Nepali Congress (NC).It is with this background that the UML party election this week has to be analysed – Oli has placed himself as the helmsman to steer the UML towards victory in the 2023 elections. The criticism against him from the other parties (by calling him authoritarian, and one cartoonist even portraying him as Adolf Hitler) is because they see him as a formidable foe.As it turned out, 2,153 votes fell at the UML general convention for various party positions, so whatever give-and-take happened behind the scenes, the outcome was democratic.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161144/636d1c639c7e80680e0af357jpeg.jpg" alt="" width="1040" height="550"><figcaption></figcaption></figure>Among the candidates for senior party functionaries, Asta Laxmi Shakya with 1,976 ballots for deputy chair, and <a href="https://www.nepalitimes.com/editorial/blood-sweat-and-tears/" target="_blank" rel="noopener noreferrer">Gokarna Bista</a> with 1,974 for secretary topped the list of those with the most votes from delegates. Surendra Pandey for the second largest number of votes for deputy chair with 1,925 votes and Yogesh Bhattarai came second for secretary with 1960.Needless to say, Shakya, Bista, Pandey and <a href="https://www.nepalitimes.com/here-now/unusual-appointment-extraordinary-tasks/" target="_blank" rel="noopener noreferrer">Bhattarai</a> were all Oli’s critics and in fact were once in the Madhav Nepal faction. Neither Thakur Gaire and Ushakiran Timsena who were elected to central membership used to be pro-Oli, either.It was even more symbolic for Oli to try to get former Maoists into the top echelons of his party, which is why he fully backed the candidacies of Ram Bahadur Thapa for deputy chair, Top Bahadur Rayamajhi and Lekhraj Bhatta as secretaries.On 28 November, the close door meeting of an 11-member committee drew up a list for the 19 member Secretariat high command and candidates for the central membership. Questions can be raised about Oli having manipulated the process in his favour, but even if he did it, it did not go against party rules. And the fact that his candidates got the most votes makes the point moot now.With his <a href="https://www.nepalitimes.com/here-now/nepals-rudderless-political-leadership/" target="_blank" rel="noopener noreferrer">eyes firmly set on elections</a>, he deliberately promoted the Nepal-faction candidates and ex-Maoists to top party positions. Even his detractors within the party understood that strategy and went along with it.And by not allowing Oli to elevate his candidates to the central membership and Secretariat unopposed, Bhim Rawal and Ghanshyam Bhusal actually helped him gain legitimacy, and earn credit for upholding internal democracy. That Oli and his supporters would win was a foregone conclusion, which is why Rawal and Bhusal actually ended up strengthening the UML.To be sure, Oli pushed his own blue eyed boys as well: Ishwar Pokhrel as senior deputy chair, Shankar Pokhrel as general secretary, as well as Bishnu Rimal as deputy general secretary and Padma Aryal as secretary.Ironically, the most dissatisfied with Oli were his close allies Bishnu Poudel, Subhas Nembang, Lalbabu Pandit, Binda Pandey, Radha Gyawali, Goma Devkota, and Bishal Bhattarai who did not get the positions and seniority they thought they deserved.

Post-convention, UML eyes set on elections

<figure><img width="1040" height="550" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016118/636d14b79c7e80680e0a998fjpeg.jpg" alt=""/><figcaption></figcaption></figure>The main opposition UML’s leader K P Oli has been sworn in again as party chair after elections on Tuesday, and he in turn has sworn in 14  central members who are all his supporters.Oli and his loyalists all got elected by a comfortable margin, or were unopposed in the <a href="https://www.nepalitimes.com/here-now/nepals-rudderless-political-leadership/" target="_blank" rel="noopener noreferrer">lavish convention in Chitwan’s Sauraha</a> where 2,152 delegates have been in attendance for the past five days.Oli had tried to make the process of getting new party functionaries unanimous, but was challenged by a rival faction led by Bhim Rawal. In electronic balloting that started at 4AM on Tuesday, Oli got more than 95% of the votes. His loyalists Shankar Pokhrel (General Secretary), Ishwar Pokhrel, Pradeep Gyawali, Prithvi Subba Gurung and Bishnu Rimal (deputy General Secretaries) have either been voted in, or won uncontested.Oli had beaten <a href="https://www.nepalitimes.com/here-now/making-up-is-hard-to-do/" target="_blank" rel="noopener noreferrer">Madhav Kumar Nepal</a> with a slim margin in the previous party convention in 2016. Nepal split off from the UML earlier this year and set up his own party, the Unified Socialists, which is part of the ruling 5-party coalition with the Nepali Congress. Seven of the leaders elected as secretaries of the UML are also all Oli supporters, including Yogesh Bhattarai, Gokarna Bista, Chabilal Biswakarma, Parma Aryal, Top Bahadur Rayamajhi, Lekharaj Bhatta Raghubir Mahaseth. Rayamajhi and Bhatta are former Maoists. Besides those two, former Maoist leader Ram Bahadur Thapa who <a href="https://www.nepalitimes.com/latest/nepals-post-breakup-politics/" target="_blank" rel="noopener noreferrer">defected to the UML</a> was elected vice-chair of the party, defeating Ghanshyam Bhusal. All three former Maoists were in Oli’s panel. Meanwhile, four UML leaders who were not supported by Oli all lost — they are Bhim Rawal for chair, Ghanashyam Bhusal for vice chair, and Bhim Acharya and Tanka Karki as party secretaries.  <figure><img width="1238" height="708" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016118/636d14b99c7e80680e0a9990jpeg.jpg" alt=""><figcaption></figcaption></figure>Oli had been grooming the former Maoists to also show that the Maoist Centre party of Pushpa Kamal Dahal is a spent force. Even after the united Nepal Communist Party (NCP) returned to its former UML and Maoist parties after a Supreme Court order in April, the Thapa, Bhatta and Rayamajhi had stayed loyal to Oli, who rewarded them with his crucial support in Tuesday’s party election.So much so that Oli sidelined Bhim Rawal to make Bhatta the party incharge for the Far-west Province. One of the reasons for <a href="https://www.nepalitimes.com/latest/political-expediency-trumps-nepal-constitution/" target="_blank" rel="noopener noreferrer">Madhav Nepal splitting from the UML</a> was Oli’s induction of the former Moaists into the party in place of Nepal’s supporters.If <a href="https://www.nepalitimes.com/latest/unconventional-party-conventions/" target="_blank" rel="noopener noreferrer">the UML general convention</a> looked like an election rally, that is also what it was. In fact, the elevation of the former Maoist to senior party positions appears to be Oli’s careful calculation for local and federal polls ion early 2023.Among the 301 Central Committee members elected on Tuesday is Ishwari Gharti Magar (pictured) who defied the Maoists during the insurgency to be a staunch UML party member in Rolpa’s Nuwagaun. She has now become the youngest member of the UML Central Committee.She started her political career while a student leader in the Arnico High School, and became a journalist for a few years before being a party cadre. Meanwhile, the Nepali Congress is getting ready for its own party convention in Kathmandu next week. <a href="https://www.nepalitimes.com/latest/deuba-5/" target="_blank" rel="noopener noreferrer">Prime Minister Sher Bahadur Deuba</a> is expected to win the party chairmanship just like Oli did in the UML — despite a challenge from Ram Chandra Poudel and Bimalendra Nidhi.RThe Hindu-right Rastriya Prajatantra Party (RPP) is also heading for a convention, and current leader Kamal Thapa is facing a challenge from Rajendra Lingden for the top party post.

Oli sweeps UML party polls

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141156/636d03449c7e80680e0a36c2jpeg.jpg" alt="" width="835" height="330"/><figcaption></figcaption></figure>In the days of the absolute monarchy, every government appointment, promotion in the civil service, and ambassadorship had to be approved by the Royal Palace. Powerful secretaries in Narayanhiti decided all important matters, while Singha Darbar was tasked mainly with carrying out orders.Nepal became a constitutional monarchy after the 1990 People’s Movement, but not much changed. Instead of the king making decisions, many mini-kings competed for power and influence – political appointments in the bureaucracy, public sector enterprises, and diplomatic assignments became the norm.The Nepali Congress and the UML were such fierce rivals in the 1990s that it was mandatory for one party to cancel and declare null and void all decisions made by the other. That tradition has not just carried on to this day, but has been honed into a fine art.The most glaring example of this was the axe that fell last week on 12 of Nepal’s ambassadors politically appointed by K P Oli while prime minister. Among them were envoys to India, China, the United States, and Britain – countries most important to Nepal.Among those being recalled are former finance minister Yubaraj Khatiwada in Washington DC last year, Mahendra Bahadur Pandey in Beijing, Lok Darshan Regmi in London, and Nilambar Acharya in New Delhi.Oli rigged the system to reward loyalists, and the coalition government of Sher Bahadur Deuba wants to do the same. This is taking partisanship and vendetta to extreme levels.Deuba also needs these diplomatic postings to appease coalition partners who have not got powerful ministerial portfolios they were angling for. Two months after it took office, Deuba has not even been able to form a full government because of <a href="https://www.nepalitimes.com/latest/government-in-installments/">tussles within the coalition for key ministerships.</a>Deuba appointed Narayan Khadka as foreign minister last week, only because someone had to lead the Nepal delegation to the United Nations General Assembly. It is clear that the recalled ambassadors will not be replaced with career diplomats, which is what should be the practice.Four of the 22 ambassadors are being recalled at a critical foreign policy juncture for Nepal. Nilamber Acharya has been in Delhi through the <a href="https://www.nepalitimes.com/editorial/lines-on-a-map/" target="_blank" rel="noopener noreferrer">turbulent Limpiyadhura dispute</a> and his contacts in the Indian government would have been useful when so many bilateral issues are pending. Recalling our ambassador in China at this time sends the wrong message to Beijing as well.Yubaraj Khatiwada was a staunch supporter of the American <a href="https://www.nepalitimes.com/opinion/sino-nepal-ties-in-the-post-afghan-era/" target="_blank" rel="noopener noreferrer">Millennium Challenge Corporation (MCC) project</a> when he was the finance minister under K P Oli. Despite regime change in Nepal, Prime Minister Deuba would have needed an MCC-backer in Washington while the clock ticks on the project’s ratification by Parliament. Deuba has also removed Nepal’s ambassador in London just before he goes to Glasgow in November to attend the Climate Summit.Prime Minister Deuba may have thought he could mute criticism of his ambassadors recall because he also called back his mother-in-law Prativa Rana from Tokyo. Her term had run out, and she was returning anyway.Among the 12 ambassadors being recalled are three <a href="https://www.nepalitimes.com/here-now/nepals-women-envoys-make-a-mark/">other women ambassadors</a> who have played important roles during the Covid-19 crisis ensuring the welfare of Nepalis abroad, mobilising aid for Nepal during the deadly second wave earlier this year, and projecting the country’s image abroad.Ambassador Sarmila Parajuli Dhakal in Oman has earned effusive praise from Nepali migrant workers in the Gulf not just for organising the <a href="https://www.nepalitimes.com/latest/nepal-struggles-to-make-repatriation-easier/">repatriation of stranded Nepalis</a>, but also bargaining with airlines for air fares even cheaper than those negotiated by the government in Kathmandu.<a href="https://www.nepalitimes.com/here-now/demand-grows-for-nepali-caregivers-in-israel/">Ambassador Anjan Shakya</a> in Israel negotiated the agreement for 1,000 new caregiver jobs – most of them for Nepali women. She was working on a Nepal-Israel agricultural cooperation agreement.  Last year, Shakya was the first Asian envoy in Tel Aviv to be named ‘Ambassador of the Year’ by the Ambassadors’ Club of Israel.Ambassador Dawa Phuti Sherpa in Spain <a href="https://www.nepalitimes.com/here-now/aid-pours-into-nepal-but-where-be-vaccines/">mobilised one of the first relief flights</a> in May to bring oxygen concentrators and cylinders, ventilators, and medical kits through the EU Civil Protection Mechanism. She was preparing for a post-Covid revival of tourism in Nepal.A <a href="https://www.nepalitimes.com/editorial/man-power/">patriarchal state</a> that is so self-obsessed that it cannot appreciate the role of these remarkable women ambassadors does not deserve respect from its citizens, nor from the international community.

Swapping ambassadors midway

<figure><img width="1500" height="1153" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141152/636d02e79c7e80680e0a36a6jpeg.jpg" alt=""/><figcaption>WHO IS WHO? President Bidya Devi Bhandari, Prime Minister Sher Bahadur Deuba, Nepal Army Chief Prabhu Ram Sharma, Chief Justice Cholendra SJB Rana, House Speaker Agni Sapkota and Deputy Mayor of Kathmandu Hari Prabha Khadgi at Indra Jatra this week. </figcaption></figure>More than two months after Prime Minister Sher Bahadur Deuba <a href="https://www.nepalitimes.com/latest/deuba-5/" target="_blank" rel="noopener noreferrer">took office</a> to lead a five-party coalition, he has not even been able to form a complete Cabinet. He was thought to have <a href="https://www.nepalitimes.com/editorial/deubas-denouement/" target="_blank" rel="noopener noreferrer">amassed a lot of experience</a> in coalition bargaining during his previous five tenures as prime minister.
But this time, he is having a difficult time untangling the knots within knots within the alliance. First, he has had to <a href="https://www.nepalitimes.com/latest/old-wine-in-old-bottle-in-nepal-politics/" target="_blank" rel="noopener noreferrer">divide up ministerial portfolios</a> among his coalition partners which turned out to be a major hurdle.
After the government was formed in mid-July, Deuba’s Nepali Congress (NC) and the Maoist Centre (MC) divided up the powerful finance, energy, home and law ministries among themselves. He then appointed a loyalist to be state minister of health, and on Wednesday he had to hurriedly appoint Narayan Khadka as foreign minister to represent Nepal at the United Nations General Assembly. Khadka was named, sworn in by the president, assumed office and departed for New York all within 12 hours.
The <a href="https://www.nepalitimes.com/latest/what-is-delaying-nepal-cabinet-expansion/" target="_blank" rel="noopener noreferrer">ministerial appointments had been stalled</a> because Upendra Yadav of the Janata Samajbadi Party had wanted the post, which he has held twice before, for himself. However, Deuba appears to have finally got all four parties who want their members in the Cabinet to agree on a quota: eight each of the NC and MC, and 6 each for the JSP and the UML (US) of Madhav Kumar Nepal.
However, this still leaves the question of <a href="https://www.nepalitimes.com/latest/who-gets-what/" target="_blank" rel="noopener noreferrer">which party gets which of the remaining ministries</a>. Predictably, the JSP and the UML (US) want the ministries with the biggest budgets: education, agriculture, transport and physical infrastructure. Since this is going to be a coalition that will oversee elections in 2023, the parties all want ministries with either power, or money, or both.
A Cabinet meeting on Tuesday decided abruptly to recall 12 ambassadors, including those to the US, UK, India and China appointed by KP Oli when he was prime minister. All are political appointees, and among the envoys being recalled is Deuba’s own mother-in-law Pratibha Rana in Tokyo.
Analysts say one reason for this purge of ambassadors is to offer plum posts for further bargaining to mollify <a href="https://www.nepalitimes.com/editorial/they-fail-we-fall/" target="_blank" rel="noopener noreferrer">coalition partners</a> not satisfied with their allocated ministerial portfolios. Deuba also has to contend with ministership demands from within his own NC, especially his rival Ram Chandra Paudel’s faction.
There has been outrage and ridicule in social media and from commentators about Prime Minister Deuba adding ministers in installments. Former prime minister Oli, who was ousted by Deuba, has been the most scathing in his criticism.
The prime minister’s job is not easy. He had to suspend Parliament in the middle of the budget session in July so that he could pass an ordinance amending the Constitution to allow parties to split if they commanded only 20% of the membership of their parliamentary party. But that ordinance, which needs to be ratified by Parliament within 60 days, has now become an albatross around Deuba’s neck.
Madhav Nepal of the UML (US) on whose behalf <a href="https://www.nepalitimes.com/latest/nepals-post-breakup-politics/" target="_blank" rel="noopener noreferrer">the party split ordinance</a> had been introduced so he could legally break away from Oli’s UML, is now worried that if it is not ratified his new party will not have legal standing. Nepal is also nervous about a writ filed in the Supreme Court by Oli, and if a verdict makes his party split unconstitutional.
Yadav of the JSP, meanwhile, wants the ordinance scrapped before Cabinet expansion so that disgruntled members of his own party who do not get their preferred ministerships do not break away.
Coalition members had said Cabinet expansion would happen on Wednesday, but negotiations appear to have stalled because of Madhav Nepal and Upendra Yadav wanting different things for their own partisan reasons.

Government in installments

<figure><img width="1286" height="1500" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d015a9c7e80680e0a3624jpeg.jpg" alt=""/><figcaption>Vice president of US Mellennium Challenge Corporation (MCC) Fatema Z Sumar arrives in Kathmandu on Thursday.</figcaption></figure>Fatema Z Sumar, vice president of the US Millennium Challenge Corporation (MCC), parachuted into Kathmandu on Thursday amidst a <a href="https://www.nepalitimes.com/latest/mcc-damned-if-we-do-damned-if-we-dont/" target="_blank" rel="noopener noreferrer">firestorm of protest</a> against the project that threatens to divide Nepal’s coalition government.Together with her deputy Jonathan Brooks, Sumar over the next four days will be meeting Nepal’s top politicians who are for and against the <a href="https://www.nepalitimes.com/editorial/a-millennium-challenge/" target="_blank" rel="noopener noreferrer">$500 million grant project</a> designed to upgrade Nepal’s electricity grid and highways. The visit follows Sumar’s written response to concerns raised by Nepal’s Finance Ministry on 3 September regarding the grant. The main objective of the MCC is a 315km transmission line between Hetauda-Damauli-Butwal, important for the distribution of the 3,000MW of electricity that will be added to Nepal’s national grid in the next three years. <a href="https://www.nepalitimes.com/from-the-nepali-press/why-there-is-no-foreign-investment-in-nepal/" target="_blank" rel="noopener noreferrer">Why there is no foreign investment in Nepal</a> , Nepali Times <img width="512" height="461" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d015d9c7e80680e0a3625jpeg.jpg" alt="">The discourse surrounding the MCC has been influenced by geopolitical rivalries between India and China on the one hand and between the US and China on the other, with Nepal’s political parties <a href="https://www.nepalitimes.com/editorial/knowing-whats-good-for-nepal/" target="_blank" rel="noopener noreferrer">weaponising the project</a> to undermine each other.Indeed, support for the MCC by K P Oli was one of the issues raised by the five-party alliance that led to his ouster in July, after which <a href="https://www.nepalitimes.com/latest/deuba-5/" target="_blank" rel="noopener noreferrer">Deuba took over as prime minister</a>.Two months later, <a href="https://www.nepalitimes.com/latest/what-is-delaying-nepal-cabinet-expansion/" target="_blank" rel="noopener noreferrer">Deuba is yet to complete government formation</a>,  and support and opposition to the MCC is now threatening to undermine his governing alliance. The MCC is such a political hot potato that it was not even listed in the coalition’s common minimum program last month despite Prime Minister Deuba being for it.However, critics including his main coalition partner Pushpa Kamal Dahal of the Maoists and Madhav Kumar Nepal of the Communist Party of Nepal (United Socialist) view the project as part of America’s Indo-Pacific Strategy, and superseding Nepal’s Constitution.Sumar’s letter attempted to assuage both of these concerns, saying that the MCC is neither a part of America’s Indo-Pacific Strategy, nor is it not above Nepal’s Constitution. However, the response added that the points previously agreed upon would not be subject to amendments, which did little to quell the growing protest, including street demonstrations. The delegation led by Vice President Samar met with opposition leader K P Sharma Oli on Thursday afternoon to discuss the project, and is also set to meet with Prime Minister Sher Bahadur Deuba, Finance Minister Janardan Sharma and Energy Minister Pampha Bhusal (both Maoists). <figure><img width="1800" height="1200" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01609c7e80680e0a3626jpeg.jpg" alt=""><figcaption>The delegation led by Sumar met with opposition leader K P Sharma Oli on Thursday afternoon. </figcaption></figure>The MCC compact has clauses requiring that it be ratified by Nepal’s Parliament, and that the project be completed five years after the work officially commences. Nepal had committed to ratifying the MCC in Parliament by September 2019, but the <a href="https://www.nepalitimes.com/editorial/just-do-it/" target="_blank" rel="noopener noreferrer">process has been deadlocked</a> by the feud in the ruling Communist Party of Nepal while Oli was prime minister.Lok Raj Baral, Nepal’s former ambassador to India, says that there has been unnecessary over-politicisation of the issue that has harmed Nepal’s international credibility."The opposition to the MCC seems to have been led by those in power who were also trying to stop the Arun III hydropower project," says Baral. “That the opinions of individual leaders dominate the discourse over official party decisions speaks to the selfishness of Nepal’s political leadership.”Former Prime Minister Oli backed the MCC after he took over from Deuba in 2017, but his main party rival Pushpa Kamal Dahal and dissidents from his own UML used provisions in the MCC that they saw as being anti-national <a href="https://www.nepalitimes.com/banner/own-goal/" target="_blank" rel="noopener noreferrer">against Oli</a>.  <figure><img width="1800" height="1121" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01639c7e80680e0a3627jpeg.jpg" alt=""><figcaption></figcaption></figure>Now, with Deuba being Prime Minister once again, the debate surrounding the MCC is likely to put a strain on his ruling coalition, made up of Dahal’s Maoist Centre and Madhav Kumar Nepal’s breakaway CPN (United Socialist) which are opposed to the project.On the other hand, the Nepali Congress and another coalition partner Janata Samajbadi Party (JSP)  seem open to ratifying the agreement in Parliament, but they do not have enough numbers in the House for it to be successful. Deuba has been sending feelers to the opposition UML to see if it will back the ratification in Parliament. For his part, Pushpa Kamal Dahal has been saying that the MCC is a conspiracy to break the ruling alliance. However, experts see Dahal’s position on the MCC as being inconsistent and opportunistic. He went along with the project, and then <a href="https://www.nepalitimes.com/here-now/power-politics-delays-mcc-in-nepal/" target="_blank" rel="noopener noreferrer">weaponised it during his power struggle </a>with Oli."It should not come as a surprise to anyone if the ruling coalition collapses because of the MCC,” says political analyst Punaranjan Acharya, who adds that it is not Prime Minister’s Deuba’s intention to go against the agreement, but  that of the “so-called” communist parties in Deuba’s alliance. "The prime minister has tried to be transparent regarding the matter,” says Acharya. “The problem is with the double-dealing leaders of the coalition partners.”Former speaker Krishna Bahadur Mahara, who resigned from his position in 2019 following allegations of rape, said last year in a statement that he had been falsely accused for opposing the MCC. His successor Agni Prasad Sapkota has also blocked the MCC Compact for discussion on the House floor.Rastriya Janamorcha Party Chairman Chitra Bahadur KC, who is a member of Deuba’s coalition, says that the MCC will not be allowed to reach Parliament, and will not be ratified in the event it is presented before the House. “We continue to oppose the MCC, which is not even included in the coalition’s Common Minimum Program,” says KC.Constitutional expert Bipin Adhikari says it would be ironic if the MCC is not allowed to be presented before the people’s representatives in the House because of the political self-interest of the Speaker and other powerful political leaders.Other analysts insist that the political process surrounding the MCC should be moved forward in a way that the project is ratified in the House without breaking the coalition and without the party whip being applied.Read also: <a href="https://www.nepalitimes.com/latest/using-the-delay-in-mcc-to-dissect-it/">Putting the MCC in context</a>, Jeevan R Sharma and David Seddon

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