If the frequent collapse of the provincial coalition in Kosi is any indication, all is not well in the power dynamics in Nepal’s nine-party governing alliance.
This week, Kedar Karki of Nepali Congress (NC) became the fifth Chief Minister of Kosi Province since elections last November. Karki passed the floor test in the provincial assembly, but with help from the opposition UML. The UML had failed to get enough votes for its own chief minister candidate which precipitated the new election.
This was an embarrassment for Maoist prime minister Pushpa Kamal Dahal who had got the coalition at the centre to back fellow comrade Indra Bahadur Angbo. And it was also a blow to NC president Sher Bahadur Deuba.
A dissident faction of the NC not happy with party president Sher Bahadur Debut’s conjugal relationship with the Maoists, got UML backing to support Karki’s chief ministership. Eight NC members from Koirala’s camp and 39 from the UML, which has the majority seats in Kosi provincial assembly, supported Kedar Karki.&nbsp;
What followed was even more intriguing. Prime Minister Dahal and Deuba summoned Shekhar Koirala and tried to convince him to backtrack on Kosi. He refused. But they did manage to convince him not to mess with the coalition setup in return for allowing Karki to be Kosi Chief Minister.
And since Nepali leaders are not best known to keep their word, the three put their deal in writing on a crumpled piece of paper, torn from someone’s copy book, and signed it (pictured).
Kathmandu interfering in Kosi is not new. In fact, the former Kosi Chief Minister Hikmat Karki of the UML was actually backed by the Maoists, despite its alliance with the NC at the centre. Rescinding that support is what led to the current instability.&nbsp;
The background to this back-and-forth is the ethnic debate about whether the province should be called Kosi or Kirat. The matter is such a hot potato that Province 1 was the last of the seven to finally vote on a name (Kosi) last year.&nbsp;
The region’s indigenous groups want a name that reflects their identity, but the various ethnic groups are not united in what that name should be. Prime Minister Dahal made matters more complicated by saying that Kosi should be changed to Kirat.&nbsp;
All this is ammunition for those who want to scrap Nepal’s federalism, saying it is a waste of money, it decentralises corruption and multiplies by seven the disarray at the centre.
However, Nepal’s provinces have never been allowed true autonomy on revenue-raising and decision-making, they have been mere appendages of Kathmandu.
Within the NC, the Kosi debate has brought to the surface the strong feelings about the leadership of the largest party in Parliament shamelessly kowtowing to the third largest party. Leading this dissenting group are Shekhar Koirala and Gagan Thapa, although there is an undercurrent of rivalry to succeed Deuba between them.
So far, the coalition has withstood tensions brought on by controversial provisions in the budget, as well as a series of high profile corruption cases that shook up and implicated the top leadership of all major political parties.&nbsp;
It is clear that Nepal’s governing coalition, especially the alliance between the NC and the Maoists, has remained steadfast because of the sheer opportunism of the leaders in charge of both the parties. (And perhaps a bit of geopolitical goading from the South.)
The aftermath of Dahal’s successful attempt to regain premiership from Deuba last year was a power-sharing deal under which Dahal and Deuba gave each other two years each as PM. As per the deal, Unified Socialist chair Madhav Nepal also gets one year at premiership, which is perhaps why he has gone along with the whims of Dahal and Deuba.
All this horse-trading leaves little time for the coalition to govern. Development is at a standstill, inflation is at an all time high (page 4) and corruption has reached pandemic proportions.&nbsp;
The Dasain mood is subdued. Coalition partners will likely use the holiday to plot, and plot some more. They will face fresh challenges, the biggest being the question whether the alliance will hold together long enough, and if Deuba and Dahal will honour their deal to rotate the prime ministership.
Shristi Karki

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Kosi now, Kathmandu next?

When he was still leading the Maoist insurgency as Prachanda, guerrillas under his command executed priests, desecrated temples, burnt Sanskrit books. But even after being elected prime minister as Pushpa Kamal Dahal, he tried to replace priests from Kerala at Pashupati with Nepali ones. Indian priests resigned, and the move angered Hindus in both countries. During the insurgency, Dahal exhorted his fighters to wage war against India, even while he and other leaders were in a safe house in a New Delhi suburb.&nbsp; Fast forward to 2023. Prime Minister Dahal visits the Mahakaleswar Temple in Ujjain &nbsp;during his official visit to India, where he offers prayers clad in saffron, holy thread, and sacred ash smeared on his forehead. Faced with criticism from his own comrades, Dahal defended his temple run an act of “cultural diplomacy”. On the home front, the cultural diplomacy continued with Dahal visiting Pashupati for the first time with his finance, foreign and tourism ministers in tow. The irony was not lost on the public, at a time when opposition leader K P Oli of the UML is on the spotlight for 11kg of gold that went missing during redecoration of the sanctum sanctorum three years ago. Then on Wednesday, Dahal attended a graduation ceremony at the Nepal Sanskrit University in Dang, the same institution his cadre set fire to in 2002, destroying ancient texts in the library. He said the university was important for Nepal’s “cultural reawakening”.&nbsp; Nepal’s Maoist leader is overseeing a cultural revolution in reverse. It was a matter of time before India’s Hindutva supremacist politics would influence Nepal, but few expected it to be as dramatic as the 180 degree turn by Nepal’s prime minister. &nbsp; To be sure, Dahal is not the first Communist leader to visit a temple. UML chair K P Oli visited Pashupati and declared that Lord Ram was born in Nepal, amidst much criticism from secularists.&nbsp; Read also: <a href="https://www.nepalitimes.com/news/nepal-india-power-play">Nepal-India power play</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230616040648_7a0da5a063d4d24f1528cde2ffbb2c12dfcb7f99c24c4a89aa1435b6d84c6ae7.jpg" data-media-id="editor_1" data-image-id="20230616040648_7a0da5a063d4d24f1528cde2ffbb2c12dfcb7f99c24c4a89aa1435b6d84c6ae7" data-rendition-name="original" width="960" height="657" loading="lazy" alt="PM in Pashupati"> </figure>  As for Dahal, he has dabbled in Hindu rituals before. In 2010, he was ridiculed when he worshipped a buffalo in Sunsari to “ward off bad luck” per an astrologer’s suggestion. Dahal has not even tried to hide why he is suddenly a born-again Hindu. With Indian Prime Minister Narendra Modi probably headed for re-election next year, he may have thought it expedient to be on the BJP’s good books by shedding his Communist skin even if it means risking radical saffronisation of Nepali politics.&nbsp; Dahal’s party is the third largest in Parliament, and he has a hush-hush deal to hand over rotational prime ministership to Madhav Nepal of the CPN-US and the NC’s Sher Bahadur Deuba. To shore up his popularity, he could be courting support from a majority of Nepalis who past polls have shown want to dump secularism and declare Nepal a Hindu state. He could also be trying to take the wind out of the sails of the RPP, the party which was trying to use the Hindu card for the reinstatement of the monarchy. In fact, the RPP’s Rajendra Lingden dismissed Dahal’s new Hindu avatar as mere optics, and said the real test would come when the RPP brought a proposal to Parliament to remove secularism from the preamble to Nepal’s Constitution.&nbsp; UML leader Bhim Rawal said Dahal would have saved the country from much grief if he had visited Pashupati in 1996 instead of starting a war, and wondered if the prime minister’s volte face was a result of his one-on-one with Modi in Delhi. &nbsp; Dahal’s one time comrade-at-arms, Baburam Bhattarai tweeted obliquely: ‘One cannot question someone else’s decision to visit a religious place, that is a matter of personal faith. But when it is a Cabinet that makes the visit together, there are questions as to whether this is politically motivated.’ Read also: <a href="https://www.nepalitimes.com/news/super-hit-or-super-flop">Super-hit, or super-flop?</a> <div class="embed-block"><blockquote class="twitter-tweet">नयाॅ ‘सांस्कृतिक क्रान्ति’ र ‘सांस्कृतिक नक्सा’??एक्लै कोही कुनै धार्मिक स्थल जाॅदा प्रश्न उठउन मिल्दैन;त्यो उसको निजी आस्थाको कुरा हो। तर जब पूरै मन्त्रीमण्डल एकैसाथ जान्छ तब त्यो राजनीति हुन्छ र प्रश्न उठ्छ! <a href="https://t.co/tzr346eyQY">pic.twitter.com/tzr346eyQY</a>&mdash; Baburam Bhattarai (@brb1954) <a href="https://twitter.com/brb1954/status/1667575738302869504?ref_src=twsrc%5Etfw">June 10, 2023</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div> All this does not seem to be deterring Dahal, who is trying to kill multiple birds with one stone. Even Nepalis critical of the Maoists have said it is better that the former guerrillas are now visiting temples instead of destroying them. Dahal also wants to keep Modi and the BJP happy, given their aggressive Hindu-right agenda having a ripple effect in Nepal. Having Modi’s backing will be beneficial if Dahal faces another power struggle within his coalition. On the other hand, the BJP seems more comfortable with a rebranded saffron Maoist leader in Nepal rather than the RPP whose agenda it may consider too monarchist and nationalistic. &nbsp; Political analysts and insiders have attributed the Maoist party falling to third position to a lack of institutional structure and the abandonment of its anti-status quo ideology. Using a Hindu card may be too tempting to forego for Dahal, who must have noticed the support among young Nepalis for populist personas like mayors Balen Shah and HarkaSampang, or new technocrats in the RSP.&nbsp; Dahal faced criticism back home that he did not raise the issues of the Akhanda Bharat map in India’s new parliament building and the Kalapani dispute. Balen Shah and Harka Sampang immediately hung their own ‘Greater Nepal’ maps ” including territory lost to British India in 1816 in their offices. NC leader Gagan Thapa also called for Nepal to issue its own “cultural map. Dahal must have expected criticism for his Pashupati visit, and whatever his intentions might be, it remains to be seen if the prime minister will make rounds of monasteries, mosques, churches, and other places of worship across the nation to show that he supports Nepal’s constitutionally guaranteed religious freedom.&nbsp; Read also: <a href="https://www.nepalitimes.com/opinion/borderlines/nepal-pm-to-india-to-reboot-ties">Nepal PM to India to reboot ties</a>, Chandra Kishore

Shristi Karki

RED to SAFFRON

Even before Nepal’s Prime Minister Pushpa Kamal Dahal returned from a four-day official trip to India on Saturday, commentators and the social web back home had given the visit an F in his report card. Welcoming Dahal before their bilateral talks on Thursday, Indian Prime Minister Narendra Modi had already declared that Dahal’s visit would be a “super-hit”. And indeed, from an Indian perspective it was. Nepal had a long wish-list of things to be sorted out during the visit, but India was not giving in on any of the really substantial ones, and most of the outcomes were cosmetic.&nbsp; Read also: <a href="https://nepalitimes.com/opinion/borderlines/nepal-pm-to-india-to-reboot-ties">Nepal PM to India to reboot ties</a>, Chandra Kishore The Nepali side has tried to highlight some of the positive achievements of the visit, but had to be satisfied with less than what it wanted.&nbsp; Nepal had demanded a 25-year energy cooperation deal with India, but Modi only verbally announced that India would procure up to 10,000MW of power from Nepal in the next ten years. The agreement on exporting only 40MW of power to Bangladesh via India was largely symbolic. The MoUs were signed in the presence of Dahal and Modi for the Lower Arun and Phukot Karnali hydropower projects (pictured below) had already got the green light in March.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230603030648_08ef06d22b8a78dff275060ab89359323f1e9d2ef12cf00b7a7d1e57a3f9975b.png" data-media-id="editor_1" data-image-id="20230603030648_08ef06d22b8a78dff275060ab89359323f1e9d2ef12cf00b7a7d1e57a3f9975b" data-rendition-name="original" width="1776" height="1152" loading="lazy" alt="Prachanda New Delhi"> </figure>  There is criticism from commentators in Nepal that those river project agreements, the Butwal-Gorakhpur transmission line as well as the ground breaking of two more petroleum pipelines in Nepal would disproportionately benefit India. Even the building of a new integrated checkpoints in Nepalganj and Dodhara Shandani would facilitate Indian exports to Nepal.&nbsp; Building petroleum infrastructure at a time when Nepal should be focussed on meeting its 2045 net-zero decarbonisation goals appeared incongruous to many. Nepal had insisted on two-way traffic on the L626 and B345 air routes west from Kathmandu that would shorten travel time and make inbound flights to Pokhara and Bhairawa airports more attractive to international operators. But India grudgingly agreed only to lower flight level traffic eastbound on L626 below 15,000ft. This would only benefit short-haul turboprops into Nepal, and not international flights from Delhi, the Gulf or Europe. India also agreed to provide access to its air space for ILS landings at the new Bhairawa airport, but said that inbound flights on B345 could not be allowed because of security concerns of its nearby air force base in Gorakhpur. Instead of air routes, Nepal got a promise to allow the use of India’s inland waterways for transportation. And while the agreement for cross-border digital payments would make it convenient for citizens of both countries, there are misgivings about privacy issues of personal data of Nepalis.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230603030648_04dd622c8dddea5a28a52443867703af8218a2558b5170565561db9b9add8562.jpg" data-media-id="editor_2" data-image-id="20230603030648_04dd622c8dddea5a28a52443867703af8218a2558b5170565561db9b9add8562" data-rendition-name="original" width="2048" height="1536" loading="lazy" alt="Prachanda New Delhi"> <figcaption>Prime Minister Pushpa Kamal Dahal was welcomed with a classical dance performance in Delhi. Photo: RSS</figcaption> </figure>  India appears to have flatly refused to even discuss the Eminent Persons Group (EPG) report which has suggested a revision of the 1950 India-Nepal treaty that Nepalis have regarded as being asymmetric. There was also no progress on the Lipu Lek-Kalapni border dispute. However, Dahal in a meeting with Nepali editors on Friday said that he had raised Kalapani with Modi and both had agreed to find a resolution through negotiations. But he floated the controversial idea that Kalapani could be swapped with India for a road corridor across 26km of Indian territory to Bangladesh from southeast Nepal. He did not seem to know that Nepal had already secured an agreement with India’s I K Gujral government 30 years ago that allowed this corridor, which was never implemented. The Kalapani swap proposal is bound to raise nationalism hackles in Nepal. Dahal’s Delhi visit had other photo-ops that did not sit very well back in Nepal. The photograph of his daughter-private secretary Ganga Dahal sitting in during the prime minister’s meeting with India’s National Security Adviser Ajit Doval and Foreign Secretary Vinay Kwatra (and not Nepal’s foreign secretary) has been much criticised in Nepali social media.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230603030656_922355b75e4806b9f715bcf888d0dda65a41e6774bfb298fc4c758bc72e05aec.jpg" data-media-id="editor_3" data-image-id="20230603030656_922355b75e4806b9f715bcf888d0dda65a41e6774bfb298fc4c758bc72e05aec" data-rendition-name="original" width="1399" height="788" loading="lazy" alt="Prachanda and Ganga Dahal in Delhi"> <figcaption>Indian Foreign Secretary Vinay Mohan Kwatra and Indian National Security Adviser Ajit Doval with visit Prime Minister Pushpa Kamal Dahal and his daughter Ganga Dahal in New Delhi on 31 May. Photo: RSS</figcaption> </figure>  Members of the Nepali delegation, who are not government officials but friends of ministers, taking selfies during solemn occasions like the wreath-laying at the Mahatma Gandhi memorial has also been lampooned in Nepal.&nbsp; But the most glaring contradiction was the sight of a Maoist prime minister of Nepal clad in saffron and holy thread, offering prayers at a Shiva temple in Indore (pictured below). Another photograph showed three senior Nepali cabinet ministers also in the same attire offering prayers.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230603030648_5ac04014aeeacb5be677111702fdf301083d8a8d7493dbb4b947e6630339666d.jpg" data-media-id="editor_4" data-image-id="20230603030648_5ac04014aeeacb5be677111702fdf301083d8a8d7493dbb4b947e6630339666d" data-rendition-name="original" width="1170" height="658" loading="lazy" alt="Prachanda New Delhi"> <figcaption>Prime Minister Pushpa Kamal Dahal offering prayers at Shiva temple in Indore. Photo: BABURAM BHATTARAI/TWITTER </figcaption> </figure>  Commentators pointed out the contrasting irony of this with the Maoists assassinating Hindu priests and desecrating temples during their armed struggle in 1996-2006, and being the most aggressive proponents of making Nepal a secular republic after the peace accord. Many have said the transformation of Prachanda to Pushpa Kamal Dahal is now complete, and it is only a question of time before the Maoist Centre drops the ‘Maoist’ label from its party name.

Super-hit, or super-flop?

<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 src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413118/63722fef9c7e80680e0c253ejpeg.jpg" alt="" width="3821" height="2788"/><figcaption>Pushpa Kamal Dahal with Jagat Prakash Nadda, national president of BJP. Photo: JAGAT PRAKASH NADDA/TWITTER</figcaption></figure>Barely days after Pushpa Kamal Dahal met the visiting head of the International Liaison Department of the Communist Party of China, Liu Jianchao in Kathmandu, he was off to New Delhi.The undisputed supremo of Nepal’s Maoists has been known to play all sides before, but this puts his balancing act on a whole new level. It also shows that Nepal’s giant neighbours are engaged in a tug-o-war as the country heads for federal and provincial elections on 18 November.Ever since Nepal was founded as a nation state, the country had to do  a tightrope between British India and the Chinese Empire. Recognising this, Prithvi Narayan Shah famously compared Nepal to a yam ensconced between two boulders, and laid out the doctrine of equidistance.Inspired by Mao Zedong, Dahal took on the mantle of ‘Prachanda’ to wage an armed struggle that killed 17,000 Nepalis. At the time, Dahal paraphrased Nepal’s founding king, to describe the country as a “dynamite between two boulders”.Here is a man who in 1998 declared a ‘tunnel war’ to prepare for an Indian invasion, but who spent eight of the ten war years at a safe house in a New Delhi suburb.After the conflict ended in 2006, Dahal has been prime minister twice. The first time, he had to resign after barely a year in power after overstretching his hand in an unsuccessful bid to sack Nepal Army chief Gen Rookmangud Katuwal in 2009, and replace him with a yes-man.It did not go unnoticed that President Ram Baran Yadav had to force him out after some critical late night intervention from New Delhi.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111413118/63722ff39c7e80680e0c253fjpeg.jpg" alt="" width="1000" height="600"><figcaption>Head of the International Liaison Department of the Communist Party of China, Liu Jianchao with Pushpa Kamal Dahal in Kathandu last week.</figcaption></figure>Last week’s visit by Liu Jianchao and Dahal’s sudden air dash to Delhi prove once more that Nepal’s domestic politics is, more than ever, a reflection of regional geopolitics.The Chinese, who had so far been content with letting Nepal languish in New Delhi’s sphere of influence have, since Xi Jinping, been taking a keener interest in micro-managing Kathmandu's power corridors.Beijing’s real worry is not so much about India as it is heightened American activities in Nepal, mainly vis-a-vis Tibet. The active lobbying by the Chinese against the US-supported Millennium Challenge Corporation (MCC), and lately the scrapped State Partnership Program (SPP) pointed to this.The Chinese have openly expressed their <a href="https://www.nepalitimes.com/latest/one-party-two-countries/">desire for Nepal’s Communist parties to unite</a>, and actually fulfilled that wish with the merger of the UML and the Maoists into the Nepal Communist Party (NCP) after the alliance’s overwhelming victory in the 2017 election.And when Dahal fell out with prime minister K P Oli and the power struggle threatened the NCP, Chinese Ambassador Hou Yanqi shuttled between the Oli and Dahal residences in Kathmandu to patch up their differences.As it turned out, not only did the NCP split, but so did the UML, the MCC was ratified, and the ruling coalition in Kathmandu adopted a Indo-Western alignment.This must have unnerved the Mandarins in Beijing, who did not have to send a high level party emissary just to feel the political pulse in Kathmandu. Liu Jianchao's main aim was to reforge Communist unity ahead of November, and do a repeat of 2017.After all, the Maoists, UML and the Unified Socialists have been trying to suss things out through emissaries. So much so that it has sent off tremors within Nepali Congress (NC), where an anti-Deuba faction led by Shekhar Koirala and Gagan Thapa have been trying to get the party to contest elections on its own.Ironically, Deuba’s own position within his party is now dependent on the coalition staying intact. This in turn has made the NC almost a junior partner in the coalition, with Dahal asserting himself as heir apparent.In a meaningful <a href="https://ekantipur.com/Interview/2022/07/18/165810525150588451.html" target="_blank" rel="noopener noreferrer">interview in Delhi with Kantipur</a>, Dahal talked about meeting his ‘old friend’ in India’s intelligence apparatus who is Prime Minister Modi's National Security Adviser, and hinted that he had blessings on a rotational prime ministership with Deuba — just as he had with Oli.The danger in all this dalliance is that closer ties with India now means closer party-to-party ties with the BJP, and the prospect for instability in the Nepali polity that it entails.All this comes as the Deuba-led coalition completes one year of misrule and miscues. It has outdone the K P Oli administration in pushing through ordinance after ordinance to amend constitutional provisions, has drafted a bill to grant further immunity from prosecution for war crimes among the Maoist militia and the government.With these tectonic forces at play, the ruling class appears unable and incapable of arresting looming economic collapse.Read more: <a href="https://www.nepalitimes.com/editorial/deubas-mixed-report-card/">Deuba's mixed report card</a>, Editorial

Geopolitical tug-o-war over Nepal

<img width="1756" height="1420" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/6372094c9c7e80680e0b5533jpeg.jpg" alt=""/>This week it will be 26 years since the Maoists took up arms against the state, and 16 years since the war ended. Sher Bahadur Deuba was prime minister in 1996, just as he is now in an uneasy governing coalition with his erstwhile Maoist enemies. The war lasted ten years, leaving 17,000 dead. Unlike previous years, preparations for <a href="http://archive.nepalitimes.com/article/editorial/20-years-wasted-in-war,2850%22%20%5Ct%20%22_blank">‘People’s War Day’ </a>on 13 February are muted. This is to be expected -- the warring sides are now not just the state, but are members of the same governing coalition. Today, both Deuba and his Maoist coalition partner Pushpa Kamal Dahal want to brush the dirty business of war under the carpet. Two commissions set up to investigate war crimes are as good as defunct. Neither side wants to rake up the past, and hope that time will help erase memories of atrocities.  Maoist ideologue Baburam Bhattarai presented Deuba with a 40-point ultimatum a day before Valentine’s on <a href="https://www.nepalitimes.com/blogs/thebrief/2015/02/16/making-war-on-the-day-of-love/%22%20%5Ct%20%22_blank">13 February 1996</a>. But even before the deadline ran out, guerrillas led by Nanda Kishore Pun and Barsha Man Pun attacked a police post in Rolpa district. Nanda Kishore <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/10/31/ex-guerrilla-is-vice-president/%22%20%5Ct%20%22_blank">Pun</a> is now Nepal’s vice-president, Barsha Man Pun has been minister several times and just returned after medical treatment in China. He may have been convicted of war crimes, but Agni Sapkota is Speaker of Parliament. Guerrilla commander Janardan Sharma is Finance Minister in the coalition government. In 1996, Deuba was too busy extinguishing a rebellion within his Nepali Congress party (sound familiar?) to respond to the spreading Maoist insurgency. When the police did react, it was with such indiscriminate violence that it the Maoists had no trouble with recruitment. Despite the 1990 transition to constitutional monarchy and the short-lived euphoria of democracy, the Maoists felt this would not end feudalism. They believed that it was only possible to end the ‘structural violence’ of the state by taking up arms against it. They faithfully followed the ‘protracted armed struggle’ tactics of Mao, who himself was a disciple of Sun Tzu.  They chose a remote and inaccessible region of the country where state neglect, inequity and social injustice were entrenched. But objective conditions for revolt were so ripe, the state’s response so ham-handed, that the insurgency spread like wildfire.The Maoists wanted to topple parliamentary democracy and constitutional monarchy, and were backed by forces inside and outside Nepal with the same goal. Emboldened by early gains, the Maoists used the momentum of the royal palace massacre of 1 June 2001 to take on the Royal Nepal Army a year later. The level of violence and casualties escalated – an average of 35 Nepalis were being killed every day at the hands of fellow-Nepalis.King Gyanendra’s ill-advised coup of 2005 backfired, and people came out on to the streets. Their demands were peace and democracy, in that order. A military stalemate on the ground, war weariness, and lobbying by external peacemakers led to a ceasefire. In the 16 years since, Nepal has gone from war to peace, from monarchy to republic, from Hindu state to secularism, but not much else has changed. Despite a progressive Constitution, social exclusion and injustice prevail, there is chronic instability, impunity, lack of accountability and governance failure. For those who still remember the horrors of war, the sacrifices have been squandered. Nepal is back to where it was in 1996 and even the political protagonists are the same people. In an election year, there is a move to rollback federalism, secularism and even monarchy. History is once more repeating itself as a farce.      Ever since the Shaktikhor tapes in which he boasted on candid camera to have hoodwinked the United Nations by inflating his party’s militia strength so he could pocket more compensation from the state, Pushpa Kamal Dahal has been known for playing to the gallery. The ongoing political tug-o-war over the US-supported Millennium Challenge Corporation (MCC) project has further exposed Dahal. The fact that he had co-signed (with Deuba) a letter to the MCC secretariat in Washington DC assuring it that he needed a few more months to build a consensus within the coalition for ratification by Parliament was diametrically opposite of what he was saying in public against the MCC. The political fallout has been damaging for PKD, even those sympathetic to his cause have taken him to task. Cartoonists and social media are having a field-day lampooning him. But Dahal has built such widespread public opinion against the project that he is now trying to portray himself as a staunch nationalist who stood up to American imperialism.   Dahal had two chances to serve as prime minister, and Bhattarai once. The two have fallen out long since, with Bhattarai now also threatening to split off from the Janata Samajbadi Party (JSP) because he cannot get along with another former Maoist Upendra Yadav. PKD’s Maoist party is now a shadow of its former fearsome self. Most of his staunchest comrades have abandoned him. Many may not even remember 13 February.

13 February

<img width="1050" height="700" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208f89c7e80680e0b5517jpeg.jpg" alt=""/>A civil society group has urged Nepal’s political parties to take action against <a href="https://www.nepalitimes.com/latest/nepal-speakers-ipu-trip-slammed/" target="_blank" rel="noopener noreferrer">House Speaker Agni Sapkota</a>, who they say has continuously violated the responsibilities and expectations vested in him as Speaker.A day after the statement, and right on cue, Sapkota for the second time postponed by a week a scheduled session of Parliament that for Wednesday, 9 February. The suspicion is that the speaker is trying to block the ratification by the House of the controversial American-supported <a href="https://www.nepalitimes.com/editorial/just-do-it/" target="_blank" rel="noopener noreferrer">Millennium Challenge Corporation</a> (MCC) project.The row has <a href="https://www.nepalitimes.com/latest/mcc-risks-split-in-nepals-ruling-coalition/">threatened to split the five-member ruling coalition</a>, with Prime Minister Sher Bahadur Deuba of the Nepali Congress and the Janata Samajbadi Party (JSP) supporting it while two Communist party members of the governing alliance opposing it.The Maoist Centre and the Unified Socialists fear that Deuba may team up with the opposition UML to pass the MCC automatically leading to a collapse of the coalition. The alliance is important to the two communist parties because they broke away last year from the NCP, and are not fully ready for <a href="https://www.nepalitimes.com/editorial/think-nationally-vote-locally/" target="_blank" rel="noopener noreferrer">elections</a> this year. Read also: <a href="https://www.nepalitimes.com/here-now/maoists-backpedal-on-mcc-letter/">Maoists backpedal on MCC letter</a>, Nepali Times <figure><img width="960" height="639" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208fb9c7e80680e0b5518jpeg.jpg" alt=""><figcaption>Anti-MCC protests at Maitighar Mandala and Parliament on Wednesday. Photos: MAIT MACHAMASI</figcaption></figure><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208fd9c7e80680e0b5519jpeg.jpg" alt="">‘It is the institutional and legal duty of the Speaker to facilitate the placement of all bills presented by the government before the House,’ the civil society statement reads,  accusing Sapkota of holding up ratification for two years. Sapkota, a close confidante of Maoist Centre Chairman Pushpa Kamal Dahal,  has used the UML’s obstruction of Parliament as an excuse to postpone house sessions, effectively blocking parliamentary discussion of the $500 million American-supported project to<a href="https://www.nepalitimes.com/banner/own-goal/" target="_blank" rel="noopener noreferrer"> upgrade transmission lines and highways in Nepal</a>. Supporters of the Maoist Centre and the Unified Socialists on Wednesday staged a street rally outside Parliament in support of the speaker and against the MCC.  Disagreement within the governing coalition prompted Sapkota to postpone Wednesday’s parliament meeting, hours before it was set to begin, to 14 February. The US has said that the project needs to be ratified by parliament by 28 February, and the Chinese have been <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/" target="_blank" rel="noopener noreferrer">lobbying actively against it</a> – adding a geopolitical element to the row.While Prime Minister Deuba backs the project, his alliance partners Pushpa Kamal Dahal of the Moaist Centre and Madhav Kumar Nepal of the Communist Party of Nepal (United Socialist) have been fiercely opposed to it.Read also: <a href="https://www.nepalitimes.com/latest/mcc-row-damages-nepals-credibility/" target="_blank" rel="noopener noreferrer">MCC row damages Nepal’s credibility</a>, Ramesh Kumar <img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637209009c7e80680e0b551ajpeg.jpg" alt=""><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637209039c7e80680e0b551bjpeg.jpg" alt=""><img width="960" height="640" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637209059c7e80680e0b551cjpeg.jpg" alt="">The open letter from civil society notes that the Speaker has sought to evade the Constitution and relevant laws in order to exercise executive powers since the day of his appointment, even though Nepal’s parliamentary system does not grant such powers to the Speaker.“The main political parties must immediately take action on Agni Sapkota in order to protect the values and principles of the parliamentary system,” the statement reads.  Agni Sapkota was appointed Speaker in January 2020 even though he has been accused of <a href="https://archive.nepalitimes.com/article/editorial/state-of-impunity,2976" target="_blank" rel="noopener noreferrer">summary execution</a> during the conflict, with cases against him pending in Nepal’s Supreme Court.Sapkota was a central committee member and leader of the underground Communist Party of Nepal-Maoist (CPN-M) in Sindhupalchok during the armed insurgency and said to be involved in the April 2005 abduction and subsequent killing of civic leader Arjun Bahadur Lama from Kavre district.  Arjun Lama’s wife Purnimaya Lama is one of the signatories of the appeal.The district police had initially refused to register an FIR on the case, until a 2018 directive from the Supreme Court to the Kavre police to investigate the case and submit monthly reports. Read also: <a href="https://www.nepalitimes.com/latest/speechless/" target="_blank" rel="noopener noreferrer">Speechless</a>, Sewa BhattaraiThe open letter says the fact that Sapkota has continuously occupied high political positions makes it clear that the police have been intimidated while conducting investigation. “Influencing the police administration by virtue of his position of power … and by remaining an absconder on the murder case of Arjun Lama, Agni Sapkota is responsible for obstructing justice in the particular case and contributing to the general weakening of the law and justice system in the country,” the statement reads.The signatories of the appeal include Purnimaya Lama, Badri Prasad Bhusal, Bhagiram Chowdhary,  Indra Prasad Aryal, Kanak Mani Dixit,   Kedar Narshing KC, Maina Karki, Manamunishwar Acharya,  Rajan Kuikel, Sabitri Shrestha, Suman Adhikari,  Surya Bahadur Adhikari,  Sushil Pyakurel, and Yagya Raj Thapa.Read also: <a href="https://www.nepalitimes.com/latest/14-years-after-conflict-no-closure-in-nepal/">14 years after conflict, no closure in Nepal</a>, Nepali Times

Nepal House speaker embroiled in MCC row

<figure><img width="800" height="557" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208b19c7e80680e0b54fdjpeg.jpg" alt=""/><figcaption>Illustration: RABINDRA</figcaption></figure>Pushpa Kamal Dahal usually gets favourable coverage in Nepal’s mainstream media. Which is why he must have been shocked when he woke up on Monday morning to banner headlines ridiculing what is seen as his duplicity in the <a href="https://www.nepalitimes.com/latest/mcc-risks-split-in-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">US-supported MCC project</a>.He must have had an inkling of it after Nepal’s cybersphere exploded after the leak over the weekend of the letter he co-signed with Prime Minister Sher Bahadur Deuba on 29 September 2021 asking the MCC for some more time to build a consensus in his coalition for <a href="https://www.nepalitimes.com/editorial/just-do-it/" target="_blank" rel="noopener noreferrer">the project</a>.Publicly, Dahal has been a vocal opponent of the project, calling for amendments to clauses he deems to be an affront to Nepal’s sovereignty.  Even sites that have been sympathetic to the Maoists were compelled to expose what they saw as his kow-towing to the Americans. Some posted photo-shopped images of Dahal with two tongues, while cartoonists had a field-day.It is not clear who leaked the letter, but Dahal has broadly hinted that he suspects it came from the prime minister’s office. Deuba himself called a tripartite meeting with Dahal and K P Oli of the main opposition UML on Sunday to sort things out.Deuba, who has been fully backing the $500 million MCC (<a href="https://www.nepalitimes.com/latest/mcc-damned-if-we-do-damned-if-we-dont/" target="_blank" rel="noopener noreferrer">Millennium Challenge Corporation</a>) project, seems now to have Dahal exactly where he wants him. Dahal used K P Oli’s support for the MCC to mastermind his ouster as prime minister in a party mutiny last year. <figure><img width="900" height="550" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208b39c7e80680e0b54fejpeg.jpg" alt=""><figcaption>Vice president of the MCC Fatema Z Sumar with Maoist leader Pushpa Kamal Dahal in Kathmandu in October.</figcaption></figure>But Oli is now playing coy, and himself using the MCC as a battering ram to try to break the ruling coalition <a href="https://www.nepalitimes.com/editorial/think-nationally-vote-locally/" target="_blank" rel="noopener noreferrer">ahead of elections</a> to three levels of government this year. He has come out strongly against Dahal’s conduct.There are already hints of friction within the coalition. Madhav Kumar Nepal of the CPN (Unified Socialists) who broke away from Oli’s UML and now a staunch Dahal ally, was not invited to the Baluwatar meeting on Sunday.The UML’s Shankar Pokhrel said Dahal tried to defend himself at the meeting with the prime minister and Oli, saying he never signed the letter. Others in the Maoist party had been posting in social media saying the signature in the letter is forged.Dahal’s daughter Ganga Dahal tweeted a statement from the Maoist party that staunchly defended Dahal: ‘The letter was a diplomatic exercise to protect the national interest, and it has been bent out of context. We are clear that this project cannot go ahead without amendments.’However, the MCC's top officials have ruled out any more amendments, and have laid out a final deadline of 28 February for the project to be ratified by Nepal’s Parliament as required by the contract. This is the reason Prime Minister Deuba is also in a hurry to cobble together the numbers in the House for ratification before then'. <figure><img width="509" height="500" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208b69c7e80680e0b54ffjpeg.jpg" alt=""><figcaption>Ganga Dahal's tweet with the Maoist Centre statement.</figcaption></figure>Deuba, however, faces a hurdle because House Speaker Agni Sapkota is a staunch Dahal confidante and has used the UML’s obstruction of Parliament as an excuse to postpone house sittings. Parliament was supposed to have a session on 30 December, but Sapkota put it off by ten days.The reason Deuba needs Oli in the picture is for him to remove his six-month long obstruction of Parliament over Sapkota not disallowing dissident members of the Nepal faction from the House. But it is clear Oli wants his pound of flesh.Deuba’s Nepali Congress by itself does not have the numbers in the House to pass the MCC, and will need either the Maoist Centre and the Unified Socialists, or the UML to pass it. If Dahal and Nepal refuse to go along, and the UML backs the NC, then <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">the coalition</a> is as good as collapsed.It is clear that Dahal cannot now backtrack from his opposition to the MCC even though his party was in a coalition government in 2017 with Prime Minister Deuba during a previous tenure when the MCC was signed.Nepal was selected for the MCC’s ‘threshold program’ when former Maoist ideologue Baburam Bhattarai was prime minister in 2014. Bhattarai is now with the Janata Samajbadi Party (JSP) and is publicly in support of the MCC. <figure><img width="750" height="457" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208b89c7e80680e0b5500jpeg.jpg" alt=""><figcaption>Gyanendra B Karki, then finance minister, now Communication Minister signing the MCC contract in Washington DC in 2017. </figcaption></figure>In a scathing tweet against his former comrade-in-arms on Sunday after Dahal’s signature in the letter became public, Bhattarai noted: ‘Anti-national inside, and nationalist outside ... Nepal will never develop as long as politics is not free of such absurd two-tongued characters.’ <figure><img width="678" height="169" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101120/637208ba9c7e80680e0b5501jpeg.jpg" alt=""><figcaption>Baburam Bhattarai tweet.</figcaption></figure>There is a geopolitical dimension also to the MCC. The project to upgrade Nepal’s electricity transmission lines does not just <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/">threaten to split Nepal’s governing coalition</a>, but Nepal’s politicians are also under pressure from the Americans to back the MCC and the Chinese who have <a href="https://www.nepalitimes.com/here-now/china-lobbying-against-mcc/">intensified their lobbying</a> with the political leadership. China’s Ambassador to Nepal Hou Yanqi has been actively meeting coalition leaders in recent months to lobby against the MCC, including with the UML’s K P Oli. The head of the International Department of the Communist Party of China (CPC) Song Tao also held a one hour Zoom talk with Dahal of the Maoists Centre last week. Chinese official media as well as posts on the Weibo platform have been openly attacking American interference in Nepali politics to push the project through. <a href="https://www.nepalitimes.com/latest/is-china-now-micro-managing-nepal-politics/">China sees the MCC</a> as being America’s response to its own Belt Road Initiative (BRI), and as Sino-US relations worsen, Nepal and the MCC have been caught in the middle. With elections approaching, the MCC has also become a factor in Nepal’s domestic politics as well. Deuba finally convinced Dahal and Nepal last month to <a href="https://www.nepalitimes.com/latest/nepal-coalition-dilly-dallying-on-polls/">lift their opposition to holding local elections</a> in May after assuring them that the governing alliance would be intact. But the coalition is not expected to survive if the MCC is put to a vote in the House. The Americans are putting up a $500 million grant for the project to upgrade transmission lines and highways in Nepal five years after ratification, while Nepal has committed $130 million. One component of the MCC will upgrade <a href="https://www.nepalitimes.com/latest/the-cost-of-no-mcc/">Nepal’s electricity network</a> with a 400kVA transmission line that can also increase export power surplus to India. Nepal’s generation capacity is expected to rise four-fold to 5,000MW by 2025. Another component of the project is to improve highways in Central Nepal to <a href="https://www.nepalitimes.com/latest/generating-electricity-and-cash-for-nepalis/">boost economic growth</a>.