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The US Department of State’s Coordinator on Global Anti-Corruption Richard Nephew paid an official visit to Nepal this past week. According to the US embassy in Kathmandu, Nephew discussed with Nepali officials the progress regarding Nepal’s anti-corruption commitment as part of Summit for Democracy, and pledged US commitment to supporting Nepal’s efforts to eradicate corruption.

Nephew’s visit comes at a time when Nepal is investigating some big corruption scandals such as the fake Bhutanese refugee scandal, Lalita Niwas land grab and Kathmandu airport gold trafficking case. The US anti-corruption head also met Deputy Prime Minister and Minister for Home Affairs Narayan Kaji Shrestha and the leadership of the Central Investigation Bureau of Nepal Police. 

Fighting corruption is a key component of US foreign policy. In response to ApEx’s email inquiry about Nephew’s visit, a US State Department spokesperson said: “We know as a universal truth that corruption erodes public trust in government and democratic institutions, deepens poverty and inequity, threatens public security, and stifles opportunity and growth.”

“It affects people in virtually every aspect of their daily lives, draining vital resources. That is why President Biden has designated the fight against corruption as a core US national security interest and why Coordinator Nephew’s mission is so important.” 

During his two-day Nepal stay, Nephew met with various Nepali officials  to learn about corruption challenges and to confer on how the US can help address these issues as part of overall Nepal-US partnership.

The US State Department spokesperson said Nephew was not in Nepal to see the progress on any specific case of corruption. In response to ApEx’s inquiry, the spokesperson said: “Just like any allegations of corruption, the current allegations of corruption and the unlawful fabrication of refugee documents in Nepal are concerning.”

This is probably the first time the US has expressed concerns over the fake Bhutanese refugee scam.  

“We understand Nepali authorities are investigating the allegations and hope they will quickly determine what transpired, hold perpetrators accountable, and deter future corruption cases in accordance with the law and the Nepal government’s commitments to transparency and accountability,” said the spokesperson.

“The United States has consistently supported Nepali government and civil society efforts to root out corruption. Transparent investigations into allegations of corruption demonstrate to the Nepali people that no one is above the law.  We commend actions by the Government of Nepal to bring truth to light in accordance with rule of law.”

Between 2007 and 2018, the US has welcomed tens of thousands of Bhutanese refugees formerly residing in Nepal as part of our global commitment to support refugees. The program has since ended, and there were no significant concerns regarding fraudulent activity associated with that resettlement process, said the spokesperson. 

Of late, visiting US officials have been raising corruption eradication as a key agenda to strengthen democracy. Earlier in January, US under Secretary for Political Affairs Victoria Nuland talked with Nepali politicians about the need to continue fighting corruption.

 The Biden administration in 2021 unveiled the US Strategy on Countering Corruption. In June that year, Biden said that corruption threatens United States national security, economic equity, global anti-poverty and development efforts, and democracy itself. “But by effectively preventing and countering corruption and demonstrating the advances of transparent and accountable governance, we can secure a critical advantage for the United States and other democracies,” he added.  

In Nepal, three corruption scandals—fake refugee scandal, Lalita Niwas land grab and gold smuggling—are under investigation. On the fake refugee case, the CIB has already filed cases against more than one person including former home minister, Bal Krishna Khand, and CPN-UML senior leader Top Bahadur Rayamajhi.
The CIB has also reopened the file on Lalita Niwas land grab case in which two former prime ministers Madhav Kumar Nepal and Baburam Bhattarai have also been implicated. The CIB is also investigating the gold trafficking case from Kathmandu’s Tribhuvan International Airport in which the involvement of high profile business persons and politicians has been suspected.

Vice President Ram Sahay Prasad Yadav on Monday left for China for a week-long official visit. He is due to attend the Seventh China-South Asia Exposition and twenty-seventh China Kunming Import and Export Fair.  

Vice President Yadav is also expected to hold some high-level talks with Chinese officials. This will be his first foreign visit after his election in March this year. He had expressed his wish to visit India first, but did not get an invitation from the southern neighbor.

China has increased its engagement with Nepal in recent days. There have been increased high-level visit exchanges between both countries, and these visits are not just limited at government-to-government level. Many visits have taken place at the party-to-party level as well. 

Communist Party of China has sent several of its delegation to Nepal and correspondingly, various political parties of Nepal have received invitations from the CPC. The series of visit exchanges between government officials and political party representatives is a clear sign that China accords high priority to Nepal.       

In meetings with Nepali officials, CPC leaders have said that they are willing to enhance cooperation and exchanges with Nepal in agriculture, poverty reduction and education to enrich the relationship between the two countries through subnational exchanges. 

China stepped up its engagement with Nepali parliamentarians as well, mainly after the endorsement of America’s Millennium Challenge Corporation (MCC). 

Earlier in June, Chairman of the National Assembly Ganesh Prasad Timilsina visited China where he held talks with his counterpart Zhao Leji and other high-level government officials. Likewise in July, Deputy Speaker of the House of Representatives Indira Rana-led parliamentary team visited China to attend the Eco Forum Global Guiyang-2023.

Amid flurry of visits, preparations are also underway for Prime Minister Pushpa Kamal Dahal’s visit to China in September. While Beijing has also extended an invite to President Ram Chandra Poudel, he is most likely to visit India first.   

Regarding the possible agenda of Prime Minister Dahal’s upcoming China visit, he has already said that some vital agreements relating to power-trade agreements and bilateral projects would be signed. But some experts say despite Prime Minister Dahal’s plan to sign a power trade agreement with China, it is not feasible. 

Ganesh Karki, chairman of Independent Power Producers’ Association, says after the construction of transmission lines, Nepal could be able to send a small amount of electricity to China, but Nepal’s main market is  India. 

Just like the transit and transport agreement, Dahal may have planned to give a symbolic message, but China cannot become a major market for power trade (see page 4 for detailed report). Of late, Chinese investment in Nepal’s hydropower sector is dwindling, while India has emerged as a dominant player. The Chinese side has been known to express displeasure with the Nepali officials over India’s dominance in Nepal’s energy sector.

For China, the implementation of Belt and Road Initiative (BRI) in Nepal is the key priority area. But there is an unease in Nepal regarding the BRI after China listed Pokhara International Airport as part of the BRI. Nepali ministers have time and again dismissed the Chinese claim, saying that Nepal has yet to execute any project under the BRI.  

Officials say the first priority of Prime Minister Dahal, while talking with Beijing officials, will be to seek China’s concrete position on the BRI. 

Prime Minister Dahal has not spoken much about the BRI in recent days. Previously, he used to say that China should help construct at least one major project as a gift under the BRI.

Tanka Karki, former Nepali ambassador to China, says the prime minister’s imminent China visit should be focused on the implementation of past agreements signed between two countries including the BRI. If there are any problems regarding the implementation of the agreements, Dahal should communicate what those problems are.

The Chinese side has also been stressing the need of implementing the past agreements signed between the two countries during Chinese President Xi Jinping’s Nepal visit. But the coalition partners are not on the same page when it comes to engaging with China.

Along with the BRI, China has also been urging Nepal to make commitments on the Global Security Initiative, Global Development Initiative (GDI) and Global Civilization Initiative (GCI). Experts say the prime minister and government officials should clearly communicate their concerns and positions on these latest initiatives of China, and not rush into signing new agreements. 

There are a lot of agreements from which Nepal can take benefit, says Karki, but the focus should be on their implementation. He is of the view that there is no need of signing new agreements with China when the past agreements have not moved forward. 

Upendra Gautam, general secretary of China Study Center, says Prime Minister Dahal must take China into confidence when it comes to securing Beijing’s core interests, including bilateral territorial security mechanisms for stable trade, transit, transport, agriculture and cultural connectivity. 

Nepal’s longstanding and generally stable ties with China offers Prime Minister Dahal a rare historic opportunity to prove that he is not just a tool in the fractious South Asian politics dominated by India-China rivalry. 

If the prime minister plays his cards right, he can steer Nepal toward the path of prosperity by establishing mutually cooperative and highly reciprocal relationships with immediate neighbors.  

Nepal’s Ambassador to China Bishnu Pukar Shrestha says progress on rail and roadway connectivity are the key priority areas of Nepal which are the bedrock of boosting bilateral trade and investment. 

During Prime Minister Dahal’s China visit, Shrestha says Nepal will request the Chinese side to expedite the China-funded development projects in Nepal. 

He adds signing power trade agreements, increasing Chinese investment and resolving trade bottlenecks are also on the list of priorities. 

Key points for PM Dahal’s China trip

• Projects under BRI
• Bringing Chinese investment
• Implementation of transit and transport agreement
• Connectivity (road and railway)
• Mutual legal assistance
• Power Trade agreement
• Border management
• Removing trade bottlenecks
•  Resumption of joint military drill
• Global Security Initiative, Global Civilization Initiative  
• Peace and friendship treaty

In 2014, when Bharatiya Janata Party (BJP) came to power in India, Prime Minister Narendra Modi emphasized on the effective implementation of Neighborhood First Policy. Over the past 10 years, it has emerged as a central pillar of India’s overall policy when dealing with its neighbors including Nepal. 

The Indian parliament’s external affairs committee has conducted an in-depth study on the implementation of the policy after consultations with the Ministry of External Affairs and experts, and its report highlights immediate neighbors as “the first circle of priority” in India’s relation with the world. The report also recommends all ministries and departments to approach their engagements with the neighboring countries with a proactive perspective.

According to the committee, the Neighborhood First Policy over the years has achieved benefits like greater regional connectivity, improved infrastructures, stronger development cooperation in various sectors. It has also urged the Ministry of External Affairs to ensure that development projects undertaken in the neighborhood are executed on time by strengthening the joint project monitoring committees and oversight mechanism for monitoring the progress of various development assistance projects.

Only successful implementation of the policy, the report says, requires concerted efforts such as timely execution of development projects and enhancing mutually beneficial cooperation.

The committee has also pointed out the lack of parliamentary exchanges between India and its neighboring countries, which is the key to effective implementation of the Neighborhood First Policy. On open borders, the committee says that anyone who has crossed the border between India’s Uttar Pradesh and Nepal or Bihar and Nepal knows that the cross-border movement is extremely difficult due to the absence of basic infrastructure.  The committee is of the view that India needs to invest massively in upgrading infrastructure—from roads to rail, from land waterways to ports, from energy and telecommunication to digital customs.

Regarding the regional organizations, the committee says that India’s engagement with its neighbors under regional frameworks— such as South Asian Association for Regional Cooperation (SAARC); Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC); and Bangladesh, Bhutan, India, and Nepal Motor Vehicle Agreement BBIN— is an important element of India’s Neighborhood First Policy.  

The committee has suggested the Indian government to play a more proactive role both in SAARC and BIMSTEC, and formulate a fresh strategy to keep them active and utilize them whenever the occasion arises. The Modi government, however, is not so keen to revive the SAARC process.

According to the committee’s report, SAARC has a strategic importance, so no member country should be allowed to impede its effective functioning, and that collective efforts need to be made by other member countries to thwart any attempts to destabilize it.

The Indian committee has suggested that the Indian government coordinate among the majority of the member countries ignoring one (Pakistan), so that regional cooperation under SAARC is not hampered due to the lack of the response from one country. 

Addressing the parliament, Union Minister of State for External Affairs Raj Kumar Ranjan Singh recently informed the Indian parliament that India accorded utmost importance to expanding connectivity in its neighborhood and beyond, encompassing all elements of physical, cultural economic and people-to-people linkages. 

India’s Act East Policy, Neighborhood First Policy, Security and Growth for All in the Region (SAGAR) and BIMSTEC have strengthened connectivity in the region, he added.

Singh said some of the key connectivity initiatives between India and its neighbors include the BBIN; the India-Myanmar-Thailand Trilateral Highway Initiative; Chabahar Agreement between India, Iran and Afghanistan;, and Bangladesh-China-India-Myanmar Economic Corridor. 

Through Neighborhood First Policy, connectivity, commerce, culture and people-to-people, Singh claimed that linkages with India’s neighbors have been improved.

The Indian parliamentary committee has observed that India’s relations with Nepal have expanded to new initiatives in agriculture, inland waterways, and power sector cooperation.  The Inland waterways between two countries with multi-modal transportation routes via Jharkhand, Bihar and Uttar Pradesh was announced in 2019. Two of the terminals at Varanasi and Sahibgunj have already been completed and work is underway to complete the remaining terminals.

Highlights of the report

• India’s bilateral relations with Nepal have expanded to new initiatives in agriculture, inland waterways, and power sector cooperation. The ‘India Nepal New Partnership’ in Agriculture, which focuses on collaborative projects in agriculture education and R&D, was launched in April 2018.

• The Inland waterways connectivity between India and Nepal with four multi-modal transportation routes via Jharkhand, Bihar and Uttar Pradesh was announced in 2019. Two of the terminals at Varanasi and Sahibgunj have already been completed and work is underway for the completion of remaining terminals.

• The Indian government is in the process of upgrading India-Nepal border trade infrastructure, with an objective to reduce bottlenecks, accelerate clearances and promote the creation of regional economic hubs.

• In view of the importance of cross-border railway link between India and Nepal for strengthening of border infrastructure and greater people to people link, India’s parliament committee for external affairs has urged the Indian government for early operationalization of the ongoing rail link projects and completion of the feasibility study of the proposed Raxaul-Kathmandu broad gauge rail link.

• India’s engagement with its neighbors under regional frameworks like SAARC, BIMSTEC and BBIN is an important element of the Neighborhood First Policy.

• The committee believes while BIMSTEC has emerged as an important regional organization in recent years, not much progress has been made under SAARC due to hurdles created by one member state.

• Though SAARC has made good progress in some areas of cooperation, it has not been able to achieve its full potential as several important connectivity and trade initiatives such as SAARC Motor Vehicle Agreement, SAARC Railways Agreement, Agreement on Regional Air Services, Agreement on Trade in Services, etc. are held up since 2014 due to the lack of consensus among all member states.

• India should take more initiatives for elimination of destabilizing forces like terrorism, organized crime, drug trafficking, etc. in the region through collective efforts of all neighboring countries.

• The parliamentary committee advises the Indian government to implement the BIMSTEC Master Plan for Transport Connectivity at the earliest.

• The committee is of the opinion that no member country should be allowed to impede the effective functioning of regional forums.

Nepal’s three major political parties—Nepali Congress, CPN-UML and CPN (Maoist Center)—are currently focused on the task of bolstering their organizational strength. Revival of dormant party organizations and increasing party members have become their priority. To this end, they have come up with their own version of a grassroots campaign. Central-level leaders have been mobilized to various districts to interact with local cadres as well as voters.

These outreach drives of these three parties did not spur from the wisdom of their central leadership. They are rather a result of a clarion call from their ranks and files, who have witnessed their political bases erode almost overnight with the emergence of new political forces, particularly the Rastirya Swatantra Party.

The UML was the first party to reach out to the grassroots soon after the results of last year’s general election were out. According to media reports, the size of UML membership has decreased by nearly 50 percent in recent years, but the party leadership denies this. Leaders say that there was “an artificial increase” in the number of party members during the short-lived merger between the UML and the Maoist Center.

They claim that the UML’s core members remain intact.

The UML leadership has announced to increase the number of its members to one million by the next party convention.
According to Kashi Nath Adhikari, head of the party’s organizational department, along with the membership renewal, scores of new members have joined the UML. Since last year’s election, in which the party retained its third position, the UML is continuously focusing on building the party base, with central leaders reaching to the local level for cadre training and organization strengthening purposes.

Besides Adhikari’s words, the UML has not presented any metrics to accurately determine whether the party’s grassroots campaign was a success or a failure.

The Nepali Congress, which emerged as the largest party in last year’s elections, has also launched a nationwide campaign. In order to win the hearts and minds of people, the NC has adopted a two-pronged strategy of resolving the internal issues of the party and addressing the concerns of common people. The party leadership has instructed its central leaders to form a “service force” at each local level to address the problems faced by the people. By setting up these service forces, the NC hopes to attract youths to the party.

The NC leadership came up with such a plan amid complaints that the leaders and cadres at the local level have not been paying attention to the problems faced by common people. It was also largely prompted by the initiatives launched by the RSP to facilitate public access to various services including government-related works.

NC leader Nain Singh Mahar says the main challenge as well as priority of the party right now is to reconnect with the common people. He admits that the party for long has been focused on political issues, barely paying attention to the plights of ordinary people. 

The CPN (Maoist Center) has also announced a special grassroots campaign through its recently concluded central committee meeting to revive the party.

The Maoists support base and organizational strength pale in comparison to the NC and UML. So the party chairman and prime minister, Pushpa Kamal Dahal, has directed the party leaders to reach out to every household across the country to connect with the people. Dahal himself has announced that he would be traveling to every ward of all seven provinces to rally support for the party.

After completion of the campaign, the party plans to organize a policy convention probably in November to shape the party’s ideology. 

Despite being in power, the Maoist party is progressively becoming weaker since 2013. In order to strengthen the party, Dahal is even planning to unite with other fringe communist forces and Maoist splinter groups.
Political observers say campaigns launched by the three major parties to connect with the masses are a direct outcome of the RSP’s meteoric rise.

The RSP’s popularity is undeniable and the three major parties feel threatened. If this groundswell of support for the RSP continues to sustain until the next election season, the party could very well sweep the polls.
At the moment, the three major parties are in no position of contesting the election alone.

Agni Prasad Sapkota, Maoist Spokesperson: We will be launching a three-month campaign to revive the party organization which is a final test of our party. I am fully optimistic that we will pass this test because it is a matter of all party leaders and cadres. We will reach every ward across the country to re-energize our party structures. We will launch the program from September 10.

Madhu Acharya, NC leader:  I think our Central Working Committee did not take sufficient measures to reform party organization and shape ideology, policy and program. Instead of fixing the date of the policy convention, the party leadership decided to hold the Mahasamiti meeting, and we are making preparations accordingly. We will reach out to the people as per the decision of the party leadership.

Deepak Prakash Bhatta, UML leader: After the general elections, we diagnosed the organizational problems within the party. The UML party organization was in a mess after the unification with the Maoists in 2018. We have identified the problems now and are in the process of resolving them. We are also planning to hold the district- and provincial-level conventions. The party has also appointed the in-charge in each of the seven provinces for organizational rebuilding.

In 2016, Nepal-India relations were at one of their all time lows because of India’s economic blockade. The then Minister for Foreign Affairs, Kamal Thapa, frequently traveled to India to convince the Indian side to lift the blockade which had severely affected life in Nepal.

In one of the meetings with his Indian counterpart, Sushma Swaraj, Thapa had proposed forming a panel on Nepal-India Eminent Persons’ Group (EPG), as agreed by the two countries in 2014, to seek experts’ suggestions to settle the long-standing issues between Nepal and India, including the revision of the 1960 Treaty of Peace and Friendship to reflect the present day realities.

Former foreign minister Thapa shared such information while speaking at a program organized by Tanka Prasad Acharya Memorial Foundation on Friday.

Initially, recalls Thapa, Swaraj was reluctant to form such a panel as the bilateral ties between the two countries were going through a rocky patch, but she agreed eventually. The Nepali side announced its EPG members, all of them picked by Thapa without consulting major political parties and stakeholders.

The names were endorsed by the Cabinet of Prime Minister KP Sharma Oli. Former Nepali ambassador to India, Nilambar Acharya, remembers Thapa calling him one evening and asking him to become an EPG member. Acharya asked Thapa for some time to think about the offer, but the latter insisted that the decision had to be made right then and there.

Though it was an expert panel, there were no experts representing the Nepali Congress, CPN (Maoist Center) and Madhes-based parties. Still, the non-represented parties had no issue with the formation of the EPG, as most of the members were non-political figures. The only politician in the EPG, Nepal, was Rajan Bhattarai of the CPN-UML. From India, it was Bhagat Singh Koshiyari of the Bharatiya Janata Party.

In 2018, the EPG prepared its report with its suggestions to the governments of Nepal and India. But Indian Prime Minister Narendra Modi refused to receive the report. This turndown essentially halted the progress of the EPG report.  During his India visit in May this year, Prime Minister Pushpa Kamal Dahal did not raise the EPG issue with Prime Minister Modi lest it should spoil the improving relationship between Nepal and India.

Former Prime Minister and UML leader Oli is probably the only leader who has been consistently and publicly speaking about the importance of the EPG report. Other political parties, mainly the NC and Maoist, seem to have no interest in the issue. 

In a public program on Saturday, Oli said that the Nepal-India relations should move ahead “as per the suggestions provided by the EPG report.” He said the report will serve as a prescription to push forward the ties between the two countries.

It has been more than five years since the EPG report was prepared, and the chances of it moving ahead are slim. Already, discussions have begun on what to do with the report.  Thapa, the former foreign minister, has suggested that members submit the report to Nepali side and close the chapter on the whole issue. As the report has already submitted its report to the Ministry of Foreign Affairs, Nepal, it can be argued that the EPG has no legal existence.  

There are some people who are demanding that the report must be made public at least, if the two governments are not ready to receive it. EPG Nepal coordinator Thapa says he holds the key to the cupboard where the report has been stored and he has been trying to hand it over to the Ministry of Foreign Affairs.

He adds being the keeper of the report has become a huge burden for him.There are multiple reasons behind the sorry state of the EPG report. First one, obviously, is the composition of the EPG without representations from major political parties.

 But there are those who argue that since the EPG was a panel of experts, there was no need for a party-wise representation. The only thing lacking, they say, is the consensus of parties and involvement of major political actors. The NC, Maoists and Madhes-based parties are not willing to take ownership of the EPG report.

It should also be noted that the Indian side was never in favor of forming a panel for the purpose of, among other things, suggesting revision to the 1950 Peace and Friendship Treaty. Several issues that the EPG was dealing with were heavily politicized.

Experts reiterate that there should be a national consensus for the EPG report to move ahead.

Though the report is yet to be made public, the Indian side has expressed dissatisfaction over some provisions that were leaked through the media.

The document has recommended establishing smart borders in order to limit the seamless cross-border movement. In 2018, The Wire reported:  “EPG has suggested that a technology-driven structure should be put in place for monitoring the movement along the international boundary, with identity cards as the mode of registration.”

Another point that the Nepal side has proposed is ensuring full independence to purchase arms and ammunition from third countries. To this end, Nepal is intending to change the Article 5 of Treaty which says: “The Government of Nepal shall be free to import from or through the territory of India, arms, ammunition or war-like materials and equipment necessary for the security of Nepal.”

This provision provides full right to Nepal to import arms but protocol to the Nepal-India Treaty of Transit states that “arms, ammunition and hazardous cargo shall not be allowed to be transported by road.” Similarly, Nepal-India Railway Agreement is not sufficient to allow the transit of arms and ammunition from India, experts say.

Similarly, the letter of exchange to this treaty bars Nepal’s independent right to import arms and ammunition from India. The paragraph-2 of Letter of Exchange says: “Any arms, ammunition or war-like material and equipment necessary for the security of Nepal that the Government of Nepal may import through the territory of India shall be so imported with the assistance and agreement of the government of India.

 The government of India will take steps for the smooth and expeditious transport of such arms and ammunition through India.” Nepal prefers to scrap both Article 5 and Letter of Exchange with a view that it is fully independent to import arms and other equipment as per its need.

 The 2007 India-Bhutan Friendship Treaty had also changed a similar clause in the 1949 version. The new treaty says that Bhutan can import arms as long as Indian interests are not harmed and there is no re-export of the weapons, either by the government or individuals.

Article 6 and 7 in the current treaty encompass the issue of “national treatment” and equal privileges for citizens on each other’s soil. While the spirit has been preserved to an extent, the EPG members have apparently backed Nepal’s position that the Himalayan republic should be able to institute more protection for its own citizens due to the asymmetry in size and economy between the two neighbors.

Nepal is of the view that such provisions are disadvantageous to a small country like Nepal, and given its population, economy and size, it cannot offer equal treatment to Indian citizens in Nepal.  Another bone of contention between the two countries is Article 2 of the treaty that states: “The two governments hereby undertake to inform each other of any serious frictions or misunderstanding with any neighboring state likely to cause any breach in the friendly relations subsisting between the two governments.” 

 Nepal is of the view that as this provision is not implemented, it is better to scrap. There has been war between India and Pakistan and India and China since the signing of the treaty, but India has not informed Nepal of the tensions.  Similarly, there has not been any military alliances between the two countries. 

Academicians and policy-makers in New Delhi say that India sought Nepal’s favor when there was Doklam crisis in 2017, and Nepal may be asked to take side by India if there is escalating tensions between two countries in coming days. Since the 1962 China-India war, Nepal has maintained a neutral position vis-à-vis India-China conflict and war.

 Along with these key provisions, Nepal has proposed to make changes in several other provisions of bilateral treaties and agreements in trade, transit and other areas, but Nepal’s major concern is the 1950 treaty. 

The main purpose behind the formation of EPG was to suggest ways on how to amend the treaty. There are also views on whether it was prudent to form a panel like the EPG to deal with sensitive issues between two countries.

 Some experts say the two countries should have instead formed government-level mechanisms to work out the outstanding issues, which they can still do with national political consensus. 

Compared to other South Asian countries, Nepal’s electoral process is considerably free and fair. However, there are many loopholes where the country needs to make urgent improvements to strengthen democracy.  

The Election Commission (EC) has come up with a draft of new law which proposes sweeping changes in the country’s election law to create a more inclusive and accountable electoral process. The draft law, prepared after comprehensive consultations with political parties, is currently being studied by the Ministry of Home Affairs. 

The changes proposed in the election laws were made based on various factors, including the orders from the Supreme Court, practices followed in other democratic countries, and lessons learned from Nepal’s own electoral history.

Constitutional expert Chandra Kanta Gyawali says the proposed law aims to address numerous issues related to free and fair elections, such as allowing voting rights to Nepali citizens living abroad, imposing a spending ceiling on candidates and taking measures to minimize the chances of vote-rigging.  The law covers all types of election, from presidential to local level, and if endorsed, will further improve and democratize the election process.  

Key provisions 

One of the proposed changes is the implementation of an online-based voter registration system. This system will modernize the way citizens register to vote, making it easier and more efficient for everyone to participate in the democratic process, say EC officials.

To ensure that Nepalis living abroad too have a say in the nation's governance, the EC has proposed including them on the voter list and allowing them to cast their votes under the Proportional Representation (PR) system. 

The election governing body has also proposed a provision to prohibit candidates who have lost in federal, provincial, or local elections from running in other elections, except in the case of their own constituencies or local units. This measure is aimed at preventing candidates from hopping from one constituency to another.

To ensure a diverse representation of voices, the EC has proposed restricting candidates, who had been elected twice under the PR system, from running again through the same route. To ensure women representation, the EC has proposed making at least 33 percent women candidates mandatory under the first-past-the-post (FPTP) voting system. 

The EC plans to boost women’s participation even further in local units. To this end, the election body has proposed a provision that requires parties to field women in the posts of either mayor/chairperson or deputy mayor/vice chairpersons in local units. If parties are filing candidacy in one of these two posts, it has to be women. The EC has also proposed that 33 percent of the candidates for the post of ward chairpersons in local units has to be women. 

Another key proposition made by the EC in the election law is  the ‘None of the Above’ (NOTA) option on the ballot paper. This option would give voters the chance to express their dissatisfaction if they feel that none of the candidates are suitable to represent them. 

In 2014, the Supreme Court had directed the government to allow voters to cast negative votes by including NOTA option on the ballot paper. But the directive was never implemented at the consensus of major political parties.  Another crucial proposal to reform the country’s election process proposed is fixing the election dates and campaigning period to ensure a more structured and organized electoral process. 

Similarly, the poll body has recommended setting the candidate eligibility criteria directly in the law itself. This proposal aims to establish clear standards for individuals aspiring to run for public office. The EC has also proposed prohibiting candidates from contesting elections under a different party's banner before formally resigning from their current party. This provision intends to discourage the practice of using other political parties' election symbols for personal gain.

To expedite the resolution of disputes regarding the eligibility of elected candidates, the EC has suggested that the concerned courts must render a final decision within six months from the day the case is filed. Furthermore, the EC has proposed a provision mandating candidates to declare their assets held in their name or in the name of their family members during the nomination process. 

Recognizing the importance of diverse representation, the EC has recommended providing a 50 percent discount on the election deposit amount for candidates belonging to Dalit, women, underprivileged, sexual and gender minorities, and people with disabilities. 

Likewise, the EC has also suggested introducing advance voting under the PR system for specific groups, such as government staffers assigned on poll duty, security personnel, election observers, and individuals preparing for foreign visits.  The EC has said that these changes would be incorporated into the ‘Bill to Amend and Unify Existing Election Laws’ and forwarded to the Cabinet through the Ministry of Home Affairs.

EC hopeful of parliamentary endorsement 

Chief Election Commissioner Dinesh Kumar Thapaliya said the commission is positive that the lawmakers will endorse the bill aimed at improving the country’s electoral system. He added that in consultations held with the chief whips of all political parties, the EC officials were assured that the proposed law will get parliamentary endorsement.  But Ila Sharma, former EC commissioner, said that there was no guarantee that Parliament would accept all the provisions suggested by the EC. As electoral reform is an ongoing process, all issues may not be incorporated at once, she added. Sharma suggested that all sections of society should exert pressure on the political parties and the government to reform the electoral process.

Key suggestions

• NOTA ballot paper 
• Ensuring diverse representation 
• Declaration of assets by candidates 
• 33 representation of women at all levels 
• Voting rights for Nepali living abroad 
• Online-based voter registration 
• Fixing the date of election by EC 

After the Central Working Committee meeting of Nepali Congress, it appears that the Pushpa Kamal Dahal-led government has become even more stronger. The NC's rival faction led by Gagan Kumar Thapa has pledged to keep the current coalition intact, a shift from his earlier position where he said that the coalition could break if the government fails to meet people’s expectations.

The CWC meeting of Congress party has also taken ownership of the decision to form an alliance with Dahal’s CPN (Maoist Center), but made no pledge to renew electoral alliance with the Maoists in the next general elections.

“Our experienced leaders demonstrated their political skills carefully, bringing Nepali politics back to normalcy, even in an adverse political situation,” the NC decision says. The party adds that the move to forge an alliance with the Maoists enhanced the NC’s political reputation as well as boosted confidence of the parties involved in the coalition.  

Congress has called its ruling partnership with the Maoists and other fringe parties as “an alliance formed for a specific purpose in a specific situation.” It has called the current alliance the very foundation from which Ram Chandra Poudel, a senior NC politician, was elected the President of Nepal. 

The decisions that came out from the CWC meeting of NC, the largest party in parliament, suggest that the Dahal government has no threat from its primary coalition partner. Another coalition partner, CPN (Unified Socialist), despite showing some dissatisfaction over the budget, is also firm on its position to keep this government alive until next general elections.

This also puts an end to all the theories and conjectures regarding government change born out of several rounds of talks that the Thapa-led faction of the NC held with the main opposition, CPN-UML. 

The Thapa camp was exploring the possibility of forging an alliance with the UML, in case things did not go quite as well with the Maoists. But NC President Sher Bahadur Deuba was opposed to this idea. 

“Thapa influence in the party is very weak and Deuba was never in favor of aligning with the UML,” says political analyst Puranjan Acharya.

Amid all these developments, it is the NC that seems to be in trouble. The CWC gathering showed that the factional rift in the party is ever more widening, with general secretary duo, Thapa and Bishwa Prakash Sharma, still insistent on changing the parliamentary party leader. In other words, Thapa and Sharma are strongly opposed to the idea of Deuba becoming  prime minister for the record sixth time.   

As per the power-sharing agreement, Prime Minister Dahal will hand over the government reins to Madhav Kumar Nepal of Unified Socialist, who will in turn cede the premiership to Deuba.

It is highly unlikely that Thapa and Sharma will succeed in stopping Deuba from getting elected as the parliamentary party leader again, as the latter simply hold too much sway in the party. 

But for Prime Minister Dahal, the friction within the Congress party is enough to make him suspicious. He fears that a conspiracy is afoot to upend the current coalition. 

“Efforts are underway to create friction inside the ruling alliance as the government is fighting corruption and maintaining good governance,” Dahal said at a public function on Sunday. A few days back, Deuba and Nepal had made similar statements. It just goes to show that the parties in the ruling alliance are plagued by uncertainty regarding their unity. Deep down, the UML could somehow scupper their coalition. 

But the UML leaders say this fear is unfounded. They say the NC leadership is not ready to enter a power-sharing deal with the UML.

In a recent interview with ApEx, UML Chairman KP Sharma Oli had said that the NC is not thinking politically by refusing to consider a power-sharing agreement outside the Maoists party.  

According to Oli, the UML was not in a rush to ascend to power, though the party was in favor of forming the NC-UML government to ensure government stability. 

A senior UML leader says Deuba even refused the party’s offer of premiership.

“He is reluctant to talk with us. We think he is under external pressure to not join hands with the UML.” 

If the current ruling alliance survives, the UML is sure to remain out of power till the next elections.
Earlier, it was expected that the Dahal government’s decision to investigate and prosecute the suspects of the fake Bhutanese refugee scandal and high level corruption cases could create friction between the Maoists and the NC. Several NC and UML politicians and lawmakers, including Bal Krishna Khand and Top Bahadur Rayamajhi, were arrested in connection to the Bhutanese refugee scam. In the wake of the infamous case, several NC and UML leaders had denounced the government’s move as “selective prosecution” and “vindictive politics” launched by Prime Minister Dahal.  

UML Chairman Oli had questioned the intent of Prime Minister Dahal and called on his government to display its impartiality by opening an investigation into the alleged corruption that took place during the management of Maoists cantonments after the 2006 peace agreement. 

For many political pundits and observers, the arrests of NC and UML politicians created an environment for the two parties to come closer and take out the Maoist party from power. Things didn't pan out that way.  Political analyst Acharya says the opening of high level corruption files means more politicians from all major parties will be under scrutiny.

“The investigations into Lalita Niwas land grab case and fake Bhutanese refugee scandal have already created an unease inside all major parties,” he says. “In this scenario, there is no immediate threat to the ruling coalition.” 

External factors, if not determinant, also play a vital role in the change of government. So far, according to a ruling party leader, India is in favor of the continuation of the current coalition led by Dahal. 

“So long as Dahal enjoys the support and goodwill of India and Western powers, he has little to fear,” says the leader who spoke on condition of anonymity.

Prime Minister Dahal is set to visit China in September, and some observers say the trip will likely determine the fate of the current coalition. Ahead of Dahal’s China trip, according to multiple sources, some UML leaders have started talks with the Maoist side for the revival of the left alliance. In that case, it is the NC that needs to be worried.

But Lokraj Baral, professor of political science and former ambassador of Nepal to India, says the reason why the talks about government change is finding traction has also to do with the political history of Nepal. 

No government since the past seven decades has completed its full term. “In fact, we have recently seen that even the government with two-thirds majority cannot complete a full term. So naturally, politicians, people and analysts think that this government will not last long,” he says.

Every year, the US State Department comes up with its annual reports on different thematic issues of the countries with which it has diplomatic relations. Such annual reports provide insights into how the US views other countries. 

In this article, we present the major highlights of the key US reports such as 2023 Investment Climate Statements, Trafficking in Person’s Report, International Religious Freedom Reports and Country Reports on Human Rights Practices.

This week, the US State Department published its Investment Climate Statements. According to the report, hydropower, agriculture, tourism, ICT sector and infrastructure have significant commercial potential for investors. Nepal has an estimated 40,000 megawatts of commercially-viable hydropower electricity generation potential, which could become a major source of income through electricity exports, the report says.

The report recognizes that Nepal has established some investment-friendly laws and regulations in recent years, but significant barriers to investment remain. One of them is corruption which is impeding the investment climate in Nepal. The report states that political uncertainty is a continuing challenge for foreign as well as domestic investors.

Nepal’s ruling parties have spent much of their energy over the last years on internal political power struggles instead of governance, the report says.

The report further states that there is a lack of understanding of international business standards and practices among the political and bureaucratic class, and a legal and regulatory regime that is not quite aligned with international practices also impede, hinder and frustrate foreign investors. 

The Investment Climate Statements also raises questions about the role of trade unions. “Trade unions, each typically affiliated with parties or even factions within a political party, and unpredictable general strikes can create business risks, although this problem, once common, has diminished in recent years.”

The US report also questions the role of the Commission for Investigation of Abuse of Authority (CIAA), the national anti-corruption body. It says: “The 2015 constitution empowers the CIAA to conduct investigation of any abuse of authority committed through corruption by any persons holding public office. In practice, according to the report, the CIAA arrests and investigations tend to focus on lower-level government bureaucrats.”

According to the 2022 Corruption Perception Index released by Transparency International (TI), Nepal ranked 110th among 180 countries, placing it in the range of “highly corrupt” countries. In Jan 2018, local media reported that the CIAA is drafting a bill to replace the Prevention of Corruption Act, with the goal of making the new law compatible with the UN Convention against Corruption that Nepal signed in 2011. But the private sector is opposing some of the provisions of the draft. Nepal is not a member of the OECD Anti-Bribery Convention.

While anti-corruption laws extend to family members of officials and to political parties, the report says, there are no laws and regulations that are specifically designed to counter conflict-of-interest in awarding contracts of government procurements.  

A few months back, the US came up with its International Religious Freedom Report which raised issues that Christian groups continued to report difficulties operating as non-governmental organizations and multiple religiously affiliated organizations reported increased challenges renewing or registering their organizations. Christian groups said they continued to face difficulties buying or using land for burials, especially within the Kathmandu Valley, the report mentions.

It also speaks about the growing influence of India’s Bharatiya Janata Party in Nepal. The report cited Nepali civil society leaders as saying that the influence from India’s ruling party, the Hindu nationalist BJP, and other Hindu groups in India continue to pressure politicians in Nepal, particularly, the pro-Hindu, Rastriya Prajatantra Party, to support reversion to the Hindu state.

The report drew criticisms for its baseless accusation that BJP provided money to Nepali leaders for the Hindu cause. There were reports that the government sought clarification from the US side on the issue but it was never made public.

The US also has significant concerns over the religious freedom of the Tibetan community in Nepal, although the report does mention that there has been some improvement when it comes to the rights of the Tibetan community. The report cites Tibetan community leaders highlighting an increased ability to celebrate some religious and cultural holidays without police interference.

In June this year, the US came up with the Trafficking in Person’s Report which states that Nepal does not fully meet the minimum standards for the elimination of trafficking, but is making significant efforts to do so.

In its Country Reports on Terrorism, the US has raised questions regarding the security situation in Nepal’s international airport as well as the open border that it shares with India. A more significant threat is non-Nepali international terrorist groups using Nepal as a transit/staging point for soft targets, the report says. Because of the open border with India and insufficient security protocols at the country’s sole functioning international airport in Kathmandu, the report says, it could be used as a transit or staging point for international terrorists.

In its Country Reports on Human Rights Practices, the US has provided its perspective on various aspects of human rights in Nepal. On transitional justice, the report says the government and judiciary did not significantly address most conflict-era human rights and humanitarian law abuses committed by the Nepal Army, Armed Police Force, police and Maoists. The country’s two transitional justice mechanisms—Commission of Enforced Disappeared Persons and Truth and Reconciliation Commission—are not fully independent.