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It has been more than a decade since Chinese President Xi Jinping came up with the Belt and Road Initiative (BRI), a massive infrastructure project, to enhance both hard and soft connectivity with countries in the Global South. In this period, over 150 countries have signed the BRI documents, and Chinese foreign investment in those countries has exceeded $60bn.

Nepal signed up to the BRI in 2017, and ever since it has been a thorny subject that has divided the political parties and the public. Over the past few months, there has been a heated debate regarding the controversy over the Chinese side claiming the newly opened Pokhara International Airport being a BRI project. In the parliament as well as in public forums, ministers and politicians face this question: Is Pokhara International Airport under BRI? While they insist that it is not, many are not convinced. 

A few days back, speaking at a meeting of the Parliamentary Committee, Foreign Minister NP Saud said that Nepal has not executed any projects under the BRI. Tourism Minister Sudan Kiranti has also been making a similar statement. But the Chinese side seems adamant in their position that all of its recent bilateral cooperation with Nepal falls under the BRI framework. In meetings with Nepali politicians and officials, the Chinese side has even presented some basis for such a claim. But top leaders of major parties have not spoken a single word about it, nor has the Nepal government officially taken up this issue with Beijing.  

China is of the view that since Nepal has become a BRI member, whatever cooperation happens between the countries falls under the broader framework of the BRI. This not only includes the development of  infrastructure projects, but also the aid that Nepal received during the Covid-19 pandemic. For China, the 14-point agreement signed during President Xi’s 2019 Nepal visit is the basis of that claim. 

The second paragraph of the first point in that agreement says: “Nepal and China take the Belt and Road Initiative as an important opportunity to deepen mutually-beneficial cooperation in all fields in a comprehensive manner, jointly pursue common prosperity, and dedicate themselves to maintaining peace, stability, and development in the region.”

On the basis of this point, according to a senior diplomat who recently met with Chinese Ambassador Chen Song, the Chinese side is claiming that all projects are under the BRI.  

During Xi’s visit, Nepal and China agreed to elevate the bilateral relationship into a Comprehensive Partnership of Cooperation. A few months ago, in a closed-door discussion with editors, the Chinese ambassador said they regard Pokhara International Airport as a BRI project, but it is okay if the Nepal government does not say so.

As the BRI debate rages on, China has come up with Laws on Foreign Relations, which is likely to complicate the matter.  The law shall apply to the conduct of China’s diplomatic relations with other countries, its exchanges and cooperation with them in the economic, cultural, and other areas, as well as its relations with the United Nations and other international organizations. 

Article 18 of the laws says: “China calls for putting into action the Global Development Initiative (GDI), the Global Security Initiative (GSI), and the Global Civilizational Initiative (GCI), and endeavors to advance a foreign affairs agenda on multiple fronts, at a different level, in various areas and of multiple dimensions.”  

Programs under the GDI, in collaboration with the UN agencies, have already been implemented in Nepal. As far as the GSI and GCI are concerned, the Nepal government has not made any position on it. 

China is seeking Nepal’s support in GSI and GCI, but Nepal is not willing.  But Beijing has already put the GSI and GCI under the broader framework of BRI. 

China’s BRI claim resembles the Indo-Pacific Strategy (IPS) of the United States in Nepal. Since 2018, American officials have been saying that whatever bilateral grants and assistance the US provides to Nepal is under the broader IPS framework. The US officials often say that there is no military component in Millennium Challenge Corporation (MCC), though it is a part of the IPS. So, like the IPS, the BRI is gradually becoming a hard-to-understand issue after 10 years of its launch.  

Upendra Gautam, a China expert, says like the US is saying that all its assistance falls under the IPS, China too is saying the same thing regarding the link between its support to Nepal as part of the BRI.

“It is either IPS or BRI, it is up to us how we deal with those countries,” says Gautam. “Now the Chinese officials are linking the BRI with financial institutions. If there are any issues, we can communicate with the Chinese side.”

The debate and controversy surrounding the BRI has also been fueled by the lack of homework and research that Nepali leaders and government ministers lack. The form and nature of BRI is gradually evolving with more components, and no one seems prepared. 

Of late, the Chinese side has been insisting on the implementation of BRI in Nepal. Recently, Home Minister Narayan Kaji Shrestha and Chairman of the National Assembly Ganesh Timilsina visited China. 

In meetings with Timilsina and Shrestha, high-level Chinese officials underlined the need for the implementation of the BRI in Nepal. 

The BRI issue is likely to figure out when Prime Minister Pushpa Kamal Dahal visits China later this year.

In Nepal, BRI is primarily perceived as an infrastructure project, though it has five distinct priority areas: policy coordination, infrastructure connectivity, unimpeded trade, financial integration, and connecting people.

Not only on BRI, but China’s claim over other initiatives such as Global GSI, GDI and GSI has also put the Nepal government in a quandary. During the Dragon Festival organized in Pokhara recently, Chinese Ambassador Chen raised eyebrows by saying that the festival was the implementation of GCI.

China was partly emboldened to make such a claim also partly because former President Bidya Devi Bhandari attended a virtual program of the GSI in September 2022. Bhandari had taken part in the program despite the Ministry of Foreign Affairs advising her not to. 

When National Assembly Chairman Timilsina visited China in the second week of June, Zhao Leiji, chairman of the People’s Congress

In the second week of June, he held discussions on the BRI and other initiatives with Zhao Leiji, chairman of the People’s Congress, and other Chinese officials. 

In one of the meetings, the Chinese side also thanked Nepal for supporting GDI and welcomed the support and participation in the GSI and GCI for jointly promoting peace, stability, and prosperity in the region and the world. 

China’s claims on the BRI and its other latest programs like the GSI run counter to Nepal government’s position, which states that there have not been any official decisions yet and that all the initiatives put forth by China are being studied.  

Nepali leaders are adopting a very cautious approach regarding China’s unilateral claims. On the BRI, Nepal is not in a hurry to take a loan to construct infrastructure because there are already questions about financial viability and sustainability of some projects, such as Pokhara International Airport, Gautam Buddha International Airport, Kathmandu-Terai Fast-track. 

Over the past 10 years, there have been a lot of changes in the original BRI document. China has emerged as a lender of last resort for developing countries that are having difficulty repaying their BRI debts. 

According to the AidData report, by the end of 2021, China had undertaken 128 rescue loan operations across 22 debtor countries worth $240bn. These operations include many so-called rollovers in which the same short-term loan is extended again and again to refinance maturing debts. 

Learning lessons from many countries, China is now cautious to provide loans under the BRI, while Nepali leaders are also equally careful to avoid a potential debt issues.

On paper, the Nepali Congress is in the pink. The party is a key piece in the coalition government in Kathmandu, leading vital ministerial portfolios, such as finance, defense, health and industry. It is also heading three of the seven provincial governments and 295 out of 753 local governments. 

But there is a sense of unease among many leaders and cadres concerning the party’s future. They say the Congress is confronting multiple challenges which if left unremedied could risk the very existence of the party. This sense of anxiety is also widespread among the district-level leadership of the party, which they made clear when they met at the NC headquarters in Sanepa, Lalitpur, last week. 

A word of assurance from NC President Sher Bahadur Deuba would calm the nerves of the party rank and file at this moment, but that has not happened—and is unlikely to happen. The alarm bell ringers in the party represent the rival factions, and Deuba has so far managed to shrug off their grievances. 

Right after the general elections held in November last year, party leaders have been calling for a Central Working Committee (CWC) meeting to discuss the intra-party and national issues, but Deuba has been postponing it. 

The meeting of the party’s executive committee has finally been set up for Wednesday, which is likely to witness a verbal war between the rival factions. For a long time, Deuba had been avoiding the CWC meeting in an apparent bid to avoid criticism and confrontation. The rival factions are prepared for a showdown with the establishment faction. 

There are multiple issues related to the party and the government that the CWC will have to delve into. The first is holding the party's policy convention which should have taken place immediately after the party's general convention held in 2021. The objective of the policy convention is to review and rework the party's ideological standing in the changing context. 

The second issue is about managing the party's sister organizations torn asunder by the intra-party infighting.  

Madhu Acharya, a CWC member, says they are presenting a detailed report on party reformation prepared on the basis of consultations held in all seven provinces and diaspora community. 

“Our first priority is to fix the date and venue of the policy convention and Mahasamiti meeting. If party leadership does not heed to our request, we will launch a signature campaign to hold the party's special general convention to change the leadership,” Acharya says.

It is no secret that the rival factions do not see Deuba’s leadership in a favorable light. Part of the resentment comes from the fact that Deuba holds a significant sway in all party committees, including the CWC and the Parliamentary Party, and almost no decision can be made without his say-so.  

For example, several appointments are pending in the party's sister organizations due to Deuba’s reluctance. Factional feud inside the NC has spread to the local level, and is eating away at the party and its organizations. There are at least four clear factions in the party: the establishment camp led by Deuba, and others spearheaded by Gagan Kumar Thapa, Shekhar Koirala, and Gururaj Ghimire.

Last week’s meeting of district-level presidents of the party was convened by the Thapa camp. Likewise, the Ghimire-led group also recently sent its representatives to all seven provinces for the “NC resurgence campaign”. The Deuba fold is not pleased with the latest activities of the rival groups.   

“It is inappropriate to call a meeting of district presidents when the whole party mechanisms are unaware about it,” says Nain Singh Mahar, a CWC member and a leader close to Deuba, of the district-level leadership meeting organized by the Thapa camp in Sanepa.

Observers say the growing factional rift in the NC will not help the party’s future. While the party may have the largest share of seats in parliament, they say the strength of the Congress party is waning away. Today’s NC cannot fight elections on its own. In the last year’s general elections, the party had to forge an electoral alliance with the CPN (Maoist Center) and other fringe left parties.  

Despite emerging as the largest party, the NC is currently playing second fiddle to the third-place Maoist party as part of a pre-election power-sharing deal. There is a general dissatisfaction inside the Congress over the performance of the current government. Some leaders are of the view that the party will fail to secure its political base if this government fails to deliver. 

Revelation of corruption scandals involving senior party leaders are also not helping the NC. While the government led by Prime Minister Pushpa Kamal Dahal has won acclaim for prosecuting “high profile” individuals, there is a fear that the Maoists could weaponize these corruption cases to ultimately disrepute and weaken the Congress party.   

Many NC leaders are not in favor of joining forces with ideologically opposite communist parties just for the sake of securing parliamentary seats. 

The meteoric rise of the newly formed Rastriya Swatantra Party has also rattled the Congress, along with other traditional mainstream political forces of Nepal. 

The NC youth leaders and members in particular seem tired of Deuba’s leadership.  

A few days ago, NC rival leader and general secretary, Thapa, made his intention known about his plan to unseat Deuba as the parliamentary party leader. 

“I am pretty clear that the same leader should not become prime minister again. So I am trying my best to change the parliamentary party leader,” he said at a public program.

Thapa had contested and lost against Deuba in the PP election held after last year’s general elections. He was defeated by a huge margin despite getting the support from Koirala, another rival leader in the NC.  

Thapa and Koirala are no longer together, as both of them are vying for the post of Congress president. Koirala has been working hard to improve his ties with Deuba.  

In Wednesday’s CWC meeting, Koriala is expected to restrain himself from criticizing Deuba’s leadership. But the same cannot be said for rival leaders Thapa and Ghimire, who could launch an all-out attack on Deuba.

Prime Minister Pushpa Kamal Dahal’s India visit last month has rekindled hope that the Pancheshwar Multipurpose Project will finally move ahead. Although there are some contentious issues that remain unsettled despite several rounds of talks between Nepal and India in the past years, the two sides have agreed to expedite the bilateral discussions to finalize the detailed project report (DPR) of the project within three months. They have also agreed to conclude the modalities of the project implementation within one year after the DPR approval. In line with the agreement reached at the top level, a meeting of the Pancheshwar Development Authority (PDA) was held in Pokhara this past week. The meeting produced some positive results. As per the agreement, the two sides agreed to renew the term of the expert panel by six months and to convene the meeting of the panel within 10 days to discuss the technical aspects of the DPR. The meeting of the expert panel has not taken place since 2018. During 2016-2018, there were a series of meetings in an attempt to finalize the DPR, but both sides failed to resolve the differences on certain contentious issues. The panel stopped meeting and the tasks related to the proposed 6,480 MW project on the Mahakali river were halted as a result of the Covid-19 pandemic and the map row between Nepal and India. In 2016, PDA had prepared a draft DPR and submitted it to both countries for feedback. To date a mutually acceptable DPR has not been finalized, which remains one of the major roadblocks hindering the project development. While Nepal and India have shown eagerness to finalize the DPR, there are other contentious issues that remain unsettled. Nepal wants a share of the irrigation benefit that India stands to get from the multipurpose project. But the India side has been insisting that since Nepal has a smaller cultivable area than India, it is natural for India to get greater benefit. It has also pointed out the greater risk of flood and inundation that India will be exposed to due to the project. “We have offered to meet the full cost of the irrigation component. The details are yet to be worked out,” says an Indian official. There are also issues concerning the division of cost between irrigation and power. As Nepal wants to put a lot of cost in the irrigation component, there are differences on how to divide the overall cost. Ranjit Rae, former Indian ambassador to Nepal, says both countries should show flexibility in resolving the outstanding issues, namely sharing of water as well as irrigation benefits and cost, so that the DPR can be finalized within three months as prescribed by two prime ministers. “This will be a huge step towards the implementation of the mega multipurpose project that will not only transform the economies of far-western Nepal and the Kumaon region of Uttarakhand,” Rae says. “It will be a significant pillar of our bilateral cooperation and a global symbol of how two neighboring countries can work together in the sensitive area of water resources and energy.” Pancheshwar Multipurpose Project is a bi-national hydropower project to be developed in Mahakali River bordering Nepal and India. Development of the project is an important centerpiece of the Mahakali Treaty between Nepal and India, which states that equal sizes of underground power houses of 3,240MW will be constructed on each side of the Mahakali river in India and Nepal. The project also offers the benefit of regulated water for irrigation to a vast area of agricultural land in both countries as well as the benefit of flood control downstream. According to officials, there has been gradual progress on these projects. Previously there were more than 500 disputes which now have been narrowed down to 127, according to Madhu Prasad Bhetuaal, joint secretary at the Ministry of Energy and Resources. Over the past few years, there has been good progress in the construction of India-invested hydropower projects as well. A senior Nepali official says that this time India has shown eagerness to finalize the DPR of Pancheshwar project. “We are hopeful that India will adopt flexibility to sort out the key contentious issues,” the official adds. In 2017, too, there had been some serious efforts to finalize the DPR, but they could not yield any progress, mainly due to the internal political situation of Nepal. The Mahakali Treaty is already a contentious issue in Nepal, so there is a need for an all-party consensus while finalizing the content of the DPR. Former Nepali ambassador to India Deep Kumar Upadhyay, who  had played a significant role in sorting out the differences concerning the project during the Sher Bahadur Deuba administration, says Indian Prime Minister Narendra Modi is interested in taking the Pancheshwar project ahead. “Former water resources minister of India Nitin Gadkari had told me that Prime Minister Modi was interested and that a high-level team from both sides must steer the project,” says Upadhyay. “Gadkari had also warned me that the project would not move ahead if the two sides continued to engage in a blame game.” He views the resumption of talks at the bureaucracy level as a positive step, but insists that only the top political leadership can settle the disputed issues. “There should be a strong political will to direct the bureaucracy to sort out the key contentious issues,” adds Upadhyay. Deepak Prakash Bhatt, a CPN-UML leader from the far-western region, says the domestic political situation is favorable to move ahead, as major political parties are not opposing the project despite some reservations. “If the technical teams of both countries work seriously, I believe all contentious issues can be sorted out,” he says.

If nothing else, the Pushpa Kamal Dahal government has won acclaim for its anti-corruption stance. It started with the fake Bhutanese refugee scandal, in which several high-profile politicians, their relatives and government officials have been arrested. Balkrishna Khand of Nepali Congress and Top Bahadur Rayamajhi of CPN-UML are among the well-known figures who have been jailed for their alleged involvement in the case.  Senior politicians, government ministers and top bureaucrats getting arrested, let alone investigated for any wrongdoing was unheard of in Nepal. Next came the reopening of the Lalita Niwas land grab case, in which a large government-owned land, just next to the Prime Minister’s official residence, was transferred and transacted as private plots with the involvement of former government ministers, bureaucrats and businesspersons. The Central Investigation Bureau (CIB) of Nepal Police has already arrested several individuals including Min Bahadur Gurung, the owner of Bhatbhateni supermarket chain, for land misappropriation. The CIB action move follows the green signal from Prime Minister Dahal, who has hinted that his government would indiscriminately crack down on corruption cases, no matter who is involved. There are many corruption cases, mainly after 1990, on which there has not been any investigation. The probe into Bhutanese refugee scandal and the arrest of senior politicians and top bureaucrats give the impression that Dahal really means business. But some observers say while the Dahal government has taken a praiseworthy step to probe and prosecute corruption cases, one cannot help but suspect his intention. In the fake refugee scandal and the Lalita Niwas land grab incident, most of the accused who have been arrested or are under investigation are not directly linked to his party. Is Prime Minister Dahal serious about stamping out corruption, or just employing vindictive politics for his political gain? Observers say while Dahal might be the prime minister, the fact remains that his party is the third largest party in Parliament, and he needs a bargain chip in order to secure his post. In the Lalita Niwas land grab incident, names of two former prime ministers Madhav Kumar Nepal and Baburam Bhattarai have been linked. Nepal’s party, CPN (Unified Socialist), is a partner in the current ruling coalition, while Bhattarai is a former Maoist party leader. As the CIB pursues its investigation, there is a chance that several other big leaders could be arrested. Senior journalist Hari Bahadur Thapa says while it is a good beginning that the government is finally serious about taming corruption and investigating old cases that were mothballed with consensus among major political parties, it is yet to be seen how these cases will conclude. True, the anti-corruption campaign of the Dahal government has been lauded by the media and general public, but the move has also rattled the major political parties like the NC and UML. It could easily upset the current political power sharing deal. The Rastriya Swatantra Party, which is poised to become a major political force in the future, and the Rastriya Prajatantra Party, which is undergoing something of a revival, are the only parties that have clearly supported the government’s position on corruption. One could argue that Prime Minister Dahal and his party is trying to appeal to the RSP and RPP supporters in view of the next general elections. Thapa says rather than offering immature praise to Prime Minister Dahal and his government, it will do well to look at the current development with a critical lens. He says the general public must be cautious, as Dahal could weaponize the high-profile corruption scandals for his own political advantage. It is crucial that the media and civil society continue to exert pressure on the government to conclude its investigations into all corruption cases, without fear or favor. Thapa says it is worthwhile to remember that there are corruption cases related to the Maoist party as well, including the one related to the People’s Liberation Army cantonment. So far, there has been no investigation into those cases. Khem Raj Nepal, former government secretary, says the support and appreciation that the Dahal government has won with the investigation of fake refugee scam may have prompted the government to look into more cases related to corruption. He is of the view that even if Prime Minister Dahal intends to take a political benefit by investigating corruption cases involving high-profile individuals not associated with his party, it will no doubt help the country by discouraging corruption. At this moment, everything hinges upon Prime Minister Dahal. He must prove that he is a man of his word.  

There are no immediate threats to undo the current coalition government led by the CPN (Maoist Center). At least, that’s what Prime Minister Pushpa Kamal Dahal and his primary coalition partner, Sher Bahadur Deuba, of the Nepali Congress have been trying to convince the people. But if one considers the recent formation of the so-called socialist front of the Maoist party and fringe communist forces, talk about the government change made by some NC leaders, and the second-rung leaders of the NC and the UML exploring the possibility of collaboration, it is hard to buy into Prime Minister Dahal and NC President Deuba’s assurance of a stable government. Some leaders in the NC and the UML say that the two parties must come together for the guarantee of political stability for at least another general election. UML leader Gokul Banskota, who is close to the party chairman, KP Oli, has publicly stated that while there cannot be an electoral alliance between the two parties, the UML and NC can form a government to ensure political and economic stability in the country. The UML has historically been the main political rival of the NC, and there are many leaders in both the parties who believe that they should always remain apart. But there are plenty of reasons that could bring these two parties together. The main one being the arrests of and allegations against several UML and NC leaders in corruption cases, like the fake Bhutanese refugee scandal and the Lalita Niwas land grab case. The leaderships of both the NC and the UML are not pleased with the Home Ministry, led by the Maoist party, opening investigations into corruption cases involving high-profile individuals. NC President Deuba, a key partner in the ruling coalition, has so far remained silent regarding government change, but people close to him say that he is not pleased with the Dahal administration, particularly regarding the way the refugee scandal is being pursued by the Home Ministry. The UML is keen to enter serious negotiations with the NC for the formation of a new government without the Maoist Center. But NC leader Min Bahadur Bishwakarma says that the party is committed to keeping the coalition intact. On Sunday, UML Chairman Oli said that there has not been any substantial discussions regarding the formation of a new coalition because the NC was fearful. But, Deuba’s non-committal and his apparent willingness to play second fiddle to the Maoist party do not mean that he is playing the safe card. Talks about a broad alliance of left parties are also gaining momentum of late, and it could see both Dahal and Oli together again. It is worth noting here that though Dahal may be leading the current ruling coalition, his party came in third in the last year’s general elections, far behind the NC and UML—and that too despite forming an electoral alliance with the NC and other fringe parties. So, it is very much in the interest of Dahal and his party to form some sort of lasting alliance at the earliest in order to stay relevant. The evolving dynamics inside the NC has also prompted Dahal to find an alternative. The factions led by Gagan Kumar Thapa and Gururaj Ghimire in the NC are already saying that the NC should not forge an alliance with the Maoist party in the next general elections. Besides, Thapa has also been saying that the current ruling alliance could change if the government fails to deliver. These developments have made Prime Minister Dahal suspicious. He may be in favor of giving continuity to the current coalition, as he has been saying publicly, but he is also aware that his party cannot survive if it were to contest the next general elections on its own. In the previous two general elections, the Maoist Center had forged poll alliances with the UML and the NC respectively. For Prime Minister Dahal’s party, the only lifeline is making an alliance with other parties. So, it sees everything through the prism of election. Several leaders in the Maoist party are convinced that the NC is not committed to a long-term collaboration and that the party should start looking for an alternative. This means the party will align with the UML, if it has to. Already, four political parties have formed a socialist alliance, led by the Maoists, with a purpose of expanding it to the grassroots level. Dahal is also in talks with the leader of Maoist splinter groups to bring them back into the party. He is said to be in talks with former Maoists ideologue Baburam Bhattarai,  now of the Nepal Samajbadi Party,  to explore ways to unite. It is said that before talking with Oli, Dahal first wants to solidify his position by bringing all fringe communist parties under one umbrella. The meteoric rise of the Rastriya Swatantra Party has also alarmed the Maoists. If the RSP continues to ride the wave of popularity until the next general elections, it is not just the Maoists that could get an electoral thrashing, the NC and the UML could also lose their political base. This was evident in the by-elections held earlier this year. The formation of a left alliance will no doubt be welcomed by China. Over the past few years, China has been consistently advising Nepal’s left parties to come together. Beijing’s leadership will ask Prime Minister Dahal for the same when he visits China in September.  Until now, Prime Minister Dahal has been shrugging off the talks about the breakup in the Maoist-NC coalition, but he has also not ruled out the possibility of leftist alliance. He said on Monday that the NC should not overreact to the talks about the formation of left unity, as it does not mean disunity in the current ruling coalition. But if Oli’s recent statement is to be believed, the Maoists and the UML could once again unite to form a large communist party, like they did in 2018 with the short-lived Nepal Communist Party (NCP). A few days back, Oli said that there must be a serious review as to why the NCP split. UML leader Amrit Kumar Bohara says there is a sizable communist voter numbers in the country, and their combined strength will not be known for as long as leftist parties in Nepal are scattered. Chairman of CPN (Unified Socialist) Madhav Kumar Nepal, also former leader of the UML, also believes that only a powerful communist party could bring social and economic changes in the country. Maoist lawmaker Madhav Sapkota says while there is no immediate chance of left parties uniting, efforts are definitely underway. He adds the parties are continuing the efforts after learning lessons from the past. Bishwakarma, the NC leader, says unification among communist parties is an agenda that has been discussed for a long time, and that his party will have no issue if the parties of similar ideologies come together. It will not upset the NC as long as it does not affect the current coalition, he adds.

Prime Minister Pushpa Kamal Dahal has completed six months in office. He was appointed the prime minister for the third time with the backing of the CPN-UML on Dec 25 last year. But the coalition didn’t last long due to a dispute over the presidential candidate, which brought together the current coalition of Dahal’s party, CPN (Maoist Center), and the Nepali Congress. On Thursday, the Office of the Prime Minister and Council of Ministers issued a 44-page long progress report of the Dahal government in the last six months. Naturally, the report talks about various achievements of the government. It makes no effort to ease the general concern regarding government stability. There is still no certainty that the current coalition will remain intact for the next five years. It took more than five months for Prime Minister Dahal to give a complete shape to his Cabinet due to the change in coalition. There is no guarantee that the current coalition will remain intact. Prime Minister Dahal is in constant fear that the NC and other coalition partners could pull out their support to his government at any time. In these past six months, the government has also failed to bring stability to bureaucracy. There have been frequent changes of government secretaries and other high-level officials. If the prime minister fails to ensure that this coalition will remain in power for five years, the bureaucracy, which is highly politicized, will not cooperate with him. This non-cooperation will impact the government’s delivery. So far, Prime Minister Dahal has spent most of his time attending formal programs and inaugurations, instead of closely working with bureaucracy to improve governance. The only positive of the Dahal government, says NC youth leader Shankar Tiwari, is that it has taken the much-needed initiative to fight corruption. After weeks of uncertainty, it seems that the government is on the right track and the NC is fully ready to back this government, he adds. Regarding the rumors about government change, Tiwari says that there is no immediate chance of that happening and that the NC is happy to sit back and support Prime Minister Dahal. NC President Sher Bahadur Deuba is also not in favor of changing the government, though the party’s general secretary, Gagan Kumar Thapa, has said that the government could change. In order to keep the coalition intact, Prime Minister Dahal has addressed the dissatisfaction of CPN (Unified Socialist) and Janata Samajbadi Party Nepal, who were displeased with the monopoly of the NC and the Maoist in the government and the budget planning process. The passage of the budget also shows that the government is secure for now. Perhaps this is why the government came up with its progress report, touting a long list of accomplishments. But the situation on the ground has not improved. We can see long queues of service-seekers in the government offices. Country’s economic situation is turning from bad to worse despite the government's claim that there has been some improvement. Lawmaker and noted economist Swarnim Wagle has warned that though Nepal is not at risk of becoming the next Sri Lank, the country could still plunge into a serious debt trap. The report says that the government has achieved success in addressing the issues such as high-interest, devaluation of Nepali currency, pressure of foreign exchange reserves, but economists are not convinced. The Dahal government has drawn some appreciation for not interfering in the investigation of big scandals like fake refugee scam and Lalita Niwas land grab case. It has claimed that the policy of zero-tolerance to corruption has been implemented in all federal, provincial and local government agencies. It has listed the investigation into Bhutanese refugee scandal and formation of a committee on shark-loan victims as achievements. But there are still doubts regarding the so-called big fish or powerful individuals getting prosecuted. As claimed in the government's document, there has been some ease in the service relating to citizenship, national identity card, passport, driving license and no objection letter but people are still forced to queue in the government offices. There are reports about people from Madhes staying in a long queue to get citizenship. The government also faces criticism for failing to provide business to both the House of Representatives and National Assembly, but the government report refutes this. The report says: "The Government has tabled nine bills (seven in HoR and two in National Assembly) and has cleared some working procedures and directives.” The decision to distribute cash incentives to minor combatants in the former People’s Liberation Army of the Maoist party had also caused a major controversy. But the Dahal government has listed this decision as a major progress made in the peace process. The progress report also lists Prime Minister’s India visit on May 31-June 3 as a remarkable progress, stating that various significant agreements were signed during the trip. Mahesh Kumar Bartaula, whip of the main opposition CPN-UML, says there is no single convincing indicator to show that the Dahal government has been a success. He claims that the problems of unemployment remain unaddressed, farmers are still facing fertilizer shortage, domestic agricultural products still do not not have market access, corruption is thriving, and the cost of living is increasing. In essence, Bartaula says, the government that was elected from the national election with a fresh mandate has failed to instill the hope of optimism and hope among the public.

According to the STEPS Survey of Nepal 2019, around 27,000 deaths occur annually from tobacco use, which comprises about 14.9 percent of all deaths. Despite this huge loss of life, tobacco related law and taxation policy remain dismal. The government is reluctant to increase tobacco tax due to the pressure from big tobacco companies. This year too, Finance Minister Prakash Sharan Mahat did not heed the experts’ suggestion to increase the tobacco tax by 40 percent. Today, tobacco products are readily available to anyone including the minors, and they are being openly consumed in public places. The Tobacco Control and Regulation Act 2011 law bars tobacco use in public places, but the law is hardly followed or enforced. The law also prohibits sales and distribution of tobacco products within a 100-meter radius of health and educational institutions. Again, there is no one to implement the rule. Shops and tea stalls outside hospitals, schools and colleges openly sell tobacco products. Health journalist Kalpana Acharya says it is common to see shops and street vendors selling cigarettes and other tobacco products outside major hospitals such as Kanti Children’s Hospital, TU Teaching Hospital, Bir Hospital, and Patan Hospital, among others. Public health experts say there is no designated agency to implement the anti-tobacco laws and regulations. Ideally, the Ministry of Health and Population should be coordinating with the Ministry of Home Affairs and its subordinating bodies to implement the laws on tobacco use. But this has not been happening. There is also a lack of awareness among the public about the laws that are in place, because the government has not taken any initiative to let people know. Journalist Acharya says running campaigns on the health risks of tobacco use alone will not help. She says many shopkeepers and street vendors she talked with didn't know that there was an anti-tobacco law in the country, and that it was illegal to sell cigarettes and other tobacco products near hospitals and educational institutions. It shows that the government simply is not bothered to discourage the use of tobacco products, because it runs against the interest of tobacco companies. This is also why tobacco tax in Nepal is among the lowest in the whole of South Asia. Global experiences show that increasing tobacco excise taxes and prices is the most effective, cost-effective, and result-oriented measure for reducing tobacco use. But the government is not ready to take the path. Health experts and stakeholders that ApEx talked to as part of the Annapurna Media Network’s ‘No Tobacco Drive’ also agree that substantially increasing the tobacco tax is the sure-fire way to discourage tobacco use and save lives. They say doing so would also help generate more revenue in the form of tobacco tax. But government officials fear that raising the tax on tobacco will only promote illicit trade. However, studies have shown that tobacco blackmarket will not be that big of a problem if the tobacco tax is raised significantly. Nepal is also obliged to raise its tobacco tax as per the WHO Framework Convention on Tobacco Control, of which it is a party. The framework talks about raising tobacco excise taxes so that they account for at least 70 percent of retail prices.  So by setting low tax on tobacco, the Nepal government is flouting the rules set by the WHO. The UN health agency has also suggested the MPOWER policy package for country-level implementation of effective interventions to reduce the demand for tobacco. The six evidence-based components of MPOWER are: monitoring tobacco use and prevention policies; protect people from tobacco smoke; offer help to quit tobacco use, warn about the dangers of tobacco; enforce ban on tobacco advertising, promotion and sponsorship; and raise taxes on tobacco. Nepal has failed to comply with most of these intervention measures. Experts say for the effective implementation of the anti-tobacco law, there should be a proper interaction between government agencies and the tobacco industry, which is not happening now. To improve the situation, there is also a need for sensitization among the political parties. Our lawmakers rarely speak about those matters in the Parliament to press the government to increase taxes and implement the law. They are more focused on securing development projects in their core constituency and less on the issues related to public health. It takes commitment and cooperation from all sides if we are to create a tobacco-free, healthy society. HIghlights

• Monitoring tobacco use and prevention policies
•  Protect people from tobacco smoke
•  Offer help to quit tobacco use,
•  Warn about the dangers of tobacco;
• Enforce ban on tobacco advertising, promotion and sponsorship
• Raise taxes on tobacco.

Deputy Prime Minister and Home Minister Narayan Kaji Shrestha is traveling to China today. He will be leading a seven-member delegation to attend a trade fair in Chengdu. Bilateral engagements and visit exchanges between Nepal and China have increased in recent days. Only last week, Minister for Industry, Commerce and Supplies Ramesh Rijal attended the 13th Xinjiang-Kashi-Central Asia and South Asia Commodity Fair organized by the Kashi Prefecture Administration of China. Rijal delivered a statement at the opening ceremony of the event on 21 June, where he said that fairs and expos offered a good platform for exhibitors, entrepreneurs, and businessmen from South Asia and Central Asia to showcase their products, as well as to strengthen economic and people-to-people relations. He also appreciated the trade facilities provided by China to Nepali products while stressing the need for bolstering Nepali exports to China. In the second week of June, Chairman of the National Assembly, Ganesh Prasad Timalsena, also visited China. He met the Chairman of China’s People's Congress, Zhao Leji, and the two agreed to advance cooperation between the legislative bodies of the two countries. Leji said that leaders of the two countries have elevated the China-Nepal relationship to a strategic partnership of cooperation featuring ever-lasting friendship for development and prosperity. Beijing has also stepped up efforts to strengthen people-to-people relations with Nepal. For instance,  Himalayan Airlines resumed its direct flight between Kathmandu and Beijing this week following a three-year interval caused by the Covid-19 pandemic. According to the Nepali Embassy in China, direct flight between Kathmandu and Beijing, which takes place every Saturday, will play a significant role in promoting tourism, and socio-economic and cultural relations between the two countries. Also this week, a Sichuan Airlines charter flight arrived at the Pokhara International Airport this week, making it the first international flight to land at Nepal’s third international airport since its inauguration in January.  This week Nepal-China Friendship Dragon Boat Race Festival was organized in Pokhara where Chinese Ambassador to Nepal Chen Song said that it is an implementation of China’s Global Civilization Initiative (GCI). WeChat Pay, a mobile payment service run by China’s tech giant Tencent, was launched in Pokhara, while Tencent is joining hands with Nepal’s NMB Bank to launch the service. All these developments within a short period of time indicate China’s softer approach toward the Pushpa Kamal Dahal-led government.  Prime Minister Dahal himself is likely to visit China later this year to further cement the Nepal-China ties. Dahal visited India from May 31-June 3 this year. Key visits 

• Deputy Prime Minister and Home Minister Narayan Kaji Shrestha’s China visit
• Minister for Commerce and Industry Ramesh Rijal’s China visit
• Chairman of National Assembly Ganesh Timalsina’s China visit
• Former speaker Agni Prasad Sapkota’s China visit
• A four-member delegation of CPC visited Kathmandu
• Wang Xiaohui, CPC Secretary of the Sichuan province, visited Kathmandu