Case 1: On July 2, the parliament’s International Relations and Human Rights Committee instructed the government to cancel the holding of the International Indian Film Academy Awards (IIFAA) in Kathmandu. The government, however, expressed displeasure at the committee’s decision; it thought the decision was taken without sufficient
homework.

Case 2: A few weeks ago, the parliament’s State Affairs and Good Governance committee instructed the Public Service Commission (PSC) to halt the process to recruit 9,000 civil servants. The government said there was no need to stop the process. The Supreme Court (SC) agreed and allowed the PSC to go ahead with the recruitment. The parliamentary committee expressed displeasure, stating that the SC encroached on the parliament’s jurisdiction.
There are several other instances where the parliamentary committees’ decisions have courted controversy and criticism. Of late, there are fears that the committees’ significance has eroded—something that calls for serious reflection on the part of the parliament, the government and the political parties.

Are the parliamentary committees making mature decisions? Are their instructions being implemented by the government? How can we make these committees more effective and less controversial? These are frequently asked questions in political circles. The parliament itself needs to answer these questions honestly if it is to maintain its dignity, trustworthiness
and significance.

In parliamentary practice, parliamentary committees are regarded as mini-parliaments that hold their sessions in the absence of a full House. Observers therefore argue that any decision taken by these committees should be free from controversy and pressure, and that the government should carry out their instructions. The basic principle of having parliamentary committees is to divide lawmakers into small groups so as to enable serious work to be done in a more effective manner.
The goal is to assist the parliament in its functioning and make government agencies accountable to the parliament. The committees are mandated to monitor and investigate government policies and programs and issue directives accordingly. They make decisions on the basis of majority.

Committees under HoR
- Finance Committee
- International Relations and Human Rights Committee
- Industry-Commerce-Labor and Consumer Welfare Committee
- Law, Justice and Human Rights Committee
- Agriculture, Cooperatives and National Resource Committee
- Women and Social Committee
- State Affairs and Good Governance Committee
- Development and Technology Committee
- Education and Health Committee
- Public Accounts Committee

Committees under NA
- Sustainable Development and Good Governance Committee
- Bill Management Committee
- Transfer of Management and Government Committee
- National Concern and Coordination Committee

 Joint Committees
- Parliamentary Hearing Committee
- Committee to monitor and evaluate the State Directives, Policy and
Responsibility

Where’s the research?
The problem, however, lies in the functioning of the parliamentary committees as they make important decisions without adequate research. Parliamentary committees are facing accusations that they depend heavily on secondary sources such as newspapers and information gathered by lawmakers while making decisions, most of which, as a result, end up being flawed. In several cases, the committees have taken decisions in haste without considering their implications. As lawmakers cannot be experts on all national and international issues, they need the support of professionals and experienced government officials.
“This is happening because the parliamentary committees do not consult experts. And their decisions are politically motivated,” says Mukunda Acharya, a former secretary at the parliament secretariat. Another reason behind the problem is the absence of senior government officials in these committees. Either an undersecretary or a section officer serves as the secretary of these committees.

“If senior staff are appointed, they can guide the lawmakers on vital issues, which reduces the chances of drawing controversy,” says Acharya. The committees are dominated by lawmakers who see politics in every issue rather than study it in a rigorous manner. Instead of undertaking serious research, the committees desire easy publicity and therefore pick up any random issue, hold meetings, and invite the media.

As such, the government has a handy pretext to ignore the committees’ instructions, resulting in a contempt of parliament. There is no official record of what proportion of instructions get implemented. A senior official at the parliamentary secretariat says the majority of instructions provided by the committees are gathering dust.

There are 10 thematic committees under the House of Representatives (HoR) and four under the National Assembly (NA). There are two joint committees. Each committee has a specific job as stipulated by the law, but there are many overlaps, and disputes over jurisdiction often arise.

“There is a sort of competition among the committees to show that they are doing something. So they sometimes take up issues that fall under another committee’s jurisdiction,” says Acharya.

Multiple maladies
There are several instances where a particular minister or a government official is invited by multiple parliamentary committees to hold discussions on the same issue, sometimes at the same time. Ministers and high-level government officials complain that there is no need to speak several times on the same issue. Failure to attend, however, will invite criticism of dishonoring the parliament.

There is a long list of work that the parliamentary committees are supposed to do. But they have so far failed to conduct their business effectively. The Speaker of the House is responsible for overseeing the functioning of all parliamentary committees, but he is not doing a good job. If a committee’s decision is controversial, the Speaker should call a meeting of the committee chairs and try to resolve the dispute.

Last year, a sub-committee under the Public Affairs Committee concluded that Minister for Culture, Tourism and Civil Aviation Rabindra Adhikari was complicit in corruption of Rs 4.3556 billion during the procurement of two wide-body aircraft. Later, the sub-committee’s conclusion was considered unjustified. Subsequently, the main committee formed a separate probe panel and the government also constituted a separate committee. Neither has made its report public.

Ruling party leaders publicly disparage the parliamentary committees. Earlier in the month, when the International Relations and Human Rights Committee directed the government to cancel the IIFAA event, both Prime Minister KP Oli and Minister for Communication and Information Technology Gokul Prasad Banskota publicly criticized the committee. A few days back, the Development and Technology Committee invited Minister for Physical Infrastructure and Transport Raghubir Mahaseth for a discussion on public transport, but the minister declined the invite.

Though it is normal parliamentary practice to invite stakeholders, Mahaseth refused to speak in the parliament and blamed the committee of violating parliamentary norms. He claimed that the parliamentary committee took a decision in a casual manner without digging into the details of the matter.

Observers say the tendency of the executive encroaching on parliamentary affairs has grown under this government. Some lawmakers from the ruling parties believe they can take any decision because they have a two-thirds majority. “Unlike in the past, ministers are openly speaking against the decisions made by the parliamentary committees, which is a serious breach of parliamentary supremacy,” laments a senior parliament official.

Domestic and international trips that lawmakers affiliated with the parliamentary committees make have also drawn considerable flak. When a team of lawmakers from the Public Accounts Committee visited a European country to inspect the Nepali embassies there, it attracted criticism on the grounds that the committee did not have the mandate to monitor the embassies, as the Auditor General does that job on an annual basis. Even the government has expressed its dissatisfaction over such visits.

Records with the Ministry of Foreign Affairs (MoFA) show that between 1960 and 1990 (i.e. during the Panchayat era), Nepal used to exchange frequent high-level visits with countries other than India and China. But such exchanges started petering out after the 1990 political change.

Data from the past two decades clearly show that Nepal’s high-level engagements have been confined to its two immediate neighbors, and that they have mostly been one way. In this period, there have been frequent high-level visits from Nepal to India and China, but fewer reciprocal visits to Nepal. High-level visits from India to Nepal have increased in the past couple of years, but such visits to Nepal from China have become rarer.

During the Panchayat regime, the kings tried to visit as many countries as possible. Such trips were aimed at garnering more development aid. The monarchy made efforts to reduce Nepal’s dependence on India and China for development needs.

Political parties agree that Nepal needs to diversify its bilateral relations beyond India and China, and that a stable government with a five-year mandate has opened a window of opportunity. The KP Oli-led government too has been trying to develop a narrative that it is diversifying its foreign relations. But there is little substance to back it up.

To meet the aspiration of graduating to a middle-income countries by 2030, Nepal has to maintain seven to eight percent annual growth. This calls for massive investment. Nepal needs an estimated $8 billion annual FDI inflow to graduate to a middle-income country in the next 10 years or so.

Money matters
One of the major factors that prompted the Oli government to diversify external relations is to bring in more foreign aid, much like what King Mahendra did in the 1960s and 70s. After the government was formed last year, Oli had expected a high volume of investment from India and China for infrastructure development. But except regular bilateral support, such investment did not materialize. During Oli’s state visits to India and China, no big economic package was announced; the focus was on completing pending projects. There was a time when its two big neighbors competed to provide more development aid to Nepal—but no more.

This led the Oli government to look beyond the immediate neighbors to the meet the country’s development needs. “We require massive investments in infrastructure development and advanced and innovative technology, for which our domestic resources are insufficient. We need the international community’s support and cooperation to fill the resource gap,” Foreign Minister Pradeep Kumar Gyawali is quoted as saying in his ministry’s website.

Foreign policy experts, however, say that while diversification is important, Nepal cannot overlook the roles of its neighbors for its economic development and prosperity. “Obviously we should broaden our foreign policy, but India and China are still the key to our economic development. Unfortunately, we haven’t been able to identify our priorities and define key national interests,” says Sundar Nath Bhattarai, Founder President of the Association of Former Career Ambassadors of Nepal.

Other foreign policy observers also think the new government has tried to diversify foreign relations, but without serious homework and without identifying priority areas. Visiting a plethora of countries without a substantial agenda, they stress, does not serve the country’s interest.

After taking charge of office, Oli has gone on eight foreign visits (see box). Attracting foreign investment is always a top priority of these visits. But the prime minister has not been able to draw investment from the countries he has visited in this period. “We should assess success on the basis of outcomes, not the number of visits,” says Bhattarai.

PM Oli’s foreign visits
- Europe: June 8-16, 2019
- India: May 30-31, 2019
- Cambodia and Vietnam: May 9-15, 2019
- Switzerland (Davos): 20-26 Jan, 2019
- Costa Rica: 27 September, 2018
- UNGA (New York): 22 Sept-3 Oct, 2018
- China: June 19-25, 2018
- India: April 6-8, 2018

Eggs in many baskets
Besides PM Oli, Foreign Minister Gyawali has also visited a number of countries and attended several bilateral and multilateral forums. In December last year, he visited the United States and held bilateral talks with US Secretary of State Michael R. Pompeo. Earlier, in November, Gyawali had visited Japan. In a gesture of reciprocity, Japanese Foreign Minister Taro Kono visited Nepal the following month. These visits carried some weight as such visits had not taken place for a long time.

Europe was a good choice in terms of economic diplomacy, but PM Oli’s visits to the continent have come under scrutiny for a number of reasons. First, every visit of a head of government or state is either a ‘state’ or an ‘official’ visit. But PM Oli’s visits to the UK and France were designated as ‘formal’, in violation of established diplomatic practice.

Second, no bilateral agreements were signed during Oli’s visits to the UK and France. After India, the European Union is Nepal’s second largest trade partner, and Nepal has old ties with Britain and France. But Oli’s visits were marred by a lack of preparation. He could not meet the British monarch and no formal ceremony was organized for him. (Oli did meet Theresa May, but she had already resigned as prime minister.) In France also, Oli could not get an audience with President Emmanuel Macron. Nor was any substantial agreement signed to bring in investments. “In terms of investment and economic cooperation, European countries matter a lot for us, but merely visiting them would not yield the desired benefits,”
says Bhattarai.

That a Nepali prime minister visited Britain after 17 years was possibly the only positive feature of Oli’s trip. Prime Minister Sher Bahadur Deuba had officially visited the UK in 1996 and 2002, while Prime Minister Girija Prasad Koirala had visited France in 2001. In 1994, King Birendra had paid a state visit to France while he undertook an unofficial visit to the same country in 1989.

Earlier, PM Oli had visited Vietnam and Cambodia, which also drew flak on the grounds that Nepal does not have strong economic and diplomatic ties with them. “Foreign policy is not an area for adventures... In fact, diversification is a wrong word in international relations. Foreign policy is not an arena where you look to ‘diversify’, but to promote your national interests,” said former Foreign Minister Ramesh Nath Pandey in a recent interview with APEX.

Constantino Xavier, a fellow at Brookings India, a think tank in Delhi, is more sympathetic to the Oli government’s attempts at diversification. “Post-Wuhan, with China and India cooperating again, Nepal’s scope to play off its two neighbors has reduced,” he told APEX. “Diversification of relations under PM Oli in recent months is giving Nepal more options, especially beyond the great power competition between China, India and even the US
and Japan.
Xavier thinks that with political stability at home, and new ambassadors finally in place, the Oli government has greater incentives to expand relations with more countries, especially in Europe, Central and Southeast Asia. “The EU and multilateral organizations like the Asian Development Bank can play an important role in diversifying Nepal’s development options,” he says.

 The federal government of KP Oli says ‘diversifying’ away from India and China is among its key foreign policy priorities. After com­ing to office a year and a half ago, Oli sought to bring Nepal-India ties on an even keel. He has been as keen to involve the northern neighbor in Nepal’s development endeavors. Yet his government has tried to do much more. Foreign Minister Pradeep Gyawa­li made a historical bilateral visit to Washington DC, in the clearest sign of Nepal’s wish to diversify away from its two neighbors. On the occasion, the Americans were quick to point out how Nepal had now become a key component of its (anti-China) Indo-Pacific Strategy. The Nepali side denied it was part of any such strategy. (Yet the steady flow of senior US officials to Nepal suggests the Americans are deter­mined to push it.)

But what do we make of the gov­ernment efforts to reach out to coun­tries like Costa Rica, Cambodia and Vietnam? Can these efforts be seen as part of the same diversification policy? What of PM Oli’s most recent trips to the UK and France? Many see no method to the government’s foreign policy ‘madness’. Former Foreign Minister Ramesh Nath Pandey says national interest rather than diversification should be at the heart of Nepal’s foreign policy.

Carnegie India’s Constantino Xavi­er disagrees. He lauds Oli for try­ing to reach out to countries other than big powers, which he thinks gives Nepal “more options”. But even if the intent of the government is right, it is failing in execution. During his UK and France visits, he could not even get an audience with their heads of state. Nor could any of the agendas he had taken along be finalized. It is also unclear what was achieved from his trips to Cambodia and Vietnam.

If Nepal stands for a non-perma­nent UN seat tomorrow, will Costa Rica or Cambodia support its candi­dacy? Will they speak out in Nepal’s favor in case of another blockade? Or are they ready to invest here? If the government has a clear goal, there is a lot to be gained from diversifying our foreign relations. But without such a clear goal, Nepal could over­stretch and its international standing might take a bad beating …

 Small political parties have an important role in a diverse soci­ety like Nepal. Riding on a global trend, the more recognized bigger parties are becoming populist. In this process, they often abandon minority groups and important agendas that they are reluctant to adopt fearing a populist backlash. In Nepal’s case, the smaller parties in the past have carried the agendas of individual ethnic groups, religions and regions. Says General Secretary of CPN (ML) CP Mainali, which cur­rently does not have any seat in the federal lower house: “Fringe parties have a big role in ensuring an inclu­sive political system.”

But these smaller political outfits in Nepal are facing an existential threat following a 2017 law that made it mandatory for political parties to secure at least one directly-elected seat and at least three percent of pro­portional representation votes for them to be recognized as a national party. This provision drastically cut down the number of parties repre­sented in the parliament.

After the first (2008) and the sec­ond (2013) Constituent Assembly elections, there were 25 and 30 parties represented in the national assembly, respectively. But following the 2017 federal election, after the new electoral law came into effect, only nine political parties and one independent lawmaker won seats under the FPTP category, and just five parties were elected under the PR category. As of now there are just four recognized national parties. The lawmakers elected from other parties are represented in the parlia­ment as individual candidates.

But the big political parties decid­ed on a threshold for a reason. “Earlier, the presence of so many parties in the parliament made deci­sion-making hard,” says Radheshy­am Adhikari, a member of the fed­eral upper house representing the Nepali Congress. Governments were constantly made and unmade as smaller parties frequently switched sides.

One good thing is that after the new law came into effect extrem­ist voices like those of anti-federal Rastriya Janamorcha and pro-mon­archy RPP have been weakened. But many marginalized communities may argue their voices are no longer heard in the new majoritarian set-up. Perhaps there is a case for slightly lowering the 3 percent threshold, say to 2 or 2.5 percent. It will be dangerous to let two or three polit­ical parties monopolize the hold on power and set the nation’s agenda and direction.  

 Life on the fringes

 Although the presence of a large number of small parties can contribute to political instability, it also ensures a steady supply of diverse ideas and provides voters with more political choices 

 Although only two parties, the Nepal Communist Party (NCP) and the Nepali Congress (NC), currently dominate national pol­itics, there is a recent history of fringe parties wielding considerable political influence. Only five parties—the CPN-UML, the NC, the Maoist Center, the Ras­triya Janata Party, Nepal (RJPN), and the Federal Socialist Forum, Nepal (FSFN)—could secure the ‘national’ status based on the seats they won in the 2017 elections. (The number of national parties is now four, fol­lowing the merger last year between the UML and the Maoist Center to give birth to the NCP.) Lawmakers from other parties are represented in the parliament as independent candidates. In the upper house called the National Assembly (NA), only the four national parties are represented.

In the first Constituent Assembly (CA) election in 2008, 74 political parties were registered with the Election Commission (EC). Only 54 of them participated in the polls, and nine parties and one indepen­dent member won seats under the first-past-the-post (FPTP) cat­egory. But altogether 25 political parties were represented under the proportional representation (PR) category.

The number of political parties taking part in the second CA elec­tion in 2013 increased significantly. But of the 122 political parties that fielded candidates under the FPTP category, only 11 won seats. How­ever, of the 122 political parties, as many as 30 were elected to the CA under the proportional represen­tation (PR) category. After the first and second CA elections, it was hard for the Parliament Secretariat to arrange for parliamentary party offices due to the high numbers of elected political parties.

In the first and second CA elec­tions, several fringe parties were formed on ethnic lines, but they failed to impress the voters in the last elections. “Earlier, the presence of so many parties in the parlia­ment made decision-making harder because of protracted bargain­ing and renegotiation,” says Rad­heshyam Adhikari, an NA member representing the Congress.

In the 2017 federal election, nine political parties and one indepen­dent lawmaker won seats under the FPTP category, but only five parties were elected under the PR category. Naya Shakti Nepal Party, Nepal Majdoor Kishan Party, Ras­triya Janamorcha and Rastriya Pra­jatantra Party each won one seat under the FPTP category but failed to get the new 3 percent of the total vote threshold required to secure national status.

The big squeeze

The number of political parties plummeted after a 2017 law had made it mandatory for parties to get both three percent of the total votes under the PR category as well as at least one seat under the FPTP cate­gory to be recognized as a national party. After the imposition of the 3 percent threshold, some small par­ties merged into bigger ones.

According to the latest EC data, altogether 113 political parties are registered as per constitutional pro­visions. But not all of them contest elections. In 2017, 95 political par­ties had submitted an application to the EC for participation in the fed­eral and provincial elections. The EC listed 91 of them as eligible and gave them election symbols. But only 55 political parties fielded candidates under the FPTP category. As many as 88 political parties had submit­ted an application to the EC for the PR category, but only 49 ended up sending their lists of candidates.

The absence of smaller parties in the parliament and in national pol­itics has both pros and cons. Over the last three decades, fringe parties were one of the reasons behind government instability. Big parties sought their support, either to form or topple the government. General Secretary of CPN (ML) CP Mainali says big parties as well as the media and civil society blamed fringe par­ties for the country’s political insta­bility, which created an opinion in favor of limiting the number of political parties by imposing a cer­tain threshold.

“But fringe parties have a big role in ensuring an inclusive political system,” Mainali told APEX. “Small parties like ours have a vastly differ­ent political ideology than the big parties,” he added.

In the past, instead of sticking to a permanent alliance, many fringe parties displayed a tendency to sup­port any party or leader if it served their immediate purpose. There are several instances of fringe parties playing a decisive role in the for­mation or toppling of governments. So electoral laws were amended to discourage smaller parties. “Now we have realized our mistake and are working tirelessly to repair our image and revive the party. We face many issues as the current govern­ment with a two-thirds majority has failed to deliver,” says Mainali.

Diversity v chaos

There indeed are concerns that restrictions on political parties adversely affect diversity and plu­ralism. In a democracy, political parties play a vital role in making the government accountable and transparent. In several cases, major political parties have a rigid ideo­logical viewpoint and dread experi­menting. It is smaller parties, whose chances of winning elections and ascending to power are slim, that can take the risk of introducing new and out-of-the box ideas. “In a plu­ral society like Nepal’s, fringe par­ties could play a vital role in giving voice to diverse ideas and opinions,” argues Puranjan Acharya, a political analyst.

But Adhikari, who had a hand in introducing the 3 percent thresh­old, does not subscribe to this view. “In other countries, fringe parties have a firm ideological position, with which they try to secure voter support. The situation is different in Nepal, where fringe parties fre­quently trade ideology for political gain,” he says. He cites the example of the Rastriya Prajantra Party led by Kamal Thapa, which he thinks has pursued power at the expense of a steady focus on its Hindu agenda.

Yet there is no denying that the voices of only a few parties are dom­inant in the parliament. In the first and second CA, Chitra Bahadur KC of the Rastriya Janamorcha vehe­mently opposed the idea of federal­ism and his presence was striking. But now that his party is no longer represented in the parliament, his ideas are rarely heard in the media and in public spaces, although he remains steadfast in his belief that a federal system is unsuited to Nepal.

“There have been systematic attempts by the big parties to min­imize the role of smaller parties in the parliament. With a party status in the parliament, it would have been easier to convey our mes­sage to the people,” KC told APEX. “Smaller parties play a vital role in ensuring political inclusion, but there have been attempts to impose a two-party system in the country. However, we will continue to con­vince people that federalism is not suitable for Nepal,” he said.

Many political commentators say smaller parties are even more important in the federal step-up. Although they are unlikely to win seats in the federal parliament, they can win elections at the provincial and local levels, where they can highlight grassroots issues neglected by the big national parties.

The existence of small parties also gives voters more political choices. In the last elections, for example, many urban residents voted for the Bibeksheel Sajha Party, which inspired voters with its agenda of ‘alternative politics’. Although it didn’t win a single seat in the federal parliament, it secured two in the Province 3 legislature.

 With the average age of a Nepali government only nine months in the past three decades, leaders of big parties are not used to staying out of power for long. After playing second fiddle to KP Sharma Oli for the past 13 months, no wonder the by nature impatient Pushpa Kamal Dahal has had enough.

 On May 29, the eve of PM Oli’s India visit, Dahal leaked the secret agreement he had with Oli on power-sharing, whereby the two NCP co-chairs would be the prime minister for two-and-a-half years each. If the message was still lost on someone, Dahal went on national television on the same day to stake his claim on government leadership.

 Dahal has given Oli a choice: give him the PM’s chair after a year or make him the ‘consensual’ party chairman following next year’s Gen- eral Convention. If only things were so easy. Oli is in no mood to vacate the PM’s seat soon, nor to give up party chairmanship easily.

 He knows that if he agrees to make Dahal a parallel power center, it is only a matter of time before the newly formed NCP splits. Even if it doesn’t, with the canny political operator in Dahal in a position of power, Oli’s hold on the party will significantly weaken. Yet Dahal’s backers in the party are adamant that the agreement must be followed in letter and spirit.

 Why did Dahal disclose the agreement now though? One, on the eve of Oli’s India visit, he was sending a reminder to New Delhi that Oli is only a caretaker prime minister and he will soon assume power in Kathmandu. Two, he must have felt that without such timely reminders, to stakeholders both at home and abroad, Oli would not leave easily.

 Dahal has been trying to take India into confidence by claiming only he can get the Madhesis on board. It does not help that New Delhi sees PM Oli as ‘pro-China’. According to one seasoned New Delhi-based Nepali diplomat, a more muscular Indian government plans to take up the Madhesi cause again and get tough on ‘China-leaning’ Oli. Fighting a two-front war will be tough on the ailing prime minister.

As Dahal angles for greater power, the ruling NCP plunges deeper into uncertainty

Pushpa Kamal Dahal may want to ensure that he gets to lead either the NCP or the government after a year, but there are other players in the game too. Even if he gets Oli’s support, it is far from certain that other senior NCP leaders would accept Dahal’s leadership

 No more guesswork. Now it is clear that Nepal Commu­nist Party (NCP) co-chairs, KP Oli and Pushpa Kamal Dahal ‘Pra­chanda’, do actually have a pow­er-sharing agreement. But how will it be translated into action in the coming days? As per the agreement, Oli and Dahal would lead the party and the government for equal time. This means that half-way through Oli’s term in government, he would hand over the prime minister’s post to Dahal. Alternatively, if Oli wants to lead the government for a full five-year term, he should hand over party leadership to Dahal, ending the interim arrangement of having two chairs. Oli has also pledged to support Dahal in the NCP’s Gen­eral Convention, which is man­dated to elect party chair and other officer bearers.

Until two weeks ago, the existence of an agreement on power-sharing between the two leaders was only speculation. Now that the ‘secret’ agreement has been leaked, the rel­evant question is not whether such an agreement exists, but whether Dahal is more likely to be the party president or the prime minister. Or will there be some other twist in the NCP tale? Party insiders say the han­dover of party leadership to Dahal is not going to be easy due to the NCP’s internal dynamics.

The agreement should be implemented in its letter and spirit. There is no question of reneging on it

NCP leader Devendra Poudel

Un-conventional wisdom

Oli is not ready to give up power after two and half years, and wants to lead the government for the full five years. He is consolidating power in party and state mechanisms. His strategy, according to leaders, is to maintain the status quo in the party, which means putting off the General Convention as that would ease pressure on him to loosen his grip on power. It’s the GC that elects the party chair, but given the state of confusion in the party it won’t be easy to hold it, as scheduled, in the next 15 months.

The intra-party dynamics are fluid. Another senior leader Madhav Kumar Nepal, who has the organiza­tional strength to challenge both Oli and Dahal, is also vying for party leadership. As APEX reported two weeks ago, Oli has already started placating both Dahal and Nepal in order to prevent a possible gang up against him. Both want Oli’s sup­port, but the possibility of them ganging up against Oli cannot be ruled out.

Nepal has publicly said that he was unaware of the agreement between Oli and Dahal. This means other party leaders may not take ownership of the agreement as well. Nepal, in an attempt to appease Oli, has also said that the current prime minister would be in office for five years.

On the other hand, another senior leader Bamdev Gautam has publicly backed the agreement, arguing that Dahal would become prime min­ister after the current government completes two and half years. Alter­nately, a few months ago, Gautam has proposed in a party meeting that Oli should lead the government and Dahal the party, ending the dual chair system. “The agreement should be implemented, otherwise it would affect party unity,” Gautam said again at a public program this week.

India the guarantor

The timing of the agreement’s leak and Dahal’s interview with a televi­sion channel disclosing it in clearer terms is meaningful. The agreement was made public on May 29 on the eve of PM Oli’s India visit. Dahal had also informed the Indian lead­ership about his agreement with Oli during his India visit last year. In an interview with The Hindustan Times then, Dahal was asked: “What is the specific understanding? Has Oli com­mitted that he would give you either the PM or the party chair, or both, in two years?” Dahal had replied, “The spirit of the understanding is one of those two positions.” In response to a follow-up question—“What if Oli doesn’t?”—Dahal had answered, “We will see then. Right now, we will move with full sincerity. I am mov­ing forward with that. I told Indian leaders that too.”

Dahal’s statements then and now clearly show that he sees India as an external guarantor in his attempt to ascend to power.

The party rank and file was not aware of the Oli-Dahal agreement, whose revelation has caused a stir within the NCP. Its leaders have started saying that there should be intra-party discussions about the agreement, and expressed unhappiness that top leaders kept them in the dark about such an important pact.

Oli has conceded that he had an agreement on power-sharing with Dahal. But he wanted to keep it a secret, as announcing specific dead­lines would make his government look like a caretaker one.

“It is no big deal. There is an agreement between the two leaders on power-sharing and that’s what Prachanda said,” NCP leader Deven­dra Poudel, who is close to Dahal, told APEX. “The agreement should be implemented in its letter and spirit. There is no question of not implementing it,” added Poudel. Another NCP leader close to Dahal said, “It was necessary to inform party leaders and cadres about the agreement. If Dahal had raised this issue at the eleventh hour, it would have sowed confusion in the party.”

Dahal also wanted to warn Oli that he is not free to monopolize party leadership and should hand over party leadership after two and half years. Dahal thought that would put Oli under pressure to clarify his posi­tion. “Prachanda was compelled to broach the issue after PM Oli time and again stated that this govern­ment would serve a full five-year term,” said the NCP leader quoted above.

Around the time of party uni­fication, there was an agreement between Oli and Dahal that they would chair party meetings on a rotational basis and that Oli would focus on the government while Dahal would be entrusted more with party-related tasks. However, the agreement was not implemented and Dahal was left playing second fiddle to Oli. Leaders say the spirit of the unification was that both leaders would have equal status in the party.

Dahal and his supporters have also started voicing criticism against the government, arguing that such a strong government has failed to deliver, resulting in frustration among citizens.

Dahal may want to be either the prime minister or the party chair­man, but there are other players in the game too. Even if he gets Oli’s support, it is far from certain that other senior NCP leaders—Madhav Nepal, Bishnu Poudel and Ishwar Pokhrel, among others—would accept Dahal’s leadership.

 On May 30, Bharatiya Janata Party (BJP) leader Narendra Modi took the oath as India’s prime minister, to start his second five-year term. In his first term, there were several ups and down in Nepal-India rela­tions. There are thus concerns over how bilateral relations will evolve in the days ahead. Before discussing this, it would perhaps be worthwhile to remind ourselves of some hiccups in Nepal-India ties during the first terms of Modi and his Nepali coun­terpart, KP Oli.

After the 1990 political change in Nepal, Oli was regarded as a leader close to the Indian establishment. But during the 2015 Indian block­ade, he took a strong anti-blockade stand, with the support of leaders from across the political spectrum as well as a large section of the peo­ple. Even after the blockade end­ed, the relationship between Oli and the Indian political leadership remained strained. Some Indian leaders blamed Oli of playing the old ‘China card’ against India. Oli, mean­while, thought India wanted him out of power at any cost.

In May 2016, then PM Oli report­edly urged President Bidya Devi Bhandari to cancel her scheduled visit to India, which added to the mistrust. According to knowledge­able sources, the visit was cancelled as Oli thought India was trying to ‘topple his government’. Earlier, Nepali Ambassador to India, Deep Kumar Upadhyay, was recalled for allegedly being a part of the same ‘conspiracy’.

When the Oli-led government was toppled, Oli blamed India for cob­bling together the Nepali Congress (NC)-Maoist (Center) alliance. Come the three-tier elections in 2017, Oli and his communist alliance exploit­ed the ‘Indian interference’ to the hilt. And soon after the left alliance won the parliamentary elections, Oli went to Rasuwagadi on the border with China and inspected possible road and rail routes to the northern neighbor, again to India’s displeasure.

Deficit of trust

All these developments only add­ed to the mistrust between Nepal and India. But soon India seemed to have realized the folly of its hardline approach and started appeasing Oli, if only to halt his tilt toward China. Following the parliamentary elec­tions, India dispatched its foreign minister Sushma Swaraj to congratu­late Oli even before he was appoint­ed prime minister.

The climate of cordiality did not last, and Oli’s relationship with India started deteriorating again. First, Nepal cancelled the 2018 joint BIMS­TEC military drills in Pune, India, at the eleventh hour. India saw this as another instance of Oli’s pro-China bias. Of late, the joint Nepal-India Eminent Persons Group (EPG) report on revision of old treaties became a bone of contention, with Modi sup­posedly not all that keen to receive it.

In this backdrop, foreign policy experts believe building trust by tackling pending issues between the two governments should be an immediate priority.

Oli is under domestic pressure to convince India to receive the EPG report and implement it without delay. In its election manifesto, the left alliance had promised to revise the 1950 Peace and Friendship Trea­ty and other ‘unequal’ treaties with India. But it is not going to be easy as India is not in favor of fundamental changes, even though it promises to address Nepal’s grievances.

Dr. Pramod Jaiswal, a senior fellow at the New Delhi-based Institute of Peace and Conflict Studies and a foreign-policy expert, foresees no major changes in India’s Nepal poli­cy. “But the Modi government will be more assertive abroad,” he argues. He adds India still believes Nepal and Bhutan fall under its exclusive sphere of influence and does not brook the presence of any third par­ty here, including China.

 BRI: Elephant in the room

China’s growing presence in Nepal is expected to add to India’s asser­tiveness. India had put pressure on Nepal not to sign the BRI Mem­orandum of Understanding (MoU) in 2017, but to no avail. India is still concerned about Nepal’s selection of projects under the BRI.

“India will not object to small BRI projects in Nepal but build­ing critical infrastructures such as railways, highways and big dams that have security implications will be of concern,” says Jaiswal. India has been maintaining that the proposed Keyrung-Kathmandu rail line should not be extended to Lumbini on the Indian border for security reasons.

Nepal is likely to face more Indian pressure on China. Yes, relations between India and China have improved following the informal Wuhan summit in 2017. But observ­ers say, chances are India and the US will increasingly work together to counteract the BRI and Chinese investment in Nepal.

With Modi’s reelection, there also are concerns about India’s approach to Nepal’s internal pol­itics. In the past year or so, India has maintained a studied silence on this, as interference in Nepal has been one of the main irritants in bilateral relations.

India may not maintain the same level of silence in the days ahead. A seasoned Nepali diplomat who has had extensive contact with the Indians says Madhes-based parties’ demand to amend the constitution will get more vocal. “As in 2015, India, especially its bureaucracy, is likely to stand in favor of those demands, and for greater accom­modation of Madhesi forces within the constitutional framework,” he says. Similarly, there are concerns in New Delhi regarding Oli’s con­centration of political power, par­ticularly in matters of foreign and defense policies.

PM Oli will try his best to remain in power with Indian support, while his party’s co-chair Pushpa Kamal Dahal will also try to worm his way back into Singhadurbar with the support of the same southern neigh­bor. This became evident when the secret power-transfer agreement between Oli and Dahal was leaked to the press on the eve of PM Oli’s latest India visit, perhaps to give the message that Oli is only a caretaker prime minister.

The victory of the Hindu national­ist BJP in the recent Indian elections has also emboldened Hindu forces in Nepal. They know of how New Delhi had put the Nepali leadership under tremendous pressure not to incorporate secularism in the new Nepali charter. In their reckoning, neither the BJP’s nor Modi’s core Hindu agenda has changed.

“Modi cannot impose the Hin­du agenda on Nepal. Yet there are concerns among the BJP leader­ship about forced conversions in Nepal,” says a formally-New Delhi based Nepali diplomat requesting anonymity.

More than this, the health of Nepal-India relations will be deter­mined by India’s willingness (or lack thereof) to resolve old issues like high trade imbalance, inundation in border areas, additional air routes, and border demarcation disputes.

5 Nepal and BRI

APEX Series

EVOLVING NEPAL-CHINA RELATIONS

 1 Post-1950 turning points (April 5)

2 The 2016 transit and transport treaty (April 19)

3 China’s relations with political parties (May 3)

4 Defense ties (May 17)

5 Nepal and BRI (May 31)

  It has been six years since Chinese President Xi Jinping announced his signature foreign policy project, the Belt and Road Initiative (BRI). And although successive Nepali governments have committed to the BRI, Nepal is yet to select specific projects under it.

Three reasons

Observers and political leaders point out at least three reasons for the delay. First, there were frequent government changes from 2013 to 2018. There has been insufficient time for preparations and no particular government has dared to take the risk of selecting projects. A year after Xi Jinping announced the BRI in 2013, the Nepali Congress President Sushil Koirala-led government made a commitment to join it, but other than making promises, there was little progress, until 2017. Toward the end of the tenure of the erstwhile UPCN (Maoist) Chairman Pushpa Kamal Dahal-led government, and a few days before the first BRI conference in Beijing, Nepal and China signed a Memorandum of Understanding (MoU) on 12 May 2017 in Kathmandu. The MoU envisions mutually beneficial cooperation between Nepal and China on the economy, environment, technology, and culture. According to the MoU, major areas of cooperation are policy exchanges, financial integration as well as infrastructure, trade, and people-to-people connectivity.

But soon after the MOU was signed, a change in government in Nepal and its preoccupation with polls stalled progress in selecting BRI projects. Progress has been limited even after the formation last year of a stable government led by Nepal Communist Party Chairman KP Oli, who has blamed other parties for not implementing the deal with China.

Second, in the face of relentless pressure from India and western countries not to join the BRI, successive Nepali governments have found it hard to take firm decisions. In the initial years, India argued that as the China-Pakistan Economic Corridor (CPEC), a flagship BRI project, passes through a disputed territory, it would encroach on India’s sovereignty, to which Nepal should be sensitive.

The third reason is lack of homework on the funding modality and other bureaucratic issues.

Dominant debate

In Nepal, railway has dominated the discourse around the BRI. A high-level government official says instead of centering all efforts on railways, smaller and more feasible projects should have been prioritized. Reportedly, the Chinese side has also suggested that Nepal select viable projects and complete them on time rather than focus on large ones.

Of late, Nepal has tried hard to assure China that it is fully committed to implementing projects under the BRI. In April, President Bidya Devi Bhandari participated in the second Belt and Road summit in Beijing. A joint communique mentions the Nepal-China Trans-Himalayan Multi-dimensional Connectivity Network, including the Nepal-China cross-border railway.

That was the first time a specific Nepali project was mentioned in official BRI documents. But it is still not listed among the deliverables. Only a pre-feasibility study has been completed and the two countries are yet to agree on a feasibility study, which will pave the way for preparing a Detailed Project Report. The pre-feasibility study has identified some topographical difficulties. Amid heated debate in Nepal about the necessity and difficulties of the Keyrung-Kathmandu railway line, Chinese Ambassador to Nepal Hou Yanqi recently said that the construction of a cross-border railway line, though important, would take time. “This is not the kind of project that can be completed in a few years. Owing to the difficult geography, construction is not going to be an easy job,” she said.

Nepal has officially decided that it wants to focus on the connectivity and energy components of the BRI projects. It had earlier selected 36 projects under the BRI, which have now been trimmed down to nine. Almost all political parties agree that Nepal should derive maximum benefit from China’s economic development, mainly through the BRI framework. While Nepal is asking for grants, China says that projects under the BRI should be by and large loan-based.

Loan or grant

But there are fears that a poor country like Nepal may not be able to pay back those loans, which some scholars have described as ‘a debt trap’. There are reports of South Asian countries like Pakistan and Sri Lanka facing debt problems with China, even as there are divergent views within those countries about the issue. Many say the debts are a result of the countries’ internal problems, and not a trap deliberately set up by China.

China maintains that the debt trap narrative is pure propaganda. “There is no instance of a country falling into a debt trap for its participation in the BRI. Quite on the contrary, it is by participating in the BRI that many countries have escaped the trap of no development,” said Ambassador Hou Yanqi.

There also are concerns about transparency in projects under the BRI. Reports of rampant corruption and environmental degradation resulting from the construction of the BRI projects have emerged. China, however, has been vehemently countering such arguments, which was one of the main objectives of the second BRI summit.

“In pursuing Belt and Road cooperation, everything should be done in a transparent way, and we should have zero tolerance for corruption. The Beijing Initiative for Clean Silk Road has been launched, which represents our strong commitment to transparency and clean governance in pursuing Belt and Road cooperation,” Chinese President Xi Jinping said in his statement. Unlike in the past, he also countered arguments about environmental degradation.

“We need to pursue open, green and clean cooperation. The Belt and Road is not an exclusive club; it aims to promote green development. We may launch green infrastructure projects, make green investment and provide green financing to protect the Earth which we all call home,” he said.

Although Foreign Minister Pradip Gyawali has publicly said that negotiations are underway on the investment modality for the BRI projects, there has been minimal discussion on this issue. In fact, issues about funding modalities have been a major obstacle to signing specific projects. While Nepal prefers some grants, China would largely offer loans for BRI projects. Observers seem unsure about the difference between taking a loan from China and from, say, the Asian Development Bank or the World Bank. Experts are of the view that Nepal should conduct a thorough risk analysis before selecting projects under the BRI and accepting loans for them.