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The Commission for the Investigation of Abuse of Authority (CIAA) has filed a corruption case against former Prime Minister Madhav Kumar Nepal and 91 others in connection with the Patanjali land scandal. The move has ignited a debate over whether the CIAA has the constitutional authority to investigate cabinet decisions, with legal experts and political analysts sharply divided.

Nepal’s party, the CPN (Unified Socialist), along with several opposition groups, has denounced the case as politically motivated. Many suspect that Prime Minister KP Sharma Oli may have influenced CIAA Chief Prem Kumar Rai to target Nepal, one of Oli’s most vocal critics, under the pretense of a corruption probe. The rift between the two leaders has been widening since the party’s split in 2021

Public reaction has been swift and skeptical. From social media to teashop gossip, many see this as an attempt to weaken the Unified Socialist and lure away its lawmakers. If successful, such a maneuver could boost the CPN-UML’s numbers in the House of Representatives, potentially pushing the Nepali Congress into second place.

But the greater concern is the deepening erosion of public trust in state institutions.  This growing distrust poses a more serious threat to Nepal’s democratic order than the revival of monarchist sentiment.

Like many state institutions, the CIAA is losing legitimacy due to a flawed appointment process, selective investigations, and a deferential attitude toward the political elite—all of which compromise its constitutional autonomy. At the heart of the problem lies the method of appointing the CIAA’s leadership.

Chiefs and commissioners are often chosen based on political allegiance or their willingness to offer bribes for the position. Such practices fatally compromise the agency’s independence.

As a result, the CIAA is frequently accused of targeting “small fish” while ignoring large-scale corruption involving high-profile figures. Its track record in major cases is dismal, with many prosecutions falling apart due to poorly prepared charges at the Special Court.

Had the CIAA built a reputation for fair and rigorous investigations, the current case against Nepal might not have provoked such intense skepticism.

This isn’t just about one institution. Across the board, Nepal’s key democratic institutions are rapidly losing public confidence. The recent delay in appointing the Governor of Nepal Rastra Bank is a case in point, which was marked by indecision and political bargaining at the highest level.

Meanwhile, the judiciary’s credibility continues to decline. One controversial verdict after another has led many to question the impartiality of the courts. Just two weeks ago, the Janakpur high court acquitted former Nepali Congress lawmaker Mohammad Aftab Alam in connection with the 2008 Rautahat blast and subsequent killing of those injured. 

Despite strong testimony from legal experts, witnesses, and journalists implicating Alam, the court found him not guilty. Such rulings fuel public despair and reinforce the perception that justice in Nepal is hostage to politics and impunity. 

The executive branch fares no better. Public trust in the government is at an all-time low, driven by repeated accusations of corruption, opacity, and indifference to citizens’ concerns. One glaring example is the unwillingness of the Prime Minister and ministers to disclose their property details more than a year after the current NC–UML coalition took power.

If Nepal’s political parties are serious about defending the current system against royalist and other anti-democratic forces, they must begin by restoring faith in public institutions. That starts with overhauling the deeply flawed appointment process. Too often, constitutional bodies are staffed not by competent, independent professionals but by political loyalists and former bureaucrats with party affiliations.

These appointees remain beholden to the leaders who installed them, rendering institutions ineffective and subservient. Far from being autonomous, many constitutional bodies now operate as extensions of the executive. The judiciary is no exception.

Over the past two decades, political interference in the justice system has become so normalized that ordinary citizens can identify the political leanings of Supreme Court justices based on their past affiliations. This perceived bias has severely undermined the legitimacy of court rulings.

Both the judiciary and legislature operate in the shadow of partisan influence. Other institutions, including the Nepal Police, Nepal Army, and various regulatory agencies, are also viewed as corrupt and politicized

Because political parties remain at the center of power, the impetus for reform must come from them. Yet history shows a troubling pattern: when prominent political figures are implicated in corruption, their parties work to weaken or discredit oversight bodies. This has been the case since the early 1990s, when the CPN-UML resisted unfavorable court rulings, followed by the Nepali Congress in the 2000s.

After 2006, the Maoists and Madhes-based parties attacked the credibility of state institutions, and now, newer parties like the Rastriya Swatantra Party publicly challenge investigations and court decisions. This persistent trend has done lasting damage to the credibility of Nepal’s democratic institutions.

Political parties often proclaim their commitment to democracy, but that commitment must be judged by actions—not words. True dedication to democratic values requires strengthening institutional integrity, not undermining it for short-term political gain. On this front, Nepal’s political leadership has repeatedly failed.

Public faith in the current political class is near collapse. To address this deepening crisis, Nepal urgently needs principled, accountable leadership at all levels—federal, provincial, and local. These leaders must ensure that public institutions function independently, deliver on their mandates, and operate without political interference.

Today, state institutions are widely seen as corrupt, politicized, inefficient, and disconnected from the public. If political parties genuinely wish to safeguard the political system, they must embrace a long-term, systemic reform agenda rooted in the spirit of the 2015 Constitution.

Although the Constitution enshrines the separation of powers, genuine institutional reform has yet to follow. Nepal does not need a constitutional amendment, but it does need a comprehensive review aimed at strengthening the architecture of democracy. Only then can the country’s political system hope to survive and thrive.

With dwindling public support and growing divisions within the movement, the pro-monarchy protests appear to have weakened for now. On May 29, a royalist faction led by Panchayat-era veteran Navaraj Subedi announced an indefinite strike, but it failed to sustain even a week.

While the first day saw a sizable turnout, participation gradually declined, forcing the Subedi-led group to shift tactics—moving protests from Kathmandu to municipalities. From the outset, royalist forces projected unity, but internal rifts have now surfaced. Tensions escalated between the Rastriya Prajatantra Party (RPP), a key royalist faction with 14 parliamentary seats, and Subedi’s panel after the latter unilaterally called for a banda (nationwide strike) without consulting the RPP. The strike was later withdrawn, but the RPP faced criticism for resorting to a tactic most political parties have abandoned.

Since the movement began in March, many RPP leaders were displeased when former King Gyanendra Shah secretly formed the Subedi-led panel to push for his reinstatement. Initially, RPP Chairperson Rajendra Lingden and RPP-Nepal Chairperson Kamal Thapa refused to join, but after pressure from royalist factions, they reluctantly participated and even directed party cadres to support the protests. Many RPP leaders saw this as an attempt to undermine their party’s leadership, further deepening internal divisions.

The first major protest this year took place on March 28 in Kathmandu, preceded by a crowd of around 10,000 welcoming Gyanendra at the airport upon his return from Pokhara. The March 28 rally, led by controversial businessman Durga Prasai, exposed further cracks in the RPP. Senior leaders Rabindra Mishra and Dhawal Shumsher Rana defied the party’s official stance and joined the protest, and now they face legal cases for allegedly inciting violence.

Gyanendra later managed to bring Lingden, Thapa and 45 smaller Hindu nationalist groups under Subedi’s committee. Over the past months, he met numerous pro-monarchy figures to rally support but resisted building the movement under the RPP’s leadership—despite its parliamentary presence. On May 27, two days before the strike, Gyanendra hosted a meeting with RPP leaders, yet his approach reportedly alienated many. Sources say he dismissed the RPP’s influence, claiming people rallied for him, not the party. His unrealistic optimism about reclaiming the throne and his dismissive attitude toward political leaders further strained relations.

The ruling CPN-UML and Maoist Center have countered the royalist movement through rhetoric and occasional force, while the Nepali Congress (NC) initially dismissed it. However, NC President Sher Bahadur Deuba recently acknowledged the need to take the royalists seriously as they adopt a more systematic approach.

Meanwhile, unrelated protests erupted this week as transport syndicates struck against Gandaki Province’s proposed ride-sharing laws—a sign of the government’s inability to reform Nepal’s dysfunctional public transport sector, long plagued by political patronage.

Two dozen civil society organizations have warned that Nepal’s transitional justice process faces a legitimacy crisis due to inadequate consultations. Recent appointments to key commissions have drawn skepticism, with critics and the international community questioning their credibility.

Former President Bidya Devi Bhandari returned from a 10-day China visit, where she met senior Communist Party officials. Her trip followed increased political activity, including provincial tours and overt ambitions to lead the CPN-UML—ignoring criticism that ex-presidents should avoid partisan politics. Her delegation included UML figures distancing themselves from Prime Minister KP Oli, signaling internal rifts.

Opposition leader Pushpa Kamal Dahal, once vocal about toppling the government, has turned focus to party-building—though his aides still engage with NC leaders on potential government changes. Meanwhile, NC leaders Shekhar Koirala and Gagan Thapa, both vying for the party presidency, privately agree on preventing Deuba from returning as PM and holding timely conventions—yet lack the numbers to challenge him.

As monsoon arrives 10 days early, fears of floods and landslides loom. Last year’s poor disaster response eroded public trust, and with damaged highways still unrepaired, concerns persist. Home Minister Ramesh Lekhak claims preparedness, but given the state’s limited capacity, skepticism remains. Another weak response could further undermine government legitimacy.

Former President Bidya Devi Bhandari returned home on Monday after completing a 10-day China visit, during which she held talks with senior leaders of the Communist Party of China (CPC) and government officials.

Her visit came amid her recent, unannounced but increasingly active involvement in party politics, drawing significant attention from both political and strategic circles. In the weeks leading up to the trip, Bhandari toured various provinces, engaging with local leaders and cadres, and has become more vocal about her ambition to lead the CPN-UML. She has ignored public concerns that former heads of state should stay away from active politics to preserve the dignity of the presidency. Bhandari was accompanied by Raghubir Mahaseth, head of the UML’s international department, Minister Damodar Bhandari and other senior leaders, who have distanced themselves from Prime Minister and party chairperson KP Sharma Oli. In Beijing, she was accorded a moderate level of respect.

Although Chinese President Xi Jinping did not meet her, Bhandari held talks with Chinese Vice-President Ji Bingxuan and Liu Jianchao, Minister of the CPC’s International Department and a prominent Chinese leader known for his close engagement with Nepali political figures.

Bhandari’s main event in Beijing was her participation in a conference of political parties from China’s neighboring countries, themed “Building a Community with a Shared Future with Neighboring Countries: Political Parties in Action,” held on May 25–26.

The reception Bhandari received as a senior UML figure must be viewed in the light of her past role and potential political future. As President from 2015 to 2022, she played a crucial part in enhancing Nepal’s engagement with China. She frequently encouraged successive governments to advance the Belt and Road Initiative (BRI). During her tenure, she attended the second BRI summit in 2019 and helped finalize the protocol on the Transit and Transport Agreement signed in 2016.

In 2017, Bhandari launched Chinese President Xi Jinping’s book, “The Governance of China,” at a special ceremony held in Shital Niwas. She also endorsed China’s Global Security Initiative (GSI) by attending a high-level video conference, despite opposition from Nepal’s Ministry of Foreign Affairs. The year 2019 saw Xi’s historic visit to Nepal, during which several strategic agreements were signed, significantly deepening bilateral cooperation. These developments have shaped the Chinese perception of Bhandari as a dependable figure in Nepal's political landscape.

For Beijing, the return of a China-friendly leader like Bhandari to active politics could be welcome news. Members of her delegation have publicly claimed that China encouraged her to initiate efforts to unify Nepal’s communist parties—a long-held preference of the Chinese leadership. However, such claims should be taken with caution, as Chinese officials rarely make such direct statements.

Within the UML, some leaders believe that if Bhandari becomes party chair, the long-elusive unification with the CPN (Maoist Centre) could be revived—something hindered by personal rivalries between Oli and Maoist Chairman Pushpa Kamal Dahal. While Bhandari is certain to return to UML politics, it remains unclear whether she will take a confrontational path against Oli or whether Oli will voluntarily step aside. Oli has recently stated that his health permits him to remain politically active for the next 15–20 years, suggesting he is unlikely to support a unification narrative that credits Bhandari over himself.

Bhandari’s visit is unlikely to have any immediate or direct impact on UML’s internal dynamics, despite some sidelined party leaders hoping it will accelerate her rise to the helm. Her supporters are trying to portray the visit as an indication that China backs her leadership, suggesting she is capable of uniting Nepal’s fragmented communist forces. However, there are ample reasons to remain cautious. Open Chinese support for Bhandari could antagonize both Oli and the Nepali Congress (NC). A senior UML leader, speaking on condition of anonymity, noted that China prioritizes political stability in Nepal and may support left unity only if it contributes to that goal—but without backing one leader at the expense of alienating others.

Nevertheless, the perception of Bhandari’s close ties with Beijing may cause ripples within the UML. Ironically, this perception could even bring Oli and New Delhi closer. China, meanwhile, appears to have realized that its earlier emphasis on communist unification risked alienating other key actors in Nepal, including the NC. Given the current state of relations, observers say China is unlikely to openly push for left unity at the cost of broader political balance.

In Beijing, Liu Jianchao met Bhandari and, according to the Chinese readout, acknowledged her longstanding contributions to China-Nepal relations. “Inter-party exchanges play an important role in China–Nepal relations,” the readout stated. The CPC expressed its willingness to strengthen engagement with all Nepali political parties and deepen exchanges in governance and administration through the “political party +” channel. Bhandari, for her part, emphasized Nepal’s commitment to finding a development path suited to its own conditions and expressed interest in learning from China’s experience in party-building and governance. 

During her address at the CPC dialogue, Bhandari praised the CPC’s governance model, stating: “The historical experience and contemporary practice of the CPC are of great reference to Nepal’s economic and social transformation and also provide important reference for developing countries around the world to explore the path of modernization.” She further stated that China’s vision of building a “community with a shared future” offers a powerful example for regional cooperation and solidarity. By amplifying China’s development model in her speeches, Bhandari is aligning herself closely with Beijing’s strategic messaging.

The US, under the Donald Trump administration, is steadily adopting a more aggressive stance toward China—an approach that is likely to reshape the foreign policy landscape for small South Asian countries like Nepal. Washington’s hardening posture is evident across multiple fronts: trade, technology, education and military strategy in the Indo-Pacific.

A major flashpoint has been trade. The Trump administration imposed a steep 145 percent tariff on Chinese goods—though currently paused—with expectations that the tariff war will escalate further. Simultaneously, the US State Department announced plans to revoke visas for Chinese students, especially those linked to the Chinese Communist Party or studying sensitive technologies, drawing sharp condemnation from Beijing.

The technological rivalry is already underway, but the conflict appears to be broadening. In a striking statement this week at the Shangri-La Dialogue in Singapore, US Defense Secretary Pete Hegseth declared that the United States is prepared to take a confrontational approach toward Beijing, a move that has unsettled many Asian capitals.

“As our allies share the burden, we can increase our focus on the Indo-Pacific: our priority theater,” Hegseth said. Emphasizing that the futures of the US and its Indo-Pacific allies are “bound together,” he noted that America's own security and prosperity are linked to those of its allies. “We share your vision of peace and stability, of prosperity and security, and we are here to stay,” he added.

Hegseth outlined a vision for the Indo-Pacific based on mutual interests, sovereignty and commerce—not conflict. “On this sure foundation of mutual interests and common sense, we will build and strengthen our defense partnerships to preserve peace and increase prosperity,” he stated.

Yet, he made it clear that the US will resist any attempt by China to assert dominance. “We do not seek conflict with Communist China, but we will not be pushed out of this critical region, and we will not let our allies and partners be subordinated or intimidated.” These remarks come at a time when US allies in South Asia are already facing economic strain due to the US-led trade war. The pressure is particularly acute for countries like Nepal, which have a limited maneuvering room in great-power rivalries.

Hegseth also raised alarm over China’s preparations to use force for the “unification” of Taiwan—a move he warned could trigger a global crisis. “There’s no reason to sugarcoat it: the threat China poses is real, and it could be imminent,” he said, stressing that while China’s exact intentions remain uncertain, the US and its allies must prepare with “urgency and vigilance.”

The Chinese Foreign Ministry (FM) stated on Sunday that Hegseth ignored the calls of regional countries for peace and development, promoted a Cold War mentality of bloc confrontation, smeared and attacked China, and exaggerated the "China threat theory"—remarks that were full of provocation. In fact, the US is the world's true hegemonic power and the biggest factor undermining peace and stability in the Asia-Pacific region, China said.  In order to maintain its hegemony and advance the so-called "Indo-Pacific Strategy," the US has deployed offensive weapons in the South China Sea, stoked tensions, and created instability—turning the region into a "powder keg" and arousing deep concern among regional countries, said China’s FM. 

A military conflict over Taiwan would place enormous pressure on countries like Nepal to take sides—much like the diplomatic tightrope it walked during the Russia-Ukraine war. While Nepal officially supports the one-China policy, joint statements in recent years have gone further, explicitly stating that “Nepal opposes Taiwan independence.”

Foreign policy experts warn that such language could box Nepal into supporting a future Chinese military action, compromising its neutrality. Further reinforcing this strategic posture, US Air Force Secretary Troy Meink told graduating cadets this week that the Indo-Pacific will define the military challenges of their generation. “The Indo-Pacific will be your generation’s fight, and you will deliver the most lethal force this nation has ever seen—or we will not succeed,” Meink said. He warned that the strategic competition with China is wide-ranging and unpredictable, adding, “There will be no sanctuaries.”

While the Trump administration has significantly cut development aid to countries like Nepal, it has signaled an intention to deepen defense cooperation in the region. Given Nepal’s strategic location between China and India, observers believe the US is likely to step up military engagement with Kathmandu in the coming years, further complicating Nepal’s delicate geopolitical balancing act.

There is a glimmer of hope that the long-pending transitional justice process in Nepal might finally be moving forward. The government has recently appointed heads and members to both the Truth and Reconciliation Commission and the Commission of Investigation of Enforced Disappeared Persons. However, skepticism remains widespread regarding whether the new leadership will truly be able to navigate and resolve the deeply complex and often contentious issues inherent in this process. Concerns have been raised about the potential inexperience of some nominees, the possibility of undue political influence and the absolute necessity of providing these commissions with adequate resources to carry out their critical work effectively. It’s important to remember that over 60,000 complaints are currently awaiting thorough investigation, which underscores the magnitude of the task ahead.

In an effort to highlight the urgent issue of climate change and its impacts on the fragile Himalayan region, the government is preparing to host the Sagarmatha Sambaad from May 16 to 18 in Kathmandu. This event aims to draw global attention to the specific vulnerabilities of mountain ecosystems. The government has extended invitations to 175 foreign representatives, including environment ministers from various countries. The presence of these international figures is intended to foster dialogue and collaboration on addressing climate challenges. However, the government has failed to ensure participation of heads of government and state, which could impact the summit’s overall influence.

The government’s continuing delay in appointing a new governor for the Nepal Rastra Bank is drawing increased criticism from various sectors of society. While both the ruling Nepali Congress and the CPN-UML assert that there are no political disputes hampering the process, the appointment remains stalled. This delay has rendered the government-formed recommendation committee effectively obsolete. In a further development, one of its members, Biso Poudel, has recently resigned from the committee, amidst speculation that he himself hopes to be appointed as the governor. Speaking at a public event on May 15, Prime Minister Oli said that he does not have a preferred candidate in mind, but emphasized his desire to see a highly capable individual take on the crucial leadership role.

On the political front, royalist forces have announced their intention to launch street protests beginning May 29. Their aim is to pressure the mainstream political parties into considering the restoration of the monarchy and the reinstatement of a Hindu state. Last week, former King Gyanendra Shah met with a number of pro-monarchy leaders, reportedly to encourage them to mobilize an impactful movement. It is worth noting that while royalist forces have historically been divided, there have been recent attempts to project a unified front. In response to these preparations, major political parties, particularly the UML and CPN (Maoist Center), have issued strong warnings against any attempts to bring back the monarchy. These parties have also directed their respective youth organizations to actively counter the planned protests by the royalist factions.

In parliamentary affairs, discussions are currently underway in the lead-up to the annual budget. Lawmakers from across the political spectrum are using this opportunity to voice their views and priorities regarding the upcoming budget. The government’s policy and program have already been endorsed by the Parliament, setting the broad parameters for the fiscal year ahead. Finance Minister Bishnu Poudel is now focusing on securing support from not only the ruling parties but also the opposition to finalize the budget.
As Nepal anticipates the arrival of the monsoon season in the coming months, predictions indicate that the country is likely to receive higher than average rainfall this year. A recent incident in Kavre district is a stark reminder of the potential dangers. A heavy rain event caused temporary blockage of the BP Highway and resulted in damages in the Panauti area of Kavre. This incident should serve as a wake-up call for government agencies, highlighting the urgent need for thorough preparations to cope with possible monsoon-induced disasters. Authorities are urged to prioritize critical infrastructure, particularly the main highways, in their mitigation efforts.

On a more positive note, the banking sector in Nepal is currently experiencing a steady rebound in credit growth. This positive trend is largely attributed to the rise in foreign trade and the increased demand for loans across key sectors of the economy. A recent report from the Nepal Rastra Bank indicates that private sector credit from banks and financial institutions grew by seven percent, reaching Rs 5,534.77bn, during the first nine months of the current fiscal year 2024-25. This growth reflects a credit disbursement of Rs 361.3bn between mid-July 2024 and mid-April 2025. To put this in perspective, credit growth was 5.1 percent during the same period of the previous fiscal year, with a total credit portfolio of Rs 5,167.17bn in mid-April of last year. On a year-on-year basis, credit disbursement grew by 8.3 percent in mid-April.

Lastly, China’s Deputy Speaker and Vice Chairman of the Standing Committee of the National People’s Congress, Ziao Jie, who arrived in Nepal on May 14 to participate in the Sagarmatha Sambaad, is taking the opportunity to engage with Nepali leaders and Parliament. He has already met with Prime Minister Oli and is scheduled to meet with Speaker Dev Raj Ghimire, National Assembly Chairman Narayan Dahal, and various cross-party leaders. 

Parliamentary cooperation between Nepal and China formally began in 2022.

Royalist parties such as the Rastriya Prajatantra Party (RPP) currently believe that restoring the monarchy through street protests is unlikely—at least for now. They are of the view that instead of taking to the streets, their focus should be on strengthening their position in Parliament and through elections.

Since 2008, the RPP has consistently advocated for the restoration of the monarchy and a Hindu state. But the current situation marks a notable departure from the past, primarily due to former King Gyanendra Shah’s apparent decision to take a more active role in the movement. Shah reportedly believes a united royalist street campaign could pave the way for his return as monarch.

Recently, the former king met dozens of supporters, including senior and youth leaders of various royalist parties, at a hotel in Nagarkot. At least two leaders present at the meeting told ApEx that Shah appeared more outspoken and optimistic than ever about reviving the monarchy.

According to leaders, Shah believes that the crowd that welcomed him at Tribhuvan International Airport on March 9 is a ‘public endorsement’ for his return to power. He has urged his supporters to mobilize even larger gatherings in the streets. 

While the former monarch believes that political parties should spearhead the movement, he is reportedly skeptical of current RPP Chairman Rajendra Lingden’s leadership. Multiple sources say Shah has expressed dissatisfaction with Lingden’s performance and certain RPP agendas. The former king believes a more charismatic leader is needed to lead the movement, said one leader on condition of anonymity.

After considerable behind-the-scenes effort, Shah has succeeded in uniting royalist forces under the leadership of Navaraj Subedi. Prominent figures such as Lingden, Kamal Thapa and other veteran RPP leaders have now agreed to join a united campaign set to begin after May 29. To make the movement effective, Shah has shared a set of strategic suggestions. The protests should be continuous rather than one-off events, should draw participants from outside the Kathmandu Valley, and should be supported by a broader awareness campaign around the royalist agenda.

However, some within RPP argue that by sidelining Lingden and promoting Subedi, Shah is alienating the very party that has long championed the royalist cause. This means RPP will support the movement, but it may not participate actively, said one party leader.

Following an extended conversation with the former king, some supporters have concluded that there is a growing disconnect between their vision of a ceremonial monarchy and what Shah seems to envision. Several leaders now suspect that Shah may not be willing to remain a symbolic figurehead if the monarchy is revived.

Shah has also acknowledged missteps, notably the controversial appointment of Durga Prasai to lead the March 28 protest, which turned violent. He believes that political figures—not non-political activists—should be at the forefront, though he has yet to name a clear preference beyond backing Subedi for the time being. Shah has also urged his supporters to resolve internal divisions within the royalist camp.

Some RPP leaders remain frustrated with Shah’s stance. They feel he has been reluctant to credit RPP for sustaining the pro-monarchy agenda over the years. During the last RPP convention, former RPP Chairman Thapa publicly accused Shah of interfering in party politics by backing Lingden for party leadership. After losing to Lingden, Thapa left the party, openly blaming Shah for meddling. Now, three years later, Shah appears equally disappointed with Lingden’s leadership.

The former king has told his supporters to advance his vision of the Prithvi Path—a roadmap for nation-building based on the Dibya Upadesh (Divine Counsel) of King Prithvi Narayan Shah. In a video message released on the eve of Nepali New Year 2082, Shah reiterated that the Dibya Upadesh remains highly relevant even today.

Since March 9, Shah has grown more vocal in expressing his desire to return to the throne. He has framed the recent royalist protests as a sign of the people’s awakening. Yet many who have met and spoken with him remain puzzled by his confidence.

As the May 29 protests approach, their direction and impact remain uncertain. The government has already signaled it will crack down on the movement. Senior leaders of major political parties have issued warnings against organizing such protests. Over 100 people, including Rabindra Mishra, Dhawal Shumsher Rana, and Durga Prasai, were arrested in connection with the March 28 violence.

The coalition government of the Nepali Congress (NC) and CPN-UML has unveiled its annual policies and programs without any major disagreements between the two parties. Parliamentarians are currently deliberating on the policy document, with some NC leaders expressing reservations, noting that certain core agendas of the UML appear to have been prioritized. Historically, the annual program and budget have often sown discord among coalition partners. Lawmakers are now offering their suggestions on the policy document. Meanwhile, the main opposition, CPN (Maoist Center), has expressed dissatisfaction, particularly over the omission of several projects previously announced by Pushpa Kamal Dahal.To preempt potential tensions over the budget, Finance Minister Bishnu Paudel has begun consultations with NC leaders, while also continuing dialogue with the Maoist Center.

A recent friendly exchange between Prime Minister KP Sharma Oli and Maoist Chair Dahal has sparked speculation, with some political analysts predicting a possible collaboration between the two communist parties. However, the UML leadership has concluded that recent efforts to destabilize the government have lost momentum. Some believe that while the NC is negotiating with the government over key positions, Oli is attempting to increase his leverage by adopting a conciliatory approach toward Dahal.

Meanwhile, Dahal’s repeated overtures to the NC have failed to yield meaningful results. NC President Sher Bahadur Deuba reiterated this week that there are no significant problems within the coalition. On the delay in appointing the Governor of Nepal Rastra Bank, Deuba attributed it to internal issues within the NRB, denying any inter-party disagreement. His remarks come amid reports suggesting that disputes over the appointment could strain the coalition—an argument supported by past experiences where minor issues, rather than ideological differences, led to the collapse of alliances.

The ongoing pro-monarchy protests have weakened significantly, though royalist parties and allied groups continue to mobilize. Buoyed by an increase in supporters, former King Gyanendra Shah has been meeting royalist forces to encourage continued protests. Learning from the violent March 28 protest in Tinkune, the former king now appears to be backing political outfits such as the Rastriya Prajatantra Party (RPP). The pro-monarchy movement under Navaraj Subedi has announced an indefinite protest beginning May 29. Subedi has managed to bring RPP Chairman Rajendra Lingden, RPP-Nepal Chairman Kamal Thapa and Keshar Bahadur Bista into his fold—an unexpected development, given Lingden’s earlier reluctance to accept Subedi's leadership. This comes against the backdrop of a meeting between Shah and RPP leaders.

Relations between the NC and China, strained since 2015, are slowly improving. After a prolonged hiatus, senior NC leaders are visiting China at the invitation of the Communist Party of China (CPC), which appears to be stepping up its outreach. This week, NC President Deuba, senior leaders Shekhar Koirala, Shashank Koirala and others attended a photo exhibition on Nepal-China ties. At the event, Deuba reaffirmed NC’s commitment to the one-China policy and pledged that Nepali soil would not be used for anti-China activities—messages well received by the Chinese side.

Prime Minister Oli has also continued efforts to make appointments to transitional justice bodies. This week, he met with Dahal to discuss the matter, but no significant progress was made. Sources close to the discussions admit that the appointments are complex, with divisions not only among political parties but also among conflict victims and various domestic and international stakeholders. Home Minister Ramesh Lekhak has said the government is committed to addressing victims’ concerns. However, Nepal’s human rights community—seen as having a significant stake in the process—is often accused of obstructing progress due to personal or institutional interests.

Nepal has stepped up security across border areas, airports and other sensitive zones in response to escalating tensions between India and Pakistan. The situation intensified after India launched “Operation Sindoor,” conducting airstrikes on nine terrorist sites in Pakistan and Pakistan-administered Kashmir following the April 22 terrorist attack in Pahalgam, which killed 26 people, including one Nepali citizen.

In other developments, the United States has announced an 85 percent cut in USAID programs, citing a shift to align foreign aid with American strategic interests. The US has started transferring the remaining programs that match its revised priorities. In Nepal, the future of the Millennium Challenge Corporation (MCC) remains uncertain, and the US has not clarified the status of remaining USAID-funded projects.

Since the 1950s, America’s development assistance to Nepal has steadily increased. However, after Donald Trump was re-inaugurated as the 47th President of the United States, this assistance was significantly cut, straining small countries’ health, education, and humanitarian sectors.

Small nations are increasingly viewing superpowers as unreliable partners, as assistance and projects have often been canceled midway. Experts say at the very least small countries should have been given time to find alternative sources of funding before support in critical sectors like health and education was withdrawn.

While the exact figures remain unclear, dozens of non-governmental organizations (NGOs) have canceled projects previously supported by USAID. Referring to America’s Millennium Challenge Corporation (MCC) during an internal party meeting, Prime Minister KP Sharma Oli noted that agreements signed after years of deliberations were abruptly terminated.

With media reports suggesting that the Trump administration might shut down the MCC, there is growing concern in Nepal that two major projects—a cross-border transmission line and a road upgrade—could be affected. Prime Minister Oli says that Nepal should not overly rely on foreign aid. In a direct reference to the MCC, he noted that even though the parliaments of both countries had ratified the compact, the US unilaterally decided to terminate it.

Foreign policy experts say the new US administration’s policies pose both challenges and opportunities for countries like Nepal, which have relied heavily on foreign aid for decades, even in critical sectors like health. In the short term, countries will struggle to secure funds, impacting infrastructure development. But in the long run, experts say it presents an opportunity to reduce dependency on foreign assistance.

Nilanthi Samaranayake, an independent analyst based in Washington, DC, says that smaller countries are clearly affected by the shift in US international engagement policy and that they should reassess their economic and security dependencies on the US.

Nepal, she suggests, should seek a broader range of international partners beyond just the US, India, and China. While Washington’s policy changes bring challenges, she is of the view that they also offer Nepal an opportunity to enhance its diplomatic outreach and diversify its economic and security partnerships.

Development cooperation between Nepal and the US dates back to 1951, when the two countries signed their first bilateral aid agreement under the US’s Point Four Program. Early US assistance prioritized building roads, establishing telephone exchanges, eliminating malaria from the Tarai region and promoting agricultural development. By 1959, the US had helped Kathmandu install its first automatic telephone exchange, providing 1,000 lines, and supported the construction of the 87-kilometer Bharatpur-Hetauda road under the Rapti Development Program. Work also began on the Hetauda-Kathmandu ropeway the same year.

In the 1960s, during King Mahendra’s consolidation of the Panchayat system, US aid surged dramatically. President Dwight Eisenhower’s unexpected $15m pledge to King Mahendra in April 1960 marked a turning point in US involvement in Nepal’s development. USAID expanded its programs in agriculture, health, education and industrial development. After King Mahendra dissolved parliament and banned political parties in 1960, US aid was redirected to support the Panchayat system. The US supported construction of administrative structures across Nepal, viewing the Panchayat system as a potential vehicle for mobilizing human resources and fostering economic, social and democratic political development.

Chandra Dev Bhatta, a Kathmandu-based geopolitical expert, says that as traditional Western donors reassess their commitments, the impact on countries like Nepal’s development and service delivery mechanisms could be significant.

“With the withdrawal of USAID and now the MCC, some of Nepal’s vital infrastructure projects may face serious challenges, if not come to a complete standstill,” Bhatta says. “International aid architecture is not only evolving but has also become increasingly politicized. While reduced aid and grants are a concern, Nepal must press forward with infrastructure development and keep the service delivery systems intact.”

In the short term, Bhatta suggests that Nepal should urge donor countries to honor their previous commitments despite new geopolitical realities. In the long term, he says, the importance of recognizing that aid is often driven by the donor’s own interests. “This is the stark reality of international cooperation,” he says. “Global political and economic dynamics demand us to have self-reliant models of economic development, and Nepali certainly will have to work in that direction.”

It is now almost certain that US assistance to Nepal will continue to decline. Support is likely to persist only in areas aligned with the Republican Party’s priorities. So far, there have been no concrete discussions between the two countries regarding this new reality.

Satoru Nagao, a Non-Resident Fellow at the Hudson Institute, says that under the current rules of global free trade, China has been catching up with the US. And for small countries, he adds global trade brings both opportunities and challenges. “While factories may relocate elsewhere, small countries can still attract investment if they maintain competitive production costs.”

Nagao points out that if tariffs dominate the new global trade rules, small countries will need to adapt. Although this shift may allow local industries to survive, there will likely be fewer opportunities for foreign investment. He says since the primary target of current US policy is China, countries that depend heavily on China could suffer under these shifts. He warns that if Nepal increasingly relies on China, it risks becoming “a passenger on a sinking ship.”