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Jan 30, Bhaktapur

It is 7:30 in the morning. The sky is partly cloudy, but Kathmandu’s temperature is gradually rising as January nears its end. A man sits in the teashop, reading the Gorkhapatra national daily. He is eager to share a piece of news about a startup conference organized by the Nepali Congress at its headquarters in Sanepa. He sees it as a positive initiative by Nepal’s largest political party but criticizes the government’s failure to create a favorable environment for startups to flourish. While some startups are thriving, he says, others have stagnated due to a lack of market access and skilled workforce. The man, who does not identify himself, appears well-informed about the challenges startups face, including legal hurdles. However, the other patrons in the teashop show little interest in discussing the topic.

Soon, another man enters and abruptly shifts the conversation to politics. He brings up news that former President Bidya Devi Bhandari is preparing to re-enter active politics. A politically conscious man in the teashop immediately responds, mentioning that Prime Minister KP Sharma Oli has sent a clear message discouraging her return. This remark sparks interest among the tea drinkers. One of them asks, “How do you know Oli sent her a message?” The man cites a recent statement by CPN-UML General Secretary Pradeep Kumar Gyawali, who publicly remarked that it would be inappropriate for Bhandari to rejoin active politics. He speculates that Oli may have instructed Gyawali to make the statement. Of the seven people in the teashop, five agree that former presidents and vice presidents should not re-enter politics.

Another person adds that former Vice-president Nanda Kishor Pun is also preparing to return and has attended party meetings, but Maoist Center Chair Pushpa Kamal Dahal is hesitant to offer him a position. The discussion then shifts to the internal dynamics of the UML. One man claims that there is dissatisfaction within the party but that no one dares to speak up, leading some to push for Bhandari’s return. He notes that Gokul Banskota was the first UML leader to invite Bhandari to a party program in Kavre last year, but a rift has since developed between him and Oli. Others in the teashop mention Bhandari’s recent visits to Biratnagar and Pokhara, where she engaged extensively with party leaders and cadres.

The conversation naturally drifts toward international affairs, particularly American politics. Some express strong opinions about former US President Donald Trump’s decision to pause US aid through USAID. One person argues that halting aid is beneficial, as it will reduce Nepal’s dependency and force the government to take more responsibility. He adds that those employed in USAID projects may be unsettled by the decision. Another person interjects, criticizing the misuse of USAID funds, pointing to extravagant expenditures on five-star hotels and other unnecessary areas. The discussion then becomes disorganized, with various people sharing their views on illegal immigration. Someone remarks, “People have spent over Rs 10m to get to the US through traffickers. If they are deported, it will be a devastating blow to their families.” Another voice chimes in, stating, “Countries will never prosper through foreign grants.” Notably, there is little discussion about Rastriya Swatantra Party (RSP) Chairman Rabi Lamichhane—a stark contrast to the frequent debates about him in past weeks.

As the morning progresses, the teashop empties. I wait, hoping for new perspectives. Eventually, a man in his sixties enters, orders milk tea, and begins discussing the durability of the current government. He recalls predictions that the Oli government wouldn’t last long but points out the cordial relationship between Oli and Nepali Congress President Sher Bahadur Deuba. He claims that the two leaders recently met and agreed to keep the coalition intact. “I think Prachanda’s efforts to topple this government will fail,” he states confidently. I ask, “So you believe this coalition will last?” He responds, “Khai, malai chai testai lagcha” (“Well, that’s what I think”). He then speculates that efforts are underway to unite all communist forces under Bhandari’s leadership and suggests that even Maoist Chairman Dahal has agreed to the plan. However, he suddenly grows uneasy, shifts the topic, and confesses, “Forget politics—I am suffering from multiple health issues. Who cares about us? I have a lot of money, but I’m not happy. Both my sons are abroad. They want me to join them in Australia, but I don’t want to leave. Who will take care of us here?”

Then, unexpectedly, he asks about my profession. This is the first time someone has questioned me directly since I started my teashop column. I answer honestly: “I am a journalist.” This marks the beginning of my uneasy moment. He launches into a tirade about journalism, accusing reporters of being irresponsible and spreading misinformation. “Tell me, why are all journalists against Rabi Lamichhane?” he demands. I try to explain the difference between journalistic and non-journalistic content, cautioning against misinformation and disinformation, but he remains unconvinced. Seeing that my argument is going nowhere, I steer the conversation toward Trump. This successfully diverts his focus, and he asserts, “Nepali people should understand that every politician prioritizes their own country’s interests, and that’s exactly what Trump is doing.”

He offers me a cup of tea, but I decline, having already had two. When I ask about his profession, he reveals that he once worked for a private company and now owns two houses—one in Kathmandu and another in Bhaktapur. Before I leave, he circles back to his criticism of the media, making unverified accusations against certain outlets. I choose to remain silent.

As I left the teashop, a question lingered in my mind: Why do people distrust mainstream media, yet readily consume unverified content elsewhere? Is it a lack of awareness, or are there genuine flaws in journalism today? I had no ready answer. 

This week was eventful for Nepal’s domestic and external affairs. As the winter session of Parliament begins on Jan 31, both ruling and opposition parties are busy strategizing. The ruling parties, primarily Nepali Congress and CPN-UML, have attempted to bridge their differences.

Some leaders of NC openly criticized the government's move to introduce ordinances, while ruling parties have been defending them. Although UML leaders strongly support the ordinances, some populist NC leaders object. NC President Sher Bahadur Deuba has instructed party lawmakers not to oppose the ordinances in Parliament, but some may defy him. The winter session is likely to witness heated exchanges between ruling and opposition parties, potentially affecting the lawmaking process.

Former President Bidya Devi Bhandari remains a topic of public discourse. She spent a week in Biratnagar seeking input from local UML leaders and cadres regarding her potential leadership of the party after KP Sharma Oli. Earlier, she had visited Pokhara, and upon her return, Oli held a lengthy meeting with her.

Interestingly, UML General Secretary Pradeep Kumar Gyawali stated that it would be inappropriate for Bhandari to rejoin active party politics. Speaking to reporters in Rupandehi on Wednesday, he emphasized that Bhandari should stay out of party affairs, adding that UML has not internally discussed her return. This highlights a potential conflict between Oli and Bhandari. Social media is abuzz with criticism of Bhandari’s political ambitions, with many arguing it would be inappropriate for her to return. UML leaders claim her residence in Chapali Height is gradually becoming a power center, as UML cadres frequently visit her. Meanwhile, Bhandari has been increasingly vocal about her political ambitions. Oli, displeased with her moves, has publicly stated that he will not tolerate factionalism within the party.

The government has introduced Nepal’s first Social Media Regulation Bill, drawing criticism from the media fraternity. The bill is expected to undergo significant public and parliamentary scrutiny. Senior NC leaders, including General Secretary Gagan Kumar Thapa and Bishwa Prakash Sharma, have voiced concerns, while the Federation of Nepalese Journalists has flagged certain provisions. Parliament is unlikely to pass the bill hastily and may refer it for further review. While social media regulation is necessary, balancing it with freedom of speech and expression remains a challenge. Governments worldwide are grappling with similar issues, but Nepal continues to make the mistake of drafting such bills without consulting stakeholders. Although Parliament has the power to amend or reject the bill, a more consultative approach would have improved its chances of passage.

In another development, Madhes-based parties are working towards forming a coalition to push their regional agenda. This week, eight Madhes-based parties established a task force to draft a concept note for their alliance, holding multiple meetings. Since 2008, these parties have suffered multiple splits, weakening their national political influence. Now, with local and national elections approaching, they seem to recognize the need for unity. While immediate unification is unlikely, their efforts may lead to a loose coalition. Some Madhesi leaders suggest India may have encouraged them to form a united front.

Like last week, speculation continues about the longevity of the current coalition. CPN (Maoist Center) Chairman Pushpa Kamal Dahal’s recent public remarks on the government's stability have annoyed Prime Minister Oli, as they create uncertainty. This week, Oli stated he has full support from NC and will reciprocate the favor by handing over power to Deuba after 17-18 months. Oli has been engaging more with Deuba, who faces pressure to reconsider his alliance with UML but appears inclined to maintain the coalition. NC General Secretary Thapa, often seen as an opposition figure within his party, is now working to keep the coalition intact, offering some relief to Deuba.

In another story that should worry us and policy makers, Nepal faces the risk of being greylisted by the Financial Action Task Force (FATF) due to deficiencies in combating money laundering and terrorist financing. The FATF Working Group Meetings, scheduled for Feb 17-21 in Paris, will assess Nepal’s progress. Nepal Rastra Bank Governor Maha Prasad Adhikari acknowledged the risk, stating that Nepal is in the listing phase after its mutual evaluation. This situation is a direct consequence of government negligence and failure to take necessary action against money laundering.

Finally, there has been significant concern over former US President Donald Trump’s decision to halt foreign assistance. Following an executive order, USAID in Nepal has informed the government and local implementing partners to temporarily suspend all projects for at least 90 days. However, the US Secretary of State has approved a waiver for life-saving humanitarian assistance during this review period. A statement from the US. The State Department clarifies that while humanitarian programs may continue, no new contracts shall be signed during this temporary pause.

Both the ruling and opposition parties are actively preparing their strategies for the upcoming winter session of Parliament, set to commence on Jan 31. Traditionally, the winter session is regarded as a ‘bills session’, but as usual, it is likely to be overshadowed by political disputes between the ruling coalition and the opposition.

The ruling parties, led by Prime Minister KP Sharma Oli, are working to present a united front on key issues, particularly the government’s decision to introduce five ordinances just before the session. Prime Minister Oli has emphasized the need for all ruling parties and their leaders to defend the government’s decisions and policies. However, his concerns are growing as some senior leaders of the ruling Nepali Congress (NC) have openly criticized the government’s performance and its move to issue ordinances. NC President Sher Bahadur Deuba has urged his lawmakers to refrain from publicly criticizing the ordinances, while the party has invited experts to brief lawmakers on the benefits of these ordinances.

Despite these efforts, dissatisfaction persists within the NC. During the party’s Parliamentary Party meeting, lawmakers expressed concerns over the government’s poor performance. While Prime Minister Oli has publicly thanked the NC for its support, senior NC leaders, including Shekhar Koirala, continue to criticize the ordinances and other government actions. NC Vice-president Purna Bahadur Khadka has stressed the need for ruling parties to present a unified stance, avoiding conflicting opinions. Echoing this sentiment, UML Chief Whip Mahesh Bartaula has called on ruling parties to highlight the advantages of the ordinances to justify the government’s decisions.

Meanwhile, opposition parties are gearing up to take a more aggressive stance in Parliament. They plan to strongly criticize the government’s decision to issue ordinances and raise other contentious issues, such as proposed changes to electoral laws aimed at introducing a threshold to prevent the emergence of new political parties. Additionally, the opposition will focus on the case of Rastriya Swatantra Party Chairperson Rabi Lamichhane, who is under investigation for alleged involvement in the misappropriation of cooperative funds. Opposition parties view this as political revenge and a targeted move against Lamichhane.

The opposition also intends to highlight the lack of progress on the constitution amendment process, which was agreed upon by the NC and UML. The Parliament Secretariat has prepared a two-week calendar for the session, with top leaders from all parties set to address the House on the first day. The ordinances introduced by the government will also be presented on the same day.

The government aims to enact over a dozen laws during this session, but the political environment remains highly polarized, with sharp divisions between the ruling and opposition parties. Despite the opposition’s protests, the NC and UML, with their strong numerical strength, are well-positioned to pass legislation. Currently, 12 bills are pending in the House of Representatives, and six are in the National Assembly. To expedite the law-making process, the NC and UML have established a two-party mechanism, with UML leader Yogesh Bhattarai and NC leader Jiwan Pariyar leading the effort.

Now, there is no ambiguity and speculation, the United States of America has officially said that all foreign assistances funded by or through the State Department and US Agency for International Development (USAID) have been paused for the review. Tammy Bruce, Department Spokesperson, said that Secretary of State Marco Rubio is initiating a review of all foreign assistance programs to ensure they are efficient and consistent with US foreign policy under the America First agenda. 

Consistent with President Trump’s Executive Order on Reevaluating and Realigning United States Foreign Aid, Secretary Rubio has paused all US foreign assistance funded by or through the State Department and US Agency for International Development (USAID) for review, the Spokesperson said.  President Trump stated clearly that the United States is no longer going to blindly dole out money with no return for the American people, the Spokesperson says, reviewing and realigning foreign assistance on behalf of hardworking taxpayers is not just the right thing to do, and it is a moral imperative. The Secretary is proud to protect America’s investment with a deliberate and judicious review of how we spend foreign assistance dollars overseas, according to the Spokesperson. 

The mandate from the American people was clear – we must refocus on American national interests. The Department and USAID take their role as stewards of taxpayer dollars very seriously, the Spokesperson further added.  The implementation of this Executive Order and the Secretary’s direction furthers that mission. As Secretary of State Marco Rubio has said, “Every dollar we spend, every program we fund, and every policy we pursue must be justified with the answer to three simple questions: Does it make America safer? Does it make America stronger? Does it make America more prosperous?” Following the decision, all activities funded by the State Department and USAID have been suspended in Nepal. The Donald Trump Administration has said that it could take 3 months to review all the assistances. 

This week, opposition parties have become increasingly united against the KP Sharma Oli-led government. In response to mounting pressure, the government has called for the winter session of Parliament to begin on Jan 31. A key issue remains the government’s controversial decision to introduce nearly half a dozen ordinances, which has sparked national debate. Criticism has come not only from opposition parties but also from within the ruling coalition, with senior Nepali Congress (NC) leader Shekhar Koirala openly expressing his displeasure.

Dissent within the NC is growing more pronounced. While some leaders, like Koirala, are covertly working to alter the coalition dynamics, others, including NC President Sher Bahadur Deuba and General Secretary Gagan Kumar Thapa, are focused on improving the government’s performance. Meanwhile, CPN (Maoist Center) Chairman Pushpa Kamal Dahal has intensified efforts to disrupt the coalition. In the recently concluded Central Committee meeting of his party, Dahal presented a political document emphasizing alliances with revolutionary forces rather than with parties like the NC or CPN-UML. This week, Dahal openly stated his intent to topple the government, declaring: “This government will not last long. If it collapses, NC will become our partner.” Dahal’s public suggestion that Prime Minister Oli should step down is a significant shift, marking the first time such an open challenge has been issued since the coalition’s formation. One NC leader remarked, “The game to remove Oli has already begun, but we cannot predict how long it will take.”

Dahal is actively engaging with opposition parties to bolster parliamentary support and enhance his bargaining position with the NC, should the government fall. However, Janata Samajbadi Party Chairman Upendra Yadav has publicly stated his refusal to support Dahal, complicating Dahal’s plans. Within the NC, the dynamics are equally intriguing. While Koirala’s faction is quietly maneuvering against the government, Deuba and Thapa are determined to stabilize the coalition. Thapa, in particular, is collaborating with senior UML leaders to explore ways to improve the government’s performance. Deuba has also urged NC ministers to deliver better results, reaffirming his commitment to maintaining the coalition.

Within the ruling UML, preparations are underway for the party’s general convention to elect a new chairman. While Oli’s position appears secure, some senior leaders have started aligning with former President Bidya Devi Bhandari, potentially posing a challenge to his leadership. In a significant development, UML announced it would not pursue unification with its splinter group, CPN (Unified Socialist), led by Madhav Kumar Nepal. However, it extended an invitation to leaders and cadres from the splinter group—excluding Nepal himself. This week, Bam Dev Gautam, a prominent figure who had been sidelined in party politics, announced his return to the UML. Gautam’s re-entry could alter the party’s internal dynamics, as he is expected to strongly back Oli. To consolidate his position, Oli might elevate Gautam within the party, potentially sidelining senior leaders who are shifting toward Bhandari’s camp.

On the international front this week, Donald Trump’s inauguration as the 47th US President has sparked concerns in Nepal. His executive orders and policy decisions, including potential deportations of undocumented Nepalis in the US, could have significant repercussions. Trump’s withdrawal from the Paris Climate Agreement and the World Health Organization could also impact Nepal’s climate change initiatives and health sector, which rely heavily on international support. Additionally, US assistance for Nepal’s gender and sexual minority communities might be affected. These developments have prompted government officials and foreign policy experts to assess the potential implications for Nepal.

To highlight the effects of climate change in the Himalayas, Nepal has scheduled the Sagarmatha Sambad, a global dialogue, from May 16-18 in Kathmandu. This event, originally planned for 2020 but postponed due to the Covid-19 pandemic, will focus on the theme “Climate Change, Mountains, and the Future of Humanity.” If successful, it will mark Nepal’s first major international dialogue of this kind, offering a platform to spotlight critical issues such as the rapid melting of Himalayan glaciers. The government faces the challenge of ensuring high-level participation from countries and multilateral organizations to enhance the event’s significance. Strong collaboration between the Prime Minister’s Office and the Ministry of Foreign Affairs will be crucial to its success. Social media has already drawn attention to the issue, with many users sharing photos of snowless mountains, underscoring the urgency of addressing climate change.

In another development this week, the Department of Immigration’s latest Nepali Departure Report reveals a troubling trend. In 2024, 66,835 Nepalis left the country permanently, obtaining residency abroad, compared to approximately 70,000 in 2023. Additionally, 856,422 Nepalis sought foreign employment. These figures highlight an ongoing exodus, with no signs of abating.

Meanwhile, the dry winter season has persisted, raising concerns about a prolonged drought. Rising temperatures may offer some respite from the cold but pose significant risks to agriculture, water resources and public health. The dry conditions also increase the likelihood of wildfires, some of which have already been reported. The government must prioritize preparations to address these challenges.

In another story, the Cabinet has endorsed a bill regulating social media in Nepal, though its contents have yet to be disclosed. This move has sparked curiosity and concern among the public, who are eager to learn about the bill’s potential implications for digital freedoms and expression.

As in his first tenure (2017–2021), US President Donald Trump has signaled his intention to adopt an aggressive Indo-Pacific Strategy (IPS) to counter China's growing influence in the region. While his administration’s exact approach remains to be seen, Trump’s actions thus far suggest a more unilateral and hardline strategy compared to his predecessor, Joe Biden, who focused on fostering partnerships and multilateral cooperation in the region.

A key question is whether Trump will continue Biden’s approach of strengthening ties with allies and regional partners or pivot to a more isolated stance, prioritizing direct US action. Another point of uncertainty is whether his administration will focus on a military-centric strategy or emphasize economic engagement with countries in the Indo-Pacific. But one thing appears certain: the Trump administration's IPS strategy is likely to adopt a more confrontational tone. This approach could aggravate not only Beijing but also some US partners in the region.

Shortly after taking office, US Secretary of State Marco Rubio held a high-profile meeting with foreign ministers from Australia, India and Japan—the member nations of the Quadrilateral Security Dialogue or "Quad." A statement from the US State Department emphasized the group's shared commitment to a “"Free and Open Indo-Pacific,” where democratic values, rule of law, sovereignty, and territorial integrity are upheld.

The statement underscored the Quad's collective stance against unilateral actions that attempt to alter the regional status quo through coercion or force. “Our four nations maintain our conviction that international law, economic opportunity, peace, stability, and security—especially in the maritime domain—are essential for the prosperity of the Indo-Pacific region," the statement declared. It also highlighted commitments to strengthening regional maritime, economic, and technological security in response to rising threats, while promoting reliable and resilient supply chains. India, as the next host of the Quad Leaders' Summit, is set to play a pivotal role in steering the group's agenda.

China has criticized the Quad, labeling it as an attempt to encircle Beijing and undermine its strategic interests. China's opposition to the Quad's initiatives could escalate tensions in the region, especially as the Trump administration doubles down on its Indo-Pacific focus.

The Indo-Pacific Strategy introduced by the Biden administration in 2022 emphasized collaboration with India and other regional groupings to promote stability in South Asia. During Biden's tenure, India-US relations saw a significant deepening of their strategic partnership. However, Trump's return to power could strain this partnership, particularly due to his hardline stance on tariffs and trade. Trump has already suggested the possibility of imposing a 100 percent tariff on imports from BRICS nations, including India—a move that could severely impact the trade relationship between Washington and New Delhi.

Trump's approach to China is also likely to exacerbate existing tensions. Having already initiated a trade war with Beijing during his first term, Trump has signaled his intent to escalate economic pressure on China. In a recent press conference, he hinted at imposing a 10 percent across-the-board tariff on all Chinese goods as early as Feb 1. Such a move would likely lead to further deterioration in US-China relations, with significant ramifications for the global economy.

Beyond trade, Trump’s previous decisions—such as withdrawing from the Paris Climate Accord and the World Health Organization—have raised concerns about the US’ role in addressing global challenges. These moves could undermine US credibility and influence in the Indo-Pacific, where collaborative efforts on climate change, public health, and sustainable development are crucial.

Despite these challenges, Trump is expected to continue working with India to counter China's influence in the region. Reviving talks with North Korea, a hallmark of his first term, may also resurface as a diplomatic priority. However, Trump’s stance on Taiwan, a critical flashpoint in US-China relations, remains uncertain.

Nepal, a strategically located country in South Asia, is unlikely to remain unaffected by these geopolitical shifts. Nepal’s relations with both India and China are integral to its foreign policy, and any significant changes in US strategy toward these powers will have a ripple effect on Kathmandu's diplomatic calculus. For instance, further deterioration in US-China relations could constrain Nepal's ability to navigate its relationships with both nations.

Additionally, Trump's policies on global issues such as climate change, health and minority rights are likely to impact Nepal directly. The country, which is already grappling with the challenges of climate change, relies on international cooperation and funding to implement mitigation and adaptation strategies. A more isolationist US approach could hinder Nepal’s efforts in these areas. Changes in US funding or support for health services and rights related to sexual and gender minorities could also have social and economic repercussions.

As Trump’s administration takes shape, it will be crucial to monitor how his Indo-Pacific Strategy evolves and its implications for the region and beyond.

Donald J Trump was sworn in on Monday as the 47th President of the United States, marking a remarkable political comeback. On Sunday, Trump pledged to issue nearly 100 executive orders aimed at reversing or eliminating policies enacted by the Biden administration. These orders primarily target immigration, energy policy, and a range of other issues.

Foreign policy experts suggest that Trump’s return to office warrants close attention to his trade war with China, his approach toward Asian allies like Japan, South Korea and the Philippines, and his “America First” foreign policy. These stances could bring significant shifts to multilateralism and global diplomacy, with considerable effects on the Indo-Pacific region. Trump's transactional approach to diplomacy is expected to heighten tensions in critical areas such as the South China Sea, the Korean Peninsula and Taiwan.

Regarding Nepal, shifting US global priorities could impact American assistance in climate change and health sectors. Political analyst Chandra Dev Bhatta notes that while American foreign policy has shown consistency over time, recent years have highlighted ideological differences between Republicans and Democrats. If Trump 2.0 adopts a more aggressive foreign policy, Bhatta predicts it will manifest through economic measures, particularly tariffs. “If Trump becomes a ‘tariff man,’ it will have a ripple effect globally due to the interconnected nature of the world economy,” Bhatta said.

For smaller countries like Nepal, where economic stakes are lower, the focus will remain on geopolitics over geo-economics. However, navigating this geopolitical landscape will become more challenging, Bhatta adds, as geopolitics and geo-economics are increasingly intertwined. He also highlights potential domestic implications for Nepal stemming from Trump’s policies, especially his declared funding cuts through the Department of Government Efficiency and Governance (DOGE) and the “Make America Great Again” (MAGA) agenda. If these cuts are implemented, they could significantly affect funding both domestically and internationally.

Trump’s immigration stance could also impact Nepalis in the US, particularly if he enforces stricter policies on undocumented immigrants. Bhatta speculates that such policies might be part of a bargaining strategy, commonly referred to as the ‘madman theory,’ or a genuine intent, the outcome of which remains uncertain. Additionally, Trump’s efforts to consolidate power in Asia under the MAGA banner will likely exert geopolitical pressure on countries like Nepal.

Strategic thinker Binoj Basnyat believes that Trump’s second term is likely to continue Biden’s legacy in Asia due to the region’s growing importance in global trade, security and geopolitics. He emphasizes that managing rising challenges, fostering alliances and ensuring stability will shape US strategies. India’s role as a vital partner in the Indo-Pacific region will be central to these efforts. The US will likely continue leveraging frameworks such as the 2017 “South Asia Policy”, the “Free and Open Indo-Pacific” strategy and the 2022 Indo-Pacific Strategy.

Basnyat highlights that these strategies align with containing China’s rise while strengthening ties with India, designated as a major defense partner in 2016. Initiatives like the India-US 2+2 ministerial dialogue, established in 2018, will continue to influence smaller South Asian nations, including Nepal. He notes that global competition and great power influence are shaping national politics in South Asia, with Nepal’s political parties also reflecting these dynamics.

Basnyat asserts that Nepal’s strategic stability is shaped by global geostrategic factors, including the Post-Cold War syndrome in Europe, the New Cold War in the Indo-Pacific and proxy wars in the Middle East. He suggests that under any potential geopolitical scenario, Nepal’s strategic trajectory will largely depend on its relationships with New Delhi and Beijing. However, Nepal should also prioritize its ties with Washington as a third neighbor, balancing national interests without falling into strategic traps.

During the Joe Biden administration, US engagement with Nepal increased significantly, with over $700m in foreign aid provided since 2019 through the US Department of State and USAID. These initiatives focused on health, economic growth, democracy, governance and food security. One of the primary US priorities in Nepal is the smooth implementation of the Millennium Challenge Corporation (MCC) project. Recently, American private companies have also expressed interest in investing in Nepal’s tourism, medical and other sectors. Meanwhile, the US push for the State Partnership Program (SPP), pending since 2022, remains a contentious issue.

During Trump’s previous tenure, the 2019 Indo-Pacific Strategy report sparked controversy over its implications for MCC and other bilateral initiatives. The Biden administration carefully avoided conflating these issues in bilateral discussions. Observers suggest Nepal should closely monitor Trump’s policies toward India and China, as they could indirectly affect Nepal.

In an interview with ApEx, Katie Donohoe, USAID’s mission director in Nepal, highlighted the agency’s enduring mission despite changes in US administrations. She remarked, “Since USAID was established in 1961, there have been 12 presidential administrations, and this will be my fifth transition working with USAID. While new administrations bring different policy priorities, USAID’s core mission has remained consistent.” Donohoe expressed confidence that USAID will adapt to align with the new administration’s priorities while continuing to collaborate with the government of Nepal and its people.

Dissatisfaction is gradually brewing up inside the ruling Nepali Congress over the performance of the coalition government led by CPN-UML Chairperson KP Sharma Oli.

On one hand, CPN (Maoist Center) Chairperson Pushpa Kamal Dahal is provoking NC leaders to break the coalition with UML, while on the other, there is increasing dissatisfaction inside the NC rank and file. A couple of factors are widening the rift between the two parties.  

First, NC leaders have openly criticized the government’s move to introduce four ordinances by delaying to call the Parliament session. Senior leader of the party Shekhar Koirala, who is currently in the United Kingdom, said that instead of calling the winter session of Parliament, the government is focusing on bringing ordinances.

I have a doubt whether the powerful government of two parties is turning into an authoritarian one, said Koirala, who has already declared his plan to run for the party president.

In the past, Koirala was one of the strong advocates of the NC-UML government, stating that it would bring stability but after six months, Koirala and leaders close to him have begun openly criticizing the government. 

Even those leaders close to NC President Sher Bahadur Deuba are criticizing some of the decisions and speeches made by Prime Minister Oli. A few days back, Prime Minister Oli said that the constitution amendment will take place in 2030 because the amendment cannot take place without majority seats in the government.

Former foreign minister and Central Working Committee member NP Saud has publicly said Oli's statement on constitution amendment, made without consulting NC, is a violation of the agreement reached between two parties while forming the new government. Similarly, NC senior leader Arjun Nara Singh KC said that relevance of the seven-point agreement between two countries has ended after Oli’s objectionable statement on constitution amendment. The statement came at a time when NC and UML were preparing to form a taskforce to work out the modality of constitution amendment. Even a leader close to Prime Minister Oli said that there is a very slim chance of constitution amendment as some forces and parties are preparing to raise the radical agenda.

Already, there is dissatisfaction inside the NC over the signing of a framework agreement on Belt and Road Initiative (BRI). Leaders say though the party has stood against accepting loans under the BRI, the crux of the framework agreement is accepting loans. Foreign Minister Arzu Rana Deuba has said time and again that Nepal has denied loans under the BRI, but NC leaders are not convinced. Senior leaders of the party such as Prakash Sharan Mahat, NP Saud and scores of leaders close to Shekhar Koirala are objecting to the signing of the BRI. 

There is another point of friction, which NC leaders have not spoken publicly about but share in private conversations: the relationship with India and western countries. They say the government's mishandling of the issues related to foreign policy has sourced NC’s relationship with India and other western powers.

Especially, our relationship with India has soured after we joined UML to form a new government, plus, Foreign Minister Deuba has failed to improve ties with India, the NC leader said: after her visit to India in August, relationship between two countries and relationship between NC and India has further deteriorated, which is concerning. According to NC leaders, before his China visit, Prime Minister Oli used to heed the advice and respect the position taken by NC but after that he is gradually dominating the NC in the decision-making process. For instance, Oli heeded NC’s position of not removing Nepal Electricity Managing Director Kul Man Ghising but now he is bent on removing Ghising.

The growing dynamics inside the NC is equally responsible for the growing criticism of the government. Now, it seems that General Secretary Gagan Kumar Thapa is with party President Deuba and he is supporting and in many cases he is involved in some of the decisions of the government. The Shekhar Koirala faction believes that Thapa is seeking Deuba’s support for the party presidency. It seems Deuba, Shashank Koirala and Gagan Kumar Thapa are coming closer to weaken Shekhar Koirala. If that is the case, the Shekhar Koirala camp will work to topple this government, the NC leader said.

At the same time, CPN (Maoist Center) Chairman Pushpa Kamal Dahal is reaching out to NC leaders, who are publicly expressing dissatisfaction over the performance of the Oli government. Dahal is urging NC leaders to make extra efforts to bring down the government. Speaking with journalists on Tuesday in Sindhupalchowk, Dahal said due to the dissatisfaction inside the NC and unpopular decisions it has taken, this government will collapse.

I cannot predict the date but I think it does not have a long life, Dahal said, due to the internal dynamics of the NC government which cannot move ahead comfortably. Dahal added that though they did not want this government to continue, they were not making any effort to topple it.  NC President Deuba, despite the differences, is in favor of the continuation of this government with a view that Oli would peacefully hand over power to him.  Dahal has conveyed the message to Deuba that the Maoists would support the NC-led government till the next elections.