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Deputy Prime Minister and Minister for Foreign Affairs, Narayankaji Shrestha, returned home after concluding a nine-day visit (March 24-31, 2024) to the People’s Republic of China, upon the invitation of Chinese Foreign Minister Wang Yi. During his stay in China, he engaged in bilateral discussions with his Chinese counterpart and paid a courtesy call on Chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), Wang Huning. 

His itinerary comprised high-level meetings primarily in Beijing, the capital city of China. However, beyond the diplomatic engagements, DPM Shrestha ventured to three strategically significant locations in China, vital for Nepal's interests. Concluding his engagements in Beijing, he visited Chongqing, Tibet, and Sichuan, situated in the southwestern part of China. These regions, emerging as pivotal trading hubs in southern China, hold considerable potential for bolstering bilateral trade ties with Nepal.

Upon arrival at the international airport, DPM Shrestha convened a press conference alongside senior officials from the ministry. He asserted that the visit had been ‘highly successful’ and had elevated bilateral relations to new heights. It's a common diplomatic practice for ministers returning from foreign trips to portray their visits in such positive terms, often using phrases like ‘newer heights’ to describe the outcomes. In Nepal, it has become a fashion statement.  

Despite the vague language used to describe the achievements of the visit, DPM Shrestha emphasized that the primary focus was on extending trade, fostering economic cooperation, and building trust between the two nations. In light of Shrestha's remarks and the outcomes of his visit, one significant progress emerges: the visit has played a role in restoring understanding and trust between Nepali and Chinese governments. This suggests that the meetings and events during the visit have contributed to strengthening the foundation of bilateral relations.

When KP Sharma Oli and Pushpa Kamal Dahal formed a new coalition led by leftist parties, breaking away from previous alliances under the Nepali Congress, rumors began making rounds that China may have played a significant role in this surprising political maneuver. Nepal’s volatile political landscape often gives rise to such rumors and gossip, and it was widely speculated that the formation of a leftist-led government in Nepal could only have been possible with the initiation and support of China, given its communist ideology. DPM Shrestha might have shared such comments and feedback with Chinese officials. And, he certainly clarified that the new coalition will try to address genuine concerns of neighbors without tilting to any side.   

Whether India sought to maintain the previous government or whether China supported the formation of the new alliance remains a question best left to be answered in due time. But in domestic political developments, Nepali political parties should stop dragging India and China as parties involved in the process. We should keep in mind that India and China have greater roles to play in a fast-changing global context beyond the neighborhood. It is completely an ignorance that New Delhi and Beijing always contemplate about intervening in Nepal’s internal affairs. This thought is just the byproduct of deficiency syndrome of Nepali general psyche.   

When the Millennium Challenge Corporation (MCC) entered into force last August, it was perceived as a significant setback for China, especially since the Belt and Road Initiative (BRI), signed four months prior to MCC, had not seen any tangible implementation. This development was seen as a blow to Beijing, indicating that the US had successfully advanced its project in Nepal while China had yet to materialize its plans under the BRI. Chinese leaders viewed MCC as part of the Indo-Pacific strategy, interpreting its entry into Nepal as a strategic move of the US aimed at countering China’s influence. While the signed document denies China’s claim that MCC is part of the IPS, Nepal’s stance should remain impartial vis-a-vis the strategic rivalry between the US and China. As a sovereign nation, Nepal should maintain cordial relations with both of its neighbors. 

This visit should be seen in the backdrop of growing mistrust between Nepal and China during the previous coalition. In that sense, the primary concern from the Nepali side was to openly exchange thoughts on bilateral cooperation and bridge that gap. DPM Shrestha has worked on it. “The visit has been instrumental in strengthening mutual harmony, respect and trust between Nepal and China,” he narrated.  DPM Shrestha is recognized as one of the few Nepali politicians with a deep understanding of foreign policy and international relations. He has demonstrated an ability to conduct diplomacy in a balanced manner that respects the sentiments of Nepal's neighbors. While maintaining relations with China, he must have kept in mind that his policy and action shouldn’t be perceived as unnecessarily loyal to any neighbor.  

During the discussion, he reiterated the importance of connectivity between Nepal and China requesting the opening of the 14 traditional trade routes that have remained closed since the outbreak of the Covid-19 pandemic, eliciting a positive response from China. This issue has surfaced in previous meetings as well. As soon as China opens all major routes for trade and transaction, it would be beneficial for China too. Nepal and China also agreed to establish a joint commission at the level of foreign ministers. This is a positive development. According to the report, this commission will play a crucial role in regularly reviewing various aspects of the existing friendly relations between Nepal and China, signifying a commitment to deepening bilateral ties through continuous dialogue and collaboration.

The much-awaited agreement on the implementation plan of the Belt and Road Initiative (BRI) was not finalized during the visit, though discussions were held to give a final shape to the plan and advance it toward the execution phase. This demonstrates the ongoing commitment of both the parties to work together on BRI and reflects their shared interests in enhancing connectivity and cooperation. Debate has been there about the modality of financing the projects under BRI. The Nepali side has been asking China to provide grants for some major mega projects while in the rest of the projects Nepal would be ready to accept the loans. China should consider the proposal of Nepal. Given that Nepal shares borders with two emerging economies and rising global powers, it is imperative to seize opportunities while avoiding unnecessary challenges.

Over a month has passed since Prime Minister Pushpa Kamal Dahal dissolved his alliance with the Nepali Congress (NC) to form a new coalition with the CPN-UML and other parties, including the Rastriya Swatantra Party (RSP).

Dahal’s rationale for the shift in political alliance was his belief that the Congress ministers hindered his work, necessitating a fresh start for the government. However, there’s been little improvement in Dahal’s approach. He continues to repeat past mistakes, such as frequently transferring government secretaries and prioritizing ceremonial functions over office duties.

Meanwhile, the NC, as the main opposition, has been vocal about addressing pressing issues such as investigating Home Minister Rabi Lamichhane for his alleged involvement in the misappropriation of financial cooperative deposits. 

The Dahal government has also failed to address other key issues such as amending more than one dozen laws targeting the upcoming investment summit, improving the country’s economy and stopping mass exodus of youths to foreign countries.

Despite the UML showing considerable support for the Dahal government, internal dissatisfaction is growing regarding its performance. The UML leadership, led by KP Sharma Oli, has refrained from criticizing the government publicly but is privately concerned.

What will UML do if the Dahal government cannot deliver on his promises and goes on to become even more unpopular? The UML leaders do not have a definite answer to it. One glue that is likely to keep the Maoist-UML together is the dream of reviving the left unity. While Prime Minister Dahal says the Maoist and UML could ultimately form a left unity, UML leaders do not seem so optimistic. They view the coalition primarily as a ruling alliance, not a true leftist collaboration.

However, second-rung leaders from the Maoists and UML say that in the face of emergence of new political parties and growing public frustration, formation of left unity is imperative for the survival of both parties. Furthermore, they say the NC’s commitment to the 2015 constitution, particularly on secularism, is wavering and that left parties should come together to protect those achievements.  

“This was also one of the reasons that led Prime Minister Dahal to break alliance because the Nepali Congress was planning to make a proposal of referendum to decide on secularism,” said on Maoist leader. He added though the parties are under pressure to reconsider secularism, at least the Maoists and UML are unlikely to agree on it.

While these agenda are likely to keep the two parties together, it is still a difficult task because there are many differences among the communist parties. The first one is obviously a power-sharing among the key leaders of communist parties such as Maoist, UML and CPN (Unified Socialist). As per the informal agreement, Prime Minister Dahal will hand over the government leadership to Oli; and it is uncertain whether CPN-UML (Unified Socialist) Chairman Madhav Kumar Nepal will lead the government.

Amid all this, the potential for collaboration between NC and UML is gaining traction. Prominent NC figures, including Dr Shekhar Koirala, Gagan Thapa, and Bishwa Prakash Sharma, have signaled openness to cooperation with the UML to address public concerns and foster political stability. 

Even Sher Bahadur Deuba, NC’s president, has expressed willingness to engage with the UML, reflecting a growing consensus within the NC on the necessity of cooperation. His regret over past decisions reflects a growing consensus within the NC that cooperation with the UML is essential for addressing the public’s disenchantment and fostering a more stable political environment. 

NC leader Koirala, who leads the anti-establishment faction of NC, is at the forefront of leaders advocating for NC-UML cooperation. Of late, he has increased the frequency of meetings with UML leaders. Talking to reporters at Biratnagar Airport last week, he said that the NC and UML need to unite to bring stability and development to the country.

He said the new UML-Maoist Center coalition can neither deliver economic development nor provide political stability. “The new constitution could only be drafted when the NC and UML came together. There is no alternative to these two parties uniting for the country’s development,” he said. “It has become clear that there won’t be stability in provincial governments. If we want to bring stability and development to the country, NC and UML must come together.” 

The UML, too, appears receptive to collaboration. Oli, during the previous presidential election, hinted at the possibility of political shifts, indicating a willingness to adapt. 

If there is an agreement, UML Chairman Oli is likely to lead the government in the first phase and hand over the power to NC President Deuba to hold the elections in 2027. 

Interestingly, PM Dahal and Oli have differences over the nature of the new alliance. While Dahal insists that the long-term plan is to achieve left unity through this coalition, Oli is not willing to accept this alliance as a coalition yet. 

“What we have created is essentially a power equation. We all have different plans and election manifesto,” Oli said, addressing the Kaski District Convention of UML in Pokhara a few days ago. It clearly shows that both Oli and Dahal do not have a concrete plan for a long-term cooperation.

Paul Staniland is a professor of political science at the University of Chicago. He is non-resident scholar, South Asia Program Carnegie Endowment for International Peace. Kamal Dev Bhattarai of ApEx talked with him about US South Asia policy, particularly focusing on Nepal. 

How do you see the broader US South Asia policy?

The US is aiming to align with India, reduce or manage Chinese influence in the smaller states of South Asia, and access the rapidly growing markets in the region. It keeps an eye on Pakistan, which is a source of concern regarding potential escalation from tensions with India and terrorism, but has clearly downgraded that relationship compared to the post-9/11 period.

It has been two years since the Joe Biden administration came up with the Indo-Pacific Strategy, how is it playing out in South Asia?

The Indo-Pacific Strategy seems to have been reasonably well-received in India as a signal of US commitment to competing in Asia. It's less popular and desirable in other states in the region, which are quite worried about getting sucked into US-China rivalry and have interests that often do not tightly align with that competition. 

What are the key US interests in South Asia?

As noted above, the US wants to keep China out, work with India, and have access to markets in the region.

How does the US see China’s growing interests in this region?

Chinese influence is certainly an area of concern as it is seen as rapidly expanding and increasingly able to deploy massive resources, though my sense is that there may be a growing recognition that it has been very difficult for China to convert its economic power into enduring political influence. The CPEC in Pakistan has not been especially successful, BRI is often contested in ‘host’ countries (like Nepal), and Sri Lanka’s economic crisis was not prevented or solved by Chinese involvement.

What are the latest trends in US-Nepal relations?

The US is definitely interested in Nepal as a case where it can provide economic and governance benefits in the context of growing Chinese influence. That said, I don’t think the US public or most of its policy community think about Nepal a lot as a major site of strategic competition—there has been an American presence since the 1950s, so it’s not wholly new. Nevertheless, there is a growing interest and some learning about how to best approach Nepal; for instance, it’s been noticeable that the US has tempered the use of Indo-Pacific Strategy framing around Nepal and is ideally hoping to provide opportunities that complement, rather than necessarily direct take on or denounce, Chinese efforts. 

What are key US interests in Nepal? 

The US wants a growing, democratic Nepal that is on reasonably cordial terms with the US and India.

The current political landscape presents myriad challenges and complexities. Each day, scores of young individuals depart the country in pursuit of employment and education opportunities elsewhere. There is widespread discontent with the prevailing socio-economic conditions and governance. Citizens grapple with soaring market prices, unemployment, shortages of essential goods, and enduring issues of governance inefficiency. They encounter bribery and favoritism as pervasive barriers to accessing basic services across government offices, corporations, and banks. This pervasive corruption fosters dissatisfaction, discontent, and resentment towards the government and political parties.

In light of these challenges, the fundamental question arises: What is the path forward? What do citizens seek, and how can their needs be addressed? Primarily, people yearn for effective governance, characterized by the eradication of corruption, accountability for wrongdoers, streamlined service provision devoid of bribery, domestic employment opportunities, and accessible quality education. These aspirations form the bedrock of public expectations, yet realizing them poses a significant challenge.

On corruption and good governance

To control, minimize, and abolish the corruption in the country, the government needs the political willpower. And the parties' leadership. The govt., parties, and bureaucratic leadership must be seen as clean and bold to fight against the menace of corruption. No tickets to corrupt leaders or cadres in the election and no party promotion: This principle must be applied. The corrupt people must be filtered from below.

In Nepal, civil servants are divided along the party lines and are doing pure politics with the State’s salary. It is objectionable and inappropriate. It must be stopped. We do not find such a situation anywhere in the world. The political parties must review it and find a national consensus on it.

On CIAA 

Though there are a lot of limitations and constraints, the Commission for the Investigation of Abuse of Authority (CIAA) is doing well in controlling corruption in the country. However, there is a need to bring some concrete reform and change. This institution must be free from political intervention, and there is a need to restructure the composition and bring change in the selection process of commissioners. Only then will the work of this Institution be effective and result-oriented.

On CIB and other investigating agencies 

Our police investigating agencies are very skilled, effective, and performance-oriented in South Asia. The work of these agencies is highly appreciated and recognized by the regional and international police investigating agencies. The Nepali people also have a positive impression of it. However, there are always setbacks when political interventions are made. Political intervention is always made ineffective and resultless to the work performed by the agencies. So, there must be no political intervention in the crime investigation process to control corruption and punish the culprits.

On service delivery

The general people are indifferent to party politics and pay attention to their daily needs and concerns. They are susceptible to and care about service delivery issues. They always compare the Panchayat system with the multiparty and present Federal Democratic Republican system. They say that they do not find new and optimistic scenarios at present. Their impression of service delivery is even worse in the present situation. They say that without bribery or approach or caste, linguistic, and regional relations, receiving service is almost impossible anywhere in government or semi-government offices. Scenarios are the same in banks (basically for getting loans) and other corporation offices. So, what should the government do here?

The government must send concrete, clear, and circular solid notices to all service delivery offices to perform their duties promptly and adequately without delay, bribes, and approach. Otherwise, it should be punished. The home ministry, related ministries, and the prime minister’s office should be vigilant and alert so that the people can realize and see the positive change in service delivery.

On unemployment

The government should have a clear-cut vision of employment generation. Employment can be generated through State, semi-state, private, and FDI sectors. There should be an investment-friendly environment in the country. All legal, political, administrative, technical, and practical barriers should be removed in a basket decision as soon as possible. Those who are obstacles in this process should be punished. All economic activities, whether big or small, should be encouraged.

On education

Education and health have a massive potential in our country. We can make it a hub in South Asia. Our national and foreign investors are eager to invest in this area. Nepali parents are very supportive and cooperative in providing their children a quality education in Nepal. They are heartily spending money on it. The Indians have money and they are eager to send their children to Nepal for quality and cheap education. They also like Nepali weather very much. So, we have the service seeker as well as the investors too.

The only thing is the government should be supportive. We should have an apparent education policy and program and a very supportive policy and attitude for the investors.

In conclusion, meeting the aspirations of the populace necessitates a concerted effort to combat corruption, enhance service delivery, generate employment, and improve education accessibility. Collaboration between government, political parties, and citizens is essential in realizing these goals and building a more prosperous and equitable society. Through sustained dedication and collaborative action, tangible progress can be achieved towards creating a brighter future for all.