Submit your Article

As by-elections draw closer in Ilam-2 for House of Representatives (HoR) and in Bhajang-2 for Sudurpaschim Provincial Assembly, major parties have expedited their election campaigns and top leaders are preparing to reach the constituencies to back their candidates.

This will be the second by-elections since the 2022 national elections in which the Nepali Congress emerged as the largest party while the CPN-UML and CPN (Maoist Center) polled in second and third respectively. However, the most talked about outcome of the election was the emergence of the newly formed Rastriya Swatantra Party (RSP) as the fourth largest party.

In the first by-election held in Tanahu and Chitwan in 2023, RSP candidates Swarnim Wagle and Rabi Lamichhane both registered thumping victories against the candidates fielded by major parties. So winning the Ilam-2 by-election—and winning it with a big margin—has  become a prestige issue for major parties. And it is not just prestige that is on the line for them. If the RSP candidate were to win in Ilam-2, it could very well mean game over for the big parties. 

The RSP is already popular among a large section of young urban Nepalis. If the party wins the Ilam-2 constituency, some Nepali Congress (NC) leaders say it could disrupt the voting pattern in the rest of the country in future elections. In other words, there is a high likelihood of RSP emerging as a major—if not the largest—political entity in Nepal come the next general election of 2027.

To stop the RSP, the two ruling parties UML and Maoist have forged an electoral alliance in Ilam-2. They have fielded the UML candidate, Suhang Nembang, son of late UML Vice-chairman Subas Chandra Nembang. Another ruling coalition partner, CPN (Unified Socialist), has refused to support Nembang and has come up with its own candidates. The main opposition, NC, has also fielded its own candidate in the fray.  

Cross-party leaders who just returned from Ilam predict that it is going to be a tight electoral race. 

 “There are intra-party rifts within both NC and UML, and as the voting day nears, it remains to be seen how these intra-party rifts will be managed,” says Nain Singh Mahar, a NC leader who recently visited Ilam. 

A large chunk of UML cadres are unhappy with the candidate selection in Ilam-2, stating that those who had been working for the party for a long time were sidelined. They argue that Suhang may very well be the son of a senior party leader who contested and won many elections from Ilam-2, but he doesn’t know anything about the constituency he represents. 

The Ilam-2 constituency became vacant following the death of UML Vice-chair Subas Chandra Nembang, in September last year. A total of 19 candidates—12 from different political parties and seven independents—are contesting in the by-election. 

The main contest is expected to be among UML’s Suhang Nembang, NC’s Dambar Bahadur Khadka, RSP’s Milan Limbu, and independent candidate Dakendra Singh Limbu Thegim.

Suhang has the support of the UML, Maoist Center and the Nepal Communist Party led by Netra Bikram Chand (Biplav). He has been appealing to the voters to write down their needs, problems, and aspirations on paper, assuring that he and his party will fulfill them.

Meanwhile NC’s Khadka, who was edged by Subash Chandra Nembang with just 114 votes in the last general election, hopes to win this time. But in 2022, he had received votes from various coalition partners, including the Maoist Center. 

This time the Maoist party is supporting UML’s Suhang. UML and Maoist Center have signed a five-point agreement at the Koshi Province level to secure Suhang's victory. As per the agreement, the by-polls will be a stepping stone for cooperation among left forces to create a foundation for party unification in the future.

However, local UML leaders fear that all Maoist votes may not be transferred to Suhang. Also, there are fears that RSP candidate Milan Limbu, who was earlier with the Maoist Center, will get substantial Maoist votes. 

Some Maoist leaders say about a third of the party’s vote could go to RSP’s Limbu. Although traditional parties have been the major players in Ilam-2, Limbu expects a miraculous vote shift in his favor this time. RSP had received 4,686 proportional representation votes and 1,380 direct votes in 2022.

Independent candidate Dakendra Singh Limbu Thegim also hopes to pull off a surprise electoral victory from Ilam-2, with the support of 41 identity-based groups. He has been reaching out to voters with the agenda of strengthening federalism, identity, equal rights, peace, and sustainable development. 

Thegim has the support of Janata Samajbadi Party as well as identity-based parties like the Rastriya Janamukti Party, Sanghiya Loktantrik Rastriya Manch, Nepal Samajbadi Party, Nagarik Unmukti Party, and Kirat Yakthung Chumlung, Kirat Rai Yayokha, and social organizations, including the Kirat religious guru Atmananda Lingden.

Apart from these four candidates, Jit Bahadur Rai of CPN (Unified Socialist), Lakshmi Gurung of Rastriya Prajatantra Party, Prem Kumar Thamsuhang of the Janmat Party, Shyam Bahadur Darji of the Nepal Workers and Peasants Party, Min Bahadur Limbu of Mongol National Organization, Dhanraj Rana Magar of the National Republic Nepal, Jayant Bikram Shah of the Rastriya Mukti Andolan Nepal, and Ganesh Bahadur Chauhan from the Rastriya Prajatantra Party, among others, are in the fray. 

Independent candidates Dak Prasad Gautam, Manoj Niroula, Arjun Kumar Shahi, Dipesh Bohra, Yogendra Gurung, and Raj Basyal are also contesting the election. The constituency comprises all of Chulachuli, Mangsebung and Phakphokthum rural municipalities, as well as parts of Ilam (excluding 10 wards), Deumai, and Mai municipalities. There are 115,342 voters in the constituency

Banks are flush with loanable funds, but they are not seeing demand for loans. As a result, the Nepal Rastra Bank (NRB) has been mopping up excess liquidity from the banking system through different monetary instruments.

According to the central bank, banks and financial institutions (BFIs) have a lending capacity of over Rs 850 billion at present. However, BFIs are not able to invest. On the other hand, an unruly group has gone after the banking and financial sector unchallenged. The government seems helpless against such groups. Recent arrests of bankers on suspicion of irregularities have unleashed a situation of fear and terror in the banking and financial sector.

That is why, bankers say, despite excess cash, there has been no investment. No wonder bankers are saying there is no environment for investment in the country. Stakeholders say that unless the government takes action against the groups spreading anarchy by saying 'loans need not be repaid' and 'if you protest, loans will be waived', the situation in the banking sector will not improve.

Banks hesitant to invest

 Bankers say the servicing of loans by borrowers has been affected after unruly groups started a campaign against banks. The banking and financial sector has been facing this problem for about a year now. On the other hand, the overall economy has shrunk recently. Most businesses are in a slump as there is no demand in the market. There has been no demand for loans from banks. In such a situation, bankers say that with unruly activities getting support to destabilize the banking sector, they have to hesitate even to lend.

However, the government has not taken any action against those spreading anarchy against banks. Protests are also being organized in the name of victims of microfinance. Some bankers feel that the state has been supporting those agitating against microfinance instead of controlling them.

The Nepal Rastra Bank has set a maximum credit-to-deposit ratio (CCD ratio) of 90% for banks. The current CCD ratio of banks is only 80.02%. While deposits have been increasing daily, lending has not increased proportionately, resulting in an accumulation of cash in the system.

According to the Nepal Bankers' Association, there has been no demand creation in the market. Interest rates have declined, but there are no new borrowers. Commercial banks, development banks, and finance companies have collected deposits of Rs. 6.17 trillion and disbursed loans of Rs 5.09 trillion.

Sunil KC, president of the Nepal Bankers' Association, cites protests against banks, arrests, and unnecessary detentions of bankers as reasons for the inability to disburse loans. “Additionally, imports have declined compared to the previous year, and most industries have not been operating at full capacity. Public construction projects have also been sluggish due to a lack of funds. For these reasons, there has been no demand for loans," KC said. "As soon as money stops flowing into the construction sector, many other sectors will be affected. These are the reasons why overall loan demand has declined." Banks' non-performing loans have also increased compared to previous levels, said KC, who is also the CEO of NMB Bank.

Tightening policies

Bankers say the central bank is not relaxing certain policies because of the conditions set by the International Monetary Fund (IMF). The IMF granted Nepal concessional loans worth $395.9 million under its Extended Credit Facility (ECF). Officials, who were alarmed at depleting foreign exchange reserves and increasing current account deficit due to high imports, agreed to accept the IMF’s conditional loan which extends until February 2025. Bringing reforms to the financial system and public finance management, including amending the law to make Nepal Rastra Bank autonomous, preparing a blueprint to prevent misuse of loans, conducting external audits of 10 big commercial banks are some of the conditions set by the IMF.

The government implemented some reform measures, but it dragged its feet on the implementation of some other conditions set by the IMF. The then finance minister, however, expressed commitment to implement all reforms in October last year after the IMF withheld the third installment of its loan.

NRB’s directives on loan classification, the new provision of a six-month wait for non-performing loans to be upgraded, and the guidelines on working capital loans were met with opposition from the private sector. Private sector bodies like FNCCI and CNI have urged the government to clear IMF loans at the earliest.

NRB's requirement of raising capital reserve by 0.5 percentage points to 9% by mid-June will decrease bank's capacity to lend by around Rs 25 billion, according to bankers. Likewise, further shrinking of spread rate to 4% has hit profitability of banks.

As Nepal is soon going to approach the milestone of graduating from the list of Least Developed Countries (LDCs), there is an urgency to develop a comprehensive foreign policy that goes beyond the traditional approach of the so-called “yam between two boulders”.

Frankly speaking, I always struggled to understand the intrinsic meaning of the reasoning behind it.

Why should a nation like Nepal that, objectively speaking, is not a tiny geographical spot on the global map, reduce itself to a binary thinking that is dictated by an over reference towards India and China?

Perhaps in the past, this thinking could have been justified.

In the realm of geopolitics and international relations, there is no room for naïveté and it is impossible for a country like Nepal not to take into consideration the strategic interest of its two gigantic neighbors.

But this isn’t the last time that Nepal forged its own strategic interests beyond those of China, India or the United States of America.

But what would take for Nepal to be able to formulate a future forward, confident foreign policy?

The spirit of amity and cooperation with all the nations is a key pillar of the country’s foreign policy.

Together with the successful (though not fully completed) transition from the civil conflict, and the creation of a federal democracy, this internationalist attitude, should represent the “north star” of Nepal’s foreign policy.

Moreover, Nepal’s incredible diversity in cultures and traditions, magnificent landscapes and cordial nature of its people could also help its ways to project itself to the world.

But how to concretely leverage these sacrosanct principles and unique endowed features of the country rhetoric?

Nepal will soon do away with the “least” developed nation label that, from the marketing and branding point of view, has been disastrous, especially if you want to bring in international investors.

This development will require a reset in the way foreign policy is framed because, between now and the next few years, Nepal will have a unique opportunity to rebrand itself and not only in terms of being an attractive investment destination.

Perhaps, reminding ourselves that foreign policy is a mirror of national politics and the way of governing a nation, could be a way to start a reflection on the links between national and foreign policies.

If national politics changes for the better and becomes more transparent and effective, then the foreign policy of the nation can, consequently, also get more strategic and ambitious so that, finally, Nepal could get rid of “yam between two boulders” thinking.

Foreign policy should be instrumental in this phase of national development but a lot will depend on how politicians perform and behave at home.

The country is trying to turn from being a net recipient of international aid to being a net recipient of foreign investments.

A vision, albeit not yet perfect, is being formulated in this regard.

There is an overarching aspiration to attract business even though, for this to happen, it might mean doing away with some convenient “double standards” like the existing limitations in the shares that a foreign investor can own.

In addition, being successful at attracting investments won’t only depend on running a successful summit or in putting in place better rules that incentivise investors.

Instead, what will count will be creating a favorable investor climate thanks to better policies that enhance good governance in the realm of the economy, including serious interventions in the fight against cartels and corruption.

In addition, unless the country manages its delivery of services better, especially in the field of education and health, it will hardly succeed at becoming an investors’ magnet.

For example, there have been discussions about Nepal becoming a medical or educational hub.

Knowing the quality of the expertise and knowhow within the country, I am confident that it is possible.

There are already enough best practices and the more the country attracts back its citizens who had decided to emigrate in places like Australia and the USA, the better.

It would be even conceivable to imagine, in the near future, “Nepal Educational Expos” around the world with the best national educational institutions attracting students, starting from continents that the country has never, so far, even remotely imagined engaging with.

But can Nepal become such a hub without the right foundations?

Fixing its foundations, improving its education system at the grassroots and raising the current level of public education would be instrumental in promoting a “whole of nation” approach rather than few best practices amid a sea of mediocrity or worse.

What about starting to think about the first ever investment-focused mission of a Nepali Prime Minister to emerging nations in Central Asia or even to Africa and Latin America?

An official state delegation could discuss bilateral cooperation, including investments and the selling of some of the country’s unique proposition, tourism and of course its education and health institutions.

A substantial effort at enhancing good governance would, consequently, also be instrumental in propelling a foreign policy capable of shaping a new narrative.

The story of a country with many imperfections and unsolved challenges but also a nation that is ambitious and attempting at building a more just and developed society that can attract high human capital investments rather than low-cost manufacturing.

Good governance could also enable and facilitate innovative policy and contributions that Nepal can offer to the world, all ideas that its diplomacy could amplify and promote.

If you read the speeches of every single Prime Minister in the international forums, it is always the same leitmotif, starting from the usual (though correct) story that the country is among the most at risk of climate warming.

It is not that Nepal must stop bringing forward its legitimate grievances but it can do this differently with practical propositions, from adaptation to climate financing.

These are just some examples where Nepal could contribute not as a “bagger” but as promoter of solutions to some of the key global challenges.

But we need a non-partisan foreign policy vision of at least five years, a very pragmatic document that does not waste time in pleasing the neighborhood or other super powers but rather is purposefully fit to serve the nation’s new development aspirations.

Formulating this vision document will compel the policy-makers to truly align national priorities with its foreign policy ones.

This would help Nepal start thinking and not only in terms of foreign policy, from the perspective of being a middle-income nation even if it is, at the moment, just an aspiring one.

But it remains essential to fix the governance first.

The nation needs to really turn its mediocre at the best governance into a “good” one so that it can be in a position to truly assert its own interests, no matter what others might expect from it.

This is a real chance for Nepal to reach the point of thinking beyond what its powerful neighbors want and need from it.

Otherwise, we will continue to read about this absurd but sadly true story that Nepal is just a “yam between two boulders”.

The author is the co-founder of ENGAGE and The Good Leadership. Views are personal

The presumption of innocence is the greatest shield ever to have been provided to an accused in criminal lawsuits. It is a vital aspect of the criminal legal system around the world. It states that every accused is ‘innocent’ until proven guilty and the burden to prove their guilt lies with the prosecution i.e., the State. Whenever a person is arrested by the government for their alleged involvement in a crime, the government must collect all evidence to prove that person’s guilt in an independent, impartial, and competent court, beyond reasonable doubt. Until that happens, the arrested individual cannot be deemed to be a ‘criminal.’

The right to be treated as innocent until proven guilty is a fundamental constitutional right and it is protected in Article 20(5) of the Constitution. Similarly, Section 12 of the National Penal Code (Act), 2017 perpetuates the presumption of innocence in criminal lawsuits. 

This legal notion has become the standard of the ‘civilized’ legal system and it has enabled States to perpetuate their obligations to protect, promote and fulfill human rights of their citizens. The US case Coffin v. United States (1895) posited that the notion of presumption of innocence lied at the foundation of the administration of criminal law. Similarly, the case of Rabindra Bhattarai v His Majesty’s Government of Nepal, Nepal Law Magazine 2055 (BS), Decision Number 6622 meticulously iterated the essence of this presumption and held that no person shall be deemed as a criminal merely based on an accusation. Thus, it is undoubtedly an elementary legal principle that helps to protect a civilian’s freedoms. 

What would happen if an accused were deemed guilty until proven innocent? The accused would have to collect evidence of their innocence with limited resources available to them. On the other hand, the court would be ready to convict them merely based on accusations. Therefore, it would be unscientific and contrary to people’s human and legal rights. 

How should an accused be treated? Theoretically, they must be granted the same respect as that of unaccused individuals. Their fundamental rights must be protected by the State, and no person shall slander them or label them as ‘criminal’ until the court finds their guilt. But does society view such a person accordingly, with no biases at all? Does it comprehend easily that such a person is still a respected citizen and deserves no eccentric remarks until the court decides?

One of the best ways to assess the social psychology of Nepali society is to skim through various social media and observe the comments and remarks people express in various criminal matters. We can fairly observe that most people are quick to judge the accused and label them as ‘criminals’ based on rumors and whims influenced by news headlines and incomplete details from case files. It is as if an individual instantly becomes a criminal the moment they are accused of committing a crime. But does it happen if the accused is rich, influential, and admired by many?

The answer is generally ‘no’ and a recent example is how people (on social media) not only declared Sandeep Lamichhane (former captain of the Nepali cricket team) as innocent on a rape charge but also slandered the victim and perpetuated how ‘baseless’ the lawsuit was. To say that the entire nation was shocked would be an understatement. When he was released on bail in Jan 2023, a mass of people rushed to him to “celebrate” his release and many women were seen chanting his name as he left the court premises. What image of Nepali society does this “influence” paint? Why were people chanting his name knowing that the victim of rape was allegedly a minor? Why did they not think the cantillation of his name would directly attack the victim’s status and shake her belief in society and the justice system?

One of the answers to this is rape myth acceptance. RMA refers to acceptance of prejudicial, stereotyped, and distorted beliefs about rape, rape victims and rapists. These are the false attitudes and beliefs about the crime, yet widely held to serve and even justify male sexual aggression especially against women. When news of rape is broadcast, people in the first instance ask questions like “Why was the woman with the man?”; “Was she wearing revealing clothes?”; “Was she provocative?”; “Why did she not come for help sooner?”; “Why would a successful man risk his life and career?”

This attitude is not only prevalent in Nepal but also in countries all over the world. Due to RMA, many women tend to blame themselves and not bring the matter to light, let alone seek legal remedy. Patricia A. Resick in her journal article “The Psychological Impact of Rape” enumerated a wide range of problems faced by women such as fear, anxiety, PTSD, depression, sexual dysfunctions, issues with self-esteem, declined social adjustment and more. Yet many people in Nepali social media, in many instances, are quick to assassinate victims’ character. 

What could be the general ways to “fix” this attitude? Nepali society must understand that every accused has their fundamental rights intact until they are proven guilty by the court. Their rights to live with dignity, to freedom, to privacy, to health, to food, to housing and such, shall be respected. At the same time, if the accused is an influential personality, he or she shall not be celebrated or given a clean chit by the public. The people should let the law do its work and refrain from lionizing such individuals. They must think about the victim who is claiming that they were subjected to abhorrent injustice. 

To alleviate this attitude, the quickest short-term measure is to strengthen laws legislated to protect women. Courts play a crucial role in establishing and nourishing robust criminal jurisprudence in favor of women’s security and clarifying the idea of sexual consent. The more pragmatic the definition and boundaries of sexual crimes, the better social and legal understanding of sex crimes. This is also where strict monitoring of social media behavior comes into place. Nepal requires an upgrade in cyber laws to prevent online sexual misconducts. 

The best long-term measure would be to educate children from early ages to protect themselves, to call out for help in need, and to teach them the idea of consent. It would be beneficial if every workplace had a periodic mandatory anti-sexual harassment training to educate employees about respect and positive behavior. As time goes on, people must be cognizant about condemning lewd remarks on women through jokes, songs, and stereotypical narratives. If we could only adopt half of these measures, our society will be a safer place for women and girls. We could prevent numerous sex offenses and maintain a victim-centric attitude to make victims believe in social restoration. 

The author is student of BA LLB at Kathmandu School of Law