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Visit Nepal 2020 kicked off with the unveiling of the oversized yetis, the much-reviled campaign logo. No sooner had the year started, coronavirus hit China, from which Nepal expected at least 500,000 tourists this year. The number of Chinese tourists soon collapsed. With much of the world now under the grip of the dreaded virus, Nepal’s signature tourism campaign has been called off. The hospitality sector that had borrowed heavily in anticipation of the Visit Nepal tourist bump has been walloped: average hotel occupancy is barely 15 percent. Restaurants are deserted in the fear of corona contagion. Travel in and outside the country has slowed to a trickle, wrecking aviation.
As if that were not enough, the re-appointment of Yubaraj Khatiwada as minister of finance, despite his dismal performance in the past two years, has sapped any remaining confidence of businessmen and investors. The stock-market that witnessed an exuberant rise when the news of his exit surfaced has since the confirmation of his re-appointment seen a bloodbath. There are more signs of trouble for Nepal. India’s GDP growth is now under-6 percent. Even without the corona epidemic, the Chinese economy was similarly slowing, and corona has firmly put on the skids. The Oli government, which had been banking on developing Nepal as a ‘vibrant economic bridge’ between these two giants, seems to have run out of ideas.

It’s easy to panic in this situation. In fact, not one thing seems to be going right for the economy. Yet this is precisely when calm is needed. Khatiwada has always been a critic of ‘laissez faire’ capitalism, and a strong advocate of greater state involvement in the economy. That would not necessarily be bad for a country in Nepal’s stage of development. It has indeed become vital to secure the interests of the poor from crony capitalists. Yet Khatiwada seems to believe that most private actors are crooks and only by wielding a stick can they be brought in line.

Instead of supporting the economy and setting the foundation for a welfare state, in line with the government’s commitment, his measures have demotivated businessmen and entrepreneurs and scared away investors. Khatiwada has a second chance to redeem himself. The monetary policy is far too tight for these troubling times. How will he lay the foundation of a functioning welfare state if he doesn’t have any money to work with? Surely, he doesn’t believe the government can achieve its ambitious economic goals without the help of the private sector. In fact, right now Nepal needs all the help it can get, from all legitimate sources in and outside the country.

Confirming months of speculation, the nine-member secretariat of the ruling Nepal Communist Party has nominated senior leader Bamdev Gautam as a member of the National Assembly, the federal upper house. Meanwhile, the party task-force to amend the constitution to allow even members of the National Assembly to be chosen as prime minister has been disbanded. Gautam had been insistent that he would decline the assembly nomination until his path to the PM’s chair was cleared through the amendment.

Gautam could now finagle the post of a senior deputy-prime minister in the Oli government, and from there he will steadily work towards realizing his long-desired dream of becoming the country’s executive head. Oli, in this reading, will be forced to give Gautam, a kingmaker in the secretariat, a powerful government post if he is to retain his hold on the party, which has been steadily slipping away as another co-chairman Pushpa Kamal Dahal amasses power, partly with Gautam’s help.

Amending the national charter to clear the way for a single person’s political ascent would always have been tricky. The NCP bigwigs thus wanted to keep the proposal hush-hush. But when the word got out, there was an instant backlash, not just from outside the party but as vociferously from inside it. The proposal was dropped.

Yet this shocking development was the perfect illustration of how our senior politicians can easily trade away national interests for personal gains. While amending the constitution in Gautam’s favor, the majority members of the nine-member NCP secretariat were apparently also thinking of addressing some demands of the Madhesi parties related to the constitution—in return for their backing for the proposal for the election of PM via the National Assembly. In the same round of amendments, the ceremonial president would also be given more powers. In other words, senior ruling party leaders were bent on wrecking the new constitution by abusing the party’s two-thirds majority in the lower house.

No wonder the two-year record of the Oli government has been so dismal. Instead of embarking on the path to prosperity and implementation of federalism, ruling party leaders spent most of this time jockeying for power. Gautam, the wily old politician who miraculously lost in the last elections, will not let anything hinder his march up the political ladder. In the end, the fact that most members of the NCP secretariat see no problem in handing over the country’s executive powers to someone without public mandate speaks volumes about the party’s democratic credentials.

 The mighty two-thirds majority government of KP Oli has often been blamed for trying to curtail the freedom of expression. And rightly so. A set of bills it had introduced in the parliament could have potentially criminalized any factual reporting or even a social media post. A person or organization publishing an ‘offensive material’ would be liable up to Rs 1.5 million in fines, and/or jail for five years. Following widespread protests, these most draconian punishments were removed from the bills. Then, on Feb 20, Minister for Communication and Information Technology Gokul Baskota was forced to resign following the leak of an audio-record that has him asking for Rs 700 million in bribe. Again, unrelenting media pressure played a decisive role in his resignation.

The Oli government is allegedly tone-deaf to public opinion. There is evidence to support this too. Despite public uproar, the Nirmala Panta rape remains mysteriously unresolved. Cartels continue to flourish. Corruption is as entrenched. But the reality is more nuanced. Yes, the government does not look kindly at criticism. As the public opinion slowly turned against it, the government tried to stifle criticism through restrictive laws. But then the media went up in uproar. Members of the civil society hit the streets. The international community spoke out. In time, the government that had enjoyed such widespread support during its formation slowly came to be seen as intolerant and ineffective.

All these incidents suggest that despite the many deficiencies of Nepali democracy, today, it is nigh impossible to take away one democratic right: freedom of speech. People’s freedoms have been steadily expanding since the promulgation of the post- Panchayat constitution in 1990. The 2015 constitution guarantees universal basic freedoms. A belief has steadily taken hold that whatever else may be wrong with Nepal, people have the right to express themselves freely, and no one dares take away that freedom.

Besides the constitutional protection, Nepal now has a robust and varied media landscape, and an indomitable civil society. The involvement of foreign democratic actors also mitigates against curtailment of basic freedoms. Even if the Nepali citizens were yesterday ready to live with some restrictions, youths today won’t tolerate any cap on their in-born rights. Such a refusal to be silenced will help the democratic process that the young federal republic has embarked on.

 Finance Minister Yubaraj Khatiwada’s announcement on February 12 that the government was slashing the annual budget by nearly 10 percent was only the final confirmation of the headwinds facing the Nepali economy. The plan of bringing in two million foreign tourists during Visit Nepal 2020 has been badly hit by the coronavirus scare. Chinese folks, who were expected to make a big contribution to Visit Nepal, are now staying put in their own country. Nepali banks that had invested heavily in hospitality in anticipation of the Visit Nepal tourist bump now fear their loans could sour. Inflation is already a worrying 6.4 percent, and given the turbulent state of the Indian economy, could further rise. Foreign aid and grants are down.

But perhaps the biggest problem is, once again, the government’s failure to spend. In the first six months of this fiscal, just 15.4 percent of the allotted capital budget was spent. Likewise, only 29.9 percent of the budget under ‘financing’ head was put to good use. The Oli government likes to talk up its focus on ‘big ticket’ infrastructure and yet of the Rs 10 billion allocated for the national pride projects, only 19 percent was spent. Yet while announcing the revised budget on February 12, Khatiwada sounded an optimistic note. He said the government still expects to spend over 80 percent of the capital budget, over 90 percent of the financing budget, as well as meet its growth (8.5 percent) and inflation (under 6 percent) targets.

Khatiwada pointed to the narrowing trade deficit and the healthy performance of the agriculture sector as reasons for optimism. He also cited higher spending on roads, hotels and hydropower as further cause for cheer. Yet Khatiwada surely knows Nepal’s economic fundamentals are still astray, starting with its perennial inability to spend. Despite PM Oli’s commitment to root them out, cartels and syndicates still sit atop all important sectors. The government has looked on helplessly as chicken farmers artificially increased poultry prices by killing off chicks and burying unhatched eggs. Nor has the government been able to crack down on dilly-dallying contractors.

The Nepali economy seems to be on autopilot. The government, and its cerebral finance minister, it appears, could not do even the bare minimum to gin up the economy, in what is turning out to be among the signature failures of the mighty two-thirds communist government. or SAARC as two regional bodies have dif