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In a surprise move, CPN-UML and CPN (Maoist Center) and other fringe parties have formed a coalition government, consigning the largest party in the Parliament, Nepali Congress, to the opposition bench. NC President Sher Bahadur Deuba is facing criticism over this debacle. Against this backdrop, Pratik Ghimire of ApEx talked to Congress Spokesperson Prakash Sharan Mahat.

How do you see the move of Pushpa Kamal Dahal?

Dahal's bottom line was that he must be the prime minister. In our party too, there were discussions on giving him the first premiership and we offered him the position at last, but he decided to go with the other alliance.

Who is responsible for such a situation?

Some leaders have resorted to social media to pinpoint specific leaders. Our party had officially decided to form a government under our leadership. As the largest party in the parliament, it was natural for us to claim government leadership. So, it is not appropriate to put blame on specific leaders. Yet, our President Sher Bahadur Deuba was lately in favor of keeping the coalition intact by offering Dahal the premiership. 

Why did the Congress not adopt flexibility on power-sharing?

All leaders were on the same page that the party should claim both the president and prime minister. So, Deuba is not solely responsible for the current situation as claimed by the media and even some of our party leaders. There is a tendency to criticize Deuba. We would have faced more scathing criticism from party leaders if we had agreed to support Dahal as the new prime minister. Party leaders should realize that only a united party makes all party leaders strong.

As I said, Deuba was convinced at last that Dahal should get the premiership when the latter went to Balkot to form an alliance with UML. We even contacted Dahal and asked him to return. But Dahal said it was already late as he had made an understanding with the UML.  Congress was flexible on this issue but a few leaders pressed our party president not to give away any of the important positions (to the Maoist party). They would not even participate in meetings and give their opinions publicly, thereby hampering the Congress-led ruling coalition. As a responsible party member, I had suggested to Deuba that we should be flexible to keep the coalition intact and he was positive too.

Being the largest party, Congress didn’t look prepared to be in the opposition. What will your party do now?

Yes, we were not ready as everything was moving in a positive direction. But we now have to review how this situation came about and who is actually responsible.  The current ruling coalition consists of both pro and anti-federalist parties. Pro-monarchy and anti-monarchy forces are also there. This coalition has no ideological consensus, so it might break in the near future and we might return to power.

What role will the Congress play as the main opposition?

Since we are the largest party, we will make our presence felt in the parliament. We will not resort to vandalism and protests as our history doesn’t allow us to do that. In the past, we could not play an effective role as the opposition because we had a few parliamentarians who had won through the first-past-the-post system. This time, we have many of them and we will emerge as an effective opposition. 

With the formation of the new government, the private sector has become active to apprise the country's leadership about the state of the recession-mired economy. On Tuesday a Federation of Nepalese Chambers and Industry (FNCCI) delegation met with Prime Minister Pushpa Kamal Dahal and Finance Minister Bishnu Paudel. Anjan Shrestha, Vice President of FNCCI was also part of the delegation. ApEx talked to Shrestha about the meetings and the demands and suggestions of FNCCI to bring the derailed economy back on track. Excerpts: How do you expect the new government to address the country's economic woes? Revitalizing the economy should be the top priority of the government. Neither the private sector nor the government or the general public can bear the brunt of the crisis anymore. There will be more problems in the economy in the coming days if the problems go unaddressed. Hence, the government needs to pay heed to the suggestions of the private sector and work proactively to resolve the issues. What issues were raised by the FNCCI delegation in the meeting with newly appointed Prime Minister Pushpa Kamal Dahal on Tuesday?  As the country's economy is in crisis, we met the new Prime Minister to apprise him about the state of the economy and private sector. We also suggested possible steps the government should take to bring the economy on the right track. We are surrounded by the liquidity crisis in the market which has led to interest rates remaining persistently higher and has contributed to the sharp contraction in business activities. The money cycle in the market has been badly affected. How serious is the new PM to address the private sector's concerns? The PM told us that he understands the problems surrounding the economy and our concerns and stressed that reviving the economy is the government's first priority. He said the very first meeting of the Council of Ministers has made a special decision in this regard.  FNCCI also met Finance Minister Bishnu Poudel on Tuesday. What was the private sector's main agenda and what was his response? We found that he understands the problems in the economy. He told us that the government and private sector are complementary to each other. We have clearly stated our demands and have suggested ways to end the economic slowdown. We hope the new government will work seriously to take the country’s economy out of the slump.  FNCCI has been strongly demanding the deferral of the guidelines on working capital loans. How does the private sector not want this monetary arrangement to be implemented? The postponement of guidelines on working capital loans is our main demand. Given the current situation where most business activities have almost stagnated, it is not possible to implement the guidelines. So, we have been demanding that its implementation should be deferred by at least two years. What is the current status revenue collection ?  The government's revenue collection has declined mainly due to weakening demands and a slowdown in business activities. The businessmen are struggling to repay the banks' interest rates and loan installments. Hence, our demand is to extend the deadline. Automobiles are one of the major verticals of your business group. The government has recently lifted restrictions on automobile imports. Have importers started to open Letters of Credit (LC) to import vehicles? Importers are gradually opening the LCs after the government lifted import restrictions. However, there is no enthusiasm in the automobile sector at the moment. Except for electric vehicles, the demand is depressed in the market. The automobile business will not bounce back until there is sufficient liquidity in the banking system to finance the auto loans.

Satoru Nagao is a fellow (non-resident) at Hudson Institute, based in Tokyo, Japan. From Dec 2017 through Nov 2020, he was a visiting fellow at Hudson Institute, based in Washington, DC. Nagao’s primary research area is US-Japan-India security cooperation. He was awarded his PhD by Gakushuin University in 2011 for his thesis, ‘India’s Military Strategy,’ the first such research thesis on this topic in Japan. Gakushuin University is a premier institution from which members of the Japanese Imperial Family have also graduated. Kamal Dev Bhattarai talked to him about Japan’s new security policy, US-China contestation among others. Japan has come up with its new National Security Strategy, what could be its possible implications for the Indo-pacific region? This National Security Strategy changes Japan’s security strategy drastically, and its impact will spread to the Indo-Pacific region. There are three pillars in this strategy. Firstly, Japan clearly identifies China, North Korea, and Russia as threats to Japan in this document. Secondly, Japan will integrate strategies both military and non-military to deal with the threats. And thirdly, Japan will strengthen international cooperation to deal with China, which means like Australia and India, Japan will possess counter-strike capabilities. In some cases, Japan will commit an offensive-defense operation. The offense-defense combination with long-range strike capability is a more effective strategy than a defense-only strategy to counter China’s territorial expansion. Say, if Japan and India possess long-range strike capabilities, this combined capability makes China defend multiple fronts. Even if China decides to expand its territories along the India-China border, China still needs to expend a certain amount of its budget and military force to defend itself against Japan. This document clearly mentions that Japan will increase official development assistance (ODA) for a strategic purpose. For the purpose of deepening security cooperation with like-minded countries, apart from ODA for the economic and social development of developing countries and other purposes, a new cooperation framework for the benefit of armed forces and other related organizations will be established. It will affect the whole part of the Indo-Pacific. For a long time, a ‘hub and spoke’ system has maintained order in the Indo-Pacific. In this system, the hub is the US and the many spokes are the US allies such as Japan, Australia, Taiwan, the Philippines, Thailand, and South Korea in the Indo-Pacific. A feature of the current system is that it heavily depends on the US. For example, even though Japan and Australia are both US allies, there is no Japan-Australia alliance.  However, China’s recent provocations indicate that the current system has not worked to dissuade its expansion. Between 2011 and 2020 China increased its military expenditure by 76 percent, and the US decreased its expenditure by 10 percent. Even if the US military expenditure were three times bigger than China’s, the current “hub and spoke” system would still not be enough As a result, a new network-based security system is emerging. The US allies and partners cooperate with each other and share security burdens with the US and among themselves. Many bilateral, trilateral, quadrilateral, or other multilateral cooperation arrangements—such as US-Japan-India, Japan-India-Australia, Australia-UK-US(AUKUS), India-Australia-Indonesia, India-Australia-France, and India-Israel-UAE-US(I2U2)—are creating a network of security cooperation and sharing the regional security burden. Japan’s latest security strategy is based on such an idea. Japan will share the security burden with the US by possessing strike capability and providing arms to countries in this region as one of the security providers of the US-led circle. Could you elaborate on Japan’s South Asia policy, its priorities, and its interest in this region? In the past, Japan did not have a strategy in South Asia. Japan supported many infrastructure projects in South Asia purely because Japan tried to contribute to the local society. However, since China expanded its influence in South Asia and provoked Japan in many places in the Indo-Pacific, Japan’s attitude has changed. Because China’s infrastructure projects are the ones with high-interest rate, it created huge debt and Sri Lanka needed to give China the right to control Hambantota port. This is one typical example of how dangerous China’s hegemonic ambition has become. This time, the National Security Strategy of Japan clearly wrote “Strategic Use of ODA.” Japan will continue many infrastructure projects in South Asia as pure assistance. But at the same time, Japan will increase the projects to save local countries and dissuade China’s hegemonic ambition. How do you see the growing rivalry between the US and China in the Indo-Pacific region? The most recent US National Security Strategy indicated that US-China competition will escalate. The document states: “The PRC is the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it. And three factors indicate that America is on the road to win the competition with China. First, the US is still stronger than China. A SIPRI database indicates that the US military expenditure in 2020 was three times bigger than China’s. In addition, the US has more allies. The number of political partners has been a decisive factor in geopolitical competition. For example, in WWI, the winning side comprised 32 countries, but the losing side was composed of just four countries. In WWII, the winning side had 54, but the losing side had only eight. In the case of the US-Soviet Cold War, the winning side had 54 countries, but the defeated side had 26. In the case of the current US-China competition, the US has 52 legal-based formal allies including NATO, the Central and South American countries, and Middle East and Asian allies like Japan. But China has only North Korea as a formal ally. The history of the US indicates that the US will win the competition with China.  246 years ago, the US was a single colony of the British Empire. But they transformed into the world’s only superpower now. During this time, all rivals of the US, including Germany, Japan, and the USSR, disappeared. This means that the US system is a successful system to be powerful and win the competition. And indeed, the US had a long-term plan to win the competition. For example, before WWII, the US had an “Orange Plan” to defeat Japan and implemented it. But when that plan was declassified in 1974, the world was surprised to learn that there were also other plans, including a “Red Plan” to defeat Britain and Canada. Both in WWI and WWII, the US supported the British. But because the world is changeable, it is understandable that the US was prepared for any type of contingency. If the US National Security Strategy states that “the PRC is the only competitor,” it is natural to conclude that the US has the plan to defeat China. US Republicans and Democrats share many similar goals toward China. The Trump administration’s so-called ‘high-tech war,’ which banned products from Huawei and ZTE,  started when the Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE was published in 2012, during the Obama administration. The current Biden administration also continued the policy. The US’s objectives in this competition have bipartisan support. Therefore, considering these situations, we should stand with the US because being on the winning side is beneficial. And three factors indicate that America is on the road to win the competition with China Where does India stand on the US-China rivalry? India and Japan share the same set of problems. For example, in the sea around the Senkaku Islands of Japan, China has employed its coast guards and increased its activities. In 2011, the number of Chinese vessels identified within the contiguous zone in the waters surrounding the Senkaku Islands in Japan was only 12. But the number increased to 428 in 2012, 819 in 2013, 729 in 2014, 707 in 2015, 752 in 2016, 696 in 2017, and 615 in 2018. By 2019, the number had reached 1097. A comparison between the number of Chinese vessels identified within the contiguous zone in the waters surrounding the Senkaku Islands in Japan and China’s incursions in the Sino-Indian border area are similar. In 2011, India recorded 213 incursions in the Sino-Indian border area, but in the following years, the numbers were larger: 426 in 2012, 411 in 2013, 460 in 2014, 428 in 2015, 296 in 2016, 473 in 2017, 404 in 2018, and 663 in 2019. These incursions are similar to China’s activities around the Senkaku Islands of Japan. Based on the number of Chinese incursions in the India-China border area and Chinese activities in the sea around the Senkaku Islands, it becomes apparent that China has increased its assertiveness in 2012 and 2019 in both regions. Therefore, India should cooperate with the US, Australia and Japan. However, cooperation also has a risk. In the QUAD, India could be the first target of China to make pressure. India shares a land border with China and the US, Australia and Japan do not. It is easier for China to provoke India by using ground and air forces. In addition, India is not a treaty-based formal ally with the US like Australia and Japan are. View from China is that India is the weakest link. If China wants to make pressure to disband QUAD, India could be the first target. Therefore, India wanted to be low profile in the QUAD military cooperation despite India promoting military cooperation with other QUAD members. However, China’s recent provocation against India on the India-China border changed India’s attitude. The more China escalates the situation, the more the QUAD should become institutionalized and cohesive. What are your suggestions to the countries like Nepal regarding the conduct of foreign policy in this turbulent geopolitical environment? The above mentioned answer indicated two things. Firstly, China’s infrastructure projects and economic support could be a ‘debt trap’. Japan’s one is workable and far better. Second, America is on the road to winning the competition with China. The winning side is always beneficial. But when Nepal shows a clear stance against China, China will provoke and try to punish Nepal. Therefore, Nepal should gradually distance itself from China. For Nepal to cooperate with the QUAD side more deeply and steadily is the best policy.  

Rajendra KC is the founder of Southwestern State College and one of the founding members of Nepal PhD Association. He has previously served as the chief advisor to HISSAN central committee, chairperson of Rural Environment and Development Association (REDA-Nepal) and board member of Kathmandu Capital Ltd as well. A notable person in the education fraternity, KC now has developed a concept of University of Three Generation (U-3G). Pratik Ghimire ApEx talks to him in this context. How did the concept of the U-3G come about and what does it actually mean? If we look around the world, we see different institutions teaching students a variety of courses in the name of universities. But they are essentially operating only to provide academic certificates. This makes it difficult for the students in the future, because certificates alone can’t help them compete in the global market. What we need to do is connect formal and informal education. In this method of education system, a senior professor, for example, can share his or her career story, of all the ups and downs. And as formal education, students are taught the academic curriculum. U-3G means three generations coming together and sharing their understanding, experience and knowledge. It brings all three generations: youths, working men and women, and retired citizens together to empower and involve the students, so that they could lead and transform society. Why do you think we need such a university? A large number of Nepali youths are abroad. Young energy, be it physical, mental or psychological, is extremely important for a country. But our youngsters have been migrating overseas for jobs and higher studies. To stop this, what we thought would come into use was the experience of adult citizens. The citizens mostly of the 50-59 age bracket who are experienced in different areas could  motivate the youths. Their network or finance could also be helpful. This exchange of experience between adult citizens and those below 40 years will act as an informal education to enhance the overall personality of our students. And since this university aims to promote, foster, and encourage all stakeholders for collaboration, partnership, alliances, and development based on 4Ps modalities (public-private-people partnerships), this concept is the need of the hour. Are the works going well with the establishment of university? Yes. We are in our initial phase and all the legal work has been completed. We have a team of experienced individuals like former government secretaries, retired Nepal Army officers, bank CEOs, academicians, and social workers, among others. How could we utilize human capital? In Nepal, especially for political leaders, capital basically means property, house and vehicle. What we have failed to realize is that the first capital for any nation is its citizens. This human capital is what eventually makes what we know as financial capital. Human capital includes the ideologies of the youth and their enthusiasm and the experience of adult citizens. As a university, we can provide the best education and experience to our students with which the trend of moving abroad could be reduced. Of course, we cannot and should not stop anyone if they wish to go abroad, but we can limit the trend of Nepali citizens migrating overseas permanently. What should our educational system look like?  In the name of globalization, we are adapting a combined curriculum from different countries. We should plan our own curriculum depending on our needs and resources. So, it is clear that our educational system has many loopholes. They should be revised as soon as possible.