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I’m sitting in the most authentic French restaurant in town. I heard it is up for sale and realizing I hadn’t been here for around a year decided to pop in after a meeting nearby. I peruse the menu. It is reminiscent of the winter 2015/16 “no gas” menus in that it is a shadow of its former self. I had wanted the wonderful, light and tasty crepes but they are not on the menu. I opt for another French classic. 

Situated in Babar Mahal Revisited Chez Caroline has been running under the watchful eye of its owner since 1997. But now it seems it’s time to go. Fortunately its sale includes the staff and menus so we must hope this restaurant, situated in the quaint setting of a recreated Rana palace, will continue to serve classic French food. I also hoped to enjoy the ambiance of the setting today but of the only two other guests, one is constantly on his phone giving advice to one caller after another which runs on a loop of “No beds available. Self-isolate.  Take vitamins.” This is not the experience I was looking for.

I wander round the complex. If you don’t know, it is a recreation of the original Baber Mahal, the remaining parts situated just up the street a little, built in 1910 by Maharaja Chandra Shumsher Jung Bahdur Rana. It is the usual white plastered building in the Neoclassical or Baroque European architecture style. Babar Mahal Revisited was build decades later in the 1990s by the grandson of Chandra Shumsher as a tribute to these old Rana palaces. As far as I am aware, the only original parts of the palace within this complex are the then cowsheds and guards houses.

Back in the present—I already know of one shop up for sale as well as a lovely boutique hotel.  The shops are open today but aside from the ubiquitous photo shoot, with model, camera-man and hangers on, it seems I’m the only visitor. One shop-keeper feels over the past couple of weeks business has picked up. Knowing the unique and expensive objet d’art sold in most of the shops, I feel this might be remaining expats who are planning trips home and are buying Christmas gifts. Shopping sprees which won’t sustain long.

I’ve heard many shops in Thamel are also closed and/or up for sale. We all had high hopes at the beginning of the Nepal lockdown that the autumn tourist season would go ahead, saving the jobs of thousands in the tourism industry. Reality has now hit. With both rising Covid-19 cases in Nepal and no relief (or plans) in sight and the second wave hitting Europe, our hopes for this season are dashed. And finally we are beginning to see the big picture… tourism might not revive for between two to five years. Depending on who you read. And even if trekkers do arrive in Nepal, many savvy local communities are closing up their lodges and teahouses quoting the risk is not worth the monetary gain in this rapidly shrinking trekking season.

But today, although disappointed I can’t get crepes, and that the bread basket only contains baguette, not the usual variety of breads, and somewhat annoyed the gentleman at the end of the courtyard is a constant reminder of the present reality, I am grateful that I can still enjoy a rare treat and that I am not forced to sit at Khula Manch to receive food. Or worse, unable to receive free food since it is now deemed, after seven months, ‘undignified and unhygienic’. As I sit in this French restaurant a famous phrase attributed to Marie-Antoinette comes to mind: “Let them eat cake.” And we all know what happened to her.

All is not well between China and KP Oli. The Nepali prime minister is miffed by the Chinese insistence of late that he should rather resign than cause a split in the ruling Nepal Communist Party. Nor are the Chinese all that pleased with Oli, who, they feel, isn’t doing enough to push BRI projects in Nepal. Oli’s off-the-cuff readiness to split the NCP, which China helped come into being and in which it has invested so much, also irks the northern neighbor.

Cornered in his own party and with the outside power that hoisted him to the PM’s chair displeased, Oli has chosen a familiar tactic: ship-jumping. Until the new constitution’s promulgation in 2015, Oli was among New Delhi’s most trusted henchmen in Kathmandu. But when he saw his fortune lay in opposing Indian highhandedness over the Nepali constitutional process, he swiftly ditched his old allegiance. Overnight, he turned into an ardent advocate of cultivating China as a balancing power against India. This anti-India stand paid him handsomely in the 2017 federal elections. 

He is now trying to reach out to his old contacts in New Delhi, sending feelers of his readiness to bury the hatchet. The recent spate of high-level Nepal visits of top Indian officials—and some covert trips the other way—suggests the same. In other words, Oli is seeking India’s help to prolong his tenure in power. In doing so, he has, among other stuff, promised not to needle India over border issues again. 

In the weeks and months ahead, he will try to convince the Indians that he is remorseful of his past pro-China stand and ready to make amends. The new message will be that India has to back him politically if it wants to check growing Chinese influence in Nepal. New Delhi seems to be taking heed and again appears ready to give him a second chance, largely for the lack of a batter alternative given the balance of power in Kathmandu. If Oli digs in and splits his party, so much the better. In the Indian eye the NCP is a Chinese construct and its disappearance would again give India a chance to play kingmaker in Kathmandu. Standing in the way is China. 

Given the enormous Chinese leverage inside the NCP, it won’t be easy for Oli to split it and still retain majority support within the party. Nor will a sudden switch to India be a cakewalk. But Oli’s goal is not long-term survival. He is more minded to keep his government intact for a bit over the next two years that remains in his term. Oli will deal with the next political hurdle when he gets to it. 

Amid the flurry of high-level visits between Nepal and India, Chinese Defense Minister Wei Fenghe is coming to Kathmandu as well, signaling that China won’t allow India to regain its dominant role in Nepal easily, not the least because it is seen as doing US bidding here. China under Xi Jinping is a beast on the prowl. Gone are the days when it reluctantly allowed India the upper hand in Nepal. 

Talks of increasing geopolitical competition on Nepali soil have become such clichés. But Nepal appears poised for a rare post-monarchy no-hold-barred open tussle between India and China for sway. India reckons it can regain its lost clout and is counting on American support for the same. China, now under an imperious leader who has set his sights on South Asia, is in no mood to back down either. 

The United States offered Nepal $500 million in grants for the construction of transmission lines and strategic roads through the Millennium Challenge Corporation (MCC). It was meant to be a transformative deal: a grant large enough to unlock in one stroke the most important chokepoints in Nepal’s power sector.

Instead, the MCC project got mired in a debilitating national debate, forcing the government to delay its discussion in parliament. Why did a transformative deal evoke such a fierce public debate?        

Many have attributed this to Nepal’s usual political squabbling or some geopolitical machination. But such simplistic explanations cloud other meaningful reflections.

No matter how the government comes out on the MCC, there is plenty to learn from the debate itself.

The debate showed that political power in Nepal is more diffuse than is believed.

The public debate only flared up late in the process, as the compact was to be presented in parliament. The debate’s speed and intensity surprised many.

Prior to the start of the debate, public communications around the compact were sparse. The collective set of public comments by handlers, both in the MCC and the government, presents an illuminating picture of presumptuous arrogance: the old presumption that if you convince five people at the top, everyone else will follow.

Nepal has changed. Welcome to the cacophony (or inconveniences) of democracy.

In the 12 months since the start of the debate on MCC, Nepal has borrowed approximately $500 million—equivalent to what the MCC offered—from the World Bank and Asian Development Bank. Why should these borrowing not be subject to the same level of transparency, discourse, and parliamentary approval? Who will be held accountable if these loans prove unproductive?   

Where the debate will lead us is unclear, but the discourse itself is critical to establishing accountability.  

The debate exhibited that the promised benefits (for example employment, income, economic growth) from building thousands of megawatts worth of hydro power plants are either not tangible enough or the public doesn’t believe it.

By the time the debate had started, load-shedding had ended and the benefits of MCC projects centred entirely on illustrating the economic gains from new power plants. These benefits were estimated and presented.

Against the promise of so much benefit, opposition to the MCC centered on perceived loss of sovereignty. Why was it that so many Nepalis were drawn to arguments about the perceived loss of sovereignty despite the opportunities for economic benefits from building new power plants? Because, not many in Nepal believe in these economic benefits.

Nepalis care for electricity and having adequate supply. But the idea that building many new power plants will lead to tremendous growth just didn’t resonate enough. Why? Perhaps because, thus far in Nepal, the process of building hydro plants has benefited only a small group.     

The tragedy for the MCC is that load-shedding ended three years too early. If the MCC project had arrived in parliament earlier in the load-shedding era, and had it argued for an end of power cuts, the compact would have passed immediately. End of load-shedding—highly tangible, we all felt its pain. Prosperity from building new hydro plants—too abstract and hypothetical, which only a few have enjoyed so far.

The debate also highlighted the need for Nepal to establish centers that could serve as sources for credible neutral information.

The MCC compact with Nepal was an innovative design but also a complex structure, clearly new for Nepal at many levels. It required an act of parliament, a bilateral agreement with a third country, an odd inclusion of a small investment in “strategic roads” within a project on the power sector, and raised questions about Nepal’s ability to compete in Indian power markets.

There was enough in the agreement for everyone with a point of view. This was exactly what happened as the debate exploded. The discourse spun out of control, feeding a frenzy from the absurd to the fantastical.

Where should ordinary Nepalis turn to for reliable and credible information while in the midst of a scorching debate? To answer that question, those in authority must first acknowledge that ordinary Nepalis have a right to know, and second, that their views matter.        

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With growing numbers of urbanizing corridors in all seven provinces, urbanization has become an unstoppable force in the country’s development. This, coupled with booming e-commerce, is a major driver of growth, in what is a tested route to high economic growth for developing countries. Countries in South East Asia and Africa have taken these paths to developing vibrant economies. But we in Nepal also lack a coherent approach to developing large-scale connectivity projects that facilitate both urbanization and e-commerce.

Underpinning the importance of urban development, the government adopted the National Urban Development Strategy (NUDS) 2017. Going beyond, the government, with technical support of the Asian Development Bank, started a separate unit of Urban Planning and Development Center (UPDC) under Department of Urban Development and Building Construction (DUDBC). The center has been conducting research and building a knowledge pool required to advance sustainable urban development. Under UPDC and with the ADB’s financial support, a multi-disciplinary Urban Corridor Development study was completed in 2019, both in the east and west, laying a foundation for economic corridors in both areas. The government has already initiated the process of implementing corridor development in Province 1 and Lumbini Province, again with ADB support.

Recently, the World Bank also provided $150 million to improve urban governance and infrastructure projects in municipalities of two strategic urban clusters: eastern-Tarai region (Province 1 and 2) and western region (Gandaki and Lumbini Provinces), complementing government efforts to expedite Nepal’s urbanization. The World Bank’s support in urban development has come at the right time: there is a critical need to help municipalities enhance their urban governance and develop cross-municipalities infrastructures such as road, solid waste management, drinking water as well as education and health services. Nepal is at a crossroad of transforming urban governance by empowering local governments in the new federal set-up. The support of both the World Bank and the ADB in this needs to be in line with the spirit of constitution for there to be meaningful cooperation among local, provincial, and federal governments. The support for municipalities should also be done in close coordination with provincial governments.

One big challenge identified by scholars with Nepal’s three-tier federal model is ensuring seamless communication and cooperation among different tiers. It is vital that federal government agencies and our development partners accommodate all stakeholders, from top to bottom, for the institutionalization of federalism and achievement of the goal of prosperous Nepal. We need to keep emphasizing this, as we are yet to fully emerge from our unitary mindset.

Urbanization is also linked to rural-urban linkages and correlates with migration. People’s movement in search of jobs and better health and education services also call for robust and sustainable urban infrastructures. Environment-friendly urban cores attract upwardly mobile people. The coronavirus pandemic has reminded us of the importance of a balance with the larger eco-system; it is critical we do not blindly follow traditional growth models.

Our local and provincial governments desperately need to ensure better infrastructure and public service delivery. And this is exactly where the development partners come in—not just to fund old-style projects but also to invest in preserving our heritages and natural resources. The whole process of development and prosperity should thus be revisited. Doing so starts with the development of our urban cores the right way.