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The US Department of State’s Coordinator on Global Anti-Corruption Richard Nephew paid an official visit to Nepal this past week. According to the US embassy in Kathmandu, Nephew discussed with Nepali officials the progress regarding Nepal’s anti-corruption commitment as part of Summit for Democracy, and pledged US commitment to supporting Nepal’s efforts to eradicate corruption.

Nephew’s visit comes at a time when Nepal is investigating some big corruption scandals such as the fake Bhutanese refugee scandal, Lalita Niwas land grab and Kathmandu airport gold trafficking case. The US anti-corruption head also met Deputy Prime Minister and Minister for Home Affairs Narayan Kaji Shrestha and the leadership of the Central Investigation Bureau of Nepal Police. 

Fighting corruption is a key component of US foreign policy. In response to ApEx’s email inquiry about Nephew’s visit, a US State Department spokesperson said: “We know as a universal truth that corruption erodes public trust in government and democratic institutions, deepens poverty and inequity, threatens public security, and stifles opportunity and growth.”

“It affects people in virtually every aspect of their daily lives, draining vital resources. That is why President Biden has designated the fight against corruption as a core US national security interest and why Coordinator Nephew’s mission is so important.” 

During his two-day Nepal stay, Nephew met with various Nepali officials  to learn about corruption challenges and to confer on how the US can help address these issues as part of overall Nepal-US partnership.

The US State Department spokesperson said Nephew was not in Nepal to see the progress on any specific case of corruption. In response to ApEx’s inquiry, the spokesperson said: “Just like any allegations of corruption, the current allegations of corruption and the unlawful fabrication of refugee documents in Nepal are concerning.”

This is probably the first time the US has expressed concerns over the fake Bhutanese refugee scam.  

“We understand Nepali authorities are investigating the allegations and hope they will quickly determine what transpired, hold perpetrators accountable, and deter future corruption cases in accordance with the law and the Nepal government’s commitments to transparency and accountability,” said the spokesperson.

“The United States has consistently supported Nepali government and civil society efforts to root out corruption. Transparent investigations into allegations of corruption demonstrate to the Nepali people that no one is above the law.  We commend actions by the Government of Nepal to bring truth to light in accordance with rule of law.”

Between 2007 and 2018, the US has welcomed tens of thousands of Bhutanese refugees formerly residing in Nepal as part of our global commitment to support refugees. The program has since ended, and there were no significant concerns regarding fraudulent activity associated with that resettlement process, said the spokesperson. 

Of late, visiting US officials have been raising corruption eradication as a key agenda to strengthen democracy. Earlier in January, US under Secretary for Political Affairs Victoria Nuland talked with Nepali politicians about the need to continue fighting corruption.

 The Biden administration in 2021 unveiled the US Strategy on Countering Corruption. In June that year, Biden said that corruption threatens United States national security, economic equity, global anti-poverty and development efforts, and democracy itself. “But by effectively preventing and countering corruption and demonstrating the advances of transparent and accountable governance, we can secure a critical advantage for the United States and other democracies,” he added.  

In Nepal, three corruption scandals—fake refugee scandal, Lalita Niwas land grab and gold smuggling—are under investigation. On the fake refugee case, the CIB has already filed cases against more than one person including former home minister, Bal Krishna Khand, and CPN-UML senior leader Top Bahadur Rayamajhi.
The CIB has also reopened the file on Lalita Niwas land grab case in which two former prime ministers Madhav Kumar Nepal and Baburam Bhattarai have also been implicated. The CIB is also investigating the gold trafficking case from Kathmandu’s Tribhuvan International Airport in which the involvement of high profile business persons and politicians has been suspected.

Nepali Congress President Sher Bahadur Deuba and CPN (Unified Socialist) Chairman Madhav Nepal held a meeting on Tuesday.

According to a source, they held a serious discussion for almost two hours.

Leader Nepal had reached Dhumbarahi to meet Congress President Deuba after the Supreme Court issued a directive in the name of government to also bring decision makers in the Lalita Niwas land grab case under investigation.

Congress Vice-President Purna Bahadur Khadka and Chief Whip Ramesh Lekhak were also present in the meeting.

Chairman Nepal also expressed his dissatisfaction over the working style of the government with Deuba.

Saying that the Prime Minister Pushpa Kamal Dahal-led government has been targeting the leaders of the coalition, a source said that Nepal expressed his displeasure with Congress President Deuba.

He accused the CPN (Maoist Center) of operating the government unilaterally.

Former prime minister Nepal said that lawmaker Sunil Sharma was arrested just for asking the resignation of Home Minister Narayan Kaji Shrestha and the government to arrest Congress leader Bal Krishna Khand in the Bhutanese refugee case.

He said that the investigation into the Gaur massacre and others are serious issues.

Nepal demanded that a serious discussion should be held among the ruling coalition partners on the issue.

The meeting ruling coalition held on Monday evening was also focused on the same issue.

A source said that Prime Minister Dahal had also called Attorney General Dinmani Pokharel to the meeting to take suggestions regarding the order of the Supreme  Court.

The Janata Samajbadi Party had expressed its dissatisfaction in the meeting.

After the party strongly criticized the government, Prime Minister Dahal, who is also the Chairman of the CPN (Maoist Center) had expressed his commitment not to proceed with the investigation into the Gaur massacre.

A meeting of the National Assembly has been postponed till August 22.

According to the Federal Parliament Secretariat, the meeting called for August 16 was postponed due to a special reason.

Spokesperson of the Federal Parliament Secretariat, Ekram Giri, informed about the postponement of the NA meeting.

Issuing a notice, the Secretariat said that the next meeting has been scheduled for 1:01 pm on August 22.

Vice President Ram Sahay Prasad Yadav on Monday left for China for a week-long official visit. He is due to attend the Seventh China-South Asia Exposition and twenty-seventh China Kunming Import and Export Fair.  

Vice President Yadav is also expected to hold some high-level talks with Chinese officials. This will be his first foreign visit after his election in March this year. He had expressed his wish to visit India first, but did not get an invitation from the southern neighbor.

China has increased its engagement with Nepal in recent days. There have been increased high-level visit exchanges between both countries, and these visits are not just limited at government-to-government level. Many visits have taken place at the party-to-party level as well. 

Communist Party of China has sent several of its delegation to Nepal and correspondingly, various political parties of Nepal have received invitations from the CPC. The series of visit exchanges between government officials and political party representatives is a clear sign that China accords high priority to Nepal.       

In meetings with Nepali officials, CPC leaders have said that they are willing to enhance cooperation and exchanges with Nepal in agriculture, poverty reduction and education to enrich the relationship between the two countries through subnational exchanges. 

China stepped up its engagement with Nepali parliamentarians as well, mainly after the endorsement of America’s Millennium Challenge Corporation (MCC). 

Earlier in June, Chairman of the National Assembly Ganesh Prasad Timilsina visited China where he held talks with his counterpart Zhao Leji and other high-level government officials. Likewise in July, Deputy Speaker of the House of Representatives Indira Rana-led parliamentary team visited China to attend the Eco Forum Global Guiyang-2023.

Amid flurry of visits, preparations are also underway for Prime Minister Pushpa Kamal Dahal’s visit to China in September. While Beijing has also extended an invite to President Ram Chandra Poudel, he is most likely to visit India first.   

Regarding the possible agenda of Prime Minister Dahal’s upcoming China visit, he has already said that some vital agreements relating to power-trade agreements and bilateral projects would be signed. But some experts say despite Prime Minister Dahal’s plan to sign a power trade agreement with China, it is not feasible. 

Ganesh Karki, chairman of Independent Power Producers’ Association, says after the construction of transmission lines, Nepal could be able to send a small amount of electricity to China, but Nepal’s main market is  India. 

Just like the transit and transport agreement, Dahal may have planned to give a symbolic message, but China cannot become a major market for power trade (see page 4 for detailed report). Of late, Chinese investment in Nepal’s hydropower sector is dwindling, while India has emerged as a dominant player. The Chinese side has been known to express displeasure with the Nepali officials over India’s dominance in Nepal’s energy sector.

For China, the implementation of Belt and Road Initiative (BRI) in Nepal is the key priority area. But there is an unease in Nepal regarding the BRI after China listed Pokhara International Airport as part of the BRI. Nepali ministers have time and again dismissed the Chinese claim, saying that Nepal has yet to execute any project under the BRI.  

Officials say the first priority of Prime Minister Dahal, while talking with Beijing officials, will be to seek China’s concrete position on the BRI. 

Prime Minister Dahal has not spoken much about the BRI in recent days. Previously, he used to say that China should help construct at least one major project as a gift under the BRI.

Tanka Karki, former Nepali ambassador to China, says the prime minister’s imminent China visit should be focused on the implementation of past agreements signed between two countries including the BRI. If there are any problems regarding the implementation of the agreements, Dahal should communicate what those problems are.

The Chinese side has also been stressing the need of implementing the past agreements signed between the two countries during Chinese President Xi Jinping’s Nepal visit. But the coalition partners are not on the same page when it comes to engaging with China.

Along with the BRI, China has also been urging Nepal to make commitments on the Global Security Initiative, Global Development Initiative (GDI) and Global Civilization Initiative (GCI). Experts say the prime minister and government officials should clearly communicate their concerns and positions on these latest initiatives of China, and not rush into signing new agreements. 

There are a lot of agreements from which Nepal can take benefit, says Karki, but the focus should be on their implementation. He is of the view that there is no need of signing new agreements with China when the past agreements have not moved forward. 

Upendra Gautam, general secretary of China Study Center, says Prime Minister Dahal must take China into confidence when it comes to securing Beijing’s core interests, including bilateral territorial security mechanisms for stable trade, transit, transport, agriculture and cultural connectivity. 

Nepal’s longstanding and generally stable ties with China offers Prime Minister Dahal a rare historic opportunity to prove that he is not just a tool in the fractious South Asian politics dominated by India-China rivalry. 

If the prime minister plays his cards right, he can steer Nepal toward the path of prosperity by establishing mutually cooperative and highly reciprocal relationships with immediate neighbors.  

Nepal’s Ambassador to China Bishnu Pukar Shrestha says progress on rail and roadway connectivity are the key priority areas of Nepal which are the bedrock of boosting bilateral trade and investment. 

During Prime Minister Dahal’s China visit, Shrestha says Nepal will request the Chinese side to expedite the China-funded development projects in Nepal. 

He adds signing power trade agreements, increasing Chinese investment and resolving trade bottlenecks are also on the list of priorities. 

Key points for PM Dahal’s China trip

• Projects under BRI
• Bringing Chinese investment
• Implementation of transit and transport agreement
• Connectivity (road and railway)
• Mutual legal assistance
• Power Trade agreement
• Border management
• Removing trade bottlenecks
•  Resumption of joint military drill
• Global Security Initiative, Global Civilization Initiative  
• Peace and friendship treaty