Dear readers,

This week, KP Sharma Oli, chairperson of CPN-UML, was sworn in as prime minister for the fourth time in his decades-long political career. He first became prime minister in 2015 during India’s economic blockade, led a communist government in 2018 with support from more than two-thirds of the parliament, and briefly served again in 2021.

Oli had not expected to return to power so soon. If the alliance between CPN (Maoist Center) and UML had continued, Pushpa Kamal Dahal might have handed power to Oli after two years. However, by allying with the largest party in the Parliament, the Nepali Congress, Oli returned to power this week. According to their agreement, he will hand over power to NC President Sher Bahadur Deuba after two years. Initially, the NC and UML had mooted a national unity government with the Maoist Center. The plan was to let Dahal lead for an additional year, then hand over to Oli, who would eventually pass the leadership back to Deuba. This proposal fell through as the NC and UML doubted Dahal. Including all major parties in a national unity government would have been ideal. 

Soon after his appointment Prime Minister Oli formed a 22-member cabinet without the delays seen in the past, which is a positive start. But the cabinet has faced scrutiny for its poor representation of women, Dalits and other marginalized communities. The new government's main priorities are stability, economic recovery and constitutional amendments. However, the agreement between the NC and UML has not been publicized, and the coalition has yet to present its Common Minimum Program (CMP). Oli is expected to outline the government’s policies and priorities during his address to the parliament on July 21, while seeking a vote of confidence. 

Major powers, including India, the US and China, have congratulated Oli on his appointment. Foreign ambassadors in Kathmandu are also visiting Singhadurbar to congratulate the new ministers. These powers are keenly awaiting the NC-UML coalition’s foreign policy blueprint. Observers are interested in how the two parties, with differing views on some issues, align their positions to present a unified message on bilateral and global matters. In the past, the UML has criticized the NC for failing to balance relations between India and China. 

Now, with the two parties working together, close coordination among the top leadership is essential to avoid contradictory messages. The newly-appointed Minister for Foreign Affairs, Arzu Rana Deuba, has pledged to maintain balanced and cordial relations with major powers. Incidentally, Nepal established formal diplomatic relations with the Republic of Kiribati this week. Nepal now has formal diplomatic ties with 183 countries, which is a good thing. We hope Nepal’s diplomacy will further expand and prosper under Deuba’s tenure.

On the economic front, Nepal Stock Exchange (Nepse) index hit a 26-month high and breached the psychological 2,300-point mark this week. The stock market rally coincided with UML Vice-chairperson Bishnu Prasad Poudel’s return to the finance ministry. While this stock market bump bodes well for Paudel, he still has a challenge of addressing some crucial issues, such as increasing capital expenditure, stimulating loan demand, boosting private confidence, and making the market dynamic.

How will the latest coalition government under Prime Minister Oli fare? It is too early to tell but Prime Minister Oli’s one-week in office leaves a lot to be desired. The prime minister has spent his first week attending public functions, rather than channelizing his time and energies on prime ministerial duties, especially at a time when the country is facing several challenges. As the leader of the country, Oli should inspire optimism among the people, restore faith in the government. 

In the coming weeks, people will closely watch the new government’s activities and performance. There is high hope that the government will take initiatives to improve the economy, create jobs, and inspire confidence in the populace about their future.

Meanwhile, out of power, CPN (Maoist Center) leader Dahal has started forming a strong opposition by bringing together fringe communist parties. This week, he organized a meeting with parties including CPN (Unified Socialist) led by Madhav Kumar Nepal. With the NC and UML forming a coalition, the opposition parties are in a weaker position in the parliament. Dahal aims to unite Maoist splinter groups to bolster his influence. When in power, Dahal often disregards these smaller parties, but out of power, he aligns with their agendas. 

In another story this week, a landslide swept away two buses and plunged them into a flood-swollen Trishuli River at Simaltal in Bharatpur Metropolitan City-29, Chitwan district. Of the 65 passengers, three survived, while 62 others were swept away. As of Thursday, authorities have managed to recover 18 bodies. The government has formed a committee to investigate and sought assistance from India, Bangladesh and other countries for rescue operations. 

Our thoughts and prayers go out to the families of the deceased and those still missing in the tragic accident. Let’s hope the search operation is successful, and that the new government comes up with a solution to make our highways safer for travel, particularly during the monsoon season.      

That’s all for this week.