In Nepal politics, a push for the new
In a recent by-election, voters chose a new party in two of three seats. Nepal's ties with India, US and China stand to be affected by the churning. Here's how.
One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. On April 23, Nepali voters took this Platonic philosophy literally to the polls.
They roundly rejected candidates from the parties that have dominated politics for decades and voted in contenders from a new party. President of the newly formed Rastriya Swatantra Party (RSP), Rabi Lamichhane and the party’s new star campaigner Swarnim Wagle beat their rivals from established parties with handsome margins. A month ago, Wagle, who had repeatedly been snubbed by the Nepali Congress (NC) leadership, including in the general election in November, had defected from the grand old party established in 1950 and joined the RSP ranks.
The third by-election seat went to Upendra Yadav, president of the Nepal Samajwadi Party, a Madhesi party. The margin of the old-timer’s win was smaller in comparison to Rabi and Wagle’s victories, and a dark shadow loomed over his campaign. In November, he was beaten by a large margin by Janata Party leader CK Raut, an engineer trying his luck in electoral politics. This time around, Yadav salvaged his reputation as a common candidate of more than half a dozen parties in the ruling coalition, including the Nepali Congress and Prime Minister Pushpa Kamal Dahal Prachanda’s Communist Party of Nepal (Maoist Center) – the largest and the third-largest party in the deeply hung parliament. Notably, RSP and Janata Party were formed only before the November elections.
Rabi, as he is popularly called, garnered close to 70 per cent of the vote cast in Chitwan-2. Dr Wagle, an economist and public intellectual, made a remarkable political debut himself, walloping his rivals, including the one from the Congress. He filled in the seat vacated by the Congress veteran Ramchandra Poudel, 78, who was elected President in March.
The by-elections took place for three seats — one vacated by President Poudel, second by Vice President Ram Sahaya Yadav while Rabi Lamichhane was defending his own seat. After his win in November, the Supreme Court declared that he had contested on illegal grounds, holding dual citizenships — as Nepali and American. He has given up his US citizenship since and established his bona fides as a Nepali citizen.
While Prime Minister Prachanda has been in office since December, he lives dangerously, his government propped up by a motley coalition of 10 parties. In his four months in office, he has
already sought the vote of confidence twice and may need to seek yet again if any of the governing parties withdraws its support.
While it’s too early to write off the traditional parties, their decline has been particularly perceptible in urban constituencies. In a local election last May, Kathmandu elected Balen Shah, a rap singer and structural engineer, as its mayor. Shah, only 32 and contesting as an independent, drubbed his much-fancied rivals from the Congress and Communist Party of Nepal-Unified Marxist Leninist (CPN-UML), Nepal’s two leading parties. Later, in the general election, Kathmandu also elected number of young first-term MPs from RSP, with impressive professional backgrounds — a lawyer, a medical doctor, and a founder of Teach For Nepal, which runs an innovative programme of paid fellowships for those who are interested to teach in public schools. Many of the newly elected RSP MPs (21 of them in the 275-member lower house) are star performers in Parliament with huge followings on social media.
RSP’s election strategy has been simple: whip up the public anger against the established parties and leaders. That’s exactly the language Rabi used for years in his popular TV show Sidha Kura Janata Sanga (‘Straight Talk with the People’) aimed squarely at the political establishment. Dr Wagle, as a very convincing intellectual, is all set to add a whole new dimension to the RSP repertoire. Offering hard datasets, he likes to point out that Nepal needs to quickly harvest its ‘demographic dividend’ before it becomes an ageing society. Despite fewer people in need of support and a window of opportunity for rapid economic growth, Nepal has been unable to take advantage of its historically high working-age population.
After a short burst of energy in the early 1990s, the economy has remained largely moribund. The percentage of earnings through remittances is now close to 25% of national GDP, among the highest in the world. In comparison, other South Asian countries’ share of remittances in the GDP is far smaller—Pakistan 7.7%, Sri Lanka 4.9, Bangladesh 4.6, India 2.9, and Bhutan 2.0.
Navigating geopolitical fault linesHistorically, Nepal has always looked to balance its ties with two large neighbours, India and China (‘A yam between two boulders,’ as Nepal’s 18th Century unifier-king Prithvi Narayan Shah prophetically warned). But there is another dimension in Nepal’s external ties now, with the West, particularly the United States, emerging as an important ‘third pole’. The salience of new geopolitical fault lines in the Asia-Pacific region, not least in South Asia, cannot be missed in Nepal amid a protracted war in Ukraine and deepening tensions between Beijing and Washington. In several United Nations votes in recent months, Nepal’s position has been independent of all the three powers – Delhi, Beijing, and Washington.
What does this political churning mean to Nepal’s domestic politics and, not least, its foreign-policy priorities?
With both India and China, Nepal runs heavy trade deficits — a major irritant in their ties. Nepal looks to sign a long-term overarching agreement on power trade to avoid negotiations on every single project with New Delhi. It now exports more than 450MW to the Indian market produced from 10 separate hydropower projects. Additionally, India forbids Nepal from exporting power produced by Chinese investors or contractors. If these issues are ironed out, power could potentially be Nepal’s largest sustainable export to India, like that of Bhutan, and will go a long way towards reducing the exponentially high trade deficit.
With all the political bonhomie and exchanges of visits, there has not been tangible progress in Nepal’s economic ties with China. After more than three years of Covid restrictions, Beijing in early April finally allowed resumption of trade from the major overland border point Rasuwa-Kerung, just north of Kathmandu. Cross-border trade is expected to resume from six overland border points soon – from Olangchung Gola-Riwu in the east (not too far from Sikkim) to Hilsa-Yari in Humla (close to Manosarovar Lake and Mt Kailash in west Tibet). Though Nepal signed BRI in May 2017, exactly four years ago, not a single project has been developed under the framework agreement, President Xi Jinping’s ambitious foreign-policy architecture.
Early last year, Nepal’s Parliament ratified the Millennium Challenge Corporation (MCC) Compact, a $500 million American grant to develop energy and transport infrastructure. This became possible after the CPN (Maoist Centre) and CPN (Unified Socialist), the ruling parties, voted in favour of the Compact. Unlike the communist parties, the Nepali Congress has been consistently in favour of the largest-ever infrastructure grant to Nepal, but a change in balance of power in government could still invite fresh hurdles in the implementation of MCC projects. Nepal’s communist parties have traditionally been closer to Beijing, with the Chinese Communist Party deepening ties with the now-defunct Nepal Communist Party (NCP) between 2017 to 2021. In 2019, when President Xi visited Kathmandu, the first visit by a Chinese head of state in 23 years, the then NCP chairman K P Sharma Oli was Prime Minister, and Bidhya Devi Bhandari, who got elected on NCP ticket, was President. The NCP government also had a sizable political base, with close to two-thirds vote in Parliament. It’s a completely different political landscape now.
PM Prachanda has been put in office by disparate parties and is unlikely to hold a vastly different outlook towards Nepal’s external relations from the one headed by the Congress until December. With the power of the PMO much reduced, the Maoist supremo will look to balance ties with Delhi, Beijing and Washington.
RSP is expected to influence foreign policy debate; Dr Wagle in particular holds the gravitas. He was Chief Economic Advisor at the UNDP Regional Bureau for Asia and the Pacific and Senior Economist with the World Bank in Washington. His advice is widely sought after not just in Nepal, but also by foreign governments in the Asia-Pacific region. Last year, as the economic crisis deepened in Sri Lanka, Wagle was invited to address its members of parliament.
Much of the debate around some of Nepal’s high-profile foreign-aided projects, such as the ones funded by the United States’ MCC and China’s BRI, has been heavily coloured by political biases and preferences, instead of economic rationale. Fresh off the bloc and without much political baggage, the new parties in particular are more likely to provide a much-needed statesmanship while prioritising Nepal’s economic development programmes.
Nepali voters most certainly would welcome that. They see traditional parties as corrupt, myopic and sclerotic, run by ageing leaders who are increasingly out of touch with the aspirations of young Nepalis. It’s time foreign governments and institutions took note of the changing political tides.
Akhilesh Upadhyay is a Senior Research Fellow at IIDS, a Kathmandu-based think tank
The views expressed are personal