Can Nepal Achieve Political Stability?

Not a single government in Nepal has served out a full five-year term since the restoration of democracy in 1990. The federal government to be formed after the November 20, 2022, elections is unlikely to be an exception.

In the recent elections, the Nepali Congress, the traditional champion of liberal democracy, emerged at the top, winning 89 seats in the 275-member federal lower house. Hot on its heels was the Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML), the torchbearer of leftist politics, with 78 seats. The CPN (Maoist Center), the revolutionary force that waged a decade-long armed insurgency to overthrow the old unitary state, came in third, with 32 seats.

In the previous elections in 2017, at a time when the UML and the Maoists had struck an electoral alliance, they won 121 and 53 seats, respectively. The two parties later united to give birth to a behemoth leftist force in the form of the Nepal Communist Party (NCP). The unified party went on to form governments at the center as well as in six of the country’s seven provinces. People had given the communist coalition an overwhelming mandate to rule for five years; they had voted in favor of stability.

But it wasn’t meant to be. As suspected at the time of their merger, the two communist parties had come together not because they were ideological cousins but because the merger suited the political ambitions of both UML Chairman K.P. Oli and his Maoist Center counterpart, Pushpa Kamal Dahal.

They had a “gentleman’s agreement” that each would lead the government for two and a half years. Oli got first crack at the top executive post, but when the time came to switch he refused to step down. Feeling betrayed, in March 2021 Dahal walked away to revive his old political outfit; at the same time, a big chunk of the UML also broke away from the mothership.

Then, in July 2021, the Supreme Court dismissed the Oli government when he tried to unconstitutionally dissolve the federal lower house and call snap elections. Removing Oli from office, the court declared Congress leader Sher Bahadur Deuba the new prime minister. Joining him in the new government was the Maoist Center, plus three smaller parties.

Decision 2022

Four of the five parties in the ruling coalition decided to jointly contest the 2022 elections. The coalition had been cobbled together out of the necessity of unseating an increasingly authoritarian Oli, but electorally, it was an unnatural amalgam. The Congress and the Maoist Center are ideological opposites. So when the Congress asked its traditional voters to again support Maoist Center candidates, some declined.

Many of them instead voted for the Rastriya Swatantra Party (RSP), a new center-right outfit, which won 20 seats in the federal parliament just six months after its formation. Besides individually beating the candidates of the three leading parties, the RSP also cut into their total vote share. (In the 275-member house, 110 members are elected based on proportional representation; the remaining 165 are directly elected.)

Likewise, the Rastriya Prajatantra Party (RPP), a conservative force that advocates Nepal’s reidentification as a Hindu state, got 14 seats.

The emergence of the RSP and its leader Rabi Lamichhane – an in-your-face former television news anchor – was easily the biggest surprise of the recent elections. Lamichhane was able to capture the public’s imagination by the sheer weight of his personality and his constant advocacy on behalf of around 4 million Nepali migrant workers. It is said that many of them called their friends and family members back home, requesting – even ordering – them to vote for Lamichhane’s new party.

Fed up with the traditional parties’ poor delivery, as well as the rather confusing electoral alliances they tended to forge, people decided to give the party of “young independents” a chance. The party did particularly well in the urban hubs around the main highway that traverses Nepal.

But it would still be the Big Three – the Congress, the UML, and the Maoist Center – which would be calling the shots in government formation.

Immediately after the publication of election results, two politicians were being talked of as likely prime ministerial candidates: Sher Bahadur Deuba, the Congress chief; and Pushpa Kamal Dahal, the Maoist Center chairman. Their parties had jointly fought the elections and the only question that needed to be settled between them was who would lead the post-election coalition government first. (The two were expected to evenly split the five-year term.)

But neither was in a mood to wait. When the Maoist Center chairman Dahal became convinced that Deuba would not allow him to be the leader first, he swiftly abandoned the old alliance and reached out to UML and its chairman Oli. Old enmity was quickly forgotten as the UML and the Maoist Center forged a new rainbow seven-party coalition (also comprising the Rastriya Swatantra Party, the Rastriya Prajatantra Party, the Janata Samajbadi Party, the Janamat Party, and the Nagarik Unmukti Party). Under this arrangement, Dahal would be prime minister for the first half of the five-year term and Oli would follow him in the post after that.

And so on December 25, Dahal, the former leader of an armed rebellion against the state, became prime minister for the third time with the support of 169 lawmakers; he only needed 138 lawmakers to prove his house majority.

Despite this seemingly comfortable cushion for the new government, stability could still be elusive.

“Political stability is government stability,” said Tula Narayan Shah, a political analyst. “And I see absolutely no chance of a stable government in the next five years.”

The new prime minister is a temperamental politician, and as such you never know what he will do next, Shah added. “His coalition partner Oli is also not someone known for his political integrity.”

The Presidential Conundrum

There will be some other difficult issues to deal with, none more so than the fate of the presidency.

With the Maoist Center taking the prime minister, the UML will now get to appoint Nepal’s new president as well as the new speaker of the House. The largely ceremonial office has played an increasingly interventionist role in Nepali politics. Recently, incumbent President Bidya Devi Bhandari, stepping on dubious constitutional grounds, refused to authenticate a law granting citizenship to stateless people. Bhandari, a former UML leader, has been repeatedly accused of working at the behest of Oli. (She must now retire after serving as president for two consecutive terms.)

Political parties see that while prime ministers come and go, the president stays for five years. History suggests the office can also be leaned on to serve vested interests. The presidency could become yet another source of instability.

Bipin Adhikari, a constitutional lawyer, reckons that the presidency will affect government stability only if a “politically towering personality” occupies the office. But if the president is chosen based on the principle of inclusiveness rather than their political affiliation, “he or she is likely to stay within constitutional bounds.”

Adhikari thus finds the ongoing talks of “adjusting” senior politicians in important posts like the president and speaker in the name of “coalition compulsion” rather troubling.

As things stand, although Dahal will lead the government, Oli, with his picks for president and speaker as well as chief ministers of up to four of seven provinces, will be calling the shots.

If Oli feels Dahal is stepping out of line, or he gets impatient to become prime minister again, the new coalition could quickly unravel. History suggests neither Dahal nor Oli is a patient person.

Although the constitution rules out a vote of no confidence for the first two years of a new government, it could still be toppled if it falls into the minority and cannot prove a majority in the house. Thus, multiple governments could either come and go over the next five years or the country could head into midterm elections.

Federalism at Risk? 

Some fear Nepal has tilted too far to the right after the recent elections, with the resurgence of the pro-monarchy RPP and the federalism-skeptic RSP. The RSP, for instance, envisions provinces with minimal powers, which is against the spirit of the new federal constitution.

Does the strong showing of these forces suggest that the federal project is in jeopardy?

Khim Lal Devkota, an expert on Nepal’s federalism, doesn’t think so. Particularly in the case of the RSP, he believes the new party is yet to understand the nitty-gritty of the country’s federal structure. “They don’t even get how power in the provinces translates to power at the federal level,” Devkota said. (The RSP didn’t field any candidates in the provincial elections.)

While the RSP and the RPP had a good election, pro-federalism forces like the C.K. Raut-led Janamat Party and the Ranjeeta Shrestha-led Nagarik Unmukti Party also did well. “In this way, the pro-federal forces will more than balance the anti-federal parties,” Devkota said.

This is why he does not believe the mandate of recent elections was that the federal setup should somehow be rolled back.

What the elections did suggest is that voters prefer candidates with solid track records and those from the younger generation. Many old political heavyweights who rose up the state ladder on the back of money and muscle power were beaten. Even in old parties like the Congress and the UML, with a few exceptions, younger candidates and those with clean images won while many of the tainted old faces were booted out. To ensure their victory, top leaders of major parties had to contest from “safe seats.”

Another interesting trend was that many voters, while enthusiastic about voting at the federal level, were not even aware of provincial-level candidates. (Nepal has a three-tier federal structure that comprises federal, provincial, and local governments.) Almost all important political leaders chose to contest the federal elections. With the provincial-level races left to candidates with little name recognition, people were unenthused. The fear is that as the country’s provincial politics is highly dependent on federal politics, the instability at the center could percolate down to the provinces.

Wobbly Economy, Errant Foreign Policy

Amid ongoing political instability, the national economy is in bad shape as Nepal continues to battle a crippling liquidity crunch and inflation is on the rise. An expected surge in Covid-19 cases this winter (and beyond) could make things worse.

Economist Chandan Sapkota foresees a continued decrease in domestic and foreign investment. The Nepali rupee could further depreciate against the dollar, leading to higher costs of production as most raw materials and intermediate goods are imported. High inflation due to higher fuel and commodity prices will reduce the purchasing power of consumers. Aggregate demand, in that case, will weaken, and economic growth will suffer.

“Unstable politics will demoralize existing and potential investors, increase cost of capital and output as the macroeconomic situation and institutions suffer… leading to policy uncertainty as well as policy implementation paralysis. This will dampen growth and employment prospects,” Sapkota predicted.

So the economy will remain iffy. But how will the elections affect Nepal’s relations with the outside world? Instability at home is likely to be transferred to instability in foreign policy.

Nepal has had topsy-turvy relations with India, its all-important neighbor, after 2015 when India blocked the Nepal-India border. Around 65 percent of Nepal’s imports come from India, so the blockage was significant. In order to repair frayed ties, India had since been keeping a relatively low profile in Nepal. But apparently no more, with its ambassador in Kathmandu recently seen rushing between the homes of top political leaders to forge a new pro-India dispensation.

In the event, its efforts proved futile with the election as prime minister of Dahal, someone New Delhi deeply distrusts, not the least because of his traditional proximity to the Chinese. India might for a while give the new prime minister the benefit of doubt. But if Dahal is seen as getting too close to China again, New Delhi will once again look to pull the plug from this government, just as it did back in 2009 when Dahal, during his first term as prime minister, tried to sack a sitting army chief.

The Chinese have long lobbied for broad left unity in Nepal, yet there have so far been few indications that they had any role in shaping the new left coalition. But with a left government in place, China will now try to push its projects in Nepal under the BRI harder, to the displeasure of India and the US.

Likewise, the Americans have also ramped up their engagements in Kathmandu and are not shying away from pressure politics. The shakier the government in Kathmandu, the greater will be the sway of these external actors.

Geopolitical analyst C.D. Bhatta told The Diplomat that governments coming and going will be less of a problem for Nepal’s foreign policy in the days ahead. “The bigger problem will be lack of foreign policy continuity between successive governments. The earlier Congress-Maoist alliance pursued one kind of foreign policy. With the new coalition, the picture will be different.”

Bhatta also fears that the entry of new actors who are unfamiliar with the nuances of diplomacy may disrupt the country’s foreign policy conduct, resulting in a further loss of trust abroad.

The Silver Lining

Yet it’s not all bad news for Nepal. The new actors could infuse the staid political scene with vigor. Their rapid rise suggests the Nepali electorate is not beholden to the old establishment parties and is now mature enough to judge candidates on the merit of their actions rather than on their ideological bent, as has traditionally been the case.

Shah, the political analyst, pointed at two more positives from the recent elections. One was the resurgence of a new set of leaders in the Congress, the mainstay of Nepali politics, which bodes well for the polity.

“Another positive is that new parties like the JSP and the Janamat Party won partly as a result of their strong standing with Nepali migrant workers abroad. These otherwise overlooked workers must feel represented,” he said.

In the end, Nepal has a rocky road ahead politically, economically, and on the external front. Yet the election of a new cohort of young and energetic candidates is something to be celebrated. The old establishment parties and their aging leaders, everyone from the prime minister down, have been warned: They either deliver or they will soon be irrelevant.