Tag Archives: INDIA-NEPAL

More HIT than Miss in India-Nepal Ties

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Published in the Hindu on June 22, 2023

On his return to Kathmandu after concluding his four-day official visit to India, Nepal Prime Minister Pushpa Kamal Dahal ‘Prachanda’ described it as “successful.” He has reason to be satisfied. This is Prachanda’s third stint as Prime Minister and compared to his earlier official visits in 2008 and 2016, the visit in 2023 delivered many more concrete outcomes. More important, many of controversial issues were successfully skirted.

Prachanda’s politics

Under Prachanda’s leadership, the Maoist Centre had fought the elections last year in coalition with the Nepali Congress (NC). There was a falling out over claims to the post of the Prime Minister, and Prachanda switched sides to team up with K P Sharma Oli-led UML. Prachanda was sworn in as Prime Minister on December 26. However, the NC decided to support Prachanda in a vote of confidence, suggesting that since he had emerged as a consensus PM supported by 268 members in a 275-member House, he should also go for a national consensus apolitical President. Though Prachanda had earlier agreed to support UML candidates for the post of President (due for election in March) and Speaker (in return for making him Prime Minister), he began to backtrack.

Relations between Mr. Oli and Prachanda turned sour with Mr. Oli accusing Prachanda of ‘betrayal’ and Prachanda claiming that he wanted to ensure political stability by taking all parties along. The opportunistic Oli-Prachanda alliance collapsed and by end-February, UML withdrew support. In order to stay in power, Prachanda went back to NC, ready to support its candidate for President. On March 20, NC returned the favour by helping Prachanda win a freshvote of confidence, with UML sulking in the opposition. 

A complex power sharing arrangement has been worked out with Prachanda continuing as PM for two years, followed by Madhav Nepal (CPN-Unified Socialist) for a year and then NC leader Sher Bahadur Deuba for the remaining two years. Nepal’s transition to a federal republic (it began in 2008 with the abolition of the monarchy and the election of a new Constituent Assembly) has been politically tumultuous, but largely peaceful. Following the adoption of a new constitution in 2015, two rounds of elections have been held, in 2017 and last November. Hopefully, the current coalition has enough incentive to hold together, providing an opportunity to the government to focus on the economy.

During his pathbreaking visit to Nepal in August 2014, Prime Minister Modi had invoked ‘neighborhood first’ to denote a new beginning in relations. To highlight the focus on connectivity, he coined the acronym HIT, covering Highways, Infoways, and Transways. However, relations took a downturn in 2015 with the economic blockade. Repairing the relationship has been a slow process but results are now visible, leading PM Modi to recall and revive the old acronym. 

Hydropower cooperation

For years, there have been statements about cooperation in the hydropower sector but gradually, things are looking up. Nepal is endowed with an economically viable potential of 50000 MW of hydropower, but till a decade ago, had an installed capacity of barely 1200 MW, making it dependent on electricity imports from India. Today, Nepal has an installed capacity of 2200 MW and in season, can export power to India. A 400 KV transmission is now operational. In 2021, Nepal made a modest beginning by exporting 39 MW; the following year it went up to 452 MW earning Nepali Rupees 11 billion in export earnings. In the lean season, Nepal does import power from India but its dependence has dropped from 20% to 10% during the last five years.

Both sides have finalized a long-term power trade agreement targeting export of 10000 MW within a 10-year time frame. The 900 MW Arun III project started in 2018 by SJVN (formerly the Satluj Jal Vidyut Nigam) will be operational later this year. In addition, it signed a memorandum of understanding (MOU) for the 695 MW Arun IV project last year. The National Hydroelectric Power Corporation (NHPC) signed two projects last year totaling 1200 MW. During the visit, announcements were made about SJVN signing the 669 MW Lower Arun and NHPC, the 480 MW Phukot-Karnali projects.

To keep pace, work has begun on a second high voltage transmission line between Butwal and Gorakhpur and two more are planned under a Line of Credit of $679 million. By agreeing to the Nepali demand for the facility to export electricity to Bangladesh using the Indian grid, India has highlighted the prospects for sub-regional cooperation.

To facilitate movement of goods and people, the Rupaidiha-Nepalgunj Integrated Check Post was inaugurated, work begun on the Sunauli-Bhairahwa ICP and an MOU signed for another at Dodhara Chandni. The Jayanagar-Kurtha railway line, inaugurated last year is planned to be extended while more links are to taken up. After the Motihari-Amlekhgunj petroleum pipeline was operationalized in 2019, work has begun to extend it to Chitwan and an MOU for a new pipeline between Jhapa and Siliguri signed including terminals and other infrastructure.

Negotiations on these projects have been time consuming; the challenge is to ensure timely implementation.

Avoiding irritants

The fact that both sides successfully avoided controversial issues and public disagreements went a long way in keeping the focus on economic ties and ensuring a successful visit. Of the three difficult issues, two are of recent origin and the third is a legacy issue.

The latest issue is the Agnipath scheme that impacts the recruitment of Gurkha soldiers into the Indian Army’s Gurkha regiments, a practice that began in 1816 by the British Indian army. This was continued under a 1947 treaty based on ‘equal treatment’. The Agnipath revision of the terms needs to be discussed between the two armies and the concerned defence and finance officials. But a resolution is possible given the traditional ties between the two Services.

The second is the Kalapani boundary issue that was deliberately stoked as a nationalist cause by Mr. Oli in 2020 when his position as Prime Minister was under threat. He pushed through a constitutional amendment and unilaterally changed Nepal’s map. Resolving this will need time because a lasting solution will need political wisdom and understanding.

The legacy issue is the !950 Treaty of Peace and Friendship. In Nepal, a conviction has taken root that the Treaty is unfair to Nepal as it was imposed somehow. This ignores the reality that in 1949, the Nepali regime was perturbed by the Maoist revolution in China and the subsequent takeover of Tibet. It sought an understanding with India and the 1950 Treaty, in large measure, reflects the provisions of the 1923 Treaty between Nepal and British India. In fact, the Treaty enables Nepali nationals ‘equal treatment’ in terms of employment and permits them to apply for any government job, except for the Indian Foreign Service, Indian Administrative Service and the Indian Police Service. Nepali nationals work in the Indian private and public sector, have joined the revenue services and in the Army, have risen to become two-star generals.

The demand to review the Treaty was officially raised first in 1995; in 1996, it was on the agenda of Foreign Secretary’s meeting. Subsequent summits have included a reference to ‘review and update’ it but no substantive talks have taken place. However, some of the cobwebs of history need to cleared so that discussions can take place in an objective manner that addresses the concerns of both countries.

For the present, as Mr. Modi and Prachanda have demonstrated, the focus on HIT will go a long way in rebuilding trust.

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Nepal’s Coalition Politics, A Game Of Musical Chairs

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Published in the Hindu on March 4, 2023

Coalition politics in Nepal increasingly resembles the game of musical chairs; in Kathmandu too, it is the same cast of characters who have been taking turns for nearly two decades. The tragedy is that scant attention is paid to critical issues like rising unemployment, growing national indebtedness and development challenges.

A coalition collapses again

The last coalition government, formed in December, after the elections last November, has lasted just two months. It was stitched together by UML leader K. P. Sharma Oli with the idea of breaking away the Maoists by promising the prime-ministership to their leader Pushpa Kamal Dahal ‘Prachanda’.

Mr. Prachanda had formed an alliance with Mr. Oli in 2018 that broke down in 2020 after a series of decisions by Mr. Oli (he was then PM) seeking to marginalise Prachanda and other senior leaders. Later, Prachanda and the Madhav Nepal led breakaway faction of UML, rechristened as the CPN (Unified-Socialist), joined with the Nepali Congress (NC) and formed an electoral alliance in 2022.

The Nepali Congress emerged as the largest party with 89 seats (the House strength is 275) and Maoists were a distant third with 32.  Power-sharing talks collapsed because Prachanda insisted on becoming Prime Minister first. Knowing Prachanda’s weakness, Mr. Oli made him an offer, he could not refuse. On December 26, Mr. Prachanda was sworn in as PM and in return, he assured support to UML for the posts of House Speaker and the President. Six other parties had joined the coalition. These included disparate groups like the Rashtriya Prajatantra Party (14 seats) that espouses a pro-monarchy and pro-Hindutva agenda and the newly created Rashtriya Swatantra Party (20 seats) consisting of professionals who professed disenchantment with the rampant opportunism reflected in the traditional Nepali politics. However, both were tempted with offers of Deputy Prime Minister-ships and Prachanda’s cabinet had four deputy PMs, one each from Maoists, UML, RSP and RPP!

Within weeks, Prachanda started chafing as Mr. Oli reverted to his old autocratic ways of calling the shots from behind the scenes. Realising that with Oli nominees as President and Speaker, he could easily be manoeuvred out, Prachanda reached out to the NC. Anticipating this, NC had voted in support of Prachanda in the confidence vote on January 10, announcing that it had done so in the interests of national consensus governance that could provide stability.

Prachanda saw his opportunity to return the favour by espousing the idea of a national consensus presidency and promised support to the NC candidate Ram Chandra Poudel. UML called it a “betrayal” and pulled out of the coalition. However, other than the RPP, the other members of the Oli-led coalition declined to follow, announcing their support for Poudel’s candidature.

Presidential elections

The Election Commission has announced that presidential elections will be held on March 9, followed by elections for the Vice-President on March 17. Since the Code of Conduct will be in effect till March 19, no overt political activity is possible. Given that Mr. Prachanda is now heading a minority government with 16 vacant cabinet positions, power sharing talks will gain momentum though the final outcome will remain a matter of speculation.

Mr. Prachanda has till month end to seek a fresh vote of confidence. Once Mr. Poudel is elected, the NC is likely to throw its weight behind Prachanda. RSP, Janata Samajbadi Party (12 seats), Janmat Party (six seats) and the Nagrik Unmukti Party (three seats), earlier with the Oli coalition have switched their support to Poudel. In addition, NC coalition members Loktantrik Samajbadi Party (four seats), CPN (U-S) (10 seats) and Rashtriya Janamorcha (one seat) will also support Mr. Poudel.

UML has put up former speaker Subhas Nembang as its presidential candidate. The electoral college for these elections is made up of 275 members of the House of Representatives and the 59 members of the National Assembly together with the 550 members of the seven provincial assemblies, with votes being weighted. Given the current assurances of support, Mr. Poudel will win with nearly three-fourths of the electoral college. In the election for the Vice-President,  it appears that the JSP candidate will obtain the coalition backing. 

Prachanda’s real challenge will emerge the following week. Managing negotiations between the competing demands of NC and these seven parties will not be easy. This is his third stint as Prime Minister; his first time in 2008 was the only time he came to power on the basis of his electoral victory but his coalition collapsed in less than a year because he failed to make the transition from being Comrade Prachanda to an elected leader. Both the second and third times have been purely opportunistic gambles of teaming up with Oli and then getting burnt. After the second time, he even naively merged his party with the UML in 2018. Fortunately for him, the Supreme Court annulled the merger in 2021 giving him a political lifeline. However, he candidly admits to being easily tempted.

On the other hand, NC leader Sher Bahadur Deuba, nearly 78 and a five-time PM, is convinced that he should be PM again. Hopefully, the events of the last two months should have a sobering influence on both because while Deuba’s intransigence led to the breakdown of talks in December, Prachanda should realise that his bromance with Oli will always be short lived.

The foreign hand

Since 2008, when Nepal declared a republic, the game of political musical chairs has been a regular phenomenon. In fifteen years, Nepal has had three NC Prime Ministers (G. P. Koirala, Sushil Koirala and Sher Bahadur Deuba twice), two Maoist Prime Ministers (Prachanda, now thrice, and Baburam Bhattarai), three UML Prime Ministers (Madhav Nepal, Jhala Nath Khanal and K. P. Oli twice), and a Chief Justice as caretaker PM in 2013. It is the resulting disenchantment of the electorate that spawned the emergence of new political forces in the 2022 elections.

Normally, it is during these rounds of musical chairs that Nepali politicians start wearing their ‘nationalist’ colours by looking for the convenient scapegoat of the ‘foreign hand.’ While India has often been blamed, China has played a visible hand in seeking to keep a united communist front but failed to find a compromise between Oli’s egoistical tendencies and Prachanda’s opportunistic impulses. 

In recent years, India has retrieved some of the lost ground by focusing on project implementation such as the Jayanagar-Bardibas railway and the Motihari-Amlekhgunj oil pipeline. Power export from Nepal has picked up: the agreement for 364 MW signed in June has yielded export earnings of $60 million in 2022 whilelooking at increasing power transmission on the 400 kV Muzaffarpur-Dhalkebar line to 800 MW. The 900 MW Arun 3 is expected to be operational later in 2023.  

Meanwhile, some of the high-profile infrastructure projects undertaken by China have generated concerns about their economic viability and resulting long term debt implications, a concern shared by other countries in South Asia and beyond.

A good ‘neighbourhood first’ policy for India is to focus on connectivity and development while letting the Nepali politicians continue with their game of ‘musical chairs.’

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Nepal Politics, Past, Present, and Future

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Published in the Hindu on December 29, 2022

The general elections in Nepal held in November passed off peacefully but prospects for a stable government remain elusive. Neither of the two electoral coalitions managed to secure a clear majority. Maoist leader Pushpa Kamal Dahal ‘Prachanda’ who had broken up with United Marxist- Leninist (UML) in 2020 and joined the Nepali Congress (NC)-led coalition, once again switched to the UML. On Christmas day, he was appointed Prime Minister for the third time. To demonstrate his majority within 30 days, Prachanda will have to satisfy the demands of UML and six other political parties with widely diverging agendas.

With 89 seats in a House of 275, NC had emerged as the largest party. It had an opportunity to form both the federal and six of the seven provincial governments with its coalition partners but missed the bus, thanks to the NC leader Sher Bahadur Deuba’s ego (he is 76 and after five stints, remains convinced of his destiny to be PM six times) and poor advice. Yet, thirty days is a long time in Nepal’s politics and Prachanda may again realise too late that he had been manipulated by UML leader K P Oli.

A messy transition

Nepal’s transition from a monarchy to a republic began in 2008. In fifteen years, Nepal has had three NC Prime Ministers (G. P. Koirala, Sushil Koirala and Mr. Deuba twice), two Maoist Prime Ministers (Prachanda twice and Baburam Bhattarai), three UML Prime Ministers (Madhav Nepal, Jhala Nath Khanal and Mr. Oli twice), and a Chief Justice as caretaker PM in 2013. In such a fluid environment, political horse trading has been rampant.

Following the adoption of the new constitution in 2015, elections were held in 2017. Then too, Prachanda was in a coalition government with the NC but a month before the elections, switched to form an electoral alliance with the UML. He soon realised that he was relegated to being the junior partner with 53 seats compared to UML’s 121. Mr. Oli assumed the post of PM in 2018 and despite promising Prachanda, never ceded control of the merged Nepal Communist Party.

Mr. Oli’s authoritarian traits soon antagonised some of his senior colleagues, Madhav Nepal, Jhala Nath Khanal, and Bhim Rawal who made common cause with Prachanda. However, Mr. Oli had a clear run till early 2020 because under the constitution, a no-confidence-motion cannot be entertained for the first two years. By summer of 2020, intra-party rumblings came to the fore, creating a showdown by the end of the year. Fortunately for Prachanda, a Supreme Court judgement in early 2021, annulled the merger of Maoists with the UML, enabling Prachanda to claim his party back.

As Mr. Oli realised that he was losing his majority, he tried to retrieve the situation by recommending dissolution of the House. President Bidya Devi Bhandari has been Mr. Oli’s close comrade since she entered active politics after the untimely demise of her husband Madan Bhandari, a charismatic UML leader, in a car accident in 1993. Mr. Oli had taken on the role of her political mentor and in 2018, backed her elevation to the presidency. She reciprocated the favour by ignoring constitutional propriety and approving dubious ordinances that were repeatedly struck down by the Supreme Court.

Maoists under Prachanda and the dissident group of the UML led by Madhav Nepal eventually jumped ship and backed the NC Sher Bahadur Deuba’s appointment as PM in July last year. The three coalition partners had fought the elections as an alliance but Mr. Oli succeeded in splitting the alliance by weaning away Prachanda, who by his own admission, admits to being easily tempted.

Election results of 2022

The 2008 elections saw the emergence of two new political actors, Maoists who had come overground after waging a decade long insurgency and Madhesis who spearheaded the call for federalism. Over the years, they have lost their ideological moorings and have aligned with whichever group forms the government. From being the single largest party in 2008 with nearly 40% seats in the first Constituent Assembly, Maoists are today reduced to 11%; the Madhesis have come down from 15% to 10%.

The 2022 elections have seen new political actors emerge. Rashtriya Swantantra Party (RSP), a creation of Rabi Lamichhane, a popular TV talk show host, became the platform for the millennial Nepalis, especially the diaspora. They were disenchanted with the self-serving leaders of the NC, the UML and the Maoist parties. However, the RSP MPs are a diverse group who campaigned on their individual platforms and with their own resources.

Similar disenchantment with the Madhesi parties led to the emergence of the Janmat party, led by C K Raut, a former supporter of Madhesi secessionism, and Nagarik Unmukti Party set up by a Tharu leader Resham Chaudhury who is behind bars but his wife Ranjeeta Shrestha campaigned successfully in his name. RSP, Janmat and NUP managed to win 20, 6 and 3 seats respectively.

This fragmentation of votes has led to a lot of ‘floaters’ who can switch allegiances, just as Prachanda has done. Upendra Yadav (Janata Samajbadi Party) was in talks with the NC when it appeared that it would form the government but shifted back to the UML-Maoist group. The pro-monarchy pro-Hindutva Rashtriya Prajatantra Party supporting the secular Communist alliance reflects the opportunism in Nepali politics!

Prachanda may think that he has a secure two-year term but with barely 32 seats (UML has 78), it is clear that Mr. Oli will call the shots. He will ensure his own candidate as the president once Smt Bhandari’s term ends in March 2023. In the provinces, Maoists will be lucky to get one chief ministership.

India’s role

It is at times of political instability that Nepali politicians start looking for the convenient scapegoat of ‘foreign interference’. India was conspicuously missing during the election campaign and Prime Minister Narendra Modi was the first to congratulate Mr. Prachanda on his appointment. Post-2018, China had played a major role in bringing about a UML-Maoist alliance but failed to keep it intact. Senior Maoist leader Barshaman Pun was in China was medical treatment recently and reportedly played a role in the new UML-Maoist rapprochement.

In recent years, India has retrieved lost ground in Nepal by focusing on project implementation. Since 2022, the Jayanagar-Bardibas railway started with India providing technical support. In 2019, the long awaited Motihari-Amlekhgunj oil pipeline was inaugurated. Power generation in Nepal has picked up. The agreement to export 364 MW signed in June has yielded export earnings of $60 million in 2022. According to Nepal Electricity Authority, the figure could quadruple in 2023 with the 900 MW Arun 3 becoming operational.

Yet there are some issues that need to be resolved. Foremost is the demonetised Indian currency issue, pending since 2016. Talks between the two central banks need a political nudge. The second is the recruitment for the Gurkha regiments, held up since the launch of the Agnipath scheme. As PM Modi declared during his last visit, the relationship needs “equality, mutual trust, respect and benefit” to sustain it, irrespective of who resides in Baluwatar.

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