‘Neighbourhood First’ in Nepal

By Rakesh Sood (12 June 2017) – Last week, on June 7, just days before he turns 71, Prime Minister Sher Bahadur Deuba was sworn in as the new Prime Minister of Nepal, marking his fourth term as Prime Minister. Yet compared to the rather turbulent politics in Nepal which makes him the 24th Prime Minister since the beginning of multiparty democracy in the country 27 years ago, this transition was singularly straightforward.

His elevation comes as part of the deal struck between Nepali Congress (NC) and the Maoist party (CPN-Maoist Centre) last July under which Pushpa Kamal Dahal ‘Prachanda’ became Prime Minister in August, with NC support on the understanding that after nine months, during which his government would conduct the local body elections, he would hand over charge and support NC leader Deuba’s claim to the post.

Prachanda delivers

Mr. Prachanda upheld his end of the bargain, and in contrast with his first term as Prime Minister which ended ignominiously with his resigning after nine months in 2009, following the controversy around arbitrarily dismissing the Army chief Rookmangud Katawal, his second nine-month tenure was productive.

Domestically, he tried to build bridges with the Madhesis and the Janjatis who had been alienated by his predecessor K.P. Sharma Oli’s highhandedness, by promising them a consultative process and a constitutional amendment that would address their concerns. In keeping with this assurance, his government tabled a constitutional amendment proposal which goes a long way in addressing the Madhesi reservations. That it has not been passed is because of opposition from Mr. Oli’s party, the Communist Party of Nepal (UML), and the difficulty in mustering the two-thirds majority necessary.

Externally, Mr. Prachanda also set about repairing relations with India which had reached a low during the tenure of Mr. Oli, who blamed India for stoking the Madhesi agitation and imposing an economic blockade. Mr. Prachanda’s early official visit in September 2016 followed by a second one during the BRICS outreach event in October, and reciprocal visits by President Pranab Mukherjee and Nepali President Bidya Devi Bhandari, helped restore the relationship.

As promised, he held the first phase of the local body elections for municipalities and village development councils on May 14, in three of the seven federal provinces. These elections were last held in 1997. At present, there are 744 local bodies in Nepal and the first phase covered 283 local bodies in three predominantly Pahadi provinces, including metropolitan areas of Kathmandu and Pokhara.

Under the new Constitution promulgated in 2015, seven provinces have been created and significant decentralisation of powers has taken place. Consequently, the local bodies now enjoy extensive financial powers. It is estimated significant that more than $5 billion will now be spent by the local bodies on infrastructure and delivery of social services. Historically, given the centralised character of the Nepali state, all political leaders have gravitated towards Kathmandu. The enhanced powers of the local bodies will enable the creation of a much needed new political leadership.

Deuba’s challenges

Mr. Deuba’s fourth term as Prime Minister will be a short one, even shorter than his previous terms. None of these had lasted two years. The second time in 2002, he was sacked by King Gyanendra for ‘incompetence’, and after his 2004-5 term, he was placed under house arrest by the same monarch. This time, he has the opportunity to ensure a happier ending for his fourth term. He has already announced that his primary responsibility is to ensure that provincial and parliamentary elections are held before January 18, which gives him a tenure of under eight months.

Mr. Deuba’s immediate challenge is to conclude the second phase of the local body elections scheduled for June 28 in the four remaining provinces. These provinces include the two Terai-based provinces (Provinces 2 and 5) and the far east and the far west provinces (Provinces 1 and 7). Madhesis have a significant presence in the two Terai-based provinces. They had demanded that unless the constitutional amendment addressing their concerns was passed, they would not participate in the local body elections.

Given the UML’s stand, it is clear that the Deuba government cannot muster the two-thirds majority needed. Mr. Deuba has, however, committed that once the local body elections are concluded, he will exert all possible efforts to get the constitutional amendment through.

Except for a small number, most Madhesi leaders who have strong roots in the Terai see the political logic in participating in the local body elections. They sense the public enthusiasm reflected in the high turnout, and realise that their boycott will not prevent the elections from going ahead but make them appear ‘spoilers’. Second, if they are cut out of local politics for the next five years, it will be difficult for them to maintain their cadre base, necessary to ensure a good showing in the following provincial and parliamentary elections.

In the 2008 elections for the first Constituent Assembly, the three Madhesi parties emerged as a credible political force for the first time, with 84 seats. Internal squabbling and power politics fractured the three into a dozen, and in the 2013 elections, they were down to 40. Realising the need for unity, some Madhesi parties came together in April to form a new entity, Rastriya Janata Party Nepal (RJPN). The first decision of the Deuba government was to amend the Local Level Election Act, on June 8, which provides recognition of the RJPN and its election symbol, enabling it to join the June 28 elections in its new avatar. Earlier, some were thinking about fighting the elections under their old symbols, but with this change, any reservations should be set aside because now the RJPN can put up a united front. The two other major Madhesi groups led by Upendra Yadav (Federal Socialist Forum Nepal) and Bijay Gachhadar (Nepal Democratic Forum) have already indicated that they will be joining the elections, thus ensuring a good Madhesi presence in the local bodies in the Terai.

Restoring goodwill    

Mr. Oli’s nine-month tenure which ended in July last year marked a low point in India-Nepal relations. It increased ethnic polarisation within Nepal and as always happens at such times, enabled him to don the mantle of Nepali nationalism and blame India for interfering in its internal affairs, of imposing an economic blockade and supporting the Madhesi agitation. Significantly, it eroded the significant goodwill that had been generated by Prime Minister Narendra Modi’s historic visits to Nepal in 2014. With Mr. Prachanda withdrawing support from the Oli coalition and forming his coalition government with NC support, it gave both Nepal and India an opportunity to step back.

Meanwhile, China has been stepping up its presence in Nepal. Miffed with India, Mr. Oli had signed an Agreement on Transit Trade which is now being developed along with an examination of a possible rail link. For the first time, joint military exercises were held in early 2017, after the first ever visit by the Chinese Defence Minister to Nepal, promising a military grant of $32 million. Work is under way to restore and upgrade the Rasuwagadi-Syabrubesi road link with Tibet. Nepal has also signed on to the Belt and Road Initiative and a special economic zone has been promised. A 1,200 MW hydel project on the Budhi Gandaki river was awarded on EPCF (Engineering, Procurement, Construction, Finance) basis to the Gezhouba group.

India needs to support Mr. Deuba’s efforts to conclude the local body elections followed by the passage of the constitutional amendment, which will clear the way for the provincial and parliamentary elections under the new Constitution. This will go a long way in bringing political stability to Nepal which, during the last quarter century has gone through a Maoist insurgency and transitioned from a monarchy to a republic. Importantly, India needs to ensure speedy delivery of the generous pledges of over a billion dollars committed during the last two years to make good on Mr. Modi’s ‘neighbourhood first’ policy.

Rakesh Sood is a former Ambassador to Nepal and currently Distinguished Fellow at the Observer Research Foundation. E-mail: [email protected]

This article was originally posted in 12 June 2017

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