The Supreme Court Chief Justice has been suspended in the latest twist in the ugly drama that has thrown the country in political chaos. Tangled in this mess is a diplomatic rivalry between the US and India on one side and China on the other.
Researched by: Sara Varghese & Nivedita Bobal
First, some history: In 2008—after decades of political strife—the government cut a deal with Maoist rebels and abolished the monarchy. Nepal became a Republic—but did not have a proper Constitution until 2015. KP Sharma Oli became the first Prime Minister to be elected under its aegis. Much of what is going on right now is a critical test of the resilience of the democratic institutions established at that time.
The current chaos:
Footnote to note: In the midst of this drama, the NCP—which had enjoyed a rare 2/3rd majority—was dissolved after the top election body said its name was illegal. And it split back into the original two groups—Oli’s communist party CPN-UML and the Communist Party of Nepal (Maoist Centre). This splinters Nepal’s political landscape even further—and makes consensus almost impossible to achieve.
Quote to note: A constitutional lawyer worries: “Impeachment is a wild process. Parliament is already in crisis. This sort of act will further weaken the state institutions.”
As residents of a tiny nation wedged between China and India, Nepalis have always been concerned about foreign interference in their domestic politics. In recent years, the US has entered the mix to counter Beijing’s growing presence in the country. All of which plays out in how governments are perceived and policy decisions are made.
Oli, version #1: When PM Oli first took power in 2018, he was blatantly soft on China. Nepal had already signed on to Beijing’s ambitious global infrastructure project—the Belt and Road Initiative in 2017. Relations between Kathmandu and New Delhi became extremely irritable. And Oli poured fuel on fire by declaring the ‘Indian virus’ more lethal than the ‘Chinese virus’—and accused India of trying to overthrow his government. The Parliament even ratified a new map of Nepal claiming parts of Uttarakhand.
Oli, version #2: But in October, 2020, Research and Analysis Wing (RAW) chief Samant Kumar Goel visited Nepal as a special PM envoy—and held a two-hour meeting with Oli—who soon changed his tune. His first attempt to dissolve the Parliament followed soon after. Opposition leaders and analysts claim Oli had India’s blessing:
“A large chunk of opposition leaders believe that without strong support from India, Oli alone would not have taken such significant political steps, and India is preventing the formation of an alternative government to replace Oli.”
Our man in Kathmandu? Experts claim that India wanted Oli to remain in power until the national elections slated to be held within a year. One reason is that the unified NCP—which tilted toward China—is no longer a factor. More importantly, Oli has pivoted toward wooing the Hindu vote, and positioning himself as a Hindu leader. After he dissolved the Parliament for the first time in December, 2021, he became the first communist prime minister to visit Pashupatinath Temple to participate in a special puja.
Point to note: While many think that New Delhi would be happy to see Nepal emerge as a Hindu state, the Nepali nationalists who support that move also see Oli as a strong leader who can stand up to India. Like all relationships, it's complicated.
Enter, Uncle Sam: In 2017, Nepal signed the Millennium Challenge Corporation agreement—which is the US version of the Chinese BRI and designed to counter its influence. But unlike the BRI—which was embraced without controversy—the MCC has become a flashpoint. Again, India is a key factor. The deal offers Nepal $500 million in US investment to set up two massive infrastructure projects.
Development for whom? One of them is a 300-km 400 kilovolt electricity transmission line that connects Nepal to India. But the electricity it produces will not be for local consumption, but will be exported to India. That makes many unhappy—and for good reason:
“With about 6,000 big and small rivers, Nepal offers a huge potential for hydropower generation. But India has control over most of Nepal’s main rivers through a series of barrages and dams. That has not gone well with nationalists within the Himalayan country. It is not hard for people in Nepal to figure out whose interests are served through Millennium Challenge Corporation Nepal.”
The foreign hand: Many fear that the MCC is also a backdoor to drag Nepal into Washington’s Indo-Pacific Strategy (IPS) aimed at China—which has a military component. While PM Deuba supports the MCC, no one in the opposition is willing to stick their neck out to support it—especially with elections round the corner:
“The House speaker has refused to convene lawmakers to ratify the aid agreement, while the Maoist Party leader has met virtually with top Chinese officials. And members of Mr Oli’s party have obstructed parliamentary action for months by shouting slogans and demonstrating inside the chamber.”
Point to note: The US claims that China has “actively fomented or encouraged or funded or facilitated” a disinformation campaign in Nepal against the project. It has now set a deadline of February 28 for its ratification—and delivered a quiet warning:
“The Government of Nepal’s choice to fulfill, or renege on its commitments to the US would have an impact on any diplomatic bilateral relationship. Should outside influence and corruption have caused the decision not to ratify, it would be deeply concerning for the US and a loss for the people of Nepal.”
Meanwhile, at the Chinese border: A leaked government report shows that China is steadily encroaching on Nepalese territory—but it has not been released in public. And the government has refused to comment on it. The growing popularity of Beijing in Nepalese politics is a testimony to its rising influence across spheres:
“China has strongly positioned itself in Nepal and scaled up its engagement in more than one way. In the past, one could notice China’s involvement in the development of infrastructure but not in soft areas. Of late, China has been penetrating in Nepali politics as well as in society.”
The bottomline: Nepal is poised to hold three sets of elections—from local to national—in the coming year. It is inevitable that the “foreign hand” will become a key issue in the months to come. These will be critical months for India’s always-delicate relationship with Nepal.
The New York Times has a good overview of the Chief Justice row. Scroll has the best reporting on the MCC agreement. Al Jazeera explains why the Oli government was dissolved. The Wire has all the intrigue on New Delhi’s relationship with Oli. This 2021 Diplomat essay looks at China’s growing influence in Nepal.
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