– NISCHAL DHUNGEL

The opinion piece originally appeared in The Kathmandu Post on 2 February 2023. Please read the original article here.

The modern globalised ecosystem has increased public debt due to changing economic and political circumstances. Handling public debt goes hand in hand with an effort to balance those circumstances. Public debt is a domestic or foreign loan issued by a government, which remains a viable option to support government spending, and development initiatives, for which the government lacks funding. Owing to economic complexity and the Covid-19 pandemic, government spending has recently increased more quickly than its capacity to generate revenue. With interest rates skyrocketing, the rising debt severely impacts the budgets of developing countries that must invest in their economies.

Nepal started budgeting in 1951, taking debt 11 years after the budgetary practice began. The history of our public debt is not very old. The government started taking domestic loans in 1962, while foreign loans were only accepted beginning in 1963. Post-earthquake and transition to federalism, Nepal’s public debt has increased over the past several years, reaching 42.2 percent of GDP in fiscal 2019-20 from a progressive reduction of 25 percent of GDP in fiscal 2016-17. The impact of Covid-19 and responses to it are responsible for the significant increase in fiscal 2019-20. The debt-to-GDP ratio for Nepal stood at 39 percent in fiscal 2020-21. Due to Nepal’s access to concessional funding (grants or loans less than 2 percent with long repayment periods) from multilateral institutions and foreign countries, its foreign debt servicing needs are low. As per the World Bank, Nepal’s debt distress risk is rated low for both external and total debt. The International Development Cooperation Policy (2019) allows Nepal to obtain a foreign commercial loan, but Nepal has yet to utilise this opportunity. The country needs to be careful while borrowing large commercial foreign loans with highinterest rates.

The impact of public debt on Nepal’s economic growth, examined by the journal Public Debt and Economic Growth of Nepal utilising data from 1978 to 2020, indicates no clear link between public debt levels and economic expansion. The limited revenue sources have resulted in a rise in government spending more quickly than government revenue. The government has borrowed money primarily for weak areas, leaving it cash-strapped and forcing it to take out another loan to repay the previous ones. Some of the current capital loan money is in the stock market and land. Due to insufficient domestic resource mobilisation, excessive fiscal deficit, export-import imbalance, and gaps in revenue and spending, the external debt has worsened. Thus, some authors argue that deficit financing should not be considered as long as there is sustained economic growth and the possibility of encouraging investment rather than discouraging it. Furthermore, there has been no improvement in the country’s capability to repay debt; there has only been an increase in overall public debt and interest.

It is also crucial to analyse the country’s debt condition in light of its foreign exchange reserves. The depreciation of the Nepali rupee against the US dollar has increased Nepal’s debt liability in local currency terms. Foreign currency debt payments may become more challenging at a time of shrinking foreign currency reserves and rising government borrowing from foreign creditors. Nepal’s foreign direct investment (FDI) is the lowest in the region at 0.5 percent of GDP. The impact of lowering the FDI threshold to Rs20 million will further decrease the inflow of FDI. Further, capital flow restrictions may have negative effects on GDP, but FDI offers the extra benefit of not increasing the nation’s debt and relieving strain on foreign exchange reserves. The government should put in place long-delayed FDI reforms, such as simplifying regulatory approval processes, which would lead to foreign currency inflows and spur the transfer of capital and technology to boost growth.

Lesson from Bangladesh

Thanks to a robust economy and a stable government, Bangladesh has avoided relying on foreign forces for domestic survival. Three factors—exports (second largest clothing exporter), remittances (one of the biggest recipients), and fuel prices (relies on imported fuels)—together account for the majority of the economic health of the country. But these factors are in jeopardy due to a global economic slowdown that is particularly destructive in developing nations. Bangladesh has less money to import fuel as exports fall and prices rise simultaneously. It has decided to postpone non-urgent projects and expressed concerns about a growing trade deficit and a decline in remittances.

However, Nepal’s exports are not as strong as Bangladesh’s, and will be less affected by the global slowdown. The government of Nepal is making several efforts to boost foreign reserve exchange. To stop the mounting debt, the newly passed Public Debt Management Act set a limit on external debt at one-third of the GDP. This measure is intended to prevent the government from borrowing carelessly and motivate it to pay down its debts on schedule so it can borrow more money in the future. Nepal also came up with a slew of measures to ban imports of luxury goods to prevent the depletion of its foreign exchange reserves and ended the ban as foreign reserves rose. These underlying traits will continue to shape how Nepal and Bangladesh react to the current global upheavals, including growing prices, impact on remittances, and widened trade imbalance.

State institutions in Nepal are fragile and continue to have problems with checks and balances. The government will struggle in 2023 to stop tax evasion and broaden its revenue base, increasing its need for public borrowing. With a new government in place, synchronising fiscal and monetary policy should ease liquidity shortage to fuel investment in productive sectors. A significant issue with the democratic history of Bangladesh is the absence of robust and viable opposition. Despite political hiccups and mounting public debt, Bangladesh has made commendable economic progress. Nepal and Bangladesh are unlikely to have the same situation as Sri Lanka if their policy measures successfully utilise public debt, and balance national goals and domestic capabilities.

Addressing structural barriers

Building on prior accomplishments and addressing structural barriers will help to accelerate growth, attract private investment, boost productivity, and develop climate resilience to successfully graduate from the least developed country’s (LDC) status and achieve lower middle-income status by 2026. Nepal’s plan for economic growth and how trade, infrastructure, exchange rates, and other economic policies can help with economic development is still unclear. The growth potential will be increased by fostering an environment, encouraging trade and foreign direct investment, growing the financial sector, building human capital, and enhancing good governance. The country must spend the borrowed funds wisely and enact programmes to reduce debt. As Nepal plans to leave the LDC status in 2026, it is crucial to leverage the advantage of a lower interest rate with a long repayment period of borrowed funds. It should then work towards building a sustainable economy by investing in productive sectors with high-efficiency levels to repay the loans over time.

– SANTOSH Sharma Poudel

The column originally appeared in The Diplomat on 16 January 2023. Please read the original article here.

Nepali politics continues to confound observers. Communist Party of Nepal-Maoist Center (CPN-MC) chief Pushpa Kamal Dahal, who was sworn in as prime minister on December 26 despite his party standing third in the recent general elections, received a strong but surprising boost in a trust vote in parliament on January 10 when his former electoral alliance partners, the Sher Bahadur Deuba-led Nepali Congress (NC) and the Madhav Kumar Nepal-led Communist Party of Nepal-United Socialist (CPN-US), voted in support of his new government.

Less than a fortnight ago, Dahal ditched the NC and CPN-US to head a government with support from the Khadga Prasad Sharma Oli-led Communist Party of Nepal-United Marxist Leninist (CPN-UML). NC and CPN-US backed Dahal in the confidence vote despite his last-minute betrayal.

The decision of the NC and CPN-US to support Dahal has become the topic of much discussion in Nepal. Some speculate that Deuba might have supported Dahal in an attempt to secure a share in the spoils of power. Others see Deuba’s move as aimed at driving a wedge between Dahal and Oli. Meanwhile, others see it as a shrewd move by Dahal to minimize Oli’s influence in the ruling coalition. Whatever the reason, it is evident that instrumentalism determines Nepali politics, and that gaining power is the only currency.

The ruling coalition comprises parties with diverse interests and political goals. Its survival and domestic issues will be Prime Minister Dahal’s primary focus. Speeches of leaders in the new parliament focused on domestic issues like good governance, political stability, corruption control, and effective implementation of federalism.

Coalition partners wield considerable leverage in the new government and Oli, who heads the largest party in this coalition, will exercise significant control. He leads the mechanism to support the government and develop a common minimum program for the coalition government. His leverage will increase if the presidency or the house speakership (or both) go to the CPN-UML. Dahal seems to be in for a rough ride.

Meanwhile, several issues on the foreign policy front deserve Dahal’s immediate attention. The need for Nepal to “balance” its engagement with the big powers – India, the U.S., and China – in the context of heightened Sino-Indian and Sino-U.S. competition while maintaining strategic autonomy and sovereignty will be a major challenge. Another is Nepal’s widening trade deficit. Such challenges have intensified in recent times.

Dahal will need to tackle several issues with India. Firstly, he will need to decide on India’s Agnipath scheme. The previous government, of which Dahal’s party was a coalition partner, kicked the Agnipath can down the road for the next government to deal with. The Agnipath scheme provides for short-term recruitment into the Indian Army, which violates the tripartite agreement between Nepal, Great Britain and India regarding the recruitment of Nepali Gurkhas into the Indian and British armies. Last year, such recruitment in Nepal was suspended because Kathmandu was opposed to the short-term recruitment of Nepalis into the Indian Army. The current government does not have the luxury of delaying a decision on the matter as Gurkha recruitment from Nepal, which has been a critical element in Indo-Nepal relations, is in jeopardy.

Secondly, Nepal needs New Delhi’s cooperation to export hydroelectricity to Bangladesh. In August last year, Nepal and Bangladesh decided to request India to allow the export of 40-50 MW of Nepali hydropower to Bangladesh as Nepal needs to use the Indian grid (via Indian territory) to export electricity to Bangladesh.

When Nepali officials raised the issue during the recent Power Summit organized by the Confederation of Indian Industries on grid connectivity in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Indian officials said that the Baharampur-Bheramara line connecting Nepal to Bangladesh was “fully occupied.” Therefore, the issue will test Dahal’s diplomatic skills.

Thirdly, Nepal has requested that India grant air entry points to facilitate aircraft movement to Bhairahawa and Pokhara. The two airports were built by Chinese companies, though the former was funded by the Asian Development Bank. Without India granting appropriate entry points, airplanes will need to circle in Nepal for a few minutes before landing, increasing operational costs. Kathmandu should engage India at the earliest to ensure the international airports are sustainable for airlines to use.

Fourthly, Dahal needs to continue the “return to normalcy” in India-Nepal relations after its nadir in 2020, when the Oli government amended the Nepali map to include Kalapani, Limpiyadhura, and Lipulekh in the far west – territories also claimed by India.

There are also issues with China that require immediate attention. One is China’s opening of the Kerung border point. This was closed with the outbreak of the COVID-19 pandemic but was reopened after Dahal assumed the premiership recently. There are concerns in Nepal over the reopening of this border point amid the surge in COVID-19 cases in China.

Nepal needs clarity on its position on Global Security Initiative (GSI), a Chinese initiative to counter rival regional blocs such as the Quad. Beijing is keen for Nepal to join the GSI. Although Nepal has clarified its commitment to non-alignment, which would mean Nepal will not join any security pacts with any country, President Bidhya Devi Bhandari joined the GSI meeting last year despite the Deuba-led government’s reservations.

Also, Beijing is impatient to see projects under the Belt and Road Initiative (BRI) take off in Nepal. Days after Dahal’s appointment as prime minister, a Chinese delegation came to Nepal to conduct a feasibility study of the Kathmandu-Kerung railway connectivity. With a friendlier government in power, Beijing would like to see BRI projects make concrete progress.

Whether Dahal makes New Delhi or Beijing the destination of his first foreign visit will be keenly watched. However, it will be pragmatic if he were to pick New Delhi first, ceteris paribus. As much as his visit to Beijing would show that he is attempting to balance between Nepal’s two giant neighbors, which every leader in Nepal professes and which is the official foreign policy, the fact is that Nepal has more issues that require immediate engagement with its southern neighbor.

Kathmandu is abuzz with speculation that New Delhi wanted Deuba, not Dahal, to lead the new government. However, despite New Delhi’s suspicions of Dahal and Dahal’s earlier misgivings regarding New Delhi, Nepal needs healthy relations with India. He might get a warmer welcome in Beijing than in New Delhi. Yet, a visit to New Delhi will show his intent to tackle difficult issues head-on, not shy away from them.

In this context, his decision to make New Delhi the first port of call, likely to be in late February or early March, is a mature decision. He has the experience of engaging India as prime minister and has a host of immediate and enduring issues on his plate. His level of success in resolving those issues will determine his legacy.

– NISCHAL Dhungel* and ABIJIT SHARMA

Dhungel is a non-resident fellow at NIPoRe. The opinion piece originally appeared in The Kathmandu Post on 18 January 2023. Please read the original article here.

With the onset of the Covid-19 pandemic and the Russia-Ukraine war, foreign relations trembled among major economic powers. While condemning Russia’s aggression and barraging the country with a series of sanctions, the West expected India to follow suit. However, New Delhi adopted studied public neutrality and abstained from successive votes condemning the Russian move in the UN Security Council, General Assembly, and Human Rights Council. Just like India, China maintained relative neutrality, with a solid foreign policy stance in response to the conflict. Despite its closeness with Russia, Beijing stopped short of supporting it in the war. It also stopped short of calling Russia the aggressor and abstained from a United Nations Security Council vote denouncing the ‘invasion’. Beijing and New Delhi had made their decision loud and clear. And they were not going to listen to anybody.

Assertive New Delhi

Speaking at the Globsec 2022 forum in Slovakia, Minister of External Affairs of India, Dr S Jaishankar laid clear India’s increasingly confident foreign policy. “Europe has to grow out of the mindset that Europe’s problems are the world’s problems, but the world’s problems are not Europe’s problems,” Jaishankar said. He criticised the West for hoarding vaccines, which impacted the Least Developed Countries (LDCs). It is crucial to understand how India came to this position, which was unimaginable until a few years ago.

India’s political, social and economic fabric had been damaged after 200 years of colonialism. Its foreign policy could not remain untouched. Following independence, New Delhi slowly started to chart its own path, pursuing different strategic approaches from 1946 to 2013. Nehruvian influence persisted from 1946 to 62, an era of strategic non-alignment amidst US-Soviet Union rivalry. From 1962 to 1971, considered the decade of realism and recovery, India made pragmatic choices in national security and political challenges despite a lack of resources. The country went through a complex phase from 1971 to 1991 as the US-China-Pakistan axis came up. From 1991 to 1999, it had challenges in retaining its strategic autonomy in a unipolar world, whereas from 2000 to 2013, India focused on balancing power.

But since assuming office in 2014, Prime Minister Narendra Modi has made an unprecedented transformation of Indian foreign policy. Modi has put India as an emerging superpower on the map and sought to engage rather than remain ‘non-aligned actively’. New Delhi now understands that it deals with multiple global complexities, making decisions based on calculated risk-taking. As a result, India is slowly standing out, drifting away from strategic ambiguity to strategic freedom and taking a solid foreign policy stance on international fora. This is a significant departure from the older ‘non-alignment’ tenet that had long established India’s typical social values and norms, at least in foreign relations.

India’s central foreign policy tenet under Modi is seen to be guided by the Eastern principle of ‘Vasudhaiva Kutumbakam’, which translates to “the world is one family”. This was evident during the Covid-19 pandemic when New Delhi delivered more than 100 million doses to countries in Asia and Africa. While Modi has spearheaded this new brand of foreign policy, his bureaucrats and ministers have helped implement it. In 2015, just two days before his retirement, the Narendra Modi government appointed a highly agile foreign service officer, a foreign ambassador to the US and China, to the position of foreign secretary. Jaishankar has been the flag bearer of Modi’s foreign policy ever since Modi’s second term in office. Jaishankar openly admits India’s shortcomings and stays committed to securing its national interest with/without taking any sides.

‘Wolf-warrior’ in Beijing

Coinciding with India’s assertive stance in global politics is China’s equally aggressive stance, especially against the West. The Chinese foreign policy has been so assertive and aggressive in recent years that it has earned a new name: ‘Wolf-warrior’. While aggressive Chinese rhetoric might appear quite normal now, it is a shift from China’s earlier foreign policy. And the man to bring about this shift is none other than Xi Jinping. At heart, Xi’s diplomacy calls for a more active role for China as a great power on the world stage, including reforming the Western-dominated international order and creating what China calls “true multilateralism”.

When the architect of China’s economic reform, Deng Xiaoping, came to power following Mao Zedong’s death in the late 1970s, he prescribed a foreign policy which was subtle and cooperative. His approach focused on “biding one’s time without revealing one’s strength”. As a result, in the 1980s and 90s, Beijing was focused on “securing position, coping with affairs calmly and hiding capacities”. The leaders who came to power after Deng continued the policy.

But Xi’s ascendance since 2012 has slowly changed things in Beijing. Far from “biding time and hiding strengths”, it is now focused on making its stance clear on the global stage. Most importantly, it is open to show its strength. Take, for instance, its recent response to the Taiwan issue. Just before the then US House of Representatives Speaker Nancy Pelosi visited the island in August last year, the Chinese President issued a stern warning to his American counterpart, allegedly saying that “… those who play with fire would perish by it”. When its alarm went unheeded, the Chinese military launched targeted military exercises.

Xi’s ambitions to help China regain its glory of the Middle Kingdom years have been evident since he took office. Upon gaining power in 2012, he immediately identified “national rejuvenation” as his primary goal. The ambitious Belt and Road Initiative (BRI) was announced a year later. At the 19th Party Congress in 2017, Xi stated that China would no longer shy away from world leadership and efforts shaping the international order. The BRI is an important example of how China has pursued its foreign policy interest. The initiative has 147 signatories and includes US allies and partners such as Saudi Arabia, Greece and UAE.

Quite naturally, the West has been critical of this stance, often saying that it might invite dangerous confrontations between China and the West. But Beijing has maintained that it is not the real aggressor but simply responding to Western threats. Defending China’s aggressive foreign policy, the then-Chinese Foreign Vice Minister Le Yucheng said last year that Beijing “had no choice but to fight back against constant ‘nagging’ and ‘insults’ from foreign critics”. Interestingly China has many flag bearers of this new assertive foreign policy, most notably the foreign ministry spokesperson Zhao Lijian. Zhao has had public spats with US diplomats and has been a vocal critic of the West.

If there is any lesson that Nepal should learn from its neighbours, it is that we need to pursue an independent foreign policy, especially in light of the geo-political games often played in the country.

– BINITA Nepali

The opinion piece originally appeared in the January 2023 Issue of New Business Age Magazine. Please read the original article here.

Nepal ranks first in South Asia and second in Asia in terms of the share of women representatives in the parliament. However, it ranks 123rd in the world in terms of the number of women holding ministerial posts. Women in Nepal have been assigned ministerial roles at general ministries only. It demonstrates the reality that, despite increased female political participation, women are not trusted to exercise authority and manage resources at the key ministries that have the potential to make major policy implications in the country.

In 2008, a mixed-model election system [First Past the Post (FPTP) and Proportional Representation (PR)] was introduced to encourage positive discrimination of women and other marginalised and unrepresented groups in the country. However, the political parties have exploited the PR system and turned it into the sole route for women to enter politics.

Political parties are reluctant to field women under the FPTP system. Therefore, to ensure constitutional adherence, women are brought onto the PR list. Only 9% the FPTP candidates in the 2022 federal and provincial elections were female. Most of the female candidates were fielded in fiercely competitive constituencies, with the less competitive seats going to the supposedly “strong” male leaders.

As per Article 84 of the Constitution of Nepal, at least one-third of the members elected from each political party to the federal parliament must be women. Therefore, at least 92 of the 275 members of the new federal parliament must be women, as there are currently only 19 women (32.2 percent), in the 59-member upper house. As only nine women were elected directly, the remaining 85 seats have been filled through proportional representation. It means there are just nine women in the top decision-making positions, as it has been found that the directly elected representatives – more than 95% of whom are men – hold greater sway over resources, authority, and influence than those who come via the PR system in Nepal’s parliament.

The country also fell short of meeting the target of having 50% women representatives in the local units. Only 14,407 (41.21%) out of the 34,953 elected in 753 local units were women. Of them, only 25 women have been elected to top or decision-making posts (13 mayors and 12 chairpersons). Moreover, women were sidelined in the guise of political coalitions during the recent local, provincial, and federal elections. Consequently, fewer women today hold leadership roles at all three tiers of government, owing to political parties’ aversion to promoting women to decision-making positions. To put it another way, Nepal missed out on the opportunities that more women in decision-making positions would bring.

First, more women in politics means a more inclusive democracy. A study shows more women in decision-making roles, with their inclusive and cooperative leadership styles, result in tangible gains for democracy. This entails better service delivery, stronger collaboration across racial and political boundaries, expanded social safety nets, and a more sustainable future.

Moreover, other research links women’s political participation to improved governance, transparency, and low levels of corruption. As women are often seen to be more trustworthy and honest, it is hoped that their increased participation in politics will reduce corruption. In 2011, Mexico replaced all of its male traffic cops with female cops to curb corruption, since women are seen as more trustworthy. New Zealand has the highest level of female representation (49.2%) of any parliament in the Asia and Pacific Region and the sixth highest in the world. Now wonder, the country ranks first out of 180 in the Transparency International Corruption Perception Index (CPI). Whereas, Nepal  ranks first in South Asia in having more women in national parliament (32.7 percent) and is 117th out of 180 in the CPI. Undoubtedly, Nepal needs more proactive women leaders who would guarantee more inclusive policies and responsible institutions that combat the pervasive corruption.

Second, more women legislators mean a more stable, inclusive, and vibrant economy. Researches show that gender equity has favourable economic gains for everyone and that the presence of women in politics corresponds with a wider economic impact.

India showed much improved socio-economic growth with greater gender-sensitive spending on programmes related to health, nutrition, and education when women were present in a decision making role. Likewise, women’s political leadership and women’s broader engagement in the economy are intertwined. Thus, if Nepal wants more women at work, it should prioritise raising the number of women in elected offices.

The government, which remains dominated by men as of now, repeatedly attempts to prohibit women from being involved in the economy. One recent example is the government’s effort to implement a law requiring women under the age of 40 to get permission from their family and local ward chair before travelling to the Middle East and Africa. In Nepal, 74% of women are involved in agriculture. Only 15.7% of agricultural work is performed by men, while the rest 84.3% is performed by women. However, they have no say in the earnings from farming and endure various types of discrimination (such as access to land, water, seeds, and training, among others). Yet, the government does not consider it essential to implement women-friendly farming policies, training, or materials.

Thus, women’s participation in two of the most important economic factors, remittances and agriculture, is minimal. This would be drastically different if more women were in positions of legislative power. More women in decision-making positions would fight against such discriminatory restrictions that limit women’s full participation in the economy and create a vicious loop: women don’t have money, they can’t win, therefore they are chosen through PR.

Third, there is significant evidence that women politicians are changing the way politics work by introducing policies in areas that aren’t usually talked about at the political table, like domestic violence, women’s reproductive health, and maternity leave, and by broadening perspectives on other policy areas. This has been seen in France, Sweden, South Africa, Rwanda, and Egypt, among others. Increased policymaking that prioritises welfare, healthcare, education, families, water and sanitation, women, and minorities is also linked to the number of elected women. Here, the New Zealand experience serves as the best example.

Women politicians not only propose such policies but also tirelessly work to put them into effect, as Margaret Thatcher rightly stated: “In politics, if you want anything said, ask a man; if you want anything done, ask a woman.” A study done in the US has found that congresswomen provide 9% more government programmes annually to their home districts than their male counterparts. And women are 10% more effective lawmakers and pass twice as many bills on average than men. The increasing instances of gender-based violence, rape, early child marriage, acid attacks, and girls’ trafficking are tearing the country apart. With Nepal’s political class becoming more and more apathetic, it is certain that greater representation of women in decision-making positions will increase efforts to put an end to these issues.

Nepal cannot afford to ignore women. It must ponder seriously what might be done to avoid losing out on these costly opportunities. As was done in Rwanda (which implemented 30% gender quotas in the parliament only in 2003 but ranks first in the world in terms of the proportion of women, 61.25%, in its national legislature due to rigorous implementation), one of the most important recommendations is to implement the legally mandated gender quota with adequate political finance regulations to support it, as the exorbitant cost of political elections is a significant barrier for women who are interested in running for elective office.

The patriarchal attitudes of Nepali society and local political parties that “women cannot win,”  which limit women’s electability and winnability in the elections must be challenged by raising awareness of the importance that women could offer to overall political governance and public service delivery. As women cannot be what they cannot see, elected women should get more media publicity to inspire other women to pursue leadership positions. Lastly, there should be more training and networks for women who want to run for government. For example, a cross-party and cross-country network for women politicians could be set up. 

– SANTOSH Sharma Poudel

The column originally appeared in The Diplomat on 30 December 2022. Please read the original article here.

On December 27, a team of Chinese experts landed in Nepal to conduct the feasibility study of the Kathmandu-Kerung (Geelong) railway. On the same day, China opened the Rasuwagadhi border point, which had remained closed for 35 months because of the COVID-19 pandemic. It came a day after Communist Party of Nepal-Maoist Center (CPN-MC) Chairman Pushpa Kamal Dahal, a.k.a. Prachanda, assumed the premiership. These appear to be “goodwill” gestures from China to the new communist leader in Nepal.

The dream of a railroad linking Nepal to China is an old one. King Birendra Shah and Chairman Mao Zedong mooted the idea in 1973.

Landlocked Nepal’s connectivity with the rest of the world is through India. This has been a source of frustration for the Nepali public and policymakers as it has made Nepal very dependent on India. The railroad to China offers Nepal a way to break its India-lockedness and provides it with alternative access to the rest of the world. Also, there is an increasing need for better connectivity, given the expanding trade volume between the two countries. It was after the Indian economic blockade on Nepal in 2015 that Nepal and China accelerated their efforts on making the railway project a reality.

Then-Prime Minister Khadga Prasad Oli signed an agreement in 2018 during his visit to China. In April 2019, China included the Nepal-China Trans-Himalayan Multidimensional Connectivity Network in Beijing’s joint communiqué of the second Belt and Road Forum. The two countries signed an MoU on the feasibility study of the proposed railway during Chinese President Xi Jinping’s visit to Nepal in October 2019. Xi said the connectivity network would help Nepal “transform from a landlocked country to a land-linked country.” For China, the vision is a part of Xi’s ambitious Belt and Road Initiative.

The proposed rail will connect to the Lasha-Shigatse railway in Tibet. On the other side of the border, the rail could be expanded to connect Pokhara and Lumbini, two other major cities in Nepal.

The railroad offers hope and has significant potential. It will symbolize the Nepali dream of better infrastructure and economic connectivity and represent good Nepal-China relations. Strategically, railway connectivity with China diversifies Nepal’s connectivity and reduces dependence upon India. It will ensure Nepal will suffer minimal consequences if India imposes a blockade in the future. Economically, it will facilitate trade with China. Supporters also point out that the railroad could be instrumental in bringing a large number of tourists from China to Nepal.

However, obstacles aplenty remain. First, the railroad has to transverse the mighty Himalayas. The terrain and ecology are challenging. China has shown that it can build a railroad in a complex landscape. However, the trans-Himalayan railroad will test Chinese abilities. Almost 98 percent of the railroad will either be a bridge or tunnel because of the terrain.

Second, the cost of the railroad is a primary concern. Previous estimates put the cost at $3 billion. However, it is expected to now cost around $8 billion (to link up to Shigatse). We will have a more accurate estimate after the feasibility study. There is a high chance of the cost being revised upwards. It will be a massive commitment for Nepal, whose GDP is around $30 billion.

Third, China has provided a grant for the feasibility study, estimated to cost around $300 million. However, it will be loans that will likely fund the implementation of the project. There is a fear that Nepal could go the Sri Lankan way if Nepal undertakes such loans without due diligence. The Nepali media is abuzz with apprehensions over the “debt trap,” citing what transpired in Hambantota port in Sri Lanka. The Nepali ambassador to China has sought to dissuade such concerns, but it will not be easy.

Fourth, some are concerned that the railway does not benefit Nepal. Nepal’s trade with China amounted to NRs 235 billion ($1.8 billion) in 2020/21. However, Nepal’s exports accounted for a paltry NRs 1 billion ($8 million). With a 1:234 export-to-import ratio, trains running will carry Chinese goods to Nepali markets but can be expected to return empty. Therefore, the railroad could only increase Nepal’s imports from China.

Fifth, India sees the Himalayas as its natural defense frontier and the region south of the Himalayas as its sphere of influence. It could see the railroad as China broaching India’s security perimeter. India was not pleased when Nepal signed the BRI agreement in 2017.

Talks of a railroad connecting Nepal to China has had India on its toes. In recent years, Nepal and India have upgraded and expanded the dysfunctional Janakpur-Jayanagar railway to Kurtha. In April, Indian Prime Minister Narendra Modi and then Nepali Prime Minister Sher Bahadur Deuba jointly flagged the cross-border railway service between Jayanagar (India) to Kurtha. The 35-km-long railway was built with an Indian grant worth NRs 10 billion ($75 million). In addition, work is underway to expand the road to Bardibas via Bijalpura. This is one of the five cross-border links being talked about between Nepal and India.

Nepal has its task cut out. Firstly, it needs to do a cost-benefit analysis in conjugation with the financing modality. If the current trade trend continues, the benefit to Nepal will be minimal. Meanwhile, Kathmandu needs to engage New Delhi to communicate Nepal’s rationale and assure it that the railway will not affect Indian security interests. Nepal needs connectivity with both neighbors, and it is not a competition. Also, Nepal needs to harmonize infrastructure development to its northern border with China and its southern border with India to support Nepal’s growth.

India builds a broader gauge railway, and China, a standard gauge. It will be a challenge for Nepal to find a way to make the railway tracks built in collaboration with the two countries interoperable. This will be a major test of Nepal’s diplomacy.

– NISCHAL Dhungel

The opinion piece originally appeared in The Kathmandu Post on 4 Jan 2022. Please read the original article here.

Globally, there has been a shift toward a low-carbon economy and a developing green “techno-economic paradigm.” British economist Chris Freeman and British-Venezuelan scholar Carlota Perez coined the term “techno-economic paradigm,” an innovation-based theory of economic and societal development that remains at the centre of the capitalist development process. Least developed countries (LDCs) like Nepal face enormous challenges pivoting towards green techno-economic transformation compared to advanced economies. Although LDCs have contributed the least to climate change, they are at the forefront of the crisis—over the past 50 years, LDCs accounted for 69 percent of all deaths resulting from climate-related disasters.

Compared to pressing infrastructure and poverty alleviation demands in LDCs, a robust pro-climate agenda may seem counterproductive and anti-development. At the same time, there is a developing transition toward a low-carbon economy, which some authors have referred to as a “green techno-economic paradigm.” There is a shift of productive resources from high-emission industries (sunset industries) to lower-emission ones (sunrise industries). LDCs are often condemned to be technological laggards, with the development of modern technologies remaining strikingly concentrated in advanced economies. Sunrise industries may encourage productivity and strengthen intersectoral productive lineages due to the formation of a new green-techno-economic paradigm, which may offer new and more sustainable pathways to LDCs and developed countries. Nepal, for instance, can emulate India’s growth in the renewable energy sector.

Nepal contributes roughly 0.1 percent of global greenhouse gas (GHG) emissions. Most of Nepal’s energy comes from hydroelectricity, a remarkable achievement that has created a strong base for future climate-smart prosperity. One of the richest water-resource countries in the world with more than 6,000 rivers and rivulets, Nepal can become the bedrock of energy security for South Asia, using renewable means. The country can significantly uplift one-third of South Asia from non-renewable to renewable energy consumption, reducing approximately 3.5 percent of the total GHG emissions worldwide by 2040.

Green structural transformation

It is high time LDCs shifted toward strengthening resilience, moving away from fossil fuel, and aligning national objectives for sustainable green structural transformation. The Doha Programme of Action reflects the continued importance of structural change and productive capacities for LDCs. Despite placing greater emphasis on increasing production capacity and facilitating economic diversification, most LDCs have made little progress in changing the structure of their economies. The disastrous effects of Covid-19 on trade, investment and production in LDCs, and its broader economic and social effects have further slowed progress.

The prospects of structural transformation are available to LDCs through internal structural change, targeted policy decisions, or exogenous changes in the international setting. The structural transformation occurred in developed or emerging economies shifting from agriculture to manufacturing to the service sector. In Nepal, a structural transformation occurred directly, shifting from agriculture to the service sector following the contribution to Gross Domestic Product (GDP). Agriculture, which accounts for two-thirds of the workforce and one-third of GDP, has to undergo reforms to increase productivity, reduce poverty and free up labour for new sources of economic growth. The broad-based reforms Nepal implemented between 1986 and 1996 made a positive impact on the economy. The share of industry in GDP and exports, as well as the share of manufacturing, virtually doubled. This led to an increase in the economy’s openness and diversification. Compared to the manufacturing and agriculture sectors, the structural restructuring of Nepal’s economy over the previous decade has resulted in tremendous growth in the service sector. Besides, a knowledge-based economy cannot be sustained without the support of an expanding manufacturing industry.

Remittance is the mainstay of Nepal’s economic activities and the largest source of foreign exchange earnings for the country. According to the Nepal Rastra Bank (NRB), the country received 1.007 trillion rupees in remittances in 2021, or 20.8 percent of its GDP, and it is expected to increase to 22 percent in 2022. Given the noticeable increase in remittances, they are probably the main driver of the improvement in living standards seen in Nepal, directly (households receiving remittances) and indirectly (increased labour income of those that remained). To escape the out-migration and remittance trap, a clear set of plans and policies to increase domestic employment should be the top priority of the federal, provincial and local governments. Large-scale migration is a symptom of underlying, long-standing issues rather than a sign of strength. It is a monumental task switching from foreign to domestic employment. Without rethinking its development model, Nepal cannot prosper or graduate into a middle-income country. More human capital must be put to productive use for Nepal to continue on a more robust and sustainable growth path.

The structural change could be strengthened by accelerating the development of productive capacities, which will trigger an organic process whereby investment (i.e. capital expansion) is accompanied by a gradual shift of labour and production inputs towards more advanced and higher-value-added industries. A virtuous cycle of catching up with advanced economies could result from a structural process, which could increase labour productivity within the industry and through structural change, and reinforce the profit-investment nexus. Nepal’s plan for industrial growth and how trade, infrastructure, exchange rates, and other economic policies can help with industrial development is still not clear.

In their book Creating A Learning Society, Noble Laureate Joseph Stiglitz and Columbia University professor Bruce C Greenwald stressed that a nation’s comparative advantage is influenced by the products it creates. Governments must constantly evaluate how well their industrial policies are working and whether they are being “captured” by special interests. Governments must also continuously work to implement industrial policies more effectively, and industrial policy design must reflect the capacities and capabilities of the government. For example, LDCs can employ the same technologies (computerisation, information technology), labour management, and inventory control procedures (such as just-in-time production) that maximise productivity growth in different sectors.

One crucial thing to take away from developed nations like the USA is that they have institutionalised learning as they go along. For instance, in July 2022, the US Congress passed the CHIPS Act to address new challenges, supply chain disruption on semiconductors arising from the Covid-19 pandemic and the Russia-Ukraine war. The Act aims to strengthen US domestic semiconductor manufacturing, design and research. Industrial policies that function in one environment and at one level of development do not function in another. LDCs should learn a lesson from developed countries to enact and implement policies targeting a specific sector that maximises productivity growth.

The biggest market failure the world economy is currently dealing with is arguably climate change. With rare exceptions, it has proven challenging to persuade nations to enact carbon pricing or cap and trade, which would prevent people and businesses from considerably reducing their carbon emissions. Industrial policies that promote renewable energy and dissuade carbon-intensive companies and technologies can help developing nations decrease their carbon emissions. Lastly, creating green jobs in the industrial sector of the LDCs is a step in the right direction toward replacing carbon-intensive industries.

– SANTOSH Sharma Poudel

The column originally appeared in The Diplomat on 27 December 2022. Please read the original article here.

This year’s Christmas brought a “surprise” in Nepal. Pushpa Kamal Dahal, the chairman of the Communist Party of Nepal-Maoist Centre (CPN-MC), which won only 32 seats in the 275-member lower house of parliament in the recent general election, was appointed prime minister after he secured the support of seven parties, including the party led by arch-rival Khadga Prasad Sharma Oli of the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML).

Sher Bahadur Deuba, who believes that he is destined to be the prime minister of Nepal seven times and was expecting to be the premier for the sixth time, was left out to dry, although his party, the Nepali Congress (NC), won the largest number of seats.

The timely election and selection of the prime minister is an achievement for Nepal’s nascent democratic process. Yet, the formation of the government reeks of a democratic deficit. CPN-MC, which stood a distant third and won only 11 percent of the votes, will lead a government that excludes the largest party. Nepal’s parties have ignored the “mandate of the people.”

As expected, the November 20 election produced a fractured result. The NC emerged as the largest party, winning 89 seats in the federal parliament. CPN-UML, CPN-MC, the National Independent Party (NIP), and the Rastriya Prajatantra Party (RPP) rounded off the top five, winning 78, 32, 20, and 14 seats, respectively. The newly-elected parliamentarians took the oath of office on December 22.

Parties had jostled for electoral alliances before the elections. Two major alliances contested the polls: a five-party ruling coalition led by the NC, which included Dahal’s CPN-MC, and the opposition coalition led by the CPN-UML. As the election results started to pour in, leaders of political parties engaged in negotiations on government formation. Deuba was confident that the ruling coalition would endure. Dahal repeated the same in public until he made a volte-face at the eleventh hour on December 25.

Primarily, two parties were vocal about their claim to lead the government: NC and CPN-MC. Within the NC, Deuba was challenged by a young leader, Gagan Thapa. While Gagan Thapa remains popular among the general populace and represents the change of generation from the old to young leaders, Deuba has a significant numerical advantage within the NC. Thus, the NC elected Deuba as the leader of the parliamentary party, who is also the party’s prime ministerial candidate, over Thapa by 64-29 votes. Meanwhile, the CPN-MC selected Dahal unopposed.

With this, the contest narrowed down to one between Deuba and Dahal. The two leaders had agreed to take turns leading the government, but neither was willing to concede the chance to lead the government first. Deuba felt he had the natural claim to the leadership first because his party was the largest by a mile, and he was confident that Dahal and Oli would not get back together. Dahal claimed it was his turn after Deuba led the government from 2021 to 2022.

Meanwhile, Dahal was engaging Oli’s CPN-UML through his trusted lieutenants. Oli was waiting in the wings to drive a wedge in the ruling coalition.ADVERTISEMENT

The president invited leaders to claim premiership with majority support by December 25. Deuba was steadfast in his claim of the premiership as the day loomed. Then, Dahal left the coalition and indicated his ditching of the alliance, saying it had “lost its relevance.”

The next day, Dahal received the support of the seven parties, including the CPN-UML, to become the prime minister for the third time. So it is déjà vu, and 2017 again, though the left parties have weakened significantly and needed support from newer parties.

Politics has created strange bedfellows in Nepal in the past. However, this coalition trumps them all.

Besides the CPN-MC and CPN-UML, the coalition includes the four-month-old NIP, the conservative RPP, Madhes-based Janata Samjbadi Party-Nepal (JSP-N) and Janamat Party (JP), and ethnic Nagarik Unmukti Party (NUP) as well as three independent members of the parliament.

Among the coalition partners, the CPN-MC and the CPN-UML largely share common agenda. They were instrumental in introducing federalism and making Nepal a secular state. However, Oli has has indicated his aversion to federalism and secularism in recent times. At a personal level, Oli and Dahal share a tumultuous relationship.

If the two communist parties are from Venus, other coalition partners are from Mars. NIP ran on a “no, not again” platform, attempting to usurp anti-establishment votes. NIP’s leader, Rabi Lamichhane, had said that he would not be a part of any government led by the establishment leaders. The RPP ran on the agenda of reviving constitutional monarchy and the Hindu state. NIP and RPP seek to undo the provincial structure. JP contested against the JSP-N, accusing the latter of ignoring the Madhesi people’s issues in their lust for power. NUP ran on an anti-establishment platform, arguing that the Tharu community in the mid-Terai needed to be freed from the establishment’s control.

The coalition partners have come together in their lust for power. There is bare-knuckle bargaining going on for ministerial portfolios and other political appointments, including in provinces. It can be seen in Lamichhane’s appointment as the deputy prime minister and home minister. There is a court petition against Lamichhane, a Nepali citizen-turned U.S. citizen-turned Nepali citizen, regarding his citizenship. Yet, he now leads the ministry which issues the citizenship certificate. It symbolizes that the coalition is devoid of ethics too.’

Given the breadth of the coalition, Dahal’s focus will be to maintain his hold on power. He will lead the government for at least two years, for the constitution mandates that a no-confidence motion cannot be introduced against a prime minister for two years. However, we can expect a revolving door for the ministerial portfolios. The council of ministers will likely report to their party leaders, not necessarily to the prime minister, weakening the government. It will be a huge miracle if there is a smooth transfer of power to Oli after two years. It will not be a surprise if a new coalition emerges then.

China and India quickly offered “warm congratulations” to the new Prime Minister.

Some Indian analysts believed New Delhi was readying to welcome Deuba as the prime minister. Others, such as former Indian envoy to Nepal Ranjit Roy, had expressed the need for India to engage all parties, big and small. Nepal’s relations with India had normalized under the Deuba-government after it had hit a new low during Oli’s tenure over Nepal’s new map in 2020.

New Delhi is not very fond of Dahal. In its early stages, his party called India an “expansionist” force. He has accused New Delhi of orchestrating his ouster from prime ministership in 2008 and insinuated that New Delhi plotted to kill him. However, he has changed his tune in recent times. During his visit to New Delhi earlier this year, he visited the ruling Bharatiya Janata Party (BJP) headquarters. He met with many senior leaders although Indian Prime Minister Narendra Modi snubbed him. However, New Delhi still considers Dahal unreliable.

Meanwhile, China could not have been happier at the moment. China had nudged CPN-MC and CPN-UML for a communist unification in 2017 and had tried its best to keep the unified Nepal Communist Party (NCP) together when it was on the verge of splitting at the end of 2020. Beijing was less engaged this time but will cheer the communist-plus coalition.

Deuba, known in Beijing as a pro-India leader, cold shouldered the Belt and Road Initiative, a pet project of Chinese leader Xi Jinping, arguing that he prefers grants to loans. Deuba led the ratification of the $500 million American grant, the Millennium Challenge Corporation (MCC), despite vocal Chinese opposition. He has been wary of the Chinese Communist Party as it has invested in party-to-party relations with Nepal’s communist parties.

Dahal shares a better relationship with Nepal’s northern neighbor. His fondness for China will be of concern to the U.S. American engagement in Nepal has increased tremendously in recent years and could slow down during Dahal’s term.

However, Dahal has been pragmatic, if unimaginative, about Nepal’s relations with the two neighbors and the U.S. He has been in politics and power long enough to understand the importance of all three major powers and their interests in Nepal. Therefore, we may not see any significant turn in foreign policy like he frequently does in national politics.

In saying that, the new government has a gamut of issues that require immediate attention. The Deuba-led government had put off the difficult decision on the Agnipath scheme of recruiting soldiers in India. Dahal will have to deal with that controversial issue now. Border disputes with India and China need his immediate attention too. The most pressing will be how Nepal engages India, China, and the U.S. amidst the Sino-Indian regional tension and the Sino-American global tussle. It will also be the issue with the most far-reaching consequences for Nepal’s security.

Dahal has shown his Machiavellian nature to grab leadership at home. We will find out if he can pull out a “surprise” in Nepal’s foreign policy.

– SAGOON Bhetwal

The opinion piece originally appeared in the December Issue of New Business Age Magazine. Please read the original article here.

One can easily get glimpses of the informal economy while passing through the streets of Kathmandu. From street vendors to home-based workers, the informal economy accounts for economic activities that are carried out with informality. This refers to activities and enterprises that are not regulated or taxed while they also continue to lose recognition and protection. The International Labor Organisation (ILO) says that ‘the informal economy consists of activities that have market value but are not formally registered’. While this economy is a global phenomenon, it is most prevalent in Emerging Markets and Developing Economies (EMDEs). It has, on average, a 35% contribution to the Gross Domestic Product (GDP) in low and middle-income countries while the contribution is 15% in the advanced economies.

According to the World Bank (WB), 80% of the workers in South Asia are involved in informal economic activities. In this region, more than 90% of businesses are informal. The informal economy is mostly defined by its composition of low funding, low-skilled workers, irregular income, lack of social security, difficult working conditions, low level of productivity and lack of protection, to list a few. At the same time, it is also important to note that despite all the negative attributes, this economy also acts as the only safety net for people who are left out of the formal one. It is often identified as a shock absorber when making ends meet becomes impossible through the formal economy. In Nepal, according to the Central Bureau of Statistics (CBS), 62.2% of the total employed people are engaged in informal jobs. The occupations with the highest informal engagement are elementary occupations, agriculture, forestry, fishery, craft and related trade works.

Gender Composition
Women’s labour force participation continues to stay lower even today. Out of those women who are active, most are engaged in the informal economy. As per the Labour Force Survey, 90.5% of employed women in Nepal have informal jobs. A number of factors can be attributed to their large concentration such as lower educational attainment, low level of skill, and cultural restrictions. Their involvement can be found in the least visible and most vulnerable segments which continue to remain under-valued.

Women lack access to need-based benefits and face continuous safety risks. A study carried out by Centre for Social Change (CSS) found that women in the informal economy of Nepal face a disproportionate load of gender wage gap, discrimination and harassment, and even unpaid labour. The constant fear of Gender Based Violence (GBV) either puts women at continuous risk at their workspace or keeps them totally out of employment. According to a study done by CARE Nepal, 66.5% of women in informal jobs in Nepal are vulnerable to violence and exploitation. Even the existing legal provisions such as Sexual Harassment (Elimination) at Workplace Act, 2015 do not take into account the violence that happens in informal workspaces and lack specific provisions to address them.

When it comes to differences in income, 66.8% of women in informal jobs earn lower than the minimum wage standard in Nepal. This is extremely high when compared to 31.6% of men working in the informal sector. Wage discrimination persists even in formal jobs, while it is worse for those in informal engagements. What is concerning here is that women are the most discriminated-against as they receive the lowest rate of income or even remain unpaid.

Informal Economy and Covid-19
The Covid-19 pandemic, followed by its containment measures, took economies worldwide into contraction. The ILO estimates that globally 1.6 billion workers in the informal economy were hit the hardest. Due to measures such as mobility restrictions, people were confined to their homes. This meant that they faced difficulty in making livelihoods as their income increased. They also faced risk of losing their jobs. A survey conducted by the Kathmandu Metropolitan City (KMC) shows 81% of the respondents living in Kathmandu were unable to pay for their daily necessities, rent, and loans because of the sudden loss of their jobs.

Informal workers engaged in tourism, trade, construction, and manufacturing sectors bore the highest risk as they lost income and lacked protection measures. The ILO estimates that about three-quarters of the total workers in the tourism sector of Nepal are in informal jobs. Even some of those, employed in formal sectors, had to slowly shift to an informal job to make ends meet. COVID-19 further affected their mental and social well being because of the financial insecurity they faced. The pandemic has shown that vulnerability of informal workers can suddenly exacerbate as workers in informal lines of jobs lack social protection and benefits.

Transitioning from Informal to Formal
Shifting to formal standards for wage workers, home-based workers, and self-employed individuals means that they will have to comply under regulations that include both obligations and advantages. This will lead to their contribution to the tax base and GDP as they also receive access, protection and insurance. The ILO in 2015 adopted ‘Transition from the Informal to the Formal Economy Recommendation’. The objectives of ILO Recommendation 204 for the transition are i) creation of decent jobs and sustainable enterprises in formal economy, ii) transition of workers and enterprises to formal economy, and iii) prevention of informalisation of jobs. At the same time, the policy interventions needed to address the existing informality have to be context and stakeholder specific. The strategy that works for wage employees in developed countries might not always work for daily wage earners in Nepal.

However, it is important to realise that this transition is not easy and is rather a long-term process. The informal economy, despite entailing low productivity and low income, has been assisting families to supplement their income and provide a safety net. It has also been absorbing surplus labour and assisting families living on the poverty line when the formal economy excludes them. In the process, the condition of women in the economy and post-pandemic recovery has to be prioritised. It now becomes important for governments to identify how the informal economy can be assisted or decide the extent and process of their formalisation. One thing to remember is that workers need to be provided the incentive for their economic activities.

– SAGOON Bhetwal

The column originally appeared in The Kathmandu Post on 12 December 2022. Please read the original article here.

Violence against women (VAW)—a form of severe human rights violation—has remained pervasive around the world, leaving women and girls in distress and affecting their potential. The Declaration on the Elimination of Violence Against Women defines VAW as “any act of gender-based violence that results in, or is likely to result in, physical, sexual or psychological harm or suffering to women, including threats of such acts, coercion or arbitrary deprivation of liberty, whether occurring in public or in private life.”

Unequal power relations result in domination, which is also a manifestation of VAW. This is perceptible around us, be it on the streets or in Parliament. When women engage in politics as voters, activists, and lawmakers, they face a threat and subjugation, primarily because of their gender. Women politicians, though, have been defying norms that otherwise expect them to remain passive. But violence has often been used to reinforce political structure(s) favouring patriarchy and to suppress women politicians from voicing their opinions freely and independently.

In a 2018 study carried out by the inter-parliamentary union (IPU), 85.2 percent of the interviewed women members of the Parliaments in Europe reported having faced psychological violence in Parliament. From Marielle Franco of Brazil, who was known to be a fierce activist, to Angiza Shinwari of Afghanistan, who constantly defended women’s rights, many women politicians have even had to lose their lives when they voiced against gender-based injustices. Women in politics across all borders and in all countries face similar risks and fears as they question the status quo.

What women politicians face around the globe and also in Nepal is a reflection of the wider gender discrimination that occurs across social, cultural, and economic fronts. A study conducted in India, Nepal, and Pakistan on “Violence Against Women in Politics” identified sexual favour, character assassination, verbal harassment, threats, and emotional blackmail as violence against women politicians. Such acts have taken new forms through new means in recent decades, including cases involving harassment by total strangers on social media platforms. An Analysis of Gender Violence in Social Media Against Women in Politics in Nepal found that the most common attacks on women politicians were insults and hate speech.

Ensure legal protection

We have long pushed for the political participation of women in our democracies. However, where we have failed time and again is at ensuring mechanisms in place for their security in political spaces. Our patriarchal political systems are resistant to change and violent, when challenged. And when women do so to demand equal participation, they face violence risks.

The first step towards fighting violence against women in politics is identifying and acknowledging them. This can be done by either expanding our existing laws or pushing new legislation(s). In 2012, Bolivia approved a “Law against Harassment and Political Violence against Women” to criminalise any such acts that threaten the political participation of women and their access to decision-making spaces. The Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW)—also considered the International Bill of Rights for Women—obliges countries to take such needed “measures to eliminate discrimination against women in the political and public life.” This should entail the right of women to vote in elections, be eligible to be elected in elections, hold public offices, and contribute to formulating government policies. In Nepal, the Sexual Harassment at Workplace (Prevention) Act, 2014, does include government bodies within the definition of the workplace and has made such acts liable to punishment. Besides that, there is an absence of incorporation of the concept of violence against women in politics and also legislation that specifically covers all aspects of VAW.

Activism against VAW in politics

Feminist movements have been playing significant roles in advancing the rights of women and girls. Activism is one of the pathways forward to combat violence women face in political engagements. It works to ensure attention and initiate discourse on violence in the political sphere against women, a matter often denied. At the same time, activism can exert influence to build seriousness and even determine what institutional and legal reforms should look like. In France, for example, a hashtag movement called #levonslomerta (end the silence) was initiated by activists and politicians demanding actions to end VAW within political organisations. Such initiatives are needed to build public opinion and, more importantly, solidarity against normalised behaviours that risk women in politics.

A large force of women, 41.21 percent, are already in local governments, and many will soon join the Parliament and assemblies of the country. It becomes the responsibility of the incoming government, political parties, civil society, and elected representatives to collectively ensure that the government bodies and political spaces of Nepal are safe and have zero tolerance for VAW in politics. It also requires the combined effort of activism and reform, along with gender sensitisation at all levels.

Because the patriarchal values of our society continue to define power relations and gender roles, they undermine the position of women in power. VAW in politics differs from political violence as it is more sexualised, used to preserve the status quo and deter political engagement of women. This is even more worrisome for those with intersecting identities who are at greater risk of facing axes of discrimination and violence. The fear of violence limits the possible political activeness of women and creates hurdles for those already in the political arena to make their best contribution.

We should, therefore, realise how a threat to women in politics is, largely, a threat to our entire democracy. Or else, every time the legitimacy of women in politics is questioned, it will simultaneously raise questions on the progress that we claim to have made in terms of their political participation.

– SANTOSH Sharma Poudel

The column originally appeared in The Diplomat on 29 November 2022. Please read the original article here.

The Nepali Congress (NC), which heads Nepal’s ruling coalition, has emerged as the single largest party in the parliamentary elections held on November 20. It is followed by the Communist Party of Nepal-United Marxist Leninist (CPN-UML), the main opposition party.

While the CPN-UML received marginally more votes than the NC under the proportional representation (PR) system (where voters cast a ballot for parties), the NC’s stronger showing under the first-past-the-post (FPTP) system put it ahead in the race to form Nepal’s next government. Most of the votes have been counted, but the total number of seats won by each party will take a few more days to be tallied. Meanwhile, leaders are engaging in hectic meetings, each seeking to corner a share in the next government.

In the run-up to the voting, analysts had described this election as a defining moment in Nepali politics. Voter frustration with the establishment’s inability to deliver economic growth and good governance was running high. The victory of a few young candidates in local elections held in May indicated that young, independent, and non-political candidates can take on and win big against the traditional political elite.

However, results from the parliamentary election indicate that this was an incrementally progressive election, but not transformational. The three major establishment parties came on top. The NC and the CPN-UML were followed by the Pushpa Kamal Dahal-led Communist Party of Nepal-Maoist Center (CPN-MC) in third place. The National Independent Party (NIP), a party registered barely a few months before the election, came in fourth.

Yet this election represented a break from the past; it displayed some new facets. First, voters unambiguously expressed frustration at the establishment. Six current ministers and 60 former parliamentarians lost their bids to return to parliament. Though the three major parties avoided the worst outcome, many of their senior leaders failed to win their seats.

Second, the NIP reaped the benefits of voter frustration and has emerged as a significant force in national politics. Voters exercised their franchise in favor of establishment candidates in the FPTP but used their PR vote in favor of the NIP. The NIP apparently chipped away votes from the three major establishment parties. Each of those three parties lost about 3 percentage points in vote share compared to 2017. The NIP has received 11 percent of the votes.

Third, people’s frustration also manifested at the regional level. A new regional party led by C.K. Raut disrupted the established order in Madhes province in southern Nepal in national and provincial elections.

The election also marks a comeback of social and political conservatism in Nepali politics. The Rashtriya Prajatantra Party (RPP), a monarchist and Hindu-nationalist party, won seven seats and almost 6 percent of the votes (in the 2017 election, it won one seat and 2 percent of the votes). A liberal agenda has dominated Nepali politics since 2006.

No party or coalition has received a clear mandate. At least three parties must cobble together a coalition to form a government unless the two main rivals, NC and CPN (UML) come together. This will likely create more instability and horse-trading among parliamentarians and parties. The pre-poll alliances were bereft of any ideology. The lust for power would only intensify in such a hung parliament. Hence, there will be more instability. The grand-left coalition won a significant majority in the last election, yet its reign ended acrimoniously within three years.

More coalition partners would mean a weaker government. The prime minister-to-be will find it difficult to impose his vision on the council of ministers. In the current ruling coalition, the ministers were answerable more to their party chief than the prime minister. To ensure his government’s survival, Prime Minister Sher Bahadur Deuba could not even sack Finance Minister Janardan Sharma of the CPN-MC.

The NIP rode the anti-establishment sentiment and promise of good governance without detailing how to deliver. The party, which is more a coalition of a wide range of candidates disappointed with the establishment, is untested. It is not yet clear if the NIP will be a part of the government or sit in the opposition.

On foreign policy, all parties have touted non-alignment and “balanced” policies in their manifestos based on the principles of the United Nations and the Panchasheel. However, there are subtle differences among parties, such as the NC’s preference for grants and not loans. This is an apparent reference to funding for Belt and Road Initiative projects.

A cobbled coalition of multiple parties will be weak and not assertive in foreign policy. Neither will such a coalition change the track radically. This would neither be the best outcome for any major powers (such as India, the United States, or China) nor would it be the worst. It would also mean that Nepali foreign policy is likely to be reactive and ad hoc.

The CPN-MC and Communist Party of Nepal–United Socialist (CPN-US) have vowed to regulate the border with India and review the 1950 Treaty of Peace and Friendship with India. However, they are unlikely to follow it up in any meaningful way, even if they are part of the ruling coalition. No party presented its concrete view on issues requiring immediate attention, such as the Agnipath scheme. India has already reached out to key leaders of the ruling coalition.

The United States has concerns over the Millennium Challenge Corporation (MCC)’s implementation. The MCC is a $500-million grant for building energy and transport infrastructure. The Nepali parliament ratified the agreement earlier in February after a toxic debate. Similarly, China would like a more Beijing-friendly government to ensure the implementation of BRI projects.

These major global powers will jockey for influence in Nepal. The next government will have to manage the major world powers, whose interests in Nepal do not align. The next government has its task cut out. But its foreign policy can only be sorted if the domestic house is in order.