Timeline of Major Events

Saffronization of Nepali Politics

After the Supreme Court overturned then Prime Minister Oli’s move to dissolve the parliament on February 23, he began to put on a show of sorts and inciting religious nationalism as a means to divert public attention from the shortcomings of his party and leadership. From visiting the Pashupatinath temple and replacing a silver ornament with a much more expensive gold ornament with taxpayer money, to two weeks later, organizing a mass gathering of his faction of the NCP in front of the former royal palace, to declaring that the Hindu god Ram was born in Nepal, Oli’s public acts continued to escalate as he began losing political capital. More recently, the Maoist chairman Prachanda came under criticism for meeting with the polarizing Indian figure and yoga guru, Ramdev, who is also a Hindutva enthusiast. The optics of such events are difficult to ignore and appear to be attempts at garnering sympathy from the pro-monarchy and pro-Hindu constituency.

Pro-Hindu agenda has been gaining traction in Nepal, with some believing that a Hindu Nepal would also be a stepping stone for reinstating the monarchy. However, Nepal does not have to look far to see that the use of religion as political fodder can have dire consequences as the Hindutva push in Nepal is quite reminiscent of the Hindu extremism in India. Hindutva politics in Nepal’s southern neighbor India has promoted a form of intolerant majority rule that encourages discrimination and violence against the minorities. The hard-line attitude of the ruling party of India towards Muslims has undermined India’s reputation as a tolerant and secular democracy in the South Asian region and the world. The mob violence unleashed upon the Muslims in February of 2019 was a result of government representatives using violent rhetoric in the name of nationalism and majoritarianism. Furthermore, comments made by Tripura’s Chief Minister Biplav Dev on Indian Home Minister Amit Shah’s alleged plans to ‘expand the party’s government in Nepal’ has also raised concerns.

Hindu nationalist ideas and organizations such as RSS, imported from across the border have already found legitimacy in Nepal further strengthened by the support of leaders like Kamal Thapa of the pro-Hindu and pro-monarchy Rastriya Prajatantra Party. However, the activities carried out by communist leaders such as Oli who are otherwise guided by leftist ideologies and secular principles, also appear to be appealing to electoral support from Nepal’s Hindu population. The politicization of religion has been legitimized due to its potential to garner voters. However, the state representative or party embracing a particular religion sanctions the politics of hatred and violates the principle of democratic republicanism. If the trends in Nepal’s southern neighbor is any indication, Hindutva politics is anti-minority, violent, undemocratic, and poses a threat to the secular fabric of Nepal. Although its implications have been limited to politics so far, possible security implications in the future cannot be ruled out.

Politicization of MCC and Propaganda Warfare in Nepal

The US-China relationship has entered a period of great uncertainty and instability as China has become more powerful and more assertive in the international arena. Similarly, China’s active role in the South Asian region has flared India’s security sensitivities. IPS as a strategy includes a military component, which aims to deter growing Chinese influence, also addressing India’s security concerns by way of The United States’ readiness in the area. While some argue that IPS and MCC are closely related as outlined in the U.S. National Security Strategy, others maintain that such claims are overblown and that Nepal would be losing out on one of the largest U.S. grants in recent history for the development of energy infrastructure and road maintenance in Nepal.

A sharp divide over the compact within the coalition government has added further complications to the ratification. Those in support of the compact argue that it is vital for the development of the country as it would create infrastructure, employment opportunities, and accelerate economic development of the country. Whereas, critics perceive MCC to be against the national interest of the country and argue that it overrides the Nepali constitution putting the United States in control of the implementation of the compact. The compact is currently under consideration in the Parliament. However, Nepal’s political parties and a large section of the public continue to be divided over the program, generating great controversy and forcing the government to put the program on hold. Foreign aid and the influence that come with it has remained a contested topic in geopolitically sensitive Nepal. Whether or not MCC is a part of the broader IPS strategy has taken center stage, triggering intense debates on the compact and if it undermines Nepal’s sovereignty and constitution.

The government of Nepal had sent a letter to MCC seeking clarification on dubious clauses in the compact. While the MCC response says Nepal is not a part of the Indo-Pacific Strategy and describes itself as an independent U.S. foreign assistance agency, American officials have made contradicting statements on the matter in the past. For instance, Secretary of State Mike Pompeo said that MCC was in fact a part of IPS during Pradeep Gyawali’s visit in 2019. However, Vice President of MCC, Fatema Sumar, during her visit to Nepal, denied any military component being attached to MCC and maintained that MCC would enable access and support Nepal’s development goals by way of investment in energy and infrastructure.

Nepal hosted two top American officials in the past year with MCC’s Vice President Fatema Sumar’s visit to Nepal in early September and Donald Lu, assistant Secretary of State for the Bureau of South and Central Asian Affairs visit in November. Both visits came at a time where the United States and MCC have become hotly debated topics in Nepal’s political discourse. While Donald Lu’s visit was said to be a familiarization trip, Fatema Sumar’s visit garnered immense attention. She met with political leaders to discuss the opportunities provided by the compact and offered clarifications on issues linked with the MCC. She also dismissed doubts around MCC being a part of the Indo-Pacific strategy which would violate one of Nepal’s core foreign policy tenets of non-alignment.

The United States Millenium Challenge Corporation (MCC) had released a statement in September expressing that both MCC and Nepal had taken positive steps towards the ratification of the compact after MCC’s Vice President to Nepal in early September. However, MCC released another statement expressing dissatisfaction after the parliament session was prorogued on 29 October, obstructing the parliamentary ratification of the compact which has been pushed several times before. The statement read that such obstructions to the ratification of the compact further delays benefits to millions of Nepali households and that delays to ratification jeopardize the critical and timely support that the grant would provide. While the statement also said that the decision to move forward with the compact or not rests with Nepal, it also emphasized that the government of Nepal had made commitments confirming their ongoing support for the compact. Furthermore, Vice President of MCC Fatima Sumar also expressed that she was confident Nepal would endorse the USD 500-million MCC agreement in a display of American persistence on the ratification of the agreement. She also added that Nepal should not delay in ratifying the Millennium Challenge Corporation (MCC) adding, “The country needs to ratify it.”, demonstrating growing American frustration with Nepal and mounting pressure on the current government. It is also a departure from previously used American strategies of persuasion or dissuasion to coercion.

Fatema also highlighted that her visit to Nepal was to provide clarity on misconceptions and false rhetoric against MCC, demonstrating that the public disinformation campaign in Nepal regarding MCC and American influence in the region has alarmed the United States. Her statement comes amidst reports alleging that China is lobbying against the MCC. “Since there has been a lot of misunderstanding, misperception and confusion on the MCC-funded project in Nepal, China has taken this misconception as an opportunity to provoke anti-MCC movement in the country”. Furthermore, American frustration is visible in Nepal as cooperation has been scaled down on various fronts over the past three years. Although Nepal and American development relationship is over 80 years old, such public disinformation campaigns and continued politicization may have adverse impact on development partnerships such as USAID, American support via the United Nations etc.Nepal is currently experiencing a propaganda warfare between two superpowers, namely, China and the United States wherein the Nepali media has been used to create certain narratives and counter narratives. Such developments can create security threats in the country.

Nepal Clear of Afghanistan Takeover Spillover Effects

President Joe Biden’s withdrawal of all U.S troops from Afghanistan in September not only marks the end of America’s longest fought war, but also removed Taliban’s most formidable hurdle in its takeover of Afghanistan. Various analysts anticipated that the move would create geopolitical impacts and shifts in the region with serious ramifications on regional peace and security as a whole. They also suggested spillover effects on Nepal in the form of a refugee crisis caused by the displacement of Afghans. However, over six months since the US pullout, there is a lack of potent indicators.

Analysts argued that the loosely regulated Indo-Nepal border would cause the flow of Afghan refugees into Nepal. However, Nepal has always looked towards India in the anticipation of a refugee crisis which would only occur if India allowed lapses in its security mechanisms. Other analysts also pointed out that the effects of the Taliban takeover can be observed in radicalization and fundamentalist activities. However, the lack of such activities demonstrates that Nepal has not directly experienced any spillover effects. Nonetheless, even in the absence of direct effects, Nepal needs to ramp up border security measures to avoid possible crisis given the loosely regulated border with India and a weak surveillance and security system not robust enough to combat terrorist forces on its own.