June 2022 Analysis: Domestic Politics and Governance

Posted by : Sourav Dahal


Date : 2022-07-12

Timeline of Major Events

Date Events
June 4 CPN Unified Socialist decided to call back its ministers and replace them with the new ones. F
June 9 Commanding General of the US Army Pacific Charles A. Flynn arrived in Nepal for his four-day visit.
June 13 A national daily accused Finance Minister Sharma of allowing unauthorised people to determine taxes for the budget of the fiscal year 2022-23.J
June 20 The government decided not to participate in the State Partnership Program (SPP) of the US
June 22 The Judicial Council formed a three-member probe committee to investigate the leaked audio recording between the Kathmandu district judge and the lawyer.
June 26 PM Sher Bahadur Deuba reshuffled the cabinet changing ministers representing the CPN Unified Socialist.

The State Partnership Program (SPP) Controversy

The Commanding General of the US Army Pacific Charles A. Flynn in his meetings with Prime Minister Sher Bahadur Deuba and Army chief General Prabhu Ram Sharma raised the issue of Nepal’s participation in the United States government’s State Partnership Program (SPP) which sparked off a controversy. Initially, all major parties and the army denied their role in proposing the program to the US – and maintained that no agreements whatsoever had been reached about the same. However, on 16 June, a proposal letter sent by Nepal Army with the government’s authorization to establish the National Guard State Partnership Program was leaked to the media. Then, all involved parties shifted the blame to the others while refusing their involvement in the process. On 20 June, the government decided to not participate in the SPP.

The State Partnership Program of the US entails security cooperation and exchanges between militaries of the two nations among others – and this provision became the major bone of contention. Although Nepal’s military has been cooperating in various ways with the militaries of other nations, of late, there have been few signs of Nepal being the flashpoint of US-Sino superpower rivalry in the Himalayan region – and in this context, the prospect of military cooperation with the US resulted in the politicisation of the SPP.

To make the matter worse, both the ruling coalition led by the Nepali Congress and the main opposition CPN Unified Marxist Leninist (UML) sought to gain out of the controversy surrounding the SPP. It is a general practice among mainstream political parties of Nepal to drag issues of foreign affairs into controversy and blame the rival parties for undermining national sovereignty while working under foreign influence. The SPP controversy is no different and is eerily reminiscent of the hotly debated MCC (Millennium Challenge Corporation) pact which had finally ended up with the parliamentary ratification. The opposition CPN UML attempted to capitalise on the SPP controversy and forge into the upcoming elections with an agenda of nationalism branding oneself as the only party which could safeguard the sovereignty of the nation, and resist foreign influence. However, it was later revealed that the government of the CPN UML too was involved in authorising the Nepal Army to request the SPP program. The main party of the ruling alliance Nepali Congress too tried to shift the blame on the CPN UML citing that the proposal letter was sent when CPN UML’s leader K P Sharma Oli was heading the government.

As in the case of the MCC, all major political parties are equally involved in the SPP, either in proposing the US for the program or in signing the leaked agreement. On June 20, the government then decided to terminate the program and by doing so, put an end to confusion surrounding the SPP. This move of the government was also propelled by criticisms of politicians across the spectrum and experts alike who expressed concerns over the nature of the program and its geopolitical implications.

However, this SPP saga has once again revealed the duplicity of politicians, their penchant for dragging issues of foreign affairs into controversy for political gains and blame-shifting. These tendencies of politicians when it comes to matters of foreign affairs have made it difficult for our friendly partners in dealing with us, and have called into question the credibility of our political leaders and institutions alike.Early indications of fissures within the ruling coalition

As of now, both the ruling electoral alliance and communist electoral alliance seem equally likely and it is only plausible that the proposed Socialist Centre would eventually join the camp which would ensure the Center with a bigger share in the coalition.

A member party of the ruling alliance CPN Unified Socialist has repeatedly blamed other parties of the alliance for not cooperating fully in the local polls held last May which it believes was the major reason behind its dismal electoral performance. Ever since, talks about the possible communist coalition – like the one in the general election of 2017 – have been making some buzz around among the politicians. A faction led by Madhav Kumar Nepal had split from the CPN UML primarily over the chairman K P Sharma Oli, who was then Prime Minister, attempts to dissolve the lower house twice – and the splinter faction formed the CPN Unified Socialist as a new party. The party however couldn’t perform well in the last local poll and won only twenty local units of seven hundred and fifty-three. On the other side, the CPN UML also got pushed to the distant second position in the local polls – and the party split was one among many reasons behind that.

With this, talks regarding the possible communist coalition have started making rounds as it could be in the interest of both the parties CPN UML and CPN Unified Socialist. The next communist party CPN Maoist Centre, however, benefited heavily from the ruling coalition in the local polls, and as of now, Maoist Centre seems interested in continuing with the ruling coalition itself. The CPN Maoist Centre’s leader has repeatedly asserted that the ruling coalition will forge an electoral alliance even for the forthcoming polls, and the Nepali Congress has attached incentives in continuing with the same coalition. However, there are reports of talks going on between the leaders of the CPN Maoist Center, CPN UML and CPN Unified Socialist for the coalition. A senior communist leader who hasn’t chosen any of the three sides after the split of the Nepal Communist Party (NCP), Bamdev Gautam, has initiated talk with all three communist parties – and other leaders are also said to be involved in finding a common ground for the communist coalition.

On the other side, there have been some intraparty tensions within the People’s Socialist Party. It is reported that the party is on the verge of a split as two leaders Upendra Yadav and Baburam Bhattarai have failed to reach a consensus on multiple issues of contention. There are also reports of talk between CPN Maoist Centre’s top leader Pushpa Kamal Dahal (Prachanda) and Unified Socialist leader Baburam Bhattarai regarding the formation of a new socialist party. Baburam Bhattarai had left the Maoist party after the promulgation of the constitution in 2015 with an agenda of “alternative politics”, and as his party failed to gain traction, the party had merged with Federal Socialist Forum, Nepal to form Samajwadi Party, Nepal.

These recent developments herald a likely realigning of parties in the ruling and opposition coalitions. However, it is way too early to definitely predict how those alliances will shape out. Of late, electoral alliances have been a common phenomenon in polls – and how those coalitions get shaped for the forthcoming provincial and federal elections will determine the trajectory of Nepali politics.Finance Minister Janardhan Sharma and Judiciary in a Controversy

A vernacular daily, Annapurna Post, published a news report alleging Finance Minister Janardhan Sharma of allowing two unauthorised individuals to determine tax rates for the fiscal year 2022-23. It was reported that Sharma instructed four senior finance ministry officials to follow the suggestions of two individuals – a retired senior non-gazetted officer and a chartered accountant – to make last-minute changes in taxation to benefit some business groups. This serious charge against the finance minister got him embroiled in controversy – and lawmakers both from the ruling alliance and opposition sought clarification from the minister in the parliament. Minister Sharma in a press statementrefuted all those allegations as baseless and denied the involvement of those unauthorised individuals.

PM Deuba and other leaders of the ruling coalition should have set up an investigative committee to look into the charge against the finance minister – and let the truth out to the public. This could only be the responsible course of action by the PM as the charges made by the national daily amount to a serious offence, abuse of authority and dereliction of duty on the part of the finance minister. That the PM chose not to do so, raises further questions – if such a move, if any, was carried out in a tacit agreement of the PM. The controversy has put the credibility and accountability of the government at stake.

Likewise, a leaked audio recording of the conversation between the judge of the Kathmandu district court and a lawyer has exposed deep-rooted corruption within the judiciary. The recording has the judge and the lawyer discussing a monetary deal to release a businessman, Iccha Raj Tamang, who is jailed for embezzlement of deposits at the cooperatives. The two are also heard discussing the involvement of the chief justice, and his green signal for the monetary deal between the two. On June 22, a three-member committee was formed to investigate the audio recording by the Judicial Council.

The extending influence of big corporations and business houses over the political leaders and organs of the government has been one major problem for decades; and these two sagas – in the executive and the judiciary – have further brought into light the crony-capitalist nexus which have paralyzed the institutions of the state.

PM Deuba reshuffled the cabinet


The CPN Unified Socialist decided to recall its ministers and replace them with the new ones on June 4th but it took almost entirely a month to bring this into effect. The decision to replace the ministers representing the party with the ones ignited tensions within the CPN Unified Socialist, and some lawmakers even threatened to revolt against the party leadership for the same. However, on June 26, ministers representing the party resigned, and PM Deuba appointed the new ones. With the reshuffle, Metmani Chaudhary has been appointed as minister for Urban Development, Jeevan Ram Shrestha as minister for Tourism, Culture and Civil Aviation, Sher Bahadur Kunwar as minister for Labour, Employment and Social Security, Bhawani Khapung as minister for Health and Population and Hira Chandra KC as minister of state for Health and Population.