NCell and Capital Gains Tax

News Analysis – July

CESIF Nepal Thematic Areas 1 Comment

Federalism and democratization followed by credible transfer of power to the intermediate classes—people who provide support to the political elites in return for privileges and benefits—has helped Nepal attain relative peace and stability. The possibility of political and social stability depends on many factors including the relations between the state, political elites, and the ordinary citizens. In particular, a political system remains stable as long as the political elites do not have an incentive to undermine the system. Democratic stability in Nepal also depends on other external factors like the strength of the civil society, the characteristics of democratic state institutions, potential economic and political crises, economic inequality, and geopolitics.

Incidents and episodes in the past few months, however, reveal contradictions in the processes of economic development and democratization in Nepal, raising questions about the country’s long-term social stability. Although political elites abide by democratic practice in broader terms—taking part in elections and constitutional processes—they resist democracy in practice while running political parties, legislating policies, or governing. The actual level of democracy, in practice, is determined by the level of concessions the elites are willing to make.

A power struggle is brewing between PM KP Oli and co-chair Pushpa Kamal Dahal Prachanda. The struggle is spilling over into other sectors including political economy, international relations, and alliance with emerging political movement around the Hindu religion.

Nepal’s international relations revolves mostly around its two giant neighbors – India and China – and lately the US. As a geopolitical need, China and India will have higher engagement with Nepal than any other countries, and the US, as a global superpower, remains engaged in the region to have a closer look at China. The competitive engagement of these countries, at times, have pressurized Nepal to choose sides, which could have been easily solved via diplomatic maturity from the leaders.

The current government’s lack of clarity regarding relation with both India and China have made both the countries distrust Nepal. This will affect Nepal’s potentials and opportunities for further development. Nepal’s public perception has played a huge part while getting involved with both its giant neighbors. 

On many occasions, the Prime Minister shamelessly accepted that he was either uninformed, misguided, or cheated by top bureaucrats and key officials on various issues and had to publicly apologize on the vegetables and fruits import row, to name one.

The ruling party leaders remain divided internally in the power bargain. PM Oli is seen gradually weakening while co-chair Dahal is slowly gaining power. Factions of Dahal and Madhav Kumar Nepal together have a grip over party’s decisions.[1] PM Oli has faced widespread criticism, both in terms of government’s performance and autocratic leadership in the party.[2] The Prime Minister seems to have made a realization and is on the path to regaining power in the party. The appointment of Yogesh Bhattarai from Madhav Nepal camp as Minister for Tourism is said to signal the resurrection to power.[3]

Internal Political Settlement

The NCP merger process has faced jolts for the last one and a half year. The merger, nearing towards completion, is stuck on a squabble over leadership of the party’s school department. The process is stalled for weeks as both party chairs will be abroad. The erstwhile Maoist and UML want the lead for their own candidates Narayan Kaji Shrestha and Ishwor Pokharel respectively.[4]

As all the positions in the party were allocated on a sharing basis, factional politics remains alive.[5] Five leaders claimed the leadership of the school department, and the inability of the party in deciding it has delayed the unification process.[6] Besides Pokharel and Shrestha, Ghanshyam Bhusal,[7] Beduram Bhusal, and Jhalanath Khanal claimed the leadership.[8]

The senior leaders are too engaged in power bargaining and have failed to look into other matters of national importance. Top leaders are competing to gain their grip in the party. After the sharing, the equation is heavier on the former UML side as Madhav Kumar Nepal is getting more shares in the bargain. Leaders of Nepal camp took leadership of 19 district in-charges whereas Prachanda camp bagged 29 and PM Oli faction leaders 23.[9]  Prachanda will eventually have a tough time leading the party in the future as there will be a lot of internal tussles coming up.[10]

Recent political changes in Nepal have favored one group of political elites including a chunk of former Maoist leaders while marginalizing others, including a group that was once close to the monarchy. Within the ruling party, there is a clear schism between the former Maoists and the former UML. Episodes in July show that the struggle for power between PM K P Oli and co-chair Pushpa Kamal Dahal is spilling over into other sectors including political economy, international relations, and alliance with political elites excluded from the recent political settlements.[11] The merger between the two parties was the most significant factor leading to a near-absolute majority for the Nepal Communist Party, which was forged after the elections. As Pushpa Kamal Dahal Prachanda has indicated several times in the past month, the partnership that propelled K P Oli to power can still be reversed or redirected if his incentives and interests are not fulfilled.

The opposition, Nepali Congress, is also facing difficulties in internal political settlements in the face of an upcoming general convention. Leaders have argued that holding a general convention was the only way of restoring NC image. NC President Sher Bahadur Deuba is facing fierce pressure from party leaders to hold the 14th general convention of the party, but some are lobbying for his one-year extension. The party statue allows extension of one-year tenure of party president under special circumstances.[12] On July 7, at the central working committee meeting, Deuba refused the proposal of holding the general convention.[13] The party, however, unanimously endorsed the party regulation, 2076[14] amidst criticism that the new regulation would convert the mass-based party to a cadre-based party and affect democracy.[15]

The Samajbadi Party, formed after the merger of Sangiya Samajbadi Party and Naya Shakti Party, is planning to pull out of the government if the Oli government does not amend the constitution. The Samajbadi Party is also talking with Rashtriya Janata Party-Nepal (RJP-N), who is also demanding an amendment to the Constitution. The RJP-N withdrew its support from the government in March.[16]

Contradictions in the Political Economy

Throughout most of Nepal’s modern history, the state and the ruling regime used the means of violence available to them to extract wealth from the people and the country rather than creating wealth and protecting private property. This characteristics of the ruling regime and the state, which prevented the country from developing in the past, has not changed even now. While the government’s efforts at economic development are facing critical hurdles, political elites are fighting over the mechanisms to extract wealth. Given the role of high-stakes players, the government is finding it difficult to impose rule of law in the market, especially for big businesses.

Overall, Nepal’s macroeconomic outlook holds a lot of promise, with the prospects of growth in the service, agriculture, and manufacturing sectors despite a contraction in public investment.[17] Nepal’s economic prospects depend on international job markets for Nepali migrants, tourist arrivals, infrastructure development, and structural reforms. There are, however, significant risks and challenges, driven primarily by corruption, climate-related disasters, inequality, uncertainty of remittance flows, and problems in the labor market.[18]  Events and episodes in July revealed some of these risks.

While Nepal’s labor policy regarding Malaysia is failing,[19] the labor market in the six Gulf countries is shrinking—the number of youth going to these countries shrunk by 17% last year. Similarly, Nepal has an opportunity to take advantage of the demographic dividend window—a period where the workforce is increasing at a greater rate than those who depend on it—but experts and reports indicate that Nepal is unable to generate employment for them.[20]

Similarly, the infrastructure development process, touted as one of the paths to economic development and prosperity, is faltering. Currently, more than 2500 infrastructure projects are facing delays.[21] About 50% of these projects are roads and bridges. One of the reasons cited for such a state of affairs was lack of preparation on the part of the ministries. Similarly, there were problems related to acquisition of land and forest clearance, which affected the USD 180-million Kusma-Butwal transmission line under the South Asia Subregional Economic Cooperation Power System Expansion Project.[22] The Gautam Buddha Airport in Bhairahawa, which is being constructed by a Chinese Company—Northwest Civil Aviation Airport Construction Company—was supposed to be completed by December 2017, but has been delayed until December 2019.[23] Nepal and India have hit a snag for the extension of the Butwal-Gorkhapur transmission line[24] and energy banking system[25] although Nepal started exporting electricity to India from July.[26] To add to the woes, the Asian Development Bank refused to finance USD 250 million for the second phase of the Melamchi project until the project delivers drinking water to Kathmandu.[27]

While government expenditure is ad hoc and mismanaged—more than Rs 256 billion was spent in the last month of the fiscal year—the revenue collection decreased by 12%.[28] Unease is growing over the burgeoning trade deficit and the dwindling foreign currency reserve[29] which is having a direct impact on government’s revenue targets. Nepal Rastra Bank issued a report in July showing that Nepal’s balance of payments deficit was Rs 90 billion in the first 11 months of fiscal year 2018-19, cushioned by an increasing remittance which amounted to Rs 799 billion in the same period.[30] Nepal depends on imports to meet its revenue targets. Nepal’s main southern ports like Birganj and Biratnagar have been unable to meet revenue collection targets due to dwindling imports, Nepal’s northern port, Timure port in Rasuwa, has exceeded the targets. Imports from the Timure transit have more than doubled in the last year to Rs 43.24 billion while export from the port has dropped 25% to Rs 1.16 billion.[31] According to the Finance Minister, about half of Nepal’s economy is informal and grey and operating outside of rule of law.[32]

The tourism sector has the potential to offer respite, however, Nepal’s tourism promotion effort for the Visit Nepal 2020 program and the national air carrier have both failed to deliver. Nepal’s tourism promotion initiative, led by a businessman close to PM Oli, has done little to promote Nepal abroad,[33] and Nepal Airlines is suffering heavy losses compounded by the failure to ensure destinations in China. An air service agreement revised in July allows China to operate 98 flights per week (from the earlier 70) to Nepal, while Nepal Airlines continues to face hurdles to fly to even a single destination in China.[34] Nepal Airlines has been seeking permits to fly to China for several years now but has not succeeded. Given the situation, Chinese airlines will be the sole beneficiaries of tourist arrivals in Nepal during the Visit Nepal Year 2020.

The Nepal Airlines Corporation has been unable to recoup money from its investment in Chinese airplanes and the two wide-body Airbus 330s. For a long time, PM Oli’s business aide with significant stakes in the tourism sector, Ang Tshering Sherpa, was overseeing the sector and is believed to have orchestrated the purchase of the Airbus aircraft. After Sherpa’s death and his reputation at stake, PM Oli is directly looking into the affairs of the national flag carrier. He held a meeting with top officials in July. During the meeting, officials briefed the PM that Nepal Airlines had accumulated more than Rs 40 billion in debt, while losses had crossed Rs 5 billion.[35] Nepal Airlines has 13 airplanes, however, only seven of them are flying at the moment, with all the Chinese airplanes grounded.[36] The Nepal Airlines is making preparation to fly some of them during the coming festive season and has refused to pay the final installment of the loan to Exim Bank, given several critical problems that have plagued the airplanes, including their technical capacity, excessive insurance fees, non-availability of spare parts, and excessive maintenance costs.[37]

Without access to long-haul routes in Europe and Asia, the NAC will continue to pile losses.[38] NAC’s new flight route to Osaka is struggling to get passengers.[39] Since removing Nepal from Europe’s blacklist is a priority, the government is preparing to amend the Civil Aviation Bill to restructure the Civil Aviation Authority of Nepal (CAAN).[40] Himalaya Airlines, patronized by PM Oli and partly-owned by Sherpa’s family, is now planning to fly to Beijing.[41] Once it gets the slot to Beijing, the airline will have to acquire a long-haul aircraft.

Distributive Tendencies

In the absence of strong labor movements, left ideology is no longer sufficient for re-election, and the political party would have to deliver macro-economic results, including redistribution of wealth, that are more favorable to the poor and the intermediate classes. Re-election depends on the votes of the ordinary people, support of intermediate classes (clients), financial resources, and, in the case of individual leaders, leverages of external actors to maintain a hold in the party. Votes of the ordinary people depend on both the delivery of economic outcomes as well as the parties’ capacity to represent or coopt emotionally charged populist agenda. As of now, the focus is not so much on the elections and popular support, as the next round of elections are still three years away. The focus is more on building relations with political elites, ensuring access to resources, and maintaining relations with foreign powers who have leverage on domestic political balance of power. The power of left ideology solely exists as redistributionand this year’s budget continues that trend. In Nepal, welfare helps social control of the women and elderly, while the youth go abroad for employment.

The government is turning into a distributive coalition with excessive and wasteful spending. The main opposition Nepali Congress has remarked that budgets presented by provincial governments were distributive in nature and gave continuity to programs and policies of the past year.[42] Earlier, critics claimed that the budget of the federal government did not address the economic reality of the country. Amidst depleting financial resources the country plans to make a lot of borrowings to pay for the increased salary of government employees. The government with a supermajority has not made any attempt towards increasing productivity and imports.[43]Ironically, trade deficit has ballooned and outflow of money surpassed the inflow by Rs 90.83 billion in the first 11 months of the past fiscal year, an increment of 17.2% for the same period in the previous year.[44]

The budget for the fiscal year failed to include any such programs in support of the policy and programs presented on May 21, which claimed that the government will adopt a policy to not import goods and services that make adverse impact on people’s health, promote unnecessary consumption, and damage domestic industries.[45] The state coffers will be exhausted on populist programs such as the constituency development program.[46] The provinces have followed the same in their budget announcement. The provincial lawmakers have been allocated as much as 9% of the total budget of the provinces.[47] The NCP government has failed to deliver on the agenda of prosperity.[48] The budget, unfortunately, a populist one,[49] has no hopes for economic transformation of the country. Most recently, the government has been giving away construction contracts to erstwhile Maoist-affiliated contractors without following public procurement procedures.[50] The cabinet, in its recent decision, approved a contract amounting Rs 43 crores without any competitive bidding.[51]

All three levels of the government have been unable to spend the budget properly, raising questions about fiscal discipline and corruption. There has been no paradigm shift in the budget expenditure pattern despite the change in the political system of the country. Despite a two-third majority government, budget spending situation is weak in all provincial governments. Thus, at the end of fiscal year 2018/19, the government was able to spend only half of the current budget. The budget utilization situation shows that the process has not taken any momentum. It remains the same – traditional, sluggish, and stagnant with recurrent expenses and nearly half of the capital budget unspent. The provinces followed the same path as the federal government.

Even after federalization, out of seven provinces, Province 2, Province 3, and Gandaki Pradesh did not perform well in terms of budget expenditure. Province 2 spent only half of the budget while the remaining budget was frozen. The province government claimed that the government could not utilize the budget sufficiently due to lack of employees.[52] A lot of expenditure seems to have gone in unproductive sectors.

The federal government is taking initiatives to enhance the capacity of the provinces and local governments, but at the same time, it is refusing to delegate authority and is trying to maintain control of provincial security. Provinces have opposed bills interrelated with federal, provincial, and local levels as there are provisions which allow the federal government to direct the provincial and local governments.[53]

Province 2 sued the federal government against the June 6 decision that authorized the merger of Sagarnath Forestry Development Project with Forest Corporation, a federal government entity.[54] National forests are under provincial government’s jurisdiction, but laws and national policies, including parks and reserves, fall under the federal government. Forests are also on concurrent lists and hence requires a clearly defined jurisdiction of the three tiers.

Conflict over ownership and extraction of natural resources will be increasing in the days to come. The constitution has elaborated on the single rights and concurrent rights of the three tiers of the governments. However, further elaboration on various issues, especially taxation and natural resources ownership, seems an immediate requirement to do away with the emerging conflicts over ownership and sharing.

Populism and its Response

Globally, as neoliberalism has failed to address issues of social inequality and economic insecurity, the left ideology has failed to become relevant while the populist right has stepped up, in most instances by projecting blame on “others” including the minorities, liberals, and immigrants.[55] While the middle ground erodes, extreme leftists and fascists are also gaining ground. Populism feeds off resentment. As in the rest of the world,[56] populism in Nepal is also weakening core democratic values and institutions like the freedom of association, free speech, an independent civil society, and core state legal institutions. Under pressure, the Nepali Congress is being forced to shed much of its liberal values and shift towards populist rhetoric.

The ruling regime appears to be moving closer to emerging movements and leaders engaged in identity politics through a discourse of nationalism and religious identity. Amid reports that PM KP Oli appeared to be growing closer to the Hindu movement and monarchists, Dahal and the Maoists responded by saying that they could oust Gyanendra from his Nagarjun residence if he continued to poke his nose in politics.[57]

The rise of the conservatism is not because of the political parties or charismatic leaders; a conservative civil society has the ability to shape political events, and in most cases, it is the ordinary people who are driving the conservative wave.[58] In Nepal’s case, nationalism and ethnic conflict have emerged as a response to insecurity by both the elites and the traditionally dominant groups. There is a need to track social movements at the level of civil society and where it is heading. At present, there is a continued undercurrent of Hindu religious movements, which fear the rise of Christianity; a growing anti-corruption movement, which is likely to grow stronger and generate antipathy towards the corrupt elite; and a nationalist movement around the idea of sovereignty with strong anti-India, anti-Madhes bias.

International Relations and Foreign Policy

Many people are criticizing the Oli government for lacking clarity and consistency in its international relations, losing trust with some of its key partners, including China and the US. Nepal has had to issue diplomatic clarifications on its position on more than three occasions to India and the US, all of them a major embarrassment to the government.[59] On many occasions, the diplomatic episodes indicated a lack of coordination and communication at the highest levels.

While China is pushing its interests, as reflected through the joint border control mechanism and air services agreement, Nepal has failed to gain from bilateral relations. Nepal signed a three-year BRI framework agreement with China in May 2017. Some 26 months from the agreement, Nepal has been unable to pursue any of the nine projects that it had identified, other than conducting a pre-feasibility project for the Kerung-Kathmandu railway.[60] Government spokesperson, Gokul Baskota admitted that Nepal was still not clear about which projects to pursue under BRI. Nepal and China continue to pursue new agreements and projects, without ensuring smooth implementation of past agreements and projects. Rasuwa immigration office has issued more than 10,000 cards to travelers visiting Kerung in the past four years. The number of people entering Nepal from the other side is much higher, with 14,000 Chinese entering Nepal in the past fiscal year alone.[61]

China, meanwhile, further increased the number of flights to Nepal, pushed for a joint border command and control mechanism, and facilitated the entry of new companies. After sustained pressure from China, Nepal has finally consented to a joint command and control mechanism to manage its northern border. Such a mechanism was one of the preconditions for the opening of the Zham-Tatopani transit point.[62] The border finally opened four years after the earthquake, but China is yet to allow free movement of people and goods.[63] China’s UnionPay entered Nepal after receiving permission from the regulatory bodies. Chinese Ambassador to Nepal, Hou Yanqi, congratulated UnionPay and encouraged Chinese business in Nepal to comply with the law of the land.[64] China has started engaging with central, provincial, and local governments, and the general public as well.

Nepal’s Home Ministry stopped the celebration of the Dalai Lama’s 84th birthday on July 6th. District Administration Office, Kathmandu, rejected a request from the Tibetan Refugee Welfare Office to organize a celebration citing that no anti-China activities would be allowed on Nepali soil.[65] As the Dalai Lama celebrated his birthday, the succession question has propelled a debate. A Chinese official and a member of a Beijing-based think tank told some visiting Indian journalists that China will reject any Dalai Lama that is born outside its territory and among the Tibetans-in-Exile.[66] The comment sparked widespread condemnation from the international community and from the Central Tibetan Administration. Chinese authority has well understood that in order to be able to ‘Sinocise’ the Tibetan community they must earn legitimacy first, which could only come if they could control the next spiritual leader.[67] The Third Tibet Work Forum was the landmark strategic forum after which China’s State Administration for Religious Affairs issued its State Religious Affairs Bureau Order no-5[68] which made the Chinese stamp of approval non-negotiable in order to choose a reincarnate.

Journalists in Nepal are discouraged from covering Tibetan affairs and government officials shy away from commenting on China-related issues. With the increasing foray of Chinese investment in Nepal’s economy, it seems as though the media is expected to be muzzled and must not offend the Chinese narrative. Furthermore, this censorship is not restricted to the media itself, as Pradip Yadav of the Samajbadi Party of Nepal was suspended for six months for taking part in a Free Tibet related program in Latvia.[69]

The constitution of Nepal does not allow local governments to sign contracts with foreign companies on leasing lands. An agreement of leasing nearly 353 acres of land, signed between Mahottari local government and a Chinese agrotech company past January to build a hi-tech industrial park, was annulled by the Ministry of Industry, Commerce, and Supplies. It has now been reported that the same project is being taken forward by the federal government.[70] It is not clear whether the project will materialize or not.

China’s security concern in relation to the Tibetan Autonomous Region has been a top agenda for Chinese engagement in Nepal. Other forms of engagement in Nepal-China relations remain secondary. The impending battle to choose the next Dalai Lama will put Nepali Buddhism followers as well as the ones in engaged and the government will have to respond to it in line with the policy as well as universal humanitarian principles.

Foreign Minister Gyawali held a meeting with his Chinese counterpart Wang Yi to explore the possibility of Chinese President Xi Jinping’s visit to Nepal.[71] Government sources confirmed that China’s President Xi Jinping will be visiting Nepal. The announcement will be made after the visit of Chinese Foreign Minister Wang Yi to Nepal.[72] 

Foreign Ministry Directive

As the status of federalism in Nepal is still questionable, the new directives on foreign contacts have made the country’s engagements federal government-controlled. The directives have restricted provincial and local governments not reach an agreement with international bodies, without the consent of MoFA. The document even says that if any officials wish to visit foreign countries, the parties should write to MoFA and present a report after returning.

The move made by the federal government comes with a surprising fact that, although MoFA officials have been frequently holding meetings with Chinese and making statements supporting China, the directives published limits Nepal and China’s engagements. The document even says not to reach an agreement to build any sister relation, without informing the ministry. This particular directive is solely targeting China, as provinces have been recently establishing sisterly relation with provinces in China. Province 5 Chief Minister Shankar Pokharel and his team visited Chengdu in China on the invitation of International Department of Communist Party of China to sign a Memorandum of Understanding on establishing sisterly relations between the Sichuan Province of China and Province 5.[73] Province 3 Chief Minister Dormani Poudel participated at Lanzhou Investment and Trade Fair and High-End Forum on Silk Road cooperation program’ in Gansu province and the two provinces have also established sister relations.[74]

Nepal-India

Nepal’s relation with India has not improved. The negative sentiments of the public toward India pushed Nepali leaders to withdraw the government’s decision of host IIFA. India’s Prime Minister Modi will study the EPG report, which has been stalled for many years.[75] In addition, the pesticide row between Nepal and India brought out pseudo-nationalism in Nepal[76] and created a negative image of India once again. Nepal stopped the import of fruits and vegetables from India citing high levels of pesticide residue, and the Indian Embassy sent a letter asking for reasons of the stoppage. The government, instead of acknowledging it as a health hazard, publicized the letter from the Embassy. Nepal cannot import anything without testing for pesticide residue, but the country does not have laboratories or testing facilities to check it. All of this was perceived as a response to the letter from Indian Embassy.

In this issue, Nepal should not be expecting relations of equals with India, but it has the rights to standardize the quality of the imports and reject the ones not meeting it. There should be a system and process in place before deciding on an ad hoc basis and causing international shame and revoking decisions. Nepal has been notorious at revoking decisions at home and it has been a culture in internal affairs; it can be said that the culture has been transmitted in international relations as well.

A talk program on ‘Nepal-India Relations: Development and Dynamics’ was held between the officials of Nepal and India on July 18. The discussion was held to forward land connectivity between the two countries and to overcome the barriers for an emerging economy.

Minister for Commerce, Matrika Yadav, and India’s Ambassador to Nepal Manjeev Singh Puri jointly inspected the cross border petroleum pipeline.[77] The 69-km pipeline was completed 15 months prior to the deadline. PM Modi along with PM Oli is expected to inaugurate the project soon. The cost of the pipeline is about Rs 350 crore and is entirely invested by Indian Oil Corporation.[78]

Newly appointed chief of India’s Research and Analysis Wing (RAW), Samant Goel met with top political leaders and high-ranking security officials during his short visit.[79] The visit drew attention as his meetings with leaders were kept secret. Goel had a one-on-one meeting with NCP co-chair Pushpa Kamal Dahal at his house in Khumaltar.[80] However, Goel met with PM Oli along with his advisors and party secretary Bishnu Poudel. PM Oli wanted to talk with RAW chief alone, but it did not happen. Oli only had a few minutes in private with Goel.[81] Despite media claims that Goel also met leaders of Nepali Congress and Madhes-centric Rastriya Janata Party-Nepal, Congress spokesperson Bishwa Prakash Sharma and RJPN’s Raj Kishore Yadav claimed that they were unaware of it.

India submitted the final DPR for 18.5-km cross border railway between Nepal and India to the railway department. The railway line connects Rupaidiya of India with Kohalpur of Nepal and will run parallel with the East-West Highway and Postal Highway.[82]

Nepal developed closer infrastructure integration with India after the completion of an oil pipeline[83] and growing use of the Visakhapatnam port.[84] However, the media reported that these developments could make Nepal more dependent on India.[85]

Security and Strategic Affairs

The outlawed CPN (Biplab) party is escalating the violent activities as there has been no formal dialogue with the government yet. The government continues its forceful action against the outlawed party. The party continues its donation drives and violent activities including destroying telecommunication towers across the country. Although the outlawed party does not have a defined cause to generate public support for armed aggression, the government should opt for a negotiated settlement and see an end to violence.

In the last five months, since the ban on the party, police arrested 606 cadres. At least nine cadres have been killed, including six in bomb explosions.[86] Som Prasad Pandey, the coordinator of the government talk team, confirmed that no formal talks have taken place with the outlawed party yet.[87] Gokul Baskota, spokesman and Minister of Communication and Information Technology, accused NC of supporting the outfit.[88] In a recent incident, Biplab cadre Nir Kumar Rai was killed in police action in Bhojpur. Police constable Sanjiv Rai also lost his life in the shootout.[89] Three cadres of the party have been killed in police action since the party was outlawed.[90] 

The party announced a general strike on July 31 against the arrest of Maila Lama, who is the central committee leader and Kathmandu district in-charge of the party.[91]

Minister of Home Affairs Ram Bahadur Thapa stated that the outlawed party is a hazard to peace and security of the country. He claimed that informal talks were underway to mainstream the outlawed party.[92]

Gender, Inclusion, and Human Rights

Migration

Travel ban on women for abroad employment is against constitutional rights. Despite being discriminatory, the government, however, has said the ban is to safeguard women against exploitation in Gulf countries, where they normally go to work as domestic help. The travel ban has limited their access to legal remedy in case of abuse and exploitation. Further, women, who left the country, before the ban was imposed, have not yet returned as they fear that they would not be able to go back to work again.

The travel ban has done more damage than good, as it has given a huge impetus to trafficking and has made the women more vulnerable than ever. Their passports are confiscated by their owners, and they are kept as bonded laborers. There is no legal remedy as they become undocumented migrants. Women, who fall prey to trafficking, lose both ways – they are deceived in their own country by the traffickers and are exploited abroad as they don’t have access to resources and lack administrative and legal knowledge. 

Three Nepali women who had reached Malawi, Southeast African country to work as domestic maids, through a network of human traffickers, have not been rescued since the last seven months. The rescue operation has become complicated because Nepal has no diplomatic relations with Malawi. South Africa based Nepali Commissioner didn’t pay much concern to their pleas. A Nepali based in Malawi informed that the women didn’t have necessary documents and visa, and they have escaped from a safe house.[93] Their current status is unknown.

Women migrants choose to work as domestic help because it doesn’t need much educational qualification and training. They choose to migrate hoping to elevate their socio-economic status in the society despite the risks associated with it. The government has failed to create a safe and dignified working environment abroad for women and instead has implemented a ban, which restricts women’s mobility and freedom to work. And, this has resulted in more cases of human trafficking as women become vulnerable at a higher degree.

Further, Nepal is missing an opportunity of taking advantage of the demographic advantage as 40% of the population are in the active age of 16-40. Failing to mobilize its human resource and skills in the country has hit the country. Amidst huge unemployment rates and the lack of opportunities at home, thousands migrate abroad for work.[94]

However, economic logic has remained supreme despite the social costs of family separation, break ups, increased extra-marital affairs, inflicted suicides, and murders. Having opportunities at home for livelihood would have made migration a secondary choice to make a living, propelling the country’s economy not remittance-dependent but production-driven.

Monsoon Maladies

The ruling and opposition parties criticized and accused each other in the parliament on relief and rescue work in the flood-affected areas. NC President Sher Bahadur Deuba proposed a diplomatic solution with India on the issue of Koshi barrage, while the ruling lawmakers have defended the government claiming that the floods were caused due to Nepal’s fault.[95]

Rajendra Mahato expressed the need for banning excessive extraction of Chure range to prevent Madhesh from natural disasters. He suggested Government of India and Nepal find a joint solution and accused the government of neglecting it, causing the Madhes to flood every year.[96]

The National Emergency Operation Centre reported that 111 people across the country were killed during the recent flood havoc. A total of 128 incidents of floods and 208 events of landslides were recorded this monsoon.[97]

European Union announced a grant of Euro 8.5 million in South and South-East Asian countries affected by flood and landslide. It is stated that Euro 1.5 million will be provided to the victims of ongoing monsoon in India and Bangladesh as humanitarian funding package and rest to Nepal and the Philippines.[98]

Incomplete construction projects took the lives of 25 children. The children were trapped and drowned in the trenches dug and abandoned during various construction projects. The trenches got waterlogged during the monsoon and the children were unable to come out from them.[99]

The loss and the damages that the flood inflicts every year is too high. Nepali media reported that the dams constructed by India caused the bordering villages in Nepal to inundate.[100] This has caused strain in Nepal-India relations. Even though it has been a perennial problem, every ruling government has failed to find solutions. Despite some steps from Nepal, the Indian government has not shown much interest.[101] It is time that the government established an autonomous authority to look into disaster and implement a permanent solution and assure a safe future for the people across Terai who live in disaster-prone areas.


[1] http://kathmandupost.ekantipur.com/news/2019-07-08/rift-in-the-ruling-party-nears-tipping-point-insiders-say.html

[2] http://kathmandupost.ekantipur.com/news/2019-07-13/growing-camaraderie-between-dahal-and-nepal-stokes-concerns-in-the-oli-faction.html

[3] https://kathmandupost.com/politics/2019/08/02/growing-criticism-and-internal-power-dynamics-force-oli-to-change-course

[4] https://nagariknews.nagariknetwork.com/news/83466/

[5] https://myrepublica.nagariknetwork.com/news/allocating-key-positions-a-fraught-task-in-ncp-merger/

[6] https://thehimalayantimes.com/nepal/nepal-communist-party-ncp-still-undecided-on-training-department/

[7] https://www.kantipurdaily.com/news/2019/07/24/15639324262736363.html

[8] http://annapurnapost.com/news/133016

[9] http://annapurnapost.com/news/132665

[10] https://kathmandupost.com/politics/2019/07/25/ruling-party-s-headaches-bound-to-multiply-even-after-secretariat-s-meeting

[11] For example, several reports in July indicated that the media supporting PM Oli attacked businesses close to Pushpa Kamal Dahal Prachanda and the incidences of corruption linked to them, while media opposing PM Oli did the opposite.

[12] https://thehimalayantimes.com/kathmandu/deuba-faction-in-favour-of-putting-off-general-convention-date/

[13] http://kathmandupost.ekantipur.com/news/2019-07-08/amid-deep-divisions-pressure-mounts-on-congress-president-deuba-to-hold-general-convention.html

[14] http://english.ratopati.com/story/10136

[15] https://nayapatrikadaily.com/news-details/20006/2019-07-17

[16] http:// kathmandupost.ekantipur.com.np/news/2019-07-01/samajbadi-party-mulls-quitting-government-to-make-a-fresh-push-for-constitution-amendment.html

[17] https://www.worldbank.org/en/country/nepal/publication/nepaldevelopmentupdate

[18] https://www.kantipurdaily.com/news/2019/07/23/156384662390749727.html

[19] https://www.kantipurdaily.com/news/2019/07/17/15633282870135937.html

[20] https://www.kantipurdaily.com/news/2019/07/23/156384662390749727.html

[21] https://www.nayapatrikadaily.com/news-details/19460/2019-07-11

[22] https://kathmandupost.com/money/2019/07/06/land-acquisition-and-forest-clearance-issues-delay-transmission-line-project

[23] https://thehimalayantimes.com/business/gbia-deadline-extended-till-december/

[24] https://www.kantipurdaily.com/business/2019/07/11/15628179038245911.html

[25] http://annapurnapost.com/news/133978

[26] https://myrepublica.nagariknetwork.com/news/nepal-practices-energy-banking-sends-200-mw-electricity-to-india/

[27] https://www.kantipurdaily.com/business/2019/07/15/156316582920357775.html

[28] https://www.kantipurdaily.com/business/2019/07/17/156332776142683326.html

[29] https://kathmandupost.com/money/2019/07/21/nepal-s-rising-trade-deficit-takes-toll-on-country-s-foreign-currency-reserves

[30] https://thehimalayantimes.com/business/country-records-balance-of-payments-deficit-of-rs-90-83-billion/

[31] kathmandupost.ekantipur.com/news/2019-06-30/imports-continue-to-surge-via-rasuwagadhi-kerung-customs-point.html

[32] https://www.kantipurdaily.com/business/2019/07/18/15634186573614401.html

[33] https://kathmandupost.com/national/2019/07/25/visit-nepal-2020-is-five-months-away-but-not-much-has-been-done-to-promote-the-country-abroad

[34] https://thehimalayantimes.com/business/nepal-china-revise-air-services-pact/

[35] https://www.kantipurdaily.com/news/2019/07/18/156341436094917138.html

[36] https://nagariknews.nagariknetwork.com/news/82978/

[37] https://www.kantipurdaily.com/news/2019/07/20/15635927488377532.html

[38] https://kathmandupost.ekantipur.com.np/printedition/news/2019-07-13/nepal-airlines-says-it-may-incur-a-loss-of-rs15-billion-this-fiscal-year.html

[39] https://www.kantipurdaily.com/news/2019/07/24/15639365519057313.html

[40] https://kathmandupost.com/money/2019/07/26/cabinet-approves-in-principle-to-draft-civil-aviation-bills

[41] https://www.setopati.com/kinmel/business/186589

[42] https://thehimalayantimes.com/nepal/seven-provincial-governments-present-budgets/

[43] https://www.spotlightnepal.com/2019/06/07/new-budget-realty-vs-populism/

[44] https://thehimalayantimes.com/business/country-records-balance-of-payments-deficit-of-rs-90-83-billion/

[45] http://therisingnepal.org.np/news/24140

[46] https://www.spotlightnepal.com/2019/06/07/new-budget-realty-vs-populism/

[47] https://www.kantipurdaily.com/news/2019/06/17/156073502112268929.html

[48] https://www.recordnepal.com/category-explainers/samajbadi-party-nepal-explained/

[49] https://aarthiknews.com/news/2150

[50] https://sagarmatha.tv/2019/07/24/25368/

[51] https://aarthiknews.com/news/4770

[52] https://www.kantipurdaily.com/news/2019/07/23/156384545916217948.html

[53] https://www.kantipurdaily.com/news/2019/07/05/156229334872296180.html

[54] https://thehimalayantimes.com/nepal/province-2-sues-federal-government/

[55] https://www.rosalux.de/en/publication/id/39160/the-far-right-in-government/

[56] https://www.brookings.edu/blog/order-from-chaos/2018/03/08/the-rise-of-european-populism-and-the-collapse-of-the-center-left/

[57] https://english.onlinekhabar.com/dont-keep-on-babbling-else-youll-be-removed-from-nagarjun-dahal-tells-gyanendra-shah.html

[58] https://www.bbc.com/news/world-45902454

[59] https://kathmandupost.com/politics/2019/07/13/repeated-diplomatic-failures-reveal-shortcomings-in-the-oli-administrations-foreign-affairs-department

[60] https://kathmandupost.com/national/2019/07/17/with-just-10-months-left-in-bri-pact-not-a-single-project-has-made-any-real-progress

[61] https://www.nepal24hours.com/rasuwa-immigration-office-issues-over-10000-cards-to-enter-kerung/

[62] https://kathmandupost.com/province-no-3/2019/07/05/nepal-and-china-decide-to-form-joint-command-to-check-cross-border-crimes

[63] http://annapurnapost.com/news/133466

[64] http://www.xinhuanet.com/english/2019-07/24/c_138251848.html

[65] https://theannapurnaexpress.com/news/nepal-stops-dalai-lamas-84th-birthday-celebrations-1709

[66] https://www.asianage.com/india/all-india/230719/china-cant-pick-the-new-dalai-lama-say-tibetans.html

[67] https://www.newsintervention.com/chinas-conspiracy-to-instal-its-puppet-as-tibets-next-dalai-lama/

[68] https://www.newsintervention.com/chinas-conspiracy-to-instal-its-puppet-as-tibets-next-dalai-lama/

[69] https://www.voanews.com/south-central-asia/nepalese-journalists-pushed-avoid-reporting-china-tibet

[70] https://www.baahrakhari.com/news-details/206191/2019-07-21

[71] https://www.urdupoint.com/en/pakistan/chinese-nepalese-fms-exchange-views-on-stren-661009.html

[72] https://shikharnews.com/2019/07/24/113190

[73] https://english.khabarhub.com/2019/01/29638/

[74] https://thehimalayantimes.com/nepal/province-3-will-benefit-from-sisterly-relations-with-gansu/

[75] https://english.onlinekhabar.com/from-the-kathmandu-press-tuesday-july-30-2019.html

[76] https://www.nepalitimes.com/editorial/toxic-pseudo-nationalism/

[77] https://www.kantipurdaily.com/business/2019/07/24/156393763587918644.html

[78] http://www.ddinews.gov.in/international/indo-nepal-petroleum-products-pipeline-ready-commercial-operation

[79] https://myrepublica.nagariknetwork.com/news/what-makes-raw-chief-goel-s-maiden-three-day-visit-to-nepal-interesting/

[80] https://english.onlinekhabar.com/nepali-leaders-keep-mum-about-their-meetings-with-indian-intelligence-wings-chief.html

[81] https://www.sanghunews.com/content/15242

[82] https://indianexpress.com/article/india/india-submits-final-dpr-for-cross-border-rail-project-to-nepal-report-5838081/

[83] https://kathmandupost.com/money/2019/07/19/nepal-india-cross-border-petroleum-pipeline-the-first-one-in-south-asia-inches-to-launch

[84] https://kathmandupost.com/money/2019/07/21/visakhapatnam-overtakes-kolkata-in-handling-nepal-bound-cargo

[85] https://kathmandupost.com/money/2019/07/20/oil-pipeline-will-be-a-boon-for-economy-but-could-make-it-further-dependent-on-india-experts-say

[86] https://nayapatrikadaily.com/news-details/20800/2019-07-25

[87] https://nagariknews.nagariknetwork.com/news/82849/

[88] https://nayapatrikadaily.com/news-details/19531/2019-07-11

[89] http://kathmandupost.ekantipur.com/news/2019-07-10/chand-cadre-killed-in-police-action-in-bhojpur.html

[90] http://kathmandupost.ekantipur.com/news/2019-07-12/another-chand-cadres-killing-raises-questions-about-governments-stanceand-styleagainst-the-outfit.html

[91] https://myrepublica.nagariknetwork.com/news/chand-outfit-s-kathmandu-in-charge-aide-arrested/

[92] https://thehimalayantimes.com/kathmandu/netra-bikram-chand-led-communist-party-of-nepal-will-be-brought-to-political-mainstream/

[93] https://www.kantipurdaily.com/news/2019/07/26/156410509519329945.html

[94] https://www.kantipurdaily.com/news/2019/07/23/156384662390749727.html

[95] https://nagariknews.nagariknetwork.com/news/83576/

[96] https://nagariknews.nagariknetwork.com/news/83374/

[97] https://nagariknews.nagariknetwork.com/news/83730/

[98] https://myrepublica.nagariknetwork.com/news/eu-mobilizes-8-5m-euros-for-flood-hit-countries-including-nepal/

[99] https://kathmandupost.com/province-no-2/2019/07/23/25-children-killed-by-floods-and-careless-construction-in-province-2-over-nine-days

[100] https://www.kantipurdaily.com/news/2019/07/14/156306940214566782.html

[101] http://kathmandupost.ekantipur.com.np/news/2019-07-15/both-nepal-and-india-have-done-little-to-address-flooding-along-the-border-officials-say.html

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