People in Nepal appear to have a high tolerance for the city's chaotic streets, potholed roads, and power shortages. However, since the pandemic, the nation's avalanche of tourists has negatively impacted locals' livelihoods and caused excessive inflation, which has rendered the populace limits of tolerance.
On December 26, Pushpa Kamal Dahal alias Prachanda was sworn in as the prime minister at Sheetal Niwas amid tumultuous political rivalry and skepticism, with the goals of reviving the economy and balancing ties with big powers. Despite his optimism, Dahal would encounter more challenges than in his previous two terms in office, both inside and abroad.
Dahal's first objective will be to re-establish people's trust in the government. To fundamentally enhance the effectiveness of government operations, Dahal should be more aggressive in promoting a transparent government mechanism and establishing a wide variety of accountability measures. Nepal's GDP per capita has been stagnant for numerous years.
The new government should invest more in infrastructure, create new jobs, channel additional industrial capital to boost tourism, and obtain different sources of income for the people, while also focusing on reducing the trade deficit, maintaining currency stability, adding liquidity to the market, and containing inflation.
Diplomatically, Dahal has a more difficult situation, as China, although actively promoting BRI efforts to enhance infrastructure investment and construction in Nepal in recent years was totally frustrated by a series of anti-China measures by previous Prime Minister Deuba.
The United States, which regards China as a rival, is trying to bind Nepal to its “Rebalancing to Asia" and the "Indo Pacific strategy" as part of its global stranglehold on China's development, while India, which has a territorial dispute with China, wishes to intervene in Nepal's domestic politics due to its hegemony over Nepal's energy and trade.
Despite the fact that the MCC (Millennium Challenge Corporation) agreement was signed by the former government with the United States, Dahal must ensure that its terms and conditions do not supersede Nepal's laws, and foreign staff executing the agreement should not have the same legal protection as diplomats to deter potential espionage.
Moreover, notwithstanding the government's final veto of the State Partnership Program (SSP), Dahal must make it plain to every citizen that any type of foreign military presence does not serve Nepal's best interests, and a free and independent neutral position would provide Nepal a stronger edge in the rivalry among superpowers.
Fortunately, even if the road ahead is challenging, there are some beams of hope. One-way trade is now possible at the Hilsa/Purang port and two-way trade has just recently resumed at the Kyirong-Rasuwagadhi border, which has been interrupted for nearly three years due to the epidemic. As more connections with China are re-opening, this ushers in new development opportunities for Nepal's northern Himalayan region.
What's even more thrilling is that the construction of the Sino-Nepal railroad has brought in new progress. On July 27, a group of six Chinese experts arrived in Kathmandu to initiate promoting the railroad's construction; the line, once opened, will not only bring new opportunities for tourism but will also improve Nepal's export pattern and enhance Nepal's economic resilience.
In terms of long term planning, the railroad will also be connected to South Asia; considerably improving Nepal's railroad will also be connected to South Asia, considerably improving Nepal's strategic position and bringing greater opportunities for Nepal.
Ganesh Sharma,
Dhungeadda, Kathmandu, Nepal
(The author holds Master's Degree in political science)
