Murari Sharma: Communist Unification, Budget and G-7 meeting

The old edicts go, a barking dog does not bite. After several months of high expectations, my friend, a former senior government official, wondered with me recently, on the condition of anonymity, about the KP Oli government.

Indeed, Nepali people had high hopes from the government because it was a majority government after a long time and Prime Minister Oli had made tall promises, which to his critics sounded deluded and even insane. There were reasons for optimism.

The electoral coalition of the CPN-UML and CPN-Maoist Center had won a clear majority in the federal parliament leading the two parties to a merger and unification. This communist unification is a rare event in Nepal’s political history for which Prime Minister Mr. Oli and to a certain extent, Pushpa Kamal Dahal, the co-chair of the CPN without any appendix, deserve appreciation.

While there are many economic and social challenges to progress in Nepal, one thing is different this time in terms of leadership. Prime Minister Oli does not have children to engage in personal corruption to amass wealth for his children, which has been the case with former prime ministers with children. This gives hope that the government would formulate and implement policies promised in the manifestos of the coalition partners.

I do not agree with the regressive elements in their manifestos. For instance, you need consolidation of agricultural land so that mechanized agriculture with high production and productivity becomes possible, not further fragmentation of land in the name of land reform to please communist voters and hold the country back.

Similarly, I do not agree with their promise to let the political workers engaged in revenge killings, like Bal Krishna Dhungel, to be released or not persecuted and jailed. Neither do I agree with their anti-industry labor militancy, the type the Maoists have promoted.

But many elements in the CPN-UML and CPN-Maoist Center manifestos are what Nepal needs to make a leap forward. Just to name a few, it is a great idea to depoliticize civil servants and teachers, focus on transport and other physical infrastructure, and pursue a balanced foreign policy. But the performance of the KP Oli government in the first three-plus months gives little room for optimism because whatever started with a bang had ended/may end with a whimper.

For instance, dismantling syndicates in various sectors — every sector of Nepal has syndicates, starting with politics — was a great idea. But as the efforts to this effect started having a bite, leaders have begun to peddle back. Once the existing transport syndicates were weakened to introduce new transport companies owned and blessed by communist leaders, the Transport Minister Mahaseth removed the man from the Transport Department who had been instrumental in doing it.

Similarly, the newly-minted Communist Party of Nepal co-chair Pushpa Kamal Dahal has threatened Home Minister Ram Bahadur Thapa not to punish the non-performing contractors because he lives in a house given to him by a contractor. Given the Maoist cadre’s strong-arm tactics in contract awards, Dahal could very well be at the top of the corrupt construction syndicate.

We all know Mr. Dahal is at the top of the crime syndicate. He pushed for the release of his supporter and a convicted murderer Bal Krishna Dhungel from jail and paved the way for the culture of impunity. Prime Minister Oli said his case was just a strand. A great and pithy orator must have known that even oceans are collections of small drops.

Mr. Dahal has been trying his level best to save Maoist criminals who engaged in revenge killing from the law. If the government releases politically connected criminals, then what moral right does it have to jail politically unconnected criminals? Even Mr. Oli was found crying over the persecution of those thugs who were connected with the CPN-UML.

On a broader and more important level, Mr. Oli promised a nimble government, but he ditched the promise and expanded his government to make it a coalition government, which are the epitome of corruption. But Mr. Oli will not have the same level of control on the cabinet members from the Federal Socialist Forum. He had shown wisdom in not appointing a deputy prime minister, but as the first sign of corruption, he had to appoint two deputy prime ministers who would jockey for power.

While the Oli government is engaged in these little things, his big promises — making provincial and local governments effective and sustainable, ending tuins (ropes to cross rivers) in two years, connecting Kathmandu by rail, Nepal having its own ship, etc. — have not gone forward much or gone in the wrong direction.

The recently presented budget of 1.31 trillion rupees has abandoned many of the key promises Mr. Oli had made before and after the election. Yet, the budget is quite good with the customary weaknesses of a developing country. Unfortunately, it is being opposed from within the ruling party because it does not reflect their personal priorities. I hope Mr. Oli rises over this bickering.

Speaking of budget, most notable among the things gone wrong is related to provincial and local governments. The Oli government has failed to check these where it must and checked in areas where it must not. For instance, these governments have set salaries, allowances and other facilities that their revenue cannot sustain, which will leave no money for development activities and make Nepal more dependent on foreign assistance for development than ever before.

It brings me to foreign relations. While the Oli government seems to strike a new balance between India and China, which is necessary, it has yet to grapple with winder foreign relations issues. For example, US President Donald Trump has upended the existing global governance, which will have direct and indirect impacts, most of them adverse, for Nepal.

Mr. Trump has withdrawn from the Transpacific Trade Partnership and the Paris Treaty on climate change. Likewise, he has threatened to pull the USA out of the North American Free Trade and the North Atlantic Treaty Organization. He has triggered a trade war with the imposition of tariffs on the import of aluminum and steel, which has prompted China, European Union, Japan, Canada and Mexico create similar protectionist barriers against American products.

He undercut the recent G-7 meeting over the trade dispute with other countries. Not only he called on other members to invite Russia to join the G-7 again, he also riled against other members of the exclusive club of rich countries and withdrew the United States from the joint statement released at the end of the summit.

All this is pushing the world towards trade war, which will impact Nepal directly and indirectly through China and India. While our neighbors and the rest of the world are taking steps to minimize disruption to their trade and to maximize their benefits in the midst of adversity. I doubt Nepal has done anything to protect itself from this fallout.

Mr. Oli’s adage-filled speeches must not only entertain but also deliver if he wants people to believe him. I hope my friend, who has begun to give up on Mr. Oli and his government with some justification, would be proven wrong.

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Murari Sharma: How Could Left Unity Affect Us?

Prime Minister KP Oli said that the united communist party will be like a jet aircraft that has tow pilots, not an auto rickshaw with a single driver. It was his response to a question related to two leaders co-chairing the merged Communist Party of Nepal. This left unity might lift or ruin our lives, depending on what the new, powerful party chooses to do in the days ahead.

The Communist Party of Nepal (United Marxist-Leninist) and the Communist Party of Nepal (Maoist Center) have merged on 17 May 2018 to for the new party. Until the next party convention, the new party will have Mr Oli and Maoist leader Pushpa Kamal Dahal will be co-chairs.

Communists of Nepal have earned a well-established reputation that they are better at splitting, rather than uniting. The Communist Party of Nepal (CPN), established in 1949, splintered into nearly a dozen and a half parties in the later years. Their mergers have proved less enduring than their splits.

One of the few enduring mergers has been between the CPN (Marxist) and the CPN (Marxist-Leninist) and the CPN (United Marxist-Leninist). Even though the CPN (UML) broke over the Mahakali Treaty with India, the splinter groups came together after a disastrous defeat in the general election. What will be the fate of the newly minted CPN without any adjective, when it has a two-thirds majority in the upper house?

It is hard to say for sure at this point because I don’t have a crucible to the future. No one has for that matter. Therefore, the only way to guess would be to look at the cases elsewhere. There are two examples in our own region: China and West Bengal.

Even though one might be tempted to use the example of China, it does not exactly fit our situation. China is still an authoritarian one-party-state politically, though economically it has embraced capitalism. Therefore, West Bengal is a more appropriate example here, because both Nepal and West Bengal have communist party rule in democratic societies with competitive politics.

Under the communist rule that started in 1977, West Bengal launched a series of land reform and promoted labor militancy. As a result, lost its economic ground considerably. According to Prof. Subba Iyer, West Bengal’s contribution to India’s GDP went down from 7.2 percent in 1980/81 to 6.1 percent in 2000-01 and per capita income from 1.02 times to 0.96 times.  The share of manufacturing slipped from 21 percent to 13 percent.  Infrastructure also suffered under communist rule, while there was some gain in poverty reduction, though less than Tamil Nadu. 

Communist leaders in democratic countries make populist land reform and labor militancy as their first port of call — a quick fix to please the poor and win the election. While land reform and workers’ rights are important to reduce poverty and promote justice, too much of them stifles growth and makes everyone poorer by hollowing out the economy. in the long run. If Nepali leaders also pursue this quick fix, Nepal will suffer the same fate as West Bengal, making Nepal and the Nepali people poorer. 

However, if the left government delivers on what it has promised, Nepal could be a blossoming country in next 10 years.  The promises have indeed been tall. As Prime Minister Oli has pronounced that Nepal will double its per capita income in 10 years, remove the blackout and tuin (single-rope river crossing), and rail connection to Kathmandu from India and China in five years, to name a few.

Policies and pronouncements often come up cheap, while their implementation is expensive and complicated. It requires strategic thinking, commitment, hard work, and perseverance for a prolonged period from government and people and sustained support from development partners. And external assistance depends largely on how major donors perceive the communist government.

India is not pleased with the communist government, even though Indian Prime Minister Narendra Modi tried to sooth the wound he had given to Nepal with his undeclared economic blockade in 2015/16 in support of the disagreement with the new constitution shown in the parts of the Terai plains. While India needs to work to slow down the Chinese inroads and continue to engage, Western countries are under skeptical about the Nepali communists’ commitment to democracy.

In this situation, the question now is whether PM Oli and his colleagues follow the path of West Bengal under the Marxists or do something more creative to ensure that the Nepali economy and society avoid the stagnation suffered by the Bengalis. Because the recently unified CPN commands a nearly two-thirds majority in the federal parliament, on the party will depend on the fate of Nepal for the next few years. 

The co-chairmanship of CPN will come with its own additional conflicts and perils. I hope it will be as short as possible and as little damaging as possible.

Murari Sharma: Modi’s Nepal Visit

A friend told me that a whole community of deprived people he just visited has become dependent on foreign assistance for their every-day needs. Indian Prime Minister Narendra Modi has returned to New Delhi after his two-day visit to Nepal, making this dependency disease acuter.

My friend said until the foreign money poured, the community worked hard to make a living. They were poor but had the self-respect and dignity of standing on their feet. Now that the foreign money comes in, the whole community has abandoned its traditional occupations, skills, and crafts. They have lost their traditional skills while have yet to acquire new skills.

I have noted it across Nepal over decades. People have abandoned their villages, farms, and arts and crafts and moved to towns and cities or foreign countries seeking employment. When the population declined, wild animals — monkeys, jackals, raccoons, and other pests — have invaded the villages and made them unlivable, forcing those who had stayed behind to move into towns and cities.

Some of the people who moved out of their traditional home have become better off. However, the majority has suffered poverty, humiliation, and other indignities. This example has become emblematic of the lahure culture of entire Nepal.

This is the lahure culture: Working for others is better than working for ourselves, especially in a foreign country. And those who stay in Nepal prefer to live on remittances rather than doing hard work at and around the home. This dependency culture has been a national phenomenon in Nepal.

Changing skill sets and occupations is a natural process of evolution. Therefore, we should not be too much worried about it. What should worry us is the lack of new skills while people have abandoned the old ones. As a result, a large number of people have nothing to support them.

While we the people need to take some blame for it, our political and community leaders deserve the lion’s share of the blame, because they set the policy and run the country and community. That brings me to Narendra Modi’s Nepal trip.

Mr. Modi was generous with his words about Nepal. He praised Nepal for its elections, promised a billion rupee assistance for the Ramayan Circuit, and started the construction of the Arun Power Project with Prime Minister Oli. Only time will tell whether his words translate into concrete actions. Nonetheless, no country can develop with foreign assistance alone, no matter how generous it is. The key to progress lies in the hand of the country concerned, particularly its leadership.

Due to its geo-strategic location, Nepal cannot develop without the generous cooperation of its immediate neighbors, mainly India. India looms large because Nepal depends on its southern neighbor for its transit to third countries as well as for essential goods and services, pilgrimage and cultural nourishment. The difficult Himalayan Mountains hinder the same levels of multiple interactions between Nepal and China, the other adjoining country.

India has three key interests in Nepal: security, water resources, and market. Since the days of the British Raj, India has viewed Nepal as a buffer between it and China and sought to keep it in its grips. Started with the Treaty of Sugauli, the trend has continued through the 1923 Treaty and the 1950 Treaty that enshrine such dependent relationship.

Under the 1950 Treaty, Nepal cannot import third-country military hardware without Indian approval. Foreign aggression against one is deemed as aggression against both. So much so, India had opposed the construction of the Kodari-Kathmandu Highway, and the contract given to a Chinese builder to construct the Kohalpur-Banbasa section of the East-West Highway.

India’s interest in Nepal’s water resources is threefold. It wants to tap the water in Nepal to produce power, for which demand is increasing by nearly 20 percent every year. It wants to irrigate its arid northwest by training rivers of Nepal. It also wants to protect its floodplains by taming rivers within Nepal.

Nepal’s captive market is another area of Indian national interest. Nepal’s largest trading partner is India. It depends on India for essential goods and services of all kinds — from construction material, medicine, petroleum, textbooks for higher education, films, clothing to motor vehicles. New Delhi would like to keep Nepal that way.

On the one hand, we should be grateful to India for what it has done for Nepal. Perhaps no sector in Nepal is free from Indian assistance at one time or another. Education, health, roads, power, agriculture, you name it and India has assisted Nepal in those sectors.

There is nothing wrong for India to protect and promote its national interest in Nepal, we in Nepal somehow find it unacceptable for India to do so. Sure, because India is a much larger and more powerful, Nepal naturally feels overwhelmed by its neighbor and sometimes, Indian leaders have not been fair to Nepal.

For instance, the three economic blockades simply because Nepal sought to chart a slightly independent course. Once, Nepal asked the Indian border mission to leave the Nepal-China border, again when Nepal bought some Chinese weapons, and again when Nepal promulgated its new constitution without India’s consent. The disproportionate share of benefits from the Koshi and Gandak Projects is another example.

While some of the blame lies with India, Nepal’s leadership is equally culpable in this unequal relationship. According to responsible officials of India, Nepali leaders may talk about their national interest in public, but in private they only speak about their personal interest. Even though the Nepali people elect them, they seek India’s help to become prime minister and ministers or to keep their posts.

For this reason, successive kings and prime ministers have failed to protect and promote Nepal’s national interest with respect to India. Now the Modi fever has caught Nepali leaders and a large section of Nepali intelligentsia. Let us hope our political and intellectual leaders would not make any compromise on our national interest with India during Modi’s visit.

The late US President John Kennedy had said, “Don’t ask what America can do for you; ask what you can do for America.” To paraphrase the statement, we should ask not what other countries can do for us. We should ask what we can do for our country. Only it will reduce our dependency on other countries.

Murari Sharma: Nepal’s Interest in the India-China-US Triangle

The interest of India, China and Western countries collide in Nepal. India and China, regional powers eager to deepen and expand their hegemony, are treading on each other’s toes: China in South Asia and India in South East Asia in collaboration with the United States to cordon off Beijing.  This configuration poses great threats  as well as offers great opportunities for Nepal.

Nepal, India, and China have been intertwined for ages. Brikuti, a Nepali princess, and Nepali and Indian scholars spread the light of Buddhism in Tibet and beyond, and Nepali businessmen traded in Tibet. Chinese scholars visited South Asia cataloged its history and wisdom.  

Nepal fought two wars with China and two with India. We lost one war and won another with China. In the second war, the Chinese forces reached to Betrawati, deep inside in Nepal. Similarly, we defeated British India in one war and sustained heavy losses in the other, losing almost one-third of our territories under the Treaty of Sugauli.

After China became communist, the United States joined in the Nepal-India-China mix by training and arming the Khampas against Beijing.   

While Nepal stayed in the Indian sphere of influence after with King Rana Bahadur Shah, China sought diluting Indian impact since it became communist, especially after it absorbed Tibet.  Its spectacular economic development, which helped it build a formidable military, has made China more ambitious over the last couple of decades and encouraged it to reach out to South Asia, Africa, and South America. 

Though India has also logged an impressive growth over the last two decades and building its military capability, China is far ahead thanks partly Pakistan.  Actually, it was the case during the Indo-Chinese war of 1962 already. China has nurtured Pakistan as a continued thorn in India’s side, and expanded its presence in Sri Lanka, Maldives, Myanmar, and Nepal. 

India has been trying to maintain its grip on its old sphere of influence, South Asia, and seeking to reach out to South East Asia, China’s backyard, with US support.  The United States wants to preserve its global hegemony, for which it much cut the emerging powers to their size. 

Yet, it would be wrong to read too much in this tense triangle. Despite all this contest, India, China, and the United States are huge trading partners, and their economic interaction has been growing. In this situation, Nepal should not perceive itself as a pawn in this broader geopolitical game to promote the players’ interests.

Neither should allow others to perceive and use Nepal as a pawn in this game.  Therefore, Nepal must be careful in what it says, and more importantly, what it does to preserve its de facto sovereignty and independence. 

In other words, Nepal must maintain the best of relations with its geographical neighbors, China and India, and our sky neighbors, mainly the United States and Europe. We must desist from being the pawn of one or another for instant gratification. We must dilute Indian hegemony in Nepal while not allowing China to increase its.

Neither should we allow Western countries to destroy Nepal indirectly, mainly by promoting identity politics and conflicts fueled by it.

Meanwhile, we must use their friendship and economic support to strengthen Nepal’s sovereignty and independence and promote Nepal’s economic and social development. If the Cold War is any guide, Nepal will be freer and safer if it did not align itself too much with any of our neighbors and it became prosperous.

For its progress, Nepal should attract more investment from inside and outside and try to be part of the global supply chain. For such investment to increase, there should be financial and economic incentives, policy stability, and strong institutions that give confidence to investors. To mitigate our geographical disadvantage, we ought to focus more on light weight and high-value products and industries. 

Our immediate neighbors and sky neighbors have been investing in Nepal to bring into their ambit. They have all deploying words and extending support to give the impression that they have Nepal’s interest at heart. However, no matter how much and how hard they promise, their first and foremost interest would be to promote their own national interest. 

We must bear in mind that our national interest would be peripheral and subservient at best and antithetical at worst to our immediate and sky neighbors. Therefore, we must increase connectivity with all three neighbors, resisting the temptation of being favorite of one or the other. We must not allow them to dictate our policies geared to promoting the safety, security, and development of Nepal and prosperity of the Nepali people.

At the same time, we should respect their genuine interest Nepal. For instance, we must not allow any of our neighbors to build a military presence in Nepal or let our territories be used against them. It should be a two-way street. History tells us how covert and overt anti-Nepal activities have been allowed and supported by our immediate and sky neighbors. 

In international relations, countries have no permanent friends or permanent enemies, as Lord Palmerston has said; they only have permanent interest.  The worst form of enmity results in wars, which only happen between immediate neighbors. Our leaders will be wise to keep that in mind when they deal with our near and far neighbors.

In other words, in the extant tension among our immediate and sky neighbors, there are great opportunities if we keep our national interest front and center and pursue them. However, if we align with one or the other for instant gratification, our safety, sovereignty and independence will be jeopardized.

Murari Sharma: Black-and-white world

Are you worried about your future? About the future of your children? We live in a grey world, but when you have leaders that tend to see things only in black and white, you have to worry.  I am talking about the reactions to what Prime Minister KP Oli and President Donald Trump, both sorts of cult personalities, do. 

Cult personalities command blind loyalty from their supporters and aversion from others. Some sections of Nepal praise Mr. Oli to the sky and others view him as someone on the steroid, of course, to treat his illness. Likewise, Mr. Trump is a hero for arch-conservatives, while for others, he is a crazy moron. 

Take Mr. Oli’s recent India visit, for example. Mr. Oli’s party colleagues and supporters have characterized the visit as a grand success. The Nepali Congress Party has said it was a lost opportunity and his detractors have faulted him for leaving out many important issues from the conversation. What is the truth? 

Hegemons often extract advantage from their smaller counterparts during high-level visits or official negotiations. India and China, the regional hegemons, do the same. Who does it overtly and widely, who does it covertly and narrowly, depends on their political systems, level of transparency required by them, and on the scope of engagement with other nations.  

If the leader of a small country comes home from a trip to bigger countries without unduly compromising his national interest, that is a success. If he comes with substantial assistance as well, that is a remarkable success, assuming that the assistance will materialize.

We do not know what transpired between Mr. Oli and his Indian counterpart Narendra Modi in the one-on-one talks. If Mr. Oli has not made any undue compromise in those talks, then the visit should be deemed as a success, because he did not give in anything publicly and secured promises of support for his pet projects, rail, and waterways. It is a different question how quickly India implements its commitment.

Those areas were not probably the most urgent needs for Nepal, but when the next election arrives in five years, we will ask Mr. Oli what promises he had made in the last election were fulfilled. Besides, it is a matter of approach to development.

For good reasons, some believe in balanced development; others in unbalanced growth, in which two or three key sectors lead the way to take off. The Soviet Union, which focused on power, roads, and railways, was the best example. So it becomes a question of an ideological bend of commentators.

It leads me to the second subject: Mr. Trump.

As we have witnessed, Mr. Trump is constantly in the news. Whatever he says or does polarizes the United States. For instance, his immigration pronouncements and policies. His arch-conservative base blindly supports his racist, anti-immigration comments and policies as if they are coming from God. His opponents see him and his words as racist.

Similarly, Americans are divided over the Special Counsel investigation into Mr. Trump’s collusion with Russia during the presidential campaign. Mr. Trump and his close supporters view the investigation as a witch hunt. To safeguard the integrity of American democracy, his opponents find the investigation legitimate and essential. Even most Republican leaders want the investigation to proceed to its logical conclusion. 

Mr. Trump’s tariff on import of steel and aluminum and on Chinese goods has received a similarly divided reaction. His core supporters believe he is right, but his opponents worry about the potential trade war that will hurt America, China and the rest of the world. China has already announced its own tariff on American products. 

Ditto about Mr. Trump’s treat to tear the six-country nuclear deal with Iran.

In any democratic political system, differences across the political divide are common. But cult leaders evoke a more visceral reaction from their supporters as well as opponents because of their provocative words and deeds.  Unfortunately,  they often end up harming themselves, like committing suicide or pushing others to do it to make their point or to escape a concocted apocalypse.

That is what worries me. Both Mr. Oli and Trump have become sort of cult leaders due to his unmeasured words in Mr. Oli’s case and his unmeasured words and whimsical deeds in Mr. Trump’s case. They are prone to interpreting national interest  — protecting sovereignty and independence and promoting the prosperity and welfare of citizens — as they see fit and act accordingly.

Obviously, that could prove dangerous if there are no people around them to check their impulses by reminding them that the world is more grey than black and white.

Murari Sharma: Stand for the Country

Bal Krishna Sama has said one’s patriotism does not die even if his country is miserable and a wife’s devotion does not die even if the husband is sinful. There is absolutely no reason why Nepal should feel inferiority complex and conduct its foreign relations with dignity. As Prime Minister KP Oli prepares to visit India from this April 6-8, he will, I hope, make us proud, as he has done twice before on different foreign policy issues.

First, he called the Indian economic blockade of 2015/16 by its name and asked the Indian government to lift it while other senior leaders kept loud silence while the Nepali people suffered. The Nepali Congress did not. Again, Mr. Oli stood up to the European Union when it sought to foment ethnic strife through its election observation report, undermining the hard-won Constitution of Nepal. This time, the Nepali Congress did it too.

Does this mean Mr. Oli has made a paradigm shift? The biggest test of it will be his India trip in a few days. Like all other countries, Indian will try to maximize its national interest during this visit. We will see whether Mr. Oli can take the right stand to advance our national interest.

We did not have enough of him the last time he was prime minister for a year. But before that, when he was deputy prime minister and minister maker in his party, he was known as a close friend of India. He has been far from consistent in standing for national interest.

For example, Mr. Oli first opposed the Mahakali Treaty and then supported it. Though he called the Indian economic blockade of 2015/16 what it was, he has never expressed his concern when China has closed the Nepal-Tibet transit points repeatedly. Evidently, he had been part of Nepali political culture.

Broadly, it means if you belong to a communist party, anything China does is good and acceptable. If you are part of a non-communist party, anything India or the West does is good and tolerable. More specifically, foreign intervention is welcome if it benefits you or your party and unwelcome if it benefits your opponents.

The spokesperson of the Indian External Affairs Ministry had once briefed Nepali journalists that Nepali leaders often visited New Delhi with personal agendas rather than national.

Such personal favors include support to gain or retain power, scholarships for their children or relatives, free medical treatment facilities for their family and friends, observation tours for them, projects in their constituencies, new vehicles for them, etc.

It is a chronic disease in Nepal, and it has only become severer with the passage of time. Started with King Rana Bahadur Shah,  the disease deepened with the rise of Jang Bahadur Rana, widened after 1990, and reached its utmost depth and openness after 2006.

Some examples. Indian counselor Mehta’s advice to unleash a storm for One Madhesh, One Pradesh and the Indian blockade of 2015/16 to support it. The EU’s recent comment on the Nepali Constitution to foment ethnic tension. The previous British ambassador Spark’s comment on freedom for conversion. China’s objection to Nepali NGOs working with the Taiwanese NGOs.

Has Mr. Oli steered Nepal’s foreign policy ship into a new direction with his stand against the Indian economic blockade and the recent EU’s suggestion?  Will he maintain his new position as a matter of policy? Until we have a stack evidence, we have no way to know.

As it appears from outside, Mr. Oli has the political strength to do it. His government enjoys nearly the three-fourths majority in the federal government and the coalition of the UML, Mr. Oli’s party, and the Maoists lead six of the seven state governments.

However, Mr. Oli might not be as strong and confident as he appears from outside. Inside his party, he faces entrenched opposition from the factions led by other senior leaders. The Madheshi parties have supported him to entice Mr. Oli to amend the Constitution, as they want.

More importantly, the Maoist leader Pushpa Kamal Dahal is a wild card. Mercurial and unreliable, he might abandon Mr. Oli and the UML-Maoist integration process mid-course and fall back into his default character. His recent demand that both parties must have 50-50 officeholders in the merged party is a clear pointer.

Considering his party’s strength, his demand lacks the sense of proportion and justice. They have taken cabinet positions on 70-30 ratio, and it seems right given their electoral performance and number of seats in the federal and state legislatures. However, Mr. Dahal made that demand anyway.

The Nepali Congress Party has thrown its support to Mr. Dahal for prime minister if he broke from the UML-Maoist integration. Most external powers do not want the merger either; they have been sending feelers to Mr. Dahal. At a critical juncture, Mr. Oli’s strength might prove the Potemkin’s village.

Therefore, let us appreciate Mr. Oli for his stand against external intervention and urge him to maintain it the future. Let us hope Mr. Dahal will not be a foreign pawn.  Let us expect the Nepali Congress not to knock on foreign doors to destabilize the Oli government.

And finally, let us hope the Oli government does not flout the fundamental norms of democracy and freedom. If he did it, we might have to ask the international community for their moral support to put a spanner into his plan. Because power corrupts, it is entirely possible.

Consequently, the world has produced a surfeit of Ferdinand Marcos, Robert Mugabe, Pervez Musharraf, Zia-ul-Haq, Zia-ur-Rehman, Suharto, Than Shwe, and so on. Who had thought President Xi Jinping of China would change the Chinese Constitution to open the door to keep him in power for life. Leaders like Mahatma Gandhi, George Washington, and Nelson Mandela have been rare.

Every progress starts with the first step. Let us hope Prime Minister Oli will continue following the spirit of Bal Krishna Sama’s poem and put Nepal and its people front and center, not succumb to the diseased political culture.

Murari Sharma: Make federalism sustainable or face conflict

Your idea and my idea of federalism might have been different, but you and I are now stuck with the bill. The bill will make politicians richer and everyone else poorer and sow the seeds of conflict for the future.

I have supported the idea of federalism ever since I visited Brazil in 2002. Brazil has a few, economically sustainable states that compete in delivering development and services to their denizens. For Nepal, my idea was to have fewer and largely self-sustainable states, which would compete to make us richer and our country prosperous.

Since 2009, I have been making this point along with a few others. Citing the examples of the United States, United Kingdom and India, I had argued that since federalism is expensive, Nepal must have just three — at most four — states.  Several political pundits, living in a fantasy, rebuffed my analysis and suggestion. Now the reality has just begun to bite, and it is painful.

Have you recently paid the land tax? If you have, then you would know the land tax has increased 1,000 percent under the new system. The local government used to issue several certificates to citizens free of cost before; now every service costs you. What cost 20 rupees before now costs you around Rs.500 or more.

This is just the first bite. It will be ten times worse after the newly elected central, state, and local governments envisage the expenditures needed for their new structures and human resources and for development activities. At the central and federal level, 884 politicians will be members of legislative bodies, more than ever. Ministers will have their political advisors in hundreds, most of them new posts.  All 753 local governments will have paid politicians unlike in the past when they were voluntary positions.

While some existing government employees will be transferred to the state and local levels, a large of new people will be necessary to make the new governments functional and effective. Political and bureaucratic officials require salaries as well as allowances, offices, rent, fuel, vehicles, and so no.

Nepal’s revenue is not enough to cover its pre-existing recurrent expenses if you include the stealthily hidden significant chunk of recurrent costs under capital expenditures.  Such hidden costs include the costs of buying weapons, helicopters and equipment, protecting the forest, etc. of the army; the regular salaries of teachers; the fuel and travel expenses of the ministries that have development projects, and so on.

Even if we stick to the published budget figures, the picture looks frightening. In 2015/16, Nepal’s revenue collection was Rs.4.85 billion and total recurrent expenditure Rs.3.71 billion. It left only 24 percent of the revenue for the capital expenditure — roads, new power projects, new schools, new hospitals, and so on.

In 2016/17, the revenue and recurrent expenditures were Rs.5.81 billion and Rs.5.62 billion respectively, leaving only 3 percent for development activities. In 2017/18, the estimated revenue of Rs.7.30 billion is insufficient to cover the recurrent expenditure of Rs.8.04 billion.

Evidently, all genuine development expenditures came from foreign assistance, most of it loan, and internal loan in 2015/16, all development and part of recurrent expenditures came from the external and internal loans in 2016/17, and all development and a large chunk of regular expenditures will come from those to sources in 2017/18. It is getting worse every year, and if you count the hidden recurrent expenses, the picture turns uglier.

We or our children must pay back the external and internal loans; Nepal will not be rich in next five-ten years; money does not grow on trees because we have pleased our leaders with hundreds of paid posts. So all three levels of government will tax you and me to death to pay for their expenses and to implement development projects, which take years to create jobs and earn a new stream of revenues.

When you have to choose between paying the taxes and feeding your children, you will certainly to choose the latter. Sooner or later, the increasing taxes, the declining services, and dead-end before you frustrate you so much that you will revolt, inviting a conflicting and the need for another political transition. It looks like our 30-year political transition is not the last one.

Can we prevent another revolt and another transition? If we have the will, we can. We must push our elected leaders to reduce the number of states, merge local bodies, or privatize public services.

I understand where the identity politicians come from. If we apply their logic, then Nepal should have 12o plus ethnic states. If we have accepted multi-identity states,  why the unsustainable seven and why not sustainable three — at the most four — states? The number of paid politicians and staff will be reduced by half, reducing the expenses on their salaries, allowances, offices, housing, vehicles, fuel, and so on. And such states will also offer the economy of scale.

Another choice could be merging the local bodies. Due to their financial constraints, the boroughs in the United Kingdom have been doing it, for instance. In the first round, several boroughs, facing a financial crunch, merged with the adjoining boroughs. For instance, in London, Kensington and Chelsea merged to become Kensington and Chelsea borough and Hammersmith and Fulham to become Hammersmith and Fulham borough.

In the second round, adjoining boroughs, such as Wandsworth and Richmond in London, have been merging their administrative functions to reduce the duplication of costs and services.

Yet another choice is to privatize most government activities so the government expenses in those activities are saved and taxes would not go through the roof though you pay to the private sector for the services they provide. We have privatized some of our public enterprises, but other countries have gone much further.

The United Kingdom is the case in point again. After the rise of Margret Thatcher as prime minister, most public services, including rail, prison, and some roads, were privatized. The mail service went into private hands only recently. The government is stealthily pushing parts of the National Health Service into private hands too. Chile and several other countries have gone down this route.

Sure, you end up paying more for the same services once they go to the private sector. But you would not complain about the government taxing you too much, and if you do not regularly consume those services, may not feel too bad about it.

Anyway, the federalism we have embraced is unsustainable. We have created too many states where tons of political officials and thousands of additional employees will be on the public payroll, who will demand allowances, vehicles, fuel, pension, office space, and so on, siphoning off every penny from the revenue for their own maintenance.

Unsustainable federalism is a source of conflict and secession: Look at Sudan. Nepal should strive for successful federalism, not a dysfunctional one that will only breed another revolt and another transition and will bankrupt the ordinary Nepalis.