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Reflecting upon the intricate challenge of harmonizing theoretical principles with the practical facets agreed upon by political parties and commissions in previous political discussions, the ongoing discourse on transitional justice is deeply engaging. Almost 17 years have elapsed since the signing of the peace agreement, yet transitional justice persists as a sensitive and complex matter. There exists a unanimous consensus that for the peace agreement to be truly meaningful, the process of creating and implementing laws, along with the effective functioning of commissions, is imperative.

Transitional justice is not merely a concern for specific political entities but also a national priority. The key lies in fostering unity and responsibility among political parties, extending beyond legal technicalities. Moreover, strict adherence to the Supreme Court's interpretation and orders throughout the transitional justice process is a crucial aspect of moving forward.

It is important to recognize the prevalence of misleading narratives surrounding transitional justice and advocate for careful discussions to dispel such misconceptions. A special committee comprising experts and members having diverse political backgrounds must be formed and this committee should play a pivotal role in providing recommendations on the bill related to transitional justice. It is necessary to address ambiguities in the bill concerning the violation of human rights and crimes against humanity through simplified definitions.

Key recommendations are the significance of inclusivity when establishing a commission for truth-seeking, reconciliation and the identification of victims of transitional justice. Emphasis should be on the inclusion of individuals with national recognition and subject-specific expertise. Furthermore, tasks related to transitional justice, encompassing truth-seeking, prosecution, reparations and institutional reforms, need prioritizing.

Underscoring the importance of embracing restorative and transformative justice concepts involves active involvement of victims in the dialogue process to gain their trust and effectively address their grievances. The report puts forward a comprehensive approach that includes truth-seeking, prosecutions for crimes committed, reparations for the victims and institutional reforms to prevent future injustices.

There should be no fight against the victims of the war. Urging introspection among all stakeholders, emphasizing the need to expedite the transitional justice process and putting an end to injustice—these must be our priorities. The event, which served as a platform for prominent figures to share their perspectives and suggestions, stands as a crucial step toward forging a path forward in the transitional justice process in Nepal.

In conclusion, the recommendations presented here are grounded in the belief that careful, inclusive and comprehensive approaches are essential for effective progression of transitional justice in Nepal. By prioritizing national unity, dispelling misleading narratives and actively engaging victims in the process, all stakeholders should work collectively toward a society that values accountability, reconciliation and lasting peace. The journey ahead is challenging, but with concerted efforts from political parties, experts and the broader community, the goals of transitional justice can be achieved.

The author is executive director at Nepal Center for Security Governance

CPN-UML Chair KP Sharma has come down heavily on the Pushpa Kamal Dahal-led ruling coalition, likening it to a slow poison for the republic and questioning its commitment to democracy, the Constitution and its conduct of foreign relations. 

Oli launched a multi-pronged attack against the Dahal-led dispensation through his address to the House of Representatives on Tuesday, saying, “This government cannot administer one fatal dose (to democracy and the republican order). Nonetheless, it is acting as a slow poison for democracy and the Constitution. 

He accused the Dahal-led dispensation of suppressing the voices of the people and conspiring to render the Parliament useless by not giving businesses to the House and its committees. 

Oli went on to elaborate the characteristics of the dispensation thus, “While this government does not do what the Constitution has told it to do, it does what the Charter has barred it from doing—without fail”. 

Referring to the recent Cabinet decision to declare Fagun 1—the day the Maoist insurgency was waged 27 years ago (13 Feb 1996)—as a public holiday, the UML chair accused the government of glorifying violence through the move. The decision to celebrate the day has further hurt the sentiments of conflict victims, Oli said, demanding that the next Cabinet meeting withdraw the decision. 

He also protested the government move to grant blanket amnesty to criminals in the name of marking Constitution Day and turning the President into an entity that does the government’s bidding. 

Oli also took the government to task on ongoing investigations into corruption cases. The government opened Lalita Niwas scam files with much hullabaloo, now it is finding it hard to close them, Oli claimed, “The (60-kg) gold-smuggling case is also giving the government a hard time.” 

The government’s good governance campaign is actually aimed at shielding smugglers and murderers, he went on. 

This dispensation has appointed those candidates, who failed exams for district judges, as well as those who helped out election candidates from the ruling dispensation as judges, he maintained, adding that it is futile to hope for a better performance from this government. 

The conduct of diplomacy also came under Oli’s crosshairs as the latter blamed PM Dahal for failing to raise Nepal’s concerns during his recent visits to the United Nations, China and India.   

The World Bank has projected that Nepal's economy is poised to achieve a growth rate of 3.9 percent in the fiscal year 2024. This marks a notable improvement compared to the previous fiscal year, FY 2023, when the country’s economic expansion was limited, registering only a 1.9 percent growth rate.

The World Bank’s optimistic report comes amid a deep economic crisis that the country is facing. Releasing its Nepal Development Update-October 2023 on Tuesday, the World Bank has said that Nepal’s economy is expected to rebound to 3.9 percent in FY 2024 owing to the impact of the lifting of import restrictions, a strong rebound in tourism, and the gradual loosening of monetary policy. The economic growth in FY 2025, will be five percent, according to the World Bank.

In its report, the World Bank says that the impact of lifting the final import restriction measures in January 2023 and the gradual loosening of monetary policy are expected to support growth in the industrial and services sectors. “Sub-sectors that suffered the brunt of the import restrictions and monetary policy tightening in FY 2023, including wholesale and retail trade, construction, and manufacturing, are expected to gradually recover over the forecast period,” reads the report.

While wholesale and retail trade are expected to benefit from the lifting of import restrictions and boost service sector growth, the report says, agricultural sector growth is expected to slow in 2024 due to the impact of the lumpy skin disease on livestock and a decline in rice production.

According to the report, strong energy sector growth helped to avoid an industrial contraction, since manufacturing and construction outputs shrank. Hydroelectric generation increased significantly for the second year in row and added close to 500 megawatts of hydroelectric power to the national grid, the report says, Nepal nevertheless remains a net energy importer.

The top financial body further states that slow credit growth and import restrictions contributed to a reduction in private investment on the demand side. Lower capital expenditure and revenue underperformance drove lower public investment. As a result, total investment decreased by more than 10 percent, a sharper reduction than in 2020. Private consumption remained robust, owing to strong remittance inflows.

Inflation is gradually increasing and a new report says that it is likely to go up.  Average consumer price inflation reached a seven-year peak in 2023. Average inflation amounted to 7.8 percent, above the central bank’s seven percent policy ceiling, driven by both food and non-food prices. Key drivers of food prices, which increased by 6.9 percent, included supply side shocks such as India’s wheat and rice export restrictions, and domestic policy changes including the removal of VAT exemptions on multiple basic food items and price support to producers of rice paddies, milk, and wheat, the report says.

Non-food prices rose by 8.5 percent, driven by higher housing and utility prices, and an increase in the consultation fee of medical doctors in May 2023, the report states, the decline in edible oil prices from February 2023 onwards, reflecting global price reductions, had an offsetting effect on prices. The persistence of high inflation impedes policies to stimulate growth. Particularly, Nepal’s vulnerability to external shocks implies a difficult trade-off between policies that boost growth and those that contain inflation, according to the report.

Agricultural output remained resilient and expanded by 2.7 percent. Rice paddy production supported the sectoral growth and increased by 6.9 percent, reflecting a good summer monsoon and improved seed varieties (Figures 1 and 2). However, a lumpy skin disease has affected livestock as of early April 2023, infecting more than 1m and killing close to 50,000. The resulting lower dairy product and meat production could negatively affect agricultural output growth. Updated statistics will be released by the National Statistics Office in April 2024.

Manufacturing and construction shrank by two percent and 2.6 percent, respectively. The decline was partly due to lower production of key construction materials (cement, basic iron, and steel) and vegetable oils in the first half of FY 2023. Higher frequency indicators suggest that the decline continued in the second half of FY 2023. Lower demand resulting from the elevated prices of manufactured goods and construction materials further weighed on industrial output, which increased by a meager 0.6 percent.

Sluggish wholesale and retail trade slowed the pace of services sector growth. Authorities estimate that the services sector expanded by 2.3 percent in this year, the slowest pace since 2020. Growth of the wholesale and retail trade sub-services sector declined 0.5 percent due to high inflation and lower goods imports.

Looser monetary policy and the lifting of import restrictions imply an increase in goods imports over the medium-term, the report states, policies to contain credit growth and lower one-off imports, including of Covid-19 vaccines, are expected to keep imports below its 2022 historic high. Near-record migration of Nepali workers should be reflected in strong medium-term remittance inflows which, however, are not expected to balance the goods and services trade deficit. Consequently, the current account deficit is expected to widen to 3.7 percent of GDP in 2025, and 4.6 percent of GDP in 2025. 

Revenues are expected to increase in line with higher goods imports, given that taxation focuses heavily on trade. The 2024 budget envisions lower federal spending on capital investment and fiscal transfers to subnational governments, yet higher debt servicing costs. Overall, the recovery of revenues is expected to reduce the fiscal deficit to 3.5 percent in 2024 and 3.3 percent in 2025. Together with the rebound in growth, tighter fiscal policy is expected to keep the overall public debt burden contained at around 41 percent of GDP in 2024 and 2025.

In the external sector, the current account deficit narrowed to a six-year low in 2023, driven by lower imports and higher remittances. The current account deficit fell from 12.6 percent of GDP in 2022 to 1.3 percent of GDP this year.  The reduction occurred through lower imports of goods and services, which fell from 42.6 percent of GDP in 2022 to 34.5 percent of GDP in 2023. Exports on the other hand remained stable, and remittances rebounded strongly. Foreign reserves ended 2023 at a comfortable level of 10 months of concurrent import cover, above the policy floor of 7 months of import cover.

Official remittance inflows surged to a five-year high in this year. Remittance inflows climbed from 20.4 percent of GDP in 2022 to 22.7 percent of GDP.  Nepal’s dependence on the export of workers and remittance inflows increased sharply over the past two decades. Goods and services exports have fallen significantly since the early 2000s as a percentage of GDP.

In FY23, total exports amounted to 6.9 percent of GDP, only one-third of what the average South Asian middle-income country exports. Not surprisingly, the 2019 World Economic Forum Global Competitiveness Index ranked Nepal 108th out of 141 countries.30 Net foreign direct investment (FDI) has also underperformed. Remittance inflows on the other hand increased to 22.7 percent of GDP in FY23, are the main source of foreign currency, and the main driver of private consumption and economic growth.

According to the bank, the near-record migration of Nepali workers should be reflected in strong medium-term remittance inflows which, however, are not expected to balance the goods and services trade deficit. “Consequently, the current account deficit is expected to widen to 3.7 percent of GDP in FY 2024, and 4.6 percent of GDP in FY 2025,” reads the report.

However, there are multiple risks to the outlook including an erratic monsoon, which could dampen agricultural growth; a renewed spike in commodity prices or continued food export bans by India which would raise prices; and higher inflation which could keep policy rates elevated, increase domestic debt servicing costs, and drag on growth. 

“Amid challenges, Nepal is leading the way towards operationalizing its green, resilient, and inclusive development vision to shape the country’s long-term economic recovery,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka. “Improved external competitiveness is key to driving this recovery and enabling Nepal to compete in export markets, in terms of both prices and quality. This requires an emphasis on reforms to help increase domestic productivity and reduce the inflation differential with Nepal’s trading partners.”

 Major points

• Nepal’s export performance has continuously declined.
• Real appreciation of exchange rate and productivity deficit negatively affected exports.
• The budgetary process needs further strengthening to better support planning.
• Increasing domestic productivity and containing domestic inflation key to improving external competitiveness.
• Credit growth to the private sector slowed owing to policy measures taken to help correct the external imbalances.
• Fiscal space diminished further with the contraction of revenues.
• Economic activity is expected to gradually gain momentum. 
• The current account deficit is expected to increase moderately.
• A rebound in revenues should reduce the fiscal deficit and contain public debt.
• Prudent policies to stimulate growth and contain downside risks are key.

Recommendations

• Changing the current tax model by shifting taxation away from the border and reducing high import tariffs
• Improving the implementation of fiscal federalism which would facilitate effective investments in infrastructure and services
• Simplifying and streamlining processes to attract more FDI which would create significant knowledge and spillover effects.
• In addition, containing domestic inflation would reduce the inflation differential with trading partners. This would help avoid further real appreciation of the exchange rate.

All G7 member-states are members of G20, while China is at the center of G77. Of the BRICS nations, President Luiz Inacio Lula da Silva of Brazil was the only head of the state and the government present at the Havana G77 summit whereas South Africa sent a cabinet minister for the summit. More than 100 countries, including 30 heads of state and government and those aligned with the Non-Aligned Movement, were present at the summit of the grouping that has 18 of the 25-member Shanghai Cooperation Organisation, observer states or dialogue partners as members in addition to seven of G20 member-states. 

The UN Secretary General Antonio Guterres participated in the recent summits of BRICS, G20, G77 and the 78th UN convention. Guterres’ emphasis was on a new global order with increased participation from the Global South in the global governance system.

Guterres has asked G20 to assume leadership on two fronts: Emission reduction and climate justice. Eighty percent of emissions is from G20 countries, he pointed out, stressing the need for the latter to reduce emissions and build resilience in communities suffering the impacts of climate change. 

“This multiplicity of summits reflects the growing multipolarity of our world,” Guterres observed ahead of the Havana meeting and warned, “Multipolarity could be a factor in escalating geostrategic tensions, with tragic consequences.” 

At the G77 summit in Havana, pointing to climate and foreign debt, he articulated that the Global South was “trapped in a tangible global crisis.” The world is failing developing nations, he said, describing the grouping as “a champion of multilateralism”. Guterres stressed that G77 should “champion a system rooted in equality that is ready to reverse the injustice and neglect of centuries and deliver for all humanity and not only for the privileged”. 

China stated that it “will always make South-South cooperation a priority” in its dealing with the outside world.  Cuban President Miguel Diaz-Canel, the chair, said, “After all this time that the North has organized the world according to its interests, it is now up to the South to change the rules of the game.” 

In the realm of international relations and global governance, the roles of India and the US in the G20 and China in the G77 have significant implications. Fostered by G77, the ‘South bloc’ challenges traditional great power dominance and undertakes collective action to shape global politics. As India, the US and China navigate these blocs, their actions influence geopolitics and contribute to the ongoing dynamics of great power rivalry. Understanding these dynamics is critical for policymakers and scholars seeking to comprehend the changing landscape of international relations.

The US holds significant political influence within the G20 by virtue of its long-established global leadership and diplomatic reach. India has emerged as a voice representing developing nations and brings its unique political perspective to the forum. The US and India bring their distinct foreign policy priorities with connectivity and North-South cooperation. The US focuses on maintaining its global dominance and shaping the international order, while India emphasizes multilateralism, inclusivity and regional stability.

China pursues a distinct political strategy within the G77. Its active role, along with economic support, allows it to garner political influence, further reinforcing its position within the bloc. China seeks to promote its vision of development, connectivity and cooperation among developing nations through G77. Chinese foreign policy objectives concentrate on strengthening ties with these nations, including shaping economic relationships and securing access to resources