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As an emissary of President Xi Jinping of China, Central Committee Member and Secretary of China’s Qinghai Province, Chen Gang, visited Nepal from 19-21 October 2024. His visit should not be viewed as an isolated event loaded with an agenda but rather as part of a continuing series of exchanges between the leaders of the communist parties of Nepal and the Communist Party of China (CPC). Nepali political leaders, particularly those from left-leaning parties, have frequently visited China at the invitation of the International Department of the CPC, and senior leaders of the CPC have reciprocated these visits.

Chen's visit came at the invitation of CPN-UML Secretary Raghubir Mahaseth, who is also the chief of the party's foreign affairs department. Upon arriving in Kathmandu, Chen engaged in discussions with the heads of major political parties, including Prime Minister KP Sharma Oli and Sher Bahadur Deuba, reaffirming the ties between the CPC and Nepali political parties. He also raised Chinese concerns, apart from sharing decisions made during the Third Plenary Session of the 20th CPC Central Committee.

How, then, should this visit be considered? Here are three key points that outline its significance:

Taking stock of Kathmandu’s mood
Chen’s visit aimed to gauge the mood in Kathmandu following the formation of a coalition government under KP Sharma Oli, president of Nepal’s largest communist party. Beijing likely finds comfort in a government led by leftist parties, but this does not imply that Chinese officials neglect their relations with non-leftist parties. China has adopted a policy of multiparty engagement in Nepal since the abolition of the monarchy. Every delegation meets the key leaders of major parties regardless of ideology or political alignment. The CPC understands that in today's globalized world, mutual respect and benefit take precedence over ideological closeness. China has a policy of shared development and shared destiny. Thus, Chen's visit was a way to take stock of Kathmandu's political situation following the formation of the new government.

Reaffirming support
Chen's visit served to reassure Nepal’s new coalition government of China’s full support. Chinese leaders have closely monitored Nepal's political dynamics and the influence of external powers on its domestic affairs. The world is currently in a state of transition: the old order is being questioned, and the new world order has yet to fully emerge. Although the US-led world order has already lost much of its influence, with China rising as a new global power, the future of world politics remains uncertain. Chinese leaders recognize that Nepal has become a focal point in geopolitical competition. The MCC is now being implemented in Nepal, and both American and European powers are promoting Western narratives that aim to counter China's growing influence in the region. During his visit, Chen discussed global politics and geopolitics, advising Nepali leaders to stay informed about Chinese affairs through official CPC and Chinese government sources.  

The third plenary session
Another important aspect of Chen's visit was to share decisions made during the Third Plenary Session of the 20th CPC Central Committee, recently held in Beijing. The International Department of the CPC and the Qinghai Provincial Committee organized a deliberation and interaction program at the Yak & Yeti Hotel, where Secretary Chen and Chinese Ambassador to Nepal, Chen Song, addressed key aspects of Nepal-China relations and explored potential future partnerships. Secretary Chen presented China's development model, focusing on the use of technology in agriculture, industry and human resource development. 

Qinghai's topography is similar to Nepal’s, and the region has faced seasonal floods and landslides. The Qinghai provincial government has swiftly carried out reconstruction and rehabilitation efforts for those affected. Secretary Chen assured the government of Nepal and political leaders that China is ready to support Nepal in the post-disaster reconstruction process. This was a significant commitment from the Chinese side. However, it is worth noting that both India and China have provided support to Nepal during such disasters, proving that "neighbors in need are neighbors indeed."

Prime Minister Oli and CPN-UML General Secretary Shankar Pokhrel echoed similar views on party-to-party relations between Nepal and China. Prime Minister Oli recalled President Xi's 2019 visit to Nepal as historic and requested the prompt execution of the commitments made during that visit. General Secretary Pokhrel highlighted the lessons Nepali political parties, especially the CPN-UML, could learn from the CPC’s growth and functioning. Pokhrel had visited China last year, including Qinghai, where he observed the region’s ecological development efforts. The CPC and the Chinese government have been transforming Qinghai into an ecological center of China, ensuring harmony between humans and nature. Under Secretary Chen's leadership, Qinghai has made significant progress. In this regard, Chen's visit was important for both Nepal and China.

The rise of populism and a crowded political culture threaten Nepal’s democracy. Although this perspective may be controversial, I believe in the need for a transparent and democratic political system that allows Nepalis to thrive in diverse ways. Nepali voters are understandably frustrated with current governance and political instability. However, it is alarming when educated and influential figures fuel political division, spread populist ideas, and engage in conspiracy theories—actions that undermine Nepali democracy. Nepal is still on its path to becoming a fully democratic state, and this journey may take generations. This does not mean Nepal’s democracy has failed; rather, it is evolving. Several factors, however, have weakened Nepal's democratic system, including the rise of populist trends, radical political groups, and the constant shifts in agendas since the 1990s reforms. Traditional political ideas have also struggled to uphold democratic values, causing a rift between voters and political parties.

In recent years, populism has gained momentum in Nepal’s political landscape. Notable figures like Rabindra Mishra, a former journalist, entered politics with strong anti-corruption rhetoric, earning public trust. Yet, his shift from democratic to authoritarian ideologies exposed him as a deceptive leader. TV journalist Rabi Lamichhane entered politics with vague and false promises, using his media influence to gain power without offering clear policies. He quickly became one of the most controversial figures, embroiled in scandals involving passport fraud, citizenship issues and financial misconduct. Lamichhane founded the Rastriya Swatantra Party (RSP), which performed well in the 2081 general election and attracted educated candidates. However, the RSP remains a populist party without a solid ideology, relying on blame tactics and controversial leadership. Lamichhane's involvement in coalition politics appears to be a strategy to shield himself from legal consequences, and his negative populist rhetoric continues to endanger Nepal’s democratic and legal system.

Recently, authorities arrested Lamichhane for his alleged involvement in a credit union fraud scheme, based on evidence collected by a parliamentary investigative committee and the police. Although the investigative process may lack full transparency, his arrest was properly carried out by government authorities and investigative bodies. Unfortunately, many of his political supporters, including some self-proclaimed intellectuals from his party, took to the streets and engaged in violent protests. This behavior presents a serious threat to Nepali democracy and the rule of law.

As a journalist, Lamichhane loudly criticized other political parties for violent or unethical actions. Now that he faces similar accusations, it raises questions about his integrity. It is crucial to remember that other high-profile political leaders are currently in jail, and their party members have not interfered with police investigations or the judicial process. Nepali leaders and the public must recognize that Lamichhane is not above the law and must cooperate with government and legal institutions like anyone else.

Nepal’s democracy has faced challenges from both radical left- and right-wing ideologies. Some leaders cling to outdated beliefs in socialism or communism, despite these systems failing in countries like China, Russia, Israel, India and the UK. Others advocate for a return to monarchy, an idea that has been tried and failed. These are merely opportunistic attempts to gain power. 

Meanwhile, democratic leaders have struggled to meet the Nepali people’s expectations. The bureaucracy remains inefficient, and successive governments have failed to address the country’s social, economic and foreign policy challenges. Since the 1990s, Nepal has dealt with crises like the Maoist insurgency and regional conflicts, yet political leaders have not been able to offer a unified, long-term vision for the country’s progress.

The rise of populism and divisive political culture poses a significant threat to Nepal’s fragile democracy. While frustration over current political instability is understandable, influential figures fueling populist sentiments and spreading conspiracies undermine the democratic process. Figures like Mishra and Lamichhane have introduced dangerous populist trends that distract from the real progress Nepal needs. Lamichhane's recent legal troubles and the violent protests from his supporters demonstrate how populist leaders can destabilize the rule of law. No one, including prominent leaders, should be above the law. Both the public and political figures must prioritize the integrity of democratic institutions over personal ambitions. For Nepal to move forward, leaders must provide transparent governance and long-term visions, while the public must stay vigilant against populist movements that offer no real solutions. True progress lies in a unified commitment to democratic values and accountability.

Views are personal

The new government formed three months ago had announced that it wanted to conduct a review of the Constitution promulgated almost a decade ago (in 2015) by exploring areas for amendments. The two largest political parties in the Parliament—the Nepali Congress (NC) and the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML)—joined hands to form the government that enjoyed the support of almost two-third members of the parliament—ostensibly to push constitutional reforms.

As per the constitution, any amendment can pass only with a two-third majority. Therefore, the public pledge made by the two largest parties during the formation of the latest coalition was viewed seriously by everyone. The parties had promised to first conduct objective analysis of the constitutional performance and suggest amendments.

Almost a decade has passed since the promulgation of the constitution, so it is an opportune time to take stock of its performance, examine its contributions and failings, and prescribe reforms for its improvement.

The constitution has embraced some fundamental changes like federalism, republic and inclusion, which cannot be compromised. But their workings can be refined to better address the aspirations of the general public.

The major parties have been suggesting that one reason why the constitution needs reforms is the current setup, which, according to them, prevents a single party from forming a majority government, leading to perennial instability in governance.

While that may be the case, it is utterly important to also pay attention to other aspects of the new constitution such as strengthening local governance.

The constitution had intended to empower the local government and recognize them as the primary vehicles for the delivery of public service and governance to the people.

As per the constitution, there are currently 753 local governments, including six metropolitan cities, 11 sub-metropolitan cities, 276 municipalities and 460 rural municipalities. Part 17 of the constitution provides for the formation of Local Executive, Part 18 provides for the Local Legislative, Part 19 provides for the Local Financial Procedure and Part 20 provides for relations between federal, province and local levels. Article 217 of the constitution has also provided for the judicial powers of the local government.

In the past, there were around 4,000 local bodies, which were reduced to 753 local governments. In the last one decade, the local governments have been strengthened with adequate powers to prove their worth by becoming immediate centers of power to the local people and the deliverer of most basic of public services. The chiefs and deputy chiefs of the local governments have become powerful in terms of their influence in budget allocations, resource mobilization and service delivery issues.

The local governments also have the power of formulating local laws. They also have separate judicial committees to provide local level justice in specified areas. Many local disputes are now being submitted for settlements at local levels.

In terms of development resources, too, the local levels have been able to use a huge chunk of the national budget. The annual budgets of local levels are in the range of Rs 400m to Rs 28bn (Kathmandu Metropolitan City). They are also found active in providing basic recommendations such as for citizenship, passport, national identity, etc. They are also becoming the first point of responders in times of disasters such as during earthquakes, disease outbreaks like Covid-19 and natural disasters like floods and landslides.

However, they still face a number of challenges to prove their worth—many of which have the root in laws and the constitution.

Legal reforms: The number of local levels needs to be reduced to less than 500 in order to make them agile and effective. The wards should be made more powerful. For example, presently, the wards are responsible for only providing recommendations for citizenship whereas it is issued by the district administration office. Laws and constitution can be changed to ensure that the people get the citizenship issued from district administrative offices delivered at the wards themselves. Processes can be interlinked between wards and district offices for this purpose.

Currently, local governments also have authority to formulate laws but in the last one decade, there has been concern that they lack skills to formulate quality laws. Therefore, this authority probably could be given to the provinces, where such skills can be available. Besides, it is also better for provinces to have uniform laws for all their local governments.

Budgetary reforms: Presently, the federal government bears almost 80 percent of the budget of the local government. There is a need to conduct reforms enabling local governments to generate more budgets for themselves, and there is also a need to change the sequence of budget-making. Ideally, local governments should be allowed to first pass their annual budgets, followed by the province and the federal government, respectively instead of the current sequence, which is just the opposite.

HR reforms: Although one decade has passed, the proper staff management has not been achieved. Local government staff should be recruited by local governments themselves within the mandate prescribed by the concerned province. Such staff should be able to transfer within the province and they should have ample opportunities for career growth.

Election reforms: Many have questioned the appropriateness of holding local government elections on a party basis. Since they are designed for service delivery to citizens, it is thought that their elections should not be guided by partisan politics. Rather, they should have independent candidates. This can facilitate smooth functioning of the local government without petty politics and political disruptions.

These reforms should be kept in mind when the government and the major political parties conduct a study for constitutional reforms.

Nepal has established legal frameworks to combat corruption, yet it remains deeply embedded within political and institutional frameworks. This entrenchment is particularly evident when high-ranking elected leaders openly defend corrupt actors.

Policy corruption refers to manipulation of public policies for private gains. It has surged in Nepal because of several interrelated factors: parliamentary affairs buckling down to party whips and whims, the increasing dependency of civil society groups on international assistance at the expense of their autonomy and the loss of credibility within Nepal’s highly politicized judiciary. Institutions that are supposed to check executive powers are either failing to do their jobs or have become part of the kleptocratic network. As a result, budget (policy) caters to a significant number of new projects rather than offering directions to complete the existing ones. Funds are mostly directed to projects that are susceptible to theft, rather than those that genuinely serve the public interest. This leads to a decline in investments in essential social sectors such as education and health. For instance, Nepal’s federal education budget decreased from 15.66 percent of total expenditure in fiscal year 2013-14 to just 11.27 percent in 2023-24, reaching the lowest 5.18 percent in 2017-18. While the health sector budget rose from three percent in 2017-18 to 8.6 percent in 2021-22—likely due to the pressing need to respond to Covid pandemic—it subsequently dropped to 5.8 percent in 2023-24. These allocations fall significantly short of comparable international benchmarks for investment in essential social sectors.

Public procurement is one of the important government functions. It is also one of the most vulnerable public functions because it receives a substantial portion of public funds, accounting for nearly 25 percent of the total public expenditure. According to the Asian Development Bank (ADB), if principal debt payments are excluded, this figure can go as high as 50 percent. Regardless, the share of procurement in public expenditure is significant and it is likely to grow. However, the credibility of public procurement has declined, and the process has become cumbersome and expensive, increasing incentives to bypass established protocols by offering favors to public officials. This trend has been amplified by a growing nexus between government and the private sector, exemplified by the increasing number of lawmakers representing the business community. Many elected officials have openly promoted their personal businesses while serving in public office, further blurring the lines between private gain and public responsibility.

According to a study conducted by the Federation of Contractors’ Associations of Nepal (FCAN), eight construction entrepreneurs won seats in the House of Representatives in the 2022 general election. Eleven others secured provincial assembly seats. Additionally, in the local body elections held in May 2022, 247 contractors got elected, including 104 as mayors or chairpersons. Furthermore, 129 contractors were elected as ward chairpersons, 14 as ward members and two as district coordination committee members. Recently, the chairperson of a prominent construction company was appointed Minister for Urban Development. The minister continued to run his business and made decisions that benefited his company

Both the Public Procurement Act, 2007 and its associated regulations brought a year later grant significant discretionary authority to public officials. As a result, decisions regarding the types and locations of projects—airports and view towers come to mind—often lack a scientific basis. This discretionary authority arises primarily from deliberately ambiguous language within the laws. The procurement laws, for example, are filled with terms that can be manipulated for personal gain, such as “as prescribed” (‘tokiye bamojim’) and “maybe” (garina sakine cha). Notably, the term “as prescribed” appears 62 times, while "maybe” is mentioned 67 times in the procurement regulations.

It is striking that, in a country where policymaking tends to be slow, the procurement regulations have been amended 13 times since their introduction in 2008. Notably, six of these amendments (from the 6th to the 11th) occurred within just one year. Among these changes, the most controversial pertained to the criteria for assessing the financial qualifications of bidders, which have been altered multiple times. Other amendments permitted businesses to extend project timelines and raised the upper threshold for domestic-only competition. One particular amendment restricted competition by only allowing a select few businesses to bid for projects up to Rs 5bn. It is evident many of these amendments were not implemented to serve the national interest but rather to favor one or two particular companies.

While many scholars agree that the primary objectives of public procurement should be to support the acquisition of quality goods and services at competitive costs in a timely manner, the prevailing focus in Nepal tends to be on low-cost bidding. Technical evaluation is part of the process, but it is often discarded after preliminary screening. Although the law does not explicitly require a need to prioritize the lowest cost, this approach is how oversight institutions typically evaluate procurement activities. As a result, contractors are incentivized to underbid, only to seek contract extensions at higher costs later on.

Public procurement is indeed a daunting task. For public officials, fear of punitive measures sometimes works as a deterrent. The incumbent Minister for Health and Population has noted that some existing legal provisions can frustrate good intentions. He explained how the ministry was unable to use life-saving equipment due to an ongoing investigation into the procurement process.

The minister’s call for safeguarding good intentions and developing a clear understanding of how to make procurement transparent makes sense. One effective way to begin this process is by facilitating dialogues around bills both before and after they are tabled in the parliament. We must find innovative ways to bring good people to policymaking at all levels. This approach can also help ensure that these bills do not become overly centered on individual or party interests.

The author is the executive director of Niti Foundation