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The proposed $500 million grant under the American Millennium Challenge Corporation (MCC) compact is close to its day of reckoning. As per the agreement, the compact will have to come into force after June 30. But the Nepali parliament is yet to endorse it owing to the differences in the ruling Nepal Communist Party (NCP).

For a long time, Prime Minister KP Oli has been trying to convince senior party leaders Pushpa Kamal Dahal, Jhala Nath Khanal, Madhav Kumar Nepal, and Bhim Rawal on the need for its parliamentary approval. He hasn’t succeeded.

Finance Minister Yubaraj Khatiwada faced considerable heat from within his own party after he incorporated the MCC grant in the new budget before its parliamentary endorsement. Responding to lawmakers’ criticisms, Khatiwada said: “If we cancel the compact, it will affect our bilateral relation with America, as well as the larger climate of international assistance to Nepal.”

With divisions in the NCP running deep, the ruling party formed an intra-party panel to study the compact and make recommendations. The panel recommended that the MCC compact be adopted only after making changes. The prime minister is not in a position to flatly reject the recommendation of a panel set up by his own party’s central committee.

If Dahal, Khanal and Nepal do not support it, the chances of the compact’s endorsement are slim. “The MCC compact cannot move ahead without an agreement in the party. The PM should act as per party directives and decisions,” senior leader Khanal, who was also a member of the panel, had told media persons on June 9.

PM Oli fears that if the compact is forcefully tabled in parliament, the move could backfire, as many party lawmakers have threatened to vote against it. Likewise, in the nine-member NCP Secretariat, KP Oli is in a minatory, and a hard line on the compact could further alienate him. Oli had called a Secretariat meeting on June 9 to build consensus on the compact but it had to be cancelled at the last minute. Now, Oli is talking to top party leaders on individual basis to forge a consensus.

Dreaded September

Inside the party, Dahal’s role on the MCC is crucial. Of late, he has not spoken much on the MCC debate but he is of the view that the compact should not be passed without extensive discussions in the party. Speaker of lower federal House Agni Sapkota, who is close to Dahal, is also in favor of consensus in the party before it is tabled in the parliament. A leader close to Oli says the prime minister made a mistake by agreeing to form an intra-party panel on the compact.

Meanwhile, the June 30 deadline is fast approaching. There could be further discussions, but it is beyond the jurisdictions of MCC Nepal office to say what will happen after that. If the current deadline is missed, the two sides could set another deadline. But if the issue drags on beyond September-October, when the fiscal year of the US government ends, there could be a problem. If the compact is not endorsed before that, the American government could divert the money elsewhere.

The Millennium Challenge Account Nepal (MCA-Nepal), however, is still hopeful the current parliamentary session will endorse it. “There is still some time before the June 30 deadline so it would be too early to speak on what will happen if the deadline is missed,” says Khadga Bahadur Bisht, Executive Director of MCA-Nepal. Bisht hopes the compact will be a top government priority following parliamentary endorsement of the budget and the new Nepali map.

According to those in the know, the main concern right now is not the deadline but parliamentary endorsement. Prime Minister Oli has been assuring the Americans that the work will be done in the current parliament session. “If there is a guarantee that the current session will endorse the compact, we can discuss deadline extension. Similarly, some points of the agreement can be clarified in line with the suggestions of ruling party lawmakers,” says another MCA-Nepal source requesting anonymity.

According to the source, the Covid-19 pandemic could be used as an excuse to extend the June 30 deadline. But for this, “there has to be a prior agreement between the two sides”.

Say it’s different

The ruling party leaders who oppose the compact fear it is a part of the Indo-Pacific Strategy. Similarly, they say some provisions in the pact place it above the Nepali law. Projects under the compact do not follow Nepal’s public procurement act, they allege.

Some senior American officials have said that the MCC is a part of the IPS, which in turn created suspicion that America was trying to drag Nepal into a ‘military alliance’. But there have also been statements refuting the MCC’s links to the strategy. A few weeks ago, Alice G. Wells, Acting Assistant Secretary of State, Bureau of South and Central Asian Affairs, had said that the MCC, established in 2004, has no relation to President Donald Trump’s vision of an open and free Indo-Pacific.

The American Embassy in Kathmandu refused to comment on the looming deadline. In an email communication, the embassy says, “We understand that the Government of Nepal is discussing ratification of the MCC Compact.  To respect the processes of the government of Nepal, we have no comment at this time. The US looks forward to the Government of Nepal ratifying the compact as signed, so that critical electricity and road infrastructure assets can be built for the benefit of the people of Nepal.

Along with a powerful NCP faction, 10 other fringe communist parties are also warning the government not to endorse the MCC compact for the same reason. They think endorsement would compromise Nepali sovereignty and violate Nepal’s non-alignment policy.

There are also media reports of the Chinese advising the Oli government against endorsing the compact, as it could drive a wedge in the ruling party and further weaken Oli. In public, China has maintained that it is completely up to the sovereign government of Nepal to decide.

The Janata Samajbadi Party, Nepal (JSPN) and some Nepali Congress (NC) lawmakers have pushed separate constitution amendment bills with the intent of addressing the pending concerns of the Madhesi people. The chances of either of these bills getting parliamentary approval are slim. Even the leaders who registered the bills are not optimistic.

As the government is not in a mood to address such private bills in the current budget session, they may not even be tabled in the full house. Right now the parliament is busy discussing the fiscal budget and the bill related to redrawing Nepal’s map.

The JSPN and NC leaders who registered the bills say the objective is to keep the Madhesi demands alive. Both JSPN and NC see Madhes as their base area and are looking to increase their appeal among common Madhesis.

JSPN leaders say their bill is aimed at creating momentum for a possible movement in the Madhes after the lockdown. According to Keshav Jha of JSPN, the new movement will incorporate all marginalized communities who have been deprived of their rights in the constitution. “We will launch a nationwide campaign for constitutional amendment through an alliance called the Rastriya Mukti Aandolan,” he says.

In order to lay the ground for another Madhes movement, two Madhes-based parties—the RJPN and Samajbadi Party Nepal—had recently joined forces to form the JSPN. Both the parent parties had already withdrawn their support to the government, blaming it of neglecting their demands. They had waited for over two years with the hope that PM Oli would amend the constitution as per their demands—to no avail.  

Many views

Without the ruling Nepal Communist Party (NCP) on board, it will be impossible to secure the two-thirds votes needed for constitutional amendment. Though the NCP co-chair Pushpa Kamal Dahal is said to be positive about the demands of Madhes-based forces, Prime Minister KP Sharma Oli is not. There are differences between Oli and Dahal over both Madhesi and Janajati demands. Oli believes there is no need to amend the constitution before the next elections, while Dahal is of the view that the ruling party would do well to accommodate the sentiments of the identity-based forces.

PM Oli has repeatedly said, without elaborating, that the national charter would be amended only ‘on the basis of necessity and relevance’. As the constitution has not completed even its first five-year election cycle, Oli and those close to him think, it is too early to make substantial changes. Oli instead wants to engineer a split in Madhes-based forces to strengthen his own party’s position in Madhes.

Meanwhile, both the NC and Madhes-based parties agree in principle that the constitution should be amended, but they are somewhat divided on the contents of amendment.

The amendment bill tabled by the JSPN has several provisions related to language, citizenship, proportional representation of women in state mechanism, and forming a powerful body to investigate the properties of those who hold high positions. Madhesi leaders reckon the current anti-corruption body, the Commission for Investigation of Abuse of Authority (CIAA), is incapable of investigating high-ranking government officials and politicians.

The NC has a position similar to Madhes-based parties on some issues. The bill registered by its lawmakers seeks to ease the process of providing citizenship to foreign women married to Nepali men, guarantee proportional representation of women in state bodies, and increase women’s representation in provincial assemblies. To address the demand of Madhes-based parties on re-demarcation of the borders of federal states, the NC wants a powerful federal commission.

The Madhes-based parties too have asked for a commission to re-think federal border demarcations. Their other demands include easing the process of citizenship for foreign women marrying Nepali men, proportional representation of women from all communities in state mechanisms, more rights to provincial government to make laws and mobilize local bodies, and granting executive rights to the deputy speaker in the speaker’s absence. All these, the Madhes-based parties say, should be done via a powerful federal commission.

Madhes-based leaders say the amendment bills are largely symbolic. “We are not hopeful about a favorable amendment,” says NC lawmaker Amresh Kumar Singh, one of the NC lawmakers to register the amendment bill on his party’s behalf. “Our goal is to expose PM Oli and NC President Sher Bahadur Deuba. They join hands on issues of vested interest. And yet when it comes to amending the constitution to address Madhesi people’s demands, they drag their feet.”

No Indian hand

In the past, India had openly backed Madhesi parties’ demand for constitutional amendment and had even enforced a blockade on Nepal to press for it. But the blockade backfired, and India has since maintained silence on Madhesi issues.

There are speculations that India lobbied with the Madhesi leaders to register their own amendment bills in order to thwart, or at least delay, the charter amendment that would recognize the 372 sq km of Limpidhura, Lipulekh and Mahakali as Nepali territory.

But a senior Madhesi leader requesting anonymity says India has nothing to do with the amendment bills concerning Madhes. “When the Oli government came up with a bill relating to Nepal’s new map, we decided to push our bill simultaneously,” he says.

India considers constitution amendment a bargaining chip with Kathmandu, he adds, and is not supportive of Madhesi demands.

Political analyst Vijaya Kant Karna too does not espy Indian hand behind the twin bills “The current Madhesi leadership still believes their demands can be resolved peacefully,” he says. “They want a win-win solution by convincing PM Oli. The feeling is that if PM is committed to stability and prosperity, he should take Madhes-based leaders into confidence.”

The fire-breathing Madhesi leader CK Raut abandoned his secessionist campaign last year following an 11-point agreement with Prime Minister KP Sharma. He is now busy building his party organization in Tarai-Madhes.

Raut has a PhD in computer science from Cambridge University and has worked in various private firms in the US. He had returned to Nepal in 2011 to launch a Madhes independence movement. The Madhesi youths were instantly attracted to this youthful leader who had seemingly given up a comfortable life in the West for the cause of Madhes. His unrestrained diatribes against the ‘racist’ government in Kathmandu, leading to his repeated arrests, further fueled his popularity.

But the common consensus in Madhes is that Raut is gradually losing his ground after the agreement with Oli. The recent unification between the two largest Madhesi forces—the Rastriya Janata Party Nepal and the Federal Socialist Part—has added to the challenges of Raut’s Janamat Party. The Janamat party is now busy laying the ground for the next round of local, provincial, and federal elections.

On 8 March 2019, Raut had signed an 11-point agreement with the federal government, pledging to honor the country’s sovereignty and territorial integrity. Immediately after, Raut registered his party at the Election Commission and gave up the secessionist agenda. Political analyst Surendra Labh says CK Raut’s attraction in Madhes has gone down drastically after the compromise with PM Oli. “People now think he is no different to other Madhes-based politicians,” he says.

Labh does not think Raut’s party will be able to compete against the likes of the new Janata Samajbadi Party, the Nepal Communist Party, and the Nepali Congress in Madhes. “He has built some organizational bases but they are not viable,” Labh says. “The key problem is that Raut’s party has failed to establish a distinct identity,” he added. Another constraint for the party in Madhes, according to Labh, is the paucity of known faces in it besides Raut.

In a local by-election on 30 November 2019, Janamat Party leader Anju Devi Mandal had filed a nomination from Pipara Rural Municipality of Mahottari district. She suffered a humiliating defeat. The ruling NCP won in the rural municipality, while Raut’s candidate failed to secure even the fourth position. The party had also filed its candidacy in the elections for ward chairs but failed to secure even a single seat.  

Raut’s party has almost the same agenda that other Madhes-based parties have had for a long time. They all reckon the 2015 constitution is not democratic and inclusive enough. As the Janamat party’s official document puts it, “It has failed to address the demands of women, Madhesi, Dalit, Tharu, Adhibasi, marginalized, and other backward communities.” 

The party is demanding bulk entry of 30,000 Madhesis in Nepal Army as per the earlier agreement between the government and then Samyukta Loktantrik Madhesi Morcha on 28 February 2008. It is also asking for a ‘referendum on key issues’ but is yet to point out what those issues might be. The other agendas of Raut’s party are corruption control and good governance, right of self-determination, and various citizenship-related issues.

The party is striving to strengthen its base in Madhes. During the lockdown, party cadres have been busy providing relief to the poor people. “Even now we are busy building party organizations and launching awareness campaigns,” says Central Committee member Kailash Mahato. The party has also started distributing online memberships since the start of the lockdown.

Before the lockdown, the party organized mass rallies in various parts of Madhes. Since the party’s registration, 63 mass rallies have already been held. Similarly, the party has built professional organizations of engineers, teachers, barbers, and Muslims. It is planning on establishing more such sister bodies. Likewise, according to Mahato, the party is expanding its organization abroad, and already has a presence in Dubai and Qatar.

Leaders of other Madhes-based parties see Raut’s emergence as a threat. So there is little cordiality between the two. Other parties accuse Raut of being Oli’s puppet. Says general secretary of then Rastriya Janata Party and leader of the new Janata Samajbadi Party Rajib Jha, “CK Raut was mobilized to cheat the Madhesi people and hatch conspiracy against us,” he says. Jha argues the earlier public fascination with Raut has largely died down.

In Province 2, the sole Madhes-only province, Raut party leaders and cadres have been on a campaign to expose the corruption and weaknesses of the provincial government.

If cornered, Raut’s outfit is likely to play on the ambiguity in the 11-point agreement with the Oli government. Its second point says: “They [the government and Raut] will follow democratic means to address people’s dissatisfaction, including those of Tarai-Madhes.” Janamat party leaders define the ‘democratic means’ as a referendum. But the ruling NCP argues that they refer only to regular elections.

(With inputs from Manika Jha in Janakpur)

Prime Minister KP Sharma Oli may have averted an impending crisis in the ruling Nepal Communist Party for now. But, as soon as the coronavirus threat dies down, there could yet be stiff opposition to the functioning of his government from the opposition parties.

The opposition parties—chiefly the Nepali Congress, the Samajbadi Party, the Rastriya Janata Party Nepal, and the Rastriya Prajatantra Party—had little coordination before the federal government came up with two controversial ordinances on April 20. The ordinances, later withdrawn, allowed for easier splits of Nepali political parties and restricted the role of the main opposition party in the constitutional council, the body tasked with making appointments to vital constitutional bodies.

At the time, even if opposition parties were critical of government functioning, no one was demanding the prime minister’s resignation. In fact, when the anti-coronavirus lockdown was put in place, the opposition parties fully supported the government. Yet the ordinances brought with ‘mala fide’ intent changed all that.

It helped bring about the long-delayed merger between the Samajbadi and the RJPN, the two Madhes-based parties, which could now spell trouble for the Oli government.

Now big and small opposition parties are preparing to fight the government’s ‘totalitarian tendencies’, which includes asking PM Oli to step down.

Political analyst Puranjan Acharya who closely tracks Congress internal politics says much depends on party leadership. “Congress President as well as its other office-bearers are failing to effectively check the Oli government’s totalitarian tendency,” says Acharya, adding that the second generation NC leaders should step forward.

Countering ‘divide and conquer’

Three opposition parties—the NC, the new Janata Samajbadi Party, and the Rastriya Prajatantra Party (RPP)—had even issued a joint statement deploring government functioning, and they plan on moving ahead together. “The current government is headed towards totalitarianism by destroying democratic norms and values… We vow to collectively fight this,” says their joint statement released last week. The pair of ordinances riled the opposition parties as they supposedly demonstrated the PM’s intent on ‘dividing and conquering’ the opposition. Another issue that angered them was the ‘abduction’ by Oli’s close associates of Dr. Surendra Yadav, a Samajbadi lawmaker, in order to split the Madhes-based party. Had the party split, the seven breakaway members were scheduled to join the Oli-led government.

Even though opposition parties have their respective agendas and don’t see eye to eye on everything, they plan on developing an alliance on common issues. The top agenda for Madhes-based parties has always been constitution amendment. They supported the Oli government so that the constitution could be amended. They now feel betrayed. Then RJPN never joined the government. Nonetheless, it helped Oli garner two-thirds support in the federal parliament, but pulled its support after Oli ruled out amendment before the next elections.

The Samajwadi Party Nepal, which unlike the RJPN was a part of the federal government, parted ways this past December, citing the failure of PM Oli to take an initiative to amend the national charter.

Though the NC and the Janata Samajbadi have come together against the government, there are some ideological differences between them. For instance, the Congress does not support the Madhes-centric parties’ ethnicity-based federal model.

Janata Samajbadi leader Keshav Jha acknowledges efforts to form an anti-government alliance between three opposition forces. “Though we have differences with the Congress and the RPP, there could be alliance on corruption, bad governance and other people-centric issues,” says Jha. After the lockdown is over, the Janata Samajbadi is preparing to hit the streets in Madhes with the support of other backers of identity politics.

The RPP, currently led by Kamal Thapa, Prakash Chandra Lohani and Pashupati Shumsher Rana, however, is still undecided about joining the opposition front. The party decision to join a meeting called by the Congress last week generated controversy. Thapa expressed his dissatisfaction over Lohani and Rana signing a joint press statement issued by opposition parties. “There are views in the party that we should retain our separate identity instead of joining any block,” says Mohan Shrestha, an RPP central committee member. Shrestha, however, says the RPP will harden its anti-government position in the days ahead.

Holding Oli to account

The opposition parties are likely to mount their protests against the Oli government, either collectively or on their own. And when the national parliament opens for budget session, they will try to hold the federal government to account for its supposed failure to contain the novel coronavirus contagion.

NC Central Working Committee member Shekhar Koirala says time is ripe for opposition parties to band together against the government's intent of destroying democratic values. “Minimizing the role of opposition party in the constitutional council suggests the government plans to control constitutional bodies, and destroy the principle of separation of powers. The government is on a totalitarian path, and the NC shoulders the responsibility of protecting democratic norms and values,” says Koirala. He thinks that as the main opposition party, it is the responsibility of Nepali Congress to bring all opposition forces together.