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It’s been a torrid one year for the KP Oli government. Having cemented the merger of the country’s two biggest communist outfits, and commanding over a two-thirds majority in the federal parliament, the government has cre­ated a semblance of stability in a notoriously turbulent polity. In theory, this should have helped attract the much-needed FDI and goaded our own businesses and industries to invest in job- and capital-creation. But with the federal government blasé about its woeful capital spending, despite the prime minister’s repeated assurance of swift and adequate infra­structure spending, the economy appears wobbly: there is a severe liquidity crunch in the BFIs, the trade deficit continues to tick up steadily, and economic growth has stalled. There has been no meaningful progress in big-ticket proj­ects that PM Oli likes to talk about endlessly—rail-links with both India and China, water-link with India. The government has asked for patience as most of PM Oli’s first year in office was spent “laying the ground”. As proof, the prime minis­ter on Feb 13 unveiled an unemployment allowance scheme and a day later, a ‘people’s hydroelectricity’ scheme. Yet there is no clear modality for either. Meanwhile, corruption has ballooned and the rule of law deteriorated. Press freedom is under threat. Transitional justice has been shelved, to potentially dangerous consequences.

 Oli has tried to diversify Nepal’s foreign relations away from the two giant neighbors

On foreign policy, the government may claim success. Relations with India have been ‘normalized’ following the blockade-time low. The Oli government also seems to be in China’s good books. Further, it has tried to diversify Nepal’s foreign relations away from the two giant neighbors. As a part of this process, Foreign Minister Pradeep Gyawali made a landmark visit to the US, even though NCP co-chairman Pushpa Kamal Dahal’s mistimed comments on the US inter­vention in Venezuela severely dented the US outreach.

To give it the benefit of the doubt, it was the first govern­ment formed under the new constitution and it has had to spend most of the past year formulating laws to make the federal formula work. Yet even on law-making, progress has been slow and there has been little consultation with the stakeholders. As it enters Year Two, the government will make another round of big promises to make up for lost time. Promising big things has always been a strong suit of PM Oli. It is in follow-through that he falters.

Both the sides are trying to dial it down. The Oli gov­ernment has asked the US to differentiate between the Nepal Communist Party (NCP) and the coalition govern­ment the party leads. By calling on Prime Minister KP Oli on Feb 5, the US Ambassador to Nepal Randy Berry also gave a clear signal: while his country is still mightily displeased with the turn of events in Nepal around Venezuela, it is not in a mood to let this single issue spoil overall bilateral relations either. The ‘centrality’ of Nepal in the Indo-Pacific Strategy adds to the urgency of a quick dispute resolution.NCP co-chairman Pushpa Kamal Dahal’s strong statement on the unfolding crisis in Venezuela came only a day after the UN and nine foreign embassies in Kathmandu came out with a strong statement of their own on transitional justice. In their Jan 24 statement the international com­munity had called on Nepal’s government to ensure that conflict victims get timely justice, in line with the Supreme Court verdict. Four years ago, the apex court had ruled out a transitional justice mechanism that provided near ‘blanket amnesty’ in conflict-era rights violations.

Dahal and top lead­ers of the former Maoist party have always sus­pected what they see as the ‘needless interven­tion’ of western powers in Nepal’s transitional justice process. Perhaps their biggest fear is that they could be apprehended and jailed abroad under international juris­diction. Dahal has already had to cancel some of his foreign engagements in fear of arrest. Interestingly, neither India nor China had signed the joint statement on transitional justice. With these two missing, the former Maoist leaders felt the initiative had to come from the US, the third most important foreign actor in Nepal.

On what many top Maoist leaders see a life-and-death issue, PM Oli is also in no position to backtrack from Dahal’s statement issued on the NCP letter-pad. This is also why Dahal has refused to back down either. As noted in this space last week, there were other reasons behind the communist government’s strong stand in favor of Venezuela, chiefly China (a big investor in Venezuela), Nepal’s perceived ‘cen­trality’ in the Indo-Pacific Strategy, and Oli’s yearning to assert himself on the global stage.

The whole episode was also a potent reminder of the risks of lingering on transitional justice, the third vital leg of the peace process after the management of the Maoist arms and army and constitution-writing.

The storm Nepal Communist Party Co-chairman Pushpa Kamal Dahal kicked up by commenting on the internal politics of Venezuela refuses to die down. On Jan 23, the Venezuelan opposition leader Juan Guaidó declared himself acting president of his country claiming that the incumbent President Nicolas Maduro had lost public faith. On the same day, US President Donald Trump recognized Guaidó as Venezuela’s president. Follow­ing this, US Secretary of State Mike Pompeo said time had come “for every other nation to pick a side… Either you stand with the forces of freedom or you’re in league with Maduro and his mayhem.”

On Jan 25, speaking on behalf of his party—when Prime Minister and NCP co-chairman KP Sharma Oli was in Davos—Dahal issued a strong statement on Venezuela. He termed Guaidó’s elevation as president and the prompt US recognition as “the grand design against the legitimately elected President of the Bolivarian Republic of Venezuela President Nicolas Maduro and the Venezuelan people.” The statement also accused the US of “trying to create chaos and violence” in Venezuela, urging it instead to respect the UN principles of “non-interference, national sovereignty and peaceful coexistence”.

American officials in Kathmandu were nonplused. Was this the position of the NCP-led government of Nepal, the US Embassy wanted to know? Following this reaction, and endless speculations in popular media, the Ministry of Foreign Affairs on Jan 29 issued an ‘official state­ment’ saying “Nepal believes that internal political problems of a country need to be resolved within its constitutional parameters in a democratic manner, free from external inter­ferences”. In other words, the government position is not much different to Dahal’s statement; the underlying message being that the ‘external interference’ of the US in Venezuela is unacceptable.

There are a few explanations for this. One, following the withering criticism of the Oli government for ‘agreeing’ to be a part of the US-led (and arguably anti-China) Indo-Pacific Strategy, the communist government felt the need to assert its independent status. Two, Nepal being pulled into the US strategic grouping would not have gone down well in Beijing, and the Oli government wanted to show it is far from an ‘American stooge’. It is also not a coincidence that Beijing is lending support to Maduro. The Chinese depend on him to protect their investments (now upward of $82 billion) in the Bolivarian republic.

Many have labelled Nepal government’s handling of the whole affair ‘immature’. ‘Calculated’ may be a better word.

There has been an interesting debate on Prime Minister KP Oli’s participation in the annual gathering of the World Economic Forum (WEF), a global talk-shop set up in 1971 with donations from rich individuals and companies. The annual meeting in Davos, Switzerland brings together political leaders, entrepreneurs, journalists, celebrities and the global ‘who’s who’ to discuss issues of common concern. Those close to PM Oli are projecting his participation in this prestigious international forum as a singular achievement for Nepal. It may be. But also remember that the WEF invites partici­pation from Nepal every year. Earlier, Nepal used to send top diplomats and ranking bureaucrats to the forum. This year, the prime minister chose to go himself. We can read this in two ways. One, hounded by critics at home, PM Oli wants to project to his countrymen the image of an important global leader whose voice carries weight with some of the most powerful political leaders and businessmen in the world.

Two, in a more char­itable reading, and one which the government is trying to promote, PM Oli genuinely believes the global forum will help him portray Nepal as a stable and peaceful democracy, with complete press free­dom, and hence a perfect investment venue. What better way to attract the much-needed FDI, right? But there is a wee problem with this reading.

The best way to attract quality FDI would be to improve the country’s business climate. But the World Bank has recently indicated that Nepal’s business climate is getting worse. The various cartels that stifle competition in just about every sector remain alive and kicking, despite PM Oli’s commitment to quash them soon after assuming office. Pervasive corruption is sapping vitality from the economy—an economy the PM vows will soon be among the ‘fastest growing’ in the world. On rule of law, post-Nirmala Pant, the lesser said the better.

This is needlessly cynical, one might argue, in a country where leg-pulling is a national obsession. Maybe the canny prime minister will prove us all wrong. Perhaps post-Davos Nepal will be an investment haven. Perhaps, then, good FDI will chase out the laundered sort. But, again, the weight of evidence is against this simplistic reading. It does not augur well when a country’s head of government feels the need to shine abroad to please his domestic constituencies.