Standby Country

Refugee scandal embroiled mainstream parties, while PM Pushpa Kamal Dahal undertook first visit to India since taking office.

Refugee scandal rocked major parties. Following arrests made by police, Kathmandu District Attorney’s Office 24 May filed charges against three senior politicians – former deputy PM, former home minister and former home secretary, all members of ruling Nepali Congress or opposition Communist Party of Nepal (Unified Marxist-Leninist) – and 27 others for their alleged involvement in issuing fraudulent documents to Nepali nationals to enter U.S. as Bhutanese refugees. Speculation grew that Nepali Congress may threaten to quit ruling coalition after it had reportedly unsuccessfully lobbied against arrests of senior officials.

PM Dahal visited India. In his first foreign visit since becoming PM, Pushpa Kamal Dahal 31 May arrived in India’s capital New Delhi for four-day state visit, signalling continued importance of bilateral ties. U.S. State Department’s 2022 Report on International Religious Freedom issued 15 May claimed that religious groups associated with India’s ruling Bharatiya Janata Party had lobbied Nepali politicians in favour of restoring Hinduism as official state religion; Nepal’s foreign ministry 28 May sent “diplomatic note” to U.S. embassy regarding report.

Senior Nepali Congress leader won presidential election, while protests by Indigenous communities over renaming dispute roiled easternmost province.

Nepali Congress leader won presidential poll. In presidential election decided by federal and provincial lawmakers, senior Nepali Congress leader Ram Chandra Paudel with support of Maoist-led ruling alliance 9 March secured comfortable victory over candidate nominated by opposition Communist Party of Nepal (Unified Marxist-Leninist), winning more than 64 per cent of votes; lawmakers 17 March elected Ram Sahaya Yadav, leader of ruling alliance member Janata Samajbadi Party, vice president. PM Pushpa Kamal Dahal 31 March reshuffled his cabinet for seventh time in three months, giving leaders from five new parties ministerial portfolios; several key ministries, including foreign affairs, remain vacant due to disagreements among ruling parties.

Official renaming of Province 1 sparked protests by Indigenous communities. Provincial Assembly members of Nepal’s easternmost province (known as Province 1) 1 March decided to rename region Koshi Province, becoming last of Nepal’s seven provinces to adopt official name since provincial system was set up under 2015 constitution. In doing so, Assembly effectively rejected proposals to name province after Indigenous communities residing in region’s hilly districts, which prompted activists of Limbu, Rai and Sherpa communities to hold street protests and shutdowns throughout month; notably, clashes between riot police and protesters in Sunsari district 24 March killed one demonstrator, further fuelling tensions.

Ahead of presidential election in March, coalition govt collapsed just two months into tenure as Nepali Congress and Maoists revived their alliance.

Maoists, Nepali Congress, and six other parties 24 Feb struck new pact endorsing Nepali Congress’ candidate for forthcoming 9 March presidential election. Deal contravened Dec agreement between Communist Party of Nepal (Maoist Centre) and Communist Party of Nepal (Unified Marxist Leninist), or UML, which propelled Maoist Chairman Pushpa Kamal Dahal “Prachanda” to PM. In response, UML 27 Feb announced its withdrawal from govt, following two other parties leaving governing coalition earlier in month. Senior Nepali Congress leader Ram Chandra Poudel 25 Feb filed his nomination for presidency at Election Commission, while UML put forward former House Speaker Subas Nembang. With new president to be elected via electoral college comprising federal parliament and provincial assemblies, Poudel appears set to garner sufficient support if new Maoist-Nepali Congress pact holds. Further politicisation of ceremonial head of state position could portend further political instability, as observers expressed concern over activist presidency undermining legislature.

New PM Pushpa Kamal Dahal received near-unanimous support in vote of confidence, while tensions emerged within ruling coalition ahead of presidential election.

New govt secured overwhelming support. In vote of confidence 10 Jan, Maoist Chairman and PM Pushpa Kamal Dahal “Prachanda” received 268 votes in favour in 275-member House of Representatives after Nepali Congress in surprise move backed Dahal despite his withdrawal from Nepali Congress-Maoist electoral alliance in Dec; Nepali Congress decision led to speculation that Maoists would in return support Nepali Congress candidate in upcoming March election for presidency.

Discord surfaced between ruling coalition parties. Communist Party of Nepal (Unified Marxist-Leninist, UML) Chairman KP Oli 17 Jan walked out of all-party meeting after rejecting suggestions that constitutional posts like presidency be shared with Nepali Congress; Oli accused Nepali Congress of “plotting” against Maoist-UML alliance, which is underpinned by 25 Dec deal whereby presidency and house speaker posts go to UML. UML leader Dev Raj Ghimire elected speaker of House 18 Jan. Meanwhile, Deputy PM and Rastriya Swatantra Party chief Rabi Lamichhane 27 Jan resigned after Supreme Court annulled his election to parliament due to invalid citizenship; Lamichhane’s citizenship was restored 29 Jan.

Maoist chief “Prachanda” became new PM after breaking alliance with Nepali Congress and partnering once more with KP Oli, raising concerns over durability of broad new coalition.

Political jostling after final election results birthed another Prachanda-Oli alliance, denying Nepali Congress power. In official results following Nov poll, Nepali Congress cemented position as largest party in parliament, securing 89 out of 275 total seats in House of Representatives; Communist Party of Nepal (Unified Marxist-Leninist) won 78 seats, while Communist Party of Nepal (Maoist Centre) won 32 seats. However, tensions between Nepali Congress and Maoists prevented formation of new govt, specifically due to impasse between Nepali Congress leader Sher Bahadur Deuba and Maoist chief Pushpa Kamal Dahal “Prachanda” over who would lead new govt first. President Bhandari 18 Dec gave parties seven days to form new govt. After Nepali Congress-Maoist talks faltered, Unified Marxist-Leninist chair and former PM KP Oli 25 Dec struck deal with Prachanda, forming new coalition govt led by Unified Marxist-Leninist, Maoists and five other parties, with Prachanda and Oli splitting up prime ministership in deal mirroring one that underpinned UML-Maoist govt formed in 2017. Prachanda 26 Dec took oath as PM. Concerns proliferated, however, over political stability and durability of new govt given ideological tensions between coalition partners and history of acrimony between Prachanda and Oli, specifically latter’s refusal to cede prime ministership in Dec 2020.

Voters participated in second general election under 2015 constitution, which saw relatively low turnout and signs of frustration with mainstream parties.

In largely peaceful vote, Nepali Congress poised to become largest party. Country 20 Nov held second general election under current constitutional set-up; vote proceeded largely peacefully despite some disruptions. Notably, police intervened to address disruptions in six districts countrywide; one person died after being shot by police during clashes in Bajura district. Around 61% of nearly 18m registered voters cast their ballots in polls for federal and provincial assemblies — marking decrease from 68% in 2017 contest. With votes still being tallied late Nov, Nepali Congress appeared set to become largest party in federal parliament with calculations predicting around 90 of 275 seats in House of Representatives, 165 of which are elected via first-past-the-post (FPTP) and 110 through nationwide proportional representation (PR) system; Communist Party of Nepal (Unified Marxist-Leninist) appeared poised to secure most PR seats with 2.18mn nationwide votes. Communist Party of Nepal (Maoist Centre) will likely remain third largest party but with its share of FPTP seats falling to 18, half of those secured in 2017. Non-mainstream and independent Rastriya Swatantra Party appeared set to secure eight FPTP seats after winning prominent races in Kathmandu and Lalitpur districts, underscoring anti-establishment sentiment, especially in urban areas.

Ahead of general elections in Nov, ruling and opposition parties continued jostling as new electoral alliances were formed.

Parties finalised seat-sharing agreements amid defections and new pacts. Ahead of 20 Nov federal and provincial elections, ruling coalition 8 Oct agreed on dividing up electoral constituencies between coalition’s members, with Nepali Congress getting 90 electoral contests and Communist Party of Nepal (Maoist Centre) getting 45; opposition Communist Party of Nepal (Unified Marxist-Leninist) will contest 35 federal and 70 provincial seats. Citing dissatisfaction over allocation of electoral seats, Janata Samajbadi Party (JSP) 8 Oct split from five-party ruling coalition and joined opposition alliance led by Communist Party of Nepal (Unified Marxist-Leninist); as per agreement, JSP will receive UML’s support for 17 federal and 42 provincial contests. UML 8 Oct struck electoral alliance pact with right-wing pro-monarchist Rastriya Prajatantra Party. PM Sher Bahadur Deuba 13 Oct dismissed four JSP ministers from cabinet following party’s defection. Following JSP’s departure from ruling coalition, Loktantrik Samajbadi Party (LSP) – regional party based in southern Madhesh plains – joined Nepali Congress-led electoral alliance after it was guaranteed seven federal and 16 provincial constituencies.

President Bhandari blocked amendment to citizenship law in move widely seen as beyond usual presidential prerogatives, raising concern over further erosion of 2015 constitution.

President rejected amendment to citizenship act, stoking controversy. President Bhandari 20 Sept refused to authenticate bill amending Citizenship Act despite its being endorsed twice by both chambers of parliament; bill was aimed at addressing demands of stateless individuals, many of them in southern Madhes plains, who have been unable to obtain Nepali citizenship and therefore do not have voting rights. Govt officials, civil society and observers widely qualified Bhandari’s move as another blow to 2015 constitution, which does not grant president (who performs ceremonial role) authority to reject bills approved by parliament; five-party ruling coalition 21 Sept called move “unconstitutional” and said Bhandari had “seriously insulted and devalued the federal parliament”. Options for coalition to challenge Bhandari’s move remained unclear, as House of Representatives’ five-year term 17 Sept lapsed and Supreme Court remained mired in dispute over Chief Justice Cholendra Rana who was suspended in Feb following impeachment motion.

Preparations continued for Nov general elections. Ruling coalition 29 Sept agreed to tentative seat-sharing formula for House of Representatives polls after Election Commission imposed 9 Oct deadline for parties to nominate candidates.

Govt announced date for general election in Nov, which sparked haggling among ruling coalition parties over seat-sharing arrangements. Cabinet meeting 4 Aug scheduled parliamentary and provincial elections for 20 Nov; 84 parties applied to Election Commission to contest polls by registration deadline on 16 Aug. Five-member ruling coalition 5 Aug established task force to determine by 16 Aug seat-sharing arrangements for upcoming polls, to ensure ruling parties do not contest same constituencies. By end of month, however, task force was unable to find agreement due to parties’ demands outnumbering available seats on offer; all five parties 25 Aug presented their claims, which cumulatively totaled 234 directly elected House of Representatives seats – far above 165 total seats on offer. Leftist members of coalition reportedly considered merger to increase their bargaining power.

Corruption allegations against finance minister fuelled criticism of govt as winter elections approach. Finance Minister Janardan Sharma 6 July resigned following allegations of corruption in relation to new fiscal year budget announced late May. Parliamentary committee formed to investigate accusations 29 July concluded that it could not confirm allegations against Sharma, largely due to insufficient evidence after surveillance footage considered crucial to probe was found to have been deleted. Following committee’s conclusion – and despite widespread rebuke of Sharma’s breach of budgetary protocol and more general critique of his neglect of worrying trends in financial sector – Sharma was reappointed finance minister 31 July upon recommendation by PM Sher Bahadur Deuba; observers criticised Deuba for prioritising ruling alliance over governance amid pressure from Maoist Chairman Pushpa Kamal Dahal. Election Commission 6 July recommended to Deuba that federal and provincial elections be held in single phase on 18 Nov; Deuba’s govt, however, is yet to announce official poll date. Deuba’s Nepali Congress party 18 July officially decided to contest upcoming elections with other ruling coalition parties.

Manoeuvring within ruling coalition accelerated ahead of general elections expected in winter 2022; protesters rallied in capital Kathmandu against fuel price hikes amid growing economic strains. Buoyed by strong showing in local elections in May, ruling coalition member Communist Party of Nepal (Maoist Centre) Chairman Pushpa Kamal Dahal 1 June threatened to reconsider alliance with Nepali Congress; observers saw Dahal’s remarks as aiming to secure power-sharing arrangement, including potential sharing of prime minister post with current PM and Nepali Congress chair Sher Bahadur Deuba in next govt. Dahal piled pressure on PM Deuba to not immediately approve reshuffling of ministerial portfolios that had been designated to Communist Party of Nepal (Unified Socialist) after party 5 June recalled its four cabinet representatives; new ministers were eventually sworn in 26 June following weeks of discord that roiled Unified Socialist party. Meanwhile, signs of discontent over economic situation emerged. Protesters 21-23 June took to streets in Kathmandu – including outside federal parliament – against fuel price hikes as some threw stones and damaged police vehicle, prompting govt to announce decrease in prices 25 June; devaluing Nepali rupee contributed to foreign debt liability rising by over $155mn in third quarter of current fiscal year. Central bank 27 June announced it only had enough foreign exchange reserves to sustain imports for little over six months.

Ruling alliance secured first place in local elections, which saw reports of localised clashes and opposition's claims of rigged vote. Local elections 13 May proceeded without any major incidents. National Human Rights Commission 13 May, however, noted that clashes between party cadres had disrupted voting in several districts. Local reports indicated police fire killed one in Katari, Udayapur district and another sustained bullet wounds after police opened fire in Bhimsen Thapa Rural municipality 13 May. Further clashes between police and party members also reportedly took place next day. Ruling Nepali Congress won 325 mayoral and 292 deputy mayoral posts across 753 total units contested in local elections. Opposition Communist Party of Nepal (Unified Marxist Leninist, UML) came distant second among individual parties, winning 202 mayor and 234 deputy mayor posts; UML’s tally was much lower compared to last local polls in 2017 when it secured 294 mayoral and 331 deputy mayoral seats. Ruling alliance member Communist Party of Nepal (Maoist Centre) won 121 mayoral and 127 deputy mayoral seats, while two other coalition members — the Communist Party of Nepal (Unified Socialist) and Janata Samajbadi Party — won 50 mayoral seats combined. UML 15 May accused ruling coalition of rigging elections, claiming governing parties manipulated vote; Election Commission officials same day dismissed claims as unsubstantiated.

Political parties remained fixated on local elections slated for mid-May amid signs of looming economic crisis. Five-party ruling alliance 20 April reached deal dividing up mayoral and deputy mayoral candidacies for 17 key local election races planned for 13 May; several local leaders of ruling Nepali Congress criticised move, claiming PM Sher Bahadur Deuba had made decision unilaterally without consulting party’s wider membership. Meanwhile, fears grew of potential economic crisis due to increase in inflation, decrease in remittances, and growing balance of payment deficit, all of which have created multiple pressures on Nepal’s import-reliant economy. Central Bank 12 April reported that inflation was over 7 per cent (highest levels in nearly five years), balance of payment deficit was over $2bn, and foreign exchange reserves were sufficient for fewer than seven months. Finance Minister Janardan Sharma 8 April suspended Central Bank governor for supposed incompetence and leaking of sensitive information in move widely perceived as politically-motivated given governor was appointed by previous KP Oli-led govt; Sharma 11 April also dismissed concerns of potential crisis as misinformation.

Ruling parties opted to continue alliance into upcoming local elections in bid to undermine prospects of opposition Communist Party of Nepal (Unified Marxist Leninist). Nepali Congress 29 March decided to contest local polls in May jointly with three other parties comprising ruling alliance, despite calls by some senior Nepali Congress leaders to compete independently; PM Sher Bahadur Deuba described decision as necessitated by current political balance of power and amid concerns of resurgence of opposition Unified Marxist Leninist party, which won 45% of seats during last local elections in 2017. Geopolitical engagement intensified following parliament’s Feb ratification of U.S. Millennium Challenge Corporation grant; Chinese FM Wang Yi 25-27 March visited capital Kathmandu and signed several agreements boosting economic, technical cooperation and infrastructure development. At UN, govt 2 and 24 March voted in favour of two U.S.-led General Assembly resolutions condemning Russia’s invasion of Ukraine.

Disagreement among parties over long-delayed U.S. development grant triggered fresh political tensions, threatening to split ruling alliance, while parliament impeached chief justice. Millennium Challenge Corporation (MCC), U.S. foreign aid agency, 3 Feb notified govt that $500mn infrastructure grant agreed in 2017 would have to be ratified by Nepal’s parliament by 28 Feb or risk being cancelled; implementation of MCC projects — mostly installing electricity transmission lines and upgrading highways — have been delayed for years due to allegations that some provisions in grant undermined Nepal’s sovereignty. Announcement of 28 Feb deadline accelerated political manoeuvring among parties, as ruling coalition member Communist Party of Nepal (Maoist Centre) 16 Feb opposed deal’s ratification absent broader consensus and threatened to quit coalition if compact was tabled in parliament. Ruling Nepali Congress, however, 20 Feb tabled MCC compact in parliament. Following 24 Feb discussions between PM Sher Bahadur Deuba and opposition Unified Marxist-Leninist party leader and former PM KP Oli on potentially forming new alliance that would ensure passage of grant through lower house, Maoists agreed to ratify deal to salvage ruling coalition paving way for parliament 27 Feb to approve compact. Meanwhile, Chief Justice Cholendra Rana was suspended 13 Feb after 98 MPs registered impeachment motion against him over corruption allegations.

Political parties disputed timing of local and general elections, reflecting potential fissures within five-party coalition ahead of polls. Following indecision by Nepali Congress-led govt on timing of local elections, which Election Commission recommended be held by early May, Communist Party of Nepal (Maoist Centre) Chairman and key leader of ruling alliance Pushpa Kamal Dahal 19 Jan argued general elections for lower house of parliament – likely to be held late 2022 – should be held first in spring and local polls delayed until later in 2022. Following widespread criticism of Dahal’s proposal for potentially undermining rule of law, ruling coalition 29 Jan agreed on holding local polls by mid-June and leaving general elections likely for late 2022. Observers argued episode revealed fears among some ruling parties that weak showing in local polls could damage their prospects in general elections, especially amid uncertainty over whether five-party coalition will continue its alliance into new electoral cycle; Nepali Congress leaders have indicated willingness to end coalition ahead of polls. In elections for upper house of parliament held 26 Jan, where 19 of 59 total upper house seats were contested, opposition Unified Marxist-Leninist (UML) lost seven previously held seats while ruling alliance parties won 18 seats; UML remains largest party with 16 seats.

Supreme Court resumed its functions after month-long pause over controversy involving chief justice, while political parties continued preparations for next year’s general elections. Supreme Court 1 Dec resumed hearing cases for first time following 18 justices’ unsuccessful efforts since 25 Oct to pressure Chief Justice Cholendra Shumsher Rana to resign; deal resuming Court’s functions dented Rana’s authority by adopting lottery system to assign cases instead of selecting them at his discretion. Ruling Nepali Congress 10-15 Dec held its general convention; PM Sher Bahadur Deuba 14 Dec re-elected party president in run-off contest after striking last-minute deal with two of other four contestants; Deuba had faced serious threats to his leadership with other candidates previously announcing their intention to oppose him in run-off. Ruling coalition member Communist Party of Nepal (Maoist Centre) 26 Dec began its general convention. Former Deputy PM Kamal Thapa 5 Dec suffered shock defeat, losing leadership of pro-monarchy and anti-secular Rastriya Prajatantra Party; Thapa blamed loss on interference of former King Gyanendra Shah, fuelling concerns about efforts to restore Hindu monarchy deposed in 2008.

Chief justice refused to step down, hampering function of Supreme Court, while political parties began preparations ahead of upcoming general elections. Chief Justice Cholendra Rana continued to defy widespread calls to resign following allegations in Oct of collusion with PM Sher Bahadur Deuba; most of other 19 justices throughout Nov refused to hear cases, except for habeas corpus petitions, in effort to pressure Rana to resign. The Nepal Bar Association (NBA) held protests against Rana throughout month, including sit in at the Supreme Court 23 Nov and march from court to PM’s residence 25 Nov. Clashes with police during protest outside court 11 Nov injured six lawyers, including NBA’s general secretary. Two-third parliamentary majority in favour of impeachment motion against Rana remained unattainable during month. Meanwhile, opposition Unified Marxist-Leninist party became first major party to begin preparing for general elections due in next few months by holding party conference 26-30 Nov, where former PM KP Oli was re-elected party chair; ruling Nepali Congress party scheduled its conference for 10-12 Dec.

Govt formed cabinet after three-month delay, but appointment of Supreme Court judge’s brother-in-law as minister sparked fresh controversy. PM Deuba 8 Oct appointed 18 new ministers, ending months of stalemate; appointment of Supreme Court Chief Justice Cholendra Shumsher Rana’s brother-in-law Gajendra Hamal as industry minister sparked widespread criticism following reports that he was appointed at Rana’s behest. Accusations centred around Deuba granting Rana share of cabinet designations as part of quid pro quo arrangement following 12 July Supreme Court decision which ousted previous KP Oli-led govt from office. Hamal 10 Oct resigned as industry minister, but calls mounted for Rana to step down from Supreme Court position for having undermined judiciary’s independence; 15 of 19 other Supreme Court justices 26 Oct demanded Rana’s resignation and have refused to hear cases at court in late Oct in protest at reported collusion between Rana and Deuba. Rana however refused to step down, 26 Oct challenged parliament to begin impeachment motion against him; Nepal Bar Association 29 Oct announced protests against Rana as Chief Justice.

Dispute among ruling parties continued to hamper appointment of govt ministers, while opposition Unified Marxist-Leninist party sought to block Nepali Congress-led coalition’s legislative priorities. PM Deuba continued to struggle to balance demands of his ruling partners, with only five ministers appointed since Deuba’s appointment in mid-July. Fearing splits inside Janata Samajbadi party (which is part of Deuba’s ruling coalition), Janata Samajbadi leaders throughout Sept conditioned cabinet expansion on repeal of Deuba’s controversial 18 Aug decree; decree had lowered requirement for members to split from one party and form another, notably allowing Madhav Kumar Nepal’s CPN (Unified Socialist) party to separate from PM KP Oli’s Unified Marxist-Leninist party in Aug. In response to writs filed in Aug, Supreme Court 24 Sept refused to annul Deuba’s Aug decree, potentially clearing path for CPN (Unified Socialist) to join ruling coalition. Meanwhile, parliamentary sessions 8 Sept resumed; Unified Marxist-Leninist party during Sept repeatedly obstructed them in protest against House Speaker Agni Sapkota’s role in party’s breakup, leaving over 50 bills pending approval.

PM Deuba faced criticism for his role in enabling split in largest opposition party as former PM and senior communist leader Madhav Kumar Nepal pledged to join ruling coalition. PM Deuba’s cabinet remained skeletal, with only four ministers appointed seven weeks after govt formation and Deuba overseeing 17 ministries. Lingering tensions within opposition Communist Party of Nepal (Unified Marxist Leninist, or UML) delayed ruling coalition’s plans to expand cabinet as Deuba sought support from UML leading figure and former PM Madhav Kumar Nepal; Nepal – whose support was critical to Deuba winning vote of confidence in mid-July – 18 Aug formally split from UML and announced formation of Communist Party of Nepal (Unified Socialist), now fourth largest party with 23 seats in 271-member House of Representatives; new party 26 Aug announced it would join coalition govt. Deuba faced criticism for issuing ordinance 18 Aug lowering criteria for formation of new political party to enable UML’s breakup in move observers claimed was reminiscent of previous PM Oli-led govt’s reliance on “ruling by ordinance”.

Nepali Congress leader Sher Bahadur Deuba appointed new PM after Supreme Court blocked K.P. Oli’s second attempt to dissolve parliament and ruled out prospects of early elections. Supreme Court’s Constitutional Bench 12 July overturned Oli’s 21 May bid to dissolve House of Representatives, ruling it unconstitutional; court also ruled that President Bhandari’s rejection of Nepali Congress President Sher Bahadur Deuba’s attempt to form new govt in May contravened statute and ordered Deuba be appointed PM; Deuba was sworn into office 13 July. Court’s verdict was criticised by Oli, with his supporters 12 July staging protests against ruling party and Oli’s party 16 July deciding to campaign against decision. Supreme Court Bar Association 15 July expressed serious concern over Oli’s remarks as well as burning of effigies representing chief justice by his supporters. Deuba 18 July received vote of confidence in reinstated House of Representatives, preventing early general election and confirming his mandate to govern until next elections, due to be held in winter 2022.

Supreme Court began hearings against President Bhandari’s decision to dissolve House of Representatives in May. Supreme Court’s Constitutional Bench 23 June began deliberations on over 30 petitions – including one by opposition Nepali Congress leader Sher Bahadur Deuba and backed by 146 MPs – challenging Bhandari’s dissolution of lower house of parliament on 22 May. Petitioners questioned Bhandari’s impartiality, claimed her disqualification of Deuba’s candidacy to lead govt in May was “extra-constitutional”, and characterised dissolution as encroachment on legislature’s jurisdiction. In written clarifications submitted to Court 17 June, Bhandari argued that decisions by Office of the President cannot come under judicial review, while PM KP Oli same day claimed that court cannot adjudicate political issue. Earlier, court itself faced criticism over composition of Constitutional Bench, prompting reshuffle by Chief Justice Cholendra Rana 6 June following accusations of conflicts of interest. Court 22 June delivered blow to Oli after annulling PM’s appointments of 20 ministers on 4 and 10 June, arguing that cabinet expansions contravened constitution given current govt’s caretaker status.

President Bhandari dissolved lower house of parliament for second time in six months and announced elections for mid-November, sparking widespread criticism that move undermines 2015 constitution. PM KP Oli 10 May lost vote of confidence, prompting Bhandari same day to call on opposition parties to form new majority govt within three days; after failure of parties to secure majority, Bhandari 13 May reappointed Oli as premier. Following political maneuvering among opposition parties in House of Representatives, 149 MPs from Nepali Congress, Communist Party of Nepal (Maoist Centre) and dissenting factions of Janata Samajbadi Party and Unified Marxist-Leninist parties 21 May presented signatures to Bhandari requesting that head of Nepali Congress party Sher Bahadur Deuba be appointed PM; later same day, Oli also presented his candidacy, claiming support of 153 parliamentarians, including several backing Deuba. After declaring that she could not appoint either candidate due to insufficient support, Bhandari 21 May dissolved parliament for second time since Dec 2020. Bhandari’s ongoing support for Oli – who had consistently sought elections in recent months – was widely criticised as undermining 2015 constitution; 146 MPs 24 May filed joint petition at Supreme Court challenging dissolution of parliament’s lower chamber and demanding its reinstatement.

Ruling party and opposition continued competing efforts to secure majority in parliament; meanwhile, govt faced criticism for handling of COVID-19 pandemic. Prospects of potential vote of no-confidence against PM KP Oli continued to linger with opposition Nepali Congress — which has 61 seats in 275-member House of Representatives — 2 April announcing decision to seek Oli’s resignation and form new govt under its own leadership; Nepali Congress, however, had yet to follow through on its decision by late April, leading to claims from observers that some of its leaders would prefer holding early elections instead. Ruling Communist Party of Nepal (Unified Marxist-Leninist or UML), accelerated its outreach to opposition Janata Samajbadi Party (JSP) — the fourth largest party holding 32 seats in parliament — including by offering to release detained JSP cadres in exchange for party joining the UML govt; potential UML-JSP coalition govt would likely render any no-confidence motion against Oli unsuccessful. Capital Kathmandu 29 April entered another strict lockdown following sharp uptick in COVID-19 infections, which increased 1,000% 15-30 April, leading to widespread criticism of govt for lack of precautionary measures and preparedness despite earlier appeals from ministry of health and population officials.

Supreme Court dissolved ruling party, bringing judiciary’s independence into question and prompting political jockeying in parliament as PM KP Oli reportedly sought fresh elections. In unexpected decision, Supreme Court 7 March invalidated legal status of ruling Nepal Communist Party (NCP) in response to 2018 petition by another party with same name. Decision created fresh political uncertainty, effectively dissolving NCP and annulling 2018 merger between Communist Party of Nepal (Unified Marxist-Leninist) and Communist Party of Nepal (Maoist Centre); both parties now effectively reinstated. Ruling came hours before House of Representatives — recalled after Supreme Court last month overturned December 2020 dissolution by Oli — reconvened. Supreme Court 31 March rejected petition filed by Maoist Chairman Pushpa Kamal Dahal 30 March seeking a review of 7 March decision. Original ruling sparked discussions between formerly merged communist parties and opposition leaders on potential new alliances to secure parliamentary majority or possible no-confidence motion against Oli. Tensions between Oli and senior communist leader Madhav Kumar Nepal escalated as Oli 29 March suspended Kumar Nepal from newly reinstated Unified Marxist-Leninist party. Oli’s absence from House of Representatives throughout month fuelled speculation that he is attempting to discredit parliament in bid to once again call for fresh elections. 

Supreme Court overturned PM KP Oli’s decision to dissolve House of Representatives amid ongoing dispute between ruling party factions. In landmark decision, Supreme Court 23 Feb overturned PM KP Oli’s 20 Dec bid to dissolve House of Representatives – thereby reinstating parliament – and called for winter legislative session to be convened by 8 March; decision widely lauded for safeguarding constitutional framework of 2015 charter and preserving judicial independence. Despite renewed calls for Oli’s resignation following verdict, PM refused to step down and his press adviser 23 Feb stated that while Court’s ruling should be accepted, Oli would be “facing” House of Representatives. Discussions around potential no-confidence motion against Oli gathered pace following court’s decision but were complicated by internal rift within ruling Nepal Communist Party (NCP). Competition continued throughout Feb between Oli-led faction and faction led by former PMs Pushpa Kamal Dahal and Madhav Kumar Nepal as both continued bids to be recognised as legitimate version of party after Election Commission refused in Jan to recognise either wing’s legitimacy; Dahal-Nepal faction 2 Feb submitted new application to Election Commission that could have bearing on formation of new govt. Nepali Congress, second-largest party in parliament and touted as likely “kingmaker” once parliament reconvenes, 25 Feb announced it would not yet take sides despite appeals for support from both NCP factions.

Amid anti-govt protests, Supreme Court continued to consider legality of PM KP Oli’s Dec decision to dissolve lower house of parliament. As Supreme Court considered cases against Oli’s dissolution of parliament, court 28 Jan issued two contempt of court notices to PM after he 22 Jan mocked senior lawyers petitioning against dissolution; contempt of court notices also followed several statements by Oli calling on Supreme Court to rule in his favour, including 3 Jan claim that issue did not warrant judicial review. Street protests against Oli’s move continued as faction of ruling Nepal Communist Party (NCP) led by former PMs Pushpa Kamal Dahal and Madhav Kumar Nepal 22 Jan led demonstrations in capital Kathmandu; police response to 25 Jan civil society-led march on PM’s residence widely criticised as heavy-handed as police beat peaceful demonstrators and used water cannons; opposition Nepali Congress and Janata Samajbadi Party both announced nationwide protests throughout first half of Feb. Election Commission 24 Jan decided not to recognise either of two competing factions of NCP – led by Oli on one side, and Dahal and Nepal on other – as legitimate wing of party, creating new legal uncertainties about party’s future. Meanwhile, FM Pradeep Gyawali visited India 14-16 Jan to discuss bilateral cooperation but made no notable progress on boundary dispute, which had triggered May 2020 diplomatic standoff.  

PM KP Oli’s decision to dissolve parliament and schedule new elections triggered protests and political crisis. Months of internal tensions within ruling Nepal Communist Party (NCP) and increasing pressure on PM KP Oli to resign reached boiling point as Oli 20 Dec dissolved lower house of parliament and announced fresh elections for April/May 2021. The move, authorised by President Bidya Bhandari, drew widespread rebuke for violating 2015 constitution, called into question credibility of offices of PM and president, triggered protests across country and sparked period of political uncertainty. Oli’s decision to sack parliament followed his order (issued with immediate effect following presidential approval) 15 Dec to amend working procedures of Constitutional Council – tasked with making appointments to several key constitutional bodies – allowing PM to take decisions with quorum of three members, dispensing with previous consensus among five council members; both moves viewed as latest to consolidate power and centralise decision-making. Oli’s decision to dissolve parliament was immediately termed unconstitutional by other leaders, political parties, and civil society members for contravening 2015 constitution, which provides only limited pathways for parliamentary dissolution. Protesters late Dec held several mass demonstrations across country against dissolution and filed 13 writs at Supreme Court, which 25 Dec demanded written justification for move. Dissolution also widened NCP’s internal divisions; Oli’s faction 22 Dec expanded party’s central committee with 556 new members, while competing faction led by Pushpa Kamal Dahal same day removed Oli as party co-chair; disputes also emerged at provincial level as Dahal’s faction 27 Dec filed no-confidence motion against Oli-aligned chief minister in Province 1. Meanwhile, Guo Yezhou, vice minister of Communist Party of China’s International Department, 27-30 Dec visited capital Kathmandu, meeting several political leaders including PM and president reportedly to assess evolving political situation; earlier in month, Vijay Chauthaiwale, Foreign Cell chair of India’s ruling Bharatiya Janata Party 10 Dec visited Nepal and met with PM Oli to discuss bilateral ties.

Intra-party dispute between PM KP Oli and Pushpa Kamal Dahal, chair of ruling Nepal Communist Party (NCP), threatened to destabilise govt and split party. Dahal 13 Nov presented report at NCP secretariat meeting listing series of decisions made by Oli without proper internal consultation within party; Dahal’s report urged Oli to make “sacrifice” and indirectly called on him to resign. Oli 28 Nov countered with a separate report rejecting Dahal’s allegations and issued thinly veiled threats that Dahal could come under scrutiny via transitional justice processes underway to address abuses committed during ten-year conflict (1996-2006) when he was leading Maoist rebellion. Oli 21 Nov met with opposition Nepali Congress President Sher Bahadur Deuba, fuelling speculation that Oli- and Dahal-led factions may compete to reach an alliance with other major parties to retain parliamentary majority in event of formal NCP split. Meanwhile, bilateral relations with India continued to improve – notwithstanding unresolved border disputes – following 3-6 Nov visit by Indian Army Chief Gen. MM Naravane and 26-27 Nov visit by Indian FM Harsh Vardhan Shringla to capital Kathmandu; Naravane had suggested in May that Nepal was encouraged by China to raise border issue with India. Three Chinese Communist Party officials 24 Nov reportedly arrived to, among other things, voice Beijing’s concerns regarding Sept allegations that Chinese security forces had encroached into northern Nepali district of Humla; Chinese MFA 2 Nov dismissed reports as lacking factual basis. Chinese Defence Minister Wei Fenghe 29 Nov visited Kathmandu to discuss military cooperation.

Divisions within ruling Nepal Communist Party (NCP) re-emerged as govt struggled to mount response to worsening public health and economic crises. Despite efforts to address factional differences in Sept, tensions flared within NCP between PM KP Oli and party co-chair Pushpa Kamal Dahal, raising prospect that party could soon split. Oli 1 Oct nominated two officials close to him to key ambassadorships in U.S. and UK, despite previously committing to taking such decisions only after discussing with other party leaders. Leadership dispute in Karnali province surfaced as local NCP leaders 11 Oct registered no-confidence motion against provincial chief minister closely allied to Dahal; move reflected how factionalism is rife at several levels within party. Oli’s 14 Oct decision to shuffle cabinet portfolios and appoint three new ministers criticised by Dahal as unilateral and taken without adequate consultation with other NCP leaders. These dynamics made more complicated following Dahal’s claims of being unaware of Indian intelligence chief Samant Goel’s unannounced 21-22 Oct visit to capital Kathmandu where he met Oli; Goel’s visit was first by high-level Indian official since Nepal-India border tensions escalated in May; Indian Army chief General MM Naravane scheduled to visit 4 Nov in further efforts to mend bilateral relations. Meanwhile, World Bank 8 Oct projected economic growth for 2020/2021 fiscal year could fall as low as 0.1 per cent, with informal businesses — comprising 50% of all enterprises — suffering most acutely. Nepal’s COVID-19 total caseload 30 Oct reached 168,235 cases; healthcare sector severely strained with 12 Oct reports of hospital bed shortages in Kathmandu and patients being transferred to hotels.

Tensions with India persisted and new border issue with China emerged. Tensions with India, which had abated in Aug, threatened to escalate again after Nepal’s Ambassador to China Mahendra Pandey 28 Sept accused Delhi of encroachment into Nepali territory and blamed Indian media of spreading “fake propaganda” to undermine Nepal-China relations. Border issues with China arose with 23 Sept reports of Chinese security forces allegedly constructing several buildings inside Nepali territory in the northern district of Humla; Nepal’s MFA and China’s embassy in Kathmandu denied reports, contradicting local officials’ accounts. Ruling Nepal Communist Party (NCP) 3 Sept nominated senior leader Bamdev Gautam to upper house of parliament in bid to ease internal party divisions; legal experts criticised decision for contravening 2015 constitution outlining that upper house appointments are partly in place to address under-representation of minority groups; Supreme Court 23 Sept issued interim order halting appointment, citing need for “serious constitutional explanation”. During his address to UN General Assembly, PM KP Oli 25 Sept urged support for Nepal’s re-election to UN Human Rights Council; human rights activists have persistently called out govt for curbs on civil liberties and for failing to deliver on human rights commitments made in 2017 prior to first Human Rights Council term. Federal govt 28 Sept took over control of policing within Kathmandu valley despite protests from provincial leaders that move infringes on their constitutional rights; move seen as latest govt effort to undermine federal structure and further shrink provincial authority.

External and internal political pressures on ruling communist party eased following thaw in relations with India and halt in intra-party tensions. PM KP Oli 15 Aug called Indian PM Narendra Modi to mark India’s Independence Day and, in first conversation between two leaders since border dispute began in May, mentioned looking forward to “meaningful cooperation” with New Delhi. Technical-level bilateral channels also reopened following 17 Aug eighth meeting of Nepal-India Oversight Mechanism (tasked in 2016 to oversee implementation of bilateral developmental projects) with Foreign Secretary Shanker Das Bairagi and India’s Ambassador to Nepal Vinay Mohan Kwatra; following discussions, foreign ministry officials proposed convening Boundary Working Group - joint entity formed by two govts in 2014 - which could pave way for formal dialogue on ongoing border row. Indian officials 20 Aug reportedly ruled out discussing contested territory along Nepal’s north-western border at Working Group level, instead preferring to address it between respective foreign secretaries. Meanwhile, leadership tensions within Nepal Communist Party (NCP) eased after internal task force formed by co-chairs Oli and Pushpa Kamal Dahal 22 Aug recommended Oli continuing as PM – with imminent cabinet reshuffle – while Dahal serves as party’s executive chair. NCP’s haphazard COVID-19 response continued to elicit widespread criticism with provincial-level officials accusing Oli’s govt of undermining transition to federalism after he 17 Aug empowered district administrators – instead of provincial leaders – with greater authority to tackle pandemic.

Pressure on PM KP Oli grew within Nepal Communist Party (NCP) while bilateral tensions with India continued. Faction of senior NCP leaders Pushpa Kamal Dahal and Madhav Kumar Nepal reiterated calls for Oli’s resignation. President Bidya Bhandari 2 July prorogued parliament on Oli’s recommendation, preventing potential no-confidence motion. After several rounds of unsuccessful talks with Dahal, Oli 18 July proposed holding NCP’s first general convention in Nov/Dec where Dahal would be appointed sole party chair in exchange for Oli retaining prime ministership; talks drew criticism from other senior NCP leaders who alleged move neglected their grievances. Dahal, Nepal and other senior leaders 28 July held long-awaited NCP standing committee meeting despite Oli’s absence; leaders criticised Oli’s flouting party rules but stopped short of demanding his resignation from office. NCP vice chair Bamdev Gautam 28 July floated proposal similar to Oli’s – allowing him to finish his five-year PM term while Dahal would assume NCP leadership. Meanwhile, bilateral tensions with India continued. Govt 9 July banned Indian news television broadcasts, purportedly in response to insults and allegations against Oli; govt 12 July partially repealed measure after civil society criticised ban for undermining press freedom; head of govt’s press oversight body 13 July stated that “press freedom has its limitations”. Oli 13 July accused India of “cultural aggression” and claimed that notable Hindu deity was born in Nepal instead of India; Oli’s statement next day drew rebuke from NCP leaders, former ministers and diplomats for further straining relations with Delhi.

Pressure on govt increased following rising tensions with India linked to competing territorial claims, prompting calls within ruling party for PM to resign, while peaceful public protests took place against govt’s poor handling of COVID-19 pandemic. Parliament 13 June unanimously approved constitutional amendment updating country’s political map to reflect Kathmandu’s claims over territory contested between Nepal and India, escalating dispute with Delhi. Several senior leaders of ruling Nepal Communist Party (NCP) 26 June criticised PM KP Oli at party meeting — which Oli skipped — for failing to initiate talks with India over border dispute and for govt’s overall lack of competence. Amid tensions with Delhi, Oli 28 June accused India of trying to unseat him as PM; NCP senior leaders, including former PMs Pushpa Kamal Dahal, Madhav Kumar Nepal and Jhalanath Khanal, 30 June urged Oli to step down from both PM and party chair positions, with other party leaders demanding proof of Oli’s claims against Delhi, describing them as “diplomatic disaster” for bilateral ties. Widespread peaceful anti-govt protests throughout June demanded better quarantine facilities and transparency regarding use of donor funds earmarked for COVID-19 response. Opposition parties and private-sector leaders expressed concerns late June over govt’s authoritarian turn following proposed legislation enabling national anti-corruption body to investigate private-sector entities; parliament 27 June decided to review bill in light of criticism.