The Nepal Communist Party majority government, headed by Prime Minister KP Oli, completed two years in office last week. Prime Minister Oli took this opportunity to highlight the achievements of his government through an hour-long address to the federal parliament. In his speech, Oli portrayed an unbelievably rosy picture of his administration’s time in power—ranging from the enactment of almost five dozen new laws, implementation of fiscal federalism, control of corruption, consolidation of the economic outcomes to the dexterity in diplomacy. His jibe on political stability, 'the survival of a government for two years itself should be considered a great achievement in Nepal', however, hinted to a perceived imminent threat to his government, seemingly from within his party’s ranks.

The fact of the matter is, these two years indeed have been a period of great achievement for Oli, at least on a personal level. He has managed to consolidate state-power singly around him and has ventured into the discretionary use of the same (largely through verbal decrees instead of legislation). He brought more than half a dozen key government agencies, which were originally conceived to function independent of direct political interference, under the Prime Minister's Office. They include the country's intelligence agency, the National Investigation Department (NID), the Department of Revenue Investigation (DRI) and the Department of Money Laundering Investigation (DMLI).

Imbalance of power

Such one-upmanship has gravely skewed the balance of power. It has brought down the separation of power—deemed sine qua non to democracy—between the three key branches of the government, namely the executive, legislature and judiciary. The parliament has become a mere rubber stamp for government-sponsored bills. All provincial governments are constantly complaining of non-cooperation, and of the federal government’s reluctance to devolve the authorities even categorically spelt out by the federal constitution. The statistics related to performance for the past two years—especially regarding governance, economy and diplomacy—barely substantiate the recent flimsy political rhapsodies by Oli.

Incidentally, the seven provincial governments have also completed their two years in office and are trying to make their achievements public as well. But their approach is more subdued and apologetic for being unable to perform at par to their expectation, scope and potential. For this, the chief ministers, directly or squarely, are pointing fingers to the non-cooperation from the federal government in formulating required laws, devolving authority, designating the required number of technical and regular civil servants and supporting the capacity building of the sub-national governments.

While Oli was boasting of implementing the fiscal federalism in his address to the federal parliament, Chief Minister of Gandaki Province Prithvi Subba Gurung not only unequivocally claimed that the federal government was not being sincere in implementing the same but also demanding a review of the formulae fixing the equalisation grants from the federal to sub-national levels. The chief ministers of other six provinces of the country also generally echoed Gurung's concerns. If the national development were an aggregate of the development of the provinces, which is indeed the case, the tall claims of achievement by the prime minister barely tally with that of the chief ministers.

Governance

The federal polity is now heavily constricted because of legal, institutional and operational shortfalls. The government seems to be keen on introducing regressive laws that are designed to restrict civic and academic liberties and strangulate the federal system. The provisions in proposed bills related to information technology, media, higher education etc. are only a few examples to this end. The transparency and accountability of the administration has been severely compromised by the arbitrary nature of the investigation and prosecution of criminal as well as corruption cases. Cases like Nirmala Panta's rape and murder, the Lalita Niwas public land graft, the corruption related to the purchase of Airbus aircraft by Nepal Airlines Corporation and transfer of ownership of a huge amount of valuable public land to Yeti Holdings without adhering to proper public procurement procedures, remind us how open to nepotism, favouritism and misuse of state power the Oli government is. In the absence of public accountability mechanisms extended parallel to the federal structure of the state, particularly with a focus on the local levels, the corruption has now diffused to the grassroots.

Economy

Against the government’s claim that the economy is on the right track, key economic indicators are extremely worrisome. The government has been forced to downward revise both revenue and expenditure targets in its half-yearly review of the national budget. In the first six months, the trade deficit has exceeded Rs642 billion which is equal to more than 20 percent of the country's gross domestic product. Inflation on daily consumer products has crossed the 10 percent mark. The inflow of foreign direct investment is at an unimpressive Rs12 billion. The most worrying factor has been the very poor absorption capacity of readily available financial resources, particularly at the local levels. The unspent amount stuck in various government accounts has now reached Rs241.78 billion, including Rs.5846 billion at the local level as of mid-January 2020. With the expected change in leadership in the finance ministry, the stock market has witnessed a lukewarm positive response; though the overall economic uncertainty continues to loom large.

Diplomacy

Not only the operational level day-to-day diplomacy, the overarching foreign policy plank of Nepal now seems to be in complete disarray. Economic diplomacy is in tatters. Oli and his government rode their anti-India and pro-China wagon to power. Now, the government has massively increased Nepal's engagement with China at various levels; between the governments, between the selected think tanks and academia and between the two ruling communist parties. At the same time, it has undermined the importance of engaging with the other powerful neighbour, India, as well as the rest of the democratic world. Extremely callous handling of the foreign policy, for all practical purposes, defeated the concept of so-called 'balanced' or 'non-aligned' position of Nepal. The entire policy paradigm has now become a plaything in the hands of a few top hats of the ruling NCP.

The latest example of foreign policy mayhem has manifested in the endeavour to ratify the $500 million Millennium Challenge Corporation (MCC) grant compact. Prime Minister Oli declared that, regardless of the report to be prepared by his party's review committee headed by former prime minister Jhala Nath Khanal (who happens to be an Oli detractor), he would push to ratify the compact in Parliament and that it will be sanctioned. At the root of such discord and confusion is the absence of well-defined, timely-calibrated and institutionalised foreign policy.

In a nutshell, the last two years have hardly made any headway towards Oli’s repeated promises of prosperity; the prosperity slogan has now become something of a joke.

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