The CPN-UML, CPN (Maoist Centre) and Naya Shakti Nepal have forged an electoral alliance with an eye on the upcoming parliamentary and provincial elections besides eventual unification. They have agreed to form a party unification coordination committee which will prepare a detailed blueprint; they are currently preparing a joint election manifesto. As per the Maoist Centre chairman, the merger process was initiated for national interest. The amalgamation may pave the way for political stability. 

Organised strength

Over the years, political instability has resulted in short-lived governments which have abused authority and amassed wealth. The National Planning Commission has changed with every change in government, with the result that projects prioritised by earlier governments are given less importance by subsequent governments, leading to delays in their completion. In addition, frequent government changes have hampered the business cycle. Similarly, political instability has hindered domestic and foreign investments. This alliance might result in a stable government that may last for, say, the next five years; which basically implies that its plans might remain intact for a couple of years. 

The alliance might lead to polarisation in the party system and strengthen tendencies towards polarised pluralism as they have highlighted national unity. While in the context of policy making, this might threaten the capacity of major established parties to internalise socio-economic and other conflicts of interest and their ability to guarantee consensual and incremental policy making. Some disequilibrium caused by the system shock of unification might be seen as a consequence, but it is likely to be temporary. Also, unification might force the parties to adopt an organisational model of an electoral professional party and influence the links parties have with their voters and other interest groups. 

Several opinions and questions have been put forward with regard to the unification agreement. The parties have not clarified the purpose behind their unification. Moreover, it is also not certain whether the unified party is trying to construct a democratic or communist system. Also, is it for totalitarian socialism or democratic socialism? Similarly, why did the Maoist party take such a long time to reach this point? All these queries need to be answered. This move might be seen as being ironic, as the constitution of the country is socialism oriented and a majority of the parties profess socialism and communism. If the parties have merged to amend the constitution, improve ties with India, China and other countries, mobilise natural resources, promote industry and commerce and resolve complications related to the future of the 5 million Nepali youths working abroad, the move can give a new direction to the country. 

Opportunity cost of socialism

If we are to welcome their unification, the foundation and purpose behind the deal must be studied. If the unified party is to follow socialism as its ideology and philosophy, it will have to work on reducing the gap between the rich and the poor by redistributing wealth. Private ownership, innovation and accumulation of wealth is discouraged under this type of economic system. A socialist economy assumes public ownership of production where goods are produced according to their usage value. The usage value is determined by the needs of society and will prevent under- or over-production. In a capitalist economy, market prices, the profit and loss system of accounting, and private property rights provide an efficient and interrelated system of incentives to guide and direct economic behaviour. Socialism is inconsistent with human nature because it does not emphasise incentives.

On the one hand, social ownership, control of the means of production and cooperative management of the economy might seem plausible. The focus might be shifted towards reducing wealth disparities, unemployment and inflation. Major industries might get nationalised, various social security schemes might get introduced, minimum wages might be guaranteed and employment opportunities might be generated. Excess or insufficient production can be avoided, and market prices can be controlled to a proper extent. 

Likewise, budgetary expenditure might be shifted from capital to social welfare like unemployment benefits, crop insurance and pension. On the other hand, incentives may be given a minimum role or be totally ignored which will result in potential lack of motivation to individuals. Entrepreneurial opportunities and competition might decrease. The national economy is likely to develop slowly, and the upmost profit from the use of land, labour and resources might not be obtained. In addition, there might be issues of distorted or absent price signals. Also, areas that have a geographical advantage might lose their chance to develop and people who have greater wealth and knowledge might struggle to make their businesses bigger and more powerful. 

There are signs that the economy is finally waking up from a long slumber. In the marketplace, there are stirrings of new enterprises that have the potential to take the economy to a higher growth trajectory; and in the sphere of governance, there is a decisive move towards a participatory and decentralised decision-making process that has the potential of reorienting development towards disadvantaged segments of society. But the potential benefits of these initiatives can dissipate as a consequence of power struggles between the newly formed alliance and the ruling party along with other political parties.

The ruling party, the Nepali Congress (NC), is looking forward to beginning a process of forming a broader democratic alliance to consolidate democratic forces. The NC is working towards forging an electoral alliance with like-minded democratic forces and expedite talks with democratic parties to form a possible alliance. This might put a stranglehold on the economy and society at large if the power struggle continues. But if there exists healthy competition between the alliances, the economy might get a further boost. Whether or not the alliances serve as a credible political alternative is a matter of concern. 

Dhital is a graduate from the University of Delhi