While Nepali Congress cadres and leaders were keeping a close eye on the party president election, a set of politicians not belonging to the party too was following the developments equally closely. And Sher Bahadur Deuba’s comeback as the party president has come as great relief for them.

Deuba is currently leading a coalition government, and his loss could have dealt a blow to his partners, especially Pushpa Kamal Dahal and Madhav Kumar Nepal, analysts say.

Dahal and Nepal are chairs of the Communist Party of Nepal (Maoist Centre) and the CPN (Unified Socialist), respectively.

Both are keen on continuing with the alliance until next general elections—and if possible even during the election.

Deuba’s victory ensures that the alliance will last at least until elections; whether he will carry them through elections cannot be guaranteed, party insiders and observers say.

“This alliance led by Deuba will continue until the elections,” said Narayan Kaji Shestha, a senior Maoist Centre leader. “It will remain intact.”

Apart from the Maoists and Nepal’s party, the Janata Samajbadi Party and Rastriya Janamorcha are also alliance partners. The latter, however, is not part of the government.

There, however, are some concerns that could have a profound impact on the current alliance.

Deuba’s victory as party president makes him a stronger prime minister, and he has some pressing issues that need to be dealt with almost immediately.

One of them is the Millennium Challenge Corporation (MCC) Nepal Compact, under which Nepal will receive $500 million from the United States. But the compact has to be ratified by Parliament.

Deuba is keen on getting it endorsed by the House at the earliest, but his coalition partners have reservations.

The Deuba government’s decision to call the winter session of Parliament is seen as an indication that the MCC would be moved ahead. It has remained stuck in Parliament since July 2019.

A leader close to Deuba said that due to the general convention, the prime minister and other ministers from the party have not been able to hold discussions on the MCC lately.

“Discussions will start on all pressing issues, including the MCC, once the convention election results are out,” said the leader.

The party convention will officially end after the results of two party vice presidents, two general secretaries, eight joint general secretaries and 121 Central Working Committee members are declared.

Party insiders say it might take five to seven days for the results to come out.

Leaders from the alliance say despite a strong push from the Americans and the Nepali Congress’ interest to get the MCC endorsed, chances are slim.

Congress leaders believe that the present alliance will continue up to the elections and the issue of MCC is unlikely to break up the coalition.

“Though the ruling alliance is yet to discuss what to do with the MCC, it will move forward during the ongoing session. And we also believe that the dispute over MCC will not split the alliance,” said Prakash Sharan Mahat, who is contesting for the general secretary post from the Deuba camp. “We are quite hopeful that other ruling parties will agree on ratifying the MCC from the House.”

The US grant has emerged as a major divisive factor in the alliance while negativity about it has reached the grassroots, with people confused about truth and rumours surrounding it.

“I do not see any chance of MCC getting through due to strong reservations from some alliance partners,” said Jagannath Khatiwada, spokesperson for the CPN (Unified Socialist).

Khatiwada said every party in Nepal is concerned about how the MCC could have an impact on their election results.

“The prime minister is aware of the ground reality and he understands the Nepali psyche very well,” said Khatiwada. “I do not see any chance of the MCC getting through anytime soon. If that’s not an issue, there is nothing to worry about the alliance’s fate.”

Insiders in the Deuba camp, however, say that since the prime minister has assured the Americans—and he himself is keen on passing the MCC, it is likely to be taken forward during the current House session.

Lately, US officials have made a flurry of visits to Nepal to discuss MCC with Nepali politicians in the lead up to the MCC board meeting.

The Nepal Compact was on the agenda of the December 14 meeting of the Board of Directors, according to the MCC website.

Prime Minister Deuba over the last few months has assured various MCC officials—Fatema Sumar, MCC vice-president, in Kathmandu in September; Alexia Latortue, deputy chief executive officer of the MCC in Glasgow; and Donald Lu, assistant secretary for South and Central Asian Affairs, in Kathmandu in November—that the compact will be ratified through Parliament.

While the MCC is an immediate concern for Deuba, there are some other challenges he is facing. One immediate issue is the smooth functioning of the House.

The CPN-UML, which obstructed almost every proceeding of the last session, resorted to obstructions on Tuesday as well, the first day of the winter session.

The UML has been demanding action on its decision to expel 14 of its lawmakers. The party has accused Speaker Agni Sapkota of not taking action against those lawmakers who later formed a new party—the CPN (Unified Socialist) led by Madhav Kumar Nepal.

Some leaders from the alliance said some drastic move by Deuba cannot be ruled out, even though such a step looks far-fetched at this time.

“If the UML continues to obstruct the House, its dissolution and elections will be a better option,” said Arjun Thapa, a central committee member of Janata Samajbadi Party. “We have no issues with the MCC as such. If it’s put to vote, we will support it. The question is for how long the UML is going to obstruct the parliamentary proceedings.”

As far as this alliance is concerned, it is in a far more comfortable position after Deuba’s resounding victory as the Congress president.

Deuba on Tuesday night defeated Shekhar Koirala in a runoff with 907 votes after none of the five candidates could secure more than 50 percent votes in the election held on Monday.

The other candidates were Bimalendra Nidhi, Prakash Man Singh and Kalayn Gurung. All three rallied behind Deuba in the runoff.

The UML, which was ready for the MCC’s ratification when it was in power, has maintained a neutral position on the US grant ever since its leader KP Sharma Oli was forced out of office.

It’s current agenda is not the MCC; rather it has been vehemently opposing Speaker Agni Sapkota’s non-action on its decision to oust 14 of its lawmakers.

A UML leader said it has no plans to let the House function.

“Our position on the MCC is clear—that we don't have a position right now. If the MCC becomes a source of a crisis in the ruling alliance, it’s their headache, not ours,” said Bishnu Rijal, a UML leader.

According to him, if the crisis fuelled by the MCC leads to House dissolution and early elections, so be it.

“Our party is for early elections,” said Rijal. “We will decide what to do with the MCC when the government brings it to the House for action.”

Political analysts following party and national politics say until elections, the alliance of five political parties is likely to go smoothly.

“I don’t see any reason for the present alliance to break up under any circumstances at this time,” said Lokraj Baral, a professor of political science at Tribhuvan University and former ambassador.

Dahal and Nepal are keen on fighting elections under the same alliance, as they see little chance of faring well if they go solo. For the Congress, an alliance with the communists does not look natural, according to analysts.

Deuba, on the other hand, also does not want to antagonise his partners, as a larger communist alliance, just like in the last elections, is not what he will prefer. And again, the Congress finds itself in a comfortable position as the communists are divided. The Congress had to fight against the communist behemoth last time, as the UML and the Maoists had forged an alliance, and later merged. The two parties were revived in March this year by the Supreme Court and the UML has seen a split after Nepal formed the CPN (Unified Socialist).

“Continuing with the alliance until the elections will serve the Congress well,” said Baral. “It, however, would be in the Congress’ interest if it goes to the polls independently.”