Scenario Post Two Verdicts

This verdict has also pushed into oblivion the much-praised earlier verdict and hascreated lots of confusion, which is bound to inflict more injuries on the ailing economy of this country.

March 14, 2021, 8:02 a.m. Published in Magazine Issue: VOL. 14 No. 14, March 12, 2021 (Falgun 28, 2077) Publisher: Keshab Prasad Poudel Online Register Number: DOI 584/074-75

The controversial dissolution of the House of Representatives(House) recommended by Prime Minister Oli and approved by President Bhandari on December 20 was nullified by the constitutional bench of the Supreme Court on February 23,after extensive hearing that stretched over some 7 weeks. In the landmark verdict, the apex court not only nullified the government’s decision but also ordered the concerned to call the new session of the Parliament within 13 days. As thought by many, commoners and elites alike, the apex court termed Oli’s move unconstitutional and invalidated all the decisions related to the dissolution from the beginning. It also stated that the term parliamentary form of government mentioned in Article 74 should be seen in totality and not in isolation. It also clearly mentioned that Nepal’s parliamentary system was built on its own past experiences and various constitutional provisions related to the House and National Assembly election, the number of Cabinet members, inclusion in the Cabinet, bar on moving no-trust motion in the first two years and parliamentary hearing made our system unique, not including all the characteristics of conventional parliamentary system. Lessons were learnt from the HOR dissolution under the 1990 constitution and the head of government was not given unconditional power to dissolve it. The verdict has also clearly stated that the decision taken on subjective ground could put an additional economic burden on people, which could not be termed constitutional, if examined in light of the spirit and objective of the constitution. Despite some rumours of differences amongst five judges on the constitutional bench, it is gratifying that the verdict came as a solid decision, much to the liking of Nepalis.Indeed, this was something for majority of people of this country to celebrate and rejoice over and it was natural for people, especially those supporting Prachanda\Nepal faction of the Communist Party of Nepal (CPN), to do so on the street. After the historic court verdict, processions\street affairs more or less ended, much to our relief. Leaders got themselves engaged in both intra and inter-party interactions, focusing on the formation of the new government.

Dahal and Nepal rushed to meet Nepali Congress (NC) president Deuba to discuss a power sharing proposal, which was followed by their meeting with Janata Samajbadi Party (JSP) leaders. Despite both the parties in opposition (NC andJSP) condemning the House dissolution as unconstitutional, they have remained noncommittal in sharing power with them and have demanded the faction of CPN to come up with specific answers to some issues. Looked like the two parties were waiting for the CPN to formally split into two. Nothing lookedcertain, even days after the verdict, because the much expected resignation on moral ground of Prime Minister Oli did not happen, despite pressure exerted on him by different quarters to do so. Some politicians close to Oli made it clear that he will bravely face the no-trust motion and will not resign. Oli turned a deaf ear to the request of many, including that of party leader Bam Dev Gautam, to take a graceful exit. Numerous urging to resign on moral grounds have just been brushed aside. Removing Oli from the top job became more and more difficult. The two factions of CPN fought a serious battle at the Election Commission (EC), counter claiming their respective legitimacy. Dahal, Nepal and other leaders of their faction wondered why EC was taking so long to take a decision even when they had invoked the dispute settlement clause of the Political Party Registration. It may be noted that the EC had earlier stated its inability to act because the dispute settlement clause of the act was not invoked. This delay, according to leaders of the faction, decelerated the speed with which they wanted to proceed to get the nation out of the confusing political mess. It was also difficult for them to remove Oli as parliamentary party leader, despite their claim of majority in it, because as per their party statue the parliamentary party meeting has to be called by Mr. Nembang, deputy leader of the parliamentary party and a close confidant of Oli, who would not call any such meeting, fully aware of the number game. Passing a no- trust motion against Oli would also not be easy without support from a noncommittal NC.Both NC and JSP looked undecided which faction of the NCP they will support.Looked like the opposition parties would extend their cooperation to any of the two factions, conceding major concession e.g. the post of top executive of the country. Despite the well-intention SC verdict, which many thought would contribute towards clearing the impasse, situation remained very confusing and some even saw the possibility of feuding leaders hugging each other, forgetting mounds of allegations and abuses publicly exchanged. Some thought Prime Minister Oli could even surprise all with another bold decision, more complicated and astonishing than his earlier decision of dissolving the House. All these guess works have, however, come to an end with another surprising verdict of the apex court that the ruling party cannot have Nepal Communist Party (NCP) as its name as it was a copy of petitioner Rishi Ram Kattel’s Nepal Communist Party and also nullified the unification of the two parties headed by Oli and Prachanda. This astonishing decision has complicated matters and made things more difficult for Prachanda\Madhav faction as the two leaders now, as per the verdict, belong to the erstwhile Maoist Centre and the United Marxist Leninist (UML) party, respectively. This verdict has opened the Pandora Box, making it possible for anything\everything to happen in the scenario to be unfolded gradually over time. Despite celebration by Oli supporters, they should not forget that the verdict has made even him little uncomfortable because he will have to prove his majority in the House soon. Prachanda is now heading the Maoist Centre and in a strategic move Nepal and Khanal have decided to get back to UML under Oli. This verdict, which coincided with the convening of the first meeting of the resurrected House on March 7, has come under attack from different quarters and politicians have termed the verdict wrong, unnatural and politically prejudiced. Alleging that the court has spoken on issues that the plaintiff had not raised in his petition, some well-respected lawyers have taken this act as a glaring example of extra judicial activism of the apex court review petition against which is likely to be filed soon. This verdict has also pushed into oblivion the much-praised earlier verdict and hascreated lots of confusion, which is bound to inflict more injuries on the ailing economy of this country.

Predictions are that Covid- devastated economy of Nepal will remain weak for some more time as industries\businesses have yet to fully recover and are desperately seeking support from the government, which has slashed its annual budgets three times in a row. Ever since its assumption of power, the Oli-led government has been slashing the budget at the half yearly review of it. The highest cut was seen last fiscal year when the total outlay of Rs. 1533 billion was cut by Rs.147 billion, while the decrease this year approximated Rs. 130 billion. Amongst different heads, capital expenditure has taken the largest hit of around 20 percent of the earlier allocation of Rs. 353 billion. It is disheartening that in the seven months of this fiscal year capital expenditure has remained low at 19 percent. Indeed, Nepal government has not been able to play the role expected of it when governments elsewhere have launched stimulus packages to stir depressed economies. Despite some efforts made by Nepal Rastra Bank (central Bank) such as allowing rescheduling of affected loans and making refinance available on easy terms and conditions, industries and businesses are still seen seeking tangible support from the concerned agencies to become fully operational. Like in China and India, medium and small scale enterprises have suffered the most in Nepal also but the attention these ailing enterprises have received here is nowhere near what they have received elsewhere, mainly China and India. Covid-19 has taken its toll on human lives and inflicted injuries on the economy and the current political mess that Nepal has been pushed into is certain to further complicate matters for some more time because the crisis, further fueled by the second verdict, is not likely to recede soon.

It looks like Covid-19 and political instability have joined hands to further injure the already sick economy of this country, which many believe is already in a state of recession and will take time to get out of it.It is beyond doubt that our economy is weak now and will remain weak next yearalso, despite Prime Minister Oli’s claim that it will grow by 10 percent next fiscal year. Current weak base year is the only advantage that next year will have to offer a growth scenario relatively better than the current one but it will be nowhere near achieving a double digit growth claimed. Indeed, one could draw some solace seeing some decrease in our trade deficit, which is as a result of decline in imports and some increase in exports of some commodities. But if we delve a bit into the composition of export, it is seen that items like soybean oil has registered a 289 percent increase in the six months of this fiscal year, occupying the position of number one export item. It should also be noted that Nepal imported soybeans from as far as Argentina and Brazil, worth Rs. 17.67 billion, and exported the extracted oil to India, earning Indian currency worth Rs.17.33 billion. That Nepal used convertible currency to import soya beans and earned Indian currency exporting the extract there should not be a problem for a country, which has to occasionally sell American dollars to buy Indian currency( sold 2.04 billion dollars for this purpose in the last six months),but the most disturbing thing is the value addition part of it.It may also be noted that like palm oil, whose export to India has plummeted due to some policy change there, soya oil is also exported to our neighbbour without much value addition. In the very short run, we could make serious efforts to increase the production and export, after proper processing, of items like ginger and cardamom, which has occupied the position of number 2 export after registering an increase of 51 percent in the last six months. Let us also try to replicate the exemplary work of some individuals in Jumla who will be soon exporting Marshi chamal, a local rice brand, and some other native products worth Rs. 5 million to Canada. Given proper support and encouragement, this tiny attempt could snowball into exports worth billions of rupees over time, which would help reduce our trade imbalance, much more meaningfully than what soya and palm oil have done. Correcting the astoundingly complex political situation, we have to make humble moves of this kind to save our economy.


Dr. Tilak Rawal

Dr. Rawal is former governor of NRB.

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