Almost half of the incumbent members of parliament — even former premiers, cabinet ministers and party leaders — lost their seats to independents or new political rivals. Amid the political instability that has wracked Nepal over the past several years, including a near constitutional crisis in 2021, the electorate appeared to be holding political leaders accountable at the ballot box for putting politicking above governing. 

A Surprising Coalition in Parliament

However, what followed election day has dampened hopes for political reform or renewal. Spurred by public resentment toward the established parties, no single party or existing coalition secured a parliamentary majority. Most expected that the outgoing government, led by the Nepali Congress party, would form a new majority following a brief period of negotiation. However, talks between the Nepali Congress’ outgoing Prime Minister Sher Bahadur Deuba and Pushpa Kamal Dahal, leader of Communist Party of Nepal-Maoist Centre (CPN-MC), broke down when the two failed to agree on who would hold the post of prime minister.

After talks with the Nepali Congress ended, Dahal, who is often known by his nom-de-guerre “Prachanda” from his time leading insurgent forces during Nepal’s decade-long civil war from 1996-2006, swiftly brokered a new alliance with his sometime rival, sometime ally KP Sharma Oli and the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML). The two men agreed they would rotate the prime minister’s office between them, with Prachanda serving as prime minister first. With this agreement in hand, Prachanda was sworn in as prime minister on December 26.

Two weeks later, Prachanda was constitutionally obligated to face parliament for a confidence vote. In a surprising reversal, the Nepali Congress and other parties in the opposition announced that they, too, would support the new governing coalition — giving Prachanda a unanimous vote of confidence.

Some analysts suggest this was an attempt by the Nepali Congress to undermine Prachanda’s alliance from the outset by giving Prachanda and the CPN-MC a back-up coalition partner-in-waiting should their pact with the CPN-UML fall through. This would weaken Oli and the CPN-UML’s negotiating power in the new government. The move also dilutes parliamentary checks and balances and calls into question the opposition’s ability to independently scrutinize the actions of a prime minister and government that it helped put in place.

The unanimous vote of confidence creates issues for Prachanda as well, as he must now manage a multi-party coalition representing a spectrum from Marxists to monarchists. Meanwhile, Nepali citizens once again are frustrated and disappointed to see a government formed by parties that have lost a significant number of electoral seats acquire the lion’s share of cabinet positions.

Ongoing Struggle to Implement Federalism

Nepal’s political theme for the last decade has been precarity, and this latest political theater comes amid some worrying trends. Governments rarely run full terms and politicians have played musical chairs with political appointments. Meanwhile, closed-door power-grabs have undermined the electorate’s will. In the seven years since Nepal became a federal state, any initial optimism for the success of federalism has largely waned.

In 2021, only 32 percent of Nepalese said they were satisfied with provincial governments, and chief ministers have complained about the federal government’s reluctance to implement federalism. Provincial assemblies have received limited funding, resources and capacity building support to enable them to be an effective tier of government.

With the outcomes of the 2022 general elections, federalism will continue to face challenges. The governing coalition’s inclusion of the Rastriya Swatantra Party (RSP), which served as an umbrella party for the election’s independent candidates, will likely disrupt decisions affecting provincial governments. The RSP are anti-federalism — they did not field any candidates for the provincial government elections, and there were incidents on election day where their supporters visibly rejected Provincial Assembly ballot papers.

With such divergent views within the government, it remains to be seen whether provincial governments will get the support they need to provide effective governance or whether federalism will be able to plant stronger roots in the governance system of Nepal.

Walking a Geopolitical Tightrope

Nepal is wedged between China and India, meaning the country must maintain a delicate balancing act to keep amiable relationships with both powers. While the “left-leaning” parties such as CPN-UML and CPN-MC, who have traditionally been seen as being close to China, seek to strengthen those ties, Nepal has deep historical, cultural and religious ties to India.

However, in recent years, the relationship between Nepal and India has at times been fractious — especially when communist parties have occupied the prime minister's office in Nepal and the right-leaning Modi has occupied the prime minister's office in Delhi.

When Nepal was reeling from devastating earthquakes in 2015, there was an unofficial Indian blockade at the border later that year, which soured India-Nepal relations and saw Oli look to Beijing for support. And in 2019-2020, nationalistic sentiment both in Delhi and Kathmandu — when Oli was prime minister — came to the fore over disputed territories along the border, with both governments re-drawing the demarcations set out in the Sugauli Treaty of 1816. 

While accusations of foreign interference in domestic politics have increased over recent years, the domestic political flux has actually made it difficult for foreign powers to negotiate, influence or broker power dynamics in a sustained manner. With fluid alliances and an average of just under one prime minister per year for the past 15 years in Nepal, neither China nor India seems to be able to pull geopolitical strings in the country for a sustained period.

The rollercoaster fate of the Millennium Challenge Corporation (MCC) compact further emphasizes this point. The MCC agreement provides $500 million in U.S. grants to support programs to improve electricity and transportation in Nepal. And while the previous Nepali Congress-led government got MCC ratification over the line, it was only after months of protests against the MCC that were fuelled largely by misformation. Now that the MCC is ratified, high-level U.S. officials have been visiting Nepal in quick succession.

While Prachanda’s political victory was welcomed by media outlets in Beijing, given the diverse political ideologies among the coalition, foreign powers near and far will likely struggle to identify true power brokers and influence national politics. On the other hand, this diplomatic uncertainty also makes it harder to build long-term sustained international relations.

Disinformation Continues to Fuel Conflict

In addition to Nepal’s political instability and diplomatic balancing act, social media has been rife with false information on various issues over the past few years, most notably the MCC. Disinformation around the MCC stoked concerns around Nepal’s sovereignty and fuelled several protests in Nepal in 2022.

The elections saw an uptick in this misinformation and disinformation, with doctored images, forged documents and false claims regarding various political leaders, as well as the former U.S. ambassador to Nepal, circulating over social media. This only served to stoke further allegations of U.S. interference in Nepal’s politics. Should this narrative be allowed to continue, it has the potential to fuel further anti-American sentiment in Nepal.

As political parties, politicians and allegedly foreign actors continue to utilize social media to control or twist narratives, senior journalists fear that the worst is yet to come for Nepal in terms of organized disinformation campaigns. In a country where political dissatisfaction has been simmering for decades, and with the government preoccupied with smoothing over the differences in the coalition, such campaigns could trigger political unrest and violence.

The Lack of Women on the Ballot

Nepal’s parliamentary electoral system is split: Voters are asked to choose from a list of candidates  for their district’s parliamentary seat as well as for a political party in the country’s proportional representation (PR) system. 165 members of parliament are directly elected to parliament, while the remaining 110 seats are filled based on parties’ vote share in PR list results.

Out of the 4,611 candidates who directly contested seats in the federal parliament, only 225 (9.3 percent) were women. Of this number, only 25 were fielded by the main political parties. The lack of female candidates on the ballot resulted in only nine being directly elected in the country’s first-past-the-post system — only three more than in 2017.

To meet the constitutionally mandated one-third female representation rule, political parties fielded more female candidates under the PR list system. The PR list system was meant to provide electoral opportunities to women and candidates from marginalized and indigenous communities — but members of parliament can only serve one term through the PR list. The intent was to give these underrepresented groups a chance to build experience, after which they could contest a directly elected seat.

Instead, Nepal’s major political parties have repeatedly taken the easy option of nominating new female candidates to the PR list system to ensure they meet the one-third quota rather than nominate experienced women for directly elected seats.

While the parties are fulfilling the constitutional obligations by meeting the quota, there seems to be little long-term investment in developing women leaders. Going forward, the parties need to do more to increase female and marginalized community representation and promote a more representative and inclusive parliament that reflects the spirit of the constitution — not one dominated by the same figures who wish to maintain the status quo. 

Where Does Nepal Go from Here?

The past two decades have yielded significant transitions for Nepal: a peaceful resolution to the decade-long Maoist conflict, as well as the end of monarchy and the promulgation of a new constitution that upheld secularism, inclusion and federalism.

But this positive momentum seems to now be staggering, with the same actors from several decades ago largely interested in maintaining a status quo while inflation steadily rises and federalism struggles.

While political forecasting in Nepal continues to be as accurate as reading tea leaves, there continues to be concerns about prolonged political instability — as can be seen by the fragility of the current coalition, which is already in danger of collapsing with the withdrawal of RSP, the third largest coalition partner.

Throw in the upcoming and contentious question of which party gets to nominate the president, and the Nepali people are once again left to witness blatant politicking at the expense of timely attention to economic and governance challenges.

Meanwhile, the Finance Ministry has warned that funding to provincial and local governments could be cut as a result of economic concerns. The entire federal system will be undermined if governments cannot deliver on services and development. Federalism was envisaged as a vehicle for economic development and if it flounders, it could have an impact on Nepal’s graduation to a lower middle-income country in 2026 based on the World Bank’s projections.

Still, the U.S. government sees Nepal as one of two places in Asia with an excellent opportunity for inclusion in the Partnership for Democratic Development. And with high-profile visits from U.S. government officials and scheduled high-profile visits from European governments on the way, there is an opportunity for the international community to urge Nepal’s government to stop politicking and start governing so that Nepal can flourish as a truly democratic nation that respects the rights of the many and not the few.     

Deborah Healy is the senior country director for Nepal at the National Democratic Institute.

Sneha Moktan is the program director for Asia-Pacific at the National Democratic Institute.