Political Instability Hits Economic Development

Nepal’s domestic politics has been undergoing a turbulent and significant shift. The unstable structure of the government and its inclination to collapse in a short period has been a regular feature of Nepali politics. After the historical political change in 1990, political stability followed by fast pace of economic progress was expected. Politics within the country has been characterised by zero-sum bargaining between the mainstream parties which has led to frequent changes in government. This has greatly hampered the nation’s development. The country has witnessed 28 different governments over the last 31 years. 

The election system in Nepal has been costly and elections are treated as an investment. From the stage of candidate nomination to the election contest, vast sums are collected and distributed. Sources of this finance include the business sector, bureaucrats, and other individuals. Those who are close to the influential leaders may get a party ticket and ministerial position. Once in government, they recoup the money spent during elections and provide favours to those who aided them financially during the elections. This had led to rampant corruption within the political sphere which has had a domino effect on other sectors such as education and sports. Although people are reluctant to vote for these mainstream parties, their wide networks and access to finance means that they hold a clear advantage when it comes to elections. The fact that no party can achieve a majority by themselves also leads to political instability as coalitions have to be formed.

National interest

As the Prime Ministerial position is elected from the parliament, instability is further created. Politicians of opposition parties are not willing to stand together on issues of national interest but are more concerned with bringing down the government and coming to power themselves. This has been exacerbated with as even smaller parties such as the Rastriya Swatantra Party (RSP) and the Rastriya Prajatantra Party (RPP) bargaining power and the ability to revoke the majority seat of the government. The differences in ideology between the different parties also lead to tensions especially because they form the same government as coalition partners. RPP is a traditional conservative party who aims to reinstate the monarchy and turn Nepal into a Hindu nation.

Though not as radical, the RSP is also sceptical about federalism but agrees on other aspects of the democratic constitution. However, the main source of contention between these parties and the major parties is their involvement in corrupt scams and poor governance. The RPP and RSP conducted their election campaigns along strong anti-establishment lines. Therefore, they may withdraw their support from their mainstream coalition partners in order to ruin their legitimacy. These issues have an inimical effect on political stability. 

According to legal provisions, any faction that can provide the signatures of at least 40 per cent of its central committee members is eligible to get recognised as the official party. The group that is officially recognised will get the privilege of retaining the party and election symbol, while the unrecognised faction will have to register as a new party which can hamper its future electoral prospects. Comfortable provisions to split the party itself creates unstable environment in the politics. Economic growth and political stability are deeply interconnected. The instability of economic growth can make countries dependent on foreign aid. The uncertainty associated with an unstable political environment may also reduce investment as high risks associated with instability make investment undesirable.

 Instability affecting investment returns could stem from a change in government, legislative bodies, and other factors. Domestic industries are facing a lot of challenges due to unstable political situation. Political dimensions of the current predicament along with domestic and geopolitical implications of internal political instability will lead to a serious and long-term weakening of the nation’s democratic fabric. Ruling party leaders have instead engaged in a bitter power struggle, which have undermined trust in the administration. It may also lead to a more frequent switch of policies, creating volatility and thus, negatively affecting macroeconomic performance. If cultural and ethnic groups feel that there is economic, political, and social inequality, conflicts are more likely to occur, causing further poverty. 

Remedies

To address the chaotic politics, some remedies should be taken immediately. Any coalition is more effective if it is between ideologically similar parties. Frequent changes in alliances unequivocally prove that such coalition partners in government are unnatural. The current mixed election system of the country needs to be amended. Either fully proportional system or parliamentarians should be elected based on the first-past-the-post system, provided that no elected parliamentarians would be eligible to join a government. 

Ministers should be nominated by the Prime Minister from the experts of concerned sector so that they could run their respective ministry in an effective manner. Elected parliamentarians should concentrate on law-making roles. Even the amendment in the present constitution demands this. A directly elected Prime Minister is a good alternative to run the government smoothly. In a small country like Nepal, there should not be excessive number of paid elected representatives. Constitutional provision to limit the number of political parties seems essential. Only two parties could be appropriate. Such steps need to be taken immediately otherwise the political situation of the country will continue to deteriorate. 

(Mainali is Former Secretary of the Government of Nepal)