As it seeks economic progress in one of the world’s poorest nations, Nepal’s new government, headed by the former Maoist rebel chief, will attempt to strike a balance in its relations with its close neighbors China and India, members of the ruling coalition told Reuters.
Pushpa Kamal Dahal, who continues to go by the name Prachanda, surprisingly won the support of the opposition Communist Unified Marxist-Leninist (UML) party and five other minor organizations on Sunday, allowing him to leave his previous alliance. A hung parliament was the result of the election held last month.
Khadga Prasad Sharma Oli, the leader of the UML and a former prime minister, is thought to support China.
India and China are both vying for influence in a number of South Asian nations, including Nepal. Based on their strong historical ties and long open border, India has traditionally regarded 30 million-person, Hindu-majority Nepal as a natural ally.
Narayan Kaji Shrestha, a prominent member of Prachanda’s Maoist Centre party, told Reuters that “we’ll preserve relationships of equi-proximity with both our neighbors.” Later, a deputy prime minister was appointed for Shrestha.
Inflation control, maintaining reserves, increasing capital expenditures, reducing the trade deficit, and lowering interest rates must all be our top priorities right away.
ECONOMIC DIFFICULTIES
Bishnu Prasad Paudel of the UML party received the important finance post, and Prachanda also selected six additional ministers. Paudel has already served as finance minister twice.
A significant appointment to the home (interior) ministry is that of television chat show personality Rabi Lamichhane.
Prachanda retained control of the foreign ministry.
Nepal has received billions of dollars in aid and investments from Beijing and New Delhi, and it has a wealth of potential to produce hydroelectric electricity.
One of the first foreign leaders to congratulate Prachanda on his appointment was Indian Prime Minister Narendra Modi. India is the country with which Nepal conducts the majority of its commercial and economic activities.
Modi stated on Twitter that “the special relationship between India & Nepal is founded on deep cultural links & warm people-to-people relationships.” “I look forward to cooperating with you to further solidify this connection,” she said.
In a tweet, a representative of the Chinese embassy in Kathmandu thanked Prachanda as well.
Analysts claimed that the $40 billion Nepalese economy, which is recovering from the COVID-19 pandemic, required rapid attention from the new administration, which must win back the confidence of businesses and investors while increasing production.
Over 8% inflation is the highest level in six years. Along with declining foreign exchange reserves, Nepal is becoming more dependent on imports of essential products.
Yuba Raj Khatiwada, a former finance minister who served under Oli, advised Prachanda to concentrate on developing agriculture to replace imports and increase manufactured goods like cement for export.
Prachanda, who from 1996 to 2006 oversaw a Maoist uprising against Nepal’s then-monarchy that lasted ten years, abandoned communist ideology and embraced liberalism after entering society as part of a peace agreement. 17,000 people perished in the battle.
Ten governments have come and gone in Nepal since the 239-year-old monarchy was overthrown in 2008.
