Balen Shah faces governance test after strong electoral victory

Chandra Bhushan: For the first time in Nepal's parliamentary history, a single political party has secured an absolute majority entirely on its own strength. This development has, at the very least, resolved the issue of political instability. The Rashtriya Swatantra Party (RSP)—which swept to victory by generating a nationwide wave of support—is a mere four years old. Its leader, Rabi Lamichhane—a figure deeply rooted in popular culture—had secured enough seats in the 2022 parliamentary elections to ensure that his party played a role, in one form or another, in three of the four governments formed between that time and the current election. However, the RSP of today—now commanding an absolute majority—differs significantly in its very character from the RSP of that earlier era.

An Unblemished Image

Within the global democratic landscape, this was a rare instance where a small political party, acting with sheer audacity, fully opened its doors to capitalize on a powerful and disruptive youth-led movement. Moreover, for the office of Prime Minister, the party put forward a figure like Balen Shah—the Mayor of Kathmandu—who, to date, maintains an unblemished public image within Nepali politics and is perceived as having no affiliation with any established political party. The only common thread binding Balen and Lamichhane is their shared background in popular culture; indeed, "Gen Z" has long been captivated by—and continues to watch—reels of their stage performances.

Democracy vs. Monarchy: Until just prior to the Gen Z-led movement advocating for internet accessibility, pro-monarchy forces remained active in Nepal. At that time, there were apprehensions that the monarchy might stage a comeback by exploiting the growing public disillusionment with established political parties. However, the election results clearly indicate that the Nepali populace has firmly advanced along the path of democracy; there is simply no role left for a King to play in this new political landscape.

The Impact of Economic Hardship

Another significant source of public discontent stemmed from the burden of personal debt repayment. Interest rates in Nepal are notably higher than those in India. Reports of asset seizures and property confiscations had begun to cause deep distress and anxiety among the populace. As soon as the political system stabilizes, these issues are bound to resurface. The two most immediate concerns are inflation and unemployment—both of which are inextricably linked to the conflict in the Gulf region. For Nepal, a shortage of fuel constitutes a major national calamity.

A significant portion of the country's foreign exchange earnings is derived from the remittances sent home by Nepalis working in the Gulf. The RSP-led government must address this issue with the utmost caution and prudence. Furthermore, the perennial challenge of maintaining a delicate geopolitical balance between India and China looms large. Fortunately, there is currently no active tension between these two powerful neighbors. The matter now boils down to effective diplomatic signaling—a task that Balen is well-positioned to undertake.

Systemic Reforms

The challenges lying ahead are deep-seated; regrettably, the prevailing electoral culture of the past 35 years has failed to even adequately acknowledge, let alone address, them. There is a glaring absence of a streamlined bureaucracy, an independent judiciary capable of upholding the rule of law, and a foundational framework conducive to fostering entrepreneurship and trade. While a solution to these systemic deficiencies cannot be achieved overnight, Balen can certainly take the initiative to set the process in motion.

The Employment Crisis

Until now, the prevailing reality has been that Nepali politicians—many of whom rose to prominence during the anti-monarchy movement—have prioritized, above all else, the preservation of their own political seats and official positions. Subsequently, their focus has invariably shifted toward three traditional sources of national revenue (and, more specifically, securing their own personal share of those proceeds). These sources are:

1. Foreign aid, which encompasses assistance from Western NGOs, bilateral aid from China and India, and loans secured from multilateral institutions such as the World Bank and the IMF.

2. Remittances sent by Nepali migrant workers employed abroad.

3. Revenue generated through tourism. A fundamental complication associated with these financial sources is that they fail to generate organized, sustainable employment opportunities.

Public Expectations

As long as Nepali society remained largely isolated from the global flow of information, it retained a sense of self-sufficient contentment—characterized by the resilience of a hill-dwelling people accustomed to grappling with the forces of nature. Today, however, the Nepali youth aspire to possess everything that their counterparts elsewhere in the world enjoy. In its election manifesto, the RSP has pledged to transform Nepal into a $100 billion economy over the next five years, driven by an annual growth rate of 7%.

Even coming close to this target will require a massive influx of capital—funds that will flow into Nepal only if investors perceive genuine prospects for growth within the country. Moreover, they must be assured that there is no looming risk of their investments going under. It is hoped that Balen Shah and Rabi Lamichhane will demonstrate the same maturity in addressing more fundamental issues as they have already displayed in the realm of politics.