Nepal & Bhutan Brief (12/16)
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(Based on Media Reports)

Political Developments:

Prachanda Hopeful of National Consensus after Budget Endorsement:

Addressing a group of journalists, on June 6, CPN (Maoist Centre) Chairman Pushpa Kamal Dahal said that the ‘gentleman’s agreement’ reached with CPN-UML would be implemented after the budget was approved by parliament. Dahal argued that national consensus was required for implementation of the constitution; resolution of the existing problems and for post-earthquake reconstruction among other issues. However, PM Oli has maintained that he would not leave the ‘post’ under pressure, While addressing a two-day public dialogue programme organized in Kathmandu, on June 2, Oli said, “some forces were threatening and exerting pressure to leave the post but he would not resign”. He also denied having entered into any ‘gentleman’s agreement’ with Dahal.

Bhattarai Announces Establishment of Naya Shakti Nepal:

Former Prime Minister Baburam Bhattarai, on June 12, announced establishment of the Naya Shakti Nepal (New Force Nepal) as his new political vehicle. He made the announcement at a function at the Dashrath Stadium in Kathmandu attended by more than 100,000 members from across the country, as claimed by the organizers. Bhattarai said that the new party would play an effective role as an alternative political force. Leaders of major political parties including PM KP Sharma Oli, NC President Sher Bahadur Deuba, CPN (Maoist Centre) leader Krishna Bahadur Mahara, RPP-N leader Sunil Shrestha, Indian leader DP Tripathi, journalist Anand Swaroop Verma and entrepreneur Yogendra Shakya extended good wishes to the newly formed party. Kathmandu-based diplomatic community also attended the event. On September 26, last year, Bhattarai, it may be recalled, had severed ties with the then UCPN-Maoist.

Maoist Centre Forms 1,099-Member Central Committee:

The recently launched unified CPN-Maoist Centre formed (June 2) a 1,099-member Central Committee; a Politburo and a 75 member Standing Committee. Earlier, on June 1, a task force formed to suggest the size of various committees had recommended 75-member Standing Committee and a 241-member Politburo. 100 positions were to be left vacant to later accommodate some leaders of the Netra Bikram Chand-led CPN-Maoist and Baburam Bhattarai-led Naya Shakti Nepal, if they later joined the party.

Dahal’s decision to expand the party Central Committee to 1099 members, has been criticized by most of the leaders of the erstwhile UCPN(Maoist), who claimed that giving out top positions without proper evaluation, will make the party committee dysfunctional and invite wrangling for positions in future. They also warned the party leadership that creating jumbo size committees would project the party in a negative light. In response, party Chairman Dahal explained the move as a ‘compulsion’ for the party to adjust leaders after the unification.

Joint Complaint Registered Against Former King and DPM Thapa:

A joint complaint filed (June 6, 2016) by17 family members of the victims of the Doramba incident of 2003, names former king Gyanendra Shah and then Home Minister and incumbent Deputy Prime Minister and Minister for Foreign Affairs Kamal Thapa and members of the security forces as accused. The complaint has been filed with the Truth and Reconciliation Commission alleging that the security personnel had arrested and killed 22 unarmed cadres of then rebel party CPN (Maoist). Investigations by the National Human Rights Commission as well as other rights organisations, had found that the detainees had their hands tied behind their backs and were shot at close range.

External Relations:

Dy. PM Thapa Visits Delhi:

Deputy Prime Minister and Minister for Foreign Affairs Kamal Thapa paid a three-day visit to India form June 10, 2016. He was accompanied by senior officials from the Ministry of Foreign Affairs. His engagements included bilateral talks with India’s External Affairs Minister Sushma Swaraj. On his return, Thapa told the media at the Tribhuvan Airport that relations between two countries were gradually improving. More than one dozen bilateral talks and meetings scheduled to be held in June-July clearly showed that relations between the two countries were becoming ‘pleasant’ and there was no bitterness in relations with India as was being portrayed outside, he added.

Nepal, India to Speed up Petro Pipeline Project:

Nepal and India have agreed to speed up the construction of long-planned cross-border oil pipeline. The 41-km pipeline linking Raxaul and Amlekhgunj is expected to ensure regular fuel supplies by eliminating the vagaries of transportation by tanker. The pipeline project was first proposed in 1995. High-level talks held in Delhi, on June 6-7, concluded with an agreement to start detailed technical survey, land acquisition and tender process as soon as possible.

PM Oli did not Accuse India, US of Trying to Topple his Govt:

CPN-UML party’s Standing Committee (June 4), refuted media reports that Prime Minister Oli had accused that India and the US along with some other countries, were showing interests in changing the government in Nepal. In a press statement (June 5), Party Secretary Pradip Gyawali said, “The news reports that PM Oli accused friendly countries, including India and the US of showing unnecessary concerns in change of government in Nepal are baseless and imaginary and that they are inspired by premeditated attempt to damage Nepal’s relationships with these countries.” The CPN-UML urged media houses to verify such claims with authentic entity of the party before running sensational stories.

Defence Ministry for Paying Up Rs 2.4 b for Arms from India:

In an attempt to expedite fresh defense purchases from India under a ‘pre-ceiling approach’ Nepal is preparing to clear long pending dues amounting to Rs. 2.4 billion towards earlier purchases from India. Nepalese Ministry of Finance had been lingering over the payment in the hope that the dues could be waived off as was done in the past when India had waived Rs 2 billion during the visit to India by the then Prime Minister Girija Prasad Koirala. Nepal had been purchasing arms and other military supplies from India on 60% grant and 40% cash payment. Nepal had requested India to raise the ceiling of the grant to 100% per cent to enable Nepal to use the 40% amount for purchase of other military supplies from India. The Indian authorities are yet to respond to this.

Terrorism Financing 0through Nepal Overstated; Claims NRB Official:

Responding to ‘serious’ concerns expressed by the United States over Nepal’s vulnerability on money laundering and terrorism financing issues, a senior official of the Nepal Rastra Bank (NRB) termed this as an ‘overstatement’. The US Department of State in its recently published “Country Reports on Terrorism 2015” has expressed concern that terrorists might use informal money transfer systems such as hundi and hawala, rampant in Nepal for money laundering and terrorism financing. NRB official said that the magnitude of risk was not as serious as mentioned in the report which has not given any concrete evidence nor has it cited such instances. According to NRB official, although a few issues mentioned in the report are close to reality, the report has overstated the risk. The central bank is yet to come up with an official statement about the report. NRB Governor Chiranjibi Nepal will soon hold talks with Financial Information Unit (FIU) and Department of Money Laundering Investigations and come out with the official statement.


Internal Developments:

Budget Report Presented In National Assembly:

Finance Minister, Namgay Dorji, presented National Budget for 2016-17 in the Assembly, on June 1, with NU 41 billion total estimates of which NU 21 b is domestic revenue and NU 14b as external grants. Education and general public services sectors will receive the highest allocation of over NU 10 b, which constitutes over 20 per cent of the total budget outlay. The external grant for 2016-17 is expected to cover 27.6 per cent of the total expenditure. The total expenditure is projected at more than NU 51b.

Bhutan Cannot Generate 10,000 MW Electricity By 2020:

The National Council Chairperson, Dasho Sonam Kinga said that they had received an official confirmation from the government that Bhutan would not be able to generate 10,000 MW of electricity by 2020. The issue came up during the Upper House discussion and government’s response to NC’s recommendations on hydropower plans and policies.

External Relations:

Swedish King and Queen Visit Bhutan:

On a four-day visit, the King and Queen of Sweden arrived Bhutan, on June 8. The same day the King and Queen of Sweden were granted audience by the His Majesty the king of Bhutan. They later visited Punakha Dzong and other sacred sites, on June 10. They also visited some traditional Bhutanese farm houses.

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