Political instability in Nepal is amplified by Trump’s decision to cut USAID funding and suspend a major grant. This development raises concerns about economic prospects and investment in the energy sector, while allegations of corruption among political leaders fuel public protests. Former King Gyanendra Shah has called for national unity to address these issues. The implications of external aid on domestic governance and the constitution have come under scrutiny amid ongoing political turmoil.
Political turmoil and economic decline have persisted in Nepal lately. Recent actions by US President Donald Trump have heightened concerns among Nepali officials. Specifically, Trump canceled $39 million in USAID funding earmarked for fiscal federalism and biodiversity projects, and he suspended a significant $550 million grant, raising uncertainties about Nepal’s intended infrastructure developments.
Such funding cuts come amid rising corruption allegations linked to US assistance in Nepal’s constitution and development initiatives. Calls for high-level corruption investigations are growing louder across the political spectrum, fueled by public skepticism of governmental integrity. Former King Gyanendra Shah has urged citizens to unify and pursue national progress, casting doubt on the current political framework that transformed Nepal into a secular republic.
Nepal recently secured agreements with India and Bangladesh for power supply, and it ratified the Millennium Challenge Corporation compact, highlighting bilateral cooperation with the US, seen as vital for Nepal’s economic future. However, the potential cancellation of the US compact could deter both foreign and domestic investment in the hydroelectric sector, jeopardizing vital power supply contracts with neighboring countries.
Moreover, FATF’s recent designation of Nepal to the “Grey List” for failing to combat money laundering will likely hinder international trade and investment. This global financial scrutiny follows an increase in Nepal’s corruption index ranking according to Transparency International. Growing political protests continue to challenge the government, with increasing demands to hold leaders accountable for corruption.
The backdrop of these developments prompted the former king to appeal directly to the public, condemning past political actions and urging unity and reconciliation. His comments were framed as a call to move beyond historical grievances, promoting stability and collaborative governance. The revelations regarding US funding and foreign influence have intensified scrutiny of the Nepali constitution and political legitimacy.
Despite the ruling parties potentially dismissing the former king’s messages, the convergence of his appeal and the US financial revelations adds pressure on political leaders. The longstanding coalition government faces renewed demands for accountability in response to various crises threatening national integrity and governance.
In summary, Nepal faces significant political and economic challenges, exacerbated by recent US funding cuts and rising corruption allegations. The potential impact on foreign investment, especially in the energy sector, becomes critical as Nepal navigates its complex relationships with India, Bangladesh, and the US. Calls for unity from figures like the former king underscore the urgent need for political accountability and reconciliation in the face of growing unrest.
Original Source: indianexpress.com
