Challenges facing Nepal’s new Prime Minister

Challenges facing Nepal’s new Prime Minister

Amid the fallout from a new constitution which has resulted in protests, a fuel crisis, and increased interference from its neighbour India, Nepal’s new Prime Minister KP Oli has entered into a political and economic storm.

When one thinks about Nepal, they associate this South-Asian country with the beauty of the Himalayas. However, this physical beauty is contrasted by a fractured political system.

Nepal has adopted a new constitution, which has caused problems politically and economically for the country’s new Prime Minister.

New Constitution

Nepal’s new constitution has belatedly come about as a result of a Maoist civil war that concluded almost 10 years ago. Constant disagreements between various political parties have meant that the parliamentary assembly failed to draw up any new document until now.

Nepal’s new Prime Minister, KP Oli, was elected by a parliamentary vote on October 11th. It was hoped that as the first Prime Minister under the new constitution, there would be political stability in the country.

However, the opposite has occurred. The constitution splits the country into seven currently unnamed provinces. The issue at hand for KP Oli is that, due to Nepal’s diversity, he faces a tough task of uniting its people. With over 100 languages spoken and divisions based on a caste system and geographical location, protests have erupted over the adoption of the new document and its perceived discrimination towards various communities.

In particular, those of the Madhesi and Tharus communities are opposed to the new constitution. Both groups are located in the Terai section of Nepal, which is a lowland area close to India. The Tharus argue that the new constitution’s provincial divisions will split them into multiple areas and will force them to share their provinces with people from hill districts. The Madhesi argue that the constitution placates the larger political parties, such as Oli’s Communist Party, and reinforces the discrimination that lowland ethnic groups have always received.

The challenge for Oli is to present this new constitution as a symbol of progression for his country. However, with ethnic groups, Hindu nationalists, and women’s groups voicing a discrediting opinion, Oli’s task has become increasingly difficult.


India’s interference with regard to Nepal’s constitution is due to the Madhesi community. The group has close ties with India, and the apparent discrimination as a result of Nepal’s constitution has led to friction between the two countries.

Historically, the countries have been very close. India sees Nepal as an important ally/buffer with regard to China whilst India is Nepal’s largest trading partner.

The challenge for Oli is to maintain Nepal’s strong economic relationship with India. India’s Prime Minister Narendra Modi reached out extraordinarily following the April earthquake pledging almost $1 billion for reconstruction.

In essence, Oli must understand the importance of Indian investment and aid to the country. However, concerns over the impact of the constitution has meant that Oli must tread a fine line between accepting India’s much needed monetary investment while also reducing India’s interference in its political process.

Fuel Crisis

A direct cause of Nepal’s political issues with India is the ongoing fuel crisis. Nepal imports almost all of its oil from India through mountain passages. Due to concerns over the treatment of Nepalese groups with ethnic ties to India, the movement of fuel tankers has been curtailed at the border between the two countries.

India has denied claims of an economic blockade, but Oli’s own party has placed the blame firmly on India’s doorstep. The lack of fuel in the country has negatively impacted businesses and development. Moreover, the lack of fuel is crippling relief efforts from this year’s earlier earthquake. As cold weather sets in, it is feared that another humanitarian crisis could unfold.

Oli is faced with giving into to India’s concerns over the new constitution or dealing with an increasingly desperate social and economic situation. The fuel crisis has affected hospitals, water plants and restaurants. Many of Nepal’s businesses use internet service providers that need generators to operate. If the internet service providers go down, coupled with the cancellation of international flights and the lack of tourism, Nepal will essentially disconnect from the world.




The tension between India and Nepal and subsequent fuel crisis has opened the door for China. The fuel blockade on the Indian-Nepalese border has led China to reopen the border with Nepal in Tibet.

China became Nepal’s largest foreign investor in 2013 and contributed greatly to the relief effort following April’s earthquake. Nepal and its new prime minister face a similar challenge that has been presented to most South-Asian states; striking a balance between India and China.

With over 80% of its population identifying themselves as Hindu, Oli risks further alienating sections of the population by moving closer to China rather than India. However, with anti-Indian sentiment on the rise due to its government’s apparent support of the fuel blockade, it is reported that Oli is warming towards China.

With China sending in commodities and goods to Nepal, it has reduced the sense of despair among Nepal’s population and seemingly filled a vacuum. Recent events have demonstrated that Nepal needs an alternative to India, and it seems that Oli is prepared to have closer ties with Beijing.

Nepal should be celebrating a new constitution that demonstrates dramatic political progression. Instead, its new prime minister faces both domestic and international political and economic challenges. In the end, it is Nepal and its new leader that must first confront its domestic problems – and those neighbouring states should leave it alone to do so.

About Author

Devesh Rasgotra

Devesh Rasgotra is a specialist in South-East Asian affairs. His experience includes working at the International Institute for Strategic Studies where his focus was on maritime security in South-East Asia. He holds his MSc in International Relations from the London School of Economics.