Three days after the resignation of Nepal’s Prime Minister K.P. Sharma Oli amid mass protests, former Chief Justice Sushila Karki, 73, was installed as caretaker prime minister in Nepal on Friday. Her interim government will be a right-wing capitalist administration, relying on the military’s support, focused on restoring a semblance of political stability in the wake of mass unrest.
Following Karki’s appointment, President Ram Chandra Poudel dissolved the parliament and announced general elections for March 5 next year. Karki’s cabinet is to be limited to 15 ministers, though she can appoint up to 25. She reportedly plans to consolidate power in her hands by holding a number of key ministries, including Home, Foreign Affairs, and Defense.
It is evident that the military and state bureaucracy will largely determine the government’s policies and direction. On Saturday evening, Karki met with Chief of Army Staff General Ashok Raj Sigdel as well as top state officials—Chief Secretary Ek Narayan Aryal, Home Secretary Gokarna Mani Duwadi, and Finance Secretary Ghanshyam Upadhyay.
The army has been instrumental in installing Karki, with Sigdel holding several rounds of talks with nominated protest leaders last week in a bid to quell the protests. According to the New York Times, ministers and political leaders were held incommunicado in the army barracks for days while the talks proceeded.
The Guardian reported that the major parties objected to the unconstitutional dissolution of parliament. Party leaders only finally consented “after the army chief Ashok Raj Sigdel warned that the military would be forced to declare a state of emergency if no political solution would be found.”
The protest movement, drawn mainly from young people and labelled Gen Z, is politically amorphous, driven by concerns and anger over the lack of opportunities, political corruption and the social gulf between rich and poor. It erupted over the government’s ban on social media, which had been used to expose the lavish lifestyles of the families of politicians.
Along with Karki, others mooted in talks as interim prime minister included populist figures such as former rapper and Mayor of Kathmandu, Balen Shah, 35, and Sudan Gurung, 36, of Hami Nepal (We are Nepal), who capitalise on the frustrations of middle-class urban youth. Balen Shah defeated the candidates of the Nepali Congress and the Communist Party of Nepal-United Marxist Leninist (CPN-UML) in the 2022 mayoral race. Hami Nepal was prominent in fuelling the protests through social media.
Several prominent politicians from the Rastriya Swatantra Party (RSP) were also reportedly considered, including its founder Rabi Lamichhane. The RSP, the only party that expressed any sympathy for the protests, was established in June 2022 and has won 20 parliamentary seats by appealing to youth on an anti-corruption platform.
Significantly, as reported by the Indian Express, army chief Sigdel attempted to promote the royalist politician Durga Prasai as interim prime minister. The army has longstanding ties to the Nepalese monarchy which was brought down by mass protests in 2006 and formally abolished in 2010. The protest leaders opposed Prasai and the army acquiesced, for now, agreeing to the installation of Karki.
Though some areas remained closed, the army began easing restrictions on Saturday, lifting prohibitory orders and curfews in Kathmandu. Police reported at least 51 deaths during protests since Monday, including 21 protesters, nine prisoners, three police officers, and 18 others.
None of the issues underlying the social discontent in one of the poorest countries in the world will be resolved by the interim government or elections next year. More than half the population—56 percent—is under 30, and facing bleak prospects. Youth unemployment stands at more than 20 percent, forcing millions of young Nepalis to emigrate.
Since 2008, the country has been plagued by political instability, with 14 governments dominated by three major parties—Nepali Congress, the CPN-UML and the Communist Party of Nepal (Maoist) which has split. Sharma Oli of the CPN-UML, who resigned last week, was serving his fourth term as prime minister. The Maoists, who waged a bloody insurgency from 1996, exchanged their guns for a place in the political establishment in 2006 and were instrumental in containing the mass movement that brought down the monarchy.
All of these parties are responsible for the country’s social crisis, which is now being compounded by a global economic downturn and the imposition of the Trump administration’s tariffs. The root cause of the social crisis, however, is not corruption, which undoubtedly is widespread in ruling circles, but capitalism. Corruption arises out of the nexus between big business, government and the state apparatus that is fundamental to capitalism. The government and state do not serve “the people” but the interests of the bourgeoisie—a relationship that is obscured under parliamentary rule.
This anti-corruption campaign enjoys support, especially among Nepal’s middle class and big business, as a means to push for pro-market reforms, which are worsening the plight of working people. Sri Lanka offers a cautionary example: The current JVP/NPP government, which came to power for the first time in elections last year by riding the tide of opposition to the establishment parties, campaigned on “anti-corruption” and empty promises to improve living standards. In power, it immediately tore up its pledges and is implementing the harsh IMF austerity agenda that is slashing jobs, cutting essential social services and hiking taxes.
The United States, India and China have all publicly congratulated Karki on becoming Nepal's caretaker prime minister. Bordering China and India, Nepal has been a focus of geopolitical rivalry as the US, backed by India, has ramped up its preparations for war against China throughout the Indo-Pacific.
New Delhi will undoubtedly seek to exploit the removal of the CPN-UML led coalition government, which had strengthened ties with China, to boost its political and strategic influence in Nepal. Earlier this month, Sharma Oli as prime minister led a Nepali delegation to attend the Shanghai Cooperation Organisation summit in Tianjin, China. During his visit, he held bilateral meetings with Chinese President Xi Jinping and Vice President Han Zheng. Oli also took part in Beijing’s commemorative events marking the 80th anniversary of the end of World War II.
China also congratulated Karki on becoming the prime minister. A foreign ministry spokesperson declared that the two countries shared “a time-honoured friendship” and that China stood ready to work with Nepal to “enhance exchanges and cooperation in various fields, and further advance bilateral relations.”
Geo-political intriguing will only compound the crisis engulfing the political establishment in Kathmandu.