Country Risk

Conclusion of Nepal’s elections before deadline positive for legislative progress, but indicates increasingly entrenched corrupt business-political relationships

18 December 2017

Key Points

  • In September, Nepal’s main political parties realigned themselves into two new alliances. The alignment, probably driven by a desire to secure votes before two-phase provincial and federal elections (held in northern districts on 26 November and in southern districts on 7 December), highlights the weak ideologies and the relational politics of Nepal’s governing elite.
  • In national and local results, the self-designated “Left Alliance” won a majority of votes. In provincial assembly elections the bloc won a majority in all seven provinces except Province 2. The alliance is likely to dominate policy decision-making and administration for at least the six-month outlook. Beyond this period, disagreements between the leadership of its member parties will determine the durability of the alliance.
  • The conclusion of elections for the first time since Nepal replaced its interim constitution in September 2015 is risk-positive, indicating a reduction of past legislative gridlock. However, it is unlikely to improve the operating environment for foreign businesses or organisations, as indications that campaigning was funded by record levels of donations point to increasing high-level corruption.


On 7 December, Nepal concluded the second phase of its federal and provincial elections, completing the electoral process across the country at all three levels of government – local, provincial, and federal – before the January 2018 deadline set by the constitution.

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