With the dissolution of the parliament, the country seems to have entered another phase of uncertainty. And it is feared that the recovery of Nepali economy is going to be delayed, at least by one year. But the current situation also offers some opportunity to restore confidence among the people in general and the investors in particular, provided that the government takes really bold but calculated steps. The government can use this opportunity in the coming budget and show that it is indeed capable of taking some bold steps. If the history of previous caretaker governments is any guide, present Deuba cabinet need not behave as a lame duck government.
But everything will depend on how the government selects the medicines. If they are not effective enough to bear result before the November 13 elections, the whole exercise may boomerang on Prime Minister Deuba and his close associates who are standing by him in face of the opposition from within their own party, the Nepali Congress (NC). It is also feared that the budget may turn out to be populist in view of the coming elections and plunge the economy further into crisis.
Deuba's declaration for the elections is supported by the main opposition party CPN-UML, which hopes to gain from the division within NC. But if the low turnout at the mass meeting on the open air theatre early May is any guide, all the political parties, including UML, seem to have lost that popular support which they had in early 1990.
The prediction therefore is of a hung parliament. And this time it will be lot different from the hung parliament of the past. None of the political parties is likely to cross 50 seats. As a result, there will be lot of horse trading in the parliament. Corruption will thrive further. That will be so if the elections are held at all. There are ample reasons to doubt whether the elections will really be held given the security situation.
In this situation, the country's bet is on Deuba's ability to make the Maoists participate in the November elections. If that happens, Maoist candidates will be elected from those districts where they prevail over the government soldiers. Again, the most likely result will be a hung parliament with the Maoists winning considerable number of seats.
Or can Deuba wipe out insurgency before the November elections? Perhaps that is the confidence that emboldened him to override the directive of his party's central committee. If he succeeds in this, the business will be the first to praise him. What best the business can do in view of such a scenario is just to wait and see.