KATHMANDU, NOVEMBER 03

Nepal will hold national and provincial elections on Nov. 20, in a contest that the country's ruling coalition, led by the centrist Nepali Congress party, hopes to win against a loose alliance of communist opposition and royalists.

About 18 million people are eligible to vote for the 275-member parliament, as well as the 330 members of seven provincial assemblies through a mix of first-past-the-post and the proportional representation system.

Here are key issues that will determine how Nepalis vote:

ECONOMY AND INFLATION

Nepal's 30 million population, is grappling with six-year high inflation of over 8%, driven by a surge in global energy and food prices following Russia's invasion of Ukraine. This comes after two years of COVID-19 pandemic woes.

About one-fifth of country's people live on less than $2 a day. They could favour those politicians who promise curbs on food prices and other essential commodities.

The economy is expected to expand 5.1% year-on-year in the current fiscal year starting mid-July, according to World Bank estimates, after growing 5.84% in the previous year.

POLITICAL STABILITY

Political stability has proven elusive for the poor nation, wedged between China and India, discouraging many investors. Nepal has had 10 different governments since the abolition of a 239-year-old monarchy in 2008.

Nepali's three major parties - Nepali Congress, the Communist Unified Marxist-Leninist (UML) party and the Maoist Centre - have all led different coalitions in the past but none have served the full five-year term due to power struggles and infighting.

Maoist rebels, who battled the government for a decade before agreeing to a ceasefire in 2006, have joined mainstream politics.

Finance Minister Janardan Sharma, who served as a Maoist guerrilla commander, has said Nepal's recent economic woes and political stability would be a priority for the voters in the election.

MAIN CONTESTANTS

The contest is mainly between the Nepali Congress party and the UML party. The Nepali Congress currently leads a four-party ruling coalition and has been in power for most of the past three decades.

Prime Minister Sher Bahadur Deuba, who leads the Nepali Congress party, has allied with the Maoist Centre party, the main group of former Maoist rebels. Deuba, 76, is seeking to return to power for the sixth time. His Nepali Congress party is considered the closest to India.

UML, led by 70-year old K.P.Sharma Oli, is in a loose alliance with a royalist group. Oli, known for his pro-Beijing stance during previous terms, is the favourite for the prime minister if his alliance wins. He has been prime minister twice before.

The Maoist Centre party led by supremo Prachanda could emerge a kingmaker in case of inconclusive elections. Prachanda, who still goes by his nom de guerre meaning fierce, is also aspiring for the top job.

There are no pre-election polls in Nepal.

CHINA, INDIA INTEREST

Neighbouring China and India, with their strategic and economic interests, will be watching the election results.

China has signed infrastructure projects with Nepal under its vast Belt Road Initiative (BRI) and envisages to link Kathmandu with Lhasa through a trans-Himalayan railway network.

Early this year, Nepal approved $500 million worth of American aid to upgrade roads and construct electric transmission line. The decision was considered controversial given China's concerns about American presence in Nepal.