Political, Economic and Social
Development in Nepal in the Year 2009
Overview
The lingering political crisis in Nepal has
eroded the state's capacity to handle security, human rights
and development challenges. The crisis underlined many of Nepal's
structural problems. The polity lacks coherence and parties
have failed to put a stable government to implement peace accord,
expedite the constitution drafting process by 601- member Constituent
Assembly (CA) and address class, caste, ethnic, gender and regional
disparity. The crisis climaxed after the ruling Unified Communist
Party of Nepal (Maoist) fired army Chief R. Katwal on May 3
for his refusal to integrate Maoist People's Liberation Army
(PLA) into Nepal Army (NA), an action loathed even by their
coalition partners. President Ram B. Yadav overturned this action
thereby provoking Prime Minister Puspa K. Dahal to resign on
May 4.
Twenty-two political parties have elected
the leader of Communist Party of Nepal-Unified Marxist-Leninist
(CPN-UML) Madhav K. Nepal as new Prime Minister on May 23. The
Maoists dubbed this new government "puppet of India"
and as a trial of strength disrupted the parliament from August
7 to December 22 except 3 days interval to pass the annual budget.
Demanding the civilian control of NA and a national unity government
under their leadership, the Maoists sent a stern threat of indefinite
strike from January 24 if their demands are ignored. They also
blamed India for maneuvering the fall of their government, resisting
the replacement of Indian priests of Pashupatinath temple by
Nepali ones and integration of PLA into NA. In contrast, the
ruling coalition despised Maoists threat to capture the state,
declaration of autonomous republic and seizure of private land.
Despite endless political dialogues, the contentious opinions
of hardliners from both sides have thwarted any chance for compromise.
The signing of post-conflict accords with a variety of unruly
groups proved to be ineffectual. Many of them just refused to
respond the government's call to engage in peace talks. Militant
youth wing of different political parties, 109 para-military
groups and armed outfits of Tharus, Tamangs, Limbus, Kirants
and Madhesi ethnic forces often flex their muscle to erode the
state's authority in society. Irresolution of a slew of issues-power-sharing,
federalism, polity, judiciary, land reforms and prior-use rights
of indigenous people in land, water and forest fuel the sources
of conflict. Nepal's poor legal framework, weak law enforcement
mechanism and impunity have created huge possibility for corruption
and cronyism. Local government bodies, the participation of
which is required by NGOs and donors to carry out their development
works, are non-functional as 1,124 local bodies are without
secretaries.
The process of transition to democracy continues
confronting adverse milieu-- labor unrest for 100 days, capital
flight, over 770 political strikes, killing of 25 businessmen
and abduction of 65 by armed bands. The acute power crisis up
to 12 hours deterred new industrial set up, business investment
and tourism. Food crisis exposed 3.7 million people at risk.
The flood killed 72 persons leaving other 20,800 families homeless
while diarrhea outbreak killed over 400 people. Nepal's government
held a cabinet meeting at the base of Mt. Everest to draw global
attention to the effect of climate change. Though buffeted by
global economic crisis, it is still the workers' remittance
that is the lifeblood of rural economy. International community's
concern in Nepal remained high due to the rivalry between neighbors--India
and China, for geo-strategic contest. Its development partners
are worried about growing polarization between the Maoists and
the ruling coalition and suggesting them to work for democracy,
human rights, constitution-drafting, peace, ecological justice
and development.
Political Development
The Global Fund for Peace has put Nepal among
the 25th of the worst 38 countries caught in statelessness.
The expansion of political constituency by parties has hobbled
state's ability to perform core functions. Fulfillment of the
nation's major tasks- declaration of new constitution by May
28, 2010, durable peace and structural reforms-remains an Achilles'
heel. The Constituent Assembly has revised its work plan 8th
times after two committees failed to produce their preliminary
drafts within deadline. Conflicting views in the CA on the preamble,
integration of PLA, nature of governance, election, chief justice,
land reforms, federalism and self-determination have mired the
constitution-drafting process. The UCPN (Maoist) is the single
largest party in the parliament having 240 members but due to
lack of absolute majority it has to negotiate with rivals to
form coalition government. The legal term requiring consensus
or two-thirds majority to pass each article of new constitution
entails the cooperation of UCPN (Maoist) in constitution drafting.
But, the hardliners within both sides has created divides thereby
leaving only a flicker of hope for timely declaration of new
constitution.
The National Human Rights Commission asked
the government the reason for the withdrawal of 238 court cases
against the criminals. It said, "Impunity is rearing its
ugly head in the country as parties are protecting criminals."
The Supreme Court, reduced as a passive appendage of the legislature,
has demanded security for the judges. The execution of Special
Security Plan has cut the violent activities of 109 armed groups
but it failed to tame as most of them have sanctuary in India
and get local politicians' support. There are 100 active criminal
gangs in the Valley linked to political parties and security
agencies. The absence of 1,124 secretaries of local bodies and
delayed transfer of the budget for them due to the failure of
parties to create inclusive mechanism mired the delivery of
basic public goods to citizens.
The outreach of state in society is shrinking.
Leaders from caste, ethnic, indigenous, Dalit and backward classes
are structuring around ethno-territorial ties. Traditional source
of authority bitterly divides them over primordial visions and
contests modern national identity. The Khas-Chhetri Unity Society
issued a stern warning of armed struggle if proportional representation
in governance is not granted by the Bahun rulers. The Nepal
Federation of Indigenous Nationalities demanded their right
to self-determination, voice and visibility in decision-making.
The Madhesi Jana Adhikar Forum (MJAF) made similar warning of
stir unless the government declares all Madhesh a single federal
state and resolves dispute over the Vice-President Permanand
Jha. Jha was deprived of state facilities for denying reoath
of his office in Nepali language as directed by the Supreme
Court on July 7. Earlier he has taken oath in Hindi language.
All the Madhesi parties demanded Hindi as national language
for Tarai, the southern flatlands. The Tharus have rejected
the Madhesi demand instead claimed for Tharuhat, an autonomous
region for them with the prior right to use forest, water and
land. As native insider, they also rejected Maoist declaration
of autonomous federal states as a ploy to convert them into
Madhesis-the outsider. To satisfy these demands the CA has proposed
11 constitutional commissions for Women, Indigenous people,
Dalit, Madhesi, Muslim, Disabled, Minorities and Backward groups,
Labor, Human Rights, and Anti-Corruption Commission, Public
Service, Election and Auditing. The CA has 11 thematic, 2 procedural
and 1 constitutional committee-the last one is chaired by Nilamber
Acharya after Madhav Nepal resigned from the post. In the by-election
for CA members, UCPN (Maoist) scored 3, NC 1, CPN-UML 1 and
MJAF 1 seats.
The Power Play
Nepal's political crisis took a sudden turn on April 20 when
Prime Minister Dahal asked General Katawal to give reasons for
new recruitment of 3,010 NA, eight retired generals' service
extension and boycott of six events in the national game by
the NA players due to PLA's participation. Unhappy with General
Katawal's account, Prime Minister Dahal dismissed him on May
3 and appointed Lt Kul B. Khadka as Acting Chief. In reaction,
the partners of ruling coalition withdrew from the government.
President Yadav asked General Katwal to continue in office.
Upset by President's move, Dahal resigned on May 4. On May 21
Maoists tabled a "commitment motion" at the parliament
for debate about the constitutionality of President's move but
Speaker of parliament Subas C. Nembang denied to entertain it.
Twenty-two parties elected CPN-UML leader
Madhav K. Nepal as Prime Minister on May 23. His cabinet reversed
many decisions of earlier government and astutely cemented relations
with the powerful stakeholder-the military, glued ties with
NC by promoting Foreign Minister Sujata Koirala to Deputy Prime
Minister and did not take any action against State Minister
for Agriculture and Cooperatives Karima Begum for slapping Chief
District Officer D. P. Bhandari of Parsa for sending old vehicle
for her. Premier knew that clash with Begum's party, MJAF (Democratic),
can bring his coalition crashing down. Likewise, Defense Minister
Bidhya Bhandari underlined the need to review the peace accord
on the ground that new recruitment in NA, arms purchase and
training were needed to make the army competitive for UN peace
mission and directed the NA to fill the vacancies through fresh
recruitment. Chief of United Nations Mission in Nepal (UNMIN)
Karin Landgren deemed it a breach of the peace accord. Conversely,
the ruling coalition blamed UNMIN for failing to check "phony
PLA during the verification process" and anti-government
bias.
The ruling coalition also dubbed the UN Secretary-General Ban
ki-Moon's advice for a national unity government as an "act
of blatant UN intervention in Nepal's internal affairs."
It also promoted Major General Toran Singh as second in rank
in the NA despite opposition from human rights watchdogs for
his poor human rights record and declined to handover Major
Niranjan Basnet to civilian court who is implicated for Maina
Sunwar's murder case. Haunted by the Maoist's version of statute
that barred the party loyal to "imperialists, feudal and
not progressive" it felt that only NA can protect the coalition
from the Maoists. The fear of Maoists' threat of state capture
through revolt for People's Republic in the country has coagulated
the interest of incongruent forces-- leftists, liberals, monarchists,
anti-secular and anti-federal forces, NA and India into a united
front. The Maoists' were forced to pull out their decisions
to replace the priests of Pashupatinath temple by Nepali ones
due to tough opposition from India and NC. The Supreme Court
issued a stay order to Maoist-led government not to touch priests,
destroy the statue of Prithvi N. Shah, the builder of modern
Nepal, and withdraw voluntary retirement scheme for judges and
appointment in National Academy.
The Maoists, too, feared the ruling coalition's
right-wing tilt spelling troubles: dissolution of CA, President's
rule, rebirth of monarchy and civil war. The coalition wants
to settle the PLA before the declaration of new constitution
while the Maoists fear the risk of counter revolution and, therefore,
prefer the integration of PLA and Young Communist League only
after the declaration of constitution and formation of a national
army. Demanding "civilian supremacy" and leadership
of government the UCPN (Maoist) blocked the parliamentary business
from August 7 to December 22 except three-day break to pass
the annual budget. The sharp polarization between the two sides
has ratcheted up despite endless meeting of task force manned
by NC, CPN-UML and UCPN (Maoist) leaders to work out a compromise
deal. The Singapore meet between Maoist chairman Dahal and NC
President Koirala on November 17 to find middle ground through
a high level political mechanism ended in a noise. The Maoists
then organized series of stir from November 1, unilaterally
declared ethno-territorial federal states, national strikes
and stoked nationalist feelings by exposing "clandestine
deals of the coalition government with foreign compradors"
meaning India. On December 23 they, however, let the parliament
run "to foil conspiracies and restore parliamentary supremacy."
On December 27 Chairman Dahal asked Indian Ambassador Rakesh
Sood to clarify whether Indian Army Chief Deepak Kapoor's opposition
to "the PLA's en masse integration into NA" is official
Indian version.
In the absence of a credible high level all-party
political mechanism to settle vital issues, the trust deficit
between the government and opposition has put the peace process
under severe strain. The leaders failed to live up to their
obligations to set up-- high level peace commission, state restructuring
commission, justice and reconciliation commission, commission
on disappeared persons, etc to manage conflict residues and
expedite the peace process. The Special Committee for Supervision,
Integration and Rehabilitation of Maoist combatants has become
prisoner of indecision of leaders as it failed to produce a
strategic plan to adjust 19,602 PLA in productive life of society.
The only progress is that on December 16 the government, the
UN and the UCPN (Maoist) signed an action plan for the release
and rehabilitation of 4,008 disqualified PLA, mostly minors.
In Nepal, few powerful leaders decide all matters whether elected
or not, even caring less to party split. On January 12, CPN
(Maoist) and CPN (Unity Center) merged to form Unified CPN (Maoist),
dropped Prachandapath as its ideology, and clinched multi-post
leadership and people-oriented republic. Blaming his mother
party for a lack of discipline and dominated by non-proletarians
and kinsmen, politburo member of UCPN (Maoist) Matrika Yadav
formed a new party CPN (Maoist) on February 10. The MJAF elected
Upendra Yadav as new president on January 21. But, the bitter
fracas splinted the party between the parliamentary group and
party's central committee incubating a new party MJAF (Democratic).
On February 29, the CPN-UML elected J.N. Khanal as Chairman
by defeating K. P. Oli.
The NC's general assembly on November 2 endorsed
a provision to elect 75 percent members in the 85-member central
committee to cut the power of president. Congress leader P.
M. Singh even blamed NC patriarchs G. P. Koirala and Sher B
Deuba for colluding to send the discredited persons in the cabinet.
The NC elected R. C. Paudel as its parliamentary party leader
and 17 members. Many CPN-UML legislators accused Premier Nepal
and Chairman Khanal of "providing cabinet berths to losers
of elections, creating a huge cabinet and reverting the decision
of previous government than working towards real agenda."
Economic Development
Nepal's total population is 29m with a growth
rate of 2.2%. It ranks 144th among 182 countries in Human Development
Report 2009.Life expectancy at birth is 59.8 years (male 60.9:female50.5
years). Adult literacy is 53.74% (68.51 % for male and 42.49%
female). With a per capita income of $471 human poverty index
value for Nepal is 32.1 % and power purchasing parity is $1.25
a day. Agriculture contributes 32.5%, industry 16.6 % and service
50.9 % to GDP. Economic growth is 3.6 %. The lack of investment
climate, poor capital expenditure, energy crisis, flood, labor
disputes and round-the-year strikes, suppressed economic growth.
Agriculture sector growth is 2.1 % and non-agricultural sector
4.8 % while the industrial production declined by 0.5%. Tourism
increased only by 1 %. There is no growth in health sector,
modest rise in education and road expansion of 62 kilometers.
This has affected employment and basic services. Nepal's unemployment
rate is 46 %. Every year 350,000 youth enter into labor market
and each day 750 people leave the country for job. About 3m
workers abroad and Gurkha soldiers in the UK and India send
US $2833.88m and $50m remittance respectively which has reduced
poverty to 32%. But, the global meltdown is likely to cut remittance
flow and augment inequality in rural areas. Inflation remained
13.2 %.
The decline in carpets and garments reduced
Nepal's export growth to 13. 5 % while import increased by 28.2%
and the balance of payment stood at $509.42m. Nepal's trade
balance is -$2936.49m, India alone is accounted for -$2833.78m.
Nepal's major export destinations are India, the US and Bangladesh
while import sources are India, China, Singapore, Australia,
etc. Its outstanding domestic debt is $1936.46m. Nepal's annual
budget is $3319.62m, $2073.46m are borne by internal revenue
and $1006.54m by foreign assistance (grant $ 730.13m and loan
$274.41m). The net budget deficit of $594.10m will be financed
by domestic borrowing.
The US has allocated $54m for peace and development
and the EU provided $0.74m for water, sanitation and Euro5.95m
to peace. German ODA stands $ 49m for various development projects.
The UK Minister for International Development Mike Foster outlined
a package of $245m for next three years for new roads, jobs
and basic services and pledged $80m for livelihood. Japanese
ODA stands at $48.6m for road, safe home and irrigation. The
Asian Development Bank increased its grant and loan to $538m
in 2009-10 from $258m in 2007-08. The ADB and UNDP provided
$3.81m to strengthen local governance. The World Bank provided
$109.2b to support energy and agriculture, a new two-year lending
of $782m, $130m for social sector and $45m for roads and bridges.
The Indian aid amounts to $337.84m. Norway agreed to allocate
$5m for the rehabilitation of disqualified Maoists and the UN
provided $ 6 m food aid. There were no policy reforms due to
crisis of governance. Even the meeting of Nepal Development
Forum was postponed.
Social Development
The frequent strikes have affected the delivery
of basic services and peace dividend to conflict victims. Nepal's
population fertility rate is 3.5 children while child mortality
rate is 48 per 1,000 live births. Legalization of abortion reduced
maternal mortality rate to 281 per 100,000. There are 14,787
people infected with HIV/AIDS. Viral influenza has killed over
400 people in the far west. Health facilities in rural and remote
areas have declined due to a lack of interest of doctors, inadequate
budget for hospitals, poor equipments, etc. Due to weak law-enforcing
agencies, every year over 10,000 girls are trafficked to India
and the Gulf region. About 77% of people benefit from safe and
clean drinking water where as 60 % of people does not have any
access to electricity. The government decided to make gender-responsive
budget.
Regional Cooperation
The South Asian Association for Regional Cooperation
(SAARC) tried to prioritize cooperation on key projects, such
as regional university, museum of textiles and handicrafts,
development fund, food bank to cope with livelihood crisis and
climate change, prune sensitive lists to increase the volume
of trade and launched regional website on trade and commerce.
Its 16th Summit will be held in Bhutan on 28-29 April 2010.
The 12th Ministerial meeting of Bay of Bengal Initiative for
Multi-Sectoral Technical Cooperation in Myanmar (December 8)
decided to establish energy and weather stations in India and
cultural industry in Bhutan.
Foreign Affairs
Nepal has deftly handled balancing act in the neighborhood and
demonstrated its main priorities to international community.
India and Nepal agreed to set up three layered mechanism to
deal with border disputes, flood and cross-border crime. India
urged Nepal to sign extradition treaty and control the flow
of fake Indian currency while Nepal asked full Indian cooperation
on Special Security Plan. During Chief of the Army Staff Chhatra
M. Gurung's visit to India in December 11 New Delhi agreed to
resume non-lethal arms supplies to Nepal. On October 27 Nepal
and India signed Treaty of Trade and Agreement of Cooperation
to Control Unauthorized Trade. With equal investment from both
sides Nepal will get 3,300 megawatt electricity from Pancheshwor
Project.
China became pro-active to checkmate external
intervention in Nepal. On August 16 Nepal and China tried to
settle border security, Tibetan migration, cross-border crime,
promotion of bilateral trade and access of Nepal's northern
people to Chinese goods and addition of 200 quotas, 20 full
scholarships for Nepali students. The meeting of six lawmakers
of Madhesi parties with Dalai Lama in India in May to "support
free-Tibet movement" alarmed the Chinese. On December 26
during Premier Nepal's visit to China three agreements were
signed-youth exchange and economic and technical cooperation.
It undertook 50-MW Upper Marsyangdi Hydro Electricity Project,
increased yearly aid to $ 21.89m from $14.40m last year, military
aid $1.35m, assured to offer duty-free access to 497 Nepali
goods and allotted $0.29m for the construction of Nepal's Consulate
office in Lhasa. Military delegations led by Lt. Gen. Shu Yutai
and Major-General Jia Xiaoning offered integrated security,
trade and economic support to Nepal including development projects
bordering China.
The US Assistant Secretaries for South and
Central Asian Affairs Richard Boucher and later Robert A. Blake
expressed Washington's keen interest in assisting Nepal in peace
and constitution. Principal Deputy Assistant Secretary for Population,
Refugees and Migration, Sam Witten, discussed the latest scenario
of the Tibetan and Bhutanese refugees in Nepal. The UK Under-Secretary
of State for Defense and Minister for Veterans, Kevan Jones
assured continued support for Nepal's peace and development.
The Japanese Deputy Minister for Defense Nobuo Kishi agreed
to construct Kawasoti hydel project. On February 5 German parliamentary
delegation led by Dr. Wolfgang Thierse discussed about development
cooperation and advised Nepalese parties to unite for statute.
Nepal assumed the chair of 49 Least Developed Countries within
the UN system in Geneva.
Abbreviations
ADB |
Asian Development Bank |
BIMST-EC |
Bay of Bengal Initiative for Multi-Sectoral
Economic and Technical Cooperation |
CA |
Constituent Assembly elected to draft a new
constitution |
CPN-UML |
Communist Party of Nepal Unified Marxist-Leninist
led by Chairman J. N. Khanal |
GDP |
Gross Domestic Product |
MJAF |
Madhesi Jana Adhikar Forum led by its President
Upendra Yadav |
MJAF (D) |
Madhesi Jana Adhikar Forum led by its President
Bijaya K. Gachhedar |
NA |
Nepal Army |
NC |
Nepali Congress led by President Girija Prasad
Koirala |
ODA |
Official Development Assistance |
PLA |
People's Liberation Army raised by Maoists. |
SAARC |
South Asian Association for Regional Cooperation
|
UCPN (Maoist) |
Unified Communist Party of Nepal (Maoist) |
UNDP |
United Nations Development Program |
UNMIN |
United Nations Mission in Nepal |
Cabinet List
Madhav K. Nepal |
Prime Minister |
Bijaya K. Gachhedar |
Deputy Prime Minister and Physical Planning
and Work |
Sujata Koirala |
Deputy Prime Minister and Foreign Affairs |
Bidya Bhandari |
Defense |
Surendra Panday |
Finance |
Bhim B. Rawal |
Home |
Shankar Pokhrel |
Information and Communication |
Rabindra Shrestha |
General Administration |
Rakam Chemjong |
Peace and Reconstruction |
Dambar Shrestha |
Land Reform |
Prakash S. Mahat |
Energy |
Bal Krishna Khand |
Irrigation |
Purna Kumar Sherma |
Local Development |
Minendra Rijal |
Federal Affairs and Legislature Parliament |
Uma Kant Chaudhary |
Health |
Mohammed Aftab Alam |
Labor and Transport |
Sharat Singh Bhandari |
Tourism and Civil Aviation |
Mrigendra K Singh Yadav |
Agriculture and Cooperatives |
RamChandra Kusbaha |
Education |
Ganesh Nepali |
Youth and Sports |
Mahendra P. Yadav |
Industries |
Deepak Bohara |
Forest and Soil Conservation |
Rajendra Mahato |
Commerce and Supply |
Prem B. Singh |
Law and Justice |
Laxman Lal Karna |
Minister Without Portfolio |
Thakur Sharma |
Environment |
Sarbadev P. Ojha |
Women, Children and Social Welfare |
State Ministers |
Karina Begum |
Agriculture and Cooperatives |
Satrughan Singh P. Koiri |
Culture and Tourism |
Sanjaya K. Shah |
Physical Planning and Works |
Ram Bachan Yadav |
Women, Children and Social Welfare |
Indra Prasad Dhungel |
Science and Technology |
Saroj K. Yadav |
Commerce and Supply |
Dilli B. Mahat |
Peace and Reconstruction |
Jit Bahadur Gautam |
General Administration |
Rijwan Ansari |
Home |
Ganesh B. Khadka |
Local Development |
Chandra Singh Bhattarai |
Energy |
Khadga B. Basyal |
Health |
Dan B. Chaudhary |
Industry |
Man B. Shahi |
Land Reform |
Govind Chaudhary |
Education |
Assistant Ministers |
Chanda Chaudhary |
Youth and Sports |
Kalawati Devi Dusad |
Physical Planning and Work |
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