and Social Development in Nepal in the Year 2010
Lingering political turmoil in Nepal has weakened
the authority of the state to ensure public security, rule of
law and delivery of public goods. Hobbled by mistrust, political
parties failed to install a stable government since the resignation
of Premier Madhav K. Nepal on June 30. Each major party claims
to lead government but lacks requisite parliamentary support.
CPN-UML's President J. N. Khanal withdrew his candidacy from
Prime Ministerial contest in the first round of voting as he
did not see any chance to win two-thirds majority required to
endorse the new constitution. UCPN (Maoist) chairman Puspa K.
Dahal also withdrew in the 7th round when he could not garner
simple majority of 301 in a 601-member Constituent Assembly
(CA). Nepali Congress (NC) candidate Ram C. Poudel vainly ran
16 times. The House session for the election of new prime minister
on January 9, 2011 only promises either a government of majority
or a syndicated rule of three major parties.
Having failed to deliver a new constitution,
the CA extended its tenure for one more year from May 28 deadline.
High Level Task Force headed by Maoist Chairman Puspa K. Dahal
settled half of 210 issues leaving federalism, self-determination,
governance, election, prior use rights, etc undecided. Major
parties have set up a Special Committee, headed by Rtd. General
of Nepal Army to work on the integration and rehabilitation
of Maoist combatants. Wracked by internal feuds, the ruling
parties are finding hard to substitute the function of United
Nations Mission in Nepal (UNMIN) after its departure on January
15, 2011. The UN sought to set up a special unit to fill the
void while Maoists sought UNMIN's 8th extension till May 28
to avert constitutional crisis. The government is willing to
set up a UN unit without its right to monitor Nepal Army.
Women, Dalits, ethnic groups, indigenous people,
youth, workers and Madhesis are exerting pressure for an inclusive
governance and democratization of political parties torn by
factionalism and split. Growth of armed groups and militant
wings of political parties are breeding inhospitable climate
for development and peace. Extortion and killing are eroding
space for civil society, NGOs and development agencies in Nepal's
southern flatlands and eastern hills. Nepal's weak law-enforcement
and impunity offer huge prospects for corruption and pillaging
of national resources. It has reduced aid effectiveness. Patronage
politics offers no incentive for public institutions to perform.
Over 800 local bodies do not have secretaries. Acute power crisis
up to 14 hours a day, political instability and labor unrest
shook the confidence of foreign investors. It is only remittance
that is feeding rural economy and supporting livelihoods.
International community has blamed political
parties for the lack of development leadership and negating
donors' ability to secure resources for post-conflict peace
process. India and China are concerned about Nepal's stability
and agree on non-involvement of third-party in peace but each
fears the other of undermining its legitimate security, political
and economic interest.
Crisis of Governance
The failure of Nepal's parliament 16th time
to elect a new prime minister after Prime Minister Madhav Kumar
Nepal resigned on June 30 under the pressure of his own party
and Communist Party of Nepal-Unified Marxist-Leninist-Maoist
(UCPN-Maoist) impends a crisis of constitutionalism. The sole
NC candidate R. C. Poudel did not score simple majority in a
601-member Legislative-Parliament. Maoist Chairman Puspa Kamal
Dahal withdrew his candidacy from the seventh run-off as he
found no possibility to win. The CPN-UML and Madhesi parties
abstained from voting as they saw no one could secure two-thirds
majority needed to approve the new constitution.
The 17th round of voting was deferred in the
wake of an accord reached between three major parties- NC, CPN-UML
and UCPN (Maoist) to explore an alternative and introduce annual
budget which was pending since last 4 months. The Maoists effort
to block the parliamentary proceeding on the ground that the
caretaker government instead of presenting the partial budget
sought to present full one forced the government prorogue the
parliamentary session to introduce the budget through Ordinance.
This made the election of Prime Minister uncertain. The Supreme
Court directed Speaker Subash C. Nembang to review parliamentary
regulations and ruled out the abstention of lawmakers from voting.
On the request of UCPN (Maoist) and five small parties President
Ram Baran Yadav called House session on December 19 but after
two-point accord between three major parties, Maoists withdrew
their proposal and the government called regular House session
on January 9, 2011. A consensus exists for rotational Prime
Minister of three big parties but each claimed to have its Prime
Minister first. NC does not want to discuss on power sharing
unless Maoists are disarmed while CPN-UML prefers to take peace
process and government formation in tandem.
The six-point deal among three major parties
in April to review past agreements, build trust, define the
authority of President, integration of Maoist combatants, drafting
new constitution and power-sharing by all parties remained unimplemented.
The UCPN (Maoist) as a dominant party in the CA claimed to lead
the government but short of simple majority of 301. Its effort
to come to power through a mass rally and 'indefinite general
strike' beginning from May 1 was suspended right away due to
popular pressure. Non-Maoist parties fear its slogan of state
capture and seeking its commitment to democratic rule. Without
Maoists' support the new constitution cannot be ready as each
article requires approval of two-thirds majority.
Multi-party consensuses reactivated Vice-President
Permanand Jha's post. Jha, who was discharged of his duties
for defying Supreme Court's verdict to retake oath in Nepali
language, was allowed to take oath in his mother tongue. Similarly,
as the CA failed to promulgate new constitution on May 28 deadline
three major parties signed a pact and extended its tenure for
one more year. The pact promised a consensus to lead the peace
process, draft new constitution and facilitate Prime Minister's
resignation. CA's 11 subject committees have prepared their
concept papers for debate and consensus. In October, 27 political
parties in the CA constituted a seven-member High Level Task
Force led by Maoist Chairman Dahal to settle contentious issues
by December 11. So far it has settled 127 out of 210 issues
agreeing Nepal as a sovereign, multi-lingual, multi-cultural
and multi-ethnic country, Nepali as official language, mixed
economy, head of the state with authority to appoint and sack
army chief on the recommendation of the cabinet, seek the consent
of province before signing a treaty if it falls under the jurisdiction
of province and incorporate a provision saying the province
shall take the consent of the federal government before signing
any agreement with foreign parties about economic matters and
citizenship. The Maoists, however, disagreed on pluralism. Right
to self-determination, federalism, judicial appointments, governance,
electoral system and conscription of youth in army, etc are
yet to be decided. The Task Force formed earlier remained moribund
after the death of NC President G. P. Koirala on March 20 while
the new one headed by Dahal was opposed by Maoist leader Mohan
Baidya for compromising too much to ruling parties.
The local bodies are without people's representatives
since 8 years. Absence of 850 secretaries out of 3913 for many
years is affecting the development. The government is planning
to form Citizens' Forum of local people and leaders to fill
this vacuum, set development priorities and oversee their execution.
Communication of grievances and action by subsidiary identities
has weakened national identity. The month-long strikes announced
by ethnic groups since July 18 demanded the state restructuring
on the basis of ethnicity, language and historical identities.
It cancelled strike after the DFID threatened to stop its aid.
Madhesi parties opposed the Election Commission (EC) voters'
identity cards distribution to make elections free and fair
as they considered it biased. On October 9 the EC and 4 Madhesi
parties reached a deal to accept citizenship certificates and
other official documents as the basis for the issuance of voter
identity cards. The Supreme Court, however, ordered the government
not to issue voters' identity cards without citizenship certificate.
The Limbuwan group also prevented EC campaign and went hunger
strike for separate statehood.
Absence of public security is retarding economy,
education and development of Tarai and eastern hills. Killing
and kidnapping by criminal and armed groups for money and patronage
politics of ruling parties created unfavorable climate for business.
Impunity has deteriorated both human rights and rule of law.
Murder of two businessmen Jamim Shah in Kathmandu and Arun Singhanayia
in Janakpur and kidnapping of medical doctor Bhakta M. Shrestha
in a broad day light manifest the condition of public security.
On January 19 senior police officers reported to the Supreme
Court that the task of law enforcement has become difficult
as "the politicians are protecting the dons of criminals."
Low morale of civil servants discourages the efficiency of development
programs and service delivery. Fear of revenge has fostered
the self-censorship of media.
Wracked by internal rift with central committee,
the chairmen of major parties are weak to exercise their authority
for national initiative. The dominant political party UCPN (Maoist)'s
sixth plenum on November 21 witnessed open rift between Vice-Chairman
Baburam Bhattarai favoring peace and constitution and Senior
Vice-Chairman Kiran Baidya for people's revolt against comprador
classes and India for national independence. Dahal-Baidya duo
declared protest programs beginning from December 3 for people's
revolt. On February 3, the politburo meet of third biggest party
CPN-UML adopted the policy of 'partnership, struggle and transformation'
with Maoists and 'defend, implement and develop' its ideology
of People's Multi-Party Democracy. One group led by J. N. Khanal-Bamdev
Gautam favored "national unity government" while Madhav
K. Nepal-K. P. Oli faction favored a government of non-Maoists.
The second biggest party NC's national convention
on September 21 elected Sushil Koirala as president defeating
his nearest rival Sher B. Deuba. Koirala camp won 32 Central
Committee (CC) members including President and General Secretary
while Deuba camp won 29 members including Treasurer. The elected
president can nominate 21 CWC members. The President, however,
met strong resistance when he tried to nominate Ram C. Poudel
as Vice-President and K. P. Sitaula as General-Secretary. Deuba
claimed proportional representation of his faction.
Madhesi Jana Adhikar Forum (MJAF), MJAF (Democratic),
Tarai Madehsh Loktantrik Party (TMLP) and Sadbhavana Party-formed
United Democratic Madhesi Front demanded the execution of all
previous pacts, proportional reservation of Madhesi people in
governance, federal democratic republic constitution and founding
of Autonomous Madhesh state with a right to self-determination,
group entry in the Nepal Army, etc. These issues contrast with
Tharus and ethnic groups' choice of multi-federal states for
Tarai having prior use rights on 'land, forest and river.' TMLP
suffered split and a new party TMLP-Nepal is born recently.
Rastriya Prajatantra Party-Nepal is demanding
referendum on Hindu state, monarchy and unitary polity which
prompted ex-King Gyanendra to believe, "Monarchy in Nepal
has not ended" and began his tour to countryside. The declining
performance of the government and support of Indian Janata Party
leaders for Hindu state prompted both deputy prime ministers-Bijaya
K. Gachhedar and Sujata Koirala and even Vice-President Jha
to reconvert Nepal into Hindu state. Rastriya Janamorcha Nepal
is strongly opposing federalism considering it a plan by foreigners
to split up Nepal.
The government discharged 4,008 disqualified
Maoist ex-combatants, granted martyr status to 1,626 people
killed during insurgency and $1,352 each to their families and
endorsed a code of conduct for the Maoist combatants. The Special
Committee for Supervision, Integration and Rehabilitation of
Maoist combatants led by Prime Minister has instituted a 12-member
secretariat, converted the 8-member Technical Committee into
the Special Committee Secretariat and appointed its coordinator
Rtd. Nepal Army General Balanand Sharma. Its efforts to detach
ex-rebel soldiers from the chain of Command of Maoist party
has failed as the Maoists claimed that the chain of command
of ex-combatants will continue to be in their hands unless the
modality of integration and rehabilitation is decided. They
also opposed five-phase action plan submitted to Special Committee
for the complete integration of Maoists by 2013.
The UN Under-Secretary General of Political
Affairs B. Lynn Pascoe on December 3 said that to ensure an
orderly exist of UNMIN the Special Committee first close the
cantonments and said that Nepal will be on UN Security Council
watch for three years. The UN has consulted the government regarding
setting up of its special unit to fill the void in the peace
process in the post-UNMIN phase. The Special Committee secretariat
is ready to take the charge of UNMIN's monitoring role but the
UNMIN declined to handover Maoist arms and monitoring equipments
without a political compromise. For civilian control of Nepal
Army, the cabinet formed a three-member Defense Steering Committee
led by Defense Minister Bidya Bhandari. On November 23 the government
of Nepal and donors signed a Joint Financing Arrangement for
Nepal Peace Trust Fund to support cantonment management, integration
and rehabilitation of Maoist combatants and post-conflict peace
Nepal with Regional and International Relations
Nepal has utilized its participation
in international forums. The 16th summit of South Asian Association
for Regional Cooperation on April 28-29 in Bhutan focused on
fighting the perils of climate change and set up a $300m SAARC
Development Fund to reduce regional poverty. Maldives will host
17th SAARC summit on November 10-11, 2011. Nepal hosted the
2nd Bay of Bengal Initiative for Multi-Sectoral Technical and
Economic Cooperation (BIMSTEC) Ministerial Meeting on poverty
alleviation, economic cooperation, technology transfer and private
sectors' role in development. Nepal's both neighbors, India
and China, prefer the non-involvement of third-party in its
peace. India is constructing 1,450 kms of black topped all weather
roads in the Terai area adjoining India at an estimated cost
of $94.17m, provided $1m for eye treatment and $3m for embankment.
Indian Army Chief V. K. Singh during his visit to Nepal on December
22 promised expanded defense cooperation. Nepalese government's
scrapping of its March 19 decision to award machine readable
passport printing contract to India amid huge public pressure
forced Nepal to pay $48,000 compensation.
Chinese leader Zhou Yongkang on March 26 said,
"China will work with Nepal to push forward the bilateral
comprehensive partnership to support its efforts to safeguard
its national independence, sovereignty and territorial integrity
and choice of development path." It allowed zero-tariff
entry facility to 4,721 Nepali exportable items and provided
$1.47m to beef up security along Nepal-China border, 108 vehicles
worth $1.8m, urged the Nepalese parties to complete the peace
process through consensus "without external help"
and pledged $11.50m (70m yuan) direct aid. China has received
nearly a dozen of Maoist commanders and leaders and arranged
meeting with the military and party officials. On December 3
it handed a draft of the new Nepal-China Cultural Cooperation
Treaty. Nepal foiled the primary polls organized by Tibetan
refugees in the Valley to elect Tibetan government-in-exile
and instructed its Ambassador not to attend ceremony for awarding
Nobel Peace Prize to Liu Xiaobo.
The visiting US Assistant Secretary for South
and Central Asian Affairs Robert O. Blake on April 26 stressed
on a permanent peace, integration and rehabilitation of Maoist
combatants and a new constitution. The EU stressed on peace
process, drafting of new constitution and creation of investment
friendly environment for development. The Speaker of Swiss National
Council Pascale Wyss recommended Nepali CA members to develop
its own model of state. Nepal also started lobbying for its
candidate Kul C. Gautam for the presidency of the UN General
Assembly and has written letter to executive heads of all UN
members to support him.
Nepal's population is 29.7m with a growth
rate of 2.2%. Its rank is 138th in Human Development Report
2010. Life expectancy at birth is 68.81 years (male 64.62: female
67.05). Adult literacy rate is 53.74 % (male 68.51: female 42.49).
With a per capita income of $562 human poverty index value for
Nepal is 25.4 % and power purchasing parity is $1.5 a day. Agriculture
contributes 33 %, service 51.5 % and industry 9.2 % to GDP.
Economic growth is only 3.5 %. Slow agricultural sector growth
of 1.2 % and disruption of transportation caused 3.3m people
food insecure. Service sector growth of 5.5% was driven by remittance
while industrial growth remained sluggish 3.9% only. Saving
rate is only 10% of GDP. To curb industrial strike and make
Visit Nepal Year 2011 successful, the government introduced
"No Work No Pay." The contribution of workers' remittance
to GDP is 23 %($3,513m). Unemployment is 2.1% while underemployment
is 30% of total labor force. Every year 350,000 youth enter
labor market and 250,000 leave the country for job. Tourism
sector contributes 1.5 % to GDP.
In December Nepal Rastriya Bank revealed that
the total trade deficit of Nepal during the first four month
of fiscal year 2010-11 remained $690.41m. Its exports stand
$296.43m against imports of %1662.32m. The balance of payment
marked a deficit of $68.90m. The gross foreign exchange reserve
of $3586.43m can sustain imports and goods and services for
only 7 months. India accounts for 99.4 % of Nepal's imports
and 88.8 % of its exports in South Asia. Nepal's annual budget
for 2010-11 is $4628.76m. The share of domestic borrowing is
$461.36m, foreign loan $304.52m, foreign grants $895.06m and
revenue target is $2967.67m. Nepal's outstanding external debt
is $4.5b. Foreign Direct Investment is $46.84m. Inflation hovered
around 10.5 %.
The Asian Development Bank's help is $559m,
USAID $15.6m for health and $30m to benefit it from the Generalized
System of Preference, EU $ 1,14m food aid, euro 22m to peace
and euro 60m for the next three years for development, the UK
55m pound for health sector, Swiss francs 12.716m for roads
by Swiss, UN $41m to fight hunger, $50m for TB and Malaria control,
$5m for sanitation, $50m for energy and Denmark $81m aid. Nepal.
German annual aid to Nepal is $46.3m in various fields-peace,
democracy and development. The World Bank offered $48.31m loan
for social safety nets, $129.2m poor people's access to health
services and $3.4m for reducing greenhouse emission.
Nepal reduced child mortality rate to 50 per
1,000 live births and net enrollment for primary education reached
93. 7 %. However, 15m do not have access to sanitation, 7.1m
lack access to safe drinking water and 10,500 under the age
of five die due to poor sanitation. Health facility in rural
areas is poor because of absence of doctor and lack of medicine.
Strikes disturbed regular education. There are 3.14 m children
engaged in child labor. Due to weak law-enforcement about 15,000
women and children are sold for trafficking and slavery every
year. HIV patients in Nepal is 64, 000.
||Asian Development Bank
||Bay of Bengal Initiative for Multi-Sectoral
Economic and Technical Cooperation
||601-Constituent Assembly elected to draft
a new constitution
||Communist Party of Nepal Unified Marxist-Leninist
led by Chairman J. N. Khanal
||British Department for International Development
||Gross Domestic Product
||Madhesi Jana Adhikar Forum led by its President
||Madhesi Jana Adhikar Forum led by its President
||Nepali Congress Party led by President Sushil
|| South Asian Association for Regional Cooperation
||Tarai Madhesh Loktantrik Party led by its
President Mahant Thakur
||Tarai Madhesh Loktantrik Party led by its
President Mahendra Yadav
||Unified Communist Party of Nepal (Maoist)
led by Chairman Puspa Kamal Dahal
||United Nations Mission in Nepal led by Karin