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Sharing Federal Experiences of Germany

A seminar jointly organized by the Contemporary Research Centre (CRC)and Friedrich-Ebert-Stiftung (FES)

17 March 2014, Lalitpur, Nepal

Ritu Raj Subedi
Associate Editor
The Rising Nepal

Federalism has been the most contested topic in the contents of Nepal's new constitution and disagreement on it led to the dissolution of the first Constituent Assembly elected in 2008. Particularly, there were two schools of thoughts over the modality of federalism. One wanted to create federal units based on the single ethnicity identity. Another stood for multiple-identity-based federalism. The Nepali Congress and the CPN-UML advocated the latter version of federal model while the UCPN-M, Madhes-based forces and some ethnic groups belonged to the former. The Madhesi and ethnic groups sometime demonstrated their extremist posture, further ravelling the political scenario. The thorny federal agenda created political, social and cultural cleavages in the Nepali society. In the second CA polls, the electorates gave their thumbs up for the NC-UML's moderate position on federalism. The poll outcomes have neutralised the hard liners and provided prospect for finding the middle ground. The voices that the economic viability and identity should have a balance role in defining the federal discourse are getting upper hand. Federal model that guarantees the territorial integrity, social and ethnic harmony and cultural tolerance only suits the country with ethnic, linguistic and religious diversity. The need of the moment is to give a positive direction to the federal debate so that the second CA will be able to deliver an inclusive statute acceptable to all stakeholders.

Against this backdrop, the Contemporary Research Centre and FES, Nepal office invited Prof. Dr Christian Wagner, head of Research Division, Asia, Stiftung Wissenschaft and Politik (SWP), Berlin, to share German's experiences of federalism. Dr Wagner shared the success story of German federalism with the selected audiences. Federalism in the largest economy of Euro zone is based on mutual cooperation between the centre and the provinces. The German political scientist suggested that Nepal should go for territory-based federal structure owing to its complex social structure. As an expert of Asian politics, Dr Wagner warned against politicizing the federal agenda. His stress was on finding the institutional framework to ensure rights of ethnic groups and the greater autonomy to the local government. His down to earth approach on the most contested issue of the world's youngest republic could provide a fresh approach to the subject. His ideas can be supportive to the CA members engaged in accomplishing the historic task within the given timeframe.

The gist of Prof. Dr Wagner's presentation:

It covers the historical development of German federalism, its institutional framework, the main functions of the Bundesrat, legislation and financial federalism, party competition, diversity and federalism, different state structures, the challenge for new states and ethnic diversity and the prospects of Germany's federalism and European integration.

The historical development of German federalism:

German Union (Deutscher Bund) 1815 - 1866

North German Union (Norddeutscher Bund) 1867

German Reich 1871 - Federal Council (Bundesrat)

Weimarer Republik 1918: stronger centralization

West Germany (1949): states with more competences vis-à-vis centre

East Germany (1949): strong centre, weak states

The institutional framework

Representation of the states (Länder) is secured by the Federal Council (Bundesrat).
States (Länder) have their own attributes of statehood. They have elected government, separate constitutions and a constitutional court and own symbols (flag) except for Schleswig-Holstein. The states represent in the Federal Council according to the size of their population. The voting pattern in the Federal Council is like this: a total 16 states have 69 votes. They have minimum 3 votes. More than 2 million have 4 votes; more than 6 million have 5 votes and more than 7 million get 6 votes.

The federal government is assigned with the bulk of legislative powers while the states exercise most of the administrative powers. The centre retains the rights related to the foreign relations, defense and currency. The states can formulate legislations on environment, health and social policy as long as the centre does not make any legislation on them. The centre only sets a general framework but the states have to do the specific legislation on public service, universities, environment, spatial and territorial planning. The states frame laws on culture, schooling, police and local government.

The main legislative functions of the Federal Council involve working with the federal parliament to chalk out the Bill on the basis of consent in case of the constitution amendment. If the Länder's budgetary revenue is affected, administrative jurisdiction of the Länder is involved. Financial federalism premise requires that the living conditions in the states should be consistent. Different taxes will be collected by different units. There should be financial redistribution system between richer and poorer states and co-financing between the centre, states and local governments for large scale infrastructure projects.

Parties in Germany

In Germany, there are mainly six political parties - the Christian Democratic Union, the Social Democratic Party, the Left Party, the Green Party, the Free Liberal Party and the Pirate Party. This is an expansion from the 3-party system to 5-6 party system. The coalition governments in states have to agree on common vote in Federal Council. The State vote in Federal Council has to be unanimous.

The states have different structures. The state parliament elects only Chief Minister, who selects government, which requires the consent of state parliament. Every member of state government is elected separately (city states). Mayors are elected directly. There is a merger of poor states with affluent states - Bremen with Lower Saxony and Saarland with Rhineland Palatina. A separate Northern State was created by combining Mecklenburg-Vorpommern and Schleswig-Holstein. However, the merger bid between Berlin and Brandenburg suffered a blow in 1995 referendum.

Ethnic diversity

German has four major ethnic groups - Danish, Frisian, Sorbs and Roma. In West Germany, the Danishes are in minority (50,000 people). It has its own party named Südschleswigsche Wählerverband (SSW). There is no five percent threshold provision in state elections and this party has sent 4 members to state assembly. Meanwhile, Sorbs are in minority in the East Germany. They are German citizens with Slavic speaking background. They have no separate political representation but own cultural institutions. The towns and streets in Sorb districts carry bilingual names.

States for greater autonomy

The Maastricht Treaty 1992 created the Committee of Regions to represent interests of states and provinces in EU, especially in agriculture. The German government has to take into account the statement of the Federal Council if EU legislative initiatives have an emphasis on matters that touch state legislation. The States are included in the negotiations within EU on Germany's position to safeguard their interests. The representatives of the States take part in EU negotiations if substantial interests of the states are touched. The Centre hands over negotiations in EU to states if subjects of the discussion include education, culture and broadcasting. There have been changed preferences by States vis-à-vis the EU: from "let us in" to "leave us alone". The states fear the interference of EU and now focus on autonomy.

Contemporary Research Centre's chairman and CA member professor Dr Ganesh Man Gurung said that federalism should address Nepal's diversity and question of identity but the economic viability should be the primary element for the formation of the new provinces. The nature of federalism in Germany and Nepal is quite different. He admitted that it is not easy to carve up federal structure in Nepal.

FES, Nepal office head Dev Raj Dahal said that federalism was not a panacea to all maladies of new Nepal but a means to ensure fair distribution of national wealth and resources among the people.

Lal Babu Yadav, an associate professor at the Tribhuvan University, said that the second CA elections had rejected the ethnic federalism and One Madhes One Province slogan, and the people's mandate was for cooperative federalism. He said that federalism has become a bottleneck in Nepal's post-2006 political process and there are many arguments - both for and against it. "In a country where there are more than 125 ethnic groups and 123 languages are spoken with dispersed population- it would be difficult to have federalism on the basis of particular identity of ethnic groups as none of them are in majority. Yadav said that the diversity that exists in Nepali society has become the uniting force rather than the dividing one and only such as approach can protect the national sovereignty and integrity. "So what type of federalism would best serve the interest of Nepali state - the answer perhaps would be the cooperative one in many ways which has been practiced in Germany, India and other countries as well.

Samira Paudel of FES, Nepal welcomed the participants and highlighted the objectives of the functions.

Comments from the floor

Dr Chuda Shrestha appreciated Dr Wagner for enlightening the participants about federalism. Santosh Pariyar noted that Nepal had different historical context, and there is a debate on identity-based versus territory-based federal structure. He said, "Since no any ethnic group is in majority, how can an ethnicity-based federalism be established in Nepal?" He asked Dr Wagner how the rights of minorities can be ensured under the new federal set-up. Kosh Raj Koirala said that the idea of right to self-determination and autonomy evoked the fear of split. "What kind of federal arrangement should Nepal adopt?" he enquired. Former lawmaker Pushpa Bhusal enquired about the function of the constitutional court in Germany. Lucky Sherpa asked how the issues of discrimination, exclusion and marginalized, which are incorporated in the Comprehensive Peace Agreement, can be addressed in the new federal structure. The situation in Germany and here is completely different. We want the provision of constitutional court to settle the disputes related to the new federal arrangement but the Supreme Court does not want entertain this idea. Cooperative federalism as practiced in Germany cannot be replicated here, she insisted.

Naresh Rimal said that Nepal's development agenda are guided by the exogenous elements. What we need is the endogenous means for executing the development tasks. Nepali Congress lawmaker Kiran Yadav said that the first CA was dissolved over the issue of federalism. Ethnic diversity, language and economic viability have been raised with the demand of forming 16/17 states. How can it be feasible? There is a challenge to balance between the right to self-determination, economic viability and diversity, she said. Ms Lara said that economic aspect of federalism has been largely passed over in the ongoing federal debate in Nepal. She said that the country does not have sufficient tax to prop up federalism. NC lawmaker Pyare Lal Rana said that federalism that Germany has been practicing for many decades made headway in the political, administrative, judicial and economic fields there. In India, federalism has been devised based on population by sharing rights between the centre and the provinces. Nepal's interim statute has adopted federalism to ensure the rights of the marginalised and the oppressed. Rana said that the NC has pushed for 4 provinces, which can be sustainable. If the provinces depend on the centre, they could not provide services to the people. The right to secession cannot be granted to the provinces. The country has 169 indigenous groups. To ensure the rights of marginalized groups and ethnic identity, special rights such as quota and reservation should be provided to them, which will make the system inclusive. Binita Kapali said that the country had many ethnic groups and it was challenging to make federal set-up viable. "How can Nepal have inclusive federalism?" I think the federal states should be based on the strength of how much the country can collect taxes. CPN-UML lawmaker Ram Kumar Bhattarai said that the country was heading to be a federal state but pooling resources for the new provinces is a daunting task. The UML has floated the concept of seven provinces. We are not industrial country. Neither are we self-reliant in agriculture. The potential areas for the economic development include tourism and hydropower. We should form federal units based on tourism and hydropower viability. We should create a few numbers of states so that they can be sustainable.

Responses from Prof. Dr. Wagner

Nepal should adopt territory-based federalism owing to its complex social structure. I rather prefer for Nepal to go for four to five federal units based on territory as the country has diverse and complex structure. Federating the country into various provinces is no doubt an uphill job but the issue should not be politicized. Depoliticise federal structure, build institutional framework and make them articulate. The provinces should be made viable to let the government function smoothly. Explore the instruments for self-autonomy, economy and self-determination. However, the quest for self-determination is endless. One-size-fits-all idea simply does not work. Nepal should adopt its own model of federal structure that will lift the people out of poverty and redress the balance for the marginalised communities. The countries are poor in paper but not in resources. There should be specific authority to collect taxes. There are also the downsides to the heterogeneous structure in which the new groups bring new dynamic and make the governing process dysfunctional. The process is paralyzed by the procedures. In Germany, federalism is still under construction. The affluent and the poor provinces are conflated to create new province. Federalism is a boring subject for the students but it is the political parties that bring process for its reforms.

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