South Asia



Nepal is at the crossroads of the most serious crisis in modern history.  The King’s opportunism, lack of consensus amongst political parties, and the Maoists barbarism have all led to hundreds of thousands of deaths -- a far worse situation than the Sept. 11 attacks on the United States of America.  In the backdrop of this turmoil, one wonders, if Nepal will ever become a peaceful, stable, democratic nation.


The political scene is now more fractured now than in the days when the democratic elected governments came and went after just a few month in power. Then there were only political parties that mattered. Today, non-elected political mafias led by the greedy cohorts and the invisible foreign hands are the active political forces on the national stage, while the democratically elected parties (impotent after the royal takeover) are harping on the street with their, “The restoration of Parliament”, slogan.


To make the matter worse, the Maoist rebels are gaining momentum in the region.  India, the first country to describe the Maoists as terrorists, in a dramatic break with past policy, held up top-level secret talks with senior Maoist leaders from Nepal, while unequivocally condemning their terrorist and violent activities in Nepal. But on June 24th, India, too, got a jolt from the blue, when Indian and Nepali Maoist militants, attacked a police station and two state-run banks in Bihar’s Madhuban Village, leaving 21 dead, according to the Indian Media reports. "The participation of Nepalese Maoists has been proved. This is the first time they were involved,” Director General of Police, Ashish Ranjan Sinha, the state police chief, was quoted as saying by the Hindu, India's premier newspaper. However, the Communist Party of Nepal-Maoist have refuted claims that Nepali Maoists were involved in a coordinated attack at the Madhuban village in the Indian state of Bihar.




Inflating Military Budget & Poverty


Furthermore, Nepal's Royal government is planning to augment the defence budget in order to give the security forces the competitive edge over the rebels. However, the channeling of billions of rupees towards military spending is contributing to the decline of the civilian economy in Nepal. And the way the Nepali military is fighting the Maoist rebels is actually invoking and creating more of them in the first place. The State has launched a military venture, which threatens the future of democracy. It has formulated the contours of an imperial project of royal domination by its territorial control over Nepal.


This astronomical arrogance pushes not simply aggression to new heights, but may well preclude our nation from spending money on various developmental infrastructures. Needless to say, this shift into a war economy will contribute to growing poverty and unemployment.


Nepal remains dominantly, a poor agrarian economy, and there has been very little in terms of either structural change or substantial development that could have caused shifts in the pattern of employment or in labour productivity in general.  Nepal has a high rate of population growth, high concentration of poor households, low per capita income, and a modest rate of GDP growth.


Agriculture is the dominant sector of our economy and, landless labourers, small and marginal farmers, dominate agrarian structure.  And the scope for extensive agriculture is more or less exhausted.  Given these and several other social and political handicaps it will be instructive to see what the State could achieve in ensuring poverty alleviation of its people in the midst of violence.


Experience in Nepal shows that growth in GDP, unless the rate is very high, will be unable to generate measurable "spread-effects". Wherever the trickle-down effect has taken place, the rate of growth of the economy has been substantial. Apart from the rate of growth, its composition also matters.


However, it is not realistic for a large portion of the poor households in Nepal to assume that economic growth would make them secure.  Nepal needs direct public interventions to eradicate poverty. Output growth in agriculture and non-agricultural sectors do not generate sufficient employment. Employment elasticity of agricultural growth is low, and is probably declining. For small and marginal farmers as well as landless labourers and poor artisans, employment opportunities outside agriculture are becoming progressively more important. Looking to the slow growth in the non-farm sector, employment opportunities cannot be provided on the requisite scale in non-farm activities for some years to come.


Thus, other opportunities either in the form of self-generated or wage employment have to be created by public programmes, mainly in infrastructure building activities. The State must recognize this fact and launch various schemes to provide employment. The scope of poverty alleviation programmes should include not only a rise in wages or in current income. It should also aim at providing assets and skills to these sections. The poor households will be able to respond to economic stimuli only if their capacity is enhanced. Without access to productive assets, which also include the marketable skills, the poor cannot contribute to, and benefit from, the growth process.




King's Duty


These are tricky times for Nepal, both economically and politically. The important point, of course, is to assess where Nepal goes from here. For one thing, it seems inevitable that Nepal will move towards further integration at different speeds. It is apparent that King’s bigotry can do little in tackling the underlying problems reflected by the recent failures.


The first and foremost cry of the hour is peace. But durable peace and stability in Nepal can only be achieved through a political settlement, which, among other things, requires the Maoists to forswear armed struggle and lay down their arms, the political parties to forswear their prior mistakes and lay down their differences, and the King to forswear his double-play and lay down his unconstitutional ambition, for the sake of the Nepal’s future.


Whatever may be the predominant cause of the hysteria, it is clear that the political stance lies at the crux of the problem. A country without political commitment cannot protect the moral integrity of its citizens. The state has, therefore, a great duty to perform. As it punishes crime, it is bound to prevent it. Consequently, conflicts among the people in society forms of course, it is impossible that every people think in the same way. Yet, there should be common agreements on some subjects for the good of society itself.


Nevertheless, The future of Nepal will be shaped effectively by how resolutely King responds to this internal tremor and the future of the King will be shaped effectively by how resolutely Nepalese responds to his legitimate actions. The king has limited alternatives other than to crush the backbone of the Maoist uprising, restore democracy by giving the power back to the peoples representatives and save Nepal along with the institution of monarchy.


How Nepal will fare without the constitutional monarchy is a question, which needs to be pondered neutrally. The likely scenario in the absence of monarchy is not a peaceful democratic country but Nepal joining the ranks of Afghanistan and Cambodia after the overthrow of the monarchy. In Nepal monarchy is an important barricade against further chaos and uncertainty.


Although a succession of democratic governments during the last decade and half have been reviled for their corruption, the Nepali people will not put up with direct royal rule unless the King defeats the Maoists and then hands over power to the elected civilian government. Political parties accuse the king of evil intentions and of wanting to be a tyrant, while they fail to see beyond this.


For Nepal, the best way forward is constitutional monarchy and multi party democracy. Very much critically depends on how the active monarchy in Nepal after February 1, 2005 deals with this crisis. I believe Nepal's King can restore order and establish peace in Nepal. But he has to show concrete results soon in favor of democracy and against terrorism.

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