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Nepal's Fragile Peace Process International Crisis Group 2007-09-28

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 Policy Briefing
Asia Briefing N°68
Kathmandu/Bmssels, 28 September 2007
Crisis Group
WORKING TO PREVENT
CONFLICT WORLDWIDE
Nepal's Fragile Peace Process
OVERVIEW
A Maoist walk-out from government on 18 September
2007 and mainstream political parties' intransigence
are threatening elections for Nepal's Constituent Assembly
(CA) scheduled for 22 November. Although a compromise
to bring the Maoists back on board is possible, the
heightened tensions add to longstanding problems
including weak political will, poor governance and
security, and continued claims for representation by
marginalised groups. The Maoists could contest elections
from outside government but polls without their
participation would be meaningless, and they retain the
capacity to make the country ungovernable if they oppose
the process. Critical elements ofthe 2006 peace deal,
such as security sector reform, remain to be tackled,
while implementation and monitoring of past agreements
have been minimal. Primary responsibility for steering
the process lies with the mainstream parties, which need
to demonstrate coherence, commitment and a will to
reform their own behaviour if lasting peace is to be
established.
Parties have started emphasising the importance of the
election, and increased signs of commitment from most
have added momentum to a process which had been
suffering from dangerous drift. At the same time, the
formerly confident Maoists have shown increasing
nervousness at facing the electorate. Maintaining a sense
of purpose, especially through nationwide campaigning,
will increase public confidence and leave less room
for spoilers to manoeuvre. Opponents ofthe process,
especially royalists alarmed at the growing republican
consensus, are desperate to derail it but have a chance
only ifthe major parties are weak and divided.
Several armed groups have vowed to disrupt the election;
mid-September communal violence following the killing
of a former vigilante leader left around two dozen dead
and illustrated how easily a fragile situation can tilt
into dangerous unrest. More serious violence is a real risk.
An election postponement will only reduce such dangers
if major parties agree on urgent, substantive steps to
address the grievances and governance failings that have
fostered recent unrest. Failing this, further delays will
only make solutions harder to find and invite unhelpful
recrimination and finger-pointing.
The November 2006 Comprehensive Peace Agreement
(CPA) was never as comprehensive as its name implied,
and it has been undermined by limited implementation
and monitoring. Maoist discontent is partly a result of
exaggerated expectations but has been exacerbated by
the lack of effort on all sides to build genuine eight-party
consensus and fulfil all parts ofthe peace deal. The
mutual confidence that enabled the agreement to be
reached had to increase to ensure its implementation;
instead it has decreased in many areas, with parties
unwilling to recognise their shared responsibilities to
make it work. The ball is in the government's court, with
the mainstream parties needing to address reasonable
Maoist concerns, hold firm to democratic principles and
take sensible steps to engage CA opponents.
The government and its constituent parties should:
□ sustain efforts to bring the Maoists back on board;
□ start nationwide electoral campaigning, on a party
basis but also emphasising a common agenda of
peace and constitutional change, recognising
unambiguously that an elected assembly, not the
appointed body some politicians have quietly
sought, is the only way to guarantee the process'
legitimacy;
□ create a secure environment for free and fair polls
by reaching cross-party consensus on security
plans, engaging groups opposed to the polls in
dialogue, and discussing the functioning of post-
poll government and the CA, including how to
guarantee roles for all stakeholders;
□ develop mutually agreed mechanisms to implement
the CPA and monitor parties' fulfilment oftheir
commitments;
□ take on security sector reform, with both short-term
measures to boost local accountability and trust in
the police and by moving forward discussion of
longer-term plans, including the future ofthe national
and Maoist armies;
□ deal sensibly with Maoist fighters in cantonments,
resolving disputes over allowances and facilities
and building on cooperation in these areas and the
now resumed combatant verification process; and
□ tackle impunity (for example, acting on
disappearances while starting a genuine consultation
on broader transitional justice issues) and restore
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 2
trust in the judiciary (including by the Maoists
stopping parallel people's courts), and in institutions
such as National Human Rights Commission.
The international community should:
□ support the peace process and the elections,
including by giving practical help through monitors
and reminding all political actors, especially the
Maoists, that obstructing progress will cost them
international legitimacy;
□ offer development assistance only in accordance
with the spirit of the CPA, which includes
recognising the Maoists' party, the CPN(M),
as a legitimate political actor (and part of the
government, should it rejoin) and engaging it in
donor programs, including in security sector reform
and political training; and
□ without raising expectations that it can resolve
domestic political difficulties, be prepared to offer
good offices to facilitate consensus if requested
by the parties.
II.     ON TRACK FOR THE ELECTIONS?
The government has consistently maintained that the
constituent assembly elections will take place as scheduled.1
However, a public which heard similar assurances in
the run-up to the original June 2007 deadline has been
understandably sceptical. The 18 September Maoist
withdrawal from the government does not in itself make
polls impossible but raises the likelihood of a further
postponement or graver threats to the process. Maoist
leaders insist they have not abandoned the peace plan but
their new preconditions for participation (most notably the
immediate declaration of a republic) suggest they would at
least prefer a later date, if not to avoid elections altogether.
The Maoists (CPN(M)) had been the most notable among
the governing parties2 to cast doubt on the viability ofthe
1 For an outline ofthe peace agreement and its challenges, see
Crisis Group Asia Report N°126, Nepal's Peace Agreement:
Making it Work, 15 December 2006. Recent Crisis Group
reporting on Nepal includes Asia Reports N°128, Nepal's
Constitutional Process, 26 February 2007; N°132, Nepal's
Maoists: Purists or Pragmatists?, 18 May 2007 and N°136,
Nepal's Troubled Tarai Region, 9 July 2007.
2 The parliamentary parties that make up Seven Party Alliance
(SPA) of mainstream parties are the Nepali Congress (NC);
Communist Party of Nepal (Unified Marxist-Leninist, UML);
Nepal Sadbhavana Party (Anandidevi, NSP (A)); Nepali
Congress (Democratic, NC(D)); Janamorcha Nepal; Nepal
Workers and Peasants Party (NWPP); and United Left Front
(ULF). Following the Maoist entry into government alongside
polls;3 other politicians stayed on message in public
while privately exploring options to convert the interim
legislature into a constitution-drafting body, thus
bypassing elections.4 Questions of poor security and
rushed technical preparations have also dogged the run-up,
compounded by the lengthy public holidays in October
and November that will reduce the time to address pending
issues.5
The Maoist withdrawal. The four remaining Maoist
ministers (one, Matrika Yadav, had earlier quit) resigned
from government on 18 September following the expiry
oftheir deadline for the Seven Party Alliance (SPA) to
meet their demands. The Maoists have not pulled out
ofthe interim legislature - which is not currently in
session - or of other cross-party bodies such as the joint
cantonment monitoring committee. Their leaders remain
in constant touch with other party representatives, and
dialogue has not broken down. Both sides hold out the
hope of a deal to restore eight-party consensus; the
Maoists could also remain out of government but still
contest the elections from opposition. However, the
street protests whose launch they have announced could
turn into a campaign to obstruct the polls.
The Maoist withdrawal was prompted by unhappiness
with the implementation ofthe peace deal, pressure from
their own cadres and a growing realisation that their
electoral prospects may be poor. The steps they have
taken to democratise their own behaviour and prepare
for free and fair campaigning have been limited, and
their own analysis has, belatedly, started to concur with
independent estimates that they will trail the NC and UML
when the votes are in. Negotiating for concessions
behind closed doors may seem preferable to facing the
likelihood of an unflattering popular verdict. If they can
be persuaded to rejoin the SPA with a revised agreement,
they have proposed reconvening the interim legislature
to vote on a republic and endorse any other new
arrangements. The amended interim constitution allows
such a decision on a republic, if the king is seen as a
threat to the CA, despite the parties' initial commitment
to defer decision to that body's own first sitting.
Political will. By early September political will appeared
to be strengthening, accompanied by practical campaign
the SPA many press reports referred to an Eight-Party Alliance.
However, there was no such formal alliance.
3 See, for example, "Nov poll more certain: Prachanda", The
Kathmandu Post, 9 September 2007.
4 Crisis Group interviews, politicians and diplomats, Kathmandu
August-September 2007.
5 The ten-day Dasain festival falls in the second half of October
and the slightly shorter Tihar festival in the second week of
November. The May 2006 declaration of Nepal as a secular state
has not affected government observance of Hindu holidays.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 3
steps. Prime Minister Girija Prasad Koirala has repeatedly
insisted there is no alternative to the scheduled elections.6
His party, the Nepali Congress (NC), has adopted a
federal republican manifesto and, despite frequently stalled
negotiations, has put itself in a stronger position by
reunifying with the breakaway Nepali Congress
(Democratic), known as the NC(D) and led by former
Prime Minister Sher Bahadur Deuba. The Communist
Party of Nepal (Unified Marxist-Leninist, UML) has long
appeared most confident, having already finalised a policy
platform and started canvassing voters. The Maoists,
initially the most vocal CA advocates, have started
retraining cadres to campaign peacefully but have also
announced a program of strikes and street protests.
Smaller members ofthe governing coalition have little
influence but appear to be gearing up. Home Minister
Krishna Prasad Sitaula (NC) has even suggested his party's
decision to abandon the monarchy could enable all eight
parties to present a common platform.7
Security. The fragile situation hampers a free and fair
campaign and, should results be disputed, a stable postelection environment. There is little law and order, and
police morale and capacity is low. Maoist efforts have
focused on maintaining a parallel force, primarily the
Young Communist League (YCL); the army, excluded
from poll security and largely confined to barracks, has
been making contingency plans, mainly focused on an
attempted Maoist takeover. Although the CPA ban on its
deployment remains official policy, senior party leaders
have started talking up the benefits of involvement.8
Strikes and protests have disrupted daily life worst in the
Tarai, especially its central and eastern districts. Three
simultaneous bombings in Kathmandu on 2 September
2007 left three dead and more than two dozen injured
and indicated that opponents ofthe peace process have
the will and capacity to resort to extreme measures.9 The
"PM urges co-ordination among ministries for poll", The
Kathmandu Post, 9 September 2007.
7 See "8 parties can share poll platform: Sitaula", The Kathmandu
Post, 8 September 2007.
8 See, for example, "Army can be mobilised for polls: Nepal,
Sushil", The Himalayan Times, 11 September 2007.
9 The bombings were carried out in three busy locations,
Tripureshwor, Sundhara and Balaju, targeting bus stops and
public transport. Two ofthe three killed were schoolgirls; many
of the injured were students and children. Little known
organisations, including the Tarai Army and Nepal People's
Army, rushed to claim responsibility but it is unlikely that tiny
fringe groups would have the capacity for fairly sophisticated,
coordinated attacks. Despite promising to publish a preliminary
report on the incidents, a 6 September police press conference
revealed only that the attacks are, unsurprisingly, believed to be
politically motivated. See "Blasts politically motivated: police",
The Kathmandu Post, 7 September 2007. The army angrily
rejected allegations that it had been involved (some newspapers
government needs not only to guard against likely further
incidents but also to refine plans for election-day security,
which depend on recruiting tens of thousands of temporary
police.10
Governance. As peace process progress slowed, the
government faced a further erosion of confidence and
capacity. Despite CPA commitments, there has been no
agreement on reestablishing local government bodies;
the reach of government at the village level has not
increased, and in some areas, including much of the
Tarai, has shrunk. Service delivery has been poor or
non-existent, with much development work suspended,
especially in the Tarai, where many remaining civil
servants have been intimidated into fleeing.
Technical preparations. Nepal has a good track record of
parliamentary elections but the CA exercise will be more
complicated than past polls. Apart from the political and
security issues, the mixed electoral system presents new
challenges to administrators and voters. There will be
twin ballot papers: one each for first-past-the-post and
proportional contests.11 Collecting and counting all votes
will, even without other problems, probably take up to ten
days.12 Moreover, the complex rules designed to ensure
representation ofthe marginalised, including women,
had implied that a seriously injured soldier, Chaturman Nepali,
had been carrying one of the bombs as it detonated). "Army
objects to media reports on Sunday blast", The Kathmandu Post,
7 September 2007.
10 Prachanda said the government should deploy the Young
Communist League (YCL) along with the Armed Police Force
(APF) to maintain law and order during CA polls, "Use YCL for
poll security: Prachanda", The Kathmandu Post, 17 July 2007;
"Maoists want to deploy PLA for CA elections", The Kathmandu
Post, 3 September 2007; some called for army deployment.
Lawmakers advised the government to hold the CA polls on the
rescheduled date of 22 November even ifthe army had to be used
for security. "MPs suggest mobilising army, PLA for elections",
The Kathmandu Post, 31 August 2007. Speaking at the
concluding ceremony of a Nepal Army coordination meeting,
Chief of Army Staff Katuwal directed all divisional heads to
remain alert for deployment if the government issues such an
order. "Stay alert for poll: NA Chief, The Kathmandu Post,
8 September 2007; "Army offers help for CA poll", The
Kathmandu Post, 10 September 2007.
11 The system agreed in the interim constitution allowed for 240
members elected in single-member constituencies (requiring a
redrawing of and increase in the 205 constituencies of the last
House of Representatives), 240 elected by nationwide, party-
based proportional representation, and seventeen members
appointed by political consensus. Subsequent deals with under-
represented groups may mean more appointees will be necessary,
for example to meet the commitment that every one of Nepal's
59 recognised ethnic communities has at least one CA delegate.
12 Crisis Group interviews, electoral experts, Kathmandu August-
September 2007.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 4
Dalits13 and ethnic groups, will make perfect
implementation hard. Parties have to submit candidate
lists for the proportional vote in advance but they will
not be ranked, and once results are in, the final allocation
of seats will be shaped by the need to fulfil guarantees
for ethnic and regional representation.14
The mixed system, already a delicate and in places
ambiguous compromise when enshrined in the interim
constitution,15 has undergone several revisions in the
electoral legislation and in response to community demands.
Delivering on the deals that have been reached will require
bargaining within parties and a degree of consensus
between them. Against a background of political confusion,
the determination of the Election Commission to ensure
technical preparations are in hand and pressure parties to
stick to the timetable has stood out.16 Chief Election
Commissioner Bhoj Raj Pokharel and his colleagues
have made clear they intend to run a tight ship, including
by rigorously enforcing the electoral code of conduct.17
III.   PARTIES AND POLICIES
The behaviour of all parties has been characterised by
suspicion, partisan interest, lack of faith in the electorate
13 "Dalit" is the term preferred by "untouchables", who are at the
bottom ofthe traditional caste hierarchy, to describe themselves.
14 Candidates included in the closed party lists are barred from
also standing for seats awarded to the individual who polls the
most votes in a constituency, so-called first-past-the-post (FPTP)
seats. The electoral law specifies that lists must ensure
proportional representation of marginalised groups. To
accommodate seats promised to ethnic groups (and perhaps other
communities still pressing demands) in deals concluded after
the electoral act was passed, parties may agree to a further
quota of appointed members to be selected after the polls.
15 The interim constitution was promulgated on 15 January 2007;
for an analysis ofthe electoral system it adopted see Crisis Group
Report, Nepal's Constitutional Process, op. cit.
16 The Election Commission has been working on several fronts:
finalising the registration of parties and the design of ballot
papers; managing voter education programs (including training,
information events such as a mock election in Pharping, Lalitpur
district on 21 July to test the system and voters' understanding
of it); authorising national organisations to engage in electoral
monitoring; and coordinating with international monitors and
donors.
17 The Election Commission published the code of conduct,
which applies to political parties, their candidates, electoral
officials and the media, on 19 August 2007. It sets campaign
expenditure limits for candidates, bans opinion polls from the
opening of candidate registration until the completion of
the polls and restricts mass meetings and rallies to the hours
between 7am and 7pm Available at www.election-commission
orgnp.
and distrust of consultation, extending to closed-door
decision-making by leaderships and elites. The peace
process has done little to address these problems, and
even its many successes have hardly translated into
popular approval or increased mutual confidence. The
weakness in forging eight-party consensus has been
exacerbated by poor discipline within most parties, with
individual politicians making provocative statements and
pursuing personal agendas in public. Civil society groups,
which played a crucial role in the campaign against royal
rule, have suffered from splits and personality clashes.
The governing parties have hinted at extending cooperation
and consensus-based decision-making after the elections,
and some representatives have started discreet discussions
on what this might entail.18 At a minimum, the major
parties will probably guarantee each other's main leaders
an easy ride in first-past-the-post (FPTP), single-member
constituencies. They may also address pre-poll anxieties by
forging a common understanding on coalition government
even if election results change the balance of power.19
The task of keeping the process on track is far from
straightforward. In a political arena crowded with many
parties, electoral constituencies, politically interested
institutions such as the palace and army, powerful
international players (in particular, India) and debilitating
intra-party tensions, leaders constantly have an eye
on other actors' positions and relationships and seek to
retain flexibility. Policy-making, therefore, is always
contingent, conditional and influenced by a wide array
of variables.
A.    The Mainstream Parties
Establishing a viable, reformed democratic system will be
impossible without the mainstream parties. However, they
have dragged their feet on many critical issues. Quick to
lecture other institutions on the need to create a "new
Nepal", they have done little to question their own attitudes
and behaviour. Despite a shift in rhetoric, especially in
recognising the need to be more inclusive, they have not
set a good example. Mainstream party leaders' equivocal
approach to the polls and peace process has had a corrosive
effect on public confidence and political progress, giving
Political analysts suggest such inconclusive discussions have
taken place. Crisis Group interviews, Kathmandu, September
2007.
19 UML leader Madhav Nepal suggests: "We can reach an
agreement on [seat-sharing] not only with the Maoists but also
with the NC since we need to move together until we achieve
our objectives. The UML has proposed that the parties should
agree to ensure that top leaders of different parties win the
elections. The prime minister, also, has taken this positively".
Interview, The Rising Nepal, 10 September 2007.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 5
the impression of enjoying a return to power and being
too comfortable to face elections.
The democratic parties are right to see their revival in the
face of hostile armed forces (the army-backed king
and the Maoists) as a victory. But they have been slow to
acknowledge that they have to build on this by helping
the Maoists join the mainstream and persuading the army
it will benefit from democratic control. Understandable
partisan interests have led some leaders to revel in the
difficulties faced by a Maoist leadership under fire from
its less accommodating cadres; the parties' own long-term
interests depend on making a success ofthe peace process.
This means not only forcing the Maoists to abandon
violence, but working jointly towards a reformed
mainstream that moves beyond the failed practices that
cost the parties dearly in the post-1990 democratic period.
Congress. The Nepali Congress has faced concurrent
challenges, principally the reunification of its two wings
and decisions on central policy issues. Lurking in the
background is the struggle for succession when its president,
Koirala, already in very poor health, hands over the reins
without an agreed heir. That the NC and NC(D) would
reunite before elections was never in serious doubt. The
process, however, was slow and tortuous. Both are
top-heavy, with numerous leaders demanding
accommodation in a reunified structure. Apart from the
personal antagonism between Koirala and Deuba, the
latter's designs on the succession alarm Koirala family
loyalists and potential independent contenders. The
reunification deal finalised on 25 September was based
on a fine, but precarious, balancing of these factors.
On the most sensitive policy - the monarchy - Koirala's
deliberately cautious approach may have paid off.
Abandonment of the monarchy has been long enough
delayed to leave royalists little time to challenge on
the conservative end ofthe political spectrum, while still
assuaging Maoist fears of a secret deal with the palace.
However, opinion within the party is still divided - not
just on republicanism, but on potentially more controversial
issues such as federalism and secularism. Although the
reunified party confirmed the republican line, key leaders
remain unconvinced. The only surviving NC founding
member, Krishna Prasad Bhattarai, played a critical role in
reuniting the party but resigned from it on 26 September
in protest at the abandonment ofthe monarchy. Whatever
the platform position, individual CA delegates could still
defy the party whip on votes. Meanwhile, Congress has
yet to grasp the nettle of internal reform. The only party
that can boast an uninterrupted commitment to multiparty democracy, it remains one ofthe least democratic
internally.
UML. Leaders are confident their party machinery is in
good shape: their cadres are organised, motivated and have
greater involvement in decisions than those of other
parties. However, concern that a mainstreamed CPN(M)
could eat into its centre-left support base has made its
calculation of Maoist strength critical; they will want to
go to the polls when the Maoists are weakest, even if that
means postponement. (The alternative approach - a "grand
republican alliance" mooted by the Maoists or a more
limited seat-sharing deal - looks increasingly unlikely.20)
The frustration that pushes the UML towards a prompt
election, however, results from its treatment as a junior
partner in the government, often excluded from key
decisions or overridden by the NC-Maoist combine. Even
if polls are postponed, the UML will have come out ofthe
pre-poll haggling looking more responsible and committed
to the democratic process than its rivals and having won
over many former doubters in the international community.
B.    The Maoists
Adjusting to the realities oftheir position has been hard
for the Maoists. Leaders have had difficulty selling the
compromises ofthe peace process to increasingly restive
cadres; the cantonment oftheir armed forces has reduced
their leverage and left them more vulnerable to the
mainstream parties; and participation in government
has brought only limited status and influence. They are
frustrated that they are expected to transform overnight
and fulfil every part ofthe peace deal, while other parties
drag their heels on issues such as security sector reform.
However, their own behaviour has often been the major
obstacle. They have not dropped the idea of revolutionary
change (although they say they want a "peaceful revolution",
they have not unequivocally renounced violence or
dismantled their capacity for it), and they have retained
the vision of parallel regimes, with separate approaches to
security, local government and justice. Even if their
prospects of winning power through the ballot box look
poor, the Maoists can still make the state ungovernable -
a threat they would prefer not to go through with but one
which provides leverage at the negotiating table
nonetheless.
The Maoists are still a disciplined, motivated and
sophisticated political movement with the potential to win
support for what is often seen as a fresh, populist agenda.
UML leader Madhav Nepal has said: "The move to create a left
alliance may make the NC suspicious towards the intention ofthe
communists. Nepali Congress may suspect that the leftist forces
are hatching conspiracy against democracy. The issue at the
moment is to intensify the process of consolidation of republican
forces. Later we can discuss about the type of republican set up
after the election... .At the moment there is no possibility of unity
between the two parties but we can come closer and work
together. For this, the Maoists should create atmosphere and
act accordingly". Ibid.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 6
But bold threats of a new uprising reflect insecurity more
than strength. The movement faces considerable internal
tensions (as the very public criticism ofthe leadership line
at policy meetings indicated) but has limited options (as
evidenced by the conditional endorsement ofthe peace
process despite the frustration). Delay in the CA elections
has not only undermined the original plan of riding a
wave of post-people's movement popularity but has also
allowed the other parties to consolidate and encroach on
Maoist political territory. The CPN(M)'s next steps will
be designed to counter this setback and to cement the
movement's unity before and beyond elections. The
party is determined to avoid succumbing to the splits that
have weakened other rebel movements.
Equivocation over the polls - a flurry of contradictory
statements has suggested indecision, even rejection -
reflects the Maoists' awkward position. On 20 August,
they published 22 preconditions for participation. The
principle demands included immediate declaration of a
republic, establishment of a commission on involuntary
disappearances, a roundtable conference of parties and
civil society (including representatives of marginalised
communities), release of all detained Maoist cadres and
a start to security sector reform. Some of these are points
already agreed in the CPA but not implemented (such as
action on disappearances and security sector reform);
others are old elements of the Maoist agenda (the
roundtable conference) or potential bargaining positions
designed to pressure the other parties (the immediate
republic declaration).
The preconditions have raised understandable questions
about Maoist commitment to the elections. While not
proving that the CPN(M) is trying to back out of the
entire exercise, the withdrawal from government reflects
both a deep-seated frustration with the process and a
strong compulsion to play to the militant wing ofthe
movement. The Maoist exit from government and
proposed street protests will not necessarily derail the
peace process but will further undermine the CPA, making
it much harder to regain the political trust needed for
progress.
For the Maoists, a workable compromise is still possible
if agreement can be reached on a few critical issues: a
solid cross-party commitment to a republic (preferably
an immediate declaration but possibly a conditional
guarantee); movement on the future ofthe PLA and state
security sector reform; and the promise of some concrete
socio-economic reforms, such as land reform. From the
perspective of Maoist leaders, other demands, such as the
headline call for a fully proportional electoral system,
are in fact less important. A return to government is not
inconceivable, but only if it is seen as part of a wider
restructuring (including reallocation of ministerial
portfolios and new nominees to fill them) rather than
a back-down and return to the status quo ante. In the
meantime, Maoist leaders would probably be most
happy if polls were postponed, and they had time to
regroup and reinvigorate their political agenda, making
the most of widespread disillusionment with the SPA's
record in government. This is a risky strategy: they could
instead find themselves taking the blame for blocking
progress and with few new achievements to mollify
internal critics.
C.      ROYALISTS: REALISTS AND REFUSENIKS
The NC's decision to adopt a republican agenda makes
the king's position tenuous but not yet terminal. Moderate
royalist parties - the Rastriya Prajatantra Party (RPP), led
by Pashupati Rana, and the Rastriya Janashakti Party, led
by former Prime Minister Surya Bahadur Thapa - have
lent critical support to the CA process, urging that the
election should go ahead while cautioning that much
remains to be done to create the proper environment.21
Others have adopted a more aggressive line, promising to
fight any attempt to end the monarchy and to undermine
the state's Hindu character. The king himself has had his
public role further curtailed. Following the nationalisation
of his palaces, he moved to a country retreat and has been
prevented from appearing at religious functions over
which he used to preside.22 For those determined to save
the monarchy, stopping the CA election may become the
only option. Some palace supporters are committed
enough to use violence and loudly telegraph their desire
to see a "democratic coup" sweep aside the eight-party
government.
IV. THE SHAPE OF THE PEACE
PROCESS
A.    An Inclusive Process?
Making Nepal's democracy more inclusive has become
essential to the success ofthe peace process. This means
increasing the participation of many groups who have
been severely underrepresented in parties, government
21 RPP President Pashupati Rana has said elections must go ahead
but has criticised the government's failure to ensure peace and
security. "Republic before CA poll impossible: Paudel: Without
republic, polls mere imagination: Dr Bhattarai", The Rising
Nepal, 8 September 2007. RJP President Surya Bahadur Thapa
has taken a similar line. "Thapa urges parties to follow pact",
The Rising Nepal, 12 September 2007.
22 For example, Prime Minister Koirala refused to give the king
a security escort on Janmashtami, the Hindu god Krishna's
birthday, and took his place at the main ceremony at Patan's
Krishna temple on 4 September.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 7
and national institutions - women, regional and ethnic
communities, caste groups and others. Building more
inclusive political structures is the task ofthe CA, but
the need to secure representation in that body and keep
key issues on the agenda has led to protest movements
and demands.
1.       Tarai
The most critical area remains the Tarai, the plains that are
home to some half of the population.23 The way in which
long-standing grievances of plains-origin Madhesi
communities were allowed to fester illustrated the general
weaknesses ofthe major parties' handling ofthe peace
process. Following an uprising in January-February
2007, it took months for the government to engage in
serious dialogue with the most significant new political
group, the Madhesi Janadhikar Forum (MJF)24 Government
negotiators concluded a 22-point agreement with the MJF
on 30 August, offering measures such as compensation for
those killed and injured in the uprising but also forcing
the MJF to drop demands such as a fully proportional
electoral system and to accept no increase in seats.
The deal with the MJF suggests the possibility of a
mainstream consensus on moving towards the election but
has also prompted serious disagreement among Madhesi
activists. Several MJF central committee members opposed
the deal (as did the CPN(M), despite having a representative
on the government delegation) and have split from party
leader Upendra Yadav,25 while more extreme groups have
continued violence and been joined by further small
groups.26 Following the deal, Yadav has spoken strongly
in favour ofthe polls and has mobilised supporters,
suggesting the MJF has a degree of organisation and
resources. However, it is unlikely to be the only new
player in the Tarai. Senior Madhesis in the mainstream
parties may push ahead with plans to register a new
regional party.27
2.        Marginalised communities
Nepal's many ethnic groups have been pushing for
ethnicity-based proportional representation with the
National Federation of Indigenous Nationalities (NEFIN),
an umbrella organisation representing some six dozen
communities, taking the lead in pressuring the government.
It demanded interim constitution amendments to commit
to a federal republic based on ethnic autonomy, to remove
the ban on ethnic political parties and to end discrimination
against indigenous languages.28 In the face of major
parties' inaction, it submitted formal demands to
government negotiators on 26 February 2007, calling for
a round-table conference "to come up with an integrated
solution and evolve common views on the issue raised
by indigenous nationalities, Madhesis, dalits, women and
other agitating groups".29
Following a series of public protests and ten rounds of
negotiations, a twenty-point deal was reached on 7
August.30 The government agreed to make the 240 FPTP
seats "proportionately representative", guaranteed that
all 59 indigenous groups will have at least one CA
representative (even if groups do not have a representative
elected from either portion ofthe electoral system) and
promised to establish a State Restructuring Commission.
Further concessions included (often unspecific)
commitments to recognise local languages, develop
mechanisms for wider consultation on future policies
and adopt international standards such as the United
Nations Declaration on the Rights of Indigenous Peoples.
This deal reflects the pattern ofthe peace process: it was
concluded as a private arrangement with one group
whose representativeness is not unquestioned; many
provisions were left deliberately vague; and there is little
indication that it will be implemented. Indeed, the prime
minister denied all knowledge of the agreement weeks
For background see Crisis Group Report, Nepal's Troubled
Tarai, op. cit.
24 Talks were also held up by the fluidity ofthe Tarai situation,
with no one - including MJF leaders - sure which parties
commanded popular support.
25 "MPRF 'ousts' Chairman Yadav", The Kathmandu Post, 3
September 2007; "21 out of 27 central members support Yadav.
MPRF expels Biswas, three others", The Kathmandu Post, 7
September 2007.
26 The most organised and influential groups, the two factions of
the Janatantrik Tarai Mukti Morcha (JTMM), are reported to
have suffered further splits; a handful of other groups, such as
the Madhesi Tigers, have called strikes, held protests and carried
out disruptive activities at a local level. On the major groups, see
Crisis Group Report, Nepal's Troubled Tarai, op. cit.
27 Informal discussions on forming such a party have been
underway for several months but have been hindered by personal
and political differences between the key individuals, and by
senior politicians' hesitation about leaving established parties.
Representatives of the group have approached the Election
Commission to discuss their intention to register the new party;
despite the passing ofthe registration deadline, the commission is
likely to approve a new formation if it materialises. Crisis Group
interviews, Kathmandu September 2007.
28 Press statement NEFIN, 23 December 2006, at www.nefin
org.np.
29 NEFIN also emphasised the need for a "full proportional
representation system during the constituent assembly elections
and a federal system of governance with the right to self-
determination based on the principle of ethnic, linguistic and
regional distribution in the interim constitution". Demands
submitted to government talks team, 5 March 2007, available at
www.nefin.org.np.
30 An English translation ofthe agreement is at http://nefinorg.np/
content/view/231/1/.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page <
after his minister had signed it. More radical agitators (such
as the Federal Limbuwan Rajya Parishad, Khambuwan
Rastriya Morcha and Tamsaling Autonomous Rajya
Samiti) are still pressing for greater autonomy and
threatening to oppose the CA process.31 Meanwhile, other
disadvantaged groups - from Dalits to women ofthe Badi
community, who have traditionally worked as sex workers
- continue to fight for better representation.32
3.       Women
The conflict has given more prominence to women's
issues but despite some organised campaigning, concrete
achievements have been minimal.33 The immediate
challenge is to secure better CA representation and to put
into practice parties' rhetorical commitment to women's
rights. Electoral law guarantees significantly increased
women's candidacies for the CA polls (one third of all
candidates in both sections and half of those elected
under the proportional section34) but this alone may not
translate into action on remaining issues. Women's
groups and parliamentarians have been effective at joint
campaigns on certain issues but their efforts have been
undermined by fragmentation, political and institutional
rivalries and (particularly in the large NGO sector)
competition for funding.
The prospect of increased CA representation and a changed
balance in the interim legislature following the CPN(M)'s
appointment of 29 women among its 73 representatives35
have given some momentum to women campaigners,
although most are understandably sceptical of parties'
will to transform structures. The conflict has changed
perceptions of gender roles and social structures but even
31 "Limbuwan, Khumbuwan Ready for Talks", The Kathmandu
Post, 6 September 2007.
32 See, for example, "Badi women stage sit-in at ministers'
quarters", Kantipur Online, 8 September 2007.
33 For example, the Nepal Citizenship Act (2006) for the first
time recognises maternal descent as a criterion for citizenship.
"Citizenship through mom possible", The Kathmandu Post, 31
May 2006.
34 The Constituent Assembly Members' Election Act (2007)
provides for women to have 50 per cent of the 240 seats from the
proportional representation system and to make up 33 per cent
of candidates across the board. (In effect, this means that final
representation in the CA could be as low as some 22 per
cent, especially if parties assign women the most unpromising
constituencies.)
35 There are 57 women in the interim legislature - slightly less
than one in five ofthe total membership. This still compares very
favourably with past parliaments: the lower house has never had
more than 6 per cent women members and the upper house has
tended to have around 5 per cent See "Unequal Citizens: Gender,
Caste and Ethnic Exclusion in Nepal -Summary", DFID/World
Bank, Kathmandu, 2006, p. 30.
the CPN(M) - which likes to see itself as in the vanguard
on women's issues - has yet to grant women real decisionmaking power within its own structures. Various ethnic
and regional groups, such as Madhesi and janajati women,
have started campaigning to ensure a high level of women's
participation and representation in the CA elections.36
B.    Peace over Justice?
The tension between the sometimes conflicting goals of
peace and justice has not troubled the governing parties.
Despite CPA commitments and lip-service to justice,
political expediency has consistently taken priority. During
the transitional period, the government's failure to address
a widespread lack of confidence in the judiciary and to
tackle the legacy of impunity has harmed its legitimacy.
There has been no progress on resolving the hundreds of
cases of forced disappearances.37 A draft parliamentary bill
to establish a Truth and Reconciliation Commission served
political leaders' interests by offering general amnesties but
was universally condemned by human rights activists, who
had not been consulted. The long-delayed appointment of
new members to the National Human Rights Commission
has also been criticised for breaching the Paris Principles
on the independence of human rights watchdogs.38
The Maoists cite a lack of faith in the judiciary as a reason
for not disbanding their parallel justice mechanisms as
promised in the CPA. They have maintained people's
courts and supplemented them with YCL cadres, who have
detained alleged criminals. Stalling on the verification
of cantoned combatants has meant that underage military
recruits (who are to be identified, then discharged) have yet
to be released and rehabilitated. Fear of Maoist action
continues to prevent many internally displaced persons
(IDPs) from returning to their homes.
The Madhesi Women's National Assembly was held in
Chitwan, 14-17 August 2007.
37 The International Committee of the Red Cross estimate of
outstanding forced disappearance cases stands at 1042. The
CPA had committed the government and Maoists to reveal the
whereabouts of disappeared people public within 60 days of
its signing, a deadline that came and went with little action. On
1 June 2007 the Supreme Court called for a commission of
inquiry but one has yet to be established.
38 The Paris Principles refer to the "Principles relating to the status
and functioning of national institutions for protection and
promotion of human rights", endorsed by the UN General
Assembly on 20 December 1993. They describe characteristics
national human rights bodies must have to ensure integrity
and independence and can be found at www.unhchr.ch
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 9
C. Security Sector Reform
The future ofthe security sector is at the heart ofthe peace
deal but the army has resisted discussion of any structural
reform, and mainstream parties have been happy to defer
the issue. Nepal Army chief Rookmangad Katwal
frequently reiterates his institution's commitment to the
democratic process but it remains autonomous, beyond any
meaningful democratic control and deeply suspicious
of politics from which it feels marginalised, its values
threatened. Powerful international players, primarily India
and the U.S., still see the army as the last defence against
a possible Maoist takeover or collapse of government;
their determination to guard against any immediate reforms
has emboldened conservative commanders.
Although the chief of army staff reports to the prime
minister, there are virtually no democratic control
structures. The ministry of defence, never more than a
rubber stamp for army decisions, is without a secretary
and, given that the prime minister has retained the portfolio,
without any effective ministerial oversight. Funds offered
by one donor to improve infrastructure went unused, as
the ministry declined to raise matching contributions. The
National Security Council exists only on paper, and the
CPA-mandated committee on security sector reform has
only met once. One member from a mainstream party
spoke of resigning; only the CPN(M) was enthusiastic
about a donor's offer to provide technical experts to
facilitate discussions.39
Concerns about rushing into ill thought-out reforms are not
fanciful. Given the political flux and weak security situation,
there would be no benefit in destabilising the largest security
force. Nevertheless, lack of progress on security sector
reform, which is an integral part of a carefully balanced
peace process, is proving a destabilising factor in itself.
Restive Maoist fighters in the cantonments need assurance
that their future is being secured, just as their commanders
need reassurance that a basic understanding ofthe peace
deal has not been abandoned. Equally, UNMIN's exit
strategy depends on a successful process. Without it, there
can be no escape from the halfway house of "arms and
armies management", which would leave Maoist forces in
limbo and, if they chose, able to reclaim their weapons and
walk out ofthe camps.
While the army has realised that it may be better off less
closely tied to the palace, it sees the CA process (unless it
produces a Maoist defeat) as a serious threat to its interests.
Successful elections would leave little excuse for further
stalling on democratic reforms - including loosening the
generals' lucrative grip on procurement contracts - and
Crisis Group interview, Western diplomat, Kathmandu,
August 2007.
increase the pressure to integrate Maoist combatants, while
also reducing unsustainably large troop numbers. The army
is unlikely to gamble its reputation on a risky political
intervention but will protect its core interests. Should
these also appear to coincide with protecting the
monarchy, weakening the Maoists and still retaining
international backing, many generals would be delighted
to step forward.
D.    New Nepal or More of the Same?
Successful elections will only usher in the next stage of a
difficult national transition. While all parties have adopted
the rhetoric of "building a new Nepal", most are wary of
making significant changes to state structures and national
identity. More immediately, concerns about the post-poll
balance of power affect their positioning and bargaining
in the run-up to the election. Apart from the risk of voters
reducing major parties' tally of legislators, anew distribution
of seats could reduce rivals' incentives to cooperate and
leave some parties out in the cold.
The electoral and constitutional processes both demand a
high degree of mutual confidence among political actors
as well as public buy-in. Trust should have been built
following the CPA but in many areas it eroded instead;
with the Maoist decision to quit the government it will be
even harder to create a working atmosphere for the CA.
Planning for the constitutional process is already weak in
terms of accountability and monitoring mechanisms, with
much depending on political consensus and day-to-day
inter-party cooperation. Beyond the monarchy, discussions
on questions such as the form and functioning of
federalism, security sector reform, implementing secularism
and land reform (especially in the Tarai) will all be
sensitive and could prompt further divisions or walk-outs.
THE INTERNATIONAL ROLE
UNMIN. The UN mission has ridden out criticism from
both the Maoists and their opponents but faces challenges
in fulfilling its mandate as well as calls to extend its
involvement in the political process. Even ifthe elections
take place on schedule, it will almost certainly be extended,
not least to continue the arms and armies monitoring role
that no other body can perform. Neither India nor China is
keen for any expansion of its responsibilities, although
the incentive of seeing a quick, clean exit might suggest
acceptance of a greater role in facilitating discussion of
security sector issues. Despite public sniping (based largely
on the perception that a sizeable budget by local standards
is not reflected in immediate achievements), UNMIN
has built and retained credibility with key political players.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007
Page 10
With care, it can use this as leverage on areas within its
mandate, while avoiding the parties' efforts to set it up
as a potential scapegoat for problems oftheir own making.
However, the difficulties of trying to fulfil its mandate
while being unable to influence the political context that
determines its prospects of success is likely to lead to some
reconsideration of its role. In the absence of other neutral
third parties and with deadlock on many central political
issues, calls for the parties to accept UN good offices in
facilitating some discussions may well become stronger.
India. Delhi has continued its strong support for the peace
process. Its mounting frustration at political leaders'
reluctance to push for the elections led Ambassador Shiv
Shankar Mukherjee to issue an unusually blunt public
reminder that there is no legitimate alternative.40 A series
of visitors, including politicians and diplomats, reinforced
this message to some effect, despite complaints from both
Maoists and royalists that India was throwing its weight
around. Once the government was ready to put a deal
on the table for the MJF, Delhi increased pressure on it and
other Madhesi groups to join the electoral process.
India's role has been based on a rare domestic policy
consensus, and critics remain on the margins (partly
because Nepal is rarely high on the public or political
agenda).
However, its increasing efforts to micromanage political
processes place it in a riskier position and threaten to
undermine the constructive cooperation with other
international players that facilitated the earlier stages ofthe
peace process. Most external actors recognise its regional
dominance and special relationship with Nepal but also
expect it to justify its claims to an exclusive role by shaping
a supportive, but not coercive, environment for Nepal's
people and their representatives to shape the country's
future. Following the 2005 royal coup, it met these demands
well but it cannot rely solely on the credit it accrued
then if its advice on current challenges moves beyond
legitimate neighbourly concern without helping to
remove roadblocks.
Diplomats and donors. Of other players, only the U.S.
has been both vocal and partisan. While stating support
for the peace process, it has funded serious programs on
security sector reform and political party training that
exclude the CPN(M) and suggest little respect for the
letter or spirit ofthe peace agreement. However, U.S.
diplomats hint that their position is not rigid, privately
recognising that the Maoists are not the only force
40 The ambassador's comments were delivered at a ceremony to
mark India's Independence Day. See "Indian envoy stresses the
imperative of holding elections on time", nepalnews.com, 15
August 2007.
that needs to change behaviour.41 China has, as usual,
scrupulously backed the government of the day (not
batting an eyelid at the inclusion of formerly shunned
Maoists), while quietly working to increase its contacts
and influence across the political spectrum as well as in
commercial and cultural fields. Its calm reaction to
the democratic transition has helped it gain in reputation
while carefully remaining above the day-to-day fray.
Development assistance is at the heart of most other
international relationships, and the transition has presented
awkward choices. Donors have been reluctant to write
blank cheques to the government as long as delivery
mechanisms and accountability are severely compromised.
But most would like to use quick-impact assistance to help
shore up the legitimacy ofthe political process, which is
hard to do by bypassing government. The one area where
there has been consensus and constructive planning is on
election monitors. Although there will be some national
monitoring capacity, there is widespread domestic
consensus that a serious international presence is needed
for a free and fair environment. Successful polls would
move Nepal one step further along the conflict-to-peace
continuum but not mean business as usual for development.
Donors will need to be ready to adjust their priorities
and practices if Nepal's political leaders do agree on
restructuring the state and reshaping politics.
YT.    CONCLUSION
None ofthe major parties has attractive alternatives to
sticking with the peace process, but unhappiness over
the concessions it involves has weakened political will and
bolstered the determination of some groups to disrupt that
process. The Maoist walk-out from government is only
the most visible of many underlying problems. If popular
expectations were decisive, they would almost certainly
ensure that elections go ahead and all parties bring
their behaviour into line with rhetorical commitments to
transform the national agenda. However, most political
leaders are only responsive to public pressure when
confronted with mass protests or violence. In the
absence of such direct pressure, their delaying tactics
and taste for brinkmanship, however skilfully played, keep
the prospect of failure uncomfortably close. Some further
delay in the CA elections may just be survivable but
there is no viable alternative plan; other forces waiting
in the wings - be they politically ambitious army officers,
more belligerent Maoist commanders or a ragtag
collection of local armed groups - would have little
concern for democracy or peace.
41 Crisis Group interviews, Kathmandu, August 2007.
 Nepal's Fragile Peace Process
Crisis Group Asia Briefing N°68, 28 September 2007 Page 11
Free and fair elections would be a major boost for the
peace process and the legitimacy ofthe parties. But while
they might cap the first phase of post-conflict transition,
their real significance would be as the starting point
of a difficult constitutional process that will have to
consolidate peace while reshaping national institutions
and building long-term stability. Whether polls happen
on schedule in November or are postponed, the need to
address popular demands for change will not go away.
Kathmandu/Brussels, 28 September 2007
 Internationa
Crisis Group
WORKING TO PREVENT
CONFLICT WORLDWIDE
International Headquarters
149 Avenue Louise, 1050 Brussels, Belgium • Tel: +32 2 502 90 38 • Fax: +32 2 502 50 38
E-mail: brussels(@,crisisgroup.org
New York Office
420 Lexington Avenue, Suite 2640, New York 10170 • Tel: +1 212 813 0820 • Fax: +1 212 813 0825
E-mail: newvork(@crisisgroup.org
Washington Office
1629 K Street, Suite 450, Washington DC 20006 • Tel: +1 202 785 1601 • Fax: +1 202 785 1630
E-mail: washingtongicrisisgroup.org
London Office
Cambridge House - Fifth Floor, 100 Cambridge Grove, London W6 OLE • Tel: +44 20 7031 0230 • Fax: +44 20 7031 0231
E-mail: londongicrisisgroup.org
Moscow Office
Belomorskaya st, 14-1 - Moscow 125195 Russia • Tel/Fax: +7-495-455-9798
E-mail: moscow(@,crisisgroup.org
Regional Offices and Field Representation
Crisis Group also operates from some 28 different locations in Africa, Asia, Europe, the Middle East and Latin America.
See www.crisisgroup.org for details.
www.cnsisgroup.org

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