If you were a politician in Nepal during the past two years, there’s some chance you may have been slapped. In January 2011—as well as in May and November of this year—three citizens who were fed up with chronic government inaction physically attacked three senior politicians.
Nepal’s citizens survived 10 years of a bloody Maoist insurrection that killed an estimated 16,000 people but also brought about the end of a centuries-old monarchy in 2008. Since then, however, the country has been hampered by chronic political and economic crises that have created a severe legitimacy crisis for the ruling elites. Can this nascent republic be saved?
It seems to be an impossible challenge in the near term. The current political crisis is so dire that there has been no parliament since May. In November, hints surfaced of a presidential coup to oust the Maoist-led caretaker government of Prime Minister Baburam Bhattarai. President Ram Baran Yadav heard advice from the military chief and the Indian ambassador about the best way out of the crisis, but he ultimately took no action. Weeks later, the political crisis persists.
On Nov. 29, Prime Minister Bhatterai and various political factions failed to meet the president’s deadline to form a national unity government that would lead to parliamentary elections for April or May. On Dec. 6, the factions failed again to meet the extended deadline. A day later, on Dec. 7, President Yadav offered yet another six-day extension. But the ruling alliance of the Unified Communist Party of Nepal (Maoist) and United Democratic Joint Madhesi Front, as well as the opposition Nepali Congress and Communist Party of Nepal, failed to select a prime ministerial candidate, missing the latest deadline. Amid such political deadlock, there has been no progress on a new constitution—a critical component of the peace deal that ended the Maoist civil war in the first place.
This political crisis has amplified the economic weaknesses of the aid-dependent country, a quarter of whose population lives below the poverty line. Youth unemployment is over 40 percent and job creation is a struggle, especially with growth expected to drop to 3.8 percent in 2012-13, from 4.5 percent the previous year, according to the International Monetary Fund. The approval of the government’s budget on Nov. 21 averted a major financial crisis that would have left half a million civil servants, soldiers, and police without pay. This was a rare spot of good news for the dysfunctional country.
Though India and China already have significant stakes in their neighbor, the political crisis puts further foreign investment in jeopardy. One report suggests that Nepal’s diplomats have secured additional investment abroad, but this is contingent on the establishment of a constitution and the return of political stability. Other potential investors, including many businessmen from Saudi Arabia, have admitted losing interest in Nepal because of the political impasse. The country’s dismal ranking of 141 (out of 176 countries) on Transparency International’s Corruption Perceptions Index, the recurring power crisis, and additional structural limitations are not helping matters.
If the political and economic situation continues to stagnate, and no constitution is finalized to unite the people, it is likely that ethnic and religious differences—as well as the frustrations of historically marginalized groups from lower castes—will serve as significant sources of conflict.
It’s clear that the ruling elites are rapidly losing domestic legitimacy. Unfortunately, this has not motivated them to resolve the political crisis with dispatch. Perhaps it’s time for foreign donors to apply overt pressure on Nepal by making future aid conditional on a resolution to the political deadlock.
Even if a political consensus emerges as to how to move forward, it will take time before Nepal’s rulers regain the legitimacy needed to allow the government to ease the economic crisis. If no consensus is reached in 2013, mass street protests—which in the past brought down the monarchy—are likely to resurface. The way things are going, another Nepali politician could get slapped.
Businessweek.com — Top News
Title Post: Can Nepal’s Republic Be Saved?
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