The election to the Constituent Assembly on 19 November 2013 — which went
off peacefully and with great voter turnout — saw Nepalis reject the
myopia-infested politics of the Maoists who had come above ground after waging
ten years of insurgency against the state. Their
leaders got caught up in the same games of power, money and greed that have
afflicted others in their fraternity. The Nepali Congress, along with coalition
partner Communist Party of Nepal (United Marxist Leninist), formed a coalition
in February 2014 and have survived the year despite sporadic spats in private
and public.
Change in India also led to
change in Nepal. The thumping victory of Indian Prime Minister Narendra Modi
and his desire to engage with the neighbourhood has benefited Nepal
tremendously. His official visit to Nepal in August 2014 — the first bilateral
visit by an Indian prime minister for 17 years — ensured that all official
channels in the bilateral relationship stayed open. Modi pushed his economic
agenda, expedited the signing of energy agreements and made credit lines
available for Nepal to be used to build infrastructure. There is renewed Indian
interest in Nepal and it has more to do with economics than political meddling.
The new coalition government
in Nepal brought back Dr Ram Sharan Mahat as Finance Minister. In his first
stint as finance minister in the 1990s, Mahat was responsible for unleashing
Nepal’s first wave of reforms. Despite serious opposition from his Communist
Party coalition partners, he has been able to drive home a reform agenda to
stoke economic growth as well as a new-look National Planning Commission and a
professionally-minded Board of Investment.
In 2014, Kathmandu was
spared the kinds of strikes that have seen the city closed down in previous
years. Kathmandu was only shut down for four days: two during Modi’s visit and
two when the city was hosting the South Asian Association for Regional
Cooperation Summit.
Questions of ethnicity and
representation were less markedly dominant in 2014, with foreign donors who had
been accused of stoking ethnic tensions largely backing down. But these issues
may, to some extent, resurface with ethnicity and federalism likely to be
central to discussions of the constitution. The Constituent Assembly, which had
promised to deliver a new constitution for deliberation by January 2015, will
miss its deadline again. Contentious issues on how to draw state boundaries
will not have been resolved.
Even if the constitution is
delivered later in the year, there will be disgruntled groups who will oppose a
new constitution. Right-wing Hindu nationalists will oppose a secular Nepal and
secular Nepalis will surely oppose anything that will bring about restrictions
on religious conversion. Parties and especially NGOs that have survived by
pushing a form of federalism that is based on ethnicity will oppose a
constitution that does not guarantee it. Conversely, there are groups that
oppose Nepal being divided into provinces based on ethnicity. The drafters of
the constitution are trying to do the impossible: create a constitution that
will please all sides. But in doing so it is more likely that they will please
no one.
While the political issues
surrounding the constitution will take centre stage, work on economic
development will continue. The government will have to decide how to deploy its
fiscal surplus and how to deal with excessive liquidity in the nation’s
financial system caused by large remittance inflows. Interest from financial
institutions in investing in Nepal has grown, and 2015 will likely see many new
projects take off. And with the new Indian government looking increasingly
confident, Nepal’s foreign relations and economic integration will begin to
mature.
If 2014 has been a year of
surprising calm and progress for Nepal, 2015 could well be a game changer.
Sujeev Shakya
is Chair of the Nepal Economic Forum and author of Unleashing Nepal.
This article is part of
an EAF special feature series on 2014 in review and the year ahead.
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