The New Nation - Internet Edition

Mostafa Kamal Majumder

The Himalayan Republic of Nepal is passing through defining moments of history with its Maoist rulers pursuing the target of establishing a federal system replacing the process of establishing a Westminster type of democracy initiated in 1990.

As a first step towards that the Constituent Assembly elected in April has deposed King Gyanendra abolishing the 239-year-old Hindu monarchy and elected in his place titular president Ram Baran Yadav.

Maoist Prime Minister Puspa Kamal Dahal Prachanda who has just ended his first visit to India, has been assured financial support to rebuild the country, and of review of the 1950 treaty of peace and friendship with India.

In return Nepal will take measures for the promotion of investor friendly, enabling business environment to encourage Indian public and private sector investments in Nepal.

Discussions on the development of water resources, including hydro-power generation, irrigation, flood control and other water related cooperation, will be pushed forward between the two sides, a press statement says.

The Nepali Prime Minister badly needed the support as his government is faced with formidable challenges in giving the land-locked country a sustainable democracy. The popular verdict that his party got in general elections two years after the 2006 peace deal that ended decade-old armed civil war should now be translated into specific economic activities that would benefit the 24 million people.

The Constituent Assembly which is set to write a new constitution on the principles of federalism has yet to adopt its own rules of procedure. A federal system that the Maoists promised during the elections on the basis of ethnic composition of the people now looks difficult to implement as ethnic groups appear unlikely to function as separate administrative units, knowledgeable Nepalis say.

Meanwhile, 75 districts did not have elections for the last eight years and are functioning without a sense of direction coming from the centre. Same is the case with village level elected bodies. As the new leaders take time to take policy lines even the law enforcing agencies are suffering from lack of guidance, insiders say.

Signs are there that the Maoists who have been elevated from fighters in the jungles to rulers in Kathmandu appear to be desperate to keep the house in order. They have embraced the capitalist model of development and have welcomed not only grants and loans from donors but also foreign investment public or private in Nepal.

Known for their anti-Indian stance Maoists are now too eager to change the image. This can only be natural as the 1950 agreement provides for free movement of citizens of the two countries through their common border, and Nepali rupee is tagged with the Indian rupee to maintain a stable exchange rate. More than three million Nepali citizens work in India and can have the right of franchise if they want to.

Consequently India maintains the largest diplomatic presence (embassy having total strength of 2000 men) in Katmandu. Informed senior Nepali citizens say, although the strength of the regular army rose from about 30,000 to about 100,000 in five years in the face of insurgency, it can hardly operate without Indian influence.

Maoists face a crucial test of dealing with the regular army which they earlier fought. The government needs to rehabilitate all Maoist fighters.

About 19,000 Maoist soldiers have now been sheltered in cantonments on the understanding that there will be a token absorption of the Maoist fighters in the Army.

Faced with undeclared opposition to such merger, Maoist leaders are now talking about the creation of an Industrial security force which their critics see as an attempt to raise a private army. Creation of such a force, it is feared, would antagonise the army which earns handsome foreign exchange for the country through participation in UN peace-keeping operations.

The people of the Terai (plains) again have been agitating for autonomy or independence from the hill people.