Crisis in Nepal: Political Circus vs. Politics of Transformation

Govinda Neupane

For the last 13 years, Nepal is experiencing turmoil, uncertainty and instability. More particularly, after the historic democracy movement of 1990, the situation has continued to remain fluid. During this period, the people created either extreme optimism or pessimism for themselves. The politicians of the gifted parliamentary school marched for their own prosperity. The radicals vanished to the jungles and came back to the villages, towns and cities heavily armed with modern weapons. And, the palace also got change of face after the tragedy, which took lives of several royals.

After the democracy movement, the change of heart and mind started from the people. During the movement and immediately after that period, the people were so optimistic that they were expecting the opening up of the flood-gate of prosperity. In their "dream-Nepal", everybody will have a decent job, children will be in schools, health facilities will reach their door-steps, poverty will disappear, inequality will vanish and physical facilities would match that of Singapore. This will not take long time as the magical multiparty was there and their leaders had promised so. Some of the leaders, even publicly, had declared that Nepal will be at par of Singapore quite soon. They were making speeches as if Nepal will start just cultivating smile, satisfaction and prosperity. But, the results did not support the loud talks. Therefore, optimism did not last long and the people changed their expectations rapidly. Hence, pessimism started to run high. In this way, the first party changing their side, expectations and fantasies were the people. They were away from the reality just for two to three years.

The second party noticeably faster in the competition of change was the galaxy of political leaders of the parliamentary school. They changed their goals, roles and assets in an unbelievably faster speed. They created oasis for themselves whereas people continued to starve. All of the sudden, they became powerful as the Ranas (a dynasty which ruled for 104 years), wealthy as the Marwaris (an influential business community migrated from Rajasthan) and unpopular as the Panchas (former ruling clique). They changed themselves dramatically.

The third party to change was the ginger group among the Nepalese left, the radicals. They were hanging around the parliamentary system talking some complex theoretical mysteries. One fine day, they discovered that nothing significant change is possible without arms. They vanished to the jungles. It was strange that one dark night the creamy layer of the Nepalese communist politics disappeared from the main roads of Kathmandu valley. They started either walking on the narrow lanes during the darkness of night or marching towards the lap of the majestic mountains. The gossip-loving Nepalese communists who had spent 47 years talking about armed struggle as a joke, this time did not tell a lie. A sea-change!

The fourth party to change was the palace. After 1990, the tamed king was residing in the royal palace. The king became so compassionate that it started to behave like a royal monk – loving, caring and above all gentle. The people started to feel close to that obedient, rule-abiding king. But, in the infamous June-One tragedy, not only the king but also all of his immediate family members were killed. As it happens in a monarchy, a new king ascended to the throne. The new king, overtly, expected an active role to play. In this way the forth and final party was the palace, which offered evidences of its change by expecting a dominant role in the coalition politics.

The leaders and their parties of the parliamentary school were discredited. The radicals in the jungles and remote areas were gaining strengths. And, the palace was trying to assert its dominant role. In this period of extreme fluidity, there was an infamous and weak government of a spineless leader who was surrounded by notorious political gangsters. The hunters, trained and motivated, overpowered this gang of political hooligans and gave them the marching order. Some termed this as a constitutional coup d'état. After this incident, in the political circus, roles changed. The yesteryear's tigers, the crooks of parliamentary school, were on the run. The political drama continued to unfold several mysteries, roles and events. One old political crony, who had already lost the teeth, was brought to chew the hard nuts of complex-make. As an obedient crony, he tried to chew. Predictably, he failed to break the nut and accepted to vanish in the wilderness. There was no problem, another crony replaced him. The second one also witnessed the same fate and disappeared. Once again, the dethroned spineless leader had the lady luck on his side. He got the chair back. In this way, the game of the musical chair has been continuing.

The people are fed up with the activity of changing the masks. For them, everybody who enters into the game park called Singh durbar (the central secretariat) is the same type of animal with a different human mask. The animal is well known as it is blood thirsty, voracious and greedy. The animalized human faces in the parliamentary school are also the same for the people and the nation as they looted the society and the state in the past. They also killed thousands of people and declared state of emergency to curtail all civil liberties and human rights whatever they were there. Only the difference is that, they do not feel tired while making lofty lectures. There will be no surprise if the former Panch's team and the parliamentary parties' team will join hands to share the booty.

What will be the net gain from such change for the people? In real sense, neither there will be any difference nor are the people expecting for. Even the radicals who have developed a habit of coming to surface for negotiating a peaceful takeover may book the ticket once more. There is no harm in trying as they will keep the mountain boots ready to disappear if the new political dolls behave differently.

The politics in Nepal has become a strange puzzle needing a large amount of neuron cells in the brain to understand and to play with. If nothing is going to change, why the new dramas are being staged? In reality, the same crowd wearing different masks will start another Tandab Niritya (a form of destructive dance). As usual, the dance will have the blending of vulgarity and utopia. All killings, commissions, bribes, nepotism, favoritism, etc. will be camouflaged by idealistic speeches and the auction of dreams. The people will be forced to watch the real action achievements of the ruling crowd – their laughter and smiles, bungalows and luxury cars, foreign trips and family shows, addition of fat in their body and brain, etc, etc. The people shall continue to watch this type of real actions with envy, jealousy and hatred till the ruling crowd will be decamped together with their rule.

The intellectuals, mostly befooled by strange schemes, talk about crisis in Nepalese political scene. They say that there is total absence of political stability. But, Nepal has not been entering into a crisis situation only because a toothless vegetarian old wildcat left the animal park or another crony vanished or a dethroned spineless leader might have the same fate. Nepal has been and will continue to be in crisis. Because, we Nepalese are 'Veer Gurkhas' (we, Gorkhalis are brave because we are stupid, we did not know to be brave without being stupid – Bhupi Serchan). If Nepalese people will get success to say good bye to the "stupid" part of the British colonial level of 'Veer Gurkhas', only then they can get rid of the crisis which is the byproduct of the criminally vulgar political circus. Therefore, the need of the day is the enlightened politico-ideological intervention further supported by strategic vision, sincerity of purpose, collective heroism and mass actions. Looking at the prevailing situation at the grassroots, there are reasons to be optimistic. The heightened level of socio-political awareness has created opportunities for change and has expanded the scope of qualitative difference at the grassroots level. Just the change of face at macro level doesn't add value. There is the need of transformation of the society. Also, there is the need of a mechanism that generates synergy to accelerate the process of change and gets rid of crisis. The most democratic and peaceful way out of the crisis and also the new departure point for the politics of transformation is to design a system accepting the sovereign right and General Will of the people. The election of the constituent assembly could be the most logical democratic process to recognize the General Will and to institutionalize the mandate. As a nation, are we ready to practice democracy?

India-Bhutan relation and the Bhutanese refugee impasse

Savitree Gurung

Bhutan has long been isolated from the rest of the World. Bhutan is located between the two giant nations of Asia - China in the north and India in the south which means that it is very useful to India to further India’s geo-strategic ends in the region. Thus, by skilful management and clever utilization of these needs, Bhutan has so far been successful in furthering its own goals at a relatively low political cost.

An Anglo-Bhutanese Treaty, signed in 1910, placed Bhutan's foreign relations under the supervision of the Government of British India.  After India became independent, the Indo-Bhutan Treaty of Friendship replaced the 1910 treaty in August 1949. The Treaty of Friendship states that Bhutan "agrees to seek the advice of the Government of India with regard to its foreign relations", but remains free to decide whether or not to accept such advice.  

Such freedom needs to be seen in the context that, Bhutan is one of the poorest countries in the world and heavily aid-dependent and strategically located within the sphere of influence of India.  Bhutan's economy remains centred on agriculture, which employs an estimated 91% of the population and contributes about 40% of GDP. The country Bhutan is most dependent on for aid is India, its largest bilateral donor.

After the late sixties, many changes influenced Bhutan, which also led to changes in foreign relations. Bhutan recognized its geo political importance being between two giants China and India. It’s complete dependence on India for economic and foreign relations Vis a Vis, its landlocked situation was/is a barrier in Bhutan’s independent ‘diplomacy’.  The non-existence of political parties and the democratic institutions also play an important role in limiting Bhutan’s foreign policy.  According to Rakesh Chhetri, one of the Bhutanese refugee scholars, the foreign policy was very nominal because there were few educated and professional people in Bhutan.

Surprisingly, only in 1972 was the Ministry of Foreign affairs established as an independent institution. Like any nation, the ultimate aim of Bhutanese foreign policy is the achievement of its national interests. The current Bhutanese foreign policy centers around five major objectives, in the words of Chhetri, viz., "search for national security, preservation of sovereignty and territorial integrity; economic development; furtherance of Bhutan-India relationship; expansion of external relations; suppression of pro-democratic movement and stalling the repatriation of Bhutanese refugees". The final two have become very important to Bhutan’s foreign policy since early nineties for Bhutan.

According to Dallas, India has had great influence over the sub-continent. Although Indian government had no master plan for influencing Bhutan’s foreign policy, however it inherited the British role in the region, and she thought continuing it would be in favour of her interest. In this pretext, India and Bhutan already had close relations in 1864 when the British began ruling India. This relationship was the product of their historical, geographical, cultural similarity and especially strategical aspect. India seems always supportive of Bhutan and claims to see Bhutan ‘independent and progressive’, renowned scholar Sharan asserts. Further, with Bhutan, India has a special treaty relationship under which Bhutan is to accept Indian advice on foreign policy; if there is any trouble, Bhutan's outlet to the sea, through either Calcutta or Chittagong, can be cut off. The special relationship between India and Bhutan was formalized in the Peace and Friendship Treaty of 1949. Under the 1949 treaty the Government of India increased the payment to Bhutan from Rs. 100,000 to Rs. 500,000a year and an area of 32 squares miles in Dewangiri that had been annexed by British in 1865 was returned to Bhutan. Bhutan is more or less a protectorate of India.

However, Indian scholar Avatar views one cannot ignore Bhutan’s role on India’s northern security. According to the 1949 Peace and Friendship Treaty, the Indian government assured Bhutan’s internal autonomy. However, it obtained the right of ‘consultation’ on Bhutan’s foreign affairs and also attained total control over communications of Bhutan.

Consequently, Dallas says both landlocked and small kingdoms of Nepal and Bhutan are situated in the same strategical locations. Both are sandwiched between India and China. Nepal is a fully independent country. Nepal can play key role in India’s security and territorial integrity. Indeed, Nepal is already obliged to take Indian advice on security matters and the Indian noose around the small, still independent, mountain kingdom is certain to tighten in the years ahead. In 1989 it began a dispute with India over trade, which resulted India closing 13 out of 15 border crossings.

In this background, Scholars have the belief that India holds the key to this trouble because India seems to have taken responsibility to guide Bhutan’s foreign relations. Furthermore, India was also the first refuge for the people fleeing from Bhutan. But, India as usual maintains that ‘the matter is a purely bilateral’ issue and it cannot do anything to solve it.

India does not seem not recognizing that more than 125,000 Bhutanese refugees suffering in different parts of Nepal and India since 1989/90. Nepal wishes India’s involvement in settling on this issue as the refugees had used Indian territory on their way to Nepal. Nepal believes that India’s role is vital to resolve this issue because of former’s  ‘leverage’ on Bhutan’s foreign affairs. She asks, "Why did India prevent the Bhutanese refugees to go back to their country (when they wanted to go for protest in Bhutan) but "allowed them" to head toward Nepal via the Siliguri corridor?" However India says that while going to Nepal, they went as individual and returning as a group is not acceptable to her. Although India might have its own compulsions for not allowing the refugees through the Indian corridor to return to Bhutan, the rational advanced by India is untenable. To sum up, the Bhutanese refugees, who have come to Nepal through the Indian lands, indicates a fact that India’s role can be instrumental to settle this issue. However it does not justify the fact that India’s sole role may totally transfix the prevailing impasse regarding Bhutanese refugees problem. But it is the high time that this issue must go through a new perspective, as time does not permit us to hang round whatever is happening.

The Asian Monetary Fund: Has Its Time Come?

A talk program on the theme of need for establishing Asian monetary fund was organized by the Center for development and governance recently in Kathmandu.

Dr. Omkar Shrestha, Principal program specialist at the Asian Development Bank, Manila was invited as the speaker of the ceremony. Speaking at the occasion the Chairman of CDG, Nepal Dr. Prof. Bishwa Keshar Maskey highlighted the theme of the discussion.

The following are the excerpts of the lecture given by Dr. Maskey and Dr.Shrestha at the occasion.

Established in December 1945 towards the end of World War II, the IMF has extended immense help to several countries several times through its various facilities, These facilities Include the Stand-By Arrangements, Extended Fund/Facility, Supplementary Reserve Facility, Contingent Credit Lines and so on. With a view to keeping itself more relevant, It has recently, in November 1999, replaced Enhanced Structural Adjustment Facility (ESAF) by the Poverty Reduction Growth Facility (PRGF) of which Nepal is a recent beneficiary $90 million (in 2003). The IMF has been "a friend in need" to the countries of the former Soviet Union, to Mexico during its difficult days in 1994-1995 and to Indonesia, Korea and Thailand during the Asian financial crisis in 1997. These are just a instances.

Against the aforementioned background, why do we hear whispers and murmurs of the need for an alternative to the IMF or an additional institution like the Asian Monetary Fund (AMF)? Is there really such a need for Asia or is it just thinking the unthinkable? Is Asia trapped between the past – that is inadequately relevant to the present needs and the future – that is yet to be charted into regional monetary and finance management?

There also seems to - be a growing trend of thinking that the needs of today's world and that of Asia in particular, are vastly different from the days when the Bretton Woods Institution was forged. The rapid growth of the East and South East Asian economies during most of the past three decades has made Asia the center of attention. Studies by prestigious and respected firms such as Goldman Sachs show that China and India are poised to emerge as two of the top three economies of the world within the next 50 years. Asia contains nearly half of the world's population, produces over one third of the global economic output and generates a large bulk of the global foreign exchange reserves.

Many schemes of economic Integration are currently taking, shape in Asia both at the regional as well as at the bilateral levels. A number of monetary and financial collaborations among Asian countries are currently under consideration. Clearly the Asian countries have begun to take regional economic integration more seriously than ever before to harvest the advantage of the synergies between neighbors for mutual development.

Therefore, is the 21st century going to be the Asian century? Is there going to be the emergence of a new Asia, dynamic, determined and confident of its future? Are changes in some of the existing Institutional set-ups therefore not only desirable but inevitable? Is the AMF being conceived with these realities in mind? What will AMF look like if it were to be set up? What will be its roles and functions and how will it be different from the IMF?

Press Release ( Based on Dr Shrestha's lecture)

The International Monetary Fund (IMF) was established at the end of World War 11 when Japan was devastated by war and most of the Asian economies were weak. The countries defended their economies by following restrictive trade policies and the intra-regional trade was minimal. Each country was to a large extent insulated from the other countries.

Today, Asia has some of the most dynamic economies in the world with the fastest growing trade and the highest domestic savings. Asian countries' cumulative foreign exchange reserves amount to almost $2 trillion. With 55 percent of the world population and with rapidly expanding economies, Asia's infrastructure investment needs come to around $250 billion per year.

The intra-regional trade among the Asian countries is today providing impetus to the world economy. For the first times since 1873 (barring aberration during war period), Japan's exports to China, Taiwan and Hong Kong have exceeded its exports to the United States. China's exports to Asian countries stand at 49%, which far exceeds its exports to the U.S. Japan's exports to Asia stand at 45%, in comparison with 25% to the U.S. and 16% to the European Union. The Asian economies are today increasingly inter-linked and inter-dependent.

The 1997 financial crisis in Thailand therefore quickly spread into other countries particularly in Indonesia, Malaysia and Korea. The IMF is mandated under its Charter to give confidence to member countries by making its resources available to them temporarily to correct their balance of payments problems. The resources available with the IMF, however, prove to be inadequate to provide the necessary support to Thailand. Out of $17.2 billion bailout package, IMF's own resources accounted for only 23.25% ($4 billion) compared with 55.2% of the resources made available by other Asian countries and the remaining 15.8% by the World Bank and The Asian Development Bank.

While the Asian countries contributed the lion's share of the Thailand bailout package, their combined voting power in the IMF was a mere 10.4% with little leverage on IMF policy prescriptions and conditionality. The voting power (or the quota) of each member country is intended broadly "to reflect members' relative size in the world economy". However, in practice this doesn't seem to hold. For instance, Belgium (with no currency of its own) has a bigger quota than that of India. Belgium's quota is 74% bigger than that of Mexico, whereas Mexico's total foreign trade alone is bigger than Belgium's GDP. The Netherlands, Switzerland, and Belgium combined have greater voting power than those of Mexico, Brazil and India combined.

The inadequate resources with the IMF to meet the present day need, the underrepresentation of Asian and other developing countries in their voting power in the IMF, the rapidly expanding intra-regional trade in Asia, and these countries' desire to create policy alternative to the IMF prescriptions are among the reasons leading to the need for forming the Asian Monetary Fund. The 1997 Asian financial crisis has made such need even more urgent.

Given the novelty of the concept and its wide regional and global ramifications, this subject is expected to generate many serious debates and discussions. The developed countries in the West and the IMF itself may have some misgivings about the need and value added of yet another regional institution. A convincing case can and has to be made. The financial stability and growth in the Asian region, facilitated by the Asian Monetary Fund, will help the growth of the world economy. A more developed Asia looking after its own financial needs would relieve taxpayers of the non-regional countries of the burden of developing aid. It will be a win-win situation.

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