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Political, Social and Economic Framework

Political, Social and Economic Framework Nepal is a small, landlocked mountainous country in South Asia. Located between India and China and occupying an area of 141,181 sq km, the northern part of the country includes major ecological zones of High Mountains, Middle Hills and Shiwaliks while the southern part includes the Terai. The altitude ranges from less than 100 m in the southern plains to more than 8,000 m in the northern Himalayas, including the highest peak on earth, Mount Everest (8,848 m). The climatic variation from subtropical monsoon conditions in the Terai region to alpine conditions in the Great Himalayas harbours a large diversity of plants and trees. Annual precipitation is approximately 1,800 mm in the eastern Terai whereas in the West it is 760 to 890 mm. Average winter temperatures vary from 19 degree Celcius in the southern Terai region to 13 degree Celcius in the inter-montane basins with summer temperatures varying from 28 to 21 degree Celcius in the same regions1. Approximately, 6,306,000 ha of the country is covered by forests2. Forests and other wooded land3 as a share of the total land area in 1990 was 32.7 percent whereas in 2000 it was 27.3 percent4. The forest resources provide 81 percent of total fuel consumption and more than 50 percent of fodder to livestock and are one of the main resources of the country, contributing about 14 percent in the national GDP5. While revenue from non-timber forests products (NTFPs) including medicinal herbs and aromatic plants account for 5 percent of the total revenue collected from the forestry sector, in certain areas, NTFPs alone provide up to 50 percent of the family income6.


Fig 1. Map showing position of Nepal in Asia
(Source: web.raex.com/~siona/nepal_map.htm)

Nepal is one of the poorest countries in the world. In terms of various indices of development, Nepal ranks towards the bottom of the global hierarchy, falling in the category that the United Nations describes as a 'least developed country'. Nepal ranks 143 out of 175 countries with a human development index (HDI)7 value of 0.499, which indicates that the level of human development in Nepal is low8. Of the total population (about 23.2 million growing at a rate of 2.24 percent per year according to 1991-2001 data), a substantial portion lives below the poverty line9,10. The population density is 157 persons/km2, but over 600 persons/km2 of arable land, which is one of the highest in the world.

With only 14 percent of the total population of the country living in urban (municipal) areas, Nepal is predominantly a country of villages. The rural set-up of the country with limited size of land-holdings means that the agricultural system in the country relies on the interdependence between arable land, livestock and forests. The Nepalese economy is overwhelmingly rural and agriculture-based, the economic structure being characterised by subsistence agriculture. Agriculture, forestry and fishing accounts for around 66 percent of the usually economically active population while accounting for 39 percent of GDP (2001/02). Economic growth averaged about 5 percent per year during the 1990s but was negative (-0.6 percent) in 2001/02. The difficult security situation and political instability have adversely impacted on recent economic performance, especially that of the tourism and manufacturing sectors. Around the end of the 1990s an estimated 38 percent of the population were living below the poverty level, using USD 1.00/day as the measure and this proportion is likely to be higher now following the recent unfavourable performance of the economy.

The political situation in Nepal has been characterised by uncertainty and chaos as evident from the chains of events in its recent history. The country was run under direct rule by the king since 1961 in the name of monopolistic partyless 'Panchayati system' that collapsed after 30 years in 1990 as a result of a revolution led by Nepali Congress and Communist Party of Nepal. Although a multi-party system with a constitutional monarchy in line with the British model of democracy was introduced in 1990, political instability with frequent changes in the government has become the main feature of Nepalese multi-party democracy. During the past 13 years, the country has been ruled by a series of unstable political coalitions. In June 2001, the country was struck by tragedy when ten members of the Royal Family were killed. The only main member of the royal family, Gyanendra Bir Bikram Shah, the younger brother of King Birendra was then declared the king of Nepal.

The Maoist insurgency, started in 1996 with its guerrilla warfare tactics, has been the major problem in Nepal. A ceasefire begun on January 23, 2003 broke down on August 27, 2003, after three rounds of peace talks. The peace negotiation process collapsed after the government could not agree on the demand of a constituent assembly of the Maoists to decide the fate of the monarchy. Immediately following the breakdown, violence resumed between Maoists and security forces, resulting in over 2,000 casualties since August and bringing the death toll to more than 10,000 since the beginning of the conflict. The sphere of influence of the conflict is extending to virtually all parts of the country. Both sides in the conflict in Nepal have violated human rights. The Royal Nepali army have been killing innocent civilians in fake encounters. Extra-judicial killings in captivity and disappearance of persons under custody have become common. On the other hand, the Maoists have tortured and killed innocent civilians and they have been sometimes used as human shields or caught in crossfire. Youths and children have been recruited by force to the rebel army.

Several political events have occurred that have helped shape the current situation. On October 4, 2002, King Gyanendra dismissed the democratically elected Prime Minister Sher Bahadur Deuba and installed his own government. This created more turmoil and confusion on the political front. The King has yet to schedule new parliamentary elections as required by the Constitution, claiming that the precarious security situation has created an unsuitable environment for holding elections. Deeming the King's assumption of executive powers unconstitutional and a regression in Nepal's movement for democracy, political parties have been organizing mass protests demanding that the king reinstate parliament or create an all-party administration. On May 30, 2003, Prime Minister Lokendra Bahadur Chand, appointed by the King, resigned, setting off a scramble to replace him. Though the King invited political parties to submit a name for his replacement, their recommendations were rejected and the King instead chose Surya Bahadur Thapa, a recognized royalist and five-time former prime minister.

So far the Thapa Government has not been able to negotiate with the political parties and has been drawn into controversies for filling up the vacant posts of local bodies with their own people and not being able to fix the date for the election. Furthermore, instead of seeking peaceful means of negotiation with the Maoists, the Thapa Government decided to set up 'unified command' under the army by providing the villagers with arms to resist the Maoists, a move highly condemned by human rights groups and donors. Neither the palace and the parties, nor the army and the Maoists show any signs of negotiating. This political crisis, the Maoist insurgency, the lack of elected officials at any level of government and endemic corruption in the political system have created an intractable political struggle between the King, the political parties and the Maoists, and the situation has caused many Nepali citizens to lose confidence in democracy11. As there is no parliament, no local bodies and no active constitution, the political situation in Nepal still seems uncertain. In a bleak scenario of prolonging political instability and deadlock in the reconciliation among major political forces, the situation could become more difficult in the near future.