Views of a Nepali Economist

Labels: catalonia, federalism, madhes, trade

The following opinion piece was published in Republica on August 6, 2015. The direct link to Republica is here.

Prithvi Narayan is not much appreciated these days. It wasn't long ago that it was not the case. Large scale of the public was staunchly pro-monarchist and worshipped the Shah Kings as avatars of Lord Vishnu. The Maoists built propaganda against that image, and succeeded to change enough mindsets to overthrow the monarchy. The mystery surrounding the Royal Massacre and King Gyanendra's (and his son's) unpopularity played their part as well. Many statues of Prithvi Narayan around the country were brought down from their pedestals. Many were happy that the centuries-long Shah oppression had finally ended.

However, it is erroneous to believe that Shah Dynasty continuously ruled Nepal since 1769. The Shah Kings directly ruled Nepal for a total of 107 years, in installments—77 years between 1769 and 1846, 29 years between 1961 and 1990, and a year between 2005 and 2006. They were ceremonial heads for 27 years—10 years between 1951 and 1961, 15 years between 1990 and 2005, and two years between 2006 and 2008. For the first 77 years of Shah Rule, Nepal was a unified country in name only, mainly for international purposes. Internally, we no longer had kings in every town, but we also did not have solid administrative structures. The country was administered and governed loosely. After the unification, the ex-kingdoms were now municipalities, still ruled by local elites with substantial local autonomy.

Exploitation of the country's people and its riches truly took place during the continuous 105-year Rana regime between 1846 and 1951. While the Shah Kings of the past had been glad to relinquish their control over most of their citizens and allow significant autonomy for local rule for the sake of national unity, the Ranas craved for absolute control. The Ranas changed how the country was ruled and administered, mostly for greater benefits to Rana rulers. They designed and perfected the art of exploitation. The Shah Kings felt that they owned the country, the people were their subjects, and it was the duty of the kings to care how their subjects fared. On the other hand, the Ranas knew that their control over the country was temporary—they did not own the country, the Shah Kings did—and this meant they had to exploit and enrich themselves as quickly as possible. There is no question who destroyed Nepal more. The Ranas were running that race against themselves, and won.

No other Shah King receives more negative press than Mahendra. Like all Shah Kings, Mahendra felt that the country was his, he owned it, and he had to protect it. In 1951, he had seen China annex Tibet, then an independent country. Post-independence India had been eyeing to annex Nepal, and historians have written about Mahendra's confrontations with India's leaders on the issue. Disbanding the democratic government, forming the Panchayat System, and pursuing a neutral policy between India and China were his attempts to ensure Nepal's long-term survival. In 1975, India annexed Sikkim, then an independent country. The United Nations and the world's superpowers had failed to defend both Tibet and Sikkim's sovereignty. Some see this as proof that Mahendra's worries about Indian intentions were spot on.

National survival and sovereignty is contingent on a degree of integration. And, integration of a society as diverse as ours could not have been accomplished without force. Prithvi Narayan accomplished that first by creating one single country instead of dozens of fragmented mini-nations, and established the modern Shah monarchy. The Ranas could have easily ended the monarchy when they were in charge. However, the monarchy was the glue that held this country together. The Ranas recognized this, and kept the monarchy alive. Even after the Rana-rule ended, the monarchy was the glue that kept the country together.

Mahendra introduced policies to further integrate the country. Very few Nepalis lived in Tarai because it was swampy and malaria-infested. Mahendra encouraged people in the hills to go and settle there. There were two clear advantages of that policy. First, Tarai had productive land that was not being put to use. People moving from the hills to Tarai would increase agricultural output and create new economic zones. Second, a thriving population in Tarai would ensure territorial defense against Indian encroachment. Remnants of this latter reasoning can still be found in far-western border villages. Mahendra gave free land there to poor people from the hills and also gave them guns to defend the border in case of Indian aggression. Households in those villages still have the guns that Mahendra gave them.

However, Mahendra is portrayed today as the occupier of Madhesh. His promotion of Nepali language as the national language is criticized as a policy of "Khas dominance." Some Nepali academics have argued that the Nepali language is imperialistic and it dominates every other language in Nepal. A language cannot be imperialistic. Also, it is wrong to attribute Khas language dominance to Mahendra's policies because the dominance predates Mahendra.

Claims by Janajati and Madheshi leaders that there is a grand design and centuries-long plan by the Khas population to dominate others is wrong. Nobody makes centuries-long plans. If the Newari Kings in the Valley had the vision of unification and acted on it, we would all be speaking Newari today. However, that did not happen. The Khas speaking king from Gorkha united us all, and we ended up taking Gorkhali language as the national language. The same has happened in the history of every single country in the world. You have to look it up.

It is always good to look back and see how we became the people we are today. We had no say in how our history was written, but we are responsible for writing our future. Being cognizant of our history—without the jingoism—to understand how we arrived here is always a good start and can show a way for the future.

Labels: ethnic federalism, federalism, Khas, madhes, Mahendra, monarchy, Prithvi Narayan, Rana

The following opinion piece was published in Republica on January 11, 2015 with the title "Loose tongue". The direct link to Republica is here.

The year was 1968. Martin Luther King Jr, a devout follower of Gandhi and his peaceful method of protests, had just been killed. The United States was involved in an unwinnable war in Vietnam. There were anti-war protests and anti-discrimination rallies held all over the US. Like all major cities, Chicago saw its share of clashes between the police and the protestors. When the situation turned violent after King’s assassination and a huge police force had to be mobilized in Chicago to keep peace, Richard Daley, the mayor of Chicago, announced: “The police are not here to create disorder. They are here to preserve disorder.” It was a Freudian slip, an insensitive thing to say at the wake of King’s assassination and the violent rallies.

CPN-UML Chairman KP Oli appears to have made a similar political slip of the tongue recently. This is not the first time he has done so. He is prone to making comments that are politically incorrect. Over a year ago, when one of his constituents asked him if he would ever return to his constituency again after the election, Oli verbally thrashed the questioner. He said that he had been elected as a Member of Parliament and not as a Village Development Committee secretary. That was not a politically correct thing to say. But, Oli cannot help himself from saying such things. He prides in letting people know that Oli ko boli is banduk ko goli (Oli’s speech and bullets of a gun are the same). How? He has yet to explain that.

However, unlike Daley’s slip, Oli’s recent Freudian slip may have more far-reaching consequences. Madheshi leaders have different aspirations from that of the other major political parties. Therefore, to throw a politically incorrect verbal abuse at them was not wise. Madheshi leaders have now decided to abstain from all dialogues in which UML is a party. But, UML is a coalition partner in the current government with Nepali Congress. So, every dialogue will have a UML presence. If the Madheshi leaders stick to their guns, their absence from dialogues will mean that a significant voice will be absent. That does not bode well for the “consensus decision making” that we keep reading about.

Maybe the Madheshi leaders were not interested in working through the mess of designing federal Nepal and writing the new constitution. Maybe they were looking for an excuse to not appear in such discussions. That is actually what the UML leaders are accusing the Madheshi leaders of. The UML leaders could be right, or they could be wrong. But what is not in doubt is the fact that Oli’s loose tongue has given the Madheshi leaders an excuse to withdraw from talks. And, like all opportunistic politicians, Madheshi leaders will milk this opportunity to try and have their demands met.

Now, to be fair to Oli, he may have spoken politically incorrectly, but his overall sentiment on the Madhesh restructuring issue is one that most of us from the plains agree on. As a resident of Morang, I would hate to see my district split. I believe the sentiment is true for most residents in Jhapa and Sunsari as well. It also does not make sense to create a single Madhesh province out of all 22 districts in the Tarai. That is nothing but greed on the part of the Madheshi leaders. They wish to have control over the entire breadbasket of the country and the profitable southern border with India. Other political parties see through that greed, and will not let that wish come true. The Madheshi leaders need to know that it is a politically infeasible strategy.

There are broader repercussions of the constant spat and disagreement between the political parties. Forces that are muted at other times become vocal to take advantage of the chaos. The British ambassador had no business poking his nose into religious matters. Nothing is stopping a Nepali from any religion converting to Christianity. It has been going on for decades without any obstruction or opposition from the Nepali public or the government. Yet, the ambassador felt the need to express his thoughts on a non-issue. Nepal has already been declared a secular republic, and converting to Christianity is not banned. And, now, after Oli’s comments on Madheshi leaders, he has been visited by the Indian ambassador to take stock of his views. These incidents show that constant disagreements among our political leaders have allowed foreign forces to insert themselves into issues that are distinctly domestic in nature. They have started asserting themselves on issues they have no business worrying about.

Oli has refused to apologize for his politically incorrect outburst; rather he has asked the Madheshi leaders to apologize to him. However, if he and other UML leaders truly believe that the Madheshi leaders simply needed an excuse to walk out of talks, they should not give in. Oli should tell the Madheshi leaders that he had an outburst and that he is sorry for it. The Madheshi leaders represent a large chunk of the Nepali population. Their presence in dialogues is necessary to get a more representative decision on constitutional and federalism issues. Their absence from dialogues is unacceptable.

Labels: ethnic federalism, federalism, Freudian slip, KP Oli

The following article was published in Republica on September 27, 2013 with the title "Trust deficit".


We are a nation fragmented and in conflict. We are divided by competing ideologies such as One-Madhes, One-Midwest, One-Farwest, Tharuhat, Kochila, Mithila, Limbuwan, etc. Language, identity and ethnicity dominate federal restructuring debates. In the past, violence was perpetrated by different groups in an attempt to get favorable outcomes.

The Far-west suffered a month-long shutdown when water and milk tankers were not allowed to ply the streets. Bombs exploded during Muslim and non-Muslim confrontations in Janakpur. Thankfully, the CA’s time expired, and relative peace has been restored since.

Leaders espousing different political, ethnic and identity lines will soon start ramping up their ideological rhetoric to gain votes once again, with complete disregard for the possibility that their rhetoric and riling of the masses could disrupt this relative peace.

These leaders have not used this peaceful period to make their cadres and constituents aware of their stance on federalism and boundary delineation. The same goes for ethnic and identity activists. Instead, what we have got so far is constant criticism of the Regmi-led government, and the news that our next CA is also going to be 601-member strong. Yet, nobody has been able to suggest with believable clarity how many states we should have.

This is not to say that there have been no positive gains so far. Intermediaries, peaceniks and mediators were busy brokering compromises and solutions between different actors before the CA was dissolved. As a result, many contentious issues about what should and should not be in the new constitution have been resolved, and parties involved in drafting the constitution have made note of those resolutions. The probability of those same issues being contested in the new CA (which will also probably serve as a parliament) is very low. This presents us with a real chance of having a much more productive CA after the proposed election.

However, this does not mean that it is going to be a smooth ride. On the ground, Nepali public is cautious of two major decisions that political parties have taken: secularism and federalism. A significant proportion of the population still wants Nepal to be a Hindu state, and this support becomes stronger as we move westwards, with the Far-west appearing to be the most supportive of a Hindu state. As for federalism, the country seems to be evenly divided into those who support federalism, those who support a unitary state, and those who remain undecided.

Secularism and federalism are not controversial ideas. They have been part of the democratic practice wherein all groups of citizens are given equal respect and space for their development and growth. They are ideas that have been used to promote harmony and self-determination worldwide. Yet, the fact remains that federalism and secularism are opposed by a significant population of our country.

There could be two possible reasons for this opposition. Either the majority of Nepalis clearly understands the consequences of having a federal and secular republic, and wants to forestall those consequences. Or the majority does not clearly understand the consequences of a federal and secular republic, and opposes the ideas of federalism and secularism in keeping with their ‘risk-averse’ behavior. This second reasoning, in my view, holds more water.

The majority of Nepalis is not aware of how the country can benefit from federalism and secularism. Political, ethnic, and identity leaders have not informed their constituents on why the leadership believes what it believes on federalism and secularism. It appears we are headed towards federalism not because we understand and want it, but because our leadership wants it.

Because our political process appears to ignore popular opinion, it has become a source of increasing distrust. Our political representatives have made a number of unpopular decisions. For example, Madhav Kumar Nepal was defeated from two different constituencies in the last CA vote, demonstrating people’s distrust of him as a leader. Yet he was made the Prime Minister. Although that was a politically and legally acceptable decision, it also made a mockery of democratic values.

Seeds of distrust have been sowed not only between people and their political representatives, but also between and among common people. Nationwide public opinion polls show that each passing year sees more respondents reporting worsening relationships between Nepalis of different castes, ethnicities, religious groups, and political affiliations. Increasing inflammatory rhetoric and political divides have further entrenched these worsening relationships, giving rise to distrust and negativity.

This negativity and pessimism can’t be good for future dialogues and compromises that will be needed in order to get the desired changes. It is time our political leadership realizes that it is difficult to bring forth change, reform, and progress if the public distrusts one another.

Every new change brings with it a set of expectations. The brokers of these new changes are responsible for realizing and managing such expectations. Failure to help realize and manage such expectations will not only breed discontent among the masses that supported to bring that change, but also sowed distrust of the leadership. We have seen this happen after the 1950 and 1990 democratic movements when the public was promised a lot more than what was eventually accomplished.

Politicians blamed strong opposition from the monarchy for mismatch of expectations and accomplishments in those two periods. However, the same cannot be said of promises that were made to the public by recent movements and their leaderships. Failure to manage expectations from the Maoist conflict, numerous ethnic and identity movements, and recent democratic movements can only be blamed on poor leadership and their wretched, empty rhetoric.

Generalized trust displayed by people is a strong function of institutions—the police, legal system, bureaucracy, and government. It would be wrong to dismiss increasing public distrust with usual fatalistic disdain of “that’s how we Nepalis are”. Culture should not be a measure of trust in a society. We can no longer blame ethnicity, religion or customs for increasing distrust of political parties. It is time for our political leadership to ditch their inflammatory rhetoric, and work towards regaining the lost public trust.

Labels: election, ethnic federalism, federalism, secularism, trust

The following article was published in Republica on February 19 with the title "Why federalism?". The unedited version is below.

Labels: Dang, federalism, local government

The following opinion piece was published today (July 10, 2012) in Kathmandu Post with the title "Federal Journeys". The direct link to Kathmandu Post is here. 


In the past month, I have visited different parts of Nepal to observe focus group discussions of local political actors regarding federalism, restructuring issues, nomenclature of states, “agradhikar” (priority rights) and ethnic federalism. These focus group discussions were held in Jhapa, Janakpur and Dang. During this time, I also interacted with the local citizens in Dang, Kailali and Dadeldhura, gauging their moods regarding the current political crisis and the election announced to be held in November.

According to the grassroots level politicians in Jhapa, Janakpur and Dang, the announcement of fresh elections was not only illogical, but also insensitive coming from the current government because it was not a decision borne from national consensus. We are already risking a broader social crisis due to the failure to re-integrate the Maoists back into society on time. Also, high unemployment, over-reliance on overseas destinations for jobs, growing inflation and government inaction in reining the stalled economy has propagated the economic crisis. The political crisis—as a result of the Maoists backtracking from
 the five-point agreement and the failure to deliver the constitution on time—has further fanned the already flaming crises.

The peace process has not come to a satisfactory conclusion, and the Maoists are blamed for this in all three districts. A major hindrance to success has been a section of the Maoist party that does not want to do away with its “armed force”. Maoists are also blamed for developing a hunger for staying in power by any means. They are accused of not participating in any concrete negotiations to resolve thorny issues of integration, federal restructuring and federal states’ nomenclature. In Janakpur, those that face blame are the NC, UML, pro-monarchy actors, Khas-affiliated groups and other status quo-seeking forces. That’s everyone except the Madhesis. These groups are accused of always having “problems” with the Madhesi issues and rights. However, all these political actors confessed that their respective national leaders were not striving hard enough for solutions.

Politicians in Dang claim that the failure to draft the constitution was not because of a lack of compromise or understanding, but it is linked directly with the federal restructuring issue. As it has been reported many times, national level leaders did reach a consensus on many issues. Madhesi Morcha demands that the entire Madhes be split into not more than two states. Then how is it acceptable to split the hills and mountains into more than two states? Isn’t that hypocritical? This, along with the aggressive ethnic federal state demands by the Madhesis and other ethnic groups, is the reason why the current polity could not release a constitution. It was much easier to announce fresh elections and let the next CA deal with such sensitive issues.

Despite their differences, the grassroots politicians in all three districts do not want a single ethnicity-based federal state. They also disagree on the agradhikar concept because it is un-democratic, non-inclusive and non-proportional. The proposal to have the first two chiefs of newly formed states come from dominant ethnic groups in those states flies in the face of democratic principles of elected representation. However, there is support for preferential rights and reservations for the previously oppressed and marginalised groups like Badi, Dalits, Tharus and others. The federalism design should focus on three important things: identity, geography and self-determination. That is a common demand of grassroots level politicians in all three districts.

The politicians in Dang spoke of a survey that was carried out by the CA regarding federalism design. The survey showed that most people in the grassroots level—including political actors—considered “geographic accessibility” as the most important criteria in designing the new federal states. However, this survey result has not been mentioned by the State Restructuring Committee, political parties, the CAs, rights organisations or the media. This highlights the fact that a few dominant voices have hijacked the national level debates on federal restructuring and the public has not found an avenue to voice its opinions. The overwhelming public opinion has conveniently been ignored.

My interaction with the citizens in Dadeldhura and Kailali painted similar pictures. Although people in both these districts are frustrated with the national level political shenanigans, those in Dadeldhura consider their distress futile as they know Sher Bahadur Deuba would win by a landslide in the next election. However, people in Kailali do not fancy giving another chance to the Maoists. Kailali was one of the worst affected districts in the Far-West during the Maoist conflict. The Maoists swept the district in the last election. Also, people here claim that they are now aware that all these ethnic confrontations are nothing but a ruse by the political parties to fool them. They also expect the Maoists to lose the district in the coming election.

Adding insult to injury through these crises, community activists and mediators have reported alarming complaints from villages in Kailali. Conflict-affected single mothers have come to mediators with complaints that their children are increasingly talking of exacting revenge. A teenager with a Maoist father killed by the Army wants to someday kill the army men, and a teenager with an Army father killed by Maoists wants someday to kill the “maobadis”. These young adults have not actually engaged in such sort of retaliation, but the single mothers fear that their kids could take that extra step.

There are other kinds of threats that come through different actors in these areas. For example, my interaction with ethnic activists in Dang showed that the Tharus vehemently demand a “Tharuhat” state and threaten riots if their demand is not met. Tharu activists claim that it is not an ethnic demand, but a demand for identity and protection of that identity. “Tharuhat” would recognise the culture, language and people that are indigenous to that region and have been living there for thousands of years. In addition, Tharu activists want the government to develop reparation packages for Tharus and other groups that have been oppressed for centuries.

On the face of all these emerging problems, maybe dissolving the CA was indeed an easier way out than having to handle the mess. However, we have to realise that avoidance is not the best strategy. You will not know how to slay the beast until you face the beast. Grassroots level politicians and the citizens of Jhapa, Dang, Janakpur, Dadeldhura and Kailali express similar feelings-that we should have just manned up and faced the beast when we had the chance.

Labels: Dadeldhura, Dang, ethnic federalism, federalism, Janakpur, Jhapa, Kailali

The following article was published in Republica on June 25 with the title "The true picture: Federalism from the ground". The direct link to Republica is here.

Labels: ethnic federalism, federalism, Janakpur, Jhapa

My latest article in Republica, published with the title "Wise Economics" on June 9th, deals with the hiccups in the development process in Nepal. The direct link to Republica's article is here. The unedited version is below.

Labels: development, economics, economy, federalism, urban giant

These grassroots level politicians believe that if the federated states give agradhikar rights to one particular ethnicity, it would be no different than what we had during the monarchy. The top ethnic leaders would have absolute power over the ethnic federal states which would be akin to having multiple kings. This would be regressive for the development of the federated states. A better approach would be to have federal states designed along “economic” lines with some sort of proportional representation to ensure the progress of each ethnic community.

Labels: ethnic, ethnic federalism, federalism