Nepal's Faltering Peace Process and Swiss

CSS Analysis in Security Policy CSS ETH Zurich No. 125 • December 2012

NEPAL’S FALTERING PEACE PROCESS AND SWISS ENGAGEMENT Nepal’s civil war ended with a peace agreement in 2006. Following initial progress, the peace process has reached an impasse. Nepal’s transformation into a democratic and federal state is being held up by political power struggles. The paralysis of the peace process is also overshadowing Switzerland’s engagement for peace and development support in Nepal, which is regarded as a model due to its integrated approach.

Fragile transformation process In which direction will Nepal develop? Will the actors manage to overcome the political deadlock and move ahead with building a democratic, federally structured state and thus create the basis for economic development? Or will the country break down due to the sheer size of the challenges involved and the lack of compromise among the political decision-makers, and risk developing from a fragile state to a failed one? Six years after the end of the civil war, this is the crucial question.

With a population of around 26 million and an area of 147’181 square kilometres, Nepal is quite small for an Asian coun- Deep political divides in Nepal: Demonstrators demand the resignation of Prime Minister Baburam Bhattarai. try. It is divided geographically into the Kathmandu, 4 August 2012. REUTERS / Navesh Chitrakar Mountain Region (ca. 56 per cent), the Hill Region (ca. 30 per cent), and the Terai, the In 2006, the Maoist insurgents and the eral extensions of its mandate, the CA has Nepalese part of the Ganges plain (ca. 14 Nepalese government signed the Compre- failed to produce a new constitution. After per cent). It is defined geostrategically by hensive Peace Accord (CPA), which ended a the last deadline had expired, Prime Min- its situation between its two big neigh- ten-year civil war. Local and international ister Baburam Bhattarai announced that bours, China and India. India has close eco- actors alike hoped that the CPA would new elections would be held, for which the nomic and political links with Nepal and provide a solid framework for the process earliest date is in spring of 2013. However, is a key influential player in developments of transforming Nepal from an autocratic due to deep divisions between the parties, within the country. The Indian percep- monarchy to a pluralist, democratic repub- it is uncertain whether it will be possible tion of Nepal is strongly shaped by secu- lic. Indeed, a certain degree of progress has to conduct them. rity considerations. The Nepalese Maoists’ been reached in the past years: A resump- links to Maoist groups in India (Naxalites) tion of fighting in the civil war has been The blockade of the peace process also af- have on occasion caused grave concerns in avoided, the elections for the Constituent fects the Swiss engagement in Nepal. For New Delhi. Relations between Nepal and Assembly (CA) were held in 2008, and a Switzerland, it is a focal country both in the China are less intensive. For Beijing, apart solution was found for the controversial field of civilian peace support and in devel- from economic relations, the main issue is issue of integrating and rehabilitating for- opment cooperation. Mainly, though, ever to prevent the Tibetan diaspora in Nepal mer Maoist combatants. since the first integrated strategy of 2005, from engaging in pro-Tibet activities. Nepal has been a test case for Swiss efforts The peace process has since reached an to pursue its foreign, security, and develop- Nepal is one of Asia’s poorest countries, impasse. Both within and outside of Nepal, mental policy goals in the framework of a despite some progress in recent years. disillusionment is spreading. Despite sev- Whole of Government Approach (WGA). Annual GDP stands at around US$525

combatants, about 1’450 were ultimately ac- Nepal and its neighbours cepted into the Nepalese army. The others were rehabilitated or given early retirement. In this way, the difficult situation of “one country, two armies” was resolved.

Political deadlock Currently, the implementation of the peace agreement is at an impasse. When the CA failed, even after the fourth extension of the deadline, to elaborate a new constitution, its mandate expired on 28 May 2012. The Supreme Court had ruled out a further extension. The failure of the CA was a heavy setback for the peace per capita. Approximately 57 per cent of based on common opposition to the mon- process. In addition, it created a legisla- the population live on less than US$2 per archy. The peace agreement of November tive vacuum, as the CA had also had par- day, and about 25 per cent are below the 2006 between Maoists and the Seven liamentary functions. The elections that national poverty level (1996: 42 per cent; Party Alliance succeeded in bringing to an Maoist Prime Minister Bhattarai had 2003: 31 per cent). This percentage varies end the civil war in which about 16’000 originally scheduled for November 2012 depending on the population group. Aver- people had died. The key elements of the have already had to be postponed. The age economic growth in the past ten years CPA were the elaboration of a new consti- next possible date currently under discus- has been 4 per cent. On the Human Devel- tution, a reorganisation of the state, more sion is in April or May 2013. The parties are opment Index for 2011, Nepal ranks at 157th involvement of disadvantaged groups, the currently negotiating on a national unity place out of 187 states, one place behind integration and rehabilitation of the Mao- government to prepare the elections. It Nigeria and one ahead of Haiti. ist combatants, the return of confiscated is questionable whether the scheduled property, the revision of the structural election date will be adhered to this time, The population is subdivided into many reasons for the conflict, the protection of which is cause for persistent uncertainty. ethnic groups, castes, religions, and lan- human rights, and a social, economic, and Observers also fear that the election may guages. More than 100 languages are spo- political transformation of Nepal. give rise to new outbreaks of violence. ken. The population is 80 per cent Hindu, but also includes Buddhist, Muslim, Chris- Considerable progress was achieved in the The main obstacle to drafting a new con- tian, and animist minorities. Ethnicity and implementation of this agreement between stitution is the question of the federal caste are very important factors that con- 2006 and 2008. Among the milestones state structure as outlined in the interim stitute crucial criteria for access to political were the integration of the Maoists into constitution. Federalism is to form the ba- power and economic opportunity. Tradi- the political process, the approval of an in- sis for decentralising power and for bet- tionally, the Caste Hill Hindu Elite (CHHE), terim constitution, and the elections for a ter involvement of hitherto marginalised which makes up about 31 per cent of the constitutional assembly that were held in groups; it is also anticipated that a federal- population, has a dominating influence. 2008. The elections were monitored by the ist structure would seal acceptance of Ne- Discrimination based on ethnicity, caste, United Nations Mission in Nepal (UNMIN), pal’s ethnic and cultural diversity. However, gender, and religion – e.g., towards the Dal- which had been present in Nepal since federalism is a matter of controversy, both its (“Untouchables”), indigenous groups, 2007, but only had a very narrowly defined between and within the various parties. the Madhesis of the Terai, women, and mandate due to Indian concerns. To the Muslims – is still widespread in Nepal today. surprise of the established parties, the Mao- Generally speaking, the CPN-M, the Mad- ists emerged as the most powerful party. hesi, and certain ethnic and regional ac- Thus, two structural factors converge in More than 20 parties were represented in tors groups are in favour of federalism, Nepal that considerably increase the risk the newly elected CA, which had 601 seats. while the NC, the UML, and the hitherto of civil war, according to empirical stud- The four strongest factions were the Com- dominant ethnic groups and castes fear a ies: Distinct poverty and distinct inequal- munist Party of Nepal (Maoist) (CPN-M, loss of influence compared to the status ity between various population groups. In 229 seats), the Nepali Congress Party (NC, quo. A number of proposals are currently 1996, Maoist rebels took up arms against 115 seats), the Communist Party of Nepal in circulation. Among the controversial the autocratic Hindu monarchy. The rebels (Unified Marxist Leninist, UML, 108 seats), questions are the number, size, geographic demanded the abolition of the monarchy and the Madhesi People’s Rights Forum (54 disposition, names, and authority of the and an end to the feudal system. After the seats). In May 2008, the CA abolished the potential federal units. For instance, the accession of King Gyanendra in 2001, the monarchy, declared Nepal to be a secular, Madhesi and indigenous groups demand situation was aggravated, and the violence constitutional republic, and elected NC rep- regions in which they together are nume increased. In 2005, Gyanendra dismissed resentative Ram Baran Yadav as its first pres- rically superior to the population groups the government, seized executive power ident. Another breakthrough was achieved that have dominated so far. The Madhesi for himself, and imposed a state of emer- in 2011/12 on the controversial issue of inte- had even called for a unified Madhesi gency. In doing so, he created the precondi- grating the Maoist fighters into the armed state that would comprise the entire Terai. tions for an agreement between the Mao- forces. Of the approximately 19’600 people In the meantime, they have given up this ists and the main parties in parliament whom the UNIMN had verified as Maoist maximal demand. The NC and the UML are

warning that federalism based on ethnic- been present in Nepal since the begin- Key documents ity and identity would be divisive for Nepa- nings of its national development aid pro- lese society. The proposed administrative gramme in the early 1950s. Thanks to the Comprehensive Peace Accord (2006) units, they say, would not be viable eco- decades-long development cooperation, Interim Constitution (as of 2007) nomically and would jeopardise the integ- it enjoys an unusual degree of trust and Swiss Cooperation Strategy for Nepal rity of the state. goodwill on the ground. Secondly, Nepal (2009 – 2012) is a focal country for Switzerland both in Swiss Cooperation Strategy for Nepal Additional challenges are making the terms of civilian peace support and in de- (2005 – 2008) transformation process even more dif- velopment cooperation. Thirdly, Swiss ac- ficult. Deficiencies in good governance tivities in Nepal have special significance Switzerland also put out feelers concern- are a fundamental problem. Corruption is because they constitute a test case for ing civilian peace support activities, due to widespread. The human rights situation Switzerland’s implementation of a WGA. the Federal Council’s intention to become continues to be unsatisfactory, and the more strongly engaged than before in this government failed at the end of 2011 to ex- The purpose of the WGA is to align the var- area. Beginning in May 2005, a Senior Ad- tend the mission of the Office of the High ious instruments and activities of multiple viser for Peace Building in Nepal (SAPN) Commissioner on Human Rights (OHCHR). national administrative units towards com- dispatched by Political Affairs Division IV The mechanisms envisaged in the CPA for mon goals, to subordinate them to a uni- (PA IV, now the Human Security Division) of dealing with the civil war era in legal terms fied strategy, and to coordinate them- bet the Federal Department of Foreign Affairs (“transitional justice”) have not been im- ter. The aim of this approach is to improve (FDFA) complemented the existing SDC Co- plemented. Political discourse is marked by the effectiveness of the nation’s engage- operation Office in Kathmandu. The trust severe disagreements between and rifts ment and optimise the use of resources. enjoyed by Switzerland due to its long- within the parties. Demonstrations and In fragile contexts, moreover, the primary standing activity in Nepal and its contacts strikes are frequent occurrences. The strong aim is to achieve better coordination of the with all parties to the conflict allowed the fragmentation of the political landscape is security, peace support, and development senior adviser to take on an important role also a source of instability, as seen in the agendas as originally expressed in the “3D” as counsellor and informal facilitator in the frequent changes of government. Since slogan (diplomacy, development, defence) run-up to the peace agreement. Switzer- 2006, there have been five prime ministers. coined by Canadian diplomats. land was just one of many international actors including India, the UK, the US, the External observers attribute the stalling of For decades, Switzerland and the Swiss EU, or the UN that were also involved in the peace process mainly to the leaders of Agency for Development and Cooperation bringing the civil war to an end. the political parties. Their lack of willing- (SDC) were engaged in Nepal mainly in ag- ness to compromise on substance, the fact ricultural and forestry activities, infrastruc- Switzerland maintained its presence in Ne- that their main priority is retaining power ture projects (e.g., construction of bridges pal after the conclusion of the peace agree- for themselves, the lack of involvement of and roads), and in the fields of sustainable ment and has expanded its activities both the party base and the population at large, resource management and education. The in the area of peace support and in devel- their rhetorical agitation – in short, the outbreak of the civil war in 1996 placed at opment. The main goals are to support the political brinkmanship on all sides – are risk the results of decades of work. In Swit- peace process and build up a democratic largely to blame for the current situation. zerland as in other donor countries and and federal state that observes the rule of The future of the process is in consider- organisations worldwide, the result was a law and safeguards human rights and hu- able jeopardy because of the tendency of self-critical and sometimes tough exami- man security. On the other hand, the aim is political decision-makers to adhere uncom- nation of the interplay between its own to promote the country’s socio-economic promisingly to their respective strategies development activities and the violent development, to reduce poverty, and to for maximising their interests. Additional conflict. The notion of development coop- support selected Millennium Development problems besides the political deadlock are eration being a mainly technical and apo- Goals. In terms of geography, Switzerland is the parties’ increasing loss of legitimacy litical process, which had been widespread active across the country, though it has de- and the erosion of trust among the general among actors in development policy, could fined two focal regions. In its programmes, public in the capability of the democratic no longer be upheld. it works together with the Nepalese gov- institutions to resolve the existing issues. ernment as well as with local and interna- The growing frustration of many sections Switzerland decided to continue its pro- tional partner organisations. of the population constitutes a threat to grammes even under these difficult cir- the peace process. The litmus test for the cumstances. However, from 2002 onwards, For instance, the current SAPN is support- future development will be the question of it adapted them to the context of the con- ing the peace process in the framework whether the elections can be conducted in flict and introduced a conflict-sensitive of the Nepal Transition to Peace (NTTP) an orderly fashion and whether a function- programme management. This was de- Initiative, which seeks together with local ing parliamentary and constitutional as- signed, for instance, to prevent inadvertent facilitators to maintain a dialog with the sembly can once again be established. stoking of a conflict, to ensure support for various actors, including outside of formal marginalised groups, and to protect the institutions and channels. Furthermore, Switzerland’s role staff members associated with the Swiss Switzerland supplied an expert in consti- Switzerland is strongly engaged in Nepal. efforts. Another question was how closely tutional issues and federalism and in 2011 This engagement is not just one of many to cooperate with state institutions that invited high-ranking party representatives in Swiss foreign relations, but enjoys a had been discredited nationally and inter- to negotiations in Switzerland. Further- special status. First of all, Switzerland has nationally after 2005. more, it supports the work of the Consti-

tution Information Centers, the purpose partment, which also has by far the most disadvantaged groups. Furthermore, the of which is to sensitise the population for financial and personnel resources at its broad and yet coordinated engagement constitutional issues. With projects in the disposal. In 2012, the SDC’s budget for Ne- enhances Switzerland’s credibility. fields of vocational training, infrastructure pal was around CHF30 million, while that (maintenance and expansion of roads and of the Human Security Division stood at Switzerland aims to continue its involve- bridges), and resource use (sustainable around CHF1.3 million. These funds are ment in Nepal. The coordination strategy land management, marketing agricultural not part of a common budget line, but for 2013 – 2017 is to be approved in the near produce), it is hoped that marginalised are supplied by different credit facilities. future. The integrated approach will be population groups in particular can be The very different orders of magnitude maintained and deepened. The intention is given the opportunity to create a living for involved regarding the available funding not just to produce a joint document, but themselves. To a limited extent, Switzer- are also reflected in the orientation and also to formulate shared goals. Considering land also extends humanitarian support configuration of the programmes. For- in the current state of affairs in Nepal, how- to Nepal. Furthermore, between 2007 and stance, as part of the 2009 – 2012 strategy, ever, it seems advisable to stick to realistic the end of the mission in 2011, Swiss mili- the lion’s share of about 60 per cent of goals. Developments on the ground will de- tary observers were active in UNMIN. available means were used for socio-eco- termine how rapidly Nepal can transform nomic development and poverty reduc- into a democratic, federal state that offers Switzerland spent about CHF130 million tion, with 30 per cent being used for peace opportunities for social, economic, and on such activities between 2009 and 2012, support and state-building. Reporting, too, political development to all groups in soci- for an average of CHF32 million per year. is predominantly geared towards the re- ety. Nevertheless, Switzerland can support This annual contribution is scheduled quirements of the SCD and quantitative such a transformation with its continued to increase slightly in the coming years indicators. engagement – especially in this difficult as part of the increase in the framework phase of the peace process. credit for development cooperation and Overall, Switzerland has had a positive ex- the planned prioritisation of aid in fragile perience with its WGA-driven cooperation contexts. That makes Switzerland a sig- strategy for Nepal. This is borne out by a Responsible editor and author: nificant financial actor and one of the top recent external evaluation of the SCD’s Daniel Trachsler ten donors as far as Official Development involvement in fragile contexts, which re- [email protected] Aid (ODA) for Nepal is concerned, which peatedly praises the integrated approach strengthens its weight both locally and in in Nepal. One advantage of this approach is Translated from German: the international context. that ideally, the programmes are mutually Christopher Findlay reinforcing and that their overall effect is German and French versions / other Already since 2005, Switzerland has been thus boosted. This is the case, for instance, CSS Analyses / mailinglist: pursuing a WGA that is expressed in the when Switzerland orients its activities both www.css.ethz.ch/cssanalysen cooperation strategies for 2005 – 2008 in the political and the economic sphere and 2009 – 2012, which were jointly devel- specifically towards providing support for ISSN: 2296-0244 oped by the various administrative units. 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