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#5259, 4 April 2017
Forecast 2017: Nepal
Pramod Jaiswal
Senior Fellow, IPCS
E-mail: pramod.jaiswal@ipcs.org

2016 began with difficult start for Nepal. Shortly after the massive earthquake and the disaster that followed, there was a shortage of fuel and essential supplies due to the ‘economic blockade’ imposed by Madhesis to pressurise the government to address their demands related to the newly promulgated constitution. To add to the woes, the 'economic blockade' took place during the winter months when the country was struggling to recover from the earthquake that had claimed thousands of lives. Despite this, the then Prime Minister of Nepal, KP Oli, refused to address the demands of Madhesis, Janajatis and Tharus through amendments in the constitution. 
With the prime minister's reluctance to pay heed to the demands, the blockade was lifted after the 134 days long protest, without any result. The first quarter of 2016 was also a period of despair as Nepal lost its former Prime Minister and senior Nepali Congress leader, Sushil Koirala. It was also around the time when India-Nepal relations were at a low because the KP Oli-led government had accused India of supporting the ‘economic blockade’ imposed by the Madhesis. 
To improve the New Delhi-Kathmandu relationship, Oli was invited for a six-day visit to India. However, nothing remarkable was achieved through his visit. Within few weeks, Oli paid a week-long visit to China. He tried to challenge India by signing an agreement on trade and transit with Beijing. However, the Oli-led government could not last long. It collapsed within 10 months, following the withdrawal of support by the Maoists as the Oli government had failed to address the demands of the Madhesis, Tharus and Janajatis. Subsequently, Pushpa Kamal Dahal ‘Prachanda’, Chairman, Communist Party of Nepal (Maoist Center) became Nepal's prime minister for the second time with the support of Nepali Congress, the largest party in the parliament. Both the Nepali Congress and the Maoists agreed to equally share the remaining 18-month term between themselves. Prime Minister Dahal was able to garner the support of the Madhesi parties as well, because he assured them that he would address their demands. 
While 2016 was a mixed bag, 2017 comes with several challenges. Nepal has to implement the newly promulgated constitution by taking the Madhesis on board by addressing their demands. The government also needs to hold the three-tier elections (local, provincial and federal) by January 2018, as mentioned in the constitution. Delivering on these would be a herculean task for both the incumbent and the upcoming government led by Nepali Congress in 2017. Failing to address these challenges will plunge Nepal into crisis.
Prachanda's Promise
Prachanda promised the Madhesis, Janajatis and Tharus that their demands will be addressed through a constitutional amendment as he was in need of their support to become the prime minister for the second time. However, despite his attempts, he has failed to do so. Though he tabled the amendment proposal in the parliament, he could not garner the two-third majority required for the amendment. Moreover, under the pressure of the main opposition, the Communist Party of Nepal [Unified Marxist Leninist] (CPN-UML), he announced that local elections will be held on 14 May.
The newly promulgated constitution requires holding of three-tier elections by January 2018. In this context, the Election Commission of Nepal had asked the government to agree on election dates at the earliest to facilitate conducting all three elections within the stipulated time. Following the strong reaction and warning of withdrawing support to the Maoists' government, Prachanda reiterated that he would address the demands of the Madhesis, Janajatis and Tharus through amendments before the local polls.
Local Elections
If the local body election takes place on the announced date - May 14 - Nepal will have a democratically elected local body after two decades. But the Madhesi political parties are agitating and have demanded that the government should first address their concerns regarding Madhesis, Janajatis and Tharus through constitutional amendments and then announce the poll dates. Meanwhile, the CPN-UML had demanded that the government should hold the elections and had rejected the proposition of constitutional amendments. 
Following the announcement of the election date, Madhesi parties announced a series of protests in Madhes. They declared that they would not partake in the election and would instead foil the process unless their demands are addressed via a constitutional amendment. With this declaration, unfortunately, five Madhesis became the target of brutal extra judicial killing by the security forces in eastern Nepal when the United Democratic Madhesi Front (UDMF) cadres tried to disrupt the CPN-UML's Mechi-Mahakali campaign.
Conducting the election without the participation of Madhesi parties is not possible and neither does it serve any purpose. It will further increase the rift between the Madhesi parties and the government, which will further complicate the existing issue. There are also chances of serious clashes between people of different communities in Madhes, which could spiral into instances of large-scale ethno-centric violence that will worsen the situation. As experienced in the past, it has the potential to escalate further with the mobilisation of security forces and the Nepal Army. The possibility of another ‘economic blockade’ at the India-Nepal border and similar implications cannot be ruled out. Frustration among the Madhesis, Tharus and Janajatis is already rising. The radicalised Madhesi youth, may raise a demand for a separate Madhes, like CK Raut’s group. Together, all these issues might create an environment for the formulation and organisation of armed insurgents like it did in the past. Under such circumstances, conducting the election is possible only if the government strikes a deal with the Madhesi parties, addresses their demands, and brings them on board for holding the election in a timely manner. 
Nepal has faced an acute power crisis for over a decade. Nepalese people were subjected to power cuts that lasted as long as 18 hours a day during peak seasons. This impacted the economy and normal lives severely. However, with electricity imported from India and the increment in domestic electricity production and some strong bureaucratic action, the power crisis has almost been resolved. Hence, it is highly probable that in 2017, Nepal's economy will thrive.
India-Nepal Relations
India and Nepal share deep historical, political, geographic, economic and socio-cultural ties. The two countries share an 1850-kilometre long open border and cross-border marriages are common. Under the provisions of the 1950 Indo-Nepal Treaty of Peace and Friendship, citizens of both countries enjoy special privileges.
Given this level of engagement between the two countries, any change in government or policy in Nepal or India cannot negatively impact the relations heavily. Yet, the bilateral has witnessed ups and downs at times. The tension in the Nepal-India relationship during the Oli government tenure was rectified as soon as Prachanda took over. Though Nepalese president Bidhya Devi Bhandari's India visit could not take place during Oli’s tenure, Indian President Pranab Mukherjee paid a three-day visit to Nepal - the first by an Indian president to Nepal in 18 years. Additionally, there were several other high level visits between leaders of the two countries. 
India is Nepal’s largest trading partner and contributes significantly in the country's development. New Delhi has played a crucial role in Nepal's major political transitions, be it the overthrow of the autocratic Rana regime; introduction of democracy; restoration of democracy in 1990; abolition of Monarchy; or mainstreaming the Maoists. It will continue to play an important role in days to come. 
However, with the thumping victory of Bharatiya Janta Party (BJP) in Uttar Pradesh - an Indian state that shares borders with Nepal - there are apprehensions in Nepal that India might impose ‘Hinduism’ on secular Nepal or might attempt to revive monarchy. But, these are highly unlikely in the present context. Even if India plans for such adventurism, it will not succeed; instead, it would be counterproductive and would have lasting implications for India-Nepal relations. India should pay special attention in Nepal to consolidate its influence, as there are speculations that China would have proactive diplomacy and engagement in Nepal in days to come. New Delhi was already alarmed since Oli tried to bring China to counterbalance India. Hence, in 2017, India must pay special emphasis on improving connectivity; bringing the political parties together to resolve their internal differences in the constitution for peace and stability; and support Nepal in improving and consolidating its economy.
2017 is full of challenges for Nepal's government as well as the political parties. The first and major challenge is to address the demands of Madhesis, Janajatis, Tharus and other marginalised groups. This will create an environment conducive for free, fair and credible elections. It will also pave way for implementing the constitution, which will gradually create peace and stability in Nepal. Failing to conduct all the three elections by January 2018 will lead the nation into another constitutional crisis and prolong the transition. Prime Minister Dahal also has to hand over the prime ministerial role to the Nepali Congress after the local election, to meet the terms of the agreement. If the political parties fail to overcome these challenges, Nepal is bound to face a series of protests, violence and demands for a separate Madhes, and the constitutional gains of the past would be at stake. Any instability and chaos in Madhes will impact the security of its neighbouring regions, especially India.

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