Nepal Monitor: The National Online Journal

The following is the "Overview" (pages 1-10) of the report. Other core authors of the report are YASH GHAI, SARAH LEVIT-SHORE and LOK RAJ BARAL :

Without peace, human development is not possible and without human development, peace is not sustainable. Both require inclusion and participation—which can evolve through the restructuring of the state and deepening of the democracy of a political system. This Report makes the case that inclusion and participation can restore sustainable peace and human development through state transformation. Politics—or the exercise of power through participation—matters for human development because people everywhere want to be free to determine their own destiny, express their views, and participate in the decisions that shape their lives. These capabilities are just as important for human development—for expanding people’s choices—as being able to read or to enjoy good health. Democracy must widen and deepen if politics and political institutions are to promote human development and safeguard the freedom and dignity of all individuals. Peace, together with prosperity and democracy, also constitute the core mandates of the 2006 April Janandolan (people’s movement).

This is articulated firmly in the Comprehensive Peace Accord and the Interim Constitution 2007. The Comprehensive Peace Accord has at least four components:
􀁠 political and socioeconomic transformation;
􀁠 management of armies and arms;
􀁠 ceasefire provisions and measures for normalization; and
􀁠 protection of human rights and fundamentalrights.

This Report focuses on the political transformation or restructuring of the state for inclusion and for human development while recognising that implementing all the other components is necessary for peace. Here inclusion refers to the equitable political representation of the excluded segments of Nepal’s population, including women, various caste and ethnic groups, and those who live in underdeveloped regions. Participation implies the active engagement of representatives in voicing the views of their constituencies so that these opinions are heard and heeded.

The Report advances the view that because exclusion causes unequal human development—which, in turn, perpetuates exclusion—eliminating it through the equitable representation and participation of excluded groups and regions will improve the quality of human development. Consequently, the Report explores different options in changes
to the state structure or political system to accommodate the interests of different groups of people. Nevertheless, the Report also recognises that equitable representation cannot alone resolve the problems of exclusion unless those who represent Nepal’s various constituencies can influence policy decisions through direct and active participation. Those now excluded are unlikely to participate as effectively as the advantaged groups because of their lower level of human development and endowment as chapter two presents, along with their marginalisation and socio-political repression. Inequalities in endowment not only create, but cause exclusion.

Consequently, inequality and exclusion must end simultaneously in all its dimensions. Rather than prescribing a particular form of political system, a specific federal structure or otherwise, this Nepal Human Development Report 2009 examines some of the essential features of democracy and democratic structures that distribute power to many. These include a fair electoral system, democracy within political parties, a federal structure and a significant decentralization of power and resources to bring governance closer to the
people and to expand their access to basic services.

While the Report focuses on state transformation and state-building, it also infers that nation-building and the viability of a strong nation-state is essential to lasting peace and sustained human development. To this end, the Report advances an agenda of ten key points for political inclusion, lasting peace and human development.

Exclusion and inequality—perennial evils for Nepal
As the first chapter of the Report shows, there are at least seven categories of exclusion and inequality in Nepal; their roots lie in the country’s diverse geography, society and culture. This highly variegated diversity has not been well accommodated by a narrow definition of national identity based on the Hindu religion, a unitary state, and a hereditary monarchy dominated by ruling Hill elites until very recently. It is not surprising that this constellation of exclusions has been contested by Dalits (oppressed people), Janajatis including Tharu (indigenous peoples), Madhesis (ingeneral the inhabitants of plains) and women.

As this Report points out, the country has been undergoing multiple transitions:
􀁠 from a monarchy to a republic;
􀁠 from authoritarianism to democracy and human rights;
􀁠 from a hegemonic to an inclusive and participatory system of governance;
􀁠 from a state wholly pervaded by one religion to secularism; and
􀁠 from a heavily centralized unitary system to one characterized by decentralization and autonomy at the regional and local levels.

For these reasons, Chapter 2 presents Nepal’s current Human Development Index (HDI), and other related indices that show the existing patterns of unequal human development and the need for a socioeconomic “leap” for the country to reach the level of its neighbours in South Asia. The text examines the urbanrural divide, the differences among development and ecological regions, and the seven major caste and ethnic groups, as well as 11 such groups by their regional identification.

Although human development has improved at the aggregate level, the gap between advantaged areas or caste/ethnic groups and disadvantaged ones is either widening or remains constant. Thus, the Dalits, Muslims and Janajatis who have had lower levels of human development continue to suffer today.

Moreover, the level of human development of women is still lower than that of men, and women still lack equitable access to opportunities and resources. Thus, continued exclusion and inequality has provided an environment for the mobilization of excluded groups against an exclusionary state. This Report therefore holds that development policy Today, Nepal stands at the crossroads of redefining both nation and state must be framed and implemented by these groups themselves. Consequently, it emphasizes power-sharing through inclusion— through fair representation and effective participation of the excluded in the political system.

Digging deeper into three components of HDI—life expectancy, education, and income—reveals that improving the level of education for excluded groups could rapidly improve their capabilities and open new options and freedoms. Of the three HDI components, the contribution of life expectancy is highest, while that of education is expanding. This points to the need for increasing public allocations to education, which is generally pro-poor.

Getting the peace process right: today’s foremost need
Achieving lasting peace is no small undertaking in a post-conflict society. It requires:
􀁠 dealing with a divided past,
􀁠 managing the high expectations of people in the present, and
􀁠 looking towards a shared future through a process of participatory constitutionmaking, among other activities for broadening and deepening democracy.

Without emphasizing wider participation, the government risks jeopardizing the peace process and thereby forestalling both socioeconomic and political transformation. Dealing with the past involves providing justice to the victims and punishing the perpetrators of the conflict. Given Nepal’s long history of impunity, Nepalis throughout the country are calling out for justice. Little progress on transitional justice has taken place since hostilities ceased. Of the several commissions set up under the CPA, the one that has evoked the greatest contention has been the establishment of the Truth and Reconciliation Commission (TRC). Its delay stems largely from the late start of participatory processes in the formulation of the TRC bill.

The TRC provides an entry point to transitional justice. This justice can be retributive—based on criminal prosecution—or restorative—based on mediation. Restorative justice is increasingly used as a major instrument of reconciliation, since it gives greater weight to making restitution to the victim and the victimized community than to punishing the offender. Because victims are central to restorative justice, the process makes offenders directly accountable to the person or community they have victimized. The long tradition of “Kshama” (forgive and forget, rather than take revenge), inherent in Nepali culture, gives restorative justice considerable scope in consolidating the peace process.

Another prominent issue of dealing with the past remains the future of the qualified and disqualified members of the Maoist army. As Chapter three shows, key questions remain the return of land and other property, along with the reconstitution and reorganization of the armed forces. Discharged combatants should also play a key role in restorative justice efforts at the local and community levels; they must become part of community healing, reconciliation and rebirth.

The issue of the present is how to:
􀁠 manage popular expectations through restoring the rule of law; and
􀁠 increase access to public goods and services, including justice.

These have a direct bearing on human development, especially that of the poor and those otherwise excluded. As is so often the case worldwide, the poor and the excluded, who need critical services, including legal assistance, lack access to such help. Even in Restorative justice makes offenders directly accountable to the person or community they have victimized today’s Nepal, there are individuals who lack identity either because of lack of citizenship or because of landlessness. They are therefore barred from benefiting from the law and policies, especially in seeking redress for the exploitation of the powerful. Corruption has also been a major factor in keeping these marginalised citizens from availing themselves of legal procedures. To enhance access to justice, indigenous practices in this area at the local level need to be examined, adapted to contemporary needs and laws, and publicly promoted.

In addition to restoring the rule of law, improving service delivery enhances human development in post-conflict situations, especially in terms of health care, education and local security. In this area, the most important factor is the reconstitution of local governance bodies. At this juncture, the establishment of Local Peace Committees provides an opportunity for undertaking peace-building initiatives at the community level. Such bodies tend to be more inclusive than those originating at higher levels of authority because they bring together government organizations, political parties and civil society bodies that bridge NGOs, private enterprises, and the victims themselves. The elaboration of a new constitution for a shared future is critical. While its preparation by the 601 members of the Constituent Assembly provides legitimacy, a major challenge is the effective participation of all these members because their levels of endowment and empowerment differ immensely. Consequently, CA members should not be the only conduit for public input into the eventual law of the land.

There is no one model for a peace process, just as there is no single model of development. Thus far, the peace process has been characterized by a “one issue at a time” approach. This has slowed progress and limited decision-making authority in the hands of an elite few. Practically speaking, it has also meant an almost exclusive focus on politics at the expense of development. Now there is a need for balancing the political and development agendas.

Power-sharing through reform of the political system
Declining voter turnout, weak internal democratic processes within the political parties, limited oversight of justice and security institutions, confusion over competencies and accountability, and a lack of clear delineation of roles and responsibilities between the centre and local levels are all key challenges of effective democratic governance in Nepal. The fourth chapter of the Report explains how representation and participation can be further enhanced by choices around the electoral systems, the internal organization of political parities, and decentralization.

The nature of the electoral system of a country determines to a large extent how inclusively its population is represented in the political system and how meaningful this participation is for human development. This Report focuses on three criteria to gauge the extent to which Nepal’s present electoral system gives its citizens a voice in decision-making and thus fosters their development:
􀁠 the inclusiveness of Constituent Assembly;
􀁠 the accountability of assembly members selected under the electoral system; and
􀁠 the stability of the political system.

The analysis of the electoral system in this Report identifies:

􀁠 how a first-past-the-post electoral system can create a spurious majority with low representation of excluded groups in the political system;
􀁠 how the recent adoption of the mixed electoral system, with a higher proportion of seats allocated through the Pro-portional Representation (PR) system in the election of a 601-member Constituent Assembly, resulted in an inclusive Assembly—but arguably at the cost of political instability; and 􀁠 how this resulted in a delay in forming a coalition government, which even when finally seated, lacked the broad consensus on controversial issues critical to the success of the peace process.

A careful review of the mixed electoral system against the backdrop of upcoming state restructuring is therefore necessary for determining the future electoral system of Nepal.

Again, an equitable representation of different caste and ethnic groups in the legislature cannot exist even under the PR electoral system if the party organizations do not represent the diversity of regions and cultural groups, and do not use democratic procedures in their own decision-making. Unfortunately, the internal democracy of a party in Nepal, as reflected by the make-up of party organization and structure, tends to diminish with time. Moreover, the parties have been less transparent and democratic in their decision-making for some time; their senior leaders hold high positions for many years, thus limiting the options and development potential of other members. More importantly, their delivery on their election manifestos is at best, thin. Civil society has not played a consistently active role to make party leaders accountable to voters and thereby strengthen democracy at the grassroots level.

Nepal has had a highly centralized political system since its unification in 1768. The heavy concentration of power and resources in Kathmandu has been itself both a symptom and a cause of exclusion. The restoration of democracy in 1990 brought with it further efforts to strengthen local bodies in the development process. Of all Nepal’s efforts in this direction, the most promising was the 1999 Local Self-Governance Act. It included the devolution of basic services, such as education, health, drinking water, agricultural extension, and rural infrastructures. However, Nepal has never realized complete decentralization; perhaps because of a lack of political will, decentralization has been somewhat limited to its administrative dimension rather than reaching towards its full political, social and fiscal potential. Governance was neither adequately open to citizens nor sufficiently close to them.

Thus, the excluded continued to be excluded. They challanged the governance system. Their demands for a federal structure represent an effort literally to reform a self-perpetuating system which in their view, simply has not delivered.

Federalism has both merits and limits
State restructuring boils down to questions of federal structure given the third amendment to the Interim Constitution of Nepal 2007. Although the details of this structure are not spelled out in the Interim Constitution, the document clearly defines the objective of federalism as “[bringing] an end to discrimination based on class, caste, language, gender, culture, religion and region.” A federation may be born of the formal association of previously independent entities (“aggregation”) or the restructuring of a unitary state (“disaggregation”). The former has generally been easier to set up, and is based on the consent of the separate units. It involves the establishment of only one new unit—the federal government (with a transfer of limited powers). In addition, the regions have already well-established systems of government and laws, identities, and boundaries, which more or less guarantee their viability.

By contrast, federalizing by “disaggregation” raises many more challenges, including the number of regions and their boundaries, the levels of governance and the sharing of power among them, the dismantling of some of the state structures and the establishment of governments at different tiers, together with the elaboration of the authority and appropriate
laws for each level.

There are two fundamental bases for designing federal structures: cultural (caste/ethnicity) and territorial. The experience of federal countries reveals that ethnic federations face greater social and political problems than the “territorial” ones. In a territorial federation, the rights and obligations of individuals are based on residence in the region; personal characteristics like language, religion or culture are largely irrelevant. By contrast, in an ethnic federation, the land itself has ethnic and cultural dimensions.

It is perceived by a community as its “homeland”, vested with religious history or highly charged associations or, in a far more common way, is regarded as the physical space in which a particular community holds a traditional numerical majority.

Federalism in Nepal, if devised properly, can promote human development, among others, through:
􀁠 increasing the political representation and participation of even disadvantaged regions and groups at the centre;
􀁠 allowing citizens to influence governance institutions directly;
􀁠 enhancing the efficiency and accountability of regional governments, and improving service delivery; and
􀁠 giving them easier access to local officials who speak their language.

These merits can also be found in decentralized governance under a unitary structure. However, the extent and depth of benefits depends on the openness of the institutions and the degree of democracy in governance in general.

Federalism is not a panacea. Despite the promises of federalism, it is unlikely that it can deliver all that is expected of it. Because Dalits are scattered all over the country, they do not have a true constituency at the regional level.

The situation of women and poor people is similar—they are everywhere. In case of the Janajatis, there are constituencies, but only at the district level. This requires that power be further devolved so as to rest in the hands of the local authorities. Consequently, it would be necessary to complement the powers of the regional authorities with additional resources; the central government would have to assumeresponsibility for providing these resources and, at least initially, administering their disbursement.

Federalism is likely to succeed where there are established traditions of democracy and the rule of law. Further, it benefits from:
􀁠 autonomy arrangements that have been negotiated in a democratic and participatory way;
􀁠 an independent dispute settlement mechanism;
􀁠 proper constitutional guarantees for the federal arrangements; and
􀁠 limits on the central power to intervene in regional government.

It must also be remembered that democratic structures are necessary for the exercise and protection of federalism. Democratic politics in a region both compel regional leaders to protect autonomy and empower them to do so. At the national level, they encourage the government to abide by the constitution and seek consensus with the regions. Generally, multiethnic federations have better prospects of success than those that are bi-ethnic.

A ten-point agenda
Successive Governments of Nepal have made attempts to address exclusion and inequality but none has successfully broken the vicious cycle. Making exclusion go away for all time requires not a sporadic effort, but a continuous and systemic change to society and to the whole gamut of state policies which could occur when those who were previously out come into the governance structure. Therefore, to end exclusion, first, the political system and state structure must undergo significant changes, and, second, such changes require peace to achieve genuine progress. Against the backdrop of state transformation outlined above, this Report puts forward a ten-point agenda for action.

1. Review and devise a mixed electoral system that is appropriate for Nepal
It is unlikely that a viable, modestly-sized parliament for the future Nepal can represent fairly all the 103 castes and ethnic groups of the country, even with the adoption of a complete PR system. But this need for wider representation is now difficult to ignore because popular demands for inclusion and identity remain at the forefront of the nation’s political life. Therefore, a mixed electoral system may need to prevail for some time to come.

Several possibilities remain for a compromise between the plurality and PR forms in a mixed system, depending on the caste and ethnic make-up and the governance structures of the regional divisions and the centre under a future federal structure. The proportion of seats allocated may have to be different between the centre and the region, and again, across the regions, depending on their cultural characteristics and their needs and demands for inclusion.

2. Democratize the political parties
Because reforming the mixed electoral system cannot alone ensure the inclusion and participation of all caste and ethnic groups and regions at the centre, the democratization of political parties is of the utmost necessity for political inclusion and systemic integration.

Indeed, if the parties are not democratic, true inclusion can emerge only with difficulty even with elections conducted under the full PR system. Among other factors, this requires making political parties inclusive in their makeup, and transparent and democratic in their decision-making.

3. Bring governance closer to the people
Despite the fact that 335 (58%) of the 575 elected CA seats have been allocated under a PR system to a number of excluded groups and regions, several caste and ethnic groups still do not have a single member to the CA.

And given the need for a legislature of viable size in the future, it will be difficult to represent all the caste and ethnic groups in a unitary state structure. There is a strong case for wider and more equitable representation through a federal structure.

Chapter 5 draws attention to the merits and drawbacks of area-based federations, as well as those based on caste and ethnicity, along with the possible weakening of governance in Nepal’s “dis-aggregation” from a unitary state into a federation of regions. Given the high diversity of Nepal’s physiographic and social mosaic, there is a need for asymmetrical federal arrangements in which the regions of the federal state do not all have the same powers.

Country experiences reveal that, federalism is likely to succeed where there is an established tradition of democracy and rule of law. The pre-conditions for the success of the formation and functioning of federalism include willingness to form the federation, trust, a strong sense of a common political community and commitment to national unity, basic agreement on values, the rule of law, supremacy of the constitution, and judicial interpretation and enforcement. Of them trust and accommodation are the vitals—they can make the difference between total failure and disintegration of Making exclusion go away for all time requires not a sporadic effort, but a continuous and systemic change to society and to the whole gamut of state policies the state or a viable and vibrant political, social and economic system.

Nepali federalism must be flexible and home-grown, developed and decided by its own citizens with their effective representation and participation. This needs to be buttressed by adequate provisions that bolster democratic principles, enforce rule of law and foster relations between diverse communities and regions.

4. Protect the interests of the poor and the excluded
Although federalism can help promote political and economic inclusion, strengthen the economy, increase public participation and promote human development, it will by no means solve all the problems of inclusion and social justice that this Report raises. The socioeconomic diversity of Nepal, along with its marked regional differences in resources, may call for a federalism that accords different degrees of autonomy and competence to different regions with regard to particular issues. This may still require a strong centre.

Moreover, to promote human development, the federal system must be accompanied by a variety of constitutional devices anchored in social justice. These supplementary devices and mechanisms have to be primarily the responsibility of the central government—and they must be formulated as national policies, although their implementation will increasingly require consultation with regional governments.

The Interim Constitution 2007 requires considerable homework on the design and structure of a federal system that must, in addition to the other functions of a state, honour the United Nations declarations/conventions on: the rights of indigenous peoples (13 September 2007) including ILO Convention 169 (27June 1989); the elimination of discrimination against women (18 December 1979); the elimination of all forms of racial discrimination 1965; and most importantly, the two seminal human rights covenants, respectively on civil and political rights, and on economic, social and cultural rights (19 December 1966).

5. Build a strong nation-state
Only a strong state can control power and devolve it; guarantee the rule of law; eliminate impunity; implement development policies effectively; mediate among diverse social groups; and create conditions for political stability, development and peace by undertaking the reconstruction of the country’s economic and social fabric. The basis of the state or of the power structure is the nation. Therefore, a state can be strong when it has a strong nation, however diverse its peoples.

Cultural differences can trigger violent conflict when state policies are discriminatory. But there does not need to be a trade-off between diversity and unity, nor between peace and respect for diversity. Both can move together well if one respects the other’s culture under multi-cultural policies of the state.

In its process of transformation, Nepal has recently discarded a number of unifying factors of the past—including the monarchy, a single official language and religion, a national anthem, and a national code of dress. Nonetheless, all its citizens have common rights and obligations that can eventually contribute to a sense of national identity and cohesion in tandem with the preservation of cultural diversity.

Moreover, the making of the constitution offers the possibility of influencing the nation-building process towards establishing a set of common ideas, values and institutions that will serve vital elements of the burgeoning of a collective national identity.

6. Build a strong sense of citizenship and political community
Building a strong sense of citizenship requires the representation and participation of individuals who are committed to non- violence and who respect the views of others. As has often been the case in Nepal, many citizens are voicing their opinions through violent protests rather than existing institutions. This has affected service delivery and trampled the rights of many, most of whom are poor.

There is need for a vibrant civil society that does not work as a clientele of a political establishment. Citizens should not merely claim rights and freedoms, but also fulfil their many obligations, among these:
􀁠 respecting the country’s laws,
􀁠 recognizing the rights and freedom of others,
􀁠 eliminating discrimination, and
􀁠 observing justice in their daily activities.

Moreover, political parties have to form a political community rising above their members’ personal interests and those of their parties. Such a sense of citizenship and the development of political community are necessary for the successful conclusion of the peace process and the making of the new constitution.

7. Provide ‘citizenship rights’ through a functioning state
In order to manage people’s expectations, the Nepali state must perform all the functions of a sovereign state, including the provision of public goods and services. It must enforce the rule of law, which demands improving citizen access to justice, ensuring the independence of the judiciary, and giving the legislature its due power.

The constitution must therefore make provisions for guaranteeing the integrity of the legislature—the body that in principle protects the fundamental rights of citizens at large and of excluded groups. However, providing citizenship rights requires a loyality and trust from the citizens, who not merely claim rights and freedoms but also fulfill their many obligations.

Moreover, economic and social policies with a focus on excluded groups are necessary for addressing unequal human development, and attaining rapid human progress. Targeting basic services including education and health for women, Dalits and Janajatis together with change in other policies is necessary. This social empowerment needs to go hand in hand with economic empowerment through the provision of decent employment opportunities.

8. Ensure representation and the
participation of different stakeholders in the peace process Based on the lessons learned through the early steps of the formation of the Truth and Reconciliation Commission, it is recommended that the other mechanisms for transitional justice implied in the CPA, along with the institutions and policies framed for the transformation, be inclusive and participatory. It is also necessary to ensure the implementation of United Nations Resolution 1325 aiming at protecting and empowering women both during armed conflict and afterwards. Similarly, in designing integration and rehabilitation strategies, their intended beneficiaries, including both combatants and conflict victims, should participate.

9. Devise and implement a social reintegration plan and build the capacity of Local Peace Committees to foster reconciliation and support social reintegration
The successful social reintegration or rehabilitation of disqualified Maoist army personnel and internally displaced persons will be crucial. Past social reintegration efforts and the current situation point to the potential of four particular thrusts for building the capacity of the individuals involved:
􀁠 non-formal education;
􀁠 agriculture and livestock;
􀁠 vocational skill training; and
􀁠 micro-enterprise development.

Such initiatives call for linkage with varied support organizations closely linked with the provision of financial services and markets. Sustainability also demands increasing employment opportunities, especially for jobless young people. This requires a sustained economic growth which is not only high but also inclusive and employment-intensive. There is thus a need for increased private investment in addition to public funding.

There is also a critical need for building capacity at the local level, including that of the Local Peace Committees, which are so far the sole organizations being created at the local level in post-conflict Nepal to support local development and promote peace-building.

Assistance from both multilateral and bilateral donors will be needed for the capacitybuilding of the peace committees—in which the long experience of the United Nations system can be put to good use.

10. Ensure effective participation of CA members and citizens in the making of the constitution and forming a new collective identity
Finally, participatory constitution-making is a must if it is to foster nation building and be owned by every Nepali citizen. The 601 members of the Constitutional Assembly reflect far greater inclusion than past bodies with comparable mandates. But unless the members faithfully and fairly reflect the views of those who elected them, their decisions on state structure and forms of governance will not be sustainable. The making of the constitution must thus go well beyond the ambit of the CA and its members and reach out to the Nepali population as a whole.

The process of constitution-making is almost as important as the content of the text. Although the process so far adopted seems sufficiently participatory, several challenges remain.

Of these, the most important ones are how to further broaden and deepen participation in the days ahead, and, even more importantly, how to analyze and incorporate the views expressed by these hundreds and thousands of people during the participatory process.

Need for a new frontier—transformation of society All the above agenda, including state restructuring and the making of the constitution, need an environment which is peaceful, with daily deference to the rule of law, and, most importantly, where there is a will for consensus and compromise among different actors. Without a politics of consensus and compromise, the peace process will be endangered.

Similarly, unless society eliminates its exclusionary practices, state transformation can do little to help individuals feel free to develop and use their capabilities to the fullest extent possible.

Thus, the ultimate need is both a democratic state and a democratic society. State transformation must advance hand in hand with the transformation of Nepali society—and requires investing in human development, a development that aspires to freedom for all people.

Click here to read the full report.
####