The shortage economy

BY SUKHDEV SHAH

The phrase 'shortage economy' was coined during the 1980s to describe the extreme shortages of consumer goods in socialist economies of the Former Soviet Union (FSU) and Eastern Europe. After an initial good start in the 1950s and 1960s, centralized planning in these countries started to develop bottlenecks that hindered production, fostered emergence of unused capacity, and created shortages of consumer items of all sorts. Shortages became extreme during the 1980s, as reflected in the long queues for basic consumer goods such as clothing and food items, health and education supplies, and of smuggled foreign goods. The depth of shortages in these countries -- most notably in FSU countries -- was captured in the popular joke about low productivity of government workers: a typical worker in FSU countries spent more time standing in queues than working in the office!
Such shortages occurred partly because of central planning that could not sensibly plan for the production of thousands of items to match consumer demand, and partly it reflected government intentions to create shortages of consumer goods to increase saving.

Achieving parity between demand and supply is almost automatic in a market economy -- or capitalist enterprise system -- which does the equilibrating job by making use of the price signal that helps eliminate the shortage.
However, the centrally planned system does not trust the market and, instead, it tries to replace it with officially fixed production, to be sold at officially fixed prices. Of course, planners have to work with insufficient information to get at correct market-clearing prices, which is seldom achieved. This led to the shortage of some goods at the same time that unsold inventories of other items piled up. Consumers also had to wait for years to get a phone connection, find a living space, and purchase a car!
Nepal's case is different!
Nepal's economy is facing shortages of many items but consumer items are not one of them. Except for the occasional shortage of petroleum products -- most of the time for reasons beyond government control --supplies of most goods and services available from private shops and businesses are plentiful. Also, foreign goods and currencies are available on demand in the private market, without having to wait in long queues or go through the black market. Most likely, the socialist economies of Eastern Europe and FSU would have survived and even prospered had they ensured adequate supplies of consumer items at prices private producers and businesses found profitable.
However, Nepal's economy is being undermined by a different kind of shortage, generally not faced in ex-socialist economies. This is the shortage of public goods, comprising such basic items for day-to-day living -- drinking water, electricity, roads, bridges, sewer system, trash management, transport, health, education, public security, and clean environment, to name a few. Because of the nature of such public goods -- need for large investments, economy of scale, common accessibility (non-exclusiveness), inability or difficulty of collecting user charges, and their impact on overall quality of life -- they cannot be provided by private enterprises which, in large part, are motivated by earning a profit.
Given that the provision of public goods, in most part, is in the public domain, adequacy of their supplies, as well as quality of their delivery, reflect, more than anything else, the government's commitment -- or lack of it -- to serving public interest. If the government is unwilling or unable to carry out such functions, it can be considered a failure -- it even looses the right to govern, at least in a moral sense.
We all are aware of the scarcity of public goods faced by the Nepali population and abysmally poor quality of the ones that are provided -- electricity, drinking water, public hygiene, road transport, health and education and, most significant of all in the post-monarchy Nepal, poor law and order situation. Looking at the scarcity of public goods faced by the Kathmandu population -- electricity, drinking water, extreme level of pollution of air and waterways -- one can scarcely believe that the government exists here in any meaningful sense.
Shortages of life-sustaining public amenities have not occurred overnight; rather, this has evolved over years and decades -- through revolutions and regime changes. However, there is no record of serious efforts made by any government to foresee the crisis and prevent unabated deterioration of living conditions for valley residents, whose number is believed to have zoomed from just one million 30 years ago to over four million at this time. Electricity, water, and waste-disposal infrastructures that were created just for one million people have changed very little over many decades. Speaking more generally, almost total neglect of investment in key public sector amenities has been the single reason for rapid deterioration in the qualify of life for Valley residents and in most of the urban areas of the county. Of course, much of the countryside has remained untouched.

Plan priorities!
Nepal has adhered to the techniques of development planning now over half a century, backed by sizeable investment of government money and foreign aid resources. However, the impression one gets is that the core structure of the economy is unaffected, and remains overwhelmingly rural and subsistence-based. In many ways, it looks as though that the economy has followed its own natural course -- making use of traditional technology to sustain life at the very basic level for a growing population -- very much like Robert Malthus envisioned two centuries ago. The reason for this failure is simple -- the wrong plan priorities.
There is a misconception in countries regarding the government's responsibility for meeting people's basic needs -- that of gaas, baas, kapaash (food, shelter, clothing); in the context of India, prior to the upsurge of double-digit growth in the last decade, people wanted the government to simply meet their food needs: Bhookh lagi hai roti do; nahin to gaddi chhor do [we are hungry, give us food; if not, vacate the thrown.]!
Such demands or expectations from governments may be alright -- even desirable -- in heavily economies, where the government owns the means of production and has centralized decision-making. In these economies, most of incomes earned by workers and households came from wage employment, overwhelmingly from government jobs, which they spent on government-provided goods and services. Public facilities -- education, health, transport, electricity, water, and sanitation services -- were provided free of charge or at highly subsidized rates.
However, in free -- or largely free -- market economies, the government is not expected to meet all -- or even most -- of the economic needs of people, except in emergency situations occasioned by natural calamities. The market system in these countries -- although not perfect -- does a pretty remarkable job allocating resources to their best uses and setting prices at levels that clear the market. Government interventions in the market are generally ineffective, tend to create artificial shortages, and breeds corruption among government officials. As noted above in the context of the situation in the Kathmandu valley, despite the scarcity of many consumer items, their uncertain supply source, and absence of any centralized distribution network, most goods are available in the market and cases of sustained scarcity of any item seem quite rare.
This is only one part of the story though -- evidence that the market and, indirectly, the private sector are doing alright, even under difficult circumstances. This is not at all so in the provision of public goods and services, which is the core function and responsibility of government. Looking at the available evidence -- scarcity of water and electricity supplies; conditions of roads and bridges; lack of public sanitation and pollution control, absence of law and order -- it would be difficult to dispute the fact that they represent the extreme form of government failure. One can say that such failure underlay the poor quality of life for most population and contributes to a lack of public trust in the government.
Government planners then must narrow down the approach to planning to areas strictly in the public domain, and drop such high-flying ideals as comprehensive planning and all-rounded development of the country -- themes that have been repeated in each plan implemented since 1956! The narrowing of plan objectives will require the government to focus its investments only on a few critical areas. At the present time, such areas can be limited to the establishment of law and order, infrastructure development, and environmental protection -- strictly Adam Smith's-type prescription for limited Government.
From the list of infrastructure items, we can eliminate “mixed” items such as health and education that can better be handled by the private sector, which does indeed happen in the Kathmandu valley and in most urban areas of the country. We can also leave out agriculture and industry sectors from the list of government priorities, since private producers can use available resources and technology in a more efficient manner than when mandated by government dictat.
The above reasoning leaves only a few infrastructure items -- in addition to law and order and environmental protection -- that need to concern government planners. Looking at the present needs of society and assessing the strength of linkages to the rest of the economy, critical areas for planned development can be whittled down to no more a few -- electricity, transport, water supply and sanitation. These core development areas are clearly in public domain and, more importantly, they have strong linkages with the rest of the economy.
We can envisage -- taking just one example -- of a five-year water development plan targeted to supply drinking water to the entire population and irrigation water to all farming areas in the country. What miracles can this do to lift the country's productive potential and improve public health? Another five-year development plan devoted to power sector and roads development can perform similar miracles. Such focused development of our infrastructure -- along with environmental protection and an improved law and order situation -- will work as an elixir for our long-dormant economy and give credibility to the government's effort to alleviate poverty and improve living conditions at the grassroots.

(The writer is an economist based in Washington DC)

Posted on: 2009-04-01 00:08:24

Is politics imploding?

BY ABHI SUBEDI

Nepali politics in less than one year has opened up many avenues of change. But judging by some developments over the months, we can make wild speculations about its future. But the hope that a new era of stability, equality, freedom and prosperity will alight like a glorious morning on the Nagarkot heights from a special clear sky once the elected jumbo Constituent Assembly (CA) writes a new federal republican constitution of the land is slowly fading. But we should approach this problem without harbouring any preconceived notions about any political parties or organisations, and close or not-so-close friends of this land.
Some of the landmarks of the chaos are the virulent battles among the youths of this land. We ordinary teachers who have witnessed the dynamics of youth for decades have always warned that the seeds of belligerency planted by political parties among the young people of this land will grow to such an extent that political party leaders will have to define their actions according to the degree of casualties that the youngsters inflict on each other in the skirmishes that will happen on a regular basis.

An example is in order. The assassination of a member of the United Marxist Leninist (UML) Youth Force member Prachanda Thaiba in Butwal allegedly by a Maoist YCL cadre on March 26 has even threatened the very existence of the coalition government. The Maoists are asking the UML and the Nepali Congress (NC) not to politicise this event, but nothing short of “decisive action” against the killers is likely to save this uneasy alliance.
The CA session opened in Kathmandu on March 29 with a note of obituary, just a day after the prime minister of the beleaguered government Pushpa Kamal Dahal Prachanda left for a visit of the Nordic countries to curry economic and trade favours that Nepal needs urgently for its economic stability. It is commonplace to hear the litany of what happens when the prime minister leaves the country at a time when it is plunging into chaos. But the CA has commenced like a wartime parliament where the predominantly male voices in the House create a choric song with contrapuntal variations of different styles and modulations. The CA session this time is going to be a pandemonium, one can guess. Parties want to settle scores with the Maoists who will get a chance to review their own occasional misfires. Some parties are overtly expecting this session to pull down the Maoist-led government and create a new coalition. But that will not bring a more stable government and far less a more stable situation in the country. The country can slowly plunge into civil war, at worst.
Implosions have begun to occur; ideological boundaries of simulation and reality kept up by Nepal's social democrats and communists are getting erased. They have begun to curry the favour of external powers to replace that loss. The psychological projection of India as a power that can put leverage on the political parties to change the power equation here is one example. Former monarch Gyanendra tried his own round of this psychological game by meeting Hinduism stalwarts like Narendra Modi, L.K. Advani and others in the third week of this month. This visit of Gyanendra clearly and timely organised by his supporters and Hindu parties was a reactionary exercise more than anything. Just see the reaction of the people here and also there appears to be the motto of this visit.
Indian writers and journalists asked me mind-boggling questions at the Agra SAARC writers' meeting in the second week of March about the possibility of restoring the Nepali throne to the erstwhile king's grandson for the sake of unity in a chaotic land. Girijababu's concurrent visit was linked to the former king's visit. I said that there could be no such political possibility at all. I even spoke publicly about that. Ironically, by overreacting to Gyanendra's India visit and his meetings with Indian politicians, the political parties and the media are giving him and his men what they have precisely wanted to achieve from this visit.
Nepali politicians and the people know very well that it would be a futile attempt to revive the influence of the Hindu monarchy in Nepal either as a symbolic institution or a symbolic presence in the form of a party favoured by the Bharatiya Janata Party (BJP) and other Hindu parties of Nepal and India. For India, Hinduism is a social construct, which, in the postcolonial context, has become a subject of political study. The Hindu nationalist movement known as Sangh Parivar was created concurrently with the secular Congress party in the 20th century. Though Hindutva could not gain tremendous influence, it remained an important religio-political construct in Indian politics.
In Nepal, the Hindu aristocracy has a different historicism. When Jung Bahadur Rana visited Britain and France in 1850 as a so-called “Hindu prince”, which is an interesting postcolonial study of mimicry, the British colonial rulers did not have much idea of what a Hindu religious designation would be like. They established Hindu as a religious group only 21 years after Jung's “'Hindu prince”' visit to Britain, i.e., after the census of 1871. The Indian Hindutva used and has been using strong rhetoric, terror and violence to create its niche. The leaders of the BJP that formed the national coalition government in 1998 made no secret of their camaraderie with the RSS and Bajrang Dal that carry the legacy of Sangh Parivar.
The confusions that the politicians in Nepal and India make about the so-called symbolism of the Nepali monarchy (of the past) is that the people of this country through a very powerful political process and consensus have overthrown a feudal order, and with it the institution of so-called Hindu monarchy. They have shown the world that the Nepali political experience and history does not need to emulate the Indian politicised Sangh Parivar legacy of Hinduism in Nepal. The monarchy was not in any way related to that Indian Hindu political experience, and for the Indian Hindutva politicians to try to use a very Westernised erstwhile monarch to contest the Maoists, the leftists and other republicans would be a futile political exercise. Any future Indian government will find it worthwhile to establish links with the leftist political parties and the NC on a pragmatic basis to solve political problems not only in Nepal but also in India and Bhutan. And the seasoned Indian politicians know that reality very well.
The political parties of Nepal are mainly responsible for the political chaos that reigns in the country now. However, what they cannot escape is their existentialism. They are united by agreements; they are brought together by the CA; they have put their heads together over problems that they can solve only jointly. I feel that the politics of Nepal is not changing; it is only seeking new dynamics. But the problem is that political leaders are not showing magnanimity, openness and democratic commitment that are in short supply in Nepal now.

Posted on: 2009-04-01 00:07:19

Unlike Indians the Chinese keep up with their words and promises

Mohan Baidya Pokharel ‘KIRAN’

Senior Leader, United Maoist Party

On Threat of A counter Revolution

The people want to see a complete change. There are nevertheless, great challenges ahead of us in our fight for the preservation of our nationalism and total freedom. Mainly, the threats are emerging from the reactionary camps and foreign forces. In this situation, it is still not very clear if the people will emerge as victor. Thus we see that the threat of a counter revolution is still looming large. We are not afraid of the prevailing situation, I think it is rather, we have analyzed the situation quite well. And, also we are completely aware of the ongoing and possible conspiracies against us. We believe that the possibility of a counter revolution remain intact until we draft the new constitution. To clarify more, there is also the presence of reactionary forces in the Constituent Assembly who are conspiring through various means.

On Nepali Congress

The NC has both positive and negative sides. To stand against the monarchy and the stand for republic declaration is the positive part of the NC. But the major question where will the NC stand in the process of drafting the new constitution? In the Ethnic, Gender and Regional issues where will the NC stand, it will perhaps determine the inclination of the NC? To tell you frankly, over the issues of Nationalism and Republic, NC has been still stuck with the status quoist mindset. Surfacially, the NC also seems to be democratic outfit but internally it is not so. Thus we have been watching it very carefully.

On Foreign Interference and India

Clearly, the foreign interference is at an all time high. However, it is completely a false allegation that we came into the peace process with the foreign support. There was the Indian support in the Peoples uprising, there were other forms of support as well. Altogether, it does not and should not mean that we have no moral to raise the issues of national interest now.

There has been the tradition that Nepali politicos reach agreements in New Delhi. The 2007 B.S. agreement was reached in New Delhi. However, the 12-Point Agreement reached between the Seven Parties and the Maoists in New Delhi was made in the interest of Nepal itself but not in the interest of New Delhi.

Nevertheless, now, India is doing all it can to extract “compound interest” out of the 12-Points Agreements made in New Delhi. It is also visible.

Security wise, relation with neighbors is based on mutual trust. One must respect the other. The relationship is based on certain values. But, India has been adopting different principles. If our identity is threatened we will not remain silent. This is it. We must raise the issue of abrogating all the past unequal treaties with India including that of 1950 Treaty. Similarly, issues of land occupation in Susta, Kalapani, Pashupatinagar must also be raised. In the issues of Citizenship, water-resources and Security—we must stop abiding by the long drawn Indian strategy.

The world has changed lot, India must thus also revise its strategy and sign treaties with Nepal on equal basis. We want to have good relations with India but that relation must remain free from coercion.

On Strong ties with China, fears in India

Unlike Indians, the Chinese, on the other hand, keep up with their words and promises. The Chinese policy of non-interference is well practiced even as of today. Whereas the Indians have been using the transitional period in Nepal for their benefit, occupying our lands and unnecessarily interfering in our exclusive affairs. The Chinese would never do that. China is clear in its intent whereas India is still unclear.

On Broader Democratic Alliance

Our administration is set with either the erstwhile Panchayati or multi-party period mindset. Old mindset is still prevalent in our administration. We still practice old laws and regulations. However, the Maoists are the ones who advocate in favor of building new structure by demolishing the old redundant ones. Basically, this is what the people also want from us. But, we have been trapped by those plagued with old mindset and we have been paralyzed. Look at the difficulty, we have to continue with the old setup, yet have to bring something new as well. Unless we remove the old, how can we build a new one? We must need a breakthrough at this point. We are searching for the path where we can push our agenda. The people have sacrificed their blood for change but not to retract.

On Performances of Government

In reality, we are also not satisfied. There are various reason for this, however, it is also not that the government has already tied its hands and sitting in an idle mood. We are doing our best to make the government becoming more effective as demanded by the people at large. But, the UML- our partner, is taking on the turtle stance.

But, since we are already in government, the possibilities are either we fail or we succeed. Let me guarantee, we will not fail. And, it is not that we have to stick to power for long, we can take on the road to yet another revolution. If we can’t bring changes while being in the government, we will adopt revolutionary measures to achieve our set goals and objectives.

On whether Mohan Baidya has surrendered to Prachanda?

I have not surrendered to any one, Prachanda is our party boss thus I respect him. On ideological grounds, I have never surrendered. We always move ahead holding healthy debates and discussions. We have already devised our new strategies to run the party affairs. We did not limit ourselves to the “Democratic Republic”, we took the line to establish typical kind of Democratic Republican order. We favor a Peoples’ Federal Democratic National Republic. While adopting the line, no one has been defeated, the party has won. The People’s desire has been fulfilled.

We want our form of republican order immediately. The old model of republic can not address the problem of the people but only the peoples’ republic can which is what is our ultimate goal.

(Dristi Vernacular Weekly, 17 March 2009)

“To Have A Federal Structure Or Redefine The State Boundaries Based Upon Janjatis Is A Dangerous Situation” - Sona Khan

Senior advocate of Supreme Court of India SONA KHAN is a well known lawyer of the region. As Nepal is in the process of constitution making, Khan addressed a gathering at CONCOI. Khan spoke to KESHAB POUDEL on various issues regarding federalism and constitution making process. Excerpts:

How did India come up with pluralistic constitution?

Without the presence of Dr. B. R. Ambedkar in the constitution committee of India, I don’t think the preservation of pluralism would have been as effective as it survives today. The role of Mahatma Gandhi and Nehru with vision cannot be ignored. But the master were not the people but were these two elite gentlemen who had the opportunity to be educated in the western system and they brought the concept of justice and equity along with them.

Why is the state so important?

One of the purposes of the existence of the state is to deliver equity and justice in an equitable fashion. There is the crux to preserve the dignity of the individual. How do you go about it is the frame work whether that is parliamentary form of government or presidential form of government is immaterial. The ultimate aim of the state is to deliver the dignity to individual in just and equitable manner.

How is it possible to have absolute pluralism in a country with so many castes, and so many people with different persuasion of culture?

That is the craft of the constitution. Various constitutions have been tried and western society has found just an easy way out. They conceptualized the secularism minus religion. They thought they have created a civil society and they have brought everything out of the religious sanctity. But, this is not so in south Asia. In South Asia religion and culture is the way of life. We cannot live without religion and culture. I am talking about the concept of pluralism in the South Asian constitution.

How would they like a society to consider and explore the possibilities of preserving the common heritage and common culture?

Here it is very important to understand that the ownership of the pluralism belongs to no political section of the society, religion, castes or creeds. It is a collective property of the nation and that collective ownership evolves upon all of us the possibility to preserve it with the state duty.

How important are pluralism and harmony?

I would humbly, with great respect to all of you, say that pluralism has to be recognised but at the same time the harmonious aspects should be respected to survive as a sovereign republic democratic notion. One would need to generate harmony. That harmony will come by bringing to preserve your individual rights by recognizing the pluralistic culture. In the case of India, for political appeasement purposes often pluralistic constitution is very handy. The supreme court of India has been playing very important role to sustain the constitution by interpreting.

How do you see the impact of globalization in all this?

The globalization which will determine the global forces determines their own equity, I don’t know what can happen in Nepal but in India very soon our politicians will be irrelevant. Why? Because the economic forces will generate another dharma and that dharma will be superior than the political agenda. Political agenda so far has been only catering to the narrow vision of the political parties. They have not gone above the party politics. They interrupt the country which is the paramount Dharma. In my opinion globalization and gender issue are undergoing a very definite change. Since the globalization will convert the burden of state into a social capital. The hunger and poverty which is the burden of the state will be harnessed into the social capital by the economic forces.

What about the effects of migration?

The migration of labour forces from one part to another would provide employment and access to economic resources. May be standard differs from one place to another. But at least, it takes care of hunger and poverty. The importance of that part is recognition of that pocket. Road, water, housing, health care and education are primary role of the country. Any regional and national party which is unable to provide this will not last for too long. Now the water cannot be pursued by the concept of Janjatis solidarity, religious solidarity or regional solidarity. The consumers set the condition for globalization. The availability of goods and comfort change the mindset. That is the phenomenon and no one can stop it.

How do you see the WTO in the context of globalization?\

The WTO norms which are part of international federalism are alluding to it. These elements are more important legal tool including the convention of international law and various other protocols which the governments of today have necessary to agree and enter. And the moment they agree and enter, the country is part of all these laws. Once the concerned government signs such protocols and conventions, they are the part of law of particular countries. But there are certain aspects which cannot be changed. For example, the fundamental rights cannot be amended, new rights may be added. Preservation of pluralism is important. The guarantee of pluralism is the guarantee of understanding and delivery to the constitution.

How do you see the concept of federalism?

Indian experiences are different. For example, the Sri Lanka and France have different federal structures. Indian federalism started with unitary federalism. The federalism has two forces - there is gravity towards the center or gravity towards the autonomous state. Both have their own merits and demerits. In my opinion, the interest of the country is paramount. The purpose of federalism is to deliver the mandate of the people and others. Functioning of the government should be proper.

How do you see federalism under the basis of caste and ethnicity?

To have a federal structure or redefine the state boundaries based upon Janjatis is a dangerous situation. You are abdicating your responsibilities or state to bring them to mainstream. It is easy for politicians but it is not conducive for the country. Because they will be happy for the moment for the autonomy but what are they going to do with that autonomy. The reason is not driven by patriotism or nationalism or regionalism but reasons are driven by economic forces. Each country has to craft and fascinate its own system. But however the ultimate key will be to make sure that you are able to be around the mainstream of development. Supposing Nepal wishes to exercise its national identity as Nepali. If you start to say, I am just Janjati and not Nepali, it may come down to people. It is not in the larger interest. What cab the Janjatis autonomy deliver in today’s context of globalization. It is only going to deliver psychological satisfaction.

What is important then?

The important thing is delivery of dignity. Janjatis are after all the citizens of Nepal. Do you think they are going to be happy with the identity without any education provision made for them or without any job provision made to them, surplus of land or reclamation of land, local sustainability, without fertilizer or without water for irrigation? Identity serves very limited purposes.

How do you satisfy all?

For example, schedule cast and schedule tribe banks have purpose to deliver the loan as micro credit banks did in Bangladesh. The purpose remains same whether you give name of schedule cast bank or micro credit bank. The description has to be differed. However, the identity base is a very dangerous thing.

If ethnic federalism will not work, what federalism is going to work?

You can list the Janjatis in constitution itself so that identity is preserved. Recognize them in constitution which was not recognized in earlier. Have a separate commission to look at them but not an ethnic commission. You have to clothe it and you have to find out your own wordings. For example, justice at door step. You have to make temple of justice. Like the case in Philippines and Indonesia, they have their own system. In South Asia, all the countries have various castes and ethnicity. Don’t encourage them to destabilize the government. You need to allocate fund to generate the goodwill. We have divided the states on various models. For instance, the Uttar Pradesh is a very big state and there is now Uttaranchal State. Jharkhand comes out from Bihar. I want to share with you the case of Punjab. For instance, Haryana was never a state as it is today when India became independent. There was referendum to see who is Punjabi or other speaker. Many people said they don’t speak Punjabi so they created Haryana. It is actually the economy which determines the state.

Source: Spotlight, VOL. 28, NO. 24, March 20, 2009

Nepal elects its first President

In a historic move, the Constituent Assembly (CA) in Nepal elected the first President of the country--Dr Ram Baran Yadav of the Nepal Congress, backed by the Communist Party of Nepal-UML and Madhesi Janaadhikar Forum (MJF).On July 21, Dr Yadav secured 308 votes defeating Ramraja Singh, a Maoist-backed candidate, who secured 282 votes.

The election result had in fact become apparent when at the last moment, a new alliance of NC, UML and MJF emerged to challenge the Maoist plans to get their candidate elected.

The newly-elected President, Dr Yadav hails from a small village of Safai in Dhanusha district in south-eastern Nepal. Most of his schooling and higher education was completed in Kathmandu. He later studied medicine in India, completing his MBBS from Calcutta Medical College and MD from Post Graduate Institute of Medical Research (PGIMR), Chandigarh.

Despite a successful medical practice, he chose the political life and entered the Nepalese politics in the 1960s as a student leader. He led the anti-Panchayat demonstrations against King Mahendra. Since then, for more than three decades, he participated and spearheaded every pro-democracy movement in the country.

During the first general elections in 1990s, he was elected from Dhanusha constituency as a Nepali Congress candidate. He served for two terms in the government as Health Minister. He was the general secretary of NC before being elected as the President.

The presidential election has set the country’s political discourse on a sharp turn. The defeat of the Maoists’ candidate has changed the political dynamics in the country. The failure of the Maoists to work up a consensus on the presidential candidate and the sudden emergence of a rival coalition indicate a confrontational politics in the days ahead. Maoists have accepted the results of the presidential election, they see a foreign conspiracy in the outcome. They believe that it was part of the conspiracy to keep them away from forming the government.

The Maoists, rolling high after the unprecedented victory in the elections, have suddenly turned reticent about their participation in the government. The Maoist leaders maintain that they have lost the moral ground to stake claim for leading the new government. The victory of the NC presidential candidate has given a major blow to the Maoists who won the largest number of seats in the April assembly elections. Presumably, their decision to stay away from heading the government was not an unexpected move.

It is obvious that the new alliance of the NC, UML and MJF enjoys a majority in the House as compare to the Maoists and its chances of forming the new government have certainly brightened after Prime Minister Girija Prasad Koirala’s resignation. The Maoists, however, can stake the claim being the single largest party in the Assembly. Senior leaders of the alliance are keen to work with the Maoists and have approached them. It is too early to figure out the alliance’s objectives in first defeating the Maoist candidate and then making efforts to persuade them to lead the government.

These developments have certainly undermined the consensual politics which was emerging after the April elections. The political parties should review their rigid stands and work towards creating a New Nepal as they had promised to the people during the campaign. The Maoists should take the lead in playing a constructive role and take the initiative in forming the new government. They should refrain from creating any obstacles in the peace process and avoid delaying the Constitution drafting process.

There is an urgent need for the political parties to stay on the path of consensual politics and avoid confrontation among themselves, to steer the country through the tough times ahead.

Source: Observer Research Foundation, July 26, 2008