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Home > International Relations > Conflict Resolution in an Asymmetric Multi Lateral World > Country Studies > Nepal Peace Process
Understanding the Nepal Peace Agreement
Full text of the decisions of the SPA-Maoist summit meeting, 8 November 2006
Respecting people’s aspiration for democracy, peace and progress expressed
through repeated historic people’s movement and struggles since 1951,
On completion of cantonment of the Maoist combatants, Nepal government would take up the responsibility for providing ration and other facilities to them
The interim cabinet would form a special committee to carry out monitoring, integration and rehabilitation of the Maoist combatants
Make arrangement for the security of the Maoist leaders as per the agreement with the Nepal government
Relating to Nepali Army
IV. Relating to the management of the conflict victims
Note of dissent by the UML
Nepal: SPA- Muddling along and giving in at every stage -.
S.Chandrasekharan, Indian Think Tank, SAAG, 19 August 20006
It is noticed that the Seven Party Alliance while muddling along in the peace process has been giving in at every stage in their dealings with the Maoists. The joint letter to the United Nations on arms management is one such case.
The problem appears to be not with the Maoists who have a clear agenda and are tackling the media, civic bodies and the politicians in a very professional way. They do not have too many spokespersons talking out of turn unlike the seven party alliance leaders whose statements not only confuse others but must also be confusing to their own cadres. Another vexed problem is the lack of unity among the SPA. On every issue - monarchy, composition of an interim parliament, citizenship to the stateless people of Indian origin, mode of future elections, and on restructuring of the State, there are serious differences among the individual units of the Alliance.
What the SPA needs is to have a serious “in house” discussions on these issues and work out a strategy in dealing with the Maoists. Negotiations are done privately and the Nepali Congress does not seem to be briefing other party leaders of the Alliance regularly. Even leaders like Madhav Nepal feel ignored!
Joint Letter to United Nations:
After hectic discussions and after many drafts, the Maoists and the Government succeeded in sending a joint letter to the United Nations on the issue of arms management of both sides on the last day of the dead line- 9th August 2006.
The letter to the United Nations, handed over to the acting UN Resident Representative Abraham Abraham, UN assistance sought the following:
1. Continuing OHCHR monitoring the Human rights situation.
2. Helping monitor the 25 point Code of Conduct relating the Cease fire.
3. Confining Maoists combatants and their weapons in designated cantonments and letting the UN monitor them.
4. Confining Nepal Army Personnel and their weapons in barracks to ensure that they are not used for or against any side.
5. Observing the constituent Assembly elections.
Compare it with what G.P.Koirala had written unilaterally earlier to the UN on July 2, 2006 which said
1. Continue monitoring of Human rights through the Office of the High Commissioner for Human Rights (OHCHR) in Nepal.
2. Assist to monitor the code of conduct during the cease fire.
3. Assist in the monitoring of combatants of Maoist and decommissioning of their arms in order to ensure a free and fair election to the Constituent Assembly.
4. Monitor to assure that the Nepali Army is inside barrack and is not being used for or against any side in order to ensure free and fair elections to the Constituent Assembly.
5. Observe the election process to the Constituent Assembly.
The critical issue is in point 3 of G.P’s letter which envisages “decommissioning of arms” to ensure a free and fair election. In other words it implies that free and fair elections cannot be had if the Maoists retain their arms. But this is what has been conceded in point 3 of the joint letter. There should be no doubt that so long as the Maoists retain their arms whether in the barracks or outside, people will not feel free to vote. This is especially true when the entire country side is still under the control of the Maoists and a parallel administration is still being run by them.
In the Parliament, as late as 17th August, the Parliamentarians complained that the Maoists in the country side are still indulging in abduction, extortion and intimidation. The fear of the Maoists will continue so long as the arms and the persons are not separated till the elections to the constituent assembly. For this, the Parliamentarians are themselves to blame. Very few of them have gone to their constituencies to rebuild their connections and most of them are sticking onto the capital not out of fear but for their own selfish interests. It is understood that there is a scramble for positions in many vacancies that have arisen in the public sector undertakings!
DDR and Arms Management:
If the arms management is considered to be part of DDR ( Disarmament, Demobilization and Reintegration) the joint letter to the UN fails to address these issues and has handed over the responsibility to the United Nations! The UN has no authority either to separate arms from the Maoists even in camps and mere verification of the arms in the camps and observation before and during elections cannot by themselves ensure free and fair elections. The UN by itself will not have enough man power to carry out the tasks and it is doubtful how far civilians will be able to help them.
Prachanda says that they have seven divisions of 5000 persons each and do not have an idea of the number of weapons they have. The general assessment of neutral observers is that they had about 9000 in number before cease fire and have added 3000 more by recruitment and not more. Similarly no one knows how many and what kind of weapons they hold.
The second issue is whether DDR is at all possible when there is actually no trust between the two parties. The Maoists have declared that the question of laying down their arms does not arise until the State and the Nepali Army are restructured.
The Government has already tabled a bill in the Parliament to amend Army Act 2016 (Nepali Era) to formally sever the traditional links between the Nepali Army and the King. The Security Council is being restructured with the Prime Minister in the chair and the ministers of Defence, Home, Finance and Foreign Affairs as members who will take decisions without referring to the King. Earlier the council consisted of the Prime minister, Defence minister and the Army Chief as members and could only recommend to the King for mobilisation of the Army in the event of any serious situation affecting the security of the State. But these changes are considered to be cosmetic by the Maoists.
The contention of the Maoists is that the army is still loyal to the Palace and they have no faith in the neutrality of the Army. Until the army is restructured and their own PLA is integrated the question of their laying down their arms does not arise.
Closely linked with the arms management is the interim constitution, interim parliament and interim government until the elections to the constituent assembly. The ICDC ( Interim Constitution Drafting Committee) is ready with the draft constitution with many blanks which could be filled up only if there is a consensus amongst all parties. The first major issue is on the position of monarchy- Prachanda wants no mention of monarchy in the interim constitution and this could be thought of later after constituent assembly elections. The reason is that the Maoists are keen to join the interim government and the interim council/parliament, but they cannot do if monarchy finds a place in the constitution! Prime Minister G.P.Koirala has on record said that the Parliament will be dissolved only after the issue of arms management is settled and an interim constitution drafted. It is difficult to see an early resolution of the arms management problem.
Need is for a "Bottom Line" and not bottomless lines:
To us, it looks that the issue of mention of monarchy is a minor one as the constitution is itself a temporary one to pave the way for elections to the constituent assembly. What is more important is for the SPA to clearly decide on the bottom lines and stick to them rather than giving in at every issue after making brave statements to the contrary! .
Nepal's Instability in the Regional Power Struggle
PINR, Report Drafted By: Adam Wolfe 03 February 2006
As the first anniversary of King Gyanendra's sacking of the government
passes, Nepal continues to slip further into instability, creating a power
vacuum in which regional powers India and China compete for influence. The power
struggle in Nepal consists of three domestic players: the king, the major
parties of the former government, and the Maoist rebels of the countryside. In
recent months, the political parties have aligned with the rebels, but each
group maintains its own agenda.
12- Point understanding
between Seven Party Alliance and Maoists, 22 November 2005
Letter of Understanding (Unofficial translation)
The long struggle between absolute monarchy and democracy in Nepal has now reached a very grave and new turn. Establishing peace by resolving the 10-year old armed conflict through a forward-looking political outlet has become the need of today. Therefore, implementing the concept of absolute democracy through a forward-looking restructuring of the state has become an inevitable need to solve the problems related to class, caste, gender, region etc of all sectors including political, economic, social and cultural, bringing autocratic monarchy to an end and establishing absolute democracy. We make public that, against this existing backdrop and reference in the country, the following understanding has been reached between the seven parliamentary parties and the CPN (Maoist) through different methods of talks.
Points of Understanding
1. Today, democracy, peace, prosperity, social advancement and a free and sovereign Nepal is the chief wish of all Nepalese. We completely agree that autocratic monarchy is the main hurdle in (realising) this. It is our clear view that without establishing absolute democracy by ending autocratic monarchy, there is no possibility of peace, progress and prosperity in the country. Therefore, an understanding has been reached to establish absolute democracy by ending autocratic monarchy, with all forces against the autocratic monarchy centralizing their assault against autocratic monarchy from their respective positions, thereby creating a nationwide storm of democratic protests.
2. The seven agitating parties are fully committed to the fact that only by establishing absolute democracy through the restoration of the Parliament with the force of agitation, forming an all-party government with complete authority, holding elections to a constituent assembly through dialogue and understanding with the Maoists, can the existing conflict in the country be resolved and sovereignty and state power completely transferred to the people. It is the view and commitment of the CPN (Maoist) that the above mentioned goal can be achieved by holding a national political conference of the agitating democratic forces, and through its decision, forming an interim government to hold constituent assembly elections. An understanding has been reached between the agitating seven parties and the CPN (Maoist) to continue dialogue on this procedural work-list and find a common understanding. It has been agreed that the force of people's movement is the only alternative to achieve this.
3. Today, the country has demanded the establishment of permanent peace along with a positive solution to the armed conflict. Therefore, we are committed to ending autocratic monarchy and the existing armed conflict, and establishing permanent peace in the country through constituent assembly elections and forward-looking political outlet. The CPN (Maoist) expresses its commitment to move along the new peaceful political stream through this process. In this very context, an understanding has been reached to keep, during the holding of constituent assembly elections after ending autocratic monarchy, the armed Maoist force and the royal army under the supervision of the United Nations or any other reliable international supervision, to conclude the elections in a free and fair manner and accept the result of the elections. We expect reliable international mediation even during the dialogue process.
4. Expressing clearly and making public institutional commitment to the democratic norms and values like the competitive multiparty system of governance, civil liberties, human rights, the concept of the rule of law, fundamental rights etc, the CPN (Maoist) has expressed commitment to move forward its activities accordingly.
5. The CPN (Maoist) has expressed its commitment to create an environment allowing the political activists of other democratic parties displaced during the course of the armed conflict to return to their former localities and live there with dignity, return their home, land and property seized in an unjust manner and carry out their activities without let or hindrance.
6. Undertaking self criticism and self evaluation of past mistakes, the CPN (Maoist) has expressed commitment not to repeat such mistakes in future.
7. The seven political parties, undertaking self evaluation, have expressed commitment not to repeat the mistakes of the past which were committed while in parliament and in government.
8. In the context of moving the peace process forward, commitment has been expressed to fully respect the norms and values of human rights and press freedom and move ahead accordingly.
9. As the announcement of municipal polls pushed forward with the ill-motive of deluding the people and the international community and giving continuity to the autocratic and illegitimate rule of the King, and the talk of elections to Parliament are a crafty ploy, we announce to actively boycott them and call upon the general public to make such elections a failure.
10. The people and their representative political parties are the real guardians of nationality. Therefore, we are firmly committed to protecting the independence, sovereignty, geographical integrity of the country and national unity. Based on the principle of peaceful co-existence, it is our common obligation to maintain friendly relations with all countries of the world and good-neighbour relationship with neighbouring countries, especially India and China. But we request the patriotic masses to be cautious against the false attempt by the King and (his) loyalists to prolong his autocratic and illegitimate rule and delude the patriotic people by projecting the illusory "Mandale" nationalism and questioning the patriotism of the political parties, and appeal to the international powers and the people to support, in every possible way, the democratic movement against autocratic monarchy in Nepal.
11. We call upon the civil society, professional organizations, various wings of parties, people of all communities and regions, press and intellectuals to actively participate in the peaceful movement launched on the basis of these understandings centered on democracy, peace, prosperity, forward-looking social change and the country's independence, sovereignty, and pride.
12. Regarding the inappropriate conducts that took place between the parties in the past, a common commitment has been expressed to investigate any objection raised by any party over such incidents, take action if found guilty, and to make the action public. An understanding has been reached to settle any problem emerging between the parties through peaceful dialogue at the concerned level or at the leadership level.
Nepal's SPA, India Pressured by US Ambassador's Speech - Preeti Koirala,
The US ambassador James F. Moriarty makes headlines whenever he makes statements. His speech delivered at the Ganesh Man Singh Foundation early this month was symbolic in a sense that late Singh was a selfless leader who didn't crave for power for the sake of democracy and freedom. Our contemporary leaders both of the NC and the UML never followed the path of Ganesh Man.
Girija Prasad Koirala even went ahead to minimize Singh during his own life time by actively conspiring to defeat Mangala Devi Singh (Singh's wife) and Prakash Man Singh (Singh's eldest son) in the general elections of 1991. Therefore, by choosing to speak at the forum of a Foundation named after late Singh, the U.S. envoy sarcastically called for inner party democracy and selflessness to nurture democracy by recalling what Ganesh Man had done but apparently what all leaders of today have forgotten.
But it seems now that the Bush administration has realized how awful and
dangerous the 12 point understanding actually is. The parties are where they
were in front of the people but the Maoists have got huge gains out of the
agreement. It has become very easy for the present government also to tell to
the people that "See we were always telling you, these seven parties have been
tacitly aiding the Maoists".
Indian Expansion - An Outline: Nepal - Dev Nathan, Journal of Eelam
Studies, Summer 1989
Unlike Sikkim, Nepal was never a protectorate of the British. The British preferred to maintain it as an independent state, as a buffer between British India and China. The 1923 treaty of peace and Friendship recognised Nepal as an independent and sovereign state. On the eve of the transfer of power, in July, 1947, Britain reaffirmed Nepal's independence when their respective legations in Kathmandu and Nepal were raised to the embassy level.
Well before this, however the seeds of India's domination of Nepal had been sown. The Nepalese Terai contained a population of largely Indian extraction. Marwari and other Indian traders had spread through the country, occupying key positions in trade and commerce. They sold industrial products manufactured in British India and sent back rice and other agricultural commodities in return. In the second half of the thirties Indian big business groups set up jute, sugar and match factories in Nepal, (Lama, 1986. 150).
While encouraging a movement against the autocratic Ranas, the GOI signed the 1950 Indo-Nepalese Treaty, a treaty that holds even today and legalises some aspects of the unequal relations between Indian and Nepal.
According to Article 6 of the treaty, the Governments of India and Nepal agree to grant on a reciprocal basis to the nationals of one country in the territories of the other the same privileges in the matter of residence, ownership of property, participation in trade and commerce, movement and privileges of a similar nature. This combined with free movement across the borders and the full convertibility of currency has enabled Indian traders, contractors and industrialists to buy up economic assets in Nepal and dominate its economic life. The granting of formally equal rights only legitimises inequality, as the Indian migrants to Nepal are essentially businessmen of various hues, while the Nepali migrants to India are Gorkha soldiers and low-paid labourers, working in hotels, restaurants and as domestic help.
The letters exchanged with the Treaty spelt out the military aspects
What this effectively does is to tie down Nepal to India's perception of the military situation. The GOI can further determine the arms that Nepal may buy. The GOI has done this not only with regard to arms purchased through India, but all arms purchased by Nepal.
In 1987 the GOI objected to Nepal's purchase of anti-aircraft guns from China (India Today, Dec. 15, 1987). Nepal's right to employ any foreign nationals, of its choice is restricted by India's necessary agreement. Faced with the growing conflict in South Asia, Nepal has proposed that it be declared a zone of peace. India has objected to this on the ground that it implies a revision of the 1950 treaty, which forces Nepal to act on the basis of Indian military perceptions. Neutrality, when India is one of the partners in the conflict, is something that India is determined not to allow Nepal.
Nepal is a land-locked country, or, rather, as it has sometimes been described an India-locked country. India has used this position to force various harmful "Trade and Transit Treaties" on Nepal. The first Treaty of 1950 forced Nepal to levy export duties on Nepalese manufactures equal to Indian excise duties so that Nepalese manufactures may not become competitive. The Treaty prohibited Nepal from selling its good in third countries at rates cheaper than those in India. It imposed GOI control on the foreign exchange earned by Nepal, which was deposited in the Reserve Bank of India. Further, all goods imported by Nepal through India, were charged import duties at Indian rates. These monies were later refunded, not to the Nepali importers but to the Nepali Government.
What India had imposed on Nepal was a customs union, an area within which trade would be free, while the area would face the rest of the world with common import duties. Export duties on exports of Nepali manufactures to India equivalent to Indian excise duties, were aimed at discouraging Nepali manufactures. Food and other primary products from Nepal faced no such duties, thus their export was encouraged relative to that of manufactures.
At the same time imports by Nepal from third countries faced import duties at the same rates as levied by India. Thus, Indian manufacturers got the same protection in Nepal that they did in India. The scheme of returning these import duties to the Nepali Government, only made the Nepali Government a party to the destruction of Nepali manufacturer; it did not change the economic effects of the customs union.
As one study pointed out, "Urban petty manufacturing of 'industrial' goods has become increasingly threatened compared with the growth of new forms of production and servicing, by 'the Indian connection', which demonstrates the extent to which small scale 'industrial' enterprises are dependent on large scale factory production outside Nepal. The former includes brass and clay pot makers, straw mat weavers, and makers of bamboo screens or winnowing trays; and the latter motor mechanics, watch and radio repairers, and tailors using imported Indian cloth". (Blaikie et al, 1980, 56)
Questions of trade and transit have continued to be major issues in Indo-Nepalese relations. The GOI has insisted on clubbing together trade and transit, so that it can make use of Nepal's weakness in transit to force concession on Matters of trade. Nepal, on the other hand,. has been trying to get the two issues delinked and separate treaties entered into for both. It was only in 1978, during the Janata Party rule in Delhi, that the GOI agreed to enter into separate treaties for trade and transit.
The GOI has frequently used strong-arm tactics to force Nepal to accept its dictates. In 1971 there was a virtual economic blockade of Nepal, prior to the new Indo-Nepal Treaty (1971) being signed. India stopped supplies of petroleum products and Nepal was threatened with a virtual transport shutdown. Nepal had to give up its demand to separate trade and transit and to agree not to raise the tariffs on new industries (conceded in the 1960 treaty.) This economic blockade was the culmination of a series of trade measures in the late sixties.
As Nepal undercut India in raw jute and stainless steel utensils and synthetic fabrics that came into India (the factories for their manufacture in Nepal having themselves been set up by Indian business groups) the GOI in 1969 banned all imports of textiles from Nepal. At this time Nepal had also approached China for help in cotton cultivation in the Terai. The GO I insisted on keeping the Chinese out of the Terai and responded with an economic blockade.
Keeping the Chinese out of any projects in the Terai has been a clearly enunciated aim of Indian policy. The reason is supposed to be one of defence, but what this actually means is that of keeping Nepal as dependent as possible on India. To make sure that no project in the Terai goes out of Indian hands, the GOI has even used outright military, pressure. After China was awarded a contract to build a section of the East West Highway in the Terai, the Indian Army was moved into position along the Nepalese border and remained there till Nepal agreed to cancel the Chinese contract.
The net result of India's economic thrust, backed up by continuous pressure from the Indian Government, is that Nepal's exports are chiefly primary products, maize, rice, herbs, ghee, dried ginger, timber and jute. Some of these, like wheat, ghee and oil seeds, are re exported to Nepal in processed form. India's exports, on the other hand, are of a variety of manufactured goods, chiefly chemical and drugs, metal manufactures, and machinery and transport equipment.
The classical colonial pattern of the nineteenth century free trade (primary products versus manufactures) is the pattern Indian has imposed on Nepal. This pattern is reinforced by government pressure, and its aid programme. Needless to say, Nepal's terms of trade with India have deteriorated in line with the fall in primary goods prices relative to those of manufactures.
The trade pattern has also led to a large deficit for Nepal, to cover which Nepal has, at times, had to convert several million dollars worth of hard currency into Indian rupees. Having a currency that is freely convertible in to Indian rupees, the Nepalese official exchange rate with the dollar is determined by India. Nepal's trade deficit with India is largely covered by the remittances of the cheap labour it provides to India.
Besides the colonial trade relation, and the supply of cheap labour there is also the use or rather destruction, of Nepal's natural resources to India's advantage. The Kosi multi-purpose flood control power-irrigation project is one such. There were differences on the compensation to be paid for Nepali lands acquired for the project. The projects have resulted in a continuous soil erosion, while yielding negligible benefits in irrigation and flood control to Nepal (Lama, 1985, 130)
The stranglehold of Indians over trade and commerce, particularly in the Terai has already been mentioned. Many of these traders have for convenience taken Nepal citizenship, but they retain all other business and family links with India. Othcr traders areIndian citizens. It has also been mentioned that Indian investments in industrial enterprises began in the late 1930s. After world war II some of the Indian business groups set up joint enterprises in collaboration with the local Nepali businessmen, compradors of compradors, as the Indian business groups had themselves set up their industrial ventures in collaboration with the TNCs. Since then some industrial units have been set up by Indian business groups. Below, a few of the units have been mentioned. But, as noted by Morris (1987), the official number of Indian joint ventures is almost certainly an underestimate.
The Sahu Jain group set up a sugar mill in 1963; Dhirajlal, Brijlal of Calcutta a starch and glucose factory. Birlas have a zinc and lead project in which they hold 25% of the shares, with another 25% being held bv Golden Moffit and Associates of U.K. Union Carbide of India Limited have a dry cells plant. In Nepal Orind Magnesite, Orissa Industries hold '25% of the shares and the unit has a technical collaboration with Harbingar Walkar of USA. The ubiquitous Oberois have a hotel, while the Mohan Meakin group brew beer. These are also units for manufacturing of glue and conversion of wood into splinters. (All the above information from Lama, 1985)
The Indian joint enterprises in Nepal fall into two clear categories.
This confirms the earlier conclusion about the nature of capital export from India. In the case of Nepal, however, the virtual customs union between India and Nepal, which give Indian manufactures an access to the Nepali market just as though it were an Indian state, has inhibited Indian investment in Nepal. Selling to Nepal is more profitable than investing there. As a result the bourgeosie that does grow in Nepal is linked to the Indian bourgeoisie, running repair shops and service centres for machinery and equipment manufactured in India, or using Indian equipment in small establishments like tailoring shops.
India is by far Nepal's largest trade partner and aid giver. The customs union forced on Nepal has helped India maintain its position in Nepal's trade, a position reinforced by the Indian aid programme.
It was in the mid 50s, that India became Nepal's largest aid-giver, a position it has held since. Aid, of course, is a means to promoting trade. The sectoral distribution of aid shows to what extent this programme is meant to benefit India. More than 50% was for building roads and airports. Besides their strategic military importance, these means of communication help the spread of Indian factory made goods into the far corners of Nepal, destroying the local handicrafts like basket weaving and pot making, building up in its stead a class of comprador merchants based on the sale of Indian factory made goods. This process is very familiar to Indians who know of the role played by the railways in Britain's imperial scheme.
Productive activities like agriculture, horticulture and industries, or beneficial activities like education and health, altogether got less than 8% of the total aid. The other major sector to which Indian aid went has been "irrigation, power and water supply". As already pointed out, this was meant to benefit India and not Nepal. If anything, Nepal has paid the cost in terms of soil erosion and other forms of ecological degradation.
Consequent upon this aid programme, Dewan Vohra (1980) has estimated the number of Indian experts in Nepal to be around 100,000