Nepal’s peace process was to end with a new constitution. Yet, after four years of delays and disputes, the country’s main political parties were unable to agree on federalism, a core demand of large constituencies. On 27 May 2012, the term of the Constituent Assembly, which also served as parliament, ended without the new constitution being completed. The parties must now decide what to do next: hold an election for a new assembly or revive the last one. This will be hard. Obduracy on federalism, bickering over a unity government, a changing political landscape and communal polarisation make for complex negotiations, amid a dangerous legislative vacuum. The parties must assess what went wrong and significantly revise the composition and design of negotiations, or risk positions hardening across the political spectrum. Talks and decision-making need to be transparent and inclusive, and leaders more accountable. The public needs much better information. None of this will necessarily mend the deep social rifts, but it would reduce space for extremists and provocateurs.

Until there is a new constitution, Nepal is guided by the 2007 Interim Constitution and the 2006 Comprehensive Peace Agreement (CPA), which provides for the state to be restructured to address entrenched inequalities, often rooted in discrimination based on identity. But federalism is not only about devolution or quotas. For groups that feel their culture, history or language have been sidelined by a unitary state-sponsored Nepali identity, it is also about dignity and recognition. A standoff has emerged between upper class and dominant hill-origin upper-caste populations on the one hand, and ethnic communities often described as historically marginalised on the other.

These divisions map clearly on to party politics. The traditional parties are the Nepali Congress and the Communist Party of Nepal (Unified Marxist-Leninist), commonly known as UML, which emerged as the second and third largest parties in the 2008 elections to the Constituent Assembly. These parties, currently in the opposition, are sceptical about acknowledging identity in a federal model. They have been encouraged by an upper-class, upper-caste backlash against the new pro-federal and pro-iden­ti­ty politics order. The two main forces in the ruling coalition, the Maoist party and the Madhesi Morcha, a front of parties representing Madhesi populations of the southern Tarai belt, were the largest and fourth largest in the assembly, respectively. They coalesced with a cross-party caucus of assembly members from janajati groups (the numerous ethnic groups outside the Hindu caste system who claim distinct languages, cultures and sometimes historical homelands) into a powerful pro-federalism alliance, with connections to social movements. They say the agenda should be set by the majority, namely themselves.

Public discussions have focused on whether “ethnic states” should be established. Sceptics of federalism sometimes define these as mono-ethnic entities where populations other than the majority ethnicity would be unwelcome. Yet discussions in the assembly made it clear that no group would enjoy a majority in any state. Nepal’s extraordinary ethnic diversity simply does not allow this. Demands for preferential political rights to be granted to the dominant ethnic groups in each state were ceded two years ago. Madhesi, janajati and Maoist actors do, however, care about how many states there will be, naming rights, and boundaries that give them a slight demographic and possibly electoral edge. Madhesi parties also focus on inclusion in state institutions.

The assembly ended because leaders of all parties, new and old alike, made secretive, top-down decisions. They were dismissive of their own members and never explained the issues at stake to the public, relying instead on fear-mon­ger­ing and extreme rhetoric. Throughout the peace process, decisions on the main points, whether the constitution or the former Maoist army, have been hostage to bargains on government formation, enmeshing power sharing with substantive issues.

The peace process has relied extensively on a tired idea of consensus between the parties. Until the constitution was completed, the main parties were to agree on all major decisions to ensure broad buy-in. This sometimes prevented the worst case scenario, but it also devalued democratic participation. Instead of discussions in the assembly on real issues, senior leaders cobbled together inadequate or unrealistic deals purportedly to save the peace process, but often about their personal futures or getting a share of government. Deep disagreements between the parties were papered over. Donor activity has sometimes unwittingly supported this tendency.

As no single party won an absolute majority in the 2008 elections, the contingencies of unstable coalition politics allowed the parties to throw government formation into the fray with constitutional issues. The deep polarisation over federalism meant that on 27 May 2012, any constitution could have elicited violent protests. The situation has calmed, but triggers remain. There is no agreement on the way forward and no minimum common understanding of federalism.

When the assembly ended, Nepal also lost its legislature. The absence of an elected parliament, coupled with the high trust deficit between the government and opposition parties, bodes ill for stability. For all the parties, deciding on how to resume constitution writing is inextricably linked to government coalitions and electoral calculations. Indeed, the discussion between the parties since the assembly ended has been dominated by questions of whether, when and how the government will change. A broader constitutional crisis looms if the opposition leans on the largely ceremonial president to challenge the government. The political context is shifting; parties are trying out new agendas and alliances and new actors are emerging. Divisions are rife within the parties – the Maoists have already split – and contradictions run deep in the alliances.

Denying moderate identity-based claims makes the polarisation worse and risks stoking communal tensions, as does dismissing the fears of groups that feel they will lose out. Explaining the debate will clarify it, but resolve little. Parties need to present a roadmap with broad buy-in before either going to elections or bringing back the assembly. For this, they can build on the work already done. Between themselves, they need guarantees on power sharing. Elections now could help clarify the context, but they will in effect be a referendum on federalism and risks of violence are real. For once, issues matter in Nepali politics. Mainstream parties are best positioned to reflect the country’s ethnic complexity, especially as the balance of political and social power is such that no single party will capture the votes of an entire group.

RECOMMENDATIONS

To address and reduce the social polarisation and democratic deficit, redesign decision-making processes and enforce transparency

To the Three Largest Parties, namely, the Maoist party, the Nepali Congress and the Communist Party of Nepal (UML), as well as the Madhesi Morcha:

1.  Make an early decision in consultation with smaller parties on whether to hold elections to a new assembly and when or whether to revive the lapsed Constituent Assembly.

2.  Recommit to the Comprehensive Peace Agreement and acknowledge the changed political landscape by including in discussions emerging, ignored or resurgent groups, such as Tharu, Dalit, Muslim and women’s bodies, as well as upper-caste groups and pro-Hindu monarchists.

3.  Acknowledge that the legislative vacuum cannot persist without dangerous consequences and separate government formation and functioning from constitution writing by:

a) agreeing on a full budget for the current fiscal year beyond the current partial budget;

b) endorsing an unchangeable timetable for polls or decisions on a constitution;

c) deciding on sequencing of government formation, elections and compromises on federalism that involve all parties ceding some ground, perhaps by designing an all-party government with a rotating cabinet or prime ministership; and

d) committing to a code of conduct for protests and government responses to them.

4.  Reduce the risk of violence if new elections are held by:

a) signing a code of conduct committing to abjuring hate speech and to participating in direct discussion rather than through innuendo in the media;

b) implementing, before campaigning starts, a public information and consultation program on federalism staffed by former assembly members, academics and lawyers associated with the drafting process;

c) maintaining contact with each other, their representatives on the ground and local actors and avoiding scheduling public party events that may clash with those of others;

5.  Ensure better functioning of a revived or new assembly by planning for more plenary discussions; enforcing rules of procedures, timetables and strict penalties for absentees, including expulsion; electing sub-com­mittee chairs; and disallowing party whips.

6.  Improve negotiations and decision-making by:

a) agreeing at an early date on the role of the report of the State Restructuring Commission, and the status of all previous agreements between governments and various protesting groups;

b) making negotiations public, even televised if necessary;

c) taking into consideration the new census data;

d) accepting technical and academic support where it might be helpful; and

e) avoiding the trap of leaving decisions up to “expert panels” or commissions that will certainly be politicised and possibly even less in touch with the general public.

7.  Initiate consultations for policy discussions on inclusion, including classification of groups, criteria for quotas and the relationship between federalism and inclusion.

8.  Address discontent and factionalism within their ranks.

To the Nepali Congress and UML:

9.  Contribute to the speedy resolution of the present crisis by:

a) clarifying their bottom lines on federalism and inclusion;

b) communicating more democratically with party organisation in the districts; and

c) protesting if need be, but allowing some ordinances necessary for governance to go through.

To the Main Maoist party:

10.  Minimise conflict with the new party by agreeing to negotiate division of countrywide assets; keeping open channels of communication with cadres in the field.

To the New Maoist party:

11.  Clarify party positions on the current impasse and a program sooner rather than later.

12.  Agree to negotiate division of countrywide assets with the original party.

To the Monarchist or Pro-Hindu Right:

13.  Refrain from using a divisive fundamentalist religious agenda.

To the Government of Nepal:

14.  Maintain trust and help create a conducive environment for decisions by:

a) maintaining constant, open and flexible communication with the opposition;

b) ensuring responses to protests are even-handed and proportionate; and

c) focusing on governance, but remaining sensitive to concerns about accountability in the absence of a legislature.

To the President of Nepal:

15.  Ensure that the office is responsive to the widest range of interests and resist pressure to transcend his ceremonial role to take strong positions against either the government or the opposition.

To the Judiciary:

16.  Refrain from involvement in the political process and exercise judicial restraint.

To the Nepal Army:

17.  Resist the urge to support any actor or pronounce on the legitimacy of governments.

To India and China:

18.  Resist pressure from interest groups and instead promote dialogue between all parties.

19.  Give Nepali actors space to negotiate their own decisions on constitutional issues.

To UK, U.S. and European Union (EU) Donors and the UN:

20.  Work more transparently within the framework of the CPA and the Peace and Development Strategy by:

a) not withholding the analysis of linkages between ethnicity, access to social services and poverty rates that informs programming;

b) addressing concerns that donors have preferred outcomes incongruent with the CPA;

c) taking Nepali partners into confidence but suspending support if pressured to work against CPA commitments and international charters; and

d) refusing support to negotiations or confidence-building measures that are not transparent or are driven primarily by a few leaders in the big parties.