Can Nepal Pull Itself Together Before It Falls Apart Again?

Nepalese Prime Minister Pushpa Kamal Dahal, also known as Prachanda, waves as he comes out of parliament after being elected, Kathmandu, Nepal, Aug. 3, 2016 (AP photo by Bikram Rai).
Nepalese Prime Minister Pushpa Kamal Dahal, also known as Prachanda, waves as he comes out of parliament after being elected, Kathmandu, Nepal, Aug. 3, 2016 (AP photo by Bikram Rai).
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On Aug. 4, Nepal elected its 24th prime minister in 26 years.

In this period, the country has seen two mass political movements for democracy, in 1990 and 2006; one decade-long civil war from 1996 and 2006; a royal massacre in 2001; the rise of an autocratic monarchy and transformation to a republic in 2008; three big political movements of identity-based assertion and rights, in 2007, 2008 and 2015; five elections, including two for a Constituent Assembly—tasked with writing the country’s post-conflict constitution—in 2008 and 2013; and three constitutions, promulgated in 1990, 2007 and 2015.

To this relentless saga of political instability, a new chapter was added in August, when the chairman of Nepal’s Maoist party, Pushpa Kamal Dahal, known by his nom de guerre, Prachanda, took over as prime minister for a second time. He replaced Khadga Prasad Sharma Oli, known as K.P. Oli, the leader of the Communist Party of Nepal (Unified Marxist Leninist), or CPN-UML. Over his short time in office, Oli had been a deeply polarizing figure who alienated half the country with his majoritarian politics after being elected prime minister in October 2015.

But the change in government does not mean Nepal’s challenges are over. Prachanda, who is supported by the Nepali Congress, the largest party in parliament, may have come to power, but with a limited mandate and a definite timeframe—he has agreed to a power-sharing deal under which he must pass the prime minister’s office to Nepali Congress leader Sher Bahadur Deuba in nine months. He recognizes that, in this period, he has to address Nepal’s biggest political challenge: discontent among the Madhesi and Tharu communities in the Nepali plains close to India, who jointly waged a six-month-long movement against the 2015 constitution and remain alienated from the Nepali state.

The past year has been especially momentous, particularly with regard to the movement in the Nepali plains and its aftermath. Nepal’s foreign policy challenges, notably its relationship with India and growing engagement with China, also shape its domestic outlook. But tracing the roots of constitutional discord in Nepal today, and understanding the current political crisis, requires an examination of the political and social challenges the country has faced over the past decade. These include maintaining a stable government; amending and implementing the constitution; addressing war crimes from its civil war; balancing foreign policy; rebuilding and improving the economy following the 2015 earthquake; and steering Nepal toward a path of inclusive politics and development.

Constitutional Impasse

The core political problem in Nepal remains the dispute over its first permanent post-conflict constitution. Nepali society is diverse, but Nepali politics is exclusionary. The constitution was meant to correct this power-sharing anomaly and lay the structures for a more inclusive polity. Moreover, the Nepali state is old, but the Nepali nation-building process never happened through democratic consent. So the constitution was also meant to be a document that would bring the nation together, carve out a new social contract, and serve as a common marker of national identity in a diverse society divided on ethnic, regional and caste lines. On both counts, the constitutional project, when it was finally completed in September 2015, did not deliver.

In the run-up to the constitution’s promulgation, Nepali politics was broadly divided into two camps. On one side were the more traditional democratic, conservative forces led by people of the hill Hindu communities, who continue to have greater access to power and are represented by the Nepali Congress and the CPN-UML. On the other were the Maoists, the Madhesi forces of the plains and various hill-dwelling ethnic groups. The two sides’ positions differ most strongly on the electoral system, affirmative action and the shape of the federal structure.

The first camp prioritized an election model that gave preference to a first-past-the-post system over proportional representation. It also wanted to give equal weight to geography and population in determining electoral constituencies. The second camp wanted a larger share of proportional representation, which had enabled its greater inclusion in the legislature. The groups representing the plains also insisted that constituencies must be based primarily on population; Nepal’s plains constitute 17 percent of the territory, but are home to over half of the population.

Nepali society is diverse, but Nepali politics is exclusionary.

The first camp wanted to dilute positive discrimination toward marginalized groups in state organs; the second camp insisted on “proportional inclusion” of all groups. The first camp wanted federal boundaries carved out in a manner that would give dominant Hindu hill-dwelling upper castes the demographic advantage in most provinces, akin to gerrymandering. They also wanted to merge districts of the plains with hill districts, which would effectively reduce the political weight of voters residing in the plains. The second camp wanted to carve out provinces in a way that would grant marginalized ethnic groups a demographic, and thus potentially political, advantage. They also wanted two provinces in the southern plains of the country, the Tarai, carved out on an east-west axis without incorporating the hill districts.

In June 2015, a few months after the devastating earthquake, the Maoists shifted sides and decided to ally with the more conservative forces led by the Nepali Congress and CPN-UML. This had major implications. It did manage to expedite the constitution-writing process, which had been stuck for seven years. The first Constituent Assembly had failed at its task and was dissolved in 2012; the second had already missed one deadline and was under pressure to deliver. The parties first decided to promulgate a constitution in June 2016, postponing the issue of federal demarcation entirely. But the Supreme Court held that the task of the Constituent Assembly was to finalize the parameters of Nepal’s federal structure, forcing the parties to go back to the drawing board. The resulting document, however, did not meet the aspirations of the marginalized groups in the plains. The draft constitution also reversed the affirmative action guarantees that the 2007 interim constitution gave them. It was discriminatory on other grounds, too, particularly by not allowing mothers to pass citizenship to their children.

The Maoists’ realignment weakened the camp committed to greater inclusion in state organs and identity-based federal structures, which was now left without a strong parliamentary presence. The Madhesi parties in particular decided that they would confront the constitutional process from the streets; they boycotted the Constituent Assembly and launched a mass protest movement in July 2015, effectively shutting down the Tarai region bordering India.

The Madhesi Movement and Its Aftermath

The Madhesi parties’ mobilization paralyzed Nepal for over six months. When it began, the top parties in government did not take it seriously. Confident that it would not pose a challenge, they continued with their timeline on the constitution. When the movement escalated, and it became clear that there was deep resentment among the Madhesi, they sought to repress the demonstrations, resulting in clashes between protesters and security forces.

In the western Tarai district of Kailali, where ethnic Tharu protesters sought to create their own state, seven police officials were killed in confrontations with protesters. This triggered a brutal state response; Amnesty International has reported on a spate of state atrocities toward Tharus in the region. In the eastern plains, as the movement escalated, there was also a disproportionate use of force by government forces. Human Rights Watch has extensively documented the human rights violations, indiscriminate killings and police violence there.

Nepalese protesters burn copies of the new constitution during a protest organized by a splinter of the Maoist party, Kathmandu, Nepal, Sept. 21, 2015 (AP photo by Niranjan Shrestha).

These tactics bred further alienation, deepening the radicalization of the Madhesi “street.” Yet the main parties in parliament did not halt the constitution-drafting process or seek to bring the dissenters into it. Instead, they put the document up for a vote, and with their numerical majority in the Constituent Assembly were able to pass the constitution.

The constitution’s promulgation deepened feelings of marginalization among the people of the plains. They accordingly decided to change their mode of protest, concluding that street agitation had not been sufficient to generate enough pressure on Kathmandu. Proximity to the open border with India gave them a lever to make their voices heard. Madhesi leaders decided to launch sit-ins at border crossings, halting the movement of all goods, including fuel, from India to Nepal. This blockade had the fairly obvious backing of India. New Delhi was unhappy with political developments in Nepal, worried that a constitution widely perceived as discriminatory would trigger instability across the open border, and angry that Kathmandu had disregarded its advice to take all actors on board and promulgate the constitution on the basis of consensus.

The Madhesi blockade had multiple consequences. In a positive shift, it seemed to have suddenly made the state more cautious, and the number of deaths due to police violence in Tarai dropped dramatically. The blockade allowed the Madhesi to continue their protests in a largely nonviolent manner without fear of government excesses.

But it also led to a severe shortage of supplies, including fuel and cooking gas. This crippled life across Nepal, both in the Kathmandu valley, hill districts and the plains. It also had huge economic costs. Manufacturing units shut down temporarily; industries linked to the supply chain in India could not operate. Transportation networks came to a grinding halt. The service sector, from tourism to banking, was hit. Agriculture was affected due to lack of fertilizers and other inputs.

The constitution’s promulgation deepened feelings of marginalization among the people of the plains.

By paralyzing much of the economy, the Madhesi blockade also helped to create a parallel economy, sanctioned and protected by the state. Smuggling networks became rampant. Even at the best of times, when authorities on both sides have cordial ties and want to regulate movement of goods, it is difficult to stop illegal trade across an open border. But when one side actively encourages black-market trading, it becomes impossible to prevent. The informal economy thus became the state’s insurance policy, filling in for the shortages. It also provided the Kathmandu political establishment with a buffer to bide its time while not wholly heeding the Madhesi demands.

The Madhesi sit-in also led to a surge of ultra-nationalism in the Kathmandu valley, encouraged by Kathmandu and targeting India. There was an official effort to discount, or underplay, the domestic roots of the crisis entirely and distract nationalist constituencies from the fact that a constitution had been imposed on a large section of the population. Instead, Kathmandu painted New Delhi as having instigated the Madhesi protesters and portrayed India as almost solely responsible for the internal protests. There is a long history of Nepali nationalism being constructed in opposition to India. The hill elite-led political camps now played to that tradition to ensure they did not have to make fundamental compromises on the constitution.

In a victory for the Madhesi movement, the constitution was ultimately amended. Within two weeks of its promulgation, an amendment was proposed giving greater weight to population size in determining electoral constituencies—and thus enabling greater political representation of the plains. The amendment would also reintroduce so-called proportional inclusion for various groups in state organs. The Nepali Congress-led government in Nepal, however, fell in October 2015, and the new government, led by CPN-UML’s K.P. Oli, did not initially show the urgency required to push forward the proposed amendment. Eventually, sustained pressure from the ground, increasing calls from mainstream parties to restore the guarantees of the interim constitution, and New Delhi’s red line that an amendment was the first step to restoring normalcy led to the amendment being adopted within months of the constitution’s promulgation in January.

Still, the Madhesi street was not completely satisfied, as the government had not addressed the all-important issue of federal demarcation. At the same time, among Madhesi activists, there was a sense of fatigue and recognition that the form of protest had to change, as the border blockade had become counterproductive. Indian authorities were also burned out by criticism not only from Nepali nationalists, but international observers who perceived New Delhi as responsible for what Kathmandu was selling to the rest of the world as a humanitarian crisis.

As a result, the blockade ended in early February. But the Madhesi movement did not only represent a domestic political crisis. It also had important implications for Nepal’s relationships with both India and China.

Nepal’s Foreign Policy Matrix: Balancing India and China

India has traditionally played a role in Nepal’s internal politics. Indeed, it was New Delhi that, in 2005, facilitated the peace agreement between Nepal’s mainstream political parties and the Maoist armed insurgency. The terms of that agreement had numerous implications for domestic politics and ultimately propelled the developments that led to the constitution’s passage.

More recently, in visits to Kathmandu in August and November 2014, Indian Prime Minister Narendra Modi clearly articulated New Delhi’s position on the constitution, pressing for an inclusive charter with a long-term perspective for future generations. Most crucially, he asked that the constitution be passed by consensus and not through a majority vote. When Nepal’s three big parties came together to push forward a constitution, ignoring the opposition from the plains, India sent a special envoy, Foreign Secretary Subrahmanyam Jaishankar, to Kathmandu. He asked the major groups in parliament to temporarily halt the constitutional process and get dissenters on board first, and warned that instability in Nepal’s plains had a direct effect on India.

There was an important dynamic at work in New Delhi—a political impulse tied to fears from its experience of Sri Lanka’s civil war and that island country’s majoritarian Sinhalese politics, with clear analogies between the situation of Sri Lanka’s long-marginalized Tamils and that of Nepal’s Madhesis. Nepal’s 2015 constitution had institutionalized exclusionary political structures. It had squashed aspirations for self-rule. The state had resorted to brutal force to put down protests against it. And Nepali Madhesis and Tharus both enjoy strong links with the Indian population across the border. India had already seen Prime Minister Rajiv Gandhi assassinated in 1991 by a Sri Lankan Tamil separatist, and the politics in the Indian state of Tamil Nadu have long been dictated by sympathy for oppressed Tamils in Sri Lanka. India did not want to see the unrest in Nepal spill over into the Indian border state of Bihar. It pushed Kathmandu to reach a constitutional accommodation by reaching out to the Madhesi movement.

Nepali leaders, however, refused to incorporate Modi’s recommendations for the constitution, saying it was too late since the charter had already been adopted. As a result, India only “noted” the new constitution in its official communiqué, rather than welcome it.

The Madhesi blockade made the differences between Kathmandu and New Delhi even starker, and their relationship more bitter. Nepal accused India of being behind the border blockade and resulting disruption in supplies. India urged Nepal to recognize the political nature of the problem and address internal discontent. Eventually, the Nepali foreign minister went to New Delhi with a four-point roadmap, which included passing a constitutional amendment on issues of representation and inclusion and creating a political mechanism to address the federalism question. Even though the Madhesi protesters were not pleased, New Delhi felt this was the best possible outcome under the circumstances.

Nepal’s 2015 constitution had institutionalized exclusionary political structures. It had squashed aspirations for self-rule.

The roadmap eventually resulted in the passage of the previously discussed constitutional amendment. But differences between Kathmandu and New Delhi persisted, with tension especially visible during K.P. Oli’s visit to India in February 2016. India wanted a categorical commitment by the Nepali political establishment that Madhesi concerns over the constitution would be addressed through a future amendment within a definite timeframe; Nepal was insistent that India should welcome the constitution as is. There was no joint statement after the meeting. Relations continued to sour, as it became clear that Kathmandu did not have any intention of creating the mechanism to address federal boundaries. India was also unhappy with the Nepali establishment’s continued efforts to stir up ultra-nationalism against New Delhi. And there were anxieties about Nepal’s recent outreach to China, which had shown a willingness to invest more political capital in shaping outcomes in Nepal.

New Delhi saw Oli as the key man behind the constitution and its insensitivity toward Madhesi, as well as Kathmandu’s outreach to Beijing. India had been keen to block his election as prime minister in October 2015, but was unable to do so. They instead invested energy in wooing Prachanda, then the chairman of the Maoist party and a key Oli ally. If Prachanda withdrew his support, Oli’s government would fall. This is precisely the scenario that played out in Kathmandu at the end of July. Nepal’s constitutional impasse had not been entirely resolved, but, from New Delhi’s perspective, a belligerent, majoritarian government was finally on its way out.

The one country that was not happy with the changing of the guard was China. Unlike India, China has traditionally not played a role in domestic Nepali politics. However, the Kathmandu establishment has often played what has come to be known as the “China card” as a hedge during periods of tension with India, with a mixed record.

Over the past decade, however, Chinese engagement in Nepal has drastically increased. This has been attributed to Chinese assertiveness globally and in South Asia, as well as its position on Tibet. Free Tibet protests broke out in Kathmandu in the run-up to the 2008 Beijing Olympics, prompting Chinese concerns about the ability and willingness of the Nepali regime to crack down on Tibetan activists. China stepped up its interactions with the Nepali state authorities, particularly its security forces. But Beijing had traditionally dealt with the monarchy. When the monarchy was abolished in 2008, China had to expand its ties across the fragmented and diverse Nepali political landscape.

Unlike India, China welcomed the Nepali constitution in 2015. When the Madhesi blockade was imposed, Kathmandu made tentative outreach efforts to Beijing in an effort to diversify its sources of supplies and compensate for those blocked at the Indian border—a push that became stronger over time. China initially promised to give Nepal a one-time gift of 1,000 tons of gasoline, which met barely a few days of demand in the Kathmandu valley.

Eventually, during Oli’s visit to Beijing in March, an elaborate agreement was signed. Nepal and China committed to enhance connectivity; explore the feasibility of bringing rail lines down from Tibet to Nepal; and conclude a commercial deal on fuel supplies. A transit agreement was also reached, allowing Nepal to use Chinese ports.

While the agreement in itself is significant, the devil lies in the details. For one, it is noteworthy that through the supply crisis of 2015-2016, China did not emerge as an alternative source of supplies for Nepal’s critical needs. Kathmandu remained crippled, and it was only after an understanding with New Delhi and the constitutional amendment that the border reopened and life went back to normal. Second, serious geographical and economic constraints interfered with the implementation of many elements of the agreement. And third, movement on connectivity, particularly the rail line, is still a long time away; as of now, all that has been agreed upon is feasibility studies for new infrastructure.

When the monarchy was abolished in 2008, China had to expand its ties across the fragmented and diverse Nepali political landscape.

But even though the Nepal-China agreement has more symbolic than substantive value for now, and India still retains huge advantages over China in Nepal given its historical and cultural links, Beijing’s assertiveness in Nepali politics is a significant departure from the traditional balance of power. This became most visible in May, when Prachanda first decided to withdraw support from the Oli government. Reports suggested at the time that the Chinese authorities expressed their preference for a “left government” and for “left unity,” and advised Prachanda to stay in the government “for the sake of stability.” Prachanda reportedly got rattled and backed out. When he once again decided to take the plunge in July, he got similar messages from China. And sources suggest that when, after becoming prime minister, he sent a special envoy to Beijing, China once again raised the issue.

That was a significant moment, marking the first time Beijing has expressed such a clear preference in terms of domestic power-sharing arrangements in Nepal. It is also important because China’s positioning is in stark contrast to India’s: New Delhi wanted Oli out at all costs and concluded that any arrangement would be better than his leadership. Prachanda himself has said that China’s main concern in Nepal is not India, but the West, and hinted that Beijing views the Tibet-related activities of Western powers in Kathmandu suspiciously.

But in the larger global and regional context, at a time when India is collaborating closely with the U.S. and faces increased tensions with China on a range of issues from Pakistan to membership of the Nuclear Suppliers Group, Nepal is emerging as one more theater of competition between the Asian powers.

Economy and Post-Earthquake Reconstruction

Nepal’s political upheavals have taken place against the backdrop of the massive earthquake that hit the country on April 25, 2015. The quake took over 9,000 lives and caused an estimated $7.1 billion in damage. It pushed almost a million people—between 2.5 and 3.5 percent of Nepal’s population—below the poverty line. Nepal was able to generate substantial international goodwill and pledges for reconstruction, but has performed dismally in kick-starting the process.

For months, political wrangling blocked the passage of legislation to create a National Reconstruction Authority that would spearhead the recovery process—the law was finally passed eight months following the quake. The body’s chair was also replaced in December, with the CPN-UML government appointing its own loyalist to replace a Nepali Congress-appointed chief. Relief and reconstruction became politicized and were hijacked by partisan interests. There have been, for example, inordinate delays in basic payments for housing.

A Nepalese woman dries vegetables on the rubble of houses damaged in last year’s earthquake, Bhaktapur, Nepal, April 6, 2016 (AP photo by Niranjan Shrestha).

With the earthquake, trade disruption and political unrest, Nepal’s economy took a battering throughout 2015. The overall growth rate for 2015-2016 was 0.77 percent, compared to 2.32 percent for 2014-2015 and an average of over 4 percent for the preceding two decades or so. The dip in tourism was the highest in 13 years. Inflation shot up. Government funds were severely depleted.

The big safety valve in Nepal over the past two decades has been migration to India, the Persian Gulf and Malaysia. Almost 30 percent of GDP is now composed of remittances. But worryingly for the economy, the outflow of migrant workers has contracted given the weakened economic situation in Saudi Arabia and the Gulf. If this continues, Nepal will confront hundreds of thousands of people returning home, in addition to those unable to leave in search of employment opportunities elsewhere outside. This will inevitably have political implications given the government’s lack of focus on creating opportunities at home.

State of Play and Future Challenges

Even though there is a new government in place, Nepal’s political challenges are far from over, with several major issues set to dominate the political landscape over the next year.

First is the power-sharing arrangement. Prachanda is prime minister, but the Maoist party is the third-largest party in parliament. His government’s survival is entirely dependent on the Nepali Congress, which is the largest. Moreover, by the terms of the deal he made in July with Nepali Congress leader Sher Bahadur Deuba, in nine months Prachanda must oversee local elections and then hand over power to the Nepali Congress. Deuba will then oversee subsequent elections for both the national and provincial legislatures.

Nepal is emerging as one more theater of competition between Asian powers.

The arrangement ensures that the current government, like most Nepali governments of recent history, will not last more than nine months. If the handover is smooth, the Nepali Congress-Maoist arrangement will continue. But if there is discord, new political possibilities will open up, leading to further instability. The CPN-UML, currently in the opposition, is waiting precisely for this scenario.

Second is the constitutional amendment. The Nepali Congress and Maoists have committed to addressing the aspirations of the Madhesi in amending the constitution, including on the issue of federal boundaries. This promise led Madhesi parties, who have not formally endorsed the constitution, to support Prachanda in the parliamentary vote. The new government has met certain preconditions of the protesters. For example, it declared those who died during the Madhesi blockade martyrs, provided compensation to the families of the dead and injured, committed to take care of the treatment of the injured, and set up a commission led by a former Supreme Court judge to investigate the violence and state excesses that occurred during the Madhesi movement.

But the real challenge is the amendment itself. On federalism, the Maoists and Nepali Congress are amenable to revising boundaries in a way that hill districts would be removed from a western Tarai province. They may also address some of the other demands by agreeing to population-based representation in the upper house of parliament, and clarifying citizenship rules that Madhesi parties fear will deprive many of citizenship and institutionalize two classes of citizens. But they are not willing to create two plains-only provinces as demanded by the Madhesi forces. This would mean that five districts of the plains would remain merged with the hills. Reaching an agreement on the amendment will therefore be a challenge for the government.

But the more important issue is actually passing an amendment if it is agreed upon, which requires a two-thirds majority in parliament. CPN-UML, which has decided to make ultra-nationalism and resistance to both Madhesi accommodation and Indian concerns the centerpiece of its political agenda in the hopes of winning support in the hills, has made it clear that it will not support one. Garnering a two-thirds majority without CPN-UML means getting the supporting of all the remaining parties in parliament, which is a difficult task.

Implementing the constitution will be another challenge. By January 2018, Nepal should have already concluded local, provincial and general elections. But the Madhesi parties of the plains have said they will not endorse the constitution or participate in the elections until it is amended. Holding elections in the Tarai would thus become difficult. And if a vote is held without the participation of a major regional political force, its credibility will be severely eroded and exacerbate the conflict.

There are also other political and technical challenges. Many laws have yet to be passed to enable the electoral process. Local bodies also have to be restructured, but the recommendations for doing so from an independent commission charged with that task have drawn severe criticism from political parties, particularly the Nepali Congress and Madhesi forces. Madhesi parties have also suggested that the sequence of elections should be changed to hold provincial polls before local ones. All of these issues have combined to create a high degree of uncertainty even among political leaders about the implementation of the constitution.

Successfully agreeing upon and passing an amendment would permit the holding of local elections, a smooth handover of power from the Maoists to the Nepali Congress, and national and provincial elections in the next 16 months. Should the CPN-UML block the amendment, it would make holding local polls difficult and potentially create discord between the Nepali Congress and Maoists on the handover of power. That, in turn, would lead to instability and the failure to meet any of the deadlines set in the constitution.

Amid these mounting political squabbles, Nepal must also reckon with its recent past. 16,000 people died in Nepal’s civil war, which raged from 1996 to 2006. Over 1,500 were disappeared. The wounds of the war persist. There are two broad views about how to address these lingering grievances. A large section of the political class, particularly the Maoists, and the security establishment, particularly the army, would like the focus to remain solely on reconciliation. But victims’ groups, activists and the international community believe that this has to be accompanied by justice, including prosecution for serious crimes.

The government set up a Truth and Reconciliation Commission (TRC) in February 2015. But activists claim that it does not conform to international legal obligations and is a tool to grant blanket amnesty to wartime perpetrators. Tackling this issue will be a priority for Prachanda, and many see it as one reason he toppled Oli’s government. The prime minister is keen on first amending the TRC law in order for criminal cases resulting from the civil war to be transferred from the judicial system, as is currently the case, to the commission; the Supreme Court had not allowed this to happen, and doing so is bound to provoke opposition from activists. Second, Prachanda has said that while certain cases involving both sides of the conflict can be prosecuted, the focus must remain on reconciliation. This too will create tensions, as victim groups may demand justice. The issue could also draw international attention in the coming months.

Certain steps could give the international community and victims’ groups somewhat more faith in the credibility of the process, including a new law on torture; amendments to empower the TRC to recommend prosecution for crimes; and the establishment by the commission of a prosecution authority and a special court. If instead the entire process is seen as geared to engineering blanket amnesty, there will be a backlash.

Amid mounting political squabbles, Nepal must also reckon with its recent past.

Kathmandu will also have to balance its foreign policy with New Delhi and Beijing. Prachanda’s election has already restored a sense of normalcy in relations with India. Modi was quick to congratulate him, extend an invitation to visit, and offer full support to his government. Prachanda soon thereafter sent a special envoy, Nepali Deputy Prime Minster and Home Minister Bimalendra Nidhi, to New Delhi. Nidhi’s message to the Indian establishment centered on his government’s commitment to both a constitutional amendment and accommodation of Madhesis internally, and better ties with India externally.

Prachanda is scheduled to visit New Delhi in mid-September. The Indian establishment will welcome him warmly, keen to counter critics who believe that India has mismanaged its policy toward Nepal over the past year. If all goes well, the visit will be proof that ties are back to normal, sending a signal to Kathmandu that the current arrangement has Indian support, and reassuring Prachanda that New Delhi will not play any destabilizing role in domestic politics. Prachanda’s visit is likely to be followed by additional visits in October and December.

Chinese President Xi Jinping is tentatively expected to visit Nepal in October, but there is no official confirmation yet. Whether the visit will happen in the new political circumstances is a subject of much speculation in Kathmandu’s power corridors. Prachanda sent his other deputy prime minister and finance minister, Krishna Bahadur Mahara, to Beijing soon after his election at the end of August as his special envoy to reiterate the invitation. A visit by Xi, or lack thereof, will be a good indicator of both China’s attitude toward the current leadership in Kathmandu and its commitment to implementing the agreements the two countries signed earlier this year.

Nepal is at a critical moment in its history. It has to overcome the legacy of its past, in the form of the discriminatory political structures and exclusionary attitudes it has inherited, and take steps to accommodate its assertive marginalized groups. Unless Nepali political elites are able to create a sense of ownership of the new constitution among excluded groups of the plains, the country will sooner or later slide toward instability and conflict. But the issues are not intractable, and resolving them could truly lead to national reconciliation and create the conditions for inclusive structures. If and when this happens, Nepal will be able to leverage its strategic position for growth and development.

Prashant Jha is the author of “Battles of the New Republic: A Contemporary History of Nepal,” and an associate editor with Hindustan Times in New Delhi.

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