Southern shutdown puts onus on Kathmandu to bridge trust deficit
1 October 2015
KATHMANDU/SINGAPORE — Nepal is reeling from the effects of a seven- week shutdown in the south of the country because of widespread protests against a new constitution seen by local ethnic groups as discriminatory.
Most economic activity in the area has been stopped by strikes and protests against the constitution and widespread killings of demonstrators by security forces. Seven policemen were killed a month ago, but almost all those who have lost their lives since then have been protesters.
The unrest has further damaged Nepal’s already struggling economy, not least because all the country’s major national highways are in the south. Many of the frontier checkpoints with neighboring India have been closed, or are processing traffic more slowly than usual.
New Delhi denies claims that it is imposing an economic blockade in an attempt to pressure Kathmandu to accommodate the grievances of the Tharu and Madhesi ethnic groups, which share close kinship ties with Indians across the border in the state of Bihar.
However, Indian customs officials say traffic at the border posts is being held up because of concerns for the safety of Indian trucks and drivers. Earlier this month, protesters torched three trucks carrying sugar near Birgunj, which is Nepal’s main border checkpoint.
Sishir Kumar Dhungana, director general of Nepal’s Department of Customs, said there had been a considerable decline in imports since mid-August, adding that the 18 checkpoints along the Indian border normally generate revenue of 205 billion Nepalese rupees ($1.94 billion) a year.
Dhungana said Birgunj alone normally collects more than 50% of Nepali government customs revenue. Industrial productivity has fallen because of a lack of raw materials, while essentials such as rice, vegetables and fuel are not making it to the market, he said.
The volatile situation in southern Nepal follows the approval of a new constitution, promulgated in September, which marked the end of seven years of wrangling between political parties but has also provoked serious opposition from some ethnic groups.
Minority groups in the south say the constitution does not sufficiently address allegedly pervasive discrimination by the Nepali state. They also say it reneges on past agreements with the three largest political parties: the Communist Party of Nepal (Unified-Marxist- Leninist), the Nepali Congress and the Unified Communist Party of Nepal (Maoist).
The constitution was endorsed by 85% of elected representatives in the country’s Constituent Assembly, but the southern groups are angry about the boundaries of states — being introduced for the first time — that will have important governing powers.
Tharu and Madhesi leaders claim that the boundaries of these states have been designed to limit potential electoral gains by their communities and will continue to deprive them of fair representation in national affairs.
Widespread support
Bishwambhar Pyakurel, chair of the Nepal Economic Association, an association of professional economists, said the constitution had to be accepted because of widespread support in the Constituent Assembly, but argued that the southern groups must be brought on board.
“The government says most of their demands have been met and that a commission would present a report on their demands and the government would look into it. [But] it would have been better had the government settled it before the promulgation of the constitution,” he said.
A southern industrialist, who is not an ethnic Madhesi, said that the lack of representation for the Tharus and Madhesis was a real issue that Kathmandu would have to resolve.
“If you say you are going to amend the constitution at a later date to alter state boundaries, as the three major parties are now saying to the Madhesis, then why can’t you do it now? And if you aren’t ready to change it, then why did you make promises to the Madhesis in past agreements?”
The industrialist argued that many of the Madhesis’ demands were justified, and that they had “been taken for granted and made to run around in circles.” Moreover, he said, “Kathmandu’s continued failure to engage directly with the people of the Terai [the region north of the Indian border] has exacerbated the situation.”
The shutdown in the south has reduced imports of key supplies to a virtual standstill, causing substantial hardship for ordinary Nepalese and leading to a spike in the prices of everyday goods across Nepal, in the the northern hills as well as in the southern plains.
The long-term implications of the shutdown will also be serious. Besides being home to all the country’s major border posts, the south contributes a major part of Nepal’s industrial output and agricultural produce. Failure to engage the minority groups will continue to hamper economic activity in the country’s most productive region, analysts say.
The stand-off in is also likely to prevent progress on economic reforms, regarded as essential by business groups. Sujeev Shakya, chair of the Nepal Economic Forum, a think tank, and chief executive of Beed Management, an advisory company, said he expected the reform agenda “to be put on the backburner” in the short-to-medium term.
Jacob Rinck, who researches political change in the eastern Terai at Yale University, said “the substantive differences on constitutional issues actually seem quite narrow, and amenable to negotiation.” However, Rinck said there was a “significant trust deficit” between many Madhesis and the three major parties, which had been reinforced by the disturbances.
This article was co-authored with Deepak Adhikari and was originally published at asia.nikkei.com on October 1, 2015.
