Democracy in Nepal: Beyond the New Institution

On October 1, 2014, The Asia Foundation hosted a discussion on the impact of a new constitution on Nepal’s political and economic development, led by Dr. George Varughese, the Foundation’s country representative in Nepal.

Dr. Varughese highlighted several issues the new constitution needs to address. The first issue is the problem of citizenship. Currently, 4.3 million Nepali people lack legal documents to confirm their citizenship. These stateless people are a major source of social instability because their rights are not protected by the government. Local governance is another issue which must be addressed by the new constitution. Local authorities are incapable of raising enough funds to function normally because they lack capacity and autonomy, so it is important for the new constitution to solve the problem of provincial jurisdiction. A third issue the new constitution must address is the federalization of military forces and the number of troops serving under the central government.

Dr. Varughese also discussed the impact of hydropower projects invested by India on Nepal’s political and economic development. Dr. Varughese stressed that these projects would not only have an impact locally, but also on the larger society. The key issue is the distribution of benefits generated by these projects and the ability of local populations to strike a better deal with the government. The development of hydropower is also related to the issue of migrant labor. Currently, remittances from abroad consist of 30 percent of Nepal’s total GDP. However, the Nepali government lacks the capacity to manage this. Hydropower projects offer the government an opportunity to deal with migration shock by providing local employment opportunities. How to distribute these opportunities is a problem for the Nepali government to address in order to avoid the clash of interests.

Dr. Varughese stressed there is a lack of governmental accountability. On the one hand, this situation is caused by the corrupted party mechanism in Nepal’s domestic politics. On the other hand, a huge number of Nepali citizens are not able to fulfill their social responsibilities, reflected by the extremely low tax payment rate. This fact also contributes to the lack of governmental accountability.

• More information on the Foundation’s office in Nepal can be found here.
• Recent publications on Nepal are available here, including:
  • Citizens’ Access to Information in South Asia
  • Impunity and Political Accountability in Nepal
  • A Political Economy Analysis of Electricity Tariff Restructuring in Nepal
  • Labour Migration Trends and Patterns: Bangladesh, India, and Nepal 2013
  • Labour Migration for Employment – A Status Report for Nepal: 2013/2014
  • Political Economy Analysis of Local Governance in Nepal