An Overview of Political Environment ofNepal

Prepared By:- Imran Khan MBA(SVCET)September 15, 2015

Table of Contents

• Introduction•Political Structure•Major Democratic Movements•Current Political Situation•Worldwide Governance Indicators•Major problems faced by Business•Some Facts

Nepal is a small, least developed, landlocked, Himalayan country.Situated in South Asia between India (East, West & South) and China(North). Area:- 1,47,181 sq. kmPopulation-28.12 million(2014)- Hinduism(80.6%), Buddhist(10.7%), Islam(4.2%), Others( 4.5%) National Emblem National Flag

Introduction

No major ethnic community; each minority group is dominant in some parts; many have social and economic relationship and shared culture with other groups as is common in any multi-ethnic nations around the world. That gives it a complex formation.

Political structure

• Official Name- State of Nepal (independent, indivisible, sovereign, secular)

• Form of state – Democratic Republic

• Head of state-The president, currently Ram Baran Yadav

• The executive-The prime minister, Currently Sushil Koirala is chosen by a vote of the constituent assembly; the cabinet is chosen by the prime minister in consultation with his party and any coalition partners.

• National legislature- The Constituent Assembly (CA) has 601 members. Of these, 575 are elected and 26 are appointed by a Council of Ministers. The assembly was charged with drafting a new constitution.

• Legal system- The Supreme Court acts as the court of appeal and review, and has powers of original jurisdiction. It chairs over 16 appellate courts and 75 district courts.

• Divided into Development Regions, Zones, Districts, Municipalities & VDCs but is in the process to change into states after making of Constitution.

1951 - End of 105 years Autocratic Rana rule.

1990 - Protests to abolish King’s Autocracy “Panchayat” system , suppressed by security forces resulting in deaths and mass arrests.

1995 - Start of Maoist revolution for more than a decade and more than13,000 were killed.

2006- Maoists and the 7 major political parties signed a 12 point agreement(CPA) to stop armed conflict and collectively fight against the king's autocracy.

Major Democratic Movements

Bloody war against monarchy

Royal Palace Massacre

2001 1 June - King Birendra, Queen Aishwarya and other close relatives killed in shooting by drunken Crown Prince Dipendra, who then shot himself.

End of monarchy

2007 December - Parliament approved abolition of 240-year-old monarchy

2008 January - A series of bomb blasts killed dozens in the southern Terai plains, where activists had been demanding regional autonomy.

2008 May - The first CA was constituted on May 28, 2008, with mandate to deliver the Constitution by May 28, 2010

2008 May - A Republic, Ram Baran Yadav 1st president.

Current Situations

Standoff over Constitution

2010 May - Governing coalition(NC & NCP-UML) and Maoist opposition extended deadline for drafting of new constitution to May 2011.

2011 May - Constituent Assembly failed to meet deadline for drawing up new constitution.

2012 May 27 - CA was dissolved after four extensions. Issue was on federalism & its structure.

2013 November 19 - Election for 2nd time (CA) which will write a new constitution. Political deadlock as no party won a majority.

2014 January 21 – CA fixed the deadline for delivery of the Constitution as January 22, 2015

2014 February - Sushil Koirala, elected as 37th prime minister (26th PM within 25 yrs)

The United Madhesi alliance, and other janjatis tore and burnt the copies of preliminary draft of the constitution saying that it is not as per their demand.

Tharu minority living in the area demand their own, separate province.

July 20 to now- Madhesi parties and  RPP-N started protests in various parts of the country including bandh and is continue more than 1 month- world record

Ongoing clashes between demonstrators and security persons has resulted death of more than 2 dozen people

….cont’d

Earthquake- Salt on wound

2015 April – Major two earthquakes & series of strong aftershocks hit. Effects• Death – Above 10,000 • Injury – Above 22,000• Post Disaster Needs Assessment (PDNA) report, a total loss of US$ 6.6

billion. • Poverty is estimated to increase by at 2.5% to 3% .

What is Governance?

Governance consists of the traditions and institutions by which authority in a country is exercised.  This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them.

  90-100th percentile   75-90th percentile   50-75th percentile   25-50th percentile   10-25th percentile   0-10th percentile

2007 2008 2009 2010 2011 2012 2013-0.59 -0.54 -0.47 -0.48 -0.48

-0.68-0.57

Voice and Accountability

2007 2008 2009 2010 2011 2012 2013-1.92 -1.84 -1.62 -1.60 -1.42 -1.37

-1.14

Political Stability and Absence of Vi-olence/Terrorism

Extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom

of association, and a free media.

Reflects perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means,

including politically-motivated violence and terrorism.

2007 2008 2009 2010 2011 2012 2013-0.65 -0.76-0.94 -0.86 -0.88 -0.99 -0.93

Government EffectivenessQuality of public services, the quality of the civil service and the de-gree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the govern-ment's commitment to such policies.

2007 2008 2009 2010 2011 2012 2013-0.55 -0.62 -0.70 -0.74 -0.72-0.81 -0.87

Regulatory QualityAbility of the government to formulate and implement sound policies and regulations that permit and promote private sector development.

2007 2008 2009 2010 2011 2012 2013-0.64 -0.72

-0.90 -1.01 -0.95 -0.79 -0.76

Rule of LawExtent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the

police, and the courts, as well as the likelihood of crime and violence.

2007 2008 2009 2010 2011 2012 2013-0.71 -0.72 -0.65 -0.65 -0.74

-0.83-0.68

Control of CorruptionExtent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the

state by elites and private interests.

Major Problems faced by Business •Interference- Gov’t & Political leaders•Lack of Finance-complex process•Small Market- dominated by Chinese &

Indian•Lack of Mutual Trust- Dept, mgmt &

employees•Lack of Efficient manpower•Lack of Technical Knowledge•Labor Problems- pressures to fulfill

interests•Lack of Infrastructure- power, transport

Some Facts• GDP growth- 3.0% (2014/15) , 5.1%(2013/14) • GDP by sector- Agriculture(35%), Industry(20%),

Services(45%)• Labor force - by occupation: Agriculture(81%), Industry(3%),

Services(16%)• Land- Cultivable(20%), Forest(33% ),Mountainous(47%)• Inflation (CPI) -7.2%• Population below poverty line- 25.2%• Unemployment rate: 38%

Discussion

Thank You