Nepal, a small poverty-stricken country of 24 million people at the foot of the Himalayan ranges, is gripped by a deepening political crisis, with social unrest reflected in strikes and a Maoist-led rural insurgency. After a bitter internal struggle, the ruling Nepali Congress (NC) recently removed its own prime minister and appointed a former leader, Girija Prasad Koirala, who last month unveiled tough “law and order” measures.

Koirala activated the National Defence Council (NDC) and then deployed the Royal Nepal Army in six districts. Announcing the military mobilisation, Information Minister J. P. Prakash said: “Maoists have been active for the last four years and the police are not trained to confront the ultras.” The government also plans to establish an “armed division of the police force” and to introduce new laws to gag the media, in order to curb “journalism supporting Maoists”.

Former premier Krishna Prasad Bhattarai resigned on March 16 after two impeachment motions. Fifty-eight of the 113 NC parliamentarians signed the first impeachment in early February. Five ministers and six deputy ministers resigned. Bhattarai promised to resign within two weeks, but reneged. It took a second impeachment motion to force him to quit.

The main issue in Bhattarai's removal was his alleged inability to crush the rural insurgency and working class unrest. The impeachment motion charged him with responsibility for “deteriorating law and order, poor administration and continued attacks by Maoists”.

On March 28, the day that Koirala was installed, more than two million workers participated in a strike against price hikes and an electricity tax. The strike was called by the Nepali Communist Party-United Marxist and Leninist (CPN-UML) and supported by nine other splinter-communist party factions, including the Communist Party of Nepal-Maoists (CPN-M).

The following week, on April 6, the Maoist party imposed a bandh—a general strike coupled with mass agitations—paralysing the country. Most vehicles stayed off the roads in the capital, Katmandu, and shops and educational institutions closed.

In the rural areas, on April 28 CPN-M forces killed four policemen and injured others in an ambush.

Under conditions of mass poverty, the Maoist insurgency that started in 1996 has spread to 35 administrative districts out of 75. The Katmandu media has reported that Rolpa, Rukum, Jagarkat and Kalikat districts in the mid-west of the country are totally controlled by the guerrilla movement.

According to Rajendra Dhal, editor of the bi-weekly journal Himal, there is “no civil government or development activity” in those four districts. “The police and administrators are confined to the district headquarters.” The paper quoted a senior police superintendent saying: “Every day they are growing stronger in numbers and weapons.”

Increasingly repressive measures to crush the rebellion have resulted in a death toll of 1,100 guerrillas, police and civilians over the past four years. Some reports say the number of deaths surpasses 3,000. According to the CPN-M, 5,000 guerillas have been detained and nearly 100 have “disappeared” or been killed in police custody. Police have destroyed houses and other properties belonging to thousands of peasants.

Former prime minister Bhattarai employed a dual policy of repression and negotiation. He appointed a commission headed by ex-prime minister Sher Bahadur Deuba, who invited the Maoists to talks last February.

However a considerable section of the Nepali Congress leadership opposed any deal with the Maoists. In his first press conference on March 24 after assuming the premiership, Koirala said: “If the Maoists lay down arms and come up for discussions they will be permitted to come to a round table conference.” He rejected the Maoists' demand for the abolition of the monarchy: “I don't want to listen to or hold dialogue with the Maoist extremists about the monarchy.”

Protracted political crisis

Both the emergence of the Maoist insurgency and the recent government reshuffle result from a prolonged political crisis. The last nine years have seen six governments. In 1994 Koirala's last NC government collapsed due to non-cooperation from his own party parliamentarians. After an inconclusive election, the NCP-UML took office as a minority government, resting on NC support.

That government fell in turn when the NC withdrew its support. Opportunist alliances were forged between the NC, the NCP-UML and the RPP (Rastriya Prajathantrik Party-National Democratic Party) to form two more regimes during the next four years. Under these conditions, both the NC and the various Communist Party factions that collaborated with it became increasingly discredited.

Having participated in parliament since 1991, the Maoist party split and one wing declared a “People's War,” consisting of guerilla attacks on political opponents in the countryside. In the 1999 election, NC came to power again with an absolute majority but, unable to contain the insurgency and widespread unrest, soon became embroiled in infighting between supporters of Bhattarai and Koirala.

Behind this political crisis lie deep-rooted political, social and economic problems.

From 1846 to 1951 Nepal was subjected to the hereditary aristocratic rule of the Rana family, which displaced the previous royal family and cooperated closely with the British colonial rule of India. At the end of the 1940s a newly-formed political front, the Nepali Democratic Congress, supported by both the Communist Party and the sidelined royal court, demanded political reforms, essentially to include a wider privileged layer in the country's government.

When a mass movement for democratic change erupted in 1951, the Indian Congress government under Prime Minister Jawaharlal Nehru intervened to impose the Delhi Settlement, which reinstated the royal line. King Tribhuvan Bir Bikram Shah assumed power, promising to call a constituent assembly to set up a new constitution. However Bikram and his successor King Mahendra refused to do so until 1959, when widespread unrest again erupted.

King Mahendra then agreed to allow parliamentary rule, while keeping decisive power in his hands. But in 1960 he dissolved the parliament, banned political parties and introduced the Panchayat system. Local councils and district representatives met in an electoral college to appoint a national body—the National Panchayat—to rule the country under palace supervision.

In 1990 the monarchy was once more forced to introduce reforms in the face of a mass upsurge. After clashes in which 500 people died, the capitalist parties, the Nepali Congress and the Rastriya Prajatantrik Party, together with the Stalinist (Communist) parties, reached a compromise with the palace.

Under the 1991 constitution the monarchy still wields considerable powers. The king appoints 10 percent of the upper house of the parliament, enjoys legal immunity and is protected by law from criticism. And in the current political crisis the king has become more influential.

Poverty and inequality

Nepal is one of the poorest countries in the world, with a per capita annual income of $US210. More than half the population is living below the poverty line, but there is a wealthy elite. According to 1995-1996 statistics, the highest 10 percent income group consumed 29.8 percent of national income while the lowest 10 percent received a meagre 3.2 percent.

Most people, about 81 percent, are engaged in the agricultural sector. Sixty-three percent of peasants own lands that are less than one hectare in size and 43 percent have only half a hectare.

Only 3 percent of employment is in the industrial sector, showing the country's economic backwardness. In a total workforce of about 10 million, some reports put unemployment at 45 percent. About 72.5 percent of people above 15 years old cannot read or write. Among women the rate is 86 percent. Infant mortality is at a high level—73.58 per 1,000 births. Life expectancy is just 58.47 years for males and 58.36 for females.

Conditions for the poor masses have worsened due to cuts in welfare spending under the “economic reforms” prescribed by the World Bank and the International Monetary Fund (IMF). Child labor is rampant and young girls are forced to work as prostitutes. Thousands are smuggled out of the country to India, Thailand and Pakistan by mafia gangs to work as sex slaves.

Hand-made woollen carpets and finished linen garments are the main export items, worth about $US240 million. These industries have been badly hit by Indian competition, however. They once employed about 500,000 workers, but 1,000 factories have closed with the loss of 300,000 jobs.

Although the country has been opened for foreign capital since 1991, no sector has attracted investment except for hydropower and tourism. The main reasons given by investors are lack of skilled labour, backwardness in technology and political instability. Institutions such as the World Bank and IMF are demanding further economic restructuring, including the privatisation of state enterprises.

During the fiscal year 1997-98 the economy suffered further from the Asian financial turmoil. The Gross National Product grew by only 1.9 percent—the lowest rate for the decade. Foreign trade declined by 1.9 percent, the trade deficit rose to $US940 million and the Nepali rupee was devalued by 15.3 percent against the US dollar. In 1997 the foreign debt amounted to $US 2.46 billion and the budget deficit was $US325.96 million.

Maoists exploit rural misery

In recent years the Maoist guerrilla movement (NCP-M) has been able to take control of rural areas by exploiting the dire social conditions of the impoverished peasants and the increasing government violence and repression.

While maintaining an armed conflict, the Maoists have been prepared to strike a deal with the ruling circles. In February the NCP-M leader Prichard (Pushpin Kamala Dhal) responded to a “peace call” by the former prime minister Bhattarai. Prichard said he was ready for discussion with the government on five conditions, including the release of Maoist leaders and members in the jail, action against the “culprits” responsible for military atrocities in the countryside and compensation for the victims.

These conditions would do nothing to halt the worsening economic and social plight of the rural and urban masses alike at the hands of the world financial institutions and the local landlord and business elite.

But the installation of Koirala signals a new turn by the ruling layers to outright military repression as a means of implementing the requirements of the financial markets. This will mean an intensification of the hardship and unrest among the masses.

In order to divert attention from social issues, the Maoists appeal to nationalist sentiments among the rural masses. As a land-locked country, Nepal's entry points are more or less controlled by India, whose companies seek to dominate the Nepal economy. The Nepali ruling class and its parties frequently use this situation to whip up anti-Indian chauvinism. All the Stalinist parties, including the NCP-M, are vehement in this campaign, denouncing “Indian expansionism” as imperialism.

This program not only plays into the hands of the Nepali elite but also pits workers in Nepal against their Indian brothers and sisters.

As for the two other prominent Stalinist parties, the Communist Party of Nepal - United Marxist-Leninist (CPN-UML) and the Communist Party of Nepal - Marxist-Leninist (CPN-ML), they today centre their agitation on official corruption, a diversion from the exploitative nature of the economy as a whole. They also demand the suppression of the Maoist movement, directly helping the NC government to introduce more repressive measures.