Federating Nepal: Carving out right

Murari Sharma

Members of the newly formed but still headless state restructuring committee have an unenviable task on hand. They will have to strike a balance between inclusion and income and aspirations and capacities to fund them. They will also have to resist the quick fixes and short-termism of politicians. Only time will tell whether they can rise to this expectation.

For starters, federalism is not a panacea for inclusion, but enlargement and fair distribution of national pie is. Federalism is a structure. You need investment and growth in education, health, accessibility, jobs and freedom to work to expand the pie, and right policies to distribute it. Federalism has not made India, Pakistan and Nigeria much inclusive in last six decades. A unitary United Kingdom became inclusive before flirting with federalism.

Nepal’s federalism has less to do with inclusion and more with the assertion of indentity politics. For instance, the privileged groups in the plains, BRYK – Brahmins, Rajputs, Yadavs and Kayasthas – want “One Madhesh One Pradesh” to extract more power from Kathmandu but do not want to share it with unprivileged minorities. Several BRYK leaders have threatened to dismember Nepal if their demand is not granted, which indicates an external hand, rather than the goal of inclusion, behind this.

Still, I strongly support federalism that can be an instrument of competitive progress and inclusion, as the United States and Brazil have done. These countries publish comparative statistics in various sectors to promote competition between states. Brazil also displays these statistics on huge hoarding boards by the roadside everywhere. States with better performance get higher federal support. Counties receive support accordingly. All this has promoted competition and progress, making the United States the most advanced country and Brazil, an economic miracle in South America, the seventh largest economy in the world. As the economic pie expanded, these nations implemented ambitious programs for inclusion.

Although ethnic federalism has a mixed record, I am not opposed to it, per se. Ethnic federalism failed spectacularly in the Soviet Union and Sudan and is on the verge of collapse in Canada and Belgium. But India has been able to hold the union together with such federalism, so far. Ethnic federalism becomes feasible in countries where ethnic groups are clustered together and population overlaps are limited. Nepal is not one of them due to its overwhelming population spillover outside ethnic homelands.

In the hills, no ethnic state will have the majority of that particular ethnic group due to population overlaps. For instance, the Limbus, the largest group in Limbuwan, will have less than 50 percent population. Out of Limbuwan’s likely six districts, three — Sankhuwasabha, Dhankuta and Ilam – have a majority of the Rais, a different ethnic group. These districts might prefer to join Khambuwan, a Rai state, across the Arun River. The Rais, though largest group in their state, will be in minority, and two districts of Khambuwan will have Chhetri majority. Similar situation exists across the hills.

In the plains, the Tharus, the largest group, outnumber other ethnic groups in Sunsari in the east, and Dang and Bardia in the west. They cannot have a contiguous Tharuwan. The BRK are spread widely, while Yadavs are located mostly between the Koshi and Rapti rivers. Hill Brahmins constitute the largest group in Jhapa and Morang. Chitwan has more hill people the plainspeople. The plains also have wide racial and cultural differences. The Tharus, Koche, Meche and Dhimal are Mongoliod, while the BRYK  are Aryan. Muslims belong to a different civilization altogether. So the terai too does not have much room for ethnic states.

There is no consensus among political parties and no consistent logic behind their proposals. The Maoists have proposed 14 states, the UML 10 states, and the Nepali Congress seven states. The BRYK controlled Terai parties want the entire plains as one state. Hill tribal elite want each tribe to have their own states. Several parties do not accept federalism at all. Unfortunately, none of the parties has carefully considered the financial viability of the states they have proposed.

All lofty proposals die at the altar of financial sustainability. Every Nepali wants to see Nepal become a Singapore, Switzerland or United States. But do we have the resources to make such a commitment?

The answer is no. A unitary Nepal spends more than 70 percent of its income from revenue under regular budget. Several regular expenses – for instance, fancy vehicles and thousands of liters of fuel procured by projects for ministers and secretaries and the military budget included in forestry, industry, and civil aviation — are hidden in development budget. If such expenses are included, regular budget gobbles up more than 80 percent of revenue. That leaves a paltry 20 percent for development budget.

Under a federal Nepal, the situation will be worse. While the central government must maintain its paraphernalia, albeit reducing slightly, states will have to create and fund their own legislatures and bureaucracies. A rough calculation suggests that the creation of five states will increase regular expenses by 50 percent and eat up the entire revenue. More than five states will force Nepal to borrow to even to fund regular expenses of central and state governments.

In view of all this, the restructuring committee will have two main tasks. First, it should find agreement on how the country should be divided into states: Vertically, horizontally, ethno-culturally, or combining more than one of these factors. Secondly, it must determine the number of states based on financial sustainability. What is politically desirable is often financially unfeasible.

Opinion polls suggest, vertical states would receive the widest support. They will be easy to create. The committee could simply recommend converting the existing development regions in to states, with necessary adjustments in names and borders. Four would be ideal financially and five could be manageable. The main political parties should have no difficulty in abandoning their proposals and agreeing to this option. But hill tribes and the BRYK are opposed to it.

The BRYK have demanded a single horizontal state for the plains. If that logic were to be followed, the country could be divided horizontally into three states – one each in the plains, hills and mountains. Financially, the state in the plains will be highly sustainable and in the hills manageable. But the one in the mountains will have to rely on the other two for its survival. Neither the main political parties nor the hill and mountain tribes will accept this proposal.

Ethno-cultural basis will lead to the creation of several states. Nepal has about 100 ethnic groups with their own languages and cultures. Ideally, every one of those groups must have a state. Muslims must have their own state too, because they represent a different civilization. This option could make all minorities happy, but none of the states is likely to be financially viable and sustainable for several decades.

The restructuring committee could also toy with the hodge-podge approach the main political parties have followed in developing their proposals. It is all right for politicians to seek a marriage of convenience. But it will be a shame if the restructuring committee consisting learned people, several of them having PhDs, recommends something that lacks consistent governing logic or defining principle behind it.

I have no doubt about the credentials of the members of the committee to do a fine job, though I am not too confident about their ability to resist political pressure. They are all educated, enlightened and successful people, risen in society on the strength of their integrity, intellect, and independence. However, in a country where even the Supreme Court has to concede defeat on the unconstitutional extension of the Constitutional Assembly’s term, it is natural to entertain doubts about the committee’s ability and will to stand up to political pressure.

That the committee is headless indicates the uneasy road ahead. Pressure and temptation will be there. The far right, hankering for the good old days, will want to preserve feudalism as much as possible. The far left, having stirred animosity among various groups, want to have the country fragmented into little pieces so they can impose North Korean-like dictatorship.  Both groups, having levers of power in their hand, will try to impose their will by coaxing, cajoling, threatening and frightening the committee members. Politicians in the middle will peddle their influence more subtly, promising posts, positions, and opportunities for business.

Temptation is more powerful than pressure. I hope the members of the state restructuring committee will resist them both and offer a logical and rational blueprint for Nepal to become a federal union. They must make sure the rights of the majority are protected while advancing the rights of the minority, both at national and state levels, for a lasting peace and unity. In the line here is the country’s future and the committee members’ reputation.


30 November 2011

(Published in Republica of 4 December 2011)


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