The 2006 Janaandolan has become a stale memory of the people’s aspirations for change, a remorseful reminder of how simple demands of life can become too complicated to achieve.

The effort to transform the Maoist conflict has turned into an effort to tame the Maoists. The people wanted to remove the king, but are now worrying that their Hindu identity has also been weakened. The citizenry wanted to end the corrupt political culture displayed by the Nepali Congress (NC) and the CPN-UML in the 90s, but are unhappy that it has now come back with a vengeance.

Nepal’s democracy is in crisis, and not just because the constitution-writing process has reached a stalemate. Nepal’s democracy is in crisis because the mainstream political parties are not interested in carrying out political and constitutional reforms that can promote inclusion and unleash growth. There are many reasons for this, but I will talk about three.

Extractive institutions

First, we talk about inclusion but we really aren’t interested in unravelling the patronage networks that extract profit from the ordinary people. The debate of inclusion in Nepal has reached a point where none of the political parties can practice politics without accepting the principle. Inclusion is not just about the representation of different groups and communities. It is about abolishing patronage networks and providing opportunity to all citizens, regardless of their background.

Despite the rhetoric of inclusion, Nepal’s state and political parties continue to foster an authoritarian and extractive regime. Individuals having membership of certain groups benefit from the systematic exploitation of a larger mass of disempowered people. This is carried out through a systemic network of political parties, bureaucrats, trade unions, businesses, and criminals. Unless an individual is a member of such a network, he or she will not gain access to the market or to services and opportunities offered by the state.

At the centre of the issue of inclusion are the role and design of institutions, whether they are political, constitutional, social or economic. Inclusive political institutions allow broad and open participation of general members in political decision-making. However, in Nepal’s case, even ‘democratic’ parties like the NC try to limit the participation of general members and concentrate political power and decision-making in the hands of a few. Inclusive political institutions have checks on political leaders. Rule of law can apply equally to all members, including top leaders.

Second, we talk about an indivisible Nepal but we aren’t willing to create a new basis for social solidarity. Every society, whether it is primitive or advanced, will have internal schisms. The only solution is to develop modalities for social solidarity. Sometimes, conflicts are managed through constitutional design with built-in power-sharing and sometimes, conflicts require good governance. At other times, conflicts require social understanding and communication.

Unleashing growth

Third, we promote the agenda of development but we are not interested in political reforms without which development cannot happen.

Daron Acemoglu and James Robinson’s elaborate work, Why Nations Fail, has an uncanny applicability to Nepal’s situation. Extractive institutions, like the mainstream political parties in Nepal, can never unleash growth. Law and order serves the members of the patronage networks, never the ordinary people. Regulations and syndicates create entry barriers and prevent open functioning of markets. This prevents the creation of a level playing field where ordinary citizens can enter into business or politics.

The example of Nepal Airlines or the Nepal Oil Corporation only serves to highlight the nature of extractive practices in Nepal. Political parties are extractive, in the sense that power and benefits are limited in the hands of a few leaders. There are no constraints, no checks and balances and no rule of law applicable to them. They dispense state resources, benefits, and opportunity to members as if those were a commodity.

Rather, we tend to argue that political stability alone will allow Nepal to embark on a path of prosperity. At the heart of the discussions about drafting a new constitution, leaders of the NC and UML believe that an unstable government (and therefore a weak prime minister) is the primary reason why Nepal has not been able to unleash growth.

It is for this singular reason that they are talking about the first-past-the-post system and have lost faith in proportional representation.

A new movement?

Suppose we have a constitution as proposed by the NC and UML and suppose we have political stability. Can we then unleash growth?

According to Acemoglu and Robinson, only inclusive economic and political institutions can encourage investments, harness the power of markets, generate broad-based participation and create economic growth.

However, under the current circumstances, neither the Nepali state nor the political parties are inclusive. In addition, none of the major political parties are interested in carrying out constitutional and political reforms required to create inclusive political and economic institutions. Therefore, we cannot unleash growth with the existing political parties and the proposed constitutional provisions.

We may have a trickle down of benefits from the extractive institutions, but it will satisfy neither the growing middle class nor the bulging youth population. It will only serve to promote discontent and political disorder.

Carrying out political reforms and making political and economic institutions inclusive will mean there will be big losers. Business syndicates and business-people will lose their income because there will be new entrants and new technologies in the market. Political leaders will lose their monopoly over power and over the state. They will no longer be able to lead the patronage system.

The 2006 Janaandolan was a glorious opportunity. However, that window of opportunity is beginning to close. Once this window closes, it will be extremely difficult to cross the threshold required to carry out political reforms.

There are only three options for Nepal’s transformation. The first option is for a younger generation of political leaders to drive political reforms. The second is for a new civil society movement to put enough pressure on the existing political parties. The third is for a new political structure, either in the form of an open party or a political movement, to drive an agenda of change.