The adoption of the new constitution was expected to bring peace and stability in the country, yet the agitation in the Tarai has become a full-blown crisis with border-centric protests by the Madhesi parties and the death of over 40 people. This was further compounded by restrictions imposed by India on the movement of Nepal-bound cargo since September 20 citing security concerns—which New Delhi has reportedly instructed its agencies on the ground to lift on Saturday. But even by Sunday evening, very little sign of improvement was visible at the ground level. The three major parties have been slow to engage the disgruntled parties. Furthermore, there is criticism that the government has not handled both the political crisis and post-earthquake reconstruction well. The bill reconfirming the formation of the National Reconstruction Authority is yet to be approved by Parliament even five months after the earthquake. As the process to form the next government gets underway, the reconstruction work is likely to be further delayed. Against this backdrop, Mukul Humagain and John Narayan Parajuli spoke to the Finance Minister Ram Sharan Mahat, also a senior Nepali Congress leader, about the ongoing negotiations with the Madhes-centric parties, the repercussion of the blockade on Nepal, the pending reconstruction work and the formation of the new government.

The Tarai crisis has been going on for almost two months now, why is it taking so long for the government to address the demands of the Madhes-based parties?

Well, the new constitution has addressed most of the agendas of the Madhes-based parties. The constitution is a document of compromise and it cannot meet all the agendas of every community. However, some of the concerns of Madhesi parties will be addressed in the coming days through constitutional amendments, and the prime minister has already committed to this in Parliament as well.

What is the response of the agitating parties on the proposed constitutional amendments?

My impression is that they are very much positive.

The revision in the delineation of boundaries is one of the major Madhesi demands, but the government has said almost nothing except stating that a future commission will handle the issue of demarcation.

What can the government say when the constitution has already been promulgated by an overwhelming majority in the Constituent Assembly?

Some of the complaints regarding the delineation of the federal boundaries can be addressed through the commission. Moreover, the government has no right to revise the provinces. It is a very serious and a delicate matter.

Are there differences among the three major parties regarding constitutional amendments?

This is not true. The prime minister had clearly expressed his commitment to amend the constitution while addressing Parliament two weeks ago—before the constitution was endorsed—and it was based on the consensus reached among the three major parties. He also reiterated his commitment on Friday. I forsee no disputes with regards to the two constitutional amendments proposed to accommodate the Madhesi demands.  

On Friday, Prime Minister Sushil Koirala paved the way for electing a new prime minister. Is there a unity government on the cards or a majority one?

It is too early to comment on this. Choosing a new prime minister through consensus will definitely be the preferable option. But this is an unlikely scenario at the moment. So we might need to go for the majority process by voting. I am not sure what the political parties will decide on, all the options are open to discussion.

There have been reports in the media of a ‘gentleman’s agreement’ between the three major parties to give CPN-UML the opportunity to lead the next government.

I am not aware of any ‘gentleman’s agreement’ as there has been no internal decision as such within the party. Even if there might have been a gentleman’s agreement between the leaders, I am not aware of it.

Is the Nepali Congress interested in leading the government again should such an opportunity come about?

There are many leaders from the Nepali Congress who would want to be the next prime minister, but then again, it also depends on the situation. I cannot say anything for sure until the  party decides on it.

Is there a possibility of including the agitating Madhes-based parties in the new government?

To include the Madhes-based parties in the government would be in the best interest of the country. So any party that will lead the government in the immediate future will be interested to ensuring their representation.

However, they are on the streets at the moment blocking the border in the south which is a very unfortunate and an irresponsible move on their part. Therefore, the idea of including them in the government is too farfetched for now. Their participation in the government is only possible if they give up agitation, join the constitutional process, and reach a broad understanding on basic issues.

How will this crisis affect our international trade in the future? And does this blockade underscore the importance of having more transit points in the north?

Even if we were to shift our foreign trade elsewhere or open new transit points, it will take a long time to do so. Our economy is heavily dependent on India and it will be very difficult to find an instant alternative. Moreover, we never foresaw this kind of situation. Nepal and India have always maintained friendly relations. We rely on them for trade, development assistance and they are also the largest investors in Nepal. Especially after Narendra Modi took office, the relations between the two countries seemed to have improved for the better. So what is happening now is very unfortunate. The present crisis has definitely underscored the need for  the diversification of transit routes. That is why we are working hard to upgrade the Tatopani and Rasuwagadi routes as soon as possible. Some more routes are also under consideration.

Have you carried out an assessment as to how much damages the economy has suffered due to the Tarai crisis and the blockade?

We cannot make concrete assessments this early as we do not know how long the crisis will continue. But the crisis has inflicted a severe blow to the economy. The country was on the verge of starting the reconstruction works but because of this ‘virtual’ blockade, the reconstruction work has come to a complete halt.  

Do you think we have lost face in front of the international community as we are yet to start the reconstruction works and have not been able to tap any of the pledged funds?

Well, some people are assuming that we have already received the pledged funds and are still not spending it. This is not true. First, the $4 billion that was pledged by the international community needs to be translated into projects. Money will be disbursed once the actual reconstruction work begins. There is a huge amount of preparatory work that needs to be carried out before we access these funds. We have been preparing projects for these pledged funds and we have already begun negotiations with many of our donors. However, this is a time-consuming process.  

Nonetheless, it is true that the reconstruction work has not been able to start due to the delay in establishing the Reconstruction Authority. And due to various political issues, the Reconstruction Authority bill is yet to be approved. We were expecting to endorse the bill this week. But because there is going to be a change in the government, it might get delayed even further. Still, the line ministries have been doing the required preparatory work for the reconstruction projects.

Do you think this delay in establishing the Reconstruction Authority is going to reinforce the fear among the donors about Nepal’s absorption capacity?

We need to admit that our capacity to implement programmes as well as the overall management of the government is far from ideal. But at the same time, we are introducing reforms. And the Reconstruction Authority will help resolve the developmental challenges that cause delays in project implementation.

While announcing this year’s budget, you had mentioned that it is going to be a budget implementation year, but we have already lost two months from the first quarter due to the protests.

Yes, this is exactly what I have been trying to say. The ongoing turmoil has resulted in a big setback for the country. It was an important year for Nepal and we had introduced a good budget along with sweeping reforms. But these disruptions, particularly the Tarai unrest, have thrown the country’s economy out of balance at the moment. So this will definitely have some repercussions in the implementation of the budgetary programmes.