It is a tribute to Nepal’s standards of domestic peace and security that the student unrest in Nepal unleashed by a government clamp down on social media apps, leading to the loss of nineteen precious lives, brought down the ruling government.
Brushing it aside as a one-off instance would be unwise. Just as surely pointing to the machinations of a foreign hand, as in Bangladesh earlier (2024) and prior to that in Sri Lanka (2022) seems less than a full explanation. Of critical importance is strengthening Nepal’s resilience to political turbulence.
The foundation of a vibrant democracy is a strong multi-party system with institutional checks and balances to ensure that the rule of law prevails including versus the ruling party. This is where many developing country governments do not meet the litmus test. Complex governance structures and processes tend to distance rulers from the people and create a fog of administration, which makes become self-serving easier than working in the interests of citizens.
Nor do governance standards improve just by doing more of the same for longer. Consider the case of South Africa. Till 2013, it ranked above India in the three vital governance indicators of the World Bank – government effectiveness, quality of regulation and rule of law. The decade after the passing of Nelson Mandela in 2013 marked the dilution of the positive political glue between people and the government, crafted so assiduously, over the years of struggle by the African National Congress. Sadly, by 2023 South Africa ranked lower than India on these governance indicators.
The Need for Practical Reform
This illustrates that radical governance reform, as Nepal implemented in 2008 by ending monarchy and adopting a democratic form of government by 2015 is not by itself a panacea.
What matters is how governments apply lofty constitutional principles to everyday matters. One can only hope that Nepal does not pursue another new legal solution to governance problems via constitutional change. Instead, it would do well to introspect on how effectively and in whose interest fiscal allocations are being made and how well public money is being spent.
A return to monarchy would be the least obvious route to progress, in a fast-evolving world, decentralisation of power trumps static, centralised authoritarian rule.
The news that protestors are rallying behind former Chief Justice Sushila Karki as an interim Prime Minister is welcome news.
On the three governance indicators listed above, Nepal does better than Bangladesh albeit not as well as Sri Lanka or India on rule of law and regulatory effectiveness. But it does worse than Bangladesh on government effectiveness.
This is a key indicator which assesses how well government converts targets and ideology into measurable benefits for citizens on the ground. Admittedly Nepal’s governance is constrained by the high turnover of thirteen governments each with an average tenure slightly more than 1 year since 2008 when the monarchy was replaced by democratic rule. So, is it could just be that democracy is still nascent – unsurprising since the relatively recent end of the monarchy.
Economic Context in South Asia
Despite cross country variations, the economic structure of South Asia does not vary significantly. All countries are in the lower middle-income range with Sri Lanka having the highest per capita GNI. All are short of resources, low on infrastructure development and incur large fiscal deficits and debt relative to GDP is high but stable.
Nepal has the lowest level of debt and enjoys concessional lending- the most recent a US$ 500 million support from the US government for infrastructure development.
It is fortunate that Nepal is a young nation with median age between 25 to 27 years so there is enough youthful energy to build upon. Total Fertility Ratio is already below 2 and population is expected to peak at thirty-six million in 2065.
It is estimated that as much as one quarter of Nepal’s citizen live abroad, which is a testament to their enterprising spirit. It is pointless to mourn the fact that so many leave for work overseas. Far more urgent is the need to upskill those that remain behind, particularly women, for dealing with the digital and technological changes expected in the workplace.
India–Nepal relations
Youth (15 to 24 years) literacy levels are high at 92 percent, as in India (91 percent), but enrolment in tertiary education is low at about 14 percent, higher than Pakistan at 11 percent but lower than India at 28 percent, Bangladesh at 21 percent or Sri Lanka at 32 percent.
This feeds into high youth unemployment at 20 percent versus just 12 percent in Bangladesh and 17 percent in India. An open border between India and Nepal provides access to India’s huge and fast-growing market but private sector share in the non-agricultural domestic economy in Nepal is low at about 60 to 65 percent versus 70 to 75 percent in India.
India has close, traditional links with Nepal. It also has an interest in keeping it as a non- aligned buffer state between it and China. Cultural and educational links already exist. Like Nepal, India actively seeks to enlarge private investment in the non-agricultural economy.
Energy cooperation is a salient pillar of future looking development. Closer cooperation on technical education, technology development and research and development would add value to the B2B links.
Closer cooperation in multilateral fora and seamless trade across borders would enhance comfort levels on both sides of the 1751 km long open border, which dates to 1816. But above all, treating Nepal’s democratic crisis as its own, and offering bipartisan support—technical, administrative, and financial—to dilute the impact on citizens and business, would be fitting and establish that India stands to gain from a politically stable, economically strong Nepal.
(Sanjeev Ahluwalia is a distinguished fellow at the Chintan Research Foundation and was previously in the IAS and World Bank. This is an opinion piece, and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)