Nepal’s progress toward lasting peace is seriously but not yet irreparably faltering. A further postponement of constituent assembly (CA) elections reflected the weak implementation of the November 2006 Comprehensive Peace Agreement (CPA) and lack of will to follow the agreed process. Leaders have now vowed to forge a new consensus and agreed to hold the elections by mid-April 2008 but have yet to address the problems that led to past postponements. Suspicions among the parties – especially between Nepali Congress (NC), which dominates the government, and the Maoists, who remain outside – are echoed in ebbing public confidence: whatever promises they hear, most voters believe the politicians prefer to stay in power rather than face the electorate. All parties urgently need to inject new momentum into the peace process and take steps to win back trust and earn legitimacy. The international community can support them in this but must also maintain pressure to keep the polls and peace process on track.

The peace process from the outset was based more on a convergence of interests than a common vision. The threat of a resurgent monarchy prodded mainstream parties and Maoists into alliance, but their major remaining shared interest is continuation in power. Even when elections seemed to be on track, no party paid more than lip service to calls for broader public participation in the constitutional process. Popular pressure to move the process ahead is not likely to worry political leaders. Civil society is divided, and the public has few openings to channel its pressure; the ultimate option of a mass movement is, for now, improbable. Constructive proposals have little outlet; parliamentary opposition is weak and without constitutional standing.

The peace plan was not inherently flawed, but it depended on all parties reforming their political behaviour, a process that should have been founded on implementing commitments starting from the November 2005 agreement between the mainstream parties and the Maoists. It also left many crucial issues to be negotiated at an unspecified date. The erosion of a common platform is not surprising. The consensus on power sharing that existed is foundering on partisanship and disputes over patronage. The prospect of impending polls has added to manoeuvring and further weakened unity. Although all parties are still talking, mutual recrimination has grown.

Other options are now likely to come into focus, although none yet appears attractive enough to win critical support. Talk of a new “nationalist alliance” – with Maoists and renegade NC leaders courting the royalist constituency – may for now be a bargaining tactic but underlines the seven-party grouping’s fragility. This has constitutional ramifications: the interim constitution cannot function without seven-party unity. Those in power, as well as the palace and the army, might not be disappointed with another deferral of elections but prolongation of the current limbo has little to offer the nation. It could provide stability in Kathmandu and a new lease on life for a modified power-sharing formula but the capital’s political games increasingly fail to reflect the realities of a turbulent country.

Holding an increasingly fractious nation together requires more than reapportioning the Kathmandu spoils. It needs action rather than the usual quick-fix backroom deals which command less and less credibility. The two armed forces have started to exert greater influence on the positions of the sides; neither has been defeated, and each would like to establish its own red lines. Maoist fighters have already left the cantonments in large numbers; on completion of the UN verification process, thousands of disqualified personnel will be discharged with no realistic plan for how to deal with them. Maoist parallel structures, notably the Young Communist League (YCL), which is already led by People’s Liberation Army (PLA) commanders, still hold sway over much of the country. Elsewhere identity-based movements have left political calculations in flux and law and order in tatters. The resignation of Madhesi parliamentarians, including an NC minister, to form a new party suggests the Tarai unrest may finally be impinging on national power games.

In this inherently unstable situation, Nepal risks slipping back toward renewed conflict even if no party actively seeks it. Two intact armies remain ready to fight. This fundamentally adversarial structure blocks other confidence-building efforts. A disillusioned public will have little appetite to defend parties which have betrayed their promises to reform and seek a new mandate. Many fear the opportunity for securing peace and institutional change is already lost. More militant groups stand to gain. The one hopeful sign is growing recognition in all parties that implementation of existing agreements is a priority. If this is coupled with the will to create conditions for holding elections by mid-April 2008 as promised, it could produce a genuine popular endorsement and stabilise the country.

The seven parties (government and Maoists) should:

• preserve unity through a combination of immediate confidence-building measures, jointly reaffirming the CPA’s shared vision, developing consensual decision-making procedures and transparently negotiating a durable power-sharing deal to bring the Maoists back into government, including if necessary a cabinet reshuffle and discussions on the shape of a post-electoral consensus government;
   
• demonstrate commitment through behaviour – with the Maoists halting parallel activities and other abuses of the CPA, and other parties setting an example by fulfilling their own commitments in a non-partisan fashion;
   
• engage with other parties represented in the legislature or registered for the elections and with civil society to build broader support for the electoral and peace process and avoid charges of narrow self-interest, including considering specific mechanisms for consensus building;
   
• review progress on implementing the CPA and subsequent agreements, establish mandated committees (and report to the public regularly on their progress) and tackle the gaps in earlier negotiations by initiating discussions on such issues as security sector reform (SSR);
   
• review the role of the NC-led Ministry of Peace and Reconstruction and consider forming an all-party mechanism to oversee the peace deal, backed by an independent monitoring body;
   
• refocus on the constitutional process, developing mechanisms to bring in the public in order to ensure it is meaningful and convince Nepalis elections are serious;
   
• develop a viable public security plan to rebuild confidence in the police, uphold the rule of law and end impunity whether of state or non-state actors and reestablish local government based at a minimum on seven-party and community consensus; and
   
• increase the focus on political inclusiveness, starting by implementing agreements on representation of women, janajatis, Madhesis, Dalits and other groups.

International actors should:

• agree on a common message pressing for a realistic roadmap to elections, offering support and reminding all that international recognition is conditional upon demonstrated commitment to peace and democracy;
   
• UN Mission in Nepal (UNMIN) should continue to clarify its role, improving communication with the public to counter criticism about lack of transparency; and
   
• donors should only support projects with all-party approval and demonstrably in line with peace process goals, including strengthening local governance to contribute to confidence-building and service-delivery to local communities to convey the sense of a peace dividend.

Kathmandu/Brussels, 18 December 2007