This is an editorial from the NYT on 15th April...
Is Nepal really turning into a failed state? Let the debate begin...
What do people think about this?

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A State on the Verge of Failure

The last thing the world needs is another failed state in south Asia, but that is what threatens to emerge in Nepal, where a spiraling conflict between the army and insurgents has taken a turn for the worse. When King Gyanendra dismissed the government, arrested opposition leaders and suspended civil liberties on Feb. 1, he said the government had failed to use the army effectively against the rebels. But by attacking the moderate political center, the king made peace more remote. The countries it depends upon for aid, led by the United States, should step up pressure on the king to reverse himself.

At the root of Nepal's anguish is some of the world's deepest poverty and a monarchy that seemed happy to allow the misery to endure. In 1990, the country gained a measure of multiparty democracy, but in 1996, leftists began a brutal insurrection that has killed more than 11,000 people.

It has long been obvious that there is no military solution to the insurgency. In any case, Nepal's army is too busy rounding up demonstrators and censoring the news media. The rebels will have to be brought to the negotiating table by a legitimate representative government, which could then tackle the hardship that feeds the insurgency.

Among the countries that supply aid amounting to 60 percent of Nepal's national budget, Britain and India have said they will not supply further military aid until the king restores democracy. The United States has failed to do so, justifying that support as part of the antiterrorism campaign. The losers are the people of Nepal, who deserve better.