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By Jo Johnson - The Financial Times
Every time Paras, Nepal's unpopular crown prince, leaves the royal palace in Kathmandu, he unwittingly pushes the Himalayan kingdom a step closer towards a republican revolution. When his bodyguards menace people in bars, when he blocks traffic in the capital so he can roar around on a Harley-Davidson flanked by gun-toting outriders and when he shows himself to be indifferent to the miseries of a people caught up in a lethal war between security forces and Maoist insurgents, he is an anti-model for the dynastic principle. Nepal is a feudal society but, as the cartoons in the daily papers show, traditional respect for its god-king is crumbling.

King Gyanendra, who threw out Nepal’s government and seized absolute power last February, has more urgent concerns than bringing a wayward son and heir to heel. He is facing an unprecedented threat to the throne he inherited from his murdered brother after the royal massacre of 2001. A new alliance between Maoist fighters and a coalition of seven political parties has left the palace isolated.

On November 17, the Maoists and the parties, after meeting in New Delhi, announced they had agreed on a 12-point “understanding”. It called for a conference of democratic forces that would form an interim government, followed by elections to a constituent assembly. What role, if any, would be left for the king is vague. By bringing the Maoists into the mainstream, the alliance damaged the king’s legitimacy, proving that where his autocratic repression had failed, multi-party politics could succeed.

The agreement marked the moment at which the Maoists prepared to trade their gains on the ground for a negotiating position in the design of a new constitution. The rebels launched their uprising against a "feudal" monarchy in the name of oppressed castes, women, indigenous tribes and other disadvantaged groups in 1996. Since then, at least 12,000 people have been killed, mostly villagers. The Maoists now control more than 75 per cent of the countryside and have established their own rule in many areas, leaving the royal writ to run only in the Kathmandu valley and provincial capitals.

"In the popular imagination, we’re already living in a post-monarchical situation," says Hari Sharma, director of Social Science Baha, a think-tank in Kathmandu. Nepal has not yet reached that "moment of madness" that would enable it to sweep away the monarchy, he says, but such an event is no longer inconceivable. "The popular press no longer venerates the king and he has not realised the significance of the radicalisation of the popular imagination. Nor has he understood that the parties have tremendously radicalised their agendas too because they want to address the fundamental issues raised by the Maoists."

In the coming days, parties and Maoists plan a final push to force the king to cede power and restore democracy. The crunch may come soon. Pro-democracy protesters are threatening to disrupt municipal elections that the king has called for February 8. Political parties that represent around 90 per cent of those elected to the last parliament are boycotting the polls, which they claim are a transparent attempt by the king to legitimise his power-grab. The Maoists, who yesterday ended the unilateral ceasefire they had declared on September 2 but renewed their commitment to the 12-point agreement with the parties, have vowed not to let the elections take place. The Royal Nepalese Army (RNA), loyal to the king, is looking nervous.

"Our desire is to have a republic in Nepal, but that depends on our ability to mobilise the people and create a tsunami that sweeps away the monarchy," said Madhav K. Nepal, leader of the Communist Party of Nepal (Unified Marxist-Leninist), one of the political parties that agreed the joint programme with the Maoists.

Other parties in the alliance, which spans a broad range of opinion, are more cautious, however, and the agreement itself nowhere mentions the word "republic", preferring the deliberately ambiguous phrase "absolute democracy” that leaves scope for a constitutional monarchy. The Maoists are resolute in their calls for a republic but it is thought they may settle for a purely ceremonial role for the king if other core demands – such as land reform – are met.

The parties believe that with the Maoists, who have in the past killed their local workers, now on their side and permitting their activities in rural areas, they can capture the peace ticket and bring unprecedented numbers out on the streets in pro-democracy demonstrations. In the best case, they hope this pressure will force the king to open negotiations with constitutional forces, ending a period in which he has marginalised the parties and recreated a medieval-style absolute monarchy modelled on the rule of King Mahendra, his father. In the worst case, they fear he will ruthlessly deploy the RNA against his own people.

"The people are rising up slowly, slowly, and it looks like this is a grand finale," says Kailash Sirohiya, managing director of Kantipur Publications, publisher of the Kathmandu Post, a leading English-language newspaper, and owner of an FM radio station whose transmission equipment was recently confiscated. "The November 17 agreement has made people believe the parties will be strong enough to do whatever they want and that the king’s options are shrinking. The Maoists are ready to join the mainstream if there is a commitment to complete democracy, with the king accepting a purely ceremonial role. But he is not interested in a purely ceremonial role. I'm afraid as to what will happen once the truce ends. There will be big, big bloodshed when they try to disrupt the elections."

What happens next in this mountainous Hindu kingdom has a geo-strategic importance that extends far beyond the Kathmandu valley. India and China, the two giants that lie on its southern and northern borders, both have significant interests in Nepal. While no one expects that Nepal will lead to another conflict between the two emerging economic giants of Asia, who briefly went to war over a border dispute in 1962, there is certainly the potential for it to become a very real source of friction.

For New Delhi, the key issue in Nepal is water but there are many others. As the lower riparian country, India has a strategic interest in ensuring the stability of the Himalayan sources of some of the subcontinent’s most vital rivers, among them the Ganges. Chronically short of energy, India also has a keen interest in developing Nepal’s underexploited potential to generate and export hydro-power. A third worry, of particular concern to the Indian government’s Communist coalition partners, is that a Maoist victory in Nepal would be a shot in the arm for Naxalite and other hard-left movements that are gaining ground in poor states such as Bihar, Uttar Pradesh and Andhra Pradesh.

Beijing has a different set of concerns, principally related to worries that instability in Nepal would threaten China’s grip on Tibet. Just as a Maoist victory would encourage Naxalism in India, China fears that Nepal could become the base for anti-Chinese radicalism in Tibet and boost pro-democracy forces in Lhasa. Such activity, it worries, could be fomented by India or the US, whose Central Intelligence Agency is believed to have played an important part in backing a Tibetan resistance movement in the late 1950s and early 1960s that operated out of Mustang, a remote area of Nepal that juts into Tibet. Such concern has led Beijing to look sympathetically at the king as a bulwark against instability and pro-democracy forces.

King Gyanendra has skilfully played India and China off against each other, reviving a cold war tactic his father used to great effect in the 1960s. Days before the February putsch, for example, King Gyanendra curried favour with Beijing by shutting the Dalai Lama’s cultural office in Kathmandu. In doing so, he has successfully divided the international community. Whereas India, the US and UK have tried to put pressure on the king to restore democracy by cutting off supplies of lethal weapons to the RNA since February, China has made no such commitment. Indeed, it has actually undermined this international effort, much to Indian, US and UK irritation, by recently supplying 18 truckloads of arms and ammunition.

"Frankly, if this place deteriorates dramatically it’s going to affect Chinese interests pretty heavily," says James Moriarty, the US ambassador in Nepal. "If we have a Maoist state here exporting revolution, everyone in the neighbourhood is going to face difficult decisions."

For King Gyanendra, the decision to play his "China card" is a last-ditch and desperate attempt to exploit divisions within India over the wisdom of squeezing the king militarily to get him to restore democracy. The Indian government is under pressure from its military security advisers to ease up on the king and help their fellow officers in the RNA, many of whom will have trained in India, in the fight against the Maoists. India and Nepal, they point out, share a 1,750km porous border. At the same time, cultural ties between the palace and India’s princely aristocracy and the support of Hindu nationalist groups for a monarch claiming direct descent from Vishnu make New Delhi sensitive to the criticism that it is leaving the door open to creeping Chinese influence.

"Many in India still remember the 1962 'stab in the back'," says Kundar Dixit, editor of the Nepali Times, a weekly newspaper, referring to China’s invasion of India. "Nepal played China and India off against each other, getting aid from each and letting the Chinese build highways right down to the Indian border. The king uses that fear to tweak India and it works brilliantly."

For the moment, as Keith Bloomfield, the UK ambassador to Nepal, puts it, there is still support for the king in western capitals but it is no longer given "unconditionally". If the king continues to be seen as an obstacle to peace – by refusing to reciprocate Maoist ceasefires and by refusing engagement with the parties – and persists in travelling down an autocratic path diplomats believe will ultimately lead to a complete Maoist takeover of the country, India, Britain and the US could shift from a position of officially supporting the monarchy to one of letting the people decide.

"That is not yet our position, but it could be," says one top western diplomat. Whether Crown Prince Paras can hear their pleas over the roar of his Harley, though, is hard to tell.

Bhutan's monarch sets a peaceful example to a fractious neighbour

If Nepal’s King Gyanendra is looking for advice on how to preserve his throne, he could do worse than to look at neighbouring Bhutan, another landlocked and mountainous country wedged between India and China.

In mid-December, King Jigme Singye Wangchuck, Bhutan's absolute monarch, announced that he would hold the country’s first national democratic elections in 2008 and hand over a constitutional monarchy to his son, the crown prince. By deciding to pre-empt demands for democracy, the Bhutanese kinghas displayed great wisdom. Such is his popularity that public enthusiasm for his new democratic constitution, now under discussion, has so far been minimal.

Last week, the Bhutanese Crown Prince felt compelled to embark on a national tour to reassure people the monarch would continue to play an important role in Bhutan, despite the transition to democracy.

The contrast with Nepal is stark. Nepal's monarchy gave up absolute rule and handed power to political parties in 1990 after 50 days of street protests, but backtracked in February 2005 when the king seized power and sacked the government.

Like Nepal, Bhutan has also provided China with an opportunity to tweak India’s nose this winter. In late December, Indian newspapers reported that 300 Chinese troops had made an uninvited incursion into Bhutan to build roads and bridges.

Rattled by the development, the tiny kingdom informed New Delhi, discussed the matter in its parliament and told Beijing it had violated the 1998 Sino-Bhutanese treaty of peace and tranquillity. Relations between the two countries are now tense, with Beijing uneasy about the arrival of democracy on its southern flank. Bhutan, like Nepal, borders the Tibet region of China and fears Chinese claims on it. Three similar Buddhist kingdoms – Tibet, Sikkim and Ladakh – have disappeared as independent states. As a result, Bhutan for years had a deliberate policy of isolation, fearing outside influences would undermine its system of government.

The 50-year-old king, who has wielded absolute power since the age of 16 with a philosophy of maximising "gross national happiness" rather than domestic product, has not made clear how much power his successor will retain in the new framework.

The draft constitution provides for two houses of parliament – a 75-member National Assembly and a 25-member National Council. The king will remain head of state but be impeachable by two-thirds vote.

Taking advantage of blistering Sino-Indian growth, however, will require Bhutan to throw open its economy. This process has started modestly with the development of a tightly controlled tourism industry.

While economic growth is considered important, Bhutan is deeply concerned with preserving its culture, environment and identity and has let its economic development be guided by GNH.

As a result of prudent macroeconomic management, development of hydropower resources and donor support, Bhutan has made good economic progress with GDP growth averaging 8 per cent over the past five years, according to the World Bank.

Living standards have risen rapidly since Bhutan began a modernisation drive in the 1960s. With an average per capita annual income of $720, Bhutan’s 830,000 population is the richest in South Asia. Nepal’s 28m – on $260 – are the poorest.

With its economy ravaged by war and dependent on remittances, Nepal is far behind but its potential, in hydropower and tourism, in particular, leaves scope for optimism.

"Nepal has the potential to be the first middle-income country in South Asia if peace is restored," says Sultan Hafeez Rahman, country director of the Asian Development Bank.

Courtesy: Finacial Times - 2 February 2006