Friday, February 03, 2006

Country On Verge Of Bankruptcy


The Economy and The State: Can It Survive?

The Government and the political parties as well have remained unconcerned since a long time about the economic situation, its direction and the general welfare of the people. Neither they are concerned about the current and emerging burning economic issues of the country. The political parties, and the organizations affiliated with them, can argue that if the political problem- no one can deny that it is the most urgent problem that the nation has to deal with - can be solved, the economic problems need no time to solve with. But our past experiences do not support this argument. The Government at the same tone has not hesitated to argue that a few economic issues have remained unsolved due to time constraint as under the present arrangement it has to handover the Government in the not too distant future to the elected representatives. But few will believe on such argument. A detail study of the measures undertaken by the current regime shows that it has been pursued with an aim to make the present political arrangement permanent. It is a different story that it could not succeed. The twenty one point economic programs issued on February 2 last year, the new economic policies and programs discussed in the current year budget and the recent changes in custom duties will make even the task of next ‘national’ government extremely difficult. The current Government, claimed to have been formed under Article 127 of the present constitution, has no right to pursue policies and programs that have long term implications. Its chief aim should be to handover the Government to the political parties as soon as possible under the current or the new arrangement decided by them, be it the reestablishment of the parliament or the national government formed with the agreement of the national political parties or an all party government established through round table conference that are now under discussion. In the meantime, it should have attempted to solve the existing inconsistencies in the policy and programs, to reduce the existing economic liability as much as possible and handover an economy that is properly functioning. But the dictatorial pattern used to operate the economy has provided little room for satisfaction. On the contrary, it has not only created new problems, but new anomalies and inconsistencies have emerged in the economy.

It needs no emphasis to state that until the political problems are solved and a new order has been adopted by the country, further deterioration in the economy with new problems is difficult to avoid. This will further help to intensify the political problems. The public has shown little satisfaction from the activities of Government which claims to “the end the ‘Maoist’ conflict first to pursue development programs” or that of political parties which “claim development possible only after the end of ‘national’ conflict”. It is generally complained by the public that whatever may the reason or reasons forwarded by both the Government and the political parties it has been designed for their own sectoral end, including a lack of well designed road map for nation development. As a result, the economy is deteriorating at a fast rate since the last four years- per capita is stagnant or even declining, price is rising and the balance of payments problem with major trading partner is deteriorating. In the lack of proper measure to improve the situation, the economy may fall together abruptly. It is, of course, difficult to specify the time. Few of the national and sectoral problems are discussed here:

(A) The gross domestic product at constant price has from 2001/02 increased at an annual rate almost equal to the growth of population (2.5 percent) or even less than that. As a result, real income in per capita terms has not increased. The general public are compelled to support their ever increasing size of the family from a fixed or declining income. The employment opportunities in the country were limited. Now, it is almost nil. The young people are migrating abroad in search of job. It is an open secret that the remittances forwarded by the migrant workers have played a major role in helping the poor people to meet their basic necessities.

The receipts from remittances have been the single most important factor determining the level and direction of economic activities of the country, both at the micro and macro level. A marginal instability in this source will disturb the foundation of the economy and is expected to be more dangerous than the current political problem. The impact of poverty, foreign employment and remittances on the macro economic structure of the country will be more obvious from the following diagram:

The foreign exchange reserve of the banking system has been increasing due to rising receipts from remittances and this source has helped the individual family to increase its consumption in excess of the rise in income. The import, however, has to go up to increase national consumption at a rate higher than the growth in income. This has led to the deterioration in the foreign trade balance of the country but, at the same time, it has been instrumental for the increase in government revenue due to rising receipts from import duties. Thus the receipts from remittances:

have contributed to rise in foreign exchange reserve to finance rising foreign trade deficit;

have been the main factor for the balance of payments to be in our favor;

have been the main factor for the increase in the foreign exchange reserve of the banking system;

it have been the main factor contributing to the growth in money supply;

and the increase in money supply has led to rise the in the resources of the commercial banks with commensurate impact on interest rate on deposit which is less than the rate of inflation.

Thus,

The high and rising poverty and the receipts from remittances associated with it appear to have generated an impression of a self-generating well managed process of the macro economic structure.

This appears to have led both the Government and the Central Bank not to hurry to initiate new policy measures.

The Government may have taken the impression that the economy is well managed.

The political parties have not felt the urgent need to take initiative in the area of economic management.

These processes may have led the general public to take an impression, however false, that the economic development programs have been given no priority with mutual agreement by the Government and political parties. Against this background, the general standard of living of the people has been deteriorating, as discussed earlier, and there have been press reports of the destruction of development infrastructure facilities of the country due to rising political conflict.

Though the nation has now been trapped in the vicious circle of poverty, the Government, if the publication of various survey reports is any guide, has claimed the decline in overall poverty level so much so that the Tenth Plan’s target on poverty reduction has been met three years ahead! The Living Standard Survey conducted in 1995/96 has shown the overall poverty level at that time at 42 percent which was expected to have declined to 38 percent in 2002/03, that is, by the end of the Ninth Plan. The Tenth Plan had fixed a national target to reduce the overall poverty level to 30 percent by the end of the five year plan period or by 2006/07. The second Living Standard Survey conducted in 2003/04 shows a poverty level of 30 percent indicating a decline in overall poverty level by 11 percent between 1995/96 and 2003/04! But few people believe in the official results as none has experienced such situation in the country or day to day life. Neither the Government has changed the official target and programs of poverty alleviation of the Tenth Plan. It has not made either objective investigations for the emergence of a result that the Government itself appears to have difficulty to believe. True, the increase in receipts from remittances as well as the number of family receiving remittances has been a great assurance to the poor people. The impact of remittances on poverty alleviation can not be underestimated or minimized, specially a country like Nepal. But the main question is: Is it a dependable source?

An analysis of the available information indicates that the migrant workers are also eager for finding alternative measures in place of making arrangements for continuous flow of financial resources to the family members back home. Indications are that several migrant workers have called the family members to their place of work and, if possible and necessary, even apply for permanent resident. It is said that several middle income families have, due to long and increasing conflict in the country, taken land for home construction or even bought homes in the nearby small border towns in India. As a result, the land price in such Indian towns has increased recently at an unprecedented rate, though detail research in this area has yet to be taken. But if the available information is any guide, it will lead to sharp decline in receipts from remittances.

(B)The nation has experienced increasing pressure on domestic price from the beginning of the current fiscal year. In the first four months of the current fiscal year price increased at an annual rate of about 28 percent compared with an increase of 2.7 percent in the first four months of the preceding year. A strange but rare feature has emerged in the economy that in the popular terminology is known as ‘Stagflation’, an economic situation characterized by low or even negative growth in real income combined with unprecedented rise in price. Such an unfortunate situation can not emerge in a country in normal circumstances. But Nepal is not under normal situation since the past several years. In particular, it is widely believed, at both theoretical and practical level, that Nepal’s inflation rate is always equal to India’s rate of inflation, given open border and fixed exchange rate between Nepalese and Indian currency. But, at present, Nepal’s rate of inflation is substantially higher than the prevailing rate in India. The domestic factors, for example changes in money supply, have not contributed to this development. It appears that the rate of inflation, defined as continuous rise in prices, has increased mainly due to change in people’s expectation, and is self generating. The people are expecting the price to rise in the coming months due to expected rise in political conflict. As a result, people are buying goods, especially consumption goods, even to hoard and are willing to pay higher price for their purchase. Similarly, as the sellers are also expecting price to rise in the months to come, they will not hesitate to charge higher price. Thus the current conflict which has changed the expectation of both buyers and sellers with respect to market price in the future has generated a inflationary spiral in the country, a situation similar to that experienced by Hungary in the mid- forties when the price increased at an annual rate of one hundred thousand percent per month. It is difficult to predict the direction and level of inflation in the country for the coming months as it depends more on people’s expectation of price formed based on domestic conflict situation rather than economic factors. True, if the people believe that the domestic conflict is not expected to escalate, the inflationary situation will be automatically controlled. It needs no fiscal and monetary measures.

(C) At end October 2005 the foreign exchange reserve of the banking system total Rs. 134 billion out of which the total Indian currency reserve amounted to Rs. 7 billion or 5 percent of the total reserve reflecting deteriorating trade balance with India. At the same time, His Majesty’s Government is committed to maintain free convertibility of Nepalese currency in Indian currency and vice- versa. Under this arrangement, the public authority, in our case Nepal Rastra Bank, has to sell or purchase Indian currency to and from the general public on demand at a fixed rate without any quantitative and qualitative restriction. The banking system needs sufficient reserves of Indian currency to perform this task, but the amount of Indian currency reserves held by the banking system at present is not adequate for this purpose. As a result, the Nepal Rastra Bank has imported Indian currency from India to finance domestic needs. The detail information with respect to total quantity of imports and the form in which it has been imported, that is, how much has been imported by selling convertible currency and how much has been in the form of loan from the Reserve Bank of India is not available. Neither the detail information with respect to policies contemplated, if any, to solve the balance of payments problem with India is available. In particular, the receipts from remittances together with receipts from foreign grant and loan have helped Nepal to maintain comfortable foreign reserve position. As a result, the policy makers have never been serious in initiating appropriate programs and policies in the area of, in particular, foreign trade and exchange rate. Against this background, there may, in the absence of assistance from India, be shortage of Indian currency in the county any time, notwithstanding high and rising foreign reserve. Can Nepal maintain current exchange rate with Indian currency or is it the appropriate rate? Any responsible government can not remain unconcerned to deal with the vital issue like this.

(D) The fiscal situation of His Majesty’s Government is at a very alarming state. Few measures that have been initiated recently, for example, supplementary budget, have added fuel to the fire. In the current fiscal year, the authorities have not cared even to maintain simple consistency and coordination among revenue, expenditure, budget deficit, and the sources to finance the budget deficit. (The policy makers may have tried but failed). Nevertheless, the Government estimate itself indicates that its contribution to development budget would have amounted only 5 percent of the total even if the total expenditure and revenue has been realized as estimated. A detail integrated analysis of the overall trend of government revenue and expenditure until recently, the current economic situation, the expected negative impact of the supplementary budget on government revenue and the new structure of custom duties show an alarming situation: the Government will be financially bankrupt by the end of May/ June. This will be more clear from the following table:

Government Receipts and Regular Expenditure
(Rs. in billion)

Contents Budget Estimate IfDS Estimate
1. Revenue 81.82 76.56 1)
2. Expenditure 89.65 92.05
Regular Expenditure 75.85 75.85
Principal Payments 13.80 14.50 2)
Supplementary Budget (Reduction in custom duties) - 1.70 3)
Deficit (1-2) 7.83 15.49
Internal Loan 11.85 11.85
Current Expenditure (+ Saving), (- Deficit) +4.02 -3.64 4)

1) Based on prevailing growth rate in gross domestic product at constant price, recent economic activities and past trend of the difference between the government budgetary estimates and realization. The government receipts have been estimated using custom duties of original budget. The financial cost of supplementary budget has been shown under expenditure.
2) Including the cost arising from changes in the exchange rate of Nepalese currency.
3) It is expected to be higher than the amount included here.
4) Capital expenditure depends fully on foreign aid in grant and loan for which detail information is not available. It is, however, expected to be very low with commensurate adverse impact on national economic activities.

Even assuming that the government revenue will be 93-94 percent of the revenue, a highly optimistic estimate given current trend, and the full realization of internal loan, the Government will not have resources to fulfill its regular budgetary obligation. This is attributable, among others, to the ad-hoc decision making process of the Government and the expressed desire of the decision makers to change budgetary provisions, including tax rate to make it compatible with their business interest. As the World Bank and the International Monetary Fund have decided not to release additional resources under Poverty Reduction Growth Facility, the Government has no independent resources at its disposal. The situation is deteriorating very fast and will be obvious to all in the not too distant future. It will be a crime against the nation to try to solve this problem by borrowing from the Nepal Rastra Bank by issuing an ordinance. It needs no emphasis to state that financial and economic problems now appear more serious than the political problem. In fact, it is. In the current fiscal year:

The growth in the per capita income will be negative or barely positive. This has been already accepted by the Government authorities. As a result, poverty, especially in the rural area, will increase further and the young people, if possible, with their family will migrate to other countries looking for employment. It is expected that the process of capital flight will increase further.

The inflation rate due to domestic conflict will increase at its own pace but due to open border with India together with fixed exchange rate it can not exceed the maximum limit that, however, is not yet obvious. But price of a few selected goods may exceed the maximum limit and occasional non availability of such goods will be a normal feature. The price of goods that does not have foreign market, for example, land and house price, and that of services will be particularly high. The problem of Stagflation in the country will be more obvious.

National consumption will increase at a faster rate than the growth in income which will further widen the trade deficit due to import of consumption goods. This process will lead to further deterioration in the balance of payments position with India. It will not be possible to maintain exchange rate with Indian currency without the assistance of India. (It is sure that International Monetary Fund will decline to advance credit in Indian currency even for the balance of payments purposes)

The foreign exchange reserve in the current year will increase marginally or even decline indicating emerging problem in the balance of payments. As a result, money supply will increase moderately. The increase in the financial resources of the commercial banks will depend on level and direction of capital flight. The overall situation of commercial banks will be determined more by the non- economic factors, for example, rising conflict, political instability etc.

The current macro economic situation and the problems discussed earlier will generate, after a few weeks lag, adverse impact on day to day activities of individual family. This will further complicate the national political problems. True, children and the young people have dominance in the demographic structure of the country. But these groups, due largely to domestic conflict, high and rising poverty, and sluggish economic performances, have neither proper education nor employment opportunities. Fortunately, many young people have been able to find job outside the country. This has, no doubt, prevented the national crisis from total explosion. But the situation is deteriorating at a very fast rate. It is not a civilized national behavior either to remain satisfied from the migration of young people from the country, and run the economy based largely on the remittances sent by them. We can not avoid or postpone national problem this way. Once the economic problem is exploded as it may, if the current situation is any guide, do so in the near future we will not have long time to deal with the people in the name of finding alternative programs and measures like, say, in the area of political issues. We will not be surprised even if the total anarchy prevails in the country, at least in the selected urban areas. At that time, neither the Government nor the political parties will be able to relax and remain unconcerned as of now. The national identity itself will be at stake. It is necessary to deal in time to check the problem from further deterioration. We request all to take the problem seriously.

Institute for Development Studies is a Kathmandu-based independent
research organisation. Please send your comments to nfea@hotmail.com or
feedback@mos.com.np--Ed.

Thursday, February 02, 2006

My Address To The King


Your Majesty.

I read your speech and also watched it in video. My lingering feeling is either you know something that the rest of the world does not know, or you are flat wrong. You have been trying to play the role of an active monarch. Is that because you think you are more qualified as an individual than the many actors produced by the democratic system, people like Madhav Nepal and Girija Koirala, and the rest of them? Or is it because monarchy is a better ideology and system than democracy? If it is about trying to prove you are a better person to run the state machinery, then you must be the most visible republican in Nepal, because no other system provides a better vehicle to the most qualified individual. On the other hand, if it is to suggest the monarchy is a superior system, you need to at least stop paying lip service to democracy as an ideal.

You keep paying lip service to the ideas of constitutional monarchy and multi-party democracy. A constitutional monarch is not someone who claims "the days of the king being seen but not heard are over," a statement you made and never took back. Someone who believes in democracy is not someone who thinks he can take away the rights of the people at will, and restore them or not. It is very possible you do not understand the concept of democracy.

Human rights are sacrosanct. If a constitution allows for their violation, that constitution is wrong. If there is some clause in some constitution that allows for their violation, that clause is wrong. If an activist king presides over their violation, that king is wrong. Nepal has the worst human rights record of possibly any country on the planet. You are as wrong as wrong can be.

You pay lip service to peace. But you act like you need an indefinite war. You have spoken against the possibility of a military solution to the insurgency, yet you lack the will, the mindset, and the skill to seek a political solution, and have done all you can to sideline the people in the country who have both the political skills and a clear roadmap to seek and get a political solution.

Your words do not match your acts, and your acts stink.

How much more pain do you expect the country to go through before you will come to your senses? Your words on your love for your country are as believable as your words on peace, democracy and constitutional monarchy. You act like one of those butterfuly collectors who so love them that they kill them. If you do love Nepal, you sure don't know how to express that love.

If you truly believe in constitutional monarchy and multi-party democracy, you have had the option to bargain for a constituent assembly that looks at all issues except a constitutional monarchy that no longer commands the army, the guarantee resting with the Supreme Court. But it has been beneath you to hold dialogue with the political parties and their leaders.

Like a virus might mutate, so can autocrats. You are just an autocrat who has adapted to the 21st century. Your actions lead one to believe that.

Democracy as practiced in Nepal during the 1990s had many problems. I am one of its fiercest critics on record. But for you to come out to criticize that democracy and then to displace it is autocracy. Welcome to the concept of constitutional monarchy. Democracy is a self-correcting system. The people can and do and will vote out the non-performers. But autocrats like thyself force themselves on the people "through the barrel of a gun."

Violence is not a legitimate political weapon, and a communist republic is not an option. So either you eliminate the Maoists or bring them into the mainstream. Elimination does not seem to be an option. The Maoists have grown by leaps and bounds on your watch. Even if elimination were an option, obviously you do not seem to have the qualifications to implement it. The Maoists have professed to disarm, and they have professed to accept a multi-party framework. They have taken the lead on the political solution option. Where have you been?

Instead it is you who has consistenly used violence as a political weapon, it is you who has maligned democracy every twist and turn. The parties have been for a multi-party framework, the Maoists used to profess a one party framework, but you symbolize the no-party option. You go one step beyond what the Maoists used to be.

Six of the seven parties in the alliance have not yet come out for a democratic republic. Many think if the constituent assembly elections were to be held today, a ceremonial monarchy would be retained. Obviously you don't want that.

Another option would be for you to bargain and get a ceremonial monarchy that does not get to become a topic with the assembly. Obviously you don't want that either.

What you want is a king who commands the army, and who gets to keep the threat of a distorted Article 127 hanging over the entire polity, and is thus really an executive monarch. You are not going to get it. The sooner you realize that, greater the chances the monarchy will be retained in some form. Yours is a race against time. You are bound to lose it. The best you can do is postpone it. But that is a lose-lose proposition for you. Because the longer you succeed in postponing it, greater the hurt you inflict upon the monarchy. Your crash and burn course leads to a republican Nepal. And if you continue down the path, the debate might no longer be if or not a republican Nepal, but how to end the monarchy. Some endgame scenarios do not look at all pretty.

I believe in non-violence and democracy and rule of law. Those are my suggested parameters to the democracy movement in Nepal. But you have not played by the rules. People you have made suffer might choose not to play by them either.

So why not skip all that and talk reason? You live in a bubble. Your TV appearance tells me that more than anything else. You are so detached from reality, it is not even funny. It is not possible you lack information. I am sure you have internet access and access to at least as much information as I do. So what seems to be the problem is your mental paradigm, your prism through which you look at the world. You have the tendencies of an autocrat. That is my diagnosis based on your public words and actions since you ascended to the throne. The past year especially has been a total failure for Nepal on all fronts. The country is on the verge of a bankruptcy.

You are not even willing to talk to the parties. That tells me as much as I need to know about you. Your idea of dialogue with the Maoists is that they surrender, and the parties that they come to your roadmap. Through such suggestions you project a proposed master-slave relationship that might be your fantassy. Monarchism is an ideology after all, and you seem to subscibe to it.

You might force the political parties through a long, hard struggle, but you don't have it in you to defeat them. For it is people power that speaks.

May you come to your senses and soon. Through my private channels I had come this close to calling up your foreign minister. I wanted to open up possibilities of talk. But your speech convinced me there is no point. You are not exactly in a mood for dialogue. You seek confrontation, and that is what you will get. The democracy movement can not be repressed. And if pushed too far, the common slogan will no longer be a constituent assembly but a democratic republic.

February 8 has been a gift from you to the democratic camp. It has further intensified the bipolarization in the country, and has exposed your regime to the world. The downfall of your regime will start soon after. Democracies have elections, but only elections do not a democracy make. Human rights make democracy. What you are offering is mock-democracy.

Hoping still for dialogue and a peaceful resolution, but fast losing patience.

Paramendra Bhagat
Brooklyn, NY

February 1 New York Rally Photos
Conspiring Against Democracy Is Treason And Can Be Legally Punished
February 1, 2006 Royal Proclamation
Non-Violence All The Way
One King Is Six Blind Men
RNA To Deliver Mail


PROCLAMATION TO THE NATION FROM HIS MAJESTY KING GYANENDRA BIR BIKRAM SHAH DEV

(February 1, 2006)

Beloved Countrymen,

It is now a year since the decision was taken to restore law and order and activate the multiparty democratic polity in the country in keeping with the nation's needs and the people's aspirations. A rresting a situation that was slipping into anarchy and reactivating a stalled democratic process has not been easy. Yet, given the commitment of our patriotic countrymen, all the Nepalese people have experienced the nation grow in confidence and the self-respect of the Nepalese people restored within a short span of one year, with the cloud of pessimism dissipating . We are confident that, remaining alert to the sensitivities of the self-respecting Nepalese people and our glorious ever independent history, we will be able to ensure for the nation peace, stability and prosperity within the next one year through mutual understanding and with patriotism as the focal point. We believe that a road-map to sustainable peace and reenergising a meaningful democracy are two sides of the same coin. We are confident that a road-map of consensus will forever end all possibilities of resurgence of violence and terrorism in our motherland, which will otherwise put at risk the universally acclaimed multiparty democracy and hurt the self-respect of Nepal and the Nepalese people. Guided by a national perspective that upholds our political, administrative and civic traditions, we are confident that by April 2007, all popularly elected bodies will be active in ensuring a bright future for the Nepalese people through a dedicated exercise in democracy so as to create a welfare society.

The nefarious designs to portray Nepal as a failed state a year back has now begun to unravel with acts of terrorism being limited to petty crimes. The elected government not only dissolved the popularly elected village, municipal and district bodies but also at the national level. The process of activating multiparty democracy and Constitutional Monarchy has now begun with the people exercising their franchise to reinstate these bodies for which the elected government had failed to conduct elections in spite of being given repeated opportunities. The people are determined to ensure the success of the municipal elections currently underway. In fact, the freedom to exercise one's vote through adult franchise forms the democratic basis for a honourable national consensus. Democracy flourishes only through the enfranchisement of the people and democrats are never losers when democracy is upheld. Therefore, the first and foremost preconditions for consolidating democracy are to gain the support of the people through the ballot and respect their mandate. In keeping with these universally accepted democratic principles, the process to reinstate all the elected bodies through free and fair elections has been initiated. We are confident of the active participation of all democrats who have faith in the people's democratic rights. Democratic norm dictates that, while upholding the people's rights, their confidence can be won only through participation in the democratic process.

Beloved Countrymen,

With efforts to initiate a meaningful exercise in democracy in keeping with the accepted norms, measures are also underway to improve public service utilities for the benefit of the people. As the bureaucracy has been freed of political pressures and discipline instilled among them, criminal activities under political patronage is now under control. The ongoing fiscal and administrative reforms will be implemented in a more effective manner. Rule of law alone will ensure good governance. As long as corruption, which has proved to be a parasite to our society, is allowed to spread its tentacles, a system of governance as aspired by the people cannot be ensured. More effective measures will be adopted to realise the commitment to maintain fiscal discipline. The concept of Land Bank will be effectively implemented to make available land to the landless, agricultural tenants and freed bonded labourers. Internal and external investments will be mobilised to accelerate the pace of economic development, increase employment opportunities, improve transport infrastructure and attain self-sufficiency in the energy sector through optimum utilisation of water resources. An effective integrated policy must be adopted to initiate development activities that have direct impact on the people. A conducive environment exists to utilise the opportunities created by information technology in the economic development of the country. Likewise, the role of the service sector is also increasing in importance. In this context, special programmes will be introduced to create opportunities of self-employment within the country for talented youths. Measures will also be adopted to train those youths going abroad for employment so that their skills and abilities are duly recognised.

The Nepalese are well aware of the fact that character without any moral foundation, politics indifferent to national pride and a form of governance bereft of the people's confidence will neither benefit the nation nor the people. They also know that politics will not have the strength to inspire the people and overcome challenges if it is tainted. It is our belief that multiparty democracy cannot be made meaningful in the absence of significant popular participation in governance, effective decentralisation of authority in the village, municipal, district, zonal and regional levels and maximum autonomy to elected local bodies in the formulation and implementation of development projects.

Democracy can be adopted into our way of life only if we are prepared to have faith in the people's abilities and the elected representatives. To achieve this, guidelines will be formulated in a transparent manner through collective wisdom and reflections based on experiences and aspirations. Appropriate measures will also be initiated to convincingly address, in the greater good of the nation, grievances regarding indigenous people as well as discrimination relating to regional and other issues. Contributing to efforts aimed at the general welfare of the people alone can ensure the collective well-being of the Nepalese. The nation can be freed from the clutches of poverty and made prosperous only through the collective participation of all. We are confident that all Nepalese, conscious of their national pride, will make significant contributions from their respective places towards the success of the pro-development strategies currently being implemented. While history will be the sole judge of an individual or a generation, it should be our endeavour to ensure that the present generation of Nepalese is given due credit.

Beloved Countrymen,

Nepal 's foreign policy is now clear and stable. Our foreign policy and relations are solely guided by how best to serve and protect our national interest in a rapidly changing world. This has restored Nepal 's prestige and credibility in the international arena. Nepal desires friendship with all and is always ready to cooperate for mutual benefit. Nepal has malice towards none and is ever alert in ensuring that her territory is not used against any friendly country. Nepal is ever ready to have mutually beneficial fruitful relations with both her neighbours. This policy remains unchanged. To act as a catalyst in enhancing economic ties between her two neighbours, Nepal is preparing to be the transit point between them. Nepal 's role as a transit point will contribute to the welfare of Nepal , India , China and the region as a whole.

Nepal has unflinching faith in and is totally committed to the principles of human rights. It is in this spirit that our country has adopted the policy of institutionalising the promotion and protection of human rights and rectifying its shortcomings. It is not easy for a country combating terrorism to strike a balance between the compulsions of national security and upholding the rights of the citizens - this is a reality faced by all democratic countries afflicted with the scourge of terrorism. But it is our strong belief that the people must be allowed to exercise their democratic rights in a peaceful manner, with due consideration to national security.

The Nepalese people desire for sustainable peace. This was clearly spelt out to us when we had direct contacts with our beloved people during our recent visits to various parts of the Kingdom. The vigilant Nepalese have well understood the conspiracy to foment further acts of terrorism in the name of momentary cessation of violence. If those who have gone astray wish to rejoin the mainstream of peace and creativity, democracy and coordination, and if they wish to dedicate themselves in the service of the people through the ballot, abjuring their murderous acts against the nation and people, we make it clear that they will be given the security and opportunity necessary to shoulder the responsibilities of governance in their capacity as the people's representatives, having won the people's confidence through the universally accepted democratic exercise. The people can be won over only through peaceful political and constructive activities. Activities like disrupting peace, encouraging discord and creating hurdles on the road to rapprochement in the name of democracy will benefit none. Let us, therefore, unite, with patriotism as the focal point, in dedicating ourselves to the people's welfare and initiating a new chapter in the exercise in meaningful democracy. We wish to emphasise that all differences can be resolved within the framework of the Nepalese patriotic tradition in keeping with the Nepalese psyche, which has never had to put up with subjugation throughout history.

Beloved Countrymen,

We have always, single-mindedly and with determination, strived to fulfil our beloved people's aspirations in the greater interest of the motherland. We have no desire other than the Nepalese people's welfare and the responsibility towards Nepal 's glorious history. While utilising the indestructible synergy constantly spouting from the fountain head of patriotism, it will be in the interest of the nation to uphold, with utmost dedication, the glorious history of the Kingdom of Nepal . The success of this alone will keep the nation secure and ensure a meaningful democracy for the people.

A clear decision was made for the country last year. Today, let us, once again, pledge to achieve this national goal. The Nepalese are determined to see a peaceful, prosperous and democratic Nepal in tune with the 21st century. The essence of Nepal 's glorious history is the fact that the Nepalese people themselves determine Nepal 's national agenda in the interest of the country and their own.

Patriotism is the only means of creating a democratic society. We, therefore, call upon all Nepalese to consign mutual recrimination to the bitter past and build a secure and prosperous future for the nation and people, while upholding democratic norms.

May Lord Pashupatinath Bless Us All.

Jaya Nepal.

In The News

Home Minister Thapa visits Tansen; NHRC launches probe on Maoist attack NepalNews
Two killed in eastern region, ward chairman seriously injured
Nepal may face bankruptcy within three months : IfDS
Rights activists refuse to accept 90-day detention order
Destruction of Palpa: Photos speak for themselves
Pro-democracy demos in Hong Kong, Sydney, Brussels and London
Family members of Palpa CDO urge for his release
No progress towards return to democracy: Javier Solana
Maoists do not have policy to target election candidates: Mahara
Govt's decision to locate polling stations in schools worries UN
Political division between King and parties encouraged Maoists: Admiral Fallon

Nepali diaspora observes ‘Black Day’ Kantipur Publications
Govt urged to refrain from using schools as ballot centers
Wife appeals for the release of CDO
Senior US Admiral stresses on King, parties reconciliation
Allow people to exercise their rights: AI
Voting mandatory for civil servants
Improvement in country’s situation in last one year: King Gyanendra
देशभर धरपकड
१० सुरक्षाकर्मीसहित १९ को मृत्यु
बर्दियाका निर्विरोध सबैलाई भारत लगियो
हिमालको नयाँ समाचार साइट
भिडन्तको त्रासमय रात
धनगढीमा फायरिङ
शाही घोषणाविरुद्ध देशभर प्रदर्शन
सभापतिको घरमा विस्फोट
उम्मेदवारी फिर्ता जारी
नेपाल भेट्न राजदूतलाई रोक
उम्मेदवारको घर जलाइयो
कार्यकर्ता नजुटेपछि मन्त्री ब्यारेकबाटै फिर्ता
असत्यमा आधारित सत्ता
प्रत्यक्ष शासनको जात्रा
अधिनायकवाद आतंकवादको आधार
शाही कदमको एक वर्ष
Maoists raid Palpa
Reality check on Royal address
‘Royal address continues autocracy’
500 arrested nationwide
‘Terrorism’ limited to petty crimes: King
The War Prayer
King's proclamation to the nation

"राजा, नयाँ राजनीतिक सिद्धान्त दिनसक्ने दार्शनिक होइनन्" Shambhu Thapa Himal

Nepal King faces EU, US criticism The Statesman, India
Nepal's rebels continue attacks despite king's claim of improved ... Canada.com
Mayoral Candidates' Homes Bombed in Nepal Washington Post
NEPAL: Testimony by a victim of torture at the hands of the army Reuters AlertNet
Delhi eye on Nepal-China ties
The Statesman, India
Nepal prepares to be transit point between China, India Xinhua
Nepal's local polls to go ahead: King Gyanendra Zee News
Students in Nepal burn effigy of Manisha Koirala
Hindu, India
Over 50 arrested, leaders' phone lines remain snapped in Nepal Zee News
European Union asks Nepal king to call ceasefire
Times of India, India
Demonstration before EU on Nepal turmoil Hindustan Times
One year later, Nepal King pats own backs as violence continues Indian Express
Maoists' trail of death, destruction in western Nepal NewKerala.com
Maoists bomb hospital and houses of poll candidates in Nepal
Monsters and Critics.com, UK
NEPAL: Interview with the editor of the Nepali Times, Kunda Dixit Reuters AlertNet
Nepal: journalists and demonstrators arrested and beaten by police AsiaNews.it
United Nations Rights Office Blames All Sides for Suffering in ... Voice of America
Nepal-Bihar border to be sealed for polls
Hindustan Times, India
NEPAL: Confronting human rights violations
Reuters AlertNet, UK
NEPAL: Interview with human rights activist, Subodh Pyakhurel Reuters AlertNet
NEPAL: Interview with the Royal Nepalese Army's former spokesman ... Reuters AlertNet
RNA firm to maintain peace, security during polls Gorkhapatra
NEPAL: Decades of damage to education
Reuters AlertNet, UK
NEPAL: Food insecurity and market access in contested districts Reuters AlertNet
NEPAL: Testimony by a victim of Maoist torture Reuters AlertNet
NEPAL: Interview with United Nations Resident Representative in ...
Reuters AlertNet, UK
NEPAL: The conflict's dangerous impact on health services Reuters AlertNet
Amnesty urges Nepal to free activists
Aljazeera.net, Qatar
As Nepal economy weakens, one export grows: people Gulf Times

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