Nepal has experienced significant political instability in recent decades, transitioning from a monarchy to a democratic republic. Major democratic movements in the 1990s and 2000s sought to curb the king's power and establish a democratic system of government. However, the country still faces political deadlock and unrest as different ethnic groups demand more autonomy. Ongoing disputes over the new constitution and devastating earthquakes in 2015 have exacerbated Nepal's political and economic challenges.

1. An Overview of Political Environment of
Nepal
Prepared By:- Imran Khan
MBA(SVCET)
September 15, 2015

2. Table of Contents
• Introduction
• Political Structure
• Major Democratic Movements
• Current Political Situation
• Worldwide Governance Indicators
• Major problems faced by Business
• Some Facts

3. Nepal is a small, least developed, landlocked, Himalayan country.
Situated in South Asia between India (East, West & South) and China(North).
Area:- 1,47,181 sq. km
Population-28.12 million(2014)- Hinduism(80.6%), Buddhist(10.7%),
Islam(4.2%), Others( 4.5%)
National Emblem National Flag
Introduction
No major ethnic community; each minority group is dominant in some parts; many
have social and economic relationship and shared culture with other groups as is
common in any multi-ethnic nations around the world. That gives it a complex
formation.

4. Political structure
• Official Name- State of Nepal (independent, indivisible, sovereign, secular)
• Form of state – Democratic Republic
• Head of state-The president, currently Ram Baran Yadav
• The executive-The prime minister, Currently Sushil Koirala is chosen by a vote
of the constituent assembly; the cabinet is chosen by the prime minister in
consultation with his party and any coalition partners.
• National legislature- The Constituent Assembly (CA) has 601 members. Of
these, 575 are elected and 26 are appointed by a Council of Ministers. The
assembly was charged with drafting a new constitution.
• Legal system- The Supreme Court acts as the court of appeal and review, and
has powers of original jurisdiction. It chairs over 16 appellate courts and 75
district courts.
• Divided into Development Regions, Zones, Districts, Municipalities & VDCs but
is in the process to change into states after making of Constitution.

5. 1951 - End of 105 years Autocratic Rana rule.
1990 - Protests to abolish King’s Autocracy
“Panchayat” system , suppressed by security
forces resulting in deaths and mass arrests.
1995 - Start of Maoist revolution for more than
a decade and more than13,000 were killed.
2006- Maoists and the 7 major political parties signed a 12 point
agreement(CPA) to stop armed conflict and collectively fight against the
king's autocracy.
Major Democratic Movements
Bloody war against monarchy

6. Royal Palace Massacre
2001 1 June - King Birendra, Queen Aishwarya and other
close relatives killed in shooting by drunken Crown Prince
Dipendra, who then shot himself.
End of monarchy
2007 December - Parliament approved abolition of 240-year-old monarchy
2008 January - A series of bomb blasts killed dozens in the southern Terai plains,
where activists had been demanding regional autonomy.
2008 May - The first CA was constituted on May 28, 2008, with mandate
to deliver the Constitution by May 28, 2010
2008 May - A Republic, Ram Baran Yadav 1st president.
Current Situations

7. Standoff over Constitution
2010 May - Governing coalition(NC & NCP-UML) and Maoist opposition
extended deadline for drafting of new constitution to May 2011.
2011 May - Constituent Assembly failed to meet deadline for drawing up new
constitution.
2012 May 27 - CA was dissolved after four extensions. Issue was on
federalism & its structure.
2013 November 19 - Election for 2nd time (CA) which will write a new
constitution. Political deadlock as no party won a majority.
2014 January 21 – CA fixed the deadline for delivery of the Constitution as January
22, 2015
2014 February - Sushil Koirala, elected as 37th prime minister (26thPMwithin25yrs)

8. The United Madhesi alliance, and other janjatis tore and burnt the copies of
preliminary draft of the constitution saying that it is not as per their demand.
Tharu minority living in the area demand their own, separate province.
July 20 to now- Madhesi parties and RPP-N started protests in various parts of the
country including bandh and is continue more than 1 month- world record
Ongoing clashes between demonstrators and security persons has resulted death of
more than 2 dozen people
….cont’d

9. Earthquake- Salt on wound
2015 April – Major two earthquakes & series of strong aftershocks hit.
Effects
• Death – Above 10,000
• Injury – Above 22,000
• Post Disaster Needs Assessment (PDNA) report, a total loss of US$ 6.6 billion.
• Poverty is estimated to increase by at 2.5% to 3% .

10. What is Governance?
Governance consists of the traditions and institutions by which authority in a
country is exercised. This includes the process by which governments are selected,
monitored and replaced; the capacity of the government to effectively formulate
and implement sound policies; and the respect of citizens and the state for the
institutions that govern economic and social interactions among them.
90-100th percentile
75-90th percentile
50-75th percentile
25-50th percentile
10-25th percentile
0-10th percentile

11. -0.59 -0.54
-0.47 -0.48 -0.48
-0.68
-0.57
2007 2008 2009 2010 2011 2012 2013
Voice and Accountability
-1.92 -1.84
-1.62 -1.60 -1.42 -1.37 -1.14
2007 2008 2009 2010 2011 2012 2013
Political Stability and Absence of
Violence/Terrorism
Extent to which a country's citizens are able to participate in selecting their
government, as well as freedom of expression, freedom of association, and a
free media.
Reflects perceptions of the likelihood that the government will be destabilized
or overthrown by unconstitutional or violent means, including politically-
motivated violence and terrorism.

12. -0.65
-0.76
-0.94 -0.86 -0.88
-0.99 -0.93
2007 2008 2009 2010 2011 2012 2013
Government Effectiveness
Quality of public services, the quality of the civil service and the degree of its
independence from political pressures, the quality of policy formulation and
implementation, and the credibility of the government's commitment to such
policies.
-0.55 -0.62 -0.70 -0.74 -0.72 -0.81 -0.87
2007 2008 2009 2010 2011 2012 2013
Regulatory Quality
Ability of the government to formulate and implement sound policies and
regulations that permit and promote private sector development.

13. -0.64 -0.72
-0.90 -1.01 -0.95
-0.79 -0.76
2007 2008 2009 2010 2011 2012 2013
Rule of Law
Extent to which agents have confidence in and abide by the rules of society, and in
particular the quality of contract enforcement, property rights, the police, and the
courts, as well as the likelihood of crime and violence.
-0.71 -0.72 -0.65 -0.65 -0.74 -0.83 -0.68
2007 2008 2009 2010 2011 2012 2013
Control of Corruption
Extent to which public power is exercised for private gain, including both petty
and grand forms of corruption, as well as "capture" of the state by elites and
private interests.

14. Major Problems faced by Business
• Interference- Gov’t & Political leaders
• Lack of Finance-complex process
• Small Market- dominated by Chinese & Indian
• Lack of Mutual Trust- Dept, mgmt & employees
• Lack of Efficient manpower
• Lack of Technical Knowledge
• Labor Problems- pressures to fulfill interests
• Lack of Infrastructure- power, transport

15. Some Facts
• GDP growth- 3.0% (2014/15) , 5.1%(2013/14)
• GDP by sector- Agriculture(35%), Industry(20%), Services(45%)
• Labor force - by occupation: Agriculture(81%), Industry(3%),
Services(16%)
• Land- Cultivable(20%), Forest(33% ),Mountainous(47%)
• Inflation (CPI) -7.2%
• Population below poverty line- 25.2%
• Unemployment rate: 38%

16. Discussion
Thank
You