For nearly a decade, from the declaration of Maoist ‘people's war’ in January 1996 to the formation of new alliance for the restoration of democracy in December 2005, Nepal has experienced a three-way power struggle between Maoist insurgents who want a republic based on egalitarian principles, elected politicians who want an unfettered role in policy making and a monarch bent upon a return to pre-democratic Nepal. This article attempts to explain this crisis from a structural-historical perspective and argues that fundamental to the understanding of this crisis is the state-society relationship. The article contends that the complex use of the constructed Hindu identity to provide cultural legitimacy to the monarchical political order, that has existed since the inception of the state in the 18th century to the democratic revolution in 1990, has contributed to the political alienation of substantial segment of ethnically, socially and economically marginalized population from the Nepalese state. By examining complex interactions among political and economic factors, this article further contends that the unrepresentative process of state formation and the tradition of governance have contributed to the alienation of the citizens from the state and created a political space for violent rebellion and state terrorism undermining fragile but emerging democratic institutions.
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