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The confusion in Nepal’s political situation appears to have been settled at least temporarily. But the future prospect is not necessarily transparent. Large-scale strikes and protests punctuated with violence have forced the increasingly isolated King Gyanendra to reinstate the dissolved Parliament. He has given up direct rule, which had continued since February 2005, surrendering power to the country’s seven-party opposition alliance.

The king appointed former Prime Minister Girija Prasad Koirala, head of the country’s largest party, the Nepali Congress, as new prime minister. The seven-party alliance hopes to eventually initiate a process for electing a constituent assembly to write a new constitution. But Nepal’s political forces are likely to have a difficult time in deciding the final shape of a new constitution.

Nepal’s Maoist rebels, who are believed to hold a key to the Himalayan kingdom’s public security, have declared a three-month halt in attacks. While most of the seven-party force wants to constitutionally limit the role of the monarchy, the rebels want abolition of the monarchy. It is unclear whether the Maoist rebels will disarm themselves and agree to cooperate with the new government.

Nepal has been a constitutional monarchy since a popular uprising in 1990. The emphasis was on the constitution during the reign of King Birendra, the brother of King Gyanendra. Birendra and most of his family were murdered in 2001 by the then crown prince, allegedly addled by drink and drugs and angered that he could not marry the woman of his choice. When King Gyanendra ascended to the throne, he made it clear that he was skeptical about political parties and that his rule would put emphasis on the monarchy.

While talking up democracy, he consolidated his power. He eventually seized power in Nepal in February 2005, arguing that the political parties were corrupt and inefficient. Most significantly, they had proved unable to defeat a Maoist insurgency in the countryside that has claimed some 13,000 lives over a decade. The king asked for three years to regain control of the country, but in the intervening period the situation has only gotten worse. The king was able to arrest political leaders and play political parties off each other, but he proved even less capable of combating the guerrillas and their influence spread until the government could only claim to effectively control the capital, Katmandu. (The rebels are still a small force; while they can strike at will, they cannot hold territory.) The king came to be viewed by many Nepalese and most foreign governments as the greatest obstacle to peace and development in Nepal.

The opposition finally coalesced earlier this year, when the seven political parties began mass demonstrations against the king. Tens of thousands of Nepalese defied bans on political protests and mass arrests and they have continued daily. A heavy-handed police response to demonstrations resulted in more than a dozen deaths and yet more protest. The opposition has escalated its tactics and called on the public to stop paying taxes and utility bills, and to boycott businesses owned by the royal family. The strikes have spread to include the middle class, students and professionals.

As a result, Katmandu has been virtually shut down. Fuel shipments to the city were cut off, and the prices of ordinary commodities and food skyrocketed. The economy more generally is threatened with collapse. The guerrillas have exacted a toll in the countryside, but the unrest has accelerated the economy’s decline. Reportedly, some 70 percent of small businesses have closed down in the first eight months of the current fiscal year. Tourism, the country’s second-largest source of foreign exchange is down by almost one-half since the king came to power. The opposition parties have called on foreign Nepalese, who officially send back $1.2 billion annually and are thought to remit another $1 billion through informal channels, to stop the aid. There once were predictions that the government could be bankrupt by June.

Sensing a need to compromise, King Gyanendra has called for elections, but there was too little in the proposal to win opposition support. Instead, the protests have escalated and the country teetered even closer to the brink.

To force the king’s hand, even foreign governments started sending a message. With Beijing, Delhi and other key sources of external support backing compromise, the king’s room for maneuver shrank. All governments that seek peace and democratic rule in Nepal must cooperate. If the situation stabilizes, aid and assistance will be forthcoming. A genuine peace process would bring the Maoists into the political discussions as well. Only then can Nepal escape the grinding poverty that haunts its citizens and rejoin the international community.

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