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A standoff between Nepal’s prime minister and its president has brought the country to the brink of crisis. The resignation of Maoist Prime Minister Prachanda threatens the survival of a peace agreement between Maoist rebels and the government that ended a decade-long civil war. The Maoists say they remain committed to change through the ballot box and the constitutional order, but hardliners may yet prevail and a bloody battle for control of the nation could resume.

Civil war was both a cause and an effect of Nepal’s status as one of the world’s poorest countries. The vicious insurgency that reduced the government’s effective control to territory just beyond the capital of Katmandu was spurred by a ruling class that was unable to better the lives of the vast majority of Nepalese. The war scared off investment, halted development and ensured that poverty remained the norm. A decade of vicious conflict claimed over 12,000 lives.

The abject failure of the Nepalese monarchy to successfully rule led to peace negotiations. The result was a 2006 accord that brought the Maoists out of the political wilderness and the king’s relinquishing of sovereignty back to Parliament. In parliamentary elections held in April 2008, the Maoists won the largest bloc of seats, propelling their leader, Mr. Pushpa Kamal Dahal, better known as Prachanda, into the prime minister’s office at the head of a coalition government.

Governing has not been easy. Infrastructure remains underdeveloped. Fuel shortages cause daily blackouts, and the inflation rate has reached its highest level in a decade. The breaking point for Mr. Dahal was reached last week, when the prime minister fired Army Gen. Rookmangud Katawal, accusing him of insubordination.

Nepal’s president, Mr. Ram Baran Yadav, countermanded the order, calling it unconstitutional since he is the army commander in chief. Mr. Dahal resigned, saying he had to take that step to save the peace process. He also pledged to work within the parliamentary order.

The prime minister’s real concern is resistance to including former Maoist fighters into Nepal’s army. Some 20,000 of them put down arms when the peace deal was signed, and they were supposed to be absorbed into the military. But the military remains profoundly suspicious of the rebels after fighting them for over a decade. Army brass maintain that the corps’ professionalism would be lost if the guerrillas were included in its ranks. That argument is backed by status concerns: Nepal’s army has traditionally drawn its members from the higher castes, while the Maoist fighters, befitting their roots, come from poorer, rural and lower castes. As a result, the former guerrillas languish in camps.

The issue came to a head when the army recently enlisted 3,000 recruits, but did not include Maoists. That prompted the prime minister to cashier Gen. Katawal, although he maintains that the recruiting had been completed when the government ordered a halt. The prime minister also pointed to the reinstatement of eight brigadier generals who had been ordered retired and the army’s decision to pull army athletes from the national games to protest the participation of former rebel fighters. Gen. Katawal disputed those charges as well, saying the generals returned to service after the Supreme Court provisionally reinstated them and that it was not his decision to pull the army athletes from the competition.

Even if Gen. Katawal is right, the prime minister had little choice. He has come under increasing pressure from hardliners within his own party to end discrimination against his fighters. Overruled by the president and facing the prospect of revolt by his coalition partners and his own party, Mr. Dahal opted for control of his party over a loss of confidence in his ruling coalition. The second largest party, the Nepali Congress, has said it will try to forge another coalition with the moderate Communist UML Party, which left the government after the firings. The chief question is how will the Maoists respond if that effort is successful. While Mr. Dahal has said he remains committed to the democratic process, his party may still take to the streets.

Even if it does not, it retains a large presence in the assembly — 238 of the 601 seats in the National Assembly — and it could use that to deny any government the ability to govern. The next ruling coalition, like the last one, will have to be a large group, and its dynamics will be difficult to manage. The Maoists should be able to exploit those fissures legally, without undermining Nepal’s constitutional order.

That may make sense as a political tactic, but a strategy of making the country ungovernable will only alienate the electorate. Nepal needs stability to develop, which is the cure for its crushing poverty. It is difficult to see how pledges to respect democracy, human rights and the rule of law will count for much if the party’s avowed strategy is to sew chaos. A broad-based coalition government makes the most sense for Nepal. That means negotiations among the major political parties. That spirit of inclusion must also surface in the military. Blatant violations of the peace accord undermine the military’s credibility and legitimacy in the eyes of Nepal’s poorest citizens. Nepal’s friends must push all the parties to do more to honor their promises.

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