May 12, 2007: The country is falling apart. In the south, ethnic Indians continue to clash with government forces and Maoists. In the west, renegade Maoists refuse to give up power they have seized in rural areas. The Maoists are demanding a republic (the removal of the king) this year, and are threatening to resume fighting if they don't get their way. The current parliament is dominated by leftist politicians, but the population is not. It's a classic "rural versus urban" situation, with the possibility of civil war, if a mutually agreeable compromise is not worked out.

May 10, 2007: Some 40 percent of fuel shipments to Nepal have been cut, because the Nepalese state fuel company has been unable to pay $90 million owed for earlier shipments. The crises developed because the government sets the price, of kerosene and cooking gas, that is below what it costs to buy it from India. Because a price increase would be politically unpopular, the government has done nothing. The state controlled fuel importing and distribution company did nothing as well, ran out of money, and now cannot pay for the fuel imported from India.

May 5, 2007: In the west, Maoists and police clashed as the government tried to reclaim government buildings from Maoists. In many rural parts of the country, Maoists ran the government officials out and took control of government property. Despite orders from senior Maoist leaders to give it up, many Maoists refuse to.

May 3, 2007: In rural areas, Maoists leaders still run their extortion racket against poor villagers. These are areas with no police, and government officials were driven out by armed Maoists several years ago. The government has not returned. Although the armed Maoists are in UN supervised camps, the Maoists still have men with clubs and fists to enforce extortion demands in many areas.