June 28, 2008: Last month, the 601 members of the Constituent Assembly declared Nepal a republic. The king has left the palace in Katmandu, and moved to another mansion in the suburbs. In the process of removing the king as head-of-state (after his family held the job for 239 years), it was revealed that over 15 percent of the national budget was being spent on maintaining the royal family. The royals are on their own now, but the kings is believed to have assets in excess of $200 million. Despite the violence last year, the economy grew about two percent. But much more economic growth will be needed to placate the growing (because of the new government) expectations of Nepalese.

Maoists control 37 percent of the seats in parliament, and the other parties have agreed to let the Maoists try and form a coalition government. This will be difficult, as the fall of the king brought out many of the ancient problems the monarchy had not solved, but had suppressed for centuries. The widespread poverty and ethnic differences are now out in the open and demanding solutions. The major violence of the Maoist rebellion (ended in 2006 with the peace deal) has been replaced by less violent unrest. The Hindus in the south and the tribes in the hills have formed political parties and are demanding changes that will help them out economically (less feudalism, more education and growth) and politically (more autonomy). Radical Maoist factions are still trying to create a communist dictatorship.

Although the Maoists have been cooperative and willing to compromise, many Nepalese still do not trust these radical communists. Thus Maoist demands to lead the new government, and to integrate some of its 20,000 fighters into the army, are viewed with suspicion. The Maoists have now agreed to control Young Communist League violence, in return for some of its fighters joining the army, and the police. This makes the non-Maoist parties (still the majority) nervous. Meanwhile, the special police (the 15,000 strong Armed Police Force), established in 2001 to fight the Maoists, has been turned into riot police and reinforcements for the border police. The Armed Police Force is still a major counter for any political violence, including the Young Communist League.

Meanwhile, the main sources of unrest are not going away. The Maoist Young Communist League is active in using threats and physical violence to gain control of local governments in the countryside. This is a violation of the 2006 peace deal, and Nepalis wonder if the Maoist politicians are unable, or unwilling, to control their violent youth auxiliary.  Then there are the Tibetan refugees, who have been demonstrating in support of recent anti-Chinese violence in Tibet. For decades, Tibetans fleeing over half a century of Chinese rule, have been crossing the border into Nepal. Currently, nearly 3,000 Tibetans a year sneak across the border. Most go on to India, where the government there has tolerated a large Tibetan exile community. But there are 20,000 Tibetan refugees in Nepal, and they can be a problem because Nepal likes to maintain good relations with its big neighbors (India and China). To that end, over a thousand anti-Chinese Tibetan demonstrators have been arrested in the last month or so.