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Assessment of the context for decentralisation and local governance in Nepal

Report commissioned by UNCDF and UNDP.

Prepared by

Neil Webster (International Consultant and Author) and Khem Raj Nepal (National Consultant)

24th April 2006

Contents

Abbreviations ............................................................................................................................................................... 2 Introduction ................................................................................................................................................................. 4 The political context for local governance .............................................................................................................. 5 The conflict .................................................................................................................................................................. 8 The present condition of local government bodies ............................................................................................. 12 Specific Findings from the Mission’s field visits .................................................................................................. 14 UNCDF and UNDP support to decentralisation and local governance ......................................................... 19 Recommendations ..................................................................................................................................................... 21 Risk assessment ......................................................................................................................................................... 24 Summary assessment of risks .................................................................................................................................. 27 Annex 1 Terms of Reference .......................................................................................................................... 28 Annex 2 Mission Itinerary ............................................................................................................................... 32 Annex 3 Persons met ....................................................................................................................................... 34 Annex 4 12 Point Agreement between 7 PA and CPN(M) announced 22nd November 2005. .......... 39

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Abbreviations

ADB Asian Development Bank

ADDC/N Association of District Development Committees, Nepal

CBO Community Based Organisation

CDO Chief District Officer

CDS Capacity Development Strategy

CO Community Organization

CPN(M) Communist Party of Nepal (Maoist)

CP(UML) Communist Party of Nepal (United Marxist Leninist)

DASU Decentralisation Advisory Support Unit (Danida)

DDC District Development Committee

DEP District Education Plan

DFDP Decentralized Financing and Development Programme

DfID Department for International Development

DIMC Decentralisation Implementation Monitoring Committee

DLGSP Decentralized Local Governance Support Programme (UNDP)

DIP Decentralisation Implementation Plan

EMIS Education Management Information System

GRP Governance Reform Programme (ADB)

HMGN His Majesty´s Government Nepal

IDP Internally Displaced Person

LBs Local Bodies (i.e. VDCs, DDCs, Municipalities)

LBFC Local Bodies Fiscal Commission

LDF Local Development Fund

LDTA Local Development Training Academy

LDO Local Development Officer

LGP Local Governance Programme

LSGA Local Self-Governance Act, 2055 (1999)

MCPM Minimum Conditions and Performance Measures

MLD Ministry of Local Development

MoF Ministry of Finance

MUAN Association of Municipalities

NAVIN National Association of Village Development Committees in Nepal

NCP Nepal Congress Party

NCP-D Nepal Congress Party - Democratic

NPC National Planning Commission

NPD National Programme Director

NPM National Programme Manager

PDDP Participatory District Development Programme

PPPUE Private Public Partnership for Urban Environment

RNA Royal Nepal Army

RUPP Rural Urban Partnership Programme

SIP School Improvement Plan

SMC School Management Committee

S-MC Sub-Metropolitan City

SNV Netherlands Development Organisation

TLO Tole Lane Organisation

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UC User Committee

VDC Village Development Committee

VEP Village Education Plan

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Introduction

1. Due to the current political situation in Nepal, UNCDF and UNDP, in close consultation with

DfID, felt it necessary to undertake an assessment of the implications for their programme

assistance to decentralisation and local governance. A Mission was fielded to make such an

assessment from 8th – 24th March, 2006, comprised of Neil Webster, International

Consultant, and Khem Raj Nepal, National Consultant. Local field visits outside of

Kathmandu were undertaken with amongst others, Bishnu Puri, DFDP Project Manager, Ram

Krishna Pokharel, DLGSP National Programme Manager, and Purusottam Shrestha, PPPUE

National Programme Manager.

2. Annex 1 contains the Terms of Reference for the Mission; Annex 2 contains details of the

visits undertaken by the Mission; Annex 3 contains a list of persons met. Where time and

opportunity permitted the Mission extended its planned itinerary to include meetings with

national and local representatives from political parties.

3. Separate debriefings were held with the Ministry of Local Development and UNCDF/UNDP

prior to the departure of the international consultant. A summary of the Mission’s findings

and its preliminary recommendations were presented at these meetings.

4. It should be noted that the conflict situation in Nepal is quite volatile at the present moment

with daily clashes between the security forces and the Maoists. From 6th April the political

situation has intensified in the urban areas with the introduction of a strike and series of

demonstrations from the side of the 7 Party Alliance of opposition parties, civil society

organisations, professional associations and with CPN(M) support. This has been extended

from the original four days planned with large demonstrations in the main urban centres in

violation of imposed curfews and often ending in violent clashes. In addition to imposing the

curfews, the security forces have made extensive arrests both pre-emptive and as a response

to the demonstrations. International pressure is coming from a number of sources; a high

level delegation has been sent from India, intentional human rights organisations are calling

for smart sanctions against specific government and military leaders, there is daily coverage

in the international media of the demonstrations and the security force’s response.

5. In preparing the report, the current events are addressed where possible, but within the

framework of the original Terms of Reference. More generally the Report sets out to trace

the paths that have led to the present context, adopting an approach that separates between

the national and local political contexts on the one hand and between the political process

and the conflict on the other.

6. The consultants wish to thank the many Nepalese citizens, government officials, NGO and

civil society representatives, Local Body members, and in particular the UNCDF and UNDP

officers for the time, support and contributions that they provided to the work of the Mission.

The content of the Report is the responsibility of the consultants alone however.

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The political context for local governance

7. The national political context in Nepal has witnessed a steady movement towards a

government under the direct authority of King Gyanendra over the past 4 years. An

undermining of the practice of democratic governance at the national level and a general loss

of popular control over government has been the most obvious outcome of this process. The

consequences for decentralisation and local governance have to be seen both in terms of (i)

the national policy environment and national level programme implementation, and (ii) the

local level implementation of policies and their programmes designed to strengthen

decentralised local bodies and local governance. The two contexts while clearly inter-

dependent need to be assessed separately as the local political context possesses different

dynamics from those present at the national level, leading to considerable variation between

regions and between districts.

8. It is also important that an assessment of actions that shape the present political context

separates between those that have their explanation in the conflict and those that have their

explanation in more specific political agendas. Often the two are conflated in the

explanations provided for actions taken and measures adopted, with the conflict being the

basis for legitimising a politically motivated action, or lack of action. It is necessary to

acknowledge the ways in which the political agendas overlay, frame, and shape the conflict

in order to be able to make recommendations as to how to support local governance in the

context of this particular conflict. Therefore it is important to note the political positions

taken by key actors as well as their failure to take a position on occasion.

9. At the national level, a series of actions have led to the concentration of authority and power

in the King’s favour. It can be noted that many of those who lost their political status and role

with the introduction of multi-party democracy have been a central factor in this

development. Many have returned to positions of power and influence in the present regime

and they constitute a political group who support a government based upon an active

monarchy invested with wide ranging powers. In addition to this group it should be noted

that there is a military leadership who owe direct allegiance to the monarchy and play a

critical role in the current political context.

10. The past four years can be captured at the national level in the following actions and

measures that have had clear and direct implications for the reform process originally

designed to promote decentralised local governance: October 4, 2002, King Gyanendra

suspended the elected government at the national level and proceeded to govern through a

series of nominated cabinets initially drawn from members of the main political parties, but

in mid-January 2005, after a deadline for negotiations with Maoists had expired; the King

dismissed Prime Minister Deuba and his four party cabinet and proceeded to govern with a

cabinet drawn from pro-monarchy political leaders plus the Palace Secretariat and military

advisers.

11. 1st February 2005 the King declared a state of emergency for three months and arrested

senior party leaders together with some HR activists and journalists. The media was placed

under strict control for next two weeks. The appointed cabinet then proceeded to present a

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21-point programme with focus on good governance, economic growth and service delivery.

Despite the existence of the existence of a Commission for the Investigation of the Abuse of

Authority (CIAA), a Royal Commission for the Control of Corruption (RCCC) was

appointed by the King with investigative and prosecution powers to act rapidly following

complaints or information received. It can also submit reports to the King in corruption cases

of any office bearer of the courts. Former Prime Minister Deuba and one of his Ministers are

subsequently charged with corruption suggesting the overtly political nature of the RCCC.

12. In April 2005, Denmark, Switzerland and Canada announced the suspension of any new

agreements of development assistance. Britain, the US and India suspended all military aid;

India subsequently resumed the supply of non-lethal aid.

13. On April 11th 2005, King Gyanendra appointed 5 Regional Administrators and 14 Zonal

Administrators in a move that is seen by many to be a return towards the pre-democracy

period of partyless Panchayat rule when there were also Zonal offices. On the same day, the

Office of the United Nations High Commissioner for Human Rights (OHCHR) and the Nepal

Minister for Foreign Affairs sign an agreement for the operation of OHCHR in Nepal. Ten

days later on 21st April, the 61st session of the United Nations Human Rights Commission in

Geneva passed a resolution on Nepal under agenda item 19. The resolution raised serious

concerns of widespread human rights violations by the Royal Nepal Army as well as by the

Maoists.

14. Still in April, the major political parties agreed on a Road Map to restore democracy in Nepal

including the restoration of the House of Parliament and the Maoist demand for a constituent

assembly. Only two small national parties (e.g. the RPP party which is loyal to the King) are

not part of the alliance. The parties agree to start protests all over the country again despite

the ban on political demonstrations.

15. 1st May, the State of Emergency is lifted, but political freedoms and civil liberties remain

restricted. Non-political public meetings are once more permitted and most of the political

leaders and cadres are released from house arrest. Curbs on the press are partially relaxed,

but censorship remains.

16. July 14th the Social Welfare (First Amendment) Ordinance 2005 is promulgated giving new

powers to the state to enable it to control and regulate programmes run by NGOs and their

activities. Under the ordinance, the Ministry of Women, Children and Social Welfare has full

authority to issue directives and supervise NGO activities instead of just 'extending support'

as laid down in the existing Social Welfare Act

17. 9th October 2005, King Gyanendra promulgated an ordinance amending six key media laws.

A legal analysis by the International Commission of Jurists concluded that “the amendments

entrench restrictions imposed on the media by the Government during the three month state

of emergency that ended in April 2005, and impose new limitations that will further

undermine freedom of expression, press freedom, and right to receive information in Nepal”.

They stated that the measures violate Nepal’s international legal commitments and its own

constitutional guarantees of free expression.1

1 ”Power to Silence: Nepal’s New Media Ordinance” ICJ, December 2005.

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18. 22nd November 2005, a 12-point agreement commits seven mainstream political parties and

the Maoists to a common struggle against the "autocratic monarchy" of King Gyanendra and

to the establishment of "lasting peace" through elections for a constituent assembly. The

Maoists also declared their willingness to participate in multiparty democracy and

internationally supervised elections.2 They continue their unilateral ceasefire until 2nd

January 2006, when it is called off after four months. On 19th January 2006, in response to a

demonstration against the royal government planned by the main opposition parties, political

leaders and activists are again arrested, telephone services are cut, and a curfew imposed.

19. Municipality elections are held on February 8th 2005. These are boycotted by all the national

parties. Of the 4,146 seats on 58 municipal bodies across 43 of Nepal’s 75 districts, under a

half have candidates. The elections are widely perceived as an attempt by the King to

legitimise his position in the face of national and international criticism. The move is widely

criticised as not being free, fair or credible, the EU describing them as “another step

backwards for democracy”. Of the 12 per cent of the electorate eligible to vote in the

elections, fewer than 20 per cent of these do so.

20. To summarise: By early 2006 the national political situation has polarised between King

Gyanendra, his appointed government and the security forces on the one hand and the seven

opposition political parties in an uneasy alliance with the CPN(M) on the other. It is very

apparent that the King through his actions has undermined the democratic status of national

governance, in particular subverting the democratic role of central government institutions

and other national bodies, thereby strengthening the move towards an authoritarian verging

on autocratic regime willing to ignore national and international criticism.

21. In the development and formulation of policy, the concerns of the security forces take a clear

priority, but underlying these is a strong political desire to promote and defend a particular

type of political rule. A fairly crude ‘realpolitik’ drives the political process at the centre with

the primary logic being to consolidate power around the King and his Government. The role

of the Rajparishad (the King’s Advisory Council) is to formulate the policy framework best

seen to achieve this end. The political legitimacy for this political direction is claimed to lie

in Article 127 of the 1990 Constitution that states: "If any difficulty arises in connection with

the implementation of this Constitution His Majesty may issue necessary orders to remove

such difficulty and such orders shall be laid before Parliament." King Gyanendra has also

asserted that he was exercising the "inherent power" of the state authority vested in the Shah

dynasty3 indicating his belief in the more fundamental right of the King personally to assume

the full authority of government.

22. Support from the highest echelon of the military appears to be unquestioning and

unwavering. Support elsewhere is more difficult to assess. The majority of intellectuals have

consistently challenged the role of the King since 2002 as witnessed in the press and

elsewhere. The business elite and middle classes of the major urban centres are not

particularly active in party politics and have remained publicly silent. However there are

strong indications that the failure to achieve any progress towards political stability is

2 See Annex 4 for the full text of the 12 Point Agreement. 3 King’s Address October 4th 2002 on the removal of the elected government under Prime Minister Deuba.

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resulting in the previous disillusionment with the previous political parties’ leaderships prior

to 2002 is beginning to be replaced with a growing criticism of the King and his government

for the same reasons. To these should be added the serious economic problems facing the

country today.4 This is addressed in more detail in the next section.

The conflict

23. The conflict has escalated during the past year, although the militancy has varied according

to whether the CPN(M) were implementing a ceasefire or not. While it is difficult to make

general statements about the nature of the conflict, certain tendencies have been indicated by

a number of observers representing a variety of organisations and interests vis-à-vis the

conflict. The first is that the attacks of the CPN(M), while increasing in number, have

become more targeted at the security forces and secondly, that the attacks and incidents

appear to be moving towards the urban areas and the Kathmandu valley and away from the

more remote rural areas.

24. The recent incidents are noted in the following map:

4 Here the scale and persistence of the demonstrations in the main urban centres that commenced 6th April suggest that the ‘urban

middle classes’ are joining intellectuals, students, and other more ‘traditional’ demonstrators.

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Source: UNDP Nepal.

25. At the present point in time the conflict at the national level is polarised between the King,

his appointed government and the army leadership on the one hand and the CPN(M) and its

armed wing on the other. This is partially reflected in the national political situation: the

difference being that while the 7 Party Alliance has entered into a relationship with the

CPN(M), based upon the 12 Point Agreement, its members are not party to the armed

conflict, relying upon demonstration and peaceful protest only. The King, his government

and the army leadership are seeking to portray the 7 Party Alliance as supporting and

collaborating with terrorists; the aim being to discredit by association with ‘terrorism’ and to

split elements of the 7 Party Alliance away from any stronger common front between the

opposition parties and the CPN(M).

26. The King’s control of the incumbent government has neutralised effectively the civil

bureaucracy at the national level (ministries and departments) in Nepal. The judiciary has

challenged actions taken by the royal government and displayed a degree of independence,

but the main body of the civil bureaucracy has been somewhat passive in its acceptance of

the present situation. Work continues even though it is acknowledged that there has been a

significant shift in the approach towards policy and its implementation, ordinances and other

measures often running counter to existing legislation and being of dubious constitutional

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status. The delays regularly experienced in policy proposals receiving cabinet and royal

approval are generally accepted as reason enough for not taking any further policy or

programme action. In this way the national civil bureaucracy has taken a passive and waiting

role with respect to the bipolar politics of the conflict. The royal cabinet and its sub-

committees, backed by the advisers of the palace secretariat, have effectively taken over the

national policy agenda and are able to work to secure the current rule by royal ordinance

without any significant opposition from the national civil bureaucracy and administration.5

27. The outcome is that the national political scenario reflects quite closely the bipolar conflict

scenario and that the incumbent government of the King is effective in being able to

legitimate its political actions with arguments rooted in a conflict scenario in which the

imperative concern is to defeat the military threat and associated political strategies of the

CPN(M). It is in the King’s interest to sustain this close linkage of the political and conflict

scenarios, while it is in the interest of the 7 Party Alliance, and possibly to an increasing

extent for CPN(M), to stress the need to treat the political context and the conflict as being

one and the same.

28. The conflict at the local level, away from Kathmandu valley and the national policy arena, is

more immediate in its nature. It is shaped in terms of its character and intensity by a number

of factors including the personalities of the local commanders from the Security Forces and

the CPN(M), the political histories of the localities, the presence or not of strategic assets

such as roads, airports, banks, etc., and not least the topography of the locality. There are few

generalisations that can be made apart from those previously alluded to (see paragraph 23).

Where the strategic interests are not so great and control outside district headquarters by the

CPN(M) is well established, there is some anecdotal evidence of a degree of pragmatism

being practiced with the effect of reducing the level of military violence.6

29. Conflict summary - the human cost:

[Fatality Data compiled from open sources by Institute for Conflict Management, New Delhi]

30. It should be noted that deaths in 2005 remained comparatively lower than previous years,

primarily due to the unilateral ceasefire announced by the Maoists in the last four months of

the year, and the Army reduced its counter terrorism operations although King Gyanendra

had refused to respect the truce, saying the Maoists could not be trusted. A second dimension

of the human cost is the extensive migration out of Nepal and the Internally Displaced

5 Again it is noted that some civil servants including some at the Home Ministry have staged ‘sit ins’ and similar actions in support

of the present pro-democracy movement and been arrested for doing so. 6 1st and 2nd Joint Donor Assessments based on District visits in 2005 and 2006, and the 3 field visits made by the Mission.

Year Civilian Security Forces

Maoists Total

2005 232 310 1301 1843

2004 380 481 1590 2451

2003 214 307 1584 2105

2002 238 666 3992 4896

2001 50 198 803 1051

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Persons (IDPs). No reliable figures exist on the current number of people internally displaced

due to the conflict. Some estimates of the total number of displaced, including refugees in

India, since the fighting began in 1996 go as high as two million. Although it is not possible

to verify any of the estimates, a more realistic estimate would be somewhere between

100,000 and 200,000.7

31. The economic cost: the government has already lowered the GDP growth rate by 1 percent to

3.5 percent for the fiscal year 2005-06. The Economic and Social Survey of Asia and the

Pacific (ESCAP) in its 2006 report has stated that the forecasted growth rate of 4.5 percent

would be difficult to attain: "Nepal could fall short of the 4.5 percent rate projected for 2006

because of the rising petroleum price, expiration of the WTO agreement on textiles and

clothing and intensified civil strife."8 If the GDP growth rate remains at 3.5 percent as now

predicted, Nepal's growth rate will be the least among the Least Developed Countries (LDC)

of the region, equal to that of Myanmar. Inflation is expected to rise by as much as 5 percent

in 2006. While government revenue grew in 2005, the fiscal budget was adversely affected

by the increased current expenditure and low capital spending due to the conflict. If this

situation continues, it is expected that targets for revenue mobilization and capital

expenditure set in the Tenth Plan cannot be realized. It is expected that there will be a rise in

remittances, official grants and pensions from abroad, but that the current account of the

country would weaken due mainly to the drop in income from services. Nepal's exports are

expected to grow to 7 percent in 2006, mainly attributable to the expiration of the WTO

agreement on textile and clothing.

32. The military balance: The King is in a defensive position with respect to securing his first

objective of “restoring order” in the country. With an estimated 80,000 soldiers in the Royal

Nepalese Army (RNA), 17,000 personnel in the Armed Police Force (APF) and a poorly

equipped 47,000 in the Police Force, the King lacks the numbers needed to contain the

Maoist insurgency, with every one of the country’s 75 districts currently affected. The

Maoists have an estimated 8-10,000 well-armed and trained “regulars,” approximately

25,000 “militia” armed with relatively primitive weapons such as pipe guns and crude

bombs, and a substantial number of “sympathizers,” officially estimated at about 200,000 in

2003, who can, under certain circumstances, be mobilized – voluntarily or coercively – for

violent action. The numbers of combatants, as with the numbers killed (body count

indicator), do not provide an accurate picture of the state of play. It would appear that the

commitment of the Maoist fighters is high as demonstrated by their willingness to attack

often with extremely poor weaponry. It is a commitment that cannot be explained simply in

terms of fear or immaturity on the part of the fighters.

33. The most recent events around the strike and demonstrations called by the 7 Party Alliance,

supported by the Maoists, demonstrate the latter’s ability to wage a political and a military

strategy that might not be capable of securing victory, but demonstrates an ability to target

and to challenge the royal government in very different ways. The reaction of the

government, in conflating the political and military strategies into a single issue of ‘the

7 Internal Displacement Monitoring Centre (IDMC) March 2003; June 2005, UN/NGO IDP Survey. See also INSEC report on

Conflict Induced Displacement in Nepal, at http://www.inseconline.org/hrvdata/idp_data.php 8 United Nations Economic and Social Survey of Asia and the Pacific (ESCAP)

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conflict’ has to helped the CPN(M) to pursue these different strategies without significantly

alienating the broader democracy movement. The significance of this movement between

military and political strategies for Nepal’s immediate future should not be under-estimated.

While the alliance with the political opposition might serve a number of CPN(M) objectives,

it also contains the potent political factor of popular expectations.

The present condition of local government bodies

34. The need for a decentralized system of governance has been a key issue in Nepal's

development ever since the restoration of democracy in 1990-91: the 10th Plan of Nepal

explicitly has incorporated policies of devolution of powers to local elected government

bodies (DDC, VDC and Municipalities),9 the Local Self Governance Act 1999 has been

enacted, its regulations are in operation, and representatives of elected bodies have completed

two 5 years terms as intended under the present law. While ten years and two elections is a

very short period for establishing democracy in local government, the elected local bodies

have made significant progress in disseminating and implementing the ideas and practice of

local self-governance, facilitated and supported by national stakeholders. Apart from actively

participating in local elections, the people have organized at the local level around user

groups and committees and other community based organisations (CBOs).

35. The Decentralization Implementation and Monitoring Committee (DIMC) has been a key

body chaired by the Prime Minister to drive the decentralisation reform agenda forward; it

designed and approved the Decentralization Implementation Plan (DIP); secured the gradual

transfer of the programmes of three sectors (primary education, health and agriculture) in a

phased manner; more than 50 DDCs have prepared their periodic plans as initiated by the

NPC; some 15 municipalities have prepared Immediate Action Plans and 5 municipalities are

on the process of preparing their periodic plans. The Foreign Aid Policy, 2002, emphasised

the central role of local government in its prioritisation of ‘cutting issues which impinge

largely on current poverty patterns - gender, environment and efficient forms of governance

and management.'

36. For their part, the local government associations ADDCN, MUAN and NAVIN had emerged

to play important roles, in particular:

o Placing pressure on the central government to move proactively and more quickly

in support of the decentralization process and

o Transferring skills and knowledge to the local government bodies and community

organizations with respect to the implementation of the LSGA and associated

reforms and practices.

9 The 10th plan has recognised four prominent sets of actors for promoting development: the public sector based on government

institutions and the civil bureaucracy; the private sector based upon service, trade, commerce and industry; the non-governmental

sector (NGOs, Cooperatives, etc); the Local Government Sector (DDCs, VDCs, Municipalities).

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37. Other achievements in the reform process include establishment of the Local Bodies Fiscal

Commission (LBFC); the completion of poverty mapping at village level and urban poverty

mapping started; new areas of local taxation transferred to local government and moves

towards a system of negotiated central revenue allocation started; the preparation of

amendments to sector legislation not in line with the LSGA; the inclusion of representatives

of Local Government Associations in national forums to participate in policy formulation and

bills preparation.

38. However the process and progress of local democratisation was seriously disrupted in 2002

when the government could not hold the local elections in time following the expiry of the

tenure of office of VDC and DDC elected representatives. Since then temporary alternative

arrangements designed to operate local bodies by central government has been neither

acceptable to the political parties nor to the service receivers. The general view is that local

level service provision has deteriorated subsequently due to poor participation in planning,

poor monitoring and evaluation, and poor resource mobilisation. Political events at the

national level have further compounded these problems.

39. After the Royal Proclamation on February 1 2005, certain institutional changes have been

made on the basis of royal ordinances: Zones created under the pre-democracy movement

Panchayat era have been revived and Zonal Administrators appointed with the mandate of

coordinating, supervising, directing and monitoring the functions of Local Bodies; Regional

Offices have been upgraded and Regional Administrators directly appointed by the King with

powers over the Local Bodies. It is important to note that the powers given to both the Zonal

and the Regional Administrators do not come under the purview of LSGA and raise serious

questions concerning the autonomy of the local government bodies. An increasing body of

anecdotal and other evidence relating to these new officials actions towards Chief District

Officers (CDO) and Local Development Officers (LDO), their use of local government funds

and assets for activities not covered by the LGSA , apparently with the acceptance of central

government, has had a significant impact on the functioning of the local bodies and on local

level civil servants in particular. The representatives of the DDCs nominated by the

government appear also to have accepted these irregularities as part of the new conditions for

working in local government.10

40. The VDCs have become the most apparent victims of the current insurgency. About 50

percent of the 3,913 VDC offices have been bombed, burnt down or locked-up by Maoists.

The majority of VDC secretaries do not work in or visit their offices due to fear of the

Maoists. The VDC secretaries are not only the administrative head of the VDC, but also

function as a chairperson appointed by the government. They conduct the VDC affairs in

most cases from the district headquarters or from centres around the district.

41. For their part, Municipalities have recently been elected, but with all the major opposition

parties boycotting the election and under 20 per cent of the eligible voters participating in the

election. For many seats there were no candidates. Those elected tend to maintain a low

10 The Ordinance formulated to amend the Local Administration Act, 2028, leaves a considerable grey area of resposnibiulity

overlap between the Zonal and Regional Administrators and the DDCs, Municipalities and VDCs. The powers given are wide

ranging and to be managed “as per the directives and orders issues by His Majesty’s Government from time to time.” They directly

undermine the democratic accountability of the local government bodies as embodied in the LGSA..

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profile for fear of the Maoists. In such a situation it is very questionable as to whether it is

possible to have an active and well functioning system of local governance in the

municipalities.

42. All 75 DDCs have been reformed with government nominees whose political and personal

merits are questioned by those they are intended to represent. Because of the Maoist threat

these members often do not stay in the district and take shelter in the military barracks at

night if they do. In addition they often face family as well as political pressure to resign,

further weakening their ability to undertake the work of the DDC.

43. The Governance Reform Program (GRP) financed by Asian Development Bank (ADB) and

implemented by Ministry of General Administration is based upon a reform roadmap in

which decentralization is a prominent component. As a part of the strategy, HMGN, through

the budget ordinance on 15 July 2005, has proposed to devolve full authorities to 14 DDCs

with civil servants being allocated from the sectoral government agencies to work at the

district level. After the announcement no subsequent action has been taken beyond some

preliminary outline planning within the first nine months of the current fiscal year. The

proposal has in fact been a cause of considerable confusion on the issues of civil service

reform and on the disbursement of district funds from various concerned ministries. The

proposal in the budget ordinance and proposal from Ministry of Local Development (MLD)

contradict each other on the number of sectoral line agencies to be devolved, possibly

reflecting the fact that the former is driven by a political agenda to which sections of the

bureaucracy have not been made party.

44. In summary the national political environment for decentralisation and local governance has

been seriously set back; the former political leadership provided by the Prime Minister’s

Office, with its central role in the DIMC, has been replaced by a political leadership with a

very different agenda. The instruments for coordinating the relevant ministries in support of

the decentralisation are no longer functioning and the national civil bureaucracy finds itself

in a situation without clear direction despite the authoritarian nature of the political regime.

Specific Findings from the Mission’s field visits

45. The following findings should be predicated with the observation that many of the problems

facing the practice local governance were also to be found in the ‘pre-conflict’ in their origin

and existence, although they may have been actively reinforced by strategic responses to the

conflict of a strategic and/or political nature on the part of His Majesty’s Government, the

Maoists and the opposition political parties

46. At the national level, the Mission found that there has been little progress in advancing the

decentralisation policy agenda. The Decentralisation Implementation Plan (2002) was

designed to set in motion sector devolution in basic health, primary education, agriculture

and animal husbandry, and small-scale infrastructure. The subsequent events, outlines above,

saw DIP weakened by the failure of the DIMC to continue its leading role and responsibility

for the reform process fell back upon the relevant ministries. The subsequent Complete Plan

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for Devolution (2005) prepared by the MLD in attempt to push the decentralisation process

forward, utilising a ‘selective approach’ based on 14 Districts, has yet to be finalised, little

information has been disseminated down to the districts, or implemented. The NPC indicated

to the Mission that the number of districts may now be reduced formally to an initial 5, in

practice probably at best 3, very much indicative of the problems present.

47. In the light of the interviews held with Secretaries and others senior officials from the NPC,

MLD, MoF, Ministry of General Administration, and the Ministry of Education and Sport it

is the view of the Mission that the national policy environment for decentralisation is not

likely to change in the near future. It is noticeable that the present Cabinet is displaying a

marked lack of urgency in facilitating the legislative amendments and other proposals

presented before it and that this has left the ministries and their departments responsible for

formulating policy and implementing the decentralisation reform process in what can best be

described as a state of semi-paralysis at the national level.

48. For their part, the main opposition parties, while pointing to the importance of

decentralisation in for example the 12 point agreement made with the CPN(M), do not appear

to have a specific programme to promote the decentralisation agenda. Instead they include

the decentralisation reform process within a broader list of issue areas that needs to be

addressed when they look at the constitutional framework of government in Nepal as a

whole. Therefore should they return to occupy a role in government in the near future, it

remains unlikely that the policy environment will be swiftly changed.

49. Given the national political context, the Mission does not consider it likely that local

elections will be held within the next 12 to 18 months. It is also likely that measures

implemented by the present government that challenge the letter and spirit of the LGSA such

as the position and roles of Regional and Zonal Administrators are likely to remain in place

for the foreseeable future as they are linked to other issues including the possible redrawing

of administrative boundaries, the holding of local elections, and the reorganisation of sectoral

service provision.11

50. At the local level i.e. the District and Municipality level, the strengthening of the Security

Forces has enabled the main towns and district headquarters to become strongholds for the

practice of local government by nominated members in the case of the DDCs and elected

members in the case of the municipalities. The Chairpersons and Mayors of the DDCs and

Municipalities respectively, state their belief that they can continue to govern effectively and

that they can reach their VDCs and Wards with services and development programmes. This

belief is echoed amongst the other nominated DDC members and elected Municipality

members interviewed; it is also strongly stated by the Zonal Administrators. It is not so

strongly held by DDC and line agency administrative staff who on occasion acknowledged

that it requires the tacit agreement of the CPN(M) to provide government services and

programmes in the more affected areas, i.e. where the CPN(M) are effectively the ruling

party.

51. With respect to the local political leadership, there are clear signs that the 12 Point

Agreement is the basis for some optimism as it contributes on occasion to to a more

11 It should be stated that the Ordinance establishing these positions has yet to be renewed.

16

pragmatic approach to local politics by the parties involved. Local political party

representatives, human rights activists, development NGOs, community organisations do

report small but noticeable improvements in access to communities for human rights and

development activities. The possibility for negotiating access does appear to be present, with

local communities often playing an active role in the case of development activities. The

signs of improvement also include local political leaders from the 7 Party Alliance, post-12

Point Agreement, being allowed and on occasion invited to go to their villages, although the

latter is treated with considerable suspicion. The situation does vary considerably from

district to district and from VDC to VDC as has previously been mentioned.

52. It is clear that in the absence of any new local elections being initiated by the present royal

government in the next 12 to 18 months and the fact that military control of large parts of

Nepal cannot be secured by the security forces, the present situation of no elected VDCs,

closed VDC offices and absent VDC secretaries, together with nominated DDCs will remain

the case for some time. Direct electoral accountability of the DDCs to their citizens through

elected representatives and indirectly through the VDCs will continue to be lacking as long

as this situation prevails.

53. In the case of the recently elected Municipalities, the Mission found their electoral

accountability to be extremely questionable due to an insufficient number of candidates

contesting the elections, the boycott by the opposition parties, and the low level of electoral

turnout. Visits made by the Mission to two TLOs in Biratnagar SMC confirmed this finding

with local citizens of the Municipality expressing little respect for their newly elected

representatives and very low expectations of the Municipality. It should be noted that there

was a relatively high electoral turnout in this particular Municipality.

54. It is clearly the case that weak or no elected representation seriously weakens popular control

over local bodies and reduces political equality amongst the citizens in such areas as

planning, budgeting, implementation, and monitoring of the government’s delivery of

services, resources and development programmes generally in Nepal. Secondly, the physical

absence of government officers from the district offices is a serious constraint on the

functioning of the district administrations visited by the Mission, and is a general problem

according to documented evidence. In one case 4 LDOs had been in the same post in the

space of one year. While this problem was present prior to the conflict, it has been

exacerbated by the conflict as it provides a reason as well as a plausible excuse for prolonged

absences. Finally, the weak presence of government in many areas means an absence of

formal law and order and recourse to justice, increasing the sense and experience of

vulnerability for many Nepalese citizens.

55. Having noted the lack of downward accountability and the problems with the local civil

bureaucracy, the Mission found that other accountability modalities do exist and continue to

be practiced with respect to various functions for which local government bodies continue to

be responsible. Examples noted by the Mission include the MCPM modality introduced

under the DFDP; the EMIS and the use of the SIP-VEP-DEP modality introduced in the

education sector for bottom-up planning, and similar modalities found in the health and

agriculture services programmes. However in line with the growing lack of policy coherence

at the national level associated with the temporary ‘demise’ of the DIMC and the Local

17

Bodies Fiscal Commission the Mission finds that these remain yet to be generalised or

harmonised practices within and across local government bodies and therefore remain

programme or project specific. This weakens their implementation and thereby the

accountability and transparency gains that could be attained with respect to local government

process and practice.

56. The lack of accountability is further exacerbated by such factors as inflexible character of the

resources provided to the DDCs and the uncertainty attached to the provision of funds from

central government (timing and final amounts). These further reduce a DDC’s sense of

control and responsibility with respect to utilisation of the funds available. To this must be

added the problem of a marked decrease in local resources available for development

activities at DDC level in the districts visited and the fact that several examples were found

of the available resources being utilised for activities outside the scope of the LGSA. The last

points very much to the need for greater accountability in DDC financial management and

the ways in which the conflict can exacerbate entrenched problems of management

responsibility.

57. In the case of the Municipalities, the local revenue generation appears to be less affected by

the conflict as access for tax collection and similar is less of a problem. However, it is noted

that the Local Development Fee collected at the rate of 1.5% on imported products price will

disappear from 2007, affecting all 58 Municipalities, if Nepal is to act in accordance with the

WTO requirements on custom tariffs.

58. Pragmatic politics as a way to management development in a conflict. The Mission noted

that in all three districts visited, a range of government, civil society and not least local

citizens stated that the conflict’s impact on the delivery of and access to local government

and non-government development programmes and services had marginally improved in

recent months (late 2005 – early 2006) and that this could be linked to CPN(M)’s unilateral

ceasefire and thereafter the 12 Point Agreement. This is also reflected in some of the

documentation reviewed by the Mission including several of the reports from 2nd Joint Donor

ssessment Missions to selected districts in early March, 2006, and in discussions with civil

society representatives and other actors met in Jumla, Nepalgunj, Biratnagar, and

Kathmandu12.

59. In a similar vein, it was noted that the DFDP is operating in 20 districts in the mid- and far-

west regions including some of the districts most affected by the conflict. As yet it had not

been found necessary to withdraw from any of these districts due to the conflict and the

evidence suggested that project activities were not confined to localities close to the district

headquarters only.

60. IPDs are a particular outcome of the conflict. During its field visits, the Mission was told of

the existence of three types in the districts visited: (i) VDC secretaries, some teachers and

other local government employees, political leaders and families of Security Personnel; (ii) a

slightly different group of wealthier families who felt insecure in the rural areas and have the

12 The Mission notes a tendency in Nepal’s aid circles to focus on problems with the state and work of local government rather than

functions and outcomes still being achieved. While understandable given the current context, there is a danger of a national

democracy, good governance and human rights agenda overly shaping the assessment of the local contexts.

18

wherewithal to move to urban areas; and (iii) a group who had been labelled as anti-socials

by local CPN(M) activists. The numbers were not high; in Biratnagar SMC there were stated

to be 363 households from 13 Districts. Of these 14 families had returned to their homes

during the ceasefire on a negotiated basis. These were from the first and second categories.

61. The practice of negotiating a way forward was a common theme during the field visits

although it was often stated that it was others and not the interviewee who accepted the

practice of ‘reaching a deal’ with the Maoists. Similarly everyone appeared to know of some

organisation or department that paid the Maoists a ‘tax’ (commonly stated to be 10-20%), but

nobody acknowledged making such a payment themselves.13

62. In the district headquarters, many political leaders and representatives of civil society

organisations stated that they would not meet with nominated members of the DDCs or with

the Zonal Administrator. However, outside formal meetings, they were prepared to discuss

and give advice to the DDC. So it was that amid the more oft-repeated incidents of

hierarchical arrogance, lack of democratic accountability, and administrative abuses, the

Mission found a relatively high degree of pragmatism being practised in order to secure the

continuing implementation of local government development activities and service provision.

This pragmatism very much extends to the Maoist affected villages and localities outside of

the district headquarters and it clearly has the aim of maintaining relationships of varying

forms between citizens and government in difficult and complex local contexts.

63. To conclude the findings emerging from the field visits, the Mission would restate the

following:

o Many of the problems found were also present in the pre-conflict functioning of

local bodies. They are often exacerbated by the conflict, but not caused by it.

o It is important in assessing the state of the local bodies to separate between the

status and condition of the (legal) institutions of local government and the status of

those occupying these institutions (nominated, elected or none).

o There is a significant difference between the policy environment at national level

with respect to local government and the practice of local government at the local

level. In the latter we have pointed to the pragmatic local politics of adapting the

means and manner of delivery to the local political realities. Hence local

government continues to function

o That aid policy based on national concerns with government could lead to serious

stress on, and undermining of, the local government institutions.

o Furthermore, to withdraw support to local governance would seriously weaken the

institutions of local government and their contributions to local development and

poverty reduction

64. A fragile state, but not a failed state. It is clear that the local government bodies are under

considerable stress due to the conflict. Yet the local government bodies remain partially in

13 The need not to be seen as colluding with the Maoists possibly played a significant role here.

19

place and their involvement in development activities and service provision is still evident

albeit weakened and varying from locality to locality. The absence of elected councils and

the introduction of political and administrative elements opposed to the decentralisation

reforms of the decade 2002 undoubtedly have affected the functioning of local government

and not least the effectiveness of its reach. But it is also important to remember that:

o Political opposition to a party-based system of elected local government was

present prior to the present phase of the conflict.

o Support to the reform process from bilateral and multi-lateral agencies was

premised upon diverse sources of resistance to democratic decentralisation and the

pattern of development in Nepal that it was seen to support.

o Part of that support has included accountability mechanisms developed both to

strengthen and to supplement the downward accountability of elected

representatives. It has been a central part of a broader framework for good local

governance and continues to function as part of a developing framework for

government practice with standards for service delivery, development activities,

planning, monitoring and much more. This has not been fundamentally undermined.

UNCDF and UNDP support to decentralisation and local governance

65. The Terms of Reference request that the Mission assess the implications of the present

context with respect to four programmes of UNCDF and UNDP. In order to place the

recommendations in the context of the four programmes, the following brief descriptions are

included in the Report.

Decentralised Financing and Development Programme (DFDP)

66. DFDP works in 20 districts with co-funding from DfID. DFDP is designed to build upon and

strengthen the participatory planning process, delivery capacity and overall accountability of

the DDCs and the VDCs. The programme provides block grants to the DDCs for small scale

infrastructure projects, aimed at increasing access to basic public infrastructure for poor

people living in remote and rural areas. However, and more importantly, DFDP also aims to

leverage institutional change within the local government system, by improving the local

government capacities in planning, infrastructure delivery and management, financial

management, and overall accountability and responsiveness. This is reinforced by an

incentive mechanism, whereby block grants to DDCs are linked to an annual review of their

compliance with Minimum Conditions, derived from basic Local Self-governance Act

(LSGA) and financial accountability provisions, and an annual assessment of overall

67. DFDP was originally scheduled to end by 31st December 2005. However, in May 2005, a

UNCDF strategic review mission recommended that the programme be extended for an

additional 9 months, until September 31st 2006.

20

Decentralised Local Governance Support Programme (DLGSP)

68. DLGSP works in 60 districts and 662 VDCs. The programme supports to enhance effective

participation of people in the governance process and ensures improved access to socio-

economic services to disadvantaged groups including Dalits as envisaged in the Tenth

Plan/Poverty Reduction Strategy Paper. It focuses on capacity building of local bodies at the

district level to make the devolved sectors operational. At the community level it strongly

focuses on improving livelihoods to empower the ultra poor, women and ethnic minorities

through social mobilisation and other skill development activities.

69. DLGSP builds on the lessons learnt from Participatory District Development Programme,

Local Governance Programme, the PDDP/LGP Bridging Phase Programme and other local

governance Programmes. The Programme supports poverty reduction efforts through Village

Development Programme by introducing pro-poor and positive discriminatory policies to

address the issues of social inclusion. A review of DLGSP is planned for May 2006.

Rural-Urban Partnership Programme (RUPP)

70. Rural Urban Partnership Programme in its third phase, has been implemented in 30 Partner

Municipalities and 49 Rural Market Centres of the country. Through the social mobilisation

process, the Tole Lane Organizations (TLOs) – form community based organizations with

the participation of 100% households. The Programme supports in building the capacity of

the TLOs by providing skill development trainings for starting up various kind of enterprises

and transfer of technology. The TLOs are developed as the extended democratic arms of the

Municipalities to engage themselves mainly in development and social activities.

Institutionally, the TLOs are linked with the VDCs and Municipalities to be a part of

integrated Participatory Municipal Development Planning activities and for promotion of

responsive service delivery.

71. The Programme has also successfully started to address the issue of HIV/AIDS, and has

already generated AIDS awareness in the local community and among the municipal

governments. The Programme has also added the component of Internally Displaced Persons

in its third phase. With the objective of creating an enabling environment for the IDPs, the

Programme has been giving orientations to municipal staff, local authorities, journalists and

community leaders. The Programme has already started to implement the affirmative action

strategy to ensure that Disadvantaged Groups are well mainstreamed in the development

process.

Public-Private Partnership for Urban Environment (PPPUE)

72. The development objective of PPPUE is to increase the access of urban citizens to basic

services, to contribute to the creation of a healthy environment and to improve the living

conditions in the urban and semi-urban areas by promoting partnership between public and

private sectors for sustainable urban services. PPPUE in the first phase was initiated in five

Municipalities of Nepal- Biratnagar, Bharatpur, Butwal, Hetauda and Pokhara. In the second

phase, it has been extended to additional five Municipalities - Mechinagar, Dhulikhel,

Bhaktapur, Kathmandu and Siddharthanagar. One of the most important components of

PPPUE is to provide required technical support (pre-investment supports) to its stakeholders

21

to initialize the PPP projects at the local level. PPPUE facilitates and provides technical

support to partner Municipalities, local chambers and local civil society in different phases of

project identification, formulation, implementation and evaluation as and when deemed

necessary.

73. A recent review of the programme portfolio in Nepal suggested that PPPUE and RUPP

should be merged. A UNDP mission in Nepal was fielded in early March 2006 to prepare a

new project document with a view to merging the two projects.

Recommendations

74. The Terms of Reference for the Mission cover a range of concerns ranging from national

policy and political issues to quite specific and detailed concerns with different programme’s

modalities, the manner of their implementation, and the outcomes in the field. The following

is based upon the need to ‘make recommendations concerning the most appropriate ways to

continue support for decentralisation in the current political and institutional context’, but it

seeks to address some of the more specific concerns on the basis of the findings discussed

above.

75. The Mission recommends that UNDP/UNCDF should continue to support local governance

in Nepal with the justification for such support placed on the need and continuing possibility

to support and strengthen democratic processes of local governance. The focus for the

continuing support should be on strengthening the accountability of the existing local

government institutions. The Mission would further recommend that:

o Such support to local governance should avoid any tendency to create new

institutions and structures as a response to the failures and inadequacies in the

nature and practice of existing local government bodies, whether directly caused by

the conflict or not.

o Support should separate the national arena from the local arena and be

proportionate to and directed by the capacity of key stakeholders in each arena to

provide support to the implementation of the decentralisation and local governance

objectives on which the particular UNCDF/UNDP programme was formulated and

is being implemented.

o Support should be secured with increased flexibility to ‘adapt’ to the local political

context and the capacity for local government to reach citizens under its

administration, both directly and indirectly (through proxies such as NGOs)

o Support should focus on consolidating presence in current programme districts

(DFDP in particular). Scaling up to include new districts should be gradual, phased

and limited while the present political context prevails.

76. At the national level, policy on decentralisation will need to return to the existing problems

of legislative coherence, fiscal decentralisation, civil service reform including transfer of

staff to the districts, and restructuring of local bodies, especially DDCs (this includes the size

22

of future VDCs, ‘districts’, and the creation of new municipalities). In particular it will be

necessary to work towards reversing the present tendency towards delegation and return to a

clear devolution agenda based upon accountable and transparent local governance in which

popular control and political equity for the citizens of Nepal are emphasised. As the Mission

does not envisage major changes in the national policy environment in the near future, the

national programme strategy should be based on quite specific activities designed to secure

the present policy framework where possible, seeking to secure the implementation of

existing policy rather than the development of new, and generally preparing for an eventual

return to an active decentralisation reform process.

77. At the local level, support to local government institutions should focus on the accountability

of local institutions. In the present political context this should be based upon a three pronged

approach:

o Strengthening the accountability of current provision of service delivery through

strengthening management of service delivery and development activities with

particular attention to transparency and efficiency in planning, budgeting,

accounting, and financial management.

o Strengthening horizontal accountability at the district level through civil society

engagement in, and monitoring of, planning, budgeting, accounting, and human

rights. Securing greater transparency is central as is the exposure of malpractices in

service delivery, project implementation and similar. Here the role of the local

media should be included.

o Creating linkages between the individual citizen and the DDCs that utilise the VDC

secretaries, user groups and sector-based village level organisations such as SMCs,

forestry user groups, and other CBOs that can feed local needs into the district

planning process and secure a degree of village level participation in the

implementation of development programmes for primary education, basic health,

drinking water, agricultural services, minor infrastructural works, etc.

78. A second phase of DFDP should be formulated building upon the existing focus of the

programme on governance and the strengthening of local bodies. These include:

o Formula-based discretionary block grants

o The use of Minimum Conditions and Performance Measures for capacity

development, grant allocations, monitoring and evaluation, and greater

accountability and transparency in general

o A Capacity Development Strategy that is demand-driven from the DDCs as well

supply-driven from the MLD/DFDP

79. HMGN should be encouraged to re-activate the Local Bodies Fiscal Commission in order

that it, together with the MLD and NPC can actively promote the fiscal decentralisation

agenda that includes revising and implementing formula funding, MCPM and other

modalities for DDCs, VDCs, Municipalities, and across the relevant sector agencies. The

Ministry of General Administration needs to be encouraged to finalise guidelines for the

23

transfer of functional staff to the districts. DFDP should play an active role in providing the

necessary support based upon its experience to date.

80. DFDP should work closely with the MLD and other local governance programmes managed

by UNDP (notably DLGSP and PPPUE/RUPP) to develop stronger linkages between the

local citizens, the VDC and Ward members (were present) and secretaries and the DDCs.

The aims should be:

o To increase the citizens participation and representation in planning, budgeting, and

monitoring of the DDCs service delivery and other development activities

o To increase the citizens direct participation in the implementation of local

development projects, including resource mobilisation

o To increase the equity in access to development services, resources and assets

generated across each district’s VDCs

81. The means should be through village level organisations such as those listed in 77 above,

civil society organisations in the district (NGOs, associations, the media), and increased

information flows between citizens and DDCs/Municipalities.

82. The possibility of bringing together the current DFDP and DLGSP programmes when

formulating new phases (2006 and 2007 respectively) is not recommended. In particular the

Mission finds that some of the DLGSP’s current core modalities including the disbursement

of funds through the LDF, the targeting of a limited number of VDCs in each programme

district, and the focus of social mobilisation on micro-projects do not match the conceptual

approach to strengthening local governance found in the modalities of the DFDP.

83. If social mobilisation is to strengthen the accountability of local government to its citizens,

then the current strategy would need to be very much modified such that its focus is directed

more towards the planning and monitoring activities of local bodies, that the facility is

available on demand for all VDCs within a district, and that the present attempt to draw in

private and public sector service and resource providers be greatly strengthened. Social

mobilisation should also be linked to the use of CBOs and UCs by other actors in the district,

in particular NGOs, as part of the same strategy of linking local citizens to the practice of

government at the district level. NGOs will require close monitoring to ensure that they do

not work parallel to local government, but rather facilitate and represent citizens’ needs and

interests, promoting a culture of ‘rights holders’ and ‘duty bearers’ on the part of citizens and

local government officials respectively.

84. DLGSP’s information collection and management support to DDCs has been significant.

However the integration of this resource into the functioning of the DDCs remains weak.

Lack of continuity in LDOs and a lack of orientation of DDC members are some of the

factors responsible, but the need is to link this capacity to the practice of participatory

planning and monitoring, and to a greater dissemination of information down to the VDCs

and the individual citizens throughout the district. If the district planning process is to move

beyond being a compilation of often micro-projects that lack coherence and synergy, then the

DLGSP’s support in this area could and should be making a key contribution to achieving

this.

24

85. Finally the Mission recommends that UNCDF/UNDP consider developing a set of basic

indicators that could be used to assess the capacity of local government, and thereby their

programmes of support, to function in a district. Such indicators could also draw upon the

Basic Operating Guidelines. They would measure the occurrence of ‘conflict incidences’ that

seriously affect government/programme functions. Such incidents could include:

o Local government/programme staff harassment

o Seizure or destruction of project/government funds or assets designed for service

provision and local development activities

o Documented enforced contributions to Maoists, Security Forces, nominated and

other officials

o District government staff compelled to leave District headquarters

o Restrictions in movement for field planning and monitoring

86. Such indicators would operate alongside existing DFDP MCPM indicators. They should be

presented openly, setting the conditions for a programme’s entry and for its continuing

presence in a District.

87. The Mission has not made any recommendations with respect to RUPP and PPPUE as it

found that a separate Mission was already present with the task of preparing a new joint

programme document. This Mission would make the observation that it cannot see any

immediate gains to be made by bringing these two programmes into a common programme

framework with DFDP. As with DLGSP, the modalities of the two programmes do not align

easily with DFDP’s and such a move might seriously weaken the latter’s focus on

strengthening local government. The limited exposure that the Mission had to the two

programme’s TLOs indicated similar problems with the social mobilisation strategy’s

implementation to those observed with DLGSP.

Risk assessment

88. Given the volatile condition of politics in Nepal today, there is a number of very real risks

present. However these need to be understood in the light of the foregoing analysis in which

the national and local political contexts are analytically and to some extent empirically

separated and in which the nature and impact of the conflict is treated separately from the

broader political contexts, also at national and local levels.

89. The most important development to date has been the 12 point agreement and the possibility

of its collapse poses perhaps the greatest risk to the political contests at national and local

levels. At the national level it would lead to a strengthening of the position of the King and

the royal government. At the local level it could reduce the development space available, not

least by fracturing the tentative cooperation between local political parties and their leaders.

This collapse could be instigated by a number of developments. These include the role of

25

Maoists, the sequencing of constituent Assembly and restoration of Parliament, etc.

Countervailing factors at the local level should this happen could include:

o Demand for services and development by community pressure from below. This

has been demonstrated in several instances.

o The practice of local pragmatic politics between opposing forces to secure

development space at the VDC level. Again this is documented as occurring.

o General conflict weariness.

90. There is Donor pressure to follow a common policy line will place pressure on

UNDP/UNCDF to ‘fall into line’. This is already a dimension present within donor circles in

Nepal and more so in their government and organisation headquarters. It reflects a tendency

to take a moral political position on the royal government’s position with respect to

governance, democracy more generally and human rights specifically. While such a position

is important both from a moral and a realist political perspective, not least for the pressure

and leverage asserted on the King, the royal government, and the CPN(M) the adherence to

moral values should not neglect the gains to be achieved by a realist pragmatism nor the

losses that can be incurred by applying overarching liberal principles to the everyday realities

of fighting poverty at the local level. For example, it is quite likely that the King will use a

call for national elections, possibly to be held in October 2006, as a means by which to

extend the ‘legitimacy’ of his government. This possibility is built into the Mission’s findings

concerning the future policy environment. Such an action should not trigger any further

withdrawal of aid support to decentralisation and local governance as it is primarily a

manoeuvring at the national level with few additional implications for the local level and

should be treated as such. It should also be pointed out that from a Nepal perspective, smart

sanctions that targeted the key ‘agents of change’ namely the military and the governing

elite, would be much more effective leverage mechanisms to bring about change.

International peace keeping operations bring very significant financial returns to the military

in Nepal as well as offering young educated recruits a trip overseas. Restrictions on travel

and international financial movements would also be very effective ways of isolating and

pressurising the governing elite.

91. A third area of risk linked to the second is the move towards crisis management and

humanitarian relief as opposed to development in engaging in a conflict driven realignment

of aid provision at the expense of a development driven peace agenda. This could undermine

the government strengthening approach of a number of programmes by increasing use of

non-government instruments for reaching beneficiaries, strengthening parallel modalities

bypassing local government, etc., both indigenous (NGOs, CBOs, etc) and exogenous (direct

project implementation by donors).

92. A fourth area of risk is that the royal government and the security forces receive increased

military support from other countries. This would strengthen the King and his government’s

belief that a political solution through strong military leverage if not by outright military

victory. The risk of such support being made available is quite high given the global view on

terror held by a number of countries with active aid and political interests in Nepal and the

categorisation of the CPN(M) internationally as a terrorist organisation. Secondly, the

26

regional politics involving Indian, Chinese and Pakistani interests could well lead to

increased military support being offered to the present regime in Nepal. Counter-veiling

factors are the apparent desire by the regional stakeholders to secure stability in Nepal. India

is concerned with the Maoist presence in India; China is concerned with instability on the

border with Tibet; Pakistan is interested in a degree of rapprochement with India and retains

links with China. Internal to Nepal are two potentially important ‘agents of change’: the

military, especially from level of Colonel down and secondly the middle and business classes

of the valley and major towns. The former appear from anecdotal evidence, interviews and

similar, to be expressing some doubts as to their current role in Nepal and as to whether it

can lead to a military victory. Experience with international peacekeeping operations and

human rights training are also relevant here. The latter have remained largely passive if one

excludes intellectuals and students, but the impact of the present conflict and the royal

response on the economy combined with a desire to emulate the middle class success and

prosperity occurring elsewhere in the region, not least in India, is a powerful potent force for

pressing for some form of resolution of the conflict and a new political strategy.

93. A comment on possible fiduciary risks with continuing support; while the Mission has not

addressed this issue in its work, it has been informed that the overall picture for previous

financial years does not suggest that additional aid is freeing up HMGN resources for

security. In the past few years increased expenditure on security has been covered mainly by

revenue growth although this may not be the case in the current year. In the case of District

Development Funds, future plans for unspent funds not to be returned to the centre may

increase the fiduciary risk here. As mentioned in the report, the Mission was provided with

examples of the DDF financing security related expenditure. However, the MCPM modality

of the DFDP is designed to minimise or prevent such practices in the case of its own fund

allocations and the MLD is committed to generalise the approach. More generally it is felt

that the NPC and the Financial Comptroller General’s Office remain institutionally strong

enough to prevent any serious diversion of development sector funds to the security sector.

There is no doubt that the prolongation of the existing local context with the heavy presence

of security forces, the new presence of Zonal and Regional Administrators, and the absence

of elected VDCs and DDCs could encourage a culture of ‘budget abuse’ with diversion of

funds becoming accepted practice.

27

Summary assessment of risks

Risk High Medium Low Comment

Conflict escalates X Conflict very likely to continue, but major sustained escalation not likely

National policy environment worsens

X Little improvement expected, but serious deterioration not likely

No local elections in 2006/7 X Parliamentary elections likely, but boycotted by 7PA if called by King without their agreement.

Donors face increasing pressure to reduce aid

X International/donor concerns with the state of (national) governance are dominating the aid agenda.

Nepal beomes a ‘failed state’ X -> <-X Very dependant upon the position of the international community and donors in particular. Less dependent upon the current pro-democracy movement of strikes and demonstrations and response of the security forces and RNA specifically

Fiduciary risk for DFDP/DLGSP future funds

X Possibly more so for DLGSP than DFDP; the latter’s MCPM secure fairly close and constant monitoring of financial utilisations. Likely to be an increasing problem in the longer term.

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Annex 1 Terms of Reference

Joint Assessment Mission on Decentralisation and Local Governance in Nepal

(March 8 to March 23 2005)

Background Governance and Decentralisation in Nepal The operational and legal frameworks for the implementation of the DFDP have been provided for through the Local Self-Governance Act (LSGA) enacted and passed by Parliament in 1999 and through the associated Local Self-governance Regulation (LSGR)(1999) and Local Body (Financial Administration) Regulation (LBR)(1999). These landmarks in the decentralization process has been followed up by the constitution of a Local Bodies Fiscal Commission (LBFC), convened by the Vice Chairman of the members of the National Planning Commission with members comprising of the Secretaries of key line ministries and representatives from local government associations and other stakeholders. In addition, a draft Local Civil Service Reform has been prepared by HMG/N, which is expected to improve the efficiency and accountability of the local civil servants, and discussions are currently ongoing to reform the size and structure of Local Bodies. The institutional framework and reform agenda is thus conducive to further develop the decentralization process in Nepal, and the performance based budget allocation system is expected to support these initiatives. The Government is currently planning to launch full devolution in a number of pilot districts. This would eventually move the decentralisation process of the country towards giving more autonomy in decision making, budgeting and planning to the local governments than today. The proposal for full devolution is with the cabinet for their approval, but the political and conflict situation of the country might delay the process considerably. The context for working with decentralisation and local governance has changed since UNDP and UNCDF formulated and initiated their current programmes in the late 1990s and early 2000. The Royal Proclamation on February 1st 2005 and the evolving dynamics of the conflict have had a significant impact on the working environment for supporting local governance and decentralisation in Nepal. UNDP and UNCDF have therefore found it timely to conduct a thorough assessment of the current environment for support to local governance and decentralisation as well as possibilities and risks for future support in this area.

UNDP and UNCDF support to decentralised governance in Nepal UNCDF and UNDP is providing assistance to the Government in the field of decentralised governance through 4 major projects in rural and urban areas of Nepal. These projects are Decentralised Financing and Development Programme (UNCDF/DFDP), Decentralised Local Governance Support Programme (UNDP/DLGSP), Rural-Urban Partnership Programme (UNDP/RUPP) and Public-Private Partnership Programme (UNDP/PPPUE). Decentralised Financing and Development Programme (DFDP) DFDP works in 20 districts with co-funding from The Department for International Development (DfID). DFDP is designed to build upon and strengthen the participatory planning process, delivery capacity and overall accountability of the District Development Committees (DDC) and the Village Development

29

Committees (VDCs). The programme provides block grants to the DDCs for small scale infrastructure projects, aimed at increasing access to basic public infrastructure for poor people living in remote and rural areas. However, and more importantly, DFDP also aims to leverage institutional change within the local government system, by improving the local government capacities in planning, infrastructure delivery and management, financial management, and overall accountability and responsiveness. This is reinforced by an incentive mechanism, whereby block grants to DDCs are linked to an annual review of their compliance with Minimum Conditions, derived from basic Local Self-governance Act (LSGA) and financial accountability provisions, and an annual assessment of overall performance (see details further below). HMG/N is now moving to adopt this methodology on a broader basis. DFDP was originally scheduled to end by 31st December 2005. However, in May 2005, a UNCDF strategic review mission recommended that the programme be extended for an additional 9 months, until September 31st 2006. Decentralised Local Governance Support Programme (DLGSP) DLGSP works in 60 districts and 662 VDCs. The programme supports to enhance effective participation of people in the governance process and ensures improved access to socio-economic services to disadvantaged groups including Dalits as envisaged in the Tenth Plan/Poverty Reduction Strategy Paper. It focuses on capacity building of local bodies at the district level to make the devolved sectors operational. At the community level it strongly focuses on improving livelihoods to empower the ultra poor, women and ethnic minorities through social mobilisation and other skill development activities. DLGSP builds on the lessons learnt from Participatory District Development Programme (PDDP), Local Governance Programme (LGP), PDDP/LGP Bridging Phase Programme and other local governance Programmes. The Programme supports poverty reduction efforts through Village Development Programme by introducing pro-poor and positive discriminatory policies to address the issues of social inclusion. A review of DLGSP is planned for in May 2006. Rural-Urban Partnership Programme (RUPP) Rural Urban Partnership Programme (RUPP), in its third phase, has been implemented in 30 Partner Municipalities and 49 Rural Market Centers of the country. Through the social mobilisation process, the Tole Lane Organizations (TLOs) – form community based organizations with the participation of 100% households. The Programme supports in building the capacity of the TLOs by providing skill development trainings for starting up various kind of enterprises and transfer of technology. The TLOs are developed as the extended democratic arms of the Municipalities to engage themselves mainly in development and social activities. Institutionally, the TLOs are linked with the VDCs and Municipalities to be a part of integrated Participatory Municipal Development Planning activities and for promotion of responsive service delivery. The Programme has also successfully started to address the issue of HIV/AIDS, and has already generated AIDS awareness in the local community and among the Municipal governments. The Programme has also added the component of Internally Displaced Persons (IDPs) in its third phase. With the objective of creating an enabling environment for the IDPs, the Programme has been giving orientations to municipal staff, local authorities, journalists and community leaders. The Programme has already started to implement the

30

affirmative action strategy to ensure that Disadvantaged Groups are well mainstreamed in the development process. Public-Private Partnership for Urban Environment (PPPUE) The development objective of PPPUE is to increase the access of urban citizens to basic services, to contribute to the creation of a healthy environment and to improve the living conditions in the urban and semi-urban areas by promoting partnership between public and private sectors for sustainable urban services. PPPUE in the first phase was initiated in five Municipalities of Nepal- Biratnagar, Bharatpur, Butwal, Hetauda and Pokhara. In the second phase, it has been extended to additional five Municipalities - Mechinagar, Dhulikhel, Bhaktapur, Kathmandu and Siddharthanagar. One of the most important components of PPPUE is to provide required technical support (pre-investment supports) to its stakeholders to initialize the PPP projects at the local level. PPPUE facilitates & provides technical support to partner Municipalities, local chambers and local civil society in different phases of project identification, formulation, implementation and evaluation as and when deemed necessary. A recent review of the programme portfolio in Nepal suggested that PPPUE and RUPP should be merged. UNDP is therefore having a mission in Nepal from March 1 to 10 2006 to prepare a new project document merging the two projects. Objectives UNCDF is in the process of formulating a successor programme to DFDP. However, given the current context of conflict in Nepal, there are concerns that any programme of support for decentralization needs to be based on an in-depth analysis of the conflict if it is to achieve its objectives. Both UNCDF and UNDP, therefore, would like to jointly review the current context for support to local governance and decentralisation including an in-depth analysis of political, administrative and fiscal decentralization to inform programme planning accordingly. The analysis will provide a common framework for both UNCDF and UNDP in its future design and implementation of the programmes in the area of decentralized governance. The assessment will assist UNCDF/UNDP (and its partners) in designing as appropriate and realistic a programme as possible, and in understanding precisely what risks will be faced by the programme. Tasks The mission will carry out the following specific tasks: 1. Against the background of the current political and conflict context of Nepal, assess the limitations and risks attached to any future programme of support for decentralisation and local government in Nepal. Undertake a critical review of the institutional policies and processes regarding political, administrative, and fiscal decentralization and full devolution. This assessment will examine the extent to which the political and institutional situation affects (or might affect) the following:

The future of decentralisation in Nepal;

Infrastructure and service delivery and its impact on poverty reduction at the local levels;

The usefulness of piloting innovations in local public expenditure and financial management;

Local accountability and local good governance;

The role of civil society and the political parties in local governance;

Capacity building at the local level;

Policy formulation at the national level.

31

Prospects for supporting the full devolution processes

Appropriate level of engagement at the district, village and community level 2. Assess whether, and under what circumstances, any programme of support for decentralisation would make a useful contribution to local service delivery and related policy reforms. 3. Make recommendations concerning the most appropriate ways to continue support for decentralisation in the current political and institutional context. Output The mission will provide UNCDF/UNDP with a full report of its analysis, findings, and recommendations that would provide a framework for designing and implementing programmes in the area of decentralization and local governance. Methodology The mission will consult with a range of stakeholders at the national level. National level stakeholders will include Ministry of Local Development (MLD), Ministry of Finance (MoF), National Planning Commission (NPC), other ministries, Civil Society Organisations (CSOs), donors, NGOs, and projects. At the local level, the mission will be expected to conduct visits to at least two Districts. During such visits, the mission will be expected to discuss political and institutional issues with a range of stakeholders including the local administration, District Development Committees (DDC) officials, line agencies, CSOs, NGOs and donor-funded projects. Timing The mission will take place from March 8 to 23 2006 and will include a stay of two weeks in Nepal. An

additional five days will be allocated for drafting the mission report. Team membership The mission will be composed of 2 consultants:

an international consultant, with a proven track record of working on local governance issues and a sound knowledge of Nepal. The international consultant will be the team leader of the mission.

a national consultants with a sound knowledge of local governance issues in Nepal and a track record of delivering outputs. The contract will be for three weeks.

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Annex 2 Mission Itinerary

JOINT ASSESSMENT MISSION ON DECENTRALIZATION AND LOCAL GOVERNANCE

(March 8 – 23, 2006)

Date Time Description

Wed. 8th 13.15 Mr. Neil Webster arriving Kathmandu and proceed to hotel Summit

1400-1500 Courtesy meet with Mr. Matthew Kahane, RR/RC Mr. Ghulam Isaczai, DRR/P Mr. Sean Deeley, Peace and Development Adviser, UNDP

1500-1700 hrs

Meeting with NPMs of RUPP, PPPUE, DLGSP, MEDEP, REDP, MGEP and DFDP at DFDP office

Thurs. 9th

0930 hrs Mr. David Johnson, Sr. Human Rights Adviser, OHCHR

1100-1200 Mr. Yuva Raj Pandey, Secretary, MLD Mr. Hari Prasad Rimal, Joint Secretary, MLD Mr. Som Lal Subedi, Joint Secretary, MLD Mr. Bishnu Nath Sharma, Joint Secretary, MLD Mr. Surya Silwal, Joint Secretary, MLD

1200-1245 Meeting with Under Secretaries/NPDs of RUPP, PPPUE, DLGSP and DFDP at MLD

1300-1345 Lunch

1400-1530 Sharad Neupane, ARR, Governance Unit

1600 Mr. Subodh Pyakurel, Chairperson, INSEC Kathmandu

Friday 10th

0800-0845 Mr. Alan Whaites, Sr. Governance Advisor, DFiD,

0900-1000 Meeting with Ms. Sylvie Gallot, Sr. Governance Adviser, SNV

10.00-1145 Security Briefing at EOC, UN

1200-1300 Mr. Murari Prasad Upadhyay, Exe. Sec. Gen. ADDCN Mr. Krishna P. Sapkota, Chairperson, ADDCN

1300 Lunch

1630 Mr. Binay Dhital, Information Coordinator, MS Nepal .

Sun. 12th 16:15 Travel to Kathmandu-Nepalgunj Neil Webster/Khem Raj Nepal/Bisnu Puri/Ram K Pokhrel

Mon. 13th 11:45 Nepalgunj Jumala

Tues. 14th -Wed. 15th

Jumla visit

Thurs. 16th 90:00 Jumla-Nepaljung-Kathmandu

13:00 Meeting with Narayan Khadka, Political Analyst

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Date Time Description

Friday 17th

09:10 1000-1100 1115-1145 1200-1245 1300-1400 1415-1445 1500-1545 1600-1630 1630-1715 1730-1815

Kathmandu – Biratnagar Neil Webster/Khem Raj Nepal/Ram K Pokhrel/Purushottam Shrestha INSEC Chief and Staff Navaraj Subba, DPHO Ballav P. Dahal, DDC president, LDO and DLGSP Staff LUNCH Sushil Pandey, DEO and Section Chief Mayor, Dy. Mayor, EO and Division Chief DLGSP Regional staff Pradeep Kumar Jha, Act. Regional Director, NHRC, Biratnagar Ram Luintel, National Coordination Officer, OCHA, Biratnagar

Saturday 18th

0800 0830-1000 1000-1030 1045-1245 1300-1400 18:15 20.00

Depart to Kaseni VDC (CMC visit/DLGSP supported VDP) Interaction with Chair Managers Return to Birantnagar Interaction with TLO/RUPP LUNCH Back to Kathmandu Meeting with CDO, Banke.

Sun. 19th

Chairta 6 10.30 Mr. Rameshwor Khanal, Joint Secretary, MoF,

Mr. Mahesh Karki, Under Secretary, MoF,

12.00 Lunch

15:00 Mr. Ramsarobar Dube, Acting Secretary, Ministry of Education

Mon. 20th Prepare debriefing

10:00 Meeting at HUGOU, Dr. Hikmat Bista, Meeting with Finn Thisted, Danish Ambassador

Tues. 21st 09:00 Meeting/Debriefing at UNDP

14:30 16.30

Debriefing: MLD Meeting Dr. Shankar Prasad Sharma, Vice-Chair, and Dr. R.P. Chaudhary, Member, NPC

Wed. 22nd Meetings with Alan Whaites, DfID, Roger Shotton, UNCDF, Bangkok. Follow-up Meeting with UNDP and UNCDF

Thurs. 23rd Departure

34

Annex 3 Persons met

Name Position

UNDP

Mr. Mathew Kahane Resident Representative & Resident Coordinator

Mr. Ghulan M. Isaczai Deputy Resident Representative

Mr. Sharad Neupane Assistant Resident Representative

Mr. Sean Deeley, Peace and Development Adviser

Mr. Anil K.C. Senior Programme Officer, DLGSP

Mr. Ram Krishna Pokharel National Programme Manager, DLGSP

Mr. Lakshman Puri National Programme Manager, Micro-Enterpise Development Programme (MEDEP)

Mr. Purusottam Man Shrestha National Programme Manager, Private-Public Partnerships for Urban Environment (PPPUE)

Thomas Skov Programme Officer

UNCDF

Mr. Bishnu Puri National Programme Manager, Decentralised Financing and Development Programme (DFDP)

Deo Krishna Madav DFDP Nepalgunj

Ministry of Local Development

Mr. Yuba Raj Pandey Secretary

Mr. Hari Prasad Rimal Joint Secretary

Mr. Bishnu Nath Sharma Joint Secretary, Governance Division

Mr. Surya Prasad Silwal Joint Secretary, General Administration Section

Mr. Surya Prasad Acharya Under Secretary, Local Body Support

Mr. Reshmi Raj Pandey Under Secretary, Planning & Foreign Aid Coordination Section

Ministry of Finance

Mr. Rameshwor Khanal Joint Secretary

Mr. Mahesh Karki Under Secretary

National Planning Commission

Dr. Shankar Sharma Vice-Chairperson

Dr. R.P. Chaudhary Member

ADDCN

Mr. Murari Prasad Upadhyay Exe. Sec. Gen

Mr. Krishna P. Sapkota Chairperson

Department for International Development (DfID)

Mr. Alan Whaites Senior Governance Adviser

Office of the High Commissioner for Human Rights in Nepal

Mr. David Johnson Senior Human Rights Officer

Ms. Sonia Muller Rappard Human Rights Officer, Sub-Office Biratnagar

Mr. Ram Prasad Luetel National Coordination Officer, Sub-Office Biratnagar

Royal Danish Embassy/Danida

Mr. Finn Thilsted Danish Ambassador

Dr. Hikmat Bista Senior Adviser on Decentralisation, Human Rights and Good Governance Unit (HUGOU)

35

SNV - Netherlands Development Programme

Ms. Sylvie Gallot Senior Local Governance Adviser

Informal Service Sector Centre (INSEC)

Mr. Subodh Raj Pyakurel Chairperson

Mr. Raj Thapa Regional Coordinator, Biratnagar Office

Mr. Bhajan Chaudhari Nepalgunj Office

Mr. Dipen Neupane Documentation Officer, Nepalgunj

Ms. Suju Pyakurel Child programmer , Nepalgunj

Ms. Bagmati Kattel Accountants, Nepalgunj

Mr. Pitamber Neupane Officer, Nepalgunj

Ms. Shakuntala Baral Dalit and other programmes, Nepalgunj

Mr. Ghanashyam Pokhrel IDP, Nepalgunj

Mellemfolkligt Sammenvirke (MS)

Mr. Benoy Dhital Information and Advocacy Officer

National Human Rights Commission

Mr. Bhanubhakta Acharya Promotion Officer, Biratnagar Regional Office

Biratnagar Sub-Metropolitan City (BSMC )and Morang DDC

Mr. Praladh Prasad Sheha Mayor, BSMC

Mr. Durga Bahadur Bhandari D. Mayor, BSMC

Mr. Ramesh Chandra Paudel Former elected Mayor, BSMC

Mr. Dinesh Kumar Thapaliya Executive Officer, BSMC

Mr. Khem Sapkota Act. Jt. Executive Officer, BSMC

Mr. Purna Adhikari Ward President, BSMC

Mr. Hari Prasad Dahal Ward Commissioner, BSMC

Mr. Ghanashyam Chaudhari Ward President, BSMC

Mr. Diwakar Rai Ward Commissioner -20, BSMC

Mr. Shyam Prasad Dahal Ward President -5, BSMC

Mr. Dinesh Kumar Shah Ward Commissioner-19, BSMC

Mr. Ghanendra Katuwal Jt. Engineer, BSMC

Mr. K.B. Mishra Ward Commissioner-12, BSMC

Mr. Rajendra Pradhan Finance Officer BSMC

Dr. Uttar Regmi Planning Chief, BSMC

Mr. Arjun Thapaliya Administration Manager, BSMC

Mr. Arjun Thapaliya Manager of BRT. Sub- Metropolitan city

Ms. Amrita Lama Chairperson, Ward No. 16, Daraiya Adarsha Tole Org

Ms. Meena Sharma Vice Chairperson Ward No. 16, Daraiya Adarsha Tole Org

Ms. Sirjana Sharma Secretary, Ward No. 16, Daraiya Adarsha Tole Org

Mr. Kishor Adhikari Joint Secretary, Ward No. 16, Daraiya Adarsha Tole Org

Mr. Krishna Limbu Treasurer Ward No. 16, Daraiya Adarsha Tole Org

Mrs. Suchitra Dahal President, Radharaman Marg Tole Organisation

Mrs Tara Chapagain Vice President, Radharaman Marg Tole Organisation

Mrs. Sita Niroula Secretary, Radharaman Marg Tole Organisation

Mrs. Deepa Sharma Vice president, Radharaman Marg Tole Organisation

Mrs. Rita Acharya Treasurer , Radharaman Marg Tole Organisation

36

Mrs. Toya Chapagain Member, Radharaman Marg Tole Organisation

Mrs. Mira Aryal Member, Radharaman Marg Tole Organisation

Mrs. Indira Shrestha Member, Radharaman Marg Tole Organisation

Mr. Ballav Prasad Dahal Morang DDC President

Mr. Sailendra Bahadur Basnet Morang DDC Vice-President

Mr. Arun K. Kayastha ASTM, DLGSP

Mr. Bishwa Mohan Thapa Morang DDC Member

Mr. Kala Ghimire Morang DDC Member

Mr. Bhagwan Thapa Morang DDC Member

Mr. Liyaul Husen Member of RPP, Sunsari

Mr. Mahendra Khadka Project Officer, Morang DDC

Mr. Hari Narayan Chaudhari Morang DDC Member

Mr. Jay Parkarn Gahchhdar Morang DDC Member

Mr. Bijay K. Tiwari Morang DDC Member

Mr. Suresh Prasad Singh Morang DDC Member

Mr. Birendra Adhikari DLGSP, Morang

Mr. CP Sigdel Morang DDA, DLGSP

Mr. Khadga Barjasa Morang DDC Member

Mr. Shyam Borb Morang DDC Member

Mr. Sayendra Bantawa Morang DDC member

Mr. Rohit Bahadur Karki Vice President of Sunsari DDC

Mrs. Laxmi Prasad Dhimal Executive Secretary, LDF,/Morang

Mr. Dhukaram Dhagal Community Organisation (CO) Chair, Kasheni VDC

Mr. Narayan Prasad Dahal CO Secretary, Kasheni VDC

Mr. Nunu Bhagat CO Auditor, Kasheni VDC

Mr. Mukhan Lath Chaudhuri CO Member, Kasheni VDC

Mr. Manju Ahikari CO Member, Kasheni VDC

Mr. Santa Ghajurel CO Member, Kasheni VDC

Mrs. Radha Ghiri CO Member, Kashenui VDC

Mrs. Rewati Kumar Timisina Social Mobiliser, Kasheni VDC

Mr. Bhadra Bahadur Basnet CO Manager, Kasheni VDC

Mr. Chandra Mani Bhattaurai CO Secretary, Dulari VDC

Mrs. Tirtharaj Ghimire Social Mobiliser, Dulari VDC

Mrs. Ambika Dahal CO Auditor, Dulari VDC

Mr. Ganesh Prasad Guragain Village Development Fund Member, Dulari VDC

Mr. Arjun Raj Adhikari Village Development Project Manager, Dulari VDC

Mrs.Umesh Bhattarai Social Mobiliser, Yangsila VDC

Mrs. Tulasha Bhattarai Social Mobiliser, Jahada VDC

Mrs. Laxmi Prashad Dhimal Secretary Morang LDF

Mr. Rajendra Kumal Majhi Overseer, Morang LDF

Mrs. Menuka Devi Acharya Savings and Credit Facilitator, Morang LDF

Mr. Balaram Gautam Accounts and Admin. Assistant, Morang LDF

Mr. Chandra Bahadur Basnet Saving and Credit Facilitator, Morang LDF

Mr. Birendra Adhikari DLGSP, Morang DDC

Mr. Chandra Prasad Sigdal DLGSP, Morang DDC

Morang District Public Health Office

Mr. Navaraj Sabha District Public Health Officer

Morang District Education Office

37

Mr. Sushil Pandey District Education Officer

Banke District

Mr. Basupati Duhal Misra DDC Chairperson, Banke District

Mr. Sarat Kumar Pulal Programme Officer and acting LDO, Banke District

Mr. Bishu Prasad Nepal Executive Secretary, Banke District

Mr. Dipal Neupane Enterprise development Facilitator, Banke District

Mr. R. Sharma DLGSP Adviser, Banke District

Mr. K. Khadka LDF Construction Overseer, Banke District

Ms. S Shah Social Mobiliser, Banke District

Mr. Yogesh Kumar Pathak Social Mobiliser, Banke District

Mr. Prabhat Sarkari Multiple Service Centre (MSC), NGO, Banke District

Mr. Shanti Shomoha Security and Peace Devt. Initiative (SPDI), NGO, Banke District

Mr. C.B. Singh Forum for Community Empowerment (FORCE), NGO, Banke District

Mr. Prakash Uppadhyaya Limlights, NGO, Banke District

Mr. Bhalkrishna Chowdhuri Rural Reconstruction Nepal (RRN), NGO, Banke District

UNDP Programme Office Nepalgunj

Mr. T. B. Gurung Officer in Charge, Programme Office Nepalgunj

Mr. Bheshnath Ghimire Infrastructure Adviser, Programme Office Nepalgunj

Mr. K.B. Bhanduri Decentralisation Adviser, Programme Office Nepalgunj

Mr. Riddhi Sharma DLGSP, Banke District Development Administration, Programme Office Nepalgunj

Mr. Prem Prasad Dawadi Municipal Devt. Adviser, RUPP, Bardiya District, Programme Office Nepalgunj

Mr. Ramesh Shah EDO, MEDEP, Banke District, Programme Office Nepalgunj

Mr. Rajan K.C. Micro-Enterprise Specialist, MEDEP, Bardiya District, Programme Office Nepalgunj

Ms. Hurna Bhusal Finance Adviser, MEDEP, Banke District, Programme Office Nepalgunj

Jumla District

Mr. Uttar Tamata Zonal Administrator

CDO, Jumla District

Mr. Dhan Bahadur Thapa DDC Chairperson

Mr. Jarid Rokaya 6 Ilaka Board Member

Mrs Kamala Dangi 4 Ilaka Board Member

Mr Dill Bahadur Khatri Dhapa VDC secretary

Mr. Min B. Shatri Kalikakhatu VDC secretary

Mr. Devi Datta Neupane Ex-DDC Vice Chairperson (once nominated, once elected)

Mrs. Raj Pura Nepali Child Care Teacher, Talihum VDC

Talihum village residents Talihum Village and VDC.

Mr. Bakta Bahadur Nepali Resident of Lamba village and VDC.

Mr. Puspa Raj Wagle Monitoring & Evaluation Officer, Western Upland Poverty Alleviation Project, Jumla

Mr. Direndra Giri Former Jumla DDC member

Mr. Nawaraj Shahi Kantipur Journalist, Jumla

Mr. Dhan Bahadur Gautam Kanali Integrated Rural Devt. & Resource Centre (KIRDARC)

Mr. Prakash Chandra Khatri Radio Kanali, Jumla

38

Mr. Prakash Buthapa FOURS, Jumla

Mr. Durga Pandey Himilaya Micro-Enterprise Assocation (HIMEA), Jumla

Mr. Kamar Buddha Jumla NGO Federation.

39

Annex 4 12 Point Agreement between 7 PA and CPN(M) announced 22nd

November 2005.

1. At present all Nepalese desire peace, democracy, prosperity, social progress and independent

and sovereign Nepal. To achieve this goal, we fully agree that the autocratic monarchy is the

main obstacle. We are in clear agreement that peace and prosperity of the country is quite

impossible without ending autocracy and establishing absolute democracy. Hence, all anti-

regressive forces have come to an agreement to focus their attack against the autocratic

monarchy independently, and bring it to an end by intensifying the ongoing democratic

movement across the country.

2. The seven-party alliance is fully convinced that sovereignty and executive right of the people

can be re-established through the reinstatement of parliament (on the basis of people's

movement); formation of all-party government with full executive power; talks with the

Maoists and election to the constituent assembly. Whereas CPN-M believes that people's

sovereignty can be established through formation of an interim government formed after a

national conference of agitating democratic forces, which will oversee the election to the

constituent assembly [This is the only point of divergence, so to speak, between the seven-

party alliance and the rebels]. Both of us agree to continue negotiation and dialogue to reach

common agreement in these procedural issues. However, we have agreed that people's

movement is the only way to attain our agreed goals.

3. The nation has demanded constructive end of the present armed conflict and establishment of

a lasting peace. Thus, we are fully committed to end autocratic monarchy and establish

lasting peace through election to constituent assembly. In this regard, the CPN-M expresses

its commitment to move into new peaceful political line. After bringing the autocratic

monarchy to an end, we have agreed that the arms of both the Royal Nepalese Army and the

Maoists will be supervised by the United Nations or a dependable international body to

ensure free and fair election to the constituent assembly. Both parties have also agreed to

accept the results of the elections. We also expect an involvement of a credible international

community in the dialogue process.

4. CPN-M has expressed firm commitment to acceptance of competitive multiparty system,

fundamental rights of the people, human rights, and rule of law and democratic principles

and values and to act accordingly.

5. CPN-M has agreed to create conducive atmosphere to allow all leaders and cadres affiliated

to other democratic forces and common people, who were displaced from home during the

conflict, to return to their respective places with full respect. The Maoists have also agreed to

return the houses and physical properties of people and party cadres seized unjustifiably.

People will be allowed to take part in political activities without any hindrance.

6. CPN-M has also agreed to criticize itself for its past mistakes and has expressed commitment

not to repeat them in future.

7. Parties will introspect on their past mistakes and they have expressed commitment not to

repeat such mistakes in future.

40

8. During the peace process human rights principles and freedom of press will be fully

respected.

9. The municipal and parliamentary polls which have been pushed forward with the malicious

intention of deceiving people and the international community, and to legitimize the king's

autocratic and unconstitutional rule will be boycotted and made unsuccessful.

10. People, representatives of people and political parties are the real bulwark of nationalism. We

are committed to protecting our independence, national unity and sovereignty, and

safeguarding geographical integrity. It is our responsibility to maintain cordial relationship

with all nations in the world--especially with our neighbors, India and China-- based on the

principle of peaceful co-existence. We appeal to all patriotic Nepalis to be wary of the

Mandale brand of nationalism preached by the monarch and his sycophants to protect their

rule and interest. We also appeal to the Nepali people and international community to

provide help to our Loktantrik movement.

11. We also appeal to all people, civil society members, professional communities, various sister

organizations, journalists and intellectuals to participate actively in the people's peaceful

movement launched under the common agreement based on democracy, peace, prosperity,

social transformation, and the nation's sovereignty.

12. The parties and Maoists have also agreed to probe into past incidents and take action against

the guilty. In future, if any problem occurs among political parties, the concerned high level

leaders shall discuss and settle the issues amicably through dialogue.