Issue 54 Vol III, December 31, 2007

C O M M E N T

Global Conflicts and the Violence in Kashmir
Ajmer Alam Wani writes from Sri Nagar

A new report on armed conflict has hinted of increased military activity by the Taliban in Afghanistan and Al-Qaida's operations could have a negative impact on the otherwise promising drop in violence in Kashmir. The report also says that these prevalent conditions would also affect the stability and chances for democracy in Pakistan.

The findings, which are a part of an annual report on "States in Armed Conflict" conducted by Uppsala University Department of Peace and Conflict Research, Sweden, primarily states that the number of conflicts in the world was no longer declining. Since most conflict-ridden years in the early 1990s, a continuous decline was registered up to 2002. Since that time, the number has held steady at around 30 active armed conflicts per year. This is probably also the case for 2007.

Researchers Professor Peter Wallensteen and Lotta Harbom say,"This is of course a cause of concern. Today's ongoing conflicts are extremely protracted. This indicates that the successful negotiation efforts of the 1990s are no longer being carried out with the same force or effectiveness.”Today's conflicts appear to be intractable and drawn-out, and the researchers believe that the 1990s peace strategies need to be improved in order to achieve results.

According to this study, the Middle East is the region in which peace initiatives are most clearly conspicuous in their absence. The central importance of the region for the world's oil supply and for world religions makes this serious. Peter Wallensteen noted, "The conference in Annapolis in late November 2007 was the first attempt since 2001 to bring the parties together. But, they even found it difficult to agree on the declaration that started the negotiations. This is a worrisome sign. At the same time, we have to welcome all attempts to bring peace to this area. It has been more than 60 years since the UN General Assembly adopted a plan for Palestine. It must be adapted to today's reality and implemented."

During this year other regional conflict complexes have emerged and worsened as well. For example, the crisis in the Sudanese region Darfur is now spreading to the surrounding countries, such as Chad and the Central African Republic.  Lotta Harbom says, "These developments have prompted neighboring countries to take certain peace initiatives". The international mediators in the Darfur conflict, including Jan Eliasson, who is also a visiting professor at Uppsala University, are working to arrange negotiations among the parties. But thus far they have had no success.

Other bleak scenarios include the situation in Africa's Horn, which continues to be troublesome because of the region's own conflict dynamics becoming intertwined with the US-headed war on terror. This has led to new conflict issues being added to the unresolved disputes between Ethiopia and Eritrea. Also, Somalia has once again become a seat of conflict.

At the same time, there are some encouraging trends as well. Conflicts between different groups and peoples, with no involvement of the state, are decreasing in the number of both conflicts and fatalities. Joakim Kreutz at the Uppsala Conflict Data Program, ” This type of conflict often arises in the wake of civil war, but they seem to be easier to bring to an end."

There are also points of light when it comes to conventional conflicts. Peace negotiations are underway in a number of conflicts, and they are also leading to peace treaties. The agreements in Nepal (from 2006) and Aceh in Indonesia (from 2005) are now being implemented with some degree of determination. Also, peace-making measures in a number of West African countries, like Sierra Leone, Liberia, and Ivory Coast, continue to be fruitful.

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Nepal end of Monarchy
23-point agreement reached, Maoists rejoin government

Over three centuries old monarchy is no more there in that poor but beautiful Himalayan country. Nepal is now Democratic Republic. This decision came after long and protracted parleys for weeks.

On December  Dec 23 in Katmandu, top leaders of the governing Seven-Party Alliance finally agreed to proclaim Nepal a republic and enforce it through the first meeting of the Constituent Assembly to be elected within 15 weeks. A two-third majority of existing members in parliament has taken formal decision and voted the monarchy, completely and permanently.

The parties struck a 23-point deal, agreeing to amend the interim constitution that now  proclaims Nepal as a federal democratic republic the first meeting of the Constituent Assembly would ratify this decision. As per the agreement, the Prime Minister now performs all responsibilities of the head of state until the CA formally ends the country's 240-year-old institution of the crown.

The parliament has also empowered through amendment in the constitution to end monarchy earlier if the king creates serious obstruction in the election process. For this, the parties have decided to amend Sub-clauses 1, 2, 3, 3(A) and 3 (B) of Article 159 of the constitution.

The parties agreed to hold the CA poll under mixed electoral system where 335 members or 55.74 percent of the 601-member assembly will be elected through proportional system while 39.9 or 240 members will be elected through first past the post system from 240 geographical constituencies. The remaining 4.32 percent or 26 members will be nominated by the prime minister. The nominations will also include members of minority groups who fail to elect any representative through both the systems.

"We, the party leaders, have taken these decisions keeping in view the national commitment to hold Constituent Assembly polls by this year end (end of Nepali year that is, mid-April 2008)," the top leaders jointly stated in the agreement paper.

The proclamation of republic and the electoral system had become major issues of dispute among the biggest parties in the governing alliance. The dispute led to deferral of the polls scheduled for November 22 and narrowly took the two-year-long peace process to the brink of collapse.

The Maoists who joined the coalition government on April 1, but quit it in September 18 following difference over proclamation of republic and electoral process agreed to join the government immediately.

In the agreement paper signed Sunday, the Maoists agreed to return all properties they seized from people during and after the insurgency within a month. A committee headed by Chief District Officer will be set up for implementing this agreement. The former rebels also agreed to stop collecting taxes and carrying out activities like extortion and intimidation.

The government will also release the pending amount for Maoist combatants in UN-monitored cantonments immediately and provide monthly allowance every month. Disqualified combatants will be sent home after paying their due allowance so far.

The government will take initiatives at the diplomatic level to releasing Maoists detained in foreign jails and the government will release all Maoists from jail by January 14.

A special cabinet committee will start discussion on integration of Maoist fighters. The government will take initiatives for acquiring national and international assistance to meet the financial liabilities required for reconstruction of damaged infrastructure and rehabilitation and relief for victims of the conflict.

The parties also agreed not to carry out any activity through their party and sister wings that could disrupt the polls. The parties will hold at least seven joint mass meetings to appeal to the people to take part in elections.

The parties agreed to form an all-party committee to coordinate government functioning. The parties will head it turn-by-turn. After a long dispute between Nepali Congress and Maoists, the parties finally agreed to give the committee only a coordinating task. Maoists were demanding that the committee be given power to steer government functions but NC leaders said it was against the constitution that has given the PM the power of head of state along with head of the government.

The parties agreed to set up commissions agreed earlier to systematize the peace process, within a month. The Commissions include Disappearance Commission, Truth and Reconciliation Commission and State Restructuring Commissions. A separate High-level Peace Commission will be formed to work in coordination with the Peace Ministry.

The parties also agreed to add new provisions in the constitution for appointment of parliament's general secretary and fulfillment of the seats of parliament vacant due to death of members or other reasons.

NWPP puts eight-point reservation

Nepal Workers and Peasants party (NWPP) put an eight-point reservation to the agreement, demanding a socialist republic and multi-member proportional system of election.

It also demanded revival of local bodies elected in 1997, and proportional representation of peasants and workers in all state mechanisms, among others.

Govt tables new motion to amend statute; RPP, RJP disapprove it.

Kantipur Report

Kathmandu, Dec 24 - The government Sunday withdrew the bill tabled in the interim parliament eight days ago for the third amendment to the interim constitution and tabled a new one in line with the 23-point historic agreement sealed by the top leaders of the Seven-Party Alliance (SPA).

Minister for Law, Justice and Parliamentary Affairs Narendra Bikram Nemwang withdrew the measure on the onset of today’s sitting of the House.

A fresh motion to amend the statute was tabled after Home Minister Krishna Prasad Sitaula read out the agreement inked by the top SPA leaders, which inter alias, states that Nepal would become a federal democratic republic.

The SPA leaders had sealed the 23-agreement agreement Sunday night, ending months-long political stalemate and paving the way for the Constituent Assembly (CA) elections by mid April next year.

The debate on the amendment motion has started today itself.

On December 16, the government had tabled the motion only to amend a provision in the statute to hold the CA elections by mid December this year to avert a constitutional crisis in the country since the SPA leaders were divided in many of the major political issues, including a new date for the polls.

The last motion had also stipulated the elections by mid April 2008.

The government had registered the new motion to amend the interim constitution at the parliament secretariat after a cabinet meeting held last night immediately after the meeting of the top SPA leaders endorsed the 23-point agreement.

The Nepali Congress and the CPN-UML lawmakers today urged the parties to religiously adhere to the latest agreement, stating that the months-long political predicaments that had twice deferred the elections could have been averted had the parties become sincere about implementing the previous agreements.

Maoist lawmaker Dev Gurung said that they settled for the agreement despite some reservations so that the country could be bailed out of the festering political crises.

However, the Rastriya Prajatantra Party (RPP) and the Rastriya Janshakti Party (RJP) leaders disapproved of the SPA agreement.

RPP Chairman Pashupati Shumsher Rana said that yesterday’s agreement was unacceptable to his party.

The party has been insisting that only the people have the right to decide the fate of the monarchy and that a fully proportional representation system should be adopted for the CA elections.

The 23-point agreement aims at incorporating ‘federal democratic republic’ in the interim constitution, which would be formally endorsed by the first sitting of the elected CA.

The SPA leaders had also settled for a mixed electoral system, comprising the proportional representation system, first-past-the-post and a provision for some appointments in the 601-member CA.

Rana also said that the people were not yet convinced that the elections would take place by mid April next year since the polls had been deferred twice in the past.

RJP Chairman Surya Bahadur Thapa charged the SPA leaders with further burdening the nation by settling for a “jumbo” CA.

Dubbing SPA leaders as autocrats, the former Prime Minister said they have snatched the people’s right by taking unilateral decision on the issues of national importance.

Meanwhile, Nepali Congress lawmaker Jaya Prakash Prasad Gupta tendered his resignation to Speaker Subash Chandra Nemwang.

He has quit the Congress party to rejoin the Madhesi People’s Rights Forum.

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Bad Year for the Small Industry in India

IT may not curtain as yet for the small scale industry in India. However, its fate does hang in balance. Next year it is feared to do much worse than in 2006 and 2007. There are some inherent problems; outmoded technology, primitive management and lack of sufficient resources. Nevertheless, it had been growing. No longer now, the government in its liberal zeal to promote and develop larger industries and imports is surely and steadily killing this sector that sustains millions of small entrepreneurs and workers.

The share of small scale units in the country's manufacturing sector may decline as newer technologies, trade barriers and strict quality norms erode their competitiveness, industry body Assocham has said.

According to a study by the Associated Chambers of Commerce and Industry of India (Assocham) it is most vulnerable as its contributions to manufacturing and employment generation is likely to slip by 5 per cent and 3 per cent respectively. It has already plunged into deceleration because of its inability to absorb latest technologies, which eroded its competitiveness a great deal. Large and medium industries are sourcing their inputs through cheaper imports that have endangered small industries’ existence and the trend is unlikely to be arrested in the coming year.

 The number of small scale units in 2006-07 were estimated at 44 lakh with employment capacity for nearly 2.38 crore workers with Rs 14 lakh crore of output to manufacturing. The study noted the sad development, "As a result of deceleration, the number of units in have come down to around 40 lakh by now and employment generation has shrunk to 2.25 crore workers. Their output to manufacturing has come down to Rs 12 lakh crore." The number of small scale industries units in 2006-07 was estimated at 4.4 million with employment capacities for nearly 23.8 million workers.

The  study on "Prospects of small scale industries in 2008 vis-à-vis other Booming Sector" such as retail, real estate, IT and stocks, as carried out by the Assocham presents very dismal picture. Chamber president Venugopal N Dhoot says small scale sector will encounter a gloom period, beginning 2008 as its contribution to manufacturing will come down to 35 per cent as compared to 40 per cent of now and over 45 per cent preceding year until 2006-07," The assessment highlights that the large and medium scale-industries are sourcing their inputs through cheaper imports that have endangered the existence of the small sector and the trend is unlikely to be arrested in 2008.

The small scale industries input costs have also risen and their supplies got restricted to vendors as, by and large, these small units have failed to absorb technologies since these called for higher investments in research and development, which the sector could not generate.

Since not many visible policy decisions such as reduction in inspector neither raj nor credit extension is being given to them at concessional rates, their export potential would decline by 7-8 per cent.

Thus, vendors in medium and large industries are sourcing their supplies from economies of scale at much cheaper price and the trend will continue as customs and import tariffs for most of the inputs would fall. Until small scale industries upgrade them technologically and the number of inspectors is reduced to less than 15, their contribution to exports as well as manufacturing would fall by 5 per cent and over 8-9 per cent, said Dhoot.

The Assocham chief added that expansion in most of small scale industries units have come to virtual halt and plugged employment opportunities. The credit extension is at very high cost and their delivery mechanism too is faulty. As long as these impediments continue, the small scale industries would find it difficult to compete with their counterparts.

The other barriers in the path of small industries are lack of information, capability to build an international market position and maintaining international business relations. Most enterprises in this sector are product and technology-oriented than market-oriented. Moreover, the lack of managers with international experience and foreign language skills is another hindrance in their growth.

Among the external barriers, the most crucial are technical trade restrictions including standardisation, quality requirements, conformity assessment, packaging and labeling, ecology requirements etc, bureaucratic procedures, marketing and distribution problems and lack of risk assurances.

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