SPECIAL REPORT

Although Nepal has over half a century long experience of democratic governance at the local level, the issue of local governance has found onlyvery nominal place in the debates inthe Constituent Assemblies, I and II. Given the current situation in which Nepal’s local bodies havebeenmaking do without the elected representatives for almost 15 years and the CA II is drafting the constitution, Ministry of Federal Affairs and Local Development organizeda two-day workshop onThe Role, Need and Possibility of District and Local Government and their Service Delivery in Federal System of Government. The workshop, attendedby Constituent Assembly members representing various political parties;members of civil society organizations, including Federation of District Development Committee, Federation of Village Development Committee and Federation of  Municipalities; and experts, former senior civil servants, senior government officials and media persons,came to the conclusion that the need of the hour is to hold the elections for local bodies as it is a foundation of democracy and give thema constitutional status in the new constitution

For the first time in a broad meeting of stakeholders,including CA members, experts, local representatives and senior government officials, participants almost had a consensuson the need to hold the elections for local bodies and give themthe constitutional statusin the new federal constitution.

At a 2-day workshop, organized by Ministry of Federal Affairs and Local Development in Dhulikhel on 27-28 March,stakeholders discussed the entire gamut of functions of local bodies in the context of the proposed federal structures in Nepal.

An overwhelming number of CA members stressed the need to continue with the present borders of the District Development Committee and the authority vested with the local bodies under the Local Self Governance Act of 1999. Although experts stressed the need to restructure the present borders and numbers of VDCs and municipalities, political leaders and civil servants were skeptical about the need.

At the function chaired by Dr. Som Lal Subedi, secretary at Ministry of Federal Affairs and Local Development (MOFALD), Dr. Hari Sharma, joint secretary and head of Federal Division, highlighted the objective and scope of the workshop.

In the presence of chief guest, Minister for Information and Communications Dr. Minendra Rijal, expert Dr. Shyam Krishna Bhurtel and Dr. Subedi presented their papers.

In his paper, Restructuring of Local Bodies in Federal Structure, Dr. Bhurtel highlighted Nepal’s experiences of local governance under the Local Self Governance Act 1999. Dr. Bhurtel argued that Nepal’s experiment of Local Governance under Local Self Governance Act is taken as a model around the world.Presenting his paper, expert Dr. Bhurtel narrated Nepal’s experiences of local government with Local Governance Act 1999 with his own international experiences in Sudan. Dr. Bhurtel discussed the experiences and achievements of the local governance experiment in Nepal over a brief period.

Former vice chairman of National Planning Commission Dr. Pitamber Sharma commented on the paper,Restructuring of Local Bodies in Federal Structure. Although Dr.Sharma was very critical on terming Dr. Bhurtel’s paper as reflections of the old mindset, he stressed the need to keep the achievements made by the act and hold elections.

Presenting his paper on Needs of Local Governance (Municipalities and Village Development Committees) in a Federal System, Secretary Dr. Subedi presented how local bodies can help to foster democracy at the local level. Dr. Subedi also presented the Local Government List.An expert on fiscal decentralization, Dr. Subedi suggested in his paper the need to devolve power to the people from the center.

Commenting on Dr. Subedi’s paper, former vice chairman of National Planning Commission Dr. Shanker Sharma talked about the models for federal structures and local bodies. Dr.Sharma hailed the list prepared by Secretary Dr. Subedi as the most appropriate for Nepal.

Chief Guest Minister of Communication and Information Dr.Minendra Rijal said that the government intended to bring a new constitution to empower the people at the grass root level. “Despite our commitment to hold the interim elections for local bodies, we are unable to do so because of political differences. I still believe that elections for the local bodies are necessary to empower the people and make local bodies accountable,” said Rijal. “The new federal constitution will give the right space to the local bodies.”

Crux of the program

One of the major thrusts of the two-day deliberations was the consensus opinion among CA members, civil society leaders, government officials and politicians about the need to hold the elections for local bodies as soon as possible. Experts even suggested interim elections for the time being. Except a lone Maoist and Federal Socialist Party’s CA member, CA members representing various other parties also stressed the need for the elections as early as possible.

Similarly, unanimous voices were raised in giving the local bodies a constitutional status to prevent the centralization of power at the provincial level. Despite the opposition from experts, CA members wanted to continue with District Development Committee as intact.

Participants argued that there was an excessive centralization of power and local level elections had not been held for the last 15 years. One of the constant refrains was that the priority had not been given to 'grass root democracy' but power grabbing by hook or by crook.

All the speakers, includingchief Guest minister Dr. Rijal, stressed the need to hold the elections. Despite important rolesplayed by local bodies to help democracy thrive at the grass root level, there was no debate on the status of local bodies when the issue regarding state restructuring was discussed in the first CA and leaders of major political parties have remained silent on this even at the second CA.

Origin of Federal Structure

After People’s Movement II of 2006, Nepal was declared as a federal state. “We are now involved in the issue of structure of province and name and border. The time has come to discuss on the tires of government, including the local bodies, whether DDC, VDC and municipalityare required or not. What model will Nepal need to follow?Different countries have different models, as Germany and Brazil hadone andSwitzerland and others had another,” said secretary Dr. Subedi.

“We need to make a decision as to what the role of DDC is. A recent decision to remove the service center has already created a lot of problems. In this way, there is the need to think how we manage change. Two papers will be presented and there will be debate and discussions on the agenda. How do we make local bodies more strong and efficient in the context of the federal structure. We want political feedback. Our ministry will publish a book,” said secretary Dr. Subedi.

With technical support given by UNDP, the 2-day workshop was the first of its kind to bring all different stakeholders together to deliberate on the important issue of local bodies in federal structure.

Experts View

Although experts had slightly different approaches, they hada consensus on certain core issues. They demanded early elections for local bodies and constitutional status for them.

“The vacuum created by lack of elections of local representatives promoted bad practices. The memory of local elections is fading among the people between 18-35 years as many of them do not know that there used to be elected representativesat the local level. There were no electionsfor almost 17 years. After 1990, we have had local governance act with completedecentralization. The execution of Local Self Governance Act 1999 is very brief under the elected representatives,” said Dr Bhurtel.

Experts argued that there shouldbe elections even before carving the provinces. They fear that Nepal will have to wait for a long time to see elections if the elections are not held in time.

There is a dispute on the structure of local bodies but everyone wants to hold the elections. “We may continue the debate for state restructuring but we cannot continue to the present state of local bodies without elections,” said Dr. Pitamber Sharma. “Political leaders should unite to hold the elections for local bodies.”

Other experts supported the logic, too. “There is no harm to hold the elections for local bodies. It will help to strengthen democracy and make the local bodies accountable to the people,” said Dr. Shanker Sharma.

Debate on Structures

Nepali Congress, CPN-UML and RPP want DDC, Municipalities and VDCs. Maoists want complete transformation in the present setup. Without clear mandate, local bodies cannot function effectvely and properly. In the power sharing,

DDC is opposed to VDC and VDC does not want Ward and Consumer Group.

Our debatewas on two tire of government. These were some of the arguments put forth with prominence.

With the vacuum developed in the absence of elected representatives, now the wards are under the Citizens Forum, which is the representatives’ body. It reaches the local level and it is inclusive. There are some 1 million people involved at the local bodies.  However, the CA members are against it.

Despite certain reservations over the number of bodies, there is a broader consensus to keep the present structure of local bodies. CA members hold the view that the DDCs should not be restructured as they can play important role in federal structures to coordinate between the center, province and grass root level bodies.

There was also discussion on the special and protected areas within provinces for particular vulnerable groups. “We have to discuss special areas and settlementpattern. Chepangs live inDhading, Chitwan and Makwanpur,” said Dr. Pitamber Sharma.

Experts argue that there is the need to raise the debate on inter-governmental issue, federal fiscal commission issue and borders of local bodies. “Every country has its own model. Germany’s model is different from that of Denmark, Ethiopia andAfghanistan have different models. One model is nofit to all,” said Dr. Subedi.

In the absence of a proper constitutional role, local bodies and provinces will fight each other. “Nepal's local body is a model all over the world. However, we are yet to accept this fact,” said Dr. Bhurtel.

Thereis the need to bring coordination among federal, state and local bodies.

Except few municipalities, Nepal's local bodies are dependent on the central government for financial resources.

Agenda of Restructuring

The restructuring issue will take years or decades to settle. There will be a lot of differences on the issue of borders of provincial and local bodies.Thereis the need to rethink the status and relevance of current VDCs, Municipalities and Districts in the context of federal structures.

If there arefewer provinces, there will be the need to reduce the number of districts. At a time when we are unable to relocate the service centers from district headquarters, it is difficult to believe one can change the border of District Development Committees without a broader understanding.

“Whether we want DDC or not? We have to look at the pros and cons of districts. We need to take a cautious approach to see what will happen in the absence of DDCs and VDCs,” said Dr. Bhurtel.

With the announcement of federal structure, there will be power and portfolio crises among the federal minister and provincial minister. Ministry of Federal Affairs and Local Development us going to be a major ministry in the coming days. However, it is uncertain that the two tires of government will bring governance to the community level.

In the absence of proper officer, chief minister will either capture Chief District Officer’s Chair or District Development Committee’s Chair. “What we need to discuss on now is what modality we want. Looking at the international trend what I can say is that the local bodies are more inclusive than the resources are.”

Dr.SomLal Subedi, in his paper Structure and need of Local Bodies (VDCs and Municipalities) in Federal System, said,“We need to decide the third tire before deciding the provinces. Service needs to be enhanced. After a long debate on local bodies, we introduced Local Governance and Community Development Project (LGCDP) with downward accountability measures. Citizen Ward Forum is the first organization to have this component.”

“The person who is now 34 doesn't know about the local elections.People are losing memory fast whether there used to be elections for local bodies. Had there been elected local bodies, half of the youths, who are leaving for Middle East now, should have been in Nepal. It is not that one size fits all. Various countries have their own modality and Nepal is no exception. We have started to restructure the VDC. Now we have 3276 VDC with 293 Municipalities. Our ministry has 7.28 percent of budgets with social security.

Political Concerns

As the state restructuring issue is on, politicians are also very concerned about it. The demands of all the CA members to hold the elections and make it more accountable are testimony to this.

“Deputy prime minister and Minister of Federal Affairs and Local Development are also concerned about the resources allocation. He often directed us and he wanted to hold the elections. There is the need to have an act with more power. There is the need to have inter-ministerialcoordinator at the districts level,” said secretary Dr. Subedi.

As the local bodies are under stress due to the absence of political leadership. DDCs,Municipalities and VDCs havebeen doing everything. Local bodies cannot take riskydecisions. It does not have the risk bearing capacity.

“There is a lot of local level stress even at the center. How long can we go for this ad-hocsystem? When people receive the service, they should not begetting problems,” said Dr. Subedi.

Along with state restructuring what do we need to doin Nepal is whether we want to continue to reduce the number of VDCs, DDCs and Municipalities. Along with this, there is the need to make accountabilitymechanisms for the country in the present state.

Although CA members have opposed the present system of downward accountability designed through Citizen Ward Forum, there is no alternative at the moment either.

“Citizen Ward Forum is a part of downward accountability. Community governance should not be opposed because of this people are more accountable. There are many challenges for local bodies and municipalities,” said Dr. Subedi.

At a time when there is a gap of elected representatives at the local bodies, Local Governance and Community Development Program (LGCDP) has been filling the gap in service delivery and carrying out development activities.  “Accountability and fiscal disciplineneed to be maintained. Service delivery needs to be made more effective and efficient,” said Dr. Subedi.

At a time when the VDC is responsible to carry out the functions of 26different offices,revenue sharing has emerged as a major issue. Development is a sectoral isolation. There is a need to build overall mechanism. Below the district, we are unable to go. Common people do not have access to public utility. There is confusion over who owns the public land. There is a growing trend of migration. The challenges in coming days will be urban governance. There also is the issueof poverty alleviation at the urban level. The rural poor who are coming to urban areas are not returning. There is the needs to manage the urban poor. There is always a territorial reform, but the line agencies are gradually removing. We have amended the list. Municipalities need more authority. Service management needs to be handed over to local bodies.

There are conflicting data among various VDCs and DDCs.  There is the need to focus on municipalities data. Bureaucracy cannot alone mobilize the people. There is theneed to have elections to mobilize the people. There aredemands of road, drinking water, health posts and schools.

As we don't have elected representatives, bureaucracy is compelled to take the entire burden and there are saturation points. Citizens are engine of economics -- structural engineers and architects.

State restructuring

“The major issue now is restructuring of state. The problem now is in understanding of thedifference on the issue of state restructuring. There are different opinions:identity, development and capability and inclusive and equity development. There is a demand for new change and the previous system cannot address the current issue. I am advocating identity based restructuring of state. We need to give identity to certain groups to provide them with their ownership,” said Dr, Pitamber Sharma, former vice chairperson of National Planning Commission commenting on Dr.Bhurtel’s paper.

We need to change the mindset. We need to have a radical thinking. Political parties need to think differently. There is the need to have a constitutionalguarantee for local bodies. However, there are no such guarantees,particularlyMadheshhis and Janjatishave opposed the power to the people and they just talkfederalism.

Districts are not necessary if we want to go for provinces. The problems are not districts, the problem is their headquarters. The government has invested a lot of money in the infrastructure built in district headquarters. Restructuring of the VDC can be easily made because the situation has changed a lot.

There are three basic principles for state restructuring-- Principle of subsidiary, give power to local people;Principleof compliments, share benefits;and Principle of connectivity.

There is no debate over federalism. All the changes are being imposed as if from a top-down approach.  Our society is very centralized and concentrated. Participatory democracy and periodic elections are most important. There is the need to have elected bodies at the local level.

“There is no way other than to hold the elections at earliest possible time. People's immediate needs can only be fulfilledthrough the local elections. Local body's elections will give connectivity. It will help to give root to the people. We have to go to elections to make government accountable and responsive to the people.There is the need to have unified thinking on watershed. There is the need to have adaptation. It is not that one province can solve the problems.The third is the need ofintense debate on Integrated Federal development strategy concept and fourth is dalit. Last but not least the concern of two neighbors. China and India's concernsare genuine and they need to be addressed,” said Dr. Sharma.

At a time when the debate over state restructuring is going on, one powerful political group does not want to discuss and debate on local elections.“There was a powerful group in CA which didn’t want to share power to the local bodies. However, the State Restructuring Committee recommended that local government is under provinces,” said Dr. Shanker Sharma, former vice chairman of National Planning Commission, commenting the paper of Dr.Subedi.

“There is the need to amend certain lists. This working list is the modality for VDCs. One cannot write everything in constitution. There are 52 Working Lists. Province and local bodies need to have separate lists,” said Sharma.

There is the need to have a clear provision for power sharing among center, provinces and local bodies. We have to be clear about what kinds of service we want to devolve. Whether the physical asset should go, too? Should it be with the center, province or local bodies? There should be a clearly defined position of power to decide what should be done and what should not be among center, province and local bodes. Nepal has signed a number of international conventions so that the CA should decide what to do. Wherethe money comes from? Basic health, social security and education, the center allocate the budget on the basis of this. If we provide subsidy, local bodies will lose autonomy. There is the need to bring private sector in the place.

“More than a decade has already passed since the dissolution of local bodies. There is a different perspective on state restructuring now. I am with egalitarian and identity based perspective. We need to respect and accept the evolving paradigm of Local Self Development Act. We talk on capacity development of Local Development. Devolution and development capacity of the Local Development has increased,” said minister of Dr. Minendra Rijal, minister of Information and Communication.

“The foremost important thing now is to hold the local elections. We had expressed the commitment to hold the election of local bodies. Due to political motivations, however, we have been unable to hold the local elections,” said minister Dr.Rijal.

This is counter-productive. At the end of the day, what counts is whether the poor and marginalized populations get the services.

“Although the current political debate on federalism is based on identity and politics, devolution of power is for development and delivery at the  grassroots level. Nepal’s geography is in such a shape that places are interdependent. Jhapa needs water from the river of Ilam and power generated by them. Similarly, Ilam needs rice and other food stuffs produced in Jhapa,” said former secretary Khem Raj Nepal.

In political and identity based debates, the development dimension of federalism has been ignored. As Nepal is in the process of constitutionwriting, we have to decide what the status of local bodies will be. There is the need to have constitutional guaranteeto local bodies. The demand of federalism has not come from people. It has been imposed from top. Had it come from people, the current problems should not have appeared.

“I am very happy to see CA members who are highly positive to empower local bodies. Unlike in the first CA when the debate on local bodies was not taken seriously, CA members are very convincing on local bodies now. Federalism has not come from the people.  There was a demand of two provinces in terai and three hills. State restructuring is a very sensitive issue. Federalism is not a panacea as there are just 28 countries having a federal structure. In a country where  5 districts generate 90 percent of revenue,  revenue cannot sustain all the provinces. Pakistan and India have federal structure but they are very much centralized,” said former secretary Shyam Prasad Mainali.

“Nigeria’s federalism is creating havoc and Sudan has already split. We have to learn from the world’s experiences. There is a very scanty debate on pros and cons of federalism. What is of foremost importancenow is to hold the local elections without any delay and make local bodies accountable to the people,” Mainali.

“The current debate on state restructuring is coming from a part of compromise and consensus. Reservation does not mean rejection. Whether we like or dislike, we are at a point of no return. Interim elections should be held for local bodies. My plain understanding about federalism is the devolution of power. Whether it is in federalism ordecentralization,development and service deliveryare key,” said former secretary Krishna Gyawali.

Political views

As experts and former bureaucrats shared their views, political leadership, particularly the members of Constituent Assembly,held similar views about the need to empower local bodies and hold interim elections to fill the gap.

Along with bureaucrats, members of Constituent Assembly are also facing a lot of problems in the absence of local bodies. They see that federal structure is not going to function without strong local bodies.Although it is not much in debate at party leadership, there is a strong opinion to give constitutional cover to local bodies.

“CPN-UML is committed to give constitutionalguarantee for local bodies. There will be three tires of governments:  Center, Province and Local bodies. There are confusionsabout protected areas. Although the report of the State Restructuring Committee suggested to place local bodies under provinces, we want to give themconstitutional status,” said Agni Kharel, chief whip of CPN-UML.

“Federalism does not meantransfer of power from center to provinces but is the basis for power delegation tograssroots level or empowering people. Thus CPN UML is stressing to hold the local bodies elections as soon as possible,” said Kharel.  “Although there is the need to restructure Village Development Committees to make them functional and viable, the current district boundaries need to be placed intact. Districts can play an important role in linking Center, Provinces and Local bodies.

There is the need to have a constitutional guarantee for the local bodies. We must debate on this agenda. The first CA could not take local bodies seriously. There should be local bodies with constitutional bodies.

CA members viewed that holding of the local elections at the earliest will solve many of the current problems related to state restructuring. They argued that local bodies should be givena constitutional cover so that they cannot go under the domain of province or center.

“There should be DDC. Majority of CA members want this. If we don't have this, there will be problems. There is no need to have special protection area for any group. We have spent a lot of timedebating on the provinces basis of ethnicity without local bodies. The time ha scome to hold the elections for local bodies and frame workable federalism,” said CA member Man Prasad Khatri, representing Bajhang constituency no 1.

“We cannot revert back from federalism.  We need to work out how to empower people. The power shifted from Narayanhiti to Singh Durbar. The challenges are that whether we can bring this to grass root level. VDCs are providing basic services for us but the current borders and headquartersneed to change. Thereis the need of a constitutional cover for local bodies. There is the need to restructure borders of Village Development Committees. But, DDC can still play important role,” said Bikash Lamsal, CA member representing Parbat 2. “There should be elections for local bodies,” said CA member Lamsal,a CPN-UML representative.

“We need federalism for development, participation and service. This is no more an agenda of a single party. There should be DDCs because they are providing services. We can restructure VDCs and municipalities, but not DDCs. There is the need to give proper constitutional space to local bodies. There should be inclusion and representation,” said CA member Hari Rajbanshi, Jhapa, representing CPN-UML.

“Federalism will be incomplete without powerful local bodies. I was elected mayor of Banepa municipality. My experience is that only through the coordination between politicians and civil servants, local bodies can deliver the results. We must give proper space to DDC in federalism. For the last fifteen years, local bodies are under the civil servants, the time has come to hold the elections,” said Kanchan Chandra Bade, Kavre 3,representing Nepali Congress.

“In the absence of local bodies, we are unable to provide basic service to local bodies. We need to hold the elections for local bodies. Holding the elections for local bodies does not mean deviation from federalism. There is the need to have a federal system with local governance. DDC should be there. There is the need to increase women’s participation at local bodies,” said CA member Anita Devkota, from Dang.

“In the absence of elected representatives, there is a rampant corruption at local bodies. There is the need to hold the elections for local bodies soon. Only elected local bodies can deliver effective services. Local bodies need to be given constitutional status. It is unfortunate that the debate has not taken place on local bodies in CA,” said CA member Ram Chandra Pokharel of Nepali Congress.

“The government should hold the elections for local bodies without delay as people are living without elected representatives. Without powerful local bodies, we cannot ensure the rights of people. In the process of restructuring,  we should not dismantle present structure ofDDC,” said CA member Andandi Pant representing RPP.

Federal structure should be based on people. The country needs federal structures for all. Women are suffering a lot in absence of local bodies. There should be fifty-fiftyshare for men and women,”said CA member Kalpana Sobof Nepali Congress.

“Nepal needs to have a Loktantrik Federalism. We need DDC, there is the need to have local elections soon.There is the need of local bodies along with provinces,” said CA member Kalpana Chaudhari of Sunsari, representing MJF Loktantrik.

There were opposition voices against local bodies. CA member Radha Timilsina of Federal Socialist Party holds the view that the issue of local bodies should be decided by province.“There is no use to have state restructuring if we cannot revamp districts. There will be anotherrebellion in case of rejection of identity based federalism,” said Radha Timilsina CA member Federal Socialist Party.

“We cannot hold the elections without deciding the provinces. There is the need to have local bodies and provinces and local bodies should be under provinces. The present setup of district needs restructuring. There should be identity based federalism,” said CA member Dhanmaya B.K.Khanal, representing UCPN-Maoist.

“Federalism does not mean dismantling the local bodies. Thereis the need to hold the elections. Local bodies are important factors of democracy. Democracy will come to an end without local bodies. There is the need of local bodies as an institution to serve the interest of people. There should be fewprovinces with many local bodies,” said CA member Prem Suwal, representing Nepal Majdoor Kisan Party.

“Local Self governance Act is a model and the polls should be held under this. There should be DDCs, VDCs and Municipalities. The foremost task at present is to hold local elections,” CA member Tapta Bahadur Bista, representing Nepali Congress,

“There should be three tires of government, including center, province and local bodies.  The present structure of local bodies needs to continue. Along with state restructuring, there must be the elections for local bodies. The present structure of DDCs needs to continue,” said CA member Pyare Lal Rana, representing Nepali Congress from Kailai district.

“We want fifty percent of our representation in the local bodies. The province should not be divided on the basis of ethnic identity. There should be periodical elections for local bodies and the constitution should guarantee it,” said Kamala Kumari Ghimire Subedi, from Ramechhap, representing CPN-UML.

“Decentralization and federalism are the same.There are many unitary states, including Japan, China and England. It is wrong to say that unitary statesarecentralized. We can empower people through decentralization. Nepal does not need federalism.There is the need to have interim elections for local bodies,” said CA member Meena Pun, representing Rastriya Jamorcha.

“In the absence of elections, local bodies have failed to deliver services to the people. There isthe need to vest constitutionalstatus on local bodies. Local bodies should be given the right to issue citizenship and passport.  Local bodies should be given the right to register the higher secondary education,” said CA member Tiku Neupane, representing CPN-UML.

“Although local bodies form the backbone of democracy, the debates on local bodies is rarely taking place in CA. Local bodies need to be strengthened for an inclusive democracy. District Development Committee, Municipalities and Village Development Committee need to continue in federal structure.The current set up of Citizen Ward Forum cannot replace the elected representative,” said CA member Bharat Bahadur Khadka, representing Nepali Congress from Doti district.

“Nepal is moving from a unitary to federal setup.Nepal needs a few provinces and more local bodies. There is the need to hold the elections for local bodies. The new constitution should give equal status for local bodies as provinces,” said CA member Rajan KC, representing Nepali Congress.

“Nepal needs to restructure the VDCs before holding the elections. Citizen Ward Forum should be dismissed because it is against the spirit of local elected bodies.Constitution should guarantee the authorities of local bodies.There must be provisions in constitution to hold periodical elections of local bodies,” said CA member Rameshwor Phunyal of CPN-UML.

Although Nepal has been holding debates on state restructuring for the last seven years, this was the first time experts, CA members, civil society leaders and government officials had come together to discuss the position of local bodies in federal structure.