Federalism has become a buzzword. At this crucial point in history, all sects of society are advocating a federal setup. Political parties too are busy putting forth their agenda on federalism. But the policy- and lawmakers have failed to take any concrete action. What is amazing is that not much has been discussed about the basis of federalism. How should the country embrace the concept of federalism and what should its modality be, what are its possible benefits and shortcomings? Its scope and limitation have not been acknowledged both at policy and operational levels as yet.

The division of state should be based on the concept of equal resource allocation instead of caste, ethnicity or geography. The highly advocated division based on caste or ethnicity will ultimately destabilise the country. History has shown us that the amount of resources is directly related to stability. Resource rich states are less vulnerable to insurgency and instability. The Maoist movement, for example, took off in areas relatively poor in industrial and agricultural resources.

If we unearth reasons for the separation of Jharkhand from Bihar state and other similar occurrences around the world, it is clear that resource plays a key role. However we should also acknowledge that resources are necessary but not a sufficient condition for stability as there are also countries rich in resources but yet hit hard by unrest and civil war.

It is interesting that the theses being proposed for federal structure in Nepal are mostly backed by geographical claims and, if not, along ethnic lines. Both the propositions have to be re-evaluated as there is fundamental dearth of acknowledgement of national resource allocation. Policymakers and political parties are still to determine the form of federalism. Politicians are afraid to suggest any idea against it. But this issue needs more homework than is being done at present. For example, if there is concentration of resources in a specific proposed federal state, it will breed resentment and tension with other states poor in resources.

The time has come to decentralise the state on equitable basis, but any endeavour in haste will only complicate matters. Some concepts of state division are sectarian and politically motivated.

Strong support for and against federalism are understandable though and reasons can be offered for adoption of each option. Some have opined that there will be a bloodbath in Nepal if the country opts for federalism. Similarly, a foreign diplomat in Kathmandu also warned that federalism only works in a resource-rich country.

On the other hand, all the mainstream political parties are for federalism. It is time to evaluate the value of federalism in the context of Nepal.

It is important that the political parties make their vision on federalism clear to the public. The voice for inclusiveness in Tarai is justifiable. The issues of Tarai need to be addressed but some of the means of protests being employed there cannot be justified in a civilised society. On the other hand, partition of Tarai as a separate federal state will adversely affect the country’s economy in the long run. Most of the resources, especially industrial and agricultural production, are located in Tarai region. Thus declaring it a separate state might deprive residents of mountainous areas of their rightful share.

Federalism on geographical basis and right to self-determination will leave the hill region far

behind as most of the non-agricultural resources are based in Tarai. This will, in turn, institutionalise benefits for one group at the cost of others. Discrepancies between hill and Tarai regions will mount, leaving the hills far behind in development race. It might be observed that the Himalayan regions are poor in resources even though they have huge potential. The problem is that the available resources have not been tapped. The cost of transportation is so high that it is virtually impossible to utilise revenue-generating resources in the region. Thus it generates very little in revenues for the government despite its vast potentialities.

A subjective judgment of the impact of federalism in Western Europe, Asian peninsula and North America indicates that federal structure is indeed preferable to Nepal, but with reservations on certain issues. Subjective judgment has its own limitations and it cannot always give a better picture than ground research. However, subjective judgment can sometimes be a powerful tool to visualise certain policies through individual lens. Once again, the major issue to be dealt with concerning federalism is the ‘basis of federal structure’. All the concerned stakeholders should explore the basis of federal structure with more seriousness. The modalities being discussed currently are mostly guided by certain ‘ism’ or some philosophical tenets through which it is impossible to come to a consensus.

Dr. Devkota and Acharya are with IDS, Nepal