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Nepal's Maoist government defends capitalism

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The overthrow of King Gyanendra in 2006 brought Nepal to the attention of the world's anticapitalists. Now, two years since this democratic revolution, the Communist Party of Nepal (Maoist), which had been waging an armed struggle in the countryside for over ten years, has won the national elections and become the leading force in a coalition government.

They have abolished the monarchy and promised to enact land reform. The CPN (M) stands in the tradition of Stalin and Mao, and takes from the latter the principal of armed insurrectionary struggle in the countryside as the main means of revolutionary change. This degree of success for a Stalinist party practicing armed struggle, contrasts quite sharply with the general tendency amongst Stalinist forces in the post-Cold War world. Since the collapse of the Soviet Union and the restoration of capitalism in China most Stalinist parties, whether they were once aligned to Moscow or Beijing, have either moved rightwards and transformed themselves into outright reformist parties or suffered a steep decline  or both. The Nepalese Maoists apparent bucking of this trend naturally gives significance to the country's political situation that is hugely disproportionate to its size. It is now effectively acting as a testing ground for whether a radicalised Stalinism could make real breakthroughs across the world in the coming years. Understanding the historical conditions favourable to the rise of the Maoists and critiquing their political strategy, is thus essential for those communists who do not want to see a repetition of the defeats suffered under Stalinist leadership in the 20th century.

Nepal's semi-colonial place in the world

The vicious autocratic monarchy is only part of the explanation behind the struggles of the last years; most people in Nepal also suffer terrible economic hardship. Nepal is one of the poorest countries in the world, and the poorest state in South Asia. It ranks 143rd in the United Nations Human Development Index (out of 175 countries).1 Differences between the tiny minority of rich landlords, capitalists, on the one hand, and the great majority of people, the toiling classes, on the other, are immense. In the 1990s the poorest 40 per cent received just 11 per cent of the country's total income. In contrast, the richest 10 per cent grabbed some 52 per cent of it.2

Industrial development first appeared in Nepal relatively late even when compared to the rest of the Indian subcontinent: it only developed during World War Two and it has never grown significantly since. Today it creates only 20 per cent of GDP and employs just 2.7 per cent of the total labour force  mainly informally, i.e. in inflexible work with few rights.3 The core component of the Nepalese economy remains agriculture.4 There has never been any thoroughgoing land reform in Nepal to challenge the power of the pre-modern landowning aristocracies and today the great bulk of the land is in the hands of these landlords and some rich peasants. The majority of peasants do not have enough land to support themselves and have to either work on estates for a very poor wage or take a share of the harvest determined by the landlord (a classical, "sharecropping" class relation typical of the pre-modern feudal systems).5 It is no wonder then that in this situation many Nepalese are trying to secure their livelihood by going to work abroad. There are almost one million Nepalese workers in India. Another 700,000 are working in other parts of the world  mainly in the Middle East, or in East and South-East Asia. Apart from that, many Nepalese are in foreign armies  in particular in Indian army. Even the British Army still employs Gurkha brigades composed of Nepalese peasants.

There can be no doubt about Nepal's semi-colonial character. Its domestic capitalist class is weak and underdeveloped, with the majority of industry in the hands of foreign capital. Like other countries of the Third World, Nepal is strongly indebted to international financial institutions6 that subsequently regulate and dictate its economic policy. Its two much bigger neighbours, India and China, also have a tremendous influence in Nepal. The Nepalese ruling class has sought good relations with both these rivalrous, fast-growing Asian economic powers, in order to strike a balance between them. In addition, with regards to the major, world imperialist powers, the USA and Japan have the most capital invested in Nepal.7 Given the semi-feudal order in the countryside it is also no wonder that the traditional patriarchal family remains very strong and the position of women in society is, in spite of formal equality, very unequal. The remains of the caste system are also present and to considerable level determine an individual's social position and standing. Many national minority groups, of which there are more than sixty in Nepal, face systematic discrimination and injustice.

In states like Nepal the endurance of semi-feudal property relations and the accordant weakness of the industrial bourgeoisie creates strong anti-democratic pressures. The semi-feudal landowning aristocracies naturally fear the possibility of a democratic political system that encourages the masses to fight for land reforms, while the bourgeoisie's own wealth and power is equally dependent on the status quo, which combines dependency on both international donors and the powerful semi-feudal landowners. As a result in Nepal periods of constitutional monarchy have historically only prepared the way for democratic breakdown and autocracy.

Neoliberalism and the bourgeois democratic regimes of the 90s

The regime of hated King Gyanendra was preceded by a decade of fragile constitutional monarchy with formal democratic rights. It originated in the Movement for the Restoration of Democracy (Jana Adolan) in 1990 that ended thirty years of the direct rule of kings. The leadership of Jana Adolan consisted of the Nepali Congress (NC)  a liberal bourgeois party linked to Indian capital  and a bloc of seven Stalinist parties called the United Left Front (ULF). They together conspired to call off the protests after King Birendra had made his first concessions. A constitutional monarchy was thus formed in which the NC was the most powerful political force, with the second party being the Communist Party of Nepal (Unified Marxist-Leninist)  the successor of the ULF, which despite its nominal "communism", played the role of a classical reformist party defending capitalism.

The first bourgeois democratic government of NC at least proved that capitalist democracy was incapable of solving the abysmal social inequalities and poverty of the masses. Immediately after entering office the NC began privatising public enterprises and opening up Nepal to foreign investors. The result of these neoliberal policies was spiralling prices and growing unemployment- but also resistance. In 1992 and 1993 there were several strikes, including general strikes, against the government organised by Maoist organisations in a united front called the Joint People's Agitation Committee. The new government responded to the movement with fierce violence and repression directed at the striking workers.

The movement was not able to win its demands, but it succeeded in making the position of the NC government very weak and, as disputes mounted within the NC in November 1994, the government fell. CPN (UML) then won in the emergency elections that followed. But it was only able to form a minority government and fell within nine months of taking office. The new government did not fulfil its promises, particularly on land reform, and as they started to lose support, the NC, and the King, conspired to dissolve parliament and force new elections. The rest of the 1990s was characterised by fast-changing governmental coalitions, mostly lead by the NC, and by an armed struggle, which the Maoists began in the countryside.

The Maoists "People's War"

Already after the general strikes in 1992 the predecessor of CPN (Maoist), CPN (Unity-Centre), that played a big part in their organisation, decided that it would move its main activity to the countryside.8 The first peasant struggles inspired by the Maoists broke out in the following years, mainly in districts of Rolpa and Rukum, and the police were sent to suppress them in 1995 during Operation Romeo. The violence that the police unleashed only encouraged further support for the Maoists amongst previously undecided peasants. In 1996 the "People's War" was formally launched by CPN (Maoist) that split from CPN (U-C) that year and has been lead by Pushpa Kamal Dahal, today known as Prachanda, and Dr. Bamburam Bhattarai. Because of the support from peasants and oppressed groups, the CPN (M) controlled Peoples Liberation Army (PLA) gained control in 22 out of 75 districts of Nepal in the years since 2001.9

Through it's "People's War" the CPN (M) were able to overcome the historic problem of the Nepalese left  not having a social base amongst the masses. They were particularly successful at organising the oppressed people  national minorities, people belonging (according to Hinduism) to the lowest castes, and women. Indeed women were to make up one third of the PLA. There can be no doubt either that the life of the peasants and oppressed got much better in those areas controlled by the Maoists. The land of landlords was redistributed, debts to usurers cancelled, a minimum age of 20 years was set for marriage so as to prevent children's marriages and divorce on demand was also introduced.10 They also made steps towards equality of nations by giving education to children in their native language, and they have  unusually for Stalinists  advanced the principle of national self-determination, as was the case with the Magar Autonomous Republic created in 2003.11

Most of all it is the sheer heroism of the partisan fighters, which naturally demands the admiration of all communists. However, none of these positive features changes the wrong strategy of the CPN (M) which has now lead their struggle to an impasse.

Problems with the Maoist strategy

The decision to wage the struggle mainly in the countryside may seem right if one takes into account the overwhelming majority of peasants in Nepalese society. However, the experience of many preceding struggles show us that the peasantry  despite the arithmetic superiority that they have in many semi-colonial countries  is not a force able to play leading role in revolution. This is because the centres of economic and political power  even in states dominated by agricultural production  are the urban centres. A peasant movement is thus compelled to seek out allies amongst the modern, urban classes, and, thus, they have to align either with the working class or the bourgeoisie. Because the peasantry must take a stance on the direction of national economic and political development, it cannot have an "independent" class policy but  should a political force with a social base amongst the peasants take power  it must choose policies favourable to either the bourgeoisie and against the proletariat, or vice versa. The development of the capitalist market in agriculture also creates class differentiation amongst the peasantry, which will incline its different components to align with either one of these urban classes; the poverty of agricultural labourers puts them closer to the working class, while the relative wealth of the richer peasants makes them more likely to align with the bourgeoisie.

Nonetheless, the question the great majority of the peasants naturally ask is: how can we win democratic rights and an equitable division of the land? In short, how can the power of the landowning aristocracies be overthrown? Naturally these questions have been confronted repeatedly before, ever since the classical bourgeois democratic revolutions against the feudal landowning aristocracies in 18th and 19th century Western Europe. In Nepal, like many semi-colonial countries, these basic tasks of the bourgeois revolution have never been completed  but nor can they be completed in the same way as they once were in Europe. The Nepalese bourgeoisie is too weak, too tied to foreign imperialist capital, insufficiently independent of the landowners, and, most of all, too fearful of the independent activity of the masses, to carry out such a revolution. In the Russian Revolution a nexus of similar conditions, led to the proletariat playing the leading role in the revolution, which not only abolished feudal backwardness, but linked this with a revolution against capitalism too. Leon Trotsky coined this linking of the anti-feudal, democratic revolution, to the socialist one, the "permanent revolution"  a term he took from Marx who used it in a similar context in 1850. The experience of the Russian Revolution not only pointed to the leading role of the proletariat, but also showed that the "democratic stage" was an extremely unstable one, and could not last for long. In February 1917 the Tsar was overthrown and the new bourgeois provisional government struggled to consolidate its political and economic power, and only the socialist revolution in October 1917 stopped a slide back to autocracy.

The Maoist strategy in Nepal is built, however, not on the theory of permanent revolution, but the Stalinist "stageist' theory, which, in contrast, proposes a long bourgeois democratic stage must proceed any challenge to the power of the capitalist class. As a result, the Stalinist movement has historically looked to form alliances with the bourgeoisie  the ìpeople's front" as it was called in the 1930s  and insisted the bourgeoisie can be allies of the proletariat despite the antagonism that exists between these classes. The CPN (M) simply uses radical language to describe the same method. The goal of what they term the "protracted people's war strategy - surrounding the city from the countryside"12, is to be a "new democratic republic". This naturally drops the question of class  whose material interests will the new republic defend? The Maoists answer is that the bourgeoisie and proletariat are both revolutionary classes in Nepal and, thus, the new republic should defend bourgeoisie interests too.13 But of course, defending the interests of capital means not advancing the interests of the working class, such as nationalising industry under worker control, introducing punitive taxation on the rich to fund welfare services, and so on. Each of these measures would need to be dropped to win an alliance with the bourgeoisie, and thus, we see, once again, that this is nothing more or less than the Stalinist democratic stage, which refuses to advance the independent interests of the working class against the capitalists.

Gyanendra's attempt to be a dictator sparks a revolution

In 2001 the Nepalese ruling classes were having increasing problems with uprisings in the countryside and repeated strikes. In this situation, a massacre in the royal family opened the way to the throne for the former King's brother, Gyanendra. Immediately after taking power, Gyanendra started to strengthen his authority and abolish democratic rights. In November 2001 he declared a state of emergency on the pretext of the necessity to get rid of the Maoists. Hand in hand with that went a reorganisation and strengthening of the army, which was then directed to retake the large swathes of the countryside controlled by the CPN (M). In doing so he received a great deal of help from the imperialist countries  in particular the USA, Great Britain, India and some countries of EU. Even China  despite its nominal adherence to Maoism  supported Gyanendra. The result of the government's aggression was a dramatic intensification in casualties. Until 2002 only 3,000 people had died in the conflict since 1996, while some 8,000 were killed between 2002 and 2005 alone.14 Nevertheless, the result was a military defeat for the government as the Maoists extended areas under their control, and by 2006 this meant 80 per cent of Nepalese territory.15

Demonstrations in 2004 ended the state of emergency but a year later, on 1 February 2005, Gyanendra launched an armed coup and seized all executive power. This was against the direct counsel of the imperialist countries who argued this would destabilise Nepal and further discourage international donors and investors. The imperialists  unusually for them  were proven right. Parties such as the Nepali Congress and CPN (UML) that were once the main supporters of the status quo, were now forced to stand against the regime. The coup even alienated Gyanendra from some monarchist parties. After the royal coup former parliamentary parties formed the Seven Party Aliance (SPA).16 It is clear that for the two main SPA parties  Nepali Congress and to lesser extent also the CPN (UML)  the main goal was a return of bourgeois democratic system in which they were ruling parties. That's why they limited their demands to the restoration of parliament, and did not call for the abolition of the monarchy and a republic.

It seems likely that at this time the CPN (M) started to realize that "surrounding the city from the countryside" was insufficient as a strategy. They controlled 80 per cent of Nepal's territory but despite this they could not successfully influence political life in the country. The urban proletariat tended to support the CPN (UML). So the CPN (M) signed a 12-point understanding17 with the SPA over the struggle against the autocracy. Crucially, it committed the CPN (M)  by the theory of stages  to the defence of the capitalist order following the defeat of the absolutist autocracy of Gyanendra. The SPA called for a four-day general strike on 5 April 2006. All three major trade unions participated in it and it did not stop as planned on the fourth day. On the contrary, the protests grew bigger. On 21 April, just in Kathmandu, 500 000 people were demonstrating and trying to get to the Royal Palace. Clashes with the army left 21 people dead and many wounded.19 On 24 April, Gyanendra accepted the demands of SPA and the old parliament was restored.

This revolutionary situation was a real test for the CPN (M) that it failed. Firstly, they were not fully active in the revolution from day one. They only began to fully participate in it when their leader, Prachanda, said "this is no longer a protest by opposition parties - it has become a people's movement".20 Secondly, their Stalinism meant that they did not see the revolutionary socialist potential in the struggle but limited it to entirely democratic tasks. As a result they adopted  remarkable as it may seem  a semi-pacifist stance on the movement in the cities, declaring "ceasefires" in solidarity with the movement, rather than delivering combatants and weapons to the cities.21

Will Maoists in government bring change?

Regardless of all their faults, in the eyes of the Nepalese masses the Maoists appeared after the revolution as the most consistently democratic force. The demand for a Constitutional Assembly  not just the restoration of the old parliament within the strictures of a constitutional monarchy  was in the 12-point agreement they signed with the SPA mainly because of them and they wereconstantly pushing the SPA to organise elections to it as soon as possible. They were also the first party calling outright for the monarchy's abolition. In this way they slowly gained support in the towns.

However, as the CPN (M) have increasingly become Nepal's most powerful political force, their commitment to defending capitalism has become more and more obvious. For example, in November 2006 Maoist leader Prachanda gave an interview in which he outlined his views on the future of Nepal. He said that "in 20 years we could be similar to Switzerland" and that "we will welcome foreign investors, using capital from abroad for the well being of Nepal".22 The comparison he intended is quite clear  he wants Nepal to be a small but dynamic capitalist economy and centre of international capitalist development. However, with such politics, Nepal will not become something similar to Switzerland  whose unusual position in the imperialist system results from very specific historical conditions and developments. It will continue to be a semi-colony and its cheap labour force will be used in sweatshops by foreign investors who sell their wares onto lucrative foreign markets.

By February 2007 the Maoists put their weapons and combatants under the supervision of the United Nations as they had previously promised to.23 On 1 April that year they joined the interim government, in which they governed alongside the SPA parties. In that time, the King was formally deprived of executive power, but he was still living at his palace and nothing was done to tackle the loyalty to him within the armed forces beyond changing the army's name. Neither was the question of the monarchy decisively solved in this period in favour of abolition, as sections of the SPA preferred a constitutional monarchy to a republic. In elections to the Constitutional Assembly (CA) that were finally held on 10 April 2008, the CPN (M) won won 229 seats out of 601 and became the largest party in the assembly. Second and third came NC (115) and CPN (UML) (108) respectively.24 This was a shock to the two established parties which testified to the masses not wanting a return to the regimes of the 1990s. The first CA session met on 28 May and it declared Nepal to be a republic. It took another two weeks for the former king to leave the palace and he was moved to another one of his estates. The Maoist government have promised to allow him to live there without ever facing justice for his crimes against the masses, many of whom raised the slogan "execute the king" in the 2006 struggles.

Disputes about distribution of power between the parties followed. The NC was at first not willing to dissolve the old government and give a leading role to the Maoists. On 13 July the Constitutional Assembly passed the Fifth Amendment to the interim constitution that allowed it to elect the government and president. In presidential elections held 19-21 July, the Nepali Congress, CPN (UML) and Madhesi Janadhikar Forum together defeated the candidates of CPN (M).25 Then, on 15 August CPN (M), as the strongest party in Constitutional Assembly, succeeded in forming the government in coalition with CPN (UML) and several minor parties, with Prachanda as prime minister. If we look into the Common Minimum Programme of the government26 we see that it has promised reforms, which - if enacted - will improve the lives of the masses. For example, land reform is planned, measures to better the positions of oppressed groups are to be taken and there will be some basic social reforms. However, as we have already said, all the basic elements of the capitalist system will be defended. The capitalists unelected state apparatus  the police, army, and judiciary  will also be preserved. The Maoists even hope to integrate their army into the old, reactionary one. The capitalist class and the landowning aristocracies will try to obstruct all pro-worker and pro-peasant measures, and, as a result, until these ruling classes are expropriated the democratic, republican and social achievements will remain under constant threat. Already there are signs the Maoist government will use repression against the working class. A trade union demonstration against precarious work contracts at the beginning of September 2007 in Kathmandu was attacked by the police and 80 leading trade union militants were arrested.27 Taking the capitalist road

In the current global economic conditions, it is not at all clear if the new Maoist led government will be able to enact its promised social reforms; capital from international donors is likely to dry up, while Nepal's domestic capitalists will suffer from higher global commodity prices, and declining demand for its exports. As in all countries, the bosses will demand the government makes the working class pay for the economic downturn. Most likely the new Maoist government will simply repeat the disappointment felt by the urban working classes, for the CPN (UML) governments in the 1990s. Certainly, to govern alongside the CPN (UML), as the CPN (M) are now doing, in itself signals that they will not radically break from its history of pro-capitalist governance. What we are witnessing in Nepal then is not a new, radicalised anti-capitalist, Stalinism but the familiar policies of the Popular Front underpinned by the Stages Theory. It therefore has important differences with the classical Maoism of the Chinese Revolution too. The Chinese Communist Party came to power through a civil war, not through elections. The Chinese Communist Party in the first instance also pursed a version of the Popular Front called the "Block of Four Classes" but this was in the context of a Communist Party dictatorship, with the bourgeois Guomingdang having been driven out of mainland China. The change in policy, in favour of the expropriation of capitalism and the establishment of a bureaucratic planning system organised according to the Communist Party dictatorship, was a response to the capitalists refusing to accept Communist Party rule. In Nepal today the obvious differences are that the Maoists have committed themselves to maintaining multi-party bourgeois democratic institutions and to the defence of capitalism for the foreseeable future.

There is an alternative to an anti-capitalist but bureaucratised Stalinist dictatorship on the one hand, and a pro-capitalist, bourgeois democratic system on the other. Finding it, however, means looking to the political tradition of Trotsky, not Stalin, Mao or the other icons of 20th century Stalinism. Nepalese workers need to draw up a programme of action that links the struggles of today to the goal of working class power and socialism. They should demand the CPN (M) breaks with the bourgeois parties, ceases to govern on behalf of capital, and organises workers and peasants' councils from below, open to all working class and peasant parties. Real democratic organs of the working class and peasants on the land and in the factories can not only organise the struggles of today, but are also the key safeguard against bureaucracy in a future workers state. Workers and peasants need to take action now to ensure the government enforces its promises of social reform. The land confiscations should be continued and no compensation paid to the semi-feudal landowning aristocracies. The state apparatus remains the main instrument the bourgeoisie has at its disposal to put down the struggles of the peasants and workers. It is the army and police force that the CPN(M) government should dissolve not its own militia. Most of all, workers in the cities should begin occupying the factories, fighting for higher wages, for workers control, and for the expropriation of the capitalists.

These are the key tasks of the socialist revolution in Nepal that direct the struggles not to a "new democratic republic" but to a new workers state, based on the principles of working class, soviet democracy. Such a state, particularly in a small, underdeveloped country like Nepal, would quickly face the aggression, not only of regional powers like India, but also the major imperialist states and no doubt become a target of their so-called "war on terror". Fighting to internationalise the revolution, first to the rest of South Asia, then further still, will be the key task of the Nepalese workers state.

It is this revolutionary perspective and strategy the League for the Fifth International will discuss with Nepalese workers and youth in the period ahead.


1 Poverty in South Asia, 2003, SAAPE,, p.121

2 ibid., p. 133

3 ibid., p. 130 and Poverty in South Asia, 2006, SAAPE, p. 76

4 ibid., p. 122

5 68 per cent of peasant families own less than 1 ha of land, while top six per cent of landlords have more than 33 per cent (Poverty in South Asia, 2003, SAAPE, p. 126)

6 Total foreign debt of Nepal equated 51 per cent of its GDP and 32 per cent of governmental spending went on debt servicing in 1999 (Poverty in South Asia, 2003, p. 128). From that time it has definitely grown because of vicious circle of borrowing in order to repay interests

7, in particular chart 29

8 "third CC meeting held in June has chalked out basic plan & programme of shifting the main focus of activities to rural areas, whereas due attention would be paid to conduct necessary activities in the urban areas." Mass Struggle Led by the Party: A Review, KSN (U-C), Worker n. 1, February 1993,

9 Between Rock and a Hard Place: Civilians Struggle to Survive in Nepal's Civil War, Human Rights Watch, October 2004(

10 Bikash Sangraula, Nepal: Life in the Red Capital, 31. 12. 2005, (

11 Building the Future (

12 quotations from Strategy and Tactics of Armed Struggle in Nepal, partst The Nature, Target and Motivating Force of Armed Struggle in Nepalî and Problem of Strategy and Tactics of Armed Struggle in Nepal, Worker n. 3, February 1996,

13 That can be well seen on quotation from Mao Tse-Tung's work On New Democracy, used in article Nepalese Revolution: How it is interlinked with World Revolution? ( "Although such a revolution in a colonial and semi-colonial country is still fundamentally bourgeois-democratic in its social character during its first stage or first step, and although its objective mission is to clear the path for the development of capitalism, it is no longer a revolution of the old types led by the burgeoisie with the aim of establishing a capitalist society and a state under bourgeois dictatorship. It belongs to the new type of e revolution led by the proletariat with the aim, in the first stage, of establishing a new-democratic society and a state under the joint dictatorship of the revolutionary classes. Thus this revolution actually serves the purpose of clearing a still wider path for the development of socialism. In the course of its progress, there may be the number of further sub-stages, because of changes on the enemy's side and within the ranks of our allies, but the fundamental character of the revolution remains unchanged."

14 "The conflict has killed at least 11, 000 people since it began in 1996 about 8,000 in the past three years alone." Mike McPhate, Nepal's uncivil war silencer of the people, 10th April 2005 (

15 Nepal: One year of royal anarchy, Asian Centre for Human Rights (

16 It consisted of Nepali Congress, Nepali Congress (Democratic), Nepali Goodwill Party, CPN (UML), United Left Front, Nepal Workers and Peasants party and People's Front.

17 You can find text of the understanding for example here: per

18 They agreed to put their arms under surpervision of UN and to respect law and democratic order.

19 Nepal 2006AD: the highs and lows, Nepal Monitor (


21 Pratyush Chandra, Ceasefire and Democracy in Nepal, 5th of April 2006,

22 Prachanda: Our Revolution Won, L'espresso, 9th of November 2006,