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The Peace Process in Nepal: From Civil War to Federal Republic

At the heart of Nepal’s transformation from a monarchy to a federal republic lies the Nepalese Civil War. The underlying causes of this conflict were a divide between the political elites and the general population, who felt increasingly excluded from power. The government’s refusal to implement meaningful reforms created inequality, which led to growing frustration. As a result of this, there was eventually a “People’s War” led by the Maoists, utilizing the repression the general populace felt to overthrow the monarchy and its political elites, thus changing the structure of the Nepalese state, and the country’s direction for the foreseeable future. The protests of 2025 seemingly stemming from many of the same reasons behind the Civil War while simultaneously showing the continued political instability after the war brings the question of whether the war in fact solved the problem to light.

BACKGROUND

Nepal’s modern trajectory has been shaped by many things, with one of the most impactful factors being the decades long change from monarchy to the federal republic it is today. The background for this change goes all the way back to 1961, when King Mahendra seized power and implemented the Panchayat system in Nepal. This banned all political parties and put governmental power under the king.

During the time of the monarchy, high levels of poverty were allowed to exist in the country, especially in the countryside where most of the population lived. Couple this with underdevelopment and an especially low interest in rural development, and the poverty-stricken people faced numerous challenges. The few strategies that did exist amounted to little benefit for the people.

As time passed, a schism between the monarchic government and the people began to appear, due to the gap between the actions of the monarchy, its government and the people, tensions rose rapidly throughout the country. By 1979 the throne had shifted to Mahendra’s son, Birendra, who upon seeing the increasing demands for democracy announced that a referendum, which was held in 1980, concerning the political future of the country was to be held. The choices being whether to allow the party-less Panchayat system to continue or if a multi-party democracy should be established. At this time the Panchayat came out ahead with roughly a ten percent lead. After this, for the decade that followed, nationalism and unrest continued to grow until it came to a boiling point in 1989. At this time India imposed an economic blockade against Nepal for several reasons including Nepal’s increasing closeness to China, and disputes over several transit treaties.

In early 1990 the discontent towards the monarchy had grown to the point that the banned Nepali Congress (NC) which was the largest political party in the country at the time, and the United Left Front (ULF) which consisted of multiple different communist parties began the People’s Movement on the 18th of February 1990. Vast demonstrations across the country erupted, and to subdue the movement the government swiftly arrested leaders of both the NC and the ULF, but this had little effect in the grand scheme of things. The movement and the protests against the monarchy continued and kept escalating, soon reaching the capital of Kathmandu. The army and the police were brutally trying to suppress the movement but top no avail, even going so far as to killing participants, but this only enraged the people more. After the NC and the ULF managed to meet with the king, he announced the reinstatement of multi-party democracy, and in early April 1990, the king removed the ban on political parties.

After this, although there were major political shifts; the country became a democracy again with a constitutional monarchy as opposed to the earlier total monarchy, many of the underlying problems that led to the unrest in the country during the monarchy remained. The deep poverty remained, social inequality remained and people felt that the new government had failed to address the needs of the marginalized majority in the country. The People’s movement had given hope to the many oppressed in the country, but the outcome was far from what people had imagined. This disconnect between the wants and the needs of most of the Nepalese people, with the ruling elite’s way of using their power later leading to the Communist Party of Nepal, referred to as the Maoists, declaring a people’s war against the government and the monarchy on the 13th of February 1996. The civil war in Nepal had begun.

CONFLICT ANALYSIS

Analyzing the conflict can be done in many ways, but understanding the motivations of each party is a crucial step to gain a better understanding of the conflict. The monarchy and the government’s motivations seem simple; to preserve the status quo. Relinquishing power to people of lower castes, which historically had been marginalized, was not in the interest of the government or the royal family. Under the Panchayat system that was mentioned earlier, one of the three pillars of the Nepalese society was the monarchy and a total belief in the monarchy, which is one of the motivations behind the actions of the government and the monarchy. The preservation of power was central; but other motivations existed as well.

Concerns over regional stability and the precedent of armed insurgency were some other motivations of the monarchy. Political leaders worldwide often want to preserve their power and ensure their regimes survival. The degree these leaders are willing to go to in order to stay in power varies widely, but in the case of Nepal it was evidently quite far. Due to this, the conflict became one of royalism versus republicanism. It could be said that the monarchies and the government’s motivations were similar for both short-term and long-term purposes, i.e. the consolidation of power and continuation of the monarchy. Perhaps due to not understanding the severity of the People’s War, or perhaps due to ignorance, the initial response of the government was slow and confined to anti-insurgency operations involving the police, only later did the army become involved as well.

In contrast to the government’s motivations, the Maoists who led the People’s war had different aims. One of the main goals was to abolish the monarchy. It was their belief that power should not lie with a hereditary monarchy, but with the people, and as such the goal was a People’s Republic. The thought was that a state like this would better reflect the needs of the people, act for the people’s interests and not for the small elite. It could be said that there is more of a long-term though behind the motivations of the Maoists, as opposed to the governments. Through the short-term actions of the Maoists, they aim to create change that will last for decades to come, whereas the government aims to prolong the status quo.

While fighting for the people could be seen as a righteous thing to do, criticism could be turned towards the Maoists as well. One of the more common ones is that the People’s War often is framed as a struggle for the empowerment of the people, but the Maoists often involved coercion and violence in their practices. This complicates their claim to represent the will of the people. The though of the “will of the people” becomes problematic, since these tactics show that it is not a matter of all the people, but only the part of the people that wholly agrees with the Maoists political agenda. Anyone who does not support the uprising is automatically seen as an enemy of the movement, no matter what caste they belong to. This is a strong form of “othering” which can be found around similar conflicts around the world.

The first significant turning point was the outbreak of the war in the 1996 which saw the Maoists utilize guerilla tactics to combat the police forces, something which the police forces were ill equipped and not trained to deal with, this saw the Maoists gain ground quickly in the early years of the war. After that, the next big turning point of the war came in 2001 with the Royal Massacre. During this event, King Birendra, the Queen, as well as other members of the royal family were shot and killed, with Crown Prince Dipendra being pointed out as the gunman. Dipendra’s fatally wounded body was found at the scene, and he later died in the hospital. This event created more instability and uncertainty within the country regarding the standing of the monarchy, possibly fanning on the flames of the ongoing civil war and perhaps spurring on the Maoists further.

Another turning point of 2001 was the first round of peace talks which began the peace process. A ceasefire was called to allow for the talks, but these led to little progress as mistrust existed between the participating parties. In hindsight it was more for show than actual de-escalation. Even though the results were not that promising, it could be said however, that it showed a certain level of willingness from both sides to find a peaceful end to the conflict since they communicated and decided to hold the talks to begin with.

The second round of peace talks were held in 2003, this second round, much like the first round of talks, led to little progress, as the Maoists saw the monarchy appointed government officials not take the talks seriously by simply ignoring the demands of the Maoists. Although the violence continued after this, this second failed attempt at carrying out peace talks hinted at both sides wanting an end to the conflict, yet for the time being they could not agree on how this end should look like.

With the coming of the third round of peace talks in 2005, so too does the most significant turning point since the beginning of the war; the culmination of the peace talks is reached and the end of the war approaches. A somewhat unlikely alliance between the Maoists and other political parties garnered massive support among the population which eventually led to protests in April 2006. As a result of these protests the king transferred his power to the last elected government which immediately proceeded to carry out negotiations with the Maoists. A ceasefire is declared and through further negotiations the Comprehensive Peace Agreement is finally signed on the 21st of November 2006.

For the Nepalese people, the end of the conflict marked a welcome change after a decade of the death and destruction that had been a part of the everyday life. The social and economic cost of the conflict had been enormous. Nearly 13.000 people had died, and an even larger number of people were displaced because of the war. Economically, the war caused widespread destruction to the country’s infrastructure, which affected the already poor rural areas the worst. The rebuilding efforts in these areas took years. Furthermore, the war led to a decline in economic growth due to the instability and uncertainty that the war caused. This led to business being disrupted, but perhaps more devastatingly, much of the country’s agriculture as well. As most of the Nepalese population works in the agriculture sector, this particularly carried grave consequences for the country.

IMPLICATIONS

Although the civil war came to an end in 2006, the implications of this war are far reaching and continue to shape Nepal’s political, social and economic landscape to this day. Politically the war fundamentally changed the structure of the state, going from a monarchy to a federal republic. This transition showed that political change could be achieved, however. It also showed that this change could be achieved through armed conflict which paves the way for future risks of instability and insurgency in the case that the government were to continue to fail in the eyes of the people. Socially the war created more room for issues related to the caste system, marginalization and more. The poor people of the country gained more recognition and representation, to a certain degree. Due to the war however, long lasting wounds and grievances became many, continuously affecting social cohesion within the country.

Economically, the war hindered Nepal’s economical trajectory for years after its official conclusion, as the decade of fighting had left institutions weakened as well as discouraging new investments into the country. Especially in the rural areas, the disruption of agriculture and destruction of infrastructure increased poverty, which leads to increasing inequalities between the city regions and rural regions. In hindsight it seems clear that the unwillingness of the monarchy and the political elites in implementing meaningful reforms strongly contributed to the dissent and violence. Because of this, the Nepalese Civil War can be taken as an example of the importance of addressing social inequalities and popular demands, as if these were to be unsolved, it can lead to a prolonged conflict creating consequences that last long after peace agreements are signed. These consequences are the lead up to the violent protests that took place in 2025.

After the war and the political change that took place, there was perhaps strong hope for change for the better, however, the political instability that existed in the country has not gotten better, rather it has remained. Fair representation is something that the country has struggled with for long, and it continues to do so in 2026, with some groups within the country hardly seeing having any representation at all. The elected officials have faced difficulties in meeting the expectations of the people due to several reasons; corruption, nepotism, weak economic development, continued social inequality and more. Failing to improve in these areas has created a deep mistrust towards politicians and the government. These are all reasons behind the Maoists People’s War, which ended about twenty years ago, and their continued existence has seen discontent in the country once more increase. After all, if the reasons for taking up arms remain but under a different political system, recurring conflicts could ensue.

Data from the International Labour Organization shows that the unemployment rate in 2017 was 10.7%, but the youth unemployment rate was almost twice as high at 20.7%. Although this data is 9 years old as of 2026, it is the most recent Labour Force Survey available, and it gives a good indication as to why the dissent amongst the youth of the country grew after the end of the civil war. These levels of youth unemployment continues into the 2020s, and thus the pressure keeps increasing. Combine this with a large chunk of the country’s GDP coming from remittances from Nepali people working outside the country, and it becomes more understandable that young people feel their prospects in the country are dire. Nepal’s economy seemingly has yet to stabilize after the civil war, further adding to the mounting dissatisfaction in the country.

As internet coverage has rapidly expanded in the country, information is disseminated more easily making the people more aware than ever before of the economic, political and social situation in Nepal. The wrongdoings of the government and affiliated elites became apparent, fueling protests. Tales of widespread corruption spread a stark contrast from the change people had envisioned during the war. It also brings greater awareness to the situation of other countries nearby, which could contribute to the growing feeling of helplessness among the young people, making many emigrate for better opportunities.

In early September 2025, the government decided to shut down a long list of social media services within the country in an attempt to quell the circulation of criticism against the government. While this had been attempted before with little success, this time it was more total than before. As much of the internet went dark on September 4th, the Nepalese youth had had enough. Through platforms not shut down by the government, plans were set in motion to organize a protest on September the 8th, in Kathmandu, which drew large crowds from the country. Initially the protests were peaceful, however this came to change as some protesters began charging the parliament gates which saw the police use conventional means to try and keep them at bay. When this failed the first gunshots rang out. The bullets kept raining down on the protesters, claiming dozens of lives even after the violence had ended.

On September the 9th the protests took a turn for the worse, as the demonstrators began expressing their anger towards the government by attacking the police, looting weapons and in several cases killing police officers. Politicians were attacked, and many important government buildings including the parliament and the presidential palace were torched. As a result, the protests gained significant momentum and proved difficult to contain, forcing the Prime Minister to resign. In the end 76 people lost their lives, and over 2300 people were injured in the protests. While this is the most severe case of such unrest in recent years, other instances do exist which suggest that a form of conflict recurrence dynamic exists, but this does not necessarily mean the country will see another civil war take place. Albeit the current political system allows for political change through different mechanisms than those available under the constitutional monarchy, where the real power was concentrated around the king. The continued persistence of the underlying reasons behind these protests will possibly lead to future protests that can turn violent as the disillusioned population has yet to see the envisioned change occur.

As such there needs to be stronger efforts to uproot corruption within the government and to pave way for meaningful changes to take place. Strengthening the institutions of the country which were weakened during the war, as well as independent investigations into corruption that apply to everyone would provide a good basis to stand on. More focus and investment in the rural parts of the country would benefit most of the population, providing the youth of Nepal with stronger reasons to remain in the country and not leave.

CONCLUSIONS

In conclusion, the Nepalese Civil War was a complex conflict with roots in longstanding inequalities across a multitude of spectrums. Essentially, the war is a struggle between the preservation of an already existing power structure represented by the monarchy and ruling elites, and the Maoists vision of restructuring said power structure into a state in the name of the people. As a result of these different goals, the motivations of both sides were fundamentally different as well. The monarchy and the government were motivated by a fear of losing political power, legitimacy and control over the existing power structure. The Maoists on the other hand were motivated by continuous inaction against economic inequality, caste-based discrimination and political exclusion.

Several turning points over the course of the war include the beginning of the war in 1996, the Royal Massacre in 2001, the early peace talks in 2001 and 2003. The signing of the Comprehensive Peace Agreement in 2006 marked the last turning point of the war, this brought an end to the conflict that had raged on for a decade and began the transformation of Nepal into the federal republic it is today. While the conflict was successful for the people of Nepal in the sense that it changed the country politically, it came at an immense cost both economically and socially. Many lives were lost, even more people were displaced, and the development within the country was disrupted. Therefore, the Nepalese Civil War stands as a stark reminder of the devastating consequences prolonged political exclusion and violent conflicts can carry. Although the country changed from a constitutional monarchy to a federal republic, political instability has persisted, an example of this being the violent September 2025 protests that were caused by the government trying to suppress criticism against it. These protests left many dead, saw the prime minister resigning and the country once more shaken up by issues that have remained for a long time, making it questionable to what degree things have changed for the better.

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