Nepal in budget crisis that could leave millions without pay Slug: Nepal budget crisis Date: 15/11/2012

Reporter: Kanaha Sabapathy Radio Australia INTRO Nepal is once again in crisis, with the caretaker government's authority to access funds from the treasury coming to an end this week. Nepal, which has no parliament nor constitution since May, has been surviving on emergency funds after rival political parties failed to pass a fiscal budget in July. Now the Maoist led caretaker government is taking its budget proposal to the president. Kanaha Sabapathy from Radio Australia reports. TEXT Months of political deadlock have plunged Nepal into a budget crisis that could leave half a million workers unpaid from this week. The crisis began in May when the failure to pass a new constitution ... left the country without a parliament and in the hands of a Maoist led caretaker government, whose legality is being challenged. Kunda Dixit is the editor and publisher of the Nepali Times. DIXIT CLIP 1 (Male, English): The government is lame duck the president is ceremonial. Yet the surprising thing is that the country lurches along and moves along and it seems as if having a government or not having one does not matter at all. Dixit says political stability is essential if the country is to address the deteriorating political, social and economic problems of the country. He says that can be only resolved once the political power struggle is addressed. DIXIT CLIP 2 (Male, English): The best way to do that is to go for elections and I think that is where the bargaining is going on at the moment and the budget has become the pawn in that, give and take. Opposition parties who had blocked the July budget say they will continue to do so until caretaker Maoist prime minister Baburam Bhattarai steps down and forms a unity government. Dr Bhattarai says he will seek a presidential decree if need be to push through the budget but therein lies the problem. Anagha Neelakantan senior analyst for South Asia with the International Crisis Group explains.

NEELAKANTAN CLIP 1 (Female, English): The president and the prime minister have some differences on how to pass the budget. The president says he would like all the political parties to agree to it. The opposition is in a bind itself because on the one hand the country desperately needs a budget. We have got people from the business community lobbying saying the political stalemate is all very well but for the economy and development and other things you need a budget to be passed. Dixit agrees. DIXIT CLIP 3 (Male, English): The president and the prime minister need to agree on the budget. They have to agree on the formation of an interim government to lead us into elections and I think that should be every ones priority because the election will be the only thing to sort this out. While political parties vie for power at the centre development in the regional areas continue to shrink. In a country where a quarter of the population live below the poverty line the failure to pass a budget means, development projects will grind to a halt, the economy will further shrink and black markets and smuggling will flourish. The failure of the Maoist caretaker government to stay true to its ideology of equality, getting rid of discrimination and the income gap has now led to a group of hardcore Maoist members breaking away and threatening to go back to war. DIXIT CLIP 4 (Male, English): The Maoists waged a war for ten years with the revolution and they were inspired by Mao Zedong who said that political power comes out from the barrel of a gun and they are now behaving like everyone else and chasing money and up to their necks in corruption. So for them political power comes out from a wallet and I think they are also nervous about going into elections because they have been so thoroughly discredited. Elections will help resolve Nepal's political crisis but that is posing a problem to says Mr Dixit. DIXIT CLIP 5 (Male, English): The main thing that is holding that back is a power tussle about who gets to be prime minister and who gets to have key ministerial portfolios in a election government because that means there will be an advantage for the incumbent. Ms Neelakantan says until the shadow of illegitimacy which seems to hang over the entire political process is addressed Nepal's development will continue to flounder. NEELAKANTAN CLIP 2 (Female, English): The parties have now spent months now without an agreement on a roadmap for the way forward so although elections were announced for an election this month, its clearly not going to happen, this month, the question is when will they happen, what needs to happen before elections can happen to an new constituent assembly. At the end of the day its not sustainable to run a government without parliament and yet I fear that is what they are looking at for sometime to come.

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