We have 10 federal states in the country, and will have three more by the end of the week. The ruling coalition has been calling the Maoists' move unconstitutional. Now, human rights activists and law experts are adding their voice to the criticism. The Kathmandu Post reports:

Human rights bodies and law experts have expressed “concern” over the UCPN (Maoist) act of autonomous state declaration and seizure of private land, saying the acts were a blatant breach of the Comprehensive Peace Agreement (CPA).

Maoist chairman Pushpa Kamal Dahal is said to be tired of the negative Nellies. The Himalayan Times reports:

UCPN-Maoist chairman Pushpa Kamal Dahal ‘Prachanda’ today warned that the party could develop the recently-declared autonomous states to parallel government if rival parties continued protest against the declaration.

These developments have worried President Ram Baran Yadav who summoned the Deputy Prime Minister Bijaya Kumar Gachhadar for questioning yesterday. From The Himalayan Times:

[Yadav] questioned the UML-led coalition’s inability to tackle to growing Maoists’ strong arm tactics. The DPM faced a barrage of powers from a “worried” president. He told Gachhadar that the government had failed to curb criminal activities and lawlessness. Also, the Maoists’ wanton seizure of land to ‘rehabilitate the landless’ figured during the talks.

The rehabilitation and discharge process for unqualified combatants has finally begun after the government, Maoists and the United Nations signed an action plan to release said combatants beginning 27 December. Republica reports:

The discharge process was stalled after the Maoists differed on the rehabilitation package offered by the UN and the government, demanding cash support for the combatants.

“But there will be no cash hand out in lump sum [as rehabilitation packages],” said Robert Piper, UN Resident and Humanitarian Coordinator in Nepal.

The action plan has envisioned a mechanism of UN-led team to monitor the implementation of the plan and rehabilitation of the disqualified for six months. Maoists are required to ensure confidential access to this mechanism to any areas it wants to visit at any times.

While the country is in expectation of a political crisis – with all the wrangling over federal territories – an economic crisis may be closing in even faster. Nagarik reports:

The deficit in international trade and decline in remittance growth rate is pointing towards an  economic crisis in the country.

Nepal Rastra bank has reported a deficit of Rs 19.45 billion in the first quarter of the year with 48 percent increase in trade deficit. Nepal had a surplus of Rs 7.7 billion during the same period last year.

Meanwhile, five banks are on the brink of collapse because of risky investments in the real estate market. Nagarik reports:

Banks and finance companies have invested Rs 114 billion on housing and real estate market, considered risky assets by the National Bank. This constitutes nearly 12 percent of the entire economy.

The country is facing a liquidity crunch because of investments in stagnant markets like real estate. Finance Secretary Rameshwor Khanal said five banks would collapse immediately if strong measures are taken to correct the situation.

Nepal Rastra Bank is charging increased interest rates to discourage investment in housing and real estate. Meanwhile, it has requested other banks not to adopt immediate loan recovery policies as it could fuel the collapse of housing and real estate market.

(Posted by Indu Nepal)