Federalism Will Progress, But Risk Of Instability Will Persist

BMI View: Nepal is pressing ahead with its peace process after a decade-long civil war that ended in 2006. The central element of building new political institutions is the adoption of a federal system to better represent Nepal's myriad minority groups. Although there has been considerable progress towards this goal, we caution that the country will remain vulnerable to instability for the foreseeable future, and a return to violence cannot be precluded.

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