Nepal's ethnic rifts alter politics and foreign ties

Significance

His first official visit was to India in mid-February. These visits come at a difficult time for the Kathmandu administration, which is struggling to foster consensus among the various ethnic parties over a new constitution. These internal political rifts are not only looming over domestic security but are also affecting Nepal's ties with its two most powerful neighbours, China and India.

Impacts

• Sporadic and small-scale political violence is likely to deter foreign investment, especially in energy projects.
• The political chaos will impede post-earthquake reconstruction work, potentially alienating international donors.
• While a return to large-scale violence is unlikely, ethnic tensions are spreading, threatening long-term security.