Maoists in, king out as Nepal faces historic vote

KATHMANDU (Reuters) - Nepal stages a historic election on Thursday meant to rope a once-feared Maoist guerrilla army into democratic politics and bring an end to a once-loved 240-year-old Hindu monarchy.

High in the Himalayas, impoverished, ill-governed Nepal is hoping its first elections in nine years will help cement peace after a decade-long civil war, and allow it finally to join its booming big brother, India, in a new era of prosperity.

Two years after mass street protests brought an end to an ill-fated period of royal rule, the vote will also formally restore democracy to Nepal.

"It is not going to solve everything overnight, but it is closure for one chapter in our history and the beginning of a new one," said Kunda Dixit, editor of the Nepali Times.

Yet the challenges ahead are immense, not least because violence and intimidation have seriously marred the campaign and could undermine the voting day itself.

The main, but far from the only, culprits are the Maoists, seemingly unable to leave behind the bullying tactics that brought them this far. Their youth wing is accused of beating up rival party workers and systematically threatening voters.

A peace accord was signed only two years ago, and is effectively in "cold storage", with few of its provisions implemented, said magazine editor Yubaraj Ghimire.

The Maoists have locked away their arms but kept the keys, ex-guerrillas have not been integrated into the army or civilian life, and the abuses of the war have gone unpunished.

Strikes, violence and power shortages mean the economy has yet to see a dividend from peace.

One of the biggest questions facing Nepal today is just how well the Maoists will fare at the polls, and if they will accept defeat peacefully, as they promise.

With no elections for nearly a decade, and no opinion polls, the results are "anybody's guess", said one Western diplomat. "The question is whether the Maoists can get sufficient strength to give them a significant stake in peace."

No one expects the Maoists to win a majority -- the country's long-established political heavyweights, the right-of-centre Nepali Congress and the left-of-centre UML are clear favorites.

Equally, few expect the Maoists to return to the jungles.

But a poor showing could raise tensions between the leadership, now apparently wedded to multi-party competition, and a hardline second rank backed by heavily indoctrinated cadres, who sound less convinced.

A split, or street protests by disgruntled cadres, are distinct possibilities if the Maoists fare badly, analysts say.

21ST-CENTURY COMMUNISTS

In a country of few roads and much poverty, Maoists ran huge swathes of the countryside in their heyday. They are still classified as terrorists by the United States, but have dropped the language of Marx and Mao since emerging into public life.

These days they call themselves 21st-century communists, who want land reform but shy away from nationalization, who want social justice but accept that globalization is here to stay.

In one of the world's 10 poorest countries, where politics is a by-word for corruption and squabbling, their idea of a "new Nepal" has won followers, but their tactics have alienated more.

"They are the only party saying anything new and they could easily have swept the election, if only they had behaved well," said Dixit. "The young hotheads have spoiled the party's chance."

Thursday's vote will establish a 601-member assembly, meant to write a new constitution and serve as a parliament for at least two years.

Its first task will be to rubber-stamp an agreement reached by major political parties last year to abolish the monarchy and establish a republic -- the Maoists' main demand during the war.

Royalist parties are calling for a referendum on that subject but are unlikely to win many seats.

Many Nepalis still support the idea of a symbolic monarchy, but few like King Gyanendra, who ascended the throne after the massacre of almost the entire royal family in 2001 and then seized absolute power in 2005.

Sooner or later, analysts say, the new assembly is almost certain to declare Nepal the Himalayas' first secular republic.

After that, it will be up to the politicians.

(Editing by Alistair Scrutton and Valerie Lee)