Whether monarchy and democracy can coexist was the key question in both Bhutan and Nepal during 2005. Two developments in Nepal will be major factors in determining the survival of the Shah dynasty and, in the longer term, whether the Nepalese nation-state survives as a sovereign entity at all. These were the ““royal coup”” of February 1 and the agreement between the Communist Party of Nepal (Maoist) and seven parliamentary political parties announced on November 22. In Bhutan, a new constitution is out for consultation that would establish a two-party democracy and reduce the powers of the king.
As small states located on the south side of the eastern Himalaya, Nepal and Bhutan are superficially very similar. In both countries, a monarchy is in the process of renegotiating its position and role, and in both, the current political dispensation faces strong challenges. However, there are also distinct differences in how political developments are proceeding in Nepal and Bhutan.