KATHMANDU: As Nepal ends its first week as the world’s newest republic on Tuesday, worries about political squabbling, food and fuel shortages and demands for regional autonomy are replacing euphoria over the end of the unpopular monarchy.

Given a tradition of party bickering and the ambition of the Maoists, who gave up their guerrilla war to topple the king and then won elections for an assembly which finally ended royal rule, the transition was never going to be easy.

But spiralling global prices of basic foods and crude oil have added pressure as they spill over the Himalayan foothills, creating shortages and threatening to fire popular anger.

Nepal is one of the world’s poorest countries, hobbled by years of strife, strikes, and chronic power shortages, and heavily dependent on foreign aid and tourist revenues.

The most immediate challenge remains to form a new government and elect the first president, expected to be a largely ceremonial position.

Leading parties, including the former rebels, who fell short of a majority in April’s polls, are fighting over positions.

The Maoists want both the posts of prime minister and president. The centrist Nepali Congress, the second-biggest group in the new assembly, say that would represent a “totalitarian system” and cannot be allowed.

Commentators say this should not be an insurmountable obstacle. “Finding a (presidential) candidate acceptable to all without losing face to their cadres should not be difficult,” said political analyst C.K. Lal.

But while the politicians argue, the problems the new government will face are mounting.

“Whichever party is going to form the government, it is going to immediately hit a brick wall with the food and fuel crisis,” said Kunda Dixit, editor of the weekly Nepali Times.

“Public expectations are so high, there is bound to be disillusionment.”

Cars and motorbikes queue daily outside gas stations, and the state-run oil monopoly has warned it could soon run out of cash and have to close more pumps if subsidised retail fuel prices are not hiked in line with the rising cost of imports.

Previous fuel price rises have sparked violent protests and often forced government withdrawal.

Consumer groups say prices of many staple foods have gone up by more than 32 per cent since January, mirroring gains in India from where Nepal imports most of its food. Fearing shortages, some retailers have begun hoarding, adding to price pressures.

CEMENTING THE PEACE: Beyond the initial hurdles lies the massive task of drafting a new inclusive constitution in a country traditionally run along feudal lines by an unrepresentative elite.

Ethnic minorities, previously marginalised lower castes, and women are all looking for a greater say in running the country and increased access to jobs and education.

“Integrating all of Nepali people into the state structure and the economy will be a real test for the constitution drafters,” said Rhoderick Chalmers, Nepal head of Brussels-based think-tank, the International Crisis Group.

Sensing an opportunity for gains, ethnic groups with varying demands have organised violent protests in which scores of people have died since the Maoists ended their 10-year fight with government troops and began peace talks.

Most of those deaths took place across the fertile southern plains, known as the Terai or Madhesh.

Ethnic Madheshis, who comprise one third of Nepal’s 26 million people, want a separate province with extensive powers in what is Nepal’s breadbasket and business hub.

The Maoists and other parties insist they have no objection to greater regional autonomy but have proposed no plans for how this will work. The Madheshis are expected to push their case in the assembly, where they make up the fourth-largest block.

Adding to security fears is the future of over 19,000 former Maoist fighters housed in United Nations supervised camps. The Maoists want them to join the national army, a plan strongly opposed by senior officers.

“Our stand is that anyone who is politically indoctrinated can’t be taken into the army. This is true with the Maoists,” a top army general said.

If the Maoists insist on their former guerrillas entering the ranks rather than being found alternative employment, tensions could rise, analysts say, possibly straining relationships between ministers and the top brass.

FUNDING THE FUTURE: And if the former rebels relent, their disarmed fighters will have to compete with almost half a million other young people who join the labour market every year to face limited opportunities.