Maintain proper records

It is indeed sad to note that despite the government’s much lauded economic policy, especially on foreign investment, it has failed to keep any statistical record of the foreign currency that has come in. The reasons for this appear to be no other than lack of legal provision and ineffective mechanism to regulate Foreign Direct Investment (FDI). Besides, this is also a result of negligence on the part
of the Finance Ministry. The government should not have blown its trumpet unless it had accurate data on how much foreign currency investment is coming into the country.

The number of industries with foreign investment has no doubt increased from 59 to 565. Of the 66 billion rupees investment proposed for these industries, 15.5 billion rupees should have come through foreign exchange. However, neither Nepal Rashtra Bank (NRB) nor the Ministry of Finance maintain data on foreign investment. Instead, the government has been claiming a boom in exports because of foreign investment. This is not true. The government can of course come up with many excuses to defend these serious lapses. But what goes without saying is that it is ludicrous that organisations like NRB and, Finance and Industry ministries should be without records.

This report is in fact a bombshell for those under the impression that the establishment is serious about creating database of the country’s economic status. No doubt, prospecting foreign investors will look into the statistics of such investment before investing in this country. It is also a fact that any government interested in increasing FDI has to rely on reviews and policy changes to enhance investment. But how can the government start without first having the basic facts?

Although NRB blames investors for the mess, it should recognise that the job of keeping records is the responsibility of the authorities more than investors. The lack of responsibility both NRB and Ministry of Finance have shown has no doubt raised doubts. The government should not have allowed this to happen when foreign investors are seeking such data. The government has to maintain proper records on foreign investment and introduce necessary measures that can regulate industries or new joint ventures in the future. Only this can support the government’s claim of rising FDI and its role in expanding export.

After Paris : Development’s ‘yes’ minister

By Saubhagya Shah

Acouple of months back when the current finance minister resigned from the previous NC government on some intra-party personality issue, the World Bank was reported to have made some noises of displeasure to the effect that if this finance minister quits, then the tide of reform in Nepal will be in serious jeopardy and relations with donors will suffer. Coming from the World Bank, nobody took it as an interference in internal matters. The public reaction was instead of awe; the World Bank in its wisdom had recognized the economic brilliance of this financial wizkid without whose guidance Nepal’s development will go to the dogs.

The public flattery for their blue-eyed boy was somewhat vindicated during the recent Nepal Development Forum meeting in Paris where major donors convened to assess Nepal’s development needs for the coming years. Unlike those previous meetings (when it was called the Nepal Aid Forum) where donors dictated what to do with their money, the Nepali delegation led by our finance minister thus forcefully, set their own priority and programmes before the lenders, or so the public has been informed. Based on this seemingly heroic act, one commentator has written that the finance minister "brought the freedom to set own agenda in accepting foreign assistance."

One would dearly like to believe that the new world order has taken roots where the meek can finally dictate terms to donors. Alas, it is not so. Since the past year the World Bank and IMF have gone through yet another revamp (Another attempt to deal with international aid’s chronic PR problem, each decade it has needed a new facelift from trickle down; basic needs: participatory: and now to national ownership of development): from now on donors will not send the development blueprint along with their money, they want recipient countries to "own up" the policies to be launched with their aid money. So rather than our minister bravely standing up and telling donors from now on we do things our way, what really transpired was that the lenders had already asked borrowers to stand up and acknowledge the spending programmes as their own.

And what are these self-conceived and self-owned policies and programmes that the finance minister asserted before the donor consortium in Paris? Decentralization, macro-economic stability, financial sector reform, broadening private sector role, poverty alleviation, strengthening civil society, reforming the civil service, checking corruption were some of the development priorities the Nepalese delegation is said to have tabled at the Paris conference. But anyone remotely aware with development issues knows that these are the very same priorities which bilateral and multilateral donors
have been pushing through for some years now.

So not only does the pretension of ownership for the development priority appear patently false, the claim that the minister told donors that from now onwards we will set the agenda is hollow. Rather than acknowledging that they were going before the Paris meeting under new lending procedures, the Nepali delegation sought to give the impression that they went and rewrote the rules of lending and borrowing. The assumed authorship is not outright false, just delegated. Bend-over and thou shalt be in favour. There is no shame in dancing to foreign music, after all we are all in a free market of ideas. But what is amateurism is to present that tune as one’s -- besides economizing truth, it smacks of plain plagiarism. But the minister must be given credit for performing these policy acrobatics with such flair that it almost passed off as spontaneous and authentic.

The socio-economic uplift of the third world countries is the stated objectives of international aid. Even if not apparent in the letters of memorandum for aid, the political and ideological objectives of the donors, are just as significant. In certain circumstances, the unstated goals may even make the overt social and economic objectives secondary and peripheral. Through the instrument of aid or the threat of its withdrawal, countries can be encouraged to adopt certain political and market policies that have strategic significance for donors.

As one of the poorest countries and the recipient of a significant amount of foreign assistance, the stated goals of development aid here officially focus on eradicating poverty, raising literacy, protecting the environment, opening the market, providing basic health, addressing the issues of women and other vulnerable sections. But what is often elided by the development discourse are the political objectives of foreign assistance which might often times have primacy over the social and economic uplift of the people. Currently, strengthening multiparty system in and easing Nepal into the global
market are the strategic goals of international aid.

These strategic goals would be met in a sustainable way if development delivered and the majority of people came to have faith in multiparty system and free market as enlightened self interest. But a host of political and economic factors obstruct the idealized trajectory of development from materializing. In such unfortunate situations, then at least the individuals, groups and parties that swear by multiparty and lassiez faire have to be bolstered through the continued infusion of foreign aid. Issues of corruption and efficiency become insignificant, in fact, it is precisely through this siphoning act that local allies in the global ideological contest can be bolstered. This is why there is advantage to studying international development aid as political economy, rather than viewing it as pure technical rationality and disembodied economics.

Upon returning from Paris meet where he was able to get a tentative pledge of $ 1.2 billion dollars from donors for next year, the finance minister proclaimed in a grave tone that "Nepal has but no other option". As far as receiving foreign aid is concerned, he need not have sounded so apocalyptic. Our otherwise worldly-wise minister seems to have misjudged the deep pockets of our donors and their continued commitment to shoring up multiparty system in Nepal. Reform or no reform, we can rest assured that the West will maintain its current aid level in the foreseeable future, especially in light of the perceived threat to reinstate democracy from the extreme left and right.

How UN offers job !

By Arun Gupto

This has to do with a recent UN job advertisement in The Kathmandu Post: ". . . low caste people will be privileged." Now what do we think of this? Do you consider you are honouring some people of Hindu caste system by calling them "low"? Or are we encouraging such segregation by calling them "low"? Are we aware that no person with self-esteem, however unprivileged, will like to be called "low," however tempting the job offer is. S/he may not oppose your categories, but that does not mean that you donate such unwanted socio-linguistic and cultural sympathies.

Someone may considers my response an over reaction because the ad may not have intended to dishonour any group or caste, but I still think this shows lack of conceptual alertness. Either one does not think about the issues of political correctness and recklessly uses terms like "negro," "low caste" and so on, or one does not give much thought to thinking in sophisticated ways. An advertisement from the United Nations’ office makes it more ridiculous.

There is a logical error too in the advertisement. In economically challenged countries (you call them poor), the economic problem is not primarily a matter of caste divisions. Along with socially underprivileged castes, there are thousands of Chhetris, Baishyas and Brahmins in countries like Nepal and India who are living under severe social and economic conditions. Does UN have any data for knowing who is "poor" and who is rich? Do you want to bar such sections of society or do you want to make your own half cooked arrogant rules depending on caste divisions and taking interviews and sympathetically enjoying, what you call, a "low caste" candidate sitting in front of you.

One must remember that at one time in India, there were many riots and deaths due to such reservation policies. Those who follow news may still remember the "Mandal Commission" episodes when VP Singh was the Prime minister of India. Nepal does not have such reservations and even if it creates them, I do not think these would depend on "low" and "high" caste divisions. If modern Nepalis do not accept such divisions, why does an office like the UN want to drag in caste instead of essential economic challenges in its lucrative offers.

Such advertisements have strange effects. Once a "low caste" candidate is selected, it automatically gives him or her a bizarre, special status in an office, it officially also reminds us of our caste status. Why do you want to know whether a Nepali works in your office and that Nepali is a "low caste" person? On the one hand, Hindus are trying to fight against caste system and many other social problems, on the other, a UN office (notice the term UN with all its humanitarian connotations) is insincerely trying to be reckless in such matters.

Nepal, as well as other South Asian countries, does have caste divisions and discriminations, but that again does not mean that sensible sections of society should encourage them intentionally or unintentionally. Furthermore, selecting an underprivileged Nepali is different from advertising for an underprivileged. An underprivileged does not mean only "low caste": it is a biased univocal interpretation of the term." People in countries like Nepal do not mind "women quotas" in job opportunities, but self-respecting feminists do not like such discriminatory reservations. They say it undermines their potential and skill. But then in such advertisements, women are not categorized as "low". The word "woman" is fine because it has no downgrading connotations. A sensible Nepali would not like to be called "low" that connotes paltry, pathetic, mediocre and words like that: Low is a politically incorrect word and a United Nations’s office should never use such terms. Do not say that the article is a non-issue. I do not say that the advertisement is a fatal error, but it surely undermines the sentiments of many people.

Another American century

By John McCain

WASHINGTON -- In a remarkably changed world and in the dawn of the next American century, our core strategic interests, like our founding ideals, remain constant: protecting our homeland and hemisphere from external threats; preventing the domination of Europe by a single power; strengthening our alliances; securing access to energy resources; and sustaining stability in the Pacific Rim.

Today, the most immediate threats are less potentially catastrophic than those of the Cold War, but their harm to American interests and ideals is, arguably, more immediate and more likely to be realised than a massive intercontinental ballistic missile attack once was. Ethnic and religious hatred, violent expressions of nationalism, proliferation of weapons of mass destruction and the means to deliver them, and international terrorism now constitute the clear and present danger.

The task confronting the US is to develop policies that will oppose today’s threats as effectively as we waged the Cold War’s "long twilight struggle" and that builds a secure foundation for preventing Soviet-like threats over the long term. America’s Cold War leadership of NATO was an unqualified success, in many respects a more difficult accomplishment than maintaining alliance solidarity in a hot war. Keeping NATO sound as it grows and adapts to new, only partly perceived threats will prove even more challenging. America’s allies are currently spending too little on their own defence. They are increasingly indifferent to the serious problems inherent in developing a defence identity separate from NATO. And they persist in avoiding coming to terms with the necessity of forging a mutual defence against threats to our interests outside Europe. These failings require immediate improvement and we must use the forms of persuasion necessary to do so.

The same is true in East Asia where our relations with Japan, South Korea and others are central to stability in the region. In the case of Japan in particular, both Washington and Tokyo need to pay more attention to the strategic aspects of this special relationship. We should all hope and work for a day when Russia is peaceful, prosperous and free. But such a Russia does not yet exist, and denying that will not make it come true.

The Russian people are now being told by many of their leaders that democracy and free markets have caused Russia’s descent into chaos. Nothing could be further from the truth. At fault in Russia is not the failure of free market and democratic principles but rather their corruption by weak leaders, militant nationals, and greedy profiteers.

We need to express clearly to Moscow that the United States intends to support only real reform in Russia: a democratic culture, genuine rule of law and free market capitalism, not kleptocrats manipulating insider privatisation. We should feel no reluctance to stand up to Russian leaders when they challenge our interests and values. We should demand action on the Strategic Arms Reduction Treaty II (START II), denounce corruption, reject Russian demands to dictate the size or mission of NATO, and brook no interference in the means we use to defend our allies’ security and our own.

In the near future, we could face a fundamentally new strategic threat: nuclear blackmail against an American president. We must act immediately with our allies in Asia and Europe to prepare to defend against this danger. As president, I would emphasize to friend and foe alike that both theatre and strategic missile defence is now a national priority, not just another Pentagon programme.

As president, I would be prepared to discuss with Russia whether the treaty can be modified to permit both our countries to respond to a rogue state missile threat. But if these talks failed, I would abrogate the Anti-Ballistic Missile Systems Treaty (ABM) the moment it became clear it cannot and will not be altered to address present danger.

The same realism is needed in our relations with China. China would prefer that the US withdraw all of our forces from Asia; end our strategic alliance with Japan; abandon our commitment to Taiwan and the peaceful reunification of China; cease all support for democratic political change in China; ignore their role in proliferation, and remain silent when peaceful protesters are rounded up or when Tibetan culture is destroyed.

We would serve both China and ourselves well by disabusing Beijing of the expectation that any of these preferences will be satisfied. I support China’s entry into the World Trade Organisation and am hopeful, but not blindly so, that China’s further integration into the world economy will weaken Beijing’s restraints on the free flow of information in China and that this will in turn hasten the tide of history that will, sooner or later, wash away the last defence of tyranny there.

The principal object of American foreign policy in the last century was a world where our interests were better secured and our ideals had a realistic chance of becoming a universal creed. And we accomplished it. The best guarantee that the new century will expand and not reverse humanity’s triumphs in the 20th century is the promise of America’s principled world leadership.

(Inter Press Service)
(*) John McCain is a senator and was a Republican candidate for president of the United States)