Declining tourism

The Immigration Department’s figures on tourist arrivals should be a source of anxiety for the tourism industry as well as the government. If it is not, nothing will arrest the decline of tourism in the country.

According to the Immigration Department and Nepal Tourism Board (NTB), tourist arrival by air--which comprises 86 percent of the arrivals--fell by almost 13 percent this year. The reduced number of Indian tourists visiting the country, by 32 percent, has contributed significantly to the total decline. These figures are alarming because Tourism is a major foreign exchange earner. Last year alone, it brought in revenue to the tune of 168 million dollars. The reduced arrivals could affect forex earnings in a big way. Tourism also contributes about four percent to the GDP and it provides employment to 200,000 people. It is a well-established industry and there is still plenty of scope for growth and development, especially infrastructure development. Thus, if this industry were to decline, the consequences could be quite far reaching. Moreover, tourism is a very sensitive sector. In the past years, tourism in Nepal has had to suffer more because of a wide range of extraneous factors than because of its own shortcomings. Lack of airline seats, RNAC’s problems, political trouble back home, pollution, a hijack, bad media and lack of international and so many other reasons have affected the tourism industry.

None of these are unmanageable problems, but they are being allowed to deteriorate beyond repair. The government must stop this negligence. It has to first of all recognise tourism as an industry that is dependent on the smooth functioning of many other areas or activities. The hijack of an Indian Airlines plane in December last year and the subsequent onslaught of negative Indian media coverage did indeed act as a major cause for the reduced Indian tourist arrival this year.

However, this is not the only factor that threatens the tourism industry. The fact that NTB is not doing enough to promote Nepal as a destination abroad is as much a threat as the present bird menace at Tribhuvan International Airport or the deteriorating political and natural environment. Thus, the promotion of tourism is a multi-sectoral effort and the government must treat it as such. This obviously calls for a different approach because the problems affecting the tourism industry are complex and often, these problems are associated with areas outside the tourism sector.

Private sector interventions in poverty alleviation

By Suman Kumari Sharma

In the context of Nepal, the government has been leading the poverty reduction effort mostly on its own but the government's capacity is stretched too thin resulting in a loss of efficiency in delivering intended services. Therefore, the private sector's role is being promoted for the sake of poverty alleviation and currently, the government appears to be making an effort to mobilize the private sector to work together with the government and/or through NGOs.

The private sector here is defined as constituting profit making organizations run by an individual or a group of individuals usually not associated with the government. The private sector in a rural, agrarian country like Nepal is dominated in large part by the informal sector. The informal sector in Nepal is largely family owned and is involved in small scale trade, micro cottage industry, service industry (mainly wayside restaurants and hotels), etc and is spread all over the country. The organized private sector is mainly concentrated in Kathmandu and a few other urban areas and it is involved in trade, service industry, small scale manufacturing, tourism and finance.

The growth (in size and coverage) of the organized private sector is a relatively new phenomenon in Nepal. Though the informal sector has been around from time immemorial, like the organized sector, it has not participated in any meaningful way in poverty alleviation. This lack of participation is mainly the result of the government’s inability to mobilize the private sector through necessary policy initiatives, incentives and creation of an enabling environment.

The past efforts of the private sector can be directly or indirectly related to poverty alleviation (even though poverty alleviation may not have been the original intention of these efforts), they fall into the following categories:

Education: There has been remarkable growth in the involvement of the private sector in education starting in the seventies and more so in the eighties and onwards motivated largely by commercial interest. Though the private sector’s role has been most noticeable in urban areas, it has nonetheless been active in building primary schools in rural areas as well. In 1995, the number of privately run primary schools was 3077 out of a total of 21473 primary schools nationwide and though privately run primary schools are concentrated in urban areas some are also located in rural areas.

Small and medium enterprises (SME): Some SMEs and specifically their associations have been active in promoting entrepreneurship among women, marketing rural based products, training rural poor women in income generating activities, formation of cooperatives, establishing rural urban market linkages, etc funded at least initially by donor agencies. A few of these initiatives have been quite successful in reaching out to poor rural women, and men, but their success only underscores their limited coverage though they do provide a model for a more extensive coverage.

Local level public-private partnership (PPP): Starting in the 1990s, local level PPPs have been promoted in various donor funded programmes as a means for poverty alleviation by tapping the resource base of the community by forging better links among the private sector, local producers, local government and CBOs. PPPs have been promoted in programmes like PDDP and LGP, DPCP, etc and have proved quite successful in enhancing rural investment opportunities.

National level public-private partnerships: The Ninth Plan document mentions various areas of cooperation between the public and private sectors in such things as hydropower, tourism, forestry, etc but policies to involve the private sector in poverty alleviation have not been spelt out. Only in the last year or so has the government given consideration to building PPPs for poverty alleviation but this is still very much at the conceptual stage and operational details are lacking.

As described above, the role of the private sector in poverty alleviation has been limited but in recent years, as the government is increasingly looking outwards for strategic partners in fighting poverty, it is making an effort to mobilize the private sector to work together with the government and/or through NGOs. Areas of cooperation which are expected to have a direct impact on the nation’s poverty alleviation endeavour are:

- Building physical infrastructure in rural areas like rural roads, rural electrification, alternative energy sources, farmer managed irrigation systems, watershed management etc.

- Building social infrastructure in rural areas like pre-primary and primary schools, non-formal and adult education centres, basic health care centres, drinking water facilities.

- Promoting labour intensive and local based technologies in rural areas.

- Strengthening linkages between rural credit, agricultural extension, marketing in rural areas and rural-urban marketing linkages.

- Training rural men and women in entrepreneurship.

Information on how the government plans to operationalize the partnership is unavailable but the initial reception accorded by the private sector to such a partnership has been warm. However, the private sector is still waiting to hear from the government to get a better understanding of how the government proposed to build and strengthen the partnership. The major concern of the private sector is the government’s call to invest in the rural sector without the government doing sufficient homework to come up with clear, unambiguous and facilitative policies which are mindful of the private sector’s imperatives and a sound, effective implementation mechanism for these policies. The private sector also feels that the bureaucracy is not used to working together with the private sector and this may be a hindrance. Another issue of importance with the private sector is the introduction of incentives, which would encourage it to enter the social sector. The focus here is on the organised private sector, but given the nationwide coverage of the informal sector and the more intimate relationship the latter has with the rural population, a way has to be found to draw in their resources as well. If a way could be devised to integrate the better managerial skills of the formal sector with the wider outreach of the informal sector, it would be possible to tap into the local resource base, expand it and market it. Only then will rural poverty subside.

Price hike and a weird stranger

By Rishi Ram Paudyal

Can you increase your income in line with the price hike ? If you are a businessman, you may say ‘Yes, I can’. And, of course, if you are a bribe-taker or a person involved in illegal things, you may also give a quick answer in the affirmative. But the majority of people will answer the question negatively.

The people working under His Majesty’s Government usually get pay raise every year. There is no guarantee that people working in private sectors will be provided with the same facilities as private institutions have their own rules and regulations. And there are thousands of labourers and farmers who don’t have regular income. How will these people cope with the price hike that takes place every now and then?

People suffer when the government is inefficient and does not understand the problem of the people. It seems that our government wants to go global leaving the people far behind. The recent petrol-price hike is one example of how our government acts globally. However, this is not to say that the government should be isolated from the world market.

The common people don’t understand the reason behind the price hike. They only feel the blow of it. The poor people who don’t have a budget to feed themselves every day know what a hundred percent price hike on kerosene means. Of course, the government is going to introduce a ration card system which will provide each household three litres of kerosene every month at subsidized rates of fifteen rupees fifty paisa per litre. But a question arises as to whether the three litres of kerosene will be enough for a month for a household.

This amount is unlikely to be enough for many households. In this case, will they be able to purchase the needed kerosene paying twenty-six rupees per litre? Does the government know about the purchasing power of the people? The petrol-price hike may result in price hike in other commodities as well. How will the people be able to bear the costs. The situation is going from bad to worse and the people have seen a gloomy future. I would like to cite one example as to how people have lost faith in the government.

One day I came out of my house to go to a shop to buy a packet of milk. On the way I saw a man who looked similar to a person I knew and talked to him. I discovered he was not the person I thought he was. Soon he began to talk about price hike and said that it was difficult to survive with his family. He further continued, "If it goes on like this, I think, we should join the Maoists and fight against the government." The use of first person plural pronoun frightened me and my heart began to beat faster. I am a peace-loving person and I fear human blood. I kept quiet and walked because I didn’t know how to make wise remarks at that time. Soon I slipped to a nearby shop and returned home with a packet of milk pondering about the grave situation the country was in.

Civil service : Redundancy, retrenchment and reform

By Shanker KC

Politicians, policy planners as well as common men have constantly alleged that Nepalese bureaucratic structure is overstaffed and bloated. Its delivery of service to common people is very inefficient and ineffective and it has become totally dysfunctional as an agent for socio-economic change .

The Nepalese bureaucracy lacks clear vision, direction and motivation. It does not have properly defined job descriptions at both individual and institutional levels. There is no clear democration of collective and individual responsibility. It does not promote professionalism and it harbours corruption and nepotism rather than integrity and honesty.

Historically, the downfall of Nepalese bureaucracy can be traced down to the referendum of 2036 B S. Though the country adopted a more liberal approach in politics and economy, large scale corruption became an accepted norm. Ironically, strengthening of institutions like the public service commission also contributed to the degeneration of Nepalese civil services. The impartiality maintained by the public service commission made it difficult for the privileged and elite class to enter the civil service. They thus became more interested in creating structures outside the civil service and gradually the civil service became neglected.

The Nepalese privileged class promoted INGOs and NGOs as an alternative mechanism for service
delivery. INGOs and NGOs offered employment opportunities with attractive remunerations. Proliferation of various committees, commissions, projects outside the set up of permanent civil service could also be seen in this light. These institution became handy for politicians and decision makers to employ their henchmen and followers.

As a result, on the one hand, the civil service was left without enough jobs, on the other, size of bureaucracy outside the permanent civil service became bloated. This trend continues even today. With liberalisation and deregulation, many functions of civil service became redundant and the opening of the economy also contributed to expansion of private sector and break up of public sector monopoly.

However, civil service could not readjust to this changed environment. Many reform commissions were constituted, but the recommendations made by them were never implemented or distorted while implementing them. These reform measures could not address the core problems of civil service. In the name of introducing innovative measures, the Nepalese civil service has developed a hybrid administrative system, which follows neither the established norms of American position classification system, nor the Anglo Indian tradition of Rank in Corps system. One example is introduction of lateral entry system in higher echelons of our civil service. Lateral entry system is appropriate in the civil service which follows the position classification system.

Position classification system specifies the particular qualification and experience needed for the job to be performed. Accordingly, a person can be recruited for that position.

However, in our case, a person entering through lateral entry system has to perform varied job from that of a chief district officer to a policy maker in the ministry. This does not contribute to prefessionalisation of the civil service.

The question that could be asked is whether the bureaucracy has lost its relevance in the changed context? Definitely, the role has changed from regulator and provider of services to facilitator and motivator. However, no one can claim that the function of civil service has became redundant. As long as there is political system, there will be bureaucracy. There is no doubt that with deregulation and liberalization, many functions traditionally carried out by this institution have become redundant. However, with the permanent civil service of approximately 1 lakh, the strength can not be
considered big for a nation state of 22 million. The main problem is that civil service could not redefine its role in the changed context. So, instead of large scale retrenchment and restructuring, reform measures should focus on human resource development. Present trend of creating committees, commissions and project offices even for minor jobs should be stopped. This could also provide enough jobs for the civil service. The government should however facilitate the exit of many employees who have become disillusioned with their jobs and many deadwood, who have become burden to organisations. Proper job descriptions and objectives should be set for each ministry, department and office.

Career development opportunities for employees should be broadened and made more scientific. Disparities in promotion opportunities among different services should be abolished. At present, in certain services, one can get promotion after 5 years, whereas on the other, one cannot get promotion even after 15 years. This has contributed to lowering the morale of personnel in the civil service.

Monetary incentives should be readjusted to consumer price index. The present monetary incentive paid to civil servants is very meagre compared to their South Asian counterparts. Within the country too, civil servants are paid very low compared to other professionals with similar qualification and experiences working in the INGOs, NGOs, private sector and other public sector corporations.

Past experience has shown that reform measures are concentrated on organisational restructuring or procedural and legal reform and minimum impacts. So, our future reform measures should focus on human aspects rather than on organisational restricting and procedural reforms. Motivated human resources will automatically contribute to organisational development and improved service delivery, and good government.