Question of national prestige

Areport states that Royal Nepalese Army (RNA) has initiated court martial proceedings against
more than a dozen Nepali soldiers who were stationed in Lebanon as UN peacekeepers. The
allegation made by the UN is that these RNA army personnel were selling arms to the Hezbollah,
an Islamic militia group. The UN had apparently informed the government of their alleged misdeed
six months back. This means the army’s court martial has kicked off rather late. Still the news that
the court martial has begun is indeed to be welcomed.

Given the internationally acclaimed reputation of RNA in its peacekeeping missions in different
troubled spots across the world, the allegation comes as a shock. First of all, it is a terrible
smear on the image of RNA as an institution. As peacekeepers, any army deployed by the UN is
supposed to maintain strict neutrality. By selling ammunition to one side of the conflict, this
neutrality has been shattered. Secondly, if proven, what these personnel have done is criminal,
and as such, must be punished most stringently. Thirdly, this is an act that tarnishes the
country’s image and its standing among the community of nations.

The RNA had begun investigation since the charges were levelled against soldiers of Singanath
Battalion six months ago. Apparently, based on its findings, RNA has started the court martial
proceedings. It would indeed be reprehensible, and also most embarrassing to the country if the
accused were actually involved in the said nefarious transactions.

RNA’s move, in the wake of allegations, is commendable. It must remain ever vigilant about maintaining discipline, credibility and professional integrity. RNA is a responsible institution, and its role in UN peacekeeping operations has earned Nepal a respectable position among the international community. Such allegations as have been made against it, do not help in anyway for they erode that reputation. The court martial must, therefore,be seem as a measure that will control the damage, if  any, that has been done to the country’s prestige. It is therefore, to be hoped that exemplary punishment is given to the accused RNA personnel, if it is proved that they did indeed sell arms to the Hezbollah. It is also to be hoped that RNA, despite its secrecy code, will reveal to the public, the ultimate outcome of the court martial because the issue cannot be limited to the army alone. It is an issue that has bearings on our national character, which a few unscrupulous people cannot be allowed to destroy.

Morass of foreign direct investment in Nepal

By Sushil R Mathema

The news titled ‘Making Nepal investment-friendly a pipe dream,’ published in The Kathmandu
Post on September 4, 2000 should not be overlooked by the concerned authorities and
institutions.

The message is no doubt an early warning to the country’s policy makers that efforts to promote
foreign direct investment (FDI) may be in vain if timely action on its structural weaknesses are not
taken care of. The news has been very stimulating to this writer and this has provoked curiosity in
the lamentations made by various forums of industrialists on the so called weaknesses or failures
of successive governments to create conducive environment.

When FIITA (Foreign Investment and Technology Transfer Act) was enacted in 1992 along with
IEA (Industrial Enterprises Act) 1992 and Foreign Investment and One Window Policy 1992,
policy makers were under the simple impression that the promotion of FDI in Nepal would, in one
way or another, assist in reducing poverty. Today, in the world, the population under poverty is
2.8 billion (nearly half of the world’s population of six billion) live on less than US$ 2.0 a day.
South Asia is among the 5-6 regions plagued by incidence of poverty. Nepal has very high
incidence of poverty at around 49 percent.

Many factors are responsible for the increasing poverty. Even growth with proper income
distribution has been considered a sustainable solution for reducing the poverty level over time.
Under the changed environment of liberalization and globalisation, FDI has been identified as one
of the potential factors believed to have a conceptual capacity of reducing poverty through the
better utilization of available resources, building up the much needed infrastructure; and last but
not the least, availing employment opportunities to the locals ultimately assisting overall
improvement of the country's foreign exchange reserves.

These were perhaps the possible de-facto objectives Nepal pursued to promote foreign direct
investment and technology transfer vigorously after 1992. Incentives such as tax holidays
including tax-free export, duty-free import of raw materials and relatively cheaper labour were
considered as serving promotion of FDI in the past. But the recent news on FDI that it has been
declining over time does indicate the existence of serious fallacy either in policy matters or
implementation stage. This needs to be categorically sorted out sooner or later. It has been an
outcry since a long time that, for boosting FDI, the country needs to identify other manufacturing
and service sectors potential areas other than tourism and hydropower that have relative
comparative advantages. These have to be supported by updated and transparent legal and
regulatory framework. The credibility of government policies must be boosted by sorting out the
existing administrative hurdles, which are major impediments to FDI development. Apart from all
these said hindrances, the major problem with FDI is the virtual lack of genuine information on
real status of joint venture industries (JVC) in the country. The intrinsic fact about FDI
development is that the said 592 foreign investment projects with a total project cost of 69200.75
million rupees hardly gives us the true picture of the status of FDI in the country. The basic
problem lies in the absence of data information system (DIS) or more arrogantly, management
information system (MIS).

Nepal has yet to develop a built-in monitoring system in the true sense to monitor and follow up
on the flow of capital, financial status and creation of job opportunities through the incidence of
FDI. The above figures, I presume, are tentatively based on approval basis only. Once the project
is approved, there is no institution or authority, which regularly and genuinely taps and monitors
international financial transactions of these joint venture industries under international norms. It is
a pity that the responsible institutions have hardly come forward to make efforts to develop DIS in
this regard.

Moreover, many seem to be in a state of confusion regarding the right institution to takeover this
job so that with the right information, the government can keep track of capital movements and
employment generation through these FDI. It can also avail the necessary data and information
as a feedback for inducing appropriate policy measures for the promotion of FDI in Nepal.

In the absence of proper data and statistics, the policies to promote FDI such as One Window
System or Fast track Committee may prove ineffective ,and it may be less pronounced at the
implementation stage. In other words, if the country lacks effective DIS/MIS system to monitor
the basic but vital characteristic and capital movement of each JVC, how could the policy
implication be better visualized. Nepal is lucky in the sense that it has had no experience of
facing the critical stage of the financial crisis as South East Asian countries did in early 1997.
With the creation of appropriate environment for inviting FDI into the country, frequent movement
of short-term capital is expected along with long-term capital inflow. It will then, necessitate
development of a kind of ‘ template’ for monitoring the equity base, inflow and outflow in the form
of foreign loans and time and structure of repatriation stage. Moreover, one should also be
cautious that FDI does put pressure on domestic interest rates, which need to be monitored with
regard to policy implications of the monetary stance.

The World Bank has indicated in its recent report that FDI in Nepal has been declining over time.
So the same is being expressed in Nepal Times reporting. This is also evident from the available
statistics of the Ministry of Industry that the approval of FDI in recent years has shown a
downward trend both in terms of number of JVCs and amount of investment.

Nepal has to follow a two-pronged approach for making FDI sustainable in the long-term. First,
appropriate policies must be identified and implemented. This ensures easier implementation.
Secondly, ex-ante measures need to be developed through the development of DIS to regularly
monitor and follow up the capital movement, financial status and employment situation of JVCs in
such a way that if needed, the government can have easy access to valuable information for
inducting appropriate policies which can prevent future occurrence of financial crisis, which could
be more truly pronounced after the country goes into full convertibility with the capital account.
The portfolio investment made through such JVCs must no doubt be carefully watched from the
forex management point of view.

It is therefore suggested that Nepal needs to develop a proper DIS in the form of a ‘template’ in
advance to monitor the activities of JVCs meticulously and to assist in their further development.
It is realized that such required data and information can be solicited from the banking system.
But past experience reveals that it is the government, which is capable of effectively exercising
authoritative rules. In this respect, it is strongly recommended that an ad-hoc committee be
formed in the beginning, which could later be made permanent after including representatives
from government institutions such as Ministry of Industry and the banking sector such as Nepal
Rastra bank (Foreign Exchange Department, Balance of Payments Division), Banker’s
Association and/or one or more leading commercial bank and FNCCI, be constituted. The
committee is required to work out a suitable modality of template to be introduced for monitoring
the financial activities of JVCs for which it may create technical sub-committee for going through
detailed working procedures.

With the development of proper Data Information System or TEMPLATE in FDI, we would be able
to stand in a better position to regularly monitor the actual status of JVC’s operation and
accordingly introduce appropriate policy stance as and when needed. The concern that in the
process of liberalization and globalisation era, the chances of the threat of insurgence of
financial/capital crisis could be minimised through the adoption of prudential policies in advance.

Even the small birds are angry

By Surendra Phuyal

Not so long ago, the ecosystem of pristine Kathmandu Valley was intact. Hundreds of birds -
ranging from egrets to doves and eagles to sparrows - used to congregate in what is now the
runway of Tribhuvan International Airport (TIA). Not only for birds, the vast green patch of land
located in the centre of this ‘sacred Valley’, was equally famous for herders and their buffaloes.
Besides this, elderly folks say, the area was a ‘true heaven’ for the then Muna Madans and Hir
Ranjhas.

But not any more. Five decades down the road, the area has metamorphosied into one of the
busiest - and most dangerous - airports of the region. Flocks of birds of varying colours and
sizes, dotting the autumn sky, are nowhere in sight today. On the contrary, the sky has been
filled with Chilgadis (aircraft) not Chils (eagles), or the other aerials. Gaucharan has literally
turned into a bustling airport with dozens of steel birds, hovering around everyday.

But things are not quite rosy these days. All is not well with TIA: angry birds are continuing to
attack their giant counterparts, made up of sturdy metals. TIA has already recorded five incidents
of bird-aircraft collision this autumn. And the menace is not showing any signs of abating.

Sources close to the bird circle say, the birds’ attack was planned. The little ones were, and are,
really very angry with Kathmandu’s rulers and their henchmen assigned to manage the airport
and its periphery.

A giant falcon - who weighs 3 kilogram - is said to be leading the daring attack against airplanes.
But after the poor birds lost over two dozen of their comrades during their first round of protests
(the recent bird-hits), the birds are known to have migrated elsewhere for emergency meeting.
The landmark meet is expected to chalk out fresh strategies to go ahead with their campaign for
clean, green and healthy Kathmandu.

The birds are discontented with a number of affairs and events, taking place in and around the
abode of Lord Pashupatinath. The birds are seriously concerned about the plight of holy Bagmati
river due to reckless discharging of both industrial and domestic effluents into the river water,
deforestation taking place in Sleshmantak ban - Shiva and Parwati’s favourite gateway, and
haphazard urbanization.

They are demanding that Deputy Prime Minister RC Poudel, must immediately work towards
improving the situation, before things worsen. The birds have drawn the conclusion that Poudel
committed a heinous crime by daring to dump Kathmandu’s junk along the sacred banks of
Bagmati.

Sources further said, the birds are mulling over submitting a list of demands to the government
before resorting to any daring attacks at TIA or the city.

It was not immediately clear when the demands would be formally submitted. But sources say
the angry birds have warned of dire consequences, if authorities continue to ignore their peaceful
and reasonable demands to protect the sanctity of the ‘sacred Valley’.

On non-governmental entities, once again !

Pratyoush Onta

Most of the commentaries on non-governmental entities in Nepal are focused on
non-governmental organizations (NGOs). While there is not much ethnography of the varieties of
objectives, functions, organizational structures, work locations and financial set-ups
encompassed by non-governmental entities in Nepal, most commentators in popular media and
academic writings seem to have already reached the conclusion that NGOs are a ‘bad’ thing.
Cultural commanders of the Maoists and university professors who otherwise voice their
commitment to pluralist democratic values seem to view NGOs with almost the same eyes. If
you think I am exaggerating, try reading the commentaries (in Nepali) of a self-appointed cultural
gatekeeper of the Maoists, Dr Rishi Raj Baral and the glossy writings (in English) of Tribhuvan
University professor Dr Bishwa K Maskay.

Without doing an analysis of our non-governmental entities which pay attention to the aspects
mentioned above, Baral has already concluded that Nepali NGOs made up of Nepali citizens is
an ‘imperialist tool’ that has tried to derail ‘the revolution which is already in progress.’ He often
draws examples from all over the world to ‘prove’ his point, but the fact that Maoists are
butchering Nepali citizens while executing their romance with the revolution does not seem to
occur to him as an ‘imperialist’ imposition of its own kind. Instead writers who have opposed the
Maoist violence and shown an interest in examining the life of non-governmental entities in the
present conjuncture of Nepali society – I am thinking in particular of Khagendra Sangraula and
his massive novel Junkiriko Sangeet – become ‘NGO Sahityakars’ in Baral’s lexicon.
Non-governmental entities and persons who might be involved in them in any capacity –
institutional or conceptual – become ‘enemies of the revolution’. Their lives and work are
delegitimized in the most crudest terms, a central strategy in the culture of left political discourse
in Nepal. Baral, who once worked as a spy for the Nepali government (a fact which he has
publicly acknowledged and ‘apologized’ for), practises a mode of analysis that does not believe in
logic, nor on the humility of a modest social analyst, trying to examine a complex social
scenario. But that would be expecting too much from a person who in the dubious capacity of a
literary critic often describes his own work as the cutting edge of progressive writing in Nepal (for
details on this you might want to read the relevant essays by Rudra Kharel and others published
in Jana Ekata some years ago).

In some ways it is understandable that Baral would think that non-governmental entities are
‘enemies of the revolution’. Schooled in left, discourses of the pre-1960 vintage, Baral and his
Maoist colleagues can only think of a society where the state has to be in the hands of the
Maoist party and the rest of us have to follow its dictates. Instead of engendering social revolution
through non-violent means – the potential for which was discussed at some length by fellow
Martin Chautari organizer Anil Bhattarai in this very page not too long ago. Baral’s idea of
democracy starts from the muzzle of a gun held by a Maoist killer, and it often ends there. Used
to eliminate fellow communists, who question the appropriateness of Maoist tactics and anyone
else who poses a problem to the ‘forward march of the revolution’, Baral’s gun-based view of
democracy is hostile to current non-governmental entities in Nepal who represent, however,
crudely and inefficiently, the society’s commitment – preliminary perhaps, but nevertheless it is
there – to a pluralist model of democracy.

While Maskay is no Maoist, his claim that Nepali NGOs have "no roots in the native soil" (in his
recent book) exhibits the same ethnographic vacuum exhibited by Baral with regards to
non-governmental Nepali entities. Maskay’s claim does not come from being ignorant of the
multiplicity of non-governmental forms in Nepal. In his earlier book, Non-Governmental
Organizations in Development: Search for a New Vision, he has presented a commendable
account of the pre-1990 and subsequent history of NGOs in Nepal. His seduction to the
description of the ‘non-rootedness’ of the Nepali non-governmental entities comes from the
inability to locate the discourse in the domain of fundamental rights. Too immersed in the
signposts created by developmentalese and international ‘development-oriented’ documents such
as the Copenhagen declaration, Maskay fails to ground his analysis on the fundamentals of
democracy and civil society, spiced up appropriately and ethnographically for our purposes. This
observation is nothing new for in a review of his earlier book, fellow researcher Dinesh Prasain
had said as much.

As I emphasized in an earlier column, I see the growth in the number of non-governmental
entities as the manifestation of Nepali citizens, exercising their fundamental rights to form
associations, a right guaranteed by the 1990 Constitution of Nepal. Since these are Nepalis
forming associations, I hold the view that it should be nobody’s business to claim that they have
no roots in the soil. Viewed as such, the growth in the number of non-governmental entities is a
positive aspect of our democracy and it augurs hope that despite various weaknesses, our
society will become more democratic as a consequence of the social action affected by these
bodies.

Starting from such a position, we should set out the terrain for a new and comprehensive
research and assessment of non-governmental entities in our society. We have to make an
inventory of their initiatives, their objectives & functions, their organizations structures &
institutional foci and cognate subjects. We have to do a sociology of their membership and their
competence. All this, by linking their presence and work with the idea of making our society
more democratic.

In other words, we have to open up the space for this investigation before reaching definitive
conclusions of the Maoist or the developmentlese kind.