Trade snag

The four-day Nepal-India inter-governmental secretary level talks concluded the other day without reaching any settlement on export surge although there was general agreement on most other points on the agenda. The difficulty over export surge was more than expected since the Indian delegation was acting at the behest of the Indian business community. And it would have been suicidal for Nepal to succumb to Indian demands that seek to curtail Nepali exports to India. The widening trade deficit in favour of India has long been a matter of serious concern. For some years, the Indian business community had been apprehensive of Nepali exports as they could not compete with these. Last year, when India saw a surge in the Nepali export, Indian businessmen even accused Nepal of dumping low quality imported goods in the Indian market. Consequently, India proposed to impose anti-dumping duties on Nepal’s exports of Zinc Oxide and Acrylic Yarn.

Historically, India has tended to see Nepal as a captive market for Indian products rather than recognizing it as a sovereign country with trade rights and interests like any other. So, Nepal is not just physically landlocked but appears economically more and more India-locked. That India has just proposed quantitative restrictions on Nepalese exports to that country or at least a 30 percent value addition requirement on five products clearly indicates this traditional attitude. Before the trade treaty of 1996 India had imposed an almost 50 percent value addition requirement on Nepali products bound for India. The automatic renewal of the 1996 trade treaty requires that neither side notifies the other of its wish to terminate it. Chances of India seeking a review are now real in view of the difficulty over export surge. India’s objection to the surge, as it calls it, will not only undermine Nepali products but also prevent Nepal from industrialization. In the past too India created complications with a Duty Refundable Process (DRP) and then it imposed a Central VAT (CENVAT) on goods. This apart, India even went a step further to impose a Special Additional Duty (SAD) of 4 percent on items being exported to India from Nepal. India has at times violated the spirit of the trade treaty and not fulfilled
its commitment.

The Nepali proposal to impose higher export duties on items bound for India should be taken seriously. But Nepal must identify and impose such duties on items that generate and carry genuine revenue value. India is a huge market and Nepali products have captured less than one percent of the total share. The Indian restriction on Nepali products means backtracking from our earlier gains. Such a move will only cost the country in terms of economic growth and industrialization. In the past also India had imposed a value addition requirement of up to 85 percent on Nepali products citing labour and raw material factors. This was in fact nothing but an attempt to discourage Nepali exports to India. And while the wording of India’s objection to export surge might be technically correct, any such phenomenon should be seen against the background of India’s immense trade surplus with Nepal and the fact that strict reciprocity in trade volume or in any other spheres is not always practicable in view of the great disparity in size between the two countries and the two economies.

Koirala’s exit and Deuba’s dilemma

By Madhab P Khanal

Now that he has captured the golden ring, Sher Bahadur Deuba faces the most difficult political environment of any prime minister since Krishna Prasad Bhattarai presided over the transition from a partyless system to a multiparty polity in 1990. During these intervening years three electoral exercises have been conducted and more than ten governments formed. The country has witnessed all forms of experiment in democratic governance i.e. majority, minority and coalitions. But all their results were lacklustre and failed to impress upon the people that the type of participatory democracy practiced in this country really works in the best interests of its people.

Just over a week ago Sher Bahadur Deuba replaced a discredited prime minister who resigned before he was thrown out of office by his own ‘fellow democrats’ in parliament for his incompetence, nepotism, and above all, alleged involvement in various scams that have made a mockery of democratic governance. Whether or not GP Koirala was singally responsible for the current political disarray and virtual lawlessness in the country, his sixteen months of imperious rule has undoubtedly led this poor kingdom to the road to self-destruction. He has left behind a political landscape that is hopelessly fractured and a parliamentary democracy frozen in dilemma.

Koirala’s recent political burial could have been averted had he been guided by the simple common sense realization that people had lost faith in his leadership. But, as Voltaire put it, ‘common sense is not so common’. Perpetually buttressed by corrupt and dishonest henchmen and notorious members of his ‘kitchen cabinet’, Koirala succumbed to his own follies and arrogance.

The ignominious ouster of Girija Prasad Koirala followed by the long predicted reinstatement of Sher Bahadur Deuba as the country’s prime minister for the second time in five years comes at a time when the country is in a muddle of unprecedented political turmoil. The recent change of political leadership at such a critical juncture raises several questions as to the sagacity and competence of Deuba for tackling the acute problems that the country is confronted with at the moment. With the same familiar faces among his cabinet colleagues some of whom have heavily tainted past records, will Deuba be able to clean up the political as well as economic mess handed down by his immediate predecessor? Is it within his political acumen to salvage the country from the deep social and political divisions created by the gory ‘people’s war’ that has cost so many precious lives? Will all the political forces extend him their sincere cooperation? Given the controversial decisions taken during the grotesque tripartite coalition he headed six years ago, one has to ask if Deuba has enough courage to resist lateral pressure from the political and regional forces that have catapulted him again to the present position? And, above all, will he succeed in bringing a sense of integrity to his government
unlike during his previous term? Surely, the days ahead will provide answers to these questions.

Prime Minister Deuba has come into office with his much publicized ambition to seek for a negotiated settlement to the ongoing armed insurgency launched by the CPN (Maoists) five years or so ago. However, in order to translate this chimerical ambition into reality he needs political honesty and sacrifice at least from within his own party, if not from the divergent political forces within parliament. As evinced by the leadership contest within the NC parliamentary party and the intra-party wrangling over the distribution of portfolios after his election Deuba has assumed the premiership under a gray sky with the shaky support of 72 lawmakers. His support base cannot be relied on permanently as many of the MPs had crossed over from the Koirala camp to the one headed by his frivolous mentor, KP Bhattarai, and do not adhere to any principled stand as such. Neither there is any sound guarantee that they will not revert to their original fold. Deuba’s inability to assemble a cabinet for almost a week after Koirala’s departure corroborates this hypothesis. Needless to reiterate that there still exists a dearth of political honesty and sense of dedication among powerful NC parliamentarians in both the camps.

It is an amusing coincidence that the eleventh prime minister in eleven years since the restoration of democracy was administered his oath by the eleventh monarch of the Shah dynasty on the eleventh day of the month at around eleven am. It is immaterial whether the auspicious timing was fixed by Deuba’s family astrologers or not. What matters is whether he will fail to generate people’s trust in his government at a time when the country is involuntarily poised for yet another transition. The credibility of the young prime minister’s leadership hinges on his success in rescuing the country from three apparently crucial predicaments, i.e. a) lethal growth of the bloody insurgency, b) a flagging economy especially in the export trade and tourism sectors, and c) India’s domineering policy that takes undue advantage of Nepal’s internal instability. If he fails to address any of these issues, Deuba will be consigned to political oblivion like Girija Prasad Koirala.

National consensus on vital issues of national importance has always been the major precondition put forth by the opposition parties before lending their support to the government which the Nepali Congress has had the privilege of monopolizing more than 85% of the time since the dissolution of the Panchayat system. In a multiparty democracy the question of national consensus does not arise when a single party has formed the government after securing the magic number of parliamentary seats. However, due to a couple of diplomatic misadventures that occurred under NC-led governments people always look upon this party with a high degree of suspicion. Therefore, the opposition parties’ demand for an all party consensus does not look irrelevant, even though not quite congruous with the established practice under a parliamentary system.

It has been noticed over the years that the posture of Nepal’s opposition parties in parliament changes every now and then as demanded by political expediency. It is very sad that they have never maintained consistency. In addition to the formidable opposition comprising these political groupings, Deuba has also to face disillusioned people who find themselves successively cheated, exploited, betrayed and bamboozled by all the ‘democratic governments’ run by their own elected representatives. Therefore, restoring trust in the government will be an equally horrendous task for the Deuba government.

To be honest, the country stands at a cross roads. The fundamental choice confronting Deuba’s incumbency is either to tackle the crucial problems or surrender to the forces that are demanding an interim government for restructuring the constitution and, thereby, paving the way for the political unknown which may naturally give rise to yet another round of political uncertainty.

Nepali people do not want to live in an illusory state any more. Nor do they believe that democratic socialism as professed by the Nepali Congress can be achieved through the style of governance demonstrated by its public figures. For the last eleven years the poor people of this country were in an Orwellian universe in which distortions of the facts are presented as the truth. They have had enough of political hocus pocus mawkishly conducted by KP Bhattarai and GP Koirala. Unlike his mentors, can Deuba prove that frivolity is not the other name of politics?

Our prized possession

By CB Dahal

Every household keeps a possession of pride. It always has a place of reverence within the family fold. The relic could be anything from an amulet to a mounted buffalo head. It could be mother’s bridal possession or the baby’s fist nappy. Every one loves to stack-up piles upon piles of baby attire and snapshots. And as you leaf through them years later it brings back all the nostalgia: the stories of that stilled moment, the love, the feelings and pain long gone and lost in the crevasses of memory.

To think back, (I don’t have the picture) my family too had a unique object of home-memory – a large teapot. It sounds weird to say that a black, dented, sooty and chipping old teapot could be a favoured family relic. But, it was so.

The pot was always kept on boil in the family hearth. It was removed only to discard the old tea leaves and to fill a fresh supply of water. The whole village was aware of its perennial supply of golden brown potent liquid, which soothed the nerves, gave warmth and just helped to relax the never-ending arrival of neighbours to our house. It was known by all and sundry that there was tea to be had at our place and on one pretext or the other people made it a point to casually drop by to relish the ever-boiling fare.

The pot, once in its shinning sparkle, was burnt soot black. The innards had turned golden red with the liquid on boil since it had arrived at our place. The pot had been purchased quite some times ago, (nobody remembers it exactly) when our parents had gone to the maghe fair held a few days walk away. There my mother had eyed the perfect aluminium pot most suited to take its favoured place in the hearth. And once the desire to posses it had been kindled, my father could not dissuade her from buying it. She had literally worn the pot home on her head.

On reaching home, she had with much love and care washed it, filled it and placed it on the fire to boil. Despite her tiredness, she had thrown in the leaves herself and when the tea was ready she had taken the first approving sip and then poured the life-arousing brew to all those present to savour it. And, since that day the pot had attained the place of family reverence, a place of pride.

My mother is long gone and my father preceded her. But, the pot remained boiling and brewing the gold-red liquid. It never left the perch and was so darkly layered inside that you just had to pour water and you had your tea without even having to add leaves. No one in the family had the guts to discard it even when the accumulated layers of soot began to chip and fall off.

It’s now replaced but it is still there for all to see and recall all the memories it had boiled and accumulated for years.

Nepal’s penal system : An agenda for change

By Ronald Nash

Last year, Prime Minister GP Koirala launched the Enabling State Programme with DFID. Under this programme, and as part of a process of gaining a better understanding of governance issues, CVICT have produced the book "Nepal’s Penal System - An Agenda for Change". It is thought-provoking book. As a guide for non-specialists it unlocks some of the mysteries of the penal system in Nepal, particularly in the "Background" section that covers the historical, institutional, legal and constitutional perspective.

The agenda for reform is substantial. Some 58 agenda items have been identified in the book covering policy, legal reform and the application of law, institutional reform of the police, courts and prisons, as well as the role of media, civil society, non-government institutions and donors in the process of change. The book lists shortcomings across all aspects of the penal system. This may make us uncomfortable. But I hope it can also be seen in a positive light. Without defining properly the existing shortcomings it will be difficult to undertake effective reform. Unless the big picture is seen, there is the danger that attempts at reform will be piecemeal and short-term, leading to unsustainable and ineffective interventions.

Among the shortcomings are: failure to implements the provision of international treaties Nepal has signed; legally discriminatory provisions, particularly in relation to women, children and other vulnerable groups; the weaknesses of the prosecution system; violation of human rights by police and courts; and, the conditions in prisons, in particular the plight of innocent children and women confined there. There is also the well documented problem of protracted pre-trial detention in this country, and imprisonment for more minor social "crimes".

Initiatives are already underway, some of them with support from donors.

- A Judicial Academy is planned, to improve the quality of judges and senior court officials following an evaluation by the Judicial Council.

- Last year a task force was set up under the Office of the Attorney General to review the criminal justice system.

- Prison staff and prison inmates have undertaken training in human rights. In addition, in six prisons the British Embassy is sponsoring human rights awareness programmes for prisoners and prison staff and I shall myself be observing this work at Nakhu prison south of Kathmandu shortly.

For the past six years, through DFID’s Nepal Police Project, fairer and more effective policing methods have been introduced, along with the development of women and child crime investigation units, community policing, and improved investigation with the provision of scene of crime kits in all districts. The Enabling State Programme together with CVICT recently started a pilot phase of the Community Mediation project in Eastern Nepal to bring informal and alternative dispute resolution at the community level.

The Home Ministry and Prison Management Department, which incidentally contributed views and ideas to the book, are currently developing an improvement intervention for consideration by donors.

So the picture is not at all bleak. There are many good people in the sector, caring for those under their custody and working for change. We look forward, too, to the opening of a regional office by Penal Reform International in Kathmandu later this year, which will obviously work closely with CVICT and be a major resource for all countries in the region.

Hopefully, because of this book, others will formulate ideas for taking forward the reform agenda. Such ideas, if brought forward by Nepalis and Nepali institutions, could be supported through the Enabling State Programme. CVICT is to be congratulated for helping to explain the issues and outlining the scope of much needed reform to Nepal’s penal system. The book will be widely distributed and a Nepali version is due out shortly.

(The author is British Ambassador to Nepal)