Maoist excess

The Maoist leadership appears to be trigger happy, slaying about two dozen policemen in remote and difficult-to-reach police stations in eastern and far western Nepal Saturday and  Sunday nights. This slaughter comes across powerfully as an inexplicable affront to the new Prime Minister. If the Maoists are at this stage only putting on a facade of wanting to solve the problem through talks and negotiations while at  the same time keeping up such wanton killings, they appear to miscalculate public opinion. For surely this is no time to overwhelm  isolated police posts with sheer superiority of numbers and then butcher the hapless policemen when they run out of ammunition. The new prime minister has already indicated that the Maoist insurgency is his topmost concern and that he wants to solve the problem through talks and negotiations. The Maoists should at least give the new man time to carry out his resolve, even if they have no intention of abandoning the gun. Causing more bloodshed
and taking more lives can only strengthen the hands of the hawks within the ruling Nepali Congress who would like to see more retaliation. For surely, if the Shining Path movement in Peru, which had many parallels with the Nepalese Maoists, can be wiped out and the problem tackled once and for all, there is no reason why the same fate cannot be meted out to the latter, given the determination of the state and the cooperation of the people.

Public support that depends on the power that flows out of the barrel of a gun, whether that gun belongs to government forces or the Maoists, can only be temporary. The more people are killed, the more alienated the people become from those that wield the gun. In recent days, the Maoist insurgents have been killing off policemen, who are basically ordinary Nepalese citizens, quite indiscriminately. The Maoists have already made their point before the people and government of this country and indeed the world at large. So there emphatically cannot be any excuse for further indulgence in excesses now. With a new and resilient leader now at the helm of affairs, there is every possibility of a negotiated settlement to the Maoist problem. The road towards this is no doubt difficult but if everybody, including the Maoists, the government and the opposition parties, are sincere about it, it is an attainable goal. There are allegations the Maoists have been putting forward their proposals for talks without really being serious about it. The time has come for them to prove that they are indeed sincere, and cessation of wanton and, in most cases, senseless killings is one good way to convince everyone of their sincerity. The five years of Maoist insurgency and government mishandling have bled the nation white. It is time both government and Maoists chalk out strategies to end the nasty conflict so that the poor of this country can live in peace and get the opportunity to better their lot and that of their children. For this, the Maoists must end their excesses forthwith.

School education and community participation

By Dr Hridaya Bajracharya

Current school education in Nepal is an outcome of different aspirations, efforts, and dilemmas that the country experienced in the past five decades. There are some big achievements in the development of education in the country, the literacy percentage has changed from 2% to over 50%, the number of schools have increased from a few hundred to near about 27,000, there has been a proportionate increase in student enrolment and number of teachers.

The government of Nepal has made several commitments to the people as well to the international community regarding some crucial aspects of educational development. It has committed itself to the provision of free school education up to grade ten. It is committed to expanding access to schooling so that all school age children could join school. It is committed to social justice and to ensuring that disadvantaged children whether in terms of caste, ethnicity, or gender get equal access to quality education. It is committed to providing a people oriented curriculum – making curriculum locally contextual, provision of primary education in the local language/mother tongue. It is committed to developing contextually competent and quality education, undertaking timely reform in the student evaluation system, providing good textbooks, recurrent training for teachers, etc. It is committed to reforming the system and operational modality of education to ensure better management.

Several steps have been undertaken to make curriculum better, to provide better school facilities, to enhance the capacities of school management and administrations and to enhance school participation by disadvantaged communities and women for achieving equal access to quality education. A master plan for the development of basic and primary education has been prepared and major projects such as PEDP and BPEP were launched to achieve the goals of the master plan. Currently, the better aspects of the projects are being turned into regular programmes of education in Nepal. Perspective plans are being developed for secondary, higher secondary and tertiary level education. Various programmes are being launched towards the directions set by such perspective plans.

Despite such efforts, education in Nepal still faces several problems and there is some confusion regarding the developments that are taking place.

The first issue raised in this direction is regarding the provision of free school education. The second issue pertains to the social transparency of the system and its operation, and the third issue relates to the role and responsibilities of the government, society and communities, particularly the parents, in the development of education in the country.

Although the scenario of school education has changed drastically compared to that of five decades ago, the issues are marked by some conceptual confusion regarding the modality of the functioning of various organizations involved including the government and society. There is a strong historical bearing in the realities of the current situation including the issues.

The political uprising in 1951 is the landmark for the beginning of school education for the general public in Nepal. Earlier, lay people did not have access to school education. Social and political activists engaged in freedom movements against the autocratic rulers of the time had adopted educational development as a mode of bringing revolution. Many people, particularly the intellectuals, came forward to support the development of school education in the different ways that they could – volunteering to work as teachers, providing space and houses as well as raising funds, etc. In many areas people organised themselves to form committees to help schools in their areas. After the political change the new government supported the people’s initiatives for the development of education. The Nepal National Education Commission (1954) was formed for developing long-term perspectives and guidelines for educational development in Nepal. Some of the important criteria set forth by the report are:

Education must be universal, free and compulsory so that it is available to all the children to the extent that even parents cannot deprive their children of the benefits of education. Schools must be opened within the reach of all.

Education must be adapted to the needs of people for whom it is intended. The educational needs of our people must be analyzed and then curriculum must be designed for these specific needs.

Education must be a cooperative enterprise. All must share its cost. The central government can give leadership and provide administrative organization, but it cannot carry more than a small portion of the financial burden. Education for special groups is not the government responsibility. Schools for training priests and lamas or giving English education or special training should be operated through private funds. Private schools should not be discouraged but government money should be reserved for common education.

In 1962 there was another political change that set back the initial democratic trends set by the revolution of the 1950s. A high level All Round National Education Commission was formed to prepare new sets of guidelines for educational development. The commission report emphasized the need for centralized curriculum enforcement, a national language and national values. However until 1971, educational development in Nepal remained basically initiated, managed and financed by the local people. The National Education System Plan (1971-76) shifted the responsibility for schools to the government. It also curbed the community’s participation in educational matters, but anticipated greater local participation in terms of financial assistance for the development of physical facilities and for teaching-learning materials.

After about a decade, in 1981 decentralisation of educational institutions was reinstituted. Decentralisation was further strengthened by the Decentralisation Act 1982 of His Majesty’s Government. The last political change took place in the 1990s and restored multiparty democracy with a constitutional monarchy. At present, the government has made provision for delegating both management and financial responsibilities to the people, and SMCs were entrusted with some management responsibilities as well. A new regulation initiated in 1992 has a provision on the running of primary schools totally by the VDCs and Municipalities with government support.

One of the major current issues in educational management and resource mobilisation in Nepal relates to the feeling of the people that education is the responsibility of the government. The other issue relates to scepticism: government authorities and personnel doubting the capability of the community to handle school management and the people doubting the sincerity and commitment of the authorities and personnel. The SMCs in many instances are unable to provide good supervision and monitoring or help in the physical development of the schools. Although the government has made provisions for the community taking over ownership of public government funded schools through School Management Committees that represent the community, the government system still controls the school because the teachers are recruited and paid by government.

Basically, school education up to secondary level is free. Legally, schools cannot raise admission fees, tuition fees and readmission fees from students. However, the current provision of funds for school operation and development is in most cases inadequate with serious implications for the quality of public schools in terms of infrastructure as well as operation. Given the situation some public schools trying to keep up their status are raising funds from parents — funds for school development, sports and library, extracurricular activities, and additional costs for quality enhancement (extra teacher). Under the current education regulation, the school managing committee is empowered to decide resource mobilisation of this kind with the approval of the DEC. The school managing committee is also empowered to mobilise other resources for the benefit of the school. However such efforts have caused controversy in the context of ‘free education’.

(To be continued)

Probe Report II in pipeline ?

By Pragya Karki

Aday after my exams ended, I along with my friends rushed to the nearest movie theatre. We were not aware of the movies screened inside it (Three-in-one theatre). That meant we could choose any of the films. That is the biggest benefit of going to a three-in-one theatre. We, half a dozen girls, decided to watch a Nepali film. Above all, we are Nepalis and it is our duty to promote Nepali films by watching it.

After collecting our tickets from the counter, we entered the hall. Well, after an hour or so, I started fidgeting, and I was trying hard not to keep my eyes off the screen. I got quite confused. I doubted if it was really a Nepali movie. The heroine of the movie looked hyper-healthy. So much so, we had to searching for her waist-line ! It seemed like the pretty faced heroine mixed up glamour with vulgarity. The hero, better call him a jumping-jack, was no better either. When it came to dancing, facial expression and flexibility were non-existent. No formal training or aptitude was needed to perform on screen. So it’s cool to be a Nepali hero, I guess.

When I heard a song of that movie, I was electrified to hear one of the western female singers voice, and thought that she had also started giving her husky voice to our film. But it was the other way round, an extract of her song was used. It was as simple as that. No doubt, the movie had the taste of the "Woods". While watching it, I remembered a story which my mom loves to tell frequently. The story goes like this- once, God – the creator, wanted to come out with the finest creation, a masterpiece. He collected all the best parts from among his various creations and started with his dream project. At last, after a series of trials and errors, the so-called fine creature was finally ready. And guess what ? It was a Camel. Phew!!!

Coming back to the theatre, I remember how we tried to kill our time looking at two lovebirds, off the silver screen. Instead of fixing our eyes on the king-sized screen, we were busy inspecting a pair of lovers, who were sitting right in front of us. It was definitely more interesting than the movie on show. At last, the movie ended, and thankfully our boredom was also put to rest.

Later on, I came to know an interesting fact. The director of that particular movie was the one who said that he wanted to make a movie about the Royal massacre. I am not a film critic, but to my average ears he sounded just like a caterpillar, harbouring a dream of conquering Mt Everest. From this particular boring movie, I can judge his ability as a director, and I can perceive the fate of his ambitious movie about the Royal tragedy. Even if he manages to come up with the movie, it will not be anything more than Probe Report. Or at best, Probe Report II !!

Laws of finance company and ambiguity

By Balkrishna Shrestha

The establishment of democracy in Nepal has provided additional platform for economic liberalization, which has resulted in the evolution of many finance companies. Finance companies are directly monitored and supervised by the central bank, Nepal Rastra Bank (NRB). Therefore, it is important that the directives and regulation issued by such an authority should be clear, adequate and rational for the efficient, effective and economical operation of business or finance companies in order to safeguard the general public, improve the economy as a whole and give adequate returns to share holders.

In addition the management has lots of other functions to satisfy other stakeholders of company.

The profit shown by companies and certified by auditors largely depends on the amount of loan loss provision provided as required by Nepal Rastra Bank directives. There is often disagreement between Company Management and Auditors over the loan categorization necessary fort the loan loss provision. Nepal Rastra Bank’s Directive Section 7 gives detailed regulations on how loans should be classified as (1) Good (2) Indicative to Feeble (3) Feeble (4) Doubtful and (5) Bad against which 1%, 5%, 25%,50% and 100% loan loss provision should be provided respectively. It is worth mentioning that there is confusion over the meaning of instalment. Does the instalment mean instalment of interest or instalment of principal? The Directive is not clear about the definition of instalment, causing confusion to both Auditors and Company Management, which normally entails application of the subjective judgment of Auditors and the Management of the Company for the classification of loans.

NRB Directive Section 7(f) allows companies to restructure/reschedule/capitalize interest when the loanee cannot pay back money in time. But the NRB Directive does not mention the condition for doing such things. It does not state whether or not a company should fully recover interest due. Details of the documents to be obtained by the Company Management to reschedule/restructure are however required as per New Directives Issued by NRB to commercial banks effective from the 1st quarter of FY 2058/59. The NRB Directive to Finance Companies also does not say anything about how many times Finance Companies can reschedule/restructure loans and capitalize interest within a "Loan Period" or within a "Fiscal Year". In the absence of such regulation, there may be a malpractice of rescheduling/restructuring the same loan many times even within the fiscal year passing off a worse quality loan as a better quality loan.

Section 5 of the NRB Directive pertains to the definition of the single group disbursement limit of credit facilities that can be disbursed. Nepal Finance Company Act 2039 Section 16 prohibits finance companies disbursing loans to directors. This section also contains other activities that a Finance Company must not conduct. Here the question arises whether or not a Company can flow a loan to somebody by pledging/keeping the collateral of the Director of that Company. NRB Directives are really silent on this matter. Although there is an "International Accounting Standards" IAS 24 for "Related Party Disclosure" requiring detailed disclosure of transactions with the related party of an entity in the Notes to the Account, these are almost not practiced in the Nepali Financial Reporting Environment by either Management or Auditors.

The definition of scheduled and non-scheduled loans and the amount of such loans in any finance company is immensely important for the "Risk Management" and overall Fund/Financial Strategy of the Finance Company. NRB Directive Section 8 merely addresses "Loan Policy, Procedures, and Period of Scheduled Loans. But the NRB directive fails to define the meaning of scheduled loan. What percentage of the total loan portfolio could be disbursed in the form of non-scheduled loan? These terms should be explicitly defined. Otherwise finance companies may disburse whole/majority of loans as non scheduled loans to show short term profit at the cost of the long term sustainability of companies. The disbursement of maximum non-scheduled loans calls for a liquidity crisis, which hazards the companies business and creditworthiness.

NRB Directives do not contain any section relating to the closure of loan/credit facilities enjoyed by the loanee. In the absence of such a regulation the company management can close the loan at the year-end and disburse the loan after year-end in order to show the best financial position of the company. "Events After the Balance Sheet Date" prohibits an entity from creating artificial transactions to provide window dressing for the financial position of the company. However these standards are also not strongly followed for External Financial Reporting purposes.