Regressive step

Pakistan’s military ruler General Pervez Musharraf, the former chief of the army, was sworn in by Chief Justice Irshad Hasan Khan as President the other day. General Musharraf unceremoniously ousted incumbent president Mohammad Rafiq Tarar 18 months before the end of his five year term. This is an attempt on the part of Musharraf to consolidate power at the cost of parliamentary democracy. Unfortunately, New Delhi has become the first democratic country to recognise Musharraf’s assumption of presidency. No matter what General Musharraf has claimed, his move is a step away from democracy in Pakistan. Now, all offices and powers are vested in an individual as was the case under previous dictators in that country. General Musharraf obviously intends to establish a power process with the military structure on top and with himself as its anointed representative. This sends out the clear signal both at home and abroad that he will stay on in power despite the Supreme Court order that "the country returns to parliamentary democracy by October 2002".

General Musharraf, citing political instability and corruption, staged a coup against the democratically elected government led by Nawaz Sharif in October 1999. The reason cited by General Musharraf for ousting civilian rule was too extreme a step in a democratic set up to be ignored. General Musharraf who had just returned from Sri Lanka accused the civilian government of trying to prevent his plane from landing, something which could have been fatal for all those on board. With that he overthrew the civilian government. This was a month after Pakistan and India fought a bloody mini-war over Kargil, territory on the Indian side of the line of control in Kashmir. New Delhi was too quick to condemn the "coup" against the Sharif’s government. India even went a step further, proposing that the commonwealth suspend Pakistan from membership. However, India did not realize that General Musharraf would be invited one day for a dialogue over Kashmir, which is still disputed territory between India and Pakistan.

Military dictators have ruled Pakistan for almost four decades since it got independence from Britain in 1947. The first military coup was staged in 1958 by General Ayub Khan against the last Governor General, Iskandar Mirza, a decade after Pakistan became an independent country. At that time Pakistan had not yet held its first general elections. In 1977, General Mohammad Zia-ul Haq overthrew the Zulfikar Ali Bhutto-led government. That was six years after India fought a war with Pakistan to liberate former East Pakistan. After the partition of the sub-continent, Pakistan fought three wars with India, including two over Kashmir and witnessed coups against civilian rulers thrice. Now
General Musharraf has not only replaced Mahammad Rafiq Tarar unconstitutionally but has
also further undermined the parliamentary order. This is a bid to hold on to power and undermine democratic values, and to that extent another regressive step.

Global trend and our economy

By Sushil R Mathema

The world economy was supposed to be at the dwindling stage when the spillover effect of South East Asian crisis that erupted in the early 1997 spread to European nations as well as Russian Federation. But the timely adoption of appropriate measures by the respective crisis-hit countries helped their economy to recover though at a slow pace. The positive impact could be much noticed in the year 1999 where the global economic conditions improved relative to the previous year. Particularly output growth either picked up or remained strong in advanced economies, the developing countries in Asia and the countries in transition.

The year 2000 has however a different discouraging scenario as far as the growth of the world economy is concerned. The global output has been pegged at 3.2 percent in 2000, a slowdown by 1.6 percentage points relative to last year’s growth. The main culprit factor for slowing down in the world economy has been the continuous fall in capital spending in the US, and in parallel, the weakening of the Japanese currency against the US dollar. It is expected that the Japanese economy will not improve for at least two years. The Federal Reserve has successively cut its short-term interest rates five times to 4 percent to stimulate domestic consumption demand. But the continuous sharp fall in price index and dropping of dollar against the other main currencies has a negative impact not only on the consumer spending but also on the business activities. The fact that USA is contemplating a zero growth this year has led many economist wondering as to whether it is heading towards recession. The slowdown in the economy of both USA and Japan has sent strong impulse in bringing slow growth and hiking inflation in the euro area also. It is inevitable that the export demand of both the euro-countries and South East Asian countries would substantially affect the US and Japanese economies. This new development could threaten the world economy, and another round of crisis cannot be ruled out.

This do hamper the economic development process of each and every country by one way or another, if timely measures are not taken up to stimulate the balance in the growth of the regional economy. The regional economy in the Asian hemisphere is specific in the sense that although most of the Asian countries have summoned to reform processes for the long-term stability of the economy, they do believe that weaker yen will bring currency crisis in the region. Besides, unlike in the past, most of the Asian currencies have adopted floating regime and therefore not in the state of danger as it was used to be during the early 1990s.

Nepal has been enjoying a spectacular growth since the last two years. The economy of Nepal registered a healthy growth of 6.4 percent last year with an expectation of around 6.0 percent growth this year too. The contribution of the agricultural sector has always been noteworthy in sustaining the national growth. But in relation to the population growth, it has not been so encouraging. Moreover, the country is suffering from structural problems in the agricultural sector. For instance, farmers have been facing difficulty in fetching better prices from their harvest of food grain crops. This will have a devastating effect on agri-GDP. Moreover, attaining a healthy growth is one aspect, but having a better income distribution is equally an important aspect, which Nepal seems to be ignoring since earlier. This will eventually make no impact in improving the lives of 23 million people.

Another sector, in which Nepal must keep strong vigilance for its sustainability is the external sector. This sector has been considered vital, as it has been helping other crucial sectors through continuous supply of foreign exchange needed for investment business. The commodities such as woollen carpet, readymade garments and pashmina which constitute around 88 percent of the total exports to other countries have been showing bleak performance since the last two to three months. The export growths of both woollen carpet and readymade garments have registered a negative growth in the successive eighth and ninth month of the current fiscal year. And pashmina export growth is also declining. This has raised the sustainability of the export sector’s contribution to the national economy, which is more relevant given the possibility of Nepal’s accession to the World Trade Organization. In addition, the continuing slowdown in the tourist inflow has added another blow to the national economy. Many factors, including the fragile government, bad governance and rising unemployment have created adverse effects on the production and investment sector.

Although the government has legalized electronic transactions effective from May 28, 2001 for easing the imports and exports of software and information technology, it has turned a blind eye when it comes to the promotion of this new alluring service industry. The fact that the government raised the income tax on the earnings of ISP from 3 to 15 percent from the current fiscal year seems contradictory, given the government's step towards promoting this industry by providing it legal status.

To achieve the competitive growth of the economy, Nepal has been committed to accelerating the pace of the financial reform. A substantial work has been done in this regard. Amendment to the Commercial Bank Act, the enactment of Company Act, drafting of Debt recovery Act and revision of Nepal Rastra Bank Act and formulation of Depository institutions Act have been made with a view
to supporting the healthy financial environment needed for the stimulation of growth processes in the country. Further, in the process of strengthening the financial system, it has been decided that the management of the oldest commercial bank- the Nepal Bank Limited, and that of the only state commercial bank- the Rastriya Banijya Bank, will be handed over on management contract with the hope that this will increase the efficiency of these commercial banks and assist in strengthening the Nepalese financial system. It should be remembered that the combined assets of these two banks hold more than 50 percent share of the total banking system. The trouble in either of these two banks therefore means to invite unavoidable default financial environment that will have significant negative impact on the proper execution of the real sector, thereby affecting the Nepalese economy as a whole.

Although macroeconomic indicators such as overall growth, trade and current account, reserve position and the movement of prices throw good signals, the sustainability of the economy depends upon a congenial policy, for example, the distribution of the national income among the 40 percent population living below poverty. Moreover, political uncertainty that has emerged in the last few years must be settled through general consensus among various political parties of the country for better future of our economy.

Western style demos in line

By Surendra Phuyal

Now that the government and the opposition party(ies) have set some precedents by taking some drastic—and dastardly—steps, Nepal’s socio-political scenario is bound to witness some changes. But let’s hope that these changes would be in the interest of Nepal’s 22-plus million (the Census 2001 report is not yet out) people, most of them living below the line of debilitating poverty.

Having passed through the painful hours that followed the unimaginable June 1 incident that rocked not only Nepal’s monarchy but also the her territorial integrity, chances are that Nepalis will strive for excellence in the days to come. That is why there are reasons to be optimistic. But palmists and astrologers based along the pavements that surround the historic Tundikhel predict changes—both good and bad—mainly on four fronts:

a) Hadtals and Bandhs: Because the government has reportedly decided to introduce a new regulation banning bandhs and chakka jams in "sensitive areas and districts", new forms of protest are likely to come up. A septuagenarian astrologer sitting at the entrance of the Khulla Manch forecasts some European-style demonstrations mainly involving young people in the streets of Kathmandu, Pokhara, Dharan and other cities in the near future. "Chances are high that our city-boys and -girls will soon begin streaking like Londoners and Romans and even start showing their not-so-fat buttocks to our leaders (Just like the Swedish protestors who did it to visiting US President Bush) as a mark of protest."

Well, if that is going to be the case, such forms of protest will not be costly for our economy like the Hadtals and Bandhs.

b) Bribery and petty-corruption: In the absence of some drastic anti-corruption measures (which appears unlikely at this point of time), these phenomena too are not going to stop overnight, according to Jyotish Suddha Chittam, who sits on the pavement adjacent to the Bidhyut Pradhikaran building, near the Old Bus Park. "At a time when a corruption-tainted leader is continuing to remain at the nation’s helm defying all kinds of pressure, you can’t help but expect more bhrastachar and ghuskhori at all levels," he says.

This means that there will be more Chase and Lauda Air fiascos, and clerks and officers and middlemen based at such crowded offices as the District Administration, Land Revenue, Driving Licence, and Transport Management offices will continue plundering the wallets and pockets of the general public. But there is a reason to hope. Jyotish Chittam adds, "The anti-corruption body - CIAA - might emerge even stronger."

c) Muzzling the Press: Most astrologers say that more incidents of government muzzling the so-called democratic, free and vibrant press are on the cards — more so, with the Maoist insurgency and a disenchanted public around.

Well, this is not new in a country where even the Home Minister acts like a police constable told to carry out a certain chore, by his officer; Deputy Prime-cum-Home Minister RC Poudel attributed the sudden arrest of Kantipur journalists last week to "orders from higher authority".

d) Surrenderialism: With the likes of Madhav Kumar Nepal, the General Secretary and top leader of the responsible Main Opposition CPN-UML, backing out of the high-level probe committee formed at a critical time - despite the King naming him to it - "expect more surrenderialistic deeds and misdeeds from responsible national figures and organizations in future," says another astrologer-cum-palmist, who can be encountered near Ratoghar, Bagbazaar.

So are we really destined for a trouble future - full of crime, hopelessness, injustice and inefficiency? Yes and no, say astrologers. But remember: Every dark cloud has a silver lining, and the sun sets in the west to herald a new sunrise from the east a few hours later.

Monarch for crisis management

By Sameer Man Pradhan

The story of the Shah dynasty begins with Prithvi Narayan Shah, who started to rule from Gorkha and went on to create modern Nepal. At 20, he was crowned the king of Gorkha.

New monarch Gyanendra has already made efforts to provide the right information by announcing a high-level committee to probe into the royal killings. As the country has never seen such a lonely monarch in the history of Nepal, the institution of monarchy is passing through a very difficult phase. Although King Gyanendra is regarded as a competent and efficient monarch, he does not have relatives and other family members like the late King Birendra who could offer advice on vital matters. King Gyanendra has an uphill task to lead the nation and overcome challenges. Despite smooth succession to the throne, the social instability generated in the aftermath of the killings is yet to be settled. The love and affection of the Nepalese people for the institution of monarchy is unquestionable and unchallengeable, since every community in the country requires the unifying presence of the institution of monarchy.

As life moves towards normalcy, there is a sense of anxiety in the face of the common citizens. The King is dead. Long live the King.

After 50 years, King Gyanendra ascended the throne for the second time. History has entrusted upon King Gyanendra, a role similar to the one he discharged in 1950. But there are more difficult challenges for him this time. In his first four-month reign in 1950, he protected the monarchy from abolition by Rana prime minister Mohan Shumsher. This time, too, he is entrusted with the task of maintaining the continuity of the monarchy and upholding public faith in the institution.

Although a section of the people sees him as a conservative member of the Royal Family, the time has come for King Gyanendra to prove them wrong. As chairman of the King Mahendra Trust for Nature Conservation, King Gyanendra has already showed his effectiveness and efficiency in the area of natural conservation. The nation hopes King Gyanendra succeeds in filling the vacuum generated in the country following the royal tragedy. That would be one of his greatest contributions to the nation and institution of monarchy.

As part of the process of making public the factual details about the tragic incident that took place during a family gathering at the Narayanhity Royal Palace on the night of June 1, 2001, King Gyanendra announced the formation of a high level committee with Chief Justice Keshav Prasad Upadhyaya as Chairman and Speaker of Parliament Taranath Ranabhat and Opposition leader in the House of Representatives Madhav Kumar Nepal as members on June 4, 2001, requiring the committee to submit its report within three days. The UML, however, withdrew its membership later on. Nepal’s new King Gyanendra has a wide experience in Nepali affairs after working closely with his eldest brother, King Birendra, in administering the state during the Panchayat era prior to 1990 and in grooming Dipendra.

S D Muni, a Nepal expert of India has noted that King Gyanendra, as a prince, had extensive business and commercial experience. He is also known to have nursed several political links in Nepal and abroad, in pursuance of his interests, and, not all these links were compatible with the growth of close and healthy Nepal-India relations. However, as a king, he should be aware, more than anyone else, that India is a positive factor not only for the growth and prosperity of his kingdom but also in the stability and strength of the constitutional monarchy.

The Nepali Congress is not against the institution of monarchy. Having realized the necessity of the institution of monarchy in the present context, the Nepali Congress has accepted it within a constitutional framework. Nepal has always been a monarchy, but it has been manifested in various forms. This is illustrated in the monarchy prior to the Rana regime; the monarchy of the post Rana period; and the monarchy even after the events of 1960. Furthermore, during 1950, Nepal had two Kings- King Tribhuvan and King Gyanendra, hence Nepal had two monarchies. King Tribhuvan had neither a kingdom nor the state machinery. He had to take political asylum, but then he had the support of the most important and sovereign element- the people. King Gyanendra has all the state paraphernalia; administrative system, the state army, people's expressed allegiance to him and so on.

Writing in the Times of India, Dubby Bhagat concurred: "Gyanendra... is the pragmatist visionary to his brother’s unfettered idealism... if anyone can rise above intrigue, and weild together the warring factions of Nepal’s new found democracy, Prince Gyanendra can."

In summing up, King Gyanendra will push a nationalist agenda in an attempt to garner support. For this, King Gyanedra is likely to play the balance-of-power politics between the two neighbours.