Government attorneys

Government attorneys have just taken a controversial decision that opens up the possibility of widespread corruption. They have in their wisdom concluded that no agency should be allowed to investigate cases where the Attorney General or other government lawyers have the right to decide whether or not to prosecute. The timing of the move is curious in that a case is pending at the Supreme Court regarding an investigation by the Commission for Investigation of Abuse of Authority, CIAA, into a decision of the Attorney General two years back not to prosecute one Sunil Maskey for allegedly trying to smuggle out Rs 12.2 million in Indian currency. Whatever the timing, the legal eagles in question seem to be of the opinion that the constitution itself guarantees the Attorney General, and by extension, other government prosecutors, the ultimate authority to prosecute or not in a given case. Obstruction of this authority, by the CIAA or any other agency, would violate the Attorney General’s immunity as under article 110(2) of the constitution. Fair enough. If that is what the law says, so be it. But it does raise the spectar of attorneys acting out of less than professional motives. Given that extra power in their hands there will also be that extra tendency towards corruption, as per that Actonian dictum much vindicated over time. What then is to be done? Short of a change in the law, the only safeguard that suggests itself is greater transparency in the workings of that law. Government prosecutors from the Attorney General down should be required to spell out the reasons why they have decided not to prosecute in a particular case. Only if the reasoning is sound and convincing and stands up to professional scrutiny will the public feel satisfied that the cause of justice has been served. Some such safeguard through transparency may have to be worked into the wording of the law before the attorneys are to be conceded the hands-off arrangement that they seek. Otherwise the attorney’s profession may come in for a measure of suspicion. Attorneys are already under some cloud because of a tendency to lose out in more cases than they win and the public impression that they do not discharge their duties properly. And while the architects of the law are at it, they might also put paid to any other legal lacunae that allows those under investigation by the relevant agency on suspicion of wrongdoing to snap back and question the latter’s very locus standi. This is precisely what our incumbent Prime Minister has done when hauled to the carpet by the CIAA in connection with the ongoing Lauda aircraft lease deal controversy.

Challenges of financial sector reform

By Surya Chandra Shrestha

Although Nepal’s financial system has seen large quantitative growth during the past decade, there are many challenges and complexities confronting this sector. The depositors have not received relatively better interest rates while the borrowers and investors are also equally deprived of competitively beneficial interest rates. The large intermediation cost and the inefficiencies associated with the financial system have been the drawbacks of the Nepalese financial structure. While it is reported that small depositors and entrepreneurs are discouraged from opening their accounts and carrying out transactions in the joint venture banks, the two large domestic banks are also equally plagued by their inefficiencies along with all sorts of deficiencies in their dealings and transactions with their clients.

The government and Nepal Rastra Bank (NRB) are now embarking on a bold initiative to effect fundamental reforms in the financial structure. The World Bank is assisting Nepal in this endeavour. The basic premise of the reform program is to make the financial system sound and efficient in order to promote investment in the financial sector and make the financial products and services more competitive and qualitative. One of the biggest drawbacks of the Nepalese financial system is the inappropriate and unbusinesslike organizational, managerial, institutional, decision-making and environmental factors that characterize the structure, functioning and processes of the State-owned financial institutions. The preoccupation of the State with the financial system as well as the unproductive involvement of the state-owned financial institutions in the Nepalese economic system have been regarded as the factor instrumental in increasing the inefficiencies.

The biggest challenge facing the Nepalese financial system is the irresponsible stance and behaviour of the people who have assumed responsible positions in financial institutions owned and controlled by the government. Some political leaders are also opposed to carrying out reform programs in ways that are essential for making the reforms truly successful. The concerned employees unions in the respective institutions are also opposing reforms day in and day out as they mistakenly believe that such reforms are unproductive for themselves and their institutions. So, the inefficient working of the government-owned financial institutions is thus the outcome of the environmental, employee-related and institutional drawbacks associated with these institutions.

Dishonest borrowers or defaulters are the biggest hindrance in the process of financial sector reform. These defaulters would like the government to continue its ownership and control in the financial institutions as such a situation would facilitate their continued fraudulent and defaulting behaviour without any let or hindrance. If these institutions were run professionally, then these defaulters would be deprived of the financial misdeeds and irregularities that they are presently indulging in collusion with the dishonest employees under the protecting umbrella of political favouritism. As the charm of pocketing borrowed money without the necessity or compulsion to pay back is quite big, trying to discipline and regularize the financial dealings of government financial institutions would be opposed by the concerned vested interests to the best of their capacity. Being big defaulters without any need to repay loans, their clout and reach are far beyond the corridors of the financial institutions. As a result, there is even the danger of the whole financial sector reform initiative being derailed and blocked by these dishonest elements. The reform initiatives in Nepal would thus have to go through a trial by fire as the reforms come in direct conflict with the interests of dishonest employees and defaulting borrowers.

Although Nepalese financial institutions in the government sector were started with the genuine purpose of expediting financial development and pursuing the financial intermediation process to fulfil the development requirements of the nation, what made these institutions unsound, inefficient, ineffective, bureaucratic, irregularized and weak is their defective way of working and their scant regard for considerations of competence, quality, service delivery, productivity and efficiency that are the inherent hallmarks of any economic institution in general and sound financial institutions/processes in particular. While looking at the rampant disregard for discipline, norms and other fundamentals of financial soundness that characterize these institutions in Nepal, it is impossible to transform such institutions into the strong pillars of financial and economic development that the nation and the economy so much valued and sought for. Instead, what has been found is that these institutions have become a big burden to the economy as they are not only accumulating huge negative networth but also providing most inefficient and unprofitable business dealings for genuine borrowers and thousands of depositors who have put their hard-earned money in these institutions.

The biggest beneficiaries from these institutions, therefore, are only dishonest vested interests like loan defaulters, employees who promote such default, and other irresponsible elements associated with institutions in general and financial dealings in particular. Such a situation at the government institutions has also encouraged joint venture banks to become complacent in their current financial practices and also motivated them to indulge in activities that are not in consonance with the requirements of sound business dealings and decision-making.

It is not only in Nepal that government financial institutions are suffering from the malaise of economic inefficiency and financial weakness. It should be realized that such institutions throughout the world have suffered similar misdeeds, irregularities, inefficiencies and financial shortcomings. The difference, therefore, is only the relative level of weakness and financial burdens that characterize these institutions across the nations. The sorry part of Nepal is that these institutions are really uneconomic, non-viable and big economic loss-makers. Despite such a situation, it is pathetic to observe that vested interests are vehemently opposing the Nepalese financial sector reform process presently being carried out by HMG and NRB.

So, the financial sector reform exercise in Nepal is a thorny trail. There is much opposition and vested interest, as stated above, which want the reforms not being implemented. This makes the job of those who are pursuing reform initiatives far more difficult and, at times, even most discouraging. The only thing that can substantially help in the reform process materializing is the strong commitment of the political leadership and the boldest implementation exercises at the institutional level. In the absence of such deep commitment and vigorous implementation, it would not be possible to carry out such a difficult process as envisaged. The present government in Nepal being a reform-minded one, it would not be a distant dream to make financial sector reform a successful venture if the government is serious and sincerely committed to this initiative.

(The views expressed in this paper are strictly personal)

A visionless country

By Sapana Raut

Ojaswi, my five-year-old cousin, whose remarks are always like thunder, gave me a sleepless night. Last night when the lights went off, we started our family chatting session. But yesterday it was different. Our room was more like a courtroom, aama was complaining. She was upset with me and my ways of doing things. So she spoke about vision in life and said that one should have a clear vision. Without it we all will be lost. From nowhere in the dark, Ojaswi asked innocently, "aama what is the vision of our country? Nobody answered her question. The chat session concluded abruptly and we all left for bed.

I could not sleep. I racked my brain trying to figure out the vision of my country. But the more I tried to figure it out the more I was confused. I could not figure it out. May be all these years I was so busy for my own luxury that I never gave any damn for my country and now when I ask myself about its vision I am confused from head to toe. I begin to think, if just a five-year-old can ask about the vision of Nepal. Why can’t we? Why can’t our leaders?

I still have a vivid picture of that golden day when democracy landed here for the third time. I was in sixth standard and was happy though I did not know what democracy truly stands for. I have now realized that democracy for us might be strikes, more Nepal bandhs, elections every year and insecurity. Democracy in Nepal can’t be anything more than what I perceive because most of us (including our politicians) are corrupt in their behaviour. I was once told that "all the people have some positive trait, if we take the time to find it".

How true.

One thing, at the least - that gives them purpose. And I don’t think I have to write about what is the only purpose of our leaders because they are those souls who don’t even know what their vision is. I can’t even imagine letting such people shape the vision of this country. I wished I could make that innocent child understand the situation of Nepal where vision is not even a factor. How the government, the opposition, Maoists and we citizens of Nepal are pushing it to darkness, where not even the gigantic sun can shed its light.

I now can say with confidence that democracy must be those fragile dreams of our politicians who want to build castle in the air. And we like fools are hoping along with them that those dreams will become a reality some day.

After the verdict

By Kuldip Nayar

Whatever the BJP may say in defence, it has to admit that it has been decimated in the state elections in Assam, Kerala, Tamil Nadu, West Bengal and Pondicherry. True, the party has had no base at these places. But it fought on its own in West Bengal, supported the AGP in Assam and the DMK in Tamil Nadu and consolidated the opposition against the Communists in Kerala. On top of it, Prime Minister Atal Behari Vajpayee went to all the states to campaign for the BJP or its allies.

Even otherwise, the two years of governance at the Centre had given the BJP enough time to implant itself throughout the country, particularly at the places where the party had to find new soil. It has to blame itself for its failure. The party just cannot rise above the parochial agenda which it has been following for decades. After the lapse of some 48 years since independence, it got the opportunity to present itself as an alternative. But it has turned out to be worse than the Congress, more corrupt, more high-handed and more opportunistic.

Few had doubts about the BJP’s communal thinking. But many had imagined that its anxiety to stay in power would make it shed its fundamentalist attitude. It was also assumed that the association with the parties, which had a secular past, would modify the BJP so that it looked a bit liberal. The result has been to the contrary: the once-secular parties have themselves stopped talking about communalism.

Once Vajpayee imparted the image of liberalism but that impression is diminishing as days go by. He is still more acceptable than others in the BJP. But he is now a pale copy of what he was. That he made no impact on the electoral landscape should have worried him. He is still content with presiding over the cabinet meetings, placating the RSS hardcore at lunches and going out of Delhi at the first opportunity.

Even the BJP members have seared into their memories the image of Vajpayee as a semi-retired person who does not want to be disturbed either for cause or captaincy. He was expected to change the party so that it would follow his way of thinking. But it is he who has compromised. If he wanted he could have framed a counter strategy against the RSS, packing the cabinet with persons believing in his philosophy of pluralism. Instead, he has accommodated even fundamentalists.

The assembly elections should make him and the BJP introspect. Even if they do not want to resile from their Hindutva stance, they have to reckon with the realities of a pluralistic society. The Muslim electorate, which constitutes 12 to 13 per cent of votes, is solidly against the BJP. They have largely voted against the party. Their five percent in Tamil Nadu has swung even some marginal seats in favour of anti-DMK candidates.

The BJP cannot afford to wish away the Muslim factor. It exerts influence in some 1,600 assembly constituencies in the states and 200 Lok Sabha seats out of a total of 545 in Parliament. The party, which is opposed to the secular ethos, can never secure a majority in the country. It is merely a matter of calculation. Yet the BJP has not realised that its policies will take it nowhere.

It is a pity that the BJP appears to be writing off Muslim support at a time when some among the Muslims are seriously questioning their community’s touch-me-not attitude. They have been struck by the fact that the instances of Hindu-Muslim rioting have drastically come down during the BJP’s rule. They wonder if they can do business with the party when they did it with the Congress under whose 45-year rule their plight was no better.

I was surprised to find a naive reaction to the judgment by the Lucknow sessions judge who dropped criminal proceedings against Home Minister LK Advani, Human Resources Development Minister Murli Manohar Joshi, Sports Minister Uma Bharati and others. The ground enunciated by the judge was that the Special CBI Court trying the case of Babri Masjid’s demolition was constituted without consulting the UP High Court. It was a technical flaw. The BJP should have said that it would issue a fresh notification to overcome it.

The verdict on the Babri Masjid destruction case has come to epitomise the fears and hopes of Muslims and liberals in the country. They want to know whether the demolition brigade of Hindu fundamentalists would be squarely punished for their misdeeds. The judiciary itself is on trial. The BJP should have realised it.

Instead, the party’s spokesman in Delhi dismisses the idea of fresh notification and goes on to say that even the Congress had withdrawn the cases emanating from the Shah Commission report relating to the excesses during the emergency. Is this a justification? The Congress will continue to pay for what it did then for years to come. Does the BJP want to follow the same path?

This is not in the interest of Advani, Joshi and others if they realise the implications. Do they want to be let off on a technicality? The charge of demolition, if not cleared by a law court, will be a millstone around their neck for the rest of their life.

The CBI’s reputation too will be tarnished. It will be alleged that the government had pressured the CBI into abandoning the case. The allegation may have the ring of truth because the agency is under the Personnel Department of the Home Ministry.

The question of notification looks like giving the secular elements a rallying point. Even otherwise consider how the BJP has to thwart the pressure which will increasingly build up against the National Democratic Alliance (NDA) it heads. The results of five state elections have put new life in the opposition. The Congress and its allies have some nine states under their control. They are not going to sit idle, particularly when Sonia Gandhi has said that elections are bound to affect the government at the Centre.

The Lok Sabha arithmetic is all right at present. The NDA has, no doubt, a majority. But it can disappear in no time. Suppose DMK chief K Karunanidhi were to come to the conclusion that his party had lost ground because of its alliance with the BJP, he could withdraw his party’s support.

By himself, Karunanidhi does not pose any danger. But he has in Andhra Pradesh Chief Minister Chandrababu Naidu, an intimate friend. Naidu’s 29 members in the Lok Sabha can pull down the NDA format in no time. The fact that the BJP has lost in the non-Hindi speaking states may influence his judgment. At present, he is in the midst of assessing the situation as he has said.

To imagine that the government will easily survive the rest of the term - nearly another three years - is to indulge in a lot of wishful thinking. Many imponderable factors can come into focus at a time when the Vajpayee regime hangs by a slender thread. The next parliament session may show how difficult the BJP’s task is. The Tehelka expose stalled the session for days. The new developments may bring into play other factors. A few individuals may join the NDA. One or two groups can quit. The coalition’s structure will remain shaky.

In any case, no bill of the government’s choosing can go through the Rajya Sabha because the opposition strength will go up still further after new members from Assam, Tamil Nadu and Kerala come to the house.