Power of capital in politics

Gradually but systematically democratic norms and values are undermined by governments in various countries, including in the western countries, known as the harbinger of freedom and liberty. Powerful corporate and companies are virtually running governments. No government in capitalistic system can implement policies that are detrimental to the financial interests of corporate. They are behind the cabinet reshuffle and policy change of governments. Now legislators in America and Europe cannot exert as much power as the heads of big business houses and industrial bodies because of their control over the production of weapons and their distribution. Most of the ministers and legislators, with some exceptions, are linked to such groups directly or indirectly to win the expensive elections.

We can imagine the power of capital from what happened recently in a city of UP, India, in the case of an independent MLA, Raghuraj Pratap Singh, charged with anti-national activities. He was arrested on the complaint of Rajendra Yadav, but now, the key witness in the case against the MLA, has been murdered in broad daylight, though the administration was fully aware of the danger for his life. The murder assumes special significance because he was the witness against a powerful politician, regarded a law onto himself in the Kunda region of the state. Moreover, he belongs to the ex-Maharaja family of Pratapgarh in UP. Our concern here is not to show whether the politician deserved detention, or it was a political vendetta on the part of Chief Minister Mayawati. What we want to show is how capital influences politics in the capitalistic system. Because the detainee belongs to the ex-Raja family, there are many in the BJP who want him to be released immediately, despite the fact that there are serious charges against him. His power could be gauged from the fact that in 1998 parliament election, the election commission barred him from entering his own constituency, fearing his mere presence in the region could derail the law and order system. This case only exemplifies how the politics in the state has become criminalized.

Now he is in jail but he can exhibit his power in the region on the strength of his unlimited capital. He can still influence the state and central ministers. It is only a matter of time before the politician is released from the jail. R P Singh’s case only reveals how economically powerful people can buy the state machinery to fulfill their designs. Such powerful politicians can hire the armed criminals to eliminate any persons they do not like. This particular instance points to the danger that lies in the implementation of democratic values in true sense. It is again due to economic disparity that untouchables and Dalit in India still cannot caste vote freely during the election. Either others cast their votes or they are prevented from reaching the polling booth if it is known that they are going to vote against the elite class. Some years ago, when Chaudhary Charan Singh was the Prime Minister of India, voters from weaker section in his constituency, Bagpat in UP, were driven back by the people of the Prime Minister’s community to ensure that they did not caste votes against him.

In this 21st century too, whether in India or Nepal, or for that matter even in America and Europe, corporate heads manage to carry out their strategy in national election. It does not make much difference whether the majority is with them, as long as they wield economic power. It is again the power of the capital that in most of the countries majority of the people are against their governments, but the latter continue to perpetuate the anti people policies on the backing of corporate bosses and industrialists. In Britain, over 80 percent people oppose Blair’s policy on Iraq, but he continues to ignore their voice because a powerful industrial lobby backs him. Similarly, in Turkey and most of the Arabian counties, the governments are dependent on the support of arm dealers and powerful industrialist for their survival, as the people are utterly frustrated with their subservient policies.

In our country too, it is hard for the ordinary people to win election, as they have no access to capital. Moreover, the ordinary people, exploited for long, cannot make distinction between friends and foes. Even the people with criminal background can get elected, if they spend money. It is because of the power of capital that democracy has remained only in slogan not in practice. In addition, people cannot change their rulers as and when they find them insincere, corrupt, and becoming a party to smugglers. Once they get elected, the politicians think themselves as the masters and owners of the people and the country. Their arrogance is sharpened with their economic influence. In our country, everybody knows the condition of the politicians of major political parties before the People’s Movement and now. However, there is no way to checkmate them from resorting to immoral practice for personal interest.

We will have to live in a false world, as long as the power of capital is not crippled. It means without having minimum economic disparity in society, the slogan of democracy will never become a reality. The power of capital can be minimised either by massive implementation of development programmes in the backward areas or by arousing higher awareness among the people. Though democracy gives equal freedom to haves and have-nots to utilise the provision of constitution, there is no way the ordinary people to compete with people having strong economic power.

Our twelve years’ experience also reveals the fact that democracy cannot reach to every nook and corner of the country, if the people are not aware and economically self-dependent. Moreover, the power of capital deprives the weak of equal opportunity of justice. The poor cannot expect justice in today’s expensive legal system. On the other hand, people like R P Singh in India’s Pratapgarh district can be released anytime and dictate their terms without fear from inside the jail. In our country, until some time ago, people were in the illusion that the arrest of politicians like Chiranjivi Wagle, Jaya Prakash Prasad Gupta and Khum Bahadur Khadka was a prelude to catch bigger fish later. However, one after another they are released and now people have realized that their arrest was not for cleansing the system, but just to befool the people for sometime, then make them resigned to their helplessness. Their release has again left an impression that the power of the capital can influence judiciary as well as bureaucracy.

Things are not bright today, but we should not be pessimistic because in the end, democracy will replace dishonesty. It is nature’s law that after every climax, there has to be a downturn. The power of the capital has almost reached its peak, and so it is bound to come down in coming days. It is in this sense that we can become hopeful of better days for tomorrow. Till some more time, we have to live in a false world where in the name of democracy; dictatorship is imposed on the helpless people. It is a good sign that people, from America to Africa, have started realising that in the name of human rights, freedom and democracy, bad people are ruling them, and so they are showing resistance to the onslaught of the capital.

The mountains called me

By RAJNI K C

Day: Tuesday, Date: 4 February 2003, Time: 8:30 am. I drew the curtains to see what lay ahead for me. It was yet another day that the sun did not want to take off its veil and it looked as though he was becoming defiant. Something had been bothering him and I hoped the person who understood him would make a contact with him without delay. The fog, on the other hand, parading everywhere looked as if it had in it, a feeling of importance, as it had been successful in making its presence since past ten days.

As my hands and feet begged to be treated with utmost care I left for work hoping that the sun would be kind enough to understand how much love we have for him and how important he is to us. The scene on the streets was similar to my thought. Time and again everyone would look up at the sky hoping to welcome the gracious presence of the sun but it was not so and different heads would bow down. On such days it is not just the fog that tries to draw our attention. The cool breeze negotiates with the fog to share such days and they reach out adamantly to caress us.

Time: 2:30 pm. Ever since I reached the office, my hands and feet were given the due attention and now they were not complaining. I had been indoors for almost five hours and I was unaware on the developments that had taken place on the weather. As I had an appointment at 3:00 pm and considering the foreseen traffic that we often encounter I left a little early. My office is in Lazimpat and I had to reach Bansbari. Weighing different options on the routes that would take me to my destination I chose the Lazimpat-Maharajgunj-Chakrapath-Bansbari route. If luck favored me I would reach my destination in a couple of minutes. But we all know and understand that lady-luck has ostracized herself from the streets. And today, at this hour, at this minute, I was glad that she had vowed not to meet us on the streets.

Waiting for the green signal to arrive, the cool breeze touched me as if it were carrying a message from someone who was indeed "mighty". As the breeze performed itself I stood there...totally complacent trying to speculate. "Maybe the rains were coming", I thought to myself. But I was wrong. What I saw thereafter was something totally elusive and I now understood whose message it was carrying. It was a message from the mountains. And they were calling out to me!! Clear as a crystal and sharp as the edge of a knife, the mountains stood in front of me. So close and yet so far. It had been months I had not seen them, the last being a year back when I went to one of their hometowns– Pokhara. And this time they were kind enough to come all the way to where I was.

The green signal arrived and I was compelled to move on, unwillingly dividing my attention between the road and the mountains. But the mountains were not egotistic and they were not arrogant. Going against the saying "Heavy lies the head that wears the crown", the mountains calmly waited for me, understanding my plight, while my vehicle moved on. They were beautiful and together they made a spectacular team.

For this 23-minute hypnotizing and enthralling look of the mountains, this day, the sun did not unveil; the fog became an unwanted guest; the breeze performed and my hands and feet complained …and …it was worth it ! !

Time: 2:55 pm. I arrived at my destination. Now I had to say goodbye to the mountains. The meeting was short but it was precious and I shall always cherish these 23-minutes. Going inside, I looked, promising them that next time it would be my turn to call out to them.

Issue of corporate governance

By ATMA SHRESTHA

In the aftermath of high-sounding col- lapse of corporate giants like Enron, WorldCom, Global Crossing etc, one can now find an increased level of unease and desperation elsewhere, especially in western part of the world to find solution to prevent and pre-empt such events in future. As the corporate fraud committed by the top executives of these companies is responsible for the corporate disaster, the issue of corporate governance has now become a key phrase and buzzword. It’s probably the most talked and discussed issue at the moment. Even at the recently concluded meeting of the World Economic Forum at Davos, Geneva, this issue found an important place for discussion and deliberation. In the light of the fact that the spectacular collapse of the US corporate giants has dealt a severe blow to US economy in particular and to the global capitalism in general, it has been felt urgent to improve the corporate governance elsewhere in the world.

No doubt, the sudden collapse of these corporate giants was the result of the personal greed and selfishness of the top corporate executives of these companies. They consciously inflated their profit figure through accounting manipulation to ensure the continued rise of the stock price for making significant personal gain as they had owned huge number of shares of their companies. It gives rise to one fundamental question why these highly rich and well-paid corporate elites committed such fraud. Is it human nature or the capitalist structure that prompts people to stretch to any extent for acquiring material wealth? When a society values money and power more than any thing else, people normally get tempted to commit such fraud whenever they find gray area to do so. Even the auditors of Arthur Anderson, one of the members of top five leagues of auditing companies whose job was to identify accounting errors and manipulations in their client’s books of accounts themselves committed such fraud by helping their clients inflate the profit figure, apparently in pursuit of amassing wealth. Now, KPMG issue is flaring up with its alleged involvement in helping its lucrative client Xerox Company inflate its revenues by $3 billion between 1977 and 2000. American’s Securities and Exchange Commission has filed civil lawsuit in Manhattan against KPMG. Such behavior of top executives of these auditing companies has diluted the confidence on auditing profession.

The issue of corporate governance has now become the hot issue everywhere from small tea shop to the meeting of World Economic Forum. However, there has been heated discussion and arguments on the modality of corporate governance system. This was debated during the Davos meet too. One view that stresses the need of more oversight on corporate activities by independent bodies has met resistant from another side that espouses self-regulating system. The United States has introduced new laws and the Security Exchange Commission has promulgated new regulations that require the chief and financial executives to declare that their field accounts are accurate and true and in case any errors are found in the accounts, it might lead to the levying of large fines and even jail for executives. Similarly, the UK government is proposing that the power to appoint auditors be held by the audit committee, comprising non-executive directors. It is also reviewing the role of non-executives to ensure they have a sufficiently independent attitude.

If we delve into the corporate governance in Nepalese corporate sector, we will find a bleak scenario: companies, mostly public enterprises do not disclose their financial positions; board members lack independence and professional competence; company directors abuse their position for their personal benefits. Corporate transparency and disclosure is virtually absent in the Nepalese corporate sector – both in public and private, though the degree varies. If we are to improve the corporate governance in Nepalese corporate sector, the board of directors of a company – both elected and others should be competent and knowledgeable. To bolster transparency and professionalism, we must even consider inducting independent professional experts into the board. In this context, I still find the relevance of the government’s previous decision to induct external professionals into the board of some select private sector banks for this very purpose. However, this decision was not implemented in the face of stiff resistance from the concerned banks.

Moreover, the issue of management audit and internal audit should be given equal importance to make the management people accountable and responsible for their actions. Though management audit is hardly a new concept even in the Nepalese context, we consciously ignore it as we still believe management people are not supposed to come under scrutiny of anybody else. Internal audit that assumes equal significance in governance system is also ignored consciously. The management wants it’s auditors to produce audit report as per its liking. In case audit finding contains serious lapses and irregularities, it is simply dumped. To make internal audit more effective, it should be given full independence- and the audit report should reach both the Board of Directors and the external regulators too in the original form.

Corporate governance has assumed increased importance at the moment in the face of increasing rate of corporate failure that has rocked the corporate America and has raised serious question on the efficacy of global capitalism as well. To prevent the corporate world from further melt-down, there has been growing realization all over the world to improve the corporate governance system for which the US and the UK governments have introduced different corporate rules. The recently concluded meeting of World Economic Forum at Davos also spent a great deal of time in discussing the modality of corporate governance. Nepal has also joined the bandwagon: almost in every seminar and meeting, we now hear of this phrase. However, if we are really serious to improve the standard of corporate governance in Nepal, it’s essential to set up a body of regulators consisting of highly competent and knowledge people who will make an objective assessment of existing practice of corporate governance of Nepalese corporate sector and recommend appropriate model and measures that must be implemented fully and effectively.