Banking Sector
It’s Time For Cooperative Bank

By Surendra Uprety

IF REVIEWED Nepal’s five decades of planned development efforts, one could conclude that the country has followed a series of economic models experimenting one after another, All of them have failed. The logic behind the failure, many development experts argue, is blind imitation of the development models of other countries.

In fact, any development effort initiated by the communities themselves certainly helps achieve the target. Nepal has now many such development practices including ‘cooperatives’ which has been providing jobs for more than 2 million people by mobilising the capital resources amounting Rs. 9 billion.

The increased influence and reach of cooperatives in the development process and programmes are emerging as a powerful social movement. One of the remarkable developments of such initiatives is the active participation of women in cooperatives. Likewise, cooperatives are playing a leading role in providing small and middle credit facilities to the people with a limited income. As a major source of capital and as these cooperatives generate direct employment opportunities to millions of people they have been playing a key role in the mobilisation of capital and human resources, supply of capital imputes and the distribution of technology among the Nepalese farmers.

But potentiality apart, cooperatives in Nepal is buffed by numerous difficulties and constraints that have been acting as inhibiting factors in the development of what could be called Cooperative Movement. Also, cooperative movement in Nepal is suffering from lack of inspiring leadership. The emergence of town-credit shop (credit cooperatives) in liberal economy, however, whipped off the cooperative trend as an alternative path of development and designed "bank for the poor" in the second half of the 1990s. They failed to ensure the cooperative philosophy. The only reason is the absence of authority to effectively control these shortcomings. It is the most serious setback for the cooperatives’ future.

In the aftermath of liberal Cooperative Act, the number of cooperatives increase both in credit and commodity/multipurpose cooperatives. But the increment of credit cooperatives which somehow seems to be fashion has posed a challenge to the whole cooperative movement to run within its own principles. It is generally felt that these cooperatives have not been operated as per the basic norms of cooperative-ownership among members. Most of these cooperatives operated within the three or four years in the capital have the premature concept of banking rather than cooperatives.

The concept of credit cooperatives only facilities members and there is no transaction beyond the members. But the prevalent practices do no ensure the right of members as per the universal cooperative norms. The principle of International Cooperative Alliance also reveals the same fact that the existing cooperative movement in some countries failed due to the lack of proper guiding, controlling, and monitoring. Although cooperatives have emerged as a big business with an annual transaction of over 9 billion rupees and creation of more than two million jobs for the people, it seems to be taken as an easy money making business in many societies. To forward the existing cooperative revolution according to its universal principle in this regard is a big challenge, both for the country’s future and the cooperative’s itself.

To correct these anomalies, the establishment of the proposed National Cooperative Development Bank (NCDB) is getting late to be operated. The government has allotted Rs. 10 million as equity participation for the bank in its budget speech of the fiscal year 2057/58 B.S.

But only the establishments of such a bank will not be the panacea for the existing evils in the cooperatives sectors. The bank’s role in monitoring the performances, in policy formulation, as a moneylender in a low interest rate for the economic and social support for its member cooperatives and acting as a last resort is desirable.

Likewise, in the long run the bank would be very supportive to facilitate the farmers by funding in the storage-complex for agro-products and other necessary agriculture imputes.

The United Nations had estimated in 1994 that the livelihood of nearly 3 billion people, or half of the world’s population, was made secure by cooperative enterprises. More than 800 million individuals are members of cooperatives, which provide an estimated 100 million jobs. In a number of countries in Africa, the cooperative movement has become the second largest employer, surpassed only by the state. In Europe too cooperative provides employment opportunities to more than 5 million individuals.

In Nepal also the cooperative has now become a sub-sector of liberalised development efforts, manifested by the better utilisation or mobilisation of stray resources of the country. The new Cooperative Act – 1992 enacted considering cooperative as an unquestioned tool of development.

In such a situation, if the proposed NCDB is able to develop a wide cooperative net, a chain of agro-based, multi-proposed and community-based cooperatives as per the cooperatives principle and norms, many people will surely benefit from the cooperative.

The Constitution That Was Never Implemented

By Dr Ramesh C Arya

NEPALI NEW YEAR starts in mid – April. The Day has an interesting political history for a new dawn in the kingdom, it was an offer of a liberal prime minister. But the people never received that. It was nipped in the bud.

Months before the democracy day, (7th of Falgoon 2007 BS,) from the first day of Baisakh 2005 BS, a Rana prime minister had awarded democratic rights to the people of Nepal through a constitution. But the Constitution, the Prime Minister offered, was never exercised.

It was, however, an important step in downsizing the Ranas and in the restoration of democracy in the country.

Stepping down is not easy. Much more so if it is from the position where a family holds the birthright for its newly born members to be ranked as a colonel and higher up. The autocratic family of the Ranas ruled the country for 104 years until democracy finally prevailed in the country. On behalf of His Majesty, they had been running the State and crowned themselves as Shree Teen. The road to democracy, where people are more powerful than anybody else, was obviously not a smooth one. It has several ebbs and troughs.

Like a tree, democracy takes time to mature. Its seedling is first planted underground. After the incubation period, it stands out as a delicate plant.

At its infancy, it is crushed several times but due to the persistent effort, it gradually stands up stronger and stronger to take shape as a tree and offers shade to the people. The struggle passes through several stages.

But in the Nepalese democratic movement, three important ebbs, however, stand out. They are: underground operation of the youths and their martyrdom; declared support from the people through people’s participation at the Satyagraha movement and bold decision of King Tribhuvan.

Like a chain reaction, one triggered the other and finally toppled down the Rana regime.The martyrdom of the youths was an event, which had a very short incubation period. The fiery youths had the meeting of minds. Five of them formed Nepal Praja Parishad in 1993 BS. They started arousing the people through their quiet pamphleteering against the selfishness of the Ranas in the third month of 1997 BS. Besides the five core members, the other youths hardly knew each other as members of the same organisation though they were fighting for a common cause. They were arrested in the seventh month of the year, charged, given the harshest treatment ands finally hanged/ shot down on the charge of being Rajdrohi (acting against the state). The four such martyrs were Ganga Lal Shrestha, Shukra Raj Joshi Shastri, Dharma Bhakta Mathema and Dashrath Chand Thakuri.

The Ranas thought, the execution would terrorise the people and they would be as subservient as they were. But it was not to be. They did change their strategy. The martyrs were executed in the dead of the night. And the youths visiting the sacred place of their execution returned with solemn anddetermined vows that they would carry on with the liberation struggle initiated by the brave martyrs until the fall of the Ranas. Rightly had Ganga Lal announced: Hundreds of Ganga Lals will be born out of this place!

Seven years later, in 2004 BS, hundreds of the democrats came up in the open against the Ranas demanding citizens’ rights through their satyagraha march on the main roads of the capital and rushed to the prime minister’s palace. The movement had active support from the teachers and students of schools and colleges and, for the first time, the Nepali women also joined the movement with the anti-Rana banners.

On one side, where people were getting united and pressurising the Ranas to behave in a democratic fashion, on the other the Ranas were divided. Prime Minister Padma Shamsher announced bringing out a new constitution to the people "within eleven days". But Mohan Shamsher, the heir to the Prime Minister, wanted to crush the people. Within the feudal family, the process of disintegration had set in. Some of their cousins such as Krishna Shamsher,and Bijaya Shamsher were more educated and far-sighted. They were in favour of gradually stepping down. Some of them settled in Bangalore and others at Deharadoon in India.

Padma Shamsher, the softhearted Prime Minister, presented the Sambhidan (constitution), and left for India for good.

King Tribhuvan had been supporting the activists. While compounder Chandra Man and martyr Dharma Bhakta Mathema were tortured and put under trial at the Ranas’ court, the King had boldly admitted that they had worked at his initiation and thus tried to defend them. The royal family had very good support of the people. But he could do very little from within the confines of the Royal Palace.

In October 1950, all the 17 members of the Royal Family voluntarily came out of the four walls of the Royal Palace and entered the Indian Embassy. Five days later, the Royal Family left for Delhi in India in the Indian Air Force plane. The Ranas installed Prince Gyanendra as the King. They tried to gain recognition for the young King and, as usual, rule in his name. But the move did not get any acceptance from any part of the world, even from Gt. Britain.

At Delhi, the King could freely meet with the Nepalese people and the Indian leaders who were supporting the democratic move in Nepal. The people’s liberation army, the Mukti Sena, revolted against the Ranas. They attacked the regional offices, (the Gosawaras) and the treasury offices in the terai and the hilly areas. The operation was at its peak in October and November.

King Tribhuvan addressed the countrymen over the All India Radio, Delhi in the third week of December in 1950. The Ranas were now under heavy pressure.

Ultimately, in the second week of January 1951, Prime Minister Mohan Shamsher surrendered with a declaration. He quoted the Constitutional Rule made effective from the first Baisakh 2005 BS and announced conducting general elections and set up a 14-member cabinet which would have 7 members representing the people. The other day, King Tribhuvan welcomed the announcement as a positive step towards establishing democracy in the kingdom.

His Majesty returned on the 4th Falgun 2007 BS and declared the return of Democracy three days later and announced running the administration of the people by their elected council.

A PAGE FROM HISTORY
The Nepal Communist Party (II)

By Guna Dev Bhattarai

THE COMMUNIST ideology of ending monarchy was not in keeping with the opinion of the majority of the people who had been regarding the monarch as an incarnation of Lord Bishnu and a symbol of unity in the country. Generally, the people were in no mood to support the policy of the Communists. That is why the Communist Party found itself totally isolated from all other Parties. Having realised their policy of anti monarchy fallible most of the Communists were bound to declare that their Party would support monarchical system of Government. After such declaration from communists, Tanka Prasad Acharya’s Government lifted the four-year ban on the Nepal Communist Party on April 16, 1956.

Though the Communist Party was recognised as a political party, its leaders were divided over many issues. As a result, fractions grew in the Party. One section was in favour of adopting aggressive policy and the other was in favour of coming to terms with the democratic parties. In the courses of time some leaders of the Party wanted to cooperate with the N. Congress Party. Nevertheless a handful of die-hard leaders did not want to be deviated from the communist ideology.

As soon as Kunwar Indrajit Simha became the Prime Minister the die-hard Communists girded up their loins to fight for their ideology to a finish-that is to say, the inner party struggle went on and on. In the meantime, the date of the General Election was announced. The Communist Party found no alternative but to participate in the election.

The Communist Party failed to win over the heart of the people. On the one hand, the leaders were divided as to their policy and on the other they were not economically sound in comparison to the Nepali Congress Party and the Gorkha Parishad. The Communist Party’s poor results in the General Elections proved that the people were in favour of a democratic government under the constitutional monarchy.

The Communist Party began to criticise the Congress Government, especially the latter’s domestic and foreign policy. The leading members of the Communist Party charged the Government that it was influenced by the reactionary elements. There was a hue and cry among the members of the Communist Party and they persuaded the Party leaders to be united and to adopt such a policy that might attract the general mass and thereby launch a movement throughout the country. The workers of the Party made the people cautious enough not to fall into the grip of the reactionary and revivalist elements. Once more the Party was divided over its foreign policy.

Moreover the Party failed to bring about concrete programmes in keeping with the time. They failed to grasp that high sounding ideology under the prevailing circumstances would not be successful. On the other side, the Congress Government also was not popular as it should have been.

King Mahendra, having undertaken extensive tours throughout the country, was fully convinced that the people would not oppose the imminent step which he was going to implement. Even the Communists who were not in good terms with the Congress Government would not oppose the step that would be taken by the king.

Eventually King Mahendra dismissed the elected Government headed by Bisheswor Prasad Koirala on December 15, 1960. All the political parties were banned. If the Communist Party had whole heartedly supported the democratic Government of B.P. Koirala, the king might have hesitated to take such an anti-democratic step.

Even during the thirty-year Panchayat System of Government the Communists were not in favour of supporting the underground members of the Congress Party. At last they realised that the reactionary elements of the country had been engaged in dividing the leaders of the banned political parties. At last, the Communist Party fully supported and even participated in the movement launched by the Nepali Congress against the Panchayat regime to the effect the reactionary elements were outwitted and King Birendra after realising the gravity of situation in the country revived democracy and an interim government, in which the communists were also included, was formed. The Communists found themselves in a comfortable position.

In short, the net result of the cooperation of the Communists paved the way for Man Mohan Adhikary, a staunch communist, to become the third Prime Minister after the restoration of democracy in the country.