Rampant Corruption
CIAA's Bold Steps

By Shirish B. Pradhan

A POOR country like Nepal, highly dependend upon foreign aids for its overall development, cannot bear corruption, whose cost is too high for us. Our country is dependent on the blessing of the donor countries not only for its development expenditures but also for the salary of the government staff in fact, the pouring of money from donor countries has made us lazy, corrupt and dependable instead of uplifting the lives of the poor people. Very negligible amount of the aid money provided by the foreign donors actually reaches the poor people as a huge portion of the money is chewed by bureaucrats and politicians.

Commendable

The recent raids conducted by the Commission for Investigation of Abuse of Authority (CIAA) is sufficient to prove this. The CIAA has to be praised for initiating the bold step as an anti-corruption drive, which can be an eye opener for many corrupt bureaucrats, occupying high positions. Prime Minister Deuba's government has done a commendable job by empowering the CIAA to take the bold measures.

But the action should not be limited to those 22 ill fated government staff if the Commission is really serious about wiping out corruption from the country. The action should also be extended to other public offices including banks, roads department, corporations, telecommunication office and the like. Assets belonging to all the former and present lawmakers, former and present ministers, leaders of political parties and those enjoying high level political appointments should also be assessed if it is really serious about penalising all those who are corrupt. Those politicians who are benefited by appointing government staff including the tax officers and revenue officers to lucrative posts should also come under the action of the CIAA.

In our society no one ever ask for the source of income of those high level bureaucrats or politicians with high bank balance, luxurious car and bungalow, and other valuable property. Because we have a tendency to worship power, position and property. How can a junior level government emplyee amass property worth crores of rupees and own ultra modern car and bungalow. We have never questioned them from where they have got the money. Instead, we respect them, praise them and give them social recognition. This way our society has encouraged the people to become corrupt.

In the past 12 years of democratic rule those who were elevated to the power have turned millionaire or billionaire over night. Those who did not own even a bi-cycle now own a pajero, those who used to stay in a rented house now own well furnished ultra modern building and those who did not have even a bank account now has bank balance worth tens of lakhs of rupees. But we have never questioned how was it possible without indulging in illegal means to earn money. Commissioning, bribing and taking gifts have become a normal way of life for our politicians. In government offices even a simple file does not move from one table to another without giving any incentive. For the government staff working in tax office, customs office and revenue offices taking bribes have become a routine job. The ordinary people have faced hardship due to their corrupt attitude.

There was no mechanism to distinguish between black money and white money in our country. The society does not make any difference between an ordinary government staff, who does not get any undertable payment and one who does not bother to employ illegal means to earn more. How can we eliminate corruption and bribery in a society, where corrupt are never penalised and honest people are never rewarded?

The recent action initiated by the CIAA has collected over Rs. 6 billion worth cash and property, which is remarkable. If two dozen government employee can amass Rs. 6 billion worth assets then how much money could be recovered if hundreds of top level bureaucrats and politians were tried? At present Nepal's total foreign debt stands at Rs. 201.55 billion, which is increasing every year. If the CIAA is able to confiscate all the assets amassed illegally we may be in a position to pay all our foreign debt, which will relieve our country from a big burden. Thus, the action should be further expanded so that not a single corrupt bureaucrat and politician left untried. People will naturally welcome such a bold step taken by the CIIA.

If multi-party democracy in our country failed to produce any tangible results in the past 12 years it is not the fault of the political system but the corrupt mentality of our politicians and bureaucrats. The Human Development Report 2002 launched by UNDP has also stressed on transparency, accountability and checking corruption. In fact, democracy cannot succeed unless we have strong anti-corruption act and political commitment to eliminate corruption and financial irregularities from the country.

The report stress on good governance saying that it does not only mean "ridding societies of corruption but also giving people the rights, the means and the capacity to participate in the decisions that affect their lives and to hold their governments accountable for what they have done." We cannot blame multiparty democracy for the present poor condition of the people. The report goes on saying quoting its chief author Sakiko Fukuda Parr "around the world there is a growing sense that democracy has not delivered development such as more jobs, schools, health care for ordinary people."

Emphasis

Politicians often use this to justify authoritarianism and curtailment of human rights, but history and academic research provide no evidence that authoritarian regimes are better at promoting economic and social progress, states the report. The report emphasizes on decentralisation, press freedom, checking abuse of power, increasing budgetary transparency, public reviews of budgetary allocation and holding public officials accountable for their actions in the court of public opinion.

Public Procurement

By Durga Nidhi Sharma

PUBLIC procurement markets are always large whether the country is industrialised or developing. In most of the European countries, public procurement is estimatd at 10 per cent to 15 per cent of Gross National Product (GNP), or 25 per cent of Public expenditure. Procurement in East Asia is thought to be in the range of 20 to 40 per cent of Gross Domestic Product (GDP). Many governments do not keep good statistics on overall public procurement because public procurement is often decentralised among Ministers, Departments, Constitutional bodies, Commissions, Boards, Corporations, Centers etc.

The government purchases of goods and services, for the fiscal year 2002/03, other than salaries, allowances, transfer traveling allowances, employee medical, retirement benefits, teacher's salary, principal and interest payments, stand at Rs 52 billion which is 12.6 per cent of GDP (FY 2001/02) and 54.1 per cent of national budget. Public procurement in Nepal is simple. The one and only simple rule is Fiscal Administration Rules, 2056 (FAR). This is enacted under the provision of fiscal procedural Act, 2055. The FAR covers not only procurement practices, but also describes budgeting, accounting, internal audition, TADA provisions, recovery of government funds, operation of consolidated fund, government assets management, auction-rent-sales of government property, advance management, revenue management. The government has formulated Budget Formulation Guidelines, 2057, Internal Auditing Guidelines, 2052, Office Operation Procedural Guidelines, 2058 and other related guidelines. But it has not formulated "Procurement Guidelines".

ADB, the World Bank, IFAD, GTZ, JICA, KFW, USAID, Danida, Finnida, SDC, Norad, DFID, and other Development Partners have their own Procurement Guidelines, and are mandatory in procurement practices in Nepal. Rule 96 of FAR has indicated that the procurement in foreign funded projects will be practiced as per the Procurement Guidelines stated in assistance agreement. Furthermore, Rule 62 has empowered Ministry of Physical Planning and Works (MOPPW) to develop procurement guidelines for works and use of consultants but excluded procurement of goods, MOPPW has developed and issued such procurement guidelines very recently. The responsibility of conducting, monitoring and evaluation of the implementation of such guidelines has been trusted in National Planning Commission (NPC). MOPPW shall develop another operational guidelines for technical inspection division in NPC for aforesaid purpose. This provision is very recent and the division is yet to be established.

Public participation in procurement works has not been the best practices in the hilly regions. Canal and road construction donors also appreciated this practice. But FAR Rule 80 (1) has made mandatory prioritisation to have users group for the projects implemented locally within the range of 2.5 million rupees. Consequently, Rule 80 (1) and 96 may create problems in the implementations of projects because of their independency. Furthermore, Rule 58 clearly states that HMG/N procurement practices must be followed if the contribution is in the form of goods to the foreign aided projects.
To sum up, there is an acute need of formulating procurement guidelines, which has adjustability with procurement guidelines of various development partners. Often issues have been raised about the implementation date of revised rules. Any changes in FAR in any specified gazette notification date, the rule comes into force at once. But the procurement guidelines from other development partners must be indicated in development agreement so that revision will be made effective later on. For instance, we can cite an example from any IDA credits that the DCA stipulates the procurement guidelines of the particular year (1991,1993, 1999, Janaury 2000 etc). The implementation process of such project is being administered by the DCA indicated procurement guidelines. Same story is repeated in disbursement procedure whether it is LACI procedure or other reporting mechanism.