NATIONAL 4 - (Spotlight Weekly)

‘Extreme Left And Right Forces Have Begun To Challenge The Constitution And Democracy’

— Biswo Nath Upadhyaya

Former Chief Justice BISHWO NATH UPADHYAYA is one of the Nepal's renowned jurists. Upadhyaya led the Constitution Recommendation Commission which formulated the present Constitution of the Kingdom of Nepal, in 1990. He found himself in embroiled in controversy following his decision in 1995, to dismiss the call for the dissolution of Parliament, called by then Prime Minister Manmohan Adhikary. Upadhyaya spoke to KANOON bimonthly magazine. The following are excerpts from that interview:

How did you visualize the role of political parties when you were working on drafting the Constitution?

The six decade long political history before the restoration of democracy in Nepal, was mainly the struggle of Nepalese people against autocratic, undemocratic political systems. Although the roles, strategies, programs and contributions may have been different, those struggling were led and guided by various democratic and leftist political parties. All these political parties had the same view regarding the overthrow of an undemocratic system, and the introduction of a publicly accountable system. To restore the democratic system, leaders of political parties and their followers had to launch many struggles. The state even confiscated the property of many leaders and their followers, and many achieved martyrdom. Under these circumstances, there was no question of the leaders' integrity, commitment, patriotism and their sense of responsibility towards the people and political system. It was natural to trust their ability to govern the people. We trusted that the leaders of these political parties would follow the commitment and spirit of the constitution expressed by the people through the people's movement. We trusted that the leaders would follow the democratic spirit and values, and work to establish a clean political system and constitutional method. Whether in the ruling bench or opposition, the leaders would think only of uplifting the nation, and the people. During the formulation of constitution or other laws, it is always expected that the law would be followed, though mechanisms are put in place to check misuse by individuals. Many such check and balance mechanisms are in place in the present Constitution too.

What has been the role of political parties in the last ten years?

Our social and citizenry concept developed under feudalism. Our political and social life were also inspired by power -- blind power rather than modern values and commitment. It is easy to democratically change our society and political leaders, but we need time. A political leader cannot be different from his social surroundings. This is why even after the change of the political system through the restoration of democracy, the political culture has not changed. Political parties and politicians have not played any meaningful role to democratize the society and protect it. There needs to be democratic process and systems for the promotion and strengthening of democracy. This is required also for the stability of political parties, discipline, unity and effectiveness. Through such efforts political parties will get opportunities to win the hearts of people and help to implement programs in an easy manner. Protection and operation of democracy can be possible from such political parties. Considering this point, the Constitution also makes provisions to run the political parties democratically through the regular internal elections. Democratic functioning and internal democratic exercise will end the possibility of one man influence and desist the possibility of internal dissension, splits and factionalism. Internal democratization will also help to choose the new leadership in the party. Unfortunately, all political parties ignored this in the last decade. The party president or chairman still holds the authority to appoint the central committee members and other powerful members in policy-making bodies. Violating the Constitution, parliament is debating about the provision to elect only 50 or 25 percent of members in the central committee. Due to such practices, structure of the political parties are yet to become democratic. In all political parties, central leaders or certain factions are seen to maintain a total grip in the decision making process. Thus, all political parties are suffering from internal dissension, factionalism and splits. As political parties are becoming weaker, they are competing to grab the power at any cost. They are even prepared to sacrifice democratic values for the sake of power. This resulted in instability in the political system and a sense of insecurity among common people.

Political parties naturally need resources to keep the political workers and to expand political organization for election purposes. Simply, they can accumulate resources through donations. But, in a democratic system, all public institutions need to maintain transparency in their functioning. Even their annual expenditure including income and expenditure accounts need to be transparent. This system will reduce the political corruption and criminalization. In the draft of the Constitution, we recommend that political parties should disclose income and expenditure annually and make provisions for auditing. But, the cabinet led by all revolutionary parties did not realise this. It is clear that these political parties dislike any kind of financial discipline. This is the reason political parties and political leaders started to accumulate more and more money by misusing their authority. In this way, political leaders have developed contacts with international smugglers, commission agents or notorious persons who are involved in social or economic crime. Crimes such as political corruption, commissions, liquor business and smuggling continues to expand following the restoration of democracy, with the participation of political leaders. The leaders, ministers and MPs whose sole objectives of life was to grab power and money did not realize the need to fulfil honest responsibility towards the people. This resulted in confusion in the country's political system and ruling structure. Political parties are unable to protect the constitutional system and democratic values and ideals giving rise to a situation where people have lost faith and trust in political leaders and political parties. Extreme left and extreme right forces have begun to challenge the constitution and democracy. In short, the role of the political parties has been discouraging in the last ten years.

So, what role should the parties play in the Constitution and democracy?

In a parliamentary system, survival and death of the government, its efficiency and inefficiency, hope and belief, suspicion and duality depends upon the role played by the members of the parliament. In reality, political parties are core to all the activities in the parliament. They have to identify ways to solve the problems of people and develop the policies and programs to compete with each other. If political parties play their role in a disciplined and systematic manner, there is a definite possibility of improvement in the political system. If differences among political parties are not based on theories, policies and programs and are instead, based on self interest and factionalism, people will gradually lose their faith in political parties. That will be very serious to the growth of democracy. If political parties work for the betterment of the country and the people, it will protect the Constitution and democracy. The spirit and objective of our Constitution is very important for the country and society's stability and development. All political parties must make efforts to achieve this target. Political parties must learn to follow the guidelines honestly. In a democratic system, every citizens has their responsibility. Every citizen has to watch carefully all the issues. If civil society ignores such important issues, and tends to avoid participation in the debate, it is impossible to build a foundation of democracy.

‘The End Results Of The Liberalization Policy Are Not Encouraging’

— Sabin Lal Shrestha

Sabin Lal Shrestha, Executive Director of Highland Distillery, is working hard to expand the family business. Currently, the Shrestha empire includes interests in tourism, construction, banking, manufacturing, trade, and IT (information technology). Nephew of renowned industrialist Ram Lal Shrestha, and son of Padma Lal Shrestha, thirty year old Sabin Lal Shrestha, is the youngest mogul in the dynasty -- but he's already got lots to say. In spite of his hectic schedule, Sabin Lal Shrestha took time out to talk to SPOTLIGHT about various business issues, as well as his take on some of the economic problems facing Nepal. The following are excerpts from that conversation:

How would you evaluate the overall economic situation of Nepal?

It is very easy to be critical, and to blame others when things don't happen as we think they should. Rather than concentrating on whether the economic situation is better or worse than before, I feel it's more important to analyse whether it is moving in the right direction or not, and to act decisively in an effort to move toward a visionary goal. The real economic situation of our country can be judged by the over-all economic condition, and standard of living of the population at large. Definitely, the economic indicators reflect some progress in some areas, but this is not at all satisfactory, for history tells us that statistics can be deceiving.

For a country to be economically sound in a real sense, opportunities to create wealth should be fairly distributed throughout the population, via national policies and action. This is not the case in our country. It is true we are learning from our mistakes, but we are not learning fast enough, and these mistakes have proven costly. Therefore, if we fail to take immediate corrective measures and creative action, we will simply get left behind, and we will be ashamed to call ourselves Nepali.

Unfortunately there is no formula which is successful in one country that can be applied in its entirety to another country. To bring about rapid, lasting changes in a country like ours, I tend to believe it is in the hands of the politicians, with the aid of a strong bureaucracy, and dedicated entrepreneurs. Certain efforts have been made toward making Nepal more conducive to foreign investment, but lack of commitment and sincerity in implementing such policies have resulted in very limited, or non-existent success. Smuggling, and the grey market, because of their multiple poisoning effects, are really hampering our economy, beyond anyone's

imagination. If Nepal was economically strong, our neighbors would treat us differently.

As a member of one of the largest Industrial Houses in Nepal, what do you predict for the economy by the year 2020?

I wish and pray to God that we Nepalese succeed in making Nepal one of Asia's strong and vibrant economies. And it is up to the people whether we achieve this or not, because people elect the leaders who make Governments and Oppositions. The duty and responsibility of government is to compete politically in nation building. The business community is made up of people whose duty and responsibility is not only to consider his/her personal benefits, but also the benefit of workers, and of the country as a whole. Similarly, employees should consider it their duty and responsibility to be dedicated, and to work hard to improve productivity while raising voice for genuine causes. In turn, consumers also have responsibilities. They should be aware of their rights, and fight to protect them. Bureaucrats too, should act like responsible governors, facilitators, educators. All this may sound like a joke, but this accepting of personal responsibility is how Nepal will succeed. So, the future of Nepal's economy after 2 years, 5 years, 10 years, 20 years, depends on the speed and sincerity with which all sectors involved in the development of our economy, accept and carry out their respective duties and responsibilities.

We still have a lot of confidence in the future of our country. We believe that we should have a rather limited, attainable, and focused agenda. We should identify our areas of core competency, and showcase them to potential investors (both local and foreign alike). We must show that Nepal has distinct business opportunities, with comparative advantages in terms of profitability and security. We have seen some initial signs of this happening already, and therefore are hoping that we can play an active and leading role in the task of confidence building, for all potential investors.

How do you see the present liberalization policy?

Well, everything is judged by the end result. And to be very frank with you, if we take data from the related ministries and departments, it clearly shows that the end result of the liberalization policy is not encouraging. The result of the liberalization policy is clearly reflected by the present deteriorating situation of domestic industries. Potential areas like IT, hydropower, and tourism are not growing satisfactorily. It's easier said than done, and easy to be critical and blame others, but still I personally feel that although the liberalization policy was proper in principal, the sincerity in its implementation and evaluation were not up to the mark. But the first step has been taken. There was ample time and opportunity for us to learn many things from the history of the liberalization of other countries, which I guess we failed to do. Every country is giving protection in disguise to their potential industries, and Nepal should be smart enough to do the same.

I strongly believe that until, and unless, the economy is liberalized, it cannot be part of the global economy, and that definitely would hamper the economic development of Nepal. In this case we are not in a position to say "It's never too late." We are too late. Looking at the past and present situation, I am really afraid about how we will do once SAFTA & WTO are really implemented. I am not trying to paint a gloomy picture of our future, but simply trying to share my view that if we initiate immediate corrective measure, we may still make it.

Which is the area Nepal needs to focus on for future?

The buzz word of the world: "IT". I feel there is a lack of understanding, of shared vision, and a clear program of action in Nepal. It is very difficult to develop core competency in everything, but especially in a country like ours, which boarders countries like China and India. This should be causing sleepless nights to the leaders with a patriotic vision, the business community, and Nepal as a whole. Time and time again, people have said, and I strongly agree, that Nepal should focus on areas like human-resources, Info-Tech, Hydro-power, Tourism, and agriculture based business. These capitalise on Nepal's tremendous altitudes, and ecological diversity, primarily catering to foreign markets. There are huge potentials hiding in these sectors. But this should not only be the government's agenda, and wishful thinking on our part. Regarding the areas where Nepal needs to focus, we should be an excellent bargainers/negotiators and many foundations have to be developed -like suitable educational system, infrastructure, policies drafted that addresses the competing countries policies, markets etc.

What is the potential of developing bilateral trade between Nepal and China?

In spite of natural and cultural barriers that exist between Nepal and China, we can learn from the mistakes, and successes of China. Plus technology, and globalization, are slowly removing the physical and psychological barriers of the past, making way for all sorts of business opportunities. We would like to see both China and India as prosperous as possible, in order to minimize our own insecurities, lessen the tension in the region, and capitalize on the spill-over effects. At present, trade potential between China and Nepal is fairly limited. However once technology eases the physical difficulties, we predict tremendous potential in bilateral trade between China and Nepal. This will include tourism and allied development in and between Nepal and China (Tibet region).

Are you different from the older generations?

Not significantly, but I feel that our generation wants things to happen really fast. Though this is out of context, I would like to take the opportunity now to touch upon a few of the things that are really making me uncomfortable. Maybe the older generations are used to it because they have been facing it for a long time, but I believe there should be a system in place, where people in positions of power are held accountable for their decisions. Since this accountability doesn't exist in Nepal, decisions are made flippantly, regardless of the implications. An example is Income tax. Even if a business records a net loss, the Income Tax Department can show it as profitable, if they so desire. The company then has to go to court, pay a fine, as well as 50% of the tax supposedly owing. At the end of all this, even if the company wins, it actually loses because of all the hassles of the process, and the uncertainty of not knowing how long it will take to settle the case. The question here is, what legal provisions are there to penalise the person who made the decision to doctor the books? I suggest the Income Tax Department pays the interest on the forfeited money. Our Prime Minister says that corruption is an invisible enemy, but I say it is visibly invisible. Without a doubt corruption can be eradicated, but only if people have a conscience, and a feeling of responsibility towards nation building.

What is the prospect of future investment in Nepal?

No one will invest in Nepal for Nepal's benefit. Everyone invests for his own benefit. Recent incidents in a few multinational companies, must have really scared investors. Minus law and order problems, which are quite solvable, the prospect of future investment in Nepal is good. We believe that every investment opportunity, anywhere in the world, must make business sense (i.e. profitability and security through distinct comparative advantages), and if we are able to give this confidence to potential investors, which we can, and for which we have resources, then the prospect ought to be good.

It is said that Nepal has one of the most attractive Foreign Investment Policies, but our rules, regulations, and policies keep on changing. When an investor invests, he invests for the long term, but in Nepal it often happens that before the project is in operation, the regulations and policies on which the viability of investment was based, are changed. Who would invest here when we don't have political stability, or policy stability? Who would invest here when what we have to offer is an unsatisfactory, inadequate infrastructure?

Investors would invest here considering the foreign markets, especially Indian market, that means; those countries policies also affect the investment environment to a great extent. Investors would also see our relation with them and politically how skillfully/maturely we negotiate. I think our present handling with India on SAD and Kodak cases have also really sent the message.