VOL. 25, NO. 16, December 16 2005 (Paush 01, 2062 B.S. )

“As Long As There Is No Economic Progress And High Literacy, Democracy Cannot Deliver”

-- MOHAN GOPAL KHETAN

MOHAN GOPAL KHETAN is a well-known industrialist of Nepal. Born in Kathmandu, Khetan completed all his academic qualification from Kathmandu. Khetan, who is witness to the social and economic transformation in the last many decades, started his business from an office in the dark alleys of Makhan, in the heart of Kathmandu city. Now his industrial empire is run from the gleaming new modern corporate building in Hattisar. A candid and forthcoming talker Khetan spoke with SPOTLIGHT at his modest office in his residence Jamshikhel. Excerpts:

What is your opinion on the King’s recent actions?

The February 1 action of King Gyanendra was a necessary step to save Nepal from crumbling. After the February 1, the situation has gradually improved and the law and order situation is getting better. All of us have to support King Gyanendra’s wish to bring back normalcy in the country. What is wrong in waiting for three years as demanded by the King. All of us know that the King has always expressed his commitments to multi-party democracy. All this situation happened due to the inefficiency of the corrupt politicians.

But, why are the western and other countries pressuring the King then?

They don’t understand the real situation of the country. We have also failed to convince them about the urgency of the situation and real and good intention behind the King’s move. As a guardian of the country, the King has every right to protect the nation at the time of crisis. This is what King Gyanendra has done.

How do you see the political transformation?

Nepal needs a very fast economic and political change and changes must start from the grass root. The changes in the past have always come from the top because we were in the feudal Rana rule. Ranas never allowed us to learn or do something good for the country. Because of their isolationist policy, the country remained isolated from the world for more than one century. Nepalese were isolated from each other. People of the valley were confined to Kathmandu. Similarly, people of Terai were restricted to their own areas. To raise the awareness level at the grass root, late King Mahendra and late King Birendra followed a political system based on the grass root level. They seemed to be aware that nothing can change without introducing democracy in grass root.

How do you see the democratic process?

Democracy has no meaning until the people living in rural parts of the country know about their basic rights. Every one must have their own home and access to education, peaceful and clean environment and job. Then, people will use their mind not lyapche (thumb print, which is a sign of illiteracy). When the majorities of people in Nepal do not have their own house and don’t have enough food to eat, what is the meaning of democracy? Money, muscle and power will always determine result of the elections. As long as there is no economic progress and high literacy, democracy cannot deliver anything except but back political parties or others. At a time when more than 40 percent of the population are illiterate and poor, how can one hope that the elections of the Constituent Assembly will be free and fair.

How do you see the progress in the country?

We have made tremendous improvement in the last five decades but we still require another 25 years to build our country. If there continues to be instability and political fighting, we cannot achieve it. The King must absolutely control the country till people become able. In next twenty-five years, people will also mature to decide whether to go for constituent assembly or not. I mean economic prosperity will make people strong and powerful. When people become strong and powerful, only then they can decide their own future.

How do you se the role of people?

When people know what is right and what is wrong, the power will automatically shift to the people and they will be the master for their own fate. This is real socialism and democracy. From 1985, when Nepali Congress launched Satyagraha, the division in the country began. B.P. Koirala had realized that there needed to be unity among all sides to transform Nepal politically and economically. In 1979, B.P. showed political guts by accepting the verdict of national referendum although it went against him. It was his realization that the country could not transform overnight. There are certain people who want to see the change overnight. In divided Nepal, India easily got the opportunity to penetrate. Had the political process chosen by King Birendra was allowed to implement peacefully, the country would not have faced the present situation.

How do you look at the recent understanding between the seven parties and the Maoists?

One of the aims of the agreement is to pressure the. I can’t understand how and why all the political parties including Nepali Congress and so called communists – who fought with the Maoists - have suddenly signed understanding with Maoist on their 41 points demand. If Maoists agenda of 41 was alright, why did they not accept it (when they were in power).

How do you see the role of Monarchy?

Monarchy has played a very important role in Nepal carrying out social and political reforms in the country. Its role is important in guaranteeing the stability to Nepal. Whether in the period of 1950 and after 1990, the role of monarchy has always been important. Like his predecessors, King Gyanendra has also been working to improve the lives of poor people. His step of February 1 is commendable and everyone has to accept it. He has requested for three years time period to bring back the country to the right track. Instead of pelting stones in the streets of Kathmandu disturbing the life of people, political parties must back the King and wait for three years time period. In the last fifteen years, many new billionaires emerged and most of them are either relatives of bureaucrats or politicians. These are a group of neo-rich. It took us hundreds of years to make money but some people have done it within a decade.

How do you see the civil service?

Nepal’s civil service, police and foreign ministry was so weak in the last fifteen years because of frequent changes in the ministers and civil servants at the top. Almost all our institutions were destroyed in the last fifteen years. Thanks to the protection of Royal Palace and the King, Royal Nepalese Army remained professional and out of politicization. Many inexperienced persons were promoted and appointed in different diplomatic missions abroad. Because of nepotism and favoritism, foreign ministry was weakened. Nepal’s civil service is still non-functioning and they are not working at par with the wish of King Gyanendra and his desire to bring change.

How do you see the role of NGOs and INGOs?

Many NGOs are working in Nepal as umbrella organizations of political parties. They don’t have any sense for the social welfare and social work. We have our own culture of philanthropy. We have our own organizations to serve the poor people of Nepal. Unlike politically-affiliated NGOs, our systems are much stronger and powerful.

You have been following all the events of last 50 years, how do you see the process of transformation?

Although there have been some ups and downs in the past, the transformation is smooth. It is not possible to have perfect democracy in a country like Nepal where you need to develop everything from scratch. Some politicians like Dr. Ram Sharan Mahat is claming that they have transformed the society in the last fifteen years. It is completely wrong. The present infrastructures were built in Panchayat days and the basic foundations were laid during that period.

Do you believe that the King’s action will bring any result?

I am certain that the King’s action will bring positive result very soon. If political parties lend support, the situation will improve soon. When King Gyanendra has taken action to deliver good governance and punish the corrupt, international community also need to back the King who is demanding three years period.

How do you see the role of business community?

All the traditional businessmen whether they are Marwaris, Newars or Brahmin are in trouble since they are unable to compete with new millionaires and billionaires. Those who are surviving are facing tough problems. Unlike in the past, the business has changed and now management and IT is important. In our family business, we have Chief Executive Officers who run the business and they simply report to us. We are working for the revenues. We hardly save 3 to 5 percent profit. Although our empire is big, our net profitability is low. In some cases, it is up to 10 percent.

Nepal is also a member of WTO and Nepalese businessmen now need to compete with global companies, how do you look at it?

We have many competitive sectors in Nepal like mine, tourism, water resources but the government has to work to make it functional. Although we have two big cement factories like Hetauda Cement and Udayapur Cement with the capacity to supply over 70 percent of local demand, they now supply less than 20 percent and Indian cement factories occupy 60 percent of Nepalese market. There are some cement packaging plants, which bring readymade products and sold it printing the label made in Nepal. These plants are making enormous money. Had Udayapur Cement and Hetauda Cement been handed over to the private sector, they would have produced cement on their full capacity. These two factories have seen more than two dozen general managers in the past few years.

How do you see the economic growth in India and China?

Both the countries have made enormous progress correcting there past system. I first visited China in 1971 when it was state managed economy but now all the industries are in the competitive markets. Similarly in India, there are more private sectors than the public sectors. The industries need to be guided by profits. Most of our industries under the government control including sugar factories are in the loss. When Jyoti Spinning Mill is making money and reliance is making money, why is not Butwal Spinning Mill making money?

In which area can we compete with them?

We can compete in every area provided the industry should be given to the private sectors. For example, my proposal to increase the production of magnesite is pending in the Ministry without any reason. The situation with the zinc product is similar. Nobody is doing anything as secretaries guide ministry, chief secretary guides secretaries and council minister guides chief secretary. In this critical situation, if we don’t change our attitude, we are going to suffer. If we continue to follow such course, we don’t have right to criticize the foreign diplomats.

Why are we unable to get benefits from Indian market?

It is not the mistake of India that we are not getting benefits from Indian markets. The Trade agreement signed in 1996 gave enormous opportunities for Nepalese traders but our industrialists had misused it, particularly the ghee industries, acrylics yarn and copper. For the few years, there was tremendous improvement in bilateral trade. But we could not monitor the complaints lodged by Indians. The agreement stressed for the industrialization of Nepalese industries based on local raw materials. Unfortunately, some of our industrialists misused it. For instance, the raw materials arrived at the 6 O’clock in the evening and next day they packed the materials. In four or five months, Nepalese products hit Indian industries and they raised the issue. Finally, the trade treaty was amended. Signing the modified treaty was blunder. I urged then Minister for Industry and Commerce not to sign it and wait for some time. We are leaders in the noodle and beer.

We also export our products to Indian states like Bihar, West Bengal, Uttar Pradesh and Delhi. We also export our noodles to Bhutan but our capacity does not allow us to export in large volume. Everybody knows noodles are made in Nepal and beer we brew ourselves. Indians are ready to give free access to Nepalese products based on local raw materials. India should treat Nepalese products in accordance to 1950 treaty between the two countries. Nepal must utilize the good clauses of the 1950 treaty. There is enormous opportunity to Nepalese hydropower but we have to identify the project in accordance with the need of India. Karnali is not a priority project in India but it wants to build high dam in Koshi. When India is eyeing for Koshi, there is no sense to talk about other projects. What is the harm to build Koshi high dam. India also needs to come up generously. India should encourage Nepal to be prosperous which will benefit Bihar also. We have to also understand our grand realty in dealing with India. If we respect Indian sensitivity, India will also give facilities to Nepal to do business with Bangladesh, Pakistan, Bhutan and Burma.