National 3 (Spotlight Weekly)

Needless Controversy

Once again the cabinet divides on the issue of appointing the NRB governor

By SANJAYA DHAKAL

Every time the government tries to appoint a new governor at the Nepal Rastra Bank (NRB) it falls into trouble. Even as the current Deuba government is embroiled in governor appointment row, it is interesting to note what had happened five years ago.

Deuba (left) and Adhikary : Is the honeymoon over?

In February 2000, when then Prime Minister Krishna Prasad Bhattarai appointed Dr. Tilak Rawal as the governor, it generated a lot of controversy within the ruling Nepali Congress (NC). Finance Minister in his cabinet Mahesh Acharya resigned from the cabinet after Bhattarai refused to approve his recommendation to appoint then finance secretary Ram Binod Bhattarai as the governor.

Two months later, Bhattarai government fell down amid growing internal differences. One of the first decisions the Girija Prasad Koirala government, which replaced Bhattarai government, was to sack the governor Dr. Rawal and appoint Deependra Purush Dhakal in his place. Later on, Dr. Rawal was reinstated to the post following the Supreme Court (SC) decision.

In 2005 like in 2000, the Prime Minister is facing stiff pressure from his cabinet colleague over the issue of governor's appointment. But unlike in 2000, the current finance minister who also happens to be the deputy prime minister is trying to have his way by pushing the Prime Minister to the wall.

There is no doubt that in a Westminster style of democracy, which Nepal is practicing, the Prime Minister is the all-powerful authority. The Prime Minister can hire or fire ministers as per his liking.

But, of late, in the name of coalition rule, the junior partners in the Deuba government are trying to undermine the prerogative of the PM. Whether it be the issue of handling local bodies, labor minister's dispute with the Lumbini Overseas or holding peace talks, the PM is being pushed to the wall, particularly, by the Unified Marxist Leninist (UML).

In the latest incident exposing the clear lack of coordination among the coalition partners, the Deputy Prime Minister Bharat Mohan Adhikary who represents UML has tried to overrule PM's choice in the appointment of Nepal Rastra Bank (NRB) Governor. A team formed by the cabinet and headed by Adhikary failed to take PM Sher Bahadur Deuba in confidence while making recommendations for the position.

Adding further fuel to the fire, the president of the Rastriya Prajatantra Party (RPP) Pashupati SJB Rana and government spokesperson Dr. Mohamad Mohasin urged the feuding partners – PM Deuba's Nepali Congress (Democratic) and the UML – to bury their differences and appoint a consensus candidate. Rana even called for common policy for appointment in all the important positions.

Despite several rounds of meeting, the coalition partners failed to reach to an understanding on the issue till Tuesday following clear differences between the PM and the DPM.

The row started after the Adhikary-led committee recommended three names for the post – Dr. Yuba Raj Khatiwada (current member of the National Planning Commission), Bijaya Nath Bhattarai (current deputy governor) and Dr. Parthiveshwore Timilsina (economist). The committee – whose two other members included Dr. Badri Prasad Shrestha and Ganesh Bahadur Thapa – had been formed for the purpose of making the recommendations for the post. The UML and former finance minister Dr. Shrestha are reported to be strongly backing Dr. Khatiwada.

However, PM Deuba is said to have disapproved of the recommendations and become 'angry' because he was not consulted before the committee made the recommendations. PM Deuba is said to favor either appointing the current chief secretary Dr. Bimal Koirala or extending the tenure of the current governor Dr. Tilak Rawal, whose term is expiring in January end.

Subsequently, the two coalition partners NC (D) and UML are seemingly making the episode as a prestige issue. There are even murmurs from within the UML that they could step down from the government if the PM does not abide by their choice. Amid such warnings and counter warnings, the crucial aspects like policy-leanings and merit appear to be clouded.

As appointment of the new governor hangs in balance, bruised egos and party interests have taken the front seat pushing qualities like merit and expertise behind. This has turned the NRB into a political football.

A governor is the most important fiscal and monetary advisor of the government. The NRB – the central bank of the country – is responsible for framing monetary policy and maintaining monetary and fiscal stability in the country.

Whether it be the single party or the coalition government, the issue of governor's appointment has always become controversial.

At a time when the country is implementing the fiscal sector reforms, anybody who is appointed as the governor needs to be a strong reform-minded person with lots of expertise and experience.