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CJ-led Government-25 (Corruption Main Reason For Poverty)

Issue 36, September 8, 2013

 Siddhi B Ranjitkar


Corruption is the main reason for the poverty in Nepal. Corruption has continued even after the fall of the Shah-Rana regime in 1951, during the 30 years of the Shah-Panchayat rule, and another 20 years of the Nepali Congress Rule. Currently, Commission on Investigation into Abuse of Authority (CIAA) has been after the corrupt officials and politicians. However, whatever the CIAA has done might be only a scratch on the surface of the massive corruption that has continued the poverty in Nepal.


Before the fall of the Rana regime in 1951, the Rana rulers had sucked the blood of the Nepalis to the extent possible leaving only a bit of resources for keeping them alive. The life expectancy was only 24 years. The Rana rule came to an end in 1951 relieving the people from their century-long repression. The corrupt Ranas escaped from punishment.


The period from 1951 until the general elections in 1958 had been the time for consolidating the power of the Shah rulers. The Shah kings had been impotent for a century when the Ranas monopolized the power keeping the Shah rulers within the four walls of the so-called palace.


So, the Shah rulers were mad about the power they had lost to the Ranas. Nepalis died for tearing down the Rana regime in 1951 but the opportunist Shah kings grabbed the power denying anything to the people. The Shah rule became stronger and the democracy became weaker.


Finally, the corrupt Shah King Mahendra killed the democracy in Nepal in December 1960. Nepalis lost whatever they had gained in personal development and human rights after the end of the most unscrupulous Rana regime.


Mahendra set up the Panchayat rule in 1962 making him the final decision-maker. The King sitting on the top of the Panchayat rulers again sucked the blood of the Nepalis. They used every possible resources came to Nepal for the development of the common folks for their personal luxurious lives.


King Mahendra spent most of the wintertime in Pokhara and Chitwan used huge resources for his stay in Pokhara and Chitwan. He built a palace on the Phewa Lake side, and another palace in Chitwan. Later on, Pokhara and Chitwan developed as the tourist destinations. The development in Chitwan and Pokhara was meager in comparison to the resources used by Mahendra.


Then Birendra became the king. His destination became the Surkhet later named as Birendranagar in his honor farther west from Pokhara for a month-long winter camp. From there, his spouse and he enjoyed flying on a helicopter every day to northern Nepal to open a small drinking water tap or a school building or a health post building and so on that everyone of them was built at the cost of the fraction of the cost of flying the king Birendra to the sites. On the evenings, the king, the queen and his sycophants enjoyed lavish dinners.


The then Nepal Electricity Authority hooked the power network built at the camp of Birendra in Surkhet to the main supply network at the huge cost for the period of the visit of the king and the queen in Surkhet. The engineer responsible for bringing the power line to Surkhet, and other State officials, elected officials and common folks serving the king and the queen at the time of their visit in Surkhet received the awards appropriating to their work and their positions at the time.


When the king asked for the green vegetables: the specially grown in the Kathmandu Valley, the next morning the army aircraft took the vegetables to Surkhet. Thus, King Birendra lived as a king in the real meaning of the word keeping the millions of Nepalis in dire poverty.


At the same time, the Panchayat rulers headed by the king took the pride in the poverty of Nepalis. They sold the poverty of the Nepalis in the international arena for bringing more resources. However, the resources could not reach the common folks. Soon, the international community and donor agencies found out that the Panchayat rulers and their leader King Birendra played some trick on them.


Then, the donor agencies funneled their resources through international non-governmental organizations (INGOs) and later on through the local non-governmental organizations (NGOs) as much as possible to reach the needy people. Thus, a large number of INGOs, and local NGOs came to being in Nepal.


Nepalis had had enough of the Panchayat regime and even the king. Nepalis wanted to tear down the Panchayat regime along with the dynastic rule but the Nepali Congress and the Unified Communist Front leaders opted to keep the dynastic rule. The king was sidelined, the Panchayat died in 1990.


Nepalis thought that they would have the chance to develop fast, and enjoy the fundamental human rights. However, soon it became clear that Nepalis had neither the opportunity of personal development nor of the fundamental human rights. The political party cadres grabbed everything leaving Nepalis again high and dry. Thus, the congress cadres and communists simply stepped on the boots of the Panchayat rulers.


In the general elections held in 1991, the Nepali Congress (NC) party won 110 seats out of 205 seats in the parliament. By hook or crook, Girija Prasad Koirala became the prime minister.  First thing, Girija did as a prime minister was to sell the brand new Boeing belonged to the then Royal Nepal Airlines Corporation, and then take a very old aircraft from Afghanistan on contract, in both cases taking a large sum of money as commission on the deals.


The Girija administration destroyed the smoothly running Sajha bus services, and the trolley bus services between Kathmandu and Bhaktapur to let the transport company of its choice to run bus services in Kathmandu. A foreign company came with a proposal for building a fast track highway between Kathmandu and Hetauda but the Girija administration wanted a commission on the project. The foreign company simply walked away from the project. Because of the commission the Girija administration sought, none of the major road projects, hydropower projects and drinking water projects was built during the 20-year administration Girija had run. The consequences of the corruption-plagued Girija administration were Nepalis continued to suffer from poverty, and shortage of power, water, and the fast track road, and so on.


Congress and communist leaders became richer but Nepalis continued to live in poverty. Those leaders wearing flip-flops at the time of winning seats in the parliament became millionaires overnight. They drove on the highly expensive foreign cars, and enjoyed luxurious lives whereas millions of Nepalis had difficulty in managing even two square meals. The poverty continued to be rampant among Nepalis due to the corruption.


A skinny man such as Ram Chandra Poudel: Vice-president of NC became overweight. NC leaders such as Chiranjivi Wagle, Khum Bahadur Khadka, Govinda Raj Joshi and Jayaprakash Prasad Gupta became very rich again keeping millions of Nepalis in poverty, as they diverted millions if not billions of rupees from the development projects to their pockets.


The Special Court especially set up for dealing with the corruption cases had acquitted Khum Bahadur Khadka, and Govinda Raj Joshi on the ground of technicality of the cases filed against them by the CIAA but the Supreme Court of Nepal overturned the rulings of the Special Court and sent both these guys to jail and recovered the money they had misappropriated. However, the prices they had paid were very small in comparison to the damages done to the nation, and to the prospect of the poverty alleviation.


Currently, CIAA has been taking up the corruption cases in a bigger scale than used to be. CIAA has filed corruption cases against 21 officials of the Nepal Electricity Authority (NEA) including the former and incumbent executive directors. They have been charged with the irregularities in purchasing billions of rupees worth of transformers. They accepted low quality transformers paying the prices for the high quality transformers. Those transformers blew up frequently causing frequent interruption of power supply that in turn caused the loss of businesses of the people.


CIAA has arrested additional 10 officials of the NEA on the charges of irregularities in purchasing the transformers. CIAA has been holding investigation into their involvement in bringing in the low quality transformers at the prices of the high quality transformers.


CIAA also has arrested more than 20 immigration and custom officials on duty at the international airport in Kathmandu for irregularities in performing their duties. The immigration officials have even shown the wrath at the arrest of their colleges turning back some of the Nepalis going for the foreign employment from the Kathmandu international airport on the pretext of not being able to read the visa in the languages other than Nepali and English.


At the time of the Girija administration, State employees bid for the jobs at the custom, tax, and land registration offices even at highest prices. At that time, paying bribes had been an open business. Corruption had been rampant causing billions of rupees loss to the nation making the poor to remain as they had been in the past.


The Girija administration also opened the floodgates of corruption making cash collection rather than depositing in a bank and submitting vouchers for any services the State agencies render. For example, once, I paid cash directly to the official at the Kathmandu district administration for a passport. Then I repeatedly paid cash for the vehicle tax at the Department of Transport at Ekantakua, Lalitpur. Now, they have started collecting bank vouchers rather than cash. Even now, a few State offices collect cash.


The Girija administration implanted a system easing the State officials to misappropriate the State revenue. CIAA needs to tear down the system, and it needs to wield considerable power than today to tackle the rampant corruption flourished during the Girija administration, and continued even today. In order to prevent irregularities in collecting the State revenue at the custom, tax, and land registration offices, a strong system is needed to put in place so that the State officials would not be able to engage in misappropriating the state revenue.


CIAA going at the corrupt officials is only remedial to the corruption but preventive measures also are necessary to stop the State employees misappropriating the revenues. A strong system put in place at the custom, tax, and land registration offices will be the preventive measures against corruption.


State control and the State-run profit-oriented business companies and factories also are the main centers for irregularities. Resources in the massive scales are embezzled at the State-run companies such as Nepal Oil Corporation, Nepal Electricity Authority, Drinking Water Supply, and National Trading Company.


These companies have been selling their goods at higher prices than the prices private companies would have sold if they were allowed to. However, none of these companies earn any profit in their lives. Consumers continued to suffer from the shortage of the goods these companies sold even at the higher prices.


National Trading Company sold many goods, machinery, vehicles and equipment imported from the then Soviet Union, and the People’s Republic of China. State employees and elected officials of the Panchayat bought the vehicles and equipment in installments. I also bought a Russian-made motorbike in 1970. When I went to pay the remaining amount in one installment, the man behind the counter said, “You are paying the whole amount but none of the Rastriya Panchayat members that had taken vehicles in installments had paid any installment so far.”


These State-run companies are not held accountable to customers for the service delivery. For example, NEA cut off the power unannounced any time. Most often than not the power outage continues for a whole day. When the power supply is interrupted unannounced, all equipment, machines, and instruments stop working. Every day, Nepalis suffer from the business losses worth of millions of rupees caused by the power outage but the NEA never shows any concern about it. However, it charge 30% late fee if customers don’t pay the bills in time; and then the punishment for not paying the electricity goes on higher and higher.


Similarly, the drinking-water-supply company in the Kathmandu Valley has been supplying water once a week. Shortage of water supply has not only caused immense troubles to the people but also has caused common folks to pay high prices for water provided by the private companies. Corruption at the drinking water company office is the main reason for the irregular supply of water. Most of the foreign loans and grants provided by the Asian Development Bank, and the World Bank and other donor agencies are spent ineffectively making the poor people without drinking water. The State employees get richer and richer whereas the common folks become poorer.


The State-run Nepal Oil Corporation (NOC) generously provides politicians and State high officials petroleum products gratis. Then, the officials of NOC steal billions of rupees. Politicians are happy, State officials are happy, and NOC officials are happy, too but the poor people pay the prices for the embezzlement, as the NOC increases the prices of petroleum products to meet the deficits caused by the misappropriation. Price rise in petroleum products immediately cause the increase in the prices of transport fare that in turn causes the price rise in the foodstuffs, and other basic need goods that common folks use.


CIAA needs to tame the state-run NOC, NEA, and other companies, and plug the loopholes the employees use to collect money or other resources for their personal benefits at the cost of the nation. Abuse of the authority by all the staffs of these companies has been rampant, and corruption has reached almost the peak. Such corruption is the main reason for Nepal not making any headway to graduate from the least developing country.


Currently, National Planning Commission (NPC) has been preparing a document that says that Nepal will graduate from the least developing country to a developing country in 2020. The document will make any sense if the NPC realizes the corruption is the main culprit for keeping the millions of Nepalis in poverty and making Nepal a least developed country, and then NPC makes necessary mechanism to kill the corruption otherwise it will fail as have failed the past twelve periodic plans due to not being able to control the corruption.


According to the local media reports, four recent former prime ministers such as Prachanda of UCPN-Maoist, Madhav Kumar Nepal of CPN-UML, Jhalanath Khanal of CPN-UML, and Dr Baburam Bhattarai of UCPN-Maoist each had distributed the State revenue more than 700 million rupees to their cadres during their terms of office. Thus they stole the State money for their private benefits. CIAA needs to go after them and recover the stolen money from them, and punish them for using the State money for their private business.


This practice of using the public money for the private purpose was certainly the remnant of the practice of the Rana-Shah regime that did not differentiate the State treasury with their private purses.


The roots of the corruption have been at the top of the administration. Prime minister, and ministers, and high State officials are the roots of corruption, and other officials at the different levels of State offices, and of the state-run projects are the branches of corruption. CIAA needs to cut the roots of corruption, and then the branches will fall automatically.


September 6, 2013

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