Thursday, November 25, 2010

Re: My article in Himal Khabar Patrika

November 23, 2010
Prateek Pradhan
Karobar Daily


The article is more like a back handed compliment to Nepali Congress Party (NC) for the extant mess (as does former king Gyanendra Shah deserves it for the abolition of monarchy). Nepali people had reposed their faith in this party in the election immediately following People’s Movement in 1990. But it misused it. It is, therefore, solely responsible/accountable for the bad governance of last two decades which engendered disenchantment in the populace due to rampant corruption and lack of employment. Forgetting/shelving the socialism propounded by BP Koirala, who NC deems to be Mahamanav, it rammed through the country’s throat extreme form of economic liberalization without any regulation, restraint or bridle; unchecked whatsoever.

This resulted in rich getting richer exponentially while poor getting submerged in poverty ever more. One example should suffice to elucidate this point: an industry set up with Rs 240 million some years back, after drawing ample dividend each year, it recently got sold at Rs 3 billion. This is a financial shenanigan that will fail any computer based financial modeling, let alone a calculator. But all these industries (very similarly, creatively, financially structured) put together failed to generate employment in the country; neither mitigated balance of trade deficit nor balance of payment deficit. Even the quality of the produce retailed in Nepal failed to meet health standard and anyone daring to point this out gets scolded by a chief of diplomatic mission from neighboring country. Even an actor was, reportedly, coerced by the same diplomat to model in advertisement extolling the virtue of that particular juice.

Most of the industries don’t create any value addition as they are either slap-stick industry (importing ready-to-be put together components and joining them together) or refill industry (import in barrels, bullets, or containers and refill in small terrapacks, jeerycans, cylinders or something else). Some are merely re-export business. Another form of industry that flourished was “sick industry business." Establish an industry in such manner that the promoter is able to extract more than 3 to 4 times of his investment during the construction of the factory period itself. Run the industry in such a manner that it fails to survive. Then buy back landed and other property of the industry at throw away price during the time of its liquidation.Quite a lot of multipliers in the various tiers of profit. In the bargain multilateral banks and banks in Nepal end up writing off the loan, ordinary and preference equity holders end up losing their investment while the main “promoter” flourishes further and even becomes a parliamentarian.

Such business activities only enrich the bottom-lines of the proponents without creating any value addition for Nepal’s economy; even the profit earned by these tycoons don’t get to stay in Nepal’s economy; it metamorphoses into capital flight with the mediums like over invoicing (paying more money for import than the real cost) or under invoicing (bringing in less money than the price the export fetches). A particular business house hasn’t figured in Forbes list by “printing greenbacks” aboard. No wonder that Nepal started having even liquidity crisis in the banking system as it is those very tycoons who own these banks.

Due to the unregulated (in substance, not just form) liberalization, the financial sector too is in doldrums; leader of the pack being by NBL and RBB and followed by renowned joint venture banks. Thanks to open air policy, airlines have proliferated; so has fatal accident rate in geometric progression. It became possible for many a Natwar Lals to metamorphose from an indigent person barely eking out two square meals to Pajero-riding neo-rich. People are going about chanting the mantra of “public private partnership”; it has been and will be private profit in a few hands at public cost. One doesn’t need to go too far to see examples of it. One comes across them in abundance.

If one looks closely at FDI, Nepal has succeeded in attracting “business people” of the same hue; even in water resource sector: SMEC in west seti, Enron in Karnali Chisapani, Elyse Frontier in upper Karnali, and so forth.

This sort of “absolute” economic liberalization isn’t even practiced by the very proponents of economic liberalization. One needs to secure a bunch of permits and approvals to do anything there; exemplified by each apple bearing FDA stamp that is purchased by a man-in-the street in these countries. Here, under our liberalization the motto is “anything goes”, as long as businesses are able to profit therefrom and keep on funneling "donations" to the political parties and their goons.

In this backdrop, people voted with their feet: some migrating in hordes overseas and others shifting their faith to UCPNM. Prachanda, Bhattarai and Vaidya, propounding obscure Maoism, which is not even practiced in China any more, didn’t succeed in mobilizing/galvanizing its support base in less than a decade on its own. NC helped it very diligently, step by step, to build the base for UCPNM. This happened notwithstanding people’s experience with another communist party (UML) which professes to believe in Leninism (which isn’t practiced any more even in Lenin’s birth place) and Marxism (which has failed all over world except for Cuba and Nor Korea). But just scratch the surface of that party and it will not be difficult to see that its policies are/were a bad carbon copy of NC: a good example is this year's budget read out by UML Finance minister of a coalition government with NC as an important partner.

Therefore, it will not be right to blame a particular party for this mess; nor blaming the so called intelligentsia will do the trick when the intellectuals blindly support a particular party or other without fully understanding the manifestation/ramification of any policy/plan. The “absolute” economic liberalization is at the root of all ills. This doesn’t mean that this scribe believes in communism. I don’t believe in any form of communism whatsoever. I firmly believe in rule of law and democracy.

I take it the epithets (greedy and coward) heaped on the intellectuals isn’t applicable to the intellectuals in general. It must have been directed at those who mortgage their intellectuality to a particular party on the basis of which side of the bread is buttered and shift their allegiance based on the need of the hour (for post, power, pelf, etc.). These people can also be described with a word that has recently been coined: “intellectitute” which is a combination of the word “intellectual” and another word which needs not be spelt out here (which begins with a “p” and ends with “titude”).

I know that there people who are willing and able to call a spade a spade without mincing words, even in the face of Prachanda, PM Nepal or PM Koiral and these people need not fly off the handle after reading the article. It is incumbent on the intellectuals to opine in the interest of the motherland and Nepali people, irrespective of which party the person is affiliated to (if the person is affiliated with any particular party).

Finally, I compliment (not a backhanded one discussed above) you for daring to tell the world that the emperor is “naked.” Instead of quarreling with the fact (bitter truth) of life that has been brought to light by the article, let's strive to properly "clothe" the emperor.

With best regards,

Ratna Sansar Shrestha, FCA
Senior Water Resource Analyst

On 11/20/10, Prateek Pradhan wrote:

> I am attaching my article published on Nov. 17th in Himal magazine. Would highly appreciate if you spare some time to read it and comment on it.
> Link:

> Prateek

> *लालची र कायर बुद्धिजीवी *

प्रतीक प्रधान*

No comments: