Prosperity delusion

Published On: July 1, 2018 01:04 AM NPT By: Kamal Raj Dhungel

Lawmakers have always treated the state fund as their personal purse. They use it to secure their vote banks for elections

A decade long insurgency that ended in 2006 had badly affected social, political and economic life of people. Law and order was disrupted, anarchy ruled. When the insurgency became instrumental in overthrowing nearly 250 years old monarchy in 2008, many considered it a successful outcome.

In between 2009 and 2015, Nepal witnessed some worst incidents—government instability, anti-constitution protests, great earthquakes and the unofficial Indian blockade—each badly affecting Nepal’s economy. The earthquakes destroyed nearly a million houses. The government has estimated its total damages to be at about $10 billion. The six-month long blockade caused a huge economic loss. The total loss was estimated to be $ 862 million during the period. 

Corruption was rampant which created a state of anarchy. Amidst this general election was held in 2017. Left alliance, with the commitment to bring prosperity and good governance, won the election with a comfortable majority. But even after the policies and programs and the budget have been announced, there is no indication of how the government will fulfill its promises made during the elections. If the government really wants to achieve prosperity and development goal it must work on two key fronts: enhancing leadership and ending rent seeking behavior. 

Prosperity barriers 
Prosperity has become a buzzword for politicians. They have sold this dream to around 80 percent of people who are poor. They are waiting for prosperity dream to come true. 

Attitude, self confidence, devotion and commitment should reflect on behaviors of politicians to make people believe that they are indeed working for prosperity cause. Unfortunately, we see none of these qualities in our politicians. Instead, our politicians compromise their honesty to serve the interests of foreigners. They have no concern for national interest.  Foreign powers know this very well. This is why they use our leaders for their advantage. At the time of acute need, neighbors can purchase them like commodity traded in the market.  

Nepotism and favoritism rules our politics. Politicians follow this norm to select their sub-ordinates (to enrich relatives, friends, nearest and dearest) in office irrespective of capability, honesty and qualifications. The tendency is rampant from the grassroots level to the top. This is main cause of corruption and a major threat to good governance and prosperity. Unless we correct this malady, we will reach nowhere. 

Rent seeking behavior is as rampant.  A process of gaining private benefits from public resources through the discretion of powerful is known as rent seeking. Generally, politicians and bureaucrats have been involved in rent seeking. Those in power appoint their relatives, and near and dear ones in public posts. Chakari (sycophancy)   and commission are other components of rent seeking. Sadly such people are recognized, protected and represented irrespective of their qualifications.  

We know how our roads erode and convert into mud immediately after their construction, repairs and maintenance. This is because the contractors, who do this work, aware awarded works based on commission payment. Commission goes to the contract providers. This is the visible example of rent seeking behavior of elites in power.

Old habits 
Nepali politicians have always sought easy way to misuse the state funds. When Sushil Koirala was the prime minister in 2015, Nepali Congress lawmakers threatened to obstruct parliamentary budget session if the government did not increase Constituency Development Fund (CDF) amount.  They launched a signature campaign to put pressure on the government to fulfill their demand.  It was expected that we would not have to experience this in the new federal set up. Sadly, the process has been repeated. 

Parliamentarians got organized to pressure K P Oli government to continue CDF program. A sizable public fund will go into their hands and it won’t make any positive impact on our economy.  They are demanding CDF money primarily to influence the voters in the next election. Obviously, if the fund is too high, it will help them to win next election. Admit it or not, CDF money is only meant to warm up parliamentarian’s pockets whether they belong to ruling or opposition party. 

In Nepal lawmakers have always treated the state fund as their personal purse. Many lawmakers use the fund to bolster their position in their electoral constituencies in order to win the next election.
Prime Minister Oli should be aware of the fact that unless he will be able to do something on these two fronts, people are not going to take his prosperity dream seriously.

The author is a professor of Economics at the Central Department of Economics, TU

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