Starting afresh

Symbolism counts for a lot in diplomacy, and few leaders understand this better than Prime Minister KP Sharma Oli and his Indian counterpart Narendra Damodardas Modi. PM Modi’s projection of raw confidence during his electrifying speech in the Nepali parliament in 2014, when he mesmerized Nepali MPs and common folks alike, will never be forgotten. But nor will the souring of his tone during his second official visit, also in 2014, which in some ways presaged the nearly five months of border blockade.

 

Or take Oli’s first India visit as government head, right after the end of the blockade. During that trip, Oli stood up to the Indian pressure and refused to toe its line. Oli and his left alliance, it can be argued, rode on the anti-blockade popularity wave to secure a thumping victory in subsequent federal and provincial elections. On becoming prime minister for the second time, Oli went to India again, and the confidence he projected in New Delhi, and his treatment of Modi as his equal in every respect, were just as remarkable.

 

The focus of Modi’s third Nepal visit is on religious places like Janakpur, Pashupatinath and Muktinath. Besides that, his 36-hour Nepal stay will be peppered with meetings with leaders from across the political spectrum. Keenly aware of the inclinations of his core constituencies back home, Modi apparently wants to show them that he is still close to his Hindu roots, which will come in handy during the 2019 Indian gen­eral elections. Some view his visit to Muktinath in Mus­tang on the northern border as an indirect signal to China to keep a safe distance from Nepal.

 

Whatever the motive for his visit, Nepalis, who have traditionally treated their guests as no less than gods, should continue the tradition. There is no point harping on past Indian injustices or, on India’s part, bemoaning the unreliability of Nepali political actors. Modi seems keen to forget past bitterness and reestab­lish bilateral ties on a more equal footing. Ditto with PM Oli. That course of action is also in Nepal’s interest. There is really no gainsaying the importance of nor­malizing relations with India.

 

Whether one likes PM Oli or not, a Nepali leader has after a long time shown himself to be capable of holding his own against any foreign counterpart. Perhaps Oli has a long-term foreign policy strategy up his sleeve. He deserves some time to prove his diplomatic credentials.

Ripe for abuse

Is it disappointing, though hardly surprising, that our new parliamentarians are lobbying hard for the continuation of the controversial Constituency Development Fund (CDF). Previous governments used to allocate funds to MPs—which swelled to Rs 30 million for each during the tenure of the previous par­liament—that were meant for the development of their respective constituencies. They each got an addition­al Rs 5 million, for similar purpose, under a separate Parliament Development Fund. Tellingly, these outlays would be spent at the sole discretion of individual MPs. Most of the funds were predictably misused, which is why they became wildly unpopular.

 

But the new MPs are now lobbying not just for the continuation of the arrangement, but they also want the allotted amount under the CDF to increase over three-fold, to Rs 100 million each. If the government bows down to their demand, and it seems to be con­sidering doing so, it will cost the exchequer at least Rs 3 billion a year. This is indefensible, for multiple reasons. Now that the country has fully embraced federalism, there are separate budgets for individual provinces and local units. Moreover, any of their budget shortfalls will be met by the central government. There is thus no justification for giving individual MPs such discretion­ary spending power.

 

These self-serving acts of our MPs and ministers also suggest that they are in politics primarily to make mon­ey, and not to serve the people, a perception that adds to public cynicism about their government. This is an unhealthy development for a budding democracy. Of course, this doesn’t imply that our MPs should not earn enough or that all of them are crooks. But they already make plenty. The basic monthly salary of a federal MP alone is Rs 55,000. When other bonuses are added, the final take-home pay is well above Rs 100,000. How much more do the MPs of a country with a monthly per capita income of less than Rs 8,500 need?

 

The new government of KP Sharma Oli has of late made some courageous decisions in public interest, for instance in its refusal to budge against the long-en­trenched transport syndicates. Its strong stand against interference in Nepal’s internal affairs by other coun­tries and institutions is also laudable. It is doing a good job in foreign policy too. Now it should have the cour­age to refuse this selfish and unjustified demand of the federal MPs. If it can do so, there would be no bigger proof of its commitment to public service.

Slow and unsteady

Time supposedly flies, at least for those whose life is easier than that of 57-year-old Bikaman Thami of Barhabise, Sindhupalchowk. On the third anniversary of the Gorkha earthquake, Thami and his family of 10 continue to live in a ram­shackle tent. The first installment of Rs 50,000 in post-quake rebuilding aid for the construction of his new home was spent on basic necessities of his large family. Broke, Thami is now worried that government officials will ask him to return the money that was meant for laying the foundation of his new home.

 

Nepal’s reconstruction efforts are in some ways Thami’s plight writ large. The government did not have the resources to rebuild over 767,000 partially or completely destroyed homes, so it decided to give the quake-affected people money to do it themselves. But identifying the right quake victims and taking the mon­ey to them via the right banking channels proved to be hard. When some people did finally get some money, it was a case of too little too late.

 

Reconstruction of other vital infrastructures has been as slow. Of the over 7,500 schools that were destroyed across 14 most-affected districts, just over 3,100 have been rebuilt satisfactorily. Likewise, less than half of the 1,200 health centers destroyed are up and running again. When it comes to rebuilding the private homes of those who lost it all like Thami, just one-seventh of the target has been met.

 

With an unclear mandate and constant political med­dling, the National Reconstruction Authority (NRA) set up in 2015 to expedite the process was hobbled from the start. Then, reconstruction was virtually put on hold as the country’s attention shifted to the three tiers of elections. Also, for various reasons, the donors who made tall promises during the international donor conference held in June 2015 failed to follow through. As the public memory of the horrors of 2015 faded, it seems, so did the compassion for the quake victims.

 

PM Oli said all the right things on the third anniversa­ry of the quake on April 25, even pledging to personally contribute labor for rebuilding. He need not do that. What he needs to do is provide strong leadership. He will have done plenty if he can ensure that the NRA is given enough autonomy and resources. Another big achievement would be convincing the donors to hon­or their pledges. But Oli should hurry. At stake are the lives of hundreds of thousands of people like Thami who are bracing for yet another nasty monsoon.

Perfect pick

Yubaraj Khatiwada is the right man to lead the Ministry of Finance. Not just because he has a Phd in monetary economics from the pres­tigious Delhi School of Economics—although that is no small consideration in a country where this vital portfolio has time and again gone to those with limited economic nous. The new finance minister has a record of helping steady the economy through diffi­cult times, particularly during his previous stint as the central bank governor.

 

Khatiwada takes over as finance minister when the economy is again hitting turbulence. Over the past one decade, the country’s trade deficit has declined by a yearly average of 21.9 percent. It has notched up over Rs 90 billion of deficit in the first five months of the current fiscal alone.

 

Foreign remittance, Nepal’s one sure source of steady income, is drying up. In the five months of the current fiscal, remittance is down 0.8 percent compared to the same period last year—the first negative remittance growth rate in over a decade. Recurrent expenditures are shooting up, productive spending is stagnant, and another real estate bubble is building. Even someone with Khatiwada’s stellar credentials could struggle to bring the twisted economy in shape.

 

But Khatiwada seems to be in a mood to make a good fist of it. In his first declaration as finance minister, he vowed to bring all government transactions online from the upcoming Nepali New Year. This, if can be done, could make a significant dent on bureaucratic corruption and reduce money-laundering, a growing problem. As a representative of the unified left gov­ernment, Khatiwada added, he is as committed to the left alliance’s electoral commitment of common pros­perity. Moreover, he said he was determined to bring Nepal’s economy back on track. But therein also lies the problem.

 

CPN-UML, the senior partner in the recent merger with CPN (Maoist Center), has long been seen as a par­ty that protects cartels and syndicates. It also has a vast patronage network to look after. This raises a legitimate fear: Will the new finance minister be allowed to work freely? Or will he be used primarily as a smokescreen behind which the various vested interests of the new communist juggernaut can hide?

 

Having shown the courage to sideline his cronies who were all angling for the finance ministry, Prime Minister KP Sharma Oli would do well to give his cho­sen one enough room to work in the country’s interest.