Stronger than the statute
The process of forming a new government is almost complete. Prime Minister KP Sharma Oli has come across as someone very thoughtful about selecting his ministers. Newly-appointed ministers like Pradeep Gyawali, Yubaraj Khatiwada, Rabindra Adhikari, Lalbabu Pandit and Gokarna Bista are promising entrants to the cabinet. There are many reasons to be hopeful, albeit cautiously, about this government. But we citizens must not forget that it is also our responsibility to ensure that the government keeps moving in the right direction.Reasons for hope
A stable and all-powerful government has been the dream of the last three generations of Nepalis. Now we are as close to that dream as we have ever been. The likely participation of Madhes-based political parties in the Oli government has further fortified the dream of stability. With three quarters of the parliament in support of Oli, he has become the most powerful prime minister in Nepal’s democratic history. This provides Oli and his government an unprecedented opportunity to deliver on past promises.
In many ways, we can say this government is more powerful than the constitution. It can rectify constitutional weaknesses and work towards safeguarding and institutionalizing the statute. While this government has the ability to revise the constitution, this is not necessarily a cause for alarm, just a matter requiring greater vigilance. Rather than dismantling the constitution, it could well be the case that this government will work to implement and strengthen it. For the time being, we have to give this government the benefit of the doubt.
Reminder to the left
Nepal’s left alliance has secured the political authority that it could never have achieved violently. The political capital, which was impossible to garner during the decade-long Maoist conflict and the two CA terms, has the potential to be finally unleashed through the alliance of the UML and CPN MC formed in the run up to the general and provincial elections last year. In a sense, it feels like the country wasted many years. If after a decade of violent war and another decade of transition, the Maoists were going to merge with the UML, it makes sense to question the very purpose of the past two decades. But perhaps such a painful process was necessary to get to where we are today. And now both the UML and the Maoists have an opportunity to deliver on their decades-long dreams of prosperity and equity.
Price of impunity
Impunity is becoming institutionalized in Nepal in large part due to the concessions that were made in the name of the transition. The justice system is biased, selective and politically influenced, and little has been done to curb the rot. After the peace process started, the cases of impunity during the pre- and post-conflict eras were also completely sidelined in the fear that addressing them may derail the process. There was a strong argument that raising the issue of impunity will cost the peace process high. Because of the fear of fresh conflict, civil society groups and the international community maintained studied silence on the topic of impunity. In a way, the earlier governments bought peace with impunity. With the official end of the ‘transition’, it is now time for Nepal to get back on the path of due process and the rule of law.
While the benefit of the doubt must be given to this government, there is still the danger that it may push the argument of development in exchange for continued and perhaps greater impunity than before. This is the greatest challenge facing us now. The Nepali people’s desperation for ‘development’ is at its peak and so the challenge lies in not allowing the development discourse to subvert due process. And this is why a strong, vibrant, regenerated and largely new civil space is necessary and must be created.
From trollyes to trolls
There are rumors we might get a metro system or sky train in Kathmandu. Wouldn’t that be interesting? I think it is quite clear an underground metro would not be suitable in the unstable ground underneath a city that sits not only on a dried out lake, but a seismic fault. But a feasibility study has been done as to whether we might be able to install an electric skytrain. Off the top of my head the monorail/skytrain will run from Tilganga Eye Hospital to Shahid Gate and on to Koteshwor. But don’t quote me… I might be dreaming!What I didn’t imagine was an electric bus system, the trolleybus, which used to run various places around the city and its outskirts. In fact, on my first visit to Kathmandu in 1990 I rode that bus to Bhaktapur. And it ran through agriculture land and rice fields. (Next time I’m in Scotland I’ll look to see if I have any pictures from that trip.)
I also seem to recall a few years ago the trolleybus was reintroduced within the city. I know one of the routes ran up to the stadium. I’m sure it was challenging in those days to make anything electrical work well. So it’s interesting that the powers (sic) that be are contemplating using electricity again to operate a public transport system. Power aside, do we want to be sitting how many meters up in the air in a metal container if there is an earthquake? And, even those of you who think the earthquake is ‘done’, what about the disruption to traffic which this system will cause while it is being constructed? Does anyone know the reason the trolleybus system was ditched in the first place? It would be interesting to find out.
Most of us remember the road expansion project—indeed it is still going on. I live near Lazimpat and it took—what—three years to complete the enlargement of Lazimpat Road. The inconvenience, dust, and disruption to people’s lives was huge. Not to mention those who lost their livelihoods and homes because of it. Can we really go through more years of that?
I have also ridden the train out of Janakpur which meandered at snail’s pace through thatched roofed villages. Yes—there was a train! The only train in Nepal! Why did that close down? It certainly wasn’t for lack of customers. When I went on it, it was completely packed with villagers transporting goods from Jankapur back to their homes. Standing room only!
After visiting whichever village we went to, my friend and I decided to walk back to town as it was slightly faster than the train! I hear that the train service been opened again, and I did plan to visit the railway station when I was in Janakpur three months ago. But I failed to get to the station so I am none the wiser as to why it closed.
As road congestion becomes an increasing problem in Kathmandu, it is sensible to look at other alternatives. But how about the easy and considerably less expensive options first? Options such as proper bus lanes, expanding the Sajha Yatayat network, and how about carpooling? We all know carpooling can work here in Kathmandu as informal car (and bike) pooling was successfully set up by the Nepali youth during the blockade in 2015/16. A similar system could be introduced which requires, as in other countries, cars to contain more than just the driver at peak times. And of course parking facilities outside core city areas where people can then walk or take (especially provided) public transport to work would reduce vehicle numbers in the city center.
However, all of this could be just a dream…
Financing federalism
Implementing federalism is a cost-intensive proposition. As the projected federal budget for the next fiscal year shows, current revenues will cover only half (US $8 billion) of the estimated $16 billion budget. Early indication suggests the government plans to generate an additional $4 billion from foreign aid and domestic borrowing—leaving a quarter of the budget unfunded. That is a sizeable deficit. Finance Minister Yubaraj Khatiwada is already scrutinizing customs collection—instructing officials to follow reference price for import duties to clamp down on the collusion between businesses and officials. This has significantly increased daily collection at key custom points. He is also rolling out an online government payment system to minimize leakages. The new finance minister has assured businesses he would not increase tax rates to fund the deficit; instead he would widen the tax net.
Revenue collection can be increased to a certain degree—particularly by bringing more individuals and informal businesses within the existing tax bracket. But keeping up with increasing public and development expenses in the next few years—including extra-budgetary requests for province and local level infrastructures—would call for a multi-faceted approach.
Local levy
There is tremendous scope for generating revenues for local governments via a property tax—a sort of an annual levy—based on market valuation. An alternative formula for taxation can be derived from market rates for housing rents. For instance, families that own concrete homes in urban areas can be charged an annual levy of 1/12th of what they would pay if they were renting an equivalent apartment in the local market. This needs to be built upon the current house rent tax that local governments collect. For this to work, an increase in tax will have to result in an increase in municipal services. Even now, in many cases, citizens contribute up to 70 percent of the funds for local development projects that directly benefit them: blacktopping of the alley road, constructing sewage plants, etc.
Policy banks
In any country, the biggest tax contributors are private firms. Naturally, growth of the private sector is central to spreading prosperity and increasing revenue base. Two of the big obstacles to private sector growth in Nepal are high cost of doing business and political uncertainty. While KP Sharma Oli’s overwhelming majority in the parliament hopefully addresses the political uncertainty part, reducing the cost of doing business would require targeted policy interventions.
For starters, the government can reduce the cost of borrowing for businesses through policy banks interventions in the form of a concessional lending and line of credit for select businesses that meet strict criteria. A revolving fund of about $400 million can be established over five years. This facility can be extended to businesses that have high export potential, and thus reduce trade deficit, or to entities that create a certain number of jobs.
For reference, current interest rate on business loans in the US is around 4 percent. Of course, this could foster crony capitalism. Yet if the governance of such policy banks is handed over to an independent party or a foreign equity investor (five percent return should be lucrative), this could work. A separate policy bank for SMEs could also be formed to similar effect. This can also make lending by commercial banks competitive.
PPP for infrastructure
Innovative use of a private-public-partnerships (PPPs) model can address funding gaps in public infrastructure development. This can allow the government to spread available resources to several projects. For instance the hybrid annuity-based model (HAM), a variation of PPP, only requires government to pay 40 percent during construction. The rest is paid annually over 15 years. In this period, the private party is also responsible for project operation and maintenance. In this region, the International Finance Corporation, a member of the World Bank Group, has worked with the government of India and state governments to structure such a model to construct sewage treatment plants along the Ganga Basin.
Done right, PPPs can foster private sector growth while allowing effective mobilization of private capital in public sector infrastructure development.
Parajuli is a Kathmandu-based journalist with an interest in public policy
Choking Kathmandu
As I write I look at the air quality app on my phone. It shows a reading taken at Phora Durbar at 10.25 am as ‘very unhealthy’ at 276 PM2.5. That purple band across my phone is enough to know it’s a bad day. These little pesky airborne particles that are smaller than the diameter of a human hair are impossible to see but are too easy to get into our mouths, noses, and ultimately, lungs. Leaving the science behind, what the purple band across my phone means is everyone, regardless of how fit, is at risk at that given time.
I take a quick look at Delhi—which is currently at 182 PM2.5 (unhealthy and red), switch over to Beijing, which reads 46 PM2.5 (good and green). What? Beijing is notorious for being extremely polluted and Beijing’s air today is ‘good’ and Kathmandu’s is ‘very unhealthy’? I’m rechecking on Beijing and come across a Reuters article from December 2017 which states “Beijing may have turned a corner in its battle against the city’s notorious smog”.
Although the article goes on to say the current winter climate has a lot to do with the lowering of pollution and Beijing certainly isn’t out of the woods yet, Reuters gives credit to the Chinese government for introducing tough anti-pollution measures. This is food for thought indeed. There are a number of individuals and organizations in Kathmandu that are working for better air quality, and they indeed have their work cut out. Let’s give them a hand when we can. And yes, while it’s hard for the average person to make a dent in air pollution, it is possible to take little steps such as not burning rubbish and not having bonfire parties.
Meantime, what can we do now for our own health?
I have a friend who sells special masks designed to filter out pollution. I personally wear one of those blue surgical masks. A recent remark by a doctor about the paper masks being a ‘placebo’ got me looking at research. Tests have been done and those blue paper masks come out pretty good (80 percent filtration). Not as good as masks especially designed for wearing in pollution (80 to 95 percent). Unfortunately the blue mask fails when you take into account it does let air in through the sides when worn by a human and not a test machine.
Hmm… guess we have to either buy a more expensive, firm fitting (hotter) mask, or hold down the sides of our masks when walking! I remember when it was only a few foreigners wearing masks and what strange looks we got. Now I see a large number of locals wearing a mask when going about their lives.
Putting the causes of pollution and the impact on health aside (as if we can really), the other sufferer here is Kathmandu herself. Remember how beautiful it was to look up at snow-mountains from almost any location in town, every day? From many viewpoints the foot hills and high mountains were spectacular in their respective greens and white. Many of us have flown into the valley and seen the crystal clear mountains and hills which take our breath away (in a good way).
We still get glimpses of course, after rain the sky of clear blue is a magnificent backdrop for the Himalayas, and during the Dashain holiday there is less traffic to pollute the skies. But on an ‘average’ day, not so much. And it impacts the global image of the country. For many tourists the name Kathmandu conjures up an image of a green valley, white peaks and wonderful heritage; how disappointed they must be when they arrive to smog, dust and dirt. Naturally when they go home, conversation will turn from their wonderful trek to the terrible air in Kathmandu…
