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For a long time the all-party mechanisms governing local level units after the dissolution of elected local governments in 1997 were considered among the most corrupt public entities in Nepal. In the absence of elected office-bearers, the local political representatives, who were really not accountable to anyone, open­ly siphoned off vital funds meant for development projects. The hope was that with the election of office-bearers, there would be a reduction in local-level corruption. It has proven to be a false hope.

Local elections were finally held in 2017, after the country went 20 years without elected representa­tives. This also marked the imple­mentation of federalism enshrined in the new constitution. But local representatives, the torchbearers of federalism, are giving a poor account of themselves. These days, 27 percent of all complaints (of over 24,000 in 2019) the Commission for Investigation of Abuse of Authority (CIAA) gets relates to local govern­ment units.

In another recent CIAA survey held across 15 sample districts, 67.6 percent of those surveyed report­ed increased corruption at the local level.

Thus, even though Nepal has climbed up the Transparency International’s Corruption Percep­tion Index this year, the local level appears to be a grim place. There are many factors abetting local level corruption. Rampant impunity, political protection of the corrupt, high electoral campaign financing, insufficient laws—they all contribute.

The growing perception that the agencies responsible for bringing federalism to people’s doorsteps are the biggest bastions of corrup­tion is dangerous for the health of the nascent federal republic. It’s true that the federal-level leaders in Kathmandu have been reluctant to delegate power and responsibility to the provincial and local levels. But the local units that often complain about the lack of funds and man­power are also making a poor use of what they already have.

This will continue to be the case until a sense of accountability is instilled in them. It’s difficult to keep a tab on all 753 local units in the country, as the CIAA is find­ing out. Never mind the new TI rankings; Nepal is still a thoroughly corrupt country.

In 2019, the Commission for Investigation of Abuse of Authority (CIAA), the anti-corruption watchdog, received 24,085 complaints related to corruption and irregularities in public and private offices across the country. Of them, complaints related to local governments were at an all-time high: almost 27 percent. The figure was 23 percent last year. Other complaints hardly crossed 15 percent. Does it mean our local bodies have grown more corrupt?
“The high number of complaints related to local level units means these bodies are thought of as highly corrupt,” says the CIAA spokesperson Yadav Koirala.
There is a perception that corruption at local level has been rising after formation of local and provincial governments following the 2017 elections. After the expiry of the term of local bodies in 1997, corruption was rife for over two decades. But, instead of improving after the 2017 elections, the situation seems to have actually worsened.
Government data and various surveys show corruption is more prevalent at the local level than at the center. Recently, the CIAA conducted a 15-district survey aimed at garnering public perception of corruption. Of the 3,000 respondents, 67.6 percent reported increased corruption at local units and 14.9 percent said they paid bribes to officials to get things done. Of the respondents, 31.6 percent were from Karnali Province, who reported corruption in 76 of 79 local units in the province. Respondents said corruption had increased after the formation of local units two and half years ago.
There are three main reasons for increase in local level corruption. First is impunity, which gives an impression that one can get away even if found guilty of corruption. Second is political protection, which runs from top to bottom and goes even beyond party lines. Political leaders try to block both the filing of a complaint and the action by anti-corruption bodies. The third reason is the tendency of elected officials to recover electoral expenses through abuse of power.
Serving political interests
Elections have been a costly affair in the past one decade. Candidates spend millions of rupees even to campaign for a ward chair’s post. They often incur debts, and try to recoup the money if elected. Former chief of the CIAA, Surya Nath Upadhyay, reckons there also “insufficient laws and mechanisms to control corruption.”
“The status of Province 2 is worse still as there is a social compulsion to earn money by any means,” adds Upadhyay.
Few weeks ago, the CIAA dispatched a long directive to local units pointing out possible areas of improvement. The commission has found that many local bodies allocate budget without proper endorsement, and transfer funds from one head to another without justification. Even after over two years, some local units are operating without an endorsed budget. This increases chances of corruption, according to the commission.
There is also a tendency of doling out money to party cadres in the name of medical treatment, which is against the Local Government Act 2017. The CIAA further states that local governments approve development projects without consulting experts, locals, and marginalized communities. The anti-graft body says projects are mostly designed to serve political interest.
The user committees formed at the grassroots level are another reason to worry as the CIAA finds them contributing to corruption in development projects. The commission has found that the same people who select projects sit in local user committees, which makes check and balance impossible. The commission has suggested dissolution of such committees.
“However, it is not easy to dissolve them without creating their alternatives on the ground. I don’t think it’s possible,” says Upadhyay. The CIAA is of the view that such committees should at least be kept away from political parties and bureaucrats who try to manipulate them for their advantage.
In some districts, the user committees and contractors receive big amounts in advance without doing anything. The CIAA has issued circulars to the local bodies to take action against these people and find alternative ways to complete work on time. There have also been cases of elected representatives operating heavy equipment companies. Moreover, there is a tendency of giving development tasks to the same company repeatedly, blocking competition, in clear violation of the Public Procurement Act. The CIAA has also found that in some places payments were made against fake bills.
Wasting taxpayer money
To reduce the chances of political leaders taking projects to their pocket areas, the CIAA has asked all local bodies to select projects based on relevance and long-term strategy.
The infrastructure sector probably suffers the most. Many projects are built without proper documentation. There is also a lot of forging, such as making fake reports of project completion. Technical officers who are responsible for monitoring the quality of construction rarely reach the sites. In several cases, there is lack of trained technical manpower, and the user committees do nothing more than exploit the situation.
Elected local officials used to draw salaries after assuming office in 2017, which was against the law. In October last year, the Supreme Court annulled the provincial laws that allowed this practice. As per the law, these officials are entitled to only some facilities including monetary incentives but not salaries. Many municipalities and rural municipalities have bought luxurious vehicles, which has been criticized as extravagance with taxpayer money.
Meanwhile, local governments get funds from both government and non-governmental organizations for ‘training and empowerment’. The CIAA finds that most such projects result in no positive outcome. Such programs have rather become platforms to pay allowances to government staff and political cadres. The same people participate in different events. In some cases, the CIAA found forged bills for event expenses.
Local bodies also seem to disregard environment while starting new construction. An environmental impact assessment is never held. Even the durability of the work is not studied. Newly constructed roads are so weak that they can be easily swept away by floods and landslides, giving local officials further incentive to allocate and siphon off funds for maintenance.

Biswas Baral and Kamal Dev Bhattarai speak to Khim Lal Devkota, a veteran analyst of federalism, about the problems in the implementation of federalism in Nepal 

How did you interpret the diktat of Nepal Communist Party secretariat on the naming and capital city-selection of Province 3?

There are two sides to it. You have to understand that this is a complicated issue. The first Constituent Assembly (CA) was dissolved due to differences among parties over names and number of federal provinces. At that time, the issue of provincial capitals was not much discussed. Even the second CA could not resolve this dispute. The new constitution gave provincial assemblies the right to decide names and capital cities of their provinces. But we committed a mistake by not mentioning in the constitution that those issues would be resolved within a year of formation of the provincial governments. There is also a tendency among provincial level leaders to seek the center’s guidance. This is our first experience with federalism. Provincial leaders may be hesitant to take independent decisions for the fear that top leaders may be unhappy.

So you see no problem with the NCP secretariat decision?

As far as the decision of the secretariat is concerned, it should not have been done so publicly. This did not give the right message. The party can instruct its cadres, but the constitution also enables federal, provincial and local governments to make executive, legislative and judiciary decisions. There will be question on the efficacy of federalism if a provincial assembly is unable to exercise its rights.

In the past, there were big protests when the government decided to extend service centers to rural areas, in what was a minor issue. So there is fear among the politicians that protests could erupt over the naming of provincial capitals. They opt for status quo and defer big changes fearing backlash. 

Are you happy with the process of selection of provincial capitals thus far?

Our development efforts till date are urban-centric, still concentrated in pockets like Pokhara, Nepalgunj, Dhangadi, Biratnagar, and Butwal. It would have been better if cities other than these would have been selected provincial capitals. With some established standards, choosing provincial capitals would not be difficult. Yes, it takes time and resources to build new infrastructure for provincial capitals. But choosing new cities as provincial capitals would have boosted decentralization.  

How do you rate the performance of the current federal government in its implementation of federalism?

There are various issues about the implementation of federalism. We have made good progress on fiscal management. The bureaucracy has done well even in the absence of political leadership. We allocated common and separate rights to all three types of governments, but it was the bureaucracy which conducted detailed homework. The issue of fiscal transfers and grants is clearly mentioned in the new constitution, paving the way for their immediate implementation. Some works like the finalization of the number of provincial ministers were completed even before the formation of this government. The government has also done a praiseworthy job on civil servant management and transfers.

There is an inter-province coordination committee led by the prime minister, with chief ministers as its members. In the initial days, the chief ministers panicked. The situation in the provinces was critical due to lack of staff, insufficient laws, and scarce resources. There was confusion about service delivery. The central government was also unable to help. But things have improved.

How do you evaluate the relation between the federal and provincial governments?

I have been evaluating the practices in other countries. In the Indian constitution, there is a provision of inter-state council. The president forms the committee on the recommendation of the central government. But in India the council was formed only in 1990, 40 years after the adoption of the Indian constitution. And even today the body does not meet often.

In our case, a similar body was formulated with the promulgation of the new constitution. It has already met thrice and has prepared a 29-point blueprint for the implementation of federalism. The blueprint has recommended forming a fiscal commission, completing staff adjustment process soon, and making the bureaucracy functional at provincial levels.

Similarly, Australia adopted federal structure in 1901. But a council to look after federalism-related issues was formed only in 1972. Compared to other countries, inter-province coordination and relationship is much better in Nepal. There is another committee in Nepal led by the federal finance minister to look after fiscal issues, which is represented by finance ministers from all seven provinces. It also has representation from local units. Regular meetings of this mechanism has helped avert possible disputes. There used to be heated debate in the initial meetings, but now there are amicable discussions.

Despite your optimism, many reckon the federal experiment in Nepal is failing.

This is baseless. Look at the progress at the local levels. For example, citizens of Karnali Province had to travel to Kathmandu even for minor services. Now, they can get it done through the local units. The number of service seekers is gradually increasing at local levels. We are at an initial stage. It takes time to see more visible results. Still, it is true that our politicians have a centralized mindset and sometimes they are reluctant to delegate rights.

But, then, visit the Ministry of Federal Affairs today, and you will hardly find anyone working there. There aren’t many service seekers as well. This is because its work has been delegated. Resources, manpower, and powers have already reached the local level. This means people now get services in their own villages. But we are yet to communicate this progress effectively.

If so, why are the provincial-level leaders so unhappy with the central-level leaders?

In the initial phase, the provinces were unhappy with the federal government. Now, the situation has changed. But, then, local units are also not happy with the provincial governments. Instead of complaining, each of them has to perform their duties. The provincial government should first exercise the rights granted by the constitution. Now, it’s time for the provincial governments to deliver as they have the manpower, resources, and necessary laws. There is no room for blame-game; you have to show the result. Certainly, there are complaints on formation of police force and laws related to security agencies. For instance, the laws for provincial Public Service Commission have already been passed, but the provinces have not made any progress. And why are the provinces failing to take decisions on their names and capitals?

Nepal’s national economy has seen an uptick of late. Would you attribute this to federalism?

No economy in the world is doing very well right now. But our economy is making process. However, we cannot say this is because of federalism. It could rather be attributed to having a stable government. In the past we suffered from frequent government changes. Foreign investors are also willing to invest because of stability.

How is the relationship among the three tiers of government?

Article 232 of the constitution says that the relationship among the three tiers of government will be based on cooperation, coordination, and co-existence. Each has its own exclusive as well as shared rights. As per the constitution, all three tiers can exercise state power. Relations in Nepal are still hierarchical, especially when it comes to fiscal issues, grants, auditing, and accounting system. The federal government can instruct provincial and local governments on two issues: matters related to inter-province relations, and on national sovereignty and territorial integrity. If they do not abide by these instructions, the federal government can dissolve provincial government and parliament. Similarly, the federal government can instruct local units on any issue.

The relationship among the three tiers is always guided by federal laws. To handle disputes over federalism and constitution, there is a constitutional bench in the Supreme Court. The bench has already taken action on Sagarnath community forests and other issues. We have formed some laws and are in the process of forming others. There are two types of relations: formal and informal. It takes time to build the kind of informal relations that results in widespread cooperation. In our case, I would say that the three-way relations are on the right trajectory.

What could be the major challenges for the implementation of federalism in the next five years?

We have given many functions and responsibilities to local governments, and they don’t have much experience. More than that, disputes could arise between provinces. There could also be disputes between provinces and local governments or between local governments. Vertical disputes, that is, between the federal and provincial governments, could be less common. So I recommend increased engagement among provinces and local units.

There are regional council structures in India where states settle inter-state issues. We can do something similar in Nepal. For example, we can form a council for Karnali and Sudur Paschim provinces. In the council, they can share best practices. In the next five years, we will face many regional issues, and so we have to form regional level councils. They will handle disputes like the ones over utilization and allocation of natural resources.

Some foresee the disputes between the three tiers of government increasing, imperiling the whole federal project.

The conflict will not reach that level. But for that the institutional mechanisms mandated to maintain inter-state relations should be enhanced; they should meet and interact regularly. Now we have started linking even minor disputes between two or more villages, which have always been seen in Nepal, with federalism. Likewise, a minor tax dispute or the behavior of an individual local representative is seen as an example of federalism’s failure. There are certainly some anti-federal elements around. In this condition, it is vital that we also talk up the many achievements of federalism.

It’s a market of 1.3 billion people, with the population projected to double by 2050. With the steady rise of the middle-class in Africa, its importance as a business destination will only grow. Yet Nepal, which has gradually embraced economic diplomacy, has paid scant attention to Africa. Nepal is served by two embassies in the continent, one in South Africa and the other one in Egypt in northeast Africa. These two embassies also handle relations with the other 24 African countries which have diplomatic ties with Nepal. The engagement between Nepal and Africa has been predictably patchy.

Nepal made common cause with third world countries, many of them African, through the Non-Aligned Movement that started in the 1950s. In April 1955, representatives from 29 Asian and African governments, Nepal among them, gathered in Bandung, Indonesia to discuss the role of the ‘Third World’ in the Cold War, mutual economic development, and decolonization. There is still much for Nepal to learn from Africa, especially its booming economies like Ethiopia and Rwanda, which were until recently beset with debilitating hunger and civil wars.

As the proverbial Dark Continent “gets brighter by the day,” veteran diplomat Dinesh Bhattarai advises a change in approach to how Nepal sees Africa. “They have lots of natural resources and are developing fast. Nepal has long neglected the region, which needs to change,” he says.

Nepal’s engagement with Africa, albeit limited, has multiple facets. Thousands of Nepali army and police personnel are serving under UN peacekeeping missions there. Other Nepalis have also started going in significant numbers to countries like Egypt, Congo, and South Sudan. A less salubrious development is the smuggling of Nepali women and girls to the dance bars and brothels in Kenya and Tanzania, again in big numbers.  

Diversification is a stated goal of the KP Oli government, and there is a strong case to be made for diversifying into Africa. 

Most African countries are in a similar level of development to Nepal’s, and have similar agendas. Just like Nepal, many countries in Africa have had to maintain a delicate balancing act between the US and China. Climate change is another common scourge. Recently, South African and Nigerian investors have shown interest in Nepal. In this Visit Nepal Year, and beyond, the continent could also send many tourists here, a relatively cheap destination.  

Any way you look at it, there is a need for greater engagement between Nepal and Africa.  

Africa ‘brightening’ but Nepal yet to feel its new luster 

Nepal Army currently has 5,095 soldiers (including 183 women) under the United Nations peacekeeping missions in 12 conflict-hit countries and territories. Of them, seven—Congo, South Sudan, Sudan, West Sahara, Mali, Central African Republic, and Libya—are in Africa. Nepal first dispatched its troops to the continent in 1974, when they were deployed in Egypt. Nepali peacekeeping missions have since helped build strong people-to-people ties between Nepal and many African countries. Nepal Police started sending its own personnel in peace missions after 1992. Currently, there are around 1,000 Nepali police personnel serving in various UN peace missions, including in African countries like Sudan, Somalia, and South Sudan.  

Nepal has also supported democratic movements in the continent, for instance, in South Africa. It stood by the South African people in their fight against Apartheid. Nepal even served as a member of the United Nations Special Committee against apartheid from its inception in 1962. From 1969 to 1994, Nepal was vice-chair of the organization. But diplomatic relations with South Africa were established only after 1994, when apartheid ended and a new government led by President Nelson Mandela assumed power.

During the Panchayat period, there were several bilateral visits between Nepal and African countries. The frequency decreased after the restoration of democracy in 1990. Foreign Ministry data shows that Nepali monarchs visited the continent on several occasions after Nepal established diplomatic relations with countries there in the late 1970s and early 80s.

The Non-Alignment Movement (NAM) was another prominent platform that brought Nepal closer to Africa. In April 1955, representatives from 29 Asian and African governments, Nepal among them, gathered in Bandung, Indonesia to discuss the role of the ‘Third World’ in the Cold War, mutual economic development, and decolonization. This was the precursor to the NAM. Most African countries, like Nepal, have since been staunch NAM supporters. The movement, today comprised of 125 member and 24 observer countries, has over the years provided a wonderful platform to cultivate ties between African and Asian countries at the top political level.

They have also developed common agendas. For instance, both Nepal and its African partners are these days trying to balance competing American and Chinese influence. Says a foreign ministry diplomat, “African politicians now seek our help in dealing with these powers.” 

Missed opportunities

Nepal’s engagement with Africa is still miniscule though. Right now, Nepal has diplomatic ties with 26 of the 55 countries in Africa. But it has embassies only in two countries—South Africa and Egypt—which are tasked with looking after all other African countries as well. What’s worse, Nepali ambassadors rarely go to present their credentials in those countries.

As the proverbial Dark Continent “gets brighter by the day”, veteran diplomat Dinesh Bhattarai advises a change in approach to Africa. “They have lots of natural resources and are developing very fast. Nepal has long neglected the region, which needs to change,” he says.

Bhattarai deplores the tendency in Nepal of looking for immediate benefits. “With the resurgence of the African markets and its demographic dividend, this region should be our foreign policy priority,” he advises. “We must use the United Nations, the NAM, and other platforms to increase our interaction with African countries.”

Not the least because the number of Nepali migrant workers in Africa is gradually increasing. According to the National Human Rights Commission (NHRC), there were around 1,000 Nepali migrant workers in various African countries in 2016. In 2017/18, 37 Nepali workers got permits to work in Egypt. (The number does not include illegal workers.) This year, 25 more did. Government data show there are also significant number of Nepali workers in Congo, South Sudan, as well as in some other African nations. Again, the numbers are small but gradually increasing.

The trafficking of Nepali women and girls to Africa has emerged as a new problem. According to a 2018 NHRC report: “Trafficking of girls/women for dance, erotic performances, involvement in production of pornography in night clubs and other so called entertainment sectors in African countries like Kenya, Tanzania and South Africa is also reported,” says the report.

Egypt to Zambia

South African investors have shown some interest in Nepal. The Department of Industry has granted South African investors approval for two industrial plants and seven projects in Nepal, with total investment commitment of Rs 87.3 million ($0.85 million). This in turn is expected to create 253 jobs. With South Africa, there is also a huge potential in tourism. According to official figures, around 10 million South African tourists travel abroad every year. Few of them come to Nepal.

There is also scope of greater cooperation with Egypt in northeast Africa. Nepal and Egypt signed a Memorandum of Understanding (MoU) on establishing a bilateral political consultation mechanism on 16 July 2007. But there has been no progress since. Late King Birendra had paid an unofficial visit to Egypt in September 1983. Former King Gyanendra and Queen Komal also visited the Arab Republic in 2005. But there been no high-level visit from Egypt to Nepal.

Ties with Zambia in south-central Africa are gradually increasing too. King Mahendra visited had Zambia to attend the third NAM Summit on 8-10 September 1970. Similarly, Zambian Army Commander Lieutenant General Paul Mihova came to Nepal from 3 to 9 January 2018 at the invitation of Nepal Army. 

The newest country Nepal has established diplomatic relations with is Ghana in West Africa. The relations were established during Foreign Minister Pradeep Gyawali’s visit to New York last September. Before that, in June, 2018, Nepal and Burundi formally established bilateral ties.

There is a definite case for empowering Nepali embassies in Egypt and South Africa to expand ties with other African countries. For now, initiating high-level visits could be a priority. The African Union has come up with Agenda 2063 with a purpose of transforming Africa into a global powerhouse. Nepal will do well to tap into its vast potential.

Former Nepali Ambassador to Egypt Ram Bhakta Thakur says Nepal should not fail to benefit from the feeling in African countries that “third world countries everywhere should collectively fight for their political and economic rights.”

Timeline for establishment of diplomatic ties with African countries

1.         Algeria: 1975

2.         Congo: 2006

3.         Kenya: 1975

4.         Botswana: 2009

5.         Egypt: 1957

6.         Equator: 2006

7.         Ethiopia: 1971

8.         Gabon Republic : 1985

9.         Kenya  1975

10.       Libya   1975

11.       Mali     2009

12.       Mauritius :1981

13.       Mali :2009

14.       Mauritania: 2012

15.       Morocco  1975

16.       Mozambique   1986

17.       Nigeria 1975

18.       Seychelles 1996

19.       Sudan  1969

20.       Tanzania         1975

21.       Tunisia 1984

22.       Zambia            1986

23.       Zimbabwe 1984

24.       Lesotho 2010

25.       Burundi 2018

26. Ghana 2019

Ever since KP Oli’s blockade-time ascendency to the prime min­ister’s post in October 2015, Nepal’s foreign policy has been all about diversifying away from India and cultivating closer links with China. There is now little doubt that the mighty Nepal Communist Party (NCP) under Messrs Oli and Pushpa Kamal Dahal is looking to emulate the even mightier Communist Party of China (CPC): both its organization and development path for China. The clearest indications of this came in 2019, a year which will be remem­bered as a watershed in Nepal-China ties. A year many Nepalis felt their country’s palpable tilt to China.

Back in April, President Bidya Bhandari visited China and signed the protocol to the bilateral trade and transit treaty that Oli had con­cluded in 2016. This opened up new routes of international trade for Nepal via China, in what the govern­ment touted as Nepal’s first major step toward changing itself from a ‘land-locked’ to a ‘land-linked’ country. During that visit, Bhandari formally invited her Chinese coun­terpart, Xi Jinping, to visit Nepal. For most of the next six months, there were constant rumors about Xi coming to Kathmandu—and all its geopolitical ramifications. Xi came, in October, to a rousing reception, breaking a 23-year hiatus since the last Nepal visit of a Chinese presi­dent.

In terms of agreements, the Xi visit under-delivered. Yet there were still some crucial ones, like the 50-km Kathmandu-Keyrung tunnel road and the Treaty on Mutual Legal Assistance on Criminal Matters. The much-discussed cross-border rail­way line still seems some way off. By stepping on the legal assistance treaty, hundreds of Chinese accused of involvement in criminal activities are now being deported to China. In an extraordinary event, members of the Chinese intelligence and police were in Nepal to help Nepal Police with the arrests.

The Oli government can be seen as reaching out to countries big and small around the world to enhance Nepal’s diplomatic clout. Yet make no mistake. For better or worse, there has never been a more Chi­na-friendly government in Nepal. Perhaps few other countries have embraced the BRI as enthusiastical­ly. In 2019 the communist govern­ment gave the clearest signal yet of its readiness to forge the strongest possible ties with China. A year of unprecedented increase in Chinese business and political interests in Nepal—not least because of growing US activism under the IPS—2019 will long be remembered as the year when Sino-Nepal ties for the first time overshadowed Indo-Nepal relations in popular imagination.