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Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

So Politicians Are More Equal?

Bir Hospital What exactly distinguishes a normal ‘person’ from a ‘very important person’? Is it the money, power or self-proclamation of standing out as a very important person? Are we all very important or such a title is reserved for a few political personalities and bureaucrats? In our context the latter is mostly true. If you are not involved in politics then you are just a person who is meant to serve the country selflessly without asking questions. Only then can you truly call yourself a proud Nepali.

For quite some time now “equality” has been a major agenda of most of the political parties in the country. They do not, however, seem to practice what they preach. How can treating few a people as VIPs and the rest of us as general people be called “equality” in any way? Yes, equality is essential. But the kind of equality that the parties are preaching for needs to be defined—perhaps their equality means the equality in the eyes of the law. But law in our country is just a tool easily manipulated by those in power. There have been instances of political figures openly challenging the court, law and the police—and these are the ones revered as VIPs.

It has not been long since 16 mountaineering support staff and guides lost their lives in the Everest avalanche. The government announced a relief of USD 400 to the families of the deceased. A mere sum of USD 400 is promised at the demise of the Sherpas while on the other hand if a VIP sneezes he is rushed in an air ambulance to the most facilitated hospitals of Nepal and abroad, the expenses for which is borne by the government through taxpayers’ money. In this context, I would like to cite government’s decision to pay all the expenses for Mr. KP Sharma Oli.  He was airlifted to Delhi then to Bangkok for treatment. He is just one of the many VIPs we have to endure and take care. Like Mr. Oli former minister Govinda Raj Joshi and Siddha Raj Ojha were also provided with NRs 5 lakhs each and the expenses of the air ambulance service was also paid for. Do you see any equality in these two cases? Those Sherpas who risk their lives and promote tourism were provided with mere USD in compensation for the lives they lost while the VIPs were given tremendous amounts of money for treatment.

How is life of a Sherpa any less important than that of Mr. Oli or those former ministers? These VIPs are already provided with a handsome salary and a lot of other benefits. Why can’t these VIPs, like any other Nepali citizen who falls ill, treat themselves without any government assistance? If these VIPs cannot afford the treatment how can a normal citizen afford it?

While 25 percent of the people live under the poverty line and most Nepalese have a very low level of income it makes it impossible for them to get any health care. The awful memories of hundreds dying of diarrhea in the Jajarkot district cannot be just done away with. You might also have seen a number of newspapers reporting people asking for help in order to raise enough money to transplant kidneys or live a few more years post cancer diagnosis. Why does the government ignore these helpless poor people when it is readily available to help these VIPs?

No country or government is going to stand if there is no population to fund and support it. If the general people are always treated as sheep they will retaliate and when they do systems are bound change. If people can vote and bring these people to the top and make them VIPs, they can as well bring them down. “सबै नेतालाई चेतना भया”

Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

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Re-thinking Public Enterprises in Nepal

When public enterprises were first introduced in Nepal during late fifties and early sixties the scenario was quiet different from what it is now.  The presence of private sector in the market was negligible and thus it made sense for the government to take control of the economy and establish several public enterprises. The government, in order to fulfill its duty of serving the people along with providing them essential goods and services, established one enterprise after other. The rate of establishment was such that at a point in time there existed 61 public enterprises–from water and food to cement and air services and everything in between–most of them monopolized the sector. Their number has been reduced to 37 today but their return in terms of goods and services to the people and profit-making for the government is questionable.

Almost six decades have passed us by and  instead of improving the services these enterprises have imposed an enormous burden on the taxpayers as well as the government. While the debate on public enterprises continues–some favor putting in more efforts and improving the management while others opt for a complete privatization. While this happens in the backdrop,  we bring to you facts on public enterprises that simply cannot be overlooked or neglected anymore. Since resources (esp. monetary) is already scarce in the country it would not be wrong for us to ask the government to use the resources in productive areas rather than pouring in taxpayers’ hard earned money into ineffective enterprises.

Public Entreprise Infograph

 

Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

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HPPCL owes us all

sancho-550x550Established in 1981 by Government of Nepal with an objective of utilizing the immense range of herbs found in the country while also creating employment, Herbs Production & Processing Co. Ltd. (HPPCL) is well known among consumers for the production of Sancho, a herbal oil used for curing common cold, cough, rheumatism, fatigue, body ache, headache, neuralgia, sprain, and itching.

Annual Performance Review of Public Enterprises, 2070 published by Ministry of Finance indicates that HPPLC has a net worth of negative NRs. 1494.95 lakhs. Similarly it owes the government a total of NRs. 6421.06 lakhs as loan. The enterprise employs a total of 204 staffs and has unfunded liability of employees benefit worth NRs. 1035.76 lakhs. HPPLC has been unable to perform financially since its establishment for various reasons and has accumulated cumulative loss of NRs. 1775.26 lakhs until the year 2068/69. It also incurred a loss of NRs. 393.37 lakhs in 2068/69.

Recent news published in a national daily indicates that HPPLC is planning to sell off its property to pay its employees’ salaries. The Ministry of Finance has given it the permission to sell off the land on conditions that employees are to be laid off and commercial production is to be started. The Head of Privatization Cell in the ministry, Mr. Bashudev Sharma is skeptic of the whole idea and believes the enterprise can only perform post privatization.

While HPPLC, Ministry of Finance, and the Privatization cell all have their own agendas, the most important stakeholders i.e. the citizens are completely sidelined and forgotten. Since government and other government institutions are the major shareholders of the enterprise, it directly or indirectly implies that “we the people” own HPPLC and it is us who are losing our hard earned (taxed) money to an inefficient enterprise which essentially sells us products that private players are selling more effectively.  Sancho and other products that HPPLC produces are not even essentials like petroleum and electricity. Then the question arises as to why the government needs to play “god” and poke its nose in every other business.

The intentions of the government were well and good during the 50’s and 60’s when the private sector was not contributing much to the economy. With time and with changes in the system we have experienced a growing private sector capable of producing goods and services for the people at affordable rates while also creating much more employment opportunities than the public sector could possibly imagine.

Most of the public enterprises in Nepal along with HPPLC suffer from the phenomenon that is most encapsulated in the form of “tragedy of the commons”. In simpler terms what belongs to everyone does not belong to anyone. Take for example our own Ratna Park, a governmental park which is free and open for everyone. The park is in a very sorry state while Garden of Dreams, a privately run park where an entry fee is required has been doing way better.

Coming to the point, although the amount of loss incurred by HPPLC when divided among the citizens comes up to being a very small sum adding up losses of all the PEs is a very alarming issue for the taxpaying citizens. The taxpayers neither have the time nor have intentions to question the government on the viability of running HPPLC and other PEs. Keeping tracks of 37 enterprises run by the government is not going to be an important agenda for the taxpayers when they are busy running their own lives and paying taxes to fund government’s businesses. While few of us are concerned we are merely small fishes in a big ocean and such issues raised by concerned citizens like you and me never reaches the concerned authorities and even if they do it does not fall under priority issue when we all are more focused on constitution and politics. They will ignore you once, they will ignore you again and again but they cannot ignore you forever so it is time we ask questions and demand satisfactory answers from the concerned authorities.

Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

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Where Do I Park?

Motorcycle jam due to mismanaged  parking

Motorcycle jam due to mismanaged parking

The Kathmandu Metropolitan City (KMC) office has brought forth a provision of free parking for vehicles in the valley since 27th of December, 2013. As encouraging as the move might have sounded to many, the following turn of events made quite a different story altogether. It almost seems like the aftermath was not duly anticipated by the office prior to making the decision. Haphazard parking, long term parking, traffic jams and discomfort for the general public have made it to the news, all thanks the move. Although, parking spaces have always been a problem, with our without the free parking provisions, from what we have seen so far, the problem has only escalated after the move.

The parking spaces, once made free means that the human resource that managed the vehicles prior to the move have been sent packing and free willed individuals can pretty much park their vehicles where they want and how they want. The Metropolitan office had plans to operate 20 legal parking spaces but neither did they plan it properly infrastructure-wise nor did they appoint adequate staff. This eventually resulted in the problems. Prior to the office’s decision of creating free parking spaces these spaces were managed by private individuals who provided services that were contracted by same office. Private parties managed the parking spaces in return for a small parking fee of NRs. 5-10 and such had created hassle free parking for the general public.

Given the scenario, KMC firstly there needs to develop infrastructure (the process prolonged due to bureaucratic hassles). Secondly, the office has to deploy their staff in the parking lots to manage the vehicles. Thirdly, a monitoring team needs to be set up to check on the staff and illegal parking.
In a city with 12 million registered vehicles, management of parking spaces is a lucrative business (even if NRs. 10 were to be charged per vehicle). Owing to the intensity of money that is transacted during the process the government, KMC, private individuals and even youth wings of political parties eye the piece of pie. When tenders for parking lots are opened by KMC there is a fierce competition among political parties, employee and local goons and hence controversies have always emerged on issues like corruption, favoritism and nepotism.

The core problem lies not in KMC or the contractor but in the inability of the government to hold local elections for more than a decade. In the absence, local bodies have been occupied by politically appointed bureaucrats and local members of all major political parties. The national vigilance report also states “Mismanagement, corruption and misallocation of resources are a common practice among the local bodies”. If local elections were to appoint representatives, this would give the representatives direct access to parking spaces in their area which they can contract out to private parties. Both private parties and the local elected bodies would directly be accountable to the local people hence reducing corruption and foul play.

As of now, the problem with parking spaces will hardly get any better with KMC’s involvement. The government and KMC are forgetting one essential component in the process i.e. the incentive structure. When a private party manages a parking space they do it because they have incentives to manage the parking and get as many bikes as possible which in turn would help them earn more. Such is not true for a KMC employee who would not be interested in managing the parking because he has no incentive to do so.

One of the easiest ways to manage the parking spaces while collecting the revenues and reducing traffic jams is by contracting it to private parties through competitive bidding. The KMC office should instead invest manpower and resources in monitoring and evaluation of the performance of private parties and such would be a win-win for all the parties involved.

Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

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Why fair-price shops are actually unfair

Image source: Ekantipur.com

Image source: Ekantipur.com

Once again with the festive season at our door steps, the government’s intervention in the market and our daily lives is clearly visible.  Owing to the fact that particularly during this season the economy becomes more vibrant and the players in the private sector try to increase their profit by engaging in unscrupulous activities, one of the many ways through which the government tries to check this behavior is by setting up fair-price shops across the country.

Although, the government does this with good intentions, the same has not necessarily translated into good results. The previous year, the government set up fair-price shops to provide salt, sugar, rice, ghee and other commodities at subsidized rates to the people. Nepal Food Corporation (NFC) also took to selling goats. NFC bore a loss of NRs. 3.7 million selling goats last year and the allegations of corruption that made it to the headlines in the distribution of goats clearly indicate government inefficiency in doing business. And yet, the government plans on doing the same this year as well. Year after year, the government incurs losses, creates avenues for corruption and does not really help the customers—how fair is their do-gooder business model then?

The rhetoric of the government of Nepal being a free economy is contradictory to its action owing to the fact that fixing price is not a sign of a free market economy at all. Last year the government hue and cry about the implementation of maximum retail price (MRP) on essential products. As it turned out while a handful of big shops in urban centers went ahead of MRP, endless small shops across the country were unaware of the decision which meant the decision to implement MRP went largely unaccounted for, unimplemented and unregulated.

The government plans to open up fair price shops at seven locations in the valley and about a dozen others all over the country. The question that pops up with around 26 million population being spread across 75 districts is that–do these few fair price shops cater to the needs of all the people across the country? And is it really fair to subsidize the commodities of urban citizens with taxpayers’ money when majority of the people in rural areas, never get benefitted by it? Definitely not. Looking back, price fixation in the previous year did not work well and very few people benefited from it. So, in that case, how is it going to be any different this year?

It is quite clear that the government isn’t good at running business and there are several reasons for it. First and foremost government is run by politicians not businessmen and we know that the only goal of politicians is to get re-elected and their intentions are mainly focused in pleasing the people for short term. Things that would be beneficial to them in a short term could become a disaster for the economy in the long term. Politicians are constantly trying to prove themselves to people and are encouraged to do so with policies that bring more harm than benefit. Even if not doing anything would be the best option politicians opt to make rules and regulations puts them in the headlines.

Similarly, an undeniable fact is that government doesn’t have capital to invest; all it does is tax people and use their money for doing business which it is not good in the first place. Private sector, on the other hand use their own capital and resources to create wealth by providing goods and services that people choose to consume and use. When a government run business fails, it is ‘us’ who suffer mainly because we are denied of the promised goods and services which we paid up for in the form of tax. On the flip side, when a corporation fails it is either a group of investors or an individual who is at loss; for a consumer even if a corporation fails there are always other options to choose from which does not happen in the case for monopolistic government-run businesses.

Another reason why government should not be running business is its nature of being a monopoly and not being competitive. Examples include Nepal Electricity Authority, Nepal Oil Corporation, Agriculture Input Company Limited and several other public enterprises. Nepal Food Corporation providing goods at a lower rate subsidized by the government keeps other competitors out of business which eventually lowers the number of private goods and service providers limiting the options for general people. Because of this very reason the sight of long queue for fertilizers, petroleum and other products provided by the government has been regular throughout the year.

If the government really wants to help the people and check the private sector it needs to build a strong monitoring and evaluation system with set standards in discussion with the private sector which would be a better way to go about.

So, this festive season when you see fair price shops and see people lining up to get goods at a subsidized rate ask yourself how fair are the fair prices shop.

Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

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Missing the target

singha-durbar-kathmandu-nepalNational planning has, for a long time, been among the government’s favorite agendas. This can be traced back to the Rana period (before World War II) when the first 20-year plan was announced but nothing significant was achieved. Has national planning worked for Nepal. Has it been able to yield the intended outcomes. Various problems occur when the government focuses its energy in planning rather than focusing on the rule of law. A total of Rs 2.62 trillion has already been spent in around five and half decades of planning. The biggest failure of planning in Nepal can be seen in poverty reduction, which was given maximum emphasis since the first plan. Twenty-five per cent of the population still live below the poverty line and amidst all the government planning, only the unplanned action of remittance brought in through foreign migration has helped in the poverty reduction, with poverty rates going down by 18 per cent between the periods of 2003-04 to 2009-10.  Read More on samriddhi.org 

Koshish Acharya

About Koshish Acharya

Acharya is a student of social sciences and has been associated with Samriddhi, The Prosperity Foundation for the last three years.

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