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Political Economy of Disaster
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Dissecting the state-led reconstruction and recovery program

Development partners have, for many years, engaged in devising a workable Disaster Risk Management Program in Nepal. A lot has been said and written about the ‘disastrousness’ of the program in recent days. It is therefore not a surprise that after a month following the first quake, we still have 70 VDCs that have not received any form of relief. Once this immediate relief is dealt with, the obvious switch is towards reconstruction phase. Our Finance Secretary, Mr. Suman Prasad Sharma has lent some of his thoughts about what the institutional mechanism should look like, as we make the switch.

The proposal is, derived from what we have seen as the international post-disaster practice, we create an Extra Ordinary Mechanism (EOM); then we customize it a little bit. The following modality has been proposed:

“Access limitations due to geographical challenges will seriously impair the capacity of a standalone EOM at the center entrusted with the mandate for reconstruction and recovery. Hence, a strong central agency of about 25 to 30 people, with an experienced executive supported by multidisciplinary experts, and headed by a strong political leadership, must be established to formulate and coordinate programs, monitor implementation, and manage fund flow. Program implementation must be entrusted to line ministries and their respective units, through the funds made available by the central agency. It is imperative to keep this reconstruction agency above line ministries in hierarchy in order to avoid intersecting communication lines.”

Here, some historical observations about central planning seem to have been overlooked. One, there is a lot of path-dependency i.e. first the “strong central agency” devises plan, develops fund flow mechanisms, devises its own version of check-and-balance mechanism, then mobilizes the line ministries, who will again go for the CDOs and VDC secretaries, and finally the people. Notice how there is no local representative of the people to either communicate the ground information to the planners, or to take ownership of state-mechanism. Here, it is no more necessary to discuss why there are still VDCs that are yet to receive any form of relief being channeled through the government.

Two, there is a lot of noise in the process, i.e. a lot of information gets lost in the process of it being transferred from the bottom-up or top-bottom in a tall hierarchy. As we move from planning to implementation (and further into the number of sub-national implementation bodies), we will have already faced a number of unforeseen circumstances, customized the service to (hopefully) the best of the bureaucracy’s knowledge, and probably many other complexities. In the end, what was planned and what is delivered will likely be two very different things.

These problems of excessive path-dependence and noise render central planning an inefficient mechanism; and very little needs be told about it when we are talking Nepalese political leadership and bureaucracy.

Interestingly, some foreseeable differing views have been acknowledged in the article as:

“Those against EOM suggest a new agency will be susceptible to rivalry with existing agencies; they fear of a lengthy process required to set up such an organization; and creation of yet more communication channels resulting in unwieldy coordination mechanisms.”

Consequently, a justification to the need of EOM has also been provided:

“But the alternatives are worse. Existing institutional mechanisms are marred by sluggish decision making, long process-oriented delivery systems leading to frustratingly slow implementation, sub-optimal procurement efficiency, serious lack of horizontal coordination, unmotivated staff and their frequent turnover, and trade unionism, to name a few.”

This here, seems to be a tall claim to make. It appears, what has been suggested is the creation of an institution that could very well fall to the same endemics that the existing institutions have been succumbing to. More bureaucracy might not be the solution to an inefficient bureaucracy.

It is definitely a commendable thing to do what the secretary has done – starting a discourse on the institutional mechanisms that need to be put in place to deal with such emergencies. It is indeed with great intentions that the new institution has been proposed.

However, as the bureaucracy tries to deal with the situation in a regular bureaucratic manner, we seem to have been overlooking the unprecedented (and frankly, popularly unexpected) voluntary initiatives started by the energetic youth of the nation. This energy, without proper guidance/ management might very well die down. Therefore we need to acknowledge their efforts and convert the volunteerism of the youth into a capital. There are furthermore, a number of community based organisations, private institutions and other non-government organisations that have already been working to bring relief and help reconstruct the damages borne by the people and communities. While this discussion on the institutional mechanism is taking shape, it will be very important to bring these parties on-board, and also pay attention to what the people on the ground really need help with.

Akash Shrestha

About Akash Shrestha

Akash Shrestha is a researcher at Samriddhi Foundation where his focus areas are investment laws, public enterprises and education.

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Why I think twice before paying taxes?

Mounting grievances and inefficiency of government institutions in Nepal which operate on taxpayers’ money makes us wonder if tax is really the necessary evil it is often touted as being. In principle, the rationale behind tax is justified. However, the current scenario does not do justice to the rationale.

Citizens have incentive to pay taxes as long as the benefits of what is asked by government in various forms of taxes is higher than the services rendered by authorities. But the government is not doing what it is supposed to do for compensating taxpayers’ giving up of their hard-earned money; we get much less services than what we paid for.

The notion of paying tax brings second thoughts to my mind. There are a number of reasons why:

Bureaucratic Inefficiency

As a Nepalese citizen, I pay my share of taxes and by this virtue alone, the authority is obliged to ensure effective and efficient public service delivery to me. Sadly, this rarely happens. The service delivery mechanism has a lot of loopholes; there is excessive red-tapism, no proper delegation of authority and the idea of good governance is limited to plans and policies.

Furthermore, the government has failed to create conducive environment for the private sector. A substantial portion of the fiscal budget is spent on different administrative headings than making capital investments on infrastructure. There is lack coordination between authorities which results in significant wastage of resources. For instance, roads built by department of roads are frequently dug down by others, once for drainage, again for water supply, and so on and so forth. Moreover, with dismally low results, wastage of resources inherent in Nepalese bureaucratic structures implies that our tax money is going down the drain.

Corruption in Public Sector

Corruption in Nepal ranges from nepotism to significant monetary scam. It is dispersed like an epidemic in almost all government organizations. Corruption Perception Index (CPI) published by Transparency International gives Nepal a score of 31 on a scale of 0-100, where 0 and 100 represent “highly corrupt” and “very clean” respectively. Abuses of authority, secret deals and bribery have lasted for years.

While the commitment of Commission for Investigation of Abuse and Authority (CIAA) is commendable, our tragedy still remains that the corrupted receive clean sheets due to dysfunctional mechanism. Moreover, recent CIAA report reads rampant corruption at local levels, particularly at Village Development Committees (VDCs), Municipalities and District Development Committees (DDCs).

I can’t foot Public Enterprises’ Loss and their Inefficiency

As of today, the number of fully and partially owned public enterprise has reached thirty seven, out of which sixteen operate in net loss. The total cumulative profit of fourteen public enterprises is about NRs. 65 billion and loss incurred by seventeen others is around NRs. 43 billion. Here, NTC alone accounts for NRs. 39.5 worth of cumulative profits. (Source: Yellow Book, Performance Evaluation of Public Enterprises: Ministry of Finance, 2014)

Janak Shikshya Samagri Kendra, a public institution that has the responsibility of ensuring timely production of subsidized education materials for public school students across the country has not been able to deliver for quite some time now. There have been instances when the books have reached students in the second half of the academic year only. Another example is that of Nepal Electricity Authority (NEA).Despite of a lot of money being poured in for the purpose of electrification it has not been able to cut down hours of load-shedding. Nepal Oil Corporation (NOC), similarly, has not been able to deliver—long queues in the petrol stations despite over NRs. 39 billion worth of taxpayers’ money floated to them being a constant reminder of that failure.

The more I understand government and its actions, the more doubts I have over having to pay taxes to fund its inefficiency.

Suraj Dhakal

About Suraj Dhakal

Suraj Dhakal, a student of Development Studies works with Research Department at Samriddhi, The Prosperity Foundation. Mr. Dhakal was previously associated with We Inspire Nepal (WIN), a youth led leadership and personal development organization.

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Five answers to help you prepare in dealing with Nepali bureaucracy

Cases of people not receiving proper attention when they visit government offices are common among a lot of Nepalese. These experience range from being lost in the maze of cryptic compliances to losing all hope of getting the job done. As a researcher, I end up talking to a lot of members from the bureaucracy (on the phone or face-to-face) to gather information. Based on five different conversations I had with bureaucrats over the past couple of months, I am able to draw some common answers you will be given when you happen to cross paths with it. These answers might help you better prepare to deal with Nepalese bureaucracy next time you need to get something done out of their offices.

bureaucracy picture

1. There is more information out there. But it is not with me, right now.
Bureaucrats seem to be often lost about their role in the bigger picture, except for some vague statements about their contribution to building the nation.

A conversation with an official at Trasport Management Office, Ekantakuna:

Me: I have been trying to develop a process map for acquisition of green number plate (tourist vehicle) licenses. I have checked the Citizens’ Charter posted on the walls of your office premises. They seem to be a decade old. I’ve been told that procedures have changed. Could you…

Him: It has only been three months since I was transferred to this department. I don’t know the complete procedure as of yet. I am not sure about the exact steps.

Me: Is there anyone who you know I can talk to for this?
Him: Why don’t you check the official website and dig into related Acts and Regulations………..

2. It is not in the policy.

A conversation with an official at Nepal Oil Corporation (NOC), a Public Enterprise

Me: Ma’am, we are doing a research on the petroleum supply and the trade policy of NOC. I will need the agreement that NOC has entered into with Indian Oil Corporation Ltd. (IOC). How can I access the document?

Her: I don’t think there is a policy of availing the agreement between NOC and IOC to the ‘public’. These could be confidential agreements and not everybody can access these…

Me: But NOC is a public enterprise. How can NOC hide its operations from the public?
Her: There is no such policy of giving you the agreement.

3. The ball must be in somebody else’s court.

A telephone conversation with an official at the Ministry of Physical Infrastructure and Transport

Me: Sir, I am currently doing a research on banning of taxi registration in Bagmati Zone, Nepal. I have learned that the Ministry signed an agreement with the Federation of Transport Entrepreneurs in 2006 whereby it is agreed that one needs to take the permission of the federation to operate a transport enterprise in Bagmati. Could you give me the document?

Him: I’m sorry to inform you that we don’t have it.

Me: What do you mean?

Him: There used to be this Ministry of Labor and Transport in the past. Now we are a separate ministry and while in the process of resettlement, some papers might have got here and there. So we might not have the document you are looking for.

Me: How do I get the document then?

Him: I suggest you call the Department of Transport Management. They should have the paper.

4. The person you are looking for is out of station. Please try again later.

A telephone conversation with an official at the Department of Transport Management (August, 2014)

Me: Sir, I have learned that the Ministry has entered into an agreement with the federation … Can you give me the document?

Him: All gazetted officers are in India to attend some program and will be back in September only. All we are left here are a few non-gazetted officers and we do not have access to the kind of document you are referring to. You should call back in September.

5. The ball must be in somebody else’s court…again!

A telephone conversation with a Division head (supposed) at the Ministry of Transport

Me: hello! Is this Mr. XYZ?

Him: Yes!

Me: Namaskar Sir! My name is Akash and I am calling from Samriddhi Foundation. We are currently doing a research on …

Him: Oh wait, who did you say you wanted to talk to?

Me: Mr. XYZ!

Him: Oh, that’s not me. He is in India and will be flying back only today. Try again after a few days.

My experience in short: In the end, bureaucracy is never really about the delivery of service. It is about compliance. Furthermore, these characteristics of Nepalese bureaucracy compel one to think – is it just about creating jobs and fulfilling the posts?

Akash Shrestha

About Akash Shrestha

Akash Shrestha is a researcher at Samriddhi Foundation where his focus areas are investment laws, public enterprises and education.

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Your Right to Information. Or is it?

right to informationWith regards to the ‘Right to Information,’ the Interim Constitution of Nepal 2007 reads, “Every citizen shall have the right to demand or receive information on any matter of his or her interest or of public interest.”

So the law respects the fact that as a citizen of the country, you and I have the right to acquire information on anything that directly or indirectly affects us. But does writing something in the constitution guarantee that the thing actually gets translated into practice? Here is an example of how the reality makes fun of the law.

I am currently doing a research on the banning of new taxi registration in Bagmati Zone (in 2000) and its effects on consumers. This is where it all begins.

After talking to a few people that have major stakes in the transportation industry (people like the taxi entrepreneurs, consumer rights advocate, bureaucrats and taxi drivers), I learned that in the year 2007, the Ministry of Transport and Federation of Transport Entrepreneurs made a deal whereby it was agreed that,

1. No public vehicles would be allowed to ply the roads of Bagmati without prior consent of the federation

2. Transport fares would be revised following every revision in the petroleum product prices

3. At the end of every fiscal year, the transportation fares would be revised

(for the time being, we will not delve into the gravity of this agreement. If it is true, then this is a government backed cartel and it has huge implications in the consumers. But we will leave it at that for now)

Now, until I see the agreement for myself, I cannot rely on something that someone says and use it on my research, right? And so begins my endeavor to get my hands on the agreement. And the joke begins to unfold.

My first instinct then was to call the Ministry of Transport. So I dialed 197, the Nepal-telecom authorized and largest inquiry service provider of Nepal, to get the phone number of the Ministry. I was told, the number was 01 4211920. I go on and dial the number. They tell me it is Ministry of Labour instead. Here is what must have happened. Previously, there used to be a single ministry by the name Ministry of Labour and Transport and now, these are separate ministries. And I asked myself, shouldn’t the inquiry service have updated their database? Or rather, shouldn’t the ministry have notified the telecom itself?

So I went back to my computer and googled it out. I call up the right ministry this time, and talk about the agreement. They tell me, ‘there used to be this labor and transport ministry and now we are a separate ministry and while in the process of resettlement, some papers might have gotten here and there… so we might not have the document you are looking for. I suggest you call the department of transport management. They should have the paper…’ Again, not what I had expected to hear, but I was not very surprised that they said what they said.

Then I ring the Department of Transport Management. They tell me, ‘All gazetted officers are in India to attend some program and will be back in September only. All we are left here are a few non-gazetted officers and we do not have access to the kind of documents you are referring to. You should call back in September (after September 1).’ Now this took me by some surprise and I was beginning to get furious at these bureaucrats. I wanted some information and the constitution guarantees that I be given the information. But none of it was any help to me.

Then I thought of approaching it from the other end. I called one of these people from Federation of Transport Entrepreneurs. Again, I am told that these guys have their plenum and it will keep them busy for some time. Once again, I am told to call back sometime in September.

It is a shame that all these institutions put together cannot guide us to a single agreement that defines how we commute to our work places. Maybe the bureaucrats are not accountable enough to people. Maybe the document holds the key to unraveling a big fraud committed by the government with the federation as an accomplice and thus it is being kept from the public’s reach. Maybe, the bureaucrats are extremely busy to respond to a public’s inquiry. I will leave it at that and let the readers judge it for themselves.

However, this is not the only case where a public cannot find the right information when it asks for one to the bureaucracy or the government. Go to transport management office and ask for the process of acquiring a green number plate. Go to Nepal Oil Corporation and Ministry of Commerce and Supplies and ask for the documentation done when they decide to hike petroleum prices in Nepal. Go to the municipality, the Department of Commerce, Department of Cottage and Small Industry and the Inland Revenue Department and ask for the process of registering a Kirana Pasal (mom-and-pop store.) Nowhere will you get the complete information from a single resource person. The Citizen Charters (nagarik badapatra) will be a decade old and officers won’t value your time and effort one bit. And there goes your right to information!

Akash Shrestha

About Akash Shrestha

Akash Shrestha is a researcher at Samriddhi Foundation where his focus areas are investment laws, public enterprises and education.

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Doing Business in Nepal: A Case Study in Tourism

China and India are set to be among the three largest economies of the world by 2020, accounting for 27% of world GDP in PPP terms. And what’s more? They are travelling. All we have to do is become the coffee-shop between two huge corporate houses, whose staff likes to venture out of the routine jobs every once in a while. But is doing business in Nepal so easy, including the tourism industry? The World Bank’s Doing Business report positions Nepal at 105th in terms of ease of doing business.

Here we will look at a case – the ground realities of the process of acquisition of green number plate licenses that travel and tour operators require.

Ground realities

The number plates are issued after a two-tiered process. First of all the applicant tour operator applies at Tourism Industry Division (TID) under Ministry of Culture, Tourism and Civil Aviation for a permission to apply at Transport Management Office (TMO). Excessive corruption, red-tapism, redundancy, lack of accountability in part of the concerned agencies are commonalities in practice.

Process of acquiring green number plate

Process of acquiring green number plate. CLICK on the image to get a better view.

Lack of Accountability

To begin with, all government agencies are required to host Citizen’s Charters (Nagarik Badapatra) at their premises as a measure of accountability towards the citizens. The charters posted at the TMO premises are a decade old and do not reflect the true processes that are followed at present. Besides, economic ordinances can make annual changes in details like vehicle tax. These issues are not addressed in the citizen’s charters posted at TMO premises. Therefore, if an entrepreneur were to follow the guidelines as mentioned in those charters, he/she would be misled and would be rendered unable to acquire the desired services from TMO.

Redundancy
Most procedures required at TID are repeated again at TMO, only increasing the scope of discretionary powers held by bureaucrats at different sections of TID and TMO. This, complimented by lack of information sharing between these agencies can cause the files to be stuck at one section or the other. For example, while the Travel Section at TID verifies all clauses as included in its 26-point check-list before writing an application to the TMO requesting that a green number-plate license be issued to the applicant tour operator, the road-test procedure conducted by the Technical section at TMO requires the applicant to undergo the similar set of processes to produce the same information all over again.

Too much information (to gather and comprehend)
Interaction with personnel posted at different sections of TMO (who are paid to have that information and share it with the applicant) revealed that they were unsure about the complete procedure for the acquisition of green number plate licenses. A number of personnel shared that they have been transferred to TMO only three or four months back (as of May, 2014) and admit how they themselves do not fully understand the steps that need to be followed yet.

The aforementioned problems lead to one, corruption and two, lawyers taking unfair advantage of the entrepreneurs’ lack of access to information. Some tour operators also expressed how they have been asked to pay a sum exceeding Rs. 100,000 at TMO being told that their vehicles do not meet the technical specifications even after being cleared by the Travel Section at TID.

Possible reform measures
Now we see, the faster the tourism entrepreneurs can acquire licenses – to operate their businesses – the better for the economy. Easy access to information for entrepreneurs and accountability on government agencies’ side is the combo that is the need of the hour. Certain steps can be taken to deal with the aforementioned issues.

A client (tourism entrepreneur) focused manual that includes a list of required documents and processes involved in the process of acquisition of a green number plate license can be developed as a short-term measure. This manual needs to be available online and should be updated as per the change in economic ordinances, for example, the tax codes. This needs to be seconded by an updated citizen’s charter at TMO premises. The concerned agencies (TID and TMO in this case) need to develop a mechanism whereby they share relevant information among themselves such that redundancy and excessive red-tapism can be avoided. Training of personnel at TMO is required at the moment, as evinced by the interaction with the personnel themselves. A medium term focus can be coming up with a one window policy to hasten the process. This will require some homework to be done on the government’s side and will thus take some time. If implemented, however, this will also help cut off the complexities, redundancies and room for corruption.

Akash Shrestha

About Akash Shrestha

Akash Shrestha is a researcher at Samriddhi Foundation where his focus areas are investment laws, public enterprises and education.

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