16-22 August 2013 #669

The price of peace

Rs 20 billion: that is how much it cost to integrate 1,421 ex-combatants into the national army
Rameshwor Bohara

TWO ARMIES INTO ONE: Former Maoist combatants go through their paces at the Kharipati base before their formal induction into the Nepal Army.
A document prepared by the Ministry Peace and Reconstruction, which the government has kept under wraps, shows that Rs 20 billion was spent from the state treasury in disarming Maoist combatants after the conflict ended in 2006.

Most of the expenditure is not properly accounted for, the costs appear to be hugely inflated, there is proof of lavish duplication in spending, and instances of outright fraud.

The figures are mind-numbing: nearly Rs 10 billion was disbursed from the Cantonment Coordinator’s Office, the Special Committee spent Rs 8.3 billion, and the Peace Fund spent Rs 1.5 billion. The total is more than the country’s annual defence budget.

The highest amount of Rs 8.15 billion was spent on the golden handshake for the 15,624 combatants who chose voluntary retirement and got between Rs 500,000-800,000 each. The second biggest item was the Rs 5.88 billion spent for the upkeep of the fighters in the cantonments.

After initially claiming that it had a fighting force of nearly 31,000, UNMIN admitted only 19,602 into the cantonments it supervised. But a new verification after UNMIN’s departure showed that there were only 17,246 inmates in the camps. However, the Maoists kept collecting the full amount and party cadre themselves have accused their leaders of pocketing the extra Rs 4 billion.

There also appear to have been major irregularities in roads, electricity supply, and other infrastructure, with double billing for construction already paid for by donors like GIZ. The cantonments and Peace Ministry were given more than Rs 180 million just to pay for electricity and even though that was for six years, sources at the Nepal Electricity Authority said the total was astronomical. Even though sub-cantonments were only a short bus ride away, Rs 3 million was paid out for transportation of combatants for verification, Rs 1.7 million for phone bills and Rs 30 million for water bills.

“The costs are unbelievably high and there has been widespread misappropriation,” says Rajan Bhattarai of Nepal Institute for Policy Studies. “The lack of punishment for this plunder of the treasury has sent the message that it is ok to steal from the state because no one is ever punished. And the message for the former fighters who returned home will be even more dangerous.”

According to a Special Committee member, the reason for the irregularities was that there was no opposition from other political parties and the donor community for fear of derailing the peace process. Although the Special Committee chaired by the prime minister tasked with looking after the cantonments was supposed to be governed by the interim constitution, the peace agreement, and cross-party consensus, it was effectively controlled by the Maoists who had a free rein over the money.


The decade-long conflict cost the nation dearly. Nepal’s defence budget grew four-fold, development was pushed back decades, infrastructure projects were abandoned, nearly 18,000 people were killed, 9,000 were widowed, nearly 6,000 were maimed, almost 23,000 families were displaced. And there were the indirect costs to the economy.

Coordinator of the Special Committee, Gen Balananda Sharma says: “Some say you can’t measure peace in dollars and cents, but giving Rs 800,000 to someone just because he took up the gun has set a precedent. The main thing is that the violence stopped, the guns and guerrillas were brought under the control of the state, and the rebel party joined the political mainstream.”

Former guerilla commander Chandra Prakash Khanal (Baldev) admits that questions about expenses for the peace process are legitimate at a time when the real goal of writing a new constitution has not been met. He adds, “It was a struggle for a political goal, so money should not be the only issue.”

But even after the war ended, the expenses kept escalating. Ultimately, one could say, the only outcome of the peace process that cost the country Rs 20 billion was that 1,421 ex-Maoists were integrated into the Nepal Army. Besides that, there doesn’t seem to be any other tangible benefit from the war.

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