 KIRAN PANDAY |
On the Monday after the valley came to a standstill due to yet another banda from a party that seems to have become irrelevant in the new political equation, a dear friend of the Beed remarked: "This may tempt the ex-king to make demands of his own and call a Banda." On the same day, investors closed the stock exchange for two days and pushed the government into loosening up a bit on margin lending against stocks. So if Nepal is to liberalise, it ought to tell foreign investors in fine print: there is a risk of business closures during abrupt holidays called for lunar, solar, ethnic and political eclipses, and the stock exchange can also be closed by anyone who makes his way onto NEPSE premises.
For everyone, closure has become the ultimate tool to use to get authorities to listen. And, it seems, authorities only indulge the habit by waiting until closures to act. Therefore, the Nepal Rastra Bank (NRB) will wait until all the people who have invested in real estate come and gherao it before it reviews its earlier decision on real estate lending.
The margin lending against shares is a classic way in which government just does something weird and never follows up. First of all they had a policy that people could borrow against shares freely with no restrictions. So everyone started pledging certificates and then getting money. That pushed the stock market. Then they decided, this should stop and put in a strange rule that one could only borrow 50 per cent against stocks valued based on 180 day pricing and which cannot be renewed beyond a year. So it did not matter whether you had stock of blue chip companies or fly-by-night operators, the rule was the same. The quality of assets did not matter, only the value did. Then the NRB decided not to pay attention to revising this by instituting a system of valuation or ratings to ensure that people with better stocks could borrow more for longer periods and people with bad stocks could not borrow a rupee. After three years, when their patience wore out, the investors started to stop trading and suddenly NRB decides to take a decision.
There are many policies that have not been reviewed for the past couple of years. Everyone lives for the present and political parties are more interested in the short run in selling government positions than doing something good for the people. The fact that we have a weak finance minister right now does not help. As someone who has been on many missions to Nepal told me, "This finance minister is probably the worst we've had since 1950." The finance ministry did better during the king's direct rule.
The business of closure that was just introduced in Nepal after 1990 has taken deep roots in our society and culture, and has grown into something very ugly. How do we end this? Perhaps we should begin by preventing kids from causing obstructions during Shivaratri. That way, we'd catch em young.
