Nepali Times
Economic Sense
In praise of watchdogs


Before departing for a long sabbatical-from one's day job, not this space-the Beed on Sunday only had time to hurriedly skim the headlines. And they were good. The boundaries of one of the many unattainables in this country seem to have been breached-the Commission for the Investigation of the Abuse of Authority has belled the cat. Sure, the exact size of the cat may not yet be known, but good lord, at least something is happening, and for that hats off and thank you.

This is just one sign of just how much the government is scrambling to regain some of its credibility. Their extensive press campaigns asking the people to declare their income or face dire consequences were fruitless. The deadlines passed, no one noticed, the headlines faded away, and no action was taken. Honest taxpayers as well as the not-so-honest ones who actually declared their wealth, later regretted having given up their cash to pay for Pajeros, the adulterated fuel they run on, and completely pointless junkets.

White-collar crime and graft are under close scrutiny world over. And what is gaining increasing emphasis is the notion that in such transactions the giver is as guilty as the taker. In the days to come it will be interesting to see, from the standpoint of a Nepali, how events unfold in the US corporate-and political-world. The thing about graft is, that it remains in all modes of economy-capitalist, socialist, and all those in-betweens. What matters is how far it spreads, and whether there are constant-and admittedly somewhat Sisyphian-efforts to curtail it.

In Nepal, unfortunately the restoration of democracy has made graft rampant, it is more and more blatant, and cuts across all segments of government, politics and even business. The democratisation of the process has meant that more people bid for coveted posts in the revenue department and other departments that have the potential to earn revenue. The price of the positions went up, and the politicians were happy to keep the market expanding, eventually resulting in little ceremonies that bore an uncanny resemblance to auctions. Of course, none of our watchdog agencies-and they are amusingly numerous given the ever-expanding nature of our graft-could take all of this on, as it would mean that the people on the agencies would have to fight their own political masters. The CIAA and its current boss have been courageous. Maybe this will be a lesson to other well-intentioned but lily-livered oversight appointees to get out and do something.

The business community should not be spared in this discussion of corruption. After delicensing and pseudo reforms, many businesspeople found it easier to do business by corrupting officials and politicians. If members of the business community did not encourage this kind of giving, and compete with each other to give more, things would have been significantly different. That said, when the government itself cannot ensure proper statutory compliances like audits and taxes in enterprises that it owns, how can it hope to have any control over the actions of private companies? Simply put, the government's reluctance to enforce proper fiscal and other controls in State Owned Enterprises gave private businesses plenty of latitude to first complain, and then outdo the SOEs in malfeasance.

Your columnist promises to keep a keen, beady eye on the CIAA's efforts and the reaction of the business community, and report back to you. And just think: if the names of takers are out in the press, maybe the names of all those givers of not just cash, but computers, furniture and appliances, are not so deeply buried either.
The only worry that one has is that this might well be a one-off exercise, bringing about a pleasant sense of euphoria in the public-right before those worrisome elections. The regulators need to put the fear of the people in themselves, and government, and politicians, and business.

(11 JAN 2013 - 17 JAN 2013)