Ever Repeating Story Of Low Capital Spending

Beyond these characters, we have to have leaders and movers including other stakeholders all having successful track records

Nov. 24, 2017, 12:56 p.m.

“With 2 times cost and time (supposed to be completed by 2011/12) over runs, and the much delayed benefits, the Chamelia Hydro Power Project has just tested electricity it generated”

 This is not a particular year, though some would say that our focused were local, provincial and federal elections, for low capital spending of the government budget. Reasoning apart, it has been in the past as well. Yes, again the newspapers have come with more lines and by-lines with a news that capital spending is low. As of 16 November 2017, the statistics from Nepal Rastra Bank and the Ministry of Finance revealed about 5.33 percent of capital expenditure against the planned expenditure of Rs. 335.18 billion of this current fiscal year. In terms of elapsed time, 4 months or 33.33 percent of time has gone by. Capital expenditures for the corresponding period of the last and previous fiscal year were 3.80 percent of total capital outlay of Rs. 311. 94 billion and 2.74 percent of total capital outlay of Rs. 208.88 billion respectively.

 One could list number of reasons beyond multiple elections – from an ad hoc budgeting to politicization of bureaucracy or civil services to employee unions to an inept bureaucracy, etc. However, major reasons lie somewhere else. In other words, there are other real reasons for such a dismal performance of capital spending. Let us look at few of them.

 First, Nepal’s budgetary preparation is very much ad hoc, that is, budget is allocated to projects or programs with no clearly establishing starting and ending date, with not procurement and implementation plans attached, and more importantly without placing appropriate movers - the staffs including a project leader or manager.

 Second, for the last few years there have been no governments without a kind of coalition of multiple political parties. This brings implications, that is, the Minister appointed and made in-charge of particular ministry is a coalition compromise than tested and trusted by the Prime Minister - the Secretary in-charge of Ministry is thus not trusted by the Minister, the Director General not by the Secretary and the Project Managers by the Director General or the Secretaries. In other words, neither Minister nor Secretary and beneath him can truly represent the Prime Minister. They are not trusted either. They also do not take the responsibilities for bearing of bad tidings or of non-performances.

 Third, expedited capital spending requires hardworking, determination and focusing. These are proven characteristics in countries where delivery is very effective - be it of service delivery or of spending budget. In our context, none of these characteristics exist. The implementation arm of the government, the bureaucracy, rarely works hard nor is it determined or focused. The big excuses come from political instability and frequent changes of the government. As such the members of the bureau are plagued themselves with backbiting and unhealthy competition to become close to the political parties rather than forced or compelled by the political masters. Equally responsible factor is a lack of an effective reward and punishment regime and its enforcement.

 Fourth, political masters especially in countries like ours are immune from performance evaluations or from  any other sort of ratings. Yes, the civil servants are evaluated and rated but all these ratings are either theoretical or rhetoric or evaluations or ratings are at best based on political affiliations, favoritism, nepotism  and kinship.

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 Fifth, both political masters and the implementation arms lack confident. They are not optimistic but pessimistic. A minister cannot think of successful construction of say, for example, the Kathmandu - Terari (Madhesh) Fast Track Road or Second International Airport in Simara! Lack of confidence and at the same time pessimism goes down to the level of project managers. Things to do not move hence budget especially the capital budget not spent as outlayed or planned.

 Sixth, an effective environment for a meaningful and expedited capital spending needs participation of multiple ministries or agencies including other stakeholders. However, because Council of Ministers is built on coalition, none of the ministers pays attention to building relationships. A politicized and an inept bureaucracy gets infected. The results are that movers move in isolation whereas successful implementation very much depends on building teams and maintaining a good relationship amongst the stakeholders - the employee, beneficiaries, service providers, facilitators, donors and others.

 Finally, claiming and counterclaiming of credits and lime lightings I are another issues in Nepal. Such claiming of credits or lime lightings rarely happen in other countries. For example, the ex-president of India Mr. APJ Abdul Kalam never claimed credits nor celebrated scientific innovations and achievements he made. He perhaps credited others! Scientists inventing and making nuclear warheads and bombs never revealed their name, claimed no credits nor expected any lime lightings. However, in Nepal there is no culture of giving credits to others. From a messenger level staff to a Minister, all want to be credited themselves or brought to the lime lights but never give credits to others or bring others to the lime lights. Think of our formers as well as sitting finance ministers. They hardly have had their tenure extending a year but all of them claim that volume of foreign aid received exceeded the volume of foreign aid their predecessors managed to receive. The volume of revenue collected exceeded much from the amount their predecessor collected. While claiming such credits what is forgotten, for example, is no donors can extend any amount of foreign aid without approving it either by their parliaments or by the board. The parliaments of all countries, especially to approve a budget, meet only once in a year! A project preparation, negotiations, commitments and agreements to be signed takes more than a year.

 In conclusion, it is a must to have movers trusted by the Head of the State or the Government; movers need to be selected and assigned to projects based on their ability for hardworking and determination; they need to be enthusiastic, confident and optimistic; and good at building relationship as well as believers in a teamwork; not fond of getting credits for them but ready to be giving to others and not fond of making lines and by-lines in the newspapers or in other broadcasting and medias. Beyond these characters, we have to have leaders and movers including other stakeholders all having successful track records. Else, the low spending lines and by-lines will be repeating again in the next fiscal year. One must note that we may not have elections excuses for next fiscal year.

The opinion expressed in the article is personal opinion of the writer.


LS Ghimire.jpg

Ls Ghimire

He can be contacted at ghimirel@hotmail.com

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