Powerful Government Confronted

Thanks God at least pitiable conditions of roads in the Valley have finally attracted the attention of our Prime Minister who has instructed the concerned minister and authorities to correct the road conditions immediately. People may be remembering that his predecessor Deuba, just some days after assuming power, had also instructed the authorities to fill up ditches and improve the road condition within 15 days. The only difference between the two instructions is that while Deuba issued his order with a distinct timeline, Oli’s instructions this time around do not contain a quantifiable time frame. Very appropriately, therefore, people have begun to find recurrence of meaningless instructions of our top leaders in power laughable.

July 21, 2018, 7:23 a.m. Published in Magazine Issue: VOL 12 No.01, July 20, 2018 (Shrawan 04, 2075) Online Register Number: DOI 584/074-75

Powerful government led by KP Sharma Oli completed its 100 days a while ago carrying out state affairs in a normal way. As did in his first stint as head of government in 2016, Oli also satisfactorily completed his visit to India and China where he was accorded very warm welcome. About his six-day official visit to China, undertaken couple of weeks after his state visit to India, Oli observed that achievements exceeded objectives and agreements and understanding reached would broaden Nepal-China economic cooperation. Despite the two countries agreeing to expedite 8 major projects and China’s reported desire to strengthen cooperation with Nepal under the one belt road initiative(BRI), people are skeptical about the pact on railway connectivity with China because both sides remained silent on funding modality and the time frame. Therefore nobody knows when the much-hailed project will take off. The guiding principle should be that instead of just extracting more and more commitments from donors, especially India and China, emphasis should be given to actualization of commitments made.

Despite the more or less smooth sailing in the honeymoon period, some of the decisions made by this government in recent times have invited lots of criticism from different quarters and the major opposition party Nepali Congress (NC) could not remain a silent spectator and has begun to protest in the Parliament. Oli-led government’s decision to revoke all the political appointments made by the erstwhile Sher Bahadur Deuba-led government after August 30, 2017 has sparked fresh confrontation with the opposition. Without bothering to examine whether it was ethical for then government to make dozens of appointments after the election results were made public, clearly showing that the left alliance was mandated by voters to form a strong government, this decision involving en mass sacking seems to have been taken basically to make hundreds of political appointments at various levels to engage party loyalists and cadres. It may be noted that many affected people have already moved the court challenging the decision. Another case that has placed this government in an awkward position pertains to senior orthopedic surgeon Dr. Govinda KC who is on a hunger strike in Jumla and refusing medication despite deteriorating health condition. It may be mentioned that Dr. KC first started hunger strike in July 2012 to press for reform in medical education and launched his 15th fast-on-to-death from June 30 in Jumla, demanding that the government work for the ordinary people instead of working for the medical mafia. Dr.KC’s demands such as bringing the Medical Education Act without changes and revoking the ban on staging protests and demonstrations at Maitighar Mandala have received the support of the opposition party, its student wing and a cross section of people representing different agencies. Fixing of a limited number of places for staging protests and demonstrations, more specifically the ban related to Maitighar, has been condemned as government’s arbitrary and anti-human rights policy. A huge protest rally consisting of doctors, politicians, students, celebrities and professionals was organized in Kathmandu to put pressure on the government to comply with Dr. KC’s demand. The protesters gathered at Maitighar Mandala and marched towards New Baneshwor, shouting slogans, accusing Oli-led government of authoritarianism and tacitly supporting medical mafia. It may also be noted that after the expiry of 72-hour ultimatum given to the government, doctors have announced another round of nation-wide protest under which they are holding rally for an hour every day. Further, acts of government such as apprehending Vice Chancellor of Sanskrit University (Professor Kul Prasad Koirala) about to leave for Canada to attend a seminar, at the airport and dragging him to the Prime Minister’s Office using Nepal police personnel is definitely not the way a democratically elected government under the republican\federal system of governance functions. It would be unwise, therefore, to accuse NC for its strong protest in the House and its student wing, although in a pretty bad shape itself currently, for organizing protests outside. In the midst of all round protests and criticisms, Prime Minister Oli may have been relieved a bit of the anxiety that Ganga Maya Adhikari of Gorkha has conditionally broken her hunger strike after the government made a two-point commitment regarding implementation of the agreements reached with her in the past. It may be noted that Ganga Maya, who was on hunger strike demanding punishment for those involved in the insurgency-era murder of her son Krishna Prasad, has broken hunger strike after 45 days and is determined to restart it if her demands are not fulfilled. On the whole, the powerful government finds itself attacked from different corners due to its own way of functioning and lack of attention to areas that warrant urgent action. Thanks God at least pitiable conditions of roads in the Valley have finally attracted the attention of our Prime Minister who has instructed the concerned minister and authorities to correct the road conditions immediately. People may be remembering that his predecessor Deuba, just some days after assuming power, had also instructed the authorities to fill up ditches and improve the road condition within 15 days. The only difference between the two instructions is that while Deuba issued his order with a distinct timeline, Oli’s instructions this time around do not contain a quantifiable time frame. Very appropriately, therefore, people have begun to find recurrence of meaningless instructions of our top leaders in power laughable. Everybody knows that some improvements in road conditions will definitely happen after the cessation of damaging monsoon.

Indeed, heavy rainfall of this monsoon has caused widespread destruction, including loss of lives, as floods and landslides have obstructed highways and led to inundation across the country. Swollen rivers and rivulets have started eroding embankments, exposing nearby settlers to high risk of danger. Many areas were inundated in nearby Bhaktapur where 3 people died in landslide and over 3000 people were displaced. Oli must be aware that problems have occurred elsewhere also such as the recent death of scores of people from flood in Japan. He must also be knowing that the opposition he is facing from a highly weakened muscle less NC is nothing compared to the row between President of the United States and his North American and European allies over many issues including trade. It may be noted that after quarreling with its allies over trade issues in the recent G-7 meeting in Quebec, Canada, President Trump of the US has raised funding issue in the NATO Summit. Urging NATO members to up their contribution to this military alliance. He made it clear that the US allies will not be allowed to enjoy free ride at US expense. Further, in view of Germany’s huge dependence on natural gas import from Russia, he went on to state that Germany is a captive of Russia. It may be noted that this European country imports 94 percent of its natural gas requirement of which about 34 percent is from Russia. Trump seems to be working in the best interest of his country although his moves run the risk of alienating his traditional allies. Some observers have begun to see an offended EU drifting away from the US and moving closer to China with which Trump has been raising serious trade related issues. A 25 percent tariff is imposed on Chinese products entering the United States and authorities there are naming hundreds of Chinese products to put taxes on. Chinese authorities also look fully determined to reciprocate in a befitting manner. Serious harm emanating from the trade war between the two largest economies of the world would not be confined to the two countries because this action by the two is bound to lead to a contraction in world trade and could pave way for global recession. It may not be easy for people to agree with what Trump has done to Paris Climate Change Deal, Iran Nuclear Deal and his protectionist policy but progress on the economic front such as very satisfactory growth of the economy and unemployment coming down to its lowest level in 50 years have provided energy and stamina for him to flex his muscle and extract concessions from friends and foes alike. In our case, Mr. Oli should not forget that people tend to trust their leaders and approve of their actions only if they fulfill their promises, producing tangible output. If problems of varying nature and magnitude that this powerful government is confronted with remain unresolved for long and criticism and protests continue to increase, one- time-achieved mandate may not wait for 5 years to shake him. He has to find quality time to concrete on economic problems to deliver the promised prosperity.

Let us hope the benefits emanating from the rain from the sky, which is believed to have facilitated rice transplantation, outweighs the cost resulting from inundation of agricultural land and other destruction caused. In the event of costs exceeding the benefit, the economy is bound to grow by much less than what is wished (8percent) in the budget. It will also be interesting to see what this government does to arrest the sharp deterioration in the external sector of the economy since long. It is learnt that learn that trade deficient has swollen to Rs.1133 billion by the end of eleventh month of this fiscal year. It would be interesting to see whether the deficit figure reaches the total budgetary outlay by the time this fiscal year ends. Looking at the way state affairs are managed, it is also difficult to believe how the ambitious target of exporting goods and services worth Rs. 140 billion will be achieved in the new fiscal year when goods worth Rs. 66 billion only have been exported till the end of 10th month of this fiscal year. Let us hope government’s efforts to achieve 8 percent growth are strongly supported by Nepal Rashtra Bank(NRB),which has recently unveiled a flexible monetary policy for the fiscal year 2018\!9.

The NRB document contains measures to check rocketing lending rates of financial institutions through improvement in liquidity position. It has not only reduced the average difference between the deposit rate and lending rate to 4.5 percent from 5 percent but has made some other adjustments to enhance liquidity position. Cuts in cash reserve ratio (6 to 4 percent), statutory liquidity ratio (12 to 10 percent) and slashes in bank rate and policy rates are likely to contribute towards improving liquidity position and thereby reducing the lending rates. The size of the refinance fund has also been significantly increased to Rs. 35 billion. The NRB document, however, could not make share investors happy because they did not find anything of substance in it to address the concerns of the market when stocks were in free fall. Investors argue that provisions barring banks from making margin calls when share prices fall by up to 20 percent (down from 30 percent) and restricting them from making margin loans in excess of 25 percent of their core capital (down from 40 percent) have understandably disappointed investors who were hoping that the central bank would set the margin call threshold at a minimum of 50 percent. It is disappointing that both government’s annual budget and NRB’s monetary policy failed to create a much expected positive impact in the capital market. Let us hope that our monetary authority succeeds in containing inflation at 6.5 percent while extending support to Nepal government in achieving the growth target of 8 percent for fiscal 2018\19.Deliver the goods, if you want to walk tall, Mr. Prime Minister.

Dr-Tilak-Rawal-150x150.jpg

Dr. Tilak Rawal

Dr. Rawal is former governor of NRB.

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