Stat Corruption And Bleeding Tax Payers

The two reported cases of mismanagement of funds would cost each Nepali for about NRs 330 per person

Jan. 13, 2019, 12:33 p.m.

Background Introduction

In business of finance, generally understood mantra is “money makes money. In similar vein, state sponsored mega projects serve as conduit for potential collusion between politicians and bureaucrats for corrupt practices. Such collusion will rip hard-earned tax payers’ money from state coffer without any moral compunction and fear of criminal sanctions. Hush money becomes umbilical cord uniting culprit parties. Let’s not underestimate most individuals are emboldened by greed and power of authority just being on higher government seat and where there is no effective oversight mechanism and sanctions. This psychic behavior grows and continues unabated without strong teeth and effective law enforcement power of CIAA (Commission for Investigation of Abuse of Authority). CIAA exists but is unable to demonstrate itself as powerful deterrent body against malpractices for no significant fish is netted yet. This is a huge setback in nation building process and good governance for development.

It is hard to ignore recent media reports on grand scale collusion between bureaucrats and politicians plundering huge sums of state funds that are being wasted on ‘glamorous’ projects. Bureaucrats are more than willing to conspire, when opportunities occur, with politicians for personal security and gains, contrary to general expectation that bureaucrats are the vanguard of civil administration. Public frustration is thus growing against increasing reports of corruption incidences unseen in the past.

It is not an overstatement that government-induced projects are disconnect between the needs of people and state’s desire for a glamour. Generally, government projects are product of leader’s whim and political rhetoric which heavily falls on tax payers’ shoulder. Hard to find financial justifications for continuing waste of treasury funds on state glamour on a losing national carrier? Both politicians and bureaucrats are too complacence on oversight mechanisms and imposition of sanctions. Is this a right way forward in rhetoric of pseudo-economic development of nascent republic?

Multiple Reports on Corruption and the Perplex

Reports of corruptions are noteworthy and disturbing. List of examples may not be exhaustive, but these are indicative of poor oversight, mismanagement of funds and absence of sanctions on abuse of authority. Auditor General’s recent report indicates disbursement of five billion rupees remained unaccounted for by spenders in various government departments. This is a lot of tax payers’ money. Further, millions of rupees of tax exemption granted to Ncell without transparent and justified reasons raises public concerns.

To make the matter worse, disappearance of 33 KG of gold confiscated months ago by Customs Department remains a mystery to general public for no one is held accountable yet in this heist. Public remain curious about the reappearance of banned Pappu Construction back in the business relationship with government. Controversies surrounding improvements of road between Narayangadh and Butwal, delays in construction of bridge over Tamakoshi River and completion of Gautam Buddha International Airport in Bhairahawa are equally fascinating. Media reports suggest apparent unavailability of business plan of airport’s operability do not make the climate of confidence any healthier. Controversy surrounding printing of poor quality ten-rupee polymer banknote from Australia by Nepal Rastra Bank makes the list longer.

Why are we regularly hearing one controversy after another once government projects get going and advances to implementation? Talking about people’s prosperity we hear individuals have risen from rages-to-riches, especially those who have powerful friends and have right political connections. These individuals have amassed disproportionate fortune compared to declared earnings. This sounds unusual to most of us who want to see nation’s prosperity.

Two alarming stories of the past weeks relate to NRs 4.38 billion purportedly embezzled in collusion between government ministers and senior bureaucrats in buying two second-hand Airbuses. This is a staggering amount of tax payers’ money. Many concerned citizens are puzzled by government flying business of aircrafts through a failed airline instead of ensuring good governance, judicious use of tax payers’ money, and maintaining law and order. The other scandal relates to purportedly government minister and bureaucrats’ demand of NRs 33 million kick-backs at the final phase of long awaited Melamchi Water Supply project. This is not only appalling but tantamount to speculation on possible delays and cost overrun.

Recent media reports indicated that lawmakers and government ministers were collecting ghost staff salaries, housing rental subsidy benefit while staying in own houses, cost of petroleum while riding bicycle. Most spectacular revelation is reportedly one former Prime Minister and leader of a leading political party receiving ghost staff salaries. Isn’t this a mockery of abuse of authority and misuse of state’s coffer? How could one morally accept this when hard working large but poor majority continues to pay taxes? How could general public on street trusts complicit politicians who are supposed to be the custodian of tax payers’ fund?

Corruption saga does not end here. Another disturbing news concerns planned felling of 2.4 million economic trees for the proposed construction of reportedly one of the largest International Airport in South-Asia in Nijjgadh, a glorified project without first undertaking mitigating measures for protecting environmental degradation and balancing bio-diversity by compensating loss of eco-systems in one the most important regions of Nepal.

Rumors of corruption at Land Revenue Department in the Valley and elsewhere where ‘no cash no work to begin with’ is equally astounding. This does not augur well with honest and unsuspecting Nepalis who are in utter disbelief of examples of governance and functioning of state machineries; not witnessed in the past. Corruption cancer seems to be spreading contagiously in nation’s social fabric and public physic.

Where Is This Nation Marching?

Parliamentary sub-committee report on alleged misappropriation of billions of rupees on purchase of two aircrafts suggest how inefficient and corrupt has become failing flag national. It just proves that state enterprise, like this one, lacks accountability to tax payers by serving as conduit for malversation of funds. This is unfortunate. Honest and conscientious lawmakers must act against misuse of funds and abuse of authority by imposing stricter sanctions and restore credibility. This phenomenon, time and again, underlines that government should not be in the running of business enterprise for it lacks market know-hows, relevant skills and up-to-date knowledge of the industry.

It raises very fundamental question of why a poor country like Nepal needs to run airline business when service can be provided by private sector and private airlines are doing so satisfactorily on competitive basis. Government should stop pretending to be a competent entrepreneur for what it is not. Private investors run airlines efficiently and adjust business plans swiftly as determined by demand elasticity and market forces. Government can’t do this. On the contrary, government’s ‘white elephant’ enterprises, will only serve as ‘milking cash cow’ as demonstrated by the purchase of two aircrafts. This revelation may only be a tip of the ice berg of government corruption!

It is just unimaginable how a poor country like Nepal afford such wasteful expenditure? The two reported cases of mismanagement of funds would cost each Nepali for about NRs 330 per person. Should not lawmakers step down from living on ivory towers to take a hard look at what’s happening on the ground and talk to ordinary people for what they want from their money earned from their sweat? Should not CIAA investigate such criminal acts?

Concluding Remark

Against mounting reports of corruption lawmakers should not remain silent spectator for they must act on measures to curbing abuse of authority and impose harsh sanctions against those implicated and accused of robbing tax payer’s money. Misappropriation and malversation of funds, bribes, embezzlement, abuse of power of office, nepotism, impunity and conflict of interests must stop.

Systematic costs overrun, and time extension demonstrates inefficiency or built-in loopholes in the governance system. Why do government projects always overrun, and time lines extended? Obviously, it indicates something is seriously wrong with government machinery. Time to ponder. It reinforces perception of lack of skills, managerial competency, relevant operational experience, and more importantly, lack of dedication to good governance and total disregard of accountability on tax payers’ money

If corruption is not managed there is no simple way to alluring prosperity for economic bounty is not coming through the roof of open and globalized market economy which continues to sweep Asian countries, sans Nepal. Isn’t this high time for looking into alternative ways of project development, financing, management and implementation so that tax payer’s money is not wasted any further?

The eye-browsing report on NRs 4.38 billion mismanagement relating to purchase of aircrafts illustrate what might be occurring within government. It is really an eye opener. State seems inept in curbing this epidemic despite having a stable government with two thirds majority in the parliament. When would general public on streets likely to feel tangible benefits, in lieu of political rhetoric, from a government?

kedar neupane reminace camp.jpg

Kedar Neupane

Neupane is the president of We for Nepal, is a former UNHCR international official, retired after three decades of service in countries of Africa, Asia, the Middle-East, and Europe.He can be reached at Neupanek1950@gmail.com

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