Opinion Capital flight

Nearly half a dozen banks and financial institutions in the country have collapsed in the past 18 months,and people are withdrawing their deposits at an alarming scale. The sudden slackness in the real estate business after a boom in the past decade has also taken a toll on lending institutions. There are fears that the worst is yet to come. Experts say under-invoicing and corruption have contributed to the flight of capital.

The failure of the current political dispensation — a combination of three major political parties which have monopolised power over the past five years — to bring peace and stability and enable a conducive atmosphere for investment has no doubt led to this situation. So far,the government has been able to get away with the assurance that things will be all right once the new constitution is drafted and the peace process completed. It is unlikely that the people will buy this theory any longer.

On June 26,Rubel Chaudhary,son-in-law of the Nepal Congress leader and Deputy Prime Minister Sujata Koirala,left for Dhaka. A Bangladeshi national,Chaudhary was under the scanner in a corruption case involving 450 million Nepalese rupees and supply of substandard armed personnel couriers for the Nepali police contingent serving the UN peace mission in Darfur. Many believed he knew all about the Darfur scam and about the end use of kickbacks.

The scandal allegedly took place when Sujata’s father G.P. Koirala was the all-powerful prime minister,especially since king Gyanendra handed over power after a powerful mass movement. Former US president Jimmy Carter even called him “my hero”.

But there has been a slew of allegations about G.P. Koirala recently,denting his once glorious image. The allegations point to nepotism and overall culture of corruption. At the height of his popularity,Nepali media,civil society and the world outside,that was encouraging the country’s efforts to write a constitution and make peace with the Maoists,ignored several home truths. One being how he gave carte blanche support to his daughter and her political ambitions. Sujata,in turn,reportedly supported Chaudhary’s rise as an extra-constitutional authority in the country in the past five years. Sujata had claimed just a day before his flight that he was innocent,that he was being framed by pro-monarchy elements for her family’s role in the restoration of democracy.

But the fact that Chaudhary,despite having been under state vigil,had a smooth passage raises the question whether the Left-dominated government and its agencies deliberately closed their eyes to it.

All three parties have collectively failed in stemming corruption and giving some stability to the country’s economy. There is a need for regulation. One major reason why the state is almost on the verge of collapse is because organisations receiving funds from international donors — most of them with some kind of affiliation to major political parties — are acting like anti-state actors.

There are some efforts to bring about a semblance of order. With the crime graph going up,the state affairs committee of parliament summoned Home Minister K.B. Mahara last week and asked him to bring out a public security policy within the next two weeks.

The feud within the Unified Communist Party of Nepal-Maoists (UCPN-M) and the sharp division among the three major political parties on the elements to be included in the future constitution only add to increasing public distrust. What is needed is an effective and accountable state — that is not in sight at the moment.

yubaraj.ghimire@expressindia.com