Bribing for Monsanto

The hybrid seeds of maize from the American multinational company Monsanto have been distributing in Nepal with the help of some handful of people. There are several news in different local media that United State Agency for International Development (USAID) is lobbying for the entry of this particular company in Nepal.

The latest news has revealed that local contractors in Nepal are trying to push the seeds of Monsanto by bribing to the government officials in Nepal. This news has taken back to the 2009 when the Government of Nepal had to give money to the local farmers in the Terai region of Nepal when the seeds of Monsanto had cost the maize production hugely. The government had dispersed Rs 2 hundred million in the five districts of Terai region through the Ministry of Agriculture and Cooperative (MoAC). 

LOOKING THE OTHER WAY WHEN CRISIS LOOMS LARGE

This article was first published in the The Reporter Weekly

The last staff report of the International Monetary Fund (IMF) in November strongly recommended structural reform in the Nepali economy with emphasis on productivity and growth. In principle, it argues in favor of need for some changes made for the Nepali economy to move ahead, but neither the IMF nor the Government of Nepal   is clear about what really needs to be done immediately.

Structural reform for productivity and growth may not be a vague prescription, but  senior economists and officials here are quite unable to decipher , and interpret it differently.  "Banking sector risks have intensified as financial institutions proliferated in an environment of weak supervision," the staff report of IMF says. This line clearly shows the lack of efficiency on the CBN's part. Dipendra Bahadur Chhetri, Vice Chairman of National Planning Commission (NPC) and former Governor of the Central Bank of Nepal (CBN), says that the IMF's report has an implied meaning- the reengineering of CBN. Finance Secretary Krishna Hari Baskota does not agree with Chhetri.

Perhaps Baskota did not want to be caught in a controversy by making any statement about the recommendation of the IMF. He suggested that the Economic Affairs Division at Ministry of Finance (MoF) was a more competent body to respond to it.  But for one who has already worked  as a Revenue Secretary before moving to the helm of the Finance Ministry  about what the IMF recommendation implies, is unfathomable .

CBN Chief Yubraj  Khatiwada, who is an expert in monetary policy, has not given any statement on the IMF recommendation  either . However, he does not conceal his disagreement  that borderlines with disappointment with the  IMF team, according to a highly placed source in the GoN. The source said that one specific meeting with IMF team had been particularly rocky. The staff report of the IMF which is released annually after the Article IV consultation meeting with Nepal, is implicitly directed towards Dr Khatiwada and the institution he is leading. But others don’t see that unusual.

In the words of vice-chairman of NPC, there is ample room for improvement in the CBN--this is where the IMF is pointing. The efficiency of CBN can be increased if there is willingness from the leader of the institution. But this is being taken by some others as Chetri’s attempt to shirk his responsibility.

As IMF emphasizes on productivity and growth, something directly associated with the NPC that should make Chettri more thoughtful and introspective, instead of blaming the CBN's leadership.  At the same time, Finance Secretary Baskota needs to understand that he should have a clear take on issues raised by an international agency which is there to support Nepal when it is in a difficult situation.

Key technocrats in the three leading government institutions looking in there different directions, and not formulating a joint approach, to say it more precisely, reflects a situation of policylessness in the country in the given context.  This difference shows lack of a harmonious relationship among these institutions and their  leaders . Not being able to formulate a joint approach would mean their collective failure at a time when the nation faces a financial down turn.

Proposal from China for 4 Ports When India Delays

There are news in media that China has proposed to upgrade the ports in the border areas of two countries (Nepal & China). The agreement is about to be signed in the near future. This news has come out just after the Indian Envoy to Nepal Jayant Prasad’s words in the capital city Kathmandu about the Indian investment of almost $ 15 billion worth of in Nepal’s hydro sector. I am sketching this context to observe the competition between two giant economies in Nepal’s neighbor for something but economic advancement.

In the last week of November, Indian scholar S. D. Muni was in Kathmandu and he was sounding a bit aggressive when journalists questioned about what would be the Indian reaction if there was a huge amount of Chinese investment in Nepal. The preparation for signing the agreement to upgrade the ports in the border area of Nepal should be a lesson to India. The most important thing here is that Nepal has been suffering due to the congestion in the Kolkata and Haldia ports. Nepal has been constantly requesting for the facility of Bhisakhapatnam port since last more than a decade.

Nepal-India Petroleum Pipeline in News Again

The petroleum pipeline that has been talking time and again between Nepal and India—this was talked once again in the Inter-Governmental Committee meeting of two sides, which was held in the Delhi last week. This project had started almost one and half year back but couldn’t be materialized due to some irregularities in the Ministry of Commerce &Supply of Nepal then.The Indian Oil Corporation (IOC) had cancelled the Joint Venture proposal (which was in the verge of signing) by saying that the project wouldn’t work in the proper way.

This Project Won’t work in the Long-run 

The pipeline project might be good for the short run of Nepal’s petroleum market but in the long run this might be a problem. I am saying that because the petroleum market of Nepal should be liberalized for private sector--there must be the private sector’s involvement to enhance the quality of market and supply situation. The much talked private sector’s involvement is not happening due to hold of some bureaucratic hazards.  

IFIC Bank Will Have More Share in NB Bank

The International Finance Investment and Commerce Bank Bank Ltd (IFIC Bank) of Bangladesh has shown interest to invest more in the Nepal Bangladesh Bank in Nepal. The Central Bank of Bangladesh has principally provided the permission to IFIC Bank to invest more in the NB Bank in Nepal.

Survey Report of Nepal is Out

Ministry of Finance of Nepal Government has published the Country Survey Report, 2011 on Paris Declaration- 2005. This report shows some significant changes in the last three years from 2008-2011. The donor agencies in Nepal do not use the Country Procurement System (CPS) as much as they used to do in 2008. Only 37 percentage of their total annual budget used to be spent through the CPS in 2008 and now it has been increased by 19 % in the last three years and have reached to 56 percentage of their total annual budget.

AID AGENCY FLOUT GOVT RULE

Nepalese authorities say we are helpless

The aid industry in Nepal does not quite follow an easy route , and there are complex dynamics it associated with it. “In our case, it is like either we let them do whatever they want, or we decline the aid altogether”, a senior official in the Ministry of Finance told The Reporter.

What he implied was a disapproval of the way many aid agencies have conducted themselves in Nepal over a period of time. “ A few bilateral donors and their aid agencies apparently do not follow the Country Procurement System (CPS) that supervises  and keeps a tab on all procurement activities associated with the public sector.

Citing examples, he said  many donor agencies,  including the  United States International Development Agency (USAID), do not follow the CPS, i.e. the aid money it brings in here is spent without following norms set by the government, and these agencies have their way. Senior officials plead helpless on the issue.

“We don't have the right to ask any donor agency to procure under the norms of CPS", secretary at Abnindra Kumar Shrestha, Public Procurement Monitoring Office (PPMO) told The Reporter. “ Article 67 of the Public Procurement Act, 2006  gives  the freedom to donors not to comply with the CPS if the aid is not for budgetary support to the Government of Nepal.”  But it is found that  still a lot of aid intended for budgetary support flaunts CPS. Interestingly, the consultants hired with the help of World Bank had drafted the PPA, 2006.  Official version of the U S Embassy on the issue was not available although it had been approached.

“We are keen that aid agencies follow rules and demonstrate higher degree of transparency and accountability “, an official said , adding “this will also have positive impact in other sectors as this sector alone contributes to 26 per cent of our annual budget.”

“At times, they are very blunt to our mild objections. They simply ask us whether we want their support or not, and that is not the kind of decision that we can take at our level in the bureaucracy”, an official in the  Ministry of Finance said.

The latest Portfolio Performance Review of 2011/2012 has clearly stated that the CPS should be reformed to align it more with our needs and CPS system. But, it is far from being adhered to by the donors and their aid agencies. According to the guidelines, the donors should spend money by following our CPS and not by compelling the officials to accept their aid in its entirety with conditionality or forsake it.