An increase in rent-seeking activities by the government has derailed politics and the economyDemonstrations against the ill-conceived Guthi Bill have already indicated what may be in store for the future.
Should we believe what our prime minister says? Let us take a look at four separate incidents. First, in the case of lab tests for vegetables entering Nepal from India, PM Oli told his party workers without batting an eyelid that he was not aware of India’s objection to lab testing. But his own agriculture minister informed the people that he had personally shown the Indian letter to the prime minister, implying that the prime minister’s statement before the members of Parliament of his own party was misleading and false. This is just one of the many incidents when the prime minister does not mean what he says, and yet we are supposed to believe his promises. Is this arrogance, incompetence or something else?
Second, the prime minister is also on record telling the people that the government banned sugar imports leading to a rise in sugar prices just before the festival season last year because he had been misled by the sugar factories. But it is hard to digest this logic when the ban was continued even when it was supposed to expire. Was the embargo then just a case of the sugar lobby misleading the prime minister or the prime minister misleading the people? In any case, the people paid heavily in the form of higher prices, and the sugar lobby was able to extract a hefty 'rent' which would not have been possible without cooperation from the government and politics of the country.
Third, in the Melamchi water supply scandal involving an ugly tussle between the minister and the secretary of water resources each accusing the other of incompetence and corruption, the prime minister again came up with the explanation that he had been duped by the secretary. In the process, Melamchi still remains a mirage, even though it is claimed that 97 percent of the project is already complete.
Fourth, monsoon has arrived and agricultural activities are in full swing. It is then the duty of the government to make sure that there is no shortage of the necessary fertiliser. The government knows this fact, and yet the reality is that farmers are complaining of fertiliser shortages while our ministers are claiming that food self-sufficiency will be achieved in the next three years. What explains this disconnect between political rhetoric and reality? This is certainly not the path of growth, an increase in productivity, and a rise in the standard of living of the poor and downtrodden.
In fact, the impression one gets of the present government is that of a blundering leadership that is more than willing to blame the bureaucracy or the opposition for its own incompetence. That explains why the prime minister or his ministers do not even have the moral courage to ask for explanations from the top echelons of the bureaucracy for their alleged fraudulent activities.
Here’s the basic problem that plagues this government and the Nepali economy: It is an increase in rent-seeking activities which is bound to derail the economy and politics in the days ahead. As a concept, rent-seeking simply means a willingness to claim a larger share of the nation’s wealth, not through increases in productivity or an increase in the size of the pie, but through redistribution that is often based on the misuse of public policy for private or corporate gain.
Rent-seeking is not just a problem for a developing country like Nepal. Even in a developed country like the US where it is claimed to be one of the reasons for a sharp rise in economic inequality, political polarisation and rise of populist politics, rent-seeking is an issue. Normally, populist politicians wallowing in rent-seeking activities see the free press as their mortal enemy. But a rich country with a fairly well established constitutional system and a strong and free press has quite a few buffers to protect it from economic and political pitfalls. However, in a country like Nepal that is poor and without much experience in tolerance, restraint and compromise, an open field for rent-seeking can easily create economic and political havoc and change people’s perception towards politics and politicians from apathy to frustration and anger in a very short period.
Oli’s government is rapidly transforming itself, not as a government headed towards a socialist order, but as a government of rent-seekers eager and willing to enrich themselves in the name of development. What we are witnessing in the country is a democracy that is of the few, by the many and for the few. At present, Nepal is a money-focused democracy where rent-seeking is not a quality to despise, but the desired character of a bureaucrat or politician who wants to succeed in the system. It is the new normal where crony capitalism based on the foundation of a neo-feudalist mindset masquerading as forward-looking and progressive lays the foundation of the rot within. This is where politics cannot be separated from economics and the evolving dynamics of society.
There is a sense of betrayal of the hope and optimism that was palpable when Oli came to power with a two-thirds majority. There was the belief that finally, we had created a strong enough political system that would take us forward on the path of justice and prosperity. And now to see that political capital being wasted at the altar of incompetence and rent-seeking behaviour has been somewhat of a shock. It is time that the prime minister became aware of this reality and not confine himself to the dreamland of a two-thirds majority. The demonstration against the ill-conceived Guthi Bill has already indicated what may be in store for the future.
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