Although a bit late, the Nepal Army on June 20 finally pulled out from its role as the key federal procurement agency of healthcare equipment and medical supplies meant to contain and cure the coronavirus outbreak. The move was indeed overdue. Nepal Army's instant compliance to government instructions in the first place, in early April, to procure these supplies was a mistake and, therefore, had drawn widespread public criticism.

The army’s involvement was especially scrutinised because it came at a time when the process had already become messy due to the apparent instances of irregularity coupled with the involvement of high profile politicians. The army was used as a shield by the decision-makers to save themselves from public ignominy, as their vested interest was exposed during the first tranche of procurement through a controversial private firm named Omni Group. The government was later forced to cancel the deal with Omni on several grounds for breach of the terms of the contract.

When the army was assigned the responsibility to purchase the medical supplies through government-to-government deals, the circumstances were so created that it was forced to procure from China and exorbitantly add on prices for items procured. This only exposed the Nepali policymakers’ collusion with the Chinese suppliers. It was an open secret that the army was picked to handle the deal since it falls outside the jurisdiction of the Commission for the Investigation of Abuse of Authority. This hugely tarnished the image of the army, despite the fact that the current Chief of Army Staff, unlike his 'business-minded' predecessors, is considered to be a no-nonsense professional.

Again, as the government prepared to procure the next tranche of urgent medical supplies, putatively through an open competition, Omni Group was picked, with the pretext of it being superior after ‘technical evaluation of the bids’, despite the fact that the group was in the 12th position during pre-qualification screening. It was this obvious corruption that prompted the Nepal Army to withdraw from the process.

Extractive motive

The army’s withdrawal from this particular procurement process, however, is unlikely to hamper the endemically extractive state apparatus for long. The tactics used by a few key ministers in the federal government while undertaking the Covid-19 related procurement were not only dubious but also showed the level these so-called leaders could sink to, even during a grave humanitarian crisis. The country, three months into a lockdown, continues to have insufficient testing kits, and poorly managed, inadequate quarantine and isolation facilities. The undersupply of these basic kits and equipment appears to be deliberate so that an emergency-like situation could be created and the doctrine of necessity could be invoked for hefty but shady procurements.

There are other instances of rampant irregularities ranging from embezzlement of state funds to dereliction of duty by the public officials. Instead of correcting course, the government, including the prime minister himself, is publicly defending the deals that are flagrantly against the established laws and norms of public procurement.

The government seems completely unperturbed even by the protests against these irregularities and mismanagement, which have now spread nationwide. One of the major demands of the protesting youths is to make the details of the Rs10 billion that the government claimed to have spent on virus containment measures public. But it has so far failed to furnish a convincing account of all expenditures.

Systemic castration

A series of attempts to award the procurement contract to certain chosen parties indicates something far beyond a one-off case of graft. On the contrary, it shows the government's deliberate attempt to castrate the existing anti-corruption laws and institutions so as to make them supportive of future extractive and extortionist bids.

The government has amended the Public Procurement Act for the 10th time in as many years more often in the interest of the contractors protected by the government. Similarly, the government has mooted the proposal in the federal parliament to amend the Commission for the Investigation of Abuse of Authority Act 1991 to expand its jurisdiction to cover private entities like medical colleges and businesses that may not necessarily receive the government funding but are 'controlled' in some way through the regulation.

The efficacy and the integrity of the anti-corruption watchdog, let alone other anti-corruption entities directly under the executive branch of the state, have already eroded to a point that it has just become a puppet in the hands of a powerful government. The Commission for the Investigation of Abuse of Authority has clearly failed to investigate obvious cases of corruption that involved powerful politicians and bureaucrats. The only reason to expand its mandate seems to be to extort the private sector.

The 19th-century French libertarian economist Frédéric Bastiat, who expound the phase ‘state plunder’ has claimed, ‘The plunderers have historically organised themselves into States and have tried to make their activities an exception to the universal moral principles by introducing laws that ‘sanction’ plunder and a moral code that ‘glorifies’ it. The plunderers also deceive their victims by means of ‘la ruse’ (trickery, deception, fraud) and the use of ‘sophisms’ (fallacies) to justify and disguise what they are doing’. Such a systemic annihilation of the entire anti-corruption system will have far graver consequences than a single instance of corruption, like the one surrounding procurement of medical supplies.

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