Royal largesse: An account of misuse of state resources (Nepalnews Feature)

May 16, 2006
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By Pratibedan Baidya

The absence of parliament and lack of accountable governance result in misuse of scarce resources of one of the poorest countries in the world. That was what was shown by the “White Paper” presented by Finance Minister Dr. Ram Sharan Mahat before the reinstated House of Representatives in Kathmandu on Monday.

According to the report, under the heading non-budgetary expenses during the 14-month-long direct rule of the King beginning February 1, 2005, over Rs 1.72 billion was spent on the visits of King Gyanendra and Crown Prince Paras to various countries, and providing loans to the state-owned Nepal Oil Corporation, among others.

Similarly, under the contingency expenses, the royal government spent over Rs 1.43 billion on purchasing helicopters and for recruiting additional security personnel, said the Paper.

During the period, the foreign minister Ramesh Nath Pandey—now under detention– spent over Rs 13.3 million on visits to Qatar, Geneva, Pakistan, Russia, China and United Nations. Officials said he did not provide even notes of his visits to his ministry, let alone organising briefings to highlight the outcome of his trips.

The sole mission of minister Pandey was to garner international support to the direct rule of the King.

Similarly, the government had to incur additional liability of Rs 1.21 billion due to the recruitment of 10,000 security personnel during the period.

After the dissolution of parliament in September 2002, security expenses increased to over Rs 16.44 billion in the current fiscal year. The security expenses stood at Rs 12.08 billion in the year 2002, according to the Finance Ministry.

The royal government doled out taxpayers’ money to media organisations and media persons in order to buy their support for the royal regime. Over Rs 12.6 million was gifted to individuals and media organisations since February 1, 2005 up to the third week of April 2006—when the anti-king demonstrations were reaching the climax, according to the “White Paper.”

During the royal proclamation, King Gyanendra said his government would give priority in maintaining fiscal discipline and good governance. But, in practice, the royal government did just the opposite as revealed now.

Most of the donor agencies and countries suspended their assistance as soon as the king seized powers. After the return to democratic rule, most of the donors have expressed positive response but are still adopting “wait and watch policy,” according to sources.

In his statement, Minister Mahat urged the international community to assist Nepal including immediate direct budgetary assistance and long-term aid for reconstruction and rehabilitation programmes.

According to Dr. Lohani, by failing to mention any specific request before the donor community, the government has made its demand weak, while at the same time it has failed to assure people that the government was working on to provide some relief to them.

“The government lacks any programme for generating employment and increasing investment in the country. The White Paper lacks clear vision about giving new direction to the economic reforms,” he added.

Economist Dipendra Bahadur Chhetri said that the government needed to identify sectors that could give immediate return and invest in such sectors for employment generation. “The government should increase capital expenditure and announce economic programmes and policies based on reality,” he said.

Commenting on the White Paper, Vice-chairman of the Confederation of Nepalese Industries (CNI), Rajendra Khetan, said the White Paper portrayed the difficult situation the economy was in.

“Rather than asking for some aid from the donors, the government should prepare a mega reconstruction and rehabilitation package and persuade the donor countries for long-term commitment. Such package would help creating employment opportunities and give pace to development activities in the country,” he said.

According to Khetan, the government needs to pay its attention to issues of custom reforms, reforms in banking sector, and revenue administration in the short term while it should address the agenda of economic empowerment and social inclusion in the next budget.

When contacted by Nepalnews, former finance minister under the royal-appointed prime minister Lokendra Bahadur Chand, Dr. Badri Prasad Shrestha, said he was not keeping well and was yet to go through the White Paper made public by the new government.

Similarly, Dr. Roop Jyoti, minister of state for finance during the royal regime, was not available for comments. Dr. Jyoti—an industrialist– has been alleged of providing tax concessions to his own industries and other businessmen who supported the royal regime.