Seminar Report on Achieving Accountable Governance in Nepal
Organised by NEFAS-FES

Oct.3-4, 2002

A two day seminar on "Accountable Governance in Nepal" was organised by Nepal Foundation for Advanced Studies in Kathmandu where accountability in governance was extensively discussed by academicians, civil servants, journalists and people from other public walks of life. The programme began without any formal opening ceremonies with Ananda Srestha, the NEFAS executive director, welcoming the participants. Devraj Dahal, FES official, highlighted the issues at stake followed by the presentation of the first paper of the day. The floor discussed the issues raised in the presentation of each topic. The presentations were titled "Public Policymaking in Nepal", "Conflict Resolution through Governance Effectiveness", "Managing Regional Disparity in Development through Governance Effectiveness" and "Politics of Hard Choices: In Quest of Economic Policies and Programmes". The authors of the papers were Hiramani Ghimire, Bihari krishna Shrestha, Chakramehr Bajracharya and Raghav D. Pant respectively. Two presentations were made on each of the two days of the seminar. Following are the excerpts of the comments of the different participants.

Devraj Dahal's address: Power and accountability should go hand in hand for a democratic process to be truly under way. Our Constitution has visualised the need for handing over power to the people by vesting sovereignty in them, but we have not been able to translate the constitutional provisions into action, in spite of the setup of institutions regarding accountability, like the Public Account Committee in the parliament.
State power is being shared by different actors in the society but accountability is not being commensurately shared. The market, the civil society have all been sharing state power. The policy domain is being decentralized in more ways than one. We are influenced by the international system but we have not been able to influence it. This produces an accountability deficit in public action. Additionally, in Nepal, there is no system of accountability in policymaking. Who is accountable for policy failure? If we can answer this question, policy gets oriented towards success and even democratization takes place through participation. We have not been able to capture the ground reality of Nepal, which lies between industrialization and agriculture, so our development policy produces underdevelopment. The political class oscillates between public interests during election times and private ones after that. This is not a proper setup for public policy to be accountable.

FLOOR COMMENTS

Session I

Chair: Meena Acharya
Author: Hiramani Ghimire

Public Policy making in Nepal

Krishna Bhattachan: How would you define the state or the government, because you defined the civil society in an interesting manner (as a past time of a few English speaking urban elites)? How do you differentiate between 'public' and 'people'? A public is aware about government policy and reacts and interacts with the government while the people are an oppressed lot. The Chepangs have been affected by forestry and conservation policy but have not contributed anything to its making. How can such policy be called public?

How do you define 'shared governance' or 'inclusiveness'? Does it include federalism? Or, constituent assembly?

Som Bdr. Thapa: Public policy appears to be a hobby of politicians and other public people. Policies have not included people's participation in their formulation, thus making implementation difficult. The administrative reforms as envisaged by the Administration Reform Commission headed by none other than the prime minister himself, Girija Koirala, could not be implemented.
Regarding parliamentary committee disputes, the Constitution does not have overlapping provisions causing the disputes, but is a natural thing in every country. Policies are not debated properly and are open to problems of implementation. Even unimplementable laws easily pass through the parliament which is divided along party lines. Public policy is also dominated by private interests rather than public ones. And, governments have become conduits to keep it that way.

Binod Karmacharya: Supranational instutions are dominating in policymaking is also related with our weak capabilities to resist it. What are the reasons for weakening capabilities? Joint secretarties that are supposed to negotiate with India on policy issues are replaced frequently. So there is hardly time for them to be seasoned in their job.

Chakramehr Bajracharya: The author should be more specific on institutional arrangements for policy advice and analysis. This is important as it infuses accountability in policymaking.

Political interference can lead to bureaucratic manipulation in return, and policy evaporation is the result of such tit for tat between politicians and bureaucrats.

We appreciate donor support to Nepal's development, but we have also seen their dominance in many areas. They run a few programmes in several villages of a district but later advertise their involvement as a district-wide initiative. This is unethical. Also, once donors opt out sustainability becomes a problem. Palpa was an example of swabalamban but where is it today?

Mahesh Dahal: Why is the suggestion to train politicians on public policy kept last in your priority list?
Policymaking has not been innovative, but remains donor-driven. The affected should be consulted in policymaking.

Gunanidhi Sharma: Should policy be publicly responsible or not? Should pension and provident fund be taxed? Just consider that even the World Bank is asking the government to create social safety nets?

Also, when the security forces are killed their dependents are compensated but the dependents of a Maoist who gets killed in the same battle are not. Should policy be so discriminatory?

Bihari Krishna Shrestha: Highly educated parliamentarians in Nepal have not led to more informed policy. So education does not seem to have anything to do with proper policy. These people are more like the mafia if we look at the way they operate. Just look at the way they have taken privileges like Pajeros. The problem is more to do with the way we elect them. The voters are usually illiterate who are overwhelmed with the flow of money during election times. In other words, to get elected you need money. And, where do you get that money? The answer is simple- earn enough through your public position and spend it to come back to that position.

Community forestry is a success story. That is because of participation in policymaking.

Khilanath Dahal: Public policies have been changing frequently in Nepal according to private needs. How do we change this trend?
If you cannot provide social security, you should not be allowed to tax.

The Public Service Commission exams do not reflect the manpower needs of the country. There should be a system of appointment in public positions whereby officials retire in the office they are appointed in. This provides room for accountability as they are not taken away to other offices by those in power to fulfill their private interests.

Suman Dhakal: Policies need to be balanced. Private and party interests have so far been dominating policymaking. A system to include feedback in policy needs to be established.

Shanta Shrestha: The country is in total disarray and we are not discussing the real issues affecting it. We are aiming to make a dishonest government honest. This is a futile exercise as many such efforts have already been made and that governments have not heeded to them.

Padmanath Tiwari: How can a non-ethical seed produce an ethical fruit? The reason for the Maoists is bad public policy.
Prioritization in policy implementation also counts. We have been copying from countries of dissimilar background. Policies need to be grounded in Nepalese reality.

Ananda Srestha: When the British left India, it left a bureaucratic culture behind. Nepal lacks one. The problem in Nepal appears to be the lack of a bureaucratic culture. If people do not bother to follow table manners in state banquets, how can they be treated on equal terms by others? Unless we set up basic criteria for political office, nothing is going to change from the present situation. The electoral process has to change so that the people who have earned notoriety never come back to power.

Author's Reply

Inclusiveness should mean inclusiveness of castes, languages and classes. I would like to add that women should be given better representation. Representation should also mean that they should be able to contribute more in the public sphere.
The state should be serious in carrying out its responsibility. Nepal was one of the first countries to provide legal backing to decentralization, but practice has put us far behind others today.
Discrimination should not be a policy goal, except if it is for positive discrimination which is provided for by the Constitution.
Policy clarity and consensus on fundamental policy goals should be essential features of public policy.

Chairperson's remarks

Formal structures have been put aside by informal ones in policy making not only here but even on the international scale. The spelled out WTO agenda is subservient to the unwritten one of big corporate houses.

Public policy is limited in its use to be used as a tool to come to power and help those around you through the spoils. It is because of the informal elements taking over the power structure that the Maoists have taken the political centrestage. They are the same informal elements that were also in the Panchayat system.

We are not a civil society, just an NGO, as we are not involved in opposing the government.

Session II

Chair: Gunanidhi Sharma
Author: Bihari Krishna Shrestha
Conflict Resolution through Governance Effectiveness

Srikrishna Yadav: The paper does not reflect the Tarai ethnic groups. Yadavs have not been mentioned in it. Why do you call the Tharus classless?

Khilanath Dahal: There is no guarantee that the cooperatives may not end up like the Sajha of yore that put thousands in jail. How do we avoid such an outcome from SFDPs?

Schools and health posts do not work properly in spite of local involvement. How do we rectify the situation? There are instances of local government being corrupt where projects exist only in paper. There are also people who have mismanaged the five hundred thousand central grant. Our governance is corrupt from top to bottom and we need to realize it.

There is a need to involve women on a wide scale at the local level.. Regarding group differences, we need only to focus on the rich and poor classes and not ethnic differences which is bound to increase conflict.

Binod Bdr. Shrestha: Is conflict self-generated or has it been generated by others? Ever since 2007, there has been a lot of beating around the bush. A few have been able to work for their private gains in the name of public interest?

Srish Rana: We need to move from a closed to an open society by empowering the grassroots. We all agree on that. But I think that we need to start shifting our parameters of analysis. Analysis should not be stereotypical. In India, there are no Bahun, Chhetri and Newars, but still the problems exist. In the US, it was the class system that was rigid. Yesterday the Blacks were not empowered but today the situation is different. We need to emulate that system. The ethnic couldron sounded high even in the first fifteen years of the Panchayat. But now we need to discard such politics.

The 2046 change came because of the intellectuals and not the politicians alone. So we need to blame them for the current mess. The Bahuns and Chhetris are privileged because they are the intellectuals. The elite need to do their own job before blaming others.

The kamis are forgetting their profession in the name of development. We are teaching him to leave his profession to become more like bahuns.
Even the land ownership structure should not be the basis for the analysis for development as most of the traditional owners are no more so. Just because the king is a Thakuri does not mean that all Thakuris are powerful. They are Thakuris working as porters in many instances. Even the powers of the King is under question today.

Padmanath Tiwari: Nobody is a born bahun, only the attainment of certain status through work turns them into one. We should not be discussing about castes, but class. There is more exploitation within the ethnic groups than among them. That exploitation is between classes within the same group.
What is the solution? We need to choose between the radical alternative and poverty alleviation programmes for change.

Prem Sharma: The paper harps on old themes that the author compiles from his consultancies with donor organisations. It does not provide the solutions needed.

Land use is not crowded as the paper claims, especially if we look at it with the crop intensity in mind.
Also the dalit associations are a reflection of the incitements by political parties rather than self-generated movements.

Santa Bdr. Pun: The paper claims that community forestry was forced by the World Bank. Does the credit go to the World Bank or the government?
According to my experience, it was the communities that managed forests until the Panchayat took over which took away the ownership from them. It is just that, later on, that ownership came back to the communities. This needs to be credited as such. In the Tarai, the forests were not managed by the community like in the hills, so it has not been such a success there as in the hills.

I think the paper does recognise the mal-distribution of resources among ethnic groups.

Rudra Upadhya: What do you say about Marwaris of Indian origin, Mananges and Thakalis?

Lal Babu Yadav: The paper talks about conflicts, but not their resolution. The state is formed to resolve conflicts.
The paper talks about Indian influence in the Tarai. But the urban centres, like Kathmandu, are more influenced through the media than the Tarai.
It was not the CDO who came back from Rautahat during the 1971 Hindu-Muslim riots. It was the Anchaladhish.

Rohit Nepali: The author thinks that mal-governance is the reason for conflicts within the ethnic diversity. He thinks the solution is in decentralization. I agree that conflict can be both positive and negative. But studying the Nepalese case, we can conclude that particular communities and areas have been consistently isolated.

In the past 12 years, we have been more centralized. All the MPs are spending 75 percent of the time in Kathmandu. We are turning genuine commerce and industry houses into smuggling entities.

Before 1950, health and schools were managed by local people. After that the government started taking over and people were made dependent on the government and the government for its part could not manage the burden. I hope it is seen as such by the author and the pitfalls in the paper mended by analysing in such a perspective.

Devraj Dahal: The paper needs to address the governance goals and then relate our analysis in terms of meeting those goals. The first goal is security. From monocentric governance we are moving towards polycentric governance. How do we manage security, both people's and the state's, in the polycentric context?

Second, law and order. It is intrinsically linked with security.

Third, voice and participation. The media, interest groups, institutions that increase people's voice and participation.

Fourth, public welfare has to be there in public policies, not client orientation which kills citizenship.

Any conflict can be structural. Such conflict needs a structural transformation in the public sphere or politics. Shared interests need to be made available for the conflict to be resolved. Then comes manifest conflict. Democracy leaves room for opposition without which dissent may go against the system itself. Such a conflict is said to be manifest. Third, conflict of the government with societal forces- marginalised groups, dalits, NGOs, human rights and other groups. The society needs to be constitutionalized and resolution of conflicts sought in the different spheres they occur.

Ananda Srestha: I agree with Srish Rana's thesis that university teachers and other elites are responsible for the mess. These people have their own interests to follow. But not everyone is like that. Also, the Nepalese bureaucrats are to blame. The decisions on the country's resources rests with them. The key positions are filled by politicians who disregard the needs of the posts involved. The Nepalese envoys have become the laughing stock of the whole world. Similar is the case with positions within the government.

At the moment, the people are sandwiched between the Maobadis and the Khaobadis. In the urban centres the upwardly mobile people have restricted our mobility and in the rural areas the Maobadis restrict it.

Author's reply

Access to education is limited to the haves. This is not only a Nepali phenomenon. In the US, they have come a long way with even their national security advisor being appointed a black. But still they have gaps between the blacks and whites.

In our context, the single solution that can be applied to make the society more open is making education decentralized. Today, the situation is such that teachers don't need to teach and students don't need to study. If communities are handed over the powers they can emulate the forestry success in education as well. And education is the most powerful equalizer of all.

Chairperson's remarks

The data in the paper are very old, some dating back to 1990. The approach too has been a micro one. But what about industrialization? Poverty alleviation and the like need to be looked at in the macro perspective as well.

There is also conflict related with external factors which the paper does not mention. There are treaties that exist with India that determine a lot of conflicts in the country. The paper deals only with conflicts originating within the country. The Indians are given national treatment allowing displacement of Nepalese workers and capital. Without independence in policymaking, how can it be made public? There is also pressure from Bretton Woods institutions and donors. If indeed India was a haven for the Multiparty politicians of the past, we can say that it is a haven for the Maoists today. Unless we take care of both the external and internal factors of conflict at the same time, it would not be an appropriate solution.

Conflict arises because of lack of justice. The legal system is obsolete. The police are corrupt. In the past, the family provided social security. Today we find no government policy to replace it.

Session III

Chair: Mohan Man Sainju
Author: Chakramehr Bajracharya

Managing Regional Disparity in Development through Governance Effectiveness

Gunanidhi Sharma: Regional disparity is high in Nepal and there is also rural-urban dichotomy. There should be participation not only of people but also of the other available resources. Growth rates and other development indicators appear to be higher as one goes east. And development appears to be reluctant to climb the difficult hills and mountains. Infrastructure has yet to reach those places. This is because of wrong planning. Even after multipaty democracy was restored, economic democracy, or participation of all the people in the market, has been utterly lacking. If we have more realistic poverty indicators, those under poverty line may reach 80-90 per cent of the people. After 1990 we adopted a defective model in the name of being market-friendly. The highly potential areas still appear to remain neglected. Villages are provided funds but not the necessary backup to spend it properly.

Prem Sharma: What is the strategy, the programmes and the evaluation mechanism to reduce regional disparity? The 1990s decentralization effort is no different from that of the eighties, except may be in words. The prime ministerial decentralization committee makes the programme and is its own monitoring agency. Is this not problematic rather than a solution for lack of accountability. The paper should have also explored into whether institutional reforms are necessary in today's local governance institutions.

Mahendranidhi Tiwari: Regional disparity is also affected by the national level income inequalities. It could be furthered by infrastructure projects also. The Lumbini goundwater project increased the price of assets like land. This is because of road access and electricity and other infrastructure. People having easy access to these new infrastructures become richer than those without. This is one way to raise inequalities as those areas without the infrastructure do not have their assets increasing. So development itself creates inequalities.

We should also be more hesitant in adopting change and when we do, we need to follow the needs of that change consistently. And, the change should remain for some time before new ones are devised.

Devraj Dahal: Post-modernists say that we should be multidisciplinary in approaching problems like disparities, otherwise it creates violence. The Tarai and India should interact less than it does with the hills. Rural urban linkages need to be increased. The hills are the political core while the Tarai the economic core of the nation. They need to integrate.
The market mechanism also helps integrate the nation just like the state and the civil society, as they all help reduce conflict in society if they are embedded in society.

Suman Dhakal: Can Humla of Karnali and Lalitpur of Bagmati be compared in spite of the differences? Local decisionmaking could go wrong because of lack of knowledge and hence a monopoly of a few local elites. So civic education is a must.

Som Bdr. Thapa : India and China have advanced as they make their leaders responsible but in Nepal no leader has been held accountable so far for their misdeeds.

There is disparity even within a district in spite of the principles and policy recognising the problem from the very beginning of planning. Patronage politics still pervades the Nepalese scene and donors are not transparent in their actions. Even Transparency International / Nepal is not transparent.
NGOs have been acting on behalf of foreign agencies to hinder Nepal's development. Arun III is a good example. Such issues should have been included in the paper to make disparities clear.

Binod Bdr. Shrestha: With the latest theories and equipment we only excel in beating around the bush. Such an approach is not going to produce development. Even without democracy, human rights and western development theories in the Rana years, Baglung, Tansen and Tehrathum were developed areas, not to mention Kathmandu.

Author's reply

Regarding integration and rural-urban interlinkages, they were identified by our past plans. Growth centers of the fourth plan was a related exercise. The East-West highway, hill-Tarai linkages were all made part of the integration plan.

The Nepalese need development, it does not matter who carries it out. People need employment, income and the like. The institutional structure should identify the diversity and differences available in the locality as even a small area has a lot of diversity.

I have experienced a lot of humane feelings from even the poorest of people in Nepal. The Nepalese have a lot of potential, from the cultural perspective. This can be capitalized for development.

Chairperson's remarks
The topic is contemporary enough for NEFAS to have organised the seminar. Chakramehr Bajracharya has provided the historical background to the local governance topic. Let me put up three points.

First, the change in the concept of governance. Until the 1990s, it was limited to the relationship between the state and the people. In the 90s, the role of the civil society was increasingly recognised and even the latest plans have accepted so. The role has also been articulated by democracy. This also means that the NGOs and the civil society also need to be held accountable, not only the state.

Second, while talking of lapses in planning and development programmes, what can be said is that the objectives were honestly devised, but their disaggregation has always remained a problem. Inequities have not been disaggregated into the various sectors of the population. For example, in poverty alleviation plans, gender, ethnicity, the marginalised classes were not part of the plan. This made poverty feminized, ethnicized or pushed towards the oppressed classes.

Finally, participation. Participation has remained a formality. But empowerment of the people is the only solution and participation has to be seen in that light, meaning that participation should be a condition from the very beginning of planning. A good example has been the forest users groups. The FUGs even show democracy in action. More than a hundred studies have been carried out from east to west and they have all found that when people have participated, it makes projects more effective and less costly. From the point of view of sustainability, participation is even more important.

Session IV

Chair: Srish Rana
Author: Raghav D Pant

Politics of Hard Choices: In Quest of Economic Policies and Programs

Chakramehr Vajracharya: I am also concerned with how to make planning consistent. The NPC should aggregate the disaggregated feedback it gets from each sector and district. Looking at the local self-governance act, consistency should not have been a problem.

The NPC has its secretariat and it has its own planning advisors. Advisors are not only a burden economically but a morally degrading factor for the secretariat employees. How do we envisage a Council of Economic Advisors in such a situation?

Gunanidhi Sharma: The economy is in a shambles and terrorists are blamed for it. The question is: Who is the terrorist?

What we should be looking into is that when a party holds a conference, 200 million rupees from the treasury is spent, according to reports.
Politics has meant intolerance to opposition. Where do we go to complain in such a situation?

Foreigners are advising every government branch, even the judiciary. The government appears to be bent on following the advice of whoever provides foreign assistance. Do we actually have our own economy? We have a situation where hundreds of thousands have gone abroad to work while employment at home is not rising. Today we are receiving assistance to kill our own people.
Neighbourhood politics interferes even in small matters. So where lie the hard choices?

Mahendranidhi Tiwari: Everbody appears high on preaching about morals but low on practice. That is why corruption has been all-pervading. In liberalization too, there should be protected areas from harmful foreign influence. Advisors and guides need to be knowledgeable people, not yes-men.

Prem Sharma: The four-point conclusion needs to add one more question- Do we have a national indigenous policy or are we just following a satellite plan extended by others?

Som Bdr. Thapa: Our history shows that out traditional economic policies had been effective when they were indigenous. But today's policies appear to be all imported and hence ineffective. The tax bill was drafted by foreigners and is very impractical. Who is responsible for the situation? The political sector is to blame, naturally.

How responsibly did we execute our responsibilities while we were in responsible positions? A proper answer to this question is the only guide to what needs to be done. Political socialism has only been a rhetoric. How can the foreign ministry be trusted with executing economic diplomacy if regular diplomacy itself has not been executed by the ministry.

Suman Dhakal: Is the privatization process honest or is it just being done for commission's sake?

Binod Bdr Shrestha: We should be talking about simple choices, not hard questions. We simply are over burdened with policies and over-governed.

Devraj Dahal: In fact, we are being governed without policy today. Prithvinarayan Shah's policy drove the nation for 200 years. Today, the case is different.

The Washington Consensus says that you have no choice and that you have to adjust. Where does democracy go in such a situation?
Economics is not independent of politics. It is the political sector that makes policies. Since it lacks capacity in Nepal, the political sector calls in foreigners to make those policies. Our policies appear to be context-free, importing whatever concept is in vogue.

The Constitution lays down the guidelines for economic policies, but it is the parties that are not geared towards fulfilling the constitutional vision.
Regarding economic diplomacy, the westerners look at it in the light of mercantilism. Nepal also did the same thing in adopting the entrepot concept in the 18th century. We have to understand the concept in that light.

Shanta Shrestha: We have a habit of not formulating plans to execute any work. Had it been so, we would have attained at least partial success.
Every seminar appears to be inviting the same faces. This means that the relevant subjects are not discussed. Calling the related experts together would be a practical way to gather the relevant recommendations.

The author should have also claimed success or accepted failure of his plans as he is out of his job as a planner

Author's reply

Vajracharya's concern can be answered this way. Decentralization would provide the micro base to the macro plans. If national programmes were to be formulated based on micro plans, then growth rates would also be coming from bottom-up. The Plan has macro targets and sectoral programmes. The question is how do we link the plan to decentralization?

We should have knowledge, the institutions and the culture to execute our job. Otherwise, others will rule. For example, assistance is moving towards 'technical assistance' where more foreigners have a chance to come in to get employed in the recipient country. A small opening is left for the Nepalese but the pay scale is much less than for the foreigners.

The government is already bankrupt. Regular spending is met by internal revenue. The development spending is 70 per cent met by foreign aid and 30 per cent by internal loans.

We do not appear to look deeply into issues while making policies. For example, we raised the civil servant pay by a hundred per cent several years ago. But the effect of that move is about to be seen. The government bankruptcy is one result. But the situation is blamed on the security situation. It is not true. That impact will take some more time to come. And a lot longer for it to be solved. Policies need to be made within an integrated framework that will benefit the nation.

Chairperson's remarks

The author's four points cover everything. Surya Bdr. Thapa had initiated a special economic programme during his prime ministerial term, in spite of the various programmes and institutions already existing. I had then asked: How can the two be coordinated? He had answered: It is possible. Politics can make it so.

The Bahun, Chhetri Newar system exists and within the system one may also find people of other castes as well. Baburam Bhattarai is a bahun, but in the traditional sense. The only difference is that he tells you to shave off your tuppi in today's context. Similarly, the vaisya being protected by the Bahuns and Chhetris is foreign capital, not Nepali capital. The neo-bahuns have turned the newly educated or the bahuns into neo-sudras. This especially so when politicians make them their cadres.

We talk about blaming the responsible persons, but democracy functions under shared responsibility. How can you blame only a few for the mistakes? In fact, even the Shree Teen lalmohar was a shared decision of the then cabinet (chakari). In King Mahendra's time, it was clear who took the decision. In King Birendra's time, the decisionmakers had to defend their decisions in the palace in front of a few select people. Today, nobody knows who makes the decision.