Milan Bishwakarma
March 20: It has been more than three decades since Nepal adopted a free-market policy but the country’s economy has not progressed as per the expectations. On the contrary, cronyism is flourishing in recent years. Cronyism means the appointment of certain group of people, especially friends and associates to positions of authority by the rulers, without proper regard to their qualifications.
When cronyism flourishes, businesses lack competition and this in turn will impact the economy negatively. Because of this new trend, the ones governing the country have been taking undue advantage while those with innovative ideas and the ones who believe in hard work are at the receiving end.
Analyst Pitambar Sharma says that cronyism thrived after the people’s war waged by the Maoists.
“Cronyism existed there even before. But, it has prospered after the abolition of monarchy in Nepal,” said Sharma.
“After the abolition of monarchy, the Maoist rebels came in power. As the new government did not have good links with the business community, cronyism was relatively less for the first few years. But slowly, a limited group of businessmen had access to the bedrooms of the leaders. The leaders also developed good relations with them. That is when cronyism amplified,” he added.
It is said that the trend of cronyism began in the Netherlands in the 15th/16th century. Experts say that this trend was prevalent in Nepal since the Malla era. However, many people were hopeful of cronyism to end and competition to prosper after Nepal adopted a free-market policy.
Former secretary Rameshwar Khanal says most of the sectors have already been plagued by cronyism.
“Besides the agriculture, information and technology sectors, almost all other sectors are in the grip of cronyism,” said Khanal, adding, “Looking at the institutional structure, this trend is overwhelming from the local level to the centre.”
According to him, cronyism is seen in small scale in the local units and the provinces while there is predominantly large-scale cronyism at the centre.
It is evident from the fact that only the people close to political parties bag contracts at the local levels. People have been complaining that the task of preparing documentaries of the local units are given to the near and dear ones of the local unit chiefs.
Cronyism reflects the relation between the government and a certain groups of people. It means that the entrepreneurs close to the government are immune to monitoring while the general public comes under the grip of those businessmen. Therefore, experts argue that cronyism is not in the best interest of free-market policy.
They say that cronyism is an obstacle to the development of free market.
Economic expert and consultant Sujeev Shakya says the government’s policy to control most of the sectors is also a form of cronyism.
“When there is government control instead of monitoring, the government itself protects those involved in wrongdoings,” says Shakya, adding that new entrepreneurship cannot develop due to the tight control.
At present, one needs government’s approval to start business in any sector. The government is found to have been giving such permissions to their close aides and confidants.
Shakya says cronyism has flourished especially in the sectors that require license.
Former secretary Khanal argues that although the leaders in power are people’s representatives in true sense, their have been mostly indulged in making those close to them rich and wealthy. He argues that this trend will deprive people who have skill from their rights.
Of late, businessmen have themselves climbed to the policy-making level. The presence of businessmen in political parties is also increasing.
“It does not mean that the businessmen cannot get involved in politics at all. But it is certain that they will formulate policies in their favour once they reach the policy-making level. This will impact the economy adversely,” said one analyst requesting anonymity.
Analyst Shrama says that big political parties are not in a mood to discourage this trend.
“Parties need money for the election. Once they take the money, they must do the works that benefit the business groups. This only helps cronyism prosper,” says Sharma.
