November 8, 2011


[Our PM, if his recent love for foreign direct investments is to be taken seriously, seems to be a new convert to globalized capitalism, a departure from his ideological conviction that formed the basis for violent politics in the past. It can of course be argued that capitalism in a period of economic transition, especially when the Maoist party is leading the government, is really a progressive "mode of production" and thus a way forward to establishing a communist state. After all, didn’t Lenin, the high priest of Marxism, advocate his "new economic policy,” a variant of capitalism, soon after he captured power?]

By Prakash Chandra Lohani,PhD
On Sunday October 16, Prime Minister Baburam Bhattarai ordered the opening, within a week, of Bhadrakali - Maitighar road (in Nepal city streets are generally called ‘roads’), which runs right through Nepalese Army Headquarters and what apparently seemed he had a belief it would ease traffic congestion at the Bhadrakali - Maitighar intersection in the capital city of Kathmandu. He also instructed concerned authorities to remove hoarding boards along the main streets in the city. By now, three weeks have already passed and neither has the road been opened to traffic nor have the hoarding boards been removed from the main thoroughfares of the capital. What is happening here? What has happened to the directives of no less a person than the prime minister of the county?

Traffic Management &  the Prime Minister

PM Bhattarai´s directives give a sense of how he views the executive role as the head of the government. Even if we assumed for a moment that the opening of a stretch of road deserves the prime ministerial attention, the question still would likely be: 'What are the strategic issues related to traffic management in the capital? Can it be solved through one time potshot decisions by the head of the government or does it require setting of certain conditions that recognize the multi-dimensional nature of the problem?'

Alternatively, is the Bhadrakali- Maitighar road something other than just a symptom of a deep underlying problem of the urban management problems that have remained ignored by all the governments including the present? If we agreed it represents a generic problem related with urban management of the capital; does it make any sense for the chief executive of the country to focus on a small part while ignoring the whole? Does this also not indicate a penchant for temporary cheap popularity instead of a serious attempt to solving the problem especially when the PM apart from being a politician and a Marxist ideologue also happens to be an architect and an urban planner by academic training?

If the Bhadrakali - Maitighar traffic problem deserves prime ministerial attention, what about the problem in Chabahil or Maharajgung, other major roads in the city where, the situation has already become almost unmanageable? Will the PM now start issuing directives for all these intersections also? The question would be almost a joke except for the fact that it concerns the head of the government.

Political Illusion

One of the illusions that politicians who are in the government have, is to think that once a decision is made, it will be implemented. The trappings and prestige of the office inflate the ego and it is easy to believe that all that is needed are attention catching directives to solve the problem. This illusion is shattered swiftly when the directives lose all their thrust and momentum by the time they reach the execution level as we are observing in the case of the Bhadrakali- Maitighar episode.

The Bhadrakali - Maitighar road episode highlights the fact that a leader as an executive in the government needs more than an eagerness to issue directives with the press in attendance. The important point is to be able to conceptualize the generic nature of the problem and to outline policies and rules that help solve it.

Once this happens, the normal tendency is to accuse bureaucracy and even complain that it is not cooperating with the political leadership. I have personally heard this kind of talks very often. The general complaint, expressed with a kind of anguish and a deep sigh, is that the country could really be transformed from scarcity into prosperity should bureaucracy become more cooperative. This naturally absolves the political leadership of their own incompetence in decision making.

I have myself gone through this process and hopefully learnt a few lessons. In 1984, when I became the finance minister, I was convinced that the only way to boost the growth rate of the country along with a gradual shift in the power balance in the political structure was to help create environments that would encourage the emergence of a new bourgeois or an entrepreneurial class. One part of this program was to privatize 12 government corporations in one year, one every month. It was a decision that was to my surprise easily approved by the cabinet and I was proud of the fact that I was able to incorporate it in the annual budget.

However, by the end of the year, to my own dismay, the finance ministry that had taken the leadership in this project had been able to involve private sector only in one government-owned enterprise. Similarly, government ministers who had to take the initiative on privatization remained completely indifferent to the proposals that they themselves had fully supported in the budget.

In spite of the grand scheme of the budget, all that was achieved was to sell 15 percent of the government-owned insurance corporation under the finance ministry. As for the remaining 11 corporations, the achievement was close to nil. What strikes most even  after 25 years since is that we have not made any substantial progress in the management of government-owned corporations. What had happened? Why were the decisions approved by the cabinet not implemented?

We failed in the past to implement many innovative ideas because the whole question of specifying the boundary conditions in a decision representing the aggregation of the interests of different groups and stakeholders into policies that forward public interest were not seriously considered. Similarly, major decisions were not conceptualized in the context of their links with new values and structures that would be necessary for successful implementation. So, new ideas quickly degenerated into potshot populist measures that ultimately created disillusionment among the people.

No Consultation With Army

The prime ministerial decision to open the Maitighar road, in 10 days, in all probability may be included in the long list of adhoc decisions that will soon be forgotten. The PM has even ignored to hear from the army. He seems to have neglected to find out if the army can indeed carry out the decision given the institutional considerations of security of its assets and infrastructure. A decision of this nature shows both inability to consider the problem from a broader perspective of urban management as well as a reluctance to take into confidence the agency responsible for implementation. The same can also be said about his another directive to removing billboards from the main thoroughfares of the capital.

Our PM, if his recent love for foreign direct investments is to be taken seriously, seems to be a new convert to globalized capitalism, a departure from his ideological conviction that formed the basis for violent politics in the past. It can of course be argued that capitalism in a period of economic transition, especially when the Maoist party is leading the government, is really a progressive "mode of production" and thus a way forward to establishing a communist state. After all, didn’t Lenin, the high priest of Marxism, advocate his "new economic policy,” a variant of capitalism, soon after he captured power?

The beauty of Marxism is that as a philosophical method of analyzing history, it sounds  highly rational, claims to unravel the essence of a historical relationship and boldly declares the doctrine as a guide to history. And, yet, its philosophical methods have been used by the high priests of Marxism to justify the most inhuman acts in history.

The 20th century was littered with the wreck and ruins of Marxism ranging all the way from one-party totalitarian dictatorship that treated human beings as nothing more than body machines to inhuman gulag (labor camps) where thousands perished in the name of a mystic new world, a new model of political and economic nirvana (enlightenment) and the dream of a new city shining on top of a hill. It is this holier-than-thou attitude; an immensely authoritarian style that reflects in many ways the values characteristic of a feudal regime – that ultimately destroys the system.

On the other hand, as a system of economic management, modern capitalism does need properly defined 'boundary conditions' that allow aggregation of interest of the stakeholders at the ground level for effective execution of central directives. It is time that the PM remained aware of this imperative.

(The author is an economist by training and former finance minister of Nepal. He is the Co-Chairman of the Rastriya Janasakti Party and a Member of the Constituent Assembly currently)

© Republica
---------- Forwarded message ----------
From: Adarsha Tuladhar <>
Date: Tue, Nov 8, 2011 at 8:41 PM
To: The Himalayan Voice <>

Dr. Prakash Lohani is no doubt a learned man and well read individual also.  He has matured to become a good parliamentarian and is a most valuable member of PAC at the Constituent Assembly of Nepal. His views and thoughts are well respected.

On his view of  the ideological  transformation of BRB or Babu Ram Bhattrai, the prime minister, I guess he needs not be worried about because in today's world the communists are going all out for FDI (look at North Korea and wait for Cuba's formal invitation) learning from China's success.  Whether the country and its infrastructures are ready or not is a different question.  It is not for nothing that China waited for sometime for the 'right' moment to come.

On the other hand Dr. Lohani should also not overlook what is happening in the USA today. In the beginning the 'Occupy Wall Street Movement’ seemed to be spreading all over the world including Nepal also.  That shows the 'limitations' (I won't say outright 'failure') of the free market economy.  The US economists have own most Nobel Prizes for Economics which show that they are the best thinkers of economic policies in the world.  But, even those distinguished groups of economists also seemed unable to suggest what is best for USA

Presidents keep dillydallying on 'outsourcing',  'tax cuts' and 'job creation at home' etc.  Therefore it is not strange that BRB is thinking of other models and what is wrong if the government can at the same time protect the interests of Nepalese  investors ?  Remember, FNCCI (and all businessmen) have approved of the BRB path and they seem to be quite excited now.  Isn't it good to see such  ideological transformation?

For BRB's failure to open the Bhadrakali - Maitighar road, I understand that it is the Army's 'fear' totally of unseen enemies so to speak.  Look at the double-edged barbed-wire-fence running around its premises?  The army does still have some anticipation of adversity to remove them even today. So, it's total 'paranoia' of the Nepalese Army which has caused delay in opening the street for traffic.  I  hope learned people like Dr. Lohani will also think about it from the 'founded' or 'unfounded' angles of paranoia of the army rather than seizing the opportunity to fault the Prime Minister. 

Adarsha Tuladhar
Team Leader/M & E Specialist
Programme for Accountability in Nepal (PRAN)
TMS/IIDS - National Research Institute
Tel.: 4439187 & 4439182 (work), mobile:  98418-88262
e-mail:  <>, <>