EDITORIAL: Cooperatives woes

These are only the tips of the iceberg that tell the dismal state of cooperatives which have not followed the true spirit and principles of cooperatives

The constitution of Nepal has defined public, private and cooperatives as three pillars of the economy which help contribute to prosperity of the nation and the people. Since the restoration of democracy in the country in 1990 thousands of cooperatives came into operation at grassroots levels to boost economic activities. As per the definition, a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. The concept of cooperatives was developed in England from where it expanded worldwide. Some countries, India and Israel, for example, have been doing excellently to improve the condition of living of farmers in rural areas as such cooperatives have strictly followed the very spirits and principles of mutual cooperation for common goal through productive activities. But in Nepal’s context the third pillar of economy has turned into a micro-financing institution without taking the productive sector into account. Management committees of cooperatives have lured depositors to open accounts promising high return.

A Cooperatives Investigation Commission formed by the government led by former chairman of the Special Court has found that as many as 160 cooperatives in the Kathmandu Valley alone are very “problematic”. The commission found that those institutions scammed depositors’ money amounting to Rs. 11.41 billion. After the case ballooned to a serious level the government has recently passed a law on cooperatives. As per the law the Ministry of Cooperatives and Poverty Alleviation will form a high-powered team with the authority to seize and liquidate property of the cooperatives and their executives who have swindled the depositors. The bill has left some loopholes in favour of the executives who can fight the legal battle using the cooperatives’ property.

So far, the ministry has declared Oriental Cooperatives as “problematic” and has asked its executives to clear the dues to the depositors. It has defrauded Rs. 4.20 billion parked by 11,840 depositors. There are other cooperatives, including Rajendra Shakya-led Guna Cooperatives, who have also run other cooperatives in different names. Guna Cooperatives has been found guilty of misusing Rs. 662.8 million deposited by 1,268 customers. These are only the tips of the iceberg that tell the dismal state of cooperatives which have not followed the true spirit and principles of cooperatives. Most of the cooperatives executives have been found to have used the depositors’ money in housing, real estate and land plotting businesses. Cooperatives are not allowed to engage in such dealing. But poor monitoring from the government side led to swindling the depositors’ money by the management committee of the cooperatives. The Cooperatives Act also appears to be liberal when it comes to realizing the money embezzled by the defaulters. The executives of the cooperatives who have misused the depositors’ money should be made legally liable to pay from their personal property or equity. The concerned government agency should also keep vigilance on all cooperatives to ensure that they have followed the law and made investment only on areas as specified by the cooperatives principle.

Cheating examinees

There was massive cheating in the MBBS entrance exams held by the Institute of Medicine (IoM) that took place on October 14. The police have confirmed that the question papers were leaked prior to the exams. Around 30 persons have been arrested, including the students, for helping them cheat. The students were helped in cheating through the use of sophisticated gadgets like wireless electronic devices. The racketeers, including doctors and educational consultancy teachers, are alleged to have helped the examinees write papers by using these devises.

Among the gadgets being used by the examinees were android mobile phone sets, laptops and wireless ear plugs seized by the police. Thus, the Free Students Union of the IoM are demanding that the exams be re-conducted. Their demand is justified. The exams that were held on October 14 should therefore be cancelled as the examinees who indulged in cheating during the entrance exams were attempting to take undue advantage. It is believed that the racket involved over Rs. 50 million by helping 500 students cheat.