The way forward
It has been one year since the devastating earthquakes took away the lives of thousands of Nepalese. Many lost their homes and most were deprived of basic needs like food, shelter and clothes. A lot of foreign aid was injected into the economy; however, whether it has been utilized or not is a big question mark. What is wrong with the country? Where are the gaps?
The bureaucracy in the country changes almost every year. Frequent changes in the bureaucracy bring about frequent changes in policies; and most of the times these frequent changes are the reasons why there are so many interruptions in the development projects -- the existing bureaucracy does not uplift the projects initiated by the preceding bureaucracy. If we view Nepal as a company, the citizens as the shareholders of the company, the Council of Ministers and the bureaucrats as the managers of the company and the Prime Minister and the President as Joint Chief Executive Officers, the agency problems between these players can be linked to the staggering economic condition of Nepal.
The managers -- the Council of Ministers and the bureaucrats -- are in a dilemma regarding whether to perform their tasks dutifully or to grab that extra penny from that tempting bribe. The Joint Chief Executive Officers -- the Prime Minister and the President -- are in a dilemma regarding whether to indulge in maximizing the shareholder’s return by formulating effective policies or to reject the advantageous project initiated by the opposing party in the name of maintaining their own party’s reputation in the market. Next are the naïve shareholders. They are the ones who expect the maximum return on their investment but are not motivated enough to take any initiative to bring a positive change in the company.
Then, the other players of the economy come into play, the competitors -- other countries and the external auditors -- the journalists. The external auditors provide assurance to the shareholders that the company is in the right track. However, the external auditors in Nepal’s case are also prejudiced. They are more influenced by politics, corruption than by the need to deliver undiluted information to the general public; there is lack of effective flow of information in the economy which blindfolds the citizens and keeps them from scrutinizing the country’s growth and hinders them from identifying the existing gaps in the economy.