How entrenched the transport syndicate is in many parts of the country, particularly in the western and far western regions, is testified by the fact that despite years of protests from various quarters against this anti-competition practice, and for the past several weeks, by groups led by businessmen’s associations, it is yet to be actually ended.
The law prohibits the syndicate, and the Supreme Court in 2063 BS issued an order for the law enforcement, and under public fire, government officials and agencies have issued directives and expressed commitments to stop this undesirable practice. The business community has blamed the political parties and the local administration for their ‘lack of seriousness’ about the problem, also accusing the police of looking on despite threats to agitators’ lives from syndicate operators. Agitators’ representatives have been in the capital to stage sit-ins and lobby for the end of this system.
The anti-syndicate agitation is fully justified, as it agrees with the spirit of free market and fairness rules of competition. The existence of powerful syndicates has driven up the prices of many goods and services. For instance, as businessmen have pointed out, to have a truckload of goods carried from Butwal to Rolpa now costs Rs.75,000, whereas it would cost only Rs.25,000 if the syndicate was broken. A syndicate, by definition, is an organisation of producers or sellers of goods or services of similar nature to reap a monopolist’s profit by jointly manipulating price, controlling output, or killing competition and blocking new entrants. In the case of transport, it leaves no choice for the consumers over price and over whose service they should buy. So, the service providers are under no business compulsion to improve their services. These restrictions strike at the heart of the spirit of free enterprise.
It is sad that the affected people have had to agitate for so long to have the transport syndicate abolished. It is the duty of the government and the local government agencies to enforce the law strictly. The State has often failed to make effective laws and rules against practices that go against fair trade, and whenever there exist any, to implement them rigorously.
As a result, unscrupulous operators, through unholy alliance or bribe, try to take all the advantages of free market but deny the rest of the stakeholders its benefits. This has only helped to create an unfavourable impression among many Nepalis about private enterprise and entrepreneurs. Many practices and instruments of private market have been introduced in Nepal too. There is the stock exchange, the policy of open sky, privatisation of the education system, liberalisation of the financial system, and so on, but the failure to put in place an effective regulatory mechanism with stiff punishment for the offenders — and only when a lot of damage has been done that the government tends to wake up to the danger — has created serious market distortions. The end of the syndicate in question should form only the first step towards cracking down on all attempts to form and operate cartels in many
areas of economic activity.