Aug 27, 2010

How to be kind and generous-our government's way?

If not anything else, our state run public enterprises have always provided us with enough reasons to be ashamed of them.  From Nepal Telecommunications Corporation of the past which used to take just about a decade to provide a single telephone line, to Nepal Airlines Corporation, which came up with a brilliant idea of looting us in broad daylight by buying airplanes in higher than the competitive prices, our public enterprises have been very competitive in committing acts of pure corruption and causing public embarrassment. Not only the above mentioned entities but entities like Nepal Electricity Authority who has brilliantly designed and implemented the service of load-shedding and Salt Trading Corporation which dreams of selling products in prices higher than market prices despite receiving government subsidies – they all deserve equal accolade when talking about shamelessness. However, Nepal Oil Corporation with its recent staff bonus scandal proved itself to be very serious on being the forerunner of shameless acts.

Though general public and CIAA failed to appreciate, when NOC’s managing director Digambar Jha decided to be generous by providing bonus to his dear employees, he was trying pretty hard to impart the thought typical to Nepal’s policy practices, “always be kind and generous but at someone else’s expense.” You may find it surprising but the events that have led to this state of NOC were purely based on this principle itself. Didn’t get it? Well, one fine day in the past, the government thought that the general public couldn’t pay for the expensive petroleum products and Nepalese people didn’t know at all about the search for alternatives if something got expensive or alter the amount of consumption to adjust to the increased prices. So the government decided to be generous and provide us with subsidies. Despite our general belief, it’s a fact that there’s nothing such as free lunch in the world. So who is to cover the losses?? Of course, the government! Who is to finance the government? Of course, the general public!  And to our surprise, we realized that the cost of financing the losses of NOC were even greater than the amount of expense we would have to pay for the petroleum products had they been allowed to be priced in the market prices. Hence, Nepal government made an example of its kindness at our expense; it’s as simple as that.

Curious? You have treasures of examples to explore in this regard. Just look at any of the public enterprises our government has created with this very noble intention. The major reasons for which our state has spent billions and continues spending millions in various public enterprises ranging from match factory to tannery is that it wants to provide us (people with political connections at least) with jobs and also wants us to provide us with goods and services so that they don’t cost us an arm and a leg.  The state has spent about 123.85 billion in various public enterprises which generate a return of about 1.8 percent in aggregate .You may wonder that is too low as compared to private sector which would have at least generated something in two digits but remember the government is not supposed to make profits! Out of the 123.85 billion, the assets have depreciated to about 81.92 billion, 33 percent less than the original value. The loan has accumulated to 83 billion and unfunded contingencies are about 21.31 billion. And a total of 37,000 people are being employed by these enterprises. So, calculating the amount, more than 60,000 rupees is being spent per person (not including the salaries, benefits, pensions etc.) to provide employment. And of course, the recent trends of generosity, “bonus” hasn’t been included in these figures yet. Who pays for all of these costs you may ask? Of course, Nepalese citizens should be proud to be supporting such noble causes. Residents of Jajarkot are paying for it forgoing their medicines that could have saved their lives from diarrhea; people in Jumla are paying for it forgoing the infrastructures in their places. That’s the way it works; “be kind and generous but at someone else’s expenses”.