Sep 26, 2011

Who's responsible for adulteration?

Recent revealing of adulteration and malpractices in almost every consumable goods has shocked all of us. From the traditional gudpaks to sausages, no edible goods seem to be uncontaminated and unadulterated. Critical questions about the integrity of the private sector and ignorance of the Nepalese consumers are being raised. Findings have delivered a huge blow and another setback to the already dwindling image of private sector. The government's move to check the quality of food and media's support in highlighting the findings are appreciable. However, some opinions being expressed question the very existence of private sector and whether the state should start playing a greater role in providing goods and services.

Since reactions to the incident has been towards the lack of integrity of private sector, it is imperative that role of all the three parties involved, namely-government, private sector and the consumers be brought under the scrutiny of public discourse and debates. 

The private sector

A critical look at the history of Nepalese private sector would be enough to convince the observer that in Nepal private sector's greatest enemy has been the private sector itself. Neither has it been able to follow ethical and moral standards of business nor has it been able to assert its importance in the economy during policy formulations. Syndicates, cartels, rent-seeking behaviors have always characterized Nepalese private sector. This is partly because of the patronizing attitude the state has always taken towards the sector since it took its first steps in 1951. Similarly, despite being the largest employment provider of the nation and the engine for economic growth, private sector has failed to assert itself when policies are being formulated. 

Free markets and ensuing competition are believed to weed out the ineffective and unethical players out of the market. However, as evident in our case, blatant ignorance on the part of consumers and government apathy at justice administration in cases of malpractices can provide incentives for enterprises to cheat the consumers and put their safety at risk. Government protection and promotion of rent-seeking behavior too is disrupting the market forces in our society. Syndicates in almost every sector of the economy prevent competition and innovate players from entering the market which is why competition has been ineffective in ensuring the quality of products and services.

Nepalese private sector should contemplate on the question that when private sector is already being attacked and blemished in the political discourses of the country, will such practices be any helpful for the continued existence of the sector?

The Government

Government's initiative to expose aberrations in the market is truly appreciable and initiatives such as these can discourage such malpractices. However, whether Nepalese consumers will  start getting  quality goods or not will mostly depend on whether or not such inspections are carried out on a regular basis rather than once in ages and whether or not the culprits are punished.

The fact is that many of the guilty enterprises were very popular and had been in operation for years which signals how ineffective the government had been  in its role as a quality controller. What were the government's regulatory and monitoring agencies were doing when almost every product available in the market was adulterated? Will all businesses that were found guilty be penalized and will the penalty be enough to deter them from engaging in such practices again in future?

Inability to punish the owner of Sugam Gas Company who was responsible for tampering with 15,314 LPG cylinders and deaths by LPG related accidents indicates the level of sensitivity of government towards consumer safety. This also inspires enterprises to engage in quick profit making schemes by risking consumer's health and safety.

The Consumers

As market inspections continue to unveil series of aberrations in the market, it is imperative that Nepalese consumers learn to be more alert and take informed consumption decisions. Nepalese consumers need to learn to take care of themselves rather than relying on the moral standards of business owners or effectiveness of government bureaucrats. It does not take a degree to know or at least assume that qualities of goods and services being offered by many of the business enterprises are of sub-standard quality and consuming such goods is hazardous to their health and safety. It is an open secret that cheap prices come with a compromise in quality. Such incidents should help us reinforce this learning in us.  Developing a habit of checking the information provided by the product covers and packages and raising voices against irregularities and frauds is another measure Nepalese consumers could take to mitigate such hazards.

Conclusion

Blaming the private sector alone wouldn't only be injustice to the businesses which are operating with ethical standards and providing quality goods and services but could also prove to be a great folly if it leads to diminishing the role of private sector in the economy rather than punishing the culprits and promoting innovation and competition by providing access to new players in the market. The private sector should learn to be ethical if it doesn't want to facilitate its own destruction whereas the government could do a better job by making such inspections regular and punishments effective. Most of all, incidents such as these should shake Nepalese consumers out of complacency and make them more responsible in taking care of themselves.

Surath Giri

(Published in The Himalayan Times-Perspectives of 25th September, 2011)