Prof. Dr. Madan Kumar Dahal
Chairman, Mega Bank Nepal Ltd.1. Introduction: The deadline for promulgating the Constitution for Federal Democratic Republic of Nepal is approaching fast on May 27, 2012 as per the verdict proclaimed by the Supreme Court sometimes back this year. In no case the tenure of existing Constituent Assembly (CA) would be extended in the name of constitution making for an indefinite period that forced to a compulsion for either to do or die. In the light of current fluid and fragile political situations the following recipes have been placed before the honorable citizens of this country to resolve the crisis, which are as follows:
2. Governance System and Election Procedure - A Mixed Approach:
The new constitution should adhere to the mixed system with President being directly elected on the basis of universal adult franchise securing more than 50 percent of total votes with all executive powers vested in him/her. The Vice-President should be elected or selected from among the representatives of federal provinces. The President shall appoint the Prime-Minister and other cabinet ministers from within and outside the members of parliament with specific assignments focusing on to run the day-to-day administration, maintain law and order, sustain peace and stability, and spur development activities. The joint strength of the parliament should limit to 300 members comprising 75 percent from elected representatives in the lower house (225), the candidate-population ratio being 1:133,333, and 25 percent to be nominated for upper house (75) on the strength of the ratio of the votes secured by the respective parties during the election especially to accommodate inclusiveness comprising women, janjati, adibashi, dalit, backward communities, and minorities such as Muslims, differently able persons, and government nominees especially from academic and professional groups. The total number of ministers should not exceed 10 percent of the total representatives in the lower house of the parliament. The President shall have the constitutional power to dismiss the Prime-Minister including his/her cabinet on the proven ground of inefficiency, corruption and poor governance.
The parties will not be allowed to campaign with provocative manifesto spreading hatred against particular caste, creed, sex, community, language and religion during the election. The parties and each candidate should furnish the details of all expenses incurred during the election in the respective constituency to the Office of the Election Commission (EC) within given timeframe. The voters must have the prerogative to call back the representatives elected from their constituencies if found guilty of misconduct through a petition to the speaker of the lower house by two-third majority. The tickets to contest general election for parliament to any candidate should be given by the party high command upon competing primary election among the candidates from within the party. There should be constitutional provision for debarring any candidate from contesting election at any level for life time if convicted by the court on the charge of fraudulence, corruption, rape, murder, loot, robbery, dacoit, damage of national property, and terrorism.
The parties securing 5 percent of the total polled votes at the general election for parliament should be recognized as a national party with assistance for a given level of state-funding to promote free and fair election, in addition to other facilities. The election at any level (center, province and all local levels) should be held at the interval of every four-year with the provision for mid-term election in case if ruling party looses majority in the lower house. Under the similar circumstances the rule of Governor would be enforced at provincial level. All existing democratic institutions such as the Supreme Court, Commission for Investigation of Abuse of Authorities (CIAA), Election Commission (EC), Office of the Auditor General (OAG), Public Service Commission (PSC), and Office of the Attorney General should be empowered in the new constitution.
3. Federalism and Restructuring of the State
A maximum seven (7) federal provinces should be created on the ground of economic potential having North-South axis adjacent to China in the north and India in the south to judiciously distribute the economic resources among the people in mountain, hills, and terai (the plain area in the south). The large number of provinces will not be sustainable, for available resources are extremely limited at macro level with a diminutive GDP (US$ 18 billion) and inordinately low GNI per capita confined to US$ 645 as of 2011.
Since there is no overwhelming majority of any caste or community in any of the 75 districts, the proposal for creating federal state on the basis of castes and ethnicity is not justified and absolutely unwarranted. In a small nation like Nepal federal restructuring should be based on the fundamentals of economic capability and not with option employing castes and ethnicity ensuring advanced political rights including the right to self-determination. The ethnicity based states if created would obliterate communal harmony and peace, impair social relations and good-will, diminish religious tolerance, compassion and benevolence, and aggravate dissension between communities ultimately leading to disintegration. In a modern society, every citizen has the liberty to enjoy fundamental rights including freedom of speech, write, and press including the mobility and migration from one place to another in quest of livelihood and descent work, and to undertake business, industry and services depending on his/her choice without disruption.
The political parties at the national level totally failed to induce regional parties in good faith that terai is bestowed with relatively better infrastructures comprising road, electricity, water, communications, irrigation facilities including setting-up of special economic zones, industrial corridor and open access to India for marketing and enjoy other facilities as compared to mountain and the hills. Similarly, in the second decade of 21st Century this is most unfortunate that Maoist party, popularly known as crusader and messiah of proletariats is propagating the idea to establish ethnicity-based federal states ensuring homeland to a few selective communities completely minimizing the rights of a large number of other smaller communities. This would definitely help germinate the never-ending seeds of contention among the most peaceful communities in Nepal.
The Marxian philosophy does not subscribe to the notion and belief in the supremacy of castes, ethnicity and even the existence of nationhood but strongly considers internationalism as a hallmark for global strength and unity to exhibit solidarity among proletariats in the world. The argument put forward by protagonists of ethnicity-based federalism in Nepal is not a sensible reaction to the unitary rule enjoyed by a segment of the society for a long time but explicitly a mission-vendetta containing hatred against one specific community with majority population. This kind of unpredictable and yet unwarranted action of a few fanatics at the beck and call of trivial leaders completely minimized the significance and historic glory of unification of the country and questioned the very existence of Nepal as a nationhood. In democracy political parties are the main actors to play for providing goods and services to people and accelerate the pace of economic development ensuring national unity and integration. This is conspicuously challenged by the rise of newly emerged petty Kabila leaders in mountain, hills and terai heavily engaged in bargaining to sustain their position and mobility like a robot with remote control placed elsewhere. Currently, the issue of federalism in Nepal is becoming more complex and circumscribed by unforeseen political fraudulence and absurdities triggered by outside intervention attributing to lack of farsightedness of major political parties and their leaders.
It is, therefore, imperative to strengthen fiscal federalism to effectively expedite the flow of resources at a reason level from the Center to proposed provinces and local bodies comprising VDCs, Municipalities and DDCs at the recommendation of the Finance Commission (FC) to be set-up replacing the existing Local Bodies Finance Commission (LBFC) under the new constitution of federal Democratic Republic order. In addition, the local bodies shall have the power to mobilize their own internal revenues through different imposts feasible to implement especially the house and land tax, Integrated Property Tax (IPT), Capital Gain Tax and Inheritance Tax to be considered in future. This will be followed by revenue sharing among the Center, provincial governments and local bodies especially with reference to registration duties and revenue received through natural resources particularly hydropower, forest, and subterranean resources. The Center will also provide financial assistance and block-grants to provinces and local bodies at the recommendation of the proposed Finance Commission. The local bodies shall also reserve the right to mobilize internal as well as external loan to expedite mega-projects for sustaining development activities within the jurisdiction of municipalities.
The Central government will have the full authority to collect and spend revenues through mobilizing major imposts such as Income Tax, VAT, Customs Duties, and excise Duties and the contribution of non–tax revenues will be shared by both provincial and local bodies. The theory suggests that the tax system is said to be perfect when revenue is mobilized at either micro or macro level not by increasing tax rates but by expanding legal tax base, improving tax administration, increasing voluntary compliance, and without creating additional burden to the taxpayers.
In Nepal there will be only one National Army with specific assignments to defend the sovereignty of the nation and participate in development activities. The President will be the Supreme Commander-in-Chief of the Nepal Army and at this capacity he will appoint the Commander-in-Chief at the recommendation of the Security Council composed of the Prime-Minister, Defense Minister, Home Minister, and Leader of the opposition at parliament, the Chief Secretary and the Home secretary. The Defense Force, if necessary, will be mobilized by the cabinet at the recommendation of the Security Council and with approval from the President especially when emergency to be declared due to foreign aggression, civil war, and natural and economic catastrophe including drought and famine. The recruitment to Nepal Army should be on the basis of merit and individual capacity as envisaged in the existing Nepal Army Act. The existing provision for Traffic and Armed Police force at the center will continue with improving efficiency and modernization. The federal provinces can separately maintain their traffic police including the municipal police and home guard under Local Bodies Services.
5. Judicial Supremacy
The Constitution will be the Supreme Law of the Land and the Supreme Court will be the apex court in the country with the establishment of Federal Courts at the provincial level that will substitute the existing Appellate Courts. The District Courts will remain intact and maintain status-quo to undertake the usual functions at the district levels. In addition, the existing Special Court will continue to trial the culprit accused for economic offence especially committed by the politicians and government servants. In this context, the role of the Office of Commission for Investigation of the Abuse of Authorities (CIAA) would be crucial and there is need to further empower CIAA by effectively strengthening its capacity to deal with the economic crimes. The revenue tribunals will be engaged in resolving the disputes between taxpayers and the tax offices. Since the Supreme Court is the final authority to independently decide on the disputes relating to all constitutional issues, there is no need to establish constitutional court separately at parallel with conflicting interest between the two judicial organizations. The government should review all existing Acts and Regulations in conformity with and to speed-up the reform programs undertaken by the government in all economic and social areas including education, health and drinking water supply.
It is extremely essential to induct meritocracy in all spheres and activities of the statecraft to avoid too much politicization characterized by compulsory installment-payments to respective parties in every appointment leading to extreme inefficiency and corruption resulting in socio-economic backwardness in Nepal. The public services must be made highly competitive as well as lucrative and the qualified prime contenders aspiring to join government services shall be competing examinations held by the Nepal Public Service Commission (PSC). The 21st Century is the era of competition and merit and, therefore, Nepal should adhere to the policy of meritocracy in theory and practice for improving efficiency, competitiveness and productivity of human resources, the wealth of the nation, instrumental to accelerate economic development. Let’s derive lessons from the progress and prosperity in South-east Asia attributing to meritocracy.
7. Resource Allocations to Local Bodies
There should be built-in constitutional provision for local bodies to ensuring 30 percent resource allocation during the formulation of budget at the Center each year. It is, therefore, extremely essential that Local Self Governance Act (LSGA) 1999 must be amended as per the requirements to adjust the provision for provincial government and local bodies especially to mobilize internal as well as external resources. Consequently, there is also need to review existing Income Tax Act, VAT Act, Customs Duties Act, Excise Duties Act, and other Acts and Regulations pertinent to non-tax revenues.
8. Good Governance
The accounts of political parties must be audited by the Office of the Auditor General (OAG) at the end of fiscal year and that must be officially published in a government newspaper. The government must take action against the irregularities identified by the OAG in its annual reports submitted to President each year. The advanced payments to government servants to undertake public activities should be approved by the concerned authorities only after settling-down the previous advance payments. The bureaucracy, army, police and the assignment with salary and fringe benefits paid from government treasury must remain neutral, and their services should be terminated if found associated with political party at any capacity. The economic offences must be dealt with stern action.
The high level public figures and personalities including President, Vice-President, Prime-Minister, Speaker of the both houses, Chief Justice and other judges at different levels, Ministers (including state and assistants), Chairman and Members of Constitutional Organizations, Vice-Chair and Members of National Planning Commission (NPC), Governor and Deputy Governors at Nepal Rastra Bank (NRB), top positioned bureaucrats such as Chief Secretary, Secretary, Ambassadors, Jt. Secretary, Executive Chairman, Chairman and Board of Directors, GM of SOEs, members of the Commission set-up by the government, and top ranking officials in the army and police should declare their property within a month of their assumption in office, and similarly they should declare the same just before two weeks of their exit from the public position. The promotion of civil servants especially joint secretary and secretary must be on the basis of merit and should not be transferred at least for a period of two years. The tenure for government servant should be either 58 years of age or 30 years of services whichever is earlier applicable to retirement, but this would be not applicable to army, judiciary, and education services.
A domicile aged sixteen shall be entitled to get citizenship if he/she is descendant (bansaj ko nata) of Nepalese parents, and also by birth (janma siddha adhikar). In addition, citizenship shall be provided on the basis of matrimonial relationship especially applicable to foreign women married to a Nepali. The state shall also provide naturalized citizenship to a person continuously living in Nepal for the last twenty years. The voters registered during the general election after the promulgation of the Constitution of Nepal 1990 should be entitled to get naturalized citizenship ensuring their rights equal to what is provided for the citizen by birth. And also it is good to provide residential citizenship to a person or family if they are willing to undertake enterprise with a given amount of investment in priority areas as envisaged in the proposed Citizenship Act and Regulations.
10. Reservations to women, janajati, indigenous and backward communities, dalit, Muslim minorities and differently able persons:
The government should set-up a High-Level Commission to devise an appropriate reservation policy with a view to ensuring inclusiveness and strengthening capacity of women, janjati, indigenous and backward communities, dalit, and Muslim minorities including the differently able persons for enabling them to competitively participate in the activities at the national level.
11. Economic system
The vision or mission of Nepalese economy should be to build a strong economic nation-state through active participation of the people ensuring a high quality of life to each individual and household within given timeframe. To attain this goal the proposed constitution for Federal Democratic Republic of Nepal should adhere to the policy and develop strategy for devising export-led and private sector-led open and competitive economy with due consideration to social security and welfare of the people.
There should be constitutional provision to ensuring the right to survival for population below absolute poverty line through developing an appropriate mechanism to enable them to buy a given amount of food and other consumption items from fair price-shops managed by the government and cooperatives. The primary function of the cooperatives should be linked up particularly with the production activities creating employment opportunities especially at local levels, and this should be made mandatory. It is necessary to explicitly distinguish the sector functions to be undertaken between the government and private sector and also there is need to expedite both vertical and horizontal merging of financial institutions through offering attractive incentives. The defaulters should be given a maximum six-month time to settle the loan above Rs. 10 million borrowed from financial institutions. In case of delinquency the government and NRB should strongly act against the defaulters to expedite repayments through the sale of collateral including from the personal guarantee. There is need to reordering of priorities based on viable economic areas comprising water resources (hydropower), tourism, bio-diversity, human resources (foreign employment and remittances), limited exports (carpet, garments, handicrafts and pashmina), and agriculture with special reference to high value crops.
The government should effectively induct and implement the policy towards economic diplomacy to expedite bilateral trade and investment on the basis of competitive edges and comparative advantages with friendly countries in cooperation with Nepalese diplomatic missions abroad. The economic diplomacy should also be instrumental to mobilize and campaign for desirable level of foreign assistance in priority areas especially in the context of economic growth and poverty alleviation. All state owned enterprises (SOEs) except specified by the government should be privatized within targeted schedule between 3-5 years.
The government shall neither operate trade and commerce nor own factory and industry, for this is the responsibility of private sector, a vehicle for economic development, to undertake business, establish industries and create employment opportunities. The government shall effectively work in tandem with private sector to attract Foreign Direct Investment (FDI) for initiating mega-projects in priority areas by creating investment-friendly environment conditioned to enduring peace and stability in the country. In compatibility with the spirit of liberalization the government should open up access for the outflow of capital and encourage investment across the country to maximize the benefits from globalization especially through promoting joint ventures between Nepalese and foreign commercial banks within and outside Nepal.
A scientific land reforms system should be introduced with a view to increase productivity of agriculture and individuals shall have the right to create wealth but with payment of taxes to government as per the existing regulations. The government must be able to abolish dual ownership on land by offering reasonable package of incentives to absentee landlords if they are willing to relinquish ownership and transfer entitlement to the actual tillers, and the constitutional provision must encompass “food security” as a fundamental right. The private property comprising factory, industry, and bank including education and health organizations should not be nationalized. Industrial relations need to be substantially improved through tripartite agreement among the private sector, trade unions and government. The development plan, annual budget, national policies and programs should be formulated on the presumption of “interdependence” to galvanize the cooperation from neighborhood economies, donor communities and multilateral funding agencies.
The National Planning Commission (NPC) should maintain its separate entity and play the crucial role of a “Think-Tank” at macro-level backed by legal status to implement its decision as mandatory and formulate the periodic plans ensuring appropriate delivery of the results. The NRB and Department of Cooperatives under Ministry of Agriculture and Cooperatives must strengthen their capacity to effectively supervise a large number of financial institutions in the country. The quality of middle-level manpower aspiring for foreign employment should be improved through imparting knowledge of English, Computer and Mathematics further supplemented by vocational and technical training at the initiation of trade schools and in cooperation with private sector.
*Professor Dahal is available for academic and professional deliberations at e-mail: email@example.com