Wednesday, May 30, 2012
Divisive rhetoric on ethnic federalism debate
Kathmandu Post on May 30, 2012 published my article on ethnic federalism with the title "Where to begin". The unedited original version is below.
Divisive Rhetoric
It is true that ethnic federalism designs have worked well in countries
like Switzerland and Belgium. It is also true that such designs have not fared
well in other instances, for example: Ethiopia. The Harari people with
population of only 1.5 lakh were given an independent provincial status by the
Ethiopian government while denying a similar status to the Sadamas with
population over 45 lakhs. Maybe these half-hearted measures have been the cause
of ethnic federalism’s failure in Ethiopia.
The question then becomes: what will Nepal turn out to be if we
implement ethnic federalism? Will we go the way of the Swiss or the Ethiopians?
Switzerland and Belgium were divided into ethnic lines based on the “language” that
people spoke in a particular region. The Wallonia region in Belgium has
French-speaking population and the Flanders region has Dutch-speaking
population. In Nepal, there are a handful of regions like upper Solukhumbu,
Mustang, Dolpa and areas in Terai where Nepali is not the dominant language.
Therefore, the idea of ethnic boundaries based on language use can be exercised
in these areas.
However, rest of Nepal is not so easy to divide along linguistic lines.
Compared to Nepal, Belgium and Switzerland are homogeneous, and it was easy to
exercise language-based ethnic federalism there. In Nepal, it’s a nightmare to
even approach the basic design of it. We have so many languages. Where do you
start?
The dominant discussion these days in Nepal is along “ethnicity” lines.
Again, this sounds easier said than done. According to the 2001 census, Gurung,
Magar, Tamang, Newar and Tharu are the majority in one district each. The
remaining 70 districts in Nepal do not have a particular ethnicity as a
majority. I see two problems here. First, it is impossible to give priority
rights or “agradhikar” to one particular ethnicity in any of these 70 districts
without hurting the feelings of other ethnicities. Second, even if we consider
“soft-majority” approach, I do not know how a single Tharuhat can be realized
when districts with Tharu soft-majority like Bardia and Kailali are in the
far-west, Dang in the mid-west and Sunsari in the east. It’s the same problem
with other areas involving Magar, Tamang, Gurung, Rai and Newar soft-majority.
Ethnic federalism approaches were proposed in other countries to ensure
that progress of regional level communities is not rendered crippled by the
central government. This mostly has to do with sharing and controlling of the
resources. It ensures that the federal states are able to extract and use their
resources for their own use and benefit. It ensures the survival and development
of the regions without heavy-handed central government interventions. But,
observing the debates ongoing in Nepal these days, I clearly see that “Economics”
is not driving these discussions. It is being driven by divisive ethnic
propaganda, and not much else.
Mithila and Kochila already have flourishing agricultural and
industrial bases. They seek to gain the most with federal system. However, has
anybody spared a thought for the poor far-west? Has anyone thought out a clear
plan for its economic development? Alright, let us say the far-west gets
divided into two provinces: the Tharuhat in the plains and whatever the other
one will be called encompassing the hills and mountains. The Tharuhat will be
able to feed itself. What about the other one? What is its source of income?
What is its dominant economic sector going to be? The way I see it, the hills
and mountains in the far-west were screwed under the central government, and they
will remain screwed under the federalized system as well.
It does not help that the people in charge of designing the federal
structure are incompetent. The most logical restructuring proposal so far came
from the Maoists. The UML kept
flip-flopping from 7 to 12-state proposal. Madhesis did not care what the
design would be as long as they got a “united” Madhes with all 22 districts from
the Terai. That would have never materialized because far-western Teria
districts want to be a separate Tharuhat while Jhapa, Morang and Sunsari are
interested in calling themselves “Kochila”. And, the Nepali Congress humiliated
itself with that proposal where it elongated the Kathmandu province to touch
the Indian border in the south. Even my 3-year old nephew could see that Nepali
Congress leaders had “lost it”.
It also does not help that some of the people fighting for ethnic
federalism argue with vitriolic rhetoric and poor logic. The writings of people
like CK Lal fan the flames of divisive rhetoric in the ongoing ethnic federalism
debate. Every article is about how pahades have wronged Madhes and everyone
else. Bahuns and Chhetris are blamed for the plight and poverty of Madhesis.
Aren’t Bahuns in the far-west as poor as the Tharus there? A handful of Bahuns
and Chhetris have political power and reach. That doesn’t mean every Bahun and
Chhetri has looted the nation’s coffers and is against Madhesis. Constructive rhetoric
is absent in their arguments.
My interaction a few weeks ago with politicians at the grassroots level
in eastern Terai revealed that they agreed that equal “respect” should be given
to people from all religion, caste, ethnicity, and culture. However, they
unanimously considered the “agradhikar” approach being put forth by national
level politicians as being wrong and divisive. The group mentioned that the
reason why people overthrew the monarchy was because they were fed up with one
group of citizens—the King and his cronies—having power and control over the
resources.
Labels: ethnic, ethnic federalism, federalism
Tuesday, May 22, 2012
Reintegration, redemption and the Nepali social fabric
The following article was published today (May 22, 2012) in The Kathmandu Post with the title "From war to peace". The direct link to the article is here. The unedited version is below:
Reintegration,
redemption and the social fabric
Among the boiling rhetoric—and subsequent violence—over the federalism
debates, we have been overlooking the critical issue of reintegration of the
Maoist combatants back into the society. Whether they chose the compensation
package or chose to enter the Nepal Army, those ex-combatants are now going
back to their communities. The mental pressures of reintegration into their
communities where they once perpetrated violence pose hurdles that are
difficult, if not impossible, to pass.
Out of the identified deceased victims, 10297 were men and 1013 were
women, according to INSEC. Of these women, 193 were killed by Maoist forces,
and the rest were killed by state security forces. There were instances when state
security forces captured, and then raped, many female combatants. Not that the
Maoists were any better. They entered
many households, killed the husbands in front of their wives, then raped the
wives, and then forcefully took the children to fight their war. Sexual
violence against women was perpetrated by both sides to “teach” the other side
a lesson.
Say whatever about the
Maoist conflict, it did provide unique experiences of freedom to women
combatants like they had never experienced before. To the women who had been
housewives for as long as they could remember, they were suddenly given
responsibilities to command and lead groups of people with missions to kill or
be killed. The Maoists propagated the idea that taking up arms and engaging in
armed disobedience was an empowering activity for the people—especially women. Therefore,
many women joined the war, picked the guns, shot others, and got shot
themselves, too.
However, having spent a decade of their life roaming like nomads and
fighting like warriors, will they go back to accepting the dull realities of everyday
life? Will they be able to resume their traditional “housewife” duties? Will
they accept the inferior status of women in the Nepali society? How will their
actions affect our social fabric? Will they, through whatever actions they take
or paths they choose, be able to reshape the fundamentally patriarchal Nepali
society? If they are not willing to go back to the status-quo situations, what
will they do? Reintegration is going to be a harsh and difficult experience for
these women.
Maoist leaders encouraged and facilitated many of their combatants to
marry one another. However, various organizations working with the
ex-combatants have noticed that the same level of encouragement and efforts
were not spent in registering and obtaining marriage certificates in a uniform
manner. The leadership preached “equality”, but it was absent in practice,
especially in the cases of registration of inter-caste marriages.
Along with women, some children and teenagers willingly joined the
Maoists to experience the “action” that came with an armed conflict. However,
many children and teenagers that participated in the conflict were abducted and/or
forcefully recruited by the Maoists. Regardless of how they got into the Maoist
army, these children and teenagers are now well into their adulthood, and are
returning to the communities they had left while they were still too young.
Many did not receive any higher education during the time of the
conflict, and are returning to their communities with low level of education
and skills. Will they be able to adjust to the life outside of the jungle and
inside the civilized society? Will they be able to identify with the society
that they come back to? Given their wayward growth into adulthood during the
war, will they be able to follow the boundaries of law and order that the
society imposes?
State security forces as well as the Maoist combatants posted at
different sites developed relationships with the locals, and had children from
those relationships. Some children were born from relationships between the
combatants when they were interned in the cantonments. If they wish to receive
any state benefits, these relationships should be legitimized by the state
through marriage and birth certificates. Since some of the fathers either died
during the conflict or deserted their wives and children after the conflict,
many of these women are returning to their communities with children with no
fathers and no citizenships.
Also, when many homes were burned or destroyed during the conflict,
important documents that could facilitate the citizenship filings of the
children got lost or destroyed. Since it is difficult to apply for citizenship
without presenting the father’s documents, many children have no citizenship
certificates. As a result, they are deprived of many rights and opportunities
that come with having a citizenship. The Maoist party has averted its eyes through
this ugly mess. It is only going to get uglier.
The most important issue that those reintegrating combatants—men,
women, and young adults—will have to face is that of redemption. The combatants
not only deserted their communities but also inflicted violence upon them
during the decade-long process. Now, they are returning to those very
communities. In a typical Nepali way, the very first question that pops to one’s
mind is: How will these returning Maoists “show their face” to the community
they harmed? It will not be easy to go back and start living “normally” as if
nothing happened. Will the community accept them back?
The answer to that last question determines the fate of returnees. So
far, communities have not resorted to violence against the returnees. But, this
does not mean they have been forgiven. The reason why communities have not
resorted to punishing the returnees is because they still have hope that appropriate
punishments will be handed out by the Truth and Reconciliation Committee.
However, there have been talks of blanket amnesty that could be given
to all perpetrators—both Maoist combatants and the state security forces—of
violence during the conflict. The returning combatants could give a variety of
reasons for why they hurt and killed their fellow community members during the
conflict. But, it won’t be enough to dissuade a mother’s rage for them having
killed her children, or a husband’s rage for them having raped his wife.
Those are the prospects that we have been willfully overlooking in our
reintegration dialogs. We’re burying our heads in the sand hoping that the sky won’t
fall. The truth of the matter is, if the state does not punish them for the
crimes they have committed, the communities could take matters into their own
hands. And, that is a scary scenario. It will break our social fabric as we
know it.
Labels: INSEC, maoists, reintegration, TRC
Monday, May 21, 2012
Mergers: Proceed with caution
The following article on mergers was published in Republica on May 20, 2012 with the title "Tread with caution". The direct link to Republica is here.
The financial market is not going to suffer for eternity. We have seen
weak and stagnant financial activities in the last few years in Nepal due to
the recent liquidity crisis. As I have stressed in my previous articles, the
liquidity crisis in Nepal was primarily the result of our banks and financial
institutions (BFIs) providing majority of their loans to the real estate
sector. The real estate market slowed down beginning late 2008. As a result,
borrowers could not pay interests, let alone the principle amount of the loans.
So, the banks lost money, and this brought a liquidity crisis.
However, the real estate sector will eventually start improving again,
and will experience increase in its activities. Then, the borrowers—who have so
far defaulted in their payments—are going to start making their payments again.
When that happens, our BFIs are going to be flush with cash, again. So, what
will they do with that excess cash?
Since their investment and loan portfolio is not diverse, the BFIs will
have to choose between two options. First, they will have to take risk and
start providing loans to the real estate sector, again. This has a tendency to
bring another liquidity crisis if the real estate market slows down, again.
Second, to move away from the risky real estate portfolio, the BFIs could use
their cash to purchase securities which are much safer than issuing real estate
loans. However, the securities yield much lower returns compared to real estate
loans.
That would be a very confusing scenario for the BFIs. On one hand, the
BFIs would not want to go back and issue excessive loans to the real estate
sector because that was what caused them suffering in the last few years. On
the other hand, the securities option delivers them poor returns. If the BFIs
are flush with cash and do nothing with it, they will have to face intense
pressure from their shareholders. When the pressure becomes unbearable, the
past experience from around the world suggests that a third outcome is more
likely: a merger spree.
The bottom line for the BFIs is to ensure that their shareholders are
happy. The best way to make shareholders happy is to show them that their
institution is growing. The best way to grow a financial institution is to
acquire assets. And, the best asset a strong and cash flush BFI can acquire is
another BFI. So, once the real estate market in Nepal wakes up from its
hibernation, and starts making money again, our BFIs will have no logical option
to follow other than engage in mergers to grow their assets.
While the shareholders will be happy seeing their institution grow
through such mergers, the mergers do not guarantee a healthy BFI or a healthy
financial market. Today, the mergers happening in the market are not the result
of choice but compulsion in saving the institutions. In the future, the mergers
will not be the result of choice but that of compulsion—to “show” the
shareholders that the excess cash is being used in asset-building.
There are reasons why shareholders should not be too happy with mergers
and acquisitions. First, the New York Times reported during the merger surge in
2005 in the US that the shareholders’ stakes in the acquiring firm typically
declines post-merger. The structure of BFIs in the US and Nepal are not very
different. So, this decline could happen in the case of merging Nepali BFIs,
too. Second, evidences from past mergers worldwide show that the CEOs end up
pocketing around 8 percent of the merger cost as their own “compensation”. So, everyone
should ask: Was the merger done for the benefit of the institution or was it
done for the personal benefit of the CEO?
The New York Times report also mentions that there has been a strong
correlation between the size of a financial institution and the salary of its
CEO. It did not matter whether an institution was faring well or poorly in the
market. The CEOs of larger BFIs always get paid more than those in smaller
BFIs. Therefore, the shareholders need to be cautious and skeptical when their
CEO argues in favor of a merger. Who benefits the most from the merger should
be considered. Do we know how much our BFI CEOs are pocketing from their merger
deals? We need to find that out.
Labels: banks, mergers, NRB, Republica
Subscribe to Posts [Atom]
