From Maoism to Capitalism?

(My article published in  New Spotlight, December 9-22, 2011).

Faced with a choice between a package that may or may not impart him/her with employable skills, that too in a situation of massive un/underemployment in the country (and getting a job means having to work) and a cash reward of at least Rs 500,000 for, well, doing nothing, a rational person is likely to opt for the latter without second thoughts.

And the prediction that yours humbly made in a blog post has come true. During the Maoist combatant categorization process—pursuant to the 1 November seven-point deal between the political parties controlling Nepal—the majority of the combatants in cantonments are reported to have opted for integration into the national army, with those opting for retirement with cash a close second, and only a negligible number preferring the non-cash rehab package. While a maximum of 6,500 of interested combatants could be integrated into a separate directorate of the Nepal Army, the rest had to choose between a package of education, training and vocational opportunity (with the cost ranging from Rs 600,000 to Rs 900,000), and voluntary retirement with cash of Rs 500,000 to Rs 800,000. With the latest re-verification exercise putting the total number of combatants at 16,508—2,795 less than that verified by UNMIN—at least 10,008 combatants will have to be “compensated”. (At least because not all of those who want to join the national army may meet the minimum eligibility criteria, and the Maoists are insisting “late-comers” be considered too).

The cost to the treasury of the direct cash payment would be at least Rs 6.5 billion, taking Rs 650,000 as an average payment per combatant. On the higher side, it would run up to Rs 8 billion. Of course, the combatants who have opted for the cash reward are unlikely to get the full amount they are entitled to: they will have to part with a portion of it as a levy to their beloved party (50 percent going by media reports). One need not be surprised if most of them splurge the money on gambling and drinking or other consumptive activities, or simply spend it to meet basic needs. The possibility of turning to crime when the cash runs out cannot be ruled out. Quite a few may use the cash to get an overseas job, but not without the irony that combatants of a Maoist party that officially is in favour of creating employment opportunities for Nepalis in their homeland and that heads the government have to seek work on foreign shores with money from the state’s coffers.

Instead of doling out cash, it would have been sensible to provide only the option of productive work to those not joining the army. This would not only help the combatants themselves and their families in the long run, but also contribute to the economy, not least by adding to the GDP and opening up further employment opportunities. How? Here are a few ideas but surely party-affiliated buddhijivis, members of the National Planning Commission and the PM’s team of economic advisors, among others, should be able to come up with even better ones (or else hang up their boots)—vocational training, internship, subsidized credit and other incentives for setting up own business (cottage and small enterprises), employment in infrastructure projects, some sort of employment guarantee, etc.

Perhaps the Maoists, in yet another volte face, are now seeing wisdom, albeit perversely, in the neoliberal preference for direct cash transfers, supposedly least market distorting, as a support measure for “vulnerable” groups. By this logic, the combatants should be free to choose the form of rehabilitation; guiding them into economic activities will interfere with the free workings of the market. Marx displaced by Friedman in a revolutionary party? Dr Sahib leaders of Nepali Congress happy now? And the slogan of creating a swadheen economy can always be reinterpreted as per the demands of the dialectics of opportunism, right, comrades?

Notwithstanding all these, we are assuming that all the re-verified combatants in the cantonments were also combatants during the Maoist insurgency, and that integrating them into the Nepal Army or rehabilitating them will lead to peace. That’s a heroic assumption, although they have been “verified” as such. That a significant number of core fighters have assumed new avatars in other wings of the party has been a robust charge leveled by Nepali Congressites, among others. 

Then there is the issue of justice, but raising it runs the risk of being accused of attempting to throw a spanner in the works of a “historic” peace accord. Still, a cabbie—a janta ko chhoro to the core—confided to this scribe the morning after the deal: doesn’t the deal disincentivize earning a living through legal and peaceful means?

Parking Rs 500,000—the minimum amount of “reward”—in a fixed deposit account in a financial institution in Kathmandu fetching an interest of at least 12 percent will give the recipient of the largesse a steady flow of income of Rs 57,000 (after deducting 5% tax on the interest) per year, or Rs 4,750 per month, in addition to the capital of half a million rupees. From Maoists to Capitalists overnight – quite a transition! Moreover, that income is nearly thrice the per capita average national poverty line (the latest one used by the Central Bureau of Statistics for Nepal Living Standard Survey (NLSS) III, 2010/11) and also more than the poverty line for urban Kathmandu. It is also more than the per capita nominal Gross National Income for the year 2010/11. By the way, according to NLSS III, the poverty incidence in urban Kathmandu is 11.147 percent and that in the whole country 25 percent. With Rs 8 billion, at least 55 MW of hydroelectricity can be generated.

Nepal’s donors welcomed the deal. How about footing the entire bill in grant form, without diverting aid from other sectors, and/or providing employment to ex-combatants on donor-country soil in the true spirit of solidarity, humanity, compassion and all that jazz?  

Rehab package: Turning Maoists into Capitalists?

So as many as 6,500 of the Maoist combatants in cantonments may be integrated into a separate directorate of the Nepal Army, while the rest will be rehabilitated, according to the seven-point deal reached between UCPN(Maoist), Nepali Congress, CPN(UML) and major Madhesi parties. Assuming that there are still 19,000 UN-verified combatants and 6,500 opt for integration into the security force, 12,500 combatants will have to be rehabilitated. The deal provides for two avenues of rehabilitation that the combatants can choose between: a package of education, training and vocational opportunity (with the cost ranging from Rs 600,000 to Rs 900,000); or direct cash payment of Rs 500,000 to Rs 800,000 (to be made in two tranches in two fiscal years).

Faced with a choice between a package that may or may not impart them with employable skills, that too in a situation of massive un/underemployment in the country (and getting a job means having to work) and a cash reward of at least Rs 500,000 for, well, doing nothing, a rational person, in general, is most likely to opt for the latter without second thoughts. The more industrious among them may use the cash to get a job abroad (Middle East or Malaysia). 

The cost to the treasury of the direct cash payment would be at least Rs 6.25 billion, or, taking Rs 650,000 as an average payment per combatant, Rs 8.125 billion. (On the higher side, it would run up to Rs 10 billion). Of course, the combatants who opt for the cash reward are unlikely to get the full amount they are entitled to: they will have to part with a portion of it as a levy to their beloved party. One need not be surprised if most of them splurge the money on gambling and drinking or other consumptive activities, or simply spend it to meet basic needs. The possibility of turning to crime when the cash runs out cannot be ruled out. It is also likely, as mentioned above, that quite a few will use the cash to get a job abroad, but not without the irony that combatants of a Maoist party that officially is in favour of creating employment opportunities for Nepalis in their homeland and that heads the government have to seek work on foreign shores with money from the state’s coffers!

Instead of doling out cash, it would have been sensible to provide only the option of productive work to those who are to be “rehabilitated”. This would not only help the combatants themselves and their families in the long run, but also contribute to the economy, not least by adding to the GDP and opening up further employment opportunities. How? Here are a few ideas but surely party-affiliated buddhijivis, members of the National Planning Commission and the PM’s team of economic advisors, among others, should be able to come up with even better ones (or else hang up their boots)—vocational training, internship, subsidized credit and other incentives for setting up own business (cottage and small enterprises), employment in infrastructure projects, some sort of employment guarantee, etc.

Perhaps the Maoists, in yet another volte face, are now seeing wisdom, albeit perversely, in the neoliberal preference for direct cash transfers, supposedly least market distorting, as a support measure for “vulnerable” groups. By this logic, the combatants should be free to choose the form of rehabilitation; guiding them into economic activities will interfere with the free workings of the market. Marx displaced by Friedman in a revolutionary party? Dr Sab leaders of Nepali Congress happy now? And the slogan of creating a swadheen economy can always be reinterpreted as per the demands of the dialectics of opportunism, right, comrades?

Notwithstanding all these, we are assuming that the 19,000 or so combatants in the cantonments were also combatants during the Maoist insurgency, and that integrating them into the Nepal Army or rehabilitating them will lead to peace. That’s a heroic assumption, although they have been “verified” as such. That a significant number of core fighters have assumed new avatars in other wings of the party has been a robust charge leveled by Nepali Congressites, among others. 

Then there is the issue of justice, but raising it runs the risk of being accused of attempting to throw a spanner in the works of a “historic” peace accord. Still, a cabbie—a janta ko chhoro to the core—confided to this scribe this morning: doesn’t the deal disincentivize earning a living through legal and peaceful means.

Parking Rs 500,000—the minimum amount of “reward”—in a fixed deposit account in a financial institution in Kathmandu fetching an interest of at least 10 percent will give the recipient of the largesse a steady flow of income of Rs 47,500 (after deducting 5% tax on the interest) per year, or Rs 4,000 per month, in addition to the capital of half a million rupees. From Maoists to Capitalists overnight – quite a transition! Moreover, that income is 2.5 times the per capita average national poverty line (the latest one used by the Central Bureau of Statistics for Nepal Living Standard Survey (NLSS) III, 2010/11) and also more than the poverty line for urban Kathmandu. It is also more than the per capita nominal Gross National Income for the year 2010/11. By the way, according to NLSS III, the poverty incidence in urban Kathmandu is 11.147 percent and that in the whole country 25 percent. With Rs 8 billion, at least 55 MW of hydroelectricity can be generated.

Donor countries are welcoming the deal. How about footing the entire bill in grant form, without diverting aid from other sectors, and/or providing employment to ex-combatants on donor-country soil in the true spirit of solidarity, humanity, compassion and all that jazz?  

On defeat of communists in India assembly polls and supposed implications for Nepal

The trouncing of the Communist Party of India (Marxist) in West Bengal's assembly elections, ending a 34-year uninterrupted communist rule, has been interpreted by some "analysts" here in Nepal as carrying important implications for Nepal's left parties and their economic policies, with some suggesting that Nepali communist parties must shape up or ship out. Their main argument is that the Communist Party, in its long reign, could not deliver economic growth and was therefore punished in the hustings. This scribe, while no apologist for any political ideology or party unlike many a writer in the Nepali media, finds such inferences highly contrived and overblown, in some instances even born of the writers' political prejudices that blind them to the differing contexts in India and Nepal.

1.       Glaringly missing from such analyses is why even as the voting public apparently got sick and tired of CPI (M) misrule, a Maoist insurgency is raging in different parts of India, including in West Bengal, covering 40 percent of India's villages. An insurgency that the Indian prime minister Man Mohan Singh described as the greatest challenge to India from within. If the rejoinder is that the Maoists there do not enjoy the support of the people and do not have anything to offer for a positive transformation of the Indian state/economy, then the same could be said of Nepal's Maoists when they too were waging their "people's war" against the Nepali state. But that would be at serious odds with the fact that the key political features of New Nepal were essentially Maoist agendas, good or bad. Nepal's Maoists emerged as the largest party in the Constituent Assembly (CA) elections vetted as being largely free and fair by the international community, including western democracies. Of course, just because western democracies said the elections were fair it does not mean that the election were actually fair, but if the analysts do not think the elections were fair, then they should have the guts to chastise the members of the international community that suggested otherwise.

2.       Paradoxically, CPI (Marxist) is the very party whose leaders were chummy with Nepali Maoist leaders who self-avowedly spent most of the insurgency years on Indian soil, in and on the outskirts of New Delhi, and who ostensibly persuaded Nepali Maoists to rejoin multiparty politics. They were hailed in the mainstream media for helping end the armed conflict in Nepal. The analysts do not deem it relevant to enquire why the CPI (Marxist) leaders cannot achieve the same in their own beloved homeland, the world's largest electoral democracy – why can't they propose that Indian Maoists be brought into mainstream politics, even if it means conceding  to some of the Maoists' demands, expanding the Lok Sabha liberally to accommodate the Maoists, and then instituting reforms to the Indian political and economic systems by incorporating the Maoists' demands – a la Nepal? Why, instead, the CPI (Marxist) government in West Bengal was cracking down on Indian Maoists? Why such bonhomie with Nepali Maoists and animosity with their compatriot Maoists?

3.       The suggestion for mainstreaming made above won't work there? But it is working here in Nepal, right? No? Then say so loud and clear. 

4.       The fact is that just as Nepal's Maoists considered the then largest mainstream communist party of Nepal (CPN-UML) a revisionist party that had deviated from communist philosophy, India's Maoists' do not consider CPI (M) as a real communist party. Indian Maoists do not consider CPI(M) to be Red enough.

5.       The analysts, who argue that CPI (M)'s core economic philosophy proved to be its undoing, ignore the fact that Mamata Banerjee, who cruised her party Trinamool-Congress to a thumping victory over the communists in West Bengal, had sided with farmers protesting the acquisition of their land for setting up a Tata plant while the ruling communist party was bent on facilitating the establishment of the plant. Which position was good for the welfare of West Bengalis is not relevant here. The point is that Mamata was doing what the communists should have been doing (but were not doing). This irony is lost on the analysts.

6.       Unlike what the analysts would have us believe, there is no significant difference in the economic policies of major political parties of Nepal, communists or otherwise. On crucial issues of national interest, they have let the nation down. All of them, for example, have pursued an export-oriented hydropower policy even as the economy reels under crippling power cuts. Politicization of the bureaucracy, rampant corruption, politico-criminal nexus, capture of government policies and decisions by vested interests, external interests calling the shots in national policymaking and decision-making and mismanagement of public enterprises have been the bane of all governments, with or without communist parties.

7.       Whether there is a communist government or a UPA government or a BJP-led NDA government at the centre in India and whether there is a communist government or a UPA government or a BJP-led NDA government or any other government in any state in India is unlikely to change basic Indian foreign policy (including its component economic policy) towards Nepal.

8.       The paradox of Nepali communist parties, even when in power, endorsing the neocolonial economic relationship between Nepal and its neighbor as exemplified by the pursuit of the policy of exporting hydroelectricity at dirt-cheap rates, and thereby exporting away potential multiplier benefits for the domestic economy from utilizing hydropower within, is likely to continue.

9.       Actually, it is not a paradox; only the operation of a principle: there is no free lunch. External benefactors naturally want their pound of flesh.