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When will Nepal’s future ever arrive?

From "Cartels and Cabals"


May 01, Kathmandu-

When will Nepal’s future ever arrive?

Illustration: SUBHAS RAI


“What do people mean by poor governance,” asked Crown Prince Dipendra“Are they fed up with corruption? Is it that they don’t like how the political parties are behaving? Are they frustrated with the government’s inability to push back the Maoists?”

A barrage of questions followed.

Corruption was obliquely referred to as the “C-word” and was used very sparingly in development literature back then. It was reserved for basket-cases like Zimbabwe, the Republic of Congo, and the like. “Poor governance” was the more elegant euphemism of choice for nascent democracies like Nepal.

Review: Why Nepal is stuck, Kunda Dixit

Over the next ten minutes or so I gave him the low-down on the various “scenarios”, “triggers”, and “resource envelopes” that framed the World Bank strategy.

Dipendra listened very patiently.

But just as I finished, to my astonishment, he said, “You know Dai, I doubt that I’ll ever be crowned King. The way I see the palace old guard messing things up, I don’t see my turn ever coming. These guys just don’t get it. And they won’t listen to me. When I try to express my views, they say I’m out of line; they say I’m too political. The thought of what might be coming keeps me up many a-nights.” 

I was stunned by Dipendra’s remarks. I could feel his pain and his anger, but I did not know what to say. Moreover, I had no clue who or what the “palace old guard” was; nor did I have the faintest idea where the line was drawn in his world between what was political and what was not.


It was high wedding season in Kathmandu. As I stepped into the crowded marquee in the groom’s house, I was surprised to see Prime Minister Sher Bahadur Deuba standing alone in a corner, nursing his drink.

We exchanged friendly banter until Deuba suddenly asked: “Can you get a couple of important donors to issue a statement, essentially to say that the King’s intentions are illegitimate?”

This was the evening of January 20, 2005 and the Kathmandu grapevine was swirling with rumours that King Gyanendra would soon relieve Prime Minister Deuba of his duties to take over executive powers for himself.

“I can’t speak for the other donors, but it’s very unlikely that the World Bank would issue such a statement,” I said, to the best of my knowledge. “Our charter forbids us from commenting on day-to-day domestic politics.”

Little did I know that I had struck a raw nerve.

“You ungrateful fools!” shouted Deuba, to the effect in Nepali. “I’ve put up with donor nuisances for all these years. Now when democracy is in peril, is it too much to ask for reciprocity?”



Illustration: SUBHAS RAI


Praful Patel, the World Bank’s Vice President for South Asia in 2005, was star-struck during his meeting with the King. Gyanendra was savvy at coddling the vanities of useful visitors. He made it a point to inform Patel that he specifically ordered the palace guards to open the main gate which was reserved only for “special guests”.

Patel was so enamoured that he shot off an email to his entire staff extolling King Gyanendra’s virtues and arguing why the World Bank should stand ready to do business with his government. But in his haste Patel apparently forgot to encrypt his email, an oversight that would come back later to haunt him.

The King hardly concealed his contempt for the political parties. He also had choice words for the donors and NGOs.

“Terrorists are getting funds from the donors. We have the information,” said the King. “We don’t want to embarrass them. But how can a country accept this? My plea to you is this: you should not do anything that gives the Maoists an impetus to feel stronger.”

On NGOs, the King said he had enough evidence to suggest that some activities had “clearly crossed the line”.

“But all donors are not bad,” the King added, as an afterthought. “There are just a few bad apples in your midst.”

“We want a true democracy,” he said. “Lincoln said: of the people, by the people, for the people— he did not say for a few.”

But the world would soon come to see that the royal government had lost the plot. King Gyanendra installed two Panchayat-era octogenarians as vice-chairs to attend to daily administrative business. One vice-chair was losing his eyesight. The other was hard of hearing.







If King Gyanendra believed that self-adulation and official hero-worship would translate constitutional overreach into legitimacy, he was obviously ill-advised by his henchmen. On the contrary, his popularity started to sag. The age of deference was long since over. All the while, regular citizens were still subjected to midnight raids and humiliating body searches at the hands of impervious Royal Nepal Army soldiers. For all that the King painted himself as a redeemer, his government’s actions suggested anything but.

The swiftness with which the tables had turned and the enormity of the royal government’s diplomatic failures came as a shocking revelation to me when I overheard James Moriarty, the US Ambassador to Nepal at the time, publicly say this during a reception: “When you meet Gyanendra for the first time, you are impressed by his intentions. When you meet him a second time, you still give him the benefit of the doubt. When you meet him for a third time, you’re convinced that he’s a con artist.”


I first met Prachanda and Baburam Bhattarai in person in late August 2006, Thefog of war had only started to lift and the Maoist leadership had taken a calculated gamble by making itself public in Kathmandu.

I had read somewhere that the greatest duos in history can exist independently of each other but that they really should not. The whole is always greater than the sum of its parts. Bonnie and Clyde, Batman and Robin, Lennon and McCartney, Larry Paige and Sergy Brin, Madan Krishna and Hari Bansha. In my mind Prachanda and Baburam belonged to that same category of iconic dynamic duo.

Bhattarai did most of the talking that day. He was all fire and brimstone. No sooner had we settled into our seats, Bhattarai launched into a diatribe against the Seven Party Alliance. He demanded that the World Bank make a clean break from the past and impose a moratorium on aid. The donors should stop “subsidizing the corrupt”. The force of Bhattarai’s contempt for the Seven Party Alliance was quite revealing.


“Has the revolution started to eat its babies,” asked Ashraf Ghani, as I pulled up a chair for him in my office one afternoon. He was paraphrasing Mallet du Pan, the late-18th century French political essayist who famously contended that revolution leads to hope, hope to frustration, and frustration to fury.

Before his election as President of Afghanistan in 2014, Ghani frequented Kathmandu at the invitation of the World Bank to help the donors think through the implications of the new political and social order outlined in the 2006 Comprehensive Peace Agreement.

I did not have a ready repartee to Ghani’s question to me in 2007 about the revolution and its babies. If I were to be asked the same question today, I would probably invoke the Lenin Tango to describe the latest shifts and trends in the Nepali transition. I would probably say that while we are still some ways away from the third phase of Mallet du Pan’s postulation about revolutions, developments on the horizon would suggest that we are well into the second.


Kathmandu never anticipated the Madhesi uprising. It was inebriated with the false sense of a done peace deal, preoccupied with personalities and agendas driven by the so-called “hill elites” who traditionally walked the hallowed halls of Singha Durbar. It had completely misread a complicated sideshow simmering under the surface in the Tarai.

The World Bank was among those caught by surprise. Embarrassingly, only days prior to the shootout in Lahan, it had released a new study, Unequal Citizens, a multi-year, multi-donor, multi-stakeholder and multi-million-dollar piece of research into gender and social inequalities across Nepali society. But nowhere in the study did it dwell on Madhesi perspectives. A quick addendum was subsequently slapped on to an early second edition.


The CPN-Maoist sprung an electoral surprise during the 2008 Constituent Assembly elections and far exceeded its own expectations. Not that the swing voters were suddenly sold on the Maoist ideology. Nor were they beholden to its leaders. And it was not like our hands hovered over the ballot boxes either. Many voters, myself included, decidedly voted for the Maoist party because we had convinced ourselves that our ballot might represent the best hope for a lasting peace. We were totally fed up with the paroxysms and constant political tantrums of the past year and a half since the signing of the Comprehensive Peace Agreement.

To use a crude Americanism, I, for one, believed it would serve Nepal’s interests to have the Maoists “inside the tent pissing out” rather than have them “outside the tent pissing in”.

Some months later I tried explaining my rationale (in slightly less graphic terms, of course) to Pampha Bhusal, the Maoist candidate I voted for who went on to serve as a minister in the Prachanda cabinet. She thought I was pulling her leg. She could not for a moment believe that a World Bank staffer, as comprador bourgeoisie as they come, would ever vote for the Maoist party.


India’s Foreign Secretary Subrahmanyam Jaishankar (subsequently Minister for External Affairs in the second Modi government) landed in Kathmandu barely 48 hours before Nepal was scheduled to promulgate its new constitution. He read the riot act to Nepal’s political party leaders.

Nepalis were caught by surprise. Our differences are ours to manage, or so we thought. Moreover, it was far too late to entertain India’s anxieties as far as the Nepali politicians were concerned. To slam the brakes now and to appear to buckle this late in the game in deference to India’s concerns, no matter how legitimate, would be politically suicidal.

Nepal’s Constituent Assembly went ahead as scheduled and promulgated the new constitution with a thumping majority of over 90 percent. That evening New Delhi said it “took note” of the fact but it stopped short of welcoming the momentous feat in Kathmandu.

A fresh wave of violence had swept across the Tarai over the summer of 2015 in the build up to the promulgation of the constitution, leaving at least 50 protestors dead in the wake. A week after Nepal announced its new constitution, India responded by imposing an economic blockade.

In Kathmandu’s political circles, the first casualty of Modi’s actions was Prime Minister Sushil Koirala. The bromance he thought he had cultivated with Modi over the previous months cost him dearly. Koirala quietly withdrew, like a jilted lover. He passed away a few months later.


History has allegorical modes of transporting us back and forth across time and space. I find it a bleak irony of contemporary Nepali history that K.P. Sharma Oli, an elected Marxist who took his oath of office as Prime Minister swearing by the spirit of a post-monarchy, federal constitution, would soon adopt the same brand of “nationalism” associated with his bête noire, the authoritarian King Mahendra.

To most Nepalis it did not matter that Oli, up until that time, was merely part of the supporting cast; a side hero in the peace process. Nor did rumours matter that he was frequently high on prescription steroids to heal his kidney transplant from some years ago. His loquacious goofiness flummoxed some, but his sardonic wit endeared him with most others. Nepalis, by and large, finally found a messiah in Oli and his anti-Indian rhetoric.


Mac Maharaj was a key figure in South Africa’s freedom struggle and among Nelson Mandela’s closest confidants in the African National Congress (ANC). He was also a key ANC negotiator and spokesperson during the peace talks.

Over lunch one day, as we discussed the applicability of South Africa’s experiences in truth and reconciliation to Nepal, Maharaj asked me if I had watched the movie Long Night’s Journey into DayWhen I confessed that I had not, he extracted a promise from me that I very soon would. But the tone of his impatience told me he did not believe for once that the South African model would work in Nepal.

Maharaj saw no analogy in Nepal. Rather, he feared that the UN foisted mechanism would allow room for the warlords to hijack the process, absolve themselves with blanket amnesties (without any confession or restitution, critical aspects of the South African approach), deepen disillusionment among the victim groups, and set Nepal up for failure.

Maharaj was spot-on in his prognosis. In the five years since they were established, Nepal’s Truth and Reconciliation Commission (TRC) and Commission on Investigation of Enforced Disappeared Person (CIEDP) have both failed to complete even a single investigation.



Illustration: SUBHAS RAI


The failures of Nepal’s transitional justice systems are only symptomatic of a wider malaise that has plagued Nepal since the signing of the Comprehensive Peace Agreement (CPA). The popular Nepali term to describe this travesty is bhaagbandaa, or cabal politics.

The origins of bhaagbandaa can be traced to the mid-1990s when, riven with instability, the collusive nature of Nepali democracy was exposed. Every government between 1998 and 2018 – twenty in as many years – was the product of either an unholy alliance, ribald political horse-trading, an obscure “gentlemen’s agreement”, or a coup.

Rather than expunging this legacy, with extra mouths to feed bhaagbandaa became more pronounced after the Maoists entered the political mainstream and proportional representation greatly inflated the size of the legislature. Bhaagbandaa manifested in deviant practices where every political party in the Constituent Assembly (there were 26 in the first CA and 30 in the second CA) deemed it an entitlement to claim their pound of flesh from the Comprehensive Peace Agreement – all in the name of consensus.

And bhaagbandaa did not stop there. It also involved the buying and selling of plum public offices. From fat contracts out of Singha Durbar to the puniest “small works” at the village “all-party-committee” level, nothing in between was spared in the feeding frenzy.

Bhaagbandaa explains why the so-called “peace-dividend”, a spurt in development and economic activity typically associated with the resolution of conflict, never materialised in the case of Nepal. It was usurped by the cabals.


The United Nations Mission to Nepal (UNMIN) descended on Kathmandu in early 2007 with all the flourish and trappings of a liberation force, albeit a civilian one. The sheer size and visibility of its presence dwarfed anything Kathmandu had ever seen before.

But UNMIN soon slid into infamy when its ubiquity was perceived as overreach. For all its grandstanding, in reality the special political mission had arrived with a limited mandate.

Some errors in judgement were to be expected of any multicultural mission on this scale. But it did not help when UNMIN allowed its slip ups to casually pass in the public mind as an inherent bias towards the Maoists. Very soon UNMIN staff were labelled as apologists for the Maoists’ ruthless intimidation of opponents and activities that often bordered on the criminal. Its reputation took a constant pummelling from incorrigible sceptics in the non-Maoist parties. During its latter days, as the mission wound down, UNMIN was even accused of trying to overstay its welcome.

Meanwhile, policy-based aid as a bellwether of economic and institutional change slipped into a deep slumber during most of the decade following the signing of the Comprehensive Peace Agreement. The donors bought into the false dichotomy promoted by the interim-era leadership that development could wait until the peace was settled, as if the two were mutually exclusive. UNMIN’s edict of do no harm was every so often invoked and interpreted as antithetical even to basic development work, let alone politically thorny reforms.



Following the 2008 elections to the first Constituent Assembly, the Speaker Subhash Nemwang told the donors, in no uncertain terms, that constitution writing in Nepal would pursue a unique, “homegrown” approach. While Nemwang managed to evade the pesky donors, he also prompted a certain torpor to set in. Most of the donors took his diktat as an excuse to lie back and think of England, as it were.


“A rising tide lifts all boats,” US President John F. Kennedy famously said in a 1963 speech defending the rights of his fishing constituents in New England to federal subsidies. Economists still parrot the expression, somewhat out of the original context, to illustrate the argument that free markets promote upward mobility and the rise of a powerful middleclass. Kennedy’s imagery is so vivid that even recent critics of free market inequality adapt the same phrase: “A rising tide lifts only the yachts”.

In Nepal, there is very little evidence to suggest that free market policies adopted after 1990 contributed to the rise of anything close to a strong middleclass. But yes, we certainly have seen the rise of the “middlemen”.

Joseph Schumpeter, the legendary Austrian-born US political economist, popularised the term “creative destruction” to describe how innovation and growth replace the old with the new. I would like to believe Schumpeter borrowed the termfrom ancient Hindu philosophy and the supreme holy trinity where Lord Shiva figures simultaneously as fearful and auspicious. Lord Shiva also represents creative destruction, his body covered in ashes denoting impermanence and his trident signifying equilibrium.

For a society that worships Shiva and prizes the Temple of Pashupati Nath, one of the Lord’s most revered sanctuaries, I find it quite ironic that Nepalis should tolerate and sometimes even idolise the omnipresence of syndicates and cartels – the antithesis of creative destruction; “conspirators against the public”, to borrow the words of Adam Smith, another legendary economist.

Moreover, for a society as hardwired as ours to chest-thumping nationalism, I am intrigued by how rarely we debate who actually owns our economy, and to what effect.

In 2017, DFID, the British aid agency, commissioned a study to try to understand who calls the shots in the Nepali markets. For all its limitations, the findings confirm a perilously high concentration of wealth and power in the hands of a small number of “business houses”. More alarmingly, in my view, having climbed into bed with an extractive political class, together they have erected high barriers to entry, spawned distortionary policies, and perpetuated predatory practices well beyond what would be considered acceptable in any democracy that is still finding its feet.

Cartels have flourished across all sectors of the Nepali economy. As a consequence of political pandering to the baser transactional instincts of special interest groups, the state has all but abdicated its regulatory obligations in most sectors. This has brought disrepute to market liberalism and perhaps explains why the Nepali public, peeved at having always to settle for the short end of the stick, has pivoted toward a mixed-market model, now enshrined as a constitutional aspiration.

But far worse could follow in our newfound affection for the “mixed model”. Nepal has a peculiar habit of cherry-picking the worst features in any given choice. No one should be surprised if our economic managers attempt to meld crony capitalism with statist coercion in our model of the mixed economy.

The long and short of it is that the world is not holding its breath for Nepal. While our neighbours all cruise the high waves of the Asian Century, Nepal, sadly, has missed the boat.


So, Nepal grew its economy 50 times over in the last 50 years, in nominal US dollar terms. We built up our human capital along the way too, quite respectably according to many universal tallies. But, for a population size that ranks 49th in the world, we still rank 102nd in the size of our economy and 156th in terms of GDP per capita among the world’s 211 countries and sovereign territories usually listed in the global count.

One can always quibble about the veracity and the precision of the numbers; the timelines; the correlation between population size, productivity and growth; or the cross-country comparisons in human development outcomes.

But the question I would ask is: where then is the qualitative, feel-good factor underlying our “progress”? Where are the high quality public assets; the communities of world-class scientific and academic minds; the SME disrupters and the cornerstones of manufacturing; the cutting-edge innovators, the uniquely Nepali brands, the venturepreneurs and the start-ups; the money managers who trade lawfully across global markets; the sportspeople who star with international clubs; the international celebrities of Nepali literature, art and cinema; or the multi-millionaire philanthropists who pay it forward? Where are our points of entry into international diplomacy and global soft power?

These are but a few sample trophies that constitute pride of place among societies that made a parallel or even later start than us in the modern age. One could enumerate a lonely handful of promising Nepali unicorns, but will they alone suffice to constitute a critical mass to stamp our national identity on the rest of the 21st Century?

Why do the loudest advertisements in our newspapers only tout education and employment abroad; short-term “consultancies” with the donor agencies and the NGOs, or job vacancies for salespeople for foreign-made goods and spare parts? Why does the Henly Passport Index 2019 rank the strength of our Nepali passport 101 among 107 indexed, subjecting us to vagabond, hillbilly status in the eyes of immigration officers around the world? Why are our NRs denominated credit cards not worth the plastic they are embossed on anywhere beyond Nepal and India?

One could ask a million more questions like these, associated with our swelling but sorely unmet middle-class aspirations of democracy and its institutions.

If things were really looking up, why then is yet another Nepali sister or brother forced to emigrate and walk into the unknown every 8 seconds? Why, as citizens of Nepal, have we become so comfortably numb as not to be outraged by these and similar questions around institutional failures anymore?

Rather, in the contemporary era, we have renounced our economic aspirations to the mercy of others. So much so that the language of development is now alien and the currency is foreign. This murkiness has allowed our “development partners”, who have commanded the loudest voice in matters concerning our choices, to confabulate failure with success and to escape accountability time and again. We have allowed our “private sector” to take the money and run.

But self-starting societies around the world, some even in our proximity, have demonstrated that economic miracles can be engineered in one generation or less if governments invest in fortifying their institutions. They have proven that there are savvy short-cuts to progress and the late-comers to economic development in the modern-era need not trudge the same long and winding road.

By comparison, Nepal’s development story would read like an assiduously promoted fiction, mis-told by the development donor and the recipient alike for self-serving purposes. This story demands a rewriting where apples are compared with oranges, and not with apples again. We must go against the grain to be honest to ourselves.


Many of the problems I belabour in this book are not peculiar to Nepal.  Democracies are under siege in many parts of the world today. It was all the rage among western scholars even up until not too long ago to lecture us about the fissures and fault-lines in our society. Now they all scratch their heads to explain new waves of chauvinism and xenophobia in their own countries – a.k.a., “nationalistic populism” – the highest in 80 years in the so-called developed world, according to some surveys.

Until fifteen years ago, many of us were convinced that we had hit a nadir; a point of no return on the slow road to Year Zero. Nothing short of a miracle explains how we managed to step back from the brink, bruised but not broken. Negotiation and compromise are the lifeblood of democracy and a little overkill was probably justified to help us make it through the night. Not many societies can say that today. Certainly not in the so-called “free world”.

What is there not to be hopeful about then?

Alas, in Nepal, the fact remains that politics has always been about the means and never about the ends. Politics is a cash-cow more than it is a calling. Its purpose has never been “to make citizens happy” as Aristotle would have us believe many eons ago.

Our practice of politics treats the economy as an afterthought and development as a chore. When they matter, they feature as jingles fancily dressed up to warrant the extraction of more rents, or to enlarge patronage networks: Bikaasko Mool Phutau; Aphno Gau Aphai Banau; Bisheshwor Sanga Garibi Niwaran; Naya Nepal; Sambriddha Nepal, Sukhi Nepali, et al. Panchayat, Socialist, Marxist or Maoist, this habit has always been the hardest to break.

The road ahead is strewn with banana peels and booby traps if we allow the short-term trading of favours to forever smoke and mirror the true purpose of politics, at its core: determining how, as a society, we might collectively prosper. We will have learnt nothing if we incessantly waffle on this count, for that will only send us back to the starting line again, possibly even at greater speed and at a much higher cost.

Real peace is more than just the absence of war. And given all that Nepal so perilously survived and so recently, one would think that our political class would keep things honest and level with citizens rather than arrogate itself to public office for purposes of vainglorious pontification. Should we not be staving off the next possible conflict? Or should we be stoking one? Is it our national fate to constantly drift, generation past generation?

Disappointment is a dangerous emotion and the consequences of thwarted expectations could be ruinous.




Nepal has never lacked competent people or good ideas. What is sorely missing is politics-proofed institutions that connect pragmatic, transformative ideas with qualified and motivated individuals. After 60 years of development planning, it still requires a coincidence, an accident, or a stroke of extraordinarily good fortune to find the right person in the right job in the public service. This dismal lack of investment in institutions explains why Nepal’s experiments with systemic reform have been, by and large, flash-in-the-pan.

As far as democratic guardrails go, the polarity of politics and the primacy of party agendas have reduced Nepali civil society to a mere dud, barring a few truly independent minds who might still voice the Nepali conscience. By and large though, people in civil society will often complain that their “space” has shrunk in the new political order. But they will hardly let you in on their own complicity.


All is not gloom and doom. That is certainly not the impression I intend to impart with this book. Yet, I am less than sanguine in my outlook when the cabals and the cartels, the dark underbelly of a transitioning Nepal, hollow out the prosperous and equitable New Nepal we were promised.The cabals and the cartels, the twin leitmotifs that drive my denouement, feed off each other and I do not see this deadly yoke being pierced anytime soon.

I do not blame the politicians. Not exclusively. One might have a lifetime’s worth of wonderfully civic-minded ideas. But, at the end of the day, one must also have very deep pockets to project oneself as a serious player in a hugely expensive, risky and asymmetrical political landscape. One cannot do the lord’s work in the devil’s playground.

I do not blame the cartels exclusively either. When it is darn near impossible to run a reputable business under the current political and social conditions, let alone grow one, it should obviously make business sense to cultivate friends in high places.

Worse still, a time may come soon when the cartels will have infiltrated the cabals to a point of no return. If cash is all it takes to “win” a parliamentary seat and the cartels have it all, they might just as well buy their way into parliament. Why bother with ideology or a political bogeyman?

Regrettably, the 2017 general elections indicate that this will increasingly become the pattern as long as “proportional representation” remains wide open to abuse by the carpetbaggers and the party moneybags.

But glimmers of hope still glow, particularly in Nepal’s vibrant media – traditional and new – to tell it like it is. And in the gumption of my no-nonsense compatriots. I have seen enough examples of late to persuade myself that regular Nepalis across the spectrum will break ranks, gather, and grow for the next social movement every time we are outraged by an insensate political class that tests our patience or insults our collective good judgement. Afterall, people power is mightier than people in power.


Bilateral grants and concessional multilateral loans are still the cheapest sources of Nepal’s external financing. Factoring in the time value of money, even the loans, if put to productive use, are as good as free at the end of their long maturities. But that is precisely the root of our troubles. The classical theory of foreign assistance syllogized by aid bureaucrats over many decades conditions us to miss the forest for the trees. If it is “free” then it must be good, we assume. We must take it. We rarely ask ourselves whether aid is working for or against us.

Truth be told, foreign aid and advice are too insignificant to make a positive difference anymore. Consider this: in any given year, our overseas workers rake in over five times the foreign exchange that Nepal receives in foreign aid. And the donors are not the gatekeepers of development knowledge they once perhaps were prior to the advent of Google, Wikipedia and the likes. Over the years, Nepal, too, has produced an indigenous community of world-class development professionals and thinkers.

Yet, Nepal’s donors have been painfully slow to reinvent themselves. If anything, they remain cogs in a rusty piece of old machinery where the organisational raison d’être is reduced to simply spitting money out of the door, preferably along a path of least resistance. For all the shrill about impact and results, aid officials prize nothing more than achieving the fictional success of high “burn rates” and “disbursement ratios”.All the while, the donors and the government will have us believe that development is a “long game” – and therefore, no necks must be put on the line; no heads will roll. But regular Nepalis must dance in the dark, possibly over many generations of debt atonement.

None of this is very good for Nepal’s development. But none of this will change either as long as the donors put the interests of the cabals first.

The donors obviously recognize the problem. But their accomplices in the government often get the better of them. Some parts of the government bureaucracy, especially those that the aid community typically engages with, are highly proficient in the lingua franca of foreign assistance. They are trained to locate perverse institutional incentives and other chinks in the donor armour. They are skilled at appealing to bleeding hearts. After all, it is their ticket to cabaldom too.

Consequently, when interests converge, the donors concoct artless excuses to keep throwing good money after bad. They devise gratuitous ways to reward the government even for elementary tasks that any government anywhere should be performing on its own. Perpetuated over many years, the donors reinforce a toxic sense of entitlement among the recipients. When aid need not be “earned” anymore, it is a crutch that cripples.


But let us imagine for a moment that the cow jumped over the moon. Some quirk of fate throws the cabals and the cartels off their game; they mend their ways, step up to the plate and commit to positive change.

Let us take a giant leap of faith and assume that the cabals somehow reconnect with popular aspirations; they rediscover their moral compass and morph into inclusive political institutions.

The cartels attain enlightenment too; they wake up to the false sense of security of living in mansions in the depth of slums; they welcome sensible regulation and promote participatory enterprise and inclusive wealth creation. Similar to the situation with the “robber barons” in 19th Century America, public opinion names and shames them into giving back generously to society.

Is this possible? Let us even imagine that the jury is out. If other societies have accomplished the same, why not Nepal?

But maybe I am barking up the wrong tree here. When Nepal’s donors display no compunctions about dispensing with profligate aid that they are not entirely truthful about even to their own taxpayers, our cabals make the most of the situation. And when the elbow grease of our migrant workers, in all innocence, pumps unlimited liquidity into our kleptic markets, our cartels cash in on it.

When nebulosity rules the roost, why then should anything that entails saving and investing for tomorrow find traction with the cabals and the cartels who have formed a habit to simply live for today off other people’s money?


Tomes have been written and recycled over the years about the many second, third and fourth order reforms that Nepal could pursue. Those volumes sit around gathering dust on the shelves of many government and donor offices. I do not intend to regurgitate the same shop-talk in this book again.

The need for fundamental change has never been greater if we are to live up to our constitutional aspirations of achieving prosperity with democratic stability. Central to that change is an exposé of the cabals and the cartels – the rogue elephants in the room – and a concerted and conclusive halt to their powerful, mutually reinforcing sway over the institutional mainstream. Never must the twain meet again.

But from the inferences I make in this book, it would appear that Nepal’s transition is heading off in diametrical tangents – in manners that even the most astute reader of tea leaves would be hard pressed to explain what it is we are actually transitioning to.

We can paper over our institutional failures and go on chipping away at the margins in an alphabet soup of second, third and fourth order economic reforms to still pretend we are making progress. But, similar to the recent past, those too will remain vulnerable to the fleeting fancies and pocketbook preferences of people in short-term office. None will endure unless we listen to our better angels to address the first order of fundamental change – the de rigueur quarantine of the worst instincts that tend to eclipse our sense of direction and misguide the priorities of our state and markets.

We do not enjoy the luxury anymore of hanging our dirty linen out in the open in the hope it might catch some westerly winds of change. That will just not cut it. We must bite the bullet, in our own best interests.

If the past continues to live in the present, will the future ever arrive?

Cabals and Cartels: An Up Close Look at Nepal’s Turbulent Transition and Disrupted Development

by Rajib Upadhya

FinePrint Books, 2020

282 pages  

Courtesy: Nepali Times:


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