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More than 500 savings and credit cooperatives across the country are not in a position to return depositors’ money, say cooperative victims.

Harish Chandra Shrestha, coordinator of the National Campaign for the Protection of Cooperative Depositors, said these cooperatives have embezzled hard-earned savings worth Rs 65bn from hundreds and thousands of depositors.

According to the Department of Cooperatives, there are more than 32,000 cooperative organizations across the country. These organizations have mobilized deposits from 7.3 million members and have a combined share capital of Rs 94bn. Likewise, they have mobilized Rs 478bn in deposits and invested Rs 426bn in loans.

“Many of those who embezzled people’s money parked in cooperatives are now affiliated with different political parties. Some have fled the country,” Shrestha said. “Most of the promoters of cooperatives are affiliated with one party or another. They become lawmakers and formulate laws that suit them. That is why the voices of cooperative victims go unheard.”

16 cooperatives ‘troubled’, Rs 13.5bn at risk

Dozens of cooperatives across the country have run into trouble. The government has declared 16 of them as ‘troubled’ institutions. Deposits worth Rs 13.14bn of 272 members are stuck in 15 out of these 16 cooperatives, according to the department.

The government, for the first time in 2018, declared 19 cooperatives—Standard, Standard Multipurpose, Kuber, Pacific, Prabhu, Chartered, Consumer, Kohinoor Hill, and Vegas—as troubled. Societal, Lunibha, Oriental, Pashupati, Tulsi Multipurpose, Shiva Shikhar, and Hamro Naya Krishi were added to the list later on. Of them, Oriental alone has mobilized Rs 3.19bn from 259 members. More than 600 depositors of Oriental have complained to the government, stating that they deposited the money for apartment units developed by Oriental chairman Sudhir Basnet.

The government declared Oriental ‘troubled’ a year ago.

Cooperative institutions that are unable to conduct financial transactions are declared as ‘troubled’ on the recommendation of the department.

Kashi Raj Dahal, chairman of the Troubled Cooperatives Management Committee, said cooperatives doing financial transactions and those based in urban areas have run into trouble. “About 500 cooperatives are in a situation of trouble. Of them, 145 come under the ambit of the federal government and 16 of them have been declared as ‘troubled’ institutions,” he added.

According to Dahal, the committee has already cleared all the liabilities of three ‘troubled’ cooperatives—Standard Multipurpose, Kuber, and Chartered. Likewise, the committee is in the process of clearing liabilities of two more cooperatives—Societal and Lunibha, he added. “As for other troubled cooperatives, the committee is searching for assets of their promoters and lenders. Frozen assets of these people are in the process of being auctioned off,” Dahal said.

According to the department, more cooperatives are being added to the list of troubled institutions. “We are investigating the financial transactions of six cooperatives. We will seek clarification from the promoters after the study is complete. If their clarification is not satisfactory, we will declare them as troubled,” Tol Raj Upadhyaya, the information officer of the department, said.

Why did cooperatives fail?

The committee has said that most of the cooperatives that have been declared as troubled institutions were facing a shortage of resources, means, and workforce. Many promoters are found to have used money collected as deposits to buy fixed assets and pledging them as collateral to take bank loans.

“Many cooperatives are found to have violated the norms. Some promoters lacked the expertise to run institutions that mobilize people’s money,” Dahal said. “Some promoters had the bad intention of misusing depositors’ money for personal gains. Those misusing people’s money must be brought to book.”

Dahal also said promoters got free rein over cooperatives due to lack of effective monitoring and regulation by state agencies.

According to the committee, it is facing difficulty in clearing liabilities of troubled cooperatives as assets of promoters are already frozen by the court after investigation by the Central Investigation Bureau of Nepal Police.

Committee chair Dahal said there is a need to give direction to state agencies to facilitate unfreezing of assets of cooperative promoters so that their liabilities can be settled.

Coordinator of the campaign Shrestha said the government did nothing even though a single individual went on to open as many as six or seven cooperatives. “Their motive was never questioned. This is mainly due to a lapse in regulation by state agencies,” Shrestha said. “The lack of monitoring of cooperatives conducting transactions worth billions of rupees speaks volumes.”

Prashant Tamrakar has been turning heads in the fashion world for three decades. He isn’t just a model but also a choreographer, actor, and founder of Big Bell Edutainment and Fashion Network Nepal (FNN), which is an e-commerce and fashion business platform. Tamrakar is a trendsetter whose ingenious ideas continue to shape the fashion industry in Nepal. He is determined to make the fashion space a viable one for the younger generation.

“Fashion is a lifestyle. It’s not just about putting on nice clothes. It’s about expressing your desires, being inventive, and figuring out how to use what you have to your advantage. When basic needs turn into something luxurious, that’s when you’ve got fashion,” he says. Talking about his style, he says it reflects the confidence and ease he feels within.

Tamrakar was just 17 when he started modeling. It was a largely unexplored territory in Nepal back then. There were little to no opportunities. The decision to audition was a bold one, he confesses, one that he is now glad he took. But it wasn’t easy to make a name for himself. Connecting with the media, both national and international, was challenging. 

It also didn’t help that he didn’t have anyone to look up to during those early days. “We made lots of mistakes and learned things the hard way. I’m proud of how far I’ve come. I’m in a good place and I want my work to inspire the younger generation,” he says.  

In 1994, he made history by becoming the first male model to represent Nepal on the international stage at Manhunt International in Singapore and Graviera in India. The international exposure introduced him to various professions like makeup artistry, event management, and fashion design. His foray into fashion choreography, however, came as a detour when he was training as a model under a Norwegian choreographer. 

Leveraging these global experiences, he officially ventured into the event management business and choreography afterward. His company, he claims, was perhaps the first event management company to get registered in Nepal at that time.

Tamrakar says when he started, 30 years ago, the fashion industry was more like a small club. There weren’t many people involved in it. But now Tamrakar, who is in his 50s, says everything is big-scale now. It takes a village to put up a show. From makeup artists, choreographers, and event managers to stylists and fashion designers, a lot of people are involved in the making of a fashion extravaganza. He sees this change as a huge win in life. 

As an entrepreneur, he is determined to take things even further and make the fashion industry in Nepal a big, booming business. He says he wants to give a platform to those with the skills and talent to take fashion forward. 

But Tamrakar doesn’t believe in limiting himself to just one thing which is perhaps why he took up acting as well. During his modeling days, he was offered quite a few movies. But due to his focus on his business, he decided not to take them up. When things were a lot more settled, he decided to give it a shot. 

In 2017, he took up the role of the villain in the movie ‘Aishwarya’. The movie was a hit and people took notice of Tamrakar. He could act and act well. That much was evident. Following that, he bagged roles in other movies like ‘Captain’ and ‘Ranveer’. As of now, he’s working on a few South Indian projects, including one titled ‘Hitman’, which will be out soon. 

The versatile actor, model, and choreographer is also busy with his reality show projects like Nepali Beauty Star and Nepal Fashion Festival. He is also the official choreographer of Miss Universe Nepal. “I focus on teaching good habits, building a strong work ethic, and emphasizing the importance of dedication,” he says. Working with his team, he aims to bring out the best in each young individual, emphasizing their uniqueness. 

Tamrakar also champions a few causes like cancer awareness, environment conservation, skill development, and education through his company that he founded 18 years ago. He is involved with a few social organizations and businesses as well. He has a lot on his plate and though juggling it all can sometimes be taxing, he says he wouldn’t have it any other way. 

Tamrakar says he is on a mission to give the fashion industry a makeover. He dreams of having a fashion council in Nepal to take industry issues to the policy level for investment and budget decisions. “We’ve got great talent, but we need a platform for the industry to grow,” he says.

As a staunch supporter of sustainable fashion, he says Nepal needs a fresh business approach that’s economically viable. This, he says, will ensure sustainability and stability in the market. He believes that investment in the textile, handlooms, and handicraft industries can boost the fashion market and thus the economy of the country. “Our old-school trends can integrate with the new fashion and tech trends to boost production,” he says. 

The ‘community forest’ initiative stands as one of Nepal’s most touted conservation development endeavors. Nepal devised the ‘Hariyo Ban Nepal Ko Dhan’ (Forest as national wealth) slogan in the yesteryears with a target of having at least 43 percent forest cover. However, propagators of the campaign say Nepal’s forest dwindled to 40 percent from 45 percent in the 1960s in just 15 years after the nationalization of private forests in 1956. This decline led to the introduction of the ‘community forestry program’ in 1987, transferring forest management responsibilities to local communities. Today, more than 16,186 forest user groups are affiliated with the Federation of Community Forestry Users Nepal, which speaks volumes about the success of the program.

 The program’s underlying motive was to elevate the proportion of forested land in the country by any means necessary. This singular focus led to widespread endorsement and implementation of the project across Nepali society with governmental support, with little room for alternative perspectives. The project’s community-centric name further obscured potential downsides even though the program was implemented without adequate consultation with rural Nepali communities.

 In official rhetoric, community forest was presented as a catalyst for sustainable development of local communities. It promised not just employment opportunities but also income generation through the sale of forest products like herbs and wood. The initiative envisaged forest users groups as autonomous community organizations to manage daily operations and generate resources for various community needs, including drinking water schemes, loans for indigenous people, public infrastructure, road construction and school management, among others. However, the implementation of the program predominantly focused on increasing forest cover. The intricate dynamics of rural livelihoods dependent on forests was largely overlooked.

 When the program was introduced, villages in hilly areas of Nepal were primarily agrarian communities. These communities believed in self-sufficiency in food production. Market dependence for staple food items, especially grains, was frowned upon during those days. Even households with significant cash earnings prioritized subsistence farming for survival. Villagers traditionally stored surplus grains to weather potential crises like droughts, which ensured community resilience and food sovereignty. This helped Nepal become a net exporter of food until the early 1980s.

 Recent researches show that Nepal transitioned to a net importer of food, particularly cereals, from the early 1980s onwards. This shift, many say, is linked to the implementation of new forest policies under the banner of community forest.  Previously, forests were freely accessible to all and they contributed to vibrant rural economies centered around animal husbandry and organic farming. As it was the only available occupation in rural areas, the younger generation participated in subsistence farming.

 Theoretically, there was room for local involvement in the organizational structure of the community forest program. However, the structure was designed in such a way that inadvertently favored control by a select group of local elites. While there were provisions for marginalized communities, particularly women, to participate actively in the program, the nature of duties assigned to members often prevented genuine people dependent on forests from active engagement. As a result, the poorest and most vulnerable members were overlooked while forming management committees. The program’s structure provided an avenue for local elites to assume leadership positions within forest user groups fostering a nexus between local leaders and government authorities. This collaboration was facilitated by the government’s objective to increase forest cover, influenced by Western ideologies, and its need for local partners to execute the initiative. Lately it was understood that the then western donors helped for this project for carbon trading so that they offer token money to countries like Nepal against the saved timbers, which otherwise could be used by locals as firewood for cooking. However, taking forest dwellers away from the jungle products have diverted village livelihood from eco-friendly sustainable life with renewable energy sources i.e. firewood to LPG gas.   

During those days, communication channels were limited to government-owned media outlets, which were accessible to only a fraction of rural households. This made it easier for authorities and the local elites to introduce new initiatives with minimal resistance from the local communities. Village dynamics also facilitated the implementation process, as the endorsement of a few influential male members would be sufficient to rally community support in those days. The attraction of leadership roles within the community forest framework, coupled with the program’s preservation-centric approach, favored those who already possessed land and trees, primarily the locally affluent. Those reliant on forest resources for their daily sustenance consequently found themselves relegated to the sidelines.

The policy of preserving forests by denying access to local communities was a flawed idea as forests are home to numerous renewable resources crucial for both communities’ sustenance and forests’ health. Regular forest management practices such as clipping and trimming could have facilitated faster forest growth, aligning with the intended objectives of the community forest initiative. Some communities did envision allowing villagers to utilize forest products. But it was not sufficient to meet the needs of the local population.

 The program’s structure was focused more on increasing forest cover rather than addressing the immediate needs of people dependent on forests. This initially led to a conflict between management objectives of the programs and the livelihoods of local communities. Despite the program’s punitive measures against collection of forest resources, many villagers, especially women and children, were forced to risk fines and harassment to gather firewood and fodder. The lack of accessible media platforms and social support networks left victims of this flawed policy powerless to voice their grievances. This suppression of traditional livelihood practices forced communities to depend on external resources, which gradually undermined their self-sufficiency.

The government prioritized road construction as a symbol of progress and modernity in later years. Road expansion enhanced connectivity significantly but also facilitated people’s access to external markets. This made a detrimental impact on local production and self-reliance. The easy availability of imported goods amid erosion of traditional farming practices exacerbated Nepal’s reliance on imported food, which led to a staggering increase in food imports over the years. This situation has proven beneficial for market fundamentalists but it has affected those advocating for a sustainable, eco-friendly and self-reliant economy. Nepal’s food imports were nominal until 2001. By the year 2021, the food import bill had surged by a staggering 78 times. This has highlighted a concerning trend of increased dependency on external food sources.

The author is associate professor of Political Sociology at Kathmandu University

Minendra Rijal is a member of the Central Working Committee of Nepali Congress. He has so far held three ministerial portfolios, the last being the Ministry of Defense in 2021. A doctorate in Operations Research from the New York University, he is also a seasoned academician. He is the chairperson of Apex College since 2000 and has taught at New York University, Kathmandu University, Tribhuvan University and Lancaster University. Rijal has 43 years of experience in research, teaching and consulting and has worked with government, universities, non-profit organizations, private sector organizations and international institutions. Ken Subedi converses with Rijal on the current issues of brain drain, economic prospects, politics, books and popular culture.

How do you analyze the current brain drain, especially our young people going abroad to pursue higher studies?  

A considerable number of Nepali people are migrating abroad, not solely for education but for employment opportunities as well. When we examine these issues together, we fail to grasp the underlying reasons driving this trend. The primary factor behind the significant migration abroad is our failure to generate an adequate number of jobs within the country. Despite the economy’s sustained growth over the past 33 years, with a real growth rate of about 4.5 percent, translating to a real per capita income growth of 2.6 percent, we have not seen a proportional increase in job opportunities. Despite discussions spanning nearly three decades on fostering an economy capable of creating at least 500,000 new jobs annually, we consistently fall short of this goal.

This dearth of job opportunities acts as a push factor, compelling individuals to seek employment elsewhere. For young men and women, the inability to secure a job leaves them with scant means of sustenance. Career progression and financial independence are paramount. Even if monetary support is extended to unemployed individuals, it cannot replace the dignity and self-respect derived from meaningful employment.

The second pull factor is the perception that better job prospects await overseas, aided by technological advancements. Many believe that lucrative opportunities abound abroad. Unfortunately, this optimism often leads individuals to accept precarious employment conditions, jeopardizing their well-being without fully comprehending the consequences. For instance, some Nepali youth travel to Russia to fight against Ukraine, while others go to Ukraine to fight against Russia, unknowingly endangering their lives in conflict zones.

I have personally encountered individuals in Europe who have paid substantial sums to brokers in Nepal, only to be transported to various European countries before reaching their final destination for employment. Many endure grueling journeys lasting several weeks to secure a job, often walking for days or weeks on treacherous trails without proper sustenance. Similar situations arise with individuals attempting to enter the US illegally through the Mexican border after paying hefty sums to brokers.

You mean the people taking the route of Panama, Guatemala, etc. to enter the US?

Yes. They do not initially travel directly to Mexico. Instead, they typically have to journey to various locations in South America and Latin America, as you mentioned. From there, they transit through multiple countries before eventually reaching Mexico and crossing its border to reach America. The amount of money they pay for this journey is staggering, beyond what most of us can comprehend. I've heard that there are organized groups facilitating this migration, selling false hopes to Nepali individuals. These brokers profit immensely from the situation, yet our system fails to hold them accountable for their inhumane actions.

Can you share some more insights about the factors pushing people to leave the country? Let’s consider the young population.

There are two types of people leaving the country. Some students aim to study abroad, seeking student visas. However, they often face prolonged periods in their academic programs and struggle to secure proper employment eligibility papers after graduation, resulting in accepting odd jobs and surviving on minimal income. On the other hand, there are students who have scholarships or can afford to support themselves and graduate from colleges and universities abroad. But many others typically do not make it to prestigious institutions and may receive an education inferior to that available in Nepal. Despite this, they opt to study abroad due to the perceived easier job prospects upon graduation.

Another contributing factor to this trend is widespread frustration, stemming from dissatisfaction with current circumstances. Many individuals have already emigrated, been working abroad and sending remittances back home. The regular receipt of remittances significantly impacts living standards, affording some families the ability to provide higher-quality food, access healthcare, enroll their children in private schools, dine out, and purchase scooters. Observing these improvements in the lives of others abroad creates pressure within families and on young individuals to seek opportunities elsewhere, believing that leaving the country will lead to better prospects for the entire family.

Addressing these challenges is complex, and there are no easy solutions. However, I believe that progress begins with small steps in the right direction. By taking proactive measures, we can work towards resolving these issues. Failure to take action only perpetuates the problem, exacerbating its complexities.

Can you shed some light on the current economic growth prospects and gaps? What are the sources of our economic sustainability?

I have already highlighted that our economy grew by 4.6 percent, with per capita income increasing by 2.6 percent in real terms over the past 33 years. Our revenue has soared by 100-fold in nominal terms and more than 10-fold in real terms during this period. Notably, there have been significant achievements in physical and social infrastructure, allowing us to provide more social services than we previously deemed possible. Our life expectancy has also risen by 17 years in the last three decades, a remarkable accomplishment deserving of pride.

Life expectancy is a particularly meaningful statistic to me, as it reflects our progress across economic, social, and political realms. While some of these achievements are attributable to government initiatives, many have occurred despite governmental limitations.

For every 100 rupees worth of goods and services produced domestically, an additional 25 rupees come in the form of remittances. This influx of remittances has spurred significant demand for domestic consumption. However, regrettably, we have struggled to meet this demand domestically. Consequently, we rely not only on imports of industrial intermediate goods and petroleum products but also on substantial imports of cereals, vegetables, fruits, fish, and meat.

Our government revenue is heavily reliant on indirect taxes like VAT and customs duties. Customs revenue from imports has become vital to meeting our rapidly growing recurrent expenditure bill. This reliance has trapped us in a vicious cycle where more young Nepalis seek employment abroad, their families receive remittances to finance consumption, this consumption drives increased imports, the government collects substantial customs revenue on these imports to cover its expenditures, and no party has an incentive to break this cycle.

Breaking this vicious circle requires concerted efforts from all stakeholders involved.

Do you see any chance of this situation improving in the future?

People often discuss challenges stemming from our geopolitical situation, but I believe it presents a unique opportunity for development if we approach it wisely and effectively. Our longstanding and close relationship with India is noteworthy; our borders are open, our cultures are similar, and our economies are closely intertwined, with India being our largest source of imports and foreign aid provider. Additionally, our ties with China have historically been strong and mutually beneficial, contributing significantly to our economic growth. As China emerges as the second-largest economy globally and India progresses towards becoming the third-largest, they represent vast market opportunities and potential sources of foreign investment for us.

To capitalize on these opportunities, we must consolidate our efforts and learn from the experiences of India and China. Our geographical proximity to India is particularly significant, and their commitment to importing 10,000 megawatts of electricity from us over the next decade is a promising development in our bilateral relations. Moreover, both our neighbors can significantly boost our tourism sector, and with proper development of our agriculture, they could serve as lucrative markets for our produce. It is imperative that we leverage these relationships and opportunities to propel our development forward.

What prospects do you see from tourism?

When assessing the tourism sector, Nepal’s enduring natural beauty ensures significant potential for improvement. Recent trends show a positive trajectory, with October recording the highest influx of tourists in Nepal’s history, followed by similarly promising figures in November. This trend is encouraging and should serve as a catalyst for further enhancement.

Several factors have contributed to this positive trend. The expansion of quality hotels and infrastructure, advancements in trekking facilities and adventure tourism, and the continued appeal of religious pilgrimages have all played a role in attracting visitors.

Further improvements in infrastructure will undoubtedly elevate our tourism sector to new heights. However, achieving this requires effective governance. Only with good governance can we implement the necessary infrastructure improvements to fully realize the potential of tourism. It is important to recognize that good governance is not only crucial for tourism but also for overall development. I should also mention that, despite periods of instability and frequent changes in government, progress has been made, underscoring our resilience and ability to overcome challenges.

How have the political upheavals in the country affected the vicious circle of the brain drain, remittance-based economy? Do you think the current electoral system and parliamentary system are pushing factors for unstable space for investment and economic activities?

We have successfully transitioned from authoritarian rule to democracy and from violent conflict to peace. It has been eight years since the promulgation of our new constitution, which institutionalized a federal democratic republican system of governance with inclusivity in public life. We have held two general elections encompassing federal, provincial, and local levels. However, despite these advancements, we still lack a clear path toward achieving a stable government.

In the past two general elections since 2017, political parties have shifted alliances, yet they continue to contest elections as part of one coalition or another. Consequently, elections are no longer fought on ideological platforms or developmental agendas but rather as strategic partnerships for political convenience. This transactional nature of politics has fostered complacency towards public concerns and increased corruption.

The prevailing uncertainty undermines governance, fuels corruption, and contributes to the exodus of young people seeking better opportunities abroad. To break this cycle, political reform is imperative, with electoral system improvements being a crucial starting point. Parties should be incentivized to cultivate their own support bases rather than relying solely on alliances.

Failure to address these issues will only exacerbate our challenges and hinder progress.

Can you share with us your passion for teaching?

I am not new to academia; however, I am not fully immersed back into academia as I am still active in politics. Nevertheless, I do have some extra time, and I choose to utilize it by teaching—a passion of mine that brings me immense joy. Even when I am tired and exhausted, stepping into the classroom rejuvenates me. Unlike many other politicians, teaching is not just a sporadic activity for me; it is a consistent part of my life. I have had the privilege of teaching at various esteemed institutions such as Tribhuvan University, Kathmandu University, New York University, and Lanchester University, among others. Additionally, with a group of dynamic individuals, we founded Apex College in 2000  and taught there until I fully immersed myself in politics following King Gyanendra’s takeover. Despite my busy schedule, my passion for teaching has always remained strong. Even after retiring from politics, I envision myself continuing to teach.

Teaching allows me to make a meaningful impact, and I firmly believe that I can impart valuable knowledge and insights to my students based on my experiences and exposures. I am motivated by the prospect of contributing to the development of Nepal’s future leaders. Therefore, I see no reason to withhold my expertise and guidance from the young minds who hold the key to Nepal's future.

You are one of the most well-read politicians in Nepal. What is your favorite genre to read and do you have any plans to write a book? A memoir perhaps?

I am not yet certain about my writing aspirations. While I have a desire to write, I am unsure about the direction it will take. It may take me another year to determine what exactly I want to focus on. I have ruled out writing my personal memoir because I don’t believe my life experiences are particularly fascinating or of interest to others. However, I am keen on writing about topics related to the political landscape, economy, and business enterprise of Nepal.

I envision writing more than one book, with one of them potentially exploring these themes through novels. Fiction provides me with the freedom to delve into topics that may not be suitable for non-fiction writing. I would particularly like to mention Joe Klein’s novel “Primary Colors,” which was first published anonymously. I liked the freedom he enjoyed writing about Bill Clinton’s campaign in it without being constrained by real-life events.

Over the past two years, I have been an avid reader, perhaps as much as anybody else in Nepal. I read a wide range of literature, particularly focusing on politics, philosophy, political economy, artificial intelligence, and even revisiting classics like the Mahabharata. While I have read the Mahabharata before, I am currently engaged in re-reading it, particularly exploring Bibek Debroy’s authoritative 10-volume version. This allows me to deepen my understanding and reflect on its timeless themes and lessons.

Besides books, how often do you indulge in other new forms of popular media? And where do you see yourself in the next few years?

It’s not just books I engage with; I also immerse myself in various other forms of media. I watch YouTube videos, listen to lectures, and delve into thought-provoking podcasts. Additionally, I value high-quality documentaries, such as those by Deutsche Welle and PBS, and I enjoy listening to NPR and The Economist podcasts. These platforms offer profound insights into societal issues and their implications.

Over the past two years, I’ve had ample opportunities to reflect on my past, present, and future aspirations. While my passion for teaching and involvement in politics and policy-making remain steadfast, I find myself uncertain about the direction my path will take. Denied the chance to serve in parliament, I feel compelled to explore alternatives. I recognize that politics alone cannot occupy me full-time. Given the significant influence of political parties in Nepal's political landscape, establishing a strong presence within a party could potentially pave the way back to parliament.

As for my future, it is unclear where I will ultimately end up. One thing I can say with honesty, clarity, and fervor is that I will continue teaching even after my political career concludes. However, the timing of my departure from politics remains uncertain.