One-window reconstruction will avoid mistakes of relief phase

JUN 08 - Six weeks after the Great Earthquake, the country is gradually moving towards the reconstruction and rehabilitation phase.  The government has planned an international donor conference for June 25 in Kathmandu to collect adequate funds and avoid the glitches it faced during relief operations. It hopes to have a detailed plan to present at the conference after the post-disaster need assessment, currently underway in coordination, with donors is completed. Akhilesh Upadhyay and Mukul Humagain spoke to Finance Minister Ram Sharan Mahat about the government and donor differences with regards to aid mobilisation, politicisation of relief distribution, forming a new authority for reconstruction and lessons learned in the aftermath of the quake.

Is there divergence in the way the government and donors are approaching relief and reconstruction? Donors don’t seem interested in giving cash while the government wants more of it.

It isn’t exactly like that. That happened in case of the PM Relief Fund. In relief, it was not possible to agree on the amount and negotiate because we wanted support immediately. Even if we had received cash, it would not have been possible to purchase goods immediately. Donors rushed into the country with medical teams, food packages, etc. We would have liked part of it to come in cash which did not happen. That phase is over now.

Now we have entered the reconstruction and rehabilitation phase. We will identify specific projects and negotiate with donors. Aid money for reconstruction and rehabilitation will come under the framework of specific projects and programmes which will be negotiated between the two parties. There is a need to build roads, homes, government buildings, hospitals and to restore monuments. We all need cash for that but under defined terms and conditions.

Donors have expressed concern about corruption at the central level, if not at the district level, and bureaucratic red tape which has unduly hampered the whole process.

Of course, red tape exists. The culture of the bureaucracy, whether it be of other countries or Nepal is the same. I accept that it may be less efficient here in some ways. We want to establish a new mechanism to expedite the implementation of the reconstruction project. That’s why we are talking about forming an authority that can overcome the problems of land acquisition, time-consuming environment impact assessments and procurement. To overcome these problems, we think that there should be a separate mechanism under a new legislation. As for the problem of corruption, it is in fact exaggerated. How often do we find countries, declaring the amount they spent in different projects, as is being done in Nepal? Here, newspapers report about it practically every day. There are parliamentary committees. There is the Commission for the Investigation of Abuse of Authority. There are so many vigilance mechanisms.

There was a controversy recently about you and your own constituency and there is a larger public perception that party leaders are routing both cash and kind through their patronage networks. Your office has itself been implicated.

Minor lapses are blown out of proportion. If there has been any wrongdoing, the law will take its course. There are plenty of agencies in this country to look into irregularities and wrongdoings. But here, there is too much of politicisation and the media also likes to sensationalise stories.

In the early stage of relief works, there was a strong perception that our government, instead of being open to international aid, was seeking more control, including trying to tax the relief material.

Do you think customs offices will allow every cargo to pass by without asking any questions? We have an agreement with international agencies that relief materials will be exempted from tax. But they will have to declare the content of the cargo, its destination, its recipients and under which conditions it is coming in. In every country, at the customs point, there are declarations to be made. In fact, the procedure in our customs office is much simpler than the procedures you see in other countries.  

The government’s concern about revenue leakage is understandable. But only yesterday, a major donor we spoke to argued that the response of the Nepali government, especially in the early days after the earthquake, was seen as ‘kneejerk’. Our government was seen as ‘controlling’ instead of ‘welcoming’.  

In the early days, we expected them to declare their content, destination and recipients. And while returning, they had certify that those things were distributed by the authorities. What is wrong with that?

Speaking of reconstruction and rehabilitation works, earlier there were talks of forming an autonomous authority. Now the reconstruction and rehabilitation plan submitted by the National Planning Commission (NPC) talks of an implementation committee under the Prime Minister’s Office with several ministers as its members. This runs in contrast to your own earlier position that we formed a high-powered independent authority.

There are many proposals that have been made. NPC’s is just one of them. The final decision will be made after thorough discussions. And how can anything be independent of the government? The implementation machinery is with the government. If the reconstruction authority is to be a very powerful body, it must be headed by the prime minister or somebody appointed by and accountable to him. The proposal to form a body led by the PM is to ensure proper accountability and to empower it. With regards to implementation, you cannot create parallel institutions. What we need is a strong authority with a full-time executive head reporting to the prime minister, who can take decisions with regards to matters concerning finance, procurement and environmental assessments that usually delay project implementation. So we need a strong, separate authority but not outside of the government.

How will you insulate such a reconstruction authority from the concurrent political instability and meddling?

The executive head will have a full term regardless of  a change in the government. The board will have ministers who might change. It will be something akin to the Investment Board Nepal but a lot more powerful. It will have a ‘sunset clause’ and its term will perhaps be five years in the least.

Given our history of bureaucratic delays and political instability, how hopeful are you?

I am hopeful. If you keep saying this is what happens in our case and keep questioning our efforts, how will things will be any different?

Let us talk of the larger economy. How much has Nepal been pushed back in terms of tourism, trade and various other sectors due to the quake?

It is a big setback but we will bounce back very soon. This setback will last for about a year. As soon as reconstruction begins, the economy is bound to bounce back as more money and goods will be injected into the economy.