Purchasing power

Nepal’s richest who used to bankroll parties from the sidelines in exchange for personal, professional and policy favours, have decided it makes more sense to enter politics themselves.

Money, not political competency, has therefore become a deciding factor in who is ultimately elected into leadership. But because politics and ill-gotten wealth feed each other, governance suffers.

Nepal’s political parties, meanwhile, have to fudge poll spending because of expense limitations set by the Election Commission.

The Nepali Congress (NC) listed only Rs48.7 million in election expenses, the UML Rs20.9, while the Maoist Center just Rs8.3 million in 2017. The NC also listed Rs20.9 million in donations, while the UML said it got only Rs40.6 million from businesses.

Read also: The business of politics underminds Nepal's democracy, Ramesh Kumar

In reality, a study by the Election Observation Committee shows that campaigning expenses were vastly underreported in 2017. It estimates that parties spent Rs51 billion in just local elections, and Rs46 billion was used to garner votes for the federal Parliament. 

“I had never seen so much cash in one place before,” said a member of the NC’s election-targeted finance management committee. “We saw businessmen come and go with suitcases full of money. It was strictly cash. They did not want to leave a paper trail.”

Political parties have also relied on membership fees to raise funds. The UML raked in Rs41.9 million through such levies in the last fiscal year. But that is nowhere near enough to cover campaigning costs. This means falling back on big business for funding.

Rajyalaxmi Golchha has publicly stated that she became a UML MP by paying the party Rs70 million. Businessman Moti Dugar of the UML was Minister of State in K P Oli’s government, while Umesh Shrestha of the NC is a state minister in the current government.

Nearly all big business houses set aside ‘facilitation fees’ to donate to parties across the political spectrum to ensure protection.

“The business community fears that a party which has not been placated may make things difficult if it comes to power,” says a prominent FNCCI member.

Read also: The business of politics in Nepal, Shekhar Kharel

Numerous laws like the Banking and Financial Institutions Act, the Medical Education Bill, or the Foreign Investment and Technology Transfer Act were passed by businessmen MPs in parliamentary committees.

Tycoons often pay political leaders under the table to get them into the legislature under the proportional representation mechanism.

Businessmen say they have no choice because they are tired of party extortion ahead of every election. Politicians use brokers to raise cash, and they are promised a pound of flesh.

The blurring of the boundaries between business and politics undermines democracy and development, says political science professor Krishna Khanal.

"I don’t blame the business community because it is entirely up to the leaders to decide whether to take their money or not. Trouble is, politicians have no integrity,” Khanal adds.