Kleptocracy in Nepal: Democratisation of corruption

Nepal is among a few countries across the world that saw multiple political transitions in a few decades. In the last three decades alone, the country has seen multiparty democracy, armed Maoist conflict, an authoritarian king, the establishment of a secular republic, and finally, a federal state. While these systems evolved and transitioned, a covert and corrupt system developed underneath feeding on the loopholes of the political volatility and transitions and stealing from the state. In sum, Kleptocracy!

Kleptocracy — a system in which corrupt politicians accumulate state power and use that power to steal state resources and multiply their riches and influence. Typically, the kleptocratic system allows a few elites close to the corrupt leaders to accumulate wealth while exploiting the rights and potential benefits of the larger population and crippling the socio-economic base of the country.

The political elites put a network in place composed of their allies — bureaucrats, the private sector, the media, and others to misuse state resources.

The existing literature on kleptocracy has often placed a dictator or authoritarian leader at the top in a vertical structure. Examples of such kleptocrats are Joseph Mabotu of Congo and Ferdinand Marcos of the Philippines who amassed a large personal fortune embezzling state funds. Vladimir Putin of Russia, because of his dictatorial tendencies and enormous wealth allegedly amassed by creating corruption networks, is a contemporary autocratic kleptocrat.

In Nepal, however, kleptocracy does not only function vertically to cater to a government leader or a political party in command. Here, the horizontal reach of the kleptocratic network is widespread and as strong as the vertical network. 

Despite the unstable nature of Nepali politics and rapid change in government structures, every government’s nexus, functioning, and approach to kleptocracy remain the same. We argue in this essay that the horizontal nexus demonstrates the “democratisation of kleptocracy”.

When kleptocracy is democratised, the kleptocratic nexus is collectively built catering to the network that includes political leaders, major political parties, public institutions, the private sector, and the media. The mainstream political parties could preach different approaches to state-building, agenda, and ideology outside, but they essentially come together to protect and retain this nexus through political decisions and policies and make the nexus strong enough to exploit the state structures using seemingly democratic ideals.

The most recent example that makes this evident is the “Bhutanese fake refugee scandal”, where the money collected from Nepalis under the promise of third-country repatriation as fake Bhutanese refugees flowed upwards (vertically) and across (horizontally) to political leaders via brokers and bureaucrats. 

At the same time, the scandal also exposed the solidarity of leaders from different political parties in committing and aiding the fraud. The persons involved included high-level politicians — former Home Minister Bal Krishna Khand from Nepali Congress, and former Deputy Prime Minister Top Bahadur Rayamajhi from CPN (UML). It also included human rights and Bhutanese Refugee activist Tek Nath Rizal, former Home Secretary Tek Narayan Pandey, and conflict resolution expert Indra Jit Rai along with the brokers protected by politicians and political parties. Perhaps there are many missing names in the puzzle.

One primary difference between the kleptocracy that functions under a dictatorship and hybrid democracy is international standing and public support. The dictatorial tendency could pressure-cook to give rise to public rage and demonstrations as the public is ripped off their rights and benefits.

However, despite public knowledge of the corrupt system, such demonstrations could be improbable in some countries due to restrictions and threats. The international community usually acknowledges the declining state of democracy of such dictatorial kleptocracy. For Nepal, only the Bhutanese Refugees case gained some international attention because of the case’s relation with the US.

With a kleptocracy like Nepal’s where most of the democratic indicators are fulfilled on the surface, it takes closer attention for the public to understand the kleptocratic nexus that is functioning underneath the seemingly democratic system, and to strategise ways to counter it. 

For example, the elections are held timely in Nepal but the electoral coalitions that parties form hugely undermine inclusion. Freedom of speech and expression is promised to a certain extent, but the voices are not taken seriously. Furthermore, the highly politicised nature of Nepali society has forestalled prompt public disassociation from political parties or leaders they have supported for years.

With Nepal’s transition into decentralisation through federalism, the kleptocratic networks now extort resources horizontally across local and provincial levels. For instance, the provisions or criteria for local and provincial tenders are designed in ways that best suit the social network of a local leader if not some “afno manchhe” that the leader can benefit from. 
Furthermore, given that the constitution hasn’t envisaged any role of the opposition at local government tiers, the local leaders have more independence to foster their kleptocratic network. 

When kleptocracy and its networks are widespread both vertically and horizontally, with small networks active across the country, replacing a political leader or a political party in power is just too difficult. It also doesn’t serve as a permanent solution as the vacuum could easily be filled by another leader/party with a similar leaning. It requires a much broader and more comprehensive approach to decimate the nexus — including the collaborative resistance coming from the public, civil society, media, and other watchdogs, where each actor and institution are held accountable. 

The kleptocratic system is often covert — difficult to identify and held accountable. However, in cases like the Bhutanese Refugee Scandal where the perpetrators are already exposed, the joint responsibility of the public and civil society is to ensure that justice is delivered and the nexus is broken. Furthermore, it requires forming robust policies that focus on monitoring conflicts of interest, organised international crimes, and the protection of victims and whistleblowers.