Findings
Pervasive corruption has been one of the major challenges faced by Nepal since the past few decades. In the recent years, problems of corruption have been a centre point of the political agenda prevalent in Nepal. This current report will discuss the various forms of corruption that are prevalent in Nepal. This increased rate of corruption reduces competitiveness as well as increases the rate of costs and this would also be highlighted in this current report, Finally, recommendations would be provided that could help the government to reduce corruption in Nepal and raise the economy of the country.
Corruption is a multifaceted phenomenon that affects the functioning of the country. It has been observed that an increased rate of corruption overall affects the efficiency of the prevalent companies. Corruption involves the use of political power in order to achieve a high-profit margin in their companies. Corruption occurs between the non-governmental organisations and this impact the level of performance. Furthermore, it has also been observed that increase rate of corruption affects the efficiency rate of the employees. [Refer to Appendix 1]
Figure 1: Different forms of corruption in Nepal
(Source: Ghimire and Ashraf, 2016)
Bribery is the amount of money that is taken by companies in order to maintain a corrupt relationship. Rose-Ackerman and Palifka (2016) commented that bribed amount is usually paid to the state officials in order to receive benefits. Businessman and clients often enter into corrupted relationship by taking bribes that would benefit each other by incurring high-profit percentage. It has been observed that in Nepal, there has been an increased bribery rate and therefore, this often impair the overall profitability rate of the companies.
Embezzlement is another form of corruption prevalent in Nepal and this involves theft of various public resources. Ghimire and Ashraf (2016) stated that embezzlements occur in certain cases where the state officials steal resources or goods from any sort of public institution. In other words, corruption involves transactions between the two individuals that occur beyond the legal regulations. It has been observed that in Nepal, embezzlement is one of the common modes of accumulating money. Higher bureaucrats, as well as political leaders, are involved in such embezzlements in order to earn high-profit percentage. Furthermore, Karkee and Comfort (2016) added that several political leaders use their powers in order to expand their business. In Nepal, several political leaders use their powers and help influential people to expand their business transactions.
Extortion involves extracting money unethically by means of violence and coercion. Kohrt et al. (2016) stated that extortion also includes obtaining money forcefully from individuals be meaning of threat or conducting fraudulent activities. In Nepal, the present political conflicts have raised chances of extortion that overall affected the integrity of the people.
Privatization, as well as high bias behaviours, has been quite common in Nepal. Most of the influential and political leaders have a tendency to favour their own family and relatives thereby prohibiting other normal people. Nepal and Jamasb (2015) stated that this form of corruption restricts the normal local people from getting their required position within their working premises thereby affecting their mental stability.
Analysis
This is another form of corruption highly prevalent in Nepal where the political leaders prefer their own kinfolk and family members. Various political leaders in order to secure their political position nominate their own family members in councils. It has been observed that this form of corruption affects the political scenario thereby impacting the efficiency of the employees.
Corruption affects the business performances and could even lead to permanent closure of the company. Increased rate of bribery have affected the integrity of the people and thereby affected the rate of business performances. Most of the businessmen have a tendency to earn higher amount of profit by taking bribes from their clients. This violates the country’s legal principles and overall impact the economy of the nation.
Corruption often results in a huge amount of financial loss through embezzlements. Increased rate of bribery and theft have overall affected the financial condition of the country. Neupane, Soar and Vaidya (2014) stated that loss of customers is quite evident due to increased rate of embezzlements. The competing organisations could seize the opportunity in order to outdo the affected firm. This would ultimately result in decline in the market share of the affected firm.
Increased rate of corruption could eventually result in loss of trust among the shareholders and this would overall lead to decline in the efficiency rate. Sharma, et al. (2018) stated that investors also lose their confidence and this again impact the proficiency level of the affected firm. Furthermore, corruption also discourages the entrepreneurs and they refuse to invest in specific business (Sharma, et al. 2016). Business image, as well as efficiency, also tends to decline and therefore, it can be said that corruption has immense impact on the business performance.
The government of Nepal has implemented various strategies in order to minimize this increased prevalence of corruption. It has been observed that in the year 2017, Nepal has been ranked 122th out of a total 180 countries. Therefore, the government has imposed several regulations and taken initiatives that have minimized the rate of corruption. Apart from the government, businesses have also implemented various strategies in order to prevent corruption.
Figure 2: strategies implemented by the government in order to reduce corruption
(Source: Van Teijlingen and Simkhada, 2015)
Government has imposed taxes and subsidies in case of public procurement. Several goods are being purchased along with taxes in order to control increased corruption rate. The government has maintained transparency in order to minimize the increased rate of corruption.
It has been observed that most of the corruption has cross-border dimension and therefore, government need to control these transactions in order to minimize corruption. The government of Nepal has developed several international conventions in order to restrict international trading. Shrestha, et al. (2018) stated that establishment of international convention prevents foreign corruption and prevents extortion. Furthermore, Van Teijlingen and Simkhada (2015) added that conflicts of interest also remain prohibited due to this establishment of international convention.
The government of Nepal has deployed the use of smart technology in order to minimize the increased prevalence of corruption. Several foreign trades have been conducted by using smart technology and therefore, this usage restricted this frequency of increased embezzlements.
Strategies Implemented by the Government
Education: It is essential that every individual of Nepal has enough education in order to combat high frequency of corruption. The individuals should understand the detrimental impact of corruption on society as well as business efficiency.
Change in governmental regulations: It has been noticed that most of the political leaders are engaged in corruption in order to secure their position in the political council. Therefore, a change in political scenario could alter the corruption rate.
Lower the inflation rate: High inflation rate is a predominant factor behind augmented rate of corruption in Nepal. Since 1964, the inflation rate was about 8.24% and in the year 2018, the government has reduced this rate to about 4.60%. This reduced inflation rate is effective in minimizing the high rate of corruption. Due to high inflation rate, the businessmen tried to raise the rate of their goods in order to facilitate high profitability percentage. Therefore, in order to reduce corruption, this inflation rate needs to be lowered.
Conclusion
Thus, it can be observed that Nepal has been ranked 122th out of 180 countries in the field of corruption. In the year 2016, this rank was about 113th and therefore, the government has taken initiatives in order to minimize this rate of corruption. High rate of embezzlements, as well as extortion, has been evident in Nepal that overall affected the business ethics and impaired their performance. Therefore, in order to minimize this increased corruption rate, the nation needs to lower down their increased inflation rate. This would help the country to reduce down their corruption and enhance their business profitability.
Reference List
Rose-Ackerman, S. and Palifka, B.J., 2016. Corruption and government: Causes, consequences, and reform. Cambridge: Cambridge university press.
Ghimire, B. and Ashraf, M., 2016. Beleaguered Administration: A Study Of Administrative Reforms In Nepal. International Journal of Development Research, 6, pp.7966-7972.
Karkee, R. and Comfort, J., 2016. NGOs, foreign aid, and development in Nepal. Frontiers in public health, 4, p.177.
Kohrt, B.A., Yang, M., Rai, S., Bhardwaj, A., Tol, W.A. and Jordans, M.J., 2016. Recruitment of child soldiers in Nepal: Mental health status and risk factors for voluntary participation of youth in armed groups. Peace and Conflict: Journal of Peace Psychology, 22(3), p.208.
Nepal, R. and Jamasb, T., 2015. Caught between theory and practice: Government, market, and regulatory failure in electricity sector reforms. Economic Analysis and Policy, 46, pp.16-24.
Neupane, A., Soar, J. and Vaidya, K., 2014. An empirical evaluation of the potential of public e-procurement to reduce corruption. Australasian Journal of Information Systems, 18(2), pp.322-356
Sharma, K., KC, A., Subedi, M. and Pokharel, B., 2018. Challenges for reconstruction after Mw 7.8 Gorkha earthquake: a study on a devastated area of Nepal. Geomatics, Natural Hazards and Risk, 9(1), pp.760-790.
Shrestha, M., Moles, R., Ranjit, E. and Chaar, B., 2018. Medicine procurement in hospital pharmacies of Nepal: A qualitative study based on the Basel Statements. PloS one, 13(2), p.e0191778.
Van Teijlingen, E. and Simkhada, P., 2015. Failure to apply for ethical approval for health studies in low-income countries. Nepal journal of epidemiology, 5(3), p.511.
Online Article
Sharma, S., Van Teijlingen, E., Belizán, J.M., Hundley, V., Simkhada, P. and Sicuri, E., 2016. Measuring What Works: An impact evaluation of women’s groups on maternal health uptake in rural Nepal. [Online] PloS one, 11(5), p.e0155144. Available at: <https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0155144> [Accessed 6th July 2018]
