03/06/2012, 00.00
ASIA - NEPAL
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More than half of Nepal's GDP comes from corruption, informal economy

Transparency International survey reports the problem. Experts blame the country's Maoist government for too much interference in the economy. Business people face absurd red tape to start new activities.

Kathmandu (AsiaNews) - More than half of Nepal's GDP comes from corruption and the informal economy, this according to the 2011 report by Transparency International of 178 nations. Graft and corruption are up in Asia. Transparency International's recently published Corruption Perception Index shows that 33 per cent of South Asians were made to pay bribes, whilst 62 percent of them believe that the corruption situation had gone worse in the last three years. It also suggests that people have come to tolerate it.

The report surveyed economic experts and international organisations like the Asian Development Bank, the World Bank and the European Union to measure perceptions of corruption among public officials. At the bottom of the list with the highest level of corruption are Somalia, North Korea, Myanmar and Afghanistan. Between 2010 and 2011, Nepal lost eight places, dropping from 146th to 154th.

Former senior Nepali bureaucrat Bhojraj Pokharel, corruption in Nepal is largely due to too much interference by the Maoist government in the economy. For ideological reasons, the government limits the right to do business, enforcing absurd red tape, especially for foreign companies. To get things expedited, bribes have to be paid. Unions are used to blackmail businesses in order to protect Maoists' personal interests.  

This year's World Bank's Doing Business report says that it takes, on an average, seven different procedures and, if all goes well, up 29 days to start a business. It can also cost up US$ 241 to register a new business, which could double or triple according to the type of business and the interests of local politicians and officials. This is the case of the tourism industry, one of the country's most important sectors.

Travel agencies that manage the most important destinations, like Mt Everest and archaeological sites, are prevented from using their own vehicles and staff. Threats and pressures are used to favour local politicians.

Recently, the authorities forced foreign travel companies to rent Mustang 4-wheel vehicles on the Pokhara-Jomsom road (north-central Nepal), which is part of Annapurna trekking route.

This favours drivers who belong to the powerful cartel that runs the road visited by thousands of tourists each year. Different brand vehicles have been attacked and damaged by hooligans in the pay of local officials.

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