KATHMANDU, Aug 2: Corruption, one of the major challenges to create an investment-friendly environment in Nepal, is ‘endemic, institutionalized and driven from the top’ in nature, according to a recent study published by the US state department.
A report entitled ‘2023 Investment Climate Statements: Nepal’ unveiled by the US Department of State, says the country is reeling under rampant corruption. Corruption takes many forms but is pervasive in the awarding of licenses, government procurement, and revenue management.
The report shows that Nepal’s judicial system, low-level police officers and tax officials are prone to corruption.
Nepal’s judicial system is “subject to pervasive corruption and executive influence,” that “corruption is rife among low-level [police] officers,” reads the statement. “Nepali tax officials are prone to corruption, and some seek positions in the sector specifically for personal enrichment.”
The primary law used to combat corruption in Nepal is the Prevention of Corruption Act 2002. This law prohibits corruption, bribery, money laundering, abuse of office, and payments to facilitate services, both in the public and private sector.
According to the report, a company that works with businesses to mitigate corporate risk, “implementation and enforcement of the Prevention of Corruption Act is inadequate, leaving the levels of corruption in the country unchallenged.”
The report expresses its concern over a lacking mechanism to tackle conflict of interest in bureaucratic procedures. While anti-corruption laws extend to family members of officials and to political parties, there are no laws or regulations that are specifically designed to counter conflict-of-interest in awarding contracts or government procurement.
“Although the officials of the Government of Nepal are aware that there should be no conflict of interest when contracts are awarded, how this is implemented is left to the discretion of the concerned government agency,” reads the report.
According to the 2022 Corruption Perception Index released by Transparency International (TI), Nepal is ranked 110th among 180 countries, placing the country in the range of ‘highly corrupt’ countries.