Tuesday, August 12, 2008


Dr. Sukhdev Shah writes an Op-Ed and quotes me:

Writing on this page last week (KP, 2/8), Chandan Sapkota decried the inefficient border administration regulating Nepal's foreign trade that involves cumbersome and expensive border-crossing procedures, with respect both to exports and imports. For example, it takes filling-in of 10 documents, 35 days, and $1,725 in customs charges to clear just one container of imports through checkpoints on the Nepali side of the border.

Normally, bureaucracies in poor countries thrive on discretionary regulations, of which customs officials are known to be most notorious. As Sapkota points out, this provides a breeding ground for corrupt officials and recruitments of political cronies, most often not trained for customs administration.

The Op-Ed he is referring to is here.

He has written an interesting piece about the miserable state of Nepal-India trade, regulatory inefficiencies, and bureaucratic laxness:

Looking at the actual operation of customs offices at Nepal-India border, one can, indeed, find unimaginable abuses of traders and general public trying to cross the border from India with almost anything of value -- small or large. The 633-page customs regulation book, being used since 1962, presents an intricate maze of fees and charges detailing 100 groups and sub-groups of commodities. For example, in the category of sugar and sugar-based items, there are 45 separate items singled out for duty rates.

Similarly, in the group called watches 40 tariff rates apply. Finally, description of regulations in each section of the book is so complicated as to challenge a trade PhD!

Of course, such regulatory nightmare creates a feisty environment for the abuse of authority by customs officials, who can earn in bribes double or treble of monthly salaries in just one day! Custom jobs are hotly sought-after - even at the cost of "salutation deposit" of upwards of five-year' salary required for a middle-level job at customs checkpoints on the Nepal-India border. And the commonly-held view is that bribes collected at the customs checkpoints are shared according to the rank, up to the ministerial level!