By K.C. Bhatt When the NRB Governor tried to assure the banking community in a recent meet that measures will be taken to not allow the prevailing cash-crunch to affect the lending by banks, he effectively said that the NRB shall be printing more banknotes to increase the cash flow in the market. He on one hand has put a cap on the interest rate by using his office and now he promises more liquidity by printing more money. The situation is alarming as far as liquidity is concerned, as the inter-bank borrowing interest rate has reached 5 per cent from one per cent, within a year. When most of the economy is tuned to consume more of the imported products or build private real estate which is more expensive in Kathmandu than in many cities in Europe or the USA, the increased supply of money will only ensure that the trade deficit will be sustained or even increased more, besides the ridiculously high real estate prices. The bureaucrats holding high offices still continue to behave as if their office is their fief, which they could use to favour an interest group in which they too might have their own vested interests. One cannot ignore the fact that many of the top-ranking ex-bureaucrats have deeply entrenched interests in the banks and other financial organizations of the country. Unbridled printing of money means a proportionate increase in inflation. So more money in the market keeps things comfortable for the interest groups benefitting from exiting scheme of things but the ordinary people will feel that the money they have in their hand is losing its value with each passing quarter. Inflation is best kept below the rate of growth to benefit all, therefore. If it goes higher than the NRB governor should feel the alarm. He should do his best to bring it down in a quarter or more. Lest he fails he should resign, for he is incapable of the post he holds. But here he promises to print more money while meeting an interest group, to keep it in good humour, for the reasons only he knows best. It is worth to note that the internal borrowing during the three years this Governor has been in office has been equal to what it was during the previous three decades. Now he has plans to borrow more. Similarly, the debt per person of the countrymen has seen a steep rise of twenty per cent during this period. In fact an official in charge of the economy of a developing country such as Nepal may continue in his office for several years even if the inflation remains twice the rate of growth, overseeing the economy being obliterated to benefit the interest groups. In many cases, the Finance Ministers or such top bureaucrats in developing countries may have their personal ties with the banks in Europe or in the USA, or they may be working for international financial organizations like ADB, IMF or the World Bank before they came here to hold such high public office very mysteriously. Because once they lose their jobs here, they have their jobs with fat pays to wait for them in these organizations abroad. Many of them could have been a professor in a renowned Western university earlier, to return to their jobs now, instead of a financial organization. They will now produce more academic papers and churn out more graduates to continue their deadly enterprise. Some of them may even hope to win a highly regarded prize like the Nobel prize, for the dubious kind of academic work they do. In fact many of them are widely suspected to have dual citizenship and hence the divided loyalty. The systems also have been designed to ensure capital flight through money laundering. Also, they have schemes to promote the return of such flown capital back into the country, where the rates of interest are much higher than their destination countries, many of which actually have negative interest rates. For example, in many Nordic countries, people are allowed to pay back less cash than they borrow from a bank, let alone be paying interest on their debt. The effect of all this is that the value of Nepalese rupees remains only 10 per cent in terms of US dollars than it was thirty years ago. This farcical situation has prevailed even many years after the country has become a republic, that too a socialist one, after undergoing several episodes of revolts and civil movements. Now instead of correcting the system through reforms the people in the ruling class or bankers are talking again about yet more revolts to change the system. They think if they will always remain in power no matter which system prevails in the country. But, hopefully, this time they will change and not the system. The people who hope to cheat more are wiser after the suffering they have undergone witnessing such charade going on for several generations now. GPO box 20460, Dillibazar, Kathmandu.