Yellow fever

Gold trade gone awry



Like any other international business, in a competitive, functional economy, bullion trade is supposed to follow the common business model: if the international market price goes up, it should rise in all the countries, and vice-versa. The gold traders in Nepal seem to have turned this commonsense market logic on its head. When gold price was soaring in the international market in the wake of the global financial crisis (as people started parking their earnings in the safety of the yellow metal), Nepali bullion traders made bumper profits. But when the international market price started declining a couple of weeks ago (which is believed to have been triggered by rumors of massive gold sellout by the bankrupt Cyprus), instead of trading the metal at reduced prices, Nepali traders shut up their shops. Rather than take the profit-loss cycle as a natural course of any business, Nepali bullion traders apparently want to turn a profit, always. The only way this can be achieved is though devious means.



Things seemed to be taking an interesting turn on Friday. Many jewelers called off their ‘indefinite strike’ on the day after government assurance ‘on the formulation of standard regulation on monitoring of jewelry shops’. They had been closed in protest of the government’s surprise inspections. But there is more going on than meets the eye. It was curious that bullion traders agreed to open shops at the precise moment that the international bullion prices seemed to be recovering from their slump. Up until this time, they had been vehemently opposed to the idea of opening up their shops, even as wedding planners desperately needed the precious metal. They had also resisted any government intervention to check their wrongdoing tooth and nail.




The kind of underhand tools employed by traders was breathtaking in their brazenness. Many gold traders were tampering with the machines which weigh precious metals. The government report prepared after the surprise inspections suggests bullion traders have been cheating customers by selling adulterated gold. It was thus laughable of the traders to cry wolf at government ‘highhandedness’. In this state of prolonged political vacuum, everybody seems ready to cut corners to get ahead, their scrupulousness relaxed in the perceived climate of lawlessness and impunity. The state is almost non-existent in its lack of response to such unscrupulous acts. We believe this is a terrible lapse of the state’s responsibility towards its citizens.



Transition or not, there can be no justification not to check illegal practices that inconvenience common people. But these practices continue everywhere. There is adulteration in every kind of food, from the tomato sauce served in posh restaurants to the vegetables sold in flea market. Our public vehicles make no attempt to add to passenger comfort and safety. All they seem to be interested in is profit maximization. Vital reforms are resisted across the board. A hallmark of a democracy is its ability to protect the vital interests of its citizens. In this, Nepal seems to be failing miserably.

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