Nepal: The vulnerable ones!

The adverse effect of the pandemic is being felt globally; however, some countries have been more vulnerable to this crisis than others, and one of them is Nepal.
Nepal’s economy is expected to suffer a hit of over $1 billion due to coronavirus containment measures which have hurt business activity and tourism in the Himalayan nation, stated by a central bank official. What’s even more heartbreaking is, far more citizens of Nepal are sick or dead in abroad than home, because of the fact that Nepalis are scattered in almost every other state or country for earning purpose.

This unfathomable pain from the deaths and illness of Nepalis abroad is withstanding a major problem for the country’s economy. In the past, international labour migration has been an essential lifeline for Nepali families coping with domestic crises, from a civil war that raged from 1996-2006 to an earthquake that brought homes crashing to the ground in 2015.

”The risk of falling into poverty is high, and it will increase into 2020,” stated in the recent World Bank report, that predicted a severe drop in GDP growth over the next three fiscal years. It will be the lowest growth since the fiscal year 2015-16 when Nepal’s economy grew by just 0.2 per cent amid effects of the deadly earthquake in April 2015 and subsequent trade blockade allegedly imposed by India.

Amidst these unprecedented times, it has become difficult to oversee the problems of Nepali families, where the whole household runs from the income of a person who is migrated to another country. With corona on place, these migrant workers have stopped earning and some of them have even returned to their native place, which again brings a toll of poverty to the family of those people.

As the economy of Nepal is fully dependent on other country’s imports, tourism and remittance earned by migrants, the economic cost will be even higher.

As per the analysis by the Asian Development Bank, the outbreak of this deadly disease will hit almost every sector of the Nepali economy, shaving up to 0.13 per cent off the gross domestic product and rendering up to 15,880 people jobless.

Foreign employment has been contributing to Nepal’s economy in the form of remittance. A report said, that the labour migrant money sent to Nepal in 2019 contributed total 26 per cent of the country’s GDP. While the pandemic has put a halt of these migrant’s jobs, the economy of Nepal will suffer on a huge scale.

The report also stated that the remittance source has been contributing only 1 per cent in country’s GDP in the last 2 months of the crisis, which has created a severe impact on overall consumption in the country.

Although Nepal is yet to experience the complete impact of the pandemic on the economy, the economic uncertainty is already been witnessed in the country. There is a high impact on GDP but this impact is directly related to the number of days the lockdown will be there. Extending the days for lockdown means extending the adverse impact on the economy.

Nepal must take dramatic action to make sure the economy is moving through this disaster. The government must make the extra fund available for banks to lend to companies because business is already taking the hit and nobody knows how bad it will hit but this confirms that it depends on long this spread lasts.

Additionally, Nepal has to prepare itself to support the poorer sections of the society, with recovery packages on the place for migrants who just lost their jobs.

By Karishma Gwalani

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