By PR Pradhan
Already, negative impact of coronavirus outbreak has started to show in our day-to-day life. All sectors have been affected, more importantly, the country’s economy has already started to suffer very badly.
The main base of Nepal’s economy is customs revenue on imports. Due to the coronavirus outbreak in the globe and particularly, in neighbouring countries having Nepal’s trade relations, imports have declined notably causing decline in government revenue.
More seriously, Nepal’s major sources of foreign currency earning are remittance and tourism. Tourism industries such as hotels, travel agencies, airlines companies, trekking companies are on the verge of collapse as tourist arrival has virtually stopped.
Accordingly, due to the spread of the deadly disease, export of manpower has virtually stopped. Furthermore, those labour forces doing jobs in foreign countries are either in quarantine or on forced leave due to the closure of the places they were working in. If the epidemic will further prolong, the Nepali labour force will be sent back. There will be a landslide decline in Nepal’s remittance revenue.
China, the first country suffering from corona virus outbreak, has announced that it has been able to bring under control the deadly disease, however, it may take some months to normalize the situation. It is expected that China would overcome the outbreak by the end of April. The United States of America has announced national emergency and Europe has been totally paralyzed from the disease. When the situation will be under control in the West, it is yet uncertain. All SAARC countries have been affected from the deadly disease and Nepal’s situation is very vulnerable. Thank God, until now, only one patient was seen with corona virus epidemic positive and now the person has already been cured. One cannot deny the spread of the disease anytime as Nepalis are returning home from the countries affected from the deadly virus. As there is no effective monitoring mechanism, how effective is self-quarantine of those who have returned from the countries suffering from the deadly virus, nobody knows and anytime the disease may spread and go out of control. How effective is the government mechanism, we can experience it from the scarcity of cooking gas, induction heater (electric oven), sanitizer, mask in the market. The government organs are claiming that there is a huge stock of daily consumable items, even though, the people are not ready to trust the government. Even during such a crisis period, black marketing has flourished in the country.
In case, the coronavirus will spread and if it is needed to lock down the cities like in other countries, how will be the daily life of the people will be effected, the government has not done necessary homework.
Moreover, the government is not serious on the coronavirus impact on Nepal’s economy. Always, Nepali domestic revenue is not enough to pay the salaries of the civil servicemen. Furthermore, since the introduction of federalism, the expenditure on general sector has increased by double. Besides, the trend of earning money at any cost among the bureaucrats and political leaders has accelerated corruption. Be it among the central level leaders or village level leaders, almost all are involved in corruption and commission. The trend of loot on the government coffer has inclined enormously.
International agencies have already assumed that the global economy may face crisis and Nepal’s economy cannot remain aloof from the crisis ridden global economy.
As Nepali economy is based on imports and we have no strong domestic sources to keep alive the economic activities, it is obvious that Nepal’s economy may face crisis even in the first phase of the global crisis. If we lack foreign currency, we cannot import goods from the international market and the sources of earning foreign currency have been seriously hit from the deadly disease.
The Finance Minister and other economic observers too believe the corona virus epidemic would become costly for the Nepali economy! However, they are unable to take precaution measures for reducing the economic damage caused by the epidemic.
The private sector business entrepreneurs have already warned the government about the serious economic recession to be faced by Nepal. They have demanded to declare economic emergency in Nepal.
Our currency has established a new record of being weak against the US dollar. This week’s exchange rate was above 118 rupees against one unit of the US dollar, which is the highest ever situation in the Nepali history of monitory market.
Nepal is compelled to suffer from such a worst situation as we didn’t do good homework. The political leaders always gave priority for sending our youths to foreign countries as they were worried from the possible revolt from local youths against the system and bad governance. The Congress or the communists, whoever comes to the government, they gave first priority to send our youths to foreign countries for dirty and risky jobs. They never encouraged our youths for scientific farming through optimum use of our fertile land. They never tried to keep our youths within the country by developing employment opportunities. As a result, Nepal, an agricultural country, became a country importing large quantity of food items from outside.
In fact, this is the time to work at war footing level to save our economy but the government is doing nothing and the political parties both in the government and in opposition are engaged in internal conflict just to grasp power and remain in position. What if there will be a massive economic recession, they have never imagined.