We find ourselves in the last quarter of the fiscal year, a critical time for the government as it prepares the budget for the coming year before presenting it in the parliament on May 28. But, given the Covid-19, planners will have sleepless nights as they struggle to figure out the level of revenue generation in the coming year because tourism and remittance, which contribute more than a third of the Gross Domestic Product (GDP) combined, have been hardest-hit by the pandemic and will continue to suffer in the days ahead. Simultaneously, foreign aid may come to a grinding halt, with the exception of some multilateral agencies. On the expenditure front, there is not much that can be cut. It’s hard to slash any ongoing development projects or social security benefits, which the state has generously started in the past decades. Moreover, they may have to increase access to these benefits as many jobs have been lost.

According to the WHO, the coronavirus pandemic is much more than a health crisis. The restrictions put in place by countries to protect health are already taking a heavy toll on the income of individuals and families, with profound, long-lasting socioeconomic consequences. The outbreak has pushed us into a new normal of high uncertainty.

Initial responses

Given that the impacts of the 2008 recession continue to reverberate across the world in almost every sector, experts warn that it will take years for the global economic order to recover from the current pandemic. The government’s decision to restrict imports of non-essential items, including luxury cars, demonstrates that it has already sensed the difficulty ahead.

There is no doubt that enhancing domestic production by reviving agriculture is the only way forward. And as the agriculture sector employs a large portion of the population, contributing about 27 percent of the GDP, the Ministry of Agriculture wasted no time in seeking suggestions from local governments to protect agriculture from possible impacts of the crisis. Experts scrambled to suggest initiating a package programme to employ returnee migrant workers and revive agriculture in order to avert a potential food crisis due to the disruption in supply of inputs in the coming year. It can be expected that the planners will heed these calls and formulate plans to revitalise stagnant agriculture.

Unfortunately, the level of agriculture production cannot be improved quickly as in a factory’s assembly line; farming across our diverse geography has become more complicated due to increased impacts of climate change; little effort has been exerted to understand the consequences and developing remedies to correct them even less so. The rising ferocity of water-induced disasters we’ve witnessed over the years, which proved difficult to address even during more stable times, will be more complicated to fix in times of Covid-19 and its companion problems.

We are left with an agriculture infrastructure stripped of its workforces, who were forced to seek employment abroad, soil exhausted of nutrients, and now with a more unpredictable cycle of floods and droughts. The emerging impacts of the coronavirus must be assessed in conjunction with these existing circumstances before formulating plans.

Lasting crisis

We are in the midst of a lasting crisis. Remittance will continue dwindling due to the looming global recession. Even if it’s available, workers may not earn as much due to the weakened economies providing jobs coupled with a surplus of labour. The cliché that remittance-based economies wouldn’t be sustainable seems to hold true at a very critical time.

Tourism will take years to resume because the outbreak has disrupted the financial security required for people to pursue travel abroad. What is spared by Covid-19 will continue to be impacted increasingly by climate change, making the economic base weaker while needs continue to rise. Globally, experts fear that the impending recession may easily slip into a depression and if that happens, the cushion required for us to emerge from it will either be too distant or not available at all.

Systemic issues which, in the past, we thought could wait because of our political priorities will now come to the forefront and demand prioritising. The most important of these issues is, of course, our food system which has increasingly turned into an import-based food system. Neither did we learn from the 2008 food crisis, nor did we begin emphasising local production, despite the fact that the import bill for food was constantly rising.

Sadly, these harrowing times are coinciding with fledgling attempts to improve our flagging economy, which has an excessively widening income gap. Earnings of the top 10 percent of richest Nepalis have grown three times more than the poorest 40 percent since the mid-1990s. Ironically, this was when the 10-year-long insurgency began to fight existing inequalities. The unfolding crisis will exacerbate the inequality gap, with the poor losing jobs and income sources. Unemployment and inflation could flare-up resentment against the government. Therefore, it’s a grim time for planners who need to see this situation through into the near future and take prudent steps.

Complete government approach

The years ahead will be shaped by the choices we make in the coming weeks and months. Before formulating plans, it’s extremely important to note that the social, economic, and environmental dynamics are changing so quickly that conventional methods of making plans to respond to rapidly changing problems won’t work for long. By the time plans are made and implemented, the ground reality will have changed drastically, making these plans redundant.

Furthermore, unlike springing into action after disasters, the time now demands swift but careful planning. It may require extraordinary measures such as suspending the constitutional provisions which give local governments the liberty to spend on activities of their choosing, such as building view-towers or extension of roads and ask all to focus more on agriculture.

We are trapped between the wreck of this novel virus-affected socio-economic reality and the snowballing impacts of climate change. Regular development plans with added measures may not be enough to keep the economic base from sliding in the warmer climate. If agriculture is to be recourse to maintain the economic base, climate impacts must be addressed with the same urgency and in the same spirit as we did with the coronavirus—a complete government approach. The government showed that it can take necessary, drastic steps when required. Remember, unlike pandemics, there is no vaccine being developed for climate change; it’s here to stay.

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