The Nepali economy will bounce back quickMore in-depth analyses and multi-dimensional perspectives are required.
All media platforms across the world are filled with analyses on the impact of Covid-19 and the resultant lockdowns on economies. Job losses in the US have made the headlines. There are doomsday prophecies to be found everywhere. It is too early to say what will be the impact, but I do not tend to agree with the naysayers. The economy will rebound to surprise all of us.
For Nepal, it is important to understand the nature of our economy and businesses. It cannot be swayed by numbers being generated in economies it is not connected to. We should not forget that in 2015, the economy was hit with a major earthquake and subsequently by a blockade. The supply chain and job disruptions that time were harsh. In the aftermath, we thought Nepalis will be hit by conscience in terms of spending on social events, not building unsafe structures and preserving open spaces. We were all proved wrong. The exorbitant spending post-2015 actually pushed our economic growth numbers. Similarly, we need to quell haphazard analyses and look at the key issues on our own.
We need to dispel the popular notion that Nepal is dependent on international tourism. On the contrary, research shows that 64 percent of the tourism revenues come from domestic tourists. Nepalis are not going to sacrifice their travel, sekuwa and booze after this for sure; rather than travelling outside Nepal, which will be a challenge for some time, the domestic movement will increase.
Data from hotel sales suggest that big hotels in Kathmandu and other big cities have their revenue driven by domestic social events like marriages and family events. It has become a societal necessity to a certain portion of the population to have multiple functions like wedding anniversaries, multiple-day wedding functions, baby shower parties, birthdays and any other functions—seemingly an attempt to emulate Indian soap operas. Along with events hosted by domestic organisations, nearly two-thirds of revenue and profitability of these hotels came from these domestic sources. These segments may be impacted until social distancing rules remain, but we definitely will not see Nepalis suddenly having events with 51 guests only. In Nepali society, like in some other societies, spending is not only about celebration, but an opportunity to show off one’s wealth and networks. Therefore, it will be important to back analysis with data.
In the context of international tourism, the bookings in China after July are looking good. For Nepal, the China market will be the one to watch post-October. With China’s ambitious soft diplomacy plans, and plans to keep its airlines afloat, we may see a large number of tourists that may travel with state support. Similarly, for Indians, the religious tourism component will dramatically increase, especially if Nepal can get over this crisis with minimal damages to lives and livelihood. We already have theories on why this former Hindu kingdom has not been hit so hard due to the great gods and goddesses that protect it.
The other big component stoking fears is an end to labour migration. But it is very hard to believe that people from host countries like the UAE and Qatar will actually get around to doing their own dishes. Their lives have been engineered to depend on workers from outside; this will not change. There may be a hiatus, but the demand will not end. For many workers who are now stranded in Nepal or may not want to go back, domestic job openings will increase. Let us not forget that, officially, there were 600,000 Indian workers in Nepal before this crisis began and there are opportunities for Nepali workers to prove that they can also work with the same productivity and accept the same wages as Indian workers. Nepalis are known for their resilience—and their ability to find work and thrive even in highly unsafe countries such as Iraq and South Sudan.
If there is a challenge at hand, it will come from those that I brand ‘DV nationalists’ who are now stuck in the country. These are the breed of people who are desperate to leave Nepal, who never consider living here, but are the ones who flood social media walls with ultra-nationalist slogans. Nearly 100,000 people who go to Australia, UK and US to seek generally long term settlement through student visas (peddled well by the education consultancy industry) will be ones who see the chances of going abroad shrinking. We have seen only a small percentage of them actually return to Nepal to work or settle down.
In another month, it will be clear where the country is heading. Nepalis need to look back and think of all the difficult situations we have persevered through in the past. This one is a different one, but it will pass.
What do you think?
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Frequently asked questions about the coronavirus outbreak
UPDATED as of May 26, 2020
What is Covid-19?
Covid-19, short for coronavirus disease, is an illness caused by the coronavirus SARS-CoV-2, short for severe acute respiratory syndrome coronavirus 2. Common symptoms of the disease include fever, dry cough, fatigue, shortness of breath and breathing difficulties. In severe cases, the infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.
How contagious is Covid-19?
Covid-19 can spread easily from person to person, especially in enclosed spaces. The virus can travel through the air in respiratory droplets produced when a sick person breathes, talks, coughs or sneezes. As the virus can also survive on plastic and steel surfaces for up to 72 hours and on cardboard for up to 24 hours, any contact with such surfaces can also spread the virus. Symptoms take between two to 14 days to appear, during which time the carrier is believed to be contagious.
Where did the virus come from?
The virus was first identified in Wuhan, China in late December. The coronavirus is a large family of viruses that is responsible for everything from the common cold to Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). After an initial outbreak in Wuhan that spread across Hubei province, eventually infecting over 80,000 and killing more than 3,000, new infection rates in mainland China have dropped. However, the disease has since spread across the world at an alarming rate.
What is the current status of Covid-19?
The World Health Organisation has called the ongoing outbreak a “pandemic” and urged countries across the world to take precautionary measures. Covid-19 had spread to 210 countries and infected more than 5,589,712 people with 347,903 deaths. In South Asia, India has reported the highest number of infections at 144,950 with 4,172 deaths. While Pakistan has reported 57,705 confirmed cases with 1,197 deaths. Nepal has so far reported 772 cases with four deaths.
How dangerous is the disease?
The mortality rate for Covid-19 is estimated to be 3.6 percent, but new studies have put the rate slightly higher at 5.7 percent. Although Covid-19 is not too dangerous to young healthy people, older individuals and those with immune-compromised systems are at greater risk of death. People with chronic medical conditions like heart disease, diabetes and lung disease, or those who’ve recently undergone serious medical procedures, are also at risk.
How do I keep myself safe?
The WHO advises that the most important thing you can do is wash your hands frequently with soap and water for at least 20 seconds or use hand sanitizers with at least 60 percent alcohol content. Avoid touching your eyes, nose and mouth with unclean hands. Clean and disinfect frequently used surfaces like your computers and phones. Avoid large crowds of people. Seek medical attention if symptoms persist for longer than a few days.
Is it time to panic?
No. The government has imposed a lockdown to limit the spread of the virus. There is no need to begin stockpiling food, cooking gas or hand sanitizers. However, it is always prudent to take sensible precautions like the ones identified above.