Reopening after a crisisIf the government is serious about making the economy resilient after a pandemic, it must begin now.
Today is the 28th day of lockdown. So far, the total number of people infected by the coronavirus has reached 31, out of which four have recovered. Over these three weeks, the government has extended the lockdown twice. The latest extension is to last until April 27, with speculations of yet another extension rife. While the lockdown has been immensely instrumental in helping the spread of Covid-19, the government slowly needs to start considering making plans to ease lockdown and restart the economy. Given that, the tentative discussion regarding the same is welcome.
The government was expecting a 8.5 percent growth rate for the current 2020-2021 fiscal year. But following the harsh impact on the economy, that figure will be nigh impossible to achieve. The World Bank has predicted that Nepal’s growth rate will be in the range of 1.5-2.8 percent in the current 2019-20 fiscal year, followed by 1.4-2.9 percent in 2020-21 and 2.7-3.6 in 2021-22. This follows the Asian Development Bank’s revised growth rate for Nepal to 5.3 percent from 7.1 percent for this fiscal year. These projections paint a weak picture for Nepal’s economy that is heavily dependent on remittance and where most of the things are imported owing to lack of industralisation.
The immediate effect of this is that a huge number of people will be pushed into poverty. The supply chain has been disrupted and even after the lockdown is eased, say, many businesses like tourism and aviation will take some time to gather pace. The fact that nobody knows when all of this is going to come to an end makes every policy decision even more challenging.
But amid this challenge, lies some silver lining too. This could be the best time for the policymakers to invest heavily in research and chart out policies even while staying within limitations. If anything, this lockdown has taught that investing in agriculture and industries is exceptionally important. For years, we have relied on money received as remittance to improve the economy. But countries in the gulf too have fallen prey to Covid-19. As a result, most countries are requesting, some even deporting immigrants to their home countries. Bereft of a place to stay and jobs to feed themselves, many Nepali migrants abroad are miserable at this point.
It is a shame that we send more human resources abroad than we export products and commodities. Hopefully, the authorities concerned have finally realised that the economy cannot be relying heavily on remittance, as it is not prudent to rely on the economies of foreign countries to be able to absorb our citizens into their labour force.
According to the Nepal Labour Force Survey 2017-18, Nepal’s unemployment was estimated to be at 11.4 percent. This figure will only look scarier as this year unfolds. But if the government is serious about making the economy resilient after a pandemic, it must begin now. One way of doing so is ensuring the supply of rice seeds in the market. Rice grains contribute the maximum in agricultural GDP. If the government carefully studies the value chain, it could help move smallholders up that chain and eventually come up with a larger plan to ensure commercialisation of the grain which Nepali people are highly dependent on for their staple food. The government has a chance. It would be prudent if they jumped into action rather than indulging in a blame game and wasting time asking rhetorical questions.
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