It has been some time since the impact of tensions in West Asia has been felt by Nepali households. Prices of staple foods and daily essentials have soared, transport costs have risen to record levels, and farmers who rely on imported raw materials and fertilisers needed for the main paddy planting season are struggling to sustain farming. As recently reported by the Post, the price of a 25-kg bag of rice, which previously cost Rs2,000, now goes for Rs2,250. Edible mustard oil prices have also gone up by Rs20 to Rs30. Similarly, diesel prices have jumped by 60 percent and petrol by 28 percent in just the past three months, driving up prices of vegetables, construction materials and daily goods. The cost of LPG, the cooking gas popular in Nepali households, has risen by 11.5 percent. Likewise, education inflation has increased to 6-7 percent. Add to this India’s protectionist policies, under which it has imposed a blanket ban on sugar exports to Nepal. Even as all this is happening, Nepal lacks a strong government response.

The latest surge in prices cannot be attributed solely to the ongoing geopolitical conflict. The country’s already weak economic conditions and lack of preparedness for such a global crisis are as much to blame. Successive governments have focused more on milking the state coffers rather than on buttressing the country’s economic pillars, which were already weakened by the 2015 earthquakes, the Covid-19 pandemic and climate-induced disasters. Even the incumbent government, which holds a historic mandate for reform, has failed to bring the desired level of urgency in dealing with this unfolding economic crisis.

The government has made minor tax adjustments and periodic fuel price revisions, required gas cylinders to be filled half, and extended the weekend from one day to two. These are vital measures. But it hasn’t curbed the role of middlemen who have taken advantage of the crisis and swindled people by inflating the prices of daily essentials. Low-income families have little financial cushion. Yet there have been no targeted subsidies for them. South Korea, for instance, has launched cash aid for the vulnerable people in response to the repercussions of the conflict in West Asia. Earlier this month, the Asian Development Bank urged the government of Nepal to take measures to protect vulnerable people.

According to a preliminary assessment report, “Military Escalation in the Middle East: Human Development Impacts Across Asia and the Pacific”, published by the United Nations Development Programme last month, if the conflict in West Asia prolongs, Nepal could go through “some of the highest risks of cumulative human development losses”. The country cannot afford to ignore such dire warnings from credible agencies. While short-term relief packages to protect the poor and most vulnerable will provide immediate assistance, Nepal now needs to work towards self-sufficiency by modernising agriculture and cutting its dependence on fossil fuels by expanding electric public transport. Should El Niño further impact agriculture, India may impose a ban on other agricultural commodities to meet its domestic demand. As wars, pandemics and supply chain disruptions due to climate change become increasingly common, it makes all the more sense to invest in domestic capacity building.