Businesspersons demand alternative to restrictions as economy takes hitContinued curbs could spell disaster for the already fragile economy and result in loss of livelihoods of many more and closure of small and medium enterprises.
When the time for the first flush came in mid-March, Shanta Baskota was largely oblivious to the fact that trouble was brewing for her medium-scale enterprise–Kanchenjunga Tea Estate and Research Centre in Panchthar.
Just as her workers were preparing for the premium harvest of the green tea leaves, the country went into lockdown starting March 24.
Tea growers like Baskota were unable to mobilise workers to pluck green tea leaves on time which would fetch higher prices for its quality. The green leaves instead matured in front of the growers' eyes.
“My losses alone stood to the tune of Rs 20 million,” said Baskota.
The tea-plucking season usually begins in March and runs through October.
Though the lockdown was lifted on July 21, amid the rising number of cases, restrictions were imposed again.
Baskota has been paying basic salary to around 150 tea garden workers even though there is no work, she said. “My business has been hit hard like never before.”
Now there are reports that restrictions could continue until Dashain. Baskota is convinced that her business for this year is wiped out.
For the first time ever, average tea prices in India, Nepal’s major market, rose by 40-60 percent this year, driven by strong buyer demand and a huge shortfall. But for Nepali tea producers, the season has been a loss.
The pandemic has hit medium-scale enterprises like Baskota’s as well as small ones and big ones.
According to economist Bishwambher Pyakurel, who has served at various multilateral agencies including the World Bank, Asian Development Bank and the United Nations as an international consultant, 90 percent of the small and medium enterprises which contribute around 22 percent to the country’s gross domestic product have remained shut.
It was not easy for domestic airlines operators—the capital intensive business that has to shell out huge amounts in salaries–as their earnings have touched the zero level for months.
“It’s painful. For the last six months, all economic activities have come to a halt,” said Birendra Bahadur Basnet, managing director of Buddha Air. His planes have remained grounded since March 20.
The government had asked domestic airlines operators to be prepared for operation twice—from August 17 first and then again from September 1. But in the wake of the rising number of Covid-19 cases, there is no concrete plan from the government when domestic airlines will take to the skies again.
“Shutting down the airlines industry is not just about a particular company losing businesses,” Basnet told the Post. “It also means depriving thousands of people of their livelihoods. There are porters, there are drivers, there are people involved in ground handling.”
Even though the government has not declared a lockdown, coronavirus restrictions are in place even today, and the Covid-19 count has been steadily increasing.
Nepal on Monday reported 979 new Covid-19 infections, which took the national tally to 47,236. The death toll touched the 300 mark with 11 fatalities reported over the past 24 hours.
In Kathmandu Valley, 326 cases were reported in the past 24 hours–293 in Kathmandu, 20 in Lalitpur and 13 in Bhaktapur.
“The Covid-19 pandemic alone has not hit the economy, it’s the leadership that has ruined all of us,” said Basnet. “The government has not realised how the ongoing restrictions that have been extended time and again are causing profound repercussions on the economy.”
The hit Nepal’s economy has taken from the Covid-19 pandemic is found in almost all the sectors.
According to the government data released on Sunday, Nepal’s gross domestic product saw a massive slump in the third quarter of the last fiscal year.
The four-month-long lockdown from March 24 to July 21 is likely to wipe out the fourth quarter’s GDP. With restrictions in place today as well, with plans afoot to extend them, businesspersons are now getting extremely worried.
“There is no alternative to resuming economic activities by strictly following health protocols,” said Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry.
According to Golchha, most industries are running at 25 percent capacity.
Golchha, along with some other industrialists, met with Prime Minister KP Sharma Oli on Sunday to discuss how the pandemic has affected the private sector.
“We demanded a stimulus package worth 4-5 percent of the gross domestic product in the form of subsidised interest on loans for at least six months and requested the government to pay half of the salary to workers for the pandemic restriction period,” said Golchha.
To give impetus to the economy, according to Golchha, the government needs to support industries, particularly the small and medium enterprises, as the ongoing restrictions have put most of them on the verge of collapse.
The small and medium enterprises employ around 2.36 million people, according to a study report of the Nepal Rastra Bank.
Preliminary estimates had suggested that last year’s economic growth could decelerate to 2.27 percent, against the government target of 8.5 percent. But on Sunday the Central Bureau of Statistics painted even a bleaker picture.
According to Central Bureau of Statistics data, at least five of the 15 sectors recorded negative growth in the third quarter of the last fiscal year. Many other sectors are likely to see a negative growth when the numbers for the fourth quarter are released.
Economists say if businesses are not allowed to resume now, the country will struggle to escape a negative growth this fiscal year, for which the government has set a 7 percent target.
With more than a month and a half of the current fiscal year already gone with restrictions in place, businessmen say failure to open the country will mean a major setback to the economy and result in more job losses.
“It’s time we eased restrictions and learned to live with the virus, as no one knows when the vaccine will be available,” said Hari Bhakta Sharma, former president of Confederation of Nepalese Industries. “The country cannot remain locked down forever. The government needs to improve healthcare infrastructure and boost the confidence of health workers as well as the general public.”
Frequently asked questions about the coronavirus outbreak
UPDATED as of September 22, 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 has spread to 213 countries and territories around the world and infected more than 31,405,983 people with 967,505 deaths and 22,990,260 recoveries. In South Asia, India has reported the highest number of infections at 5,557,573 with 88,943 deaths. While Pakistan has reported 306,304 confirmed cases with 6,420 deaths. Nepal has so far reported 65,276 cases with 427 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.