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A dire situation of Nepalese Economy due to COVID-19

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With the rising second and subsequently third wave of coronavirus, economy in the South East Asia Region has been dented significantly. The economic impact due to these new waves of COVID-19 has been devastating for many Asian countries. Countries like India, Pakistan, Bangladesh, Sri Lanka have had to take serious measures to combat the situation. Nepal has been a no exception in the matter. With businesses shut and number of infections ever increasing, employment of daily workers has been given a major jolt creating serious concerns on the economy of Nepal. Most of the jobs have been lost in the hotel industry, agriculture, retail sectors & wholesale industries. These industries have already seen devastating effect in the past year or so. And now again with this looming crisis, authorities fear the chance of breakdown of the economy. As per the latest World Bank Update Report, economy was projected to grow by 2.7 percent against the ambitious government target of 7 percent [1]. This figure now could be impact even more with the current situation. The health department data shows over 420 thousand cases recorded till date with close to 4300 deaths [2]. Many predict the peaks to be still weeks away. Certain business sectors have completely closed and looks to remain so for the foreseeable future. 

With heavy reliance of economy on its neighbouring countries like India and China and those countries facing their own crisis, Nepal now faces a tough challenge of battling this virus. In the past week, the prime minister urged countries to lend a hand in combating the situation which is getting out of hand. The surge in cases in India is also another major concern for the Nepalese economy as India have always been a go to nation for Nepal in times of such crisis. The land proximity to India and open border policies between the nations means that situation in India directly impacts Nepal. Also, we need to take into fact the number of Nepalese populations working abroad. Nepal is heavily dependent on the remittance of workers abroad. A surge of cases in those countries and the subsequent closure could force many workers to return to their home. This would create devastating effect on the economy that is already crippling and stands majorly on the source of remittance. The government has decided to allow big infrastructure projects to operate in a bubble but that is not enough for thousands of workers that lives by the day. The hotel and tourism sectors that had started to see some local movements has now again been given a severe blow and this time, their revival is going to be even harder.

The devastating effect of earthquake in 2015 still has its presence on the economy. As such, lasting of COVID-19 for a long time would result uphill task for the resurgence of the economy. The government that is already in a political turmoil faces a tough challenge of finding means to resuscitate various sectors as the virus looks to take its peak in the country. Mass inoculation and heavy testing along with the hospital infrastructure build up becomes significant towards opening the economy. As a citizen and a fellow human being, it is our duty to do every bit that can contribute to each other’s easiness as the world faces this unprecedented catastrophe.

References:

  1. https://www.worldbank.org/en/country/nepal/publication/nepaldevelopmentupdate
  2. https://covid19.mohp.gov.np/
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