NEPAL’S ECONOMY AFTER EARTHQUAKE

Different estimates put a strain of up to $10 billion on Nepal’s economy. The US Geological Survey put it around $20 billion according to the reports available. A US based consultancy firm, IHS Global, has come to the conclusion after its assessments that Nepal needs $5 billion over five years for quake related reconstruction.

The United Nations estimates that the quake has affected 40% of Nepal. In revised estimates, the UN estimates that the quake has affected some 8 million Nepali residents, up from its earlier estimate of 6.6 million.

According to the UN estimates, 11 districts are severally devastated while in overall, 39 of the 75 districts of Nepal are affected by this earthquake.

Nepal is an impoverished, landlocked nation of over 28 million (27.8 million to be exact), it is among the poorest in the world. Its global fame is due to Mount Everest, Earth’s highest peak. Ascending the mountains to reach Mount Everest and Himalayan trekking contribute to the economy in a major way. According to the World Travel and Tourism Council, tourism related activaties contribute around 8% of Nepal’s GDP.

Nepal is a low income economy with its GDP around $19 billion. Most of the population, over 70%, is engaged in agriculture. But its contribution to the GDP is around 33.7%. So, around 70% of the population is engaged in an activity that contributes just 34% of the GDP.

Services sector, of which tourism is part, contributes around 52% to Nepal’s economy, the largest chunk. Remittances are an important part of it as Nepal cannot employ most of its employment-age population, some estimates put the figure around 50%. In 2013, remittances constituted around 29% of the GDP. Hotels, real estate and construction are important parts of services-based industries.

As expected, manufacturing forms the lowest chunk. It contributes just 14% to the GDP.

Nepal is said to be a smuggling haven for India and many international brands are routinely smuggled into India via Nepal. India is also its biggest economic partner, the country that borders Nepal on three sides – east, south and west. Around 55% of exports to Nepal is from India.

China that is competing with India for a strategic stake in the nation, comes at distant third with 4% of exports. The US accounts for 9% of exports.

While most of the Nepal is badly hit by the devastating earthquake, the tourism industry has started feeling the heat already. People and parties are cancelling their Nepal tours and plans to ascend Mount Everest. Even the Indian regions of the affected belt, Darjeeling, Sikkim and Northeast India, are affected in the wave. Tour operators say 90% bookings to Nepal and affected regions stand cancelled at this hour.

China has closed the way to Mount Everest from its side, though a less popular one, and there is no timeframe when it will be opened. Route through Nepal is universally accepted and a more popular one. The Everest base camps at around 5000 meters in Nepal are badly devastated in ensuing avalanches. Some 200 are still missing. When the quake-induced avalanche happened, many mountaineers are on their way up to Mount Everest and many were planning to do so. Eight of 10 world’s tallest mountains are in Nepal.

Nepal was already among the least developed countries in the world and was aiming for the tag of ‘developing country’ by 2022 but the poor nation with per capita GDP of around $700 according to the World Bank figures has been pushed back by at least a decade.

Staring before it is the mammoth work of reconstructing a massive earthquake hit economy.

And staring in the face is the task of making it earthquake resistant! After all, Nepal falls in an earthquake prone zone, on a fault-line of Indian and Eurasian plates, and when they begin rehabilitation and reconstruction work, it should be in the minds of the policymakers, unlike after the quake of 1934.

It may happen this time if they speak in urgent, uniformed voice.

1934 was a monarchy. 2015 is a democracy.

©/IPR: Santosh Chaubey – https://santoshchaubey.wordpress.com/

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