Pandemic, political instability, economic crisis rattles Nepal  

Written By: Saloni Murarka WION
Kathmandu  Published: May 08, 2021, 11:35 AM(IST)

File photo: Nepal flag Photograph:( ANI )

Story highlights

Nepal’s gross domestic product (GDP) is anticipated to grow by 3.1% in fiscal year (FY) 2021 from a contraction of 1.9% in FY2020, says the Asian Development Outlook (ADO) 2021, the flagship economic publication of the Asian Development Bank (ADB)

Coronavirus cases in Nepal are skyrocketing and hospitals in the country are overwhelmed with the huge influx of COVID-19 patients. Prime Minister KP Sharma Oli is seeking help from other nations and also is under pressure because of the political crisis that is looming over his government. 

“Nepal is facing the worst situation. As the pandemic is currently ravaging the country, we are trying to ensure continuous supply of food and prioritise the food security of the citizens. We need to boost our online business, e-commerce companies and meet the demands of our consumers,” Moti Lal Dugar, special economic advisor to PM Oli told WION.  

“All the flights have been suspended and many borders with India have been closed, which will result in serious effects on the import and export of goods. We are dependent on India majorly for raw materials. This will be a challenge for us. India is the biggest market for Nepal including China,” Dugar added. 

He said the government has limited resources but is trying to provide market to small industries as 'the country cannot be dependent on imports for long’. 

As Nepal’s economy is heavily dependent on remittance, the economic advisor said, “Due to the pandemic, Nepali nationals working in different countries are coming back home. So, for them, we are trying to generate employment.” 

Continued political instability and weak governance is hampering the development initiatives in the country.  

Nepal’s gross domestic product (GDP) is anticipated to grow by 3.1% in fiscal year (FY) 2021 from a contraction of 1.9% in FY2020, says the Asian Development Outlook (ADO) 2021, the flagship economic publication of the Asian Development Bank (ADB). 

The fiscal year 2020-21 ends in mid July and the country is expected to recover from the financial crisis triggered due to nationwide lockdown in 2020, but the country has been hit by the second wave of coronavirus and is again under lockdown.   

WION asked the economic advisor about the expansion and investment in the health sector as the country is grappling with the coronavirus, he said, the “situation is under control.”  

“The number of wards are being increased in both private and government hospitals. There are vacant government-owned buildings, which will be used as isolation wards. The pharmaceutical industries, which were closed, are being provided with facilities to revive,” Dugar told WION.  

He said Nepal is manufacturing masks, sanitizers and ventilators and more doctors are being trained to treat COVID-19 patients. 

According to a World Bank Report, the economic benefits of vaccination are huge: The current vaccination campaign in South Asia will prevent a cumulated 10 per cent GDP loss in 2022 and beyond, at the cost of up to 0.55% of GDP in the region. 

“Nepal is trying to reach a deal with Russia for two million Sputnik V COVID-19 vaccines. There is an ongoing decision with China. Further, Nepal has paid the due amount to India for two million doses of Covishield vaccines,” Dugar told WION.   

Dugar said government has aimed to vaccinate 60-70 per cent of population by the end of the year 2021.  

Nepal is currently under tremendous pressure due to second wave of coronavirus, economic crisis and political instability.  

Speaking to WION, Opposition Nepali Congress lawmaker Pradeep Giri said, “Nepal is in a very confusing state. The constitution, which was so greatly installed and praised, is now very much being questioned.” 

Recently, PM Oli-led government lost majority in the House of Representatives after Pushpa Kamal Dahal 'Prachanda' led-CPN Maoist Centre withdrew its support to the Prime Minister.  

“Mr Oli wants to get an early election under his leadership and other parties are not happy about it. So, the parties are trying for a fresh election, which is more impartial and in a judicious way. We cannot say what will be the outcome,” Giri told WION.  

He said Nepal is a very poor country and does not have resources like other countries and Nepal’s domestic politics is impacting its foreign relations. 

Speaking on the impacts of domestic politics on international relations, he said, “China has been showing a very keen interest in the affairs of the Nepalese politics. With the increase in China’s interest, Americans have become equally ambitious and so the European Union.”  

Sooner or later, the country would have to seek a fresh mandate of the people to ensure long-term peace and stability. 

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