The pandemic Novel Coronavirus (COVID-19) has hit the entire world and everyone is struggling to get rid of the pandemic. As per (www.worldometers.com) on May 12, 2020, 4269200 people have been infected, 287513 have already died. Governments of respective countries are working at their best possible to control and mitigate the crisis. The Government of Nepal (GoN) is also doing what it believes the best, although it is not enough. GoN has declared lockdown on March 24, 2020, and it is still extant. While going through all the activities and decisions, GoN seems much focused to address the short term effect of the crisis. The government has decided to best, allocated budget to fund the COVID-19 epidemic, and also allowed non-governmental organizations to divert 20 percent of their project budget in COVID-19 related activities. The World Bank has agreed to support $29 million to respond to the epidemic. Similarly, many other initiatives to gather resources is taking place. But in spite of all those efforts, the government has missed focusing on two major parts; what after COVID-19 is under control and preparation for future pandemic and crisis.
The crisis time is very hard, and at such time demands urgent focus where the government needs to concentrate on resources and energy, but it is not the only thing that the government needs to focus on. No matter how dangerous that COVID-19 is today and will turn out in the coming days, it will be under control, eventually. COVID-19 is not the first pandemic that human being has faced and it is for sure that it wouldn’t be the last too. Thus, it is very essential that the government should not only focus on the current crisis but needed to prepare for the future crisis due to COVID-19. Over 50 days of lockdown and increasing rate of COVID-19 infection had brought uncertainty of the normal functioning of everyday life and businesses. Thus, among others, the financial crisis is certainly because of the COVID-19.
Nepal hugely depends on imports and the major source of foreign currency earning is remittance and tourism. Both the sector is highly affected by the pandemic and it is for certain that it will take a longer time to get back to the normal situation than other sectors. Thus, the country would face capital inadequacy and as a result, there might be a capital crisis for national pride projects in the coming days. Thousands of semi migrant labor to India have already returned to Nepal and others are in the process to enter Nepal. Similarly, Nepalese from many foreign destination countries waiting to return to Nepal. Thus, in this context two major problems; unemployment and inflation will take place. According to the Labor force survey 2018-19, the unemployment rate is 11.4%. The inflation rate in 2018 is 4.1% and it is forecasted to be 6.1%.
Different countries are doing their own preparedness. Here, Nepal also needs to make a plan and prepare to bring the economy back under the track after COVID-19. A country like Nepal has a very poor government institution that is not only incapable to plan on time and efficiently implement the program/project but equally weak in monitoring. The corruption is rampant, and it is for sure that people with access to power will try to rip personal benefits out of the crisis. The symptom is already on the ground with an example of the medical supply procurement process with the Omni group and Sulav Agrawal’s involvement in black-marketing among many. Small and medium scale industries are in the verse of collapse and the government has not yet brought any plan or package to them. People dependent upon day-to-day wage has already back to their respective village and engaged in agriculture for self-sustenance, but the voices of the big corporates are heard louder and the lobby is heightened in their favor for relief and financial package. Now there is a question whether the government acts equitably to protect infant industries and help a large number of daily wage earners or act to reduce the loss of few corporates in the name of relief and a financial package of COVID-19. The smell of inflation is already widespread in the town although the government has raided and fined few shops and there is no sign of proper control and it is for sure that the interest group induced inflation will get rampant soon. Thus, at such a situation, more transaction is necessary for the economy and for that it would be better for government to directly transfer cash relief package to a large number of poor than help few corporates.
Similarly, monsoon is approaching and soon in Nepal. It will not only bring good rain to farmers but also sin to people living in the plain and weak landscapes in the hill because of floods and landslides. Every year the monsoon drains not only the crops of Terai, but many people are made homeless. It doesn’t seem that government has any plan yet for this possible upcoming crisis. If the monsoon brings disaster in the peak time of COVID-19 then will the government be able to handle both the situation? Thus, it would be wise to prepare a possible crisis as soon as possible.
Also, relation with India is deteriorating every day due to a land dispute in Lipulekh. Nepal highly depends on India for various things ranging from food, medicine, big machinery and skilled labor. Similarly, the number of infected people is increasing in India. Thus, if India blocks the border as a response to the combined effect of everything discussed above, it will be very challenging for Nepal. Nepalese already have a bitter experience of economic blockade from India in the crisis time of Nepal. Nepal had agreed to bring 33% of the fuel from China, but when the supply was eased from India, Nepal didn’t bring fuel from China anymore. In this context, Nepal is solely dependent and the lifeline of Nepal is on the hand of India. Thus, it is a very critical time for Nepal to combat COVID -19, prepare for future potential natural threats and most importantly strategically deal with India, so that as in Nepali saying, Sarpa Pani Marne – Lathi Pani Nabhachne (killing snake without breaking stick).