Impacts of COVID – 19 Pandemic on Nepalese Socio-Economic Sphere

That so many lives are being taken away and so many awareness programs are being held are
recognitions that the threat from pandemic known as COVID – 19 is serious, it is urgent, and it is
growing. Our generation's response to this challenge will be judged by history, for if we fail to meet it -
boldly, swiftly, and together - not only we risk consigning future generations to an irreversible
catastrophe but also there might not be a future generation, to begin with.

The outbreak of coronavirus disease (COVID-19) has been declared a Public Health Emergency of
International Concern (PHEIC) and the virus has now spread to many countries and territories. While a
lot is still unknown about the virus that causes COVID-19, we do know that it is transmitted through
direct contact with respiratory droplets of an infected person (generated through coughing and
sneezing) Individuals can also be infected from touching surfaces contaminated with the virus and
touching their face (e.g., eyes, nose, mouth). As this disease can be transmitted through air, it has deeply
affected the socioeconomic status of the whole world.

Nepal, a landlocked country aspiring to graduate from a Least Developed Country status, stands highly
vulnerable to the unfolding COVID-19 pandemic. Heedful of its vulnerabilities, the Government of Nepal
has enforced a nationwide lockdown and activated its federal, provincial, and local level mechanisms to
respond to the crisis. While there is an urgent need to strengthen the existing health system to handle
the situation in case of any sudden surge of an outbreak, standardize the quarantine facilities and
provide immediate relief to the most-affected, equally important is to help the country mitigate the
socio-economic impacts and prepare for longer-term recovery.

The strict lockdown to contain the spread of SARS-CoV-2 and supplies disruptions are wreaking havoc on
the socio-economy of the nation. It is going to push many vulnerable households below the absolute
poverty line and will likely increase inequality. It has affected all segments of the population and is The
COVID-19 outbreak affects all segments of the population and is particularly detrimental to members of
those social groups in the most vulnerable situations, continues to affect populations, including people
living in poverty situations, older persons, persons with disabilities, youth, and indigenous peoples. Early
evidence indicates that the health and economic impacts of the virus are being borne disproportionately
by poor people. For example, homeless people, because they may be unable to safely shelter in place,
are highly exposed to the danger of the virus. People without access to running water, refugees,
migrants, or displaced persons also stand to suffer disproportionately both from the pandemic and its
aftermath – whether due to limited movement, fewer employment opportunities, increased
xenophobia, etc. People are forced to live under constant fear of death. Young people who strive for
their peers are being vulnerable to depression and anxiety. Some of those young minds also commit
suicide to quench their negative emotions and feelings. According to an article posted in THE
KATHMANDU POST; over 1200 people tried to kill themselves during the lockdown period; out of which
was a case of a 12-year-old boy who was too tired of sitting at home and playing video games all day.
Not only this; it also increases crimes such as theft and robbery. The pandemic has greatly affected our
society and community.
Nepal Government has reported over 10,000 COVID-19 cases as of 23 June 2020. This number is hugely
alarming and if urgent measures aren’t taken the whole nation might be in chaos. Meanwhile, the
secondary impact of the global pandemic is huge and it is already taking a serious toll on an economy
that relies heavily on remittances, imports fueled by remittances, informal labor, and tourism revenues.

During the lockdown, over 90 percent of economic activities have come to a grinding halt. The latest
projections show that the agricultural, industrial, and services sectors are projected to grow by 2.6
percent, 3.2 percent, and 2 percent, respectively. These numbers are drastically lower than the growth
these sectors experienced last fiscal year.

The economy was already weak before the lockdown and social distancing measures were
implemented. For instance, a delayed monsoon, shortage of fertilizers, use of substandard seeds, and an
armyworm invasion dented agricultural output before the Covid-19 pandemic. The pandemic
exacerbated the situation through agricultural inputs crunch (such as workers and fertilizers), especially
to harvest winter crops, connect to agricultural markets, and prepare for summer crops.

Similarly, weak capital spending and the lack of an investment-friendly environment affected industrial
output before the pandemic. The Covid-19 outbreak in Nepal happened to exacerbate the situation as it
hit in the second half of the fiscal year—the period when a majority of economic activities occur. No
wonder, mining, and quarrying, manufacturing, and construction activities are expected to contract in
the current fiscal year. Work from home norms do not apply to these activities and productivity losses
will continue to linger for some quarters.

Within the services sector, a deceleration of remittance income and decline in imports were already
affecting retail and wholesale trade, which has the second-largest share in the GDP. After the pandemic,
this sub-sector is expected to grow by just 2.1 percent, down from 11.1 percent last fiscal. Travel and
tourism-related activities such as hotels and restaurants, and transport, storage, and communications
are expected to contract. Other services activities that are badly hit are financial intermediation, real
estate and business activities, and education. 

Overall, consumption has been subdued, and fixed public and private investments are contracting. The
government’s 2.3 percent growth estimate for the fiscal year might itself be a bit optimistic because it
assumes that the affected economic activities, except for international tourism-related activities, will
start to pick up the pace from mid-July. But this is highly unlikely, owing to the uncertainties over Covid-
19 contagion, unfavorable external factors (decline in remittances and foreign direct investment),
difficulty to quickly reverse the dispersal of workers, and supply disruptions. This crisis will increase the
fiscal deficit because of lower than expected revenue mobilization and nominal GDP growth, and higher
than expected expenditure needs.

Importantly, since a large proportion of the households are clustered just above the absolute poverty
line, an income shock due to the Covid-19 will push many of them below the poverty line. It will also
potentially widen inequality because the poorest households are disproportionately affected. 

Given the enormity of the emerging health, social and economic problems, a well-coordinated and
synchronized relief and recovery package are of urgent need. Extraordinary circumstances require
exceptional measures. A detailed relief and recovery package is missing. The immediate-term focus
should be to stabilize aggregate demand and to lower the burden on workers due to unemployment and
income shock. Then we need to focus on strengthening the economic bonds of the nation such as
proper revenue mobilization, expand employment using the funds lying idle at various autonomous
authorities, etc.

To sum up; The pandemic named COVID 19 has greatly threatened the socio-economy of the nation. If
necessary measures aren’t taken soon, the whole nation might face the catastrophic impacts which will
lead to chaos and the doom of the nation. Thank you!!!