We are staring into a second wave of Covid 19 that – if allowed to go unchecked – could be potentially extremely damaging to the economy leaving in its wake not just threat to health and life but to sustainability of livelihoods across sectors. There has been no significant confidence in business movement despite the first phase of availability of vaccine. With the added burden of an unstable government, rise in corruption, low investment, tourism industry at almost complete stall, and lack of employment security across sectors, what would you deem to be three critical interventions that the government must assess, prioritise and implement to ensure that there is least damage to economic activity and recovery and better healthcare delivery?
Dr. Mona Shrestha Adhikari
CEO, EMERGE (Enterprise for Management, Economic Reform and Gender Equality)
The ‘new normal’ is here to stay. Businesses are struggling as everyone is grappling with their survival and livelihoods amidst managing Covid 19. Economic recovery is more crucial than ever as economic activities and people’s well-being is very closely intertwined. Every individual, community and institution both at the private and public level must fulfill their respective responsibilities and join forces to use the crisis as an opportunity to build back better and build back equal. We were unable to do so in the aftermath of the 2015 earthquake, but we should not waste the crisis this time around.
The government, in particular, has the resources as well as holds prime responsibility to revive the economy more inclusively and sustainably. In my opinion, here are three critical interventions that our government could undertake:
Build a robust business thriving environment: Through sound policies, implementation arrangements and active monitoring, the government could make use of these institutional structures and help further build an environment that is grounded on trust and goodwill. Such an environment will help businesses to thrive even during times of crisis. It could leverage the involvement of local community groups and the private sector in generating employment and tapping into the reservoir of corporate social responsibly funds which are in most cases not optimally used, such as those by the financial institutions. Digital literacy promotion and promoting innovative solutions aimed towards inclusive and sustainable growth must be the key focus of policies in all sectors. These measures can be supplemented by ensuring proper utilisation of refinancing facilities initiated by Nepal Rastra Bank. Support measures should be streamlined, hassle-free, easy, and quick for businesses to access.
Foster and upscale inclusive entrepreneurship ecosystem: There is a growing demand particularly from diverse groups of youth, women and ethnic communities who are eager to join the entrepreneurship ecosystem. Harnessing their full potential would require the government to foster and upscale inclusive entrepreneurship ecosystem for which more dialogues, platforms, and mechanisms must be created and strengthened for all interested to join hands and grow together. Training the right people in the right kind of jobs as deemed necessary depending on the need for the emerging skill sets. This is an area that the government could undertake through various training programs including vocational training that could meet the needs for both backward and forward linkages. One area that has relatively done better during the pandemic is e-commerce. However, most of this has happened due to the efforts of the private sector and compulsion for consumers to use their services, with limited support from the government. Three critical challenges identified by the eTrade Readiness Assessment conducted in 2017 are policies and regulatory framework, skills, and infrastructure. Government should therefore follow an ecosystem approach to the promotion of the e-commerce sector so that they are not only able to serve the domestic market, but also can enhance their export potential.
Increase government procurement: The government itself is a huge buyer of goods and services. We often run around in search of markets for our Nepali products and services when the government can take the lead and increase its procurement from Nepali producers or service providers. This would not only boost economic recovery but also encourage the local businesses to flourish, which in turn would generate employment.
Finally, what matters the most is the political will on the part of the government and responsible business culture – low on rhetoric and high on action. Doing so will help promote resilience as Covid 19 is not the last crisis we will ever face.
Rajendra B Singh
Managing Director, Sita Air
It is normal for citizens to always expect better governance from their government. In times of natural disasters or massive health pandemics, governments become the one source for public safety and wellbeing. The earthquake of 2015 and Covid 19 pandemic have amply proven this. Unfortunately, government efforts acutely lack robust and proactive preparedness to deal with these massive onslaughts. The question that hits hard then in our minds is what is going to make it happen for our government authorities to put smart governance in place?
With the kind of international recognition and support Nepal enjoys in terms of cooperation and assistance, all we need is a proactive approach in Public Administration issues rather than conventional reactive endeavors. With the impact of the first wave of Covid 19 started to wane off – on the surface at least – it seems as though the government focus was concentrated only on the vaccination supply chain management.
In my opinion, everybody needs to understand that there is not going to be a straight line “BACK TO NORMAL” scenario ever from this pandemic and in Nepal all of us are wishing for that to happen, even the governmental management approach seems to exhibit it. This pandemic definitely brings about paradigm shift in our day to day social as well as personal lives. What lifestyles or social management have we changed or adopted? This is the question that should prompt the government to create necessary interventions to try and keep Nepal safe from not only Covid 19 but from any future pandemics. We need to create long term defense mechanisms and design a regulated approach to balance and normalise our economic and social life. Vaccines alone may not be the answer.
I don’t rate Nepal governments reaction to the pandemic as substandard though. Considering the national capabilities and resources, Nepal government did try to put its maximum effort in combating the pandemic as and when it started affecting us in 2020. However, functioning of the government in this matter is still riddled with unnecessary bureaucratic autocracy, and by and large limited to drafting policies on paper rather than putting together effective implementation on ground. This needs to change and I know this is a way big thing to ask for!
Every minute that passes with nothing but the rhetorical sound byes with regard to the impending real threat of the second wave and the official number counts has started to create panic. Authorities are still found to be happily confined to conventional wisdom that they had gathered before the onslaught of the first phase of Covid in our country. And least have they shown any proof of management intervention that they learnt in the handling of the first phase. Based on what all of us as a society have been through so far, following three things ought to be implemented to try and reduce the wild propagation of the virus second time around:
Protect Kathmandu: This is the nerve center of the country not only in economic terms but in terms of national capabilities. If Kathmandu becomes the epicenter, it will eat up majority of the health care and governmental resources and then rest of the country will spin out of control. So implement toughest entry barriers into Kathmandu and start curtailing free movement within the valley as well. People’s compliance to safety measures inside the valley like wearing masks are very encouraging, all that the government needs to do is to implement strictest barriers for the entry of virus inside the alley.
But on the contrary, at the time of writing this opinion, there has been unabated entry of people from India not only by ground but by air as Kathmandu suddenly becomes the re-routing hub for air travel to the Middle East due to the suspension of international aerial connectivity from India by several governments around the world. India is becoming the new epicenter and it should have been but normal for us to have been diligent and maintain space. This is an acute indicator of how we function as a government and how far are we from creating our defenses. May be this is what our government needs to understand soonest.
Regulate Indo Nepal border points stringently: One of the biggest mistakes authorities did last time around was to let Nepalese migrant workers flocking back from India go unchecked straight to their native places. This contributed solely to the spread of the virus to as remote places as Mugu and Humla needless to say about its spread in Kathmandu too. Authorities should not waste a minute to open only selected border points and establish maximum holding/quarantine facilities at selected border points. People coming in from India should be held for at least a week at these quarantines before allowing them to go to their respective home locations. Containment, identification and attack are probably the key things in countering the spread of this virus. In fact, local governments should increase quarantine zones at the entry point of each district in their respective areas and further screen people movement.
Increase the number of ventilators/lifesaving drugs needed for treatment and create maximum bed capacity across the nation in hospitals for Covid treatment. Recognise the doctors in private hospitals who were more than successful in treating Covid cases on their own and create a network of active, knowledgeable and proven medical heroes and collectively steer the management effort. Put expert medical faces to lead the process and not ordinary administrators or politicians.
If it is a real national emergency then first thing is to break away from the traditional governmental approach of management but as I have said may be this is a way big thing to ask for from our traditionally riddled government.
Prof Dr Harish Chandra Neupane
Chairman & Managing Director, Chitwan Medical College
Nepal’s economy came to a standstill in FY20 with negligible growth of 0.2%. Covid 19 led to a deceleration in the service sector and a contraction in industrial activity in Nepal, further derailing the country’s growth momentum. Growth is expected to remain subdued in FY 21-22. As periodic and localised lockdowns continue, under a baseline scenario, GDP is projected to expand by only 0.6% in FY21. Should Covid 19 persist, continued disruptions and weak subnational capacity to implement relief spending could weaken growth to 0.1% in FY21, thereby likely increasing poverty.
Addressing the numerous challenges posed by Covid 19 will require improving the quality of policymaking in the federal context. Short term response measures will need to be accompanied by comprehensive policies to boost long term growth. Policy transparency is central and fundamental at all stages of this Covid 19 response. This will include expanding and improving the results of investment in public health and education, and most importantly, improving governance and business environments in the country.
Health & Education Sector Interventions: Covid 19 pandemic started in May/June 2020 in Nepal requiring multispecialty hospital in different cities with sufficient critical care facilities (ICU beds, ventilators, high flow cannulas) and manpower to handle critical care situations. Once we have realised the failure in government health system to overcome these, we need to implement evidence based policies and effective planning, develop a clear mechanism for management of Covid 19 as well as a mechanism for proper coordination among the three tiers of the government and the health care delivery systems. Focus should be directed to systematic surveillance of risk factors associated with the rampant transmission of Covid 19 in the community. At the grassroot level, we need to develop strategies to empower communities to tackle Covid 19. The government needs to introduce supportive packages for vulnerable groups like differently-abled, elderly, children and immuno compromised individuals. We should also start leveraging digital health within the health system. It is paramount to develop an effective system for contact tracing and maintain proper coordination between the case investigation and contact tracing (CICTTs) at the community level. The proper management of isolation and quarantine centres also needs adequate attention.
Pharmaceutical companies of the country need to be granted subsidiary loans so that the demand and supply of essential drugs and consumables for the management of Covid 19 can be adequately maintained without having to depend on other countries. We need to promote the use of our own raw materials for the manufacture of medicines, thus also creating jobs as well as working towards self-reliance and self-sustenance.
Higher Education institutions and schools should be encouraged to digitize content and to invest in technology to promote remote delivery of learning courses. Schools with technology and resources should expand their offering to students of less privileged schools as CSR activities. We also need to create a public awareness campaign targeting schools to address the spread of any new infections and enhance their preparedness. The government can conduct online entrepreneurial courses at minimal cost. Health related courses can be incentivised and trainer’s time can be utilised for e-content development and e-training delivery. Educational institutions should be provided subsidised loan to maintain and expand their programs. Students pursuing their higher education should be provided education loan so that they can continue their studies as parents are deprived of regular income sources.
Food & Agriculture Sector Interventions: In the days to come, various low interest financial arrangements should be made available for rapid recovery of loss from the Coronavirus pandemic. Industries related to food and agriculture should be granted a Tax Relief for the period hit by pandemic. The Central and Provincial Government should classify daily essential foods items without having severe impact on supply chain to retail shop and industries. Should there be a national lockdown once again, Tax Relief should be provided to e-commerce businesses. There should be regularisation of transport for food delivery from farmers and producers to the local markets. It is mandatory to implement strict regulations in major vegetable markets and retail shops to prevent black marketing and unnecessary price hikes. Agriculture and allied export policy during pandemic needs to be commissioned and pesticides, fertilizers, etc. should be made available at concessional rates. Various seminars and trainings on agriculture and food related issues should be held and skill development trainings should be conducted. It is paramount to encourage youths to involve in agriculture sector as a prospective career.
Tourism Sector Interventions: The government needs to adjust travel restriction continuously to address the level of threat of the Covid crisis. We need to ensure that the information on travel restrictions and other travel advisories are accessible, consistent and reliable. There should be reduction in corporate tax. Reduction should also be in individual tax rate to employees. Reduction in VAT for tourism related business should be implemented. Emphasis should be on promoting employment, upskilling and reskilling through digital intervention, as well as on identification of new tourism products and promoting tourism in cross cutting areas. Entrepreneurship should be encouraged and there should be provision of financial stimulus through prioritised lending, incentivised FDI and fast track investment in infrastructure. We should encourage completion of tourism infrastructure as well as promote digital intervention and transformation of tourism.
Ajit B Shah
Director & CEO, Lotus Holdings
In the beginning of 2020, the government imposed a nationwide lockdown from March to September due to the persistent drumbeat of positive tests and death tolls. Whilst the number of cases seem to decline steadily, the country suffered the most abrupt and widespread cessation of economic activities resulting in a plunge of 15.4% growth rate in Q4 of 2019-2020 fiscal year. Only after the government decided to ease restrictions and administer the Covid 19 vaccine, the country started to see a sign of a gradual economic recovery. With this impending Covid 19 second wave, drastic measures may not be an ideal solution and would only lead Nepal’s economy back under stagnation. Instead, targeted interventions to curb the spread Covid 19 and stabilise the economy should be introduced.
To insulate the country from the second wave, the first and immediate response is for Nepal to apply containment measures on international travel. Following the guidelines of countries such as Australia, Thailand, and Singapore, those traveling into Nepal should be required a proof of Covid 19 test 48 hours prior to entering the country. Upon arrival, travellers are subject to entry screening, at least seven-day mandatory state provided/alternative quarantine, and RT-PCR testing twice during quarantine. Those who have been vaccinated may reduce the quarantine duration or allowed self quarantine but must report to public health officer. The Alternative Quarantine (AQ) scheme also has its benefits as it helps provide hotel owners with another revenue lifeline. In Thailand, for example, hotels signed up for AQ offer packages that are typically for single accommodation and include perks such as three daily meals, twice-daily temperature checks with a nurse on 24-hour standby, plus RT-PCR tests.
It is imperative that vaccine supply is sufficient for all and target population should be prioritised on the basis of occupations rather than age group. The upcoming second phase of inoculation should extend to include essential workers whose job functions are crucial to Nepal’s economic continuity. Workers within food and agricultural, manufacturing, transportation and logistics, hospitality as well as service industries should be amongst the first to gain access to the vaccine in order to minimise potential supply chain delays and service disruptions.
Toward resilient recovery, policymakers need to be forward looking in addressing the immediate economic challenges and reforming policies in driving local economy. Relief measures to swiftly alleviate and remedy those affected by the pandemic should be put in place at the initial phase of economic recovery. This could come in a form of liquidity support to ease financial burdens for businesses and households. In the medium term, the government must introduce credit measures such as debt repayment moratorium and reduction, debt restricting as well as soft loan scheme. Injecting stimulus packages that encourage local consumption through domestic travelling is another way to revitalise Nepal’s tourism industry and local economy as a whole. The packages should be designed to boost domestic travel by providing subsidies available for flight bookings, hotel accommodations, local activities, and food. However, the government must at least apply certain social distancing restrictions to guarantee safety.
Covid 19 also provides Nepal with an opportunity to improve its participation in the global value chain and reposition Nepal as the world’s backbone. Generally, Nepal has a comparative advantage in tech services and will likely be in higher demand as the global economy is shifting digitally. This will play an essential role in creating new opportunities for informal workers allowing Nepalis to be integrated into the global supply chain. The government will need to improve digital access and equip workers with digital skill set and strengthen its infrastructure. Business Process Outsourcing (BPO) could be the first service industry to showcase Nepal’s true potential.
Hari Bhakta Sharma
Executive Director, Deurali Janata Pharmaceutical
Improve vaccination rate by making vaccination available to larger sections of the society.
Enhance fiscal support program by allowing more industries to get access to the Covid 19 refinancing scheme announced in the monetary policy. Extend the validity of the refinancing to two years.
Improve the health management system (capacities in hospital both in terms of bed and equipments like ventilators) to cope with the situation specially if the outbreak exceeds the normal projections; as second wave is likely to be more virulent and infectious than first wave.