I am happy to join this virtual meeting. It is such a pleasure to see distinguished speakers today.
The outbreak of coronavirus has been devastating in terms of cost of human lives across the globe. The coivd19 pandemic has also caused economic catastrophe worldwide. Global economy is shrinking, and pushing us backward.
The primary indicators are so depressing about the global economy falling into an unprecedented recession. A report from IMF says it could be a major economic recession after the great economic depression of the 1930s and will be worse than the financial crisis of 2008-9. No one, not even economists, seem to be sure when the normalcy will return. There are forecasts that 2021 would only see a partial recovery.
Given the centrality of the human capital, the recovery period depends how quick and effective health care facilities we can provide and manage. It is my feeling that only a secure and super health care facilities in place and backed by adequate resources will help for the resumption of economic activity to create what we call a new normal.
To prevent long term negative consequences of health and economic emergencies, the governments and communities require more unity, more cooperation, solidarity, and a collective and co-operative global response.
More importantly early innovation of vaccines is largely required to prevent, contain, and mitigate the viruses so that global stability and economic revival arrives sooner than later.
There is a danger covid19 pandemic pushing larger number of people into poverty trap. It has caused jobless soaring, lowering income, higher health expenses, higher household expenses, low productivity, mental stress, lower consumption, domestic violence and social distress and imbalance. Gender violence seems to be another pandemic in the making.
Moreover, the collapse of commodity prices, capital flow reversal, unemployment, fixed recurring expenses, will lead to the closure of factories, labour unrest and heavy financial loses.
Like other developing and developed countries, Nepal is also struggling to overcome this crisis. Nepal- a landlocked and least developed country has its own features. Economy is projected to suffer greatly with the decline of remittance inflow, tourism industry and international trade.
It is no exaggeration to say that remittance is the mainstay of the Nepali economy which represent more than one fourth of national GDP. Nepali migrant workers sent more than 8.64 billion dollars in 2019, making the country one of the biggest beneficiaries of remittance in the world. But this year it is expected to drop by a 14 percent, because of economic distress stemming from the pandemic.
Similarly, another pillar of Nepali economy is tourism industry which is suffering immensely. The reduced flow of tourists, restrictions on the entry of citizens from infected countries and the cancellation of Visit Nepal 2020 have put the industry in peril.
Nepal Rastra Bank- Central Bank of Nepal- announced its monetary policy for the fiscal year 2020-21 that unveiled rescue packages to mitigate the economic effects of Covid-19. It promised to support the extension of loan repayment deadline, refinance facility, grace period extension for infrastructure projects and targeted lending in productive sectors at cheaper rate as key measures for relief and revival of various sectors affected by the virus.
Micro, Small and Medium Enterprises contribute a major role in most economies regardless of developing and developed countries around the globe. Such enterprises comprise of 90% of businesses and more than 70% of employment worldwide. It also contributes up to 40% of national income GDP in global economies. Since Small and Medium Enterprises are the backbone of Nepali economy, it is therefore, necessary to address their concerns.
It is verified that Nepal has huge amount of natural resources such as mines and minerals, different metallic and non-metallic ores, hydrocarbons, hydroelectricity, herbal and medicinal plants. Now we should focus to prospect and extract them which generate large number of employment and revenue.
As we believe that every cloud has silver lining, covid19 pandemic has forced us to see some opportunities amidst the mountains of challenges to the Nepali economy too. Therefore, we should build up an entrepreneurship-based economy for the sustainable growth. Number of youths are expected to return back homeland losing their jobs from abroad and this should be a good time to deploy them into production and other entrepreneur related activities, revive village economy.
Additionally, in response to the questions by moderator of the session Martina about the role of China’s Belt and Road Initiatives project to revive Nepali economy, chairperson Koirala told that Nepal government officially signed to join BRI and hence we should welcome all the investment which are in favor of country’s national interest from BRI project, Asian Infrastructure Investment Bank, World Bank, Asian Development Bank and other donor agencies that may support to recover Nepali economy.