There is empirical evidence that the second pandemic wave has further impoverished Nepal’s poor. Even by modest estimates, some 9 million Nepalis have been pushed back below the poverty line due to Covid-19 induced lockdowns. In this week’s Saglo Samaj tv magazine, Shankar Sharma, former ambassador to the US and vice-chairperson of the National Planning Commission spoke to Kanak Mani Dixit. Excerpts:
Kanak Mani Dixit: We went back to people we had interviewed four months ago, and found that their situation had further declined. Do they represent the current Nepali society?
Shankar Sharma: They are an accurate representation. There are three categories that have been hit the hardest by the pandemic: the first are subsistence farmers below the poverty line, this also includes disadvantaged groups. The next are people in the informal sector whose livelihood has been endangered with the extended closure of the market. Then there is the hospitality industry and unlike others, they haven’t been able to pick up after the first wave because the impact of the lockdown on the travel industry is long-term. These businesses had loans and now their debt has accumulated.
These impacts are directly reflected in our macroeconomic numbers. Economic growth rate last year was 2% and this year it won’t be more than 1%. Similarly, the World Bank estimates following the pandemic there are now a total 9 million people in Nepal below the poverty line.
Would you say that because it is not monetised rural subsistence living is faring better?
Back during the Maoist insurgency, some development partners had conducted a study about people who had migrated to the cities due to the violence. They asked people if they would go back to the village once the peace accord was signed, 93% of the respondents said no.
One of the main reasons behind this was Nepal’s agriculture couldn’t compete with Indian and Chinese produce. This also led to more people migrating abroad. Experts have suggested the concept of contract farming, which is also included in this year’s budget and will do well for the country.
But one of our biggest problems is our inability to identify the poor. The government has developed ID cards for their identification, but 23% of the poor are not on the list but 25% are those who have listed themselves in hopes of getting some relief. As a result, the real poor have been deprived even of their social security fund.
What should we do to boost their morale and of the country?
The affected people are those in rural Nepal but they also have an advantage of three levels of government. But it is still the responsibility of the central government to provide relief worth at least two months at $1 per day for its people. Unfortunately, there is no mention of this in the budget this year.
The Nepal government has also allocated a total of Rs50 billion for training in the last two budgets but hasn’t been able to spend that money. This fund should be used in skill development for Nepalis post lockdown, effective spending of the budget is a must. Similarly, the government should support cottage and small industries so that they don’t close down. If we lack funding, we could use loans and grants we have received from international development partners.
Despite the pandemic, there is still talk about Nepal graduating from Least Developed Country (LDC) status to a middle-income country. What will happen now?
Following the pandemic, the United Nations has set a new deadline for the LDCs to graduate to lower-middle-income and middle-income countries. The good news is that we have made some progress in our per capita income, and the fact that our economy is now dependent on multiple factors is a positive sign. But what is worrying is that our economic growth is still lower than the average growth of underdeveloped countries. This means we will have to work more on increasing our living standard.
It is said that Nepal is not a poor country, but the government just cannot seem to spend its development budget. If they were held more to account by civil society and media during this pandemic that might help?
I think that is an appropriate conclusion to make. The government will always play the lead role, but it is important to highlight the importance of civil society and journalists in creating awareness about various programs at the local level such as the Prime Minister’s Employment Scheme, which goes a long way in rejuvenating elected representatives in villages and towns.