www.carnegieindia.org | May 21, 2020
Having endured earthquakes and other disasters, the people of Nepal were in some ways braced for the pandemic’s disruption. Yet the economy and health system will still need help ramping up.
Nepal so far has had fewer cases of the coronavirus than its neighbors, but it has adopted a similar strategy of enforcing social distancing to combat the pandemic. As of May 20, Nepal had reported only 427 confirmed cases, including forty-two recoveries and two fatalities. Although the first coronavirus case in Nepal was detected in January, the government only began imposing restrictions in March, when India experienced an uptick in cases.
On March 20, Prime Minister Khadga Prasad Sharma Oli announced a partial lockdown—halting nonessential services, sealing Nepal’s borders, and placing temporary bans on flights and long-haul transportation across the country. While the lockdown was supposed to be lifted after two weeks, Oli clarified that as long as the number of coronavirus cases in India continued to rise, the government could not lift the restrictions. This is mainly because of the porous nature of the Indo-Nepali border, which makes it almost impossible to curb movement. Nepal’s easing of restrictions is thus likely to mirror India’s.
The Nepali government has thrown its weight behind enforcing social distancing to contain the spread of the coronavirus, knowing full well that the country’s fragile healthcare system leaves it ill-equipped to confront a major outbreak. Since early April, Kathmandu has expanded testing to eleven laboratories across the country. The government has focused on collecting samples in western Nepal and the Terai districts, regions that have seen an influx of returning migrant workers from India. But as in other countries, questions have been raised about the reliability of results generated by rapid diagnostic tests, which are more convenient than polymerase chain reaction tests but are known to return to false negatives.
The international community has been actively assisting Nepal in combating the pandemic. In early April, the World Bank approved $29 million in development aid to boost Kathmandu’s capacity to detect new cases and trace their contacts. The funding will also help the Ministry of Health and Population set up new isolation facilities and intensive care units. Nepal has received additional assistance from China, which sent testing kits, thermometers, and personal protective equipment in late March. India recently sent Nepal 23 tons of essential medicines, including doses of paracetamol (acetaminophen) and hydroxychloroquine, and its health professionals are working with their Nepali counterparts on the ground.
The pandemic has already impacted the Nepali economy. Tourism, a source of both employment and foreign exchange, has come to a near standstill, as have manufacturing and agriculture. Additionally, remittances sent by Nepali workers abroad—which accounted for nearly 26 percent of the country’s GDP in 2019—have significantly declined due to the global economic downturn.
Rahul Bhatia is a research assistant at Carnegie India.
INTERVIEW WITH SUJEEV SHAKYA, CHAIR, NEPAL ECONOMIC FORUM
How does Nepal perceive the role of international institutions in combating the coronavirus pandemic?
Nepal understands the challenges that countries across the world are facing as a result of the pandemic. As a result, it does not expect support to pour in from either international institutions or the international community at large at the same pace as it did after the 2015 earthquake. Overall, Nepal is in good international standing and receives aid from the European Union, the United Kingdom, and the United States. Further, the country benefits from its geographic location—nestled between India and China—and receives support from both. Once the pandemic subsides, Nepal will look to international institutions for support—specifically, investments to boost economic activity, rather than grants or donations.
Given that South Asia is the most densely populated region in the world, what are the opportunities and challenges for the South Asian Association for Regional Cooperation (SAARC) amid this pandemic?
South Asia is densely populated, adding to the challenges of containing the coronavirus. More than SAARC as an organization—or even the governments of its member countries—it is up to the people of the region to follow their local health measures. Containing the outbreak requires people to enforce social distancing, keep their environments clean, and help each other in this time of need.
How would you describe Nepal’s preparedness to tackle the coronavirus outbreak? Does Kathmandu require further international assistance?
As in many parts of the world, preparations in Nepal weren’t up to the mark. However, given that the trillion-dollar economies of the United States and Europe are suffering, it would not be fair to expect the Nepali government to do much better. Nevertheless, Kathmandu should have done more testing during the initial phase of the lockdown. Instead, the government became embroiled in chain-of-command issues and there was a lack of coordination among government agencies.
Confusion about the procurement of medical supplies also hindered Nepal’s preparation. The government was forced to cancel its contract with the Omni Group—the firm contracted to supply the country with testing kits, personal protective equipment, and thermal cyclers for laboratory tests—owing to delivery delays and the receipt of substandard equipment. The government subsequently contracted the Nepali Army to procure medical equipment from China. Fortunately, the country is at least well situated to reach out to its two large neighbors, India and China, for help.
What is the likely impact of the pandemic on Nepal’s informal workers and what can the Nepalese government do to help them?
Nepal is facing challenges with regard to employment, but its people are typically prepared for such disruptions, following their recent experiences during the earthquake, blockade, and other breakdowns from strikes and the insurgency. Even most of the poor would have saved enough food and cash to last two or three months. In the long run, the economy is likely to bounce back quickly, and people’s income levels will be restored.
With regard to Nepali migrant workers, it is true that Nepal has a large remittance inflow that has been impacted by the pandemic. But the behavioral pattern is unlikely to change—Nepalis will continue to go abroad and work because of continued labor demand in those regions, particularly the Middle East. Fewer migrant workers may go abroad over the next six to eight months, but as the pandemic lets up, this travel is likely to resume.
Given that Nepal has witnessed prolonged political turbulence in the last three decades, is the coronavirus likely to have an impact on the political stability of the country?
The political situation in Nepal only calmed two years ago after nearly fifteen years of instability. However, the current government is utilizing the current lockdown to strengthen its political position. Recently, the government issued two controversial ordinances that drew criticism from both the opposition parties and from within the ruling party. The first dealt with the splitting of a political party. Under the current Political Parties Act, a party can split only if a split vote secures 40 percent support in the party central committee as well as the parliamentary party. The new ordinance required only 40 percent support in either the party central committee or the parliamentary party, drawing accusations that the Oli administration was engineering a political split. The second ordinance sought to change the functioning of the Constitutional Council, allowing decisions to be taken if they enjoyed the support of two out of its six members. Nepali President Bidhya Devi Bhandari was criticized for approving these ordinances, and her independence from the executive was called into question. As a result, she ultimately repealed them both.
The ruling Nepal Communist Party (NCP), which was formed from different communist factions, continues to be divided and is likely to see more intraparty fighting. Different factions within the party have sought to take advantage of the pandemic and have been quick to criticize Oli’s handling of the outbreak. Further, the co-chair of the NCP, former prime minister Pushpa Kamal Dahal, will continue to challenge Oli’s party leadership. But because the NCP holds nearly two-thirds of the seats in the Nepali Parliament, a major upheaval is unlikely. As the pandemic unfolds, the government is likely to continue its tendency to push authoritarian measures by introducing legislation and taking actions that curtail freedom of speech, censor the media, and co-opt the judiciary.
Rahul Bhatia | FLAME Alumnus | Part of the team writing on South Asian responses to COVID that Carnegie India has published