Separate estimates point to 95 percent job losses in the informal daily-wage job markets in the tourism, construction, manufacturing, transportation, and wholesale and retail sectors where 4.4 million Nepalis find work.
- Sagar Prasai
May 19, 2020, 2:30 p.m.
There is not even a faint smell of science or logic in the repeated extensions of the curfew-type lockdowns made in the last 9 weeks.
Nine weeks into the Covid-19 crisis, Nepal’s government has decided to bury its head in the sand. No amount of bad news makes the government budge, even a little. There is an incomprehensible arrogance about how the government thinks, what it does, and what it likes to do. It is difficult to tell what the source of this arrogance is when things are falling apart most everywhere you look. Let me take you to the beginning. There were two key policy goals in front of the government when the lockdown started on March 24: to control the spread of the infection and to prevent the economy from sliding into a freefall. After 9 weeks of lockdown and with no end in sight, let’s see where we are on the economic front first.
A recent UNDP and Institute of Integrated Development Studies report estimates that 60 percent of the jobs in the MSME sector may have been lost. Separate estimates point to 95 percent joblosses in the informal daily-wage job markets in the tourism, construction, manufacturing, transportation, and wholesale and retail sectors where 4.4 million Nepalis find work. The April figures in the Nepal Rashtra Bank’s monthly situation report show an even deeper distress in the economy. Compared to Mid-March figures, the Mid-April figures show that remittances are down by 57 percent, exports are down by 61 percent, capital expenditure is down by 66 percent, and revenues are down by 20 percent. It is worth reminding the readers that remittances make roughly a quarter of our economy and that the impact on revenues will unfold in its full glory in the May report.
Our fiscal deficit—what the government takes in and spends out–on the 9th month of the fiscal year, has reached 6.5 percent and this too is expected to widen further. For those who are economically uninitiated, any gap of over 4 percent is usually considered an irresponsible behaviour in fiscal management.Next year’s outlook is even worse but no government agency has had the guts to spill in public; the Central Bureau of Statistics (CBS)revised the growth estimate from 6.7 percent to 2.2 percent two weeks ago with an assumption that the rest of the economy baring tourism with get back to normal by May 15. It is May 19 today and we still have a curfew-type lockdown in the country with no hope of any reasonable, data-driven easing.Whether all sectors of the economy are now in full swing or not is for the CBS to determine.
We heard from our government the policies and programs for the next fiscal year last week. I don’t have to speak for the opposition parties or the more thoughtful Members of Parliament from the ruling party itself, they have spoken enough. Listening to the policies and programs for the coming fiscal year, I could not help but notice that we are not in a crisis. All is well and we want to open new universities, complete reconstruction of the damaged buildings from the earthquake 5 years ago, complete constructions of new international airports in Pokhara and Bhairawa and indeed start construction of the expressway to Nijgadh where we are planning to build an ambitious regional airport. It is difficult to imagine who exactly plans to land in these new airports in the next 12 months. In the meantime, 95 percent of the tourism establishments do not have the ability to pay next month’s salary to the 1.3 million Nepalis, who are directly or indirectly employed in the sector. There was nothing for them in the policy and program statement.
On the second policy goal of controlling infections, not thinking beyond the vocabulary and practice of lockdowns will eventually cost us dearly. We are worried about saving lives, as we should be. We just crossed 350 cases in total, in a country of 30 million. These numbers are good, but the question really is in what reality do we exist? In the three major states that border us in India—UP, Bihar and West Bengal—the state governments are preparing for a hundred cases per million. They are currently at 27 cases per million, we are at 11. The Indian states that I have named above are very likely to get to 100 cases per million, so are we. By that measure, if we are not prepared to handle at least 3,000 cases within the next 45-60 days, we have not understood what this pandemic is all about. We have an open border that is completely porous, and we cannot alter our geography or the ground reality. There are deep economic interdependencies in the population that lives along the two sides of the India-Nepal border and contact cannot be avoided by lockdowns or by any other means. It is not about migrant workers at all, it is all about the economic inter-linkages that cannot be severed even by lockdowns. We still have not internalized this reality and have been planning everything as if we will get away with 500 cases or less.
This leads me question our experts in the public health community. They have failed us in two key respects. First, so far there is not even a faint smell of science or logic in the repeated extensions of the curfew-type lockdowns made in the last 9 weeks, which the government claims are based on the recommendation of the experts.Until the experts come out and tell the public what their recommendations have been,we will not know what they have been up to.For instance, what is the logic of putting Khotang under curfew-type lockdown for 9 weeks when the infection is spreading in Parsa and Banke? What has the health establishment done in Khotang to prepare for the pandemic in the last 50+ days apart from sending a few test kits and PPEs? Afterall, lockdowns don’t cure the disease, they are only meant to help the health services prepare for an upsurge of cases and control infections rates when they go out of control. One couldn’t possibly argue that the cases in Khotang have gone out of control, they have none.So is the case with 46 out of the 77 districts, yet the entire territory of Nepal is under lockdown for 10 weeks. With a little bit of common sense, we could have tweaked the lockdown rules, eased the economy in safe areas, and prevented many Nepalis from slipping into poverty. But we didn’t.
I would have imagined that it is relatively easy and inexpensive to conduct a nation-wide random sample survey of 7,000 people using serology and, in confirmatory numbers, PCR kits in the 50-plus days we have been under lockdown. This simple exercise that would have cost us 3-4 crores and would have given us plenty of information on whether our test kits and sample collection methods are reliable or not, whether we have untraceable community transmissions in certain localities or not, how many asymptomatic cases we already have, and which location is relatively safe to open and which is not. In the absence of this information, we are inflicting an unnecessary social and economic damage to the country as a whole for no measurable public health outcomes.
The damage I talk about is not an abstract one. All of us remember how crowded our government health facilities were before March 24. Have you visited them lately? There are no lines, no ambulances running back and forth, very few doctors can be spotted in out-patient departments, and surgeries are performed only occasionally. What happened to all the patients? Remember, this is country with less than 300 cases of Covid-19 infections. This is what a lockdown does to service seekers. The UNICEF estimates that as many as 4,000 children could potentially die because of the lockdown and its impact on the economy in Nepal in the coming year. In a May 13 press release, the WHO itself has warned the global public health community that ignoring other public health needs during the pandemic response can easily reverse the gains made in the last two decades. With the full knowledge of the fact that 18 percent of the population still lives under the poverty line and 8 percent of the population is food insecure, is locking down the entire country for an indefinite period the only solution this enlightened community of experts could come up with?
The second mistake that our experts and their political bosses have made is even more serious and is about to reverse the dial on whatever success Nepal may have had in controlling the infection so far. Advising the government not to let the migrant workers enter Nepal from India, the Gulf region, East Asia and various parts of Europe to Nepal for 10 straight weeks while the country was under lockdown will prove costly for a long time to come. Even today the spectacle of politicians and experts appearing in the media and stigmatizing migrant workers, calling them “vectors” and how “they” should be kept away from borders and airports continues. These are your fellow citizens, just like you. They have been fired from their jobs, perhaps just like your neighbours or your sons and daughters or someone you know. What on earth makes you think “they” should not be allowed to come back home?
From an epidemiological angle, the refusal to allow your own citizens to return while you fully knew that they had nowhere else to go, will prove costly over the next six months. Had we repatriated the migrant workers while we were still under lockdown–and there were nine such weeks to play with–we would have been able to control the potential risks significantly. Now that the economy is no longerin a position to sustain the lockdownsand the case load is on the rise, the government finally appears ready to do what was the right thing to do, right from the beginning.I am not talking about small numbers here, mind you. There could be as many as a million Nepalis wanting to return from the Gulf, East Asia, Europe and India. Where in the annals of epidemiology would it be argued that you don’t allow a million people to travel back from all over the world while you have less than 10 cases, but you allow them once you have crossed 400 cases?Who pays for the suffering that a million people went through for 10 weeks just because your mind was out of wits? So much so, the government denied permission to repatriate the bodies of 144 migrant workers who died during the lockdown from non-Covid-19 related ailments and accidents in the Gulf region. On what basis was the determination made that these dead bodies represented a risk to the population?
Public policy experts would tell you that the key to success in any crisis response would be an alignment of purpose across allunits of the government and all constituencies of citizens. Forget the idea of getting the citizens on board, the level of disjointedness in the government itself is reaching new heights. A person whose legal name is Hitler Shakya is the Chairperson of Ward Number 6 of Lalitpur Metropolitan City. On May 14, Mr. Hitler issued an order in the ward saying house owners and renters who leave the area without his permission will not be allowed to enter back in the house and the ward will “seal” the house if they returned without permission. Mr. Hitler was not alone in issuing illegal orders of that kind and this went on for five before the government finally took notice.
On May 7, the High-level Committee on Covid-19 issued a directive easing the movement of some commercial goods and personnel. On May 14, District Administrations in valley cancelled all vehicle passes issued under that directive just a week before. On May 17, the Director General of Supplies announced that tax clearance certificate will be mandatory to all vehicle pass applicants. Businesses that have had no sales for full 9 weeks have to now run around clearing taxes just to open their shutters but with what money? While governments around the world have deferred tax deadlines, ours chose to clamp down on businesses that are about to go belly-up. On May 16, the same High-level Committee announced that it is making early preparations to repatriate stranded migrant workers from Gulf and elsewhere. On May 14, an online news portal quoted Ministry of Labour official saying the migrant workers will have produce PCR test results in order to qualify to be repatriated. The gentleman himself will not be able to get a PCR test in his own country on demand, how will the stranded workers get PCR test in some other country on demand? This would effectively disqualify all migrant workers. There are plenty of such examples and one wonders if the government’s right hand knows what the left hand is doing.
The pattern now is becoming familiar. Lockdowns are announced for a 2-3 week period, nothing substantive happens in between, two days before the extended lockdown period ends, the High-level committee meets for 2 hours and extends the lockdown for another 2-3 weeks. This has happened four times now and it may happen again once the current lockdown period comes to an end on June 2. Yet, the government is completely convinced that this is the way to go and we don’t need to worry about anything else.