Nepal | November 27, 2020

EDITORIAL: Revive economy

The Himalayan Times
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The govt, private sector and the BFIs need to inject money in constructive and service sectors to revive the economy hit hard by COVID-19

Impact of coronavirus has been witnessed in all sectors of the economy from tourism, education, export and import to the service sector. According to macroeconomic report unveiled by Nepal Rastra Bank (NRB) on Wednesday, external trade and credit expansion of banks and financial institutions (BFIs) in the first two months (mid-July to mid-September) has been hit the hardest due to the COVID-19 pandemic.

The report shows merchandise export has increased only by 10.5 percent (Rs 20.44 billion) in the first two months compared to the same period last year when its export stood at 25.9 percent. Similarly, merchandise imports also decreased by 22.1 percent to Rs 178.85 billion compared to a decrease of 1.2 percent last fiscal. Looking at the overall economic scenario, imports of industrial goods such as fuels, capital goods, transport equipment, parts and accessories decreased sharply because of COVID-19 pandemic.

Industrial and capital goods are the driving forces that lead the national economy forward. Most development works initiated by the government and the private sector have come to a standstill following the seven months of lockdown and prohibitory order to bring the virus under control. The NRB figures show the total trade deficit narrowed down to almost 25 percent to Rs 158.41 billion in the last two months because of no business activities in the country.

Income from services remained at a deficit of Rs 5.45 billion in the review period, with travel income plummeting to 90.5 percent to only Rs 973 million as there was no tourism activity during the period. The education sector also suffered the most to Rs 2.47 billion.

Before the COV- ID-19 pandemic the education sector used to generate service worth Rs 7.64 billion. However, the positive side of the pandemic during the review period is an inflow of remittance that increased by 8.1 percent to Rs 165.73 billion in the review period. It was 0.6 percent during the same period previous year. The way the remittance has increased by eight folds indicates that migrant workers felt secure in sending money through banking channels rather than through illegal channel such as hundi. The current account has also remained at a surplus of Rs 26.07 billion as against a deficit of Rs 22.69 billion last year. The balance of payment has also seen a surplus of Rs 67.63 billion.

All these figures indicate that the government and the BFIs have enough money at their disposal but COVID-19 pandemic has prevented them from investing in the constructive and service sectors that create job opportunities in the country. Consumer price inflation (CPI) stood at 4.52 percent in the second month of the fiscal. CPI was 6.16 percent a year ago. The rate of CPI went down because nobody is buying goods other than foodstuffs. The NRB revealed that price of vegetables, pulses and legumes has gone up as consumers are stocking them up for their survival. The inflation rate has remained at less than 5 percent across the country. What the NRB report suggests is an urgency of accelerating the economic activity by flattening COVID-19 curve to a desired level. The BFIs also need to inject money in the market so that more jobs can be created.

Language trouble

Quite a few languages spoken in Nepal are going the way of the Dodo. Nepali and English are the languages of instruction in the schools, while people are increasingly communicating in the Nepali language even with members of the same ethnic community.

Thus, it is not hard to understand why ethnic languages are dying out, with only a few elderly people, mostly illiterate, able to speak them. This is the case of the Magar language in Province No. 1 where, despite the strong lingual presence there, the number of Magar speakers is dwindling. Today’s youngsters can barely speak a few Magar words, and it is only a matter of time before their mother tongue is lost forever. The Magar language could have gotten a boost had schools at the elementary level taught it.

But then there are also students who come from a Limbu, Tamang, Maithili and Nepali background, making it difficult to hire teachers for each of the other ethnic languages. It is easy to heap blame on the government for doing little, but then Nepal has 125 ethnic groups speaking 123 languages. So the community itself must come forward to promote its language by creating a verbal dictionary, starting informal classes and programmes on radio and TV.

A version of this article appears in print on October 23, 2020 of The Himalayan Times.

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