Reviving Economy

During the Gen Z protest, the Nepali economy suffered a significant loss. Preliminary assessments suggest that the total economic damage could amount to tens of billions. The Gen Z took to the streets, demanding that the government lift a ban on social networking sites and end corruption. The protest, all of a sudden, escalated into violence, causing the death of 19 people on its first day. Then, it was followed by arson, vandalism and looting. Both public and private properties were damaged or destroyed. This dealt a severe blow to the economy that was recovering from the impact of the COVID-19 pandemic. 

The irate demonstrators set fire to the key government buildings, including Singha Durbar, the Supreme Court and Federal Parliament. The economic costs of their damage are yet to be assessed. The hotel industry alone has suffered damage worth Rs. 25 billion, with a dozen hotels being vandalised, looted, or set on fire. The newly constructed Hilton Hotel alone was turned into ashes, resulting in Rs. 8 billion in damage. 

Likewise, auto dealers estimate the loss of around Rs. 15 billion. Among Bhatebhateni’s 28 outlets, 21 sustained damage, out of which 12 were destroyed. Amenities at Chandragiri and Maulakali Cable Car and the head office of Ncell were vandalised, while the corporate office of Simrik Air and Annapurna Post, and Kantipur daily were torched. Undeterred, the leading businessmen have said that they would rise again. Their unwavering commitment has rekindled hope among the business community. The tourism industry is one of the pillars of the economy. This has hit the sector hard. There is a sharp drop in the bookings of the hotels, with more than 10,000 individuals rendered unemployed. Upon assuming office, Prime Minister Sushila Karki said that the state was serious about the loss incurred by the private sector. 

The country endured the destruction of private and public properties weeks before the biggest festivals of Nepalis - Dashain and Tihar. These festivals bring vigour to the economy, with the spending on clothes, food and traveling. But the casualties of at least 72 people have cast a pall on the mood of the Nepalis. This has not only affected the economy but also upset the social and cultural fabric. On Monday, PM Karki appointed three ministers, who have pledged to reconstruct the country damaged by the unprecedented political crisis. 

The business enterprises also want political stability, good governance and an investment-friendly environment to work. Newly appointed Finance Minister Rameshore  Khanal said that he would not give continuity to the piecemeal projects, which would enable him to save around Rs. 100 billion. This amount will be channelled to reconstruct the destroyed infrastructure. Before his appointment to the post of minister, Khanal said that the Gen Z revolt provided an opportunity for course correction and to remove Nepal from the Financial Action Task Force (FATF) grey list. As the government puts its best foot forward to ensure good governance and transparency, this will certainly help the battered economy to bounce back.