Besides the enormous loss of human lives, the earthquake has thrown Nepal’s economy completely out of gear, with major crisis looming in energy while the tourism industry stands shattered with half of historic monuments in a state of desecration, an early assessment by ASSOCHAM said.
The chamber, which will soon be launching a major ‘Rebuild Nepal Programme’ in coordination with the Indian Government, said while the reconstruction estimates vary between USD 10-25 billion, “At this point of time, major economic crisis is looming on the Himalayan nation which , in any case, falls among the Lease Developed Countries (LDCs). The biggest impact would be on tourism that contributes over 8 percent of the country’s GDP.”
Besides the contribution to the GDP, the tourism generates employment for hundreds of thousands of people engaged in the entire value chain of tours and travel. It contributes to seven per cent of the country’s total job creation. “Hundred per cent cancellations have been reported from tour operators who do Nepal bookings. Several countries have given advisories to their citizens to avoid Nepal. In any case, all forms of transport have been damaged.”
Even after normalcy is restored in terms of basic needs like water, food, medicines and some civic facilities, it would be a long haul before tourism is restored in a country where, according to UNESCO assessment, more than half of the historical monuments have been flattened.
Of the seven UN World Heritage sites located in Nepal, three – Durbar Squares of Kathmandu, Patan and Bhaktapur have been completely damaged.
Ironically, the Nepalese Government had drawn mega plans for increasing power generation and improving its transmission and was working on reforms in the energy sector. The major damage would be felt on agriculture, the main stay of the country’s USD 66 billion economy. Agriculture employs 75 percent of its people.
India is Nepal‘s largest economic partner accounting for over 50 percent its exports and imports.
The Nepalese economy had suffered immense loss because of protracted political conflict and instability. As it is trying to pick up the thread, with economic growth of 5-6 percent, the natural calamity has struck.