To deal with the problem, it has suggested the government take steps to lower inflation, which has not gone down as it has across the region, put in place a social protection mechanism with a longer-term vision, and strengthen a mechanism for emergency food access.
The report, Economic and Social Survey of Asia and Pacific for 2009, released on Friday, cautions that the country’s poverty might rise due to a loss of employment and income amid the global financial crisis. Higher food and fuel prices have also increased the risk of leaving more children malnourished and households reeling from food insecurity.
“The situation mainly threatens to push the country farther off from the millennium development goal’s (MDGs) targets on reducing poverty and improving nourishments,” said Robert Piper, UN resident and humanitarian coordinator, who launched the report at a program Friday.
The UNESCAP report for 2009 has mainly dealt at length with challenges facing the countries in Asia and the Pacific due to the global financial crisis, higher food and fuel prices, and climate change.
The report which although admits Nepal has not witnessed an adverse impact on remittance inflow, does raise concern over deceleration in the number of outbound Nepali workers. It also cautions that Nepal might feel the heat of the global financial turmoil in the tourism sector, exports and the foreign investment front.
“It could hit implementation of bigger projects such as the Seti hydropower project and fast track road,” said Dr Jyoti Lohani of the Center for Policy Research and Analysis, presenting the report.
To tackle the problem, UNESCAP has suggested the government take initiatives to restore lost confidence from the private sector. “It must devise an appropriate fiscal stimulus package, which should be of good size, and concentrate on taking appropriate decisions rapidly,” says the report.
The report has also suggested the government avoid a protectionist policy, the pressure for which generally mounts during crisis situation. Instead, it says the government must take steps to promote intra-regional trade and enhance availability of export credit.
UNESCAP has placed a strong emphasis on laying down an effective social protection system. “It should be established as a part of long-term framework for future development, instead of being crisis-driven,” says the report.
As for climate change, UNESCAP has said it will mainly cause Nepal’s agricultural productivity to decline and increase the risk of natural disasters, mainly related with melting of glaciers and disruption of the water system. To deal with climate change, it has urged governments in the region to promote a shift in attitude.
The report also projected the country’s economic outlook for 2009. However, it was based on older data and hence “made projections look more optimistic than they should be”, as Piper put it.
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