Speaking at an interaction on 'Nepal's Post-disaster Economy: Cost, Consequences and Alternatives' organized by Nepal Economic Association in the capital on Monday, they also underscored the need for increased trust toward the government while heading toward reconstruction and rehabilitation in the post-disaster period.
"The disaster has not only damaged homes and structures in the country. It has also weakened people's confidence. Investors are concerned about their investment and people are worried about their livelihood and shelter. This is going to inflict loss on the economy," Prithvi Raj Ligal, an economist, said. He also said that the disaster has also opened an opportunity to promote tourism of mid-western and far-western regions which have remained under-promoted so far."Tourism is one of the worst-hit sector. It may take four to five years for the sector to recover. However, this has also opened the opportunity to promote tourism in mid-western and far-western regions which are not much affected by the earthquake," he added.
He also underlined the need for more transparency and accountability from the government to build trust among donors and international communities.
Similarly, Posh Raj Pandey, executive chairman of South Asia Watch on Trade, Economics and Environment (SAWTEE), said that physical and collateral damages from the earthquake will make an adverse impact on the income flow of the people. "While the macroeconomic fundamentals will also suffer, the GDP growth target will also face some setback," he added.
Saying that the rehabilitation and rebuilding campaign should be led by the government, he also urged the government to allow other institutions, civil society groups and donor communities to carry out their efforts in coordination with government agencies. "Post-disaster management is not only about technical engineering. A holistic approach is needed where local knowledge, skills and raw materials are utilized to an optimum level," he added.
Tilak Rawal, former governor of the Nepal Rastra Bank (NRB), said that the government should pursue fiscal stimulus policy to create internal demands. "The central bank should come up with accommodative monetary policy if not the expansionary. The government should enhance domestic demands," he added.
Rawal also said that the government should be able to give a feeling that the national economy has not suffered from the earthquake. "To boost the economy and bring it back on the track, we should be able to relay message to national and international investors that the economy has not come to a grinding halt. The government should give an impetus to economic activities," he added.
'REVENUE DRYING UP'
Meanwhile, Minister for Finance Ram Sharan Mahat said that revenue is drying up due to the earthquake. "Two custom points have been damaged by the quake and are closed. Revenue collection in other custom offices has also been hit," he said, adding that revenue collection is down 40 percent from the target.
Stating that human loss is incalculable, Mahat said the government has already started assessment of economic loss as well as the investment that the country need in the post-disaster period. He, however, said that there will be no budget crunch for rebuilding and rehabilitation works.
"Fiscal space is our advantage. We can use the fund that has gone unspent and also make internal borrowing. We also have tremendous international goodwill and donors who are willing to contribute to our efforts of rebuilding," Mahat said. "The current estimate is that we need $5-10 billion for the purpose.
Stating that the 'business as usual' approach is not going to work, Mahat said: "We may have to change our working style, amend some regulations and change our approaches."
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