The decelerating growth rate !
ADB recently revised growth forecast to 3.8 percent against the target of 5.2 percent envisaged by the Government of Nepal and inflation projected to rise further 8.2 percent during the current FY 2014/15. The growth rate might be further slashed down between 3 percent and 3.5 percent, if supply situation is disrupted more intensely than expected resulting in double digit growth rate. The deadly earthquake (7.9 Richter scale ) that occurred on April 25, 2015 in Nepal followed by a series of big and small tremors (aftershocks) thereafter till yesterday totally jeopardized the prospects for speedy recovery of the economy and this is further aggravated by and attributed to inefficiency, corruption and poor governance.
In the aftermath of devastating earthquake in Nepal it is most unfortunate that entire administration suffers from three lags (3Ls):
(1) Lack of national policy to efficiently deal with rescue, relief, reconstruction and rehabilitation programs and effectively coordinate and manage assistance provided to quake-victims especially by development partners and donor communities,
(2) Lack of formulating emergency budget and plan with estimated cost of damage and need assessment and effectively mobilizing internal and external resources, and:
(3) Lack of transparency and accountability about the flow of fund available to the victims of earthquake from both internal (Prime Ministers' relief Fund) and external sources (directly managed by donors in kind and cash).
The prime concern is - how long fragile Nepalese economy would sustain with squeezed growth rate, higher inflation rate, alarmingly high level of unemployment at home, rapidly declining production and exports followed by a conspicuous reduction in FDI with extremely inadequate poor infrastructure. This kind of terrible situation would lead to disaster in the economy resulting in 'banana economy' with increasing menace to sovereignty.
I would, therefore, humbly urge to the government to immediate call a meeting of cross section of the society comprising private sector, donors, political parties, economists and professionals, and experts including policy makers and collectively determine the path for early recovery through devising appropriate strategy to accomplish the herculean tasks of rescue, relief, reconstruction and rehabilitation within given time-frame. Let's save Nepal !
Prof. Dr. Madan Kumar Dahal
Chairman, Mega Bank Nepal Ltd.
4th Floor, Rising Mall, Kathmandu
www.megabanknepal.com