COVID-19 Costs And Strategies

It is evident that the pandemic the world is struggling with originated in Wuhan, China and is an unprecedented health crisis and a humanitarian disaster

April 23, 2020, 7:32 p.m.

The Coronavirus apparently has appeared as a lethal pandemic when the world has faced similar outbreaks in the past. Unexpectedly outbreaks, endemic and pandemic have been attacking human beings from Plague and now to COVID-19 interestingly every 100 years. The different approach of the global power and the global body can be witnessed more than ever before. South Asians have also witnessed the heads of governments of South Asian Association for Regional Cooperation (SAARC) boarding together. What are the consequences that politics in the pandemic will direct us to? Nepal’s President endorsed two Ordinances through President’s decree paving away for political maneuvering. The nations was looking for a cohesive front and focus on the pandemic and the impact the pandemic would bring about. Lockdown should not be a surge to world’s authoritarians. From border closures to the employment of mass digital surveillance, moves that it classifies as spreading out of state power. With COVID-19 it is now acknowledged as an essential step in the global, regional and domestic endeavor to curb the pandemic. Unanticipated times, it has been collectively agreed and also will call for anticipated measures.

It is evident that the pandemic the world is struggling with originated in Wuhan, China and is an unprecedented health crisis and a humanitarian disaster. Words like war against COVID-19, battle against Coronavirus, this war has to be won etc is often being used for this pandemic but without doubt this is not a war but a health catastrophe that has an multi fold impacts as any war encompass and is dealt by health practitioners’ supervised by governments and managed by administrators. The others government machineries like the army, law enforcement, the intelligence community and communities are in a supportive role to prepare prevent and treat this deadly disease and the consequences.

There are five lessons that will persuade the whole world; one, is that the pandemic is more than a global health devastation, second, no one nation can fight this virus alone as the virus does not have citizenship nor borders, third is the lack of preparedness and capabilities of public health when diseases similar to COVID-19 has being occurring time and again. The argument of the World Health Organization the global body and the Regional Intergovernmental Organizations functioning to its contentment and lastly adoption of repressive measures by some countries for reasons unrelated to the pandemic as the outbreak risks becoming a human rights crisis.

This leads to a reservation and functioning of the global structure the United Nations (UN), SAARC’s credibility, bilateral cooperation and country’s capability to control this disease as well as efficiency for recovery.

The “American First Policy” that President Trump is striding forward but the US November 2020 election will distinctly portray where the global power desires to be and go. But lack of financial support to the World Health Organization (WHO) has raised questions regarding one, US disinclination in globalization and multilateralism, and two, bring other permanent members of the United nations (UN) Security Council in particular China to support in parity with the US. The US in the other hand has been supporting with $ 500 million and working directly with nations on bilateral basis for handling the hazardous pathogen through the USAID, which includes functioning with the forefront workers to slow down the increase, care the affected and equip the local entities with the gears that is needed to fight back COVID-19. The global body and global financial institutions after the World War II has been of assistance for the world to be a safer place.

Counting the Cost

The world has espoused globalization and multilateralism as a progression which put emphasis on the step of free movement of people, ideas and technology. The construal of globalization and multilateralism wrapping up will be easier said than done to transpire with the contrast of 2008 financial crisis.

Restricted supply and controlled movement of people, border closures and commotion in national incomes will be sternly impacted. 2008 financial crisis and H1N1 epidemic can be an example. Derelict investor self-assurance, business collapse and job losses are raising the specter of recession and even depression as many other Least Development Countries and Nepal have economies that depend on remittances and aid. World Bank Group (WBG) record shows Nepal’s Gross Domestic Product (GDP) as 28.6% from remittances. Swift fiscal and measures needs to be accommodated to avoid financial sector distress.

The international financial institutions are gearing up to assist. The donor with the fear of being impacted with the reoccurrences of the disease is also on board to assist needy countries to upgrade their health capabilities and financial institution from collapsing. The G-20 has committed to go along with WHO, International Monetary Fund (IMF), WBG, UN and other international organizations. US$ 14 billion by the WBG and Internal Finance Corporation will go to assist financing companies and countries. Furthermore, the WBG is to apportion as much as US$160 billion in financial support to aid in economic recovery efforts over the next 15 months. Nepal will receive through fast track US$ 29 million for Emergency Response and Health Systems Preparedness Project to prevent, detect, respond and strengthen public health preparedness to the pandemic IMF let go approximately US$50 billion responding to COVID-19 efforts for low income and emerging economy members. Almost 20% (US$10 billion) of the fund is being allocated to the poorest members through Rapid Credit Facility. The IMF is also ready to lend US$1 trillion to assist countries struggling with the humanitarian and economic impact. Of the 25 countries Nepal will receive debt relief for six months.

In the Regional front, the Asian Development Bank (ADB) has allocated US$ 5 billion package for its Developing Member Countries to aid the pandemic effort and an additional worth US$ 225 million to country specific. The Asian Infrastructure Investment Bank (AIIB) has increased funds to US$ 10 billion due to demand from specific countries.

While assistance is being assured, Minister of Finance has asked for a rescheduling of the loan repayment schedule and debt relief from donors.

Following the Video conference of the Heads of SAARC more than US$ 21.8 million has been accumulated as emergency fund to dealing with the pandemic with no domino effect so far.

As far as bilateral assistance goes the US has provided additional US$ 1.8 million besides personal protective equipment to bolster readiness and response to the pandemic to Nepal. Nepal has not formally made request of assistance to both our immediate neighbors though procedures and mechanism is coordinated from containment to mitigation. China has been dispatching medical supplies both granted and paid. India has been assisting with medical equipments and also offered a rapid response team with medical equipment to contain the possible outbreak.

Nepal received foreign aid totaling US$ 1.79 billion in 2018/2019 from multilateral and bilateral donors and international non-governmental organizations. Bilateral donors accounted to 60 percent of the foreign aid. Outstanding loans to be paid to international institutions stand to US$ 52.36 million as per Dec 2019.

Nepal is one of the 55 food crisis countries in the world. The World Food Program’s “Nepal COVID-19: Food Security and Vulnerability Update” a UN agency has come out with two assessments in the last two weeks said that the food security in Nepal has improved but 4.6 million people are 10 percent mildly, 22 percent moderately and 10 percent severely food-insecure. The Ministry of Agriculture and Livestock Development has criticized and objected the report.

Service industries like tourism in Nepal accumulated Rs 240 billion and more to that is the one million jobs it created. GDP of 8.5 percent was expected with little cushion now. Tourism is nearly at a halt. The ‘Visit Nepal 2020’ project, which had significantly promoted has come to a close.

As per the WBG, agriculture dominates the economy and provides about 33 percent of the GDP. In the livelihood of more than 90 percent of the population only 20 percent of the total land area is cultivated. The real GDP at market prices in percent for Nepal in the mid-July to mid-July in 2019 was 7.1 will be 1.5 to 2.8 in 2020, 1.4 to 2.9 in 2021 and 2.7 to 3.6 in the year 2022

Limited job opportunities, political turmoil and economic conflicts in the Gulf Cooperation Council countries and Malaysia were already impacting the labor migration, now with the pandemic estimated to go much higher. The unemployment rate will significantly rise. Nepal is the 19th largest in the world and 4th in South Asia receiver of remittance of US$ 8.1 billion in 2018 according to the WBG.

The world Press Freedom Index 2020 has plunged Nepal six places on global press freedom index to rank 112th out of 180countries. The environment for journalist working for independent media outlets has been difficult with the introduction of laws for restriction of freedom of the press.

Assuring the Future ….Exit Strategy

COVID-19 has engaged the world with bewilderment and is redefining geo-politics and the outline of political, security, health, human rights and economic realm. Global assistance, regional mechanism and countries transparent efforts are the ways to move forward together collectively to protect lives, safeguard people’s jobs and incomes, restore confidence, preserve financial stability, revive growth, minimize disruption to trade and global supply chains, provide help to all countries in need and coordinate on public health and financial measures. The countries are mostly performing alone as first responders and now looking for assistance to safe harm from recession and even depression.

In the precedent, universal call out led to multilateral innovations. The UN and the IMF were created in the wake of World War II. G-7 became formidable after the 1973 oil shock and the G-20 forum after the 2008 financial crisis.

The decisions of the political leaders in the next few weeks will shape the world, South Asia and Nepal. Few nations may be successful in finding the solution by containing their nations, but recurrence will hunt them again. This is a global problem of the developed and the least developed nations and needs global solution.

Prolonged halting of economic activities, collapsing trade and greater stress in the financial and banking sectors, the South Asian regional growth will fall to a range between 1.8 and 2.8 percent in 2020 down from 6.3 percent projected six months ago as per the WBG. That will be an appalling performance in the last 40 years. This will hang back in 2021 with 3.1 and 4.0 percent down from 6.7 percent estimates.

Nepal has brought forward 6T strategy to deal the crisis but is missing the “exit strategy” to assure the future. 6 Ts are Travel Restriction, Testing, Tracing, Tracking, Treatment and Together. There are six factors hindering the implementation of the federal government’s modalities. First, is Nepal Communist Party’s internal political dynamics and leadership aspiration, second, two Ordinances promulgated by President’s decree during a lockdown when fundamental rights appear on the edge; one on the ease to splitting of the political parties and the other on appointments of constitutional bodies, third, lack of strategic coordination and cooperation in strategic planning, political determination and governance, four, inter-ministry rivalry and accountability, five, establishment of COVID-19 Crisis Management Center when the nation had National Emergency Operation Center under the Ministry of Home Affairs and Health Emergency Operation Center under the Ministry of Health and Population and lastly intentions of corruption.

The “exit strategy” should be divided into consortium below different ministries but with the National Security Council as the core establishment under the Prime Minister for effective delivery post COVID-19. The availability of vaccines, capabilities of public health system and control of reoccurrence in inclined towards health strategy. With millions unemployed the country should seek for casual employment focusing in agriculture. The likely security, economic and political disorder has to find plans to come back to its normal order.

When Biological warfare is being ruled out, the un-orderly development processes has challenged mother-nature. Nature from time to time is reacting with viruses and now with Coronavirus. Nations can do on its own but to be more effectual SAARC nations need to restart green investment to adopt green stimulus measures as a “green revolution” from the mountains to the oceans. South Asian and South East Asian politicians, companies, lawmakers and activists should come together for fighting climate change and promoting biodiversity and build stronger economies. The healthy dynamic will demand new coalition, regional and global cooperation and co-optations.

Talking about development Nepal’s strategic plan can be part of the 2019-2023 WFP UN development assistance framework 2018-2022, guided by the 2015-2035 agricultural development strategy, the 2016-2025 national action plan for zero hunger, the multi-sector nutrition plan for 1018-2022, the 2016-2023 school development plan.

Competent governance together with the anti-corruption bodies must distinguish zero in corruption. Law Enforcement Forces and the Intelligence community should be geared up with new strategies to deal with law and order instability. The foreign migration for work will virtually discontinue and casual employment will be impacted severely. There is a likelihood of more than 12 million unemployed with 50 thousand additional every year. Shortages of food will draw disparity between the have and the have nots in the rural set ups.

Rights guaranteed by the constitution of Nepal should appear in full swing with the culmination of the lockdown and end to the likelihood of reoccurrence of COVID-19. Human rights should guide the response and recuperation to health, social, cultural, traditional practices and economic crisis. Secretary General of the UN said “We see the disproportionate effects on certain communities, the rise of hate speech, targeting of vulnerable groups, and the risks of heavy handed security responses.”

The political decision makers should create space to plan for near, medium and long term challenges with sidelined professionals and experts, marginalized bureaucrats, “NO” to corruption and “NO” to politicalization of institutions.

In the interconnected and consistent world, variety of well administered and efficiently managed cooperation will be desirable. We must all decide whether to see ourselves as separate isolated or as part of a larger “WE” that appreciates and accomplishes on our irretrievable interdependence. As other global calamity constrict in, this is an examination we can’t afford to fail.

Binoj Basnyat Profile Photo.jpg

Binoj Basnyat

Basnyat is a retired Nepali Army Major General, is a political and security analyst

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