The global COVID-19 pandemic and the mounting health crisis in Nepal have significantly slowed down the economy, brought widespread job losses and the erosion of livelihoods on an unprecedented scale. The key drivers of Nepal’s growth, including tourism, remittances and agriculture, have suffered huge setbacks, entailing a much lower than projected growth rate. UNDP’s rapid assessment of the economic impact of COVID-19 shows that because of international travel restrictions, tourism receipts in Nepal are projected to fall by 60 percent in 2020 resulting in a loss of foreign currency earnings worth USD 400 million. Similarly, the fall in remittances is likely to range between 15 and 20 percent this fiscal year. With the large impact on some of the key sectors for Nepal’s economy, including trade, tourism and remittances, Nepal’s GDP growth is projected to fall below 2.5 percent in 2019-2020, compared to pre-COVID projections of between 6-8 percent, and severely constrain any quick rebound. Further, accommodation and food, arts, entertainment and recreation, and transport are among the most affected sectors of the economy.
UNDP’s assessment found that every three in five employees have lost their jobs in the micro, small and medium-sized enterprises (MSMEs) that were surveyed. On average, the MSMEs have seen a fall of 95 percent in monthly revenue. Most of these businesses fear to have to shut down completely, despite the recent easing of some of the lockdown restrictions. All these developments have disproportionately affected the women, people with disabilities, gender and sexual minorities and other disadvantaged populations, running the risk of widening existing inequalities pervading the society.
As the COVID-19 crisis first emerged in Nepal, UNDP responded by focusing on three immediate priorities: health systems support, multi-sectoral crisis management, and socio-economic impact assessment and response.
But this is an enduring crisis, whose impact will linger for a long time to come. Beyond the emergency response phase, UNDP is now shifting gear to tackle the longer term recovery by aligning its resources, know-how, projects and field presence to support Nepal to reorient development plans and policies so that the impact of the crisis is minimized and progress towards the Sustainable Development Goals is safeguarded.
The next phase of UNDP’s COVID-19 crisis response is designed to help decision-makers look beyond recovery, towards 2030, by supporting them to make choices and manage complexity and uncertainty in four main areas: governance, social protection, green economy, and digital transformation. It encompasses our role in technically leading the UN’s socio-economic response.
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This area of work is more important than ever as governments come under pressure to navigate crisis and uncertainty, deliver digitalized services, enable access to information and social protection, and function in transparent, accountable and effective ways. Governments and civil society will need to work together to advance social cohesion and gender equality while upholding human rights and the rule of law in those countries where justice and security concerns may be more acute.
In Nepal, UNDP will support our partners, including all levels of governments and civil society organizations, in making choices that build social capital, deliver inclusive services, and open civic space to lay the foundations for the future. Our aim is to support the development of a governance system that is fully reflective of people’s agency, that builds trust in institutions and closes the gap between people and the state. In the immediate to medium term, UNDP will provide its support in the following areas:
Pro-bono legal aid services to women and vulnerable people;
Promote right to information;
Protect human rights, in partnership with the National Human Rights Commission;
Promote business community’s compliance with human rights, including through a rapid assessment of human rights due diligence of the private sector;
Capacity building of Judicial Committees to function during crises;
Civic engagement to ensure government accountability;
Crisis communications and business continuity support to provincial and local governments;
Support to parliaments and province assemblies in their outreach and oversight during crisis.
In Nepal, the impact of the pandemic has been more severe given that a large section of the people who have lost their jobs are engaged in in the informal economy and do not have access to social protection. This has deepened pre-existing inequalities. UNDP believes that uprooting these inequalities requires governments to increase investment on social protection, including cash transfers, universal health coverage and access to other basic services.
For the Government to invest in these areas, it needs broader fiscal space. UNDP will leverage its expertise tested across countries in helping the Government expand its existing fiscal resources and use them effectively. Public-private solidarity and partnerships will be critical to build resilient social protection systems that can weather shocks and create strategies for informal sector workers. UNDP Nepal will support this process through the following initiatives:
Promote access to health services in remote areas through renewable energy powered health care facilities;
Promote the business community’s adherence to human rights;
Automation and robotics support to strengthen the health system;
Support to institutionalize risk insurance and endowment funds;
Health care waste management and training to waste workers;
Study on and advocacy for a universal basic income.
For the first time in recent history, residents in the Kathmandu Valley enjoyed breath-taking views of some of the rarely seen Himalayan peaks, including Mt. Everest. With restrictions of vehicular movement, pollution levels went down dramatically during the lockdown, an unintended silver lining. The pandemic has in fact opened an opportunity to spur a transformation to a green economy as part of the recovery. UNDP believes that this is the time to design and invest in nature-based solutions as part of a new social-environmental safety net for the world. This will include encouraging sustainable public-private partnerships, such as in ecotourism and green transport systems, and transforming agriculture from a carbon contributor to a carbon sink.
Guided by this thinking, UNDP in Nepal will focus on putting in place advisory and policy measures and programmes to stimulate an inclusive green economy, through the following initiatives:
Design a national roadmap for green recovery and green economy;
Support Nepal to raise, and achieve, its climate ambitions in line with the Paris Agreement on climate change;
Support to adopt clean mass transport, business, and household solutions and create green jobs;
Promote access to affordable clean energy and technology in remote areas;
Integrate adaptation, renewable energy and DRR into local level planning;
Support Nepal to achieve the SDGs through SDG sub-platforms that promote a “whole-of-society” approach
Support to adopt urban risk-resilient models and roadmaps;
Promote community-driven nature-based solutions;
Improving sustainable supply chains and cooperatives market development;
Support women from marginalized communities to become successful entrepreneurs;
Support development of sustainable waste management and recycling systems.
Support the development of green parks and community learning centres for children, elderly and disabled population.
With schools closed and stark divides in access to online learning, UNDP’s Human Development Report Office estimates that 86 percent of children in primary education are now effectively out-of-school in countries with low human development - compared to just 20 percent in countries with very high human development. This is the largest reversal in education on record. The past three months of lockdown revealed that with very weak infrastructure, most of Nepal’s public institutions are not prepared to function properly in the new situation.
In Nepal, immediately after the lockdown, UNDP extended its support to help Governments at all levels quickly adopt new IT solutions, such as video conferencing facilities for the parliamentarians, the provincial and local governments and the human rights institutions. Even before the COVID crisis, UNDP supported a number of digital solutions, such as a digital building permit system, an early warning system for floods, digital information services for courts, and mobile apps for monitoring post-earthquake reconstruction and practicing climate-smart farming. In the coming days, UNDP will build on the existing solutions and focus on the following activities:
Digital solutions for smarter local governments;
E-learning platform for SDG localization and green business;
E-learning platform for women leaders in the local governments;
Health care information and learning platforms;
Digital marketplace to help connect farmers with consumers;
Human rights mobile application for reporting and handling of cases;
Expanding the electronic building permit systems and Early Warning Systems.
Based on initial assessments, UNDP will support the provincial and local governments in their efforts to respond to and recover from the crisis. The total cost for the first phase of the support has been estimated at US$15.8 million. In response to the call from the government, a preliminary analysis of approved work plans for 2020 indicates that around US$3.8 million of existing funds could be repurposed for COVID response in consultation with national implementing partners and development partners.