Nepal to get IMF debt relief

Nepal is going to receive debt relief from the International Monetary Fund (IMF) for six months as part of its response to help address the impact of the Covid-19 pandemic.
The global monetary advisor announced the debt service relief for the 25 countries – including Nepal, Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, DR, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen – today under its revamped Catastrophe Containment and Relief Trust. “As of December 2019, Nepal’s outstanding loans to be paid to the international institutions stands at SDR 38.5 million ($52.36 million),” according to the fund's website.
The SDR (Special Drawing Rights) are the units of account, which is like currency and pegged with a basket of important foreign currencies like the US dollar, euro, Chinese yuan and Japanese yen. One SDR is equivalent to $1.36.
Nepal had received loans from the fund after the devastating earthquake in April 2015. “Debt relief for six months means Nepal need not pay installment – including principal and interest – for six months.
The government had however requested IMF to provide debt relief for two years.
During a video conference with senior officials of multilateral development partners including IMF, the World Bank (WB), Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB), finance minister Dr Yuba Raj Khatiwada had asked for a deferral of the loan repayment schedule and debt relief from development partners, though Nepal has forex reserve that can pay for the import of goods and services for 8 months.
The IMF provides grants to its poorest and most vulnerable members to cover their debt obligations for an initial phase over the next six months, under the scheme.
“This will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,” managing director of the IMF Kristalina Georgieva said, adding that the Catastrophe Containment and Relief Trust can currently provide about $500 million in grant-based debt service relief, including the recent $185 million pledge by the UK and $100 million provided by Japan as immediately available resources.
“Others, including China and the Netherlands, are also stepping forward with important contributions,” the press note issued by the IMF reads.
Georgieva has also urged the development partners to help it replenish the Trust’s resources and boost further its ability to provide additional debt service relief for a full two years to its poorest member countries.

ADB triples Covid-19 response package to $20 billion

The Asian Development Bank (ADB) today tripled the size of its response to the novel coronavirus disease (Covid-19) pandemic to $20 billion and approved measures to streamline its operations for quicker and more flexible delivery of assistance.
The package expands ADB’s $6.5 billion initial response announced on March 18, adding $13.5 billion in resources to help ADB’s developing member countries counter the severe macroeconomic and health impacts caused by Covid-19. The $20 billion package includes about $2.5 billion in concessional and grant resources, according to a press note issued by the ADB headquarters in Philippines.
“This pandemic threatens to severely set back economic, social, and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession,” said ADB president Masatsugu Asakawa. “Our expanded and comprehensive package of assistance, made possible with the strong support of our Board, will be delivered more quickly, flexibly, and forcefully to the governments and the private sector in our developing member countries to help them address the urgent challenges in tackling the pandemic and economic downturn,” he added.
ADB’s most recent assessment, released on April 3, estimates the global impact of the pandemic at between 2.3 per cent and 4.8 per cent of gross domestic product (GDP). Regional growth is forecast to decline from 5.2 per cent last year to 2.2 per cent in 2020.
The new package includes the establishment of a Covid-19 Pandemic Response Option under ADB’s Countercyclical Support Facility, the press note reads, adding, “Up to $13 billion will be provided through this new option to help governments of developing member countries implement effective countercyclical expenditure programs to mitigate impacts of the Covid-19 pandemic, with a particular focus on the poor and the vulnerable. “Grant resources will continue to be deployed quickly for providing medical and personal protective equipment and supplies from expanded procurement sources.
Some $2 billion from the $20 billion package will be made available for the private sector. Loans and guarantees will be provided to financial institutions to rejuvenate trade and supply chains. Enhanced microfinance loan and guarantee support and a facility to help liquidity-starved small and medium-sized enterprises, including those run by female entrepreneurs, will be implemented alongside direct financing of companies responding to, or impacted by, Covid-19.
The response package includes a number of adjustments to policies and business processes that will allow ADB to respond more rapidly and flexibly to the crisis. These include measures to streamline internal business processes, widen the eligibility and scope of various support facilities, and make the terms and conditions of lending more tailoured.
All support under the expanded package will be provided in close collaboration with international organisations, including the International Monetary Fund (IMF), World Bank Group (WBG), World Health Organisation (WHO), UNICEF, and other UN agencies, and the broader global community.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty, according to the press note. “Established in 1966, it is owned by 68 members, 49 from the region.”

Health Ministry confirms two more corona cases today

Health Ministry today confirmed two new cases of the coronavirus infection, taking Nepal’s total number of Covid-19 cases to 14, and live cases to 13, as one has returned after being treated in January.
Spokesperson of the Ministry of Health and Population Dr Bikash Devkota – during the regular press briefing today – has confirmed two more cases and informed that a 19-year-old male from Rautahat and 65-year-old female from Kailali tested positive for the deadly virus.
“One of those infected is a 65-year-old woman in Kailali,” he said, adding that the woman, who tested negative on Rapid Diagnostic Test (RDT) after a 15-day quarantine, has now been detected with coronavirus infection. Initially, the woman had tested negative on Rapid Diagnostic Test (RDT) during the14-day quarantine.  Her throat swab and blood sample were collected and sent to Kathmandu for further tests. The result of her sample tested at the National Public Health Laboratory in Kathmandu has come out positive,” he added.
The sexagenarian was put in a quarantine facility at Lamki Multiple Campus in Lamkichuha Municipality-1 of Kailali district over 15 days ago, after she reached there from Birgunj in Parsa district in a group of seventeen. She is presently receiving treatment at Seti Provincial Hospital in Dhangadhi. The government is investigating and tracing contract, he added. “The woman used to run a tea-shop in Birgunj along the Nepal-India border.”
Likewise, a 19-year-old boy in Rautahat district has tested positive for Covid-19, taking the total number of infected in the country to 14. Like the earlier case, the result of his test conducted at the National Public Health Laboratory came out positive, Devkota said, adding that the teenager was also in quarantine earlier. “He has now been shifted to a hospital for treatment.”
With the new addition, there are five active cases of Covid-19 at Dhangadhi based Seti Zonal Hospital, three in Birgunj, two in Baglung, two in Kathmandu, and one in Rautahat.
The new Covid-19 cases were reported two days after three Indian nationals residing in Birgunj were confirmed to have the coronavirus. On Saturday, three Indian nationals residing in a mosque in Birgunj tested positive for the virus.

Coronavirus to eat 3 to 4 per cent of economy

The coronavirus forced lockdown is going to damage our economy by 2 per cent to 4 per cent of the GDP, according to the Prime Minister.
“The adequate attention of the government has been drawn to the analyses of various subject experts that the damage to our GDP shall be to the tune of 2 per cent to 4 per cent due to this pandemic,” said the premier addressing the nation today morning on the occasion of New Year 2077 BS.
“Relevant agencies of the government have already been tasked to estimate post-epidemic damages,” he said, adding that as the speed of the pandemic will be predictable within the coming week, broader evaluation process will be conclusive only after that. “Apart from the social and psychological cost of this pandemic, the consequent global economic recession is going to inflict profound impact on the emerging economies such as ours.”
The PM also vowed to bring plans to revive the country's economy which has hit hard by the deadly virus. According to various studies, the country is losing some Rs 5 billion everyday due to lockdown. The government had imposed lockdown from March 24 to contain the spread of Covid-19 – popularly known as coronavirus – as maintaining the physical distancing is key to contain the deadly pandemic that has already claimed over 100,000 lives across the globe.
Talking about the $29 million cooperation agreement that has been concluded with the World Bank as emergency support for prevention of coronavirus infection, along with, some $1,563 million on different headings, arranged from various development partners including the World Bank, the Prime Minister assured that policy to implement the employment programme targeting those youths on overseas employment, who are at the risk of losing job due to the possible global economic slowdown, and those unemployed youths within the country will be dealt and promoting agro-based, small and medium enterprises (SMEs), concrete plan will be put in place in collaboration with the relevant entrepreneurs, experts and youths themselves to explore the potential new areas of self-employment.
The pandemic has hit hard the daily wages workers, and unorganised sector employees as the lockdown has snatched their jobs, and livelihood.
As the government has been charged of neglecting the people of lower strata, and also those around the poverty line, the premier claimed to announce an 'economic recovery package' through its policy and programme and budget to connect the missing link with the broken production-relation and how to run again the obstructed production system. “Once we flatten the curve of this pandemic, we will surely adopt the policy of 'investment, investment and, again investment' in order to enhance economic activities,” he said, adding that currently the government study and survey is focused on 'how to connect the missing link with the broken production-relation' and 'how to run again the obstructed production system'. “Based on the findings and recommendations of the study, the government will announce an 'economic recovery package' through its policy and programme and budget.”
“With the end of this pandemic, a dialogue needs to be initiated about human-centred new world order,” he added.
PM Oli also to not get his salary, which will go to the government established fund, until the pandemic ends.
Reciting his wish list, the premier said that it was government’s plan to inaugurate Ranipokhari – in the first half of the first month (Baishakh) of the New Year 2077 BS –damaged by the devastating earthquake of 2015. “It was contemplated that the Dharahara would be rising not only up to the 10th floor but beyond that,” he said, adding that awarding of contract would have been concluded for the Sunkoshi-Marin Diversion project. “A new programme would have been announced on public transport.”
However, due to the epidemic, the country has arrived at a juncture that requires postponement of a number of projects, creates obvious delays in construction works and makes it necessary for the transfer of budgets to another headings and the rearrangement of the priority sectors, Oli said, adding that the highest and only priority today, as we all know, is the health and safety of all the citizens. “The most important development and reconstruction activity at present is to ensure the prevention of the infection from spreading.”

Economy to grow between 1.5 per cent and 2.8 per cent

The economic growth is expected to fall to a range between 1.5 per cent and 2.8 per cent in the current fiscal year 2019-20 reflecting lower remittances, trade and tourism, and broader disruptions caused by the coronavirus outbreak, according to the World Bank.

The government – despite lowering the budget during the mid-term budgetary review – was still targeting to achieve 8.5 per cent economic growth, despite its failure in capital budget spending, and meeting the revenue mobilisation target. The corona pandemic has become a face saver to the majority government led by Prime Minister KP Sharma Oli that has not only failed to expedite economic growth but also create business environment in the country.

Likewise, the Asian Development Bank (ADB) – last week – also slashed its own growth forecast for Nepal to 5.3 per cent for the current fiscal year, a sharp decrease from last year's 7.1 per cent growth.

Releasing its twice-a-year-regional update, the Washington-based multilateral development partner said that the prolonged outbreak of Covid-19 would impact growth significantly with a further deceleration or contraction in services and industrial production. “Economic growth during fiscal year 2020-21 is also likely to remain subdued due to the lingering effects of the pandemic with some recovery expected in the fiscal year 2021-22,” the report reads, adding that the Covid-19 shock will likely reinforce inequality in South Asia. “Nepal’s economy will grow by 1.4 per cent to 2.9 per cent in the fiscal year 2020-21, followed by 2.7 per cent to 3.6 per cent in the fiscal year 2021-22.”

According to World Bank country manager for Nepal Faris Hadad-Zervos, the World Bank is closely monitoring how the Covid-19 pandemic is evolving across Nepal. “Our immediate priority is to coordinate our action with the government, private sector and international development partners to ensure that health supplies and equipment are readily available and that a comprehensive recovery package is in place to support the poor and most vulnerable," he said.

The impact of the pandemic will hit low-income people hard, especially informal workers in the hospitality, retail trade, and transport sectors who have limited or no access to healthcare or social safety nets.

“As played out across the region, the sudden and large-scale loss of low paid work has driven a mass exodus of migrant workers from cities to rural areas, spiking fear that many of them will fall back into poverty,” the report reads, adding that there are no signs yet of widespread food shortages but a protracted Covid-19 crisis may threaten food security, especially for the most vulnerable.

In the short term, the report recommends preparing weak healthcare systems for greater Covid-19 impacts, as well as providing safety nets and securing access to food, medical supplies, and necessities for the most vulnerable. The report calls for establishing temporary work programmes for unemployed migrant workers, enacting debt relief measures for businesses and individuals, and easing inter-regional customs clearance to speed up import and export of essential goods, to minimise short-term economic pain.

Amid the mounting human toll and global economic fallout triggered by the Covid-19 pandemic, South Asian governments must ramp up action to curb the health emergency, protect their people, especially the poorest and most vulnerable, and set the stage now for fast economic recovery, the World Bank said.

In its South Asia Economic Focus, the WB anticipated a sharp economic slump in each of the region’s eight countries, caused by halting economic activity, collapsing trade, and greater stress in the financial and banking sectors.

In this fast-changing and uncertain context, the report has presented a range forecast, estimating that regional growth will fall to a range between 1.8 and 2.8 per cent in the current fiscal year 2019-20, down from 6.3 per cent projected six months ago. “That would be the region’s worst performance in the last 40 years, with temporary contractions in all South Asian countries,” it reads. In case of prolonged and broad national lockdowns, the report warns of a worst-case scenario in which the entire region would experience a negative growth rate this year.

The deteriorated forecast will linger in the fiscal year 2020-21, with growth projected to hover between 3.1 per cent and 4 per cent, down from the previous 6.7 per cent estimate.

Once lockdown restrictions are loosened, South Asian governments should adopt expansionary fiscal policies combined with monetary stimulus to keep credit flowing in their economies, the report suggests, adding that many South Asian countries have limited fiscal space, these policies should target people worst hit by the freeze on economic activity. The report urges governments to adopt temporary spending measures and coordinate with international financial partners to avoid unsustainable long-term debt levels and fiscal deficits.

“After tackling the immediate Covid-19 threat, South Asian countries must keep their sovereign debt sustainable through fiscal prudence and debt relief initiatives,” said World Bank chief economist for the South Asia Region Hans Timmer. “And looking beyond the present crisis, lie great opportunities to expand digital technologies for payment systems and distant learning to unlock remote areas in South Asia.”

Due to the Covid-19 pandemic, economic circumstances within countries and regions are fluid and change on a day-by-day basis, and the World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs, the press release reads, adding that it is deploying up to $160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.

Nepal has been under lockdown since March 24, effectively shutting down the entire country.

The economy has lost more than Rs 100 billion in Chaitra (mid-March to mid-April) alone.

Lockdown not to end anytime soon

Though, the country is losing more than Rs 2 billion a day due to lockdown, the government is mulling to contain the pandemic Covid19 – popularly known as coronavirus – by extending the shutdown.
Prime Minister KP Sharma Oli – in the video conference held today with the chief ministers of the seven provinces – said that the lockdown measures will not be lifted immediately unless the situation goes back to normal in India.
Discussing issues related to prevention of Covid19 and effective implementation of lockdown with the chief ministers, the Prime Minister also informed that that border security will be tightened further, PM Oli’s press advisor Surya Thapa said quoting the PM. “It is insignificant to open the borders now as infections are increasing in India lately,” he is said to be quoted. “There is no better mechanism right now than what the government has adopted.”
Though, the Prime Minister did not disclose how long the extension would be for, it seems far-fetched as India has witnessed rising coronavirus cases lately. “There is no point in becoming emotional about lifting the lockdown,” said the Prime Minister also requesting the chief ministers to regulate the functions properly, in the time of crisis.
In the process of containing the virus, the country will have accomplished outstanding progress in the fields of health, treatment, laboratory, equipment and health supplies, as well as skilled human resource management, he added. Nepal has the poorest public health system and the countries with better public health system are also falling prey to the deadly virus.
PM Oli, on the occasion, also stressed the need to step up strong coordination between the federal government and the provincial governments to contain the novel coronavirus in the days to come.
On the occasion, the chief ministers briefed the Premier about the ongoing efforts in their provinces to prevent and control the coronavirus pandemic. Currently, Nepal has nine coronavirus cases, of which one has already returned home after being treated. There has been not a single case of coronavirus in last one week, according to the Health Ministry. However, Nepal has entered into second phase as one case has been identified with local transmission, though all the seven cases were the migrants, who had returned from abroad.
The chief ministers of Province 1 Sher Dhan Rai, Province 2 Lal Babu Raut, Bagmat Province Dormani Poudel, Gandaki Province Prithvi Subba Gurung, Province 5 Shanker Pokharel, Karnali Province Mahendra Shahi and Sudurpaschim Province Trilochan Bhatta briefed the prime minister they have been doing to contain the deadly virus. The four-hour-long conference witnessed experience sharing on controlling the virus, necessary treatments, and efforts made of each province.
Province 2 chief minister Lal Babu Raut, after the video conference, said that the Province 2 is more conscious about the deadly virus as it has the largest number of migrants and also the only province to share border with India.

Women hit harder by socio-economic impacts of coronavirus: UN Women report

Gender and social inequalities that underpinned societies in Asia and the Pacific before the novel corona virus disease 2019 (Covid-19) pandemic are now exacerbated, making bad situations for women and girls even worse, warns a new report by UN Women.
The report, “The First 100 Days of the Covid-19 Outbreak in Asia and the Pacific: A Gender Lens,” presents a snapshot of the gender dimensions of the socio-economic impacts of the pandemic and captures promising practices for integrating gender in preparedness and response planning while proposing potential and entry points to mitigate the socio-economic impacts for women and girls in the region.
The publication highlights the immediate needs of women in the context of the pandemic, including those of female health-care workers and survivours of gender-based violence, as well as direct impacts related to women and girls’ unpaid care work, sexual and reproductive health and rights, interrupted access to education and unequal access to information.
“Asia and the Pacific continues to be the region most prone to natural disasters in the world,” UN Women Regional Director for Asia and the Pacific Mohammad Naciri said, adding that the gendered impacts of additional disasters within the context of Covid-19 can be anticipated: A Mekong drought, for example, combined with the increased need for hygiene practices like handwashing in the context of the pandemic, will likely result in significant increases to the unpaid care work burden of women, who are primarily responsible for collection of water for household use. “Response and recovery efforts must place the needs of women and girls at the centre and be grounded in the socio-economic realities that they face.”
The ‘100 Days’ gender report discusses the impacts and the potential way forward on issues including women, peace and security, gender and disaster risk reduction, ending violence against women and women’s economic empowerment, while stressing the specific needs of marginalised and underserved groups, including refugees, women with disabilities, LGBTQI persons and women living with HIV.
The report also brings to light that a gender lens on this crisis enables us to leverage existing work and expertise – from rebuilding in disasters to rebuilding peace – to ensure that the world post-COVID is built on principles of human rights and gender equality.