10 Problems & Solutions in Nepal Post Covid-19

"It’s not too early to talk about a Paradigm shift...change at a colossal level is going to be vital...we all need to think differently...find new ways to work together."

Now it’s 2077 so, “Naya Barsha Ko Subhokamana Satiharu!” We all hope that this year is going to see the end of the Covid-19 Virus and that the World, not just Nepal is going to come out relatively economically unscathed. However, realistically we have to be ready for some big changes. The World has been rapidly developing for the last 2 decades and we are all entering a digital age in which so much of what we do is online and Mobile Platform or App based. We were already slowly transitioning to a new way to work before Covid-19 and now the Pandemic has pushed us faster towards those goals.

"It’s not too early to talk about a Paradigm shift, in fact the idea of Change at a colossal level is going to be vital in managing future Epidemics and Pandemics of this nature and our response as a Country and as a Planet to having to work remotely and from home (WFH) will dictate our ability to ride economically through these future storms of market downturn. So we all need to think differently. We all need to find new ways to work together."

There will be environmentally important changes too like the era of Businessmen taking private jets with enormous Carbon Footprints for face to face meetings could be at an end, when the same meeting can be done in 10 minutes over platforms like ZOOM or SKYPE and the World is crying out for people to take more responsibility for their personal impact. This idea is crucial because our impact on the planet as a species is at least partially responsible for the problems we are facing now. Changing our perspective and behavior to reduce our impact environmentally will have the knock on effect of bolstering our economies when we face less economic disasters.

I want to take a little time now to look at 10 areas that post Covid-19 could have a negative effect on our economy and then look at 10 ways that we can mitigate this and work on strengthening our response to future disasters that affect us.

 10 Potential Problems facing Nepal post Covid-19:

1.      Many small businesses will have gone bankrupt trying to keep overhead costs paid with no income during the Lock down period. Those that have survived will find it very difficult with no cash flow to meet Government requirements like Tax payments, Rent, EMI payments, License renewals etc.

2.      Many Nepali’s who were working abroad but were laid off with no wages will be forced to return home, their families will need to take additional loans to pay for their airfares and this will lead to economic ruin for many Nepali families with returning migrant family members and escalating debts from sending them out to work and then bringing them home early.

3.      Subsistence farmers who rely on crops for their livelihood but were forced to destroy crops during the Covid-19 Lockdown will be sent into a spiral of financial debt.

4.      Cash flow from the 30% of our GDP that is foreign remittance will fall dramatically especially luxury products. This will lead to the collapse of multiple businesses down the food chain.

5.      This is really critical for a country like Nepal to understand:

"All countries are looking for signs of hope, but the lesson from Singapore is that there is no room for complacency, and that all countries must be prepared to face a second - and possibly third or fourth - wave of infection." ( www.bbc.com/news/world-asia ) As soon as our Government decides we can’t economically sustain a lockdown and we all go out again, if the countries round us are still having High Covid-19 cases then it's only a matter of time before the 2nd wave hits us. When airports reopen and borders allow crossing again we will be hit by a sudden wave of cases from outside being brought in by "carriers" who aren’t sick, don’t display symptoms but can transfer the virus to others.

6.      The other critical issue is that Covid-19 outbreak clusters occur in densely packed places like "cruise ships" and "refugee camps" and "labor camps" and those conditions are actually normal living conditions in places like Nepal and India and Bangladesh. This habit of "oh let's go to Mammaghar today" during lockdown or "let the kids play in big groups in the street" or "let's drink tea and play cards in front of our house" is exactly the behavior that ensures that when we are hit by a wave even social distancing and self-isolation won’t be very effective.

7.      Cash is no longer King. This Pandemic and the subsequent lock down in Nepal happened fairly quickly and many people would not have been ready financially with any sort of savings or cash. Yes they will mostly have had money tied up in property, land and gold but that’s not readily usable and at a time like this when we can’t go out then there won’t be access to banks or customers to view land etc or jewelry shops to buy your gold. Many people need to buy food and pay rent but don’t have the money to do so. We are seeing lots of day laborers trying to leave Kathmandu (which is in lockdown) because they don’t have anywhere to stay or money to buy food and their families in their villages need them home.

8.       Our Tourism and Hospitality industry will have taken a huge blow in the loss of the Spring season but we also likely face losing the Autumn season as many countries will be homeschooling and have reduced international travel till the end of the year and people who haven’t been earning won’t be able to travel as planned. This means that freelance staff who rely on seasonal work will have lost a year’s wages and all the original hotels and the new ones that were prepared for Visit Nepal 2020 will still have overheads to pay but face little to no visitors.

9.       As a Nation we shouldn’t need to rely on foreign aid or cash handouts.               At a time like this many companies will not be aware of the financial packages and partnerships that would most benefit them in building themselves back up again. There are going to be many International agencies working towards a common goal of helping countries to rebuild a more robust economy and not necessarily through aid and handouts but without research and focused strategy many companies here will miss out on those opportunities.

10.  This lockdown has shown us that we have a long way to go in digitization of the workplace. We are already behind most of the rest of the World in this area. For example; Multiple signatures needed for paper cheques means it’s hard to manage payroll during lockdowns, duplicate paperwork copies for all official documents for future audits means that working from home becomes impossible in many sectors, lack of shared online resources means that teams who rely on paper based resources in the office can no longer function. Legislation in digitization is another area that will require drastic changes in order for us to catch up with the technology that is being widely used outside Nepal.

10 Solutions Post Covid-19 for a better future in Nepal:

1.      Our Government will need to consider license fee renewals and annual taxes and EMI repayments of loans in the light of lost revenue and spiraling debts. Either give concessions this year or face mass unemployment and bankruptcy.

2.      Rulings to protect low income earners from loan sharks with stricter punishments for people taking advantage of other peoples misfortune. For example families who have to take loans to bring their loved ones home from abroad who have lost their jobs and source of income, these people are especially vulnerable at this time. To protect people from this happening in the future our Government needs to look at stricter regulations in the migrant labor industry to protect the workers from the crippling debts that come with getting a job abroad.

3.      The availability of micro-finance and small holding loans, of extended credit lines and insurance against future crop failure will be all the more important. The 55% of Nepalis who are currently unbanked will need to be provided with banking facilities to enable them to survive through times like this. Mobile payment platforms are the future of banking the unbanked.

4.      This is also the time when being at the forefront of any new developments will really count. Luxury brands will need to adapt to changing markets or face collapse and we all need to look outside to see how other people do these things around the World and bring those ideas back home to Nepal.

5.      We need to avoid complacency and make sure we are prepared for the further periods of lockdown, for still no tourists to come, for supply chains to continue to face disruptions and we need robust solutions in place if we do quickly have to go into lockdown again. Wages for staff to avoid furlough periods are the most critical cash need and it is very much the moral responsibility of the Company and the Stakeholders to ensure that their staff do not spiral into financial ruin by missing wages. If we face multiple lockdown periods and companies can’t pay wages then consider the knock on effects of widespread rent not being paid and food not being affordable and healthcare not being accessible because of euemployment.

6.      We need to seriously reconsider the lives of segments of society here that cannot afford to buy land or build homes. The city slums that are so densely packed that one person with an illness will spread like wildfire to hundreds more. What would the strain on our health system be then? To alleviate this we must develop solutions to homelessness and day laborer areas that are so densely packed that they are high risk in future outbreaks.

7.      Mobile wallets and payment platforms can really come into their own at a time of crisis like this. With ATM’s and banks closed and reduced cash flow then the ability to use your mobile wallet app of choice to access short term credit facilities or micro-loans could be the only bridge between you and a serious situation. We need to push for changes in legislation that will allow for these payment platforms to grow and keep up with the rest of the World. Better access to ecommerce for example and easy access for small shops and even street sellers to be able to utilize this cashless system for their customers to make very small payments for day to day household groceries. Any Mobile wallet that has a Government granted license should in turn have access to all sellers registered with this system of payment. After all if you get a visa card machine then anyone with a visa card can use your services. Forcing Mobile Wallets to appoint teams to compete with each other to find Merchants does create healthy competition but at a time of crisis like this it means that I can’t necessarily use my bank and mobile wallet to access the shop that is open and close to my house but uses a different mobile wallet.

8.      MSME’s - (Micro, Small, and Medium Enterprises) who traditionally run very close operational margins are seen as a major boon in any economy providing jobs and services. Hotels, guesthouses, Adventure companies, Trekking agencies, food delivery, restaurants, transport who rely on a steady flow of visitors or guests will suffer. They will now need specifically targeted support from our Government to ensure that they don’t simply collapse and create mass unemployment. The UK Government has declared that they will pay up to 80% of the wages of any staff that have to be furloughed due to cash flow problems and it is likely that we too will need to find a similar solution to avoid mass redundancy through times like this. There is also a real need to look at future sustainable solutions for funds.

9.      Businesses need to cash in on the advantages on offer both domestically and internationally post Covid-19 to kick start economies and support failing businesses. By appointing a small dedicated Post Covid-19 International Developments and Research taskforce, your business can dedicate some manpower towards finding partnerships and funds that will help you through these difficult times. You should also look at the top 10 core sectors that are necessary at this time and find ways to become indispensable to them. Decide what we can do that will support them and make yourselves the "solution" that they all choose. Verne Harnish of “Gazelles International” has been talking extensively through the lockdown about the need for companies who haven’t been able to run their business as normal to spend time and their available resources on re-tasking themselves to provide products and services that support critical areas. For example Fashion Industry companies like; Prada, Nike, Zara and Patagonia have re-purposed their factories to produce Face masks and PPE suits for front line service and health care workers.

10.  It is now, more than ever crucial that we instigate the digitization of the workplace. You only have to walk into any Government office or a bank or a post office and see the rooms with floor to ceiling bundles of paper in duplicate and triplicate, the mountains of carbon copy and the management systems requiring 5 signatures for any piece of work to get done and you will realize that we are far behind most other countries. It is an event though like the Covid-19 crisis that can push us towards finding digital solutions. For example: Online payment platforms with biometric verification for payroll, Blockchain accountability systems that enable us to go paper free, Cloud based computing and sharing platforms to back up everyone’s work on a team and ensure everyone has access to all resources, wherever they are. Large data and machine learning will become very integrated into our everyday lives and we are already seeing many Governments abroad bypassing current legislation on privacy laws in order to track the Covid-19 outbreaks. This large scale data processing and AI algorithms will become a normal part of business in the very near future. We may even see a widespread change in legislation and acceptance of crypto-currencies.

Throughout all of the changes that lie ahead of us it’s important that we recognize that our best way to make them happen effectively and fast is to work together. Our Government it has to be said has responded really well through this time of crisis and the lockdown has undoubtedly saved us from mass deaths like we are seeing in the UK, Italy, Spain and the USA. As a developing country we still have a long way to go in many areas and we can hope that post Covid-19 some of these developments will be accelerated. Our economy is currently not robust enough to survive multiple Pandemics like this but it could be. If we all sit back when this is over and say “oh it won’t happen again,” “why all the panic” then we won’t be ready when it does inevitably happen again. However if we use this as a wake-up call and we collectively focus our resources towards effecting a massive change then our economy will develop. Digitizing the workplace and bringing our legislation in line with International best practices will undoubtedly make us more agile in the future and ensure that we can protect our workforce and our companies when we have to work from home and go into lockdown. Companies need to diversify and increase their online and digital revenue streams so that in times of crisis like this they can still maintain a cash flow to be able to pay their staff and operational overheads without needing Government assistance. Equally we need to call on the Government to review legislation that will allow us to speed up the process of fortifying our economy and Businesses against future problems of this scale.