– Ram chandra Rupakheti
More than two million people have been infected due to coronavirus COVID-19 which is affecting more than 210 countries. The data is increasing trend. The world is under threatening of this virus all economic activities are almost stopped except in few countries. Nepal is now under lockdown whereas almost all economic activities are stopped due to this pandemic virus. Nepal had a motive of 7.1 percent of economic growth. This motive is almost impossible in this fiscal year 2019/20. Afterwards, a policy issues for the economic growth has been aroused due to this crisis. Thereafter, policy makers are suggested to concentrated while formation of fiscal policy as well as monetary policy there.
Contribution of Agriculture In GDP
As per the economic survey report as issued by ministry of finance contribution of agriculture sector to GDP is gradually decreasing every year, while that of nonagricultural sector is increasing. Consequently, the contribution of agriculture sector and nonagricultural sector to GDP is estimated to stand 27.0 percent and 73.0 percent respectively in the current FY 2018/19 while their contribution during FY 2017/18 was 28.1 percent and 71.9 percent respectively. Therefore, after this pandemic disease COVID-19, a long action plan needs to be taken increase the contribution of agriculture sector in Gross Domestic Product. The remittance-based economy should be least prioritized for the sustainable GDP. The foreign employment dependency should be reduced by public awareness. The world is concentrated to minimize the effect of corona virus and trying to eradicate this pandemic disease. One question is threatening to Nepal how to survive the Nepalese economy. Millions of people are unemployed during the spread of this pandemic diseases. Service sector are curtailing its business. Education sectors are almost closed except some online courses. In such a situation, agriculture sector should be prioritized in Nepal.
Nepalese Culture and Agriculture
One proverb is common in Sanskrit that is “Uttam Keti Madhyam Ban, Nich Chakari Kukkar Nidan”. That is, best farming (agricultural work) is the best work in our society. Trade is said to be a middle level work. Chakari means job is said to be a bad job, our elders have been giving it nouns like moving the tail like a dog. This concept had been prevalent in ancient times in Nepal. In Indian philosophy also, this concept which has been around for centuries. However, this has turned completely upside down today. And since we have reversed it, we are moving towards destruction. If our society and our politicians understand this saying in the right perspective, then many problems of the country should be solved in a pinch. Therefore, emphasis should be given to agriculture also for the daily consumption. The country should produce the basic need sustainably. The daily consumption items should not be imported from outside Nepal.
Possible Impact of Pandemic Disease COVID-19 in Economy of South Asian Countries
Recently, a report has been issued by world bank shows the situation of economy during the fiscal year 2020 in the South Asian Countries. International policy makers are exercising to measure the effect of corona virus worldwide.
| SN | Top Countries | Fiscal Year | 2019 | 2020 |
| 1 | Afghanistan | December to December | 2.9 | -5.9 to -3.8 |
| 2 | Bangladesh | July to June | 8.2 | 2.0 to 3.0 |
| 3 | Bhutan | July to June | 3.9 | 2.2 to 2.9 |
| 4 | India | April to March | 6.1 | 4.8 to 5.0 |
| 5 | Maldives | January to December | 5.2 | -13.0 to -8.5 |
| 6 | Nepal | Mid July to Mid-July | 7.1 | 1.5 to 2.8 |
| 7 | Pakistan | July to June | 3.3 | -2.2 to -1.3 |
| 8 | Sri Lanka | January to December | 2.6 | -3.0 to -0.5 |
Source: World Bank
Afghanistan, Maldives, Pakistan and Sri Lanka go into negative growth of GDP. Further, the report projects that it takes next one year to come normal situation. The Agriculture dependent countries can not be negative it is because there is capacity of managing basic need for sustainability. Nepal has capacity of agriculture products used in daily consumption to sustain the economy.
| Countries | Agriculture | Industry | Services |
| Afghanistan | 23.00% | 21.10% | 55.90% |
| Nepal | 27.00% | 13.50% | 59.50% |
| India | 44.00% | 25.00% | 31.00% |
| Pakistan | 18.50% | 20.30% | 61.20% |
| Bhutan | 16.20% | 41.80% | 42.00% |
| Bangladesh | 14.23% | 33.66% | 52.11% |
| Sri lanka | 7.80% | 30.50% | 61.70% |
| Maldives | 4.00% | 23.00% | 73.00% |
Source: Wikipedia
In the above table, Maldives has 4 percent of contribution of agriculture in GDP. Development of the infrastructure in the Maldives is mainly dependent on the tourism industry and its complementary tertiary sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and it is used to improve technology in the agricultural sector. Similarly, the contribution of Agriculture in GDP are 14.23 percent, 16.20 percent, 18.5 percent in the economy of Bangladesh, Bhutan, Pakistan respectively. The projection of the World Bank in GDP growth shows negative growth in Maldives, Sri lanka, Afghanistan, Pakistan. It is because the Contribution of Agriculture in such countries is low in comparison to India. Indian GDP growth is between 4.8 to 5 percent during 2020. It is because India has 44 percent contribution of Agriculture in GDP. Therefore, it is clear that remittance-based economy may be broken anytime due to global crisis like this time of COVID-19 pandemic disease.
The History of Pandemic Disease
During 18th century the world has faces different kinds of diseases like Smallpox, Plague, Yellow Fever, etc. In 1772, about two million people died from Persian Plague in Iran. Most of the European countries faced various pandemic diseases in various events. France had faced from Plague which kills 100000 people during 1720 to 1722. In Iceland during 1707 to 1709, nearly 36 percent of total population died from Smallpox. Likewise, during 19th and 20th century pandemic diseases badly affected the population. Russia lost nearly one million people during 1852 to 1860 from cholera. During 1889 to 1890, nearly one million died from Influenza virus in the world. After the first world was, nearly 17 to 100 million people died from Spanish Flu. In 2009/10, it is estimated that 500000 people died from Pandemic H1N1/09 virus in the world.
Effect of Pandemic Disease in World Economy
A decrease in the supply of manufacturing workers that resulted from COVID-19 would have had the initial effect of reducing manufacturing labor supply, increasing the marginal product of labor and capital per worker, and thus increasing real wages. In short run, the unemployment rate may increase due to collapse of service industry. The laborer may focus on agriculture sector or another sector than they are engaging. There is unemployment may increase in one sector and another sector may face labor crisis. Depression may occur in short term this may cause hyper inflation in next economic stages. Shortage of raw materials may occur in the industries. In the short term, labor immobility across cities and states is likely to have prevented wage equalization across the states, and a substitution away from relatively more expensive labor to capital is unlikely to have occurred. Per capita income will be very low in every country. The concept of globalization is degraded. Tourism industries may be sick for sometimes. However, the effect of such kind pandemic diseases like COVID-19 is short run.
Effect of Pandemic Disease in Nepalese Economy
Most of the tourism industries are suffered from COVID-19 diseases which has direct and indirect source of income. The visit Nepal 2020 is adversely suffered. The goal of government is attracting nearly 2 million tourists. Various development works have been disturbed due to this pandemic disease. Most of the tourists from different countries have been returned to their homeland. The investment made in tourism industries may have resulted into loss. Regulatory bodies in Nepal from different sectors are aggressive in collecting impact statistics. They are preparing long term planning in foreseeable future. Expansionary fiscal policy and monetary policy are being prepared by the government and central bank to reduce unemployment. The interest rate is decreasing. The cash reserve ratios of different banks are decreasing. Some people are returned to their home. They have started their agriculture activities. Some daily wage earners are also hurt. Therefore, most of the industrial and service sectors are miserably disturbed due to this crisis. The remittance shall be decreased because of this world wide pandemic disease. Most of the industries which imports Nepalese Labor hurt such as South Korea, Malaysia, Saudi Arabia etc. A large number of laborers from foreign countries may returned back to Nepal.
Policy Suggested in Upcoming Fiscal Policy
The government should introduce restrictive policy in import of luxurious vehicles, junk foods, expensive clothes, fashioned clothes, liquor, alcohol products. The priority should be given only to Agricultural machines, equipment, technologies, seed, seed processing technology for the import. The agriculture sector should be modernized for the effectiveness and sustainability. Subsidy on agriculture industries should be prioritize to enhance the production. Basic need related industries should be prioritized. Strict policy and law and orders should be introduced to protect the Nepalese economy. Insurance policies related program should be prioritized in agriculture sector. It is because agriculture sectors are the backbone of Nepalese economy. During Korean war, Nepal helped large amount of food to south Korea. So, Nepal had the capacity to export the agriculture items. Land reform policy should be initiated. Land fragmentation system should be broken and agriculture land or fertile land should be protected. The law to punish those who keep land bared should be penalized. The fertilizer industries, technology, education systems related with such industries should be initiated and prioritized. Only import of computers, and machineries, heavy equipment Agricultural equipment, processing components, medical instrument, medical processing units should be allowed to import, other unproductive import of such luxurious items, jewelry and fashionable product should be restricted till the normalization of Nepalese economy. Tax exemption should be given to those industries. The priority to produce the highly productive agricultural product should be given such as barley, tea farming, pashmina products, ghee, forestry products, palm oil, fruits like kiwi, avocado, berry etc. Hygienic food production should be given priority. The highly export oriented agriculture product are prioritized. For example, Nepal is famous for ginger product in the World.
Ginger Production In world
| SN | Top Countries | Metric Tons |
| 1 | India | 1,119,596.00 |
| 2 | China | 600,518.00 |
| 3 | Nigeria | 359,476.00 |
| 4 | Nepal | 287,337.00 |
Source: Nation Master, Woolwich NSW 2110, Australia
Nepal is producing 2,87,337 metric tons in 2018. It has ranked in fourth positive in worldwide. It depicts that Nepal’s most of hilly and mountainous lands are appropriate for the ginger farming. If the appropriate fertilizer, upgraded seeds, labors, investment, technology are prioritized in ginger farming, theoretically can be said that Nepal can earn foreign currency by exporting such agricultural products. It can be found that cost of one kg of the raw ginger is $ 3 to 3.5 in United State of America. It is a major importer of ginger from foreign countries. Since 2013, Nepal Export of Ginger increased 19.4% year on year. With $3,864,901.88 in 2018, the country was ranked number 16 among other countries in Export of Ginger. Nepal is overtaken by United Kingdom, which was ranked number 15 at $4,737,562.6 and is followed by France at $3,780,629. China lead the ranking with $431,164,124.71 in 2018, that is an increase of 2.9% versus 2017. Netherlands, Nigeria and Thailand respectively ranked number 2, 3 and 4 in this ranking.
Finally, advanced technology, skilled manpowers, managerial knowhow, marketing and rapid industrialization in agriculture sector, the production can be increased double digit times than usual production. Large manpower can be utilized in production of ginger. Like ginger farming, there must be researches conducted to find the capacity of land and its productivity so that priority should be given in various kinds of crops, food, cattle, dairy, poultry, corn, sugar. They are the food items. Besides this, the priority should be given to those agricultural sectors which are the raw materials of industries in Nepal. Therefore, the agriculture land should be protected. Land plotting, fragmentation of fertile land, housing policy, should be revised. Land baron is prohibited, or else such land should be transferred to government or kept to sale. Unproductive investment activities should be diversified, agriculture revolution is essential from the policy levels.
(The writer is working as Chief of Finance Department with National Microfinance Bittiya Sastha Ltd.)
