December 21: Experts at a discussion program said that the 2015 earthquakes had little impact on the country’s economy.

Despite damages worth billion of rupees, the 2015 earthquakes did not affect Nepal’s economy in a fundamental manner, pointed out Dr Yuba Raj Khatiwada, former Vice Chairman of the National Planning Commission while making a presentation to provide an overview of the medium to long-term impact on the economy, at a discussion forum organised by South Asia Watch on Trade, Economics and Environment (SAWTEE) in Kathmandu on Wednesday, December 20.

During the discussion program titled “Impact of Post Earthquake Reconstruction on the Economy”, Dr Yuba Raj Bhusal, CEO of National Reconstruction Authority (NRA), said that the impact of earthquakes on national economy may be negligible but the distress on the individual household level is severe and has further amplified the magnitude of vulnerability of many.

Meanwhile, Khatiwada pointed out that the economy seemed to have stagnated in the subsequent fiscal year 2015-16, but the border blockade in the same year also affected the economic activities which manifested as marginal growth that year.

He suggested that there exist both fiscal and monetary space for accommodative macro policies to expedite reconstruction, and it may be necessary to resort to deficit financing for reconstruction, as capital constraints would otherwise hinder the economic growth process and perpetuate low-investment-low growth-low saving-low investment cycle, SAWTEE quoted Khatiwada as saying in a statement.

Likewise, he also recommended that it is better for the government to finance the reconstruction through grants than from concessional loans to prevent country from falling in debt stress due to debt accumulation. He attributed the slow pace of reconstruction to the regulatory hassles and problems with coordination among the responsible government agencies.

Referring to housing reconstruction activities, Bhusal pointed out that the NRA is targeting to complete the construction of 450,000 houses by the end of this fiscal year. Further, to expedite the process, they will mobilise personnel to solve the problems that has slowed down the pace.

Dr Bishnu Dev Pant, executive chairman of the Institute of Integrated Development Studies, emphasised that more skill development trainings are necessary to meet the labour shortage and to tackle exodus of Nepali workforce for the benefit of all.

Likewise, Dr Shankar Sharma, former Vice Chairman of National Planning Commission, also pointed out that we need to have a positive outlook as the reconstruction activities do not take place overnight and although it is slow right now it will gather pace eventually.

Some 30 participants from various organizations, including research institutions, experts, activists and development partners, participated in the event.

SAWTEE said this is the seventh series of such discussion forums it organized under the project ‘Initiating dialogue on Post Disaster Reconstruction Experience’ undertaken with the support from The Asia Foundation (TAF).