The real cost of Nepal’s second wave

The pandemic makes Nepalis poorer and ruins the economy, but the government has no solutions

Richshaw operator Kancha Lama hardly gets one ride a day. He mostly depends on people distributing free food during the lockdown.

After two months in which there were new records of cases and fatalities every day, the second wave of the Covid-19 pandemic appears to be cresting in Nepal, but it has left the economy in ruins with a crisis-ridden government offering no hope to citizens.

At its peak in mid-May, there were more than 9,000 new infections and up to 250 deaths daily. And that was just the official count, models put the figures at least three times higher. However, the real impact of the pandemic is in the country’s economic meltdown, with more than half the employed losing their jobs.

The Covid-induced lockdowns have pushed millions of  Nepalis back below the poverty line, which means they are now unable to access food and water, basic health care and education. This has completely reversed Nepal’s gains in poverty reduction in the past ten years.

Back in March, at the tail end of the first wave, Himalmedia’s tv magazine Saglo Samaj interviewed farmers, tourist guides, hotel operators and taxi drivers most affected by the lockdowns.

This week, the team revisited each of the same people to find out what had become of them. Their stories are a microcosm of a society ravaged by the pandemic, where the poor have got poorer.

Nepalis suffered altogether five months of lockdown in 2020, and another nearly two months this year. The restrictions were eased this week, even though the daily number of fatalities and active cases are higher than when the lockdown was imposed on 29 April.

The pandemic and the lockdowns have disabled every sector. Some 1.1 million people in the hospitality industry have been directly impacted by the pandemic and more than half of Nepalis lost their jobs in the past month alone.

Yet, the government has no clear plans to provide alternative employment opportunities for those who lost their jobs. In fact, it has been too preoccupied with a political power struggle for most of the pandemic to plan a real exit strategy. Every response to the crisis has been too little, too late.

On Tuesday, even though other districts prepared to relax their lockdown just as Kathmandu did, Nepal saw 4,522 new cases and 41 fatalities. There are a total of 52,648 active infections, 762 of them in ICU and 218 in ventilator support in hospitals across the country.

Public health experts are already warning of a possible third wave and urging the government to make preparations for increased contact tracing and hospital treatment to avoid much devastation.


Buffalo milk is the only source of income for farmers in Kamdi village of Banke district in the western Tarai. But many of the dairy farmers were unable to sell their milk during the lockdowns in 2020. Later, they didn’t get a fair price and the Dairy Development Corporation was slow to pay even what they were owed.

“The market is closed, there is barely any feed for the cattle. We are working day and night, but for nothing,” says Malati Prasad Yadav, who has 150 buffalos, but little income since the pandemic.

The farmers took loans to buy feed and take care of the buffalos, but the second wave has quashed the little hope they had. They were hoping the government would announce a relief package in this year’s budget. But their hopes were dashed.

“We are having to pour the milk into the drains, there are no consumers for ghee or cheese. We are running at a loss and there is no telling how long it will last,” says Saroj Pandey of the SJ Dairy in Nepalganj. “The government should boost the morale of farmers and local businesses, subsidise their electricity or promote Nepali goods by stopping import from the third country.”


One of the hardest-hit sectors is tourism. And while professionals of most fields have had to cope with the challenges brought on by the pandemic, tourist guides have been unemployed for more than a year now.

Four months ago, tourist guide Shankar Bhattarai had taken up teaching to make a living but was spending all his free time reading up about Nepal’s history and culture to better prepare himself for when the tourists would come back post lockdown. But the second wave killed what was left of Nepal’s tourism.

He has since given up any hope of normalcy and is constantly worried about debt collectors. Hoping for an alternative for tourists guides like himself, he was further depressed with this year’s budget.

“There were provisions only for the big hotels and travel agents, we didn’t find ordinary tour guides like us anywhere in the relief packages,” says Bhattarai, who had been a tourist guide since 2011. “I’ve tried my best to promote Nepal through my work but at our time of need, we have no government support. I now question myself about staying back in Nepal.”


Big businesses have their own woes. The three-star Airport Hotel in Kathmandu has seen only a handful of guests in more than a year. The hotel’s original staff of 100 is down to 10, and only 10 of its 62 rooms are kept serviceable.

“We are doing much worse than last year, we did survive 15 months somehow, there were some domestic tourists, but then the second wave happened and it destroyed what little we had,” says owner Binayak Shah, adding that he has not been able to pay the monthly instalments on its loan for 17 months.

He adds: “I have no income, so how can I pay them? This means sooner or later, the bank is going to blacklist me, and put this hotel up for auction.”


While some worry about paying millions in bank loans, daily wage labourers worry about the next meal. Kancha Lama has been operating a rickshaw in Kathmandu for 38 years, but his business is down and out. He hardly gets one ride a day, and mostly depends on people distributing free food.

“It’s easy for the government to tell us to stay home and eat healthy, where is the money? It doesn’t even allow me to beg on the streets. At least they should distribute rations for people like us,” says Lama. “If I get Covid, at least I will be out of this misery.”

Bir Bahadur Lama is in Asan every day, and if it is his lucky day he will get a client or two to carry loads for them. Otherwise, he sits on the temple steps passing the day with other jobless porters. Before the pandemic, they used to carry loads for Asan’s many shops. Sometimes, good samaritans offer them food, but that is rare.

“I just wish I did not have to sleep hungry and lockdown would end soon, that is all I wish for,” he says.


During the lockdown last year, a bank took possession of Ganesh Tamang’s taxi which he had bought with Rs500,000 out of savings from years of toil in the Gulf.

With no other source of income, he is now back to his village and raises livestock. “I often feel like I was born in a wrong country, to a wrong family, and at the wrong time, it wouldn’t have come to this anywhere else,” he says.

Sagar Bohora has a sickly mother at home, and a family of young children dependent on him. But his taxi has broken down because it has not run much for the past year-and-a-half. He needs at least Rs30,000 for repairs, but he has barely enough after paying off the auto loan.

“I only ask banks and financial institutions that they give us a few months until after the lockdown so that we can pay our dues, by then we will be able to get up, with or without government help,” says Bohora.

Pandemic makes the poor poorer

There is empirical evidence that the second pandemic wave has further impoverished Nepal’s poor. Even by modest estimates, some 9 million Nepalis have been pushed back below the poverty line due to Covid-19 induced lockdowns. In this week’s Saglo Samaj tv magazine, Shankar Sharma, former ambassador to the US and vice-chairperson of the National Planning Commission spoke to Kanak Mani Dixit. Excerpts:

Kanak Mani Dixit: We went back to people we had interviewed four months ago, and found that their situation had further declined. Do they represent the current Nepali society?

Shankar Sharma: They are an accurate representation. There are three categories that have been hit the hardest by the pandemic: the first are subsistence farmers below the poverty line, this also includes disadvantaged groups. The next are people in the informal sector whose livelihood has been endangered with the extended closure of the market. Then there is the hospitality industry and unlike others, they haven’t been able to pick up after the first wave because the impact of the lockdown on the travel industry is long-term. These businesses had loans and now their debt has accumulated.

These impacts are directly reflected in our macroeconomic numbers. Economic growth rate last year was 2% and this year it won’t be more than 1%. Similarly, the World Bank estimates following the pandemic there are now a total 9 million people in Nepal below the poverty line.

Would you say that because it is not monetised rural subsistence living is faring better?

Back during the Maoist insurgency, some development partners had conducted a study about people who had migrated to the cities due to the violence. They asked people if they would go back to the village once the peace accord was signed, 93% of the respondents said no.

One of the main reasons behind this was Nepal’s agriculture couldn’t compete with Indian and Chinese produce. This also led to more people migrating abroad. Experts have suggested the concept of contract farming, which is also included in this year’s budget and will do well for the country.

But one of our biggest problems is our inability to identify the poor. The government has developed ID cards for their identification, but 23% of the poor are not on the list but 25% are those who have listed themselves in hopes of getting some relief. As a result, the real poor have been deprived even of their social security fund.

What should we do to boost their morale and of the country?

The affected people are those in rural Nepal but they also have an advantage of three levels of government. But it is still the responsibility of the central government to provide relief worth at least two months at $1 per day for its people. Unfortunately, there is no mention of this in the budget this year.

The Nepal government has also allocated a total of Rs50 billion for training in the last two budgets but hasn’t been able to spend that money. This fund should be used in skill development for Nepalis post lockdown, effective spending of the budget is a must. Similarly, the government should support cottage and small industries so that they don’t close down. If we lack funding, we could use loans and grants we have received from international development partners.

Despite the pandemic, there is still talk about Nepal graduating from Least Developed Country (LDC) status to a middle-income country. What will happen now?

Following the pandemic, the United Nations has set a new deadline for the LDCs to graduate to lower-middle-income and middle-income countries. The good news is that we have made some progress in our per capita income, and the fact that our economy is now dependent on multiple factors is a positive sign. But what is worrying is that our economic growth is still lower than the average growth of underdeveloped countries. This means we will have to work more on increasing our living standard.

It is said that Nepal is not a poor country, but the government just cannot seem to spend its development budget. If they were held more to account by civil society and media during this pandemic that might help? 

I think that is an appropriate conclusion to make. The government will always play the lead role, but it is important to highlight the importance of civil society and journalists in creating awareness about various programs at the local level such as the Prime Minister’s Employment Scheme, which goes a long way in rejuvenating elected representatives in villages and towns.