Business

Can Nepal's shattered economy be rebuilt?

Logan Gyawali inspects tea samples in his Kathmandu office
Image caption Lochan Gyawali inspects tea samples in his office in Nepal's capital, Kathmandu

In a clean and tidy office in Kathmandu, boxes of speciality teas are stacking up on the floor.

These are delicate first-flush teas picked from plantations in eastern Nepal, and destined for high-end restaurants in cities such as Copenhagen and London.

But for the moment they're not going anywhere.

"We're unable to send out tea or samples as there is so much aid coming in that the customs are not doing anything for exports - and rightly so," says the company's owner, Lochan Gyawali.

Since the earthquake hit his business, his main priority has been to check on the welfare of his staff. They all survived, but many lost homes, farmland and second businesses and so work at the tea manufacturers has stalled.

"By and by, it will be normalised. That's what we want," he says.

Much of the media focus since the powerful 7.8 quake has been on the loss of life and damage inflicted in Nepal's capital Kathmandu, including the destruction of ancient temples and treasured world heritage sites. The death toll has now reached 8,000.

Yet the city is fast returning to normal life.

The tens of thousands of people who fled in the immediate aftermath to check on family and homes outside the capital are beginning to return. Shops are open, streets are busy once again.

It's a different situation in the region the Nepalis describe as the middle hills - the steep, inaccessible, forested hillsides that bridge the flatlands to the south and the high Himalayan mountains to the north.

More than a dozen districts in this region were hit by the quake - some town and villages flattened completely. The government says half a million people in this area are in immediate need of shelter.

Nepal's 25 April quake and aftershocks

Nepal's Finance Minister, Ram Sharan Mahat, has estimated the economic cost to the country as at least $10bn (£6.5bn) - half the value of Nepal's economy.

But it will take weeks to conduct a thorough assessment of the damage, partly because so much of it is in remote regions, so this figure could be far higher.

The middle hills are historically the poorest and most neglected region of Nepal. Here, the majority eke a living as subsistence farmers, sending their young men abroad to work in dangerous and low-paid jobs on construction sites in India, Malaysia and the Gulf - leaving their women, elderly and children alone to work the fields.

It is here you see the hardship and deprivation that has kept Nepal's status as the least developed country in South Asia.

And it is here, according to Finance Minister Ram Sharan Mahat, that the effects of the earthquake will be felt the most.

"Tens of thousands of people who had just crossed the poverty line run the risk of falling back into absolute poverty," he says.

Harvest hit

The most immediate problem is the coming monsoon. The pre-monsoon rains have already started to fall and the government and aid agencies are under pressure to provide adequate shelter before the full deluge arrives in two months.

Then there is the question of keeping people on their land so they can continue farming.

"The winter wheat is still in the fields and it needs to be harvested," says Johannes Zutt, Nepal country director for the World Bank.

"The rice crop that should come in the summer needs to be planted in the next three or four weeks.

"I think many families who've been heavily impacted are not going to be able to harvest their wheat or to store it effectively because their storage capacity has been demolished," he says.

Image caption Crops need to be harvested before the summer monsoon in earthquake-hit parts of Nepal

Many of those affected are looking to the government to provide them with cheap seeds and loans, and to help them rebuild their houses.

But Nepal's fragile multi-party democracy does not have a long history of looking after its people, or of investing in its crumbling infrastructure.

"Any government would have been overwhelmed but remember before the earthquake hit, we were a mismanaged, badly governed, politically unstable, economically weak state," says Kunda Dixit, editor of the Nepali Times.

Almost a decade after the end of Nepal's civil conflict, the country's warring political parties have still to write a constitution and are regarded by many as self-serving, inept and corrupt.

After the quake, it took several days for the Prime Minister, Sushila Koirala, to return to Nepal from an overseas trip, and leaders are yet to address the nation with their vision of how to rebuild.

In fact, says Mr Dixit, there's a joke doing the rounds of many Nepali Facebook timelines showing the pictures of the country's six top politicians with the tagline: "Have you seen these people, missing since the quake".

'Vision' needed

But others are optimistic that the disaster could be the catalyst to draw Nepal's politicians away from their deeply entrenched squabbles and rivalries towards longer-term planning.

"Since 1990, we've had more than 20 governments," says economist and author Sujeev Shakya.

Image copyright Getty Images
Image caption Many are looking to the government to help with cheap seeds and loans, and to help rebuild their houses

"This has led people to have short-term perspectives. What we need now is vision - we need to say how do we want to look in 20 or 30 years' time."

As Nepal takes stock of the damage and plans for the future, businessmen like Lochan Gyawali are hoping for the least disruption to their profits as possible.

They know it will take time to rebuild, but they are hoping both the government and international donors will provide the support that they need.

"We're just keen for things to return to normal," he says. "I just hope things are better than the old normal."

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