Af­ter the quake: Nepal econ­omy by the num­bers

Financial Mirror (Cyprus) - - FRONT PAGE - By Jon C Ogg

Nepal may be most known for hav­ing Mount Ever­est, but a dev­as­tat­ing 7.8mag­ni­tude earth­quake has rav­aged the na­tion and the death toll is now re­ported to be near­ing 4,000. This quake was strong enough that it de­stroyed many build­ings, and af­ter­shocks have left many fear­ing to go back into build­ings. The de­struc­tion is al­most cer­tain to se­verely ham­per what is al­ready a weak lo­cal econ­omy.

The CIA World Fact­book calls Nepal one of the poor­est and least de­vel­oped coun­tries in the world. About one-fourth of the pop­u­la­tion is said to be live be­low the poverty line.

Pop­u­la­tion is 30,986,975. Some 31.6% is aged 14 and younger, with 22.6% be­ing ages 15 to 24, and an­other 35.7% aged 25 to 54 years old. Only 5.6% of the pop­u­la­tion is 55 to 64 years old, and only 4.5% is age 65 or older. This pop­u­la­tion ranks as num­ber 42 in the world. Its labour force is roughly 14.76 mln, with a se­vere lack of skilled labour.

Gross do­mes­tic prod­uct (GDP), un­der the pur­chas­ing power par­ity cal­cu­la­tion, was shown by the CIA World Fact­book as $66.92 bln in 2014 (97 in the world). That would com­pare to es­ti­mates of $63.44 bln in 2013, and $61.09 bln in 2012. Per capita GDP is very low, at $2,400 in 2014 (rank­ing 197 in the world).

In­fla­tion has been an is­sue in Nepal, but per­haps get­ting bet­ter — at 8.4% in 2014, af­ter 10.2% in 2013. The mar­ket value of its pub­licly traded shares was listed as be­ing only $9.67 bln as of Oc­to­ber 31, 2014. That com­pared to $5.81 bln in the same time in 2013 and to $5.23 bln in 2010.

Im­ports and ex­ports are out of line. Ex­ports were es­ti­mated at $1.12 bln in 2014, up from $991.5 mln in 2013. Im­ports were $7.28 bln in 2014 and $6.5 bln in 2013. Nepal’s ex­port part­ners are In­dia (53.7%), United States (9.2%), China (4.9%), Ger­many (4.2%) and Bangladesh (4.2%). Nepal’s im­port part­ners are In­dia (50.6%) and China (35.0%).

Re­serves of for­eign ex­change and gold were es­ti­mated at $5.44 bln as of the end of 2013 and $4.43 bln as of the end of 2012. Agri­cul­ture is the main­stay of the econ­omy, which sup­ports over 70% of the pop­u­la­tion but ac­counts for a lit­tle over one-third of GDP. Industrial ac­tiv­ity is fo­cused on the pro­cess­ing of agri­cul­tural prod­ucts, in­clud­ing pulses, jute, sug­ar­cane, tobacco and grain.

Nepal has con­sid­er­able scope for ex­ploit­ing its po­ten­tial in hy­dropower, with an es­ti­mated 42,000 MW of com­mer­cially fea­si­ble ca­pac­ity, but po­lit­i­cal un­cer­tainty and a dif­fi­cult busi­ness cli­mate have ham­pered for­eign in­vest­ment. Ad­di­tional chal­lenges in­clude its land­locked geo­graphic lo­ca­tion, per­sis­tent power short­ages, un­der­de­vel­oped trans­porta­tion, civil strife and labour un­rest.

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