Safe from Re­ces­sion

Southasia - - -

Nepal’s economists have pre­dicted that the cur­rent eco­nomic re­ces­sion in the U.S. and Europe will not hit Nepal but will only bring mar­ginal slash in exports and do­na­tions from these re­gions.

Ad­dress­ing the me­dia last month, Suresh Ku­mar Bas­net, Pres­i­dent of Nepal Cham­bers of Com­merce said since Nepal does not have any di­rect de­pen­dency on the coun­tries af­fected by re­ces­sion, it will not make the coun­try “bleed to death.” How­ever, he sug­gested the govern­ment to watch out for In­dian mea­sures and act ac­cord­ingly. “We have spe­cial re­la­tions, trade ties and static ex­change rate with In­dia, so ef­fects on the In­dian econ­omy will di­rectly hit Nepal,” he said.

The re­ces­sion is also not likely to af­fect Nepali for­eign job mar­kets - Malaysia and Gulf States. “They are de­vel­op­ing coun­tries with high growth rate, so re­ces­sion will not af­fect the mar­ket in the early stage,” Mr. Bas­net added. Ac­cord­ing to Nepal Ras­tra Bank, the govern­ment earned Rs 229.52 bil­lion in re­mit­tances last year.

How­ever, se­nior econ­o­mist and former bu­reau­crat Dr. Bhola Chalise said that the cur­rent re­ces­sion in Amer­ica and Europe could en­ter the Gulf re­gion soon enough that could cause se­vere af­fect to the re­mit­tance dom­i­nated econ­omy like Nepal.

“World econ­omy is volatile since 2008, so as a small coun­try Nepal should take pre­cau­tion­ary mea­sures closely ob­serv­ing neigh­bors,” he sug­gested, adding that the re­ces­sion in Amer­ica and Europe will af­fect aid from the re­gion to Nepal.

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