Debt relief ‘an answer’ for Nepal
The greatly impoverished Himalayan nation is reeling from two earthquakes which disrupted lives
NEW DELHI: Multinational lenders such as the World Bank and the International Monetary Fund (IMF) can help Nepal rebuild and recover from two devastating earthquakes by cancelling some of its almost $4 billion (R48bn) foreign debt, campaigners said yesterday.
The greatly impoverished Himalayan nation is reeling from last month’s 7.8-magnitude earthquake, which disrupted the lives of about 8 million people – almost a third of the population.
A second quake of 7.3- magnitude struck last Tuesday, worsening the situation and further hampering efforts to get aid to survivors in remote regions. More than 8 500 people have died.
Nepal estimates it needs at least $2 billion to rebuild homes, hospitals, government offices and historic buildings.
Campaigners say one way of supporting its recovery efforts would be to write off some of its $3.8bn foreign debt.
“Before the earthquakes, Nepal was one of the least developed countries in the world and paid $215 million annually in debt payments,” said Eric LeCompte, executive director of the Jubilee USA Network, which campaigns for debt relief for poor countries.
“Debt relief for Nepal means short-term recovery and long-term infrastructure stability. Strengthening infrastructure is crucial when we recognise that thousands died because buildings were unable to withstand earthquakes.”
Nepal is one of 38 countries eligible to receive debt relief from the IMF when it suffers disasters, but the World Bank has yet to set up a mechanism, he added.
An IMF spokesman said the fund was helping the government determine its financing needs, but it was too early to say whether Nepal would qualify for debt relief under its Catastrophe Containment and Relief Trust.
“We don’t have enough information yet on the full scale of this disaster,” the spokesman said in an e-mail.
In 2010, the IMF cancelled Haiti’s $268m debt after a massive earthquake, and in February this year granted Guinea, Liberia and Sierra Leone debt relief of about $100m following the Ebola outbreak.
A World Bank official said Nepal had not requested debt relief or rescheduling, and was unlikely to require it as its “fiscal position and external debt are in good shape”, but the bank would review repayments if requested.The bank has told the government: “We would be open to carrying out a fresh Debt Sustainability Analysis and deploy all instruments at our disposal, given the scale of the disaster,” said Rajib Upadhya, World Bank senior external affairs officer in Nepal.
Rebuilding will place a substantial burden on Nepal, but it is expected to “maintain a reasonable fiscal balance without increasing its debt sustainability risk”, said the Asian Development Bank. If that risk increases, the bank, which does not provide debt relief, said it would consider providing Nepal with a grant.
JOHANNESBURG: As the earth began to shake, South African citizen Klasie Wessels took cover under a trolley as he heard things crashing down around him.
“It was something that will stick with me for the rest of my life… I couldn’t stop thinking about my loved ones and my relationship with them,” Wessels told Cape Times sister paper The Star.
When the Nepal earthquake hit on April 25, Wessels had just landed at Kathmandu airport. He was in Nepal readying a small group of South Africans who were planning to climb to the Mount Everest base camp.
“I hugged the trolley as the rumbling continued. It was only 30 or 40 seconds, but it felt a lot longer than that.”
After the earthquake, Wessels grabbed his bag and ran out of the airport.
“This quiet chaos began to fall as people stood in the streets and realised what had happened. It was something new for all of us. I finally made my way to the hotel. There were sirens and police everywhere,” he said.
Although he did not see any injuries personally, Wessels said the damage was visible.
“There were walls which had fallen down and cracks in buildings. When I got to the hotel, we had to sit under a door frame throughout all the aftershocks.”
He said the sensation of the aftershocks ranged from the feeling of “riding a wave” to being “shocked by electricity”.
Although he and his group, who were stuck in Dubai at the time, were shaken, they still decided to make the trek.
“We were the first group to make it to base camp after the earthquake… Most Western tourists cancelled,” Wessels said.
He said they were afraid, but “there was this feeling of this is a challenge and we need to meet this challenge and defy it”.
With tourism, one of Nepal’s main industries, coming to a standstill, Wessels said this was their way of giving back. “We thought about what we could do – we could help in a soup kitchen or volunteer – but we thought that by carrying on with this trip, we could contribute to the economy.”
On their journey to the base camp, the group walked through damaged villages. “It was visible, some homes had walls that had completely collapsed.”
What touched him was the reactions of the villagers. “They were surprised to see us, they kept coming to us and thanking us for coming.”
He said the group was on high alert and aware of aftershocks, but just kept moving.
As he looked back on this experience, Wessels said it made him realise what was really important in life. “You stop fussing over the small things and take notice of the real human concerns… It makes you reflect on your life and what you are doing,” he said.
Wessels is the founder of Street School, a local organisation which takes students and adults on experiential journeys to Nepal and India.