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The economic aftershocks of Nepal’s earthquake

Nepal
Economics
nepalblog1.jpg

A family beside a damaged house near Naglebhare, Nepal. Asian Development Bank under a Creative Commons Licence

In downtown Kathmandu, Nepal’s capital city, travel agent Sonam Ghale has plenty of time to talk.

He spins his computer screen toward me, and scrolls demonstratively through a long Excel spreadsheet of cancelled bookings: business is terrible.

It’s an impact, he says, of the April and May earthquakes which killed over 8,500 in Nepal. The travellers for whom he usually arranges tours and Himalayan treks are steering clear.

We’re in Thamel, the capital’s backpacker heartland, a usually bustling warren of charmingly shabby alleys touting adventures, hotel rooms and curios to the annual slew of foreign visitors.

Although the earthquake was gentler on buildings here than in the many parts of the city, which are still frozen in scenes of raw devastation, it’s hitting the traders hard. Yak wool, felt, cashmere and crewel-work still spill colourfully out of Thamel’s shopfronts, but today it doesn’t look like anyone is here to buy. More than 3 months after the quake, Thamel’s streets are all but empty of tourists.

Nepal expects quieter monsoon months from June to August, which are the ebb-tide months of the tourism year. But this year’s lull, I’m told repeatedly, is extreme.

Kshitiz, head waiter at the popular tourist haunt The Yak, expresses the crisis in terms of dinner guests: on a typical late-July evening, he serves at least 25 customers. Tonight, he can expect just 4.

Holiday-makers aside, the monsoon is peak season for Hindu pilgrims from India. Most monsoons, Sonam arranges an estimated 1,000 pilgrimages to Mount Kailash in Tibet. How many this year? I ask him. ‘Zero,’ he says, and shrugs.

Sonam and Kshitiz number among half a million Nepalis who work directly in tourism, and for whom Thamel’s quiet streets are an augury of financial hardship.

I spoke to Chandan Sapkota, Economics Officer with the Asian Development Bank in Nepal, who underscored the significance of the tourism sector as a source of livelihoods.

‘Revenue generation from tourism is pretty low,’ he said, ‘about 2% of GDP. But direct and indirect employment generation is high. A lot of consumable goods for tourism-related industrial and services activities are procured internally, so there’s a long value chain.’

Sapkota explains that many of the vegetables grown in Nepal are destined for consumption in hotels and restaurants that thrive on tourist dollars. So it isn’t only concierges and chambermaids, or trekking guides and porters, who rely on a healthy flow of visitors for their incomes, but farmers and truck drivers and all the many thousands who work economically upstream.

Sheikh Abdul Khaiyum's home in Kathmandu collapsed when an earthquake struck Nepal on April 25.

Maya Prabhu

A short walk down the road from the Yak Restaurant, I meet Sheikh Abdul Khaiyum, a signmaker.

He is sifting through the crumbled wreck of his family home, a casualty of the 25 April earthquake. The 3-storey house was his grandfather’s, then his father’s, he tells me. In 1934 the house withstood an 8.0 magnitude quake, needing only minor repairs.

Surveying the brick-and-matchstick rubble heap before us, he shakes his head. Finding an extra $140 each month for a small flat to accommodate his family – who ‘thanks be to God’ all escaped via a first-floor window when the structure began to list – isn’t easy. It’s especially hard after losing the income he used to draw from renting out his home’s ground floor to a local butcher.

Khaiyum’s plans for reconstruction are accordingly modest. ‘I want to build a cottage,’ he says, stepping up onto a chunk of wall and sketching a floorplan with his hands: ‘with two rooms, here.’

But saving up for building materials seems close to impossible when his clients – the hotels, shops and bars of Thamel – have no money to spend. And, with his repeated applications for government assistance generating no response, he hasn’t even managed to clear the site yet.

Trembling ground

The rains are due to let up in the next month; the mist will lift and the crystal peaks of the Himalayas will be visible even from smoggy Kathmandu. The drier air should signal the onset of peak tourism season, but travellers are unlikely to arrive in their usual numbers. ‘It’ll be challenging to go back to previous visitor levels during 2015/16,’ Sapkota told me.

While a recent, government-commissioned study conducted by structural engineers at Miyamoto International declared the popular Annapurna trekking zone ‘safe’, the quake-hit region remains seismically very active. Locals are growing used to the trembling ground they live on.

Sonam Ghale told me that ‘in the month after the earthquake, we used to run from our houses when we felt [a tremor]. Now, we don’t even get out of bed.’

As a new geological report warns that stress levels along a stretch of the Himalayan fault to the west of Nepal continue to build, foreigners might not feel quite as confident. And now, a controversial draft constitution has sparked political protests in pockets across the country.

Kshitiz, head waiter at The Yak, expresses the crisis in terms of dinner guests: on a typical late-July evening, he serves at least 25 customers. Tonight, he can expect just 4

So, what’s next? In July, the Tourism Ministry reset its tourism target for this year, from 1.1 million visitors to 475,000. A post-disaster assessment determined that the sector will need an injection of $387 million to rebuild.

Sapkota says that a 2016/17 bounce-back to 800,000 visitors is possible, but warns, ‘unless the government manages to assure travellers that Nepal is safe, it will be very difficult to recover.’

So far, the government’s intentions seem promising. A high-level committee to promote tourism has been formed; the Miyamoto report commissioned.

Nepali representatives have made appearances at Indian tourism conventions, declaring the country back on its feet. What is lacking, explains Sapkota, is concrete action and an appropriate sense of urgency.

Government-led recovery initiatives have already faced serious delays. Nepal’s reconstruction chief was only appointed to the post on 14 August, more than 100 days after the earthquake. Meanwhile, the politics of the new constitution are threatening to overshadow recovery plans.

And Nepal’s tourism agencies have a track record of failing to hit targets. Despite a much-promoted goal of 1 million annual arrivals by 2011, the country’s busiest year to date has fallen 200,000 travellers short.

The fact that the Nepal Tourism Board is currently embroiled in a hefty corruption scandal, with charges filed against more than 20 employees, is likely to hamstring the body further.

A delayed rebound is a worrying prospect, Sapkota concedes: ‘a lot of low-skilled and unskilled jobs are dependent on [the sector’s recovery].’ Nepal is safe, authorities assure prospective visitors. But unless their message is heard, the livelihoods of Nepal’s poor remain at risk.

Maya is a writer, recently based in New Delhi. She tweets as @mayakprabhu.