Disquiet of Business Community Grows with Extension of Lockdown

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Disquiet of Business Community Grows with Extension of Lockdown

The country’s private sector has raised its voices against the 8th extension of the lockdown till June 14. A meeting of council of ministers held on May 30 decided to further extend the lockdown amid the rising number of Covid-19 infection cases and deaths. Critics say that instead of curbing the spread of coronavirus, the lockdown, which is in place since March 24, has crippled economic activities sending the country’s economy into a deep recession unlike anything Nepal has experienced in the past. Major private sector bodies, that have avoided criticizing the government in terms of its handling of the situation, have now started criticizing the government for its indifference to their demands and ignoring warnings of economic fallout of the protracted lockdown. Expressing their displeasure, they have said that extension of the lockdown, without any change in the modality, will be disastrous for the already severely weakened economy.

Issuing a press statement on May 31, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) urged the government to rethink the duration and modality of the lockdown while considering the sensitiveness of public health. “We urge the government to devise the modality of the lockdown so that the economic activities can be restarted,” reads the statement.

Earlier, the government permitted to operate 42 types of industries during the lockdown period. However, the strict restrictions in transportation and movement of people and market access have hindered industrialists to operate their industries in full capacity. According to them, the lack of coordination between authorities and all three levels of the government has added to their problems to restart industrial activities. Industrialist complain that government is not showing any seriousness despite the worsening situation which will ultimately lead to the collapse of the industrial sector. They say that the government now needs to contemplate international practices in easing lockdown by further strengthening the health sector expanding the scope of Covid-19 testing, tracing tracking and by introducing effective social distancing measures to reduce the risk of spread of coronavirus.

FNCCI has said that it is concerning that the 8th extension of the lockdown was announced without taking suggestions from stakeholders at a time when the economic loss from the lockdown has amounted to 4 percent of the country’s GDP, business activities have collapsed, and millions of people have lost their jobs.  “The government needs to engage in dialogue with stakeholders directly associated with the country’s economy to extend restrictive measures,” FNCCI has demanded.

Shekhar Golchha, senior vice president of FNCCI said that the lockdown should be eased for the industrial sector under any circumstances. “We don’t know why the government is ignoring the economic fallout. But one thing has become clear that only lockdown cannot save people from coronavirus,” he opined, adding, “It is true that our open border with India has increased risks of the contagion of the virus. However, there are no alternatives than to gradually ease the lockdown by maintaining effective health security.” Golchha warned that number of Covid-19 cases and deaths could increase in the coming days and that all should be prepared to face the challenges.

According to him, the private sector has shouldered the burden of the country’s economic recovery. “We have provided employment to millions of Nepalis. The share of the private sector in government revenue stands at 70 percent. Therefore, an immense pressure has been created for the private sector in terms of revival of the pandemic-ravaged economy,” noted Golchha, adding, “Nevertheless, if the lockdown is extended without proper exit plans, the country’s economy will reach of point where recovery will not be possible.”

Satish Kumar Moore, president of Confederation of Nepalese Industries (CNI) also said that lockdown needs to be eased by implementing effective health security measures. According to him, the economic slump will further deepen if the government does not show seriousness to restart business activities. “It will be appropriate to continue lockdown in areas highly affected by coronavirus while easing economic activities in less affected areas,” he said.

Pashupati Murarka, former president of FNCCI said that the government now needs to shift its focus from stopping the spread of coronavirus to saving the country’s economy from collapse. “Supply chains have been badly affected by the lockdown. Some industries that have restarted their operations are unable to supply their products to the market. The ongoing lockdown has hindered cement industries to transport raw materials from mines to their factories,” he said.  According to him, the government needs to announce policies to ease the problems for the industrial sector. “There are no alternatives for us than to learn to live and carry on our activities facing the challenges posed by the coronavirus,” he expressed.

Rajesh Kaji Shrestha, president of Nepal Chamber of Commerce (NCC) said that the government has ignored the concerns and problems of the business community. “It seems the government thinks that its one and only responsibility is to give continuation to lockdown and it does not have to pay attention the plight of the business community. Now the government urgently needs to prioritise changing the modality of the lockdown so that business activities are restarted,” he said.

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