LDC’s and the Multi-Dimensional Threats posed by COVID-19: Brief Look at Nepal

04 June, 2020

International Affairs

As states grapple with the uncertainty of the near future, major global shifts have taken place in the short span of the Covid-19 spread. Global institutions have been warning leaders of the possible effects of a pandemic that has crippled economies and ensued a period of closed borders. The possibilities to gain a stable economic and political environment for relatively smaller economies with limited capabilities have been a matter of apprehension hanging over the international community.


The scale at which a “hunger pandemic” for example could double by the end of 2020 - a warning that the World Food Program has been stressing on. Such institutions have been at the forefront of such cautionary remarks and as the lockdowns persist in many states the idea of an easy recovery seems more to hope for than what reality has to offer. This may very well become a problem that may not be escapable for Least Developed Countries (LDCs) that are already dealing with protracted circumstances of conflict, are developing and dealing with poverty or have unstable governments. For the first time since the 1998 Asian financial crisis, global poverty is projected to rise and, as the World Bank has posited, the lesser-developed states are more likely to face the brunt of it.


Crisis Of and Beyond the Economy


As the virus takes the shape of something akin to a catastrophe in many parts of the world, challenges for individual states and the collective global community has become more pressing Inequality inadvertently arising from the crisis has been at the forefront of the concerns in dealing with the ripples created by the virus. The UN had cautioned of a doomsday scenario when the pandemic was not even labelled a global health crisis, and it assessed that the world economy could take a $2 trillion hit. In states where public health infrastructure is woefully unprepared to handle the pressure, governments have been trying to develop policies that adhere to WHO standards by issuing lockdowns.

The UNDP claimed that for the first time in almost three decades, the Human Development was at risk of declining and that for those in the less developed states basic requirements may become a luxury, especially for those portions of their population that already were at risk. This becomes a significant issue as the UNDP administrator has argued that while every crisis before this including the 2007/08 financial crisis caused some form of setbacks to the human development goals which were later salvaged, the coronavirus that has a “triple hit to health, education, and income – may change this trend.” On March 30, the organization predicted that developing states would face income losses exceeding $220 billion. Were one to solely look at the economic forecasts made by several agencies, they showcase situations of uncertainty. As it stands, with global recession ever on the forefront of minds LDC’s have been expected to grow by only 0.8% in 2020.


Needless to mention, the virus has multidimensional impacts, affecting everyone from the highest of the social strata to the lowest, admittedly though with different intensities. LDCs are considered to be the most vulnerable units of the global network, susceptible to economic shocks and environmental pressures, and have limited resources as per the UN-OHRLLS. Currently, forty-seven countries fall under this category. These states face constraints that make them exceptionally predisposed to the socio-economic effects that the pandemic poses. In an instance, for several African LDCs that have been dealing with several epidemics including Ebola, one could imagine the sheer strain that the virus could put on several countries in the region that also deal with issues of famine and war.


To even imagine this pandemic as solely a health crisis would undoubtedly be an understatement. The preparedness of several LDC’s in dealing with the mediation responsibilities as well as the long lingering aftershocks would depend on the sturdiness of their respective infrastructure and effective policy decisions. As it stands the WFP has determined that low and middle-income states would face issues of acute food insecurity by the end of 2020, with around 265 million people facing the probability of hunger and poverty.


The already fragile and underequipped health infrastructure in these states points towards the urgency of survival for LDCs. Added to that, furthermore, are the threats that stem from the problems of accessibility and the crisis of faith that may emerge between the state and the populace. And this would hold more truth for states embroiled in conflict, where government control has always been tentative at best and questions of legitimacy are quick to arise. In circumstances like those that plague Yemen, COVID-19 might even serve to exacerbate the situation, whereby the persisting violence may serve to cut off all efforts of assistance – a humanitarian crisis in the making. This begs the question of how such states would fare in a world visibly divided in interests and capabilities, whereby many great powers that support global institutions are struggling to maintain control in this time of emergency.


Unchartered Territories: An Uphill Battle for Nepal 


There has been a clear need to revive the economy and make sure that governments survive the strenuous times. The International Labor Organization (ILO) has stressed on the importance of according adequate focus to those sections of the population that are dependent on informal economy, or are unemployed to ascertain that they do not become what has been labelled as “double casualties.” Some sectors will be more affected than others as well. LDCs that depend on tourism or remittance for economic stability will be facing unique challenges. Some states like Maldives and Samoa, with a level of dependence on tourism, for instance, were states that were looking to graduate from the status of being an LDC - chances that are lessened now to a certain degree. Nepal in this instance faces a “unique” set of trials.


The country has relied on remittance and tourism first, and retail and the wholesale and retail sector second, and both have suffered substantially according to the World Trade Organization. And with the current budget plan that the government has set, there have been considerable issues that many have raised, some also coming members from the ruling party. With border issues towards the South taking up much of the national attention, the government continues to face tribulations with the cases on the rise. A recent report has clarified that the tourism industry has suffered a loss of NPR 6 billion and food security may be a rampant issue with restricted movements in many parts of the state.


While the government has tried to strengthen the preventive measures and mitigate the impacts of the virus a new study published by the United Nations Nepal points towards trends that extend beyond it being a matter of public health crisis. Several socio-economic concerns have emerged. Certain vulnerable groups counting women, migrant workers and disabled individuals among others have been disproportionately affected due to strict travel guidelines and pre-existing inequalities. The funding required for the preparedness and response, according to the Report would exceed $97 million.

As aid and assistance come in from institutions and states alike, Nepal deals with some infrastructural constraints. With mounting cases and an economy reliant on remittance and tourism the prospects of escaping this pandemic without noticeable scars are slim to none. While assistance flows in from states like the U.S., China and India the country will require stronger regional integration and support from developed nation-states to combat the aftershocks left by the virus.


Major powers are entering recessions and the endurance of developing states in the face of such wide scale global phenomenon has been a matter of conjecture. It is a matter of recognition that some states are simply more vulnerable, owing to their lack of resources, the smaller size of their economy or the fragmented responses of their institutions. And that these states will not be able to handle the efforts to contain the virus and stabilize themselves from the possibly long-withstanding effects, without some form of external support.

The rising death tolls in developed states, with advanced health infrastructure and strong governmental support systems in places raises enough warning bells for states that lack both in devastating quantities. This leads to the point that any policy launched, and any global, as well as individual state-level steps taken towards abating the effects of such an unprecedented crisis of the modern times, would require significant foresight and the recognition that the pandemic goes beyond just being a global health concern.  


The views expressed above belong to the author.