Nepal earthquake: Shock turns to anxiety over recovery challenge

Springtime is a season for Nepalese weddings and foreign tourism in Kathmandu, and in April the Annapurna and Yak & Yeti hotels would normally be packed with partygoers and holidaymakers. But Saturday's earthquake, which killed more than 5,000 people, has left the function rooms empty and replaced the tourists with television news crews.

Even as rescue workers struggle to extract bodies from the rubble of collapsed buildings in the Kathmandu valley and reach devastated villages in the Himalayan foothills, the Nepalese people are wondering how their impoverished $20bn economy will cope with the challenges of recovery that lie ahead.

The seismic demolition of historic monuments and tourist attractions, including those in Kathmandu's Durbar Square, has received particular attention abroad, with Unesco director-general Irina Bokova calling the destruction a "huge disaster".

"We've lost a lot of history, we've lost a lot of crucial points where tourists come," says Deepeksha Rana, food and beverage director of the Hotel Annapurna. "To restore them will be another huge problem."

Estimates of how much it will cost to rebuild the economy after the 7.8 magnitude quake vary, but Ram Mahat, finance minister in the coalition government, puts the figure at up to $10bn.

International agencies, however, regard such numbers as mere guesses. "The biggest problem we have in a post-disaster period is that there are numbers thrown out in advance of any serious [assessment] work," says one expert on the Nepalese economy.

There is some good news too, amid grim reports about the risk of spreading disease and fears of food shortages for the 28m people of landlocked Nepal. Despite the severity of the biggest quake in the area in 80 years, bridges were not broken, the main supply routes to India are open, electricity and telephone networks are largely restored and Kathmandu's airport is functioning.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

Tourism, furthermore, is not the biggest contributor to the economy. It is important - directly and indirectly the sector accounts for about 8 per cent of GDP and more than 1m jobs - but is dwarfed by remittances from migrant workers in the Gulf and elsewhere. According to the IMF, remittances make up about 30 per cent of GDP.

About 750,000 foreign visitors - including Hindu and Buddhist pilgrims from India and China and western trekkers and mountaineers - come to Nepal each year. However, Mr Silvanus wryly recalls visiting Ocean Park in Hong Kong and hearing an announcer boast of the arrival of the theme park's five-millionth visitor that year.

"In tourism I don't think there will be a significant decline," says Rameshore Khanal, a former finance secretary in the Nepali government. "Our numbers are already very low."

Mr Khanal is among those who hope that from the tragedy of the earthquake will emerge a new sense of purpose among politicians and investors to remedy the country's many problems - although policy makers are also concerned in the short term about possible civil unrest and the hoarding of gas cylinders and other essentials by black marketeers.

"There is a lot of fiscal space. The debt to GDP ratio is very low at 30 per cent," says Mr Khanal. "The problem is not the finance but management capacity and governance. It's a totally corrupt society."

Bankers and investment officials expect inward investment promised for hydropower and agriculture projects to stall briefly before returning to normal, and again see the glimmer of an opportunity in the unfolding disaster.

"We've been pushing the economic reforms on to the back burner and focusing on politics," says Radhesh Pant, chief executive of Investment Board Nepal. "Probably this is going to be a starting point to really come together in terms of politics and society to rebuild Nepal."

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation