Nepal Earthquake: 10 Years of Economic Growth Lost In 2 Days

Nepal Earthquake: 10 Years of Economic Growth Lost In 2 Days

The current death toll for Nepal stands at 3815, in the aftermath of an earthquake that registered 7.8 in magnitude, crushing its capital of Kathmandu and injuring 7000+ and counting.

The earthquake split roads and highways in half, destroyed thousands of homes, energy generators and the country’s telecommunication networks.

The loss of human life is nothing but sheer tragedy, however adding fuel to the fire the heavy economic costs of rebuilding Nepal will potentially set the country back a decade.

According to Rajiv Biswas, the chief Asia-Pacific economist for IHS said in a note to clients: “The total long-term cost of reconstruction in Nepal using appropriate building standards for regions vulnerable to severe earthquakes could exceed $5 bn, which is around 20% of Nepal’s GDP”.

Nepal’s economy grew 4% last year, must slower than its neighbor India’s growth of 7%. Prior to the earthquake, the unemployment rate in Nepal was at 40% with agriculture, tourism and overseas workers making up the bulk of its struggling GDP.

“The standard of housing construction in Nepal is extremely low, which is why the damage to buildings has been extremely severe.”

“Massive international disaster relief and rescue efforts will be needed urgently, as well as large-scale international financial and technical assistance for long-term reconstruction of the economy,” Biswas said.

US, India and China were all quick to come to the country’s aid, while Asian Development Bank will provide $3 million to Nepal for immediate relief and $200 million for future rehabilitation.

Nepal has long been one of Asia and the World’s poorest countries, with the nation’s per capita GDP at $694 in 2013, according to the World Bank, as opposed to $1,497 in India, $6,807 in China and $47,969 in Australia. To put things in perspective, your average Saturday night out in Sydney will cost someone in Nepal about 2-3 months of work.

Nepal has just 2.1 physicians for every 10,000 people, according to the World Health Organization. In contrast Australia has 37.5 physicians for every 10,000.