Print Edition - 2015-06-14 | MONEY
With Rs112.5b losses, services sector worst-hit
- Post disaster needs assessment
Jun 13, 2015-
The services sector faced a cumulative business loss of around Rs112.5 billion due to the April 25 earthquake and subsequent aftershocks, according to the Post Disaster Needs Assessment (PDNA) prepared by the National Planning Commission (NPC).
Tourism is the worst-hit sub-sector with an economic loss of Rs62.37 billion, followed by financial and transportation sectors. Economic loss to the country stands at Rs187.08 billion.
The tourism sector requires Rs41.33 billion for reconstructing and rebuilding, according to the PDNA report. The sector has sustained damage worth Rs 18.86 billion and total disaster effect worth Rs81.24 billion.
“Hotel bookings have been cancelled while occupancy of international as well as domestic flights too has gone down. This has caused a huge loss to the tourism sector,” NPC Vice-chairman Govinda Raj Pokharel said.
The government will appeal for help to the international community based on the PDNA report in a donors’ meet scheduled to be held in Kathmandu on June 25.
Hari Bhakta Sharma, senior vice president of Confederation of Nepalese Industries (CNI), said the government will have to hold a global marketing exercise with a message that Nepal is alright for tourists. “This needs to be done at the possible earliest. Proactive marketing can help to a larger extent,” he said, adding the private sector is ready to collaborate with the government.
Tourism entrepreneurs from Pokhara to Sauraha have introduced discount schemes to attract visitors.
As per the government’s categorisation, retail and wholesale markets, hotels and restaurants, transportation, storage, financial sector, real estate and business services, public administration, defence, education, health, community infrastructure and social as well as personal service fall under the services sector.
The services sector growth is projected to drop to 3.86 percent this fiscal year from 5.89 percent last fiscal year.
The report reveals the second hardest hit is the financial sector, which faced an estimated loss of Rs26.89 billion. Sharma said the sector has sustained such a huge loss due to insurance claims. “The way the claims are increasing, the figure should jump further,” he said.
The transportation sector saw an economic loss of Rs4.93 billion. Losses in the sectors like water and sanitation stood at Rs8.73 billion, health and population Rs6.33 billion and education Rs3.25 billion.
Sharma said business losses are higher than what the PDNA states, as the losses of small- and medium-scale enterprises have not been taken into account. “Some 50,000 small- and medium-scale enterprises have been damaged. Operating a small and micro industry cost around Rs50,000 to Rs400,000 on an average. This is a huge loss,” he said.
Services sector losses
Tourism Rs 62.37b
Financial Sector Rs 26.89b
Transportation Rs 4.93b
Water and Sanitation Rs 8.73b
Education Rs 3.25b
Health and Population Rs 6.33b
Total Rs 112.5b
Published: 14-06-2015 08:49