Death toll passes 3,700 two days after the earthquake hit the Himalayan nation Nepal. Emergency services continue rescue operations, while thousands of people sleep in open for the second night.
However, even before the quake hit Nepal, the country was already hit by a fragile economy. Nepal’s per capita gross domestic product (GDP) stood at $694 in 2013, compared with $1,497 in neighbouring India and $6,807 in China, according to the World Bank, making the country one of Asia’s poorest. Before the quake, the Asian Development Bank (ADB) estimated that Nepal needs to spend about four times more than it currently does on infrastructure until 2020 to attract foreign investment.
Under these circumstances, Nepal’s capacity to fund relief and long-term reconstruction efforts are extremely limited. Although it’s too hard to tell to what extend the damage will affect the GDP, analysts at consultancy service of IHS estimate with the rising death toll that it could exceed $5 billion, which makes the 20 percent of the poor nation’s GDP. This means the country needs global financial help for relief and reconstruction in order not to hurt its economy even further.
The ADB said on Monday it will provide a $3 million donation to Nepal for immediate relief efforts and up to $200 million for the first phase of rehabilitation.
The International Monetary Fund also said on Sunday that it was ready to send a team to Nepal to evaluate financial needs after the earthquake, while the European Commission announced €3 million in emergency aid for Nepal.
The worst quake that hit Nepal since 1934 destroyed many old buildings and ruptured roads while telephone and internet communication were severely disrupted. Home to numerous protected historical sites, Kathmandu's old district, has been hit the most, according to officials. This puts a great pressure on Nepal’s tourism sector, which contributes significantly to the country’s economy.
According to Nepal’s Ministry of Culture, Tourism and Civil Aviation, one job is generated by every six tourist visits, while 138,000 people are employed in the tourism sector. Most tourists come from India and China, who are mainly attracted to the temples.
Nepal has a small stock exchange and its Nepalese rupee is pegged to the Indian rupee. It was unclear if financial markets or banks would operate on Monday, with some banks in Kathmandu shut.
Governments and aid agencies are supporting the country with search and rescue operations in Kathmandu. India, China, Pakistan and the US are leading international efforts, however, rescue work has been disrupted by a series of aftershocks and bad weather conditions.