Nepal has faced repeated shocks. After Nepal formally came out of the conflict in 2006, the fragile peace process lasted for almost a decade, with the country, however, unable to pass a constitution. Then a devastating earthquake hit in 2015, and though Nepal was able to pass a constitution hurriedly, it was contested by disaffected elements and Nepal had to face almost a year-long economic blockade. The earthquake of 2015 and economic blockade have had far-reaching consequences on the economy and livelihoods of the people, not to mention the countless lives that were lost during the earthquake.

COVID-19 hit Nepal as it was just coming out of these twin shocks.

COVID-19 has had and will continue to have unprecedented health, economic, and social impact in Nepal as it has globally. The situation in Nepal is more precarious in that the country has already been battered by numerous shocks.

With this context in mind the abstract has two-fold objectives:

  • To examine the consequences of the pandemic on Nepal’s political economy in general and in people’s livelihoods in particular.
  • To examine the consequences of rural out-migration on the household economy – especially in times of shocks. 

To address the first objectives, the paper will examine secondary literature such as the government’s reports such as the economic survey, studies undertaken by various donor agencies in Nepal and by Nepali scholars to map out, in broad contours, the consequences of the pandemic on Nepal’s political economy in general and in people’s livelihood in particular.  It will examine the consequences of the pandemic on agriculture, manufacturing, and service sector as well as discuss the patterns of trade and tariff, consumptions, savings, and capital formations in the aftermath of the pandemic.

To address the second objective, the paper will draw on primary panel data generated by the Nepa School of Social Sciences and Food and Agriculture Organization (FAO) in 2017 and 2020 on a study related to migration, agriculture, and women’s migration. With a sample size of around 1,000 households spread equally across five districts of Nepal, namely Achham, Rolpa, Nawalparasi, Makwanpur and Jhapa, this has been a panel survey that examines the situation in these rural households both before the pandemic and during the pandemic[1]. Based on these two objectives, the paper will seek to explain economic trends and extrapolate the new orders that could possibly prevail in the near future and in longer term.

[1] The authors are associated with Inter Disciplinary Analysts (IDA), which had been involved with Nepa School of Social Sciences and Humanities, in undertaking this panel survey.