In these difficult times or situations, it is important to stand united and help one another in whatever way we can.
As the repercussions of the global pandemic COVID-19, an estimated 2.7 billion people, or more than four out of five workers in the global workforce, have been affected by lockdowns and stay-at-home measures. Out of all the economic shocks, consumer emotion is the most harmful. Since the global outbreak of coronavirus (Covid-19), the panic and fear among the public throughout the globe is spreading even faster. The impact of Covid-19 is not limited to the demand side of the market only, but the supply chain is also equally hampered. On March 24, Nepal’s government announced the nationwide lockdown to contain the spread of COVID-19, closing schools and non-essential businesses, and suspending air travel.
Throughout history, pandemics have had a negative impact on business across all levels. The 1918 Influenza Pandemic also called the Spanish flu had a devastating impact on businesses across the US and Europe. Although the exact amount of the total loss remains unavailable, researchers estimated that the overall economic loss to US-based business revenue was in double-digit percentage drop among others. The sectors impacted the worst were service providers and entertainment. In 2020, the coronavirus pandemic has created a similar ripple effect in the global economy, where the total loss from the impact is estimated.
Coronavirus is shaking up business and consumer behavior on a massive scale. Both the public and private sectors are scrambling to slow the spread of the illness and contain COVID-19 infections. While the full economic consequences of this black swan event are still unclear, we know that the effects of the virus and the drastic measures being taken to contain it are already precipitating change across industries.
Hit by the Covid-19 crash followed by social distancing and a nationwide lockdown, businesses are experiencing major impacts irrespective of how established they are, resulting them to reschedule and re-look at how can they manage and operate their business. Factories, offices, and markets have fallen silent for now. As the lockdown drags on and movement remains restricted for all in Nepal, consumer companies are assessing the impact of the shutdown on their businesses. It has become challenging for most businesses to keep their financial wheels turning during the lockdown period due to less revenue churn and the general uncertainty in the global financial environment.
Harka Bahadur Basnet, 35, works as Electrician, Painter, and Plumber. Basnets’s wife, his son and two daughters left for their village in Surkhet, prior to the lockdown announcement by the government.
I was planning to go to my hometown to receive my children but due to the lockdown there is no work to stay here and have no money to feed my family and hire the vehicle to return hometown and I have no access to getting a pass from the government too.
“I was out of business,” said the 40-year-old Sanjeev Karki from Dolkha. His two employees had nothing to do. After a week at home with no work, he started getting restless. Karki then realized that there are certain essential things that people cannot do without, for example vegetables and fruits.
“Before I used to go to Kalimati for the vegetable market to buy what I needed for my restaurant. Nowadays, I bring vegetables and fruits in wholesale,” said Karki. For the last four weeks, Karki has been going to Kalimati vegetable market as early as 4:00 am in the morning, and by 6 am he sets up a shop in front of his restaurant to sell, with the shutters still down.
My income is not as much as it used to be from the cafe but something is better than nothing,” said Karki. A total of 8 members, including 6 children are there in my family. I have to feed them. Of course I will go back to my own restaurant business once the lockdown ends, but what I am doing right now will help tide me during the crisis.
The business has led to a sudden halt in demand, and many firms are running out of revenue even when they continue to pay rents, wages, and interest payments. Restaurants in Kathmandu were the first casualty of the COVID-19 pandemic, as they stopped seeing customers long before the lockdown.
I was also planning to go. But I got stuck,” said Upreti, 35 years, from Sarlahi, who lives in Town planning, Pepsicola Kathmandu on rent. “I thought the lockdown would be lifted soon but it did not. There was no work. I was running out of money.
Upreti pays Rs 8,000 for a 2-room apartment in Pepsicola and Rs.10,000 for his shop space.
“I was afraid of getting evicted if I failed to pay rent. My shop was closed for a month; it’s difficult to feed family members. All the monthly expenses are managed from the profit income of shop but there is no hope”, said Upreti.
Upreti decided to sell fruits door to door. “I save up to Rs. 500 a day by selling fresh maize, greens, and other fruits for hours in the morning and evening time in the locality”, said Upreti. With the saving income she runs the house expenditure and the medication of her grandmother, a patient of paralysis, for the past 5 years, who cannot even wake up from the bed.
With tourist arrivals suddenly dropping, restaurants in Kathmandu were already without customers. Long before the government announced lockdown, it canceled all international flights. Nepal so far has reported 258 till15 May 2020 Covid-19 cases, but globally infections and death toll are rising.
Though the current lockdown is applicable until June 2, there are chances that it could be extended further. According to officials, Nepal may not lift the lockdown until India lifts it, given the chances of the spread of the virus through the open border. Factories, offices, and markets have fallen silent for now. As the lockdown drags on and movement remains restricted for all in Nepal, consumer companies are assessing the impact of the shutdown on their businesses.
In an address to the nation, the government said that all shops and businesses will be closed except for pharmacies, laboratories, banks, supermarkets, petrol stations, and healthcare providers. Most organizations’ crisis response has first prioritized the health and safety of workers. Now, as organizations begin to emerge from this initial phase, leaders are focusing on the next set of workforce challenges as they plan for recovery. The biggest challenge organizations will likely face next is the tension between getting back to work and embracing a new reality. How leaders and organizations handle the recovery may define their brands for years to come and ultimately define whether they are truly operating as a social enterprise. All the health facilities like; sanitizer, gloves, and provision of lunch, breakfast, dinner alongside accommodation should be given to their staff as guaranteed.
While the government has extended some financial help for many of the poorest and relaxed some financial regulations to help the country’s larger firms and banks, small and medium-sized businesses seem to be falling through the safety net.
With the growing number of cases and rising fear among the public, it would not be pessimistic to say that the worst is yet to come. However, it’s just as important to take stock of the situation right now.
Omi Gurung
Finance Officer, FECOFUN
Twitter: @gurungome