The Nepal Weekly 
July 4, 2022
– Kush Kumar Joshi, President of NBI Nepal
The private sector and business community as a whole is not just the backbone of the nation’s economy, but a strong helping hand whenever the nation faces adversities.
Nepal is one of the most disaster-prone counties in the world because of its topography and varied climatic conditions. The country lies in an active seismic zone, and it has numerous young-fold mountains. That is the reason, it experiences frequent earthquakes. Floods, landslides, glacial lake outbursts, avalanches, wildfires, drought and other multiple hazards are also frequent in Nepal.
Economic Vulnerability Analysis shows that Nepal exhibits heavy economic losses – in terms of business operations, agricultural productions, tourism, infrastructure and property – as well as non-economic losses – in terms of impact on individuals, society and environment. This is because of high exposure to risk and the high level of hazards. As per Nepal Disaster Report 2019 published by Ministry of Home Affairs (MoHA), between 2017 and 2018, a total of 968 people lost their lives to disasters -most of them to floods, landslides, thunder strikes and fire. The total economic loss caused by disasters during the period is estimated at about NRs. 6.83 billion.
This shows that Nepali business community is highly affected and is vulnerable to disasters. It is known that private sector has always been actively engaged during emergencies in relief and response activities. The community plays active role in relief measures.
On the other side, preparedness of the business entities has been limited. Due to lack of resilience plan, many businesses succumb to the market collapse and others suffer heavy setback. For instance, during the massive earthquake of 2015, micro, cottage, small and medium industries were worst hit compared to larger industries. This was a direct result of lack of preparedness and contingency plan.
Moreover, many other gaps surfaced during the earthquake. The community observed limited capacity of government in coordinating search, rescue and relief activities; inadequate supply of essential goods and services and mismatched coordination and duplication of efforts among various sectors and agencies.
The COVID-19 pandemic presented yet another reality check. NBI conducted studies on the impact of the pandemic on MSMEs and what could be the post-pandemic recovery strategy for building resilient MSMEs. As per the study, almost 61 per cent enterprises remained closed while 35 per cent operated partially during the four month long nationwide lockdown in 2020. The estimated economic loss of Nepal in the first month of nationwide lockdown was between NRs. 8.5 billion to NRs. 16.9 billion (World Bank data published in 2020). Similarly, the industrial sector loss alone ranged between NRs. 1.7 billion to NRs. 4.2 billion and the service sector loss ranged between NRs. 5.7 billion to NRs. 9.98 billion (as per ADB data published in 2020).
Reacting after disasters has never been an option for the private sector. However, we’ve been too complacent and relaxed. After the dust finally settles, the sector begins to forget about everything. The level of awareness and sensitivity towards impending disasters heightened for a while. In case of massive earthquake of 2015, just 7 years have passed, but it is almost forgotten, and alertness and caution have already taken a back seat.
Over the years, Government of Nepal (GoN) has already shifted its focus from a reactive to a proactive approach for disaster risk management (DRM) and has undertaken efforts in strengthening legal frameworks, policy and planning, organizational aspects, institutional capacities and partnerships for DRRM. DRR related polices and act calls for multisectoral collaboration. Government has set priority areas by endorsing National Disaster Risk Reduction Policy 2018 and Disaster Risk Reduction National Strategic Plan 2018 – 2030, which includes investment in DRR from both public and private sectors. This provides a potential opportunity to link the CSR initiatives of private sector with DRR. CSR has been made mandatory as governed by Industrial Enterprise Act 2016, which requires large and medium industries and also small industries having annual turnover of more than NRs. 150,000,000 to set aside 1% of their annual profitability to spend on CSR activities. Rule 37 of Industrial Enterprise Rule 2019 has elaborated the 8 broad areas, which includes
– Natural disaster prevention and rescue related activities.
– Pollution control, waste management, tree plantation, preservation of water sources, alternative energy promotion and other environment conservation activities
There are mainly two types of hazards – natural and human induced. Experiences show that the risk resulting from hazards leading to disasters is mostly human-induced. The weak structures built and deforestation leads to loss of lives and destruction of properties.
Private sector alone employs more than 4 million employees. So the sector can raise awareness and train them on how to be safe during emergencies. It needs to conduct safety drills and trainings on periodic basis and develop strategy and implementation plan for occupational safety and health. The trained employees, in turn, will transfer the knowledge to their families and friends, who will further advance it to the community extending even wider. Thus, private sector needs to begin from its own workplace from today keeping in mind that disasters can occur without any prior warnings.
In partnership with Asia Pacific Alliance for Disaster Management (A-PAD), NBI Nepal is working seriously to create an environment to this effect. An international symposium on “Establishment of Multisectoral Disaster Risk Reduction and Management Platform in Nepal” was organised in Kathmandu recently.
(The text is based on the welcome remarks delivered by Mr. Kush Kumar Joshi, President of National Business Initiative Nepal on the occasion of the international symposium. Mr. Joshi was President of Federation of Nepalese Commerce and Industries during BS 2064 – 2067)
