Thu, June 13, 2024

‘Impacts of Russia’s war on our economy demand progressive and visionary leadership’

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The shockwaves of Russia’s war with Ukraine is slowly permeating the rest of the world. It may seem far away from Nepal but its economic effect is rippling in surely. Is the government adequately preparing for the impacts of this war on our economy? Or, are we still focused on an election that we can ill afford? What are our priorities as a nation and where does the citizen fit in into the scheme of things? Ordinary Nepalis are overwhelmed by the rising cost of living. A taxi driver I spoke to recently said it was time he headed back to his village as even providing for one decent meal for his family was becoming an impossible task. What would he do in the village, I asked. He said he would at least not have to see his family starve. This war is bad for business. Already struggling sections of the economy will be faced with multiplied challenges. With prices of essentials going up, the cost of business will escalate at the tail of being already battered by the covid crisis. An international research report estimates that “the conflict in Ukraine implies that the level of global GDP declines by 0.5% in 2022, and close to 1% by 2023 (which is about $1 trillion of global GDP). It adds up to 3% to global inflation in 2022 and about two percentage points in 2023, which would also increase the cost of living and could further put pressure on household consumption”. Neighbouring India does not have significant merchandise trade with Russia, but it stands to lose economically because of supply disruptions caused by Western sanctions. Needless to say, what affects India’s economy has an immediate impact on Nepal. A war closer home in Afghanistan did not have the same impact. This war is also about asserting a new global economic and geopolitical order. Our prosperities, our peace are interconnected but geopolitics is taking centre stage and the alliances we build and keep take on a more important dimension than ever before. We can now never stay untouched by what is happening on the global spectrum. Nobody had ever imagined that the heart of Europe would be in the biggest crisis since World War II, yet it has happened. It raises a question mark on the role of the UN. It also demands the redefinition of what is democracy. And most importantly, in Nepal, it demands a progressive and visionary leadership. READ ALSO: 
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MAY 2024

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