Nepali Economics Waiting for another great economic depression? By Prajwal Shrestha The COVID-19 pandemic has seriously hurt the global economy. Firstly, the Chinese economy was hit hard and it is still unable to recover its economic health properly. Gradually, Chinese China is trying to resume its economic activities, in the meantime, the COVID pandemic is demonstrating its optimum level of destruction in the USA and Europe and economic activities has totally stopped in those places as well. As today’s world is completely inter-dependent with each other, Chinese factories are facing scarcity of raw materials to be supplied from the US. When the American, European, Japanese, South Korean and Gulf countries’ economy have be affected, obviously, the global economic growth rate will be affected. Economic observers, international economic and monitory institutions have already warned of the possibility of another great economic depression, more serious than the great economic depression that took place in 1930 beginning from the United States of America. According to the historical records, the timing of the great depression varied across the world; in most countries, it started in 1929 and lasted until the late 1930s.  It was the longest, deepest, and most widespread depression of the 20th century. The great depression is commonly used as an example of how intensely the global economy can decline at times of crisis. The great depression started in the United States after a major fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929, (known as Black Tuesday). Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. By comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the great recession. Some economies started to recover by the mid-1930s. However, in many countries, the negative effects of the great depression lasted until the beginning of World War II. The Great Depression had devastating effects in both rich and poor countries. Personal income, tax revenue, profits and prices dropped, while international trade fell by more than 50%. Unemployment in the U.S. rose to 23% and in some countries rose as high as 33%. Cities around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming communities and rural areas suffered as crop prices fell by about 60%. Facing plummeting demands with few alternative sources of jobs, areas dependent on primary sector industries such as mining and logging suffered the most. Present global crisis and Nepali scenario: Nepal is a totally import dependent least developed country (LDC). In early decades, Nepal was self sufficient in agriculture products and she was an agro-product exporting country. Presently, Nepal is not only importing industrial products but also a main consumer of agro-products from the international market. Nepal’s revenue generation is totally dependent on import tax and revenue from excise duty on domestic products is very nominal. Nepal is totally relying on the remittance income by exporting our youths for labour works in the Gulf countries. Remittance income is the major source of receiving foreign currency. Secondly, tourism is the other source receiving foreign currency. Besides, foreign grants and loans are the source of receiving foreign currency needed to import goods from the international market. As we have no exportable items so that we can earn foreign currency, in the meantime, we are likely to lose our labour market in the Gulf countries and in the near future, there is less chance of tourism promotion due to the corona virus pandemic. As countries are postponing all activities, Nepal may face the burden of above six million youths returning from labour job from European and Gulf countries. Already, many European companies have started to cut-down job opportunities and many of the Gulf countries consuming Nepali labours are facing financial crunch and thus it is going to hit our labour export business. What Nepal should do? How long the COVID-19 pandemic is going to exist in this globe, we don’t know. How much will be the impact of the corona virus pandemic, we don’t know. So far, Nepali economy is going to be affected very badly. First of all, Nepal needs to cut down its general sector expenditure, even by cutting down salaries, daily allowances and other facilities paid to the “people’s representatives”. Nepal should think about sustainable economy as Nepal’s dream for grants and donation may not come true at a time when the donor countries themselves are facing economic crisis. Therefore, the present federal structure, which is expensive and unbearable for our economy, should be scrapped. If we want to rescue our economy, this federalism has to be scrapped. Immediately, the construction projects taking place in the PM’s residence, the President’s Office, construction of ministerial quarters and guest houses have to be stopped and good homework has to be done to reenergize our economy. Relief packages should be announced for the survival of lower class people, subsidies have to be announced to reenergize our industrial sector and the main thing is providing employment opportunity to those youths who have returned from working abroad. For this, attractive package has to be announced in the agricultural sector for optimum utilization of our land left without cultivation. Firstly, all efforts have to be done to substitute imports and making Nepal a self reliant nation. In as it is situation, Nepali economy may collapse!