"We've not really seen this before..."

Economic update from Nepal

Cost of living pressures are a global phenomenon. Disrupted supply chains following the pandemic, a series of natural disasters and the war in Ukraine have conspired to create more debt, snowballing inflation, increasing interest rates and sharply rising prices. 

Ajay and Nayan, from our partner the Welfare Association for Children, Tikapur (WACT), report in on how the global situation is playing out for the families with whom they work in Nepal. 

“The cost of everything is still going up – staples like rice and oil are often as expensive as in Australia but of course there is far less opportunity to earn a living,” Ajay says.

“Fuel, fertiliser, transport costs and rent – some prices have risen more than 20-30%. At the same time, very little money is coming in. Health, education and construction workers on Government contracts are three months behind in their wages, and there are more and more protests every day.”

The cost of rice and other staples is often as high in Nepal as in Australia
... but wages are far, far less - and continuing to shrink

As local wages freeze or go backwards, more people are joining the hundreds of thousands of working age Nepalis already living abroad. The wages they send home to help their families survive made up more than 22% of Nepal’s GDP in 2022.

“The financial pressures mean not just men but women are forced to leave our community to go and work in India," Ajay says. "We've not really seen that much before. Children are left alone."

“We know of families where both parents are gone for months at a time, sending home money so the children can buy food and try to still go to school. There may be a grandparent or other relatives nearby, but often those adults will be out trying to find work as well. It’s so hard for these children to stay at school or concentrate on learning.”

In the main streets, Nayan says, businesses are closing up shop. 

“There’s no work for drivers or shop owners and many say they plan to leave because they can’t survive,” she says. 

“I asked some young boys in our projects last week what they want to do when they’re older and they said they want to learn Korean so they can leave Nepal for better work.

The Korean and Nepali governments have an agreement which recruits tens of thousands of Nepalis into the Korean shipbuilding, automotive and textiles industry. Wages there are 4-5 times higher than India or the Gulf, so its no wonder that our children have started dreaming of Korea.”

In the midst of this extremely sobering situation, WACT’s Self Help Groups are critical. 

“They’re needed more than ever,” Ajay says. “Honestly, people just want to be part of them. We’re continually thinking of ways we can help the people in the groups earn a livelihood here.” 

“The women want to learn how to breed goats or chickens, learn how to grow better crops or make products like pickles that they can sell in small stalls, all to provide just a little more income,” Nayan says. 

“When the money is so tight, every tiny thing can help them avoid the decision to leave their families or take their children out of school.”

The groups have had an important role in providing emergency savings, too. Group members pool anything they can spare so that others can borrow it in a crisis, repaying at no interest.

“We are finding the groups are able to save only as little as 100 rupees ($1.13) and even that is being requested to borrow by the members because things are so difficult,” Nayan says. 

“But even apart from the material things we can offer, we know that bringing the people together to support each other really matters.

And we want to be able to continue to do that throughout this crisis.”

Generous donations from International Nepal Fellowship supporters have so far provided funding that can support 300 people to be part of Self Help Groups in some of Nepal’s most disadvantaged regions.

Please, if you’re able, donate BEFORE JUNE 30 to provide a place for someone to learn livelihood skills and support themselves and others through a Self Help Group.

Donate now