Kathmandu: An assessment of the impact of the devastating April 25 earthquake and major aftershocks thereafter shows that Nepal's recovery needs an amount equivalent to a third of the Himalayan nation's economy, the World Bank said today.
The damage to the economy will require sustained financial support and effective recovery programmes to create a more resilient Nepal and to target support for those most in need, the World Bank said in a report ahead of a donor conference scheduled for June 25.
Reacting to the Nepal government's announcement of the key results of its Post-Disaster Needs Assessment (PDNA), the World Bank said the June 25 donor conference must provide Nepal with sustained support to repair the economic damage and to prevent more people from falling into poverty.
The PDNA estimates the damage at $5.15 billion, losses at $1.9 billion and recovery needs at $6.6 billion -- roughly a third of Nepal's economy.
Early estimates had suggested that an additional three percent of the population has been pushed into poverty as a direct result of the earthquakes. This translates into as many as a million more poor people.
"The economy of Nepal took a huge hit from these earthquakes and there is a danger that many of the country's impressive gains in overcoming poverty could be reversed unless this challenge is addressed in a decisive way," said Annette Dixon, vice-president for the South Asia region at the World Bank.
"The country needs resources to pay for the recovery that can be channelled through credible programmes to make itself more resilient to the next natural disaster and ensure that those most in need receive the help they deserve."
The donor conference on June 25 is being organised by the government of Nepal to coordinate efforts among partner governments and organisations involved in the reconstruction effort.
The PDNA, led by the Nepal government and supported jointly by the Asian Development Bank, European Union, the Japan government, the UN and the World Bank, will take part in the discussion by highlighting the extent of the damage to the economy -- and suggesting how to help the Himalayan nation recover.
Given the short time within which the PDNA was completed, it provides rough estimates of the damages, losses and needs in each of the 23 sectors and themes it covers. This is sufficient to show the approximate overall damages, losses and needs, as well as the relative impact between sectors.
The most heavily-impacted sector by far is housing, which accounts for about three-fifths of damages and half of needs. As the government and its development partners transition from relief to reconstruction, more detailed assessments will be completed at sectoral levels.
"The results of the Post-Disaster Needs Assessment show that reconstruction will be costly and time-consuming," said Johannes Zutt, World Bank country director for Nepal.
"To raise the money needed, there must first be clear plans on how it will be spent. To this end, the World Bank is working with the government of Nepal to develop credible recovery programmes that will be implemented with transparency and accountability for the benefit of those who lost the most from the earthquake disaster."