Beyond Kathmandu: Impact of the blockade on Pokhara

Driving from Kathmandu to Pokhara, the first hints of the impact of the blockade on the lake city can be picked up in the form of the unusually thin traffic along the highway. There is a visible drop in the number of Pokhara-bound private vehicles, microbuses and other tourist buses, while most eateries along the highway look relatively empty.

Tourism in tatters: An otherwise buzzing lake-side usually frequented by vacationing families, young adults and foreign tourists at present is un-lively and lacks its customary flair. Tourist-oriented businesses reported a further drop, from the already previous drop post-earthquake in sales; despites hopeful signs of recovery prior to the obstruction at the border points. Conversations with businesspersons in the area reveal that sales have tumbled by as much as 50-80% since the beginning of the border disruptions. While the city had seen a relatively lower decline in the number of internal tourists after the earthquake, their number at present has markedly plummeted owing to the fuel crisis.

Occupancy rates in standard hotels along the lake-side, according to hoteliers stand at a lowly 20% prompting a slash in room tariffs by as much as 40-50%. Most of the hotels and restaurants have resorted to using firewood to prepare meals for their guests and have modified their menus to a limited selection. They estimated a rise of about 25% in their operating costs due to use of firewood, rise in food prices, and usage of diesel bought on the black-market.

Not-so-accessible black market: Unlike in Kathmandu; where the black-market for fuel is relatively more accessible and gallons of fuel can be easily arranged over phone calls, inhabitants of Pokhara maintain that fuel can be procured only through close and familiar contacts, and that too in very limited volumes. Black-market price of petrol and diesel which reached as high as NPR 350-400 and NPR 250-300 during the height of the crisis have now declined to settle at around NPR 200-250 and NPR 150-180 respectively.

Local market out of steam: Apart from the more touristy places, Pokhara also has a bustling local market fueled by tourism-earnings and remittances. Shortages in fuel and rise in prices; a result of the border disruptions, have however dampened disposable incomes which has had a direct bearing on spending patterns. Business enterprises stated that people are substituting expensive luxury goods like apparel, accessories and cosmetics with relatively cheaper substitutes. Additionally, the supply of these items itself has been severely curtailed due to obstructions at border points. When questioned about the perceived inflation in daily essentials, the locals generally responded that there had been an approximate of 25-50% hike in prices.

Drugs’ shortage: During the height of the blockade, news media had reported stories about crippling shortage of medicines in Pokhara. But, interactions with medicine wholesalers revealed that while there was shortage of medicines, especially those required by patients of cardiovascular and respiratory diseases, the perception of the shortage was more pronounced than in actuality. About 60% of Nepal’s medicine consumption is based on imports from India, and therefore as border points remained obstructed, supplies of Indian medicines started dwindling. While Nepali substitutes for such medicines—except for some which are solely supplied by Indian pharmaceuticals—do exist, and while the stock of such medicines was enough for some time in the beginning, the consumers of the Indian variety perceived it as a shortage.

Also, stock of medicines in other parts of the country could not be easily transported to Pokhara due to the fuel crisis. In case of surgical equipment, shortage caused by border disruptions was further compounded by certain hospitals panic buying in a bid to stock up their supplies, which sharply reduced the presence of these products in the market and heightened the perception of shortage.

Viewpoints: A mixture of pessimism and hopefulness defined the mood of hotel and restaurant operators, transporters, travel agents, local businesses and residents of Pokhara. At one end of the spectrum, the brewing discontent about the inabilities and inefficiencies of the state in providing basic services during crises has aided in further disillusioning the populace with the polity. While on the other hand, with the border obstructions now lifted, people are hopeful that Pokhara’s tourism will rebound in the upcoming season and the lost momentum will gradually be regained.

Note: This neftake is based on conversations with businesspersons, hoteliers, taxi drivers, local residents of Pokhara, and documents their opinion on the impacts of the blockade on its economy.