The executive order that prohibits selling, distributing and drinking alcohol outdoors in hotels, resorts, restaurants, and bars is done with the intention to reduce the consumption of alcohol in Nepal but instead, this will have unintended consequences. There will be a decline in the amusement, entertainment and hospitality industries as most of them profit from selling legal alcohol.
On the whole, the economic effects of prohibition will be largely negative. The reduction in the sale of alcohol will result in the closing of breweries and distilleries leading to the elimination of thousands of jobs and also have a domino effect on other related industries.
Not being able to drink alcohol outdoors in hotels, restaurants, and bars is also a violation of private property rights guaranteed by Nepal’s Constitution as just prohibition of legal alcohol does not mean it is for the public interest. Instead, people will try to illegally acquire alcohol and this will only profit the bootleggers. Making it harder for the public to obtain good quality, legal alcohol will only push them to consume illicitly made substandard alcohol which will, in turn, have a hazardous effect on public health.
The executive order is also going to adversely affect the coffers of the government as the government receives huge revenue from taxation on alcohol. It is also going to increase the expenditure of the government as they have to engage more security personnel to monitor the imposed order.
Therefore, the intention to curb the consumption of alcohol will only hurt the economy.