Profile of Urban Consumer

Expenditure Pattern of Urban Nepali Consumers (figure in % total expenditure)

Source: Nepal Rastra Bank

Industrial units established in the country relying on natural resources, directly or indirectly, could create adverse impact on the health and living style of the people and also lead to environmental degradation. And persistent pressure from the civil society saw the government take some hard-line decisions like withdrawal of the Arun hydro-electricity project, framing of the environment protection law and vehicular emission standard, imposing ban on cigarette and liquor advertisement over the electronic media, and more recently, control on plastic usage. However, the civil society complains that the business community is turning a deaf ear to such demands as providing unadulterated food commodities and proper management of industrial wastes.

In a program entitled "New Millenium and Consumer Protection" conducted recently, civil society activists came out with the conclusion that the Nepali business community has not been very successful in developing sustainable consumption and being environment-friendly.

Sustainable consumption is related with making minimum use of natural resources and making do with other resources at hand in production process for industrial purposes.

This concept, however, has not been accepted fully at present in Nepal. According to Ratnakar Adhikari, general secretary of People’s Protection Forum, economic globalization coupled with the communication revolution has had a direct effect on sustainable consumption. He said, "Super markets, fast food joints, dance restaurants, beauty parlors, gymnasiums and swimming pools have cropped up while refrigerators, washing machines, air conditioners, vacuum cleaners have become commodities of everyday use. These are unfavorable for sustainable consumption since they account for misuse of fuel, pollution, depletion of natural resources and also unemployment."

Advertising Criticized

Advertisement, which has become an essential tool of mass communication, is making a negative impact on people’s consumption pattern, argued the participants at the forum. They accused developed countries of manipulating and exploiting this medium which has a peculiar desire-raising capacity in human beings, thereby bringing about imbalance in consumption pattern.

They pointed out that advertisement itself was an unsustainable medium. According to their estimation, the yearly advertisement expenses worldwide amounts to a whopping US$ 435 billion. When expenses of other marketing promotion activities are included, the amount touches the US$ 1000 billion mark. On a worldwide scale, this divides to some US$ 182 per person, i.e. 86.67 percent of per capita income of Nepal. That is not all. According to a finding, some 50 percent of the print and electronic advertisement does not reach the targeted audience at all. Which means that a staggering US$ 217.5 billion spent every year on advertising actually goes down the drain. The amount would account for global expenses on health and nutrition for 16.75 years. Said Adhikari, "Where the Kantipur daily had only 8 pages until a year ago, it now has about 16 pages, not merely due to increase in flow of news, but because of more advertisement." The increase in number of pages means increase in cutting down of trees for paper as well as in consumption of chemical products used for printing and other purposes, he argued.

Why Sustainable Consumption Pattern?

According to participants of the forum, sustainable production and recycling of products (eco-friendly products) supplement each other. Today’s naturalist or environmentalist does not see any difference between the two. So much so that production, sales, distribution and consumption of eco-friendly commodities have become an issue of personality and means of gaining confidence of consumers. Dev Raj Dahal, a representative of Friedrich Ebert Stiftung (an INGO), calling on Nepali industrialists to consider this, pointed out that a few years ago Nepali woolen carpets lost their market in Europe because they were found to be using harmful chemicals for dying purposes. Consequently, that had a telling effect on our foreign earnings. He added, "Business and industrial houses would do well by considering the changing behaviour in consumerism world over."

Attempts In Sustainable Consumption

Attempts, to some degree, have been made in order to maintain sustainable consumption and production. Procter and Gamble Company had announced in 1997, that it had been able to produce detergents by cutting down on harmful chemicals by some 400,000 tons and at the same time maintaining the quality of the products. Several countries have declared 22nd of November as a shopping holiday. An association called Mumbai Grahak Panchayat of India has called upon shoppers to use cloth bags instead of plastic. Back home in Nepal, following government’s order not to sell plastic bags of less than 20 microns, the plastic manufacturers too have issued notice calling upon consumers to use only recyclable plastic. In some overseas five-star hotels, customers are asked to reduce the use of soap and shampoo and getting bed-sheets and towels changed only when necessary. The Korean government has levied a unique tax on disposing household wastes. Consequently, household wastes are reported to have been reduced by 20 percent.

Although such examples are few and far between, lawyer Dhruvesh Chandra Regmi points out that there has been a positive influence on people from the campaign to economize on resources. According to him the effects of advertisement and pretentious nature of the Nepali people has resulted in soaring expenses by way of cultural programs, dowry, growing night life, beauty parlors and gymnasiums. "These are examples of neo-consumerism that have been imported from abroad", he opines and adds, "We go to visit a sick relative with a bottle of Horlicks in hand, we prefer feeding instant noodles to our children while we go for tinned fruit juice rather than fresh fruit juice. These are hazardous to human health and are not sustainable because they make wasteful use of natural resources."

Salary Controversy

The announcement in the new budget for salary increment for government employees has brought smiles to the faces of government employees while agitating those in public corporations.

The reason is a decision of the Council of Ministers dated June 5, 2000 circulated to the corporations. If implemented literally, the circular reduces the take-home salary of the corporation employees. All the allowances that they have been enjoying till now will be adjusted in the proposed salary increase. Faced with this situation, the employees of public corporations are now busy preparing strategies to maintain the allowances while getting the increased salary.

In this context, a joint meeting of the All Nepal Bank Employees Union, National Committee and All Nepal Corporate Employees Union, National Committee has elected a 101 member Action Committee under the coordination of Mahesh Khanal. According to a member of the Action Committee, the committee is presenting a list of demands to the government through the Ministry of Finance, formulating pressure programs to get the demands fulfilled and, if necessary, activate some 30 federal level employee unions.

Likewise, another big employees union, Nepal Financial Institution Employees Union (NFIEU), is busy in bringing together a scheme to fight the government’s decision. According to a union member, the union has decided to first hold talks with the government on the decision before formulating any course of action.

The president of NFIEU, National Committee, Amit Mani Poudel describes the decision of the government as unfortunate. Says he "The job nature of corporation employees is very different from that of government employees. Corporation employees are getting more benefits because of their contributions." He also warns that unnecessary interference on the government’s part might agitate employees and the government might find itself in a difficult position.

Grade Dispute

Two years backs, the government had made a decision whereby government employees were to be provided with grades each equivalent to a day’s salary. This has, however, till date, not been implemented in the case of government offices while public corporation employees have been enjoying the new grade scheme. They also seemed satisfied with the scheme. But when a Grade Recommendation Committee formed by the Finance Ministry suggested readjustment of the system, the new plan had it that a single grade be given to an employee who had been working between one and four years, two grades for employees serving between five and eight years and three grades for those employed for over eight years. This did nothing to improve the mood of corporation employees. For if the new scheme is to be put into place, it would mean reduction in the salaries, says Khoyahang.

Fringe Benefits Dispute

Every corporation, under some heading or another, has been providing fringe benefits to its employees as per, so-called "financial capacity". Some of these fringe benefits relate to educational expenses, house rent, transportation expenses, medical expenses, fuel expenses, telephone expenses, and so on. Government organizations do not make available these facilities to its employees. It was thus seen that monthly payments to corporation employees was as much as between 50 and 150 percent higher than that of government employees. To bring about uniformity in salaries, the government, after reinstatement of democracy, tried to bring about readjustment in salaries and fringe benefits. However corporations are seen to ignore this policy and provide benefits creating new headings. Says Madhu Sudan Adhikari, coordinator of NFIEU, "Corporations are established to provide service and also to make profits. The government should have no problem if these corporations wish to give to their employees financial benefits to motivate them, and that too from the internal resources. The stand of the government is not in keeping with international norms."

A highly placed corporation official claims that the issue of perks and benefits had been misbriefed made to the government by the Board Members of the corporations, who enjoy no such perks as they are mostly government employees.

He also questions that if the government is so concerned about bringing about uniformity, why only think in terms of salary and fringe benefits? Says he, "Why doesn’t the government, which has been unable to form a corporation service commission till date, take all corporation employees under public service and make their positions equivalent to those of government employees giving them the same status enjoyed by government servants?"

This decision of the government contradicts its own open and liberalization policy, say union leaders. They point out that private banks will be seen to provide better remunerations to its employees than public sector banks do. In this situation if the government does away with the fringe benefits, how will the public sector banks be motivated to compete with their private sector competitors? The union leaders also deny responsibility in case of failure of any public corporation and put the blame on the shoulders of the government, accusing it for lack of foresightedness, over politicization and frequent interference in the management of the corporation.

Dispute Affecting More

Although the salary dispute has not concerned the private sector companies much at present, it is beginning to show a gradual effect in small and medium enterprises since their remunerations are based on government’s salary scale.

A couple of months prior to the budget presentation, the government had revised the wages for labourers. The government sector’s salary scale had been one of the bases in this revision. With the new salary scheme, it is felt that the labour force also would call for a review in their wages.

It is also seen that this current issue may have a negative impact on other policies of the government, like that of privatization of state-owned enterprises that are mostly sick since the government’s liabilities in these organizations will actually increase with the increased salary.

Ojaswi Gautam