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COVER STORY |
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COVER STORY |
SELF-EMPLOYMENT While the large number of young population compete for limited jobs in the formal sector, some unemployed rural folks have generated new jobs for themselves in informal sector. Although the informal sector consists of mostly the self-run business, it is the major sector of employment right now. Thanks to the opportunity thrown open by the burgeoning urban population, the rural folks are learning new entrepreneurial skills supplying products of day-to-day household needs to the urban consumers. Despite their centuries old link with agriculture, these new breed of entrepreneurs are capturing almost all small trades and businesses dealing in several commodities ranging from fresh vegetables, fruits and other essential items. Ignored and untouched by the national programs, these small entrepreneurs have shown how self-employment can address unemployment problems. At a time when large numbers of unemployed youths are taking part in agitation creating social and political unrest, self-employment could have distracted them from politics By KESHAB POUDEL Affable and cordial, Krishna Kumar Sapkota, 45, does not worry about the future of his children. Sapkota is a small-time vendor at the Open Vegetable Market at Koteshwor, a small town five kilometer east of downtown Kathmandu. With a daily income of Rs. 700, Sapkota makes enough money to feed his four- member family and sends his children to private boarding school for education. Proud of his own business, Sapkota, who is a high school dropout, is busy all the time along with his wife and two offspring. He has no tensions since his son and daughter have already secured first division in the School Leaving Certificate examination. ìHad I joined the government job fifteen years ago, I would have had hard time surviving in a city like Kathmandu,î said Sapkota, who migrated from Solukhumbu with his wife and two small children in search of government job a decade and a half ago. ìAfter knocking the doors of ministers and other relatives, I gave up my initial plan to secure a government job. Fortunately, I had the idea of starting my own small business investing merely Rs.1000. Sapkota is not a single success story of self-employment. There are thousands of individuals like Sapkota in Kathmandu valley and other parts of the country. They are the new breeds of small and medium entrepreneurs who are sustaining the national economy. Although these new classes of small informal sector entrepreneurs, who have shown many typical ways for conducting successful businesses, remain un-mentioned in the government reports and programs, they might actually be the models for sustainable self-employment. In a country, where 53.4 percent of total population belongs to the working age group of 15-59 years, more than 15 percent of population remains unemployed. As such, poverty alleviation programs need to be integrated with the employment. Unnoticed for the past many years, the policy-makers have now started to give priority to the employment. The tenth plan has for the first time shown the modality for the employment generation. It also links the employment generation with the poverty alleviation programs. The government is proposing various kinds of employment-friendly programs in rural and urban areas. Policy makers agree that the informal sector has been playing more important role in generating job opportunities and predict that its role will further extend. ìOnly 2 percent of total population secures employment in the formal sector. So the non-formal sector has a major contribution in the employment generating activities,î Dr. Shankar Sharma, vice chairman of the National Planning Commission (NPC) told SPOTLIGHT. ìThanks to the economic liberalization, informal sector has extended to different areas.' For a long time, employment used to receive low priority. Despite its significant role in reducing the level of poverty, employment was not integrated with poverty alleviation program. A country where 15 districts are yet to be connected by road and more than 80 percent of the farmers have to rely on rain for agriculture, it is not easy to generate the employment without activating informal sector. Small Is Beautiful Be a small vegetable and fruit grocery or tea stall and meat shop, these self-motivated small entrepreneurs are lifeline of newly emerging sub-urban and urban areas in and around Kathmandu valley. Most of the open markets run by them are yet to be formally recognized; but the urban life will be incomplete without them. It sounds unbelievable to find out that women baking corn in the sidewalks could make profit ranging from Rs.100 to Rs150 a day selling them. They charge Rs.5 for a baked corn and make Rs.2 profit in each green corn. The women selling cigarettes in baskets, too, make profits between Rs.100 to 125 a day. With a very negligible amount of investment, the rural people are making their life possible. From Kalimati wholesale market to other many small markets in the valley, the street vendors have changed the traditional market pattern. Whether they be Lagankhel, New Baneshwor, Chabahil, Balaju, Gongabu, Jawalakhel, Koteshwor, Lokhanthali, Basundhara, Dillibazar, Anamnagar or Kalanki, the local vegetables and fruit markets are controlled by these small time vendors. These tiny entrepreneurs procure fruits and vegetables from Kalimati and Tukucha wholesale market and distribute them to nooks and corners of expanded urban areas of Kathmandu. Although they come from the family of traditional agricultural based society, the small street vendors are learning the techniques of modern business. As the life becomes competitive and frequent disruption of city life by political agitations, they have learned their way for survival and dominate business of baked corn, cigarettes, vegetables, fruits, meat, juice-makers, tea-stalls, cloth stalls in footpaths, groceries and other small activities. Manmaya Tamang, 28, who sells lemon at Lagankhel vegetable market, has a different story to tell. She supplements her husband salary to run the family. ìI make a profit of about Rs.100 a day in the investment of Rs.2000. The money I earn is handy as we are now able to send two of our children to boarding schools at Lagankhel,î said Gurung.î I have also made some savings.î Some women even make money by selling cigarettes, baked beans and nuts. ìSince I have to send my two children at the private schools, I make money with the investment of Rs.500,î said Thulimaiya, a wife of peon of government office, who sells cigarettes at the outside corner of RNACís central office. ìOur problem is the city police who throws us out and also our goods rudely from time to time.î From green vegetables to meat and lemon to cigarettes and dairy, ready-made garments and imported goods, thousands of small entrepreneurs are engaged in self-sustained chores. Since the government job is shrinking, large numbers of migrants from villages are moving to set new businesses and emerging as a a new class of entrepreneurs. As the process of urbanization continues to expand, new opportunities are opening up for them. ìIt is a tedious and difficult job and we need patience and courage to continue the business. We were happy back in our villages in subsistence farming. But now I am learning to take risks in business dealings,î said Ghanashyam Thapa, a wholesale dealer of Kalimati who has been there for last ten years. ìI have invested Rs.50,000 in this business.î Due to the investment of the UNDP to build a well-organized wholesale market in the Kalimati, many opportunities for rural farmers as well as new group of entrepreneurs opened up. Till a decade ago, the farmers had to sell their vegetables in a price set by certain individual dealers. Run by Marketing Sections of Ministry of Agriculture and Cooperatives, the wholesale market has now devised its own method to set the market prices. Vulnerable to Unrest Nepal has been passing through a very critical phase of population transition with majority of the population below 30 years. If the governments do not formulate any plan to provide them with employment opportunities, they will be perennial source of political and social unrest. Although almost all governments have seen the power of unemployed youths as a force that can destabilize the political and social process, no one has ever made any effort to provide them job opportunities in the country. Be a democratically elected government or nominated government, giving employment opportunities never became a matter of concern to them. These strong unemployed youth forces are now major factors to bring the government down. Be in rural areas or urban areas, the political forces from radical to moderate depend upon the strength of young and unemployed. According to a book published by ILO Nepal in December 2002, out of over 9.5 million workers employed in various sectors, only 1.5 million (16 percent) are paid and remaining 8 million workers are engaged in self-employment. The report indicates that literacy has increased impressively in the last decade but over eighty percent of labors have never gone to school and only over 3 percent of workers have passed the SLC. The studies have shown that Nepalís unique rural products like spices, tea, herbals, medicines, vegetables and flowers, mushrooms can help to generate employment opportunities in the rural areas as well as increase their income level. Although the number of population involved in small enterprises continue to increase, they donít have efficiency and capabilities to meet the new challenges. The government is planning to introduce new training targeting the small business groups. Since there is no government data available specifically focusing on this new class of entrepreneurs, it is roughly estimated that it provides the employment for more than 100,000 population in the Kathmandu valley alone. The population Census 2001 included these groups under a title of having economic activities but it is not adequate to gauge the situation. Traditionally, certain communities have monopoly over vegetables, fruits; and meat and grocery businesses. With the increase of the urban population, new groups joined the business. In the span of 40 years, Nepalís urban population increased from 3.6 percent of the population to 14.2 percent. According to a report prepared by the Ministry of Population and Environment, this is an increment of 400 percent over a forty-year period. The population of Kathmandu valley has doubled in the last one decade.
According to studies, in rural areas about 60 percent of the employed populations are in agriculture and related industries. The personal and community services absorbed 17.7 percent in rural areas whereas in urban areas, this sector absorbed 38.3 percent. The proportion involved in commerce and finance is four times more in urban areas than rural areas. ìWe need to encourage rural population to go for cash crops like vegetables, dairy and fruit so that new jobs will be created in the urban areas,î said Dr. Naryan Khadka, former vice-chairman of National Planning Commission. ìThe government cannot provide employment opportunities to all since the role of government is shrinking. What the government needs to do is to equip these entrepreneurs with a skill of business. Nepal appears to be mired in a low-skill, low technical competence trap. The country has made some progress especially in enrolment ratio in primary education, but the pace still remains far too slow to make a substantial difference. With the start of the Maoist movement and slow down of the economy, the countryís unemployment rate has gone up With the increase in the labor force, the government needs to create employment opportunities in agriculture as well as non-agriculture sector. The total labor force for the year 2001/2002 was estimated at just above 10.75 million. According to the International Labor Organization Kathmanu office projection, it is expected to increase to 10.96 million by 2002/03. In the end of the tenth plan in 2006/07, there will be 11.89 million labor forces. If the economic trend continues to decline, there will be more than 2 million unemployed people in the country. According to the tenth plan, the country expects to achieve 7 percent growth rate ñ which seems virtually impossible now resulting in more unemployment. The new groups of Nepalese entrepreneurs are trying to compete in the urban market. Some skilled manpower even has started other businesses like furniture shops. One of the important aspects of this emerging informal sector employment is that they are self-generated and self-motivated. Despite the lack of educational background, the small entrepreneurs have developed self-knowledge regarding the market terms. These peddlers know about the bargaining methods and the recovery and recession cycle. ìAfter completing their education, my son and daughter will make more profits and deal more professionally,î said Sapkota. ìI have learnt everything here since we (Brahmins) donít know about the terms of bargaining and business tactics.î Equal Opportunity Although this is an informal sector family run businesses, one can find equal opportunities in the working between men and women here. Both husband and wife share all kinds of opportunities and the distribution of job is based on mutual understanding. Whether it is in the decision-making or in the process of investment and expansion, the husband and wife equally share the responsibilities. They know that they have to take responsibility equally for consequences of failure and/or success. ìI have to support and back my husband in the decision-making process,î said Ambica Sapkota, 35, wife of Sapkota. Since the duty of husband is to go to the wholesale market early in the morning, the wives care about the running of the business. When many other sectors, despite the efforts of many agencies, have been suffering from gender-based discrimination, this informal sector has developed its own mechanism of equality without external intervention. This is the reason most of the small entrepreneurs are run and controlled by the women. From Kalimati wholesale market to small vendors, one can see women leading the business. As a family business, there is participation by all members of family. ìI have to wake up at four in the morning to buy vegetables in Kalimati wholesale market. My wife and children look after shop business. In this way, my wife, son and daughter have also learnt the tricks of the trade,î said Sapkota, whose wife is just a literate. Likewise, these informal sector businesses are also a great example of judicious distribution of opportunities based on castes and communities. Whether Newars, Madhesis, Brahmins or indigenous people, all have found their place in the small marketplace. As large numbers of population are moving to the urban areas, one can see the change in the employment pattern. The women work force consists of more than 40 percent of total labor force. According to a study, the share of economically active population in the primary sector (agriculture, forestry, hunting and fishing) has gradually declined from 94.3 percent in 1971 to 91.5 percent in 1981 and 81.23 percent in 1991. According to a study by Narayan Manandhar and Gopal Shrestha on industrial employment in Nepal, the transformation was very much noticeable in the urban areas though rural economy was also transforming gradually. As per the Living Standard Survey Study 1996, around 26 percent of the people engaged in the economy are wage earners which include 12 percent in the agriculture and 10 percent in the non-agriculture. The proportion of wage earners in non-agricultural sector is very much marked in the urban areas. The figure is 38 percent in urban areas and 8 percent in rural areas. As the economic transformation is profoundly influencing Nepali society and culture, in general, and living condition of the people, in particular, this transformation is very much visible in the urban areas. Although the unemployment problem is coming up with a major threat to the countryís political and social stability, Nepalese small entrepreneurs have shown that there are still hopes to find a way out by providing an alternative arrangement to employ the youths in their self-generated employment. In rural areas, agriculture still occupies the first place but in urban areas
service sector is the leading one. According to the Population Census 2001, National
Report, the title under households operating small-scale non-agricultural activities,
indicates the shift in the traditional occupation. Although the agriculture still remains
a major sector in providing employment to the majority of the population, increase in the
infrastructures including roads, telecommunication and education has introduced some
changes in the traditional pattern. More Unemployed Among 41,74,374 households, only 8,40,128 engage in economic activities and
33,34,246 do not carry out financial activities. Out of the total households, 65, 471;
2,55,767; 22,432; 2,93,831 and 2,02,627 engage in manufacturing, trade/business,
transport, service and others respectively. The census report shows that remote districts
have more households without economic activities than those in more accessible regions.
The districts of far western region have more acute problem with the population of
household not engaged in economic activities. With the total household of 2,35,387,
Kathmandu district has 73,826 households that engage in some economic activities - and the
type of their activities include 6210 in manufacturing; 30,896 in trade/business; 2,615 in
transports; 24,411 in services and 9694 in other sectors. However, in the far-western
region that has total of 3,65,401 household, only 54,099 are involved in economic
activities. "Tenth Plan Targets Employment"
Dr. Ram Hari Aryal Dr.RAM HARI ARYAL, a well-known
population expert, is a joint secretary at the National Planning Commission (NPC). Aryal,
who has a long experience in demographic field, spoke to SPOTLGIHT on various issues
relating to labor and unemployment. Excerpts: How do you see the present state of unemployment problem? The studies have shown that about 16 percent of labor forces are unemployed
and large number of new work forces are entering into the labor market every year. This is
one of the reasons why the on-going tenth plan has, for the first time, focused its
attention on the employment sector. The plan has a clear strategy to generate employment
opportunities with focus on Dalit and Janjati communities. What specific plans are there? As I mentioned, the tenth plan pays attention on how to accommodate Dalit and
Janjati communities in the informal sectors and improve their skills and capabilities.
Large numbers of people under these categories are unemployed and many other marginalized
communities are facing similar situation. Due to lack of possibilities to increase the
employment in the formal sector, we need to encourage people to create self-employment in
non-formal sectors.† For the first time, the tenth plan has given priority to the
employment sector and has developed a long term and short-term strategy to improve the
situation. The plan has separate chapters on poverty alleviation and employment. The
strategies have been drawn to create employment opportunities in formal and informal
sectors. How do you see the education sector? We are still far behind in the education sector. If numbers of educated
population rise, so will the demand for employment. The tenth plan, therefore, is also
concentrating on catering to those demands. The government is planning to take information
technology to the rural areas to create jobs there. We have to show that there are
opportunities for the employment. There is also a need to create job markets in the rural
areas. How do you link the poverty alleviation with employment? In the tenth plan, focus is more on providing employment and poverty
alleviation. Poverty and unemployment are interlinked. As long as the employment
opportunities are not generated in the rural areas, the target of poverty alleviation
cannot be achieved. This is the reason programs based on agriculture and horticulture will
be implemented in the rural areas. Over sixty percent of total populations of Nepal are
below 25 years and there must be a long-term program to address their problems. If the
country does not introduce programs focusing them, these youths will lose their patience.
Along with giving priority in generating local level employment, we are focusing our
attention to the foreign employment also. The government is creating job market abroad as
well. However, it is very challenging to create employment opportunities. What kinds of facilities is the government offering for those working in
informal sectors who have generated self-employment? There is a very small group of population who are motivated to create
self-employment in informal sector and their present number needs to be increased. There
are many programs and opportunities to encourage those who really want to create
self-employment. The backward and dalit communities can receive concessional and soft
loans. The present industrial policy and national policy also stress on the need to
encourage these groups. What is the number of unemployed people? According to the tenth plan, there are 10.4 million economically active labor
forces in the market at the beginning of the plan period. At the end of the previous ninth
plan, there were 9.9 million work forces in Nepal and five percent of them were expected
to belong to unemployed category. If we redefine the term employment on the basis of real
economic terms, the unemployed populations were much higher than those projected in the
ninth plan. The tenth plan has four pillars of focus like achieving high growth rate,
local development through balanced development, good governance and social sector
development. What is the role of NPC in promoting self-employment? Creating self-employment opportunities is one of the main targets of the plan and it focuses its attention on achieving high economic growth rate. Employment opportunity is directly related to the economic growth rate. As long as the country cannot achieve the high growth, it is impossible to achieve the target for poverty alleviation and generation of employment. There is a clear need to increase the employment opportunities to achieve the target of reducing the level of poverty to 30 percent. |
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