Cover Story (Spotlight Weekly)

UNEMPLOYMENT
Breeding Instability

Thanks to the political instability and disruption in the economic activities, job market continues to shrink as a large number of youths have difficulty to land a job. As the country’s youth, educated as well as uneducated, are not finding any job in the market, they seem to have emerged as a major force, which is exploited to prolong political instability and engage in destructive activities. At a time when generating employment opportunities seem to be nobody’s agenda, the country will have to face many phases of similar political disruptions in the future until and unless these youths are ensured decent jobs

By KESHAB POUDEL

Ganga Bahadur Thapa, 20, a resident of Taruka VDC of Nuwakot wants a job. Thapa, a bachelor student at Mahendra Ratna Education Campus, has roamed scores of places including the houses of senior bureaucrats, industrialists, political leaders and relatives. But he has obtained nothing but empty assurances. He was asked to wait till the return of normalcy and growth of economy.

Pressed by his family members back home, Thapa is desperate to have a job. As a sympathizer of the CPN-UML student wing, finally Thapa knocked the door of a student leader to explain his predicament. Thapa was assured of a good job once the movement against regression becomes successful. To secure the job, he is now taking part in the agitation.

Youths at work : Scarce opportunities

“Our leaders have already declared that we will be awarded in accordance with our role in the agitation. If I were injured and treated at hospital, it will be an additional qualification for employment opportunity,” said Thapa.

Krishna Phuyal, 21, a resident of Thulopakhar of Sinhupalchowk district has a different story to tell. With the dismissal of Deuba government by King Gyanendra in October 2002, Phuyal was among the first youths to join the demonstration hailing King’s actions. Phuyal, an undergraduate, took part in a number of demonstrations holding the slogans hailing the role of King, lured by the promise of a job in a private bank. Frustrated by the dilly-dallying tactics of one of his leaders, Phuyal is now considering to shift his loyalty to other agitators.

“If I could not get a job, as assured, I will be in the street supporting the agitation against the regression,” said Phuyal. “I now realize that their assurance was just to keep youths like us in their fold so that they can organize big rallies.”

Thapa and Phuyal are not the only two examples how unemployed youths are becoming easy prey to political agitations. There are many others who are taking different sides in hope for an employment. But nobody knows whether their quest to secure the job will be fulfilled?

Like Thapa and Phuyal, an estimated 300,000 youth enter the job market every year but only a few lucky thousands – around ten percent - can expect to secure jobs. Recent political instability and violence have reduced the economic growth, which has, in turn, shrunk the employment opportunity.

Rural Unemployed

In rural areas, the problems of semi literate and illiterate youths are different. Since they don’t have any option in securing job, they are prepared to do anything for the sake of employment.

Along with the educated but unemployed youths of urban areas, there are a large number of unemployed and underemployed youths in rural parts of the country. In every household, there are at least a couple of youths searching for job.

Youths in agitation : Violent turn

Since the insurgency has already disrupted the process of self-employment in the rural areas, the youths are moving to urban areas. In Kathmandu alone, there are a large number of migrant workers working in the service sector.

Thanks to the construction boom in the valley, many youths were absorbed by this sector. Those youths who can afford initial costs, are eyeing the foreign market.

Following the closure of public sector enterprises and reduction in the government jobs, the rural youths had very little chance to secure a permanent job.

The private sector is also not in a position to create massive job opportunities. Despite being labor intensive, Nepalese laborers have little chances to secure jobs skill-oriented industries like carpets and garments.

Agriculture Sector

Agriculture sector is still the largest sector of employment but it is yet to modernize so that it could absorb more number of people and generate more income. The agriculture pattern is still subsistence-based and there is no possibility to secure the cash benefit.

Economic reports show that the contribution of agricultural sector to national economy has been declining in recent years. Its share of GDP has been below 40 percent for the last 3-4 years, probably due to the faster and dynamic growth of non-farm sector as well as labor migration.

Because of geographical and climatic varieties, Nepal has a huge potential to increase investment in the agriculture sector by developing the supply of the off-season vegetables and fruits to the neighboring countries. Since school education here lacks any approach towards self-employment and entrepreneurial skills, every one prefers to join salary-getting jobs rather than engaging in creative ones.

“We need to attract the rural population in the agriculture sector by giving them training and skills to produce more cash crops including vegetables and fruits,” said an economist. “This will give good opportunity to the rural population and generate the employment opportunity back home.”

Burning tyres in the street : Meaningless destruction

But this is easier than done. In the last eight years, the Maoist insurgents have virtually destroyed the limited infrastructures including the banks and micro-credit centers leaving the villagers without such basic institutions.

“I see many possibilities to revive all these institutions in case the country secures peace,” said Dr. Shankar Prasad Sharma, vice chairman of the National Planning Commission (NPC). “There is potential to achieve higher economic growth.”

Education And Employment

In a country where more than 15 percent of educated youths are unemployed and more than 42 percent of them are underemployed, there are always possibilities of seeing them being used as regular foot-soldiers by various elements to create uncertainty.

Since the Maoist violence and political instability continues to disrupt the process of industrialization, there are few possibilities of creating massive job opportunities back home. Many youths even with higher education degrees, nowadays, apply for jobs in the Gulf and other south east Asian countries. “Only a high economic growth can generate employment opportunities but it requires political stability,” said an economist.

There is no hope for the immediate relief to these youths. Despite the assurance of different governments, no one is seriously making efforts to open up new opportunities for them. State has not taken the problems of youth seriously.

“Nepal can settle the Maoist problems and political difference sooner or later but this nation has to enter a difficult cycle of growing population and unemployment,” said a western diplomat. “You can perhaps tackle the Maoists but it is not so easy to open the new industrial establishments to recruit youths.”

According to the Tenth Plan, produced by the National Planning Commission, out of Nepal’s 23 million population 10.4 million are expected to be economically active population. At the end of ninth plan in 2001, 9.9 million people were employed and only 5 percent of the populations were fully unemployed; 32.3 percent of population were underemployed and this was equivalent to 12.4 percent of total unemployment – making the total unemployed population at around 17.4 percent.

The National Census Report 2001 of the Central Bureau of Statistics (CBS) shows that more than half of the population in Nepal is between 14-29 years of age. The present age structure suggests that a large number of youths are coming in the employment market and they also need resources to increase basic facilities such as education, nutrition and health.

“If we are talking about total unemployment, it is only five percent but underemployment is 32 percent. If we convert that underemployment into total unemployment, it comes to around 17 percent. If we take this in general, the situation is quite alarming,” said Dr. Shankar Prasad Sharma, vice chairman of the NPC.

Youths have been the part of the political disruption since the restoration of democracy in 1990. Whether during the tenure of the government of Girija Prasad Koirala or CPN-UML or Sher Bahadur Deuba, these youth forces were part of the political instability. From burning public properties to causing heavy damage, the jobless youths remained strong forces that were exploited to create anarchy in different periods of time.

According to a report prepared by Narayan Manadhar, executive director of Industrial Relations Forum, the number of workers in the established factories continues to fall over the years. In 1991/1993, there were 2575 establishment with 347,164 workers and workers per establishment were 134.82. In 2000/2001, the number of establishment went up to 4296 with 394,541 workers. Interestingly, the number of workers per establishment went down to 91.84.

The number of industries fell down since many government undertakings were shut down and many workers were laid off in the last few years. New industries were hardly established. In 1995, 2,575 establishments were registered but only 282 industries were registered in the last six years.

Thanks to the political instability and growing violence, the trend to establish the industries have almost grinded to a halt.

Political Parties

Nepal’s main political parties absorb tens of thousands of youths under their various wings. CPN-UML is said to be the largest political industry in terms of the number of youths it has absorbed followed by Nepali Congress.

According to the party sources, CPN-UML has more than 300,000 youth members actively working through student wing, democratic youth wing, people’s volunteer wing and women wing.

Nepali Congress, country’s largest democratic party, too, is not far from recruiting the youths. The party claims that it has more than 200,000 youth members who have been participating in the political process through Nepal Student Union and Tarun Dal.

Other political parties including Rastriya Prajatantra Party and other smaller communist outfits also have student wings to attract the youth workers. Even the Maoists have powerful student wings. Luring youths in their own organization is one of the main targets of all the political parties and organizations.

At a time when the country does not have new industries, many youths see taking the membership of different political parties as a good way of securing job later on when the party comes to power.

“It is interesting to note the same faces of youths taking part in anti-corruption rally denouncing the followers of previous government. Next day the same faces could be seen taking part in the destruction of public property at the call of five agitating parties,” said a senior police officer, who has been discharging duty in the valley for the last two years, on condition of anonymity. “There are groups of youths who seems to have specialized in the agitation.”

Sociologists, too, agree that one of the Nepal’s major challenges in future will be to adjust a large number of youths. If the state cannot provide employment, they will be a force of destruction and instability forcing every government to bow down.

“You don’t need Maoists to create troubles in future. The present unemployed students will be enough. Now these youths are under the discipline of political parties, tomorrow if some other unsocial elements take them under their control, the situation will be out of control,” said Dr. Rishikeshab Raj Regmi, an anthropologist. “The society will have to face more instable situation in future,” he predicted.

The unemployed youths were headache for then prime minister Girija Prasad Koirala when the youths were used by his rivals to destabilize his government but now all other political parties see them as messiah of democracy. Unlike in the past, many Nepalese are now fed up with the disruption caused by the protesters and many accuse them as being Nepalese who are working against Nepalese since the roadblocks, general strikes and other disruptions affect none others but their own brethren.

Foreign Employment

At a time when the country’s industrial sector is not showing any good trend to absorb the country’s growing labor force, the foreign employment has been an only outlet. According to the recent figures by the Department of Labor and Employment Promotion, 260,000 workers went to overseas from 1993 till the end of last fiscal year. This is the government data whereas the major bulk of overseas workers go on their own. As such, the actual number of such overseas workers is much more.

The country’s labor plans include ambitious target for expanding the number placed in foreign employment from 104,739 to 550,000 in 2006/07. According to the Population Census 2001, national report, published by the Central Bureau of Statistics, there were 762,181 Nepalese working abroad during the period of census and that 589,050 of them were working in India alone.

“The government has not yet realized the beauty of foreign employment and the benefits from remittance. In the home front, a workable modus operandi to activate foreign employment opportunities should be developed which demands formulation of Acts and implementing rules,” said Dr. Bishwambher Pyakuryal, a renowned economist.

Despite formulating new programs that target the youths, there continues to be a large number of youths who are unemployed. If immediate actions and plans are not executed, these youths will work to destabilize the political and economic process pushing the country into perpetual chaos

“Our Education System Misses The Vital Component Of Encouraging Entrepreneurship”

— Dr. Shankar Prasad Sharma

Vice chairman of National Planning Commission Dr. SHANKAR PRASAD SHARMA has had a long association with the commission. Dr. Sharma spoke to SPOLIGHT on various issues regarding employment opportunities. Excerpts:

What is the present status of unemployment problem in Nepal?

If we see in terms of statistics, it is not very good. There are two different definitions of unemployment in Nepal - total unemployment and under-employment. If we are talking about total unemployment, it is only five percent but under-employment is high at around 32 percent. If we convert the figures of under-employment and adjust it, the total unemployment will come around 17 percent. If we take this data, it is quite alarming. On the top of that we have two problems. Unemployment in urban areas is high and also the unemployment among the educated class. Sometime it is even said that if we send youths to schools and colleges, we are converting them from general unemployed people to educated unemployed ones.

What is the level of unemployment among educated people? Do you have any statistics?

We don’t have specific statistics about unemployment of educated people since the labor force survey does not do such type of analysis. It is very difficult to say about that. If we look at the volume of urban unemployment, it is close to 14 to 15 percent.

Don’t you see any possibility of mobilizing these educated but unemployed people in a nationwide literacy campaigns so that people at large as well as these unemployed can benefit?

This year we have also done that. In some of the selective districts, what we have said is that depending upon the output in literacy; such people will get job as well as remuneration. The remuneration will be performance and output based. Similarly, we are using national volunteers recruiting from local level and central level. We don’t have enough money. From next year, we will also initiate vocational training program through the support from Asian Development Bank. We are working on the modalities to give skill and entrepreneurial training to youths as much as possible. We are in the process to collect the data of youth unemployment in the country.

We have seen many political upheavals brought about by these unemployed youths. Don’t you see these unemployed people are going to be a breed ground for permanent instability?

I agree with that point but it is like a chicken and egg problem. We have to have stability to generate 7 percent of growth rate in the country. We should have good strategy, which will come only through good leadership. Both the parts are missing in Nepal. If we have instability of this kind, even if different governments introduce different programs, they are not going to be sustainable. Such programs will only be half-hearted. We have seen that many governments and their good programs died down because of instability. First of all we need to have political stability. We have all the potential to grow by 7 percent or more. If we can generate the 7 percent of growth and reorient our programs, we can absorb all our unemployed people. I am not pessimistic about the situation since we can still do a lot.

What specific programs does the government have to provide employment to educated youths?

We have four different kinds of programs in addressing the unemployment problems. One is basically entrepreneurship development. We have skill development program and higher education program but they don’t have any component in encouraging entrepreneurship. Various researches and reports show that because of lack of such component in the education system, even educated youths are not getting employment opportunities. Despite the large number of higher education programs and vocational development programs, hardly few people think about developing self-employment.

What are other problems?

Second problem is that there is no employability among the educated masses. We have been spending a lot of money in education and vocational training programs but they seem to be incompetent. Annually, government spends close to Rs.1 billion in vocational training. We have programs within the Ministry of Labor, Ministry of Industry, Ministry of Agriculture, Center for Technical Education and Vocational Training (CTEVT) and others. If we tally the programs with the demand of the market, there is where the real problem lies. We are giving training in one area but the market demand is in another. There is a mismatch between demand and supply. We also have problems in what employment framework says about equality. We are supposed to start the programs to benefit disadvantaged groups, poorer people, people of deprived and backward communities. Mostly people who live in district headquarters are benefiting from our programs.

Do you have any new plans for increasing employment opportunities?

In the last four or five years, we have improved upon policy making in employment as one of the focus area of overall development objectives of the country. This means employment mainstreaming in development activities. It is not easy to do. Only those countries, which have high economic growth, can absorb huge number of people. That part we are missing especially over the last four or five years. During early 1990s the economic growth rate was above 7 percent but that has also slowed down.

Do you see any special areas for employment generation?

There are certain areas where we can generate the mass employment like road construction and other labor-intensive sector. We need to employ people in income generating activities. In the Maoist affected areas, we want to mobilize users group in various programs in rural areas. For instance, we have increased the food for work program. Similarly, other donors are also trying to generate employment opportunities and income generating activities. We also have quick impact programs in many districts. We have reoriented a number of programs towards the income generation activities in the rural areas. We are trying to work on micro-enterprise programs and we are expanding it to 10 districts. We implement the programs on the basis of resources available and demand of the districts. Similarly, other programs are also reoriented looking at the demand of the market. In foreign employment sector, we are providing training. These are some areas where we need to improve.

How do you see the rate of return from higher education?

We have spent a lot of money in the higher education sector but that has neither created the entrepreneurship ability nor any salable scheme. That one is very difficult to change. To change the education system and introduce saleable schemes, it takes time. We have to build entrepreneurship in the education system. Otherwise, it will lead us to nowhere. But some of the Universities like Kathmandu University have focused in this area and are producing students that can enjoy demands of the market. Those students who graduate from such colleges and universities do not have any problem in securing the employment. Other universities and colleges need to change their old practices. We are also trying to change the labor law giving more opportunity to the Nepalese laborers. Because of existing rigid laws, they cannot employ Nepalese for short term.

What are other areas for meeting the demands?

Enhancing the foreign employment is another area. In the last couple of years, the number of Nepalese heading towards the foreign countries is increasing. It should be encouraged. We are also receiving more remittances from these workers. We also want more value added so that more remittance can be received from the same number of foreign workers. We have already started the training programs for people going for the foreign employment.