Key Issues In Nepalese Labour Market


Dr. Lok Nath Bhusal

Labour is one of the factors of production. It makes other factors of production functional and dynamic. Labour merits a prominent place in traditional as well as modern growth accounting. Economic growth and development are critically interlinked. When we talk about development, labour is both the means and end of development. Therefore, a country’s development largely depends on the efficient and effective development and deployment of labour.  Nepalese labour and employment sector has a number of unresolved issues which have historically undermined national development endeavours. These issues range from national manpower planning to research and development. With the emergence of a positive scenario in our economic sphere (growth rate of about seven percent) recently, these pertinent issues need to be highlighted and addressed quickly to pave the way for economic take off.

The first issue is of National Manpower Planning. Despite the planned development experiences of more than six decades, we do not have a manpower plan which clearly spells out the demand and supply situation of human resource in the country. This lacking misses the interface between education and labour market, making our education system ineffective.

The second issue which is also related to the first one is about equipping the manpower with skills required for the local and global markets. The available data reveals that most of our labour force is unskilled. Even many of the school and college graduates are lacking required skills for the contemporary labour market. This skill gap has necessitated the imports of skilled and expensive foreign labour and, in the meantime, exports of large number of cheap domestic labour force to the Gulf and Malaysia.

Thirdly, developing labour market information system has also been a critical issue in the Nepalese labour market. The lack of such a system undermines the efficient and effective labour market operation and the productivity of the whole economy. Workers are unaware of job availability while the employers are unaware of labour availability.

The fourth issue is about fixing labour laws and regulations. Since this issue is related to labour governance, it affects the smooth mobilization of labour and determines the productivity of labour. There is a persistent need to carry out a host of labour market reforms.

The fifth issue also related to the earlier one is about striking a balance between labour rights and industrialization. While industrial relations have improved remarkably over the years, the pace of industrialization has become rather slow. This has resulted in the steady decline in the contribution of manufacturing sector in the gross domestic product for the last two decades. Industrial jobs have also declined over the years.

The sixth issue is about creating approximately five lakh jobs annually in the economy. As the sustainability of foreign employment is critically weak, there is no alternative to generating domestic employment opportunities massively. While labour-intensive industrialization is by far the most prominent alternative to create jobs, policy reforms should also induce the creation of jobs in the primary and tertiary sectors.

The seventh issue is related to ending informality. Only four per cent of Nepal’s labour force works in the formal sector. Informal sector is largely characterized as lacking descent working conditions such as social security, minimum wage and occupational safety and health. Under such a situation, Nepalese labour force cannot contribute much to the national economy, rather a situation of disguised exploitation prevails. Work must be liberating and freedom-giving to realize the essence of human development. Only formalisation of employment can ensure this.

Identifying employment elasticities and promoting domestic and foreign investment in job-intensive sectors is the eighth issue under consideration. The state must know where it should invest to create more jobs. Capital-intensive technology might be profitable from the business point of view, but the issue of growing unemployment cannot be undermined from the larger perspective of social harmony and stability.

The ninth issue is about a thorough implementation of National Employment Policy, 2071. For this, there is an urgent need of mainstreaming employment in sectoral development policies. This is a momentous task which demands for critical coordination and accommodating mindset from various sectoral agencies.

Designing and implementing National Employment Guarantee Schemes has been identified as the tenth pertinent issue for our labour and employment sector. In India such schemes have become quite successful in reducing poverty, unemployment and inequality at the same time.

Eleventh, Nepal needs to promote gainful labour diplomacy, given the fact that our foreign employment dependency has dramatically escalated over the years. Ensuring productive, secure and descent foreign employment should be our goal until we fail to create enough domestic employment opportunities.

Finally, for new light, improvement and lesson learning, there is an urgent need to carry out labour and employment-related research, monitoring and evaluation. The policy of establishing a labour academy has not yet materialized.



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