essay about unemployment problem in nepal

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Problem of Unemployment in Nepal – An Essay

The problem of unemployment in nepal – an essay.

Nepal has to face many problems and one of these is the problem of unemployment. The whole world is facing this problems but Nepal is one of the worst sufferers. The number of the unemployed is always on the increase. The government is finding it difficult to solve however the policies developing by government has shown little light in the field of employment. The current situation of job market and contemporary belief system of labor are the major causes for unemployment. The condition of health and safety measures does not supporting in Nepalese context for lower graded job along with the payment. The spreading pandemic of COVID-19 possibly hampers the Nepalese job market in the near future.  

Unemployment means lack of work for those who are willing to work. It means compulsory leisure to some, when others are over-worked. Both the educated and the uneducated have suffered and are still suffering from unemployment. There is unemployment in the skilled as well as unskilled people and some people are intentionally unemployed as they don’t have sense of respect in working in low paying sectors. In some cases the skill of people is not utilized because of opportunities.

There are many reasons for unemployment. The population is increasing rapidly. The factory system is killing cottage industries. Manual workers cannot find jobs. Nepal migrant workers sent $8.1 billion in 2018 marking if the 19 th biggest beneficiary of funds sends by migrants around the world, according to the report released by World Bank. The remittances were up to 16.39 percent year on year deposit a drop in the number of departures. The population of Nepal represents 0.44 percent of the world’s total population which arguably means that one person in every 229 people on the planet is a resident of Nepal, where as the unemployment nation is 3.20 to 4.50. It shows the incensement in population the chance or incensement in unemployment is possible in future.

Nepal has secured the top spot in job creation in South Asia with employment rate hovering around 68 percent says the latest world bank report. This means 32 percent of the country’s working age population people aged 15 to 64 is either unemployed or voluntarily inactive the lowest in south Asia. The major cause of unemployment in Nepal is respect to the profession. Nepalese people are ready to risk their lives in overseas where as they don’t like to invest time in Nepal for similar pay. On the other hand the employment problem has been correspondence to the currency value is somehow similar the pay which manpower receives differs in various countries.

Our system of education is defective. It produces only clerks who are feeling shame of doing small jobs. Nepal is an agricultural country but no one wants to do the farming and to live in village. All want to rush towards cities. The life of a farmer is looked down upon. So, there is rush for government service in cities and towns. Parents send their sons and daughters to school and collages in order to enable them to get a good job after education. so, there is a rush of candidates before offices. Very few candidates get into them while others remain unemployed.

The big number of youth has been returned to Nepal from different foreign country because of covid-19. The pandemic has snacked the opportunity of employment inside the population which was employed in overseas is returned to the country. In this situation, we can guess the situation of employment in Nepal in the near future. Our government is trying to solve this problem. Technical and vocational colleges are being opened. Cottages and handloom industries are being encouraged. Every effort is being made for family planning to control population. Irrigation and multipurpose projects are multiplying fast.

But there is still much to be done. The first things to be done are to being about a complete change in the outlook of our young men and women. For this our educations system should be greatly changed. They are to be taught the dignity of labour that they may leave their love for clerical jobs. They must feel attracted towards manual labour, farming and doing things in small cottage industries of their own. Only then the problem can be solved to a great extent.  

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The burden of unemployment

A recent Nepal Rastra Bank survey which looked into the effects of Covid-19 on Nepal’s economy showed that tens of thousands of people were rendered jobless during the four-month-long lockdown while there was a massive disruption in the production and supply chain as 61 percent of businesses shut their operations completely. The survey, which covered 52 districts involving 674 industries, business ventures and start-ups, reported that small and medium scale enterprises and early-stage start-ups were among the worst hit while 77.2 percent of the businesses did not have the cash flow to pay employee salaries besides other fixed expenditures.

The survey also showed that 22.5 percent of employees were laid off by businesses, including in the manufacturing and service sectors, two-thirds of whom were under contract basis or were hired on a temporary basis. The largest layoffs were in the hotel and restaurant sector, followed by small and medium scale enterprises which laid off 30.5 percent of their employees. The survey also reports that on average, industries and businesses trimmed 18.2 percent of their payroll. However, the average pay cut by big businesses was 22.5 percent against a 13.6 percent cut by medium businesses.

For an already bleak reality, re-imposed lockdown and prohibitory orders amid the deteriorating Covid-19 situation in the country is only increasing our challenges which, if not dealt with urgently, could embroil the country in socio-economic and political issues. There is little foresight on how and when the current situation will evolve to our advantage, and youths, especially in rural Nepal, have started to leave for India in search of jobs. This has raised a big question on the employment schemes that have been rolled out by the government to absorb the labour force at home, especially when the country expects more returnees from migrant destination countries given the pandemic.

While the challenges keep getting bigger, the symptoms, however, are not new. Unemployment remains one of the biggest problems in Nepal, which has forced hundreds of thousands of Nepali youths in the past decades to migrate in search of livelihood opportunities, often in dangerous and slave-like conditions. While none of the political leadership to this day has been able to commit to its promises to create jobs, the Oli administration’s Prime Minister Employment Programme has also failed to create jobs and meet its targets, two years since its inception.

This fiscal year, as part of the programme, the government aimed to create a minimum of 100 days of wage employment jobs for some 200,000 people, but there are no jobs at the local level. Even the outgoing finance minister Yuba Raj Khatiwada repeatedly said that the domestic workforce could replace foreign workers involved in various sectors, but the much touted employment programme, which has instead drawn criticism for taking loans for its implementation, has failed and the budget allocated for the programme remains unspent.

Earlier this year, the government had doubled the programme’s budget to Rs11.6 billion and in July, the Labour Ministry had also received a soft loan of approximately Rs14 billion from the World Bank to implement the five-year Youth Employment Transformation Initiative under the programme, but it has not shown any credible results while nothing has changed for Nepalis who continue to migrate to India or are seeking labour permits or seats on the next flight out.

Desperate times call for desperate measures. We cannot afford off-and-on lockdowns and prohibitory orders which directly affect the economy, and as a result, employment opportunities. Reopening the economy, given the public health crisis of this scale, depends on how swiftly we expand testing and contact tracing to break the chain of transmission of the virus. The government must rise to this challenge and launch a massive testing programme, together with antibody testing. It must also launch a nationwide behavioural change campaign to instil precautionary measures against the coronavirus. This is the only way to reopen the economy and create jobs and safeguard them.

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Youth Unemployment in Nepal: A Silent Disaster in the Making

In the land of stunning landscapes and soaring mountains, a silent crisis is haunting Nepal’s vibrant youth. As the sun rises over the breathtaking Himalayas, it illuminates a harsh reality: a growing tide of unemployment that threatens to engulf an entire generation. This write up delves deep into the pressing issue of youth unemployment in Nepal, exploring its underlying causes, devastating consequences, and, most importantly, the potential solutions that lie within our grasp.

Nepal’s youths, brimming with ambition, creativity, and determination, are facing an uphill battle in their quest for meaningful employment. The statistics paint a sobering picture: with an alarming youth unemployment rate that surpasses the national average, the country stands at a crossroads, grappling with the repercussions of a demographic dividend gone awry.

Unemployment among the young not only stifles their dreams and aspirations but also undermines the nation’s progress. Lost opportunities, wasted potential, and a sense of hopelessness permeate the air, threatening to dampen the spirit of a nation known for its resilience.

Yet, amid these dark clouds, a glimmer of hope emerges. This article seeks to shed light on the multifaceted causes behind this crisis, ranging from an inadequate education system to a lack of job opportunities and a widening skills gap. Moreover, it explores the far-reaching consequences of youth unemployment, from social unrest to economic stagnation, offering a stark reminder of the urgency to act.

Youth unemployment is a critical issue affecting many countries worldwide, including Nepal. As a developing nation, Nepal faces numerous challenges in addressing the high rate of unemployment among its youth population. By understanding the factors contributing to this issue and implementing appropriate strategies, Nepal can strive towards creating a brighter future for its young workforce.

Nepal’s overall unemployment rate has remained a concern, with the latest data indicating an unemployment rate of 10.6 percent (World Bank, 2021). However, the youth unemployment rate, which primarily affects individuals between the ages of 15 and 29, stands at a staggering 19.4 percent (Central Bureau of Statistics, 2021). This significant disparity in youth unemployment emphasizes the urgent need to address this issue effectively.

Causes of youth unemployment

• Inadequate education system: The education system in Nepal often fails to equip young individuals with the necessary skills and knowledge demanded by the job market. The curriculum may not be aligned with industry requirements, resulting in a gap between education and employability.
• Limited job opportunities: The availability of suitable jobs is a significant challenge. The Nepalese economy faces structural issues, with limited formal sector employment opportunities compared to the growing number of job seekers. This imbalance leads to high competition for a small number of positions.
• Skills mismatch: There exists a significant gap between the skills possessed by youth and the skills demanded by employers. Many young individuals lack the specific technical skills and practical experience required by industries, leading to difficulties in securing employment.
• Rural-urban divide: Disparities between urban and rural areas contribute to youth unemployment. Opportunities are often concentrated in urban centers, leaving rural youth with limited access to education, training, and employment prospects.
• Lack of entrepreneurial ecosystem: Entrepreneurship can be an alternative path for employment. However, the absence of a conducive ecosystem, including access to finance, mentorship, and a supportive business environment, hampers the growth of entrepreneurial ventures.
• Gender inequality: Gender-based discrimination and traditional societal norms affect employment prospects for young women. They often face limited opportunities, lower wages, and barriers to accessing education and training.
• Political instability and policy constraints: Periods of political instability and policy constraints can hinder economic growth and job creation. Uncertainty in governance, inadequate infrastructure, and inconsistent policies can discourage investment and business expansion.
• Migration and brain drain: The allure of better opportunities abroad leads to significant youth migration. This brain drain exacerbates the unemployment issue, as skilled individuals leave the country, creating a shortage of talent domestically.

Addressing these causes requires a comprehensive approach that focuses on improving the education system, fostering entrepreneurship, bridging the skills gap, promoting inclusive growth, and creating an enabling environment for investment and job creation.

Consequences of youth unemployment

Youth unemployment in Nepal has several consequences, which are outlined below along with examples:

• Economic consequences: Youth unemployment can hinder economic growth and development by reducing productivity and stifling innovation. When young individuals are unable to find employment, their potential contribution to the economy remains untapped. This leads to a loss of economic output and a burden on social welfare systems.

  Example: A high youth unemployment rate means a large portion of the population is unable to contribute to the country’s GDP, limiting overall economic progress.

• Social unrest and discontent: Youth unemployment can lead to social unrest, dissatisfaction, and a sense of hopelessness among the unemployed youth. This can fuel social tensions, protests, and even acts of violence as frustrated individuals seek to voice their grievances.

  Example: In the past, Nepal has witnessed protests and demonstrations by unemployed youth demanding better job opportunities and economic prospects.

• Poverty and inequality: Unemployment, particularly among young individuals, can perpetuate poverty and exacerbate income inequality. Without adequate employment, individuals and their families may struggle to meet basic needs, leading to a cycle of poverty and widening income disparities.

  Example: High youth unemployment rates can result in a higher prevalence of poverty among young people and contribute to the persistence of intergenerational poverty.

• Brain drain: Another consequence of youth unemployment is the potential brain drain, where talented and skilled individuals seek opportunities abroad. This drains the country of its intellectual capital and exacerbates the skills gap, making it more challenging to drive economic growth and development.

  Example: Many highly educated and skilled Nepali youth choose to migrate to countries like the United States, Australia, Canada and European countries in search of better employment opportunities.

• Social and psychological impact: Unemployment can have detrimental effects on mental health, self-esteem, and overall well-being. Young individuals may experience stress, depression, and a loss of purpose due to the lack of meaningful employment.

  Example: Unemployed youth may feel a sense of frustration, helplessness, and social isolation, which can have long-term negative impacts on their mental and emotional health.

• Social dependency and crime: Prolonged unemployment can lead to increased social dependency on family and social welfare systems. It can also contribute to a rise in crime rates as individuals resort to illegal activities to sustain themselves financially.

  Example: In the absence of employment opportunities, some young individuals may engage in criminal activities as a means of survival or out of frustration and desperation.

Addressing youth unemployment and its consequences requires a multi-faceted approach that includes creating employment opportunities, improving education and skills training, fostering entrepreneurship, and promoting inclusive economic growth.

Solutions to youth unemployment

Addressing youth unemployment in Nepal requires a comprehensive approach involving various stakeholders. Here are several possible solutions, with examples:

• Enhancing education and skills training: Improving the quality and relevance of education is crucial. This involves updating curricula to align with market demands, promoting vocational training, and incorporating practical skills development. Partnerships between educational institutions and industries can facilitate internships, apprenticeships, and on-the-job training.

  Example: Establishing collaborations between technical schools and local businesses to provide students with hands-on experience and relevant skills training.

• Promoting entrepreneurship: Fostering an entrepreneurial ecosystem can empower youth to create their own employment opportunities. This entails providing access to finance, mentoring programs, business incubators, and simplified procedures for starting and operating businesses.

  Example: Initiating entrepreneurship development programs that offer financial support, mentorship, and training to aspiring young entrepreneurs.

• Encouraging public and private sector collaboration: Close collaboration between the public and private sectors is essential to create a favorable business environment. This can involve public-private partnerships, policy dialogues, and joint initiatives to promote job creation, investment, and economic growth.

  Example: Establishing industry-specific task forces comprised of government representatives, industry leaders, and youth representatives to identify sector-specific employment opportunities and develop targeted strategies.

• Promoting rural development and agriculture: Investing in rural development and agriculture can create employment opportunities for rural youth. This includes improving access to agricultural resources, promoting modern farming techniques, and supporting value-added agricultural activities.

  Example: Introducing programs that provide training, access to credit, and marketing support to young farmers, encouraging them to engage in commercial agriculture.

• Encouraging foreign direct investment (FDI): Attracting FDI can spur economic growth and create job opportunities. Providing a conducive investment climate, streamlining bureaucratic procedures, and offering incentives to foreign investors can encourage them to establish businesses in Nepal.

  Example: Establishing special economic zones or industrial parks with attractive incentives to attract foreign investors and stimulate job creation.

• Strengthening labor market information systems: Developing robust labor market information systems can bridge the information gap between job seekers and employers. This includes collecting and disseminating accurate data on job vacancies, skill requirements, and labor market trends.

  Example: Establishing online platforms or job portals that provide real-time information on job vacancies, skill requirements, and training opportunities.

• Encouraging youth-focused policies: Formulating and implementing youth-focused policies that prioritize job creation, skill development, and social inclusion can address the specific needs and aspirations of young individuals.

  Example: Implementing targeted youth employment schemes that offer wage subsidies to employers hiring young job seekers, thereby incentivizing youth employment.

These solutions, when implemented in a coordinated manner, have the potential to tackle youth unemployment in Nepal, unleash the potential of the young workforce, and drive sustainable economic development.

Igniting the flames of change

The challenges of youth unemployment are multi-dimensional, rooted in a complex interplay of social, economic, and political factors. Inadequate education systems, limited job opportunities, skills mismatches, and gender disparities are the daunting barriers that stand tall, blocking the path to progress. But, as the resilient spirit of Nepal’s youth has shown time and again, no obstacle is insurmountable.

Amid the adversity, rays of hope pierce through the dark clouds of despair. The seeds of change have been sown, and solutions are within reach. By transforming our education system to be dynamic and industry-relevant, nurturing entrepreneurship with unwavering support, and promoting a fertile ground for investment and innovation, we sow the seeds of a brighter tomorrow.

It is time to break free from the shackles of convention, to embrace innovation, and to forge partnerships that transcend boundaries. The journey towards reducing youth unemployment calls for a collective effort – one that unites government, businesses, communities, and the young themselves.

As Nepal’s youth discovers their own strength and potential, their aspirations will soar to heights never imagined before. Let us foster an environment where dreams flourish and opportunities abound. Together, we paint a masterpiece of progress, where every stroke of change brings us closer to an empowered and thriving nation.

In the pursuit of progress, we must remember that the true measure of success lies not merely in economic growth, but in the welfare and well-being of our young generation. Empowering them with opportunities is not just a goal; it is a moral imperative, for a nation that invests in its youth invests in its own future.

Together, we shall unleash Nepal’s untapped potential, igniting the flames of change, and watch as our youth, with their brilliance, passion, and resolve, illuminate the path towards a brighter, more prosperous Nepal for all.

References:

• International Labour Organization (ILO): https://www.ilo.org/
• Bikas Udhyami: http://www.bikasudhyami.com.np/
• Spotlight Nepal: https://www.spotlightnepal.com/
• Youth unemployment rate in Nepal (2022):

https://www.statista.com/statistics/812273/youth-unemployment-rate-in-nepal/

• Unemployment rate in Nepal (2021):

https://www.macrotrends.net/countries/NPL/nepal/youth-unemployment-rate

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Unemployment: The Biggest Challenge For Nepal

Most people in Nepal are self-employed. They are engaged in agriculture, trade, cottage and small-scale industries etc. These people should be helped financially, providing raw materials and technical training.

Hari Prasad Shrestha

Unemployment generally drops down during periods of economic growth and go up during recessions, causing significant pressure on public finances as tax revenue decreases and social support costs increase.

Unemployment generally drops during periods of economic growth and goes up during recessions, causing significant pressure on public finances as tax revenue decreases and social support costs increase.

Unemployment is associated with demand and supply. The economy performs well when production is high and the demand for labor becomes also high, that means unemployment is low. Conversely, when the economy is in doldrums, companies do not want many people that means unemployment is high.

Unemployment rates in the US varied from as low as 1% during World War I to as high as 25% during the Great Depression 1980 followed by the financial crisis 2008 and Covid -19 pandemic 2020 abnormally high. During COVID-19 pandemic, American unemployment saw a huge increase; more than 38 million Americans lost their jobs and applied for government aid, including nearly 4 million people in California, in the eight weeks since the coronavirus pandemic began.

There are a variety of factors that impact unemployment. First is cyclical unemployment; it occurs when there is not enough aggregate demand in the economy to provide jobs for everyone who wants to work.

Another one is frictional unemployment, which reflects the gap between someone voluntarily leaving a job and finding another.

The last one is structural unemployment, which is caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap). Structural unemployment is often brought about by technological changes that make the job skills of many workers obsolete.

In Nepal, the overemphasis on academic performance and the widespread interest among youths in getting a degree has led to the production of qualified but hardly employable graduates. They do not have the technical knowledge and skills.

Our industrial and service sectors are desperately short of skilled professionals. Therefore, the current crisis is not because of joblessness but lack of skills in the organized sector. There are job openings, but not the right candidates.

In year 2021, the unemployment rate in Nepal was 5.1%. It defined the number of unemployed people as percent of the labor force. The labor force includes the people who are either employed or unemployed, i.e., who don't have a job but are actively looking for one. The labor force does not include children, students, prisoners, retirees and does not have an interest in a job.

Currently, the total active workforce in Nepal is around 7 millions and out of it 1.7 million are unemployed. Everyday 1500 youths are going abroad for the jobs. External shocks of permanent labors from bordering India in Nepalese job market are unavoidable factors due to open borders. There are no scientific statistics, but it is estimated that their numbers are close to a million, more than Nepali work in India.

There are limited jobs, 25-30% in the formal sector of government and private institutions in Nepal. A large proportion of work forces are dependent on informal sectors. And every year, over 500,000 young people are entering the labor force.

Jobs are a critical point of the economy. Employment measures the economic health of the economy. GDP could be slower if the unemployment rate is high. It is believed that 4-6% unemployment is natural and more than 6% is supposed to be bad for the economy.

Nepal has been always failed in generating employment to its citizen in minimum level. As result of the declining nature of agriculture and manufacturing sectors are unable to absorb rural unemployed youths, previously which were the highest sources of employment,

Sudur Paschim, Karnali and Madhesh provinces are most hit by unemployment problems, from where hundreds of thousand people go for job to gulf countries and India compared to other provinces.

Age distribution and ethnicity participation are also important in employment. Unemployment rates are high among untouchables, lower castes compared to high castes population. Moreover, urban areas, especially the Kathmandu valley provide high opportunities for better jobs compared to rural areas.

Joblessness and job loss have a far-ranging effect on many parts of society. The families of unemployed people have a very hard time. Prolonged unemployment harms health, especially mental health, and shortens the lifespan. High unemployment can have a self-perpetuating negative impact on businesses and the economic health of the country, which in turn leads to a rise in poverty. Unemployed labor is a waste of the most important economic resource, human labor.

During the Covid-19 pandemic there was a collapse in demand and people lost their jobs. The pandemic did horrible damage to jobs. After the end of pandemic job creation has started, which is still fluctuating up and down.

During the pandemic period the hospitality industry and other important sectors of the Nepalese economy were in great loss and employment in those sectors was very low. After the end of Covid-19 , broad based, sustained revival of jobs seen in construction, hospitality, tourism, health, education and retail sectors.

Some improvement has been observed in narrowing down between male and female participations ratio in labor market. Previously when manufacturing sector was performing well, more male was in employment compared to women and now when service sectors started to dominate the economy, male participation ratio has been decreased and women participation is increasing in labor market.

The main objective of the county’s employment policy should be to increase employment opportunities and the productivity of labor. Government should adopt a policy that provides employment to all people.

It is essential that labor-intensive technology should be encouraged in place of capital-intensive technology.

To increase employment, it is essential to increase production in the agriculture and industrial sectors. Development of small and cottage industries should be encouraged. Moreover, programs like irrigation, roads, flood control, power, agriculture, rural electrification can provide better employment to people.

Decentralization of Industrial activity is necessary to reduce unemployment. If industrial activities are centralized in one place, there will be fewer employment opportunities in underdeveloped areas. So, Govt. should adopt such policies which encourage the decentralization of industrial activity.

And the government, at all levels, must increase their capacity to spend capital expenditure to support job creation.

Reservation in government jobs is playing some roles to narrow down ethnicity imbalances in employment as this sector is very small. Moreover, unemployment benefits and social security allowances have been supportive, even for small numbers of people, to run their daily life.

As there are fewer opportunities for employment in Nepal and its majority of working population are dependent on Gulf countries for jobs. If the Gulf countries stop hiring Nepali workers or send them back, due to unexpected crisis, there is going to be massive street demonstrations by the hordes of jobless people demanding work in Nepal. The government has no idea what the consequences will be. The government should come up with effective macro-economic policies and ensure improvements in the structure and functioning systems of governance to stabilize economic growth and create more jobs.

(Shrestha is a former Under Secretary at the Ministry of Finance and associated with UNDP Africa)

He worked under Ministry of Finance, Nepal as Under Secretary and has been associated with the United Nations Development Program (UNDP) Sierra Leone and South Sudan and UNMISS.

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Essay on Unemployment in Nepal

Unemployment in Nepal is a significant socio-economic challenge that affects individuals and the nation as a whole. The country, nestled in the Himalayas, faces various issues contributing to its unemployment woes.

One primary factor is the rapid population growth, which outpaces job creation. The mismatch between the number of job seekers and available opportunities has led to heightened competition in the labor market. This, coupled with limited industrial diversification, results in an increased unemployment rate.

Agriculture, despite being a crucial sector, cannot absorb the burgeoning workforce. Many Nepalese youths, often possessing educational qualifications, find themselves unable to secure employment in their desired fields. The education-to-employment gap exacerbates the unemployment crisis, highlighting the need for skills that align with market demands.

Nepal’s economy is also heavily reliant on remittances from abroad, with a significant portion of the working-age population seeking employment opportunities overseas. While this provides financial relief to families, it does little to address unemployment within the country. Moreover, it contributes to a brain drain as skilled individuals seek better prospects abroad.

The informal sector plays a vital role in Nepal’s economy, absorbing a substantial portion of the workforce. However, jobs in this sector often lack job security, decent wages, and social benefits. This precarious employment situation perpetuates economic instability for many individuals and families.

Government initiatives to tackle unemployment include skill development programs and entrepreneurship support. However, the impact of these efforts is constrained by resource limitations and the magnitude of the challenge. Effective collaboration between the public and private sectors is crucial for creating a conducive environment for job creation and economic growth.

In conclusion, unemployment in Nepal stems from a complex interplay of factors, including population growth, limited industrial diversification, and the education-to-employment gap. Addressing this issue requires comprehensive strategies that prioritize skill development, encourage entrepreneurship, and foster collaboration between different stakeholders. By tackling the root causes, Nepal can pave the way for a more prosperous and sustainable future for its citizens.

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What are the primary causes of unemployment in Nepal?

The main factors contributing to unemployment in Nepal include rapid population growth, limited industrial diversification, and a mismatch between the number of job seekers and available opportunities. Additionally, the education-to-employment gap and reliance on remittances from abroad contribute to the unemployment challenges.

How is the informal sector influencing unemployment in Nepal?

The informal sector plays a crucial role in Nepal’s economy by absorbing a significant portion of the workforce. However, jobs in this sector often lack stability, decent wages, and social benefits. This precarious employment situation contributes to economic instability for many individuals and families, perpetuating the overall unemployment issue.

What initiatives has the Nepalese government taken to address unemployment?

The Nepalese government has implemented various initiatives to tackle unemployment, including skill development programs and support for entrepreneurship. However, the impact of these efforts is constrained by resource limitations. Effective collaboration between the public and private sectors is essential for creating an environment that fosters job creation and sustainable economic growth in the country.

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Youth Unemployment: A Serious Problem in Nepal

Nepal’s job market is unable to accommodate a large youth population seeking employment resulting in an increase in foreign employment..

 "I have passed my college yet I am unemployed. It is not easy for me and my family. I have been trying to get a job for a while. The situation is really discouraging and now I am planning to move abroad to earn some money. My family is struggling to make ends meet,” says a bachelor graduate Rajesh Mahato.

Nepal Labour Force Survey 2017/18, performed by the Government of Nepal National Planning Commission and Central Bureau of Statistics reveals agriculture to be the most popular employment sector in Nepal, with one in every five people who work employed in agriculture. This confirms that Nepal is in present still an agricultural country in regards to internal employment engagement.

However, industries have a huge role to play in generating mass employment opportunities for youths in Nepal. Announcing the budget for the fiscal year 2022/023 in the Federal Parliament, Finance Minister Janardan Sharma unraveled the government’s plan to make provisions for leasing state owned land for 50 years. These lease provisions are aimed to minimize unemployment by ensuring a favorable industrial environment for industries to grow in Nepal.

Government’s initiative is hoped to make a change in youth unemployment rate but there are many facets to youth unemployment in Nepal that need to be addressed, through youth led discussions and programs.

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Home /  Employment and Entrepreneurship in Nepal  

Npc sets ambitious target of reducing nepal’s unemployment to one-third in next six years.

Year of Publication: 7 July 2023 | My Republica

Published by: CESLAM

KATHMANDU, July 7: The government has set an ambitious target of reducing the country’s unemployment rate to one-third in the next six years.

According to the National Planning Commission (NPC), there are 900,000 jobless people in the country. The NPC has aimed to reduce the number to 300,000 by 2029. It means the government targets to provide jobs to 600,000 people at present along with the newly emerged manpower in the next six years.

Experts said that with no concrete plan to generate the notable number of employment opportunities in the country, the government’s ambitious target is just a populist one.

The NPC says it has forwarded the work to devise a plan to develop human resources for this purpose. A direction committee led by the NPC member Ramesh Poudel has recently finalized its study report on the human development plan.

Representatives from the Prime Minister’s Office, Ministry of Finance, Ministry of Federal Affairs, various universities, private sector schools and the Federation of Nepalese Chambers of Commerce and Industry are among the members of the study committee. The report has come up with the details on the current status of Nepal’s human resource, employed and unemployed people and possible creation of employment opportunities inside the country.

According to Poudel, the detailed report has recommended to the authorities concerned to generate skilled employment opportunities. For this purpose, the report has identified 14 working areas. “After the report is finalized by adding the experts' advice, we will take it to implementation through coordination among the agencies concerned,” he said.

The irony of the NPC’s target is that the country is now reeling under slow economic growth while the private sector has lost confidence. As government revenue collection is well below target, the government has cut off the budget for even the major projects. Similarly, the inflow of foreign direct investment is also not encouraging.

Likewise, the agricultural sector that is giving jobs to a larger number of people is expected to grow only 2.6 percent during 2023-2025, according to the Nepal Development Update of the World Bank dated April 2023.

As the government body announced its ambitious target, around 2,044 individuals are leaving the country daily seeking jobs abroad. In the first 11 months of the current fiscal year, 740,000 individuals received government permits for foreign employment, while the figure is expected to cross 800,000 by the end of this fiscal year.

Published on: 7 July 2023 | My Republica

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Problem of Unemployment in Nepal – An Essay

• Ramji Acharya
• 2021, Mar-07

The Problem of Unemployment in Nepal – An Essay

Nepal has to face many problems and one of these is the problem of unemployment. The whole world is facing this problems but Nepal is one of the worst sufferers. The number of the unemployed is always on the increase. The government is finding it difficult to solve however the policies developing by government has shown little light in the field of employment. The current situation of job market and contemporary belief system of labor are the major causes for unemployment. The condition of health and safety measures does not supporting in Nepalese context for lower graded job along with the payment. The spreading pandemic of COVID-19 possibly hampers the Nepalese job market in the near future.  

Unemployment means lack of work for those who are willing to work. It means compulsory leisure to some, when others are over-worked. Both the educated and the uneducated have suffered and are still suffering from unemployment. There is unemployment in the skilled as well as unskilled people and some people are intentionally unemployed as they don’t have sense of respect in working in low paying sectors. In some cases the skill of people is not utilized because of opportunities.

There are many reasons for unemployment. The population is increasing rapidly. The factory system is killing cottage industries. Manual workers cannot find jobs. Nepal migrant workers sent $8.1 billion in 2018 marking if the 19 th biggest beneficiary of funds sends by migrants around the world, according to the report released by World Bank. The remittances were up to 16.39 percent year on year deposit a drop in the number of departures. The population of Nepal represents 0.44 percent of the world’s total population which arguably means that one person in every 229 people on the planet is a resident of Nepal, where as the unemployment nation is 3.20 to 4.50. It shows the incensement in population the chance or incensement in unemployment is possible in future.

Nepal has secured the top spot in job creation in South Asia with employment rate hovering around 68 percent says the latest world bank report. This means 32 percent of the country’s working age population people aged 15 to 64 is either unemployed or voluntarily inactive the lowest in south Asia. The major cause of unemployment in Nepal is respect to the profession. Nepalese people are ready to risk their lives in overseas where as they don’t like to invest time in Nepal for similar pay. On the other hand the employment problem has been correspondence to the currency value is somehow similar the pay which manpower receives differs in various countries.

Our system of education is defective. It produces only clerks who are feeling shame of doing small jobs. Nepal is an agricultural country but no one wants to do the farming and to live in village. All want to rush towards cities. The life of a farmer is looked down upon. So, there is rush for government service in cities and towns. Parents send their sons and daughters to school and collages in order to enable them to get a good job after education. so, there is a rush of candidates before offices. Very few candidates get into them while others remain unemployed.

The big number of youth has been returned to Nepal from different foreign country because of covid-19. The pandemic has snacked the opportunity of employment inside the population which was employed in overseas is returned to the country. In this situation, we can guess the situation of employment in Nepal in the near future. Our government is trying to solve this problem. Technical and vocational colleges are being opened. Cottages and handloom industries are being encouraged. Every effort is being made for family planning to control population. Irrigation and multipurpose projects are multiplying fast.

But there is still much to be done. The first things to be done are to being about a complete change in the outlook of our young men and women. For this our educations system should be greatly changed. They are to be taught the dignity of labour that they may leave their love for clerical jobs. They must feel attracted towards manual labour, farming and doing things in small cottage industries of their own. Only then the problem can be solved to a great extent.  

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Tackling Unemployment Problem

Shyam Prasad Mainali

With a population of around 29 million, Nepal faces acute unemployment problem. Two-thirds of the population is under the age of 30 and the unemployment rate within this demographic group is about 20 per cent. This number is far greater than the national average joblessness. A report suggests that 500,000 people enter the domestic and international labour market every year, a clear indication of the quantitative component of the employment challenge in Nepal. The unemployment issue also has a qualitative aspect as it is mostly confined to informal sectors where earnings and working conditions are subpar. As a result, Nepal faces a situation where it must lower the unemployment rate as well as create meaningful and secure employment opportunities. 

A growing population and lack of opportunities have a negative impact on unemployment numbers. As a result of the industry and factory system, cottage industries have been discouraged. The lack of well-paid jobs within the country has also forced many to look at the international labour market. Many Nepali youths find themselves risking their lives to work in the heat of the Gulf countries, South Korea and Malaysia. Manpower companies charge exorbitant fees and exploit hopeful workers who are trying to find opportunities abroad. 

Temporary venture

About 32 per cent of GDP is contributed by remittance from migrant workers. Due to this influence of remittance, the policy and priority of the government are diverted toward expediting more jobs abroad instead of encouraging domestic industries, opening factories, and creating environment conducive for investment. Sending youths overseas to benefit the economy is a risky and temporary venture. 

The government should have concrete plans to utilise the expertise of returnees. These vulnerabilities came to the fore during the COVID-19 pandemic as many lost their jobs abroad, which severely hampered Nepal's economy. The creation of domestic long-term opportunities is of paramount importance to the country. The education system of the country is also not appropriate as higher education is focused on creating clerks. Whilst the country has enormous agricultural potential, this industry has been abandoned for several reasons. For some, there is a shame attached to working within the agricultural sector and they move to the cities to secure a more socially respectable job. 

Agricultural imports from India have also led to a decrease in demand for Nepali products. This has discouraged farmers from the industry. The government has also failed to provide proper support for farmers making agriculture an unattractive means of living. Finally, climate change is also having an inimical effect on agricultural yields and farming has become less lucrative. This has caused people to abandon their land and moving to urban centres for employment. A government job is still very prestigious and, therefore, competition to enter the civil service is incredibly tough as more and more individuals attempt to secure a job within the government. However, limited opportunities mean that the majority are rejected and left unemployed.

On top of the factors listed above, some other determinants of unemployment in Nepal are health, interest rate, inflation rate and political conflict. Education, health, population growth, and inflation are inversely related to the employment of agricultural sectors. Health and political conflict positively affected employment whereas interest rate and level of education affected it negatively. 

In the case of the service sector, employment, education, health, population growth and inflation impacted positively but political conflict impacted negatively. The planners and policymakers in the country seem to be indifferent to this problem as they are satisfied merely with the growth of remittance from migrant workers. This pathetic situation worked as a safety valve for those in power who carelessly failed to create employment opportunities for youths. The botched privatisation process in which state-run profit-making industries were sold to the private sector, led to the loss of jobs for Nepalis.

Transferring labour from agriculture and industry to the service sectors is in demand currently. Expanding education in the country seems the most promising way. This could be done by allocating a substantial amount to the education sector. Effective implementation of 'Education for All' programmes is a must. 

The opening of vocational education centres should be given priority so that skilled and highly skilled manpower could contribute domestically. Likewise, an increase in employment in non-agricultural sectors is given a greater priority, and human capital investment in health seems highly desirable. By increasing access to health services for poorer and disadvantaged groups of people through the expansion of health networks, the goal of higher life expectancy can be achieved. Population growth and inflation positively increase service sector employment. 

Monetary policy

The government could use inflationary monetary policy to boost service sector employment. Decreasing the interest rate could be a good policy to increase the service sector employment. Further investment in the industrial sector furnishes well the better employment opportunity. For a long time, the exchange rate between India and Nepal currencies remained fixed on the open border policy. Implementing this policy, Nepal is facing numerous difficulties regarding the manipulation of inflation. India is too big a trading partner for Nepal for an independent monetary policy. Economists must contribute to the alternative ways to this problem, so it might be a matter of vigorous research.

It is highly necessary on the part of different levels of governments to provide easy loans and grants to entrepreneurs, unemployed youth, differently abled persons, and the recently returned migrant workers to start businesses. Prospects for employment are high in the livestock, agricultural, industrial, tourism, business and trade sectors, apart from micro, small, medium, and larger development projects in the country. But for the betterment of such a dire situation, strong political will is a necessity. Otherwise, increasing trends in muscle and brain drain continues which will ultimately deteriorate the opportunities for employment and the overall economy.

(Mainali is a former government secretary.)

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The Inter-Relation Between Poverty and Unemployment in Nepal

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