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Aug 28, 2011

When intentions and policies contradict

Source: www.ekantipur.com
Two recent happenings which are in sharp contrast to each other raise concern. The first one is the government draft of the Employment Guarantee Act promising to provide a job to all the families living below the poverty line. The act, if implemented, is supposed to provide a job of at least 100 days per year to at least a member of poor families. The act considers guarantee of employment a critical part of socio-economic security and fundamental rights of citizens.

The second is that Surya Nepal's permanent shut down its garment production unit due to constant agitation by trade unions. The decision is likely to render at least 3000 people jobless and a significant loss in government's revenues. The company's decision shouldn't come as a surprise to anyone, since the prevailing trend is of industries shutting down, scaling down or relocating out of country. Militant labor unions and inflexible labor laws have been the primary reasons for such trends.

The Irony

On the one hand, the government is purportedly concerned with the high unemployment and underemployment rates of the country and the poverty it engenders. Whereas, on the other hand, the government is shamelessly blind to the plight of Nepalese industries which are being forced to close down resulting in joblessness of thousands of employees and loss of revenues to the government.

Employment Guarantee
In it's noble attempt to gain cheap popularity and with its misguided sense of responsibility, the government has brought yet another scheme that looks great at face value but is bound to fail eventually. If the findings of the latest Nepal Living Standards Survey tells us anything, then it's that people are better able to lift themselves out of poverty than the government trying to plan and do it for them. The steep decline of absolute poverty by 18 percents is accompanied by a steep rise in the number of households receiving remittances from foreign employment. According to the report the number of households receiving remittance income have also risen dramatically to 55.8 percent from 31.9 percent reported in NLSS 2003/04. 

While the politicians were bickering over power and positions and bureaucrats busy making money, the poor people were quietly and steadily lifting themselves out of poverty. Fortunately, when people are left alone to fend for themselves and grow and politics isn't involved, they tend to achieve their objectives very efficiently. Poor people of Nepal have not only managed to lift themselves off poverty but they have also been contributing more than 17.4 percent of the GDP through their remittance incomes. In other words, it's not the government that's helping the poor but the poor that are helping the government officials get their salaries.
Source: http://kardiesel.blogspot.com/
It was fortunate that government failed to realize the potential of foreign employment and didn't dabble in the sector. Had it tried to plan and guide foreign employment sector it would have ended up like every other sector guided by the so called numerous five-year plans . We are already on the 12th  plan but are yet to see any significant economic growth or development done by these plans. Previous attempts of government to provide employments such as Youth Self Employment Scheme have failed to achieve their obectives despite the huge fanfare they created initially and are currently limited to a room or two at the Finance ministry employing less than a dozen people at mostly administrative jobs. The government should review and scrutinize its previous attempts at providing employments to poor or youth segment of the population before preaching lofty dreams of guaranteeing jobs. The committee which drafted the act is said to be holding discussions with private sector so that jobs could be created in the industrial sector which in itself is truly ironic.

Hypocrisy and insensitivity
The government that was deaf and dumb while many major industries of the country shut down their operations and whisked away their capital and resources abroad to establish more enterprises in friendlier environments is holding discussions with the private sector to provide jobs for the poor. What could this step possibly mean except sheer hypocrisy and insensitivity in the part of the government?

Surya Nepal Garment's permanent closure the government's apathy at the incident highlights how serious the policy makers and government is about finding practicle ways to adressing the abject poverty of Nepal. Surya Nepal  had been providing direct employment to around 650 people and indirect employment to more than 1400 people most of whom come from the poor segement of the population and consist mainly of women. 

As evident in this case, militant trade unions who claim themselves to the voices and protectors of poor are in fact the very enemies of the poor. It is high time the government got rid of policies that merely sound good and bring in those that are realistic. For starters, bring in realistic and practical policies to provide jobs through protecting job providers and encouraging industries to flourish.


If Nepal is serious about achieving economic growth and prosperity, the government and policymakers should shift the role of government from a feudal patron granting favors to its citizens towards the role of a protector of citizens and productive forces in the country and facilitator of peaceful interactions between the members of the society. Employment Guarantee Act may sound great at face value but the bitter truth is it's another avenue for the politicians to garner short term popularity and loads of wealth for themselves.

-Surath Giri
(Published in The Himalayan Times of 28th August 2011)