Discuss the poverty and unemployment scenario of Nepal. Highlight the legal provisions of poverty and unemployment in Nepal. How do you think poverty and food security are related?
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Model Ans:
Poverty and Unemployment Scenario in Nepal
Nepal, as a developing country, faces significant challenges in reducing poverty and unemployment. Both issues are deeply interlinked and impact the country's socio-economic development.
Poverty Scenario
Nepal's poverty rate has declined over the years, but it remains a critical concern:
Multidimensional Poverty: As of recent data, 16.6% of the population lives in multidimensional poverty, which includes lack of access to health, education, and living standards.
Income Poverty: The poverty rate based on international standards (living under $1.90/day) is about 17.4%.
Regional Disparities: Poverty is more severe in rural areas, especially in the Karnali and Sudurpaschim Provinces, compared to urban areas like Kathmandu Valley.
Contributing Factors: Low productivity in agriculture, lack of industrial growth, inadequate education and healthcare systems, and infrastructure deficits exacerbate poverty.
Unemployment Scenario
Unemployment and underemployment are persistent challenges:
Unemployment Rate: Official unemployment rates hover around 4-5%, but the figure for underemployment is much higher, with a significant proportion of the workforce engaged in low-paying or seasonal jobs.
Youth Unemployment: Nearly 20% of Nepal's youth are unemployed, leading to a surge in labor migration to countries like Malaysia, the Gulf nations, and India.
Skills Mismatch: Many workers lack the skills needed for better-paying jobs, creating a gap between available jobs and workforce capacity.
Post-COVID-19 Impact: The pandemic severely affected tourism and small businesses, further worsening unemployment.
Legal Provisions on Poverty and Unemployment in Nepal
Nepal has incorporated several legal measures to tackle poverty and unemployment:
Constitution of Nepal (2015):
Right to Employment (Article 33): Every citizen has the right to employment, and the state is responsible for providing work opportunities.
Social Security and Justice (Article 43): Ensures rights to social security for economically vulnerable groups.
Directive Principles and Policies: Mandates the state to work towards poverty alleviation, equitable resource distribution, and economic empowerment.
Poverty Alleviation Policies:
Poverty Alleviation Fund (PAF) Act, 2006: Focuses on community-driven development programs to empower the poor and marginalized.
Sustainable Development Goals (SDGs): Nepal aligns its development agenda with SDG 1 (No Poverty) and SDG 8 (Decent Work and Economic Growth).
Employment Laws:
Employment Service Center Regulation, 2018: Provides mechanisms for job seekers to connect with employers.
Prime Minister Employment Program (PMEP), 2019: Aims to provide 100 days of guaranteed employment per year for unemployed citizens.
Labor Acts:
Labor Act, 2017: Protects workers' rights and regulates fair wages, working conditions, and employment contracts.
Relationship Between Poverty and Unemployment
Poverty and unemployment are deeply interconnected and influence each other in a cyclical manner:
Unemployment Leads to Poverty:
Lack of jobs means no income, pushing households below the poverty line.
The absence of financial security makes it harder for people to access education, healthcare, and better living conditions.
Poverty Causes Unemployment:
Poor individuals often lack education and skills required for higher-paying jobs.
They are often excluded from economic opportunities due to social or geographical marginalization.
Vicious Cycle:
Poverty restricts access to resources like education and healthcare, leading to low productivity and employability.
Unemployment keeps people trapped in poverty, further reinforcing the cycle.
Multiplier Effect:
High unemployment reduces overall economic demand, slowing growth and exacerbating poverty.
Poor economic growth further limits job creation, perpetuating unemployment.
Conclusion
Addressing poverty and unemployment in Nepal requires a comprehensive approach. Enhancing education and skill development, boosting agricultural and industrial productivity, promoting entrepreneurship, and ensuring equitable distribution of resources are vital. Legal provisions, if implemented effectively, can play a significant role in breaking the cycle of poverty and unemployment, ultimately contributing to Nepal's sustainable development.
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Backdrop:
Economic Survry 2022/23
Among the province-wise population distribution, multidimensional
Poverty is highest in Karnali at 39.5 percent and lowest in Bagmati at 7.0 percent.
Out of 5526704 Nepali workers who have received new work permit for foreign
employment by mid March 2023, 94.4 percent are male and 5.6 percent are female.
Out of 337144 people who received work permit by mid March of FY 2022/23,
90.0% are men and 10.0% are women. As of mid March of 2023, 85,804 workers
have gone to South Korea for foreign employment through the EPS system
Nepal Living Standards Survey 2022-23
The Fourth Nepal Living Standards Survey 2022-23 report released by the National Statistics Office reveals that as many as 20.27 percent of the population lived below the poverty line in 2023 compared to 25.16 percent in 2011.
According to the statistics office, the poverty rate was calculated based on a revised poverty line of Rs72,908 per person per year that is required to fulfill their basic food and non-food consumption needs.
The poverty rate in urban areas stood at 18.34 percent while it is 24.66 percent in rural areas, the survey showed. Province-wise, the poverty rate is the highest (34.16 percent) in Sudurpaschim and lowest in Gandaki Province (11.88 percent).
Nepal has made significant strides in poverty reduction since the restoration of democracy in 1990. When the first living standard survey was conducted in 1995-96, Nepal’s poverty rate was 42 percent, which declined to 31 percent by the time of the second survey in 2003-04.
Labour Market Profile Nepal – 2022/2023
The relatively low unemployment rate at around 5.1% in 2021 is shadowed by a broader underutilisation rate of 39%. Nepal’s youth unemployment rate is remarkable lower than the Southern Asia average. dazzled by one of the highest NEET rates (those not in employment, education, or training) and the massive out-migration of young men
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FIGHTING INEQUALITY IN NEPAL, Jan 2019
More than 500,000 people enter the labour force each year in Nepal, but employment opportunities are limited and 80% of these people leave to seek employment abroad. For those who stay, too many face insecure jobs and underemployment: 31.8% of Nepali labourers work less than 40 hours per week, and for a growing percentage this is not by choice. Young people particularly are struggling to find work: 15–24 year-olds are more than twice as likely to be unemployed than adults.
Wages have increased in recent years; however, they remain low for the average worker, and women continue to earn significantly less than their male counterparts. Establishing and strengthening minimum wages can play a significant role in reducing inequality. However, 96% of workers are employed in the informal sector,35 where minimum wages and other provisions, such as the Social Security Fund, are less likely to be honoured and harder to enforce. The CRI Index shows that in Nepal respect for trade unions and the rights of women in the workplace is very poor, and the country is ranked for labour rights among the lowest countries in the world in the Index. There are no laws to prevent discrimination based on gender and no law against rape in the workplace.
There is also worrying evidence of the exploitation of children and vulnerable groups in Nepal; the International Labour Organization estimates that 6.2 million children are currently at work in Nepal, with 2.1 million of them working in hazardous conditions.37 Bonded and forced labour are also still highly prevalent in Nepal, with more than 100,000 bonded labourer households involved in agriculture. These people are excluded from prosperity and denied their rights.
Legal Provisions: The Labour Law of 2017, the Contributory Social Security Law of 2017, the Right to Employment Act of 2018.
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