Tackling Unemployment in Nepal

29 Jun 2009

Man seatting in front of his home in Nepal
Photo: UNDP

One of Nepal’s biggest knitted fabric exporters was forced to shut down in May, after its leading U.S. client, facing its own downturn, stopped placing orders. The closure threw 1,277 employees out of work.

“The loss of the regular orders from this big clothing company has been the final nail in the coffin,” after work interruptions due to political turmoil, conflicts and long power cuts, said Bidur Pokharel, manager of the company, JD Apparels Garments.  

To further exacerbate the unemployment problem, migrant workers are losing their jobs abroad and returning home to look for work.

Rana Bahadur Sunar, 22, a Nepali contract worker at a Qatari construction company, saw his two-year contract terminated after 15 months, because his employer could not afford to keep paying all of its workers. Sunar had not finished paying back the loan that he had paid to the broker who found him the job, and he has now returned to his village in the Banke district. As he has no other skills, he has to rely on day labour. He feels lucky if he can find work every day.

To support these young people through this transition, the United Nations set up a 10-member Youth Advisory Panel, to identify opportunities to address adolescent and youth issues. Its members are women and men aged between 15 and 29.

In tandem, UNDP is running a micro-enterprise programme that provides skills training in 10 conflict-affected districts in the terai (lowland) region. Some participants have become entrepreneurs, opening sawmills, a brick factory and sugar-cane mills and restoring a sense of hope about the future.

A Ray of Hope

But tourism, a sector in which UNDP has focused some of its efforts, has seen some growth, after Nepal’s tourism board started marketing in neighboring countries, rather than mainly in the United States, Europe and Japan.

Tourism revenues plunged 16 percent in the first three months of 2009, possibly as a result of the recession, said Prachanda Man Shrestha, the CEO of the Nepal Tourism Board.

“Since 45 percent of the tourism revenue originates from Western Europe, North America, Japan and Australia, the impact will definitely be seen in Nepal,” Shrestha said.

But when the board shifted focus toward attracting tourists from neighbouring countries, like India and China, tourism rebounded by 17 percent - in April. “Nepal is a cheap destination for tourists, so maybe the recession could even be a boon for the tourism sector,” Shrestha said.

Nepal depends heavily on tourism and remittances. In 2007, a year after the peace agreement was signed between the Maoists and the government, tourism grew 37 percent, and together with remittances, generated revenues of US$ 1.7 billion.

UNDP partnered with the Nepal Tourism Board to pilot rural tourism in six of the 75 districts in the country, efforts which could stave off the worst effects of the crisis.

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