Wednesday, January 28, 2009

Growing unemployment may topple ruling coalition

Growing unemployment poses the single biggest threat to the longevity of the Maoist-led government. If the issue is not addressed immediately, it will definitely snowball into a nationwide crisis, precipitating the ruling coalition’s downfall.
How can the problem be tackled? On paper, the prognosis is simple. The government needs to create more jobs. But, in reality the task is proving to be Herculean. To make matters worse, the en masse return of migrant workers is likely to have a cascading effect on both the national exchequer and forex reserve. Remittance makes a significant 17.4 per cent contribution to the
Gross Domestic Product. Besides, it is a major source of foreign currency earner, notably, the US dollar.
The unemployment crisis is caught between two stools. On the one hand, Malaysia and the Gulf — the major destination for Nepali migrant workers — are in the middle of downsizing, thanks to the global downturn, and no new job opportunities are also being created back home.
Entrepreneurs share a similar sentiment. They fear that even the existing jobs at home are in danger since the government has failed to protect businesses much as it would preach about protection of national industrial capitalism. The government-affiliated unions are forcing closure of industries on ‘unreasonable demands’ over implementation of minimum wage and permanent appointment.
“Militant trade unionism has been on the rise even though industrialists have agreed to pay the minimum wages as suggested by the government,” said an industrialist on condition of anonymity. “All the workers are asking for a flat Rs 1,300 hike in their salaries. Those who are getting more than 4,600 — the minimum wage — are also demanding the raise,” he added. The government has fixed Rs 4,600 as minimum salary — Rs 3,050 is the basic component and an additional Rs 1,550 is considered as dearness allowance.
If the present impasse continues, the business houses that are battling other blues like inordinate power cuts and frequent bandhs are certain to do a rethink of persisting with their enterprises.
Perhaps, an exit will be a last resort in these troubled times.
There are four aspects of business: opportunity, expansion, sustainability and exit. Business opportunity and expansion are a distant dream in the present context because industries are fighting tooth and nail for their survival.
“Prior to the Constituent Assembly (CA) elections, entrepreneurs, along with the public, had hoped that there would be stability,” said Rajendra Kumar Khetan, industrialist and CA member.
“But, in view of the present scenario, the big question remains: what next?”he asked. A section of industrialists blame government for promoting anarchy. While, others prefer to maintain studied silence.
The government, too, is indulging in the blamegame. It alleges that the latter are minting money by exploiting people. Though it does not have any credible statistics to back its claims as it failed to reduce transportation fares.
Finance Minister Dr Baburam Bhattarai had threatened in pubic that the government would intervene, if the prices did not come down. But the catch lies somewhere else.
“Transportation cost is preventing revision of prices in the domestic market,” reasoned Khetan.
Industrial Districts Management Ltd (IDM), too, had to join issue with the militant trade unions to ensure smooth running of factories. For instance, the IDM exerted pressure for vacating all occupied buildings in industrial estates across the country. Be that as it may, various industrial districts, including the Patan Industrial District, is still under the siege of Maoist-affiliated trade union. Despite repeated attempts, the agitators could not be dislodged. They threaten of protest, if forced to vacate.
Earlier, the Young Communist League (YCL) — the para-military wing of the Maoists — had vacated the Balaju
Industrial Area after much persuasion. On January 7, the YCL also vacated Miracle Nepal (Pvt) Ltd — owned by Saiyad Samim Shah — inside the Balaju Industrial District in the capital after holding on to it for around two years.

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