Amidst the fear of rapid contamination of COVID-19, almost all countries around the globe have adhered to strict measures that restrict the movement of the people. Nepal has also remained in a countrywide lockdown since March 24. As a consequence, the pandemic has weakened all three sectors of the economy – manufacturing, service, and agriculture.
The measure taken to flatten the curve has in no doubt come at the cost of a countrywide economic slowdown. In pursuit of addressing the same, the government has declared economic packages to help ease the burden on businesses. However, it is apparent that these packages will not be able to cover the full extent of damages. The circumstance has made many businesses reluctantly turn towards solutions like cutting salary or laying off staff in the short run and refraining from hiring new staff in the medium term. In the United States alone 26 million have filed for unemployment benefits and in India downsizing has begun. Nepalese companies may soon be forced to take similar steps given the current scenario.
While the situation for the ‘employed workforce’ is dire, fresh graduates and unemployed individuals in search of jobs are in equal, if not more, terrible condition.
In the past year, 70,077 students graduated from Tribhuvan University alone. Additionally, this year Nepal also experienced a surge in fresh Nepalese graduates from foreign universities returning to the country. Some of these individuals already have a job, some had a job and were laid off after the pandemic and many were still in search of one.
The catch is, these individuals have graduated into a havocked economy and Nepal has nothing to offer to them. Providing employment is in itself challenging at a time when the unemployment rate is at its peak, 11.4% as per Nepal Labour Force Survey 2017-18, and fresh graduates do not qualify for economic relief packages. With a similar situation around the globe, the number of people who will migrate to a foreign land in search of job opportunities is likely to decrease. The situation is not likely to get better even after the pandemic is over as the economy will continue to suffer in its aftermath and the effect on the job market will be long-lasting. Prior research has found that U.S. college students who graduated during a recession earned 10% less the first year after they completed their studies than would otherwise be expected and the negative effects lasted over the next seven years.
As per an article by Forbes, recent graduates are more attracted to start-ups. Nepal can leverage the attractiveness and promote start-up culture among youths in Nepal. To do so, the government should devise policies that facilitate entrepreneurship, like easing up the company registration procedures, tax exemptions for start-ups, easier access to credit, among others. This might help resolve the issue to some extent as the new workforce will have the incentive to open their business and be self-employed as well as provide employment to others.
The current situation can be optimistically viewed as an opportunity for Nepal to capitalize on promoting entrepreneurship and innovation in the country. More importantly, start-ups tend to be mission-driven organizations that help bring innovative solutions to many underlying problems in the country. And the thousands of unemployed minds might have just the right solution to the many problems that might arise in the aftermath of this global pandemic.