By MuKunda Bhattarai ,Butwal Nepal

1. Covid-19 and Employment
Mukunda Bhattarai
Introduction:
The outbreakof a newcoronavirusdisease,also knownasCOVID-19,haspanickedthe whole world.The
disease wasfirstidentifiedinearlyJanuary2020.Withthe outbreakof novel coronavirusdeclare a
pandemic andan international publichealthemergencybythe WorldHealthOrganization(WHO),the
entire worldisworkingtoaddressit.The economicimpactsof the COVID19 pandemicisnow being
witnessedatall levelsandthe irrevocablefinancial damage,which mayconsideredsecondaryto
mattersof healthandsafety,inthe nearfuture mayprove justas detrimental.The UN estimatedthe
outbreakof thisdeadlyviruscouldatleastcost a trilliondollarsandcouldslow downthe global
economytounder2.0 percentthisyear.Nepal alsohasto share a sizeablepartof thisloss.Aswe
estimatedthe percentageof the global lossthatwe will have tobear,the governmentshouldidentify
the particularsectorthat will be affectedthe most.EconomicgrowthinFY2020 is anticipatedtocontract
frompre-COVIDestimate of 6.3%to5.3%. However,growthcouldfurther contractif the economicand
financial crisisdeepensdue tothispandemic.The impactonlivelihoodof dailywagersandinformal
workerscouldbe huge if the situationpersistsformuchlongerperiod.COVID-19drivenblockagesin
global andregional supply chains,the collapse of the tourismsector,severe dropsinconsumer
confidence andmanufacturing,anda negligibleeconomicIMFgrowthestimate of 1.2 percent in2020
(downfrom5.7 percent in2019), the ILO estimatesthat.
Slow down the Demand and Supply:
Coronavirushasdisputedthe demandandsupplychainacrossthe countryand withthisdisruption,it
can be seenthatthe tourism,hospitality andaviationsectors are amongthe worstaffectedsectorsthat
are facingthe maximumimpactof the current crisis.Closingof cinematheatresanddecliningactivities
inshoppingcomplexeshasaffectedthe retailsectorbyimpactingthe consumptionof bothessential and
discretionaryitems.Asthe consumptionof anyproductor service goesdown,itleadstoan impacton
the workforce.Inthe currentscenario,withall the retailersclosingdowntheirservices,the jobof
employeesisathighrisk. The financial markethasexperienceduncertaintyaboutthe future course and
repercussionsof COVID19.The supply-side impactof shuttingdown of factories resultinadelayin
supplyof goodswhich hasaffecteda huge numberof manufacturingsectorswhichsource their
intermediate andfinal product .Some sectorlike automobiles,pharmaceutical,electronics,chemical,
productetc were impactedbig times.Accordingtosurveythe immediate impactof covid -19 reveals
that besidesthe directimpactof demand andsupplyof goodandservices,businessare alsofacing
reduce cash flowsdue toslowingeconomicactivitywhichinturnis havingan impacton all payment
includingtothose foremployees,interest,loanrepaymentandtaxes.

2. 3.4 trillionin lostincome
Self-employmentindevelopingcountries,whichoftenservestocushionthe impactof economicshifts,
mightnot doso thistime due to the severe restrictionsbeingplacedonthe movementof people and
goods.AccordingILO Reductionin accesstoworkwill alsomean“large income lossesforworkers” Study
saidthat between$860 billion and$3.4 trillion bythe endof 2020. Whichwill reduce consumptionof
goodand servicesthatwill affectthe prospectsforbusinessandeconomies. DeclineIn economicactivity
will declinethe jobof manypeople which will make manyworkingpeople close toorbelow the poverty
line.The ILO called for urgent,large-scale andco-ordinatedmeasurestoprotectworkersinthe
workplace,stimulate the economyandemployment andsupport joband income,including through
social protection,paidleave andothersubsidies.The agency pointedoutthatsome groupswill be
disproportionatelyimpactbythe jobscrisis,includingyouth,olderworker,womenandmigrants.
Global crisisof Unemploymentdue to COVID-19 pandemics
Accordingto UnitedNationsCOVID-19pandemicwill significantlyincreasesglobalunemployment,
leavingupto25 millionpeople outof work,andwill dramaticallyslashworkersincome. The
International LabourOrganization warnedthatthe economicandlabourcrisissparkedbythe
coronaviruswill have “far-reachingimpactson labourmarketoutcomes”.The COVID19is no longera
global health crisis;itisalsoa major labourmarketandeconomiccrisisthatis havinga huge impacton
the People.
The UN agency’s studysuggests the worldshould prepare tosee a“significantrise inunemployment
and underemploymentinthe wake of the virus.”
Presentingdifferentscenariosdependingonhow quicklyandwithwhatlevelof co-ordination
government’s react.itfoundthateveninthe best-case scenario. 5.3million More peoplewillbe pushed
intounemployment.Atthe highendmeanwhile,24.7millionmore will be jobless,on topof the 188
millionregisteredasunemployedin2019.
AccordingtoILO by comparison,the 2008-9 global financial crisis increaseglobal unemploymentby22
million.Itwarned that,Unemploymentisalsoexpectedtoincrease onalarge scale,as the economic
consequencesof the virusoutbreaktranslateintoreductionsinworkinghourandwages.
Covid-19 impact on Nepal
At a time whenvarioussectorsof Nepal have beenannouncingtheirgrowingfinancial difficulties,Asian
DevelopmentBank(ADB) haspredictedthatNepal will have tobear2 percentGDP lossineconomic
activities.Thisisequivalentto16.95 billionNRsatconstantpricesandabout 62 billionNRsincurrent
price, lotof lossdue tothe global outbreakof coronavirus –withlotof jobcuts dependingonhowthe
virusevolves.Accordingtoanalysis,the novel coronavirus(COVID-19) outbreakwill hitalmostevery
sectorof the Nepali economy.The COVID-19will affectvarioussectors,includinghotelsandrestaurants,
manufacturing,construction,transport,trade andbusiness,amongothers,inNepal.Accordingtothe

3. National LabourForce Survey(2018/2019), there are 29 millionpeople inNepal,outof which,20.7
millionpeopleare of workingage.They can helpinspreadingawarenessaboutpublichealththrough
social awarenesscampaignsandthustheyare critical to control the spreadof the virusand itspossible
impacton the family,societyandeconomyatlarge.But,around62.2 per centof themare employedin
informal sectorsandare alreadyexperiencingincome shocks.Theyare notcoveredbyanysocial
securityprovisionasformal sectorjobsare verydifficulttofind.Accordingtothe Ministryof Finance
estimates,500,000 people enterthe Nepali labourmarketannually.Until now developmentplansand
strategiesof the governmentare focusedoncreatingproductive employmentinservice sectors
includingindustry,trade,tourism, educationandhealthto utilize the youthlabourforce.The planshave
nowgreatlychallengedbythe virus.
Jobs at risk
Under the circumstancesof lockdowninNepal,COVID-19drivenblockagesinglobal andregional supply
chains,the collapse of the tourismsector,severe dropsinconsumerconfidence andmanufacturing,and
a negligible economicIMFgrowthestimate of 1.2 percent in2020 (downfrom5.7 percent in2019), the
ILO estimatesthat
There are nearly3.7 millionworkersearningtheirlivelihoodsin different sectorsjudge mostatriskto
experience asignificant(mediumtohigh) reductionineconomicoutputasa resultof the Covid-19crisis.
Nearlyfourineveryfive workers jobisunsecure mainlywho are inthe construction,manufacturingand
trade sectors.Between1.6and 2.0 millionjobsare likelytobe disruptedinNepal inthe currentcrisis,
eitherwithcompletejoblossorreducedworkinghoursandwages.Intotal 631,000 female jobsand1.3
millionjobsformenare estimatedatrisk.
It will be clearfromfollowingfigure.

4. In total,around27 percent(193100) of the 7.1 employedpeople are atmediumtohighrisk.
The jobsdisruptedincludesnearly 780,000 workersinwholesale andretail trade,446,000 in
manufacturing,404,000 in construction,211,000 in transportand 62,000 inaccommodationandfood
service activitiesand83,000 inother services,real estate andadministrative activities.
Approximately5.7millionor80.8 percentof workersinNepal have informal jobs.The majorityof
workersinall sectorsare ininformal employment,includingthe sectorsexpectedto face the highest
degree of disruption:construction(97percent),trade (74 percent) andmanufacturing(84percent)

5. Employmentissues
The fairlygrowingNepali economyisnow staggeringthroughthe seriesof barrierscreatedbythe
pandemic.
The EmploymentService Centre(ESC) hasbeenestablishedasperthe RighttoEmploymentAct,2018, in
each local level tobalance the demandandsupplyof the labourforce andprovide atleast100 days’
employmentduringafiscal year.Itcan be instrumental toidentifythe unemployedpeople,whowillbe
more than everinthe aftermathof the pandemic,andfacilitate alternativepolicysolutions.
Around4.3 millionNepalipeople are currentlyabroadforwork.Verysoon,amajorityof themare
returningtoNepal.Manyof themare alreadyin an extremelyserious situationandappealing tothe
governmenttotake backto theirown country. AsperContribution-basedSocialSecurityAct,2017, the
Social SecurityFundhasreceivedRs20 billiontobe usedforthe welfare of the workers.However,the
governmentisnotdesigninganyalternativeplantomanage the prospective returneesandexisting
labourforce withinthe country.
What Now
Due to the lockdownandthe general economicdistressgloballyandinNepal,employersacrossvarious
sectorsare facinga significantcash shortage due tothe lack of productionand consumptionby
customers,andthe abilitytocollectpayments.Thishasleadmanybusinessestoexamine variouscost-
cuttingmeasurestoensure thattheyare able tosustaintheirbusinessonce the lockdownislifted.
These measureswouldinclude reductionintheiroverheads,whichincludesemployee salaries.Inthis

6. regard,the Central GovernmentandvariousState Governmentshave issueddirectivesandadvisories
encouraging/requiringemployersnottoterminate theiremployeesandpayfull wagestothem. While
thisisa commendable stepandwouldensure jobsecurityduringthe lockdown,itwouldhave an
adverse impactinthe longterm.Due tothese directionsandadvisories,employersmaynotbe able to
undertake anycost-cuttingmeasuresinthe shortterm andwill have nooptionbutto exhausttheir
reserves,potentiallyresultingindrasticstepssuchaswinding-upbusinessesorlookingatmajor
restructuringinthe longterm. Thisis not goodfor the economyandemployment.Therefore,itwould
be importantfor the Central andstate governmentstoprovide clarityanduniformitywithregardtothe
directions/advisoriestoemployersandtoallow employers,inaregulatedmanner,tonegotiateand
arrive at an understandingwiththeiremployeestoallow for some shorttermmeasuressuchasa
temporaryreductioninwagesorprovidingforemployeestogoon leave toreduce the liabilityof the
companywitha longertermviewof retainingjobs.
What We Can DO (Conclusion)
The governmentshouldcome upwithspecial programmesaimedatrevivingthe country’slaboursector,
provide relief andensure employmentopportunitiesforworkersastheyremain destroyed bythe Covid-
19 pandemic.Thus,the governmentneedstoaddressthese emergingchallengesthroughspecial
programmesandpolicies.Workersinthe countryandNepali migrantworkersabroadhave beenhitby
the global healthcrisishard.Thousandsof Nepali workersfromlabourdestinationcountries,including
Indiaare returningas theyhave losttheirjobs.Once theyreturnhome,theyneedjobs,whichisamajor
challenge fornow. The special budgetshouldconsideremployingtheseworkersnotonlyinbig
infrastructure projectsbutalsoexplorenew sectors.Otherwise,the countrymightface ahuge problem.
Self-employmentschemesandpromotingmodernisedandcommercialfarmingcanhelpthe country
create newjobsand bringthe import-basednational economybacktoa self-sustainingone. The
governmentshould create jobs inthe agriculture sector,whichneeds tobe more mechanised,
commercialisedandmanaged,andalsoidentifyotherpotential areaslikemanufacturing,construction,
trade and domestictourism. Governmentshould developachartwhichwill give detailsaboutthe labour
force [employedandunemployed],still available andaffectedemploymentopportunitiesdue toCovid-
19, and whethertheywere temporarilyandpermanentlyaffectedandtheirchancesof return atjob
accordingto that what kindof strategyand interventionisrequiredtodeal withsuchsituationplan
shouldmade.Hope thatthispandemicwill endsooninNepal aswell as inworldandlotof jobwill be
createdwhichwill reduce Unemploymentproblem soon.
Thank you