Has Covid-19 exposed the stark inequality between Nepal's haves and have-nots?Social distancing, the primary weapon to prevent the pandemic from spreading, is a privilege.
Nepal is far away from being a perfect country in terms of the distribution of wealth. According to one 2019 report by Oxfam, the top 20 percent of the Nepali social strata own more than half of the country's wealth, whereas the bottom 20 percent earn only 4 percent. This disparity between the haves and the have nots, however, had mostly been invisible to the privileged class. But the Covid-19 global pandemic has reinforced this inequality in a manner that will have long-lasting socioeconomic consequences. With the beginning of a nationwide-lockdown last month, the ones who can afford the luxury are indoors and 'working from home', while the underprivileged are walking—hundreds of kilometres—back home.
Covid-19 has already accounted for tragic human costs worldwide; it is expected to have a graver impact in the coming months due to an unprecedented economic shock. The economy in Nepal, much like the rest of the world, has come to a standstill since the nation-wide lockdown was announced. The World Bank Group recently estimated that Nepal's economic growth is expected to fall to a range between 1.5-2.8 percent in 2020. The institution cites a decline in remittance, trade, tourism, and border disruptions amidst this fast-changing and uncertain context as the significant reasons for this decline.
Employers are finding themselves in the centre of the aftershock of the financial strain that this pandemic, and the necessary response to it, has brought. While some businesses have directed their staffs to work from home, this approach isn't suited for most enterprises in the country. The businesses who are forced to face financial challenges in these worrying times will consequently have no option but to shed redundant employees—and the primary blow of which will be faced by the workforce mostly in the bottom half of the enterprise's organogram.
Even though the practice of retrenchment is somewhat inevitable for businesses facing financial difficulties, the state must ensure that the effect is mitigated. Our labour law, the Labour Act 2017, has made prescriptions regarding similar situations that may befall the economy. The labour law makes honest efforts to cushion the effect of reduction. It prescribes the grounds where an employee may be retrenched only if the enterprise suffers a financial difficulty or if the business is to be shut partially or totally. The legislation also warrants for the procedural requirement of procuring notice to and consulting with the Labour Office and Trade Union before retrenching any worker. The law further offers a priority filter where the employees are to be shed in an order where foreign nationals, employees charged with misconduct, underperforming employees, employees appointed later among the same category are let go first, in that order. Moreover, the Labour Act also states that the retrenched staff are entitled to retrenchment compensation at the rate of one-month remuneration for each year in service, along with terminal benefits. Moreover, the retrenched employees must be given a priority in re-hiring if the enterprise revives operation within two years.
Despite all the statutory safeguards that our laws warrant, this crisis will substantially impact the working class. This pandemic will also be a litmus test for this government to evaluate its contribution-based Social Security Fund. It will be interesting to see if this highly rated scheme brought by the current government will work as it ideally should, now when the workers need it the most.
Nepal cannot bounce back quickly from an economic downturn, such as the current one. The International Labour Organisation (ILO) has also feared that a country like ours will face many burdens due to the current pandemic since we are less equipped to 'respond to Covid-19 as access to basic services, especially health and sanitation, is limited; as decent work, social protection and safety at work are not a given; and as institutions are weak and social dialogue is impaired or absent'.
Social distancing, the primary weapon to prevent the pandemic from spreading, is a privilege, too. Wealthier people have stocked up resources beforehand, and they also do not need to step outside to buy essentialities regularly. It is also commonly witnessed that the well-off population are routinely staying home as compared to the less privileged families. The practice of social distancing is a luxury that not all people are fortunate enough to afford. The rich of this country will build their walls high enough to survive this pandemic, just like they've used their privilege to overcome every difficulty this country has faced. But there seems to be no respite for the working class.
This disparity is likely to renew the sense of social inequality. It is often argued that there has always been a correlation between epidemics and political upheavals and rebellions. Examples include the Justinian Plague and the weakening of the Roman Empire, Black Death and decline of serfdom, and how the Ebola outbreak led to the emergence of civil unrest in West Africa.
Covid-19 has broadcasted a cruel but honest truth about the social reality of our country. The gap in wealth distribution and disparity in access to health facilities has historically been a socioeconomic issue. But the current crisis will make sure that these issues go from severe problems to acute ones. In this context of impending uncertainties, the government must make needful policy-level interventions to reinforce cohesion and social coexistence. It is expected from the federal government to prepare and implement response packages, such as a fiscal stimulus, to benefit the vulnerable and marginalised class. Such packages must duly address the working class's grievances and ultimately uplift the underprivileged.
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