One evidence of unemployment in the country is provided by the young people in my neighbourhood who pass the time playing carrom on the street corner all day. Structural unemployment also exists in Nepal where there is a mismatch between skills and the jobs available. The industrial and service sectors are desperately short of skilled professionals. Therefore, the current crisis is not of joblessness but skillessness. There are job openings, but not the right candidates.

Overemphasis on degrees

The overemphasis on academic performance and the widespread interest among youths to get a degree has led to the production of qualified but hardly employable graduates. They do not have the technical knowledge and skills. Consequently, a large number of students go abroad for higher education, get a job and settle there. After the restoration of democracy in 1990, the unemployment problem seems to have worsened. Moreover, cheap labour from impoverished border towns in India has been coming to Nepal, swamping our small labour market.

Unemployment is universally recognised as a dreadful thing. Joblessness and job loss have a far-ranging effect on many parts of society. The families of unemployed persons have a very hard time. Prolonged unemployment harms the health, especially mental health, and shortens the lifespan. High unemployment can have a self-perpetuating negative impact on businesses and the economic health of the country which in turn leads to a rise in poverty. As the population is increasing, people need work to support their families. Unemployed labour is a waste of the most important economic resource, human labour. We can measure the economic condition of a country by the number of job opportunities. When the economy is healthy with a high Gross Domestic Product, there is usually low unemployment and wage increases, as demand for labour swells to fulfil the needs of a growing economy.

However, our economic growth has always been slow, leading to fears of a slump and unemployment. Still, we are ignoring the importance of the relationship between unemployment and economic growth to create sound policies that will boost economic growth. When growth is tied with high unemployment, it means that the economy is experiencing structural changes. The absence of income created by unemployment can force families to deny educational opportunities to their children and deprive the economy of those future skills. The economic costs of unemployment are probably more obvious when viewed through the lens of national expenditure. Nepal has started to distribute unemployment benefits and social security allowances. The increasing number of unemployed people will mean a higher payout burden for the federal and state governments in the future.

The high unemployment rate in the country points to shoddy planning by the government. Our policymakers might also be aware that an economy based on remittance can never be sustainable.

When unemployment becomes a pervasive problem, there are often increased calls for protectionism and severe restrictions on immigration, which is difficult for Nepal to enforce due to its open border.

If there is a crisis in the Gulf countries and they stop hiring Nepali workers or send them back, there is going to be massive street demonstrations by the hordes of jobless people demanding work. The government has no idea what the repercussions will be. The government should come up with effective macro-economic policies and ensure improvements in the structure and functioning systems of governance to stabilise economic growth and create jobs. There is a need to reorient education and training programmes at various levels in tune with the required skills, emerging trends and job profiles. A good mix of classroom teaching and practical training is necessary.

Creating more jobs

There is no point in producing a massive number of generalist graduates who have no specialisation or skill to take up jobs. Several existing colleges can be converted into specialised educational institutions, imparting knowledge and skills in diversified areas that will make the students employable. The key to reducing unemployment is increasing government spending and creating a conducive environment for investors to increase investment in the productive sectors to create more jobs.

Shrestha is a former under-secretary at the Ministry of Finance and served with the UNDP in South Sudan and Sierra Leone