Global uncertainty may hit Nepal hard

Nepal might feel the heat of global uncertainty, according to the International Labour Organisation (ILO).
"The global uncertainty stemming from the euro area sovereign debt crisis and the continuing weakness of the US economy has negative implications for all countries, including those in the South Asia region, particularly those dependent on remittances and tourism like Nepal," said the Global Employment Trends 2012 released today by the ILO.
South Asia that now accounts for almost half of the world’s working poor — estimated to be at 46.2 per cent in 2011 — faces the challenge of high degree of informality that persists despite strong growth, as unemployment is not the main labour market challenge in the region.
The unemployment rate in South Asia is estimated to have been just 3.6 per cent in 2011, down from 3.8 per cent a year before, it said, "Similar to other regions, the unemployment rate is higher for youth at 9.9 per cent and women 4.8 per cent."
In the South Asian context, it is the persistence of low-productivity, low-pay jobs, which are mostly located in the agricultural and urban informal sectors as most of the population continues to derive a livelihood from agriculture.
In 2010, agriculture sector accounted for 51.4 per cent of employment, although it is down by almost 11 percentage points from the share in 1991 (62.2 per cent). As of 2010, industry and services accounted for just 20.7 and 27.9 per cent of workers in South Asia, respectively.
Accelerating the movement of poor people out of agriculture into more productive jobs in the non-farm sector remains one of the most critical priorities for the region, suggested the report.
The main challenges in South Asia is to increase labour productivity, to ensure that incomes are rising and poverty is falling, and create enough jobs for a growing working-age population, which is expanding by around two per cent every year. "With almost 60 per cent of the population under the age of 30, South Asian governments are seeking to take advantage of the demographic dividend and not let it become a cause of poor labour market outcomes and, ultimately, conflict and insecurity, it added.
Similarly, the world faces the 'urgent challenge' of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report of the ILO. "After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million," stated the ILO annual report 'Global Employment Trends 2012: Preventing a deeper jobs crisis'.
Moreover, the report said more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year. The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the $-2-a-day poverty line, mostly in developing countries.
The report said 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than four million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.