Thursday, May 26, 2016

Strikes bleeding national economy

The country came to a standstill today due to a strike by public transportation. While private vehicles were able to ply the roads, the strike by public transport limited movements in the industrial sector and movement by the public at large as well.
While a general strike for one day causes the country a loss of Rs 2 billion, a day's strike by public transport will cost the economy half that amount, or around Rs 1 billion, according to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the umbrella organization of the private sector. As lack of movement will curtail the flow of goods, that will also send up the price of consumer goods too.
Strikes in the transport sector hit the industrial sector first, according to FNCCI President Pashupati Murarka.
The movement of industrial goods has been halted, causing a loss to industry, he said suggesting transporters not to take any extreme measures like going on strike and to sit for talks instead. "The government should also at least listen to them," he added.
Transport entrepreneurs and transportation workers associated with various transport associations including Nepal National Transport Entrepreneurs Association called the strike today to protest against the government's recent move to hike penalties for traffic rules violations, with effect from May 14.
The strike has inflicted losses on transport entrepreneurs also, according to Muraraka. "A truck owner, who could have earned Rs 10,000 a day lost that income," he added. "The transport sector itself is suffering from the Indian blockade of almost five months and this strike will not do any good to the thousands of people associated with this sector."
The transport sector is expected to grow by only 0.5 per cent in the current fiscal year because of the Indian blockade, according to the Central Bureau of Statistics (CBS).
Similarly, a study by Nepal Rastra Bank (NRB), the central bank, shows that the direct cost of general strikes during 2008-2013 stood at Rs 1.8 billion per strike day and Rs 27 billion for a year at current prices. "The lost output per year accounted for 1.4 per cent of the annual gross output," it reads, adding that the total accumulated output loss due to general strikes in the five-year period amounted to Rs 117 billion.
With such losses, general strikes decelerated annual GDP growth rates in a range between 0.6 percentage points and 2.2 percentage points during 2008-2013.
The transport strike, however, hit consumers hard also. "The monthly inflation rate jumped to over 9 per cent as a result of a two-day general strike while strikes called for three or more days led to an inflation of more than 10 per cent," the central bank report says.
The strikes not only hit the industrial sector but the social sector also as people could not get to hospitals for lack of taxis.

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