May 1, 2017 Sujeev Shakya

Do Nepalis Really Need Jobs?

Recently, a young woman quit her job in an organisation a month after starting work, because her employers refused to give her a two-week leave to attend ‘sangeet’ rehearsals for her cousin’s wedding. Stories like this are common in Nepal. We read multiple comments on social media about the poor customer service in banks, restaurants, hotels, internet service providers, supermarkets, taxis, water tankers, the printing press and other areas that touch our lives. This raises one big question: Do people really need jobs in this country?

Rent-seeking mindset

The central thesis of my book ‘Unleashing Nepal’ concerns how Nepalis have embraced a rent-seeking mindset instead of an entrepreneurial one. This situation has not changed; in fact, it has deteriorated further. You can hold a job and still have an entrepreneurial mindset. But when we call banks and talk to the service staff, they sound like they are doing customers a favour by keeping our money and giving us loans. One needs to talk to the CEO or senior managers for even the smallest things. This means that the senior management team spend 80 percent of their time dealing with minor issues instead of thinking of strategies to promote growth.

The Nepali term for a job is ‘jaagir’, an Urdu word meaning a land grant provided by feudal lords and rulers on which you seek rent. A market that is dominated by rent-seeking individuals kills the competition in the same manner that rent-seeking cartels kill level playing fields for business. The Nepali maxim of ‘ramro manche bhanda afno manche’—your own people rather than good people—continues to be the

hiring mantra for a majority of jobs. Given this state of affairs, people do not have to work too hard to get jobs, and so they do not have a feeling of gratitude. In my

personal experience of almost 30 years, I have noticed that people who really need a job outperform those who are simply there to rent seek on their family name, connections or inherited wealth.

Development industry’s impact

Nepal’s development industry has been the most sought after sector that most people want to join due to better pay, perks and work environment. They have been untouched by the labour unions that have plagued the private sector. Unlike the many issues facing employees in the private sector, development industry workers are well provided for; they get paid on time, receive good perks, and are given opportunities for personal development and training. These are features that the private sector in Nepal has yet to start believing in.

However, the development sector has also created its own unwritten rules that have had numerous impacts. For instance, there are ways to distinguish between

people who earn dollar rates and salaries and those who earn salaries in rupees. Rates for editing or translation are based on the number of pages, not on the quality of output. The world of training has been converted into something that participants are paid to attend, rather than a learning opportunity that participants should pay to attend. The art of calculating allowances (either for daily expenditure or for travel purposes) while attending junkets has been made so complicated that it may soon produce a PhD dissertation on the subject. Merit and quality are made secondary to the understanding of the procurement process.

Vendors for certain services and people working for these vendors have mastered the process of service provision in Nepal. They have captured the market and are now providing mediocre services at unaffordable rates. Now, firms are finding it more cost effective to work with vendors from outside Nepal, where they at least know that they are getting their money’s worth.

Four remedies

Nepal stands at a stage where the political transition is coming to a close. Now, there is a real need for quality human resources that can deliver a high growth rate. Here are four pointers. First, for the big picture to be put right and the rent-seeking

mindset to be uprooted, the inheritance laws need to be enforced. This would entail a tax on inheritance that would surpass a threshold figure. Second, the cartels that have created a rent-seeking environment in certain areas must be disbanded. Cartels are disguised as various associations, and firms rent seek from these powers. People who work for such establishments do not have an entrepreneurial mindset. Before pointing fingers at labour unions, one has to put one’s house in order.

Third, the development industry folks should form a team to look into certain practices and identify those that need to be remedied. It has been a long time since they were first established and times have changed now. Finally, the government should open up the market for skilled people, allowing firms to hire skilled people and vendors from outside Nepal, thus providing access to better service at better prices. Protectionism in our labour market has cost us dear. Perhaps once these changes are implemented, I can write an article titled ‘Nepalis do need jobs’!

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