No impact of global meltdown yet: Govt

No impact of global meltdown yet: Govt
ekantipur, 29-Dec-08

While foreign employment agents and economists have been warning that the global financial crisis would severely affect employment of Nepali youths abroad, government officials maintain that the country has not witnessed any impact yet.

Krishna Hari Baskota, revenue secretary at the Ministry of Finance, said on Monday that layoffs in the job destinations had been limited to highly paid employees and workers in the lower rungs were untouched. “As Nepali migrant workers fall under the second category, it is unlikely that they will lose their jobs en masse,” he told an interaction on the global financial crisis and its impact on foreign employment.

He said that the government was watching the developments in the world economy very closely so that it could take appropriate and timely measures. He added that there was no need for panic as the crisis was yet to be felt in Nepal.

However, foreign employment agents said that the situation was beginning to look bad for Nepali workers as companies in the job destinations had stopped giving overtime work, and some had started discharging their employees before their contracts expired.

Talak Bahadur Ranabhat, president of the Nepal Association of Foreign Employment Agencies, said that thousands of foreign workers were being laid off in the Gulf countries and that Nepalis were starting to feel the heat. “As a result of the world financial crisis, the future of foreign employment agencies is also at stake,” he said. He added that the country was receiving Rs. 389 million in remittances daily, and that the economy will suffer if the inflow were to decline.

Ganesh Gurung said that the fallout of the crisis on Nepal's economy would begin from the Gulf and Malaysia with massive job cuts of foreign workers there.

“Its impact will be seen in the transactions of financial institutions and the real estate business as remittances have been one of their main sources of funds,” he said. Explaining the impact of remittances on the livelihoods of people, he said the annual household income from remittances reached Rs. 34,698 at the end of conflict period compared to Rs. 15,160 at its beginning.

Economist Dr. Chiranjeebi Nepal blamed the government for doing nothing to insulate the country from possible impacts of the global crisis.