Nepal may face shortage of 3.6 million workers by 2030 if people continue to take up jobs in foreign labour markets, creating hurdles for nation’s transformation into a middle-income economy in the next 13 years as envisaged by the government, a latest report says.
The projection was made on the basis of supply and demand of labourers in the coming years, and past economic and labour productivity growth rates, according to the report, ‘Pathways to Prosperity and Inclusive Job Creation in Nepal’, released on Thursday by the Overseas Development Institute (ODI), a UK-based independent think tank on international development and humanitarian issues.
The report was released at a time when many are saying the country should gradually put the brakes on mass labour outmigration, which has not only created shortage of workers in sectors such as agriculture and construction, but made the country over dependent on remittance. But even if no one leaves the country for employment purpose from now onwards, the country will face labour deficit of 600,000 by 2030 if economic and labour productivity growth rates remain the same, says the report.
This implies the country must ramp up economic growth and generate more high productivity jobs. This will give a boost to aggregate wages and help the country to attain the goal of becoming a middle-income country by 2030.
“But sustaining creation of high productivity jobs is difficult in Nepal because of very slow transformation from low to high productivity economic activities,” ODI’s Dirk Willem te Velde told an interaction on ‘Supporting Economic Transformation: Pathways to Prosperity and Inclusive Job Creation in Nepal’ organised by the South Asia Watch on Trade, Economics and Environment (Sawtee) in Kathmandu.
If Nepal continues to generate low productivity jobs, as in the case of agricultural sector, then many more employment opportunities need to be created to meet the 2030 goal of graduating to middle-income economy, the report says.
Nepal has set a target of raising per capita income of Nepalis to $2,500 by 2030, from existing $862, to become a middle-income economy in the next 13 years.