Bridging between Jobseekers and excess liquidity

Provide jobs to able citizens is a major responsibility of the government. To bridge the demand and supply between  enterprenuers and job seeker there should be some semi-governmental institutions. According to NLSS 2011 about 7.5 million population are between the age of 15-30. These are the  youngsters who enter to the job market after completing some education or training. In other word the group of jobless youth.

A year ago banks were feeling thirsty due to liquidity crunch and now they are flooding with over liquidity with no proper outlet for proper streamline the deposit. According to the central bank NRB, the banking sector has an estimated deposit of more than Rs 64 billion and lending from banks was only Rs 11 billions as of last December(Paush Masanta, 2068). Laxmi, the goddes of prosperity and wealth is considerd unsteady and tottering. If money stays in one place it is counter productive. The current event of banking sector in Nepal has exibited the same nature of money. When the loaning outlets are nearly exhausted Nepali banks which flourished and boomed in the past decade are now getting under the pressure of the unused deposits. They are lowering the interest rate and investing in less productive NRB  treasury bills.

Talking to the bankers at his office on December 2011, Finance Minister, stressed on the need for increasing investment in the productive sector, utilising the surplus liquidity currently in the banks and financial institutions. “The liquidity in banks should be floated to the market,” he said, and added the government and NRB will prepare necessary programmes to develop infrastructure for the investment. However, bankers are less optimistic with the miracle promises of the Finance minister.

In November, 2011 the central bank NRB issued treasury bills worth Rs 5 billion, to sooth the outlet problem of the commercial banks but it was an insignificant approach. Currently, the deposited amount at banks is as huge as more than Rs 64 billion and lending only Rs 11 billion. The lowering of interest rate and asking the government for further concessions to the housing loans, show their anxiety. Burrowing from banks has dwindled after the governmental imposed source of big amount of investment in buying any property which that the business in housing, land, and share had dramatically declined.

Thus on one side is a large volume of money waiting for better investment outlets and on the other side is the large labour force  semi educated and skilled seeking jobs. The bridging between these two if can be done will solve a big problem and if not solved properly will transform to one or other devastating consequences. Government, should establish some semi government or independent institute to do research and work as bridge.

Some investment sector for Nepal are industry, business, infrastructure, energy, education, health etc. Which of them are more potential for long term investment is a hot question now.

Industry is Nepal is a failed experiment. Hundreds of industries including several large joint ventures are closure due to labour strikes or energy crisis. Closing of several large industries like Nepal Lever, Hindustan Unilever, Dabur Nepal, and Surya Nepal are some example of such failure. Uncontrollable flood of cheap Chinese and Indian goods creates suffocation to the national industry. Shortage of labour and energy crisis are other impediments. As an aftermath of the visit of the Chinese premier, China has announced to accelerate plans to expand a railway network Joining Tibet with Nepal boarder with an consideration of building a railway line in Nepal connecting the Indian Boarder.  Meantime, India also has several such plans and Indian railways are already connected to several boarding cities of India. These initiations by the two neighboring Giants makes the possibility of large industries more impossible. They are highly industrialized and has cheap labour so that such the transit will flood the Nepali market with cheap goods. Industries like cottage and indigenous product seems to have future.

Other sectors like infrastructure and energy are potential however the large investments and long gestation time needed by them makes such investment risky and inaccessible for small unorganized investors.

Investment in education is still promising however it is saturated in many sense. High competition has made it unethical and less profitable. Strikes and traditional pedagogy has made this sector difficult.

More promising sectors are agriculture, tourism and health. Value added agriculture such as livestock and dairy industry, carpet and dyeing, apple/orange and whiskey production. These are such example where agriculture production is indigenous type and output is value added with semi skilled labours.

Tourism is the evergreen investment sector for Nepal with mountains, hills, rivers, glaciers, temples, Buddha's birthplace and religious locations. But it needs governmental assurance and roads as prerequisite. According to the United Nations World Tourism Organization in 2010 about 16 million international tourist visited Thailand and 22 million visited Austria which is a small landlocked country of Europe. On the same year less than half million tourists visited Nepal that according to Nepal Tourism Board was the recorded number.

The newest and highly emerging sector is health. With the ever growing percapita income health service will flourish in the coming days.