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As COVID leaves many jobless, cooperatives could come to their rescue

KATHMANDU: As the COVID-19 pandemic and subsequent containment measures have led to the loss of incomes and livelihoods for thousands of Nepalese, cooperatives could likely offer those who have become jobless some respite with their financial resources and presence across the country and their network of members, say leaders of the cooperatives sector.

They say that cooperatives not only have the potential to create direct employment opportunities for those who have lost employment but also provide them support to become self-employed by starting their own enterprises.

Though there is no exact data till date on the number of Nepalese who have lost their jobs due to the pandemic, there are estimates that nearly a quarter of Nepal’s workers have lost their jobs due to the coronavirus.

A survey carried out by Nepal Rastra Bank among nearly 700 enterprises has revealed that these enterprises have laid off 22.5 percent of workers. Most of the job losses are in hotels and restaurants followed by agriculture, forestry, fisheries, and the wholesale and retail sectors.

It is apparent that unless things normalize and businesses pick up pace these workers will struggle to return to the job market and earn a decent income.

While big industries and enterprises in urban areas are still looking at cost-cutting measures, cooperatives that have a large base in rural areas could become a source of jobs.

Leaders of the cooperatives sector say that cooperatives could also provide financial resources to many such people to become self-reliant.
There are over 30,000 cooperatives with nearly 45 million people associated with them as members. They have mobilized Rs 40 billion in capital, collected Rs 160 billion in savings and provided loans worth Rs 135 billion.

Moreover, the cooperatives are involved in diverse sectors of the country’s economy including agricultural production, dairy, manufacturing, financial services, communication, energy, education, and health and consumer service businesses.

Due to their potential and contribution to the country, the Constitution has also recognized the cooperatives sector as one of the three pillars of the economy.

Of the total number of cooperatives, around 14,000 are savings and credit cooperatives while another 4,000 are multipurpose cooperatives. These cooperatives mainly focus on providing banking services and boosting the production sector.

According to an estimate, 1,500 agriculture and farming cooperatives have helped nearly one million households across the country to improve their living standard.

As many Nepalese who have gone abroad to various countries for foreign employment are likely to return home due to the economic fallout of the pandemic, the government is likely to face a challenge in addressing a rise in unemployment in the near future.

Cooperatives which have a presence in rural areas could help such returnee migrants utilize their skills to start their own enterprises by offering them the required finances and finding a market for their goods and services among their members.

While cooperatives are not immune to the impact of the coronavirus outbreak, they have so far survived the pandemic largely unscathed.

According to a report made public by the International Labor Organization in 2009, cooperatives are more resilient in times of crisis than traditional enterprises and in general more cooperatives survive and last longer than small businesses in the private sector.

“Many Nepalese workers are returning home as they have lost their jobs abroad due to the impact of the pandemic. Cooperatives can help these workers be involved in the productive sector,” said Minraj Kadel, chairman of National Cooperatives Federation of Nepal.

“This will not only help create employment opportunities but also aid many people to become self-employed. Moreover, it will also help boost domestic production and go a long way in eradicating poverty in the country,” he added.

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