The Inter-Relation Between Poverty and Unemployment in Nepal

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Table of contents

  1. The State of Poverty and Unemployment in Nepal
  2. Solutions for Poverty and Unemployment in Nepal
  3. Conclusion

Nepal is a lovely South Asian landlocked nation lying on the laps of the Himalayas. The total area of Nepal is about 1, 47,516 square km. Nepal is surrounded by two giant nations, China in the north and India in the rest of the sides. From the giant Himalayas to hills and then Terai. More than 30 million people have made Nepal their habitat and earned their livelihood. Although Nepal has been trying for the refinement of the nation, still it lags in the present scenario on the world map. There are many issues that hindrances to the growth of the country. However, I will discuss about the poverty and unemployment along with its solution in this essay.

The State of Poverty and Unemployment in Nepal

Nepal has known as one of the developing countries in the world. Poverty is defined as a state or condition in which an entity lacks the economic means and requirements for a basic level of living. One of the key reasons that Nepal is a poor country is political instability. In the last few decades, Nepal has gone through a lot of political transformations. Another issue that has harmed Nepal's economy is corruption. Nepal has been recognized as South Asia's third most corrupt country. Due to corruption, every new concept that emerges in Nepal is quickly phased out. Uneducated, unemployment, lack of vocational and technical education etc. are also causes of poverty in Nepal. The fourth Nepal Living Standards Survey that was planned to be representative of Nepal's new provinces was launched in March 2020 but had to be recalled due to the COVID- 19 pandemic. A significant share of vulnerable families in Nepal face the risk of falling back into poverty due to COVID-19. Specifically, this pandemic is likely to have direct impacts on remittances, which have been a key driver of past poverty reduction; weaken labor markets in an economy dominated by agriculture and casual services and impact non-monetary consequences are given the high share of private spending on health and education. Moreover, according to UNICEF and Nepal Multidimensional Index 2021 report, 18.7% of people live below the absolute poverty line while the multidimensional poverty index is reported to be 17.4%. Nepal ranks 142th among 189 countries with a Human Development Index of 0.579 in the year 2019 which shows the critical condition of the population residing in Nepal. Low income, illiteracy, dependency on agriculture, lack of proper knowledge, lack of employment opportunities can be listed as the main causes of poverty. People cannot afford their basic daily requirements like food, clothes, primary education, health services, shelter etc. Lots of people have facing the problem of hand to mouth at morning and evening. Even poor people are dominated by upper class people.

Unemployment is a condition of people are not engaging in income generating activities. According to the report on, the Nepal Labor Survey, almost 908,000 Nepalese are looking for work. Nearly one-third of those looking for job were long-term unemployed, meaning they had been unemployed for at least a year. Due to a lack of prospects and jobs in Nepal, a big number of people with highly educated, skilled, and adept people have relocated to other nations over the last decade. There is no training provided to the labor and they are not monitored closely. As a result, people prefer to earn a living in other countries. Lack of manpower, Nepal would have a difficult time rolling out development efforts. Brain drain is also one of the main reason of unemployment in Nepal to migrate highly skilled-full people moving to abroad to secure career. According to the study, roughly 52% of students want to go abroad to forward their degree or find better career opportunities and a better way of life. High income and better living standards (29.7%), better job and working environment (25.6%), family future security (17.4%), personal freedom (9.9%), and political stability in abroad (10.7%) were found to be major pulling factors for skilled manpower to abroad. On the other hand, thousands of people are moving to gulf countries like UAE, Saudi Arabia, Qatar, other Asian countries and some parts of Europe to involve in income generating activities. Approximately 3.5 million Nepalese (14 % of the total population) labor in other countries, mainly in Malaysia, the Gulf Cooperation Council (GCC) countries and India. 

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Likewise, problem of unemployment leads to different kind of impact on the society and country. Those people who don’t have job can involve in criminal activities like robbery, murder, smuggling and poaching activities. High unemployment shows that the economy is underutilized and inefficient, resulting in lower output and income which resulted lower GDP of the country. (Pettinger, T. 2019). Poverty is also negative impact of this issue.

Solutions for Poverty and Unemployment in Nepal

Poverty can be reduced by developing and implementing rapid and sustained economic growth policies and programs such as health, education, nutrition, allowing the needy to experience and contribute to the growth. Studies show that a 10 % growth in a country's average income declines poverty by as much as 20-30 %.

Moreover, there should be improved management of water and other natural resources. The government should remove in most of the rural areas in Nepal, people depend on agriculture or other natural resources for their livelihood. Therefore, it is necessary that they have more equitable access to those resources so they are better able to manage their resources. The government must create and improves access to jobs and income and develop entrepreneurial talent.

On the other hand, unemployment is itself a problem to the people in Nepal. To reduce the unemployment rate in Nepal there must be good plan and vision to create an environment of getting job opportunities to youths. Similarly, those people who are engage in agriculture as an income source, they should get easy loan to invest in agriculture in low interest, hybrid seeds, farming modern technology and irrigation facilities. It motivates youth to involve in farming. Apart from micro, small, medium, and major development projects in the country, employment prospects are good in the livestock, agricultural, industrial, tourism, business, and trade sectors. Government of Nepal should make policy of technical and practical education from the school level which makes skilled-person when they matured. Brain drain should be stopped because they create an environment of job opportunities. China and India are two neighbor big countries. However, government should make policy of easy access to establish the different types of industries. It creates thousands of job to the people. In this way, employment rate can be increased that meets the people's basic needs in their life as well as improve living standard.


In conclusion, poverty and unemployment have been discussed which are closely inter-related to each other. Nepal has faced lots of problem like poverty, unemployment etc. and again covid-19 pandemic also responsible for losing job, reduced salary and economic totally came down. The problem of unemployment and poverty are against the economic growth of people and nation. The government of Nepal should focus to bring effective policies to reduce the rate of unemployment and poverty. Government, different industries and organization should bring job opportunities. Likewise, facilities of education, health services, proper nutrition, clothing, and shelter should be provided by the government those who are poor.

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