Effect of Strike in the Development of Nepal

Submitted to:
Ahrar Ahmad
Masters of Development Studies
BIGD, BRAC University

Submitted by:
Sukirti Amatya
ID: 17262016
Semester: Spring 2018
Date: 03/25/2018
Table of Contents
1. Introduction: - ....................................................................................................................................... 1
2. Background ........................................................................................................................................... 2
3. Methodology......................................................................................................................................... 3
4. Analysis ................................................................................................................................................. 4
5. Results ................................................................................................................................................... 6
6. Conclusion ............................................................................................................................................. 7
7. References ............................................................................................................................................ 8
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1. Introduction: -
Any countries development is mostly based on the economy of the country. Economic
development of any country is based on the development of the economy, political and social
wellbeing. But the economy of the country can be affected by various reasons; major reason to
affect is not only economy of the country but also by the noneconomic reasons like political
system, culture and its practice (Shrestha & Chaudhary, 2013). Any country that have a stable
political system which focuses on the development of the nation and involves in facilitating the
investment for the economic growth can bring a drastic change in their economy. In any country
where there is proper economic growth the citizens participate less in any kind of political activities
like strikes. The least developed countries or the developing countries where there is very little
development, the citizens in those countries are very likely to participate in the political activities
as they have various problems. Political participation of those citizens could be knowingly or
sometime unknowingly to solve their problems from the political channels.

Nepal have a long history of political instability. The long autocratic rule of Rana regime was
ended after the various strikes and revolutions in 2007 BS (1951 AD). After the end of autocratic
rule single system party came to rise in 1960s and ruled for 30 years. In the period of single system
party (Panchayat System) the economy of Nepal went drastically down which led to poverty,
malnutrition. The education system was very low and the most of the citizens were illiterate. As
the citizens began to realize the situations there was another revolt to change the political system.
In 1990 after a long revolution, the single party system was changed to multi-party system. The
multi-party system brought some changes in the social sector but couldn’t bring change in the
economic sectors.

Then in 1996, the Communist Party of Nepal (Maoist) began an armed rebellion against
government. The insurgency was spread across the country in a decade. It had attacked the police
posts and governments the most, killing more than 13,000 people in a decade. As the government
was unable to end the insurgency, king took over the power in a coup supported by the army in
2005 February. This created a conflict between the democratic parties, Moist and the monarchy
which was backed by military.

In 2007, constituent assembly election was planned but it was postponed twice because of the
dispute among the political parties. Then in 2008, 601-member body was elected who will draft a
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new constitution and in the same year constituent assembly met for the first time and voted to
abolish the monarchy system and declared Nepal as a Federal Democratic Republic. After the
declaration of ‘Federal Democratic Republic of Nepal’ there has been many conflicts between
different political parties and the interest groups to implement various agendas that benefit them
or that are in their favor in the new framework. As there was many conflicts and disagreements
between the political parties they couldn’t write the constitution in the Constituent Assembly of
2008. Even after four years the political parties couldn’t write the constitution so in 2012,
Constituent Assembly dissolved and second Constitution assembly was elected in 2013 to write
the new constitution.

2. Background
There are various types of strikes in both economic and socio-political context. Economic factors
as well as social factors have very much influence on the strike patterns. The most of the
“economic” factors leading the strikes are short term whereas the “socio-political” focuses on long
term (McGuire, 1992). In Low and middle income countries, strikes pattern are very important. It
is not important for the enterprises and economies but they also have impact in bigger things like
structural adjustment and in the process of globalization (Murillo, 2001). The general strikes which
are in larger scale is important to make the political stability and political development.

The causes of the strikes are mostly connected with Political, economic, social, psychological
factors and the role of unions and management (Meher, 1970). Strikes can be classified into two
general classes i) Strikes for immediate needs, like higher wages, shorter hours, better working
conditions, etc. ii) Strikes for the strengthening of the unions, which includes the strikes to secure
recognition of unions, strikes to secure re-employment of discharged fellow workmen or the
discharge of non-union workmen, strikes for closed shop or enforcement of closed shop agreement
and etc. (Strikes and Boycotts, 1921).

Most of the causes of strikes are based on three causes i) Immediate causes, ii) Conditional causes
and iii) Underlying causes (Knowles, 1954).

These causes of strikes have different themes. Major five themes are (Nicholson & Kelly, 1980)
(1) the strike as protest, in which leaders race to keep pace with membership demands; (2) the
strike as warfare, in which intergroup hostility sets the keynote for conflict; (3) the strike as
stratagem, in which it is a counter in negotiation; (4) the strike as group process, where social
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structures and processes govern conflict susceptibility and control; (5) the strike as organizational
change, through which the strike is a formative influence on the industrial relations 'climate' of the
participants.

Strikes in Nepal

The strikes are known as “Bandha” in Nepali which is used for general strikes. In Nepal during
strikes, the vehicles are restricted to move out, the shops will remain close, business and offices as
well as schools and colleges will remain closed. United Nations Department of Safety and Security
(UNDSS) have record of 12051 number of general strikes in 2010 only and there was 957 in 2009,
732 in 2011, 707 in 2008, 632 in 2012 and 218 in 2013. There are various types of strikes in Nepal.
Most common strikes in Nepal is nationwide strikes and regional and city strikes. But there are
many other types of strikes in Nepal like student’s strikes, fuel strikes and others. The nationwide
and regional strikes have the most effect on the economy in national level as during that time most
of the roads, shops, business, industries and other are affected and are closed (Shrestha &
Chaudhary, 2013).

The main reason to do this research is to find how strikes in Nepal have affected their economic
development. The objectives of this paper are

i) To know how much economic loss happed due to strikes

ii) To know how the economic loss have affected the economic development

3. Methodology
Source of Data: The research is based on the secondary data. The strikes data are collected
from Open data Nepal which are sourced from United Nation Department of Safety and
Security (UNDSS), Nepal office. The budget data are extracted from the Annual budget
report of Nepal. The budget surplus is calculated by subtracting the Expenditure of Annual
budget from the Allocated Budget. The GDP data are extracted from World Bank and
Central Bureau of Statistics, Nepal.

1
The number of strikes are counted in individual district levels, so if there is any national wide strikes then the
number of districts that are affected are counted in the total number of strikes .
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Study Period: In this research the study period used is from 2008 to 2013 AD. Whereas the
year used in budget is from the five fiscal year from 2008/2009 to 2012/2013.

4. Analysis
There are several strikes in Nepal in the study period which is from 2008 to 2013. In the figure 1
we can see that the highest number of strikes is seen in year 2010, year in which new constitution
was expected to be made after the election of Constituent Assembly in 2008. In 2010, as the new
constitution was failed there was huge conflict and many general strikes. Highest number of
strikes is 1205 in 2010 where as the least number of strikes are seen in 2013 with 218 number of
strikes.

Number of strikes in Nepal

1400
1205
1200

1000 957

800 707 732

632
600

400
218
200

0
2008 2009 2010 2011 2012 2013
Figure 1

In this study year (2008 to 2013), most of the strikes are conducted in the Terai region of Nepal
whereas Mountain region has been less affected and have very few number of strikes (Figure 2).
In 2008 and 2009 most of the strikes occurred in Terai region than other regions. But in 2010,
year in which most of the strikes took place, Terai region had lower occurrence of general
strikes. In 2010, hill region had the highest occurrence of strikes (543). Whereas, in other all
years Terai has the higher number of strikes.
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Number of Strikes
(Geographic Region)
600 556 543
529
500 459
419
400 371
326
284
300
203 184
200
133 109
102
100 77 78
18 29 31
0
2008 2009 2010 2011 2012 2013

Terai Hill Mountain

Figure 2

Most of the strikes done in the study period was by the political parties with 1412 number of
strikes. Second highest strike initiator were Rebellion groups with 677 number of strikes in 5 years.
This shows that most of the strikes are initiated by the political parties for political reasons. There
are very few strikes initiated by the student’s union and trade/labor unions.

Number of Strikes
(Actions Initiator)
1600 1412
1400
1200
1000
800 677
600 473
303 362
400 174 164
200 95 43
0

Figure 3
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5. Results
The study shows that as the number of strike increases, the government couldn’t spend the budget
on the different sectors. In 2010, total number of strikes occurred is 1205 which is highest in the
study period and in the same year more than 80 million Rupees was not spend (Figure 4).

Number of Strikes vs Budget Surplus

1400 1205 90000000
80000000
1200
957 70000000
1000 60000000
800 707 732
632 50000000
600 40000000
30000000
400 218 20000000
200 10000000
0 0
2008 2009 2010 2011 2012 2013
Total Budget Surplus

Figure 4

As Terai region is the most productive area where the most of the food production as well as many
agro-based industrial are found it has the most effect in the Gross Domestic Product (GDP) of
Nepal (Figure 5). In the research, it is found that when the strikes number was high in the Terai
region, GDP was the lowest in 2008 and 2009. In 2010, even though the number of strikes was
very high GDP had slightly grown as the number of strikes in Terai region is lesser than the strikes
in Hill region.

Figure 5
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6. Conclusion
People of Nepal have experienced many political systems from Autocratic rule of Rana to federal
democracy. They have also experienced single party system known as Panchayat system to
democratic multi-party system. There have been many political changes in Nepal and as the
changes increased the people’s expectations also increased as every political change gave them
new perceptions and increased their expectations. The economy of the nation was going down
rather than going up as the political instability increased. As the expectation of the people were
not fulfilled after many changes, many people were directly and indirectly involved in the political
activities. Most of the people from social and economically backward people moved forward and
formed many political as well as other interest groups which put forward the voices that couldn’t
be heard or the voices of the backward people. Most of the works done by these parties or groups
are like putting forward the demands of the people, to show opposition or support of some political
parties. These groups express these issues through strikes, blockade, lockouts or some other
activities which has involvement of mass people. These activities usually hamper the general life
of the citizens. The strikes, blockade or lockouts will not only affect the people but it affects the
overall economy and development of people. The cost of one strike will bring loss of NRS 1.8
billion in the nation (Shrestha & Chaudhary, 2013).

The study timeframe i.e. 2008 to 2013 AD, concentration of strikes was in Terai region with 2443 and the
lowest concentration was found in mountain region with only 460 number of strikes in total of 4451
strikes. Most of the strikes occurred in 2010 with 1205 number of strikes whereas 2013 had the lowest
number of strikes i.e. 218 number of strikes.

The strikes have major effect in the utilization of economy for the development of nation. In year 2010,
NRS 80 million was surplus from the total budget of NRS 330 billion. It has also slowed the growth rate of
GDP.

Nepal is full of natural beauty and water resources and can be developed through tourism and
hydropower. The political instability and the strikes have affected the development of these sectors. Due
to the strikes and political instability, Nepal have been unsafe for the tourists and the strikes and blockade
have also affected the development of Hydropower generations. Nepal can develop in few years if there
is political stability and develop tourism and hydropower in full phase.
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7. References
Knowles, K. G. (1954, November). "Strikes-Proneness" and Its Determinants. American Journal of
Sociology, 60(3), 213-229. Retrieved 3 22, 2018, from http://www.jstor.org/stable/2772680

McGuire, J. W. (1992). The Causes of Strikes in Argentina. Berkeley: Univeristy of California.

Meher, M. R. (1970). The Problem of the Strike. Indian Journal of Industrial Relations, 6(2), 185-187.

Murillo, M. V. (2001). Labor Unions, Partisan Coaliations, and Market Reforms in Latin America. New
York: Cambridge University PRess.

Nicholson, N., & Kelly, J. (1980, October). The Psychology of Strikes. Journal of Occupational Behaviour,
1(4), 275-284.

Shrestha, M. B., & Chaudhary, S. K. (2013). The Economic Cost of General Strikes in Nepal. Kathmandu:
Nepal Rastra Bank.

Strikes and Boycotts. (1921). Harvard Law Review , 880-888.