"Labor stir that resulted in closure of factories like Surya Nepal should never have happened. It is very unfortunate that unwanted labor strike mire industries, affecting their operations as well as threatening jobs. The new government takes this situation seriously. We will improve industrial relations and restoring normal industrial climate."

This is what Finance Minister Barsha Man Pun pledged on Saturday when he addressed the business community that has been worried over deteroirating industrial climate in the country. The statement reflected greater realization on the part of the influential UCPN (Maoist) leader, who joined the government just a week ago, of the dire situation.

But businessmen like Uday Raj Pandey, president of Garment Association Nepal (GAN), said they will believe the minister´s word only after seeing concrete action, for this is not the first time the Maoist leadership made such a pledge.

Back in 2008, when Maoist Chairman Pushpa Kamal Dahal led the government and the present Prime Minister Baburam Battarai was finance minister, both of them had expressed similar concerns on weakening industrial relations and promised numerous corrective actions. So much so, they even proposed industrial peace for three years.

"The words of new finance minister were really heartening, but we wonder if he will really execute his pledge," stated Hamsa Ram Pandey, a member of Labor Relations Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

The business community hold such doubts mainly because the Maoists act differently when they are in the government and out of the government.

Records show about half a dozen factories shut down permanently over the last three years -- Surya Nepal´s garment unit being the latest case -- due to labor stir. More than a hundred factories almost choked to death as padlocking and other stiff forms of protests by workers forced closure of their operations from a week to three months.

"There were serious rift between trade union and management in about 80 firms that temporarily closed operations in a span of one year," said Pandey.

Those facing survival threats ranged from foreign investment ventures like Barun Beverages (bottler of Pepsi), Surya Nepal Garments and Fire and Ice restaurant to domestic ventures like Nepal Biscuits Company (Nebico), Sita Ram Gokul Milks, Reliance Sugar Factory, Hama Iron, Triveni Spinning Mills, Bhagawati Rolling Mills, Arati Soap and Chemical Factory, Nepal Pharmaceuticals, Arati Strips and Mahashakti Soap.

"The list is long. But bear in mind that even these names I mentioned are reported cases only. If the unreported cases are considered, then the number is much higher," Pandey added.

Furthermore, FNCCI officials said, Maoist-affiliated trade unions were responsible for over 90 percent of the closures--temporary and permanent.

As such affair largely drove away new investments and hurt output, contribution of manufacturing sector in gross domestic product (GDP) shrank from almost 9 percent to 6.5 percent during the past three years. Country´s manufacturing output remained fairly low and exports dropped from over Rs 67 billion (2008/09) to Rs 64 billion (2010/11), creating macroeconomic imbalance.

Saddest part was, strikes launched to "serve workers´ interest" mostly rendered them jobless. Although there are no officials figures, FNCCI claims tens of thousands of workers lost their jobs and shifted to work in India, Malaysia and Gulf countries during this period.

Clearly, labor problem was not the sole reason behind this gloom, because power crisis, poor governance and liquidity crunch too aggravated during the period. But entrepreneurs term labor problems as the number one cause of the present industrial gloom.

"Interesting side of the whole episode is, Maoist leaders that talked sense in the past while in the government never bothered to discipline their trade unions when they were not in the government," said GAN President Pandey.

FNCCI officials mainly tag trade unions, almost all of which are led by those who are not workers, as the major cause of present poor industrial relations than workers in general.

Worse is; the number of trade unions (as each party has its own trade union, and as much as three unions in case of the UCPN Maoist), has soared so rapidly and they are discrediting each other so heavily, entrepreneurs said they are grossly confused whom should they approach and talk to for resolving industrial problems.

For instance, when FNCCI signed an agreement on minimum wage hike and industrial peace with big three trade unions on Mrach 24, it had thought it contained the industrial unrest successfully. But Tarai-based trade unions instantly challenged the agreement and paralyzed factories in major manufacturing hubs.

If the government cleared these confusions and disciplined the trade unions, entrepreneurs said they will readily expand their businesses and up their productions.

Published on: 13 September 2011 | Republica