A statement issued by the ILO at
Media Round Table on ‘Transition from the informal to the formal economy for
decent work’ read that a majority of young people, in particular those between
15 and 19 years, depend on the informal economy for their livelihoods and are
generally underemployed with inadequate earnings.
It has cited the weak regulatory
framework, lack of enforcement mechanisms and insufficient skills as the
barriers to the formalization of the informal businesses and employment.
“High costs of doing business, complicated
processes for registration, weak accountability, inadequacy of social benefits
and various forms of discrimination are also challenges to the formalization,”
said ILO.
It said that in emerging and
developing economies, the challenge of the transition to the formal economy was
closely linked to the challenges of development, job creation and productive
transformation of the economy.
It asked the government to adopt
integrated strategies to address the informality.
According to the ILO, integrated
strategies included measures for the creation of formals jobs, specifically
designed initiatives to formalize informal jobs and units and extension of
social coverage to informal workers.
“Incentives for the development
or expansion of sustainable enterprises and of employment, and programmes
designed to increase skills of the labour force and access to capital for
productive investment, labour inspection plans and support to the formalization
of low-productivity micro-enterprises, and social protection programmes that
offer health care coverage and maternity protection are included in those
strategies,” read the statement.
Speaking on the occasion, Head
of Informal Economy Unit at the ILO Headquarters Geneva Frederic Lapeyre said
that it was possible to formalize every employment as some Latin American
countries like Brazil, Argentina, Paraguay, and Peru had successfully
eradicated the informal employment.
He asked the Nepal government to develop a
strategy for efficient coordination and administrative cooperation between the
government enforcement agencies, labour inspectorates and social partners,
social security authorities and tax authorities.
“Reasonable indicators are
needed for the number of labour inspectors based on the size of the workforce and
quality, and power for enforcement bodies should be increased,” he said.
National project coordinator of
ILO in Nepal Prakash Sharma, said that agriculture, trading, craft-workers,
construction, transport, tourism and micro-enterprises were the major sectors
of informal economy in Nepal .
President of Joint Trade Union
Coordination Centre (JTUCC) Khila Nath Dahal said that of the total 10.7
million active work force in Nepal, about 96 per cent was engaged in informal
sectors.
He asked the government to utilise
the welfare funds in the interest of workers.
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