Surya garment closure,Threats to Foreign Investor

The decision of Surya Nepal Garment to shut down production in the face of anarchist trade unionism comes as the biggest blow to Nepal’s slackening industrialization. It is also an ominous reminder of what an unsavory place Nepal has become for doing business. In addition, this development sends a strong negative signal to potential investors, domestic and foreign. It is the first instance of its kind in Nepal. Multinationals like Kodak and Colgate Palmolive folded their operations in Nepal either because of local value addition complications or to take advantage of better tax incentives, infrastructural support and business prospects in bordering Indian states.

Surya Nepal Garment became the largest manufacturer of readymade wear in the country within just five years of commencing operations. It established its own popular brands and occupied an impressive slice of a domestic apparel market dominated largely by Chinese products. It was planning rapid expansion and was also in the process of bagging lucrative orders from global brands at a time when Nepal’s readymade garment industry is going through a painful slump. Sadly, continued trade union militancy and uncalled-for labor stirs have undone all this hard work and dimmed the prospects. Without any doubt, workers do have their rights and those must all be respected. Workers should be allowed to resort to collective bargain, an internationally accepted tool, to put pressure on management for fulfillment reasonable demands.

But we oppose any sudden and complete closure of production to press impractical demands and we’re just as strongly against vandalism and the padlocking of managerial staff, such as was seen at Surya Nepal Garment some three months ago. We have said many times that Nepal’s rigid labor laws, which infamously favor labor over investors, have been the biggest bottleneck to expanded industrialization in the country. None of the successive governments has seemed serious about addressing this shortcoming and checking the erosion of investor confidence, though there has been some initiative in that direction. We urge all concerned to take this issue seriously and act immediately to restore the battered confidence of investors before it is too late.

We wish to remind trade unions that their activities are self-defeating and will ultimately scuttle the ship in which they are all sailing. We urge trade unions to correct their ways and contribute to industrial development at the same time that they promote labor welfare. We also demand in the strongest terms that the political parties promptly de-politicize the trade union movement. We believe this is crucial for restoring investor confidence at a time when the country is in dire need of investments for generating employment and keeping the economy afloat.Edidorial,Republica

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