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Migrant labour Leaving behind economic lethargy?



"Considering the significant role foreign employment plays in stimulating economic growth‚ we should think of the dependence on remittance. The major question is will this push Nepal into the "vicious policy cycle" where policymakers rely heavily on remittances"

In the last decade, Nepal has witnessed migration, in particular, outgoing migrant labor in an unprecedented scale to the extent that there is at present an ongoing debate as to whether this phenomenon would prove a bane for the country in the long run.

According to Nepal Demographic and Health survey 2011, the net migration rate stands at 0.61 migrant(s)/1,000 population. The survey also shows that around 55 per cent of the country’s total population fall under the economically active (working population) group aged between 15 to 59 years. The same survey also mentions that more than four lakh youth have left Nepal in 10 months of the last fiscal year in search of employment abroad. In total, 27 per cent of the working population has left the country. No wonder, the alarm has begun to sound.

The scenario clearly shows we lack a proper plan for managing our youth, leave alone an employment plan. Had policies been geared toward creation of job opportunities within the country, we perhaps would not be witnessing an exodus of the Nepali work force to the mostly dirty, dangerous and demeaning jobs in some four dozen countries.

At present, Nepal sends one per cent skilled and 29 per cent semi skilled workers to about 108 destinations. The remaining 70 per cent of workers are unskilled. Our main target ought to have been to educate this segment of the work force and enhance their capability so that not only would the remittance flowing in make a huge difference, but in the long run, the country would be able to retain its productive population. The government has registered 54,442 jobless youths in the past four years. So far, according to the economic survey, the government has been able to lend Rs 330 million to some 3,343 unemployed youths in the last three years. It costs Rs 100,000 to create one job. While this investment is indeed heavy, only a small fraction of the unemployed work force has actually benefited. Besides, it is hard to ignore that such schemes actually benefit mostly the cadres of the party/ies in power and do not in any meaningful way change the unemployment pattern.

Researchers say the main reasons for youth migration are increased outflow from the Tarai, demand for unskilled workers (especially in Qatar, Saudi Arabia, the United Arab Emirates and Malaysia) and closure of domestic industries due to frequent labor disputes and high interest rates. When we scrutinize these reasons, the fundamental mechanism to be reproached is the poor quality of human resources and lack of government responsiveness towards the situation.

Reports about irregularities in foreign labor migration and problems faced by migrant workers before and after their departure for foreign employment are not addressed at the policy level. The Department of Foreign Employment has already recorded 1,898 outsourcing frauds worth Rs. 1.04 billion in the first eleven months of the current fiscal. About 152 cases amounting to Rs. 403.31 million reached the court.

The migrant work force has contributed to the development process to some extent. Statistics show that remittances bring in one hundred billion rupees each year. This has helped money transfer business flourish. But if we see the internal loan account, it increased to Rs 124.45 billion in 2010 from Rs 54.25 billion in 2000. Similarly external debt also remained quite insensitive to remittance as it stands at $4.5 billion in 2011 which increased from $2.4 billion in 2000. Thus we can say that migrant labor income was used to acquire more consumer goods, which means investment in non-productive assets did little to increase productivity. According to World Bank, Nepal is among top five countries with remittance amounting to 23 per cent of the national GDP and to some extent; the migrant work force has supported investment and saving. Data suggest that for every rupee transferred, households save 0.18 to 0.29 rupee. One per cent increase in remittance leads to a 0.36 percent rise in savings.

Keeping in mind that the Nepalese economy has over the years become increasingly dependent on remittance, the government must not only plan to ensure security for migrant workers, but also utilize the revenue accruing through remittance. This requires serious collaboration among the government, outsourcing agencies, migrant workers and the countries providing employment.

Though it hasn’t happened this year because of the caretaker status of the government and the prevailing political situation, there is serious need of budgetary intervention for prioritizing the working class population. Our planners need to think of targeting the underemployed and unemployed youths. Skill enhancement schemes, creation of job opportunities and enabling self-employment within the domestic market have become necessary. The major question is will this dependence syndrome push Nepal into the “vicious policy cycle” where policymakers rely heavily on remittances followed by inadequate investment climate, low private investment, low growth, limited job opportunities and more migration resulting in more remittance and the continuation of the same process?

Singh is a

researcher with CRE


This article is so true. There is no reason why i cant see all nepalese youth leaving the country and migrating to another country. All politicians are corrupted and they have no moral. Corruption happens everywhere even in the biggest countries but in Nepal it is way too much causing the country to downsize and degrade everyday. Politicians in Nepal invest less than 1% of the budget 99% is gone into their pockets. N S, USA

Since last 10 years i have been visiting nepal every year and the friends made in the last visit were not there to welcome me and the trends is still the same.The most common topic amongst the youth apart from Indian Cinema,Music is about getting Visa and the frequent round made by them to KTM. Strange but true,i get a feeling that in times to come if this continues,we will only see the senior citizens waiting for their Kids to come back and the country will be calld as the Country of Senior Citizens. Governement/Business Houses chhatra bahadur chhetri, New Delhi

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