To address the mounting challenges facing Nepal, comprehensive reform is urgently needed. Modernising the education system, creating jobs, improving infrastructure and fostering entrepreneurship are essential steps towards building a more resilient and diversified economy
Nepal is currently grappling with a severe unemployment crisis that has pushed many young workers to seek opportunities abroad. With an economy heavily reliant on low-productivity agriculture and struggling to diversify into manufacturing and services, the country's growth has stagnated. Compounding this issue is a growing mismatch between the skills of graduates and the needs of the labour market, alongside an outdated education system. As a result, young Nepalis are confronted with an escalating cycle of high unemployment and underemployment.
This crisis has led many to migrate to countries like Qatar, Saudi Arabia, Malaysia and South Korea in search of better wages and work conditions. Although remittances from Nepali migrant workers play a vital role in supporting the economy, they also expose the deep-rooted deficiencies in Nepal's domestic job market. Moreover, the growing trend of migration brings about social and psychological challenges for both the migrants and their families back home.
In regions like Nepal's Terai, villages once brimming with life now stand empty. This abandonment is a striking indication of the economic hardships many Nepalis face. The phenomenon, termed 'absent population', refers to those counted in the national census but not present in the country during data collection. This absence has become a powerful symbol of the economic struggles that drive so many to leave.
The economic hardships are particularly felt among the youth. According to recent data, the youth unemployment rate, which tracks those aged 15-24 actively seeking work, remains alarmingly high. In 2022, the rate stood at 20.52 per cent, a slight improvement from 22.75 per cent in 2021. However, the trend has been consistently troubling, with the 2020 figure at 23.80 per cent and 2019 at 19.88 per cent.
The 2021 Census of Nepal, which reported a population of 29.2 million, highlights the broader demographic trends. The country's population growth has slowed to its lowest rate in 80 years due to declining fertility and a surge in migration. Over 2.1 million Nepalis now live abroad, and remittances account for about 30 per cent of Nepal's GDP. From 2011 to 2021, the number of Nepalis living overseas grew by 14 per cent, and female migration, in particular, saw a notable increase.
This migration wave is a direct response to the lack of domestic job opportunities. The increasing number of absentee Nepalis underscores the severity of the country's economic challenges and the pressing need for reform.
Meanwhile, Nepal's net migration rate-which tracks the number of people leaving versus entering the country-has steadily risen in recent years. In 2024, the rate decreased to 4.144 per 1,000, marking an 18.26 per cent drop from the previous year, but this continues a trend of rising migration since 2021.
Nepal's economy is hindered by slow growth, widespread unemployment, and underemployment, which creates a vicious cycle of poverty. The scarcity of job opportunities limits economic mobility, particularly for young people. As a result, many are compelled to seek work abroad.
The lack of stable employment opportunities has made remittances an essential lifeline for many Nepali families. Workers in countries like Qatar, Malaysia and Saudi Arabia send funds back home, offering temporary relief but highlighting a more profound issue: Nepal's inability to create enough local jobs to sustain its population. This reliance on foreign income, while crucial, is a symptom of broader economic stagnation.
Political instability and corruption further exacerbate the situation. Frequent changes in government and deep-rooted corruption erode public trust, obstructing effective policy implementation and hindering long-term economic growth. The lack of stable governance and coherent economic strategies prevents the country from achieving sustainable development.
The exodus of young Nepalis seeking employment abroad has only accelerated in recent years. In fiscal year 2013–14, the number of youths seeking jobs overseas surpassed 500,000 for the first time in a single year. However, the impact of the COVID-19 pandemic has inflated these numbers.
The Foreign Employment Board reported that over 600,000 Nepalis sought jobs abroad in the year following the pandemic, with that number rising to more than 750,000 in the most recent fiscal year. Currently, more than 7 million Nepalis, about 23 per cent of the total population, live abroad.
To address the mounting challenges facing Nepal, comprehensive reform is urgently needed. Modernising the education system, creating jobs, improving infrastructure and fostering entrepreneurship are essential steps towards building a more resilient and diversified economy. Strengthening data collection will also provide clearer insights into absenteeism and the reasons behind it, helping to inform more effective policies.
As the country faces a demographic crisis marked by high absenteeism and migration, the need for inclusive and sustainable economic policies is clear. By focussing on job creation, improving living conditions and addressing the root causes of migration, Nepal can work towards a brighter, more stable future for its people.
The Census 2021, which revealed that 23 per cent of the population is now absent, highlights the urgency of reform. Only by addressing these pressing issues can Nepal hope to provide its people with the opportunities they need to build prosperous lives at home.
Kayastha holds Ph.D. in Journalism and Mass Communication
