Stories
Foreign Migration and Remittance in Nepal
February 12, 2017
Labor has been the most significant export from the country, one member of much of the rural households has been reported to have sent out. It is no surprise that the main reason for migration has been utter lack of job opportunities (push factor) at home and high pay aboard (pull factor), Nepalese have been to some extent compelled to leave the country to look for job opportunities. The main “push factor” for migration has been a general negative perception of the country’s economy amongst the youth, which is true to a large degree. The elevation of violence during the Maoist insurgency led to large number of youths leaving their homes and crossing the border to India to look for personal security and jobs. The conflict also led to a halt in developmental activities, industrial sector being hit the hardest. It, also led to a decrease in employment ventures in the country itself.
And
of course the “pull factor” is affecting foreign employment, created out of
demand for labor in the economically booming Gulf countries in the last two decades.
Usually, the Gulf countries, which developed because of the oil boom in the
1970’s-80’s created millions of jobs. This opportunity has been seized by
migrants from countries that lack employment in their own home country. Higher
wages in these countries allure workers who get more remuneration for the same
work in the foreign destination. For example, “The government of
Korea has offered basic salary Rs. 60,000 per month to Nepali labors where in
Nepal even the Nepal government officer receives half of the salary offered in
Korea.”[2] Hence, the comparative wages have attracted Nepali youth to work in
countries like Malaysia, Qatar, Saudi Arabia and Oman, South Korea etc. In
terms of total share of GDP, Nepal was the world’s largest remittance recipient
in 2012.
Figure 7- remittance-
percentage of GDP- 2012
(Source-World Development Indicators and World Bank Development
Prospects Group)
Nepal has a long history of migration, beginning from
the 19th century, when Nepalese troops (namely the Gurkhas) were
recruited in the British-India army as provisioned by the Treaty of Sugauli
(1816). Besides that, large number of Nepalese peasants migrated to places such
as Assam, Darjeeling, Dehradoon attracted by the new agricultural programmes
launched by the British.[3] Later, it was the Labor Act of 1985 that
opened possibilities for Nepali migration to around a dozen of countries.[4]
Figure 8- Main
destination of Nepali migrants (a numeric graph)
Country/FY
|
2007/08
|
2008/09
|
2009/10
|
2011/12
|
2012/13
|
TOTAL
|
Malaysia
|
50,554
|
35,070
|
113,982
|
105,906
|
98,367
|
477,908
|
Qatar
|
85,442
|
76,175
|
55,940
|
102,966
|
105,681
|
485,909
|
Saudi Arabia
|
42,394
|
48,749
|
63,400
|
71,116
|
80,455
|
345,393
|
UAE
|
45,343
|
31,688
|
33,188
|
44,464
|
54,482
|
234,336
|
Kuwait
|
1,967
|
2,291
|
8,255
|
15,187
|
24,575
|
54,716
|
Bahrain
|
5,099
|
6,360
|
4,234
|
4,647
|
5,865
|
27,406
|
Oman
|
2,626
|
4,247
|
3,285
|
2,442
|
3,163
|
16,272
|
South Korea
|
146
|
2,909
|
2,532
|
3,728
|
5,627
|
15,707
|
Source:
Department of Foreign Employment, 2012
“Remittances are flows of more than just cash
- they bring information, ideas, and trends, and all of these things can
influence life here in Nepal.”[5]
Migration also has led to dissemination of technical know-how in the villages
through the ones that have returned. There are many examples of returnee
migrants who have succeeded in setting up their own small scale businesses and
uplifted their communities. Moreover, poverty reduction schemes such as
Micro-Enterprise Development Programme (MEDEP) initiated by the government and
United National Development Programme have assisted returnee migrants to start
their own businesses by providing them entrepreneurship skills and financial
assistance. MEDEP works in 38 districts
of Nepal, it has assisted to create 62,000 sustainable jobs across the country.[6]
“According to the
Third Nepal Living Standard Survey 2010-11, 55.8 percent of households receive remittance , with each household receiving an average
Rs 80,436 per year.”[7]
Remittance has been one of the most effective ways to alleviate poverty in
Nepal as it directly increases house hold per expenditure capacity. Due to the lack
of existence of self-sustaining manufacturing sector or other such revenue
adding sectors, the current flow of remittance into the country is helping the
country sustain its economy to a degree. Remittance has helped the country in
increment of foreign exchange currency. Even in the absence of a strong export
sector, through which a country earns foreign exchanges, Nepal has been able to
import extremely large amounts of goods; which would not have been possible if
not for the huge flow of remittance into the country’s coffers.
“Remittances have been responsible for poverty
reduction, increase in foreign exchange reserves, and the expansion of banks
and financial institutions.” But, “The money from remittances is an enormous
cushion for Nepal - until something bad or unexpected happens,” says Chandan Sapkota,
an economist with the Asian Development Bank in the capital Kathmandu. Hence, it
is not possible for any country to have a sustained growth by just depending on
remittance.
The social
challenges from rampant migration have also been very severe. For instance, the
potential problems a migrant faces before as well as after the departure are
usually not mitigated through the policy making processes. In most cases, the
migrant firstly has to get access to loans, usually not accessible under legal
umbrella. These loans are given out on high interest rates, already the migrant
is starting on a huge debt burden. Usually, the future course of event is very
uncertain for these migrants, nonetheless there seems no sign of decrease in
the outflow. In 2007 alone, 754 Nepalis died in the Gulf and Malaysia.[8]
More than 400 Nepali construction workers are reported to have died building
the world cup stadium in Qatar.[9]
These deaths have been ascribed to extremely harsh working conditions, “squalid, overcrowded accommodation”[10] and also lack of proper
nutrition etc. Even this has not deterred the youths of the country to leave
the country for jobs abroad. The
lack of proper information has turned out to be one of the major problems. In a
large number of cases, unregistered workers are without legal protection either
by the government of Nepal or the receiving governments.
The role of the man-power
agents aggravates the already sorry plight of the migrants. Moreover, the
problems of undocumented migrants are even more difficult to address. In case
of death of such migrants it even makes it difficult for the government of
Nepal to negotiate with the host country for return of the dead body to the
country. Another problem is to free Nepali migrants who are imprisoned abroad.
For example, several hundred Nepalese migrants are still in Malaysian prison
even after having finished their jail sentence. The Nepali embassy in Malaysia
informs that the release of migrants which do not have proper identification becomes
a difficult task, as the migrants have not been registered with the Department
of Foreign Employment while leaving the country.[11]
It is found that various agents find loopholes in the legal framework and
smuggle the migrants on fake passports, false dubious employment papers and
also tourist visas.
In the long run, migration seems to have a negative
impact on the country’s sustainable development. It is no doubt that the
remittance has contributed significantly to the economy of Nepal, but there are
some downsides to it as well, usually manifesting in personal lives of the
migrants. “Remittances may currently be the lifeblood of Nepal’s economy but
those who suggest that remittances are positive for Nepal in the long run
fundamentally misunderstand economic realities.”[12]
"We only talk
about how the government benefits from the money migrant workers send home. But at what cost?" says Kopila Rai, who
was a returnee migrant to Kuwait.[13]
Another major issue has been of women’s human rights violation. There is an
upsurge in women migration in recent years. Women are more vulnerable to
exploitation, especially in the Middle East. This has resulted because, in many
cases they are employed as domestic workers and these works are informal so it
is out of the purview of legal channels. Most of women emigrants are found to
be working in the informal sector as housemaids or caregivers. Moreover, it has
been found out that when women leave home seeking jobs overseas, the children’s
upbringing is adversely affected back home.[14]
In addition to the exploitation of women’s labor rights in the foreign
destination, they have to face the negative impacts of stigma that is attached
to women’s migration abroad. Hence, women migrants suffer at multiple
instances.
Moreover, it is of no guarantee that the work skill
that the migrants acquire in the destination country can be utilized when he or
she returns. For example, a worker may be engaged in the construction sector
(which is the major job provider) and after back he may not find the same
nature of work back home. This way the skill that he has garnered goes in vain
because he might get an opportunity to find work in similar area.
Considering uncertainly in demand for labor in
international market, the future of Nepali work force working in the major work
places, especially in the Arab Gulf is uncertain. Once their needs for less
skilled workers are fulfilled, they will discontinue the prevalent inflow of
workers in their countries. Hence, it will leave the sender country with no
option. The demand side of
international labor market cannot be fully relied upon. If in case, some
restraints are put on bringing Nepali migrants into these countries, there will
be an economic and social catastrophe in the country.
In Nepal’s context, the boom in the remittance
sector is leading to mass import of good from abroad. Chandan Sapkota[15]
maintains that much of the money in the country has been coming from outside
the country and also most of it being spent on imports; hence, it is not really
contributing to the economy in real terms. He further adds that of course
remittance has had appreciable contribution in poverty reduction, the side
effects of remittance as source of wealth has resulted in manifestation of “The
Dutch Disease” in Nepal. In the sense, continuous flow of remittance has made
policy makers very complacent. It has averted the urge to bring economic
reforms that would otherwise cater to improve “investment climate, increase job
opportunities domestically and channel remittances to productive sectors”.[16]
Another backside to excessive immigration is lack of
labor in the agricultural sector. For a country like Nepal, agriculture is the
backbone of the economy because it still is a major source of income,
employment and food in the country. The migration of large number of young
labors out of the country and consequently lack of labor in agriculture has
become a challenge leaving the work solely on elder people and women.[17]
This is led to the suggestion that there is a need for agriculture
mechanization in the country. Huge tracts of agricultural land have been found
to be abandoned. Even if a huge portion of the country’s GDP can be credited to
remittance, agriculture still has a dominant influence on the national economy.
Policy makers need to implement policies that encourage the working force to
pursue jobs in agricultural sector. For instance, it has been found, out of the
huge majority of migrants who have returned, only some turn to agriculture
whereas most of them choose to go back because of lack of good job
opportunities. [18]
Nonetheless, to some extent, the economy of the country which was prevalently
agriculture-based is gradually shifting to remittance-based.
Notwithstanding,
agriculture still is the main component of the country’s economy. For instance,
agriculture and forestry are likely to contribute 30.27 % to the GDP this year.
A steady rise in GDP growth from last year’s 3.26 percent to 5.15 percent this
year is largely attributed to rise in increase in agriculture production this
year. “This illustrates that even in the case of a labor force shortage,
agriculture remains the major source of GDP for the country.”[19] Certainly, on the one
hand the policy makers need to ensure the well being of the emigrants abroad; it
should also focus more on the agriculture sector of the country on the other
hand.
Moreover, the eventual contribution of remittance to
the national economy is not significant as most of which does not add in
creation of capital formation.[20]
Remittance money needs to be used for creation of jobs in the domestic market,
so that this acts as a deterrent for young people to leave the country in the
first place. It is a dilemma for policy makers as well, because it will not be
justified on their part to stop one from leaving the country in pursue of a
job, especially, when the state itself is unable to provide better employment opportunities
inside its own territory.
References:
1. [1]<http://www.washingtonpost.com/blogs/worldviews/wp/2014/01/06/a-nepali-woman-went-to-kuwait-with-dreams-but-came-home-in-a-coffin/ >
2. [1]
MIGRATION TREND AND REMITTANCE INFLOW THE EXPERIENCE OF NEPAL- Nawaraj Sharma
Paudel p. 13
3.
[1]
migration trend and remittance inflow the experience of Nepal- Nawaraj Sharma Paudel
4.
[1]
<http://www.migrationpolicy.org/article/nepals-dependence-exporting-labor>
5.
[1]Knight,Kyle.<http://www.aljazeera.com/indepth/features/2014/04/subtle-wounds-nepals-remittance-boom-201441144741533395.html>
6. <http://www.undp.org/content/undp/en/home/ourwork/povertyreduction/successstories/migrant-worker-returns-to-nepal-to-build-new-business-and-rebuil/>
8. <http://www.ceslam.org/index.php?pageName=newsDetail&nid=241>
9. <http://www.theguardian.com/football/2014/feb/16/qatar-world-cup-400-deaths-nepalese>
10. Amnesty International
12.
Former American Ambassador to Nepal Scott H. Delisi- Building a New Nepal:
focus on the economy
13.
ibid
14. http://www.gsdrc.org/go/display&type=Document&id=4294&utm_medium=rss&utm_campaign=gsdrc&utm_source=newsfeed>
16. Sapkota, C. Remittances in Nepal: Boon or Bane? P.1317
17. <http://www.myrepublica.com/portal/index.php?action=news_details&news_id=74026>
18. <http://www.ekantipur.com/the-kathmandu-post/2014/05/06/editorial/reap-what-you-sow/262499.html>
19. <http://www.chinapost.com.tw/commentary/the-china-post/special-to-the-china
post/2014/05/08/407171/p2/More-reliant.htm>
20. <http://nepalitimes.com/article/interview/Money-from-remittances>,148
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