By – Rishab Tuladhar
Nepal has seen a rise in outmigration for the last 2 decades, where many of the country’s youths have gone to foreign countries to seek education or employment opportunities. In the last fiscal year, 628,503 people received labor permits, the second highest number on record. The figure does not include youths going for education and people migrating to India, where labor permits are not required. An estimate of 500,000 Nepali youths are said to have entered labor markets every year, out of which 400,000 youth seek foreign employment. According to the Ministry of Education, an estimated 20,000 students leave the country annually to pursue their education abroad, and the number has only increased with each passing year. The numbers dampened during the Covid-19, but after the pandemic subdued the foreign migration, once again, witnessed a surge.
Analyzing the demand in foreign countries, the outflow of Nepalese is most likely to increase in the near future. Most people migrate to countries such as Qatar, Saudi Arabia, UAE, Oman, Kuwait, Bahrain, Jordan and Malaysia for employment opportunities. Post the pandemic, in an effort to recover their economy, these countries have outlined many projects which are likely to increase the demand of workers from our country. It was predicted that after the Fifa world cup 2022, the demand of workers will decrease, but many other projects such as Qatar Vision 2030 and the Asian Games in 2030 have been lined up which will need migrant workers. The Gulf countries are also planning to decrease their dependency on oil and shifting their focus towards developing sectors such as Tourism, manufacturing, and technology.
Migration has both positive and negative impacts on a country like Nepal. Some of the positive impacts for Nepal achieved through access to greater educational and employment opportunities are: the improvement in literacy and educational status, changes in the beliefs of people, change in social status of people, politically emigrated people seem to be more aware, and access to opportunities for marginalized and low skilled manpower to climb up the development ladder through foreign employment. Remittances from Nepali workers abroad have continued to defy expectations. They have risen to Rs 729.02 billion, a 16.5% increase from the same period last year, according to a nine-month update report by the Nepal Rastra Bank (NRB). About 30 percent of Nepal’s GDP comes in the form of remittance money and it has, to a great extent, assisted in reducing the country’s poverty rate. Given the current situation of Nepal – depleting foreign reserves and problems associated with increase in currency value of dollar – remittance can indeed provide some respite to the country’s economy.
However, since remittance is an unsustainable means of development, over-dependence on this can be harmful to our economy. Remittance inflows may increase the reservation wage and reduce labor supply in the country. Reduction in labor and workforce can pose a significant challenge in the long run as with highly skilled manpower migrating to foreign land for better economic opportunities, the development of Nepal will be sluggish. Nepal will be short of individuals who would otherwise have contributed to the economy through enterprising, innovation, or other medium. This not only affects the productive capacity of the nation but also diminishes the potential of greater employment opportunities in Nepal, translating to Nepal remaining underdeveloped.
While remittance is beneficial to our economy today, to prevent adverse consequences in the future, it is important to shift the country’s dependence from remittance to other sectors. Nepal should also aim towards shifting the remittance income to productive sectors of the economy. For the same, the government should introduce policies that enable individuals to access greater economic and employment opportunities to earn a decent livelihood. Improving ease of doing business, bringing in investment, and foreign trade are some areas to start with.