Al-Jazeera: Nepali migrant workers feel pain of economic downturnd

Foreign workers are bearing the brunt of the current economic downturn – they’re often the first to lose their jobs. With migrant workers sending home remittances of almost 400 billion dollars last year the subsequent loss of income could be devastating for many.

There are 2 and a half million Nepalis working overseas and the money they send home is the country’s biggest source of foreign exchange.

Al Jazeera’a Subina Shrestha reports in October 2009 from Nepal where migrant workers are beginning to return home.

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[Below is an excerpt from a report by the Deputy Manager of Nepal Bank Limited.  It a useful source of facts on the hundreds of thousands of workers and peasants who are driven by oppressive economic and social conditions in Nepal to migrate to India and other countries in the Middle East and Asia;  the important role that remittances from these overseas workers play in propping up the Nepali economy and state; and the 60,000 Nepali troops that are part of the Indian Army.–Frontlines ed]

Remittance to Nepal Option and Modality

In the context of global labormarket several millions people are now living and working in another countries, far away from their countries of birth. These people regularly remit a substantial portion of their earnings to their home countries. The financial flows generated by these migrants by way of remittances are very substantial.
Although accurate figures are extremely hard to get, it was estimated that in 2004, remittances to developing countries from developed countries exceeded US$126 billion, which was up by nearly 48.7 percent as compared to 2001. Actual amounts were probably much larger because flows through informal channels such as hawala were not included in official data collection.
Nepal has become one of the major labor exporting country in recent years. The history of foreign employment in Nepal dates back to the early nineteenth century when Nepalese soldiers began to work for the British army. In the ensuing decades, hundreds of thousands of Nepalese have worked in British and Indian army. Currently, over 60 thousand Nepalese are working in the Indian Army and other government institutions in India.

As the border between India and Nepal is open, hundreds of thousands of Nepali goes to India for labor work. The pace of the foreign employment increased dramatically after 1996 and the consequent of shrinking economic opportunities back home compelled Nepalese youths to look for alternatives elsewhere. The massive unemployment inside the country is the main reason behind this upsurge in venturing out to distant lands. As per the government data among the total population of 23.2 million, 47 percent are underemployed.

According to one estimate, every year 300,000 to 350,000 new Nepalese enter the labor market. Out of these new entrants, 30 to 40 thousand find jobs within the country; 100,000 to 150,000 go abroad and the rest remain in the country with no job. According to the National Planning Commission (NPC), the number of overseas workers has grown, on average, by 30 percent in the last couple of years.

There are now an estimated 1.2 million Nepalese working in 40 countries, excluding India. In the Gulf region alone, about 700,000 Nepalese are working in Bahrain, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates (UAE). The demand was so high that Nepal had to open a consulate in Qatar to supplement the efforts of the embassy in Saudi Arabia, where there are over 200,000 Nepalese.

Malaysia first opened its domestic job market to Nepalese in 2001, and it is estimated that about 150,000 workers have legally entered the country since then. Around 70,000 more are estimated to work in Hong Kong. Large numbers are also illegally employed in the rest of Southeast Asia.

There are huge number of Nepalese in UK and USA. They went to those countries as a student but their returning to Nepal is rare. They are remitting their earnings through unofficial channels since the commission charge in official channels is very high.

Migrant workers’ remittance is a strong source of foreign exchange earnings for Nepal. It is estimated that in 2004 money transferred from migrant Nepalese have crossed Rs 100 billion—making it a bigger source of foreign exchange than tourism and all exports combined. Workers remittance is now consider as a backbone of our economy. According to a study by David Seddon for the DFID, the value of foreign remittance from migrant laborers could be equivalent to 5 percent of official gross domestic product (GDP).

 

Nepal Bank Limited is presently receiving around USD 1.45 million per month as remittance from Gulf countries and Malaysia. In 2004, this amount was almost USD 2 million.
Western Union is recognized for sending money quickly, reliably, and conveniently with more than 150 years experience and 245,000 agent locations in over 200 countries and territories. Currently there are 5 main agents of Western Union viz. CG FINCO, SITA World Travel, Annapurna Travel, NABIL Bank Ltd. and Hulas Remittance. We had received proposal from all the agents except Annapurna Travel for sub agency, Hulas Remittance being the latest to offer the sub-agency. Likewise, Hulas Remittance offered us the exclusive sub agent in banking sectorand all USD remittance through us. After analyzing the proposals of the above four agents, we joined hand with Hulas Remittance on 22 December 2005.
Now, Nepal Bank Limited is providing Western Union’s services through its 60 branches covering all the regions of the country and we are in the process of adding the rest branches in this network in the near future.

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