It is by now a fairly well-established fact that the remittances Nepali migrant workers abroad send home prop up Nepal’s economy, and very likely saved it from collapse during the five-month Indian blockade.
The annual $5 billion from overseas workers and another $2.5 billion from India help pay for Nepal’s imports, 60 per cent of which is petroleum products. We barter sweat for oil.
What is less well known empirically is that remittances have reduced Nepal’s poverty rate, and spurred development. In the past seven years, Nepal has improved its Multi-dimensional Poverty Index (MPI) from 65 per cent of the population to 44 per cent.
This has been achieved despite conflict, instability, corruption and greed, and remittances played a large part. We can only imagine just how much further ahead we would be if Nepal were better governed, and if we had been able to reap the peace dividend after the war ended ten years ago.
Remittances help pay for better health care, reducing the country’s maternal and infant mortality rates by more than half in the last decade. Most families pay for their children’s school fees from money sent home by relatives. There is therefore an indirect correlation between migration and health as well as literacy, and even in lowering Nepal's average fertility rate.
As elsewhere among labour-supplying countries, there are social downsides to labour migration and relocation. In an ideal world with statesmen for leaders, we would have a clear longterm strategy to wean Nepal away from being a remittance-driven economy. Attracting investors, and creating jobs through a concerted push to build infrastructure would keep young men at home while fostering economic growth and development.
Given the current instability such a strategy will take time to yield tangible results. What should do we do in the meantime? There is only one answer: make it as easy and as cheap as possible for Nepali migrant workers to leave for work, reduce the fees for official money transfers, crack down on bribery and exploitation of workers by recruiters and immigration officials, and maximise the earnings of overseas contract workers.
Unfortunately, the government’s zero-cost migration initiative has been sabotaged by recruiting agencies. Workers were still paying up to Rs 70,000 each to manpower agencies when they should be paying nominal fees. Exploitation of workers, breach of contract, abandonment of workers who are left stranded in Malaysia and the Gulf are as rife as ever. The earthquake offered a big opportunity for reconstruction money to be spent on creating jobs at home for overseas Nepalis, but that chance has been recklessly wasted.