Remittonomics and conflict

The fragility of Nepal’s economy is once more highlighted by the conflict in West Asia


Dasain homecoming for the Nepali diaspora this year was overshadowed by the killing of 10 Nepalis in a Hamas attack on an Israeli kibbutz on 7 October. One student is still missing.

Dasain also coincided with the annual conference of non-resident Nepalis in Kathmandu. Unlike workers, these are Nepalis who have permanent residence abroad, and they seemed more concerned about getting Nepali citizenship papers.

But fear of a widening war in West Asia is the main concern today for millions of other Nepali workers. As the Nepali diaspora spreads across the globe, many find themselves in war zones or caught up in violence.

This is not the first time Nepalis have been caught up in conflict. Many migrant workers are living in active conflict areas like Ukraine. Many of the estimated 4,000 Nepali students there escaped to Poland in February 2022 when the Russians invaded. Some of the others enlisted and there are Nepalis fighting on both sides.

Nepalis trapped in Ukraine
Nepalis trapped in Ukraine in 2022.

Only this week, a Nepali mercenary Bibek Khatri fighting with the Russian Army was captured in the Avdiivka by Ukrainians. In a video posted on X by Anton Gerashchenko, Khatri says he joined the Russian military to make money and make his mother proud.

To be sure, Nepal’s Gurkha soldiers have fought in most major wars of the 20th century: Flanders Field Gallipoli, Italy, Malaya, Burma, Falklands, Sri Lanka, and are deployed on India’s borders with Pakistan and China. 

But it is in the volatile North Africa-West Asia region where Nepalis find their situation most precarious. Twelve Nepalis workers were executed in 2004 by Ansar al-Sunna in Iraq. The Saudi-UAE blockade of Qatar from 2017-2021 affected Nepalis, many of whom lost their jobs.

In 2014, some 126 Nepalis were evacuated from war-torn Libya to neighbouring Tunisia with the help of the Indian Embassy in Tripoli. IN 2016, 13 Nepali guards were killed in a Taliban attack on the Canadian Embassy in Kabul. Some of the estimated 2,200 Nepalis, mostly female domestic workers, had to be evacuated after the Beirut blast in 2020. 

This time the rescue of Nepali students from southern Israel was swift because they were well-documented students and were easy to track down. The presence of an Israeli embassy in Kathmandu, and a Nepal embassy in Tel Aviv helped.

Nepalis rescued from Israel NT
Nepalis were rescued from Israel earlier this month following the Hamas attack on a kibbutz where they were working. Photo: SUMAN NEPALI

“There are two types of Nepali migrants, those who are compelled to go and those who will leave anyhow. But both need to know about the status of destination countries, and once they get there they must notify the Nepal Embassy of their location in case they need to be evacuated,” says former foreign minister Bimala Rai Poudel.

Migration expert Ganesh Gurung says the government should at the very least guarantee the safe return of its workers in the event of a disaster of any kind. 

Nepal’s Foreign Employment Welfare Fund has collected Rs7 billion over the years from fees paid by people leaving for overseas jobs, and is used in rescue and resettlement of migrants. However, it does not take care of people who do not pay the fee, or do not go through recruitment agencies. 

Gurung says the facility should apply for all Nepali workers abroad in case they need emergency evacuation. The facility was most useful during the Covid pandemic when hundreds of thousands of stranded workers had to be flown home.

Nepal’s economy survives on remittances, and money the diaspora sends home has reached record levels this year.

“One of the major contributing factors to Nepal reducing its poverty rate was the money that workers abroad sent home,” explains Gurung. “But if more people choose to come back because of increasing geopolitical tensions and conflict, it will have a cascading effect on Nepal’s remittonomics.” 

Nepal is heavily reliant on remittance money because other sectors are stagnant. Migration is a safety valve, but there does not seem to be a strategy to create meaningful jobs at home.

Those who came home during the Covid-19 pandemic have mostly gone back because of the lack of job prospects here. Now, as geopolitical tensions rise, risking the very safety of Nepalis abroad, migration and the economy’s dependence on remittance will be fragile. 

Bimala Rai Poudel says the West Asia conflict is a warning bell for Nepal to rethink its over-reliance on outmigration.

Ganesh Gurung agrees that the Israel-Hamas war should be a warning that Nepal’s remittance economy is vulnerable to geopolitics. He adds: “What Nepal has been doing so far is crisis management, what we really need to pre-crisis preparedness given the potential dangers of crises like the one in Israel we will be exposed to in the coming days.”