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Large-scale Migration and Remittance in Nepal: Issues, Challenges, and Opportunities

Large-scale Migration and Remittance in Nepal: Issues, Challenges, and Opportunities

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Published by Chandan Sapkota
Large-scale Migration and Remittance in Nepal: Issues, Challenges, and Opportunities based on Nepal Migration Survey 2009
Large-scale Migration and Remittance in Nepal: Issues, Challenges, and Opportunities based on Nepal Migration Survey 2009

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Published by: Chandan Sapkota on Jul 08, 2011
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LARGE-SCALE MIGRATION AND REMITTANCE IN NEPAL:ISSUES, CHALLENGES, AND OPPORTUNITIES
1.
 
The scale of migration and remittance in Nepal is staggering.
Almost half of allhouseholds have at least one migrant abroad or a returnee. Estimates of the number of Nepalimigrants abroad vary widely, but the most frequently cited estimate, including seasonal workersin India and those who use informal channels, is about 4 million
 – 
one-third of the working malepopulation. Foreign remittances now constitute a quarter of the income of all households andalmost two-thirds of the income for those receiving money from abroad. In FY 20
09 ―officialremittance‖ measured by the Nepal Rastra Bank (NRB)
totaled US$2.7 billion, or 22 percent of Gross Domestic Product (GDP). This figure excludes remittance from India and informal flows,and therefore total inflows could easily exceed 25 percent of GDP. International migration hasthus become the most important economic activity in Nepal. Foreign exchange earned frommigration is higher than that of export receipts and official aid combined.2.
 
The ubiquity of Nepali migration is confirmed by its uniform distribution.
Almosteveryone is migrating
 – 
the rich, the poor, people from the Mountains, Hills, and Terai, and from
all of the country’s
five development regions. Migration has spread through networks and nowinvolves the entire country. Worker outflows and remittance inflows are likely to continue, given
Figure
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1: Migrant Departures and Remittances (2001-10) Figure
Error! Notext of specified style in document.
2: Destinations of Nepali MigrantsFigure 3:
 
Size of Foreign Exchange Inflows to Nepal (1996-2009) Figure 4: Largest Remittance Recipients in the* World (Share of GDP, population above 10 million)
 
2the scarce domestic job opportunities, large young population, and the reach of the
migrants’
networks.
Migrants
3.
 
The Nepal Migration Survey (NMS) 2009 puts the number of Nepali work migrantsabroad at 2.1 million.
Their key destinations are India, the Gulf countries, and Malaysia, withnotable numbers in other developed countries such as Australia, Japan, the United Kingdom, andthe United States. India is estimated to have 867,000 Nepali migrant workers, 41 percent of thetotal working overseas, and the Gulf countries another 810,000 (38 percent). Malaysia is said tohave 245,000 (12 percent), while 186,000 (8.7 percent) are in the other developed countriesmentioned above. Oft-quoted numbers of migrants in India range between 1.5-3 million. Thedifferences between the NMS survey and other estimates may be explained in part by theseasonal return of many migrants to Nepal
 – 
as this survey was carried out at the peak of Nepalifarming season (May-June), when many migrants who normally reside in India were back working on farms at home.
1
 4.
 
India is also the key transit point for Nepali migrants using informal channels.
 Without documentation, they cannot fly out of Kathmandu, so they use informal agents in Indiaand often fly to destinations prohibited by the government of Nepal, such as Afghanistan andIraq. Women migrants who could not receive letters of guarantee from Nepali ambassadors indestination countries for the safety of the work also migrate through India.5.
 
Most migrants are aged 20-44, and the out-migration is causing domestic laborsupply shortages in many rural areas.
Many migrants are in their mid-20s (Figure 5)
 – 
and theage-distribution graph of the population remaining in Nepal has a dent around that age. As aresult, the labor supply in rural areas has fallen significantly, raising real wages in many cases.Many male members of remittance-receiving households have also less incentive to work andhave reduced their labor supply, exacerbating labor shortages.
1
In addition, 1.2 million Nepalis are abroad as non-work migrants
 – 
many with student visas. There is inadequateinformation on how many of them actually work while abroad.
Figure 5: Age Profiles of Work Migrants and
 
Figure6: Non-Parametric Regressions of ProbabilityNon-Migrants Are Quite Different of Migration and Wealth Indices
Sources and notes: NMS 2009.
 
36.
 
Migrant destination countries vary by wealth status
(Figure 6). Everyone, from thepoor to the rich migrate, but the likelihood of a household having a member working abroad is
highest when the household belongs to the ―middle class‖ – 
around the fourth quintile in terms of wealth. There are various economic reasons for this. Households with the least wealth tend to
send members to India, but India’s attractiveness declines rapidly as wealth increases. The
opposite applies in the case of migration to other developed countries, where migration increasesin line with wealth increase. For the Gulf countries and Malaysia, the relationship is non-linear:migration increases as wealth goes up and peaks at the fourth wealth quintile before declining tothe wealthiest quintile. In addition, as the wealth index and human development indicators arecorrelated, those with less education tend to go to India. Relatively better-off and better-educated
migrants are more likely to work in ―other developed countries‖
.7.
 
Migrant destinations tend to vary according to the place of origin of migrants.
Mostmigrants from Mid- and Far-Western regions travel to India. Migrants from Western and Easternregions dominate the Nepali workforces of Malaysia and the Gulf countries, with workers from
the Central region being a distant third. ―O
ther developed countries
are often the destinations of those from Eastern, Central and Western regions. Migration to those
―other‖ countries is also
common for urban workers in the Central Development Region, where the Kathmandu Valley islocated.
The ―likelihood‖
of migration is highest among people of the Western and Far-Westernregions, while those of the Central Development Region have the lowest, though still significant,tendency to migrate (22 percent).
Figure 7 : Household Migration Rates by Destination
 
Sources and notes:
NMS 2009.
8.
 
In terms of ethnicity, the probability of migration is above average forMuslims/others, Hill Dalits, Hill Janajatis, and Brahman/Chhetri
(in descending order).Muslim/others and Hill Janajatis tend to go to the Gulf while the major destination of Hill Dalits

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