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The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian


Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent.
ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their
use. Terminology used may not necessarily be consistent with ADB official terms.

Country Report of Nepal


Presented
To

7th ADB-ADBI-OECD-ILO Roundtable on


Migration in Asia

Held in Manila, 18-19 Jan. 2017

By

Govinda Mani Bhurtel


Joint Secretary

Government of Nepal
Ministry of Labour and Employment
Singha Durbar, Kathmandu
Greetings from the country of Mount Everest
Presentation Outline
1. A Brief Profile of Nepal
2. Background of Foreign Employment in Nepal
3. Labor Migration Trend in Nepal
4. Skill Profile
5. Trend of Remittance Inflow
6. Initiatives for Remittances Management and
Utilization
7. Institutional arrangement & Legal Framework
8. Problem & Challenges towards labor migration
with in country & destination
9. Recent Initiatives & Reforms
1. A brief introduction of Nepal
Nepal is situated in between India and china.
A Himalayan country with 15% land covered by high
snowy mountains ( Mt. Everest top of the world and
other seven peaks above 8000 meters high), 68%
Midhills and 17% Terai (Flat Land).
Nepal is rich in natural and cultural assets, however
economically a least developing country at present.
Nepal has a population of 275,00,000 people (of whom
48.56% are Male & 51.44% Female). (Nepal in Figure
2014).
Around 500,000 Nepalese youths enter labour market
every year.
Per capita income 775 US$ per year (Economic Survey
of Nepal, 2014/15).
Nepal
National Flag Emblem

Map of Nepal
2. Background of Foreign Employment in Nepal
The Foreign Employment has a long history in Nepal, starts from Army-
Recruits in India as Gurkha regiment after the Sugauli treaty of 1816.
Officially, Labor Migration for foreign employment from Nepal started since
the decade of 1980s just after formulating the Foreign employment Act
1985.Initaially workers mobility started from gulf countries and South East
Asian Countries.
At Present, Nepalese migrant workers are working in more than 150
countries in the world, however, the concentration is highly in Gulf and
Malaysia.
Presently, Labor migration for foreign employment remains a key means of
economic and social empowerment in Nepal.
Gradual and slow pace of economic growth, lack of economic and
employment opportunities, political instability, severe unemployment and
underemployment conditions, poverty situations are the pushing factors for
labor migration from Nepal. Whereas the increasing demand of short term
labor from gulf countries & Malaysia are external motivating and pulling
factors for labor migration in Nepal.
Nepalese workers are very much preferred by GCC countries, Malaysia ,
Korean and Israeli employers due to their dedication, diligence, discipline,
above all honesty with hard working nature.
3. Labor Migration Trend in Nepal :
Annual outflows of Nepalese Migrant workers
Fiscal Year Male Female Total

1993/94 2005/06 758,675 Data not available 758,675

2006/07 204,143 390 204533

2007/08 244,366 4,685 249,051

2008/09 211,371 8,594 219,965

2009/10 284,038 10,056 294,094

2010/11 344,300 10,416 354,716

2011/12 361,707 22,958 384,665

2012/13 425,830 27,713 453,543

2013/14 498,446 29,368 527,814

2014/15 490,859 22,028 512,887

2015/16 399,406 19,307 418,713

Total 4,223,141 155,515 4,378,656

Source: Department of Foreign Employment (2016)


3. Background of Foreign Employment in Nepal Continued
There was a decrement by 3.8% in F.Y. 2015/16 due to the
earthquake in Nepal and changes in policy of receiving
foreign workers in Malaysia.
However, In the past two decades, Nepal observed a
dramatic increase in out migration.
More than 4.3 million work permits for foreign employment
were issued by the Government during the 1993/94-
2015/16 fiscal years.
It is estimated that approx 3.0 million Nepali migrant workers
are living abroad at present.(excluding India).
At present, on an average 1300 youths leave the country
every day to work abroad.
There has been a significant increase in the number of work
permits acquired by women as above figure illustrates.
Cntd
3. Background of Foreign Employment in Nepal Continued

Annual Outflow of Nepalese Migrant Workers Profile


4. Trend in migration flows by country of destination

The trend of Nepalese migrant workers in major Gulf countries including Malaysia

Country 2012/13 2013/14 2014/15

Malaysia 157,203 206,327 194,500

Qatar 85,837 104,068 105,955

Saudi Arabia 86,126 75,010 89,909

UAE 51,419 42,593 43,642

Kuwait 7,890 8,971 7,642

Bahrain 2,535 1,647 2,244

Oman 2,331 1,148 1,082

393,341 439,764 444,974


Total
4. Trend in migration flows by country of destination
5. Skill Profile of Nepalese labour migration
Low skilled 75%
Semi-skilled 24%
Skilled/professional 1 %

About 75% Nepalese migrant workers are low


skilled and mostly working in 3D works
(dangerous, difficult, & dirty works).
6. Trend of Remittance Inflow and Its Ratio to GDP

Flow of remittances & ratio to GDP

Remittance inflow
Fiscal Year Ratio to GDP
(NRs. in Billion)

2009-2010 (066/67) 231.7 19.4 %

2010-2011 (067/68) 253.6 18.5%

2011-2012 (068/69) 359.6 23.5%

2012-2013 (069/70) 434.6 25.6%

2013-2014 (070/71) 543.3 28.0%

2014-2015 (071/72) 617.0 29.2%


6. Trend of remittance inflow and its ratio to GDP Continued

Remittance from labor migration is becoming a major source of


economy in Nepal at present
Nepal received NRs. 617 billion from remittance in 2014/15 which was
roughly equivalent to the size of the annual budget of the same fiscal
year. However, contribution of remittances towards the country's
development has not been well recognized in comparison with foreign
aid, FDI & debt. Although, Foreign aid represents only 15 % of the
national budget. It is because we are not being able to utilize the
remittance in productive sectors as well.
Financial data shows that remittances contributed a 10.9% share of the
GDP in 2003/04, 19.4% in 2009/10 and 29.2% during the fiscal year
2014/015. The remittances flow, therefore, is increasing and a major
contribution to development financing as well as poverty reduction in
Nepal.(National Household Survey, 2011)
Migration and remittances have made a substantial contribution to
poverty reduction in Nepal. Poverty incidence decreased from 42 % in
1996 to 25 % in 2010 and 21.6% in 2015/16. It is observed that reducing
the rate of poverty is one of the major cause of the impact of remittances
in Nepal.
6. Trend of remittance inflow and its ratio to GDP Continued

Likewise, remittance has evolved as a major driver of balance of


payments. It constitutes 62% of current account receipts.
Moreover the share of remittances in house hold income is 31%. (Nepal
labour force survey, 2008)
As estimated 3 million Nepalese (of which 3.55 % women) are employed
abroad and send remittances to around 56% of households. The impact
of remittances at the household level has also led to a reduction in the
poverty level of the nation.
A joint study on remittances by IOM & IIDS showed that only 2.4 % of
total remittances are invested in capital formation, 0.6 % in saving and
0.5 % in business.
Besides the financial remittances, the social remittances are equally
important. Migrant workers have also brought valuable knowledge, skills
& experience with them from the foreign employment and have helped
for the poverty reduction.
6. Trend of remittance inflow and its ratio to GDP Continued

Country & their Remittances to GDP ratio

Country Remittances as % of GDP


41.7 % 1st
Tajikistan

Kyrgyz Republic 30.3 % 2nd


29.2 % 3rd
Nepal

27.9 % 4th
Tonga

26.2 % 5th
Moldova

Nepal was 3rd largest recipient remittances - as a share of GDP in the


world in 2012 (WB 2014) and the top recipient among least developed
countries (UN, 2014, P.15). Only Tajikistan and Kyrgyz Republic are
above Nepal.
According to the World Bank, Nepal holds 23rd of world position in
receiving remittance. In 2015, Nepal received 6.6 Billion U.S.$ as
remittances. (Source: WB)
7. Source of Remittance Inflow & its use in Nepal
Source of remittance inflow Data shows that about 29% remittances inflow
Money Transfer 43% via informal channel i.e. Hundi (according to
Hundi 28.9%
Bank 21.7 %
household survey ,2008).
Other Sources 5.6 % However, the scenario is changing onwards
2009. Informal channel has been discouraged
gradually.
Source: Household budget survey report,
2008
Still, we need to formulate encouraging and
effective policy and procedures in receiving
remittances through formal channels.

Remittance use The economic remittances from the labor migrants


Purchase of land/home 49 % are very crucial to Nepal's economic development.
Clearance of Debt 25 % But the significant amount of remittances are being
Savings in Banks 11 %
used for household consumption and land acquisition.
Education, Health etc 9%
Social Activities 3% About 80% of the remittance earning is spent on daily
Investments 2% consumption ( Nepal Living Standard Survey, 2008).
Therefore, policies & plans relevant to promoting
productive investments of remittances is increasingly
important and Government of Nepal is putting in
priority
.
8. Initiatives for Remittances Management and Utilization

Issuance of foreign employment saving bonds by the


Central Bank (i.e. Nepal Rastra Bank) for mobilizing
resources for development.
Twelfth (2011-2013) Development Plan
The plan mentioned about the issuance of Infrastructure
Development Bond for mobilizing resources
Skill development & financial literacy training to the
dependent family members of migrant workers
25 % tax exemption on the registration fees at the time of
land purchasing by the returnees if they have used formal
channel to send their remittances.

However, there is a gap in effective implementation of policy


and plan.
9. Problem & Challenges Towards Labor Migration Within Country

Inadequate information for safer labor migration at


local level.
Insufficient & ineffective skills and pre-departure
orientation training.
Lack of ethical recruitment and high migration cost.
Excessive case of cheating, exploitation and
fraudulent activities.
Use of illegal channel especially for domestic work
Increasing social cost.
Labor deficiency and less use of productive lands.
10. Problems faced by Nepalese migrant workers abroad
Recruitment companies/employers are not strictly following the
terms & conditions mentioned in the employment contract.
Problem of double contract, differ in salary, job and company.
Unpaid or delay in salary payment.
Long working hours and less opportunity of overtime payment.
Deduction of levy from the salary.
Holding workers ID/passport by Employer .
Unwillingness to issuing the exit-visa after the contract terms over
Intentionally, forced retention by the employers and forced to be
undocumented .
Abuse and torture by the employers/sponsors Female domestic
workers face mental, physical & sexual abuse.
High death rate-everyday 3 to 4 dead bodies of Nepali migrant
workers are repatriated.
Lack of effective supervision & monitoring by law enforcing
agencies.
11. Death Scenario:
(a) Details of death cases of Nepalese Migrant workers
abroad(Source:FEPB Nepal)
Year Male Female Total
2008/09 87 3 90
2009/10 399 19 418
2010/11 541 8 549
2011/12 632 14 646
2012/13 716 11 727
2013/14 818 24 842
2014/15 1003 - 1003

Grand Total 4196 79 4275

(b) Country wise Death Cases From 2008 to


2014(FEPB)

Country No. of death cases


Malaysia 1121
Saudi Arab 880
Qatar 739
UAE 264
Kuwait 96
12. Policy and legislative framework of Labor Migration
(Major legislation and regulations governing migration in Nepal)

Foreign Employment Policy 2012


Foreign Employment Act 2007
Foreign Employment Regulation 2007
Domestic workers work permit guidelines 2015
Five years Strategic National Plan of Action,2015( to
implement foreign employment policy 2012)
Guidelines for orientation training institutions 2014
Pre-departure orientation training curriculum , norms
&standards 2013
Individual works permit guidelines 2012
Comprehensive working procedure and Guidelines for DOFE,
2066
13. Institutional Arrangements

Ministry of Labour and Employment


Department of Foreign Employment
Foreign Employment Promotion Board
Foreign Employment Tribunal
Ministry of Foreign Affairs
Department of counselor services
Diplomatic Missions at country of Destinations
Department of Immigration
14. Recent Initiatives and Reforms
Review and amendment of Foreign Employment Act and regulation, 2007.
Implementation of Safer Migration project (SaMi) in 19 districts focusing on
the Access to information, Access to Justice and access to Skilling at local and
community level.
Upgrading Foreign employment information management system (UFEIMS)
and introduction of web based online system for prompt service delivery from
Department of Foreign employment( DoFE).
Execution of free visa free ticket Policy, 2015 in seven countries (GCC and
Malaysia where 98% Nepalese workers work).
In the process of entering into bilateral labor agreement with Saudi Arab,
Malaysia, Kuwait, Jordan and Lebanon.
Introducing country wide awareness building programme.
Counselor (Labor) and Labor attaches deputed in UAE, Qatar, Saudi Arabia,
Malaysia, Kuwait, Bahrain, Oman and Korea.
Strengthening of diplomatic missions at CODs, mobilization of NRN and other
charity organizations.
Organized a SAARC consultative forum that endorsed the plan of action on
Migration and development for south Asia.
Finally, Three Enquiries:
Movement of labour is an important aspect of globalization and provides
alternative livelihood opportunities to many people. It also poses new
challenges for government and policy makers in managing safe, orderly, regular
and systematic migratory flows both in the countries of origin & destination.
Unethical recruitment exists both COO & COD. Therefore, unethical recruitment
is a global problem requiring a global solution.
I would like to leave the floor with my Three Questions for further discussions.

1. Recruitment fees are different from one country to another within Asian
countries. So, can we make more or less uniformity through collective
efforts? If yes, then How?
2. Migrant Workers still facing many problems in COD such as low paid or
unpaid salary or delay in salary payment, working long hours and less
opportunity for overtime payment, unwillingness to provide exit visa even
after the employment contract is over, holding worker's passport/ ID by
employers, and so on. So, how can we solve these problems collectively in
order to ensure and promote fair and ethical recruitment considering
unhealthy market competition among the labor sending countries.
3. How can informal remittance be brought into the formal channels and how
can we maximize the use of remittances in productive sectors?
Last but not the least, we would like to extend our
sincere thanks to the organizer for this important meeting
and the hospitality rendered to us in this beautiful city
Manila.

We wish you all the best to all, present here and every
success of our mission here in Manila.

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