Due to rising unemployment coupled with militant trade unions, workers outflow increases

Half the Nepali households have members that are away from home indicating the startling rise in loss of human capital in the country.

At present, 52.8 per cent of the total households have at least one member away from home, according to Nepal Living Standard Survey (NLSS)III. “Some 20 per cent of the total population is away from their homes mostly for better prospects for employment,” it stated, “Of the total households, 32 per cent families have members away in foreign countries. Likewise, 55 per cent of the total households receive remittance from the members abroad.” Growing unemployment in the country due to militant trade unions has also forced the youths to go abroad looking for a greener pasture.

“But the country is losing the human capital that will have lots of socio-economic impact,” economist Dr Chiranjibi Nepal said. For quite some time the surge of the number of migrant workers has resulted in the growing flow of remittance to Nepal. Though, the higher remittance income has lifted the living standard of the people, it is a short term phenomenon. The more people are enjoying better facilities and the remittance has fuelled the import and consumption that is not contributing to the economy. The gain of remittance income results as the loss of able manpower in the migration equation. “Remittance income is considered to be slow poison for the economy as growing number of outgoing migrant workers reduces the nation’s productivity,” he said, adding that the government is also indifferent about creating employment back home due to easy income from remittances which has left the resources unutilised.

Over 354,000 Nepalis left the country last fiscal year to work in foreign destinations for better income prospects that has created dearth in agricultural and industrial labour back home. “The income from remittance has fuelled the consumption of Nepal as the major part of the income earned abroad is spent by the familymembers here,” he pointed out. Nepal earns about Rs 210 billion from remittance coming in from abroad annually.

According to NLSS-III, 79 per cent of total remittance is spent on daily consumption.

Only a meagre 2.4 per cent of the remittance contributes to capital formation.

“It is unfortunate in Nepal’s case that migrant worker’s hard earned income has mostly contributed to reducing saving and stimulating inflation,” Nepal lamented, adding that the empirical evidences also show that the developmentprocess of the economy that is dependent on remittance is relatively slower by about 1.5 per cent.

The major destinations for the unskilled workers are developing countries like Gulf countries, Malaysia and South Korea that are on the road to development with the help from Nepalis. “The demand for Nepali workers will dry up once the destination countries upgrade to developed stage,” he said, citing the examples of European countries and US where the demand for manual labour is low.

Published on: 29 August 2011 | The Himalayan Times