Kamal Raj Dhungel

Is it really sustainable? En-route to Dhangadi a few weeks back, my flight from Kathmandu was delayed.

I had an hour and half to spend at the airport with nothing else to do, I walked around without an intention to observe the huge mass of people leaving Nepal. Apart from a small population that looked like students, all of them seemed to be heading for foreign employment to India, Doha, Bahrain, Abu Dhabi, Bangkok, Korea and such. The majority of them seemed to be in the age group of 15-40. With a bag and passport in their hand, these people neither looked happy nor excited. Though they seemed to be worried, they all had an ardent hope of having a better standard of living after they landed the jobs in foreign lands.

When I got to Dhangadi, it was difficult for me to find a room at any of the numerous hotels, because most of them had already been booked. I tried to figure out what the reason was. One of the hotel managers explained that a lot of youngsters book the hotel for a night before going to India in search of jobs. Most of them try to get to Mumbai for jobs, so they come to Dhangadi from the hill districts.

Mahendranagar is one of the popular gateways to India for Nepali labor. Everyday, at least 25 people go past Tanakpur, and there are numerous such entry points along the 1000 km long border across the east west Nepal-India border.

These people who search for opportunities elsewhere live under the poverty line. From an economist’s point of view, they can be seen as the saviors of the economy as they send back remittance. According to the population census 2011, the total population is 26.6 million out of which 2 million are absentees. This number could be as high as three times had the census considered those who migrate to India seasonally. Thus, the number of absentees due to foreign employment is much higher than what the census has come up with. The general trend of migration is that whenever people see any opportunity abroad, they go for it. Irrespective of the salary or wages they get paid, the working condition they should work in, the amount of time they need to put into those jobs, and without other such considerations these workers desperately look for these mild opportunities that they believe will get rid of the destitution that they have to contend with at home.

No doubt, poverty in Nepal has come down from 30.9 per cent in 2003/04 to 25.2 per cent in 2010/11. What made this progress possible? There is no easy answer to it because the period in consideration was plagued by insurgency, popular mass movement II (2006) and political instability (2006 to date). It is quite difficult to believe in the size of the poverty that the government recently made public based on the threshold income of Rs. 54 or approximately $0.70 per capita per day. Is this amount sufficient to provide the basic needs to the people? There is no strong reason to believe it. We have been running on double-digit inflation for the past few years. Food inflation is the major contributor to pushing up the average inflation rate into double-digit. The economic development activities in the domestic front have remained stagnant, if not deteriorated, as the economic growth rate on an average stood at 3.9 per cent with large variations during the same period of time.

The country confronts high unemployment problem as our youths are migrating to India and the rest of the world in search of employment. No wonder, remittance is one of the biggest contributors to the economy for the last decade covering over 25 per cent share of the national GDP in recent years, a highest and remarkable share compared to other countries of the world.

Most probably, the share of remittance in GDP could be higher if our accounting system was capable of collecting information about seasonal remittance coming in from India. If poverty reduction of this size in the dire situation has been defined by remittance, it can be concluded that the progress made is unstable, unbalanced, uncoordinated and ultimately unsustainable. To ensure economic expansion, including political stability, Nepal must figure out a way to exploit its hydro-power potential, tourism, and improvement in the agriculture sector. This will, without doubt, create employment opportunities at home and, hence, increase in the total output. This in turn will increase the earning of the people who live in destitution, which will undoubtedly be the means of sustainable poverty reduction. But, Nepal is moving in quite an opposite direction. Instead, it relies on the labor market of east and south Asia, Middle East and western developed countries, where Nepalese cheap labor could be employed to support our ailing economy. The saddest part of all this is, whatever is earned from remittance is spent on non-productive sectors, mostly in real estate. This has created an explosion in residential and commercial real estates.

Thus, it can be said that whatever is being achieved by losing the productive age group of Nepal, cannot sustain the economy without them being employed within the country by creating opportunities that could not only sustain their lives but also the entire economy.

Published on: 2 February 2012 | The Himalayan Times