As international oil price continues to plunge—to now under US $40 a barrel—the whole of Middle East, the source of most of the oil in global markets, is in a swoon. Middle East, incidentally, is home to around two million Nepalis; there are around 400,000 more in Malaysia. Together, they send US $3.5 billion in remittance to Nepal every year. But as petro-dollars dry up, so will the earnings of Nepali workers. Malaysia is not as reliant on petroleum as the Middle Eastern countries affiliated with the Organization of the Petroleum Exporting Countries (OPEC).

 

Yet the economic slump in Middle East has not left Malaysia untouched—and Nepalis working there are feeling the pinch. There have been growing cases of violence on Nepalis in Malaysia. They have been attacked, for example, by the local Tamils who believe that Nepalis are taking up jobs that would otherwise be available for them. The slump in Malaysian economy coupled with growing insecurity is making most Nepalis working there consider coming back to their country; as many as 300,000 of them have now asked Nepal government to arrange for their return. This could be a sign of the broader trend of the exodus of Nepalis from across the Middle East and South East Asia.

 

Remittances today account for nearly a third of our national GDP. This is a risky arrangement. Nepali workers will send this money only so long as their host countries are able to provide them gainful employment. But with the price of oil at near an all-time low, and with no possibility of a quick recovery in the horizon, millions of Nepalis could in the days ahead look to return to their home country. This will be problematic because the Nepali economy is already shedding jobs, thanks to the prolonged political insatiability, a trend which was exacerbated first by the earthquakes and then the Indian economic blockade. Adding millions of people to the ranks of the unemployed youths back in the country is a recipe for disaster. Nepal is badly prepared for this impending crisis. With disagreements over the new constitution the focus of the political class, other important areas are being badly ignored. If our workers abroad start to return in droves how will they be adjusted here? What will be its implication on the Nepali society?

 

The tide of returning workers will be a double whammy for Nepal. On one hand, it will lose out on remittances, the lifeblood of Nepal's economy. On the other hand, it will have a new floating population of the young and restless. This is why it is important to quickly tide over the Madhesh crisis and then embark on the process of economic development. The country will then be better placed to negotiate good terms for its workers abroad. The problem with Malaysia is that there is no government-to-government agreement with Nepal. This is another reason why it is hard for Nepal to bargain for the rights of its workers there. One thing is clear: Nepal in the days ahead won't be able to so completely rely on remittances to keep its economy humming.