The stampedes being witnessed at the centers taking in applications for the South Korean Employment Permit System (EPS) shows the desperation of Nepali youth to leave the country. In the first two days of application, over 40,000 had registered for the mandatory Korean language tests; the number is expected to climb to 60,000 by the Saturday deadline.

South Korea is considered the most lucrative employment destination for non-skilled workers, with normal monthly pay averaging Rs 100,000, which comes to 25 times the average monthly income in Nepal. Since the pay is so good, even those with graduate degrees are applying. Only a fifth of all applicants will be eligible to eventually fly to South Korea. While on the short term Nepal stands to gain from their remittance, in the long run, the mass exodus of skilled and non-skilled workers in such vast scales—with as many as 2,000 leaving every single day—negates any possibility of revival of the moribund Nepali economy. 

The Nepali economy of late has been in the doldrums. Our government and banks and financial institutions (BFIs) are flush with cash, thanks to remittance again. But they have not been able to spend much in productive sectors. According to informal estimates, as much as 90 percent of remittance money is spent on consumer products and since most of these products are imported, a big chunk of the money entering the country is leaving it as quickly. In the first eight months of the fiscal 2013/14, Nepal’s trade deficit ballooned to Rs 398.52 million, up nearly 18 percent from the same period last fiscal year. Yet the coffers of BFIs continue to swell as remittance (Rs 400 billion last year) easily exceeds exports. But this state of affairs is unsustainable. Unless the money coming into Nepal can be channeled into sectors like agriculture and energy (two of Nepal’s core strengths) and in reviving our neglected industries, creating thousands of jobs in the process, Nepal is soon going to have a rude awakening. 

The global economy is still wobbly after the 2007/08 financial crisis. Growth prospects of big Nepali labor importing countries like South Korea and Qatar are uncertain. If the oil prices tumble, the likes of Qatar and Saudi Arabia would be in a tight spot. In the event, their first move will be to prune foreign laborers in order to secure jobs for their citizens. South Korea’s economic growth, at touch over 2 percent, is also anemic and unlikely to improve significantly in the near future. Concurrently, it is not true that there are no ‘opportunities’ in Nepal. The increasingly wealthy urban population, for instance, will willingly pay a premium for organic vegetables as disturbing news of poisoning of our fruits and vegetables emerge. But we need people to grow them. The IT sector could take off with better policies and more investment. Improved irrigation technologies can wean the country off its overreliance on monsoon rains. If only we can get our political priorities right! For the timely promulgation of new constitution will mean not just political stability, but also creation of potentially hundreds of thousands of new jobs right here in Nepal.

Published on: 21 August 2014 | Republica