Labour export likely to remain low in next fiscal year as well

The number of people leaving the country for foreign employment, which had reached its peak in fiscal year 2013-14, has gradually started to fall, signalling saturation in overseas labour migration.   A total of 527,814 Nepalis accepted jobs abroad in 2013-14, the highest in the history of the country, show the data of the Department of Foreign Employment (DoFE). That number fell to 512,887 in fiscal year 2014-15. The number is likely to take a dip this fiscal year as well, as only 386,315 people have left the country in the first 11 months of the current fiscal year — down 20.6 per cent than in the same period last fiscal year. “The flow of workers towards overseas job destinations has shrunk this fiscal, as Malaysia suspended recruitment of foreign workers (to reduce its reliance on overseas workers),” said DoFE Director Rama Bhattarai. “Also, number of Nepalis leaving for other destinations has not increased significantly.” This situation is not likely to improve in the next fiscal year as well, as fresh demand for Nepali workers from labour-absorbing countries has fallen this fiscal year. In the first 11 months of this fiscal year, Nepal received fresh demand for 1.15 million workers from overseas destinations, as against 1.19 million workers in the same period last fiscal year. “This is an indication that overseas labour migration will remain at a similar level in the next fiscal year or even drop,” said Bhattarai. Fall in outflow of Nepalis may come as good news for industries facing shortage of workers. But in a country, where major source of foreign income has been labour export, drop in overseas migration may have other repercussions in the economy. For example, the country’s foreign exchange reserve currently stands at an all-time high of $9.5 billion, which is over 40 per cent of the gross domestic product. Forex reserve is in a very comfortable position because of money sent by Nepalis working abroad. But with the fall in outflow of workers towards foreign job destinations, remittance growth rate has already started to decelerate. In May, for instance, remittance growth stood at 10.2 per cent, as against 27.5 per cent in September. One of the reasons for deceleration in remittance growth is plunge in outflow of workers towards Malaysia — the top overseas labour destination for Nepalis until last fiscal year. The Southeast Asian country, which had absorbed 193,455 Nepalis in the first 11 months of the last fiscal year, provided employment to only 51,484 Nepalis in the same period this fiscal, marking a drop of whopping 73.4 per cent, show DoFE data. Number of Nepalis leaving for Malaysia had started falling since beginning of this year because of erosion in the value of Malaysian currency, which tends to hit income of workers, who have to remit their income. Then in February the Malaysian government suspended recruitment of all foreign workers. The decision was taken after companies and some non-government organisations protested a reported intake of 1.5 million workers from Bangladesh over the next three years, according to Bloomberg. Many said ‘entry of a large number of workers would exacerbate the problem of undocumented foreign labour in the country’. They also said the policy ‘diverges from a plan to reduce reliance on overseas workers’. While this move has tapered flow of Nepali workers to Malaysia, Saudi Arabia filled the gap by recruiting more Nepalis. The Gulf country provided jobs to 115,740 Nepalis in the first 11 months of the current fiscal year — up 25 per cent than in the same period a year ago, show DoFE data. This has made Saudi Arabia the top Nepali labour recipient country so far this fiscal. “However, some of the companies in Saudi Arabia have started retrenching workforce as lower international oil prices have started to eat into their profits,” said Bhattarai. “So, the prospects of Nepalis working in Saudi are pretty grim.” Among others, outflow of Nepalis towards Qatar and Kuwait — other major labour destinations for Nepalis — is steady. Qatar absorbed 108,352 Nepalis in the first 11 months of the current fiscal year, as against 117,523 in the same period a year ago, while Kuwait provided jobs to 8,406 Nepalis in the 11-month period, as against 9,011 in the same period a year ago, DoFE data show.