Documente Academic
Documente Profesional
Documente Cultură
January, 2016
Kathmandu, Nepal
Abbreviation
BoP
Balance of Payments
CBS
CDR
DoFE
EDR
FWDR
FY
Fiscal Year
GDP
Ltd
Limited
MBNL
MoF
Ministry of Finance
MWDR
NRA
NRB
UAE
USD
WDR
1.1.
General Background
Over the past decade, a surge in out migration for foreign employment to various countries has
been occurring in Nepal. Every year, about 500,000 labor forces are entering in to the international
labor market, the figures excluding the migration to India. The migration to India would be just a
rough estimate as the work permit is not required and long open border. Failure to provide adequate
employment opportunities within the country has led to the increased outbound trend of migrant
workers for foreign employment. As a result, the growth rate of workers remittance has continued to
swell in the recent years.
The ratio of remittance to GDP that stood 25.7 percent in FY 2012/13 reached 28 percent by FY
2013/14. The inflow of workers' remittances increased by 13.6 percent to Rs. 617.28 billion in the
FY 2014/15 compared to 25.0 percent growth of the previous year. An increase in workers
remittances helped the country to maintain the BoP (Balance of Payment) surplus of NPR 145.85
billion and foreign exchange reserves of NPR 702.88 billion in FY 2014/15. According to the World
Bank data, Nepal stands third among the countries in the world in terms of share of remittance to
GDP. Nepal receives workers remittance worth NPR 1.5 billion every day.
1.2.
The major objective of this report is to analyze the trend of workers migration in the foreign
employment and the inflows of remittance in Nepal. However, some of the specific objectives are
listed below:
a. To identify the major destinations of foreign workers.
b. To analyze the migration data based on major districts, ecological and administrative regions
and gender.
c. To study the trend of the remittance inflows based on the volume and share of gross
domestic product (GDP) of Nepal.
d. To examine the pattern of usage of remittance income by Nepali households.
1.3.
Methodology
The report is based on the quantitative analysis of available secondary data published by the
Department of Foreign Employment (DoFE), Foreign Employment Promotion Board, Ministry of
Finance (MoF), World Bank, Central Bureau of Statistics (CBS), Economic Survey of Nepal 2014
and Nepal Rastra Bank. Similarly, the reviews of the literature such as newspaper reports, journals
and other project documents of NGOs/INGOs on the labor migration and remittance inflows in
Nepal have been made. Time series data of labor migration and remittance inflows have been
presented and analyzed. In addition, the analysis of the migration trend, based on gender, districts,
ecological belts and the administrative regions has been presented.
600,000
40.00
527,814
500,000
512,887
450,834
400,000
354,716
30.00
384,665
25.00
20.00
294,094
300,000
15.00
219,965
20.61
200,000
17.20
10.00
17.08
5.00
8.44
100,000
2008/09
35.00
33.70
2009/10
C hange
0.00
2010/11
2011/12
2012/13
2013/14
2014/15
-2.83
-5.00
The approval for foreign employment grew by 15.70% on an average during the period of 7 years
reaching as high as 33.70% growth in approval in FY 2009/10 and as low as -2.83% in FY 2014/15.
The numbers of approval granted in FY 2008/08 was 219,965 that reached to 527,814 in FY
2013/14. However, the total numbers of approval declined by 2.83% and reached 512,887 in FY
2014/15. The number of people going abroad for foreign employment had declined due to the
impact of the earthquake and the strike of the manpower agencies against the governmental
decision of free airfare and free visa for the workers.
423092
344300 361707
284038
211371
22958
27742
29154
8594
10056
10416
Female
Male
The
numbers
of
female
getting
Female; 5%
Male; 95%
Share of Top Ten Districts in Total Approvals for Foreign Employment (in percentage)
District/Year
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
Average Share
Dhanusa
6.7
5.3
4.9
4.5
4.8
4.8
Mahottari
3.7
11.2
5.7
3.6
3.2
3.5
4.8
Jhapa
5.8
4.7
4.6
4.5
4.5
4.2
4.6
Morang
4.3
4.2
4.3
4.2
4.2
4.2
Siraha
4.6
4.2
4.3
3.5
3.5
3.9
Nawalparasi
3.1
2.9
3.3
3.3
3.1
3.1
Saptari
2.5
3.2
3.1
2.8
2.8
3.1
2.9
Sunsari
2.7
2.6
2.7
2.9
2.9
2.8
Sarlahi
2.1
2.3
2.4
2.2
2.6
2.5
Rupandehi
2.1
1.8
2.3
2.3
2.7
2.7
2.4
The table above represents the top ten districts of Nepal in terms of number of foreign labor
migrants. In FY 2013/14, people of Dhanusa district migrated more in number as foreign labor,
which constitutes 4.8% of total labor migrants. Moreover, over the last six years, Dhanusa
contributed more numbers of foreign labors. The data shows that the majority of the migration as
foreign labor comes from Eastern Development Region and Central Development Region.
Avergae Share of top-ten Origin Districts for Female Labor Migrants, 2008/092013/14
S indhupalchowk; 9%
Jhapa; 9%
Morang; 6%
Makwanpur; 5%
Remaining District; 50%
Kavrepalanchowk; 4%
Dolakha; 3%
Ilam; 3%
Kathmandu; 4%
Nuwakot; 4%
S uns ari; 4%
The above chart represents the top ten districts of Nepal with origin of female labors for foreign
employment over the period of six years. The data illustrate that Sindhupalchowk district with 8.86%
of the total female migrants stands at the top. Similarly, Jhapa (8.57%), Morang (5.87%),
Makwanpur (4.76%), Kavrepalanchowk (4.28%), Kathmandu (4.17%) are the major districts of the
origin of the female labors.
Average Share of Labor Permits by Ecological Regions, 2008/09-2013/14 Average Share of Labor Permits by Administrative Regions, 2008/09-2013/14
Mountain; 6%
WDR; 22%
CDR; 33%
Terai; 50%
Hills; 44%
MWDR; 10%
FWDR; 4%
EDR; 31%
In terms of ecological regions, the majority of the labors are from Terai region as shown by the
average share of labor permits during the FY 2008/09 to FY 2013/14. On an average, Terai
contributes 50.4% of the migrants, while Hills contributes 43.9% migrants as the foreign labors. In
other hand, Mountain region has the least i.e., 5.7% of the share in total labor permits over the years.
Similarly, the Central Development Region (CDR) and Eastern Development Region (EDR) contribute
33.27% and 31.42% of the total labor migrants. In addition, Western Development Region accounts
21.82% in terms of the labor permits obtained over the years.
Countries/Yea
r
2008/09
2009/1
0
Malaysia
29,320
111,366
Saudi Arabia
45,044
59,549
2010/1
1
106,02
9
62,499
Qatar
54,732
25,612
UAE
24,057
Kuwait
2011/12
2012/13
2013/14
2014/15
96,272
157,212
206,719
202,828
68,130
86,126
75,026
98,246
35,943
44,883
85,837
103,850
124,368
17,778
24,047
34,503
51,419
42,542
53,699
410
2,286
9,165
7,890
8,979
9,668
Others
66,402
77,503
131,712
62,350
90,698
24,078
Total
219,965
294,09
4
7,981
118,21
7
354,71
6
384,665
450,834
527,814
512,887
Nepalese
foreign
employment
600,000
527,814512,887
500,000
500,000
450,834
384,665
354,716
FY
400,000
300,000
200,000
200,000
100,000
100,000
have
increased
except
for
the
400,000
294,094
300,000
219,965
Malaysia
Saudi Arabia
Qatar
UAE
Kuwait
Others
countries as well.
Total
Kuwait; 2% Others ; 5%
UAE; 10%
Malays ia; 40%
Qatar; 24%
for
UAE
and
1.89%
for
foreign
The table below shows the numbers of death incidents occurred in during the foreign employment
from FY 2008/09 to FY 2013/14. The total numbers of deaths have been increasing from FY
2008/09. The total numbers of recorded death incidents in FY 2008/09 was 90 that surged to 842
deaths during the FY 2013/14. The numbers show that the total numbers of male deaths over the
period were 3,139 while the numbers of female death was 79 totaling to 3,272 deaths in 6 years
period. On an average, the death incidents have increased by 89%.
Total Numbers of Death Incidents from FY 2008/09 to FY 2013/14
Year
Male
Female
Total
2008/09
87
90
2009/10
399
19
418
2010/11
541
549
2011/12
632
14
646
2012/13
716
11
727
2013/14
818
24
842
3,193
79
3,272
Total
800
700
600
500
400
300
200
100
0
Malays ia
S audi Arabia
UAE
Kuwait
Qatar
increased in years.
2.2. Remittances
According to the government records, 1500 Nepalese on an average migrate to foreign countries,
mainly to the Gulf Countries and Malaysia for the foreign employment in the international labor
market and that figure is believed to be an undercount as many more cross the open border with
India regularly. Foreign employment has become the major source of income as the Nepali migrant
workers send back home remittances coming into the country which equals almost 30% of the GDP.
Nepals Economic Survey of 2014 states that almost 56% of the Nepalese households receive the
remittance income and household budget survey of FY 2014/15 conducted by NRB states that
17.61% of the household income is derived from remittance.
617.28
600
543.3
500
434.6
359.6
400
300 231.7
253.6
200
25
19.4
20
28
25.7
29.1
18.5
15
100
10
5
0
2008/092009/102010/112011/122012/132013/14
The remittance inflows have increased over the periods. The figure alongside shows that the
remittance income in FY 2009/10 was NPR 231.7 billion that have climbed to NPR 617.28 billion in
FY 2014/15. The remittance income experienced a healthy growth of 22.14% on an average during
the period of FY 2009/10 to FY 2014/15. In other hand, the share of remittance income in Gross
Domestic Product (GDP) has increased over the periods. In FY 2013/14, the share of remittances to
GDP was 29.1%, which remained at 19.4% in FY 2008/09 and 18.5% in FY 2009/10.
According to the Nepal Remitters Association
(NRA), 78.9% of the remittance income is
used for the consumption and entertainment
Cons umption
Use of Remittance
(%)
Repayment of Loans
7.1
Education of Children
3.5
2.4
4.5
Capital Formation
0.6
0.5
2.5
S avings
Bus ines s
Others
78.9
The data reveal that the remittance that accounts more than the annual budget of Nepal has not
been channeled to the productive sectors thereby hindering the sustainable economic growth of the
nation.
World Bank's Estimate of Remittance Inflow to Nepal, FY 2013/14 World Bank's Estimate of Remittance Inflows from Gulf Countries and Malaysia, FY 2013/14
UAE; 15%
India; 14%
UAE; 11%
Saudi Arabia; 27%
USA; 5%
Kuwait; 4%
Malaysia; 3%
UK; 2%
Aus tralia; 2%
Qatar; 29% Others; 4%
Kuwait; 5%
Malaysia; 4%
The actual data on the remittance inflows in Nepal from different countries have not been published
or documented so far. However, it is crucial to know the major countries sending remittance to
Nepal. The estimate of the remittance to Nepal as receiving country in 2014 made by the World
Bank shows that Qatar, Saudi Arabia, India, UAE, USA, Kuwait, Malaysia etc. are the major
remittance sending countries. Remittance estimates were made using the migrant stocks, host
country incomes, and origin country incomes. The estimates are made in the millions of USD.
Based on the same estimate, the share of remittance coming from Qatar and Saudi Arabia was
comparatively higher. Both of these countries were estimated to send 29% and 27% of the total
estimated remittance to be received by Nepal. Similarly, India shares 14%, UAE shares 11%, Kuwait
shares 4% and Malaysia shares 3% of the total estimated remittance in 2014. Though the maximum
numbers of the Nepalese migrants fly to Malaysia, the estimated incoming remittance is lower in
comparison to the others.
In other hand, if the remittance of the Gulf Countries and Malaysia only is considered, Qatar sends
39%, Saudi Arabia sends 37%, UAE sends 14%, Kuwait sends 5% and Malaysia sends 4% of the
total estimated remittance to be received from the Gulf and Malaysia.
3.2. Recommendations
The study suggests the growing labor migration trend and increased remittance inflows in the days
to come. As the remittance is the line of business of the Commercial Banks, the remittance is the
source of income for the Bank. Therefore, it is necessary to widen the remittance network based on
the major origin districts of labor migrants, the major destination countries and the estimated share
of remittance received by Nepal from different countries. It is suggested that the Bank should focus
in Terai regions and the Central Development Regions and the Eastern Development Regions for
the expansion of the remittance networks and partners. The Bank should focus on intensive
marketing for collecting the remittance money in the areas that stands the top ten origin districts of
labor migrants.
ANNEX
Work Permit Approvals Granted for Male and Female Labor Migrants, FY
2008/09 to FY 2013/14
Year
Male
Female
Total
2008/09
211,371
8,594
219,965
2009/10
284,038
10,056
294,094
2010/11
344,300
10,416
354,716
2011/12
361,707
22,958
384,665
2012/13
423,092
27,742
450,834
2013/14
492,724
29,154
521,878
2,117,232
108,920
2,226,152
Total
Share of Female Labor Migrants to the Total Labor Migrants and Growth of
Female labor Migrants, FY 2008/09 to FY 2013/14
Year
2008/0
9
2009/1
0
2010/1
1
2011/1
2
2012/1
3
2013/1
4
Total
Total Labor
Migrants
Total Female
Labor
Migrants
Rate of
Increase in
Absolute Terms
Percent of the
Total Labor
Migrants
219,965
8,594
294,094
10,056
17.00%
3.4%
354,716
10,416
3.60%
2.9%
384,665
22,958
120.40%
6.0%
450,834
27,742
20.80%
6.2%
521,878
29,152
5.10%
5.6%
2,226,152
108,918
3.9%
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
Total
Malaysia
15
105
219
237
253
292
1,121
Saudi Arabia
27
124
133
179
206
211
880
Qatar
26
114
125
130
151
193
739
UAE
13
53
37
50
47
64
264
10
22
22
39
96
Kuwait
Bahrain
12
14
48
Rep. of Korea
14
13
41
Oman
14
36
Lebanon
20
Israel
Japan
Afghanistan
Sri Lanka
Russia
Germany
Maldives
Papua New
Guinea
USA
Libya
Italy
Total
1
90
418
549
646
727
1
842
3,272
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
55
50
57
44
49
68
83
111
147
678
771
823
1212
1453
1734
2727
2985
3469
4217
4793
5210
5433
6173
Annual Growth
(%)
-9.09
14.00
-22.81
11.36
38.78
22.06
33.73
32.43
361.22
13.72
6.74
47.27
19.88
19.34
57.27
9.46
16.21
21.56
13.66
8.70
4.28
13.62
In million USD
1,683
1,598
832
666
282
232
155
117
91
51
30
30
16
12
10
Spain
Denmark
Belgium
Norway
Netherlands
Finland
China
Italy
France
New Zealand
Switzerland
Vietnam
Bahrain
Austria
Ireland
Portugal
Bhutan
Brunei Darussalam
Czech Republic
World
8
6
5
5
5
4
4
4
4
4
3
3
2
2
1
1
1
1
1
5,875
Share (%)
30.26
24.43
17.61
7.12
17.25
3.33