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Migration and Remittances in Nepal

Written by Shaili Dhakal on June 04, 2023. Posted in News & Events.

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Nepal has adorned itself with various names throughout its history, such as "The Land of Truth," "The Land of Solitary Meditation and Penance," and many more. These titles exemplify the multicultural and diverse essence of Nepal. In today's interconnected world, Nepal has become an appealing destination for a wide range of investors. Not limited to businessmen alone, the country's enchanting landscapes and vibrant ambiance have captivated the interest of film producers, writers, and artists. Alongside this, a considerable number of Nepalese individuals are migrating abroad. In the contemporary global landscape, international migration has become a prevailing phenomenon that impacts individuals worldwide. Advancements in transportation have facilitated more accessible, affordable, and rapid mobility for those seeking employment, opportunities, education, and an improved standard of living. Simultaneously, factors such as conflict, poverty, inequality, and the absence of sustainable livelihoods propel individuals to leave their homelands in pursuit of a promising future for themselves and their families in foreign lands.


Migration and Remittance in Nepal


The history of international labor migration in Nepal spans approximately 200 years and has evolved into a crucial livelihood strategy for a significant portion of the rural population. It originated from the recruitment of physically strong individuals by powerful nations. In the nineteenth century, Nepalese men joined the army of Sikh monarch Ranjit Singh in Lahore, marking the early beginnings of international labor migration, known as "Lahure."


Formal labor migration began after the Nepal-British-India war in 1814-1816. Following the Treaty of Sugauli in 1816, 4,650 Nepalese youngsters were recruited into the British-Gurkha regiment, becoming a part of the British armed forces. Additionally, Nepalese migration for employment in the tea estates of Darjeeling and the forests of Assam in India started in the latter half of the 19th century, signifying a shift towards labor migration for economic reasons.


The Middle East witnessed a surge in labor migration from South Asia and other regions during the early 1970s due to the oil boom. This trend also affected Nepal, leading to increased labor migration to Gulf States, Malaysia, and other Southeast Asian countries. This phase of international labor migration in Nepal has a history of around 30 years.


The impact of foreign labor migration on the Nepali economy has been profound. It has shifted the economy from its traditional agriculture-based model to a remittance-based one. Remittances sent by Nepali migrants working abroad have become a significant source of income and a vital component of the country's economy. This transformation has reshaped Nepal's economic landscape, with remittances playing a crucial role in sustaining livelihoods and supporting overall economic development.


Official labor migration in Nepal began in the 1930s with the growth of organized industries, but a national framework for labor movement was established in 1947, starting in Biratnagar. Subsequently, the regional labor office was established in the 1960s, followed by the Department of Labor in 1971 and the Ministry of Labor in 1981. In recent decades, labor migration from Nepal has significantly increased and diversified.


According to the National Census 2078 report, approximately 2.19 million Nepalis reside overseas, with men comprising 82.2 percent and women 17.8 percent of the total. Nepal has become an important source of migrant workers for countries experiencing labor shortages, with Middle Eastern countries such as Malaysia, Qatar, the UAE, and Saudi Arabia attracting Nepalese workers.


Labor migration and remittances have become a major pillar of the Nepalese economy. Remittances sent by migrants are vital for the livelihood security of hundreds of thousands of poor families and a significant foreign exchange source for many low-income countries like Nepal. In the fiscal year 2019/20, Nepal received NPR 875 billion in remittances, accounting for 23.3 percent of the country's GDP. These remittances influence household consumption and investment patterns and contribute to the transformation of the overall economy. They play a crucial role in national development, making a substantial contribution to the gross domestic product (GDP) and serving as a key source of development financing in Nepal.



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