Foreign Employment: Millions of Nepali Workers Abroad – Analyzing Costs and Earnings
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A recent survey analyzing the expenses and incomes of Nepali workers abroad reveals that many migrants do not occupy highly skilled or leadership positions.
The Central Bureau of Statistics (CBS) of Nepal, with technical assistance from the International Labour Organization (ILO), recently published the inaugural “Labour Migrant Recruitment Cost Survey 2023.”
“The data shows that very few highly skilled individuals have migrated abroad,” said Dhundhiraj Lamichhane, Deputy Chief Statistician and spokesperson of the CBS.
“Only 1.6 percent of migrants go for high-skilled or managerial roles, while 44 percent are unskilled workers and 55 percent have semi- or limited skills.”
Labour expert Meena Paudel states, “Nepal has not prepared its workforce to align with the demands of the modern labour market, which limits its competitiveness.”
“When Nepali workers began migrating to Gulf countries about 20 years ago, most were employed in the construction sector. Those destinations are now hubs for tourism, technology, and transportation, but our capacity has not evolved accordingly,” she added.
What the Government Says
Officials from the Ministry of Youth, Labour, and Employment report a clear policy shift towards sending more highly skilled workers abroad, with positive effects beginning to emerge.
Ministry spokesperson and Director General of the Foreign Employment Management Division, Pitambar Ghimire, noted that government-to-government (G2G) agreements with countries like Israel, South Korea, and Japan have improved security and income conditions, and efforts continue for all destinations.
“In recent labour agreements, we have prioritized skill requirements and facilitation processes,” Ghimire said.
“Our efforts are particularly focused on Gulf countries, aligning Nepali workers’ skills with their labor market demands.”
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The survey indicates approximately 2.5 million Nepalis have migrated and returned. According to Lamichhane of CBS, if all of them were skilled workers, the scenario regarding earnings would be vastly different.
“Currently, the average income of Nepali workers abroad is just around NPR 54,000-55,000,” he explained.
“Female workers, in particular, earn even less. Education and skills play a crucial role in increasing monthly income.”
Many Migrants Have Low Educational Qualifications
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According to the survey, around 8 percent of the population who migrated and returned are part of the international labor market, with an analysis of their skills and wages.
Researchers express concern that only 4 percent of migrant workers have studied beyond the ‘plus two’ level.
Meena Paudel says, “Globally, youth under 25 have a higher tendency to work, and Nepal reflects the same trend.”
“However, most young workers going to the Gulf and Malaysia lack skills, awareness, and confidence. Many have resorted to informal channels, which creates even more difficulties,” she added.
The survey reveals that most migrants with low education leave through unauthorized institutions, indicating that informal and risky channels remain prevalent.
Despite strategies like ‘free visa, free ticket’ in key labor destinations like the Gulf and Malaysia, the study finds that 34.7 percent of foreign workers did not pay any fees.
Among these, 54.2 percent were women and 33.2 percent men reported no expenses.
Regionally, 37.2 percent of workers in the service sector went abroad without any expense, compared to 32.8 percent in industry and 29.5 percent in agriculture.
“This means that the number of migrants who incur zero costs is limited. This is also reflected in the data about those going to India,” Lamichhane explained.
Higher Costs for Female Migrants
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The CBS reports that male migrant workers spend around NPR 176,000 to go abroad, while females incur expenses of about NPR 219,000.
Malaysia is the most expensive destination, requiring nearly NPR 200,000 in expenses, while India is the cheapest, with expenses around NPR 16,000.
“Men can typically recover these costs within about three and a half months, whereas women take approximately four and a half months,” Lamichhane explained.
Labour expert Paudel remarks, “Despite improvements in skills, earnings of Nepali workers have not significantly increased over nearly two decades.”
“Limited savings also result from currency exchange rates, but earnings are closely linked to skill levels,” she added.
Dhundhiraj Lamichhane emphasized that these findings send a clear message to policymakers to reduce costs and prepare skilled workers.
“This survey provides an opportunity to assess how to organize foreign employment systematically and to evaluate the amount of money workers bring back home,” he concluded.
Dominance of Gulf Countries and Malaysia
Recent reports indicate increasing diversity in migrant destinations.
Despite this, Gulf countries and Malaysia remain the primary destinations, accounting for 81.3 percent of Nepali migrant workers. Thousands of Nepalis also work in various European countries.
Meena Paudel states, “Many Nepali workers have been employed in different countries during their active years, indicating labour market expansion that cannot be stopped.”
“However, the government needs to formulate clear policies that benefit both workers and the nation by focusing on skill development and confidence-building programs.”
According to official estimates, about a decade ago, nearly one million Nepali migrant workers were in India, although the actual number might be higher.
The report suggests that reducing recruitment costs would significantly increase remittance flows and accelerate national development.
Sending workers abroad at lower costs also strengthens their safety, according to the conclusions.
“Workers pressured by debt burdens may face increased exploitation. High costs are often driven by complex intermediary networks operating between source and destination countries,” the report notes.
