Two days after releasing the country’s first and its maiden Federal Budget 2018-19, the Oi-led Nepali Government came up with a decision that woos Nepali citizens.

For the first time in his history, the Government of Nepal announced a cap on foreign employees to be working in foreign-aided projects or joint venture firms of the country.

The government’s new regulation restricts the number of permits to foreign workers to three and the overall foreign workforce to not more than 5 percent in any Nepali firm.

However, the regulation exempts foreign governments, diplomats and companies that have already signed agreements with the Nepal Government.

 “We have been providing work permit to foreign workers as per the recommendation of enterprises, provided they could not get Nepali workers for the given task,” says Nabin Pokharel, Section Officer at Department of Labor that releases work permits.

Besides, the regulation has also cut down the maximum validity period of work permit for foreign workers. While the validity was earlier five and seven years for unskilled and skilled workforce, the number is now cut down to maximum of three and five years respectively as per the new regulation.

And, the fee for attaining a work permit is also increased. While it was Rs 10,000 (USD 92) to get a foreign work permit, now the regulation mandates foreign workers to pay Rs 15,000 (USD 139) for validity up to six months and Rs 20,000 Nepali Rupees (USD 185) for more than that.

A Boost to Local Employment

The latest decision to control the number of foreign workforce comes as an encouragement to local employment in Nepal, which is currently witnessing a migration trend.

As a country with more number of migrant workforce, Nepal has seen a steep rise in number of its workforce moving to foreign destinations for education and employment. To stop this trend, the government.

Let’s hope the new regulation would encourage more migrating population, especially the youth, towards pursuing their employment and educational career opportunities locally, contributing to the domestic growth. #NepalForLocalEmployment

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The May Day, also called International Workers’ Day, was put forth by the international labor movement, social activists and other stakeholders working for the wellness of working population, globally.

Like many other nations, Nepal has also been celebrating the Labor Day since 1963, however, listed the day under public holidays only since 2007.

Addressing Nepali nationals on the 129^th Labor Day, President Bidya Devi Bhandari lauded the global Nepali working community for their contribution towards the establishment of the Federal Democratic Republic in Nepal.

She further added that the constitutional provision of making Nepal a socialism-oriented economy will benefit the Nepali working class.

The President also wished a conducive working environment, at home and abroad, for the global Nepali community by means of fair remuneration, effective human rights and overall social security.

Meanwhile, speaking on the occasion, Nepali Minister for Labor, Employment and Social Security Gokarna Raj Bista promised massive and more decent employment opportunities for Nepalis at home.

While stating that the Nepali Constitution is committed to successful protection of the rights of Nepali migrant labor, Bista said the government would coordinate and take necessary measures to ensure a decent, systematic and safe foreign employment for Nepali migrants, while also putting an end to child labor and guaranteeing social security.

On the occasion of the 129^th Labor Day, let’s take a glance at some of the key happenings and announcements pertaining to Nepali workforce, locally and globally, in the recent times:

New Year Decision

Assuring a happy new year for Nepali working class, the Government of Nepal announced plans for the revision of minimum wage limit for Nepali labor, as per the Labor Act 2017, effective from the Nepali New Year 2075 day on April 14, 2018.

The government’s decision was in line with the Labor Act 2017 that proposes hike in minimum wage limit for every two years.

“As wage revision for workers is envisioned by the Labor Act, we are prioritizing effective implementation of the act as soon as possible by bringing a Labor Guideline. We will soon hold discussions with labor unions and employers on revising the minimum wage for workers,” Secretary at the Ministry of Labor and Employment (MoLE) Laxman Mani Mainali had said in a statement.

Stating that the new Labor Act will benefit both the workers and employers, Bharat Raj Acharya, vice-chairman at the Employers’ Council of the Federation of Nepalese Chambers of Commerce and Industry said, “A relevant revision on minimum wage for workers will be made after holding discussions with workers’ union and the government.”

The new Act, endorsed in the Nepali Parliament in August 2017, envisages a minimum wage of Rs 9,700 per month to workers. While ensuring uniformity in wages for jobs of similar nature and social security, the new law also mandates employers to provide insurance facility to the employees.

Status Report on Migrant Workers’ Contribution and Concerns

• Contribution to Nation’s GDP

Nepal ranks fourth in terms of remittance contribution to nation’s GDP, said the ‘Labor Migration for Employment – A Status Report for Nepal: 2015/16 – 2016/17’ by the Nepali Ministry of Labor, Employment and Social Security.

The report, also supported by the International Organization for Migration (IOM), UN Migration Agency, International Labor Organization (ILO) and The Asia Foundation, placed Nepal in the top fourth position globally among the list of countries with large remittance contribution to GDP.

According to the Nepal Rastra Bank, the country received Rs 699 billion in remittances in the Fiscal Year 2016-17 with Rs 471 billion in the first eight months of the year (by mid-March).

The Department of Foreign Employment data shows a total of 246,324 fresh departures and an additional 172,424 Nepalis reentries to the destination countries during the same eight-month period.

• Concerns To be Addressed

The report also highlighted key concerns pertaining to recruitment and malpractices concerning the Nepali migrant labor.

As per the report, a total of 7,500 complaints involving high-level frauds and malpractices have been registered by the Nepali migrant labor community as part of their recruitment and employment abroad in the last three years period.

The report also released some alarming stats about the death of Nepali labor migrants in foreign destinations. The report recorded deaths of around 5, 892 Nepali migrant workers, 5,765 males and 127 females, in the last nine years in at least 28 foreign destinations.

Malaysia with 2,154 deaths topped the list, followed by Saudi Arabia (1,638), Qatar (1,203), the United Arab Emirates (427) and Kuwait (186), with significant deaths also recorded in other most-sought destinations such as Bahrain (77), Republic of Korea (77), Oman (47), Lebanon (20), and Afghanistan (19).

“To understand further, the causes of the migrant worker’s death, an in-depth investigation of the autopsies and medical records in the destination countries would require,” the report noted.

• Need of the Hour

“Sound data and accurate analysis are essential to formulate evidence-based policies and implement them effectively in Nepal, a country where over half of all households have at least one family member currently living abroad or living at home as a returnee,” says Paul Norton, Chief of Mission, IOM Nepal.

“This report is an important step for the government agencies and other stakeholders to work towards effective regulatory mechanisms to protect and promote migrants’ rights and well-being,” he added.

Stating that the report shed light on key areas for reforms in the foreign employment sector, Minister Bista said, “the Ministry will be working to make the foreign employment sector more transparent and result oriented, so the migrant workers feel the positive change in the sector immediately.”

On an End Note!

Marking the occasion of May Day on May 01, 2018, the Prime Minister of Nepal KP Sharma Oli said the government is committed to protection and development of the Nepali working class who have been contributing to the country’s overall progress.

In an announcement, the Prime Minister also announced governmental preparations for minimal wage hike to guarantee systematic work under an appropriate wage system. 

Raising concern over large number of Nepali youth leaving to foreign destinations for career and employment, the Prime Minister informed that the government was working towards creating a labor-friendly environment in the country for utilizing the young human resources for overall development of the nation.

The government remains committed to the fundamental principles and treaties laid by the International Labor Organization.

Also Read: Nepal Employment Status

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In its recent report titled ‘Jobless Growth?’, WB recommended a rise in job creation for Nepal to meet the employment needs of the gradually-growing working age population.

“Every month, the working age population increases by 35,000 people and Nepal must create 286,900 jobs a year to maintain its employment rate,” WB said in its report.

While WB projected Nepal’s GDP growth at 4.6 percent in 2018, “providing opportunities to these young entrants while attracting more women into the labor market, will require generating even more jobs for every point of economic growth,” says Martin Rama, World Bank South Asia Region Chief Economist citing to the growing working age (youth) population in South Asia through 2025.

Stating that the growth rebound is inconsistent across economies, the report noted that the exports remain weak despite the accelerating global growth and trade.

However, a slow recovery was observed in case of Nepal.

“Nepal has seen an economic recovery after disruptions from earthquakes and a trade blockade, but growth is expected to slow from 7.5 percent in fiscal year 2017 to 4.6 percent in 2018 due to the heaviest floods in decades combined with slow recovery of exports, slowdown in remittances, and an increase in lending rates,” the report added.

Case of South Asia

WB’s twice-a-year South Asia Economic Focus (SAEF) report made these observations as part of its assessment on the overall growth of South Asia.

According to Martin, “more than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region.”

To control the gaps in employment rate, the report urged South Asian economies to create a minimum of 1.17 million jobs a year.

“Growth is important, but even very high growth will alone not be enough to increase South Asia’s employment rate. Policies and actions are needed to make growth more labor-intensive, and especially to create the kinds of jobs that can encourage greater labor force participation by women,” says Robert Beyer, the report author.

Status of Employment in Nepal

Over the years, there has been a growing trend of inclination for foreign employment among Nepali working age population, especially the youth, due to the lack of employment opportunities locally.

As a result, Nepali working population have been migrating to the foreign destinations such as Malaysia, Singapore and Gulf countries, majorly. The first eight months of the current fiscal saw at least 1,026 migrants per day to various overseas labor destinations.

However, there is also a declining trend being observed over the last two fiscals with regard to overseas labor migration. This trend is encouraging the need for creation of more jobs, locally.

The Economic Survey of the Ministry of Finance was quoted to have reported the addition of a minimum 512,000 youth population to the Nepali labor market, annually.

While the number of new entrants to the Nepali labor market stands at more than 42,000 people per month in the last fiscal, the number is expected to grow further in the coming years owing to the declining dependency ratios.

The International Labor Organization (ILO) calls Nepal a young country with 63.7 percent of the country’s overall population (26.5 million) aged below 30 years.

However, when it comes to the employment, the unemployment rate among youth aged 15-29 years stands at 19.2 percent compared to 2.7 percent for the whole population.

“Over 400,000 young people are estimated to enter the labor force every year. These figures indicate the quantitative dimension of the employment challenge in Nepal,” says ILO.

Basic employment-related challenges in Nepal are attributed to the predominance of employment in the informal segments of the Nepali economy with low productivity and earnings, and poor working conditions, resulting in underemployment in the country.

Higher incomes and dignity of labor are among other aspects contributing to the rise in migration for foreign employment.

As a Solution: The Government of Nepal had on many occasions urged ILO for its support to enhance job opportunities within the country. Towards this end, ILO worked with the Nepali Government in developing a comprehensive national Employment Policy and is also assisting towards the effective implementation of the same with special focus on informal economy, social protection and youth employment. To monitor the changing trends, ILO is working in collaboration with the Central Bureau of Statistics (CBS) of Nepal to develop employment monitoring and evaluation tools. The organization has also extended its technical support for the labor market reform in the country resulting in a modified labor bill. This has further moved Nepali Ministry of Labor to bolster the public employment services thus contributing to the possible rise in employability across the country.

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