Nepal's Dependence on Exporting Labor

Nepal is one of the world's poorest countries, with a population of around 27 million and a per capita GDP of under US$1. It is also landlocked, between India and China, and mountainous, situated between the Himalayas and the plain of the Ganges River. Agriculture remains a major source of livelihood, and tourism is also important.

But one of Nepal's major exports is labor, and most rural households now depend on at least one member's earnings from employment away from home and often from abroad.

The Labor Act of 1985 has facilitated arrangements for Nepali migration to about a dozen specified countries, but the government has failed to develop a coherent labor export policy. Every five years, the government of Nepal produces a plan as a policy guideline. Although the current 10th Plan recognizes both the contribution remittances make to the national accounts and the increasing demand for Nepali workers abroad, the government is struggling to keep up with these trends.

In the last decade, foreign labor migration has become a major feature of Nepal's economy and society. Approximately 700,000 Nepalis work "overseas," meaning beyond India, mainly in the Middle East, East Asia, and Southeast Asia. About five percent of these are women. At least another 700,000 work in the private sector in India, and 250,000 in India's public sector.