Uttam Maharjan

The COVID-19 has been taking a toll on the world economy for the last four months. Due to the disease spreading all over the world, economic activities have come to a halt, resulting in a shutdown of factories and industries and layoffs or sending on leave, paid or unpaid, of employees. This has led to apprehensions of job losses among many employees.
Nepal is a remittance-based country. There are migrant Nepali workers active in various parts of the country. The exact data on the number of such migrant workers are not available. However, it is estimated that the number runs into millions. According to a report, there are about 500,000 Nepali migrant workers in Malaysia, the most popular destination for Nepali workers; over 400,000 in Qatar, about 334,500 in the United Arab Emirates; and about 70,000 in Kuwait. There are three to four million migrant Nepali workers in India.
Remittances have sustained the economy of the country. In 2019, the contribution of the remittances to the gross domestic product of the country was 27.3 per cent. Last fiscal year, the country received Rs. 879 billion in remittances. During the first eight months of this fiscal year, the country has received remittances worth USD 5.19 billion equivalent to about Rs. 623 billion, a slight increase of 1.7 per cent vis-à-vis the same period last fiscal year.

Primary source
Remittances have played a big role in lifting the standard of living of the people. Remittances are regarded as helping to lower the level of poverty in the country. Further, remittances are taken as primary sources of financing imports in the country, where imports far preponderate over exports. Now, the incidence of the COVID-19 has turned the situation topsy-turvy. The inflows of remittances to the country have dwindled due to adverse conditions engendered by the disease in the destination countries. The World Bank has projected a falling-off in remittances by 14 per cent, which translates into Rs. 145 billion.
Many migrant Nepali workers have been out of a job. It is not certain whether they will be reinstated in their jobs after the situation has limped back to normal. Further, the country is under pressure to bring back home 70,000 migrant workers from the Gulf countries. A large number of Gulf countries have already asked the government to take back its migrant workers. The United Arab Emirates has threatened the labour-supplying countries to withdraw their workers, failing which they will have to face dire consequences like blacklisting and scrapping of labour relations. Kuwait has also issued a warning to the labour-supplying countries in a similar tune. When migrant Nepali workers have to return home in hordes, there will be a strain on the economy of the country. They will have to be provided with alternative jobs in the country.
It is encouraging to note that the government has formed a task force under National Planning Commission member Ram Kumar Phuyal to study the effects of the COVID-19 on remittances and foreign employment. The task force will calculate the probable number of migrant Nepali workers returning home from abroad and suggest various measures to create jobs by discussing the matter with various ministries and stakeholders. Similarly, the Ministry of Industry, Commerce and Supplies has also formed a task force to formulate a special plan to develop entrepreneurial skills at the local level. These measures are likely to be incorporated in the forthcoming budget.
The COVID-19 has proved that the remittance-based economy of the country is vulnerable and that the remittance business is not a viable option. As long as the economic condition of destination countries is sound, it works. Any disruption of the economies of such countries will adversely affect the remittance business. So the country should learn that too much dependence on remittances to sustain the economy of the country is not only viable but also risky.
This is the right opportunity for the government to engage migrant workers returning home from abroad in agriculture and other activities. Although an agrarian country where over 65 per cent of the people are involved in agriculture and allied activities, the status of agriculture in the country is not sound. For the development of the country, commercial agriculture is required but subsistence farming has dominated over commercial agriculture. The government has not paid required attention to developing commercial agriculture. Further, it has emphasised imports over exports. As such, the balance of trade has remained unfavourable for years.
Besides, those returning home from abroad may be engaged in infrastructure projects. There are many such projects going on in the country such as hydropower projects and road construction projects. Moreover, they may be encouraged to engage themselves in entrepreneurial activities. The Prime Minister Employment Program, which guarantees at least 100 days’ employment, may be reactivated. Its scope may also be broadened to accommodate more and more unemployed people.

Effective measures
The government should therefore take effective measures to create employment in the country itself. There are many development activities to be embarked upon to uplift the economic condition of the people and also to attain the status of developing country by 2022 and that of middle-income country by 2030. By transforming agricultural, industrial and other sectors by employing the manpower and resources available in the country, including the migrant workers returning home from abroad, the economy of the country can be upgraded. After all, the remittance- and import-based economy cannot sustain itself for long.

(Former banker, Maharjan has been regularly writing on contemporary issues for this daily since 2000. uttam.maharjan1964@gmail.com)