Migration and Foreign Employment, Economic Development Plans

Subject: Business Environment in Nepal

Overview

Population change includes migration as a key factor. International migration is the movement of individuals across international borders, and Nepal is a nation with limited industrial growth. The number of people who relocate abroad to work has been rising yearly. Data about the economy can also be found in national development plans. The national planning system has a considerable impact on the pattern of economic development in Nepal.

Population change includes migration as a key factor. It is also the main factor influencing population structure and change in a nation. However, migration is typically a major concern for a nation and its planners in response to changing land use, housing, and transportation patterns, for labor market analysts examining the shifting nature of an economy's human resource base, for school administrators preparing for facility construction and infrastructural needs, for businesses dealing with shifting consumer demand, and for social service providers responding to shifting client and community needs. Since there has been little industrial development in Nepal, land has been the nation's most valuable resource. But finding land in Nepal is not at all simple. Land was more readily available in Nepal during the colonial era, and people could buy large tracts of it. As time went on, the frontier lands were occupied, raising the cost of the scarce land.

In Nepal, there has been a consistent pattern of migration from the hill and mountain areas to the Terai in recent years. A productive agricultural region called the Terai runs along Nepal's southern border. Nepal's census in 1981 revealed a noticeable transition from a mountain-rural plains-urban civilization (Goldstein; Ross; Schuler). In Nepal, migration has historically been a major demographic force. Recent years have seen a significant increase in migration. One survey result shows that of the migration taking place, 75 percent had cited as family reasons, 12 percent for comfortable living conditions, and 7 percent looking for a job.

The movement of people across international borders is referred to as international migration. It is the main factor affecting how populations change and are structured differently. The number of Nepalis leaving the country to work abroad has been rising yearly. According to local statistics, Malaysia is the top country for finding work abroad, followed by Qatar, Saudi Arabia, and the United Arab Emirates. Thus, these four nations account for 95% of international work opportunities for Nepalese citizens.

Fig: Citizen Immigration to Australia

According to the diagram above, less people used to travel to Australia than to gulf countries. To support their way of life, the majority of Nepalis have migrated to the Gulf States. Recently, a labor agreement was reached with the UAE and South Korea to safeguard the rights of workers seeking employment abroad. Similar labor agreements are anticipated to be struck soon with Malaysia and Qatar.

Around 10-15% of the labor force currently works as expatriate labor, accelerating and diversifying the long-standing practice of Nepalese pursuing economic opportunities in India and elsewhere. Their remittances are thought to total $900 million annually.

Whether the recent increase in labor remittances is a long-lasting or passing phenomenon is a crucial question. The following preparations have been taken by the government to speed up loan approvals and ease remittance:

  • Loans for moderately poor individuals from the war impacted, underprivileged, minority, and female groups. The plan calls for granting 80% of the loan amount without any kind of security.
  • Every individual seeking employment abroad is eligible for a Rs. 500,000 insurance plan for the duration of the contract.
  • For the purpose of rescuing persons who have been wronged during a foreign work course, a foreign employment rehabilitation fund has been established.
  • The need of the domestic and foreign labor markets will be taken into consideration while launching skill development training programs. Families of martyrs, victims of the Peoples' Movement, the disabled, the blind, women, those impacted by armed conflict, and underprivileged communities will be given priority.
  • In order for Nepalese workers employed abroad to effortlessly remit their foreign currency earnings to their family, money transfer organizations are being promoted.
  • To promote the influx of convertible currency obtained from abroad employment, such money transfer services in the private sector are allowed to charge a commission of 15 paisa each US dollar.
  • The ability to open a foreign currency account is provided to organizations that place Nepalis abroad for employment as well as organizations qualified to take payments in convertible currency in exchange for their services.
  • A policy choice has been taken to permit the opening of convertible currency accounts to organizations authorized to carry out remittance transactions in accordance with the regulations in effect.
  • Additionally, a policy provision has been developed to permit Nepalese international employment services organizations to open branches or representatives offices (in India and other nations).

Economic Development Plans

Data about the economy can also be found in national development plans. These plans give businesses a lot of valuable information. In a developing nation, the state is thought to serve as a planner and keeper of the social welfare of the population. By raising peoples' standards of life, the government takes on the duty of meeting their fundamental needs. The government undertakes this responsibility by establishing national goals and targets, prioritizing, adopting policies and strategies, and mobilizing the limited resources available from various sources in order to achieve the goals and targets.

The national planning system has a considerable impact on the pattern of economic development in Nepal. With the introduction of the First Five Year Plan in 1956, the age of planned development officially began in Nepal. However, there were two further interruptions to the intended development implementation process. However, the development and execution of five-year plans have been a consistent aspect of the Nepalese economy.

The primary goal of the First Plan (1965–1961) was to promote social and economic growth. The Second Plan (1963–1965), however, put infrastructure development front and center. The primary goal was to establish the framework for dynamic expansion. The Third Plan (1965–1970), in a similar vein, sought to establish the circumstances essential for quick economic expansion.

Regional development was emphasized in the Fourth Plan (1970–1975). The result was the division of the nation into four development regions. Back then, the Mid-Western Region included the Far-Western Region. This division was created with the intention of minimizing regional inequities by improving administrative oversight and allocating resources to priority initiatives that would benefit the target populations and locals. The Fourth Plan's identification of growth corridors, growth axes, and growth hubs was carried over to the Fifth Plan (1975-1980).

The Sixth Plan (1980–1985) prioritized sectoral expansion while putting an emphasis on human resource development, community involvement in development, and investment in vital industries including power, irrigation, agriculture, health, and family planning, among others. The Seventh Plan (1985–1990) gave the people's minimum standard of living first priority. Initiated in the 1980s, the Basic Needs Approach to development planning. The Eighth Plan (1992–1997) placed a strong emphasis on technology transfer, economic policy reforms, and foreign investment.

Poverty reduction was the principal goal of the Ninth Plan (1997-2002). The Ninth Plan set a 6 percent annual rise in industrial production as its goal. The Tenth Plan (2002–2007), like the Ninth Plan, placed a high premium on reducing poverty. The strategy also intends to increase the private sector's capacity and motivate it to take part in social development initiatives.

Thus, the goal of all development programs was to raise the average income per person in order to raise the standard of living for everyone. Agriculture, industrialization, and infrastructural development were given top priority. The plans also addressed a number of important social and economic issues, such as population management, poverty reduction, technology, export trade, and regional balance.

Reference:

  • asiafoundation.org/resources/pdfs/MigrationReportbyGovernmentofNepal.pdf
  • mrsc.org/Home/Explore-Topics/Economic-Development/Economic-Development-Basics/Planning
  • Pant, P. R. (2009). Business Environment in Nepal (SIXTH ed.). Kathmandu, Nepal: Buddha Academic Publishers and Distributers.
Things to remember
  • The Terai is a fertile agricultural area along the southern border of Nepal. The labor pact has recently been concluded with UAE and South Korea for the protection of rights of the labor rights of the labors going to foreign employment.
  • The long tradition of Nepalese seeking employment opportunities in India and foreign countries.
  • Foreign employment loan for marginally poor people from among affected by the conflict, disadvantaged, minorities, and women.  
  • The plan aims to strengthen the capability of the private sector and encourage it to participate in social development activities.
  • Skill development training programs will be launched considering the demand of national and international labor market. Priority shall be given to martyrs’ families, peoples injured in Peoples’ Movement, handicapped, blind, women, conflict-affected people, and under-privileged community.
  • The major aim of the development plans is the alleviation of poverty and to maintain the proper living standard of people. 

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