Earthquake Forces Nepal’s Overseas Workers to Make Tough Choices

Nepal - One of the very first businesses to open in Chautara, Nepal, following the April 25 earthquake was Western Union. Along the length of the town’s rubble-strewed main street, remittance exchanges for overseas workers are as common as tea shops: they cluster in groups of four or five on every corner.

“I manage accounts for about 25 families and though we’ve not seen a big increase yet in remittances, I expect that will change,” said office manager Manoj Lamichhane. “At least one person in every family is working outside Nepal and about half of them have more than one person. It’s what keeps this area alive.”

By his estimates, one-in-six of the town’s 6,000 residents are currently abroad, a trend reflected in recent census data: in the five years before 2011, 50,000 people left Sindhupalchok, roughly 15 percent of the population.

Chautara is no exception. It is impossible to find someone in Nepal untouched by the country’s remittance economy and there are real concerns now about the impact of the earthquakes on the many households that rely on remittances to feed, clothe, educate and care for the sick in earthquake-affected areas.

“These remittances account for at least 30 percent of Nepal’s GDP and are the only thing keeping tens of thousands of families from slipping back into poverty,” says IOM Nepal’s chief of mission Maurizio Busatti.

“If, as we expect, this money is to be focused on rebuilding, how will they pay for their children’s education, for health care and basic necessities? There’s also a real danger the small savings of the overseas workers will be wiped out, forcing them to stay abroad longer, much longer, and really the longer they stay away, the less likely they are to return.”

Rasmilah Shrestha’s husband Hemant is one of the people weighing what to do next. The earthquake reduced most of her family’s four-story shop-house in Chautara to rubble. Miraculously no one was killed when the walls collapsed onto the street, but as the dust settled so too did the reality of her situation and that of many families across the quake zone.

“I’ve only been married for six months and my husband left almost immediately to work in Portugal,” she says gesturing to what was once a child’s bedroom wall where framed pictures of her young nephew look out across a street strewn with smashed bricks, timber and crushed appliances. “Now he will have to work for many years so we can build again. It is very hard for both of us. I miss him… and want him to come home to help our family rebuild. Now we only have Viber (social media) to keep us together.”

The government’s inaugural migration report Labour Migration for Employment - A Status Report for Nepal: 2013/2014 released in September 2104 captures the meteoric rise of the Nepali overseas worker: in 1993/94, just 3,605 people left the country to work overseas; the figure last year was over 520,000. 

Officially, an estimated 2.2 million Nepalese are currently working abroad, primarily in the Gulf states and Malaysia. These figures are challenged by the unregulated flow of labor migrants into India, where there are no immigration checks for incoming Nepalese, which could add an additional one million people to the total. An estimated $5 billion was remitted in 2014 through formal channels: the value of remittances sent home via informal channels is unknown.

According to government figures, a disproportionate number of migrant workers – roughly one in five – come from the 15 districts most damaged by the earthquakes, so the decisions they make will have important consequences for both the local economy. Remittances account for 22 per cent of household income in Sindhupalchok district and nearly 28 percent in Gorkha, two IOM field hubs.

Nepalese economist Chandan Sapkota sees two possible scenarios emerging in the coming months, both of which will be heavily influenced by the success of efforts of the government and international community in the coming months.

In the first, overseas workers may flock home to rebuild, cutting the value of remittances. Household finances will suffer and pressure will be applied to both the government and central bank, which will already be feeling the pinch if the numbers of overseas visitors to Nepal does not rebound in a timely manner.

In the second scenario, a lack of paying jobs will force greater numbers of Nepalese overseas, creating a labor shortage at home, but boosting the overall value of remittances. A month after the earthquake, the unknown is the timing of these migration flows.

“Folks will want to return to take care of distressed family members and their assets, if the government cannot do so immediately,” says Sapkota. “There is already evidence (of this trend) and the government is facilitating return of workers by providing two way airfares for people who need them. But, we have to see how many want to come back and how many want to stay outside. Whatever happens, there’s going to be more migration in the coming years,” he adds.