Migration and Remittance Trends in Nepal: A General Overview

 Prashun Kumar Upadhyay 

 28 August 2024

Historical Migration Patterns

Migration to India

Historically, the migrations between Nepal and India have had deep-rooted cultural, social, and economic elements, primarily shaped by centuries of shared history.

From the time of the princely states in both Nepal and India to the present day, many Nepali workers have crossed into India in search of permanent or temporary job opportunities. Due to an open border with India, there were no or limited ways of tracking the numbers of people migrating or the payments they received. These people were primarily paid in cash, crops, or goods, often under informal arrangements that bypassed official records. These payments, although crucial for the survival of the workers and their families, were largely unregulated and undocumented, leading to challenges in tracking the economic impact of this migration.

The Nepali men also migrated to work as soldiers in the army of the Sikhs. Although the Gurkha forces faced setbacks against the forces of Maharaja Ranjit Singh in the 1809 conflict in Kashmir, they were well-noticed by all. The Sikhs created their foreign regiment containing the Gurkhas. These men were referred to as "Lahure" or "Laure". The term itself is derived from "Lahore," a city in present-day Pakistan, which was one of the prominent centers where many Nepali men enlisted. "Lahure", was in use long before the British established their first Gurkha battalions

Over time, Lahur symbolized the broader phenomenon of Nepalis leaving their homeland for employment in foreign lands, particularly within the military. Lahur's attraction was driven by the promise of regular income and the prestige associated with serving in a powerful army. For many Nepali families, having a member in Lahur was a matter of pride and a means to improve their economic standing. In Nepal, the term "Lahure" is still commonly used as a synonym for army personnel. 

On the other hand "Muglan" was a broader term that encompassed migration to any part of India, not just for military service but also for various other forms of employment. Muglan, which originally referred to the Mughal Empire, eventually became synonymous with the entire Indian subcontinent. Nepalis ventured into Muglan for a variety of reasons, from seeking agricultural work in the fertile plains to finding employment in princely states or the expanding industries of British India. This migration was often seasonal, with workers returning home during the off-season or after earning enough to support their families. It is not unusual for the older generation, especially from remote areas of Nepal, to use the term "Muglan" when referring to India. 

Migration to China

For centuries, the inhabitants of northern Nepal, particularly from regions like Mustang, Dolpa, and Humla, have ventured across the Himalayas to seek work and engage in trade in Tibet and other parts of China.

This migration was primarily driven by the harsh environmental conditions and limited agricultural opportunities in northern Nepal. The high-altitude regions, characterized by rugged terrain and a short growing season, offered few prospects for sustaining livelihoods.

Similar to the migration to India, the migration to China also involved unaccounted cash payments and informal labor arrangements. Many Nepali workers received their wages in cash or goods, often without formal contracts or records. This lack of documentation made it difficult to assess the full economic impact on the region or Nepal overall.

First Use of Passports in Nepal

Some historical documents suggest that on a particular Shivaratri of 1931, the government issued a notice stating: "Inspect and allow those who bring a paper stamped with the passport seal. For others, please take the necessary action.

This directive was not for foreign nationals but for Nepali citizens coming from other districts. In other words, even traveling from one district to another within Nepal required permission at that time. An earlier passport, dated 1900 AD, which is 31 years older than the aforementioned notice, has also been found. The Passport Department has cataloged this as the oldest passport currently available.

Maharaj Jang Bahadur Rana, the then prime minister of Nepal went to Britain on January of 1850 AD. However, it is not yet clear whether he and his entourage traveled using passports or by other means. 

The historical documents and archives indicate the oldest written evidence found so far is from the year 1900 AD

The Passport Museum of Nepal currently holds copies of ten old passports. These passports were issued to individuals traveling from one district to another and from Nepal to India.

A century ago, it was inconceivable for personal photographs to be used on documents in Nepali society. Therefore, to identify individuals, passports would include a description of their approximate height and facial features. For example, the earliest known passport issued includes permission for ten people, including Kali Prasad (last name not specified), to travel from Kathmandu to Butwal and Taulihawa.

The museum also holds another passport from the year 1900 AD, issued to a person named Krishna Bhagat for traveling from Indrachok, Kathmandu, to Calcutta, India, for trade purposes. This is the earliest verified passport issued for travel outside the country. 

1950s to 1970s

Modern passports in Nepal were first issued in the early-mid 1950s. Before this, passports were issued on single sheets of paper. The transition to the booklet form of passports began in the 1960s.

This period marked the beginning of Nepal's integration into the global community, with passports becoming a key document for citizens traveling abroad for work, education, or other purposes. Initially, passports were issued selectively and were not easily accessible. It wasn't until later, particularly with the reforms introduced by Prime Minister Krishna Prasad Bhattarai in the 1990s, that passports became more widely available to ordinary Nepalis. 

1970s to 2020s

In the 1970s, Nepal experienced relatively modest migration, with an estimated 10,000 to 20,000 people leaving the country annually. This early migration wave was primarily driven by the search for better employment opportunities and improved living standards.

The 1980s and 1990s saw a significant increase in migration, with annual figures rising to between 30,000 and 40,000. This period marked the beginning of Nepal's higher labor migration, with many Nepali workers moving to India, the Gulf states, and Southeast Asia.

The passport reforms of the 1990s were pivotal in facilitating this higher-scale migration. These reforms allowed a broader segment of the population to travel abroad, making labor migration a crucial economic contributor through remittances. The reforms also represented a shift in Nepal’s approach to international mobility, enabling its citizens to engage more fully with the global economy.

From 2000 to 2010, migration figures surged dramatically, reaching between 200,000 and 300,000 annually. This sharp increase was driven by political instability and economic challenges within Nepal, prompting many citizens to seek employment abroad.

Between 2010 and 2021, the net outflow of migrants from Nepal is estimated at 1.6 million. This period saw sustained high levels of migration, particularly for temporary labor in countries like Qatar, Malaysia, and Saudi Arabia, as Nepali workers continued to seek better economic opportunities.

Net Migration Rates

The net migration rate, which quantifies the difference between the number of immigrants and emigrants per 1,000 inhabitants, provides a clear picture of Nepal's migration dynamics. In the 1970s, Nepal's net migration rate was relatively low, ranging from 0.2 to 0.5 per 1,000 people. However, by the 1980s and 1990s, this rate had increased to 2 to 3 per 1,000. The early 2000s saw a further spike, with net migration rates reaching as high as 4 to 5 per 1,000 people, reflecting the massive outflow of labor migrants. By 2010, Nepal's net migration rate was among the highest globally, underscoring the significant labor outflow from the country.

Remittance Flows

Remittances have been a lifeline for Nepal's economy, providing crucial financial support to families and contributing to national economic stability. In the 1970s, remittances accounted for a modest 1-2% of Nepal's GDP, mirroring the lower migration numbers of that era.

As migration increased in the 1980s and 1990s, so did remittance inflows, rising to 5-10% of GDP. This upward trend continued into the early 2000s, with remittances comprising 15-20% of GDP by 2010. The global financial crisis of 2008 had a temporary impact, but remittances quickly rebounded.

By 2020, remittances constituted approximately 25-30% of Nepal's GDP. This significant increase highlights the critical role that migrant workers play in supporting the Nepalese economy. The World Bank and IOM have noted that remittances have been instrumental in reducing poverty, improving living standards, and funding education and healthcare for many families across the country.

In 2022, Nepal was ranked 10th among the top recipients of international remittances by share of GDP, with remittances making up around 23% of the national GDP. This statistic underscores the importance of remittances to the economy, despite the various challenges faced by migrant workers abroad.

Key Migration Corridors

Several migration corridors involving Nepal have stood out, particularly in recent years:

- Female-Dominant Corridors: The Nepal-to-India corridor has seen significant female migration, with estimates ranging between 500,000 and 750,000 female migrants. This trend underscores the growing role of women in Nepal's labor migration narrative, particularly in sectors such as domestic work and caregiving.

- Male-Dominant Corridors: The Nepal-to-Qatar corridor had approximately 1,000,000 male migrants, and the Nepal-to-Saudi Arabia corridor had about 500,000 male migrants. These corridors reflect the high demand for male labor in construction and other physically demanding jobs in the Gulf states.

Internal Displacements

Beyond international migration, Nepal has also faced significant challenges related to internal displacement. In 2022, Nepal ranked 14th among the top 20 Asian countries for new internal displacements due to disasters and conflict, with an estimated 250,000 people displaced. Natural disasters, particularly earthquakes and floods, have been major drivers of internal displacement within the country.

Global Comparison

A comparative perspective reveals that other countries with significant migrant populations have experienced similar trends:

- Pakistan: Between 2010 and 2021, Pakistan experienced a net migration flow of 16.5 million. Remittances in 2022 contributed nearly $30 billion, making it one of the top recipients globally.

- India: India from 2010 to 2021 received over $111 billion in remittances in 2022, the highest in the world and also is the country that has witnessed negative migration in some years.

- Bangladesh: Bangladesh experienced a net outflow of 2.9 million migrants and received around $21.5 billion in remittances in 2022.

- Sri Lanka: Sri Lanka had a net outflow of 1.0 million migrants from 2010 to 2021, with remittances playing a significant role in its economy.

- Syria and Venezuela: Both countries saw significant migrant outflows due to conflict, with Syria witnessing 4.6 million and Venezuela 4.8 million net migration.

Countries like Jamaica, El Salvador, and Honduras also rely heavily on remittances, with these financial flows constituting a significant portion of their GDPs, highlighting the broader global reliance on labor migration for economic stability.

Key Drivers and Destinations

The primary drivers of Nepal's migration patterns include economic necessity, lack of employment opportunities within the country, and the prospect of better wages abroad. Historically, India has been the top destination for Nepalese migrants due to its geographical proximity and cultural ties. Additionally, the Gulf Cooperation Council (GCC) countries, including Saudi Arabia, Qatar, and the United Arab Emirates, have emerged as major destinations for Nepalese workers in the construction and service sectors.

In recent years, Malaysia and South Korea have also become significant destinations, thanks to bilateral labor agreements that ensure better working conditions and wages for Nepalese workers. Developed countries like the United States, Australia, Canada, the United Kingdom, and various European nations have attracted Nepalese migrants primarily in the form of students, further diversifying the migration landscape.

Challenges and Opportunities

While remittances have provided substantial economic benefits, they also present challenges. Nepal's over-reliance on remittances makes its economy vulnerable to global economic fluctuations. Moreover, migrant workers often endure harsh working conditions, exploitation, and limited social protection in their host countries.

To address these challenges, the Nepalese government, with support from the IOM and the World Bank, should work on policies aimed at protecting migrant workers' rights, improving their working conditions, and ensuring their safe return and reintegration into society. Efforts are also being made to diversify the economy and create more employment opportunities within Nepal, reducing the need for labor migration.

Conclusion

Migration and remittances have been deeply embedded in Nepal's socio-economic fabric for a long time. The collected data underscores the profound impact of these trends on Nepal's economy and the lives of its people especially during the period from 1970s to the 2020s. As Nepal continues to navigate the complexities of labor migration, it remains crucial to balance the benefits of remittances with sustainable development strategies that create better opportunities within the country.

Also, as a member of the International Civil Aviation Organization (ICAO), Nepal was required to issue machine-readable passports (MRPs) starting in 2010. Consequently, Nepal ceased issuing handwritten passports as of March 31, 2010. In 2021, Nepal introduced its first electronic passport or e-passport.

 This advancement, along with the introduction of an online application system, more passport offices, faster processing times, and better connectivity with family and friends abroad, could further ease and encourage more Nepalis to migrate overseas in the future.

References

- International Organization for Migration (IOM)

- World Bank

- United Nations World Population Prospects 2022 (UN DESA, 2022)

- Ratha et al., 2023

- Photo is AI Generated

- https://www.macrotrends.net/

https://web.archive.org/web/20150807204808/http://dopmofa.gov.np/

https://www.himalkhabar.com/news/130755