Social Science Baha


Give Migrants Their Due

The least the government could do is make migration a pleasant experience, at least while departing and arriving

Deepak Thapa
The Kathmandu Post
16 June 2016

I do not know if many readers are familiar with the name RP Bhattarai. I was not—until a while ago. Surfing the news,

I had come across an article that showed the image of a seemingly well-off couple with the intriguing title: ‘She would cook tea; I attracted customers.’ It turns out Bhattarai aka Lajalam is a popular TV comedian, and the article was about his struggles, which consisted of a rapid rise to wealth, an unexpected fall into huge debts, a gradual clearing off of the loans, and a foray into the entertainment sector, gradual acceptance and fame. The tea cooking was from the time he was heavily in debt, and his wife and he ran what sounds like a hole-in-the-wall neighbourhood bakery. What struck me though was his statement that the main reason he could get out of debt was the ‘manpower business’ he started and how in less than seven years he cleared everything, including Rs5 million in interest payments alone.

A remarkable enough story and I was reminded of Lajalam (and more on that later) upon learning about the fresh issuance of the foreign employment bond and the rather lukewarm response it has received so far. Compared to the pitiful 0.4 and 0.07 percent in 2010 and 2011, recent years have looked more promising at around 30 percent but it remains to be seen how it will fare in the coming years. As a World Bank analyst wrote about the 2010 fiasco: ‘This local currency diaspora bond had an interest rate of 9.75% and a maturity of 5 years. Commercial banks in Nepal offer up to 13% on 5-year fixed deposits.’

Not being an economist, I cannot understand what could have persuaded Nepal Rashtra Bank to fix a rate so far below what banks were offering back then, and also do not know how it can now offer nine percent when rates in commercial banks have hit rock bottom. I presume the real test will be when interest rates rise once again.

Non-productive remittances
One of the reasons the diaspora bonds exist was to head off criticism that remittances are being poured into what is derisively called the ‘non-productive’ sector, meaning everything from food to education to mobile phones to land. There were repeated calls to harness the money pouring in and use it for the nation’s development. And, what better way than to channelise the money into government coffers in return for a safe investment.

It all sounds quite logical until one begins to think about the migrant labourers and the conditions driving them to leave home and hearth. According to the Nepal Living Standards Survey 2010-11, and things could not have changed much since, more than half of Nepal’s households receive remittances. It says a lot about the finances of the individual households that that a full 79 percent of the remittances received was spent on ‘daily consumption’, seven percent in loan repayments, four percent each on household property and education, and ‘capital formation’ accounted for just two percent. Although the total volume of remittances estimated by the survey in the 12 previous months was Rs259 billion, it masks the fact that the average size of the remittance received annually by households was a mere Rs80,436, an amount that surely cannot go further than meeting daily expenses.

Respect for migrant workers
Now, consider Lajalam, with whom I began the story. By his own admission, within a few years he had earned millions of rupees, and so would have many of the 750-plus recruitment agencies currently active. For, unlike what official policy says at home or in many destination countries, that kind of money could not have been raised from service charge or as commissions from labour-employing companies. To carry out some back-of-the-envelope calculations, in the year 2013-14, the government issued 450,027 labour permits through recruitment agencies. If the service charge for each permit were Rs 10,000 (the amount allowed under current rules), the total raised would be Rs11.3 billion, which divided among the 754 recruitment agencies would bring each an average of just under Rs6 million per year. That is before accounting for costs such as salaries, taxes, commissions, etc. The rest of the millions and millions earned by recruitment agencies would have to come from grossly over-charging the poor labouring class who slog under the most inhospitable conditions to make a fraction of those amounts. No wonder the average migrant worker struggles to save less than Rs100,000 a year.

Until and unless the government comes out proactively on the side of migrant workers, this condition will not change.

Like almost everyone else in Nepal, recruitment agents are politically connected and also have the money to get their voices heard. The government does not care to recognise and honour the huge contribution made by migrant workers over time, from propping up the economy through the years of the Maoist conflict to reducing poverty from 42 percent in 1995-96 to 25 percent 15 years later.

The fact that remittances make up nearly 30 percent of GDP, which continues to rise, gives a sense of the huge contribution made by migrant labourers. More interesting is how it now dwarfs aid flows into the country.

To get another perspective of this contribution, the World Bank estimates the figure for 2015 to be nearly $7 billion. That is 50 percent more than the $4.4 billion pledged by donors for the post-earthquake reconstruction. Compare all the excitement over the aid conference with the meagre efforts to help migrant workers and one gets a sense of misplaced priorities.

For starters, the least the government could do is make migration a pleasant experience, at least while departing and arriving. Drive home the point to immigration officials and security officials that they are dealing with the unsung heroes of Nepal, and are to be accorded as much respect, if not more, than any backpack swinging Westerner or snooty well-to-do Nepali. A heart-warming gesture perhaps would be to emulate what the Philippines has done—provide an actual red-carpet welcome to the much-hailed Overseas Filipino Workers on their arrival at the Manila airport. Such a simple touch would tell our migrant labourers that they are truly and safely back home.


Share Via: