Remittances from Nepali workers abroad have continued to defy expectations. They have risen to Rs729.02 billion, a 16.5% increase from the same period last year, according to a nine-month update report by the Nepal Rastra Bank (NRB).
This was equivalent to $6.18 billion, a 13% rise from last year when during the same review period there had been a 4% compared to the preceding year.
In the immediate months after the lockdown last year, there had been a drop from Rs79.3 billion in March 2020 to Rs34.5 billion and Rs54 billion in April and May 2020 respectively. But in 2021, Nepal received Rs86.8 billion in April alone.
Remittance to Nepal was estimated to decrease significantly: 18% by NRB, a worst-case scenario of up to 28.7% by the ADB, and a 14% drop later revised to 12% by the World Bank.
South Asia as a whole has also proved to be a lot more resilient than predicted: initial projections by the World Bank predicted a 22% drop in 2020, later revised to 4% in 2020 followed by an 11% drop in 2021. However, the actual 2020 estimates for South Asia instead show a 5.2% growth. Global remittances were predicted to fall by 20% in 2020, but fell by only 1.6%.
The reason for remittances staying robust is said to be the normalisation of informal remittances, the transfer of the last of the savings and end-of-service benefits of migrants, the counter-cyclical nature of remittances and the engagement of migrants in essential sectors that were needed to keep societies functioning through the lockdowns.
“Informal economic activities such as gold smuggling are less prevalent due to Covid-19, so formal transfers have increased,” explains Executive Director of Nepal Rastra Bank Gunakar Bhatta.
“Expenditure on consumer goods like electronics have perhaps also decreased given the crisis with a preference for savings and more cash transfers. Formal transfers have also been better managed in countries like South Korea in the recent years with more branches of banks abroad which has contributed to remittance formalisation.”
The impact of the pandemic has not been uniform across countries, and subsequently, recoveries of economies and deployment of workers have also been uneven. Since 2017/18, Nepal’s Central Bureau of Statistics has stopped releasing data on bilateral flows of remittances.
That year, the USA, India, Saudi Arabia, Malaysia and Qatar were the five top sources of remittances to Nepal. The impact of the pandemic on these countries varies significantly which would in turn impact remittances differently.
A slight ray of hope had started to emerge before the current lockdown with a steady recovery of workers deployment overseas. While countries like Malaysia and South Korea were not allowing new workers, demand in Saudi Arabia, Qatar and the UAE was picking up.
With the second wave, however, foreign employment has once more come to a screeching halt. The government has stopped flights and the issuance of labour approvals. On the destination country side, too, Nepal is included in the ban list by an increasing number of countries, such as most recently by Malaysia and the UAE.
As a result, many with tickets either in Nepal or in the destination country are stranded indefinitely, just like last year, although at a smaller scale.
Migrants in destination countries doing relatively better than Nepal will want to hang on to their jobs, and remit more to families back home to help them better cope with the crisis in the coming months. But amid the uncertainty, it is not just financial remittances which have stayed strong.
Nepalis abroad are also trying to help their country cope with the crisis. The Non-resident Nepali Association (NRNA) in Oman is set to send 600 oxygen cylinders on Saturday to the Ministry of Health.
“During the first wave, things were chaotic both here and in Nepal. In close coordination with the Nepal Embassy here, we were engaged in helping stranded Nepalis,” says Suresh Khadka, Vice President of the NRN Social Club Oman. “This time, given the situation, we are sending oxygen cylinders which seemed a lot more impactful than money.”
Nepal’s Ambassador to Oman Sharmila Parajuli Dhakal is trying to arrange for a flight to take the cylinders. She says, “The situation is so bad in Nepal that every bit of support helps. I encouraged the Nepali community here to come together and their biggest challenge was logistics. We have arranged a flight to take the cylinders to Kathmandu. Even if we manage to save one life, it will be well worth it.”
The government could also learn from mistakes last year in the large scale repatriation of migrant workers – for example communicating transparently and regularly, clearing up if migrants were eligible for the contributory welfare fund when there was a special Covid-19 budget that could have been used to help the stranded undocumented workers.
Even for documented workers, the guidelines for repatriation support fund were made so complicated that less than 200 benefited from it. Big promises were made regarding reintegration support to those who returned, but a year later, there is not much to show for it.
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