Following the approval of guidelines earlier this month to send skilled Nepali workers to Japan, the government is all set to sign labour agreements with ten countries—mostly European—to curb illegal departures of Nepalis who see no prospects at home.

On February 8, Nepal approved the guidelines to send skilled workers to Japan in 14 different sectors including manufacturing, construction, agriculture, and hospitality, among others.

“There is a demand for 10,000 Nepali workers in Japan this year,” said Rajeev Pokharel, joint secretary at the Ministry of Labour, Employment and Social Security.

Several reports show that the developed economies are in a race for high-skilled workers, and are tweaking immigration policies to attract them. The year 2023 saw many countries, previously migrant-shy, ease restrictions to fill in critical labour shortages.

In the wake of an acute labour shortage due to its ageing demography, the Japanese lower house in December 2018 through a special bill, which sought to make major changes to its immigration law, decided to accept foreign workers from nine labour source countries including Nepal.

In March 2019, Nepal and Japan signed a labour agreement, formally paving the way to send "specified skilled" workers to Japan, one of the most lucrative destinations, for the first time.

However, there were several complications in sending workers to Japan as the agreement was not a government-to-government model like that with South Korea.

The agreement also did not allow recruiters to play a role like the pact with Malaysia and Gulf countries.

“Then in 2022, we requested the Japanese government that we follow the South Korean model.

But the Japanese government replied that it’s a business sector and that the government would not be involved in it and urged for a business-to-business agreement, Pokharel said.

“That is why, Nepal opened the doors to send workers through a business-to-business model,” he said.

“Based on the demand, the manpower agencies now can send as many workers as possible to Japan,” said Pokharel.

“We have also made provision that if the Japanese government is ready to accept workers under a government-to-government model, we are ready for it,” Pokharel said.

The workers' expenses while going to Japan will be based on the requirements of the Japanese company.

In Japan, Nepali workers will have two benefits: As it costs Rs1 million to Rs1.5 million to go to Japan currently, now under the agreement, the employer will bear the expenses. “The agreement has made the cost transparent,” said Pokharel.

Expenses like airfare, insurance, health tests, contributions to welfare fund and social security fund, and expenses for obtaining labour permits will be borne by the employer.

Secondly, if the workers do not get the promised salary or face difficulties, the manpower company will be held liable and should compensate the workers as per the Foreign Employment Act.

If a Nepali worker needs to be rescued due to physical or mental health or in case of death due to any cause, the employer needs to provide compensation to the family of the deceased and bear the expenses while sending the body to Nepal.

The average starting salary of Nepali workers in Japan will be Rs150,000, according to Pokharel.

As per the new guidelines, Nepali citizens intending to go to Japan as skilled workers need to pass the language and professional skill exams from the institute authorised by the Japanese government.

The Department of Foreign Employment will be informed by the authorised institutions about the details of workers who have cleared the language test.

The guidelines have also set a qualification required for the institution.

There should be at least two certified language instructors in the authorised language training centre.

The money sent by Nepali migrant workers has been a lifeline for Nepal’s economy.

The remittance inflow crossed Rs1 trillion for the first time in 2021-22 since Nepalis started to look for overseas employment more than two decades ago.

In the last fiscal year 2022-23, remittance inflows increased by a whopping 21 percent to Rs1.22 trillion, following the exodus of Nepalis abroad.

According to the Nepal Rastra Bank’s statistics, 774,976 people obtained labour permits in the last fiscal year, the highest permit issuance on record.

Remittance inflows have already reached Rs733 billion in the first six months of the current fiscal year, rising sharply by 25.3 percent, indicating that they will touch Rs1.5 trillion mark by the end of the fiscal year.

The direct impact of remittance has been on Nepal’s foreign currency reserves.

The gross foreign exchange reserves currently stand at Rs1.81 trillion in mid-January 2024, an all-time high.

Happily, apart from Japan, the government is exploring new destinations to send its citizens to earn money.

The government has prepared a standard format for the memorandum of understanding.

“We are set to sign labour agreements with ten different countries,” said Pokharel.

“We have forwarded the draft of the labour agreement to Croatia, Poland, Portugal, Malta and Spain. We have prepared a standard format of the memorandum of understanding to meet the principle of International Labour Organisation and other labour rights,” said Pokharel.

“We have requested the Nepali embassies in those countries that we have sent the draft to fast-track the process. We have received responses from some of the countries,” he said.

“The agreement will be signed after we receive a green signal from them," said Pokharel.

In Gulf countries, Nepal has proposed labour agreements with Saudi Arabia, Kuwait and Oman.

The discussion for signing a labour agreement with Saudi Arabia has reached a final stage, Pokharel added.

Nepal has so far signed labour agreements with ten countries.