The Covid-19-induced lockdown has resulted in a loss of jobs at home, but this is also set to reduce the number of Nepalis going abroad for work, which experts say could hit the country’s economy hard, as it will massively curtail remittance inflows.

There has been a huge slump in the number of work permits issued by the government to individuals seeking to go abroad for employment.

During the 2019/20 fiscal year that ended on Wednesday, the number of permits issued saw a drop of 27.5 percent, compared to the previous fiscal (2018/19), according to the statistics maintained by the Department of Foreign Employment.

“If we didn’t have the Covid-19 pandemic and the subsequent restrictions, the number wouldn’t have dropped so much even as that had been declining,” said Swarna Kumar Jha, a labour migration researcher.

A total of 368,433 labour permits were issued to aspiring migrant workers during 2019/2020, compared to 508,828 during the previous fiscal (2018/19), according to the Department of Foreign Employment.

Labour migration observers say that the main reason behind the slump is the government decision to suspend permits issuance.

“Following the Covid-19 terror, the government stopped sending migrant workers abroad,” said Jha. “This resulted in the drop.”

Following the spread of the coronavirus in labour destination countries, particularly in the Persian Gulf, Malaysia and South Korea, most of the countries enforced restrictions on international flights. Later, the Nepal government also suspended issuing labour permits to migrant workers, bringing the country’s foreign employment departures to a halt.

Rameshwar Nepal, a labour migration researcher, said the impact of Covid-19 on the country’s foreign employment sector was visible weeks before the government stopped issuing permits.

“The drop in labour permits doesn’t surprise me. Even before the Nepal government prevented Nepali workers from leaving, there were fears among aspiring workers who were reluctant to leave due to the crisis,” said Nepal, who is also the South Asia director at Equidem Research, a UK-based human rights research organisation.

“The movement of migrant workers had been declining since February. This was expected in the wake of the Covid-19 outbreak.”

Covid-19 has prompted a decline in employment opportunities for Nepali migrant workers abroad, experts say.

The number of permits issued has been on the decline for the last three years now as major labour destinations endure financial and political turmoil and some countries try to diversify their pool of workers. Countries such as Saudi Arabia have even adopted a policy of reserving jobs for their own citizens.

With the global economic slowdown impacting the labour migration sector, a drop in the money remitted by Nepalis working abroad is imminent. As per the World Bank estimates, the country is likely to suffer a loss of Rs145 billion in remittance this year.

Although there were fears of a massive downfall in remittances because of the pandemic, it is unlikely to be as worse as per the initial projections. But if there is a decline in the number of Nepalis going abroad to work, there will be a reduction in remittance inflows.

The Nepal Rastra Bank had projected a drop of over 15 percent in remittances in the current fiscal year and the Central Bureau of Statistics also projected a reduction of Rs163 billion or over 18 percent of the total remittance sent by Nepalis working on foreign soil the previous year. Last fiscal year, the country received a total of Rs879 billion sent home by Nepalis working abroad.

According to the central bank, the country received remittances amounting to Rs34.5 billion in Chaitra (mid-March to mid-April), compared to Rs71 billion in the same month in the previous fiscal year. The figure improved to Rs53.9 billion from mid-April to mid-May, and according to preliminary figures from the central bank, remittances from mid-May to mid-June grew to Rs62 billion.

Despite the changing policies of labour destination countries, Nepalis are likely to continue getting work opportunities, but in lesser numbers than in the past, say experts. That too will be contingent on how and when the economies recover from the shocks of Covid-19, according to them.

“After every crisis, the economy crashes and then as time goes by, it is revived,” said Nepal. “When the economies rebound at a certain point, there will be employment opportunities again. But we do not know when it will happen. Some labour destination countries have reopened, but we are still in a wait-and-watch situation.”

According to Jha, the reopening of labour markets might take some time as fear of contagion is high and measures such as physical distancing need to be followed everywhere, starting from the airport.

Labour migration experts, however, blame the Nepal government for failing to prepare in advance to cope with extraordinary crises even when the economy relies heavily on remittances sent by migrant workers.

The government has failed to take action over the long-debated issue of diversifying Nepal’s labour market beyond the Persian Gulf and Malaysia.

Like in the past, Nepalis have continued migrating to the same countries for work. Last fiscal year, the departures numbered 93,424 to the United Arab Emirates, followed by Saudi Arabia (83,163), Qatar (81,567), Malaysia (59,714) and Kuwait (16,862).

Experts have long argued that such a high concentration results in a host of risks for workers as well as the country’s economy.

“Our government is not adequately prepared to seek alternative labour markets,” said Nepal.

According to Jha, the ongoing Covid-19 crisis and government’s inaction have had a multiplied effect on the country’s foreign employment sector, which already dealt with several challenges.

“We know that the country receives remittances equivalent to over 25 percent of the country’s gross domestic product, and currently there is no substitute for it,” said Jha, who also coordinates the National Network for Safe Migration, an organisation working in the field of labour migration and migrants’ rights.

“The government has been coming up with policies to absorb migrant workers inside the country. However, we know they will not come into force immediately.”

As the country’s large chunk of the labour force, which migrates abroad for employment, remains unskilled, mostly working for the construction sector and factories, it also makes it difficult to mobilise them once they return home.

“Also, for several years, we sent unskilled workers abroad. Only if we had trained them before sending out, reintegrating them and providing them with jobs would have been much easier,” said Jha.

The Nepal government has announced an ambitious plan to create nearly 700,000 jobs, mostly targeting returnee migrant workers.

But that won’t be enough, according to researcher Nepal, as every year nearly 500,000 people enter the labour market.

“Not having prepared in advance to create jobs for critical times like these impacts the most vulnerable, who are likely to suffer more,” said Nepal. “These migrant workers and their dependent families will face another pandemic.”