Laxmi Capital News
Fall in number of workers not linked to 'free-visa-free-ticket' NRB

The falling number of Nepali workersgoing for foreign employment after the enforcement of the'free-visa-free-ticket' system is due to not any slowdown in demand but supplyside issues, according to a report issued by Nepal Rastra Bank (NRB).

The report released on Tuesday showsthat there was an increase of 4.7 percent in the demand for workers in theseven countries where Nepali workers are not required to pay any visa fee orairfare under the system implemented from June 9, 2015.

The number of workers going foremployment in the subsequent years has been falling, giving credence tomanpower operators' claims to some extent that the government's new policy wasresponsible for such decline. According to them, there is lower demand forworkers who should be offered visa cost and airfare.However, as per the report,in the two years after the free-visa-free-ticket system came into force, thedemand of workers in these seven countries rose 4.7 percent from the 2.47percent of the preceding two-year period, despite the fall in number ofoutbound workers."There were superficial accusations that the fall in thenumber was due to the government policy. However, the report has found thatit's not due to the government policy because the demand for Nepali workers is rising.Instead, it's due to the less number of workers who applied for or wereinterested to go abroad for work," said Nara Bahadur Thapa, executivedirector of the Research Department at the NRB.The study report also found that82.3 percent of workers it surveyed went for foreign employment under thepolicy of 'free-visa-free-ticket'.

The central bank collected data from 313outbound workers, 54 manpower companies and the Department of ForeignEmployment and the Foreign Employment Promotion Board for the study.

There has been reduction in the averagecost of Nepali workers going abroad for employment, the report found. Thenumber of Nepali workers going to these seven countries -- Malaysia, Qatar,Saudi Arabia, the UAE, Kuwait, Bahrain, and Oman -- where 'free-visa-free-ticket'system is implemented accounts for 95 percent of the total workers leavingabroad for employment.

Recruiting firms claim the'free-visa-free-ticket' system was responsible for the decelerating growth ofremittances and falling number of workers going for foreign employment. Theannual growth rate of remittance has been on a downward trend since the FiscalYear 2013/14. The rate fell to 4.7 percent, or Rs 695.45 billion, in the FiscalYear 2016/17 from 7.7 percent of the previous year, according to the NRB.

The slowdown in remittance growth is inline with the fall in the number of workers going abroad. While the number ofworkers was on an increasing trend until 2014, the number started to go down inthe subsequent years. A total of 398,978 Nepali citizens received work permitfrom the Department of Foreign Employment in the last Fiscal Year 2016/17.

"The decline in the number ofworkers going abroad despite no slowdown in demand results from the supply sideconstraint," reads the report. "The demand for workers in thedomestic market is high due to reconstruction works after the 2015 earthquake.It could be presumed that the number of workers going abroad could have fallenin recent years as the wages have also gone up with the high demand.”

Source: MyRepublica, 13thJune 2018

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