Foreign employment and inclusive growth in Nepal: what can be done to improve impacts for the people and the country?

Research reports and studies
June 2013
Harry Jones and Yurendra Basnett

Migration touches the lives of the majority of Nepalis, whether directly or through family members: 55% of Nepali households receive remittances, which contributed at least 25% of Nepal’s GDP. Migration is also an inclusive phenomenon, with more than half of the impressive reductions in poverty in Nepal over the past two decades directly attributed to remittance income.

Yet there are also many challenges: from poor treatment and conditions for workers abroad, to a lack of productive investment of remittances back in Nepal, meaning the potential value of migration is not being capitalised upon.

This report by Harry Jones, carried out at the Centre for Inclusive Growth in Nepal, is intended to answer the following questions:

  1. How is labour migration contributing to inclusive growth in Nepal, and how can this contribution be improved?

  2. How do institutions, incentives, structural factors and knowledge and information shape the drivers and constraints around the key policy issues?

  3. What can realistically be done to make improvements, what are the most promising entry points and what are the prospects of success?

The study builds on the work of the RAPID programme at ODI to apply the knowledge, policy and power framework to pressing problems for developing countries. The approach looks at political context, the role of actors and different types of knowledge and knowledge interaction processes. After drawing out the key drivers and constraints around both the costs and benefits of labour migration for inclusive growth, the report provides recommendations for government, external agencies, civil society and the private sector.