April 19: Malaysia's policy to stop hiring foreign workers in the formal sector from June 1 is a major setback for the growing labor force of Nepal. The Malaysian government announced in March 2023 that foreign workers will be allowed to enter Malaysia only until the end of May. The time to get visa was fixed till April 21.

Malaysia employs foreign workers from 15 countries including Nepal. A large number of Nepalis have been working in Malaysia. According to government data, most of the Nepalis who took labour permits to work abroad in the last fiscal year went to Malaysia for work.

According to the Department of Foreign Employment, a total of 259,596 Nepali workers were issued labour permits to work in Malaysia last year. The figure includes new workers as well as those who renewed their work permits.

In the current fiscal year, the number of Nepalis visiting to Malaysia for work has declined compared to last fiscal year.

As of mid-March this year, 63,976 Nepalis have traveled to Malaysiafor work. Malaysia has long been an important labour destination for Nepali workers.

Foreign employment experts say that the new policy adopted by the Malaysian government regarding migrant workers may have a direct impact on Nepal.

Foreign employment expert Ganesh Gurung says that Nepali workers will lose work opportunities in a major labour destination due to Malaysia's new policy. He pointed out that there is a danger that the number of people going to Malaysia illegally may increase while it may cause unemployment rate to rise in Nepal.

“Banning foreign workers does not mean that companies in that country do not need foreign workers. It will increase the number of people going to Malaysia illegally," said Gurung.

According to government estimates, more than 500,000 new labor force enters the labor market in Nepal every year. Almost all the labor force that is added every year in the market goes abroad.

According to the Department of Foreign Employment, 497,704 new Nepali workers went abroad for work last year. The number of people who came to Nepal on vacation from abroad and returned for work stood at 277,272. The figure shows that about 800,000 Nepalis went abroad for work last year. The number of students who go abroad is also large.

The country lacks job opportunities due to the poor condition of the economy. According to a recent report of the World Bank entitled 'South Asia Development Update', the employment ratio (employment in percent of working-age population) in Nepal has decreased by 11 percent in the last 23 years. As the working-age population is increasing, the trend of people going abroad in search of work has increased due to the inability to create jobs in the country.

If Malaysia stops hiring foreign workers, remittances from there will also decrease in the future. Remittances have been an important pillar of the Nepalese economy for many years. According to the World Bank, among the South Asian countries, Nepal receives the most remittances compared to the country's gross domestic product. In the last fiscal year, Nepal received remittances of Rs 1220.56 billion.

“If the number of workers going to Malaysia decreases, remittances from that country will obviously decrease. It may affect the Nepalese economy," said Dr Gurung said.

Dilliram Pokharel, deputy spokesperson and information officer of Nepal Rastra Bank, said that although it is not possible to say exactly how much remittance comes from Malaysia, it can be estimated that a large amount of money comec from there as there are a large number of Nepali workers in Malaysia.

Rajendra Bhandari, president of Nepal Foreign Employment Professionals Association, says that Malaysia's policy of not hiring foreign workers has caused a big crisis in foreign employment.

He said that the demand for workers is low even in the Gulf countries, and its impact is being seen in Nepal. Bhandari says that it is time for the government to facilitate sending workers to other countries including Europe.

"After the closure of Malaysia, the government should facilitate the sending of workers to other countries, including Europe, where Nepali workers are in demand," he said.

Workers who go to the Gulf and Malaysia send remittances and return back and work within the country. But those who go to developed countries usually do not return and tend to take as much property as possible from the country.

Therefore, employment in the Gulf and Malaysia is important for Nepal, Gurung said.

According to labor expert Gurung, the government should now create conditions for employment within the country. It is important to do homework about how many jobs are to be created and when. However, the country has not been able to create job opportunities due to political instability and poor investment environment in the country. Due to this, there is a trend among youths to travel abroad for work.

Stakeholders say that the closure of regular destination countries of Nepali workers will force them to go to work in risky places.

"At present, the trend of going to different countries illegally has increased," said Bhandari, adding, "Nepalis are ready go to Russia and Ukraine and die."

Joint Secretary of the Ministry of Labor Govinda Prasad Rijal said that although the government has not received any official information from Malaysia about the decision not to hire workers, the ministry is preparing to get information through diplomatic channels. "The ministry will take necessary decisions accordingly," he said.

The Department of Foreign Employment estimates that there are more than 500,000 Nepali workers in Malaysia. This number is of those who legally went to Malaysia by taking work permits from the government. The number of people working illegally in Malaysia is believed to be equally high.

A senior official of the Department of Foreign Employment informed that 44 percent of the Nepali workers who went for foreign employment in the last fiscal year went to Malaysia. Malaysia stopped hiring foreign workers for two years during the Covid-19 pandemic.

Last May, the government declared some organizations involved in the process of sending Nepali workers to Malaysia to be illegal and shut down their operations. This made it further difficult for Nepali workers to go to Malaysia.