‘Brain drain’ or gain in Nepal?

There is a saying in the Mahattari District of southern Nepal that in nearby Bhramarpura, “a child is conceived over the phone”. Up to 90% of the young men in towns such as Bhramarpura live and work abroad, adding to the 32.2% of GDP in Nepal based on personal remittances. The nation faces a severe problem of ‘brain drain’ – skilled workers flocking abroad rather than working domestically. The general belief amongst young people in Nepal is that there are no opportunities for them unless they train and work in Europe or the US, and with a median age of 21, Nepal is losing its potential labour force and stock of human capital at an alarming rate.


Source: https://www.thesouthafrican.com/wp-content/uploads/2013/05/brain-drain1.jpg


It is not only skilled workers leaving Nepal, unskilled and vocational workers are flocking abroad as well. Some estimates place unemployment in Nepal at a whopping 47%, as manual labourers are often forced to seek employment in terrible conditions in Middle Eastern economies where there is a shortage of domestic workers for major infrastructure projects.


This phenomenon of ‘brain drain’ has alarmed policymakers in developing countries for years. Citizens who could be lecturing at universities, operating in hospitals and developing innovative products are no longer contributing to the domestic economy. Nepalese healthcare professionals are in strong demand in Singapore and the USA, and some commentators argue Nepal has comparative advantage in eye care, but rather than developing domestic industries that could boost domestic productivity such as eye care or hydroelectric power, workers are being attracted abroad.

On the other side of the coin there is an argument that the loss of productivity because of ‘brain drain’, is more than made up for by the boosted salaries Nepalese workers are sending home in remittances, increasing the quality of life for the domestic population and their families. The children of these workers may be able to afford better educations, become entrepreneurs, without going abroad. Those working abroad may return, bringing knowledge and innovation from more developed countries. A study in Romania found that those who studied and worked abroad in the USA and then returned to Romania earned higher incomes and had a greater quality of life than those who studied and worked in the same sectors domestically. We may be able to apply these findings to Nepal’s migrant labour force in addition to Romania’s, a clear argument that the ‘brain drain’ phenomenon has its upsides.


However there are undeniable problems not just economically but socially with Nepal’s current situation. Economically, huge flows of remittances accompanied by slow credit growth are feeding into a problem of excess liquidity in the Nepalese banking sector. Further fuelling undesirable condition is the major uncertainty surrounding the health of the banking and risk management sectors in Nepal. Measures to counter this may drive inflation even higher than its current 8%, and do more harm than good to the overall macroeconomy.


Socially, many rural communities are plagued with alcohol and drug addictions that migrants developed while abroad and have spread to locals. Communities are often dominated by women, who are socially excluded from schooling and often forced to work in subsistence farming or at home, and still face the practice of ‘chaupaudi’, restrictions and even isolation during menstruation. This means they cannot without significant social reform in Nepal contribute to the economy in the way men would if they remained domestically. The richest areas of rural Nepal are those where most of the young men have left to work abroad. It has become a common trade-off for Nepalese women – higher incomes and a better quality of life, in exchange for loneliness and raising a family alone.


While the government focuses on balancing the fiscal budget, rebuilding after the devastating April 2015 earthquake, and trying to maintain political stability, it has neglected to address the problems facing communities, especially in rural areas, as a result of young workers flocking abroad and out of Nepal’s borders. The strategy for the Nepalese government should be to invest where its strengths lie, for example in hydropower generation and infrastructure, to generate industry growth and become more internationally competitive, keeping the best and brightest within the country and providing real graduate opportunities for its young minds. It also needs to improve the quality of education and syllabi domestically. 54% of Nepalese adults do not have a secondary education diploma, and the literacy rate nationwide is only 65%. The government must heavily invest in education and infrastructure to even have some chance of tackling the problems of ‘brain drain’, that are only going to become ever more urgent as time goes on.

Sources: https://www.theguardian.com/global-development/2016/may/03/nepal-bhramarpura-streets-have-no-men-women-hold-sway

https://www.cia.gov/library/publications/the-world-factbook/geos/np.html

https://www.theguardian.com/global-development/poverty-matters/2011/sep/16/nepal-challenge-keeping-girls-in-school

http://www.intmedtourism.com/en/news/550.html

http://www.economist.com/node/18741763

http://www.worldbank.org/en/country/nepal