FIELD BULLETIN Returnees from migrant labour: Welcome home? 1

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1 Issue No. 17; August 2011 United Nations Resident and Humanitarian Coordinator s Office Background FIELD BULLETIN Returnees from migrant labour: Welcome home? 1 Happy he who like Ulysses has returned successful from his travels, or like he who sought the Golden Fleece, to rest well earned - wise to the world - amongst his family Joachim du Bellay The scale of Nepali work migration since the mid-2000 is unprecedented 2. In some villages of the Central Tarai it is said that every other family has a relative working in the Gulf countries. The overall economic benefits for Nepal have been acknowledged with remittances being estimated to form over 25% of the Gross National Income 3. At the local level, even moderate increases in income have been observed to dramatically improve the socio-economic status of migrants families (see TSS Field Bulletin #2 4 ). However, going abroad is a big investment and a significant share of migrants earnings goes to paying intermediaries and repaying loans and high interests accrued. This field bulletin focuses on returnees and their perspectives once they have returned home. It contrasts slow, painful but nonetheless positive material improvements with the often disappointing lack of skills gained from their work experience abroad. Many of those who return are not hopeful of reaching the same level of income while working in Nepal and many return to working abroad for long periods. Interviews in the field confirm recent statistical observations: Nepal s extensive labour migration has deep effects on communities supported by remittances in rural areas, including a change in land use and an overreliance on remittances as main the source of family income 2. A costly and uncertain voyage The upfront costs associated with migrating represents a big investment and migrants spend a large part of their earnings on reimbursing costly loans taken to go abroad (see Box 1). One migrant interviewed left Nepal because his friends working abroad were rumoured to be earning high salaries. However, the job he found paid only NRs. 14,000 per month, which was just enough to pay back his high-interest loan (48%) to a money lender in the village. One recruiter interviewed agrees that although earnings are sufficient to pay back loans and feed the family it accounts for little else. Only a few of the people I have recruited have been able to buy land and build brick or cement houses, he says. The costs of migrating entails that not all can migrate to where they may originally have planned, e.g. the Gulf. In an impoverished Dalit community of Dhanusha, interviewees affirm that seasonal jobs in India remain their only option to complement their income because the high costs associated with migration to the Gulf. Some better off Nepali see little 1 UNFCO Bharatpur interviewed migrant workers from Rautahat, Dhanusa districts who recently returned from work abroad 2 See figure 2 in Hisanobu Shishido, Large-Scale Migration and Remittances: Benefits and Costs. Policy Cluster Leader, World Bank. 3 World Bank, Migration and Remittances Factbook. 4 un.org.np/sites/default/files/headlines/field_bulletin_-_issue-2_impact_of_remittances_in_a_tarai_village_april-2011.pdf 1 P a g e

2 benefit in migrating for mostly unskilled jobs. One interviewee earning NRs. 10,000-12,000 in a skilled job in his village resolved to stay in Nepal with his family rather than migrating. Sometimes migrants find life abroad more permissive than at home and entertain new habits. According to one returnee, drinking alcohol is common and about 10% of Nepali workers abroad frequent female sex workers despite the strong prohibitions in Gulf countries. These additional expenses cause some workers face difficulty repaying their loan or even buying Box 1: Fighting crippling loans According to one recruiter, only 5% of migrants can afford the cost of migrating. The other 95% are indebted to local money lenders at interest rates ranging from 48-60%. Realizing the high interest rates borne by migrants in his village, Paritosh Dubedi initiated a saving and credit scheme called Chetana Bachat Tatha Rina Sahakari Sanstha Limited. The cooperative provides loans of up to NRs. 50,000 to migrating workers at 17% interest, guaranteed by community. their return ticket to Nepal and therefore extend their stay for years as they do not want to return home empty-handed. A booming business for intermediaries The process of obtaining proper work abroad, including contracts and labour migration authorization involves visits to Ministerial offices in Kathmandu which are difficult to access for many would-be migrants, hence many recruitment agencies and intermediaries sell services to support the migration of workers. One recruitment agency director states that his agency assists one hundred people to migrate to the Gulf every month, and adds that his is one of about 950 such recruitment agencies registered in Nepal. The Ministry of Labour has set the maximum fees that a recruiting company can charge for migrating to different countries 5. The fee includes airplane tickets, medical insurance as well as processing and service charges. However, according to one recruiter, there are additional extra unofficial costs at different stages. For example, interviewees state that although the official amount required by the Ministry of Labour for approval is NRs. 1,000 and NRs. 2,000 for a compulsory insurance, in practice, the total amount required to get paperwork processed in a timely manner is NRs 4,200. A recruiter interviewed hints that his company does little placement but often just act as an efficient intermediary with administrations, saying: Around half of the migrant workers come to us only to obtain the mandatory approval from the Ministry of Labour. Cheated upon arrival After getting into debt to migrate, migrant workers sometimes do not get the work that was agreed prior to leaving Nepal. According to one recruitment agency, this happens mostly because of competition between recruitment agencies and middlemen who use false pretences in order to recruit more workers (See Box 2). One migrant worker interviewed explains that he agreed to migrate to the Gulf to work in an electrical store but ended up as a manual labourer carrying timber logs. He believes that most workers are diverted to hard labour after they land in the host countries, despite having signed agreements for different kind of jobs. A returnee from Qatar noted I went to Qatar with an agreement to work as an electrician but instead I worked as a labourer on a construction site for four years. Another returnee says he passed his Employment Permit System (EPS), an exam to work in Korea, and was supposed to work in manufacturing. He ended up working in the meat freezing industry, where he suffered pneumonia because 5 e.g. NRs 70,000 for the Gulf countries, NRs 80,000 for Malaysia and NRs 118,000 for Algeria (ILO) 2 P a g e

3 of the cold, and returned to Nepal after only three months. Another migrant explains that he went to Malaysia through an agent in His visa was counterfeit and he and 51 others were arrested and sent back to Nepal where they were detained by the Police for investigation. After the would-be migrants lodged a complaint, the recruitment agency returned the fees paid and he went back to Malaysia through more formal channels, working in a factory producing computer parts. There are many other difficulties faced by migrants whilst abroad, including language barriers and different climates. Lack of information about the new work environment, including new technologies, can make it difficult to adjust. Interviewees explained that in recent years, many workers prefer to seek work in Malaysia as they often get to work in more comfortable conditions indoors, and can adapt more easily to the weather and the culture than they would in the Gulf. Box 2: The middlemen calls for more transparent recruitment Interviews suggest that some of the middlemen used by companies to recruit migrant workers misinform and over charge the migrants-to-be. Many workers do not understand the process, the costs involved or the nature of work abroad, with the result that they often end up with lower pay, different work or with different companies than those agreed. However, there has recently been some positive change. Workers now get the agreed pay and work based on skill and knowledge criteria because recruitment agencies in Nepal and hiring companies abroad have clear agreements approved in advance by the Ministry of Labour. One recruiter interviewed explains that he does not use middlemen but visits villages himself. His company reaches out to each household to find out what human resources they can supply to Gulf countries. He says his company provides detailed counseling with appropriate information so that people can make an informed choice and migrate with confidence. It is important to provide accurate information, he says. People who migrate with enough information are better prepared to tackle new and different environments. Remittances bring visible but slow progress to the community Some returnees manage to save money. I could pay off my loan and saved NRs. 8,000 per month says a returnee in Dhanusa. Many returnees invest their savings in building a home or buying land. A recent returnee explains: Our village used to experience fires every year because all the houses had thatched roofs, but now you see the change. The brick and cement houses are gradually replacing the old huts and we suffer fewer fires. Savings, however, are slow to accumulate and it sometimes takes several family members migrating in succession for the family to save enough to secure good housing. One returnee explains: In Qatar, I earned NRs. 12,000 a month, but I could not deposit my earnings there so I sent them home. My father used the money to pay back the loan I had taken to migrate and to buy food for the family. I also managed to support my brother to migrate to the Gulf without having to go to the moneylender. Now, we have begun to construct a house with the money my brother is sending. In a village of Nawalparasi, thanks largely to remittances, housing conditions have improved: thatch, corrugated iron and cement now coexist. 3 P a g e

4 Beyond constructing houses and purchasing land, giving a better education to their children is also a priority for many migrants. But a closer look at how remittances are spent, suggests that earnings also go to a large extent toward food and other regular family expenses, indicating a situation of dependence on remittances for day-to-day expenses while the main breadwinners are away. In some cases, migrants families use remittances to move from the villages to larger towns and district headquarters, seeking better education for their children. Little choice but to travel again Although those interviewed stressed that they would prefer to remain in Nepal, many have found little to do in Nepal upon their return and are considering migrating again. Returnees often face the same difficulties finding work upon their return as they did before leaving Nepal. A recruiter says that from his travels to villages he has not noticed any significant progress among returnees, but that upon return to Nepal most revert to their previous occupations, if they had one. One returnee, who came back to Nepal four months ago, noted that he is still unemployed and that the pay for work in the local market or small scale business is not enough to feed his family. He therefore plans to return to the Gulf. Another returnee states: I will go abroad when I get a good offer. I tried different jobs - I worked in a medicine factory and as an electrician - but I earned too little to feed my family. For those starting with marketable skills, there are more opportunities. One man explains: I got my job in Kuwait through a global company that employed me in Kathmandu. I was able to rise through the ranks in Kuwait and ended up as assistant manager. The same global company offered me a good job in Kathmandu but when my newborn son is older I may return to Kuwait since I regularly receive good offers. With remittances going mostly toward construction and other non-productive activities 6, there seems to be little entrepreneurship among returnees. I have heard of some former colleagues starting a goat and pig farm, but they are very few cases like that says a recent returnee, adding that he does not see any possibility to start a business in Nepal because it requires a too large an investment. Another returnee is of similar opinion: There are opportunities but this needs political stability. With so many strikes and bandhs, investment is not profitable. However, a middle manager who spent several years in the Gulf is nonetheless impatient to create his own enterprise: I am tired of working for others. I want to have my own business even if I earn two rupees a month. He however agrees that political stability and government policy towards investment are important elements in creating a conducive, economic environment. The few skills learned cannot be applied in Nepal An additional difficulty in using savings productively is the lack of applicable skills brought back from abroad. One recruiter claims that most workers fail to acquire new skills abroad and one migrant worker explains that he received no training whilst abroad, but was simply paired with a team for three months to learn the technology used. Another recounts, Over there, eight hours of work means work! You do not get time for rest or to learn. You have to operate as fast as the machine operates, often working overtime. In such an environment, he did not find time to enhance his skills. Another returnee offers an additional explanation: The technology I used abroad was more advanced than the one used here in Nepal, where people prefer to keep doing things the way they are used to. Therefore, since I returned to Nepal, I am 6 See Table 2.3, p. 24 in A rapid situation assessment on agriculture and migration in Nepal. Food and Agricultural Organization (FAO), ftp://ftp.fao.org/tc/tca/nmtpf/country%20nmtpf/nepal/thematic%20studies/migration%20_final_.pdf 4 P a g e

5 using the same skills as I did before I left. However, many migrants do learn new languages and are exposed to cultural diversity, hard working habits, and realize the importance of getting an education. One returnee explains that he could only speak Bhojpuri and Hindi before leaving his village but, as the only Madhesi among 400 other Nepali, he learned to speak Nepali whilst abroad. Like many other interviewees, he also realized the value of getting an education and Box 3: Politics and voting Migrants are increasingly aware of belonging to a large community that is not participating in Nepal s political life while abroad. One said: Many of the Nepali youths are working abroad, they do not have the opportunity to vote in Nepal as they cannot afford to travel back home. If the Government makes some sort of provision to vote through embassies or consulates, Nepali abroad as well as the nation would benefit. encourages the children in his village to attend school. Other notes that he learned Arabic, basic English and the importance of working efficiently. Many also speak about the healthy and hygienic lifestyles which they had in host countries, but say that they cannot afford to practice these when back in Nepal. Conclusion There have been many calls to improve the way in which labour migration is managed. The experiences gathered in this field bulletin from some of those who have returned from working abroad confirm that many opportunities to make the most out of the high demand for Nepali workers are being missed. Expensive loans are still a heavy burden for migrants, even though it can be argued that migrants are safe investments for financial institutions. With more information, migrants would less often fall prey to unscrupulous intermediaries or suffer unnecessary hardships and disappointments. With technical training integrated into their work, migrant workers would return from their experience abroad with more skills and better opportunities to invest and use their savings productively upon their return. As labour migration is a multidimensional process, it requires multi-sectoral approaches to address the challenges faced by returning migrants. Finally, there is a growing feeling among workers that the many intermediaries they use to go abroad benefit disproportionately from their migration. Therefore, if no effort is made for remittances to benefit all equally in the long run, stark fault lines may develop and migrants from poor disenfranchised communities, who toil hard and endure much to improve their lives, may become increasingly vocal, as they realize their sacrifices should benefit them more. Disclaimer: This field bulletin is prepared following a brief field study and also uses secondary data. The information presented in this field bulletin does not imply official endorsement or acceptance by the United Nations. Although the RCHCO aims to confirm all information independently, occasional factual inaccuracies can occur. United Nations Resident and Humanitarian Coordinator s Office (UN RCHCO) GPO Box: 107, UN House, Pulchowk, Kathmandu rchco.nepal@one.un.org Phone: , Fax: Visit the UN Nepal Information Platform at 5 P a g e