The formal signing of a Mem­orandum of Cooperation (MoC) between Nepal and Japan this week on labor migra­tion has opened doors for Nepali workers to be employed in Japan. Thus far South Korea has been an attractive destination for skilled and semi-skilled Nepali work­ers. The opening of the Japanese market will help close the gap between the population entering the workforce and the number of jobs created at home. It is also significant in that it will expose our workforce to additional skills and best practices that can be transferred back to Nepal.

 

Understandably, there has been some criticism of this lat­est MoC—particularly on the eve of the second Nepal Investment Summit. Many find the govern­ment’s approach contradictory. On the one hand, it wants to bring in billions of dollars in foreign investment, but on the other, it is actively encouraging its skilled population to go abroad.

 

Faulty reasoning

According to this line rea­soning, if the plans to attract billions of dollars in investment are to materialize, Nepal needs to produce a skilled workforce to underpin a foreign invest­ment-fueled growth.

 

While this looks like a valid argument on the surface, it misses several points. One, an increase in investment flows does not hap­pen in one go; most likely it will happen gradually over several years. Two, investments such as in hydropower and infrastruc­ture, which will absorb a large portion of the money flow, do not necessarily create many jobs and often require international-lev­el technical know-how. Three, the argument that exporting workforce eats into a country’s ability to develop is not entirely true. In fact, returning migrants bring in lots of expertise just by being exposed to a differ­ent work environment.

 

Exposure to Japan’s sophisti­cated and efficient work environ­ment can only be a positive thing. Besides being a win-win solution for Japan’s problem of a shrinking workforce and for the migrant workers’ families, Nepal will also benefit. If there are opportunities back home, many will choose to return. After all, there is no place like home.

 

Is Nepal capable though?

But doubts remain about the Nepal government’s ability to timely meet its end of the obliga­tion under the MoC. Since this is a government-to-government (G2G) arrangement, there are fears that Nepal will be too slow to set up a system to send workers. Nepal is the only South Asian nation to be selected as a source coun­try, but there are other countries competing from South East Asia. Tokyo plans to take approximate­ly 70,000 workers a year for the next five years.

 

In early 2011, Nepal botched a similar opportunity when our bureaucracy sat on a request from Japan that would have created a potential export industry. In the aftermath of the earthquake and tsunami in March 2011, Japan faced severe shortages of food supplies as the twin disaster caused disruptions to its supply chains. To address the issue of food insecurity over the long run, Tokyo approached several countries to produce specific food products for its population. For a developed country, Japan already has a very low food self-sufficien­cy level. Several estimates suggest that less than 40 percent of food consumed by its population is produced domestically.

 

Tokyo had reportedly sub­mitted a proposal to Nepal to grow food in the Dang Valley for the Japanese population. Because there was no response for several weeks, Japan report­edly took the proposal to anoth­er East Asian country, given the urgency of the matter.

 

Another opportunity came up in early 2017 when Qatar approached Nepal for vegetable, spices and other supplies in the wake of a blockade imposed by its Gulf neighbors. While there was discussion between the private sector and government officials in Nepal, it did not result in any sig­nificant increase in Nepali exports to the Gulf nation. One reason was the lack of harmonization of food quality standards in Nepal in tune with global practices.

 

Not a long-term solution

This clearly shows that Nepal’s private sector can benefit from more insight and exposure from countries that are globally com­petitive in terms of production and services. One way to bring this expertise is by bringing in more FDI and the attendant know-how. Another way is to give more of our people opportunity to work abroad in skilled sectors.

 

Clearly exporting our workforce is not a long-term solution, but in the short to medium term, this approach provides tangible bene­fits to all the parties involved—pro­vided there is no exploitation and the working conditions are right.