West Asia conflict slows down intake of Nepalis in foreign jobs.
Indra Dev Yadav, who comes from Ward 5 of Bariyarpatti in Siraha, has been looking for work abroad for the past two months by going to human resource firms. In the hope of finding employment in the United Arab Emirates (UAE), he arrived in Kathmandu in the third week of March. He has since participated in interviews with four distinct recruitment agencies, but his name has not been included on any selection lists. He stated on Friday while waiting in line for an interview at a manpower agency in Basundhara, Kathmandu, "I thought paying the money would guarantee me a job abroad, but that’s not how it works." I consistently fail the interviews.
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Nepal has the highest youth unemployment rate in South and Southeast Asia, at 20.6%, according to data from the World Bank. Sharp drop in the number of new work permits. The Department of Foreign Employment's data show that, compared to the same period last year, the number of new labor approvals decreased by nearly 19% in the first ten months of this fiscal year. 452,311 individuals received new labor permits during the comparable period of the fiscal year 2024-2025.
During the same time frame of the current fiscal year, that number decreased to 367,100. UAE, Saudi Arabia, Qatar, Kuwait, Romania, Japan, South Korea, Malaysia, Croatia, and Bahrain are the top ten destinations for Nepali workers. According to department records, the number of new labor approvals continued to rise from the middle of November to the middle of June of the fiscal year 2024–25. 53,646 workers received permits alone between the middle of June and the middle of July, the highest monthly number for the fiscal year.
On the other hand, the only times during the current fiscal year that labor approvals exceeded 40,000 were from mid-July to mid-August, mid-August to mid-September, and mid-April to mid-May. The remaining seven months saw approvals every month ranging from 22,000 to 31,000. Additionally, recruitment agencies assert that major labor markets' demand has diminished since the Gen Z protests of September 8 and 9, 2025.
The sector has come under sustained pressure, according to Rajendra Bhandari, the former president of the Nepal Association of Foreign Employment Agencies. He stated, "We have been going through a very difficult period after the Gen Z movement." Our most popular destination, the UAE, was closed for some time. The rule that required UAE embassies to verify police reports was then implemented. West Asian tensions grew at the same time. The United Arab Emirates (UAE) has long been a popular destination for Nepali workers in both skilled and unskilled fields. Nearly 200,000 of the 500,000 Nepalis who received new labor permits during the previous fiscal year relocated to the UAE, or 39.76 percent of the total. This percentage has now decreased to 25%. The UAE tightened visa regulations for Nepali workers in response to the Gen Z uprisings and suspended labor and visit visas for nearly three months.
It implemented a policy on December 4 that mandates police report certification from the UAE embassy, resulting in an additional expense of approximately Rs14,000 for employees. The United Arab Emirates (UAE) has continued to tighten its Emiratization policy in an effort to increase private sector employment in the country. Companies with 50 or more employees are required to ensure that Emirati nationals fill 10% of skilled positions by 2026. Companies that don't comply face severe penalties, which forces many employers to cut back on hiring foreign workers.
The UAE economy has also been impacted by the conflict between the US and Iran, which has further decreased demand for labor. Suraj Sharma, a Nepalese employee at a major hotel in the United Arab Emirates, stated, "Most hotels are not even 20% booked right now." "This leaves us with only two choices: either stay without pay and benefits or come back to Nepal on unpaid leave." Additionally, Saudi Arabia hinders recruitment. Additionally, the flow of Nepalese workers to Saudi Arabia has decreased. Workers have been reassigned to other large projects or sent home as a result of the halting of several major projects under the ambitious NEOM initiative. In the past, the project alone employed around 80,000 Nepalis.
Recruitment has become even more complicated as
a result of Saudi Arabia's introduction of the mandatory Skills Verification
Programme (SVP). Workers in five occupations are required to pass a skills assessment
under the program, which went into effect on June 17 before visas can be
issued. Manpower agencies have objected to the policy, claiming that it was
implemented without Nepal's consent, could encourage certification fraud, and
could result in additional costs of approximately Rs15,000 per worker. The
planned implementation was put on hold as a result of protests, and the testing
company later issued a notice officially suspending the program. Qatar demand
remains weak after the World Cup 2022 peak
The labor market in Qatar also continues to be sluggish. Qatar was one of the most popular destinations for Nepali migrant workers before the FIFA World Cup 2022, with approximately 100,000 Nepalis traveling there annually. At its height, Qatar hired 30,000 foreign workers each month. Currently, that number is only 2,000 to 3,000. The majority of Nepalis employed in Qatar are current employees rather than newly hired workers. Even for those who are already in the country, the absence of major construction projects following the conclusion of the World Cup has reduced employment opportunities. An official from the Nepali embassy in Doha stated, "Most employers are cutting workforce numbers." In the face of regional decline, Malaysia provides some relief. Malaysia has reduced its quota for foreign workers from 15% to 10%.
Nepal's labor market has remained unstable for the past five years, and recruitment from Nepal has only recently resumed in the manufacturing sector after being suspended for two years. Between the middle of April and the middle of May, only about 9,000 Nepali workers traveled to Malaysia, which is significantly less than in previous years. Malaysia, on the other hand, is anticipated to provide some relief given the diminishing opportunities across the Persian Gulf. According to Malaysia's Human Resources Minister Ramanan Ramakrishnan, widespread job losses have resulted from geopolitical instability throughout the world. Ramanan was quoted by Bernama, a local media outlet, as saying, "The number of Malaysian citizens who lost their jobs across various economic sectors reached 38,953 in the first five months of this year [2026] alone." Manufacturing, wholesale and retail trade, auto repair, and administrative and support services, according to Ramanan, are the most affected sectors. The unemployment rate in Malaysia is currently three percent.
Expected to further limit opportunities for foreign workers, the government is
moving displaced workers into sectors with a labor shortage. At 1,700 ringgit
(roughly Rs63,000), Malaysia currently has one of the highest minimum wages
among major destinations for Nepali workers. Workplace risks are exacerbated by
global shocks. Conflicts involving the United States, Israel, and Iran have had
a greater impact on employment than the COVID pandemic, according to a May 18
report from the International Labor Organization (ILO). According to the
report, nearly 40% of jobs in the Gulf are at risk, particularly in the fields
of construction, manufacturing, transportation, trade, and hospitality. From
March 1 to April 20, the Department of Foreign Employment put a halt to the
approval of labor for West Asian nations as a result of the conflict. During
that time, employers refused to renew expired visas, and thousands of workers
were unable to use visas that had already been issued. The ILO report further
states that the conflict in West Asia has slowed production, reduced
recruitment, and cut overtime work across multiple industries.
Approximately 60% of
Nepalese migrant workers are employed in Gulf nations. Before the conflict
began, approximately 1.9 million Nepalis were employed in the region, according
to the Ministry of Foreign Affairs.
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