Remittance earnings boost villages — usually


A village in Achham district, Far-western Nepal, 2017.
A village in Achham district, Far-western Nepal, 2017.

The remittances that migrant labourers send back to their countries contribute massively to those economies, but the impact on poverty reduction is much more complex, as a new book by Ramesh Sunam details

This article was published in Nepali Times on 15 September 2020.

As you might expect, the remittance village is punctuated by smooth, concrete houses rising among their weary-looking brick, mud and bamboo neighbours, a settlement where shiny motorcycles whine back and forth.

 But in the remittance village you will also find residents who cannot even afford the price of a flight ticket to join the growing queue of fellow villagers trooping overseas to earn. It is also a place where going to work abroad actually drives some households into poverty instead of lifting them out of it. 

This is why author Ramesh Sunam’s book, Transnational Labour Migration, Livelihoods and Agrarian Change in Nepal: The Remittance Village is so valuable. It precisely details the economic, sociocultural and even political forces that shape the livelihoods of rural people, among which is transnational labour migration (TLM) whose earnings are sent home as remittances. 

That cash has largely propped up Nepal’s economy in recent decades, at one point making up about one-third of GDP. Today it is about 25% and at any given time, 1 in 5 working age Nepalis is overseas for work. A recent World Bank report ranked Nepal as the largest remittance-receiving country in South Asia and the fifth largest in the world as a share of GDP.   

Pre-Covid, the International Labour Organisation (ILO) estimated that 164 million people were officially working outside their home countries although, notes Sunam, the actual figures would be much higher with the inclusion of ‘undocumented’ migrants. A little over 40% of those migrant workers were women.

Panchayan village, Sunsari district

Spotlghting the people and livelihoods of Panchayan village of Sunsari District in Province 2, situated between Dharan and Itahari, The Remittance Village is based on field work that Sunam did between January 2012 and February 2013. 

An academic endeavour, the book can be challenging for non-specialists. But Sunam, an assistant professor at the Waseda Institute for Advanced Study, at Waseda University in Tokyo, clearly and consistently signposts and summarises the contents of each chapter of this compact read. The insights generated will be useful for anyone who wants to better understand one of the key economic drivers and policy issues of today’s Nepal, particularly with labour migration threatened by the effects of the Covid-19 pandemic. 

Sunam concludes that various factors — including of course crossborder migration — are weakening the bonds between villagers and the land, but that the same cannot be said for the poorest rural residents, for whom working the fields remains a key step in the climb out of poverty. 

He writes: ‘TLM does offer a pathway out of poverty: over two-thirds of migrant households changed their status from being poor to non-poor in this way. It is, however, important to highlight that these households became successful through a diversification strategy by combining migration with other farm and non-farm pursuits.’ 

Need to work at home while toiling abroad

Sunam tells the story of Aman Chaudhari, who spent four years working in a garment factory in Dubai to try and better the lot of his family. Meanwhile, his wife Mena continued sharecropping in farmers’ fields in Panchayan, also working as a wage labourer on villagers’ farms. After Aman returned, they built a house on a small plot of land bought with his remittances, sent their children to a private school, and vowed that Aman would not migrate again to work. 

On the other hand, the poorest of Panchayan’s people, who lack the clout to even get loans from the local money-lender, struggle to pull themselves up. Often landless and burdened by illiteracy and low caste status, they are unable to finance the visa, ticket and administrative requirements to undertake TLM so they remain at home, just scraping by. 

In The Remittance Village, Sunam takes nothing at face value, ‘It’s not that simple’ could have been the subtitle of this book. For example, it might seem obvious that when villagers migrate for work they open up space for poorer residents left behind to take over tilling the land. But, Sunam notes, the overall decline in workers because of TLM means that some land owners who are unwilling to pay the higher wages called for by the shrinking labour supply choose to stop working their land altogether, actually resulting in fewer opportunities overall for the poorest residents to earn. 

Even for migrants themselves, the experience can be negative, with lasting implications, Sunam writes. ‘Migration has not just reduced poverty or helped poor households prevent their further impoverishment. It has also exacerbated and (re)produced poverty.’ He tells the story of Ajit Magar, who migrated to the United Arab Emirates in 2010 dreaming to save enough to build a house to replace the family’s hut, and to send his daughter to private school. 

“I cannot imagine building a new house. Lenders visit me almost every week, forcing me to clear their loans soon. I have never faced such a difficult situation in the past.”

— Ajit Magar, whose overseas contract ended prematurely

Six months after Magar arrived, his company stopped working and he had to return to Panchayan, burdened by debt. ‘At the moment I do not have money to buy a warm blanket to beat this cold winter,’ he told Sunam. ‘I cannot imagine building a new house. Lenders visit me almost every week forcing me to clear their loans soon. I had never faced such a difficult situation in the past.’ 

Just as the causes of rural poverty are complex, so must the solutions be. Here is where I would have appreciated more fleshed-out ideas from Sunam, who obviously cares deeply about the livelihoods of the rural poor. His suggestions include: 

–  A policy ‘to address the needs of poor households who cannot make their way out of poverty through migration or non-farm employment’

– Preventing the conversion of farmland for speculative, non-agricultural purposes, a process that leaves Dalits and the landless without access to and control over land as well as challengedto produce food for their own consumption

– To provide access to land and other resources,‘distributing unused public land and barren forest land (forest land in law but with no trees) to the current occupants, if they are landless, through a community-based land-titling programme.’

Yet, having described so meticulously how crossborder migration is not itself a solution to rural poverty but just one of many factors that intersect to shape the lives of residents of the remittance village, it is understandable that the task of further articulating and designing those solutions should be left to another researcher. 

Transnational Labour Migration, Livelihoods and Agrarian Change in Nepal: The Remittance Village

By Ramesh Sunam, Routledge, 2020, 140 pages, £120 (hardback) £33.29 (e-book), ISBN 9780367471569

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