Concerns Over Impact of Iran Conflict on Overseas Employment and Remittances, Nepal Government Seeks Solutions

Nepali officials have been analyzing the potential negative effects of the prolonged conflict in the Middle East, particularly in Iran, on the employment of Nepali workers there and on remittances they send home. Concerns have heightened following the failure of peace talks mediated by Pakistan between the US and Iran over the past weekend. However, officials report that so far, the ongoing conflict has not caused significant negative impact on overseas employment or remittance inflows.

It is estimated that around two million Nepalis, both skilled and unskilled, work in Gulf countries. Approximately 40 percent of Nepal’s remittances are sent from Gulf countries. Officials warn that if the conflict prolongs and employment opportunities in the Gulf region are affected, there could be adverse consequences for remittances as well. Mahesh Bhattarai, Chief of the Economic Policy and Analysis Division at the Ministry of Finance, stated, “There was a slight decrease in that share during the month of Falgun; however, with data from only one month, no definitive conclusion can be drawn. Nonetheless, if the situation extends, there is no doubt employment opportunities will diminish.”

To conduct a thorough analysis of the situation, the Ministry of Finance, under newly appointed Finance Minister Swarnim Wagle, has formed a special task force led by division chief Bhattarai to study the matter. Meanwhile, labor ministry spokesperson Meena Paudel has issued a cautionary note, saying that although there has been no direct impact on workers’ employment so far, the current situation may not sustain in the long term. She added, “It has been reported that some employers have expressed concerns or sent messages to workers in the Gulf region asking them to return home.”