Alarming trend: Young talents are leaving Nepal

Brain drain is the ongoing exodus of educated, skilled, and talented people from one country to another. It is not just a migration of individuals, but a loss of valuable human capital that could contribute to the development of the homeland. For Nepal, this problem has become particularly acute: the country is systematically losing its youth and educated professionals, which has a profound and multifaceted impact on the economy, society, and the future of the nation as a whole.

The term “skill drain” itself highlights that the country is losing not just a portion of its population, but precisely those sections of it that have the greatest potential to contribute to innovation, productivity growth, and the development of key economic sectors. We are talking about the loss of “brains” – people who are capable of generating new ideas, developing advanced technologies, and managing complex processes. Since this drain is “ongoing,” its negative effects are not limited to the immediate moment, but tend to accumulate, creating a cumulative effect of talent shortage and exacerbating the country’s development problems in the long term. This threatens Nepal’s ability to modernize and its competitiveness in the global arena.

The Scale of the Exodus: Facts and Figures on Nepalese Youth Emigration

The scale of emigration from Nepal, especially among the youth, has reached alarming levels, as confirmed by official statistics. In 2024, 1.674 million Nepalese left the country, of which 1.2 million were men and 467,257 were women.¹This figure is especially significant considering that Nepal’s total population is approximately 30.8 million people.²

The majority of those leaving go abroad in search of work – in 2024 there were 856,422 such people (769,890 men and 96,197 women).¹Educational migration is also a significant flow: 119,409 students (64,335 boys and 55,068 girls) left Nepal to study abroad in 2024.¹This trend is confirmed by the fact that in the financial year 2023/24, more than 112,000 Nepalese students received the so-called “No Objection Certificate” (NOC) required to study abroad.⁴In addition, 66,835 people (34,544 men and 32,287 women) migrated from Nepal for permanent residence in 2024.¹

The geography of migration flows is also of interest. Traditional destinations for labor migrants from Nepal are the Persian Gulf countries (UAE, Saudi Arabia, Qatar, Kuwait) and Malaysia.⁶However, in recent years, there has been a rise in popularity of European countries such as Romania, Croatia, Malta, Cyprus and Portugal. In the first eight months of the 2024/25 financial year, the number of Nepalis who received work permits in Europe reached 34,366, up 46% year-on-year. Romania led the European destinations with 17,830 work permits.⁷

For students, the main destination countries are Japan (where more than 45,000 students went in 2023⁸, and 34,731 NOCs were issued in FY 2023/24⁵), Australia, the United States (where 15,090 Nepalese students were studying in the 2022/23 academic year⁸), the UK (which became the sixth largest source of international students for Nepal with a 63% growth in 2024 and issuance of 12,234 student visas⁸) and Canada.⁵

The high proportion of young people among emigrants, especially those leaving for education or their first job, means that Nepal is losing the most active, dynamic and potentially innovative part of its population at the very time when they could make the greatest contribution to the country’s development. This is not just a quantitative loss of the workforce, but a loss of future growth potential, “fresh brains” and energy needed for modernization. The increasing number of citizens leaving the country for permanent residence is a particularly alarming signal. It indicates deep disappointment and lack of faith in prospects at home, which may be related to a complex of economic, social and political problems. The fact that emigration for permanent residence is almost equally distributed between men and women may indicate either a tendency for entire families to emigrate, or that women are also actively and independently seeking opportunities for permanent residence abroad, not seeing long-term prospects for themselves and their loved ones in Nepal.

Table 1: Nepalese Youth Migration Overview (2024/2025 Update)

Why They Leave: An Analysis of Key Drivers of Migration

The decision to leave one’s home country is rarely spontaneous; it is often the result of a complex interaction of a number of factors. For Nepalese youth, these factors can be roughly divided into economic, educational, and socio-political, which together form powerful “push” forces from Nepal and “pull” forces from abroad.

Economic reasons play perhaps the leading role. The high level of youth unemployment, reaching approximately 20.8% in 2024¹⁰, leaves many young people without prospects at home. Even those who find work often face low wages and limited career opportunities, especially compared to what developed countries offer.¹²For example, the average monthly salary in Kathmandu is around $221.92, while in Sydney, Australia it can reach $3,711.31.¹³General economic instability, a lack of sufficient quality jobs and limited opportunities for entrepreneurship are exacerbating the situation, pushing young people to seek a better life abroad.¹²

Educational motives are also a significant factor. Many Nepalese students and their families seek higher quality education, which they feel is unavailable or underdeveloped in Nepal.¹⁴Problems in Nepal’s higher education system include outdated curricula, lack of practical training and modern teaching methods, limited choice of specialized courses, and inadequate resources in universities.¹⁶Foreign education is perceived as more prestigious, offering access to cutting-edge knowledge, modern research facilities and opening up better career prospects in the global labour market.¹⁷

Socio-political factors and overall quality of life contribute to the decision to emigrate. Long-term political instability and weak governance create an atmosphere of uncertainty and lack of faith in the country’s future.¹⁸The problems of corruption, nepotism and favouritism also demotivate the youth.¹⁹The desire for a better quality of life, including access to modern infrastructure, quality health care, a safer and cleaner environment, is a natural desire.²⁰Nepal, ranked 110th in the Legatum Prosperity Index²²and 85th place in the World Happiness Index in 2025²⁰, cannot yet offer a standard of living comparable to developed countries. Limited opportunities for innovation and research due to insufficient funding and weak infrastructure also discourage talented young people.¹²Finally, having family connections abroad and the influence of peers who have already chosen the path of emigration can facilitate the decision-making and the process of moving itself.²³

It is important to understand that the decision to migrate is rarely determined by just one factor. More often, it is the result of a complex interaction of economic, educational and socio-political aspects. For example, the low quality of education and its inconsistency with the demands of the labour market directly affect the employability of young people, exacerbating the economic reasons for leaving. Political instability and poor governance undermine confidence in the future of the country, hinder long-term planning and investment in key areas, including education and job creation. Thus, a young person faced with poor education, a lack of decent career prospects and general uncertainty sees migration as a comprehensive solution to their problems – it is not just a search for higher earnings, but a search for a system that functions more efficiently and provides better opportunities for self-realization.

Table 2: Key ‘Push’ and ‘Pull’ Factors for Nepalese Youth

Echo of the drain: Impact of talent drain on Nepal’s key sectors

The ongoing outflow of skilled youth from Nepal has a significant negative impact on the development of key sectors of the country’s economy, creating a shortage of specialists and slowing down progress.

Healthcare suffers from a severe shortage of doctors and nurses, especially in rural and remote areas. The doctor-to-patient ratio in Nepal is 1:1,721, which is well below the WHO recommended level of 1:1,000. In the Kathmandu Valley, this figure is slightly better (1:850), but in rural areas it reaches a critical value of 1:150,000.²⁶The nursing shortage is estimated at nearly 15,000: there are about 50,500 nurses working in the country against a need of 65,000; by 2030, the need is projected to be 81,000.²⁷The main reasons for the migration of medical workers are low salaries (the average annual salary of a doctor in Nepal is about $4,357, while a medical resident in the US can earn $63,400 per year²⁸), high level of job dissatisfaction (83.42% of doctors express dissatisfaction²⁸), poor working conditions and political instability. The consequences of such a brain drain are a decrease in the availability and quality of health services, especially for vulnerable groups of the population, which directly threatens the health of the nation.²⁶

Information Technology (IT) Sector, despite its growth and significant export potential (IT exports reached $515 million in 2022, and the government has set an ambitious target of Rs 3 trillion over the next 10 years³⁰), also experiences a shortage of skilled professionals such as software developers and engineers.³¹IT professionals are moving abroad in search of higher salaries, better career prospects, access to cutting-edge technology and opportunities for innovation.31Lack of funding and weak research and development infrastructure in Nepal also contribute to this outflow.12As a result, the pace of digitalization in the country is slowing down, its innovative potential and the competitiveness of Nepalese IT companies in the global market are declining.¹²

Engineering faces similar problems. The shortage of engineers is felt in the implementation of large infrastructure projects and in the development of industry.³³It is noted that even returning migrants with engineering skills often do not find a suitable ecosystem in Nepal to apply them.³⁴The reasons for engineers migrating are similar to those for IT specialists: the search for better working conditions, higher pay, and opportunities for professional growth abroad. The consequences are delays in the implementation of important infrastructure projects, dependence on foreign specialists, and a general slowdown in the pace of industrialization in the country.¹²

Agriculture, traditionally the backbone of the Nepalese economy, is also negatively affected by migration. The outflow of young and active labor from rural areas leads to its shortage.²⁴It is estimated that about 20% of agricultural land in Nepal remains unused due to the outflow of youth.³⁵This increases the burden on remaining family members, most often women and the elderly.²⁴Land abandonment or a shift to less labour-intensive crops often occurs, which can negatively impact food security and overall agricultural production.35Research shows that migration increases the likelihood of land becoming fallow by 16-24%.37Thus, the brain drain from the village threatens not only the traditional way of life, but also the country’s food security.

IN for the economy as a whole In Nepal, the brain drain represents a loss of human capital in which significant public and private investment has already been made, primarily through the education system.³⁰This leads to a decrease in overall labor productivity and the innovative potential of the economy.³⁸The World Bank notes that the slow development of promising sectors such as hydropower and tourism, as well as the continuing decline of the manufacturing sector, are partly due to the shortage of skilled labor and the generally unfavorable investment climate.³⁸Thus, the brain drain has a direct impact on Nepal’s long-term economic growth prospects and achievement of the Sustainable Development Goals.

The problem is aggravated by the fact that the outflow of specialists from one industry can indirectly harm others, creating a systemic effect. For example, the shortage of IT specialists³²can slow down the implementation of modern digital technologies in agriculture (agriculture, precision farming) or in healthcare (electronic medical records, telemedicine), thereby reducing the efficiency of these vital sectors. Similarly, the shortage of engineers³³affects the pace and quality of infrastructure development (roads, bridges, energy facilities), which is necessary for the growth of all sectors of the economy, including tourism, industry and agriculture. Thus, the brain drain is not just the sum of individual losses in various sectors, but a complex problem, where the weakness of one link weakens the entire economic chain, generating a cascading negative effect and synergistic damage to national development.

Table 3: Impact of labor brain drain on selected key sectors in Nepal

Money Transfers: Lifebuoy or Anchor for the Economy?

Remittances from Nepalis working abroad play a huge role in the country’s economy. They are so large that Nepal is among the world leaders in terms of the share of remittances in GDP. In 2023, this figure was about 26.89%.⁴¹, and by some estimates, Nepal ranks sixth in the world by this criterion.⁴²During the first nine months of the financial year 2024/25, remittance receipts reached 1.19 trillion Nepalese rupees (approximately US$8.74 billion).⁴³These figures clearly indicate the huge dependence of the Nepalese economy on external income.

The positive impact of remittances is undeniable. They play a significant role in reducing poverty and improving the living standards of many Nepalese families.⁴⁰For a significant portion of the population – 76.8% of households received remittances as of 2022/23⁴⁷– these funds are the main source of income. The money sent by migrants is mainly spent on current consumption: food, paying for children’s education, medical services and other daily needs.⁴⁷Remittances thus serve an important social function, ensuring survival and some improvement in living conditions for millions of Nepalese.

However, this positive picture hides serious problems and risks. One of the main problems is that a significant part of these funds is not directed to productive sectors of the economy, such as industry, modern agriculture or innovative projects, which limits the possibilities for long-term sustainable economic growth.⁴³There is a risk of developing the so-called “Dutch disease”: the inflow of foreign exchange from remittances can lead to an appreciation of the real exchange rate of the national currency, which in turn reduces the competitiveness of Nepalese exports and stimulates imports of consumer goods financed by the same remittances.⁵⁰

In addition, it creates a dangerous dependence of the economy on external income, making it vulnerable to global economic shocks or changes in the migration policies of recipient countries. Such dependence can also reduce the motivation to work at home and lead to a further reduction in the labor supply, especially in labor-intensive industries such as agriculture.⁵⁰Insufficient financial literacy among remittance recipients and a lack of accessible and attractive financial products targeted at migrants and their families also hinder the effective investment of these funds in the economy.⁵⁰

A vicious circle thus emerges. The loss of skilled and motivated youth due to lack of prospects at home leads to increased remittances. These in turn support consumption but do not create sufficient quality jobs or stimulate the development of productive sectors at home. As a result, the economy continues to stagnate in certain respects and the pressure on government and businesses to undertake the deep structural reforms needed to create an attractive environment and retain talent may weaken. This in turn perpetuates the problem of talent loss, as young people continue to see insufficient reasons to stay and grow in Nepal. Reliance on remittances may thus mask the underlying structural problems of the Nepalese economy and delay necessary, albeit perhaps difficult, solutions.

The War for Talent: What Can Companies Do to Retain Employees?

With a constant outflow of skilled personnel, Nepalese companies are faced with the urgent task of not only attracting but also retaining valuable employees. This requires a comprehensive approach that includes both material incentives and the creation of a favorable working environment and growth prospects.

Competitive salary and benefits packages are the basis for retaining specialists. Companies must provide fair compensation that corresponds to market rates, qualifications and experience of employees.⁵²In addition to the base salary, important benefits such as health insurance, paid holidays, a bonus system, possible subsidies for transportation or food, as well as pension and savings programs play an important role.⁵²These are the basic expectations of any qualified professional, and meeting them is the first step to building a long-term employment relationship.

Opportunities for career growth and professional development – another key factor. Young and ambitious professionals strive for continuous learning and development of their skills. Companies that invest in their employees through training, advanced training courses, certification programs demonstrate their interest in their future.⁵²The introduction of mentoring and coaching programs, where more experienced colleagues share knowledge and guide young professionals, also contributes to their professional development.⁵²It is important to create clear and transparent career paths within the company and encourage internal promotions, letting employees know that their efforts and loyalty will be rewarded.⁵²

Creating a positive and supportive work culture is of great importance. A toxic or unfavorable work environment is one of the leading reasons for employee turnover. It is necessary to actively work on creating a culture based on trust, respect, open communication and collaboration.⁵³Recognising the achievements and contributions of each employee, for example through personalised rewards or special recognition programmes, increases their motivation and loyalty.⁵²Ensuring a healthy work-life balance, including the possibility of flexible hours, remote work (where applicable) and encouraging regular vacations, is also an important aspect of modern corporate culture.⁵²Implementing ethical business practices, transparency in decision making and fair treatment of all employees create the foundation for long-term trust.⁵³Regular feedback and employee involvement in important discussions and decision making help them feel included and valued by the company.⁵²

Some Nepalese IT companies can serve as an example of successful talent retention practices. For example, F1Soft places emphasis on innovation, flexibility in work, customer focus and a culture of continuous learning. The company actively develops teamwork and strives to ensure employees a balance between work and personal life, providing opportunities for career growth and professional development.⁵⁸Another company, Fusemachines, focuses on developing talent in the field of artificial intelligence by offering scholarship programs (such as the AI ​​Fellowship Program), mentoring, and creating an environment that encourages innovation and solving complex technological problems.⁶⁰These examples show that even in the context of Nepal, with its specific challenges, it is possible to create attractive and competitive conditions for highly qualified specialists.

Effective employee retention strategies not only reduce turnover and its associated costs, but also have a broader positive impact. Companies that are known for caring about their employees increase their attractiveness in the labor market, making it easier for them to recruit new talent in the future. In the Nepalese context, where social ties are strong and personal recommendations are important, a reputation as a good employer can spread quickly, turning satisfied employees into “brand advocates” for the company. This, in turn, indirectly contributes to business growth and success. Thus, investing in employee retention is also an investment in attracting new talent and strengthening the employer brand, creating positive synergies.

Table 4: Employee Retention Strategies by Companies

Creating the Future Home: The Role of Public Policy and National Initiatives

The Nepalese government has taken steps to address the brain drain and create a more attractive environment for young people within the country. These efforts range from employment programs to support for innovation and education reform.

In the area youth employment was launched Prime Minister’s Employment Programme (PMEP )in 2019, with the ambitious goal of providing every unemployed citizen with at least 100 days of employment per year. However, despite good intentions, the program has faced problems with effectiveness: it often fails to reach the most needy segments of the population, actual employment is shorter than stated, and there are cases of political interference in the distribution of jobs.⁶⁵A new policy has been announced for the financial year 2025/26 Youth Startup Program, targeting Generation Z (born between 1997 and 2012). The initiative aims to stimulate domestic job creation and reduce reliance on foreign employment by supporting youth start-ups.⁶⁷In addition, the government announced the period from 2025 to 2035 A Decade of Promoting Domestic Employment, with the aim of ending forced labor migration.⁶⁶

Considerable attention is paid to policy to support startups and innovations. In 2024, it was approved National Startup Enterprise Policy 2024, aimed at attracting foreign direct investment (FDI) and investment from non-resident Nepalese (NRN). The policy provides for the establishment of the Nepal Startup Fund.⁶⁹A formal definition of a “start-up business” (a company less than 10 years old with an annual revenue of less than Rs 150 million) was introduced and a Start-up Enterprise Credit Operation Work Procedure 2024 was developed with a total budget of Rs 1 billion. This procedure envisages providing soft loans to start-ups at 3% per annum.⁷⁰In the financial year 2024/25, 165 startups were funded out of 5,158 applications. Tax incentives are also provided: startups can receive a 100% exemption from income tax for the first five years of their activity.⁷⁰

Reforms in Higher Education are also on the agenda. There is recognition of the existing problems with the quality, relevance and effectiveness of higher education, as well as its inability to produce graduates in demand in key economic sectors such as information and communications technology (ICT), energy and agribusiness.⁷¹The proposed reform measures include the creation of an independent quality assurance and accreditation agency for educational institutions, a review of curricula with an emphasis on developing critical thinking and practical skills that meet the needs of the labour market, and the introduction of performance-based and efficiency-based university funding models.⁷¹In addition, the School Education Bill 2023 has been introduced in Parliament, aimed at reforming the school education system in accordance with the principles of federalism.⁷²

The government also pays attention to Non-Resident Nepalese (NRN) Policy and attracts their investments. The Non-Resident Nationals Act 2064 (2008) and its bye-laws of 2009 aim to encourage the participation of NRNs in the development of Nepal and to stimulate their investments in the country’s economy.⁷³The legislation allows NRNs to acquire land for residential purposes, invest in industrial and commercial enterprises, and provides mechanisms for the repatriation of investments and profits.⁷⁴This is an attempt not only to attract capital, but also to turn the “brain drain” into a “brain circulation” or, at least, into an “inflow of capital and experience”.

Despite these and other government initiatives, there is a significant gap between the declared policies and their actual effectiveness on the ground – the so-called “policy-practice gap”. Bureaucratic obstacles, insufficient coordination between different government departments, a lack of financial and human resources, and the politicization of decision-making and resource allocation can undermine even the most thoughtful and promising initiatives. For example, reports on the Prime Minister’s Employment Program point to the failure to achieve stated goals and political interference.⁶⁵The startup lending program has funded only a small number of projects out of more than five thousand applications, which may indicate the complexity of the procedures or the limited availability of funds.⁷⁰The success of government policies to retain talent and stimulate economic development depends not only on the development of sound strategies, but also, to an equal extent, on the creation of transparent, accountable and effective mechanisms for their implementation, as well as on ensuring long-term political stability and consistency in the implementation of reforms.¹²

Conclusion: Towards a Prosperous Nepal – Challenges and Opportunities

An analysis of the problem of Nepal’s brain drain reveals a multifaceted picture. The scale of the youth outflow, especially of educated and skilled professionals, has reached a level that threatens the country’s long-term development. A combination of factors, including economic hardship, dissatisfaction with the quality of education, socio-political instability, and the desire for a better quality of life, are creating powerful “push” forces. The consequences of this exodus are felt in all key sectors – from health care and IT to engineering and agriculture, undermining their potential and slowing down modernization. Remittances, while a lifeline for many families and an important component of GDP, also create dependency and do not always facilitate investment in productive sectors, which may preserve existing problems.

It is important to recognize that the brain drain is not an isolated phenomenon, but rather a symptom of deeper structural problems in Nepal’s economy, education system, and governance. The country has significant potential, especially given its “demographic window” – a relatively young population structure that will remain in place until about 2047.³⁰This period offers a unique opportunity to harness the energy and talents of youth for the benefit of national development. However, this requires urgent, decisive and comprehensive action.

To achieve a prosperous Nepal that can retain and attract talent, efforts need to be focused on several key areas:

1. Creating real economic opportunities and quality jobs within the country. This requires stimulating the private sector, attracting investment (both domestic and foreign) into promising sectors such as hydropower, tourism, agro-processing, information technology, and creating a favorable business climate.
2. Continuation and deepening of reforms in the field of education at all levels. The emphasis should be on improving quality, ensuring that training is practically oriented, that curricula meet the needs of the modern labour market and that research potential is developed.
3. Improving the overall investment and business climate. This includes combating corruption, ensuring political stability, strengthening the rule of law and simplifying administrative procedures to increase the confidence of investors and entrepreneurs.
4. Developing effective mechanisms for involving the diaspora (NRN) in the development of the country. This concerns not only attracting their financial investments, but also using their knowledge, experience, professional connections and innovative ideas.
5. Formulation of a comprehensive national talent management strategy. Such a strategy should include measures not only to retain existing specialists, but also to attract qualified personnel from abroad, including the return of our own citizens.

Ultimately, solving the brain drain problem is not just a matter of keeping people from leaving. It is a matter of building a country that people will want to stay in and return to, to live, work, and raise their families. This requires a fundamental shift in thinking and approach – from tackling the symptom (migration) to addressing the root causes (lack of opportunities, poor quality of life, lack of prospects). Success in this regard will depend on the synergy between the government, the private sector, academia, and civil society at large. Only by working together and sustained can Nepal turn the challenge of brain drain into an opportunity to build a prosperous and competitive future.

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