IMAGE: AP
ARUN RAI, a chef from Dharan, has been waiting since March for a call from the five-star hotel in Abu Dhabi that sent him home on unpaid leave. Guests thinned after America and Israel began striking Iran on February 28th, and the hotel cut its staff to a fifth. He is losing about 7,000 dirhams (some Rs287,000) a month, and his visa expires within a month. Mr Rai is one of about 1.9 million Nepalis in the Gulf, nearly 60% of all Nepalis working abroad, according to the foreign ministry. The government has no reliable count of how many have lost jobs or come home on leave.
Hiring can be counted. Between the start of the war and mid-September, the Department of Foreign Employment issued 109,249 new labour approvals for Gulf jobs, down 52% from 228,165 a year earlier.
The fall was steepest in the UAE (59%) and Saudi Arabia (57%), followed by Bahrain (45%), Kuwait (43%) and Qatar (35%). Oman, less touched by the fighting, took 24% more. Renewals held steady in Saudi Arabia, the UAE and Qatar, which softens the national totals: in the year to mid-July first-time approvals fell by nearly 100,000 to 406,519, while renewals rose by over 52,000 to 385,783.
Remittances have not yet noticed. Nepal received Rs2.363trn in 2025-26, up 37.1%, and the month to mid-August brought Rs215bn, up 21.2%. Guru Prasad Paudel, the central bank’s spokesman, said the money comes from workers who left six months earlier, and that more of it now travels through banks rather than informal hundi channels. The Nepal Rastra Bank puts the Gulf’s share of remittances at 40% to 45%. On that basis the region sent home some Rs950bn to Rs1.06trn last year, about five times the Rs191bn the state spent on capital projects.
The lag may not last. In early April the World Bank projected that Gulf growth would slow to 1.3% this year from 4.4% in 2025; it has not publicly revised the forecast. Qatar’s output fell 7% in the first quarter, with energy production down 25.8%, and Reuters has estimated its lost gas sales at $24bn. Houthi attacks on Saudi Arabia, including a drone strike on the East-West oil pipeline, have disrupted projects such as Neom and the Red Sea developments, which employ thousands of Nepalis. A ceasefire between America and Iran collapsed in July. On September 26th President Donald Trump rejected Iran’s offer to reopen the Strait of Hormuz within seven days, and the UAE’s state oil company has said full flows will not resume before 2027 even if a deal comes quickly.
Naradnath Bhardwaj, a former ambassador to Qatar, described the order in which employers cut: hiring stops first, then overtime, then temporary and lower-skilled staff. Nepal has so far seen the first. The International Labour Organisation says about 40% of Gulf workers are in sectors at high risk of job cuts, with retail (17%) and construction (14%) the largest; both employ many Nepalis. The UNDP estimates that unemployment among low-skilled Gulf workers could rise by 3 to 4.5 percentage points if the disruption persists. Nabaraj KC, whose agency has supplied workers to more than 2,000 Gulf employers, said new investors have not appeared, so there are few new projects to staff, and Nepali agents now compete for scarce openings with their counterparts in Africa and India.
Nepal is better placed to absorb a fall in dollars than a fall in jobs. Reserves of $25.84bn in mid-August covered 18.8 months of imports of goods and services. The labour market has less slack. About 500,000 young Nepalis reach working age each year, according to the World Bank; 745,000 unemployed people have registered at local employment centres; and the economy grew by 3.85% in 2025-26. Those who cannot leave, and those who return, will compete for work in an economy that has not been generating enough of it. The labour ministry is preparing a ten-year employment programme and says a scheme for returning workers could start this year.
The central bank’s next monthly report, covering the period to mid-September and due in mid-October, is the first to sit past the six-month mark that Mr Paudel described. If the approvals that vanished from March onwards are going to show up in remittances, that is where they will start to appear. ■
