Kathmandu, Nov 3: Nepal must make better use of its working-age population by creating productive jobs, improving skills and strengthening social protection, the World Bank has said in a new report. It also calls for reforms to help the country convert remittance income and the skills of returning migrant workers into long-term economic gains.
The report, Demographic Change in South Asia: From Tailwinds to Headwinds for Development, says South Asia has 1.17 billion people of working age, but this demographic advantage is nearing its peak. The region’s working age population is expected to begin declining in less than a decade. By 2049, people aged 65 and above will account for 14 per cent of the population.
Nepal has more time to prepare than its neighbours. Its working age population is projected to peak in 2047, with the country expected to become an ageing society by 2059.
Remittances account for around 25 per cent of Nepal’s GDP and contributed 40 per cent of poverty reduction between 2001 and 2011. However, migrant workers returning home earn less than other workers for nearly three years, indicating that their overseas experience and skills are not translating into higher domestic productivity.
The report also points to high teenage pregnancy, uneven access to healthcare and low female employment. Around 60 per cent of doctors work in urban areas, while only 28.4 per cent of health facilities are prepared to provide services for non-communicable diseases. Women work an average of nine fewer hours a week than men, partly because of domestic and care responsibilities.
Around 91 per cent of workers aged 65 and above are in the informal sector, leaving most without contributory pensions. The World Bank recommends expanding Nepal’s Social Security Fund, established in 2018, and retaining the monthly Rs 4,000 old-age allowance for eligible citizens. It also urges the government to link vocational training with employment opportunities and practical skills.
Across South Asia, only 60 per cent of working-age people are employed, and 88 per cent of those with jobs work informally. Just 17 per cent of working-age people contribute to pension schemes, while only 10 per cent of older people receive pension benefits.
World Bank South Asia Vice President Johannes Zutt said the region was ageing before reaching higher income levels. He called for better jobs and early preparation for rising healthcare, long-term care and pension needs.
The report also urges Nepal to improve access to finance for small businesses, simplify regulations, invest in education and healthcare, remove barriers to women’s employment and encourage savings and investment.
People’s News Monitoring Service
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