If things remain unchanged, Malaysia is likely to close its labor market to Nepalese migrants. Known as a lucrative market for Nepalese security guards, Malaysia annually is absorbing over 200,000 Nepalese workers.

Angered by an unfriendly attitude shown by Nepal just a week after assuming power, new Malaysian government, led by Mahathir Mohammad, is reportedly considering suspending recruitment of Nepalese migrant workers to Malaysian companies.

As Nepal continues to take a rigid stand on labor issue, pursuing its demands, Malaysia’s new government, which is busy handling its own internal issues, will likely discontinue the agreement.

At a time when Nepal is yet to generate employment necessary for new labors entering Nepal, the Malaysian decision will prevent at least 3000-4000 thousand Nepalese entering the Malaysian market.

The recent decision of Air Asia to suspend its flights to Kathmandu completely from October 13, for at least one year, citing the shortage of passengers indicates the likely decision of Malaysian government.

The decision of Malaysian low-cost airline company, which has cited lack of adequate passengers for suspending its flights to Nepal for one year, will even have a drastic impact on Nepal’s tourism sector.

Air Asia had been conducting four flights a week to Kathmandu on an average through its Airbus 330 aircraft with 274-seat capacity. According to the company, it had been flying with only 50-60 passengers on an average in the recent times.

The recent decision of Department of Foreign Employment, EPG section, to allow a foreign airline to carry Nepalese workers leaving to South Korea is also likely to have implications for Nepal.

Despite the offer of cheaper price by Korean Airlines, which has direct flights between Kathmandu and Seoul, Nepalese officials picked up another international airline with a transit with higher price than the offer of Korean Air.

Although Korean officials have not made any comment publicly, the decision has angered Koreans, who see the decision of Nepal government is unfriendly towards Korea.

The attitude shown by new minister Bista towards Korean officials has also irked them. As Korea is also facing economic crisis following the global trade situation, new labor minister Bista and Home Ministry’s response may give them a good excuse to withdraw the policy of recruiting Nepalese workers.

Employing workers for the country’s own development is a good vision and option in case of availability of work in the country. Until Nepal can create jobs for its citizens, Nepal needs to negotiate with foreign labor markets and walk the rope carefully.

As global trade disputes are creating trouble for the economies around the world, Nepal needs to take a cautious approach to protect the rights of its workers and the lucrative labor markets as well. With the growing trade deficit and shrinking remittance flow, Nepal may face a crisis of balance of payments next year and need to go for bailout to IMF.