KONG YEN LIN HARD TIMES: Farmer Kadevi Chhantyal, 32, (centre), of Kuine Mangile VDC collects remittance at a finance corporation in Beni. In the past, her huband, who works as a wielder at a steel company in Dubai, used to send back as much as Rs 100,000 but the amount has decreased recently.

When export orders at his Malaysian hydraulic hose company fell this year, production operator Jiblal Shrestha knew his job was on the line. Sure enough, his three-year contract was terminated prematurely. The 26-year-old is now back at his former job, working as a waiter at Hotel Yeti in Beni.

Myagdi is the district with the highest per capita outmigration in Nepal, and there are hundreds like Shrestha who have been laid off and have come home in the recent months.

"I was lucky I had skills and experience so I found a job in Nepal easily within a month, but some of my friends have been jobless for months," Shrestha said.

Retrenchment is most severe in Malaysia, where foreign labour policies have been tightened. Approval for work permits have been slashed by almost 70 per cent and worker levies doubled.

"It's like slow poison, remittances will gradually go down," says economics lecturer Bhola Nath Ghimire, "the crisis could hit us full force if developed economies do not make a fast recovery."

Dhaulagiri Corporation, a Beni remittance company, used to handle Rs 5 million worth of remittances daily till two years ago, but it has gone down to Rs 3.2 million a day. Buddha Money Transfer handled Rs 50 million in remittances last year, but expects a 20 per cent drop this year.

The drop in cash inflow has affected land transactions and other businesses. Jiban Biswokarma of the Chamber of Commerce says investment has slumped 40 per cent. Land prices on Beni's New Road has dropped by 20 per cent in the past three months alone.

"All this will increase unemployment because the local labour market can't absorb all the retrenched Nepalis," says Biswokarma.

However, some remain optimistic and most believe that job security remains high in the Gulf. Supermarket staffer Shanker Subedi is on a two-month leave from his job in Qatar and says he will return to his Rs 25,000 a month job.

Despite harsh working conditions abroad most are unable to resist the attraction of higher paychecks. "Many of those retrenched are still lining up to apply for foreign employment despite the risks," says Bhola Nath Ghimire.

Laxman Khatri, 26, used to earn Rs 35,000 a month in his job as a supervisor at a Dubai steel company, six times more than his current wage as a computer technician. Laid off three months ago due to financial problems within the company, he says: "To repay the loan I've taken and to afford my children's education the only option is for me to go abroad again."

The government has promised financial aid for the retrenched, but people here in Myagdi are demanding more should be done in the long-term to generate local employment through investments in tourism, cottage industries and agriculture.

"Our government lacks bargaining power when it comes to formulating foreign labour policies and regulating employment," says Ramji Prasad Subedi of the Dhaulagiri Finance Corporation, "Nepalis are the first to be laid off when foreign companies face a downturn. The welfare and rights of Nepali workers must be better protected in foreign lands."