Growing tensions in the Gulf countries following the war launched by the United States and Israel on Iran have quickly spread to Dubai, Bahrain, Jordan and Kuwait—where a majority of Nepali migrant workers are based—triggering global alarm.
According to media reports huge blasts were heard in Dubai and in Doha for a second consecutive day on Sunday, following Iran’s retaliatory strikes on neighbouring Gulf states in response to US and Israeli attacks on the Islamic Republic. Iran had earlier warned it would target US bases in the region, but strikes have hit a range of other sites across Gulf cities.
Three people were killed in Dubai after shrapnel from intercepted drones fell on two houses, according to a Dubai Media Office statement.
Dubai’s international airport, the landmark Burj Al Arab hotel and the upscale man-made Palm Jumeirah island also suffered damages. Qatar’s interior ministry said it was responding to a limited fire in an industrial zone after debris fell from an intercepted missile. An Israeli strike reportedly hit a girls’ elementary school in Minab, in Iran’s Hormozgan province, killing 108 people. Mizan News Agency, the judiciary’s official outlet, reported the death toll from the attack on Shajareh Tayyebeh girls’ elementary school in Minab amid a massive US-Israeli offensive launched Saturday morning.
The last time the US and Iran exchanged attacks in June 2025, sparking a 12-day war, civilian casualties in Iran were also significant. Remittance-dependent Nepal may now face a series of economic shocks, particularly in the labour market, experts warn.
Around 2,300 Nepali workers leave for foreign employment destinations each day.
Remittance inflows are a cornerstone of Nepal’s economy, consistently accounting for over 25 percent of gross domestic product, with records in fiscal year 2024-25 showing a 28.6 percent share.
This massive inflow, often exceeding agricultural output, drives household consumption, stabilises foreign exchange reserves and serves as a major poverty reduction tool. Most airlines connecting Gulf countries have cancelled flights, leaving hundreds of Nepalis stranded at Kathmandu airport.
Observers say a prolonged crisis in the Middle East, which employs nearly 80 percent of Nepal’s migrant workforce, could directly hit the country’s economy and urge preparations to absorb emerging geopolitical shocks.
In the last fiscal year, which ended in mid-July 2025, Nepal issued 839,266 labour permits—505,957 new and 333,309 renewals—of which Middle Eastern countries absorbed 80 percent.
According to Nepal Rastra Bank, the United Arab Emirates is the top destination, hosting 274,590 Nepali workers last fiscal year.
The UAE is followed by Qatar (140,792), Saudi Arabia (152,557), Kuwait (59,065), Bahrain (11,624), Oman (8,601), Cyprus (2,409), Jordan (2,052) and Israel (1,342).
The surge in remittances coincides with heightened youth unrest at home. In early September last year, youth-led nationwide protests over corruption, governance failures, unemployment and police accountability disrupted businesses, caused losses to public and private property and dented investor confidence.
Economists say the protests reflect deep frustration among young people facing shrinking domestic job opportunities. Political instability, frequent government changes, stalled development projects and weak private-sector hiring have limited employment growth.
For many young Nepalis, migration has become the only viable option amidst growing instability and economic stagnation. The continued failure of agriculture, manufacturing and services to generate meaningful employment reinforces a cycle in which instability fuels unemployment, prompting more youth to leave. Remittances rise, but at the cost of a depleted workforce, weakened productivity and long-term economic vulnerability.
Nepal’s heavy dependence on remittances has deepened to the point that it functions largely as a labour-exporting economy, with rural households particularly reliant on at least one family member’s income from abroad, according to central bank studies.
Political uncertainty, corruption and poor accountability remain core obstacles to economic transformation, pushing both skilled and unskilled youth overseas.
Following the escalation of the war on Saturday, Nepal on Sunday temporarily halted issuing labour permits for migrant workers, raising concerns for the already strained economy.
In view of the evolving situation, the Embassy of Nepal in Abu Dhabi requested Nepali nationals in the UAE to avoid unnecessary travel, exercise caution and follow security advisories issued by local authorities and Nepalese diplomatic missions.
Similarly, Nepali embassies in Doha and Riyadh have urged citizens to refrain from unnecessary travel.
