By Sudeshna Sarkar,

Kathmandu, Sep 1 (IANS) Nepal's overseas job industry, the mainstay of the economy, came to a standstill Friday, as it observed a 'Black Day' in memory of the brutal killing of 12 workers by Islamist militants in Iraq two years ago.

Nepal Foreign Employment Entrepreneurs' Association, a private umbrella organisation of recruitment agencies, called the protest to pressure the government into paying compensation to the agencies, whose offices were ransacked by angry mobs in Nepal on this day two years ago.

Scores of recruitment agencies nationwide affiliated to the association stopped work as part of the protests. Foreign employment entrepreneurs waving black flags and placards marched towards the Birendra International Convention Centre in the capital for a protest meeting.

The protests were a sequel to the abduction and subsequent beheading of 12 Nepali workers in Iraq by a little known terrorist group calling itself the Ansar-al-Sunna.

When the news of the killings reached Nepal, followed by the posting of a video of the executions on the Internet, Nepal went berserk, attacking recruitment agencies, whom they blamed for duping the hapless men into going to Iraq, a destination banned by the government.

Nearly 300 employment agencies in Kathmandu alone had their offices vandalised with militant crowds setting furniture and documents on fire and smashing windowpanes. Besides the agencies, the mob also attacked the offices of Middle East airlines as well as mosques and two people were killed.

The recruitment agencies say they suffered a loss of about NRS 750 million. Two years later, the victims are yet to be compensated by the government.

Every year, thousands of Nepalis go abroad seeking jobs in the Gulf countries, Malaysia and neighbouring India and the money they send home has been keeping Nepal's economy afloat during the decade-old Maoist insurgency and political instability.

According to Nepal's central bank, Nepal Rastra Bank, the remittances amount to over $1 billion. However, that's just the tip of the iceberg since a substantial chunk of money is routed through private operators with no official records.

The government has also not been able to keep account of the exact number of citizens working overseas since many of them go illegally via India to countries like Iraq and Afghanistan, which are banned by the government. There could be over 4.5 million Nepalis working abroad.

According to the World Bank, Nepal recently recorded a 10 percentage point drop in poverty despite the ruinous effects of King Gyanendra's coup last year and the decline is attributed to remittances.