REMITTANCES AND THE ECONOMY OF NEPAL: THE IMPACT ON EMIGRATION (original) (raw)
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This paper assesses the current remittance status and its impact on Nepalese economy. Secondary data from various sources were used for study. Statistical techniques including descriptive statistics and correlation was used. The number of Nepalese citizen for foreign employment is increasing year after year. Malaysia is the primary destination of Nepali migrants followed by Qatar, Saudi Arabia, UAE and others respectively. Nepal ranks 19 th position in top remittance receiving countries of the world and it ranks 4th position when remittance is compared as a percentage of GDP. Percentage increase in inflation was lower in comparison with the proportion of remittance as compared with GDP. Result showed insignificant relationship between remittance inflow and increase in agricultural land. Remittance has played several positive roles in Nepalese economy like reduction of poverty and unemployment, maintaining foreign exchange reserve and correcting balance of payments. Positive and significant correlation was found between GDP and remittance inflow per year at 10% level of significance. Remittance as compared with percentage of GDP and share of agriculture, forestry and fishing were negatively and significantly correlated. The share of agriculture, forestry and fishing to GDP of country was found to be diminishing but proportion of remittance when compared with GDP was increasing. Problem of labor shortage in agricultural as well as non-agricultural works is a genuine problem as active youths are involved in foreign employment. As volume of remittance is being increased rapidly, dependency of people on remittance is increasing and Nepalese economy is gradually becoming consumption oriented. Also, Nepalese economy is transforming from agriculture based economy to remittance based economy. So, formulation and implementation of appropriate policies which tap and utilize received remittance into productive sector is recommended. Remittance is that part of earning sent by individuals from migration destination to their home country or their place of origin, which is a vital source of foreign income for developing countries like Nepal. Although remittance can be sent in the form of kind but the term usually limited to represent monetary and cash transfers sent by international migrant workers to their place of origin [1]. Remittance covers large portion of financial flows to developing countries like Nepal. Remittance is important source in labour exporting countries to maintain foreign exchange reserve and to correct Balance of Payments. Remittance implies household income from foreign inflow mainly from momentary or permanent migration of people to those economies [2]. According to World Bank [3] remittance enables households to increase their level of consumption, ensure better health facilities, nutrition, education and other facilities. In developing countries, remittance is three times more than official development assistance [4] and it ranks second largest source of external finance after foreign direct investment [5]. Remittance is important to economies at micro as well as macro level. The impact of remittance on macro economic level is found to be qualitative [6]. For the countries that are affected by political and economic crisis, remittance is regarded as important and stable
International Advanced Research Journal in Science, Engineering and Technology , 2021
The rural economy of Nepal is largely dependent on agriculture and remittances. Remittance has stood out as one of the key factors in reducing poverty, improving human capital and financing imports. This study aimed at presenting the research on the contribution of remittance to the rural economy as well as national economy in Nepal. For this, I reviewed the published and unpublished pieces of literature from various government institutions and other sources, including the World Wide Web. The information on the contribution of Remittance on the rural economy, concerning the current situation, destination, ratio of GDP, has been discussed, collected systematically reviewed for discussion and conclusion. It was found that the ratio of remittance to GDP has highly increased in the nation because the increasing rate of remittance inflow is more than the increasing rate GDP. Major destinations of unskilled and semiskilled labour are countries like Malaysia, Qatar, UAE, and Korea. The poor working conditions, lower wage level and rising cost living in the destination countries, fraud recruitment and lack of social protection are the major problems of migrants. The potential benefits of utilizing migrants' human capital have not yet been sufficiently explored by governments. The government should perform a positive role to promote employment by inducting and adhering to economic diplomacy.
Blaming the vicious trap of existing unemployment gap, youths-the power-house for nation's development-, into an excessively large number, are departing to foreign countries irrespective of gender, age, location, religion and other traits. Each of those expatriating mass exhibits identically consolidated anxiety and agony that sensing no future in county they felt bound to move. Such sordid elaboration indicates that prosperity of nation is mutilated, vulnerable and irreparable too. Thus, flying to foreign land seems to be an only granted option for many. Though such flight of human resource is a transitory sangfroid for them, has that been really useful for the nation in any other mission? What are they incurring as the irreparable cost of migration and what the inexplicable scourges or brunt of remittance are they and the whole nation is bearing? These issues still need a serious study. Though many people assertively exaggerate the gains of remittance, it has taken miles on giving us an inch. Remittance has more grotesque pains over little gains thus has turned seemingly suicidal, retrogressive or as only a pyrrhic victory for the nation. This paper, taking reference of various countries with special consideration to Nepal, underscores to infer an argument that remittance has been being less appealing and more appalling to all the receiving countries; and Nepal undoubtedly doesn't manifest an exception over this mainstream identity. Methodologies and Research Design: Taking the qualitative nature of study in the account, this research adopts the paradigm of interpretation as key method of analysis. This shall be purely a doctrinal and an archival research, which burrows all the information and data-needed in course of justifying the proposition projected on-from various secondary sources. Diving it closely to match the only after design of experimental research, this study picks only the post-observation views and opinions of different scholars on the subject to escort and fortify the argument. Nonetheless, this research will be largely an explanatory research. Hypothesis: This research conjectures that remittance doesn't bequeath any significantly contributory role to ensure the development of nation; rather it is grossly unproductive, largely decaying and hugely counterproductive bequest of destructive agent for pace and path of prosperity in remitted nations. Literature Review Besides having the similar praxis around the globe, the World War I initiated the trend of foreign employment in Nepal. Subsequently, being clerk and working into various tea plants
Role of Remittance in Economic Development of Nepal
Journal of Nepalese Business Studies, 2008
This article deals with the analysis of direct impact of remittance on three development indicators viz. GDP, GNP and PCI of the nation which are also the dependent variables of the proposed models. The analysis has been carried out with linear and log-linear models under multiple regressions. The impact of remittance has been seen most remarkable in the GDP and GNP both in nominal and real terms. In the nominal GDP and GNP, the remittance shows 61 percent and 72 percent impact respectively while in real term it shows 48 percent and 55 percent respectively. It has also shown positive impact on the PCI but it is comparatively low (four percent in nominal and one percent in real terms). The growth rates of independent variables (Rm, K, L and X) have also been tested in the same model to find the effects on the dependent variables. The findings are positive except for labor force, but they are marginal which show that remittance has not been used effectively so as to increase the real ...
Remittances and Development in Nepal: A Disaggregated Analysis
Journal of Management and Development Studies, 2021
Remittance flows into low/middle-income counties are on a continuous rise and this trend is seen in Nepal as well. There is a constant increase in the number of the Nepalese workers migrating for foreign employment and that has been instrumental to boost the remittance inflow into the country. Remittance is contributing significantly to Gross Domestic Product and is emerging as a backbone of the country’s economy. However, the ways remittances contribute to social development necessitates that many facets of development be explored because they affect the country’s development in multiple ways. This study attempts to analyse the possibility that remittance positively contributes to social development, considering health and educational development as its proxies. Based on the latest available disaggregated educational enrolment and nutrition data of 2009 A.D. by districts, this study analyses the impact of the remittances on school enrolment and improvement in health status of famil...
NEXUS BETWEEN REMITTANCE INFLOW AND HUMAN DEVELOPMENT IN NEPAL
Nepal is one of the largest remittances receiving country in the world as a share of GDP. Not only remittance income has become major determinant of overall economic structure and dynamics but also it influences key components of human development such as Gross National Income Per Capita, Life Expectancy at Birth and Mean Year of Schooling and the like. This studycarried out influence analysis of remittances on human development of Nepal. Secondary data required for this study has collected from various authentic sources for 35 years i.e. from 1980-2014. Simple Linear Regression analysis and Pearson Correlation Coefficient were used to analyze the data. Even though output of the analysis shows positive influence of remittance inflow on overall Human Development Index, for sustainable economic development, it is indispensable for Nepalgovernment to utilize their young human resources in productive sector of origin country rather than making national plan and policies depending on remittance inflow. KEYWORDS :HDI, origin and destination country, regression, remittance, XLSTAT.