Remittance Challenges – The Himalayan Times – Nepal’s No.1 English Daily Newspaper
KATHMANDU, APRIL 10
Nepal is a nation plagued by low income, poverty, rising unemployment and an unhealthy reliance on agriculture. According to the 2077/78 Economic Survey, about 66 percent of the population depends on agriculture, but this population is invisibly near-unemployed or seasonally unemployed.
While there is poverty and unemployment on the one hand, on the other there are employment opportunities aplenty in the global labor market, offering an attractive Rs 1,500 per day and around Rs 500,000 per year.
Remittances in the context of Nepal add up to a staggering contribution to Gross Domestic Product (GDP).
Increased remittances have contributed to absolute poverty reduction over the decades.
It also raised the standard of living of the people and contributed to the accumulation of wealth and foreign exchange reserves, solving the problem of unemployment while developing business and increasing government revenue. Considering the huge influx of funds, many issues, complexities and challenges have sunk to an extremely low level in the Nepalese society.
As Nepalis enter the external labor market, imports of goods increase and exports decrease, leading to huge trade deficits year after year. Remittances are used to import luxury goods or to invest in unproductive sectors, such as arable land. This has resulted in uncontrolled urbanization, service distribution problems, increased internal migration and higher consumption costs. In addition, social isolation, mental stress and suffering are no less trying. Even more painful is the tragic scenario of our migrant compatriots who find themselves in the statistics of 3 deaths per day on average.
Therefore, remittance income by itself cannot be a permanent solution to the nation’s sluggish economic growth.
And due to some of its long-term effects, it is advisable to transform the export-oriented labor force into an export-oriented commodity economy.
For this, it is necessary to make maximum use of the four pillars of development, that is to say, land, labor, water and technology according to its capabilities.
Provision should be made for the scientific study and search of land for agricultural purposes, the establishment of cottage industries in rural areas, incentive programs for returnees from abroad and training opportunities to create an environment that allows them to use their skills at home. If a strategy is developed to harness the outsourced labor with water and technology, the product can be transformed from an import-driven economy to an export-driven economy, with a solid foundation for the national economy. It is high time to do our best to finally justify remittances.
A version of this article appears in the April 11, 2022 printing of The Himalayan Times.