That poverty has decreased in Nepal in the last ten years is attributed mainly to the remittance inflow

It may come as a complete surprise that remittance to Nepal by its migrant workers abroad has seen a whopping increase of 17 per cent in dollar terms. This is mainly due to the remittance from India which has a vibrant economy. This is contrary to the belief that the remittance would have gone down with thousands of migrant workers from Nepal being displaced, particularly in the Gulf countries. But, it has, in fact, seen a significant increase, as the World Bank's Global Economic Prospects June 2011 points out. In recent years remittance contributes a large chunk to the Nepali economy. That poverty has decreased in Nepal in the last ten years is attributed mainly to the remittance inflow. Nepal's per capita income is estimated to be $568 at present, whereas the per capita gross national income in the fiscal year 2000-2001 was $259. That goes to show that significant progress has been made in the poverty alleviation front.

However, these developments should be taken with caution because the economic growth rate is still below 4 per cent, which is nothing to gloat about.

As such, it seems the economy is highly dependent on remittance. No doubt, the country's economy took a battering during the conflict period that did not augur well for the overall economic growth. During the transition period that we are now in, the economy growth is not doing much better. Moreover, the industrial unrest has brought the industrial sector to a virtual standstill. This is why entrepreneurs are very reluctant to invest here. Thus, the Foreign Direct Investment is on the decline.

This is very unfortunate, for to progress there is every need to attract such investments. The investors should be convinced that they would get attractive returns from their investments in Nepal. The current trend, however, shows that the environment is not congenial for investors, both Nepalese and foreigners. So that the investors are enticed to invest in Nepal, there is need for, among other things, political stability.

Furthermore, the protracted periods of load shedding is scaring away investors as well as forcing many industries to close down or produce below capacity.

Meanwhile, although it is encouraging that the remittance inflow is expanding, there is every need to entice youths who are the majority of migrant workers to serve the country in various capacities. They could do well with vocational training so that they could start their own enterprises and create work for themselves, instead of searching for jobs abroad.

Every year thousands of youths join the labour force, and lack of employment in the domestic market forces many of them to become migrant workers.

This calls for efforts to be made to create more jobs for the youths as per their expectation and qualification. Though remittance may have contributed in reducing the poverty rate in the country, it has led to so much complacency that our own industrial and agricultural sectors have performed below their capacity.

In sum, we should be more foresighted and not be solely dependent on remittance in the larger interest of the country and the people by creating the necessary development infrastructure.

Published on: 14 June 2011 | The Himalayan Times