Jagannath Adhikari

I was not surprised when the Nepal Living Standard Survey (NLSS) III revealed its findings, portraying the general prosperity of the country in terms of income and consumption patterns. 

I recently visited Khotang district and learned about its high level of recent out-migration and the subsequent inward remittance coming to the district. My impression of the economic change in the district clearly corroborates with the findings made public by the NLSS III survey. Estimates on the poverty status based on the NLSS III survey reveals that the poverty rate has declined to about 13 percent—a drop by 18 percent in the last eight years. I also noticed that in Khotang, economic mobility within all categories, except within some very poor households suffering from disability in the family, was prevalent.

On average, almost half the households have one or more members currently working away from home, mainly in Gulf countries and Malaysia. Moreover, almost two-thirds of the households can be considered as migrant households if members with migration experience in the recent past are also put into the category. A few aside, all migrant households were found to have access to some remittance. However, there was wide variation in its volume depending on educational status, skills, destination country and the migrant’s sheer luck. Nonetheless, most people reported that there is improvement in the living standard of the people in general. Even the poorer section of the population has reaped the benefits of outmigration and remittances. Even though there is less of a marked improvement in asset development or income and employment generating works, the consumption of household goods, school attendance and access to health services have clearly improved.  This all has come from the income derived from remittance.

Now, it is clear that the recent outmigration and remittance have contributed significantly in poverty reduction, which almost 50 years of development planning could not achieve. This is because development work could not increase income at the household level even though there was a huge investment. A large part of the money invested through development initiatives of the government eventually returned to Kathmandu and other centres of the economy. On the other hand, remittance money directly reached the hands of wives and parents of the households of the migrants in villages or urban areas. This money was invariably used, in most cases, for fulfilling the consumption requirements of food and other non-food necessities. This ability to meet consumption requirements has helped many to come out of poverty as of now. This was aptly illustrated to me by Bam Bahadur Biswokarma when he said ‘if there were no remittances, we all would have been sukumbasis. In the absence of income and employment opportunities, there are no ways for the young people to meet their rising cost of living and expectations. Traditional subsistence farming has not shown any ability to meet these rising expectations because of declining land holding, low yield and lack of access to market.

As is widely reported in the recent past about the possibly unsustainable economy that is mainly based on remittances, NLSS III also raises the same fear. Remittance is blamed as a cause for the growing import of goods and commodities for consumption and for the decline of local production for export.

On the question of the investment of remittances for income and employment generating work, it is seen that migrants have interest in doing this. They are also aware that if they invest all their savings in consumption, it will soon be used up. It is precisely because of this reason and the want for their children to receive better education, that they are also migrating away from rural areas to urban areas or market centres where they can start a business or enterprise. The interest to send their children to better schools is guided by a desire to make them earn more in future. But only a few migrants who have a high level of remittances have been able to do this. Those who have access to little remittance have tried their best to expand their asset base within the village. In order to encourage these people to invest in villages or within the rural district, access to infrastructures that give access to market like better school and health services are necessary. Only then will returned migrants be encouraged to stay in their district.

Nepal’s economic future is now dependent on the entrepreneurship of returned migrants. Present migration data shows that the young population coming into the labour market is all absorbed by foreign migration. But, it is also likely that most of them will return to Nepal eventually. This is especially so for those who go to Malaysia and the Gulf countries for work. Even in the past, Nepali migrants who went to India to work in the general labour market, or in both the Indian and British armies, came back. They contributed significantly to improve the country’s economic situation. Their skills and experience was very useful in both rural and urban areas. Similarly, the migrants who return to Nepal with experience of work outside the country could play a significant role. After about a decade or so, Nepal will start to see a large number of such returnee migrants. It is in the interest of the country and its economic prosperity that their skills and experiences are used by creating an appropriate investment.

Adhikari is a researcher on labour migration, agricultural development and food security

Published on: 14 August 2011 | The Kathmandu Post