Remittance inflow starts looking up
The remittance income of the first month of the current fiscal year compounded to almost 10 per cent of the annual income in the past fiscal year as with the increasing numbers of migrant workers.
From mid-July to midAugust, Nepal received Rs 21.87 billion in remittance income while last year annual remittance income received in Nepal was Rs 253 billion. First month recorded a whopping 23.6 per cent increment in remittance compared to the same period of last fiscal year when the first month witnessed a growth of only 6.5 per cent amounting to Rs 17.7 billion, according to Nepal Rastra Bank (NRB).
Despite the widening trade deficit substantial increase in remittance inflow has brought about surplus in Balance of Payments (BoP) too. After going through a prolonged BoP deficit, it has started to become positive since midJune 2011. By the first month, the BoP was surplus by Rs 8.5 billion unlike last year when BoP was surplus by Rs 1.5 billion.
The improving economic situation in the destination countries along with upward trend in migrant outflows have contributed in increased remittance income. According to Department of Foreign Employment a little over 354,000 Nepalis have been granted approval for foreign employment which is a 20.6 per cent increase in comparison to that of the previous year.
Remittance income is supposed to grow more in the months of September and October due to festive season. Moreover, the recent appreciation of US dollars in terms of Nepali currency will also contribute in inflating the remittance income.
In the first month alone, 45,165 people have left for different foreign countries looking for employment.
There are more than three million Nepalis working abroad including different Gulf Countries, Malaysia and OECD countries. There are even more undocumented workers from Nepal employed in that send remittance to their family. At present, 52.8 per cent of the total households have at least one absentee member that is away from home, according to Nepal Living Standard Survey (NLSS)-III. Of the total households, 32 per cent families have members away in foreign countries.
Likewise, 55 per cent of the total households receive remittance from the members abroad.
However, the startling number of Nepalis working abroad is not considered sustainable for Nepali economy despite the lucrative remittance income.The empirical evidences also show that the development process of economy that is dependent on remittance is relatively slower by about 1.5 per cent.
“The gain of remittance income results as the loss of able manpower in migration equation that is seeping the national productivity,” economist Dr Chiranjibi Nepal said, adding that it is good for a short term, when the industrial and agriculture production is low but prolonged outflow of workers has left the resources unutilised which will be dangerous for future generation.
Published on: 12 October 2011 | The Himalayan Times
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