Foreign Employment and Remittance in Nepal

Nepal's development expenditure is heavily financed by foreign aid and it has become an integral part of Nepal's political economy. Besides foreign aid, tourism sector has also remained one of the lucrative sectors for Nepal.  In spite   of   common   consensus within the government and development agencies that there is greater potential of the overseas migration as a safety value in the view of gloomy economic scenario, the remittance economy.

Migration is a major determining factor of Nepali economy which has suffered from prolonged conflict, political instability and unrest. The number of Nepalese going overseas in search of job alongside their income has been growing marginally. Similarly, a few migrants have been bringing in new technology and skill. Remittance income through formal banking alone is substantial and makes nearly 23.6% of Nepal's gross domestic product. As the economy continues to supper from decline in agriculture and industrial production, remittance is described as soon as it has prevented economy from virtual collapse.

It is a well known fact that our youths are migrating abroad for their livelihood. The percentage of households receiving remittance has increased from 31.9% in 2003/04 to 55.8% in 2010, with the annual average growth rate of 9.8% . It is not a surprising amount that Nepal's has received during that period as million of our youths are working in the countries of East Asia, South Asia and Middle East and nearly 1500 Nepalese youths are leave country daily to work for another country. 

income and other factors thereby causing hopeless plunges in savings & investment rates. Consumption to GDP that stood at 88.3% in FY 2000/01 has gone up to 93.3% by FY 2010/11. Moreover the Nepali economy is the manifestation of an acute disguised unemployment and subsistence farming with limited prospect. At that condition foreign aid continued to play a critical role over the years in sustaining the economy.

Savings, investment growth, consumption and income distribution are of cheap and stable source of foreign currencies, remittances are likely to stem investor panic when international reserves are taking downward trend or external debt is rising.

At present, remittance provides significant source of foreign exchange, finance imports increases national income and contributes to BOP. The contribution of remittance never be under estimated as it plays a significant role to improve livelihood of the receiving households. But some research paper have revealed that foreign employment has negative impact on the economy in long run as it does not give proper direction of country's economy rather helping to have status quo condition.