Nepal is one of the countries that is highly dependent on remittances, ranking 19th among nations of the world on inward remittance according to The World Bank report of 2018. For a developing nation like Nepal, inward remittances help the economy stay afloat, earning foreign exchange and lifting many Nepalese above the poverty line.
Nepal ranks 4th in the world on Remittance to GDP ratio. The Remittance accounts for an astounding 30.1% of the total GDP, which is higher than all the tax earnings combined at 23.8%. Inward remittance helped Nepal rebuild itself from the devastating earthquake of 2015.Nepal received approximately US $8.210 Million as Foreign Inward Remittance from around the world in 2018.
Increase in purchasing power from remittances has a positive correlation to Education and Healthcare. Achieving a healthy and educated society is a proven path to build a better nation. Studies also show that remittances have fueled the growth of small business.
The unemployment rate in Nepal in 2017 was 2.7% of the population. The total population of Nepal is estimated to be approximately 29 Million according to the United Nations. The total labor force of Nepal is approx. 16.81 million of which 25% of the labor force work in other countries. The main source of the economy of Nepal is Agriculture at 69%, Industry at 12% and Services (includes Tourism) at 19%. Foreign opportunities have allowed Nepal to solve the problem of unemployment at home.
The top five countries that send money into Nepal are Qatar, Kingdom of Saudi Arabia, India, the United Arab Emirates, United States. Other primary countries are Kuwait, Malaysia, the United Kingdom, Australia, and South Korea.
The number of Nepalese workers abroad has doubled in the last decade with a high concentration on Asian countries like Malaysia, Singapore, South Korea and Middle-eastern countries like Saudi Arabia, Qatar, and UAE.
The second-generation Nepalese populations are mainly in the USA, India, Australia, and Europe. The Nepalese diaspora in the United States exists in large metropolitan areas such as New York, Boston, Minnesota, Portland, and California.
Remittance has a profound impact on Nepal. From rebuilding a nation shattered by a natural calamity to enabling a nation to achieve the target of Millennium Development Goals. However, one can argue that the positive contributions of remittance are offset by the negative aspects of having a brain and labor drained nation highly dependent on imports.
Date Source: World Bank