Abstract

  This paper assesses the current remittance status and its impact on Nepalese economy. Secondary data from various sources were used for study. Statistical techniques including descriptive statistics and correlation was used. The number of Nepalese citizen for foreign employment is increasing year after year. Malaysia is the primary destination of Nepali migrants followed by Qatar, Saudi Arabia, UAE and others respectively. Nepal ranks 19th position in top remittance receiving countries of the world and it ranks 4th position when remittance is compared as a percentage of GDP. Percentage increase in inflation was lower in comparison with the proportion of remittance as compared with GDP. Result showed insignificant relationship between remittance inflow and increase in agricultural land. Remittance has played several positive roles in Nepalese economy like reduction of poverty and unemployment, maintaining foreign exchange reserve and correcting balance of payments. Positive and significant correlation was found between GDP and remittance inflow per year at 10% level of significance. Remittance as compared with percentage of GDP and share of agriculture, forestry and fishing were negatively and significantly correlated. The share of agriculture, forestry and fishing to GDP of country was found to be diminishing but proportion of remittance when compared with GDP was increasing. Problem of labor shortage in agricultural as well as non-agricultural works is a genuine problem as active youths are involved in foreign employment. As volume of remittance is being increased rapidly, dependency of people on remittance is increasing and Nepalese economy is gradually becoming consumption oriented. Also, Nepalese economy is transforming from agriculture based economy to remittance based economy. So, formulation and implementation of appropriate policies which tap and utilize received remittance into productive sector is recommended.

Keywords: Economy; Employment; GDP; Poverty; Remittance

References

1. Neupane NK. “An analysis of impact of remittance on Nepalese economy”. TU, Nepal: Department of Economics (2018).
2. IMF. “Balance of payment and international investment position manual” (2009). 
3. World Bank. Resilience Amidst Conflict: An Assessment of Poverty in Nepal, 1995/96 - 2003/04, Washington, D.C: World Bank (2005).
4. World Bank. “Monthly and Quarterly Remittances Flows to Selected Countries”. Washington, DC: World Bank (2015).
5. Ahamada I and Coulibaly D. “Remittances and growth in sub-Saharan African countries: Evidence from a panel causality test”. Journal of International Development 25 (2013): 310-324.
6. Arranz M and Giuliano P. “Remittances, Financial Development, and Growth”. IMF Working Paper (2005).
7. Kapur D. “Remittance: The New Development Mantra?” United Nations Conference on Trade and Development. Geneva (2003).
8. NRB. “Impact evaluation of remittances: A case study of Dhanusha district”. Janakpur: Banking development and research unit (2012).
9. de Haas H. “Remittances, Migration and social Development: A Conceptual Review of the Literature”. Programme on Social Policy and Development. UNRISD, Geneva (2007).
10. Giuliano P and Ruiz-Arranz M. “Remittances, Financial Development, and Growth”. Journal of Development Economics 90 (2019): 144-152.
11. Bhatta G. “Remittance and trade deficit nexus in Nepal: A VECM approach”. NRB Working Paper (2013).
12. Stark O. “On the Role of Urban-to-Rural Remittances in Rural Development”. Journal of Development Studies 16 (1980): 369-364.
13. Chiodia V., et al. “Migration, Remittances and Capital Accumulation: Evidence from Rural Mexico”. Journal of Development Studies 48.8 (2012): 1139-1155.
14. MoL. (2018/19). Economic survey. MoL (2016).
15. KNOMAD. Migration and Remittances: Recent development and outlook (2018). 
16. Rastra Bank. CMRa annual tables 2017/18 (2018). 
17. Meyer D and Shera A. “The impact of remittances on economic growth: An econometric model”. EconomiA.
18. Thagunna K and Acharya S. “Empirical analysis of remittance inflow”. Economics and Financial 3 (2013): 337-344.
19. Pant. “Harnessing Remittances for Productive Use in Nepal”. Economic Review 1-20 (2011).
20. Gaudel Y. “Remittance Income in Nepal: Need for Economic Development”. The Journal of Nepalese Business Studies 3.1 (2006).
21. Malekoo R. “Impact of remittance on deposit of commercial banks' and economic growth of Nepal”. MBA Dissertation (2015): 1-76.
22. Tung L., et al. “The impact of remittance inflows on inflation: Evidence in asian and the pacific developing countries”. Journal of Applied Economic Sciences 10 (2015): 1076-1079.
23. Roy R and Rahman M. “An Empirical Analysis of Remittance – Inflation Relationship in Bangladesh: Post-Floating Exchange Rate Scenario”. Bangladesh: Munich Personal RePEc Archive (2014).
24. Rodrik D. “The real exchange rate and economic growth”. Brookings Papers on Economic activity (2008): 365-412.
25. Gartaula H., et al. “Shifting perceptions of food security and land in the context of labour outmigration in rural Nepal”. Food Security 4.2 (2012): 181-194.
26. Dhungana B. “Remittance and Nepalese economy” (2011).
27. ADS. “Agriculture Development Strategy (ADS) 2015 to 2035”. Kathmandu, Nepal: Ministry of Agricultural Development, Singh Durbar (2015).
28. Central Bureau of Statistics. (2003/04). Nepal Living Standards Survey. Kathmandu: CBS.
29. de Hass H. “Migration, Remittances and Regional Development in Southern Morocco”. Geoform 37.4 (2006): 565-580.

Citation

Citation: Rajan Katuwal Chhetri., et al. “Remittance and its Impact on Nepalese Economy". Acta Scientific Agriculture 4.3 (2020): 01-05.

Copyright

Copyright: © 2020 Rajan Katuwal Chhetri., et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.