Nepal became third highest remittance earner in terms of GDP

November 13, 2013
Remittance has emerged as one of the biggest factors in poverty reduction in Nepal and she became third among countries receiving the highest proportion of remittance in terms of gross domestic product (GDP). Nepal receiving remittance worth 25 percent of GDP in 2012, according to a report published by the World Bank (WB), African country Lesotho had also received remittance of 25 percent of GDP in 2012. In 2011, Nepal was fifth in the list.

According to the Third Nepal Living Standard Survey 2010/11, 55.8 percent of households received remittance with each household receiving an average Rs 80, 436 per year. The scale of remittance in Nepal is 25 percent of the country’s GDP, which is the highest among South Asian countries.
Nepal received remittance worth 23.1 percent of GDP in the fiscal year 2068/69 and 22.1 percent in 2069/70, according to the economic survey. The country had received Rs 359.60 billion of remittance in 2068/69 when GDP was Rs 1.53 trillion while the figure was Rs 434.58 billion in 2069/70 when the estimated GDP was Rs 1.71 trillion.  According to the central bank data, Nepalese had sent remittance worth Rs 434 billion in the fiscal year 2012/13.
Tajikistan became the highest remittance earner in 2012 with 48 percent of total GDP followed by Czech Republic and Nepal with 31 percent and 25 percent of total GDP respectively. Moldova is fourth in the list with 24 percent. WB estimated the remittance inflow of developing countries to grow by 6.3 percent and reach US$ 414 billion in 2013. China and India received around one/third of the remittance income of developing countries in 2012. According to WB, the total remittance income of the developing and developed countries in 2012 reached US $ 550 billion. The remittance income of developing countries and that of the developing and developed countries will grow by nine percent on an average annually and reach US$ 540 billion and US$ 707 billion respectively, according to WB. India received remittance income of US$ 71 billion, China US$ 60 billion, Philippines US$ 26 billion, Mexico US$ 22 billion, Nigeria US$ 21 billion and Egypt US$ 20 billion in 2012. Pakistan, Bangladesh, Vietnam and Ukraine also received a large amount in remittance. WB revealed that remittance income grew everywhere across the world in 2012 except the Caribbean and Latin American regions where it fell due to the economic slowdown in the United States of America (USA).
Following table shows the list of the countries with the highest remittance earner in 2012.

Name of Country	Total Remittance received  in terms of total GDP
Tajikistan	48 %
Czech Republic	31%
Nepal	25%
Moldova	24 %

Besides helping to reduce poverty, the remittance has become the lifeline for Nepal’s economy. It is because the remittance has been the source of supporting imports when export size is very small. According to The Nepal Rastra Bank (NRB), the country’s export can only support 12 percent of the exports. The top remittance sending counties to Nepal in 2012 were Qatar, Kuwait, and Saudi Arabia etc.

If Nepalese workers in abroad failed to earn money, then remittance income in Nepal will be decreased and it will badly affect Nepal’s economy, so government of Nepal should have the proper plan to manage the human resources in Nepal.