Written by: Bipan Sajwal - 24016, Grade XI
Posted on: 11 April, 2023
Remittances are the main source of financing for the small, landlocked country of
Nepal in South Asia. Remittances are money sent home by Nepalese migrants who
work abroad to their loved ones and families. Given the deep impacts they have on
the economy, society, and culture of Nepal, it is impossible to overstate the
importance of remittances in that country. To put things in perspective, Nepal, with
a per capita income of around $1,350, is among the world's poorest nations. As a
result of this being significantly below the average for the world, it is very difficult
for people to maintain an acceptable standard of living. Nonetheless, the sizable
inflow of remittances has allowed Nepal's economy to grow and develop
throughout time.
Almost 30% of Nepal's GDP comes from remittances, which are important to the
country's economy. In 2020, Nepal received over $8 billion in remittances, which
is a sizable sum given the size of its economy, according to the World Bank. These
funds are used to pay for necessities like food, healthcare, education, and shelter,
among other things. Remittances also contribute to the decrease of poverty in
Nepal. With the money they send, migrants' families can raise their standard of
living, which lowers the country's overall poverty rate. Additionally, it generates
employment possibilities across a range of industries, including services, retail, and
construction, which helps the general economic prosperity of the nation.
Remittances have a considerable impact on Nepalese society's social and cultural
aspects as well. It's wise to have an alternative plan as a precaution. Remittances
also give families the means to better the health and education of their children,
which promotes social mobility. Remittance inflows can, however, also have some
bad repercussions, such as an over-reliance on them and the risk for brain drain, in
which highly skilled individuals leave their home nations in search of better
economic prospects outside. Therefore, it is essential that the government and other
interested parties endeavor to create a setting that is supportive to the country's
economic development and employment creation.
One simply cannot overstate the importance of remittances in Nepal. It has had a
big effect on how the country grows and changes in its money, people, and way of
life.But, it's imperative to take steps to develop a strong and independent economy
in order to avoid the country being unduly reliant on remittances.
