1. Contribution of Remittance in
Nepalese Economy
Presented by
Anup Rai
Prerana Shakya
Isma Pokhrel
Mohan Sagar Moktan

2. Contents
• Introduction
• Foreign Employment
Data
• Remittance Inflow Data
• Contributions
• Utilization of Remittance
• Harnessing Remittances
• Conclusion

3. Introduction to Remittance
Transfer of money
or goods by foreign
migrants to their
households or residents
in the country of origin
Largest source of
foreign income for
developing countries
(Remittances are not
Foreign Aids)
Direct impact of
remittance to Nation’s
GDP

4. Remittance in Nepal
Introduced with the entry
of Nepalese Youth in the
British and Indian Army
during the World War I

5. Remittance in Nepal
• Single largest source of
income of foreign
currencies
• Third largest recipient
of remittances in 2014
• Receives remittances
from around 35 countries

6. Foreign Employment

7. Foreign Employment Data (2063-2069)
Qatar Malaysia Saudi
Arabia
U.A.E Kuwat Baharain Oman South
Korea
Lebanon Isarel Afganistan Japan Others
0
5000
10000
15000
20000
25000
Female
Female

8. Foreign Employment Data (2063-2069)
0
100000
200000
300000
400000
500000
600000
Male
Male

9. Remittance Inflows (yearly)
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
0
100
200
300
400
500
600
700
Migrant remittance inflows (US$ million)
Migrant remittance inflows (US$ million)

10. Bilateral Remittance Inflows to Nepal
12 14 19 35 35 63
106 141 185
268
332
803
1005
1853
2021
0
500
1000
1500
2000
2500
US$Million
Estimated bilateral remittance inflows to Nepal (> $10 million)

11. Gross Domestic Product (GDP)

12. Balance of Trade
• Decreasing trend shows
negative increment in
balance of trade
• Each year trade deficits
increases
• Trade Deficit in
2014-15 is Rs 689.36
billion

13. Balance of Payment
• Balance of trade
surplus
• Trade deficit
compensated by
remittance
• Surplus in
2014-15 is Rs
144.85 Billion

14. Foreign Exchange and Gold Reserve
• Remittance plays vital
role in collecting
foreign currency
• Increasing trend in
foreign exchange and
gold reserve
• 125% positive growth,
since great recession
2.93
3.63
4.34
5.4
6.22
8.24
10.07
0
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015 2016
Billion U.S. dollars

15. Poverty Alleviation
• Remittance has direct
impact on poverty
• Decreasing trend shows
reduction of poverty
• 2015-2016 estimates
shows 23 percent under
poverty

16. Human Development Index (HDI)
Year HDI HDI Ranking
2014 0.548 145º
2013 0.540 145º
2012 0.537 145º
2011 0.533 145º
2010 0.527 146º
2008 0.501 138º
2005 0.477 136º
2000 0.449 127º
1990 0.388 120º
1980 0.286 116º

17. • Life Expectancy
 Access to better
health service, food,
shelter, clothing etc.
• Education
 Increase in literacy
 Access to better
education facilities
• Per Capita Income
 Gradual increase in
per capita
 More average
income
Human Development Index (HDI
measurement factors)

18. Economic Activity and Growth
• More capital and higher
access to resources
• More income more
spending, increase in
Tax return and moving
of Capital
• Continuity of Economic
Cycle and economic
growth in a long run,
multiplier effect

19. Net National Saving and Investment
• Monetary resources
for small and
medium scale
industries
• Source of capital for
investment

20. Economic Crisis and Disasters
• Remittance has helped
during great world recession
2008
• Soaring of remittance during
2014-2015 earthquake and
blockade
• Rs 617.3 billion in 2014-15
and Rs 679.0* billion in 8
month in 2015-2016
• Stabilizing national economy
during crisis

21. Other Contributions
• Creation of Skilled
Manpower
 foreign work experiences
 innovative ideas
• Social Welfare
• Reduction of Inequality
• Technology etc.
Stable economic source than capital flow without
liability
• Continuous source of capital

22. Utilization of Remittance
(2016 sample Data)
Daily consumables
24%
Health and
Education
10%
Business and
Enterprise
1%
Household Assets
3%Load Payoff
25%
Rites and Rituals
4%
Savings
28%
Others
5%

23. •Capturing a share of remittances for development
purposes
•Stimulating transfers through formal channels
•Promoting financial literacy
•Stimulating investment of remittances
•Outreaching migrant workers with secure ventures
•Influencing consumption patterns etc.
Harnessing Remittances for Productive
Use in Nepal

24. Conclusion
• Remittance has contributed significantly in benefiting families,
local communities and nation's economy as a whole
• However Remittance has resulted inflation, decrease in national
productivity, conspicuous consumption of unnecessary goods,
lower labor force participation, internal labor shortage,
dependency etc.
• Remittance has caused Dutch disease effect
• Sectors like agriculture, manufacturing, trade etc. have declined
in productivity
• Productive use of remittance should be stimulated for the
development of the country

25. Thank you!