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January 2016 Economy and Policy

Published on: 2016-01-21 12:59:13     2097 times read    1  Comments
Remittance : A Blessing and a Curse

--By Dwaipayan Regmi

Running a country through remittances can be an easy way to move ahead, but it comes with a price. Every day, 1500 Nepalis fly out from Tribhuvan International Airport for jobs abroad. The decade-long Ten years of insurgency made large numbers of young people go abroad and now, again, the slow economic growth rate and rising unemployment has made staying in the country even more difficult and a choice generally avoided by Nepal’s young generation. The devastating earthquake again acted as another reason to go abroad. The recent blockade by India has also certainly created huge pessimism among the youth, giving them a further reason to leave the country, or make plans to do so.

Almost 56 percent of households are receiving some sort of remittance one way or the other in Nepal. The remittance senders fly abroad, when they don’t see any possibility in Nepal, willing to be away from their families and ready to do the 3Ds (Dirty, Danger and Difficult) jobs, making Nepal one of the highest recipients of remittances.

The craze for international jobs already had a certain appeal and was a matter of prestige even before the massive earthquake, blockade and weak job prospects. 'Nothing can be done living here', is a mantra often repeated by the youths time and again. But it is also evident that, when people go abroad, the country profits hugely. The profit maybe short term and economical, but there are several things that go away as well. Primarily, there’s the Brain Drain issue. The country loses its skilled manpower and the host country benefits from a Brain Gain. Next is the Flow of Money, because it is not as if the host country invites them with open arms. The job seeker has to spend money to go abroad. 

We don’t have good international aeroplanes, so the money from plane tickets goes out of the country. Even if a person spends 50 thousand, every day around 75 million flows out. Remittances over all, makes a country dependent.

However, will remittance develop a nation? The question is open for debate and yet many remain silent on the issue. 

Nepal is a country where political instability is a major issue. If one political party is disgruntled, they call for a banda, ignoring the welfare of the general public. It is a depressing fact that Nepalis are going through the 4Ds (Detention, Depression, Deportation and Death) abroad yet through their efforts, the country is able to set a budget. 

Remittance has increased the living standards of families in the home countries. Today, almost everyone in Nepal carries a mobile. Not just in towns and cities, but even in the villages. It has also helped to reduce poverty in the country. Remittances have been contributing in currency appreciation as well. 

In any country, remittance contributes to economic development and Nepal is no exception here. For any developing country, remittance has been a blessing. However, no country can depend on remittance for a long period of time, and it is no way a long term solution. Remittance is only for the short term.

If properly utilised, there is ample opportunity for it to work. A husband sends a certain amount to his wife and children. If the wife invests it in some productive sector, it could bring a positive impact and further contribute to economic well being. Maybe, the wife’s investment could bring her husband back one day. A country can never develop depending completely on remittance. There are billions of dollars entering the country in the name of remittance, but not more than six percent has been utilised in capital investment.

Where is the money going? That should be a matter of huge concern to the government. They need to be taught the skills that will help them to be independent; they need to be taught to live their lives on their own. They need to be showed, how by agriculture, they can call their dear ones back home. It is practically impossible for the government to stop people going to work abroad, and morally unwise as well. However, if agendas like ‘Entrepreneurship by 2030’ could be brought ahead, it would help to some extent. 

One serious impact of remittance is that it discourages investment within the country. People start being dependent upon remittance instead of concentrating on doing something on their own. Gradually the nation will become a victim itself. A sudden halt in remittance can lead to a huge financial crisis. Remittance again encourages migration because in sending money home, neighbours or relatives will want to send their children abroad seeing the improvement in the standard of living.

Consequently, remittances are good for the short term, but we should not completely depend on it. Qatar- which will be hosting the World Cup soon- has made such huge long term progress by using Nepali labour. We are happy with remittances and they (Qatar) are happy about their development- hence the questions arise, short term happiness or long term happiness?

From Abu Dhabi and the airports of the Middle East, to the dhabas of Kerala, Nepali youths have been working to send their hard earned money home. However, at one point, these youths will return home, adding to the 'youth bulge' in Nepal. 

From marriages to buying a new smart phone, Nepali migrant workers have been sending money home. However, this money will be used in the productive sectors only if attractive schemes are introduced.

There have to be solutions prepared for the long term and there has to be respect created for every individual who flies abroad. It is not our finance minister, who makes the country’s economy strong; rather it is these unemployed youths who are queuing up at the airport, ready for 3D jobs and 4D situations that shape our economy!

The writer is an MBA student at JNTU(A), Andhra Pradesh, India.


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bimal pradhan

thanks Regmi jee and please keep writing on these issues.

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