Remittance: Nepal's Economic Backbone and Its Risks
Summary
Remittances have become a backbone of Nepal’s economy, helping stabilize foreign exchange, support consumption, and reduce poverty. But heavy dependence on money sent from abroad also leaves the country exposed to external shocks, labor shortages, and weak domestic production.
Key Points
- Remittances make up a large share of Nepal’s GDP and foreign currency inflows, cushioning the economy and helping finance imports.
- Most remittance income is spent on consumption, education, health, and loan repayment, with very little invested in productive sectors.
- The article warns that dependence on foreign employment creates Dutch disease, drains productive manpower, and increases social and family strain.
- It calls for policies to channel remittances into productive investment, expand domestic jobs, and improve the quality of overseas employment.
