Himalayan News Service

Kathmandu, May 11:

Every 11th Nepali male is working abroad and sending in Rs 1,721 per person each year which has led to a huge reduction in poverty by 11 percentage points between 1995-96 and 2003-04.

The country’s economy is largely dependent on remittances sent in by the large number of migrant workers abroad. The contribution of remittances to GDP grew from three per cent in 1995-96 to 15 per cent in 2003-04.

Michael Lokshin, senior economist at the World Bank and Mikhail Bontch Osmolovski, consultant at WB made a presentation on ‘Work Migration and Remittances in Nepal with analysis from Nepal Living Standard Survey (NLSS)-I and II’ today, at a workshop on ‘poverty assessment’ organised by the Central Bureau of Statistics (CBS), with support from the World Bank.

Quoting the findings of NLSS-II, Lokshin said the flow of remittances witnessed a significant growth of 30 per cent per annum during the review period of eight years. “Nepal’s balance of payment reached a favourable position at nine billion rupees and foreign currency reserve stood at Rs 75 billion during the period mainly due to remittances,” he said.

The proportion of households receiving remittances increased from 24 per cent in 1995-96 to 32 per cent in 2003-04. The average amount of remittances increased in real terms from Rs 684 per person per year in 1995-96 to Rs 1,721 per person per year in 2003-04, over 150 per cent increase over the last eight years.

Share of remittance from outside Nepal has increased from 55 per cent to 76 per cent over the period. The share of remittances from India, which was 33 per cent in 1995-96, has slipped to 23 per cent in 2003-04.

These trends are present across all strata of population, although richer households are more likely to receive remittances.

Even though the proportion of households receiving remittances increased in all regions of Nepal, the actual amount of remittances has declined in the rural eastern hill region, while it increased in all other regions.

Ironically, the rural eastern hill region is the only region in the country where poverty increased between 1995-96 and 2003-04. According to NLSS-II, the poverty in the region grew by 19 per cent during the period.

Figures compiled by the department of labour and employment promotion shows that over one million workers were working abroad in 2004. India remains the most popular destination for migrant workers with about 65 per cent of the total outbound labour heading to the southern neighbour.

The findings also show that average age of Nepali migrant workers is 35 and the majority of them comprise of males at 80 per cent.

Earlier, Elena Glinskaya, senior economist at WB made a presentation on ‘Poverty Trends in Nepal between 1995-96 and 2003-04’ and Daniel Westbrook of Asian Development Bank presented a paper on micro-finance.

Dr Yuba Raj Khatiwada, member of National Planning Commission (NPC) chaired the session.