EDITORIAL: Role of remittance
The amount of remittance can be much higher than what has been reported by the WB if all the remittances are sent through formal channels
The remittances sent by the migrant workers have been keeping the national economy afloat for many years. But the remittance recipient households save little money for capital investment.
The remittance recipients save only 28 percent which is less than one-third of the total money the migrant workers send annually.
The rest of the money goes on repayment of the loan borrowed, health, education of the family members and consumption, according to the Nepal Rastra Bank which conducted a sample survey of 320 remittance recipient households in 16 districts in all five development regions covering hills, mountains and plains.
The study has revealed that two-thirds of the households used the saved money to purchase land and house while the rest of it is spent to meet the family requirements.
The study also shows that most of the migrant works, mainly from South Korea, send money to their families through hundi, an illegal and informal channel, while others working in the Middle East use the formal banking channels that have become quite common after the government cracked down on hundi.
The World Bank report shows that Nepal received a total of US$ 6.6 billion as remittance in 2015, which is in third position after Tajikistan and Kyrgyz Republic.
The amount of remittance can be much higher than what has been reported by the WB if all the remittances are sent through formal channels.
The government must do serious homework to ensure that all the migrant workers follow the formal banking channel so that a clear picture can come up to know how much remittance actually enters into the country.
The migrant workers will be willing to send their money from the banking channel if more banking branches are opened in rural areas in remote districts from where a large number of youths leave the country as migrant workers.
The NRB survey has said that the Nepali workers can send more remittance if the government makes arrangements for sending skilled and high-end professionals in the host countries where Nepali labourers are in high demand.
The survey report has also suggested diversifying the labour destinations in other countries from the Middle East, Malaysia and South Korea.
The government should also come up with a national strategy to use the remittance money for national development so that the future generation may not need to depend on overseas jobs that keep fluctuating due to economic recession and conflicts in the labour destinations.
The concept of “Remit Hydro,” for example, was a good initiative taken by the government some two years ago. But it failed to generate much enthusiasm among the migrant works as their family members could not understand its importance and its usefulness for their livelihood.
The government must develop a suitable mechanism under which the migrant workers and their family members can easily invest their money in a public venture, such as in hydropower projects, making the government guarantor or safe keeper of their investment.
Another initiative the government can do is to encourage family members of the migrant workers in productive sectors by providing them with skills and training so that they can become self-reliant.
In a bid to keep up with the technology, NOC is all set to introduce some automatic fuel pumps in several places in the Kathmandu Valley.
As such pumps display the quality, density, temperature and quantity the consumers would be satisfied. It is alleged that there are anomalies in the quality as well as distribution of fuel by the privately owned petrol which number 2,500 throughout the country.
The Indian Oil Corporation is to help set up these automatic fuel pumps and also provide the necessary training for technicians.
Vehicle owners can choose to pay using fuel cards or credit/debit cards.
In the initial stages such petrol pumps will be supplying fuel only by NOC, a government entity. So far it is not operating petrol pumps.
This would be setting a precedence. In the later stages the private petrol pumps would also be encouraged to possess automatic fuel pumps.
Meanwhile, since a lot of people are employed by the petrol pumps, the concerned should see to it that the affected are provided with relief and also alternate jobs as more advanced petrol pumps are introduced in the country.