Remittance income being spent on unproductive purchases

NEPAL has not been able to benefit from the remittance sent home by Nepalis working abroad as most of this money is being spent on basic needs, particularly food, and fast moving consumer goods. Speakers at the sixth global convention of nonresident Nepalis (NRNs) said that there had been massive migration from the country in the last two decades, but the country had not obtained any concrete gains from it. “It has been a big concern today how this remittance is being spent,” said Gopal Prasad Kafle, deputy governor of Nepal Rastra Bank, speaking at a session entitled “Looking at the Potential and Emerging Trend of Investment in Nepal”. Remittance accounts for one-fourth of the country’s Gross Domestic Product (GDP) or two-thirds of the balance of payments. The money sent back by Nepali migrant workers abroad in the fiscal year 2012-13 amounted to Rs 434 billion. “This money is not being mobilised in the productive sector, and it is a really worrying factor,” said Kafle. According to Kafle, the central bank is planning to issue foreign employment bonds worth Rs 1 billion this year. Issuance of bonds will help secure the money earned by migrant workers, and prevent it from being spent haphazardly. It will also help the government direct the collected funds to different productive sectors, Kafle said. “This can turn a very small amount of equity into a large cash flow,” he added. He also urged the NRN community to help the government channelize remittance through banking channels, stating that a huge amount of remittance still comes to Nepal through the informal sector. For example, Korea is a big remittance generating country, but its contribution to the total remittance inflow is merely 0.02 percent. Likewise, Kafle said that remittance from Australia and the UK was very nominal. Addressing the same meeting, Kush Kumar Joshi, former president of the Federation of Nepalese Chambers of Commerce and Industry , said that the country receives Rs 40 billion in remittance from migrant workers every month, but it’s a wonder where all the money gœs. “Remittance is not visible in the productive sector,” said Joshi, who is also the chairman of Nepal Purbhadhar Bikas Company. The company is building a Rs 35-billion express tunnel highway connecting Kathmandu with the southern plains by mobilising domestic resources. Foreign Minister Madhav Prasad Ghimire (centre) hands over the registration certificate of NRNA to newly elected NRNA President Shesh Ghale (left) on Monday. POST PHOTO 6TH NRN GLOBAL CONFERENCE