Nepalis working abroad earn more hard currency for their home country than all exports, tourism and foreign aid put together.
Most articles on Nepal by foreign correspondents would begin: "Nepal, one of the poorest countries in the world…" It is true, the country´s per capita income is among the lowest in the world, it has a poor industrial base, and agricultural production is lagging behind population growth. They all point to an economy going nowhere. Yet, when a commercial bank recently made an initial public offering of shares worth NPR 175 million (USD 1 = NPR 69), it was oversubscribed within a week to the tune of NPR 1.4 billion. Nepal, the poorest country in the world, seems to be awash in cash.
The domestic job market, too, is a paradox. Nepal´s economic growth rate had once reached 8 percent sometime in the mid-1990s, enough to absorb the 300,000 or so people who enter the labour force every year. By 1998/99, however, it had slowed down to 3 percent, which meant only 100,000 new jobs were created. With a population of 23 million, 200,000 unemployed youth would have formed a large enough group to create social imbalance or political upheaval.
But nothing of the sort. In fact, banks in remote districts report difficulty in keeping up with interest payments, so huge has the savings become. Nepal´s per capita income grew by NPR 1500 (about USD 20) in 1998/99 compared to the previous fiscal year. Balance of payments rose by 100 percent to reach NPR 9 billion in Nepal´s favour. The government´s current account, which had been in the red in previous years, also showed a surplus last year, and foreign currency reserves marked a 1 6 percent increase to reach NPR 75 billion. And although imports from India doubled, Nepal´s banks still have convertible and Indian currency reserves to cover a whole year´s imports. Where is all this money coming from? The only way this can be explained is by taking into consideration remittances from Nepalis working abroad, an amount that is now larger than the money generated by exports, tourism, and foreign aid put together.