“Remittance is more effective in lifting people out of poverty, and its impact on the economy and households is more tangible than ODA (grants and other assistances extended by donor countries and agencies),” the central bank governor said, referring to instances of how remittances received by Nepali households have allowed many to send children to better schools, spend more on nutritious food and improve living standards.[break]
This shows LDCs can mobilize their own resources to some extent to finance costs related to good nutrition, health and education, rather than relying too much on ODA, Dr Khatiwada told a symposium on ´Assessment of Remittance Policies and Programs in Nepal´ held in Lalitpur on Tuesday.
“I think we can discuss this modality (of laying emphasis on remittances than ODA) with the international community as a measure to push development and reduce poverty in LDCs,” the governor said, as he referred to the old adage of ´handing a fishing rod rather than fish to the poor´. “Remittances are fishing rods, while foreign grants and other assistance are fishes.”
But to increase flow of remittance to LDCs, Governor Khatiwada added, the international community must consider aspects like job safety and security of migrants working in labor importing countries.
Nepal received remittances of Rs 359.55 billion from official channel in the last fiscal year, which is well over 20 percent of the country´s GDP. In the first eight months of the current fiscal year alone, Nepal received Rs 266.09 billion in remittance from Nepalis working abroad, while data show the share of remittance in household income hovering at 31 percent.
“Remittance has been making significant contribution to human and social development in LDCs,” Gyan Chandra Acharya, under secretary general of the United Nations, told the symposium.
Despite this, remittance cannot be a substitute for ODA, Eric Adja, director of the International Migrants Remittances Observatory (IMRO), said, in a tone that contrasted view of Governor Khatiwada.
“Remittance flows are private in nature,” Adja further said. “How can we channel this flow of money for productive works is a challenge.”
Economists Prithvi Raj Legal and Madan Kumar Dahal also emphasized the need to direct remittance flows to productive sectors to give a boost to capital formation process.
Dr Devendra P Shrestha, principal investigator for survey on ´Assessment of Remittance Policies and Programs in Nepal´, stressed the need to come up with a separate and coherent policy on remittance as most of the legal documents, that incorporate remittance, only promote foreign employment and financial aspects related to overseas employment.
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