Nepal to receive $8.5 billion in remittance: WB

Remittances to Nepal are expected to increase by a marginal 3.6 per cent to $8.5 billion in 2022, up from $8.2 billion in 2021, surpassing pre-pandemic levels, according to a report.

The main drivers are an increase in vaccinations and lifting of travel restrictions in the GCC, which is the main destination for Nepali migrants, paired with conducive conditions in the GCC, the Migration and Development Brief-37 (November 2022) titled 'Remittances Brave Global Headwinds', which has special focus on Climate Migration, and published on Wednesday by Migration and Remittances Team, Social Protection and Jobs of World Bank, in association with  Global Knowledge Partnership on Migration and Development (KNOMAD), reads.

While high global inflation did not spare Nepali households in Nepal, thanks to strong market price support policies in the GCC, Nepali migrants enjoyed low inflation and maintained a steady flow of remittances to Nepal in the year, it reads, adding that remittance growth was aided by high oil prices ($98 a barrel) and employment opportunities in the construction projects for the FIFA World Cup 2022 in Qatar. “Considering the centrality of remittances in the Nepali economy, the government offered an incentive for remittances of an additional 1 per cent in interest on remittance deposits, increased the daily threshold for money remitted from abroad from Rs 1 million to Rs 1.5 million, and allowed Non-Resident Nepalis (NRNs) to open foreign currency savings accounts in Nepal.”

Historically, the GCC countries have been the main destination for migrants from South Asia but a gradual structural shift is occurring in favour of higher-income countries for Indian migrants. For the majority of the migrants from other South Asian countries, the GCC is still the main destination. They have temporary contracts for low-skilled jobs mostly in the construction and other labor-intensive sectors (Ahmed and Bossavie 2022). In 2019, about 50 per cent of emigrants from Pakistan and 42 per cent from Bangladesh were in GCC countries. Saudi Arabia employed more than 25 per cent of Sri Lankan emigrants and 20 per cent of Nepali emigrants (UNDESA 2019). Every year 400,000 Nepalis leave for Kuwait, Saudi Arabia, and the United Arab Emirates. Since 2010, every fourth Nepali leaves for Qatar.

Nepal recently started checking those who leave as migrant workers and created job contracts and made salaries public information to prevent recruiters from scamming migrant workers. About 8 per cent to 10 per cent of the South Asian emigrants work in countries within South Asia, the report reads, adding that remittance flows to South Asia are expected to grow by 3.5 per cent to reach $163 billion in 2022, a notable slowdown from the 6.7 per cent gain of 2021, but benefiting from strong performance in India and Nepal. “Overall remittance growth in South Asia (3.5 per cent in 2022) masks a large disparity across country results, from India’s gain of 12 per cent, Nepal’s increase of 4 per cent, to an aggregate decline of 10 per cent for the remaining countries of South Asia.”