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Remittances in Nepal: Boon or Bane?

Chandan Sapkota

Journal of Development Studies, 2013, vol. 49, issue 10, 1316-1331

Abstract: Nepal is one of the highest recipients of remittances (percentage of GDP) in the world. For a small land-locked economy battered by a decade-long Maoist insurgency (1996--2006), prolonged political instability, slow growth rate and large exodus of youths for employment overseas, high inflow of remittances bears a huge significance both at micro and macro levels. Exploring various facets of high migration and remittances, this article shows remittance-induced Dutch disease effects and policy laxity to improve investment climate in Nepal. Since it is costly to sterilise the impact of remittances each year, it might be prudent to learn to live with it and gradually channel remittances to productive usages with a goal to boost productivity.

Date: 2013
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DOI: 10.1080/00220388.2013.812196

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Handle: RePEc:taf:jdevst:v:49:y:2013:i:10:p:1316-1331