Remittance important to reduce poverty: WB report

The World Bank's Global Economic Prospects (GEP) report for 2006 has underlined that the high inflow of remittance have greatly contributed in reducing poverty.

As per available statistics, over one billion dollars has entered Nepal as remittance money. However, the official figure comes to be around Rs 36 billion as per various organisations’ statistics. Nepal lies among the 20 top remittance receiving countries.

Hans Timmer, leading economist and manager of Global Trends of World Bank and one of the lead authors of GEP-2006, said that despite a cyclical slowdown, GDP continues to grow rapidly in developing countries, underpinned by past policy reforms.

He also highlighted role of globalization in achieving a strong growth particularly in developing countries and added, "Because of globalization, global growth has been strengthened and the business cycle is relatively stable.

Making a presentation, Dilip Ratha, senior economist, Development Prospects Group, The World Bank, said that migration and remittances continue to increase globally.

He commented that migration generates substantial welfare gains and reduces poverty and benefits countries of origin.

Commenting on the presentation, Krishna B Manandhar, deputy governor of Nepal Rastra Bank (NRB), said remittance has been an important contributor to the national economy. However, some of the remittance transfer operators charge high fees that encourage the informal sector, he added.

“There should be a system for receiving remittance in the country,” he said, adding, “Those who send money from formal channels have not faced any problems so far.”

Likewise, Professor Ganesh Gurung said that the healthy inflow of remittance has played a crucial role in lowering poverty and sustaining economy, which has been engulfed in various problems.

He however stressed that along with the promotion of foreign employment, the government should also put due attention in developing labor-intensive industries like carpets and garments.

Dr Bimal Koirala, chief of the Management Development Center, said that remittance has been a reliable and important source for developing countries to make their balance of payment position favorable. He also urged the government to play constructive role in management of migration to ensure a sustainable development of the country.

As per the GEP 2006, real GDP growth in South Asia is estimated at 6.9 percent in 2005, slightly higher than in 2004 and this aggregate performance reflects a stable growth of about 7 percent in India and an acceleration from 5.8 percent to 6.6 percent in Pakistan. nepalnews.com pb Dec 09 05

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