IMPACT OF FOREIGN EMPLOYMENT AND

REMITTANCE IN NEPAL

A Seminar Paper

By

Krima Khanal

Exam roll no.: 32810/21

T.U registration no.: 7-2-444-13-2021

Submitted To:

Faculty of Management, Tribhuvan University

Modern Nepal College

Bachelor of Business Administration (BBA)

Shorakhutte, Kathmandu
May 2023
 STUDENT DECLARATION

The researcher hereby declare that this seminar paper entitled “IMPACT OF
FOREIGN EMPLOYMENT AND REMITTANCE IN NEPAL” was carried out for
the degree of Bachelor of Business Administration (BBA) under the guidance and
supervision of Mr. Arjun Kumar Karki of Modern Nepal College. The work presented
here are not to be published or submitted elsewhere for the requirement of any degree
program. All the literature, data or any forms of work done by others are cited within
this report with due acknowledgement.
………………Krima Khanal
May 2023

ii
 CERTIFICATE FROM THE SUPERVISOR

This is to certify that the seminar paper entitled “IMPACT OF FOREIGN

EMPLOYMENT AND REMITTANCE IN NEPAL” is academic work done by
“Krima khanal” submitted in the partial fulfillment of the requirements for the degree
of Bachelors of Business Administration at Faculty of Management, Tribhuvan
University under my guidance and supervision. To the best of my knowledge the
information presented by her in the seminar report hasn’t been submitted earlier.

…………………………...
Mr. Arjun Kumar Karki
January 2023

iii
 ACKNOWLEDGEMENT
This seminar paper was created as part of requirements for a Bachleor’s degree in
Business Administration at Tribhuvan University. The researcher received help and
guidance from several people, whose contribution made the seminar paper possible.
The author hopes that this report will serve as a reference for student interested in
similar topics.
The researchers expresses sincere gratitude to their supervisor, Mr. Arjun Kumar
Karki, and acknowledge Tribhuvan University for providing a platform for students to
gain both theoretical and practical knowledge. The preparation of the report has been
a valuable learning experience, and the author feels privileged to have had the
opportunity to work under their supervisor’s guidance.
The author wishes to extend heartfelt thanks to all those who provide support and
assistance throughout the completion of this project.

Krima Khanal.

iv
 TABLE OF CONTENTS
Cover pages…………..………………………………………………………………………….i
Student Declaration................................................................................................................ii
Certificate From The Supervisor………………………………………………………………….iii
Acknowledgement...................................................................................................................iv
Table Of Content…………………………………………………………………………………………v
List Of Tables…………………………………………………...……………………………………….vi
List Of Figuers..
…………………………………………………………………………………………………………………..vii

CHAPTER-I: INTRODUCTION
1.1 Background of the Study..........................................................................................1
1.2 Statement of Problems.............................................................................................2
1.3 Objectives.................................................................................................................2
1.4 Significance of the Study.........................................................................................3
1.5 Methodology............................................................................................................3
CHAPTER-II : DESCRIPTION AND ANALYSIS
2.1 Theoretical Review..................................................................................................4
2.2 Empirical review......................................................................................................4
2.3 Description and Analysis of the Study.....................................................................5
2.4 Remittances Inflow..................................................................................................5
2.5 Foreign Labour Migration from Nepal....................................................................6
2.6 Trend of Foreign Employment.................................................................................9
2.7 Foreign Employment and Remittance....................................................................10
2.8 Impact of Foreign Employment.............................................................................11
2.9 Impact of Remittances on Poverty Reduction, Income Inequality and Social
Welfare in Nepal..........................................................................................................12
2.10 Challenges Facing Nepal’s Economy in Terms of Remittances........................13
2.11 Measures to overcome the problems seen in the Foreign Employment...............14
CHAPTER-III: FINDING AND CONCLUSION
3.1 Finding...................................................................................................................15
3.2 Conclusion..............................................................................................................16
3.3 Reference…………………………………………………………………………18

v
 LIST OF TABLES
Table 1: Top 10 labour destinations of Nepali migrants workers……………………8

vi
 LIST OF FIGURES
Figure 1: Annual remittance inflows to Nepal………………………………………...6
Figure 2: Annual number of labor approvals………………………...………………10

vii
 CHAPTER-I: INTRODUCTION

1.1 Background of the Study

‘Employment’ is not simple term denoting the mere holding of a job for which a wage
is paid, or the operating of one’s own business. Rather, it signifies the state of anyone
who is doing what, under the circumstances, he most wants to do (Cooley, 1963).
According to Foreign Employment Act 2064 of Nepal, ‘Foreign Employment means
employment in which workers gets abroad’. While the Department of Foreign
Employment has so far approved 110 countries as labor migration destinations for
Nepalese, it is estimated that Nepalese work in as many as 172 countries. Nowadays it
has become a common trend for Nepalese youths to go to different countries for
working and earning. Foreign employment is increasing day by day due to lack of
employment opportunities within the nation, political instability, the low salary
structure, increase in poverty and inability to earn enough to support oneself and their
family. The massive outflow of young and productive work force has limited the
scope for raising country's economic growth rate, despite the fact that Nepal has one
of the highest rates of labour force growth in the Asia and the Pacific region. The
overseas migration and remittances have been instrumental in poverty alleviation as
well as for improving the living standards of the people (Seddon et al., 1999 and
Shrestha, 2004).

Remittances are commonly defined as monetary transfers sent from migrants to

family back home through formal and informal channels (Zanker, 2014). Remittances
are dispatched owing to affection and responsibility towards the family. Remittances
can generate a positive effect on the economy through various channels such as
savings, investment, growth, consumption, and poverty and income distribution. From
2002 to 2021, remittance inflows to Nepal have increased at an average annual rate of
17.2 percent (NRB, 2021). Remittances assist in augmenting national income by
providing foreign exchange and raising national savings and investment as well as by
providing hard currency to finance essential imports hence curtailing any balance of
payment crisis.Remittance helps in poverty reduction. The major portion of the
remittance is used for meeting household consumption and paying off loans borrowed

1
 to go abroad (Seddon et al., 1999). Remittances are used for meeting daily necessities
like food, clothing and payment of debt and interest. Thus the role of remittance has
also appeared important in maintaining the economy intact. The financial flows
generated by these migrants by way of remittances are very substantial development,
(The World Bank, 2006).
The aim of this paper is to show current status of foreign employment and remittance
inflow and analyze the contribution of remittance inflow on poverty reduction
strategy of Nepal.
1.2 Statement of Problems
Foreign employment in the context of Nepal has been considered as a major economic
phenomenon; however there is a major question of sustainability of Nepalese
economy with the remittance economy. There are also some critical issues regarding
the remittance and economic growth in the Nepalese scenario that poor utilization of
remittance, excessive investment in unproductive sectors, low economic growth,
limited job opportunities and the trend of brain-drain that need to be answered. The
remittance inflow in the country has been increasing and Nepalese economy heavily
depends on it excessive dependence on remittance might not to be sustainable given
the fragile state of national and international economic
 What is the current level of remittance inflow in Nepal, and how has it trended
over the past decade?
 What is the current status and trend of foreign employment in Nepal?
 How does foreign employment and remittance inflow affect Nepal’s social and
economic development, particularly in terms of income inequality and
poverty?
1.3 Objectives
 To accesses the remittance inflow in Nepal.
 To analyze the current status and trend of foreign employment.
 To examine the impact of foreign employment and remittance inflow in Nepal.
1.4 Significance of the Study
Overseas employment has reduced the share of poverty and unemployment to a
certain extent. The life style of the household who succeeded in going for overseas
employment has changed. But they have not been able to utilize and invest the whole
remittance in the productive sector. Therefore investment and utilization of the

2
remittance has emerged as a major problem in the field of overseas employment. And
the government has also encouraged the private institute to run skill development
program to address increased demand of Nepalese workers in overseas countries as
well as to make them capable to increase their salary and wages.
1.5 Methodology
The present study analyzes the current status and trend of Nepalese migrants and
remittance inflows in Nepal and its impacts on the Nepalese economy. So, the
research design followed in the study is descriptive in nature and the secondary data
and information were used. . The necessary secondary data were collected from the
different government publications such as: publication of Economic Survey of
Ministry of Finance (MoF), Employment and Social Security.This paper is a
descriptive analysis based on various books, journals and articles along with some
data analysis.

3
 CHAPTER-II : DESCRIPTION AND ANALYSIS

2.1 Theoretical Review

 Kshetry (2004) in his article "Emigrating Workers in National Perspectives"
identified the causes of Nepalese emigration as limited employment opportunities in
government and private sector. Underdevelopment of industries and rudimentary
services sector provides limited number of jobs to ever increasing labor force. In the
farm sector which conventionally used to absorb almost all the work force failed to do
so because of low motivation for farm sector work. The entrepreneurs in this sector
are not enthused to invest more either due to low returns or risk involved in this
sector. Such events and lure of making quick money at least from legal means by
going overseas for menial work prompted to exit large number of workers from rural
Nepal.
 Shafqat, Ashfaq and Bano (2014) stressed on “The promotion of economic growth
in remittance recipients countries” which is widely effected by the workers
remittances. He highlighted to provide productive ideas to policy makers for taking
best decisions regarding management of these flows in the way that it would give
productive output in terms of investment. In order to explore the relationship between
worker remittances and economic growth, multiple regression analysis was used in
the study. Several tests and multiple regression analysis conducted revealed that
workers remittance positively and significantly contributed in economic growth.
Thus, it was examined that remittance was the best source of income in terms of
foreign exchange from developed countries to under developed countries.

2.2 Empirical review

 Pokharel (2004) identifies Nepali overseas worker sending foreign exchange to Nepal
as the backbone of Nepalese economy. They bring with them not only money but also
special skills, knowledge and exposure. With appropriate strategies and programs this
resource plays an important role in rural transformation.
 Pant (2006) explored remittance inflows to Nepal: Economic impact and policy
options. The remittances have been an important avenue of support for family
members remaining at home. As the number of workers going abroad for employment
continues to rise, the corresponding growth of remittances has become a critical flow

4
of foreign currency into Nepal. This has been partly the result of measures undertaken
by the concerned officials to streamline financial systems, dismantling controls and
creating incentives, with the aim of attracting remittances particularly through the
official channels. Economic growth, interest rate and exchange rate policies are
crucial determinants of remittance inflows. In order to further encourage the inflow of
remittances to the country through official channels, and to promote the tendency to
exchange these remittances of foreign exchange into local currency, it is imperative
that these policies be conducive to the inflow of remittances.
The study of the literature further reveals that theoretical and empirical evidences on
the impact of workers' remittances on economic development and growth have made
the issue debatable because some researchers are in favour of remittances positive
impacts while some negate its outcomes but a few are of the view that there are no
relations between the two. However, comparatively the major portion of literature
found is in favour of positive impact of workers’ remittances on economic growth and
development of developing countries.
2.3 Description and Analysis of the Study
This paper analyzes the objectives of the study based on the following data:
remittance inflow, trend of foreign employment, impact of foreign employment and
remittance, labour migration. On this ground, this study is designed to address the
following research question related to overseas employment and remittance:
 What is the trend of foreign employment and remittance?
 Does the remittance have positive economic impact?
2.4 Remittances Inflow
The remittance inflows to Nepal jumped by a record 20.4 percent to Rs378.04 billion
during the first four months of the current fiscal year amid the world’s largest
economies teetering on the brink of a recession triggered by inflation, latest data from
the Nepal Rastra Bank showed. The growth in remittances was attributed to the
strengthening of the US dollar against the Nepali rupee. According to the country's
central bank, in US dollar terms, the remittance inflows increased 10.8 percent to
$2.93 billion in the review period, against a decrease of 7.3 percent in the same period
of the previous year.
According to the World Bank, remittances to low- and middle-income countries may
withstand global headwinds in 2022, growing at an estimated 5 percent to $626

5
billion. With Nepal’s external earnings growing and imports decreasing, the central
bank said that Nepal’s economic and financial situation is improving. The central
bank said that the current account remained at a deficit of Rs35.40 billion in the
review period compared to a deficit of Rs 220.91 billion in the same period of the
previous year.
This year, migrant workers and remittances were affected by the impacts of COVID-
19 pandemic, Russia-Ukraine war and inflation among others factors, according to the
World Bank.
Figure 1: Annual remittance inflows to Nepal in four consecutive FYs (in NPR
billion)

The surge in remittances in FY 2021/22 is by a smaller percentage (4.8%), against a

9.8% increase in FY 2020/21. Despite this minimal increase, the amount reaching the
range of trillions is worth notifying as it is significant and indicative of the gradual
revival of the country’s migration sector, which had seen a temporary halt during the
peak of COVID-19.
The remittance inflows to Nepal increased from NPR 87.1 billion (USD 0.68 billion)
to NPR 92.4 billion (USD 0.72 billion) from mid-May to mid-June 2022 alone, which
is a 6.12% increase from the previous month. A continued surge in the upcoming
months can likely revive the country’s income. Figure 1 depicts the annual trend of
remittance inflows to Nepal over the last four fiscal years ( Maharjan 2022 ).
2.5 Foreign Labour Migration from Nepal
Nepal has a long history of labour migration. For around 200 years, Nepali men (and
to a lesser extent women) have been leaving their homes to seek employment and
living abroad. At present a large proportion of laboures go abroad temporarily, with

6
the aim of returning back to their homeland. Foreign labour migration and subsequent
remittances prop up the country's ailing economy. Yet, this important sector continues
to be neglected by policy makers and planners.
Labour migration has been a common livelihood strategy for Nepalese households
over the recent decades. According to the World Bank, remittances contributed 24
percent of the country’s GDP in the year 2021. The report encapsulates the major
trends and activities in the country’s labor migration sector covering the period
between 2019/2020 and 2021/2022 which follows the efforts of the ministry to
periodically present a comprehensive overview of labor migration in Nepal.
According to the report, the ministry has adopted and implemented a range of policies
and legal instruments to address labor migration related issues in the country such as
shifting labor migration related services to online system, adopting new directives and
procedures for the reintegration of returnee migrant workers, as well as significant
modification on immigration policies especially aimed at the migrants in major labour
destination countries. Despite this progress, Nepali migrant workers’ health and safety
issues as well as cases of fraud, abuse and exploitation continue to occur in large
numbers that cannot be ignored.

S.N. Country 2019/20 2020/21 2021/22

1 Saudi Arabia 39279 23324 125374

2 Qatar 29835 22131 76822

3 UAE 52085 11611 53846

4 Malaysia 39167 106 25770

5 Kuwait 8974 2 22786

7
 6 Bahrain 3305 3146 7592

7 Romania 1930 1954 6423

8 South Korea* 3542 16 4253

9 Oman 1996 1556 3627

10 Cyprus 1447 1003 3222

Table 1: Top 10 labour destinations of Nepali migrants workers in the last three FYs
(institutional and individual – new and legalized)

8
However, India, which is unaccounted for in the official data, remains one of the
largest migration destinations for Nepalese living in the border regions of the
neighboring country.
2.6 Trend of Foreign Employment
In the first 7 months of the current fiscal year, nearly 5 lakh youths have gone abroad
for foreign employment. According to the data of the Department of Foreign
Employment, the number of new labor permits and renewals of labor permits for
foreign employment has reached 482,475.
This year, the number of Nepalese who took new final work permits (institutional and
individual) within 7 months has reached 3 lakh 14 thousand 767 people. In the month
of January alone, 39 thousand 124 young people have obtained new work permits for
foreign employment.
During this period, 1 lakh 67 thousand 708 people flew abroad for foreign
employment with re-employment permits, according to the data.
In the month of January, more than 25,000 youth have renewed their work permits.
During this period, it seems that the maximum number of 182,000 youth went to work
in Malaysia.
This year, the number of people going to work abroad has increased by 130,000
compared to last year. During the same period last year, 3 lakh 52 thousand 423
young people went abroad. The number of people who went abroad with a new work
permit was only 2 lakh 102, while the number of Nepalese who got a new work
permit was 1 lakh 52 thousand 325.
The number of Nepali workers (institutional and individual-new) taking approval for
foreign employment increased 102.5 percent to 195,196 in the review period. The
number of Nepali workers taking approval for foreign employment increased 46.4
percent to 87,428 in the review period. Industry insiders say given the way Nepalese
are moving abroad in search of jobs, Nepal may see nearly a million workers
migrating overseas by the end of this fiscal year.
Similarly, the gross foreign exchange reserves increased 2.5 percent to Rs1,246.27
billion in mid-November from Rs1,215.80 billion in mid-July. In US dollar terms, the
gross foreign exchange reserves increased 1.0 percent to 9.63 billion in mid-
November from 9.54 billion in mid-July.

9
Figure 2: Annual number of labor approvals in the last five FYs

Encouragingly, the number of Nepali workers, including institutional and individual

(new and legalized) workers, taking approvals for foreign employment
also increased from 72,081 to 354,660 in the last month’s data of the FY 2021/22
(ending mid-July 2022). The increase signifies a whopping 392% jump from the
previous year, majorly because of the relaxation of lockdowns and COVID-19
restrictions. Furthermore, increasing employment opportunities with increased
salaries in destinations such as Malaysia, Qatar, India, and others also contributed to
this positive trend. Likewise, the number of Nepali workers seeking renewed entry
approvals increased by 198.5% to reach 282,453 in mid-July 2022, against a decrease
of 46.8% in the previous corresponding period (Figure 2).

2.7 Foreign Employment and Remittance

A) The positive impact of remittance in Nepalese economy:
 Remittances can generate a positive effect on the economy thorough various
channels such as savings, investment, growth, consumption, and poverty and
income distribution. At the national level, remittances contribute significantly
to GDP.
 Remittances can also contribute to stability by lowering the probability of
current account reversals. Since they are a cheap and stable source of foreign
currencies, remittances are likely to stem investor panic when international
reserves are taking a downward trend or external debt is rising.

10
  At the community level, remittances create multiplier effects in the domestic
economy, producing employment opportunities and spurring new economic
and social infrastructure and services, especially where effective structures and
institutions have been set up to pool and direct remittances. Where these have
been set up and encouraged, and where the state is cooperative, remittances
can bring about a change, especially in remote rural areas.
B) The importance of foreign employment in Nepalese economy:
a. To solve the unemployment problem: Nepal has a severe unemployment
problem. Foreign employment helps to solve the problem of unemployment in the
country.
b. Remittance income: Another benefit of foreign employment is that it helps
increase the country's remittance income. The amount of remittance income depends
on the numbers of workers going for foreign employment.
c. Skilled and trained human resources: The worker who returns to the home
country after some years is the generally skilled and trained workforce. Their skills
and knowledge can create new opportunities in the country.
d. Increase standard of living: The standard of living of the members of the family
living in the home country increases. This is due to the money the worker receives
from a foreign country.
e. Poverty reduction: Remittance income received from foreign employment
increases household income, which helps increase the consumption of low-income
families. It also increases living standards and reduces poverty. Currently, there is a
decrease in the poverty in Nepal because of remittance.
f. Development of human resources: The remittance income from foreign
employment plays a significant role in developing human resources in Nepal. A large
part of remittance income is spent on education, health, and nutrition. This increases
literacy rate and life expectancy, which means human resource development.
2.8 Impact of Foreign Employment
Foreign Employment seems quite alluring with its advantages but in long run
foreign employment is not beneficial for any country. Country needs to work on
creating job opportunities within country rather than sending workers abroad for
opportunity. The negative impact of foreign employment in Nepalese Economy
are;

11
a. Shortage of human resources in the country: The increase in foreign
employment has brought the problem of a shortage of labour in the agriculture and
industrial sector of the country. At present, Nepal is facing this problem.
b. Brain drain: The most severe cost of foreign employment is brain drain. Due to
the opportunity for foreign employment, the country's most talented, skilled, and
highly educated workforce is migrating to developed countries like the USA, UK,
Canada, Australia, etc. Therefore, it harms the economic development of developing
countries like Nepal.
c. Mismanaged family: Migration of parents can leave families of young children
with inadequate guidance and an additional burden of household responsibilities,
which can lead to higher school absences, school dropouts, poor nutrition and health
care of children- especially younger children, and substance abuse - mainly older
children.
d. Creates dependency: It is argued that remittance receipts from foreign
employment can create dependency. It may reduce recipients' incentive to work and
thus slow economic growth. This, along with a shortage of skilled workers in the
country, may hurt the country's economic growth in the long term.
e. Human costs: Remittance may also have human costs. Migrants make significant
scarifies. They have to remain separated from their families and incur risks to find
work in another country. They may have to work hard to save enough to send
remittances. Many Nepalese workers are suffering hardship in gulf countries.
Moreover, some of them die in a foreign land due to their hard work.
f. Increase in trade deficit: In Nepal, imports are very high compared to exports.
This is resulting large trade deficit in Nepal. One of the major causes of the trade
deficit in Nepal is remittance income received from foreign employment because
remittance causes an increase in demand for consumer goods, which is fulfilled by
importing goods from other countries.
2.9 Impact of Remittances on Poverty Reduction, Income Inequality and Social
Welfare in Nepal.
Remittances have had a significant impact on poverty reduction and social welfare in
Nepal. According to the World Bank, remittances have helped reduce poverty by
around 2% in Nepal. This is because remittances provide a sources of income for
families that can be used to purchase food, clothing, and other necessities.
Additionally, remittances have also played a role in reducing income inequalities.

12
Families that receive remittances tend to have higher incomes than those that do not,
which can help to reduce the gap between the rich and the poor.
Remittances have also had a positive impact on social welfare in Nepal. They have
helped to improve access to education, healthcare, and other basic services.
Additionally, remittances have helped to improve living standards and the overall
well-being of Nepalese families.
2.10 Challenges Facing Nepal’s Economy in Terms of Remittances.
Despite the significant contribution of remittances to Nepal’s economy, there are
several challenges that needs to be addressed. These challenges include:
1. Currency fluctuations
Remittances are usually sent in foreign currency and fluctuations in the exchange rate
can have a significant impact on the value of these remittances. A decrease in the
value of the Nepalese rupee against the US dollar can reduce the value of remittances
received in dollars, making it difficult for families to afford necessities and for
business to invest in new projects.
2. High transaction costs
The cost of sending and receiving money can be quite high, particularly for those
living in rural areas. This can make it difficult for families to access their money and
can also reduce the overall value of remittances received.
3. Lack of financial infrastructure
Many people, particularly in rural areas, do not have the access to formal financial
services. This can make it difficult for them to receive and use remittances, as they
may have to rely on informal channels such as money lenders.
4. Volatility of the economy
Dependence on remittances can create a volatile economy, as a decrease in
remittances can have a negative impact on the economy.
5. Brain drain
Many educated and skilled workers leave Nepal to work abroad, which can have a
negative impact on the long-term development of the country.
These challenges can limit the positive impact of remittances on Nepal’s economy. It
is important for Nepal to take steps to address these challenges and to continue to
develop policies to enhance the positive impact of remittances on the economy.

13
2.11 Measures to overcome the problems seen in the Foreign Employment.
Although foreign employment has helped a lot to solve unemployment problem
prevailing in our country as well as has increased the living standard of the people, it
has some challenges too. So, following are the measures to overcome the challenges
seen in the foreign employment:
1. Mostly, the semi-skilled and unskilled manpower go to foreign countries. So, they
should be well trained about the work before going there.
2. The workers should learn the language where they are going so that no difficulties
can be seen while working.
3. The companies or agents should teach the workers about the rules and laws of the
country for being aware, otherwise there will be great possibility of being imprisoned
and involved in criminal activities if the rule us broken.
4. The government should formulate the laws and policies required for foreign
employment to overcome the challenges seen in the foreign employment and strictly
implement it.
5. The government too should alert the ambassador to know about the situation of
foreign employment and should supervise time to time.
6. Those manpower companies which are illegally established and are involved in
illegal draining out of workers should be punished according to law made by the
government.
7. The concerned authority for foreign employment should provide legal visa to the
workers and punish those who intend to give illegal visa for foreign employment.
8. Those manpower companies which are cheating the workers as they do not get
good job as contracted before should be strictly banned and punished.
9. The Manpower Company or brokers shouldn't send the Nepali people for long hour
working jobs.
10. Those people who are mentally and physically tortured as well as sexually
exploited should be rehabilitated by the ambassadors of the particular countries.

14
CHAPTER-III: FINDING AND CONCLUSION
3.1 Finding
The major findings of the study are mentioned as follows:
 At recent time, the remittance inflows increased 10.8 percent to $2.93 billion
in the review period, against a decrease of 7.3 percent in the same period of
the previous year. The growth in remittances was attributed to the
strengthening of the US dollar against the Nepali rupee. In conclusion,
remittances have played a vital role in Nepal’s economy, providing sources of
income for many Nepalese families. Despite some challenges remittances have
helped to played a key role in helping to reduce poverty, improve living
standard, and support social welfare in Nepal.
 The trend of labour migration and foreign employment are increasing day by
day. Foreign employment has become a major economic phenomenon of
Nepal and Nepal is one of leading countries according to remittance.
Although, the foreign employment has many positive impacts on the economy,
but it also has some negative impacts that affect the economy in a bad way.
These negative impacts can be mentioned as reduction in export and increase
in import, shortage of skilled and energetic workers, decrease in Foreign
Direct Investments, and so on. Increasing dependency on remittance is another
problem because of unexpected stop in the inflow of remittance can bring
serious financial crisis.
 Foreign employment helps to divert large amount of remittance into national
economy. Remittances have positive impact on national economy as well as
household economic condition but this is not satisfactory. So the current need
is for more effective migration management to reduce the vulnerabilities of
migrant workers and safeguard the rights of migrant workers.

15
3.2 Conclusion
Furthermore, we can conclude that foreign employment and remittances is one
important component of national economy. Remittance has a greater scope of
expansion for a "role play" in the socio-economic development, Poverty reducing of
developing country like Nepal. Nepal has an encouraging picture toward this
direction. However, because of the lot of traditional or emerging new reasons, the
remittance sector also would go in jeopardy if timely and proper policy measures and
strategic actions are not adopted.
To overcome the challenges of foreign employment the government should develop
appropriate training and education programs to assist returning migrants or remittance
receipts in making effective investment decision. Moreover, the appropriate
infrastructure should be developed to generate favourable investment climate and be
complement investments out of remittances. The capital, skills and technology which
migrant workers bring back home are among the most valuable gains from foreign
employment that should be properly utilized by the government. The result shows that
mere increasing remittance income does not support for the economic growth and
development of the nation unless it is extensively used into the productive sectors.
Thus, it is recommended to the government agencies for the formulation and
implementation of remittance utilization policy for the enhancement of national
economy.

16
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Department of Foreign Employment, Labour Migration for Employment, A Status
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Kshetry.(2004). Emigrating Workers in National Perspectives.
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