Remittances, Resilience, and Ramro GDP: A Satirical Inquiry into the Nepali Economy
Dr. Arthik Byatha, PhD, DArchy, MPhil, LOL
Journal of Theoretical Economics & Applied Sarcasm (JTEAS)
Volume 7, Issue 2 — June 2025
Abstract
Nepal’s economy has evolved through paradoxical phases—from feudal agriculture to remittance-fueled GDP growth—conveniently bypassing industrialization. While classical economists trusted that the “invisible hand” would solve economic inefficiencies, Nepal seems to have misplaced both the hand and the manual. This article traces Nepal’s economic path using historical references, macroeconomic facts, and a healthy dose of sarcasm. Particular focus is given to the persistence of underperforming public enterprises, the rise of labor migration, and the role of remittance in sustaining national consumption.
1. Introduction
In many ways, Nepal’s economy is a beautiful contradiction. It survives on exports it doesn’t produce, grows with labor it doesn’t retain, and develops through government entities that lose money annually. Traditionally agrarian, Nepal still has over 60% of its population engaged in agriculture, which contributes less than a quarter to GDP (World Bank, 2023). Meanwhile, remittances account for over 26% of GDP, making “abroad” the most productive sector in the country (World Bank, 2023).
2. Classical Economics and the Great Depression
Adam Smith’s invisible hand (Smith, 1776) was supposed to guide individuals acting in their self-interest toward collective economic good. Unfortunately, in 1929, that hand dropped the ball—resulting in the Great Depression. This crisis gave rise to Keynesianism, which promoted public investment as a tool for job creation and economic stabilization (Keynes, 1936).
Developed economies responded with public works, social security systems, and large-scale infrastructure. Nepal, however, took a different path: building public enterprises that neither worked well nor created significant value. Yet they remain funded with enviable loyalty—perhaps as monuments to economic nostalgia.
3. Methodology
This paper adopts a mixed-method approach:
- Quantitative Analysis: Macroeconomic data from credible sources.
- Qualitative Insight: Public discourse, reports, and audit summaries.
- Sarcastive Interpretation: Filtered through socio-economic irony and policymaking humor.
4. Analysis
4.1. The Rise of Remittance: The Real National Product
Nepal has seen an exponential rise in labor migration since the 1990s. Labor permits surged from 220,000 in FY 2008/09 to over 520,000 by 2013/14 (Sapkota, 2021). Remittance inflows reached $11 billion USD in 2023, comprising 26.6% of GDP (World Bank, 2023). Yet, most of this capital fuels consumption, real estate, and imported motorbikes—not productive investment.
Despite being a temporary fix, remittance has become a permanent economic pillar.
Other words: Every momo you eat is statistically 1/4th funded by someone sweating in Saudi Arabia.
4.2. Inflation and the Invisible Wallet
The Consumer Price Index (CPI) has risen steadily, with inflation rates averaging above 7% annually (Nepal Rastra Bank, 2024). ARDL-based studies confirm that remittance inflows have a long-run inflationary impact, often outpacing wage growth and eroding purchasing power (Dangal & Ghimire, 2020).
Observation: In Nepal, you don’t raise prices because of scarcity—you raise them because someone abroad got a raise.
4.3. Agriculture: The Shrinking Backbone
Agriculture employs the majority of Nepalis, but contributes less than 25% to GDP (World Bank, 2023). Panel data show that remittance negatively correlates with agricultural output (Khanal, 2023). Labor migration has left fields empty and cows confused.
Despite slogans of “Krishi Deshko Mool Aadhar,” agricultural investment remains performative at best.
4.4. Public Enterprises: Faith-Based Budgeting
While the rest of the world moved from public to private sector efficiency, Nepal chose to double down on public enterprises (PEs). According to the Ministry of Finance (2023), only 12 out of 44 state-owned enterprises were profitable. The rest posted cumulative losses of NPR 17.28 billion.
Yet, year after year, budget allocations continue as if performance is a minor technicality.
Case Study: Nepal Airlines, despite its patriotic branding, has flown more losses than flights in the last decade.
The Office of the Auditor General (2023) highlights chronic mismanagement, delayed reporting, and low returns across nearly all PEs.
5. Discussion
Nepal’s economic model has turned into a unique blend: a classical textbook case of what not to do, laced with remittance-fueled survival and fiscal romanticism. The government’s obsession with public enterprises appears to be less about economics and more about symbolism, employment protection, and political inertia.
6. Conclusion
Nepal’s economy is sustained less by policy and more by perseverance. The invisible hand hasn’t worked, and the visible hand is signing off on loss-making budgets. Structural transformation is often discussed but rarely attempted. If economic theory were a Bollywood movie, Nepal is still stuck in the first act—lots of drama, no resolution.
7. Recommendations
- Redirect Remittances into productive investment through diaspora bonds and rural cooperatives.
- Reform Public Enterprises by introducing performance-based incentives and exit strategies.
- Support Agriculture with mechanization, irrigation, and land reforms—not just slogans.
- Financial Literacy Campaigns to help households invest savings rather than spend on consumption.
- Encourage Private Sector Innovation, particularly in technology, tourism, and agro-processing.
References
Dangal, M., & Ghimire, A. (2020). Remittance and Inflation: A Time-Series Analysis for Nepal (2000–2020). Economic Journal of Nepal, 43(2), 45–62.
Khanal, D. (2023). The Mirage of Growth: Remittance and Agricultural Decline in Nepal. Journal of Rural Development, 12(1), 23–41.
Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. Macmillan.
Ministry of Finance. (2023). Annual Performance Report of Public Enterprises FY 2079/80. Retrieved from https://mof.gov.np
Nepal Rastra Bank. (2024). Quarterly Economic Bulletin (Q3). Retrieved from https://nrb.org.np
Office of the Auditor General. (2023). Annual Audit Report 2023. Retrieved from https://oag.gov.np/publications
Sapkota, C. (2021). Nepal’s Remittance Economy: Policy Challenges and Responses. Policy Review Journal, 9(3), 1–12.
Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. W. Strahan and T. Cadell.
World Bank. (2023). Migration and Development Brief 38. Washington, DC: World Bank.