Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010while cardamom is mainly produced in the eastern hills; tea is also produced mainly in the eastern areas; andfruit and vegetables production is spread throughout, though it is concentrated in the rural hills and the Terai.Accordingly, growth of these crops can have varying, positive regional effects.Remittances from export of labour export are quite inclusive and can have strong potential to reduce povertyin Nepal. The incidence of remittances from labour export services abroad is widely distributed across thegeographic regions and castes of Nepal (Table 1.4). The incidence of remittances in 2003/04 is higher in ruralthan urban Nepal. Among rural areas, the incidence of remittances is the highest in rural west mountain/hills, followed by rural western Terai, rural eastern Terai, and rural eastern mountain/hills. The share ofhouseholds receiving remittances from abroad also has increased uniformly across the country. For example,between the mid 1990s and the mid 2000s, the rural eastern hills--the poorest region in Nepal--registered afourfold increase in the number of households receiving money from abroad. That same proportion morethan doubled in ‘other urban areas’ of Nepal.Looking at the proportion of households receiving remittances by caste, Dalit (the so-called lowest castes inthe Hindu caste hierarchy) have the highest probability of receiving money from outside Nepal (25 per cent),while the incidence of external remittances is much lower among Newar and Terai-hill Janjatis (indigenouspeoples). At the same time, only 10 per cent of Dalit households receive remittances from Nepal. This mightsuggest that poor job opportunities at home prompt Dalit households to concentrate their job search effortsabroad.Table 1.4Percentage of Nepali Households Receiving Remittances by Regions and CastesReceive remittance Receive remittance Receivefrom Nepal from abroad any remittance1995/96 2003/04 1995/96 2003/04 1995/96 2003/04RegionsKathmandu 14.3 7.8 3.6 5.7 17.9 13.5Other urban areas 13.1 17.1 6.0 14.3 19.2 31.3Rural West mountain/hills 10.6 11.1 19.6 29.4 30.2 40.4Rural Eastern mountain/hills 11.1 16.9 2.0 9.3 13.1 26.2Rural Western Terai 12.0 12.6 10.6 19.2 22.6 31.8Rural Eastern Terai 14.7 14.6 11.0 18.1 25.7 32.7CasteBrahmin/Chhetri 13.4 15.8 11.1 19.9 24.5 35.7Dalit 12.0 9.8 15.1 24.7 27.0 34.5Newar 13.2 14.3 3.6 7.8 16.8 22.1Teari-hill Janjatis 9.8 14.6 9.4 15.4 19.2 30.0Muslim/Other minorities 13.1 12.1 11.4 18.3 24.4 30.3Total 12.3 13.9 10.6 17.7 23.0 31.6Source: Lokshin et al (2007)Remittances from labour export services abroad also have contributed to a decline in poverty. It is estimatedthat one-third to one-half of overall reduction in headcount poverty rate between 1996 and 2004 was due toincreased remittances--increases in remittances coming from outside Nepal have a much stronger impact onpoverty than increases in internal remittances 3 . This is not surprising given that the contribution of consumptionto GDP growth increased from 79 per cent during the 1991-95 period to 86 per cent during the 1996-2000period and 103 per cent during the 2001-08 period. Consumption, in turn, is driven by remittances. Additionalevidence from the Nepal Living Standard Survey points to the poverty reducing effect of remittances.3CBS 20068NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT