1. Discuss about the major economic indicators of Nepal. Discuss the major economic indicators of Nepal.
Ans:- Economic indicator is simply an economic statistic which indicates how well the economy is doing and how well the economy is going to do in future. They are useful to analyze economic performance of the country as well as making international comparison. The major economic indicators of Nepal are discussed below:
i) Gross Domestic Product (GDP):- GDP and it’s growth rate are very important indicator to evaluate performance of the economy. The GDP of Nepal is 24.47 billion US dollar which is very low as compare to it’s neighboring countries like India and china. The average growth rate of GDP for past 10 years is around 4%.
ii) Gross National Product (GNP):- GNP is another important economic indicator. It also helps to evaluate economic performance of the country. The GNP of Nepal is also very low as compare to it’s neighboring countries India and china.
iii) Per Capita Income (PCI):- The per capita income of Nepal is very low as compare to other developing countries. Per capita income also helps to analyze the economic performance of the company. The per capita income of Nepal is 989 US dollar in the fiscal year 2017/2018.
2. Concept of Foreign Employment and Remittance
Ans:- If labor force of a country moves to another country for seeking job it is known as foreign employment. In other words foreign employment is defined as the working abroad for earning money.
The money dent by people to their home country from foreign employment is known as remittance. Nepalese economy is increasingly becoming dependent on remittance sent by migrant workers. Currently Nepal’s major economic indicators do not show the satisfactory result. In this situation remittance have played an important role to sustain the economy of Nepal.
3. What are the advantages of foreign employment in Nepal?
Ans:- The advantage of foreign employment in Nepal are explained below:
i) Solves the problem of unemployment:- There is major problem of unemployment in Nepal. Foreign employment helps to solve the problem of unemployment in the country because it provides opportunities to work for the survival.
ii) Remittance income:- Foreign employment helps to increase remittance income in the country. The amount of remittance income depends upon the numbers of workers going abroad for foreign employment.
iii) Skilled and training manpower:- The workers who returns to home country after some years are generally skilled and trained manpower. Their knowledge and skilled can be utilize to create new opportunities in the country.
iv) Increases standard of living:- The standard of living of the members of the family living in home country’s increases. This is due to money send by the workers who is working in foreign country.
v) Poverty reduction:- Remittance income received from the foreign employment increases household income. This helps to increase consumption of poor families. It increases living standard and reduces poverty.
4. What are the disadvantage of foreign employment in Nepal?
Ans:- The disadvantages of foreign employment in Nepal are explained below:
i) Shortage manpower in the country:- The increasing in the foreign employment has brought the problem of shortage of labor in the agriculture and industrial sector of the country. This can be harmful for the growth and development of the country.
ii) Brain drain:- Brain drain is the most serious cost of foreign employment. Due to opportunity of foreign employment, most talented, skilled and highly educated manpower of the country are migrating to the countries like USA, UK, Canada, Dubai etc.
iii) Mismanaged family:- Migration of parents can leave family of young children with inadequate guidance and an additional burden of household responsibility. This can lead to higher school absence, school dropout, poor nutrition and health care of children.
iv) Creates dependency:- It is also argued that remittance creates dependency. It reduces the willingness to work in home country and thus slows down economic growth of a country.
v) Human cost:- Remittance may also have human cost. Migrant makes significant sacrifices. They have to remain separated from families and incur risk to find work in foreign country. They may have to work extremely hard enough to save money and sent remittances.
5. Concept of Nepalese Economy
Ans:- Economy is a system that tries to balance the available resources (Land, Labor and Capital) against the need and want of consumer.
Nepal is a land locked country and Nepalese economy is locked between India and China. Nepal is among the poorest and most remote countries in the world. Agriculture is the backbone of Nepalese economy. Approcsimately 66% of total active population are engaged in agriculture farming. About 32% total GDP is contributed by agriculture sector. There is huge disguised unemployment, mass poverty, dual ownership, low productivity, unequal distribution of land in Nepal. About 22% of populations are below poverty line.
The industrial sector is a secondary sector in Nepal which provides employment opportunities. Industrial sector is still at the development stage. It provides employment less than 2% of total labor force. About 14.5% of GDP is contributed by industrial sector.
6. Introduction to Nepalese Economy
| GDP | $24.47 Billion |
| Per Capita Income (PCI) | $989 |
| Remittance Income | Rs.699 Billion |
| Contribution of agriculture to GDP | 325 |
| Contribution of industry to GDP | 14.5% |
| Contribution of tourism to GDP | 2.55 |
| Rate of inflation | 9% |
| Hydroelectricity generation | 860 Mega watt |
| Population | 2,96,24,035 |
| Population growth rate | 1.4% |
| Poverty (below poverty line) | 22% |
7. Explain the main characteristics of Nepalese Economy.
Ans:- The main characteristics of developing countries are explained below:
i) Low per capita income:- The per capita income of Nepalese economy is very low. The per capita income of Nepal is US dollar 766 which is very low as compare to it’s neighboring countries like India and China.
ii) Mass poverty:- There is mass poverty in Nepalese economy. About 22% of total population of Nepal is below poverty line. Mass poverty is due to low per capita income and unequal distribution of income.
iii) Excessive dependence on agriculture sector:- Agriculture sector is regarded as the backbone of Nepalese economy. About 66% of total active population of Nepal is engaged in agriculture farming. About 32% of total GDP of Nepal has contributed by agriculture sector.
iv) Underutilization of natural resources:- Nepal is very rich in natural resources like water resources, forest resources and mineral resource. There is no proper utilization of these natural resources. Nepal has about 600 rivers which have potentiality of generating 83,000 megawatt of hydroelectricity. Despite of such huge potentiality of hydroelectricity, Nepal has been able to generating only 830 Megawatt hydroelectricity. This data shows that there is underutilization of natural resources.
v) High trade deficit:- Trade deficit occurs when the value of countries import is greater than the value of countries export. And in context of Nepal, there is high trade deficit because Nepal imports more and exports less. Therefore, Nepal should produce those goods and services which have comparative and competitive advantage.
vi) Dualistic and mixed economic system:- Dualistic economic means both traditional and modern characteristics prevail in the economy. The urban sector is characterized by non-agricultural sector while rural area is characterized by agricultural sector.
On the other hand, mixed economic is an economy where there is existence of both capitalism (private sector) and socialism (public sector). In context of Nepal, it has mixed economy system. For example, Nepal electricity authority, Nepal Oil Corporation and controlled by government.
vii) Rapid population growth:- There is rapid population growth in Nepal. According to population census, population growth rate of Nepal is 1.4%, this is higher than other developing countries. The main reason for rapid population growth in Nepal is illiteracy, early marriage, polygamy etc.
viii) Remittance economy:- There is lack of employment opportunities in Nepal. Therefore, large number of Nepalese youth has migrated to foreign countries in search of job. They have gone specially to Malaysia, Qatar, and Dubai etc. The money earned by this people are sent to Nepal in the form of remittance. Remittance helps to improve the living standard of people and reduce poverty.