Remittence: There was a small but increasing flow of remittances to Bhutan from Bhutanese working abroad, particularly in the US and Australia.
Non-resident Bhutanese remitted various currencies worth Nu 508 million (M) from January to December, 2014, according to the Royal Monetary Authority’s monthly bulletin of February. This was an increase of Nu 164M from Nu 344.6M in the previous year during the same period.
In other words, remittances increased by 47 percent last year. This also means that the number of Bhutanese citizens working abroad has increased significantly over recent years.
Economists believe foreign remittances provide economic fuel to the receiving nation, arguing that spending and investments drive the economy. There are also others though, who say that it causes negative impacts such as inflation.
Bhutan last year received Australian dollar (AUD) 4.24M, which is roughly Nu 203M at the current buying rate. Remittances received from the US amounted to USD 4.15M or Nu 261M.
Remittances from Australia and the US comprised 91 percent of the total remittance receipts for Bhutan.
In 2013, Bhutan received Nu 12M from Australia. There was however a slight decrease in remittances from the US. In 2013, remittances from the US was Nu 346M.
Bhutan also received “other European currencies” besides the Euro worth Nu 13M and other currencies worth Nu 1.9M.
Unlike in most of the South Asian neighbours, foreign remittances do not form a major portion of the Gross Domestic Product (GDP) in Bhutan. A recent World Bank report titled “Global Economic Prospects: Having Fiscal Space and Using It” reveals that remittance inflow into Bhutan is the lowest among the SAARC countries, contributing only two percent of the country’s GDP.
Nepal, where 29 percent of its GDP comprises remittance receipts, was the highest receiver of foreign remittances in the region last year. Bangladesh was the second highest receiver and remittances contributed to 11 percent of its GDP.
Meanwhile, the government has plans to send about 30,000 Bhutanese to work abroad. This is further to likely increase foreign remittance to Bhutan.
By MB Subba