Nepalese Diaspora and New Nepal’s Innovation Systems

To provide an enabling environment for building new Nepal beyond remittance economy and to engage Nepalese Diaspora worldwide in Nepal’s national systems of innovation, the Diaspora community should have a say in institutional reforms that attract them and their progeny to contribute to their home country Nepal.

Laxmi Prasad Pant

Diaspora is a group of people residing in foreign land having same national identity and origin. According to Nepal government sources, by the end of the fiscal year 2006/2007 the population of Nepalese Diaspora outside the South Asian counters is about a million, the major destinations being Malaysia, Qatar, Saudi Arabia and UAE. In the last fiscal year alone 214 thousand people left the country for foreign employment. There has been a quantum leap on the remittance inflow since the beginning of the 21 century which coincided with the time of intense insurgency and people’s displacement from Nepal. The current contribution of the remittance in country’s gross domestic products (GDP) is estimated well above 20 percent as a significant amount of remittance flows in through informal conduits. Nepal Living Standard Survey estimated that the contribution of remittances in reducing poverty between 1996 and 2003 was 11 percent, a major contribution.

Source: Nepal Rastra Bank (2007)

Worldwide remittance is exceeding the value of international development assistance to developing countries. Nepal is moving towards remittance economy as elsewhere in the countries of the southern hemisphere. International development experts contemplate on how countries in the South can move beyond remittance economy. As Yevgheny Kuznetsov (2008) with the World Bank Institute presents, Nepalese Diaspora worldwide can contribute building new Nepal in five major ways – remittance, donation, investment, knowledge transfer and institutional reforms (http://go.worldbank.org/ZKRU5RAKU0). First, as mentioned above, the most highlighted contribution of Nepalese Diaspora is remittance. However, this is a very narrow and limited contribution because most money received through this channel is consumed and thus its contribution in investment and economic growth is very limited. For example, people either buy land and build house or change thatch roof to zinc or concrete or move their kids from subsidized government schools to private boarding schools and colleges.

Second, a recently emerging trend is collecting donations for a charitable cause. Charitable donations can be for saving lives in case of natural disaster, such as earthquakes and landslides, and personal tragedies, such as capital punishment in a foreign land. Once again donations should move beyond this and contribute to social entrepreneurships, such as promoting community based organisations who can generate economic as well as social and environmental benefits to poor people. Again the distinction between consumption and investment is important.

Third, although successful business entrepreneurs are very limited among Nepalese Diaspora worldwide, people can be interested to invest saving from their meager income in Nepal either in joint venture or through family businesses. They can also join partnership with their foreign colleagues. Investment is important to generate growth through employment and income. Fourth, neither form of funding –remittances, donations and financial investments – can have strategic importance until new ways of doing businesses including social entrepreneurship are strengthened through collaboration of public and private, both profit and non-profit, organisations. Learning networks of actors connecting people at home and abroad can serve as a new driver of building new Nepal’s innovation systems in various sectors including agriculture, natural resources, eco-tourism and manufacturing. Nepalese Diaspora employed in various organisations around the world including universities, governments, international research centres, international non-governmental organisations and multinational firms can contribute to networking and innovations either staying abroad or returning home on secondment through their current employment or up on retirement.

Fourth, all of the above four roles of Nepalese Diaspora in the mission of building new Nepal can only be possible through institutional reforms and the Diaspora Community should have a say to this cause. Professor Sridhar K. Khatri, Executive Director of the South Asia Centre for Policy Studies, in a study revealed that those workers who go to countries like Malaysia, Qatar, Saudi Arabia and UAE are the major contributors to the remittance coming to Nepal. Unlike those living in developed countries like UK, USA, Canada and Australia, Nepalese Diaspora in these countries cannot keep the money there indefinitely and send money home immediately. Therefore, the study argues that it is not the well off people who go to the countries in the West but less well-to-do labourers in South East Asia and Middle East who contribute to the remittance economy. This provides strong evidence that the prevailing macroeconomic policy in Nepal has failed to harness the potential of well-off and highly educated Nepalese Diaspora residing in developed countries.

To provide an enabling environment for building new Nepal beyond remittance economy and to engage Nepalese Diaspora worldwide in Nepal’s national systems of innovation, the Diaspora community should have a say in institutional reforms that attract them and their progeny to contribute to their home country Nepal. One such voice can come from their representation in the Constitutional Assembly, but unfortunately this opportunity has so far been overlooked. The one million Diaspora are a huge population and it is continuously increasing over years, but they have got not a single representation in the Constituent Assembly. People who flew away during the decade-long insurgency do have loyalty to their home land and should be given an opportunity to contribute to building new Nepal. Incentives to return home can be less attractive for those who are professionally established elsewhere in the world but they are always willing to contribute to their homeland. The second generation Nepalese Diaspora who did not have a say in their immigration to a foreign land should also have their rights to return to the country when they reach a legal age of making their own decision. Diaspora is the one having two homes –one leg on each boat – and should be given an opportunity to manage both homes as many of them may choose to do it. Although there can be various incentives, a provision of dual citizenship, specifically for the second generation Diaspora who born in foreign land, can be instrumental for learning and innovation across borders of both nations. Diaspora communities together can potentially enhance all five roles – remittance, donation, investment, knowledge transfer and institutional reforms - but specifically the higher order roles, such as investment, participation in learning and innovation networks beyond the borders of both countries, and enabling environments and institutional reforms.

(Laxmi Prasad Pant is a PhD candidate at University of Guelph, Canada He can be contacted at: laxmi_pant@yahoo.com)

(Editor’s Note: Nepalis, wherever they live, as well as friends of Nepal around the globe are requested to contribute their views/opinions/recollections etc. on issues concerning present day Nepal to the Guest Column of Nepalnews. Length of the article should not be more than 1,000 words and may be edited for the purpose of clarity and space. Relevant photos as well as photo of the author may also be sent along with the article. Please send your write-ups to editors@mos.com.np)

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