Remittances from the US now account for 51.2% of Bhutan’s total inward Remittances in 2022
The United States has surpassed Australia as the top source country, accounting for 51.2% of overall remittances in the year 2022, the royal monetary authority (RMA) said in its monthly bulletin.
This corroborates with the world bank report (2021) citing the US’s economic recovery as one of the important drivers of any country’s remittance growth as it accounts for a major percent of total remittances in the country over the last four years.
Meanwhile the inward remittances from Australia account for 34.8% of Bhutan’s total inward remittance in 2022. In 2022, remittances amounted to USD 82.55 million, nearly 3.5% of Gross National Product (GDP).
Additionally, the share of remittances from Australia declined sharply by almost 44% last year compared to 2021.
Other than the US and Australia, Singapore emerged as the top third source of the country’s remittance last year accounting for Nu 151.04 million (mn), which is 2.36% of total remittances received in 2022.
Meanwhile remittances are one of the major sources of external financing for low- and middle-income countries, including foreign direct investment. (FDI). FDI remains the highest source of external financing in the country with the government approving eight new FDI projects worth Nu 356.29mn in 2022, Bhutan now has 101 projects worth Nu 43.62 billion (B) today, according to the FDI annual report 2022.
According to the World Bank report on migration and remittances flow to low- and middle-income countries declined marginally.
Meanwhile Bhutan’s inward remittances over the last four years, despite the recent slackening, has been increasing in huge amount which is attributable to the fact that many people are staying and working abroad.
The total inward remittances received by the country over the last four years account for nearly Nu 25,615.22 million or Nu 25.6 billion (bn). Out of which, 42 % (Nu 10 bn) came from US and 49.7% (NU 12bn) from Australia.
The top country that send in the most inward remittances to Bhutan has been Australia in last three years but in 2022, the US surpassed the Australia by 32.02 %.
Australia and the US have been the major destination of Bhutanese migrants for the past decades. Out of total migrants from Bhutan (almost 32,258), out of which 10,911 (33%) are in Australia, 1,327(4.1%) in US, 9,519 (29%) in India, 3,184(9.8%) in Kuwait, 1,356 (4.2%) in Thailand, according to the foreign minister of Bhutan, Dr Tandi Dorji.
Today, Bhutan receives the major inward remittances from US, Australia, Europe, Canada, Singapore and Japan.
Subsequently, out of total remittances received in 2022, 51.2 % was from US, 34.8% from Australia, 0.86% from the United Kingdom, 1.7% from Europe, 1.9% from Canada, 2.3% from Singapore, 1.2 % from Japan and rest 5 % is other countries.
Meanwhile, the observer says that in the crucial times like the Covid 19 pandemic, remittances benefited the whole country as migrant workers on an average send USD 200 to 300 every two or three months.
“This represents only 15 or 20 % of what they earn, the rest stays in their host countries. But what they send can make up as much as 60% of a household’s total income, representing a lifeline of many families in the country.” He said.
Additionally, according to an economic specialists, migrants abroad make an invaluable contribution to the Sustainable Development Goals (SDG), through investment and remittances.
“They specifically aid in achieving the Sustainable Development Goals of ending poverty and hunger, advancing excellent health, adequate education, clean water and sanitation, decent work, and economic growth, and reducing inequalities.”
Tshering Pelden from Thimphu