Tourism as a source of Economy

Tourism is considered as a force of economic and social change. Tourism plays very important role for economic change in developing countries.
In Developing countries when there is not much export of the other things. It is the only means of foreign currency earning. Tourism in Nepal has strong relevance to economic development but as a recent phenomenon, it has to find a distinctive role in the building of the country. It has become the good source of raising capital and employment on the country.
In Nepal mainly mountaining region is considered as a major tourist area. But it lacks the initiative development. There are lots of places in Nepal where there is no any facility of transportation, as say lack of basic infrastructure like: electricity, water and transportation. If these things are well developed then, Nepal will be able to gain maximum foreign currency from tourism. There are also other problems, which have played a barrier for growth of tourism industry just like language problem. In the rural areas people don’t know English language and foreigner don’t know nepali language. Productive activities are not held to increase the efficiency of it.

But now tourism industry is in danger because of political instability. Political instability of Nepal has become one major problem for tourism industry. The number of tourist is decreasing day by day with the fear of violence of Nepal. Lots of Banda and strikes creates problem for tourists. That’s why they do not prefer to come to Nepal.
Many hotels are closed because of the decreasing number of tourists. Many people lost their jobs because of the closing down of hotels. It has caused lower GDP also increased unemployment. Which two are the major facts necessary for economic crisis.

Role of Entrepreneurship and small business in National Development.

Nepal is the least developed country but it is rich in terms of natural resources. It has lots of resources that could be sufficient for the nation building if utilized properly. Outsourcing of the human resource is the major problem of Nepal. Lack of entrepreneurship Nepal has become the poorest country although it has lots of resources. Nepal is wasting its resources because there is not much human resource. There are not much entrepreneurs that they utilize these resources and could be benefited.
Entrepreneurship is the process of new venture. It develops new innovative ideas. Entrepreneurs are able to find out the hidden opportunities and they identify these opportunities. With the help of entrepreneurs we can enter into the new market, we can make new products; introduce new services in the market using the local resources. It generates employment for the local people. Entrepreneur helps to formulate the capital of the nation.

In developed country small businesses is defined with the help of numbers of workers. It is a type of business where there are less than one hundred workers. But in Developing countries small business is defined on the basis of capital invested on the business. A business that has invested less than Rs.30 million as fixed capital is known as small business. It has own independent management .Ownership is closely held in this business. It uses the local resources and creates employment for the local people. Small business has small size limited resources and performs managerial function by themselves.
Contribution of Entrepreneurship and small business
It encourages the innovation: Entrepreneurs works very hard, they are known as risk bearers, farsighted, and good leaders. They mainly focus on the new ideas. New innovation.
They complement large type of business: small types of businesses are responsible for providing necessary support for the large scale industry.
Employment creation: entrepreneurships are known as job creators. They create job for themselves also for other people.

Market of Foreign exchange in Nepal

Trading of one country's money for another country is the foreign exchange market. This market is trading by a number of large banks. A million dollar trade worth is small for this foreign exchange market, but it is the prices of these transaction affect the exchange rates.
In Nepal there is excess of import rather than export. When we demand the things from abroad we change our money with the goods or we pay the amount for the goods. We use Nepali money to buy the currency of that country and that currency is used to buy the goods. In this way we deal with the foreign exchange market.
The exchange rate or the price of foreign money is very important price when we buy things that are made on another country. There are two things which affect the exchange rate mostly. One is the price of the things in the native country and other is dollar price of that currency.
If the market determines the price of foreign currency it will adopt a system of floating exchange rate. In the developing countries government fix the exchange rate and domestic currency can not be freely converted into the foreign money. Shortage of foreign money occurs if the government sets the foreign exchange below the market price.It prevents the market from increase in price to eliminate shortage by outlawing private transactions in foreign exchange. The citizens who get foreign exchange has to sell it to the government .Government is the only legal source of foreign money in the developing countries.
If the foreign exchange is above the market- clearing price there may occur shortage of domestic currency. The government can prevent the shortage from raising price by selling foreign exchange into the market.

Remittance In Nepal

Remittance means sending income in terms of money or goods in home by the migrants or workers who have their earning outside the country. It has become a major part for economic development in developing countries.

Remittances are especially important for low income countries. A remittance transaction is completed in three steps. In the first step, the sender pays the remittance to the sending agent or institution using cash, cheque, or money order to debit card using e-commerce and so on. In second step, the sending agency instructs its agent in the recipients’ country to deliver the remittance. In the third step, the paying agent or union operator makes the payments to the beneficiary. According to the Nepal Rastra Bank, remittance contributes 17.5 to the GDP in fiscal yr2062/63

Remittances are typically helpful to meet specific needs of the respondents’ family members and thus tend to increase their standard of living. This source is more stable than capital flows. It is said that remittances has represented more than 10 percent of GDP in Nepal in the late 1990s. It would be highly beneficial to the country, where there is natural calamities, political conflict, people war, low investment in entrepreneurial activities and economic recession.

The cost of remittance service does not really depend on the amount of principal. The real cost of a remittance transaction include labor charges, house rent, technology, networks etc. It is also known that greater competition among banks and money transfer operators brings down the cost of transaction.

If remittances are large, the recipient country could face an appreciation of the real excange rate that may make its economy less competitive internationally.

Initially, remittance in Nepal was introduced with Gurkha remittances. The Gurkhas were renowned for good qualities of soldiers. That is why British India formally recruited Nepalese youth as a regular army, which later divided into British and Indian army.

With regard to delivery of remittances, the World Bank has expressed the view that the producers of receiving remittance in Nepal is the best in compare to others.

Regarding the transfer of remittances in Nepal, the record of banking sector showed that Rs.15.9 billion was received in fiscal yr 2000/01 . Considering the increase number of workers, assuming four lakh per yr going outside the country in this perspective, remittance received was estimated at Rs. 50 billion in fiscal year2001/02. In this regard it is also estimated that more than 500 people per day are going abroad for foreign employment. From such migrants, about 100 billion per year is expected to enter into the country through remittance income only.

Contribution of remittances to GNP

Remittance as major component of current account plays a vital role in increasing current transfers in balance of payments .

Initially the share of remittance to GNP was found 1.74 percent in mid-jul;y 1991. This share increased sharply 9.38 percent after the period of mid july1999 and eventually reached to 12.03 percent in mid july 2005. On average the share of remittance to GNP was 11.03 percent during the review period from mid july 2000 to 2005. Under the transfer category of BOP, remittance income increased by 11.65 percent totaling rs.65.42 billion in 2005 sue to the increasing trend of Nepali workers going to Malaysia ans Gulf countries for employment.