Diaspora Remittances to Nepal and Bhutan

Since the third-country resettlement programme began relocating Lhotshampa refugees from camps in eastern Nepal in 2007, a growing financial corridor has developed between resettled communities — concentrated in the United States, Australia, Canada, and Europe — and family members who remained in Nepal or Bhutan. These remittance flows, channelled through money-transfer services, bank transfers, and informal hundi arrangements, provide critical support for households that did not participate in resettlement, including elderly relatives, those who refused resettlement in hopes of eventual repatriation, and families in Bhutan who maintained contact across the border.

Remittances from Bhutanese nationals abroad — encompassing both the refugee diaspora and the more recent wave of economic migrants who have left Bhutan for work in Australia, Canada, and the Gulf — reached US$342.9 million in 2025, more than doubling the figure from the previous year according to the Bhutan Broadcasting Service. This aggregate figure reflects structural changes in Bhutanese migration patterns as well as the growing earning power of a maturing refugee diaspora now more than fifteen years into resettlement.

Destination and Use of Funds

Remittances from the Bhutanese diaspora flow along two distinct corridors. The larger stream runs from resettlement countries — above all the United States, which hosts the majority of resettled Bhutanese refugees — to Nepal, where an estimated several thousand former camp residents continue to live in informal settlements or in the two remaining former camp sites of Beldangi and Sanischare. These families, many of them elderly, depend on monthly transfers for healthcare, food, and rent. The closure of formal UNHCR support following the winding down of camp services has made diaspora remittances an informal social safety net for those who fell outside the resettlement programme.

A smaller but culturally significant stream flows to family members in Bhutan itself. Lhotshampa families that were separated during the expulsions of the early 1990s sometimes maintained partial connections across the border; children who left with their parents have, in some cases, continued to support elderly relatives who remained in or returned to Bhutan. The precise volume of this cross-border flow is difficult to quantify because transfers are often informal and because Bhutanese official statistics do not disaggregate remittances by sender origin.

Funds are most commonly used for:

• Healthcare expenses, including medicines, hospital fees, and transport to clinics
• Education costs for younger relatives still in Nepal
• Housing — rent payments and, increasingly, small home improvements or land purchases in eastern Nepal
• Ceremonial and religious expenses, including funeral rites, annual festivals, and life-cycle rituals
• Loan repayments, including debts accumulated during the camp period

Transfer Channels and Costs

The resettled diaspora uses a range of transfer channels. Western Union and MoneyGram maintained a dominant position in the early years of resettlement, but their relatively high fee structures have been progressively challenged by digital transfer services. Platforms such as Remitly, Wise, and mobile-money applications have reduced transfer costs substantially for technologically literate senders, and younger community members increasingly use these services on behalf of older relatives who are less comfortable with digital platforms.

Informal hundi or hawala-style transfers persist, particularly for flows to Nepal where the combination of familiar brokers, lower fees, and greater flexibility on identity requirements makes them attractive. The Nepal Rastra Bank has periodically expressed concern about informal remittance flows escaping the formal banking system, though enforcement capacity in eastern Nepal's border districts remains limited.

The FRED/St. Louis Federal Reserve series tracking remittance inflows to Bhutan as a share of GDP underscores how structurally important diaspora transfers have become to the Bhutanese economy — a situation that mirrors broader South Asian patterns in which smaller economies become significantly dependent on diaspora income.

Economic Significance

Remittances represent a qualitatively different form of diaspora contribution from philanthropy or investment. Whereas philanthropic giving tends to flow to institutions and programmes, remittances reach households directly and provide immediate consumption support. For families in Nepal living outside the formal camp system and without legal right to work under Nepali law, diaspora transfers are often the primary source of cash income.

Economists studying diaspora economics note a tension inherent in remittance dependency. While transfers sustain living standards in recipient households, they can also reduce incentives to pursue local economic activity or formal employment and may entrench a pattern in which recipient families remain in a state of prolonged waiting — hoping for either repatriation to Bhutan or eventual resettlement — rather than integrating into local Nepali society. This structural consideration is particularly significant for the remaining stateless refugees in Nepal, whose legal limbo compounds the economic precarity that remittances partially offset.

From the sender's perspective, remittances impose a significant financial burden on resettled households. Studies of Bhutanese refugee communities in the United States document that many households send regular transfers to Nepal despite earning entry-level wages and carrying their own financial pressures, including housing costs and healthcare expenses. The obligation to support family abroad is experienced as both a moral duty and a source of financial strain.

References

1. "Bhutanese abroad send USD 342.9M in remittances." Bhutan Broadcasting Service, 2025. https://www.bbs.bt/239856/
2. "Money sent home by Bhutanese overseas more than doubles in 2025." Asia News Network. https://asianews.network/money-sent-home-by-bhutanese-overseas-more-than-doubles-in-2025/
3. "Leveraging remittances to boost Bhutan's economy." Kuensel Online. https://kuenselonline.com/leveraging-remittances-to-boost-bhutans-economy/
4. "Remittance Inflows to GDP for Bhutan." FRED / Federal Reserve Bank of St. Louis. https://fred.stlouisfed.org/series/DDOI11BTA156NWDB