Int’l Day for the Eradication of Poverty

After six decades and billions spent poverty alleviation remains a far cry

Published On: October 17, 2019 07:18 AM NPT By: SHREE RAM SUBEDI

KATHMANDU, Oct 17: Billions of rupees have been spent in the last six decades in the name of the poor and various training. However, nearly one-fifth of Nepal’s population lives below the poverty line (those earning less than $1.90 per day, as per the World Bank).

As the world is celebrating the International Day for eradication of poverty Thursday, lack of targeting, duplication of programs and one-shot intervention without their sustainability have rendered Nepal’s poverty alleviation efforts futile. Worse, the lack of coordination among the three tiers of governments is hurting poverty alleviation efforts, confide elected representatives and officials.

The official poverty rate is equally sketchy – hovering from 18.7% to 40%. A household survey conducted for identifying poor households in 26 districts in 2070 BS suggests 40% population lives below the poverty line. However, a Multi-Dimensional Poverty Index (MPI) measurement done in 2016 – with a special focus on health, education and living standard – shows the percentage of those living below the poverty line at 28.6% percent while the government’s 15th periodic development plan document further scaled it down to 18.7%, on the basis of consumption and income parameters. 

The official and authentic figure of poverty is 25.2%, according to Nepal Living Standard Survey (NLSS) III (2010/11 AD) which consists of a rigorous method of calculating the Households (HHs) level consumption on the basis of cost of basic needs (CBN methodology). No survey has been done to map the national poverty rate since NLSS III. The Central Bureau of Statistics (CBS) is conducting the NLSS IV this year and the result is expected to come within the next 15 months, according to officials.

A senior government official, who prefers not to be named, questioned the current poverty rate of 18.7% mentioned in the 15th development plan document.

“It is unscientific and unethical to claim that the poverty rate is 18.7 percent,” he argued. 

“Poverty estimation cannot be taken on a linear fashion and through a regression analysis of poverty headcount on GDP, especially when the distance between the surveys is 10 years. There are many other factors that contribute to fluctuations in poverty rate,” he added. 

“The disaster and vulnerability factors should be taken into account as these have increased lately. These must have had impacted the poverty rate, bringing it higher than the estimated figure,” the official argued.

The government’s estimation of poverty rate is based on a regression analysis--taking care of the relation between GDP growth rate and poverty reduction (head count rate). The assumption is that GDP growth contributes toward the reduction of the poverty rate. The poverty rate was estimated on the basis of per capita consumption expenditure status of the three living standard surveys, according to CBS officials. The first NLSS was done in 1995/96, second in 2003/2004 and the third in 2010/2011. 

Ishwari Prasad Bhandari, Director of National Accounts at CBS says, “It’s an ad hoc basis of telling the poverty rate on the premises that the income and consumption are correlated as the consumption is a proxy of the income status.”

He agreed that the reliability of the data could be questioned as the distance between the surveys is long. “Questions can be raised as to whether it has truly explained the state of poverty, still this is the only option we have,” he said, adding, “The NLSS IV results would tell us the exact poverty rate.”

A recently endorsed national strategy for development of statistics (NSDS)-2076 BS seeks to conduct NLSS every five years and more frequent surveys in the years to come, informed Bhandari, saying that it would make the data including that on poverty more scientific and reliable. 

Dr Govinda Bahadur Thapa, an economist, meanwhile argued that the government has a minimal role in reducing poverty. “It is the remittances and individual efforts that have made significant contributions,” Dr Thapa, who served as an advisor to a former finance minister, said. 

There is a prevailing thought that economic growth brings down poverty, but this is not always true, he says. 

“They are not emphasizing pro-poor growth and,  social sector program, and targeted initiatives for the poor is lacking,” he argued, further adding that, unlike the earlier governments, the directed credit for the deprived sector is not being emphasized by the current government.

“Without lifting the living standard of one-fifth of the population, the government’s slogan of ‘Prosperous Nepal, Happy Nepali’~I will ring hollow,” he said. 

Nepal aspires to graduate to the league of developing countries from the current least-developed category by 2022, and a middle-income country by 2030.

Investment climate is deteriorating and Nepal is witnessing erosion in the ease of doing business index, argues Dr Swarnim Wagle, former vice-chair of National Planning Commission (NPC). A bold and next-generation reform is lacking on the part of the government, Dr Wagle said adding, “A clear cut road map is needed for prosperity. For this, job-creating economic growth, economic opportunities through infrastructure development, financial outreach, adequate public provisioning of basic services and viable systems of social protection are needed.”

Bhim Dhungana, general secretary of the Municipal Association of Nepal, the umbrella organization of municipal governments of Nepal, says that the government is not coming out from its centralized thinking in service delivery.

The constitution of Nepal  has clearly spelled out poverty alleviation as a common agenda of all three layers of government, but no further details on operational modality have been worked out,  he added, “It looks like the government is working on a pilot basis for its five-year tenure.”

There is a lack of coordination among the several poverty alleviation programs. Poverty Alleviation Policy 2019 mentions that 24 various programs on poverty alleviation are currently under implementation by various ministries. Also, there are more than 13 ministries involved in imparting trainings for skill development and enterprise creation for the deprived sections of society with investments worth billions of rupees. There are 87 social protection schemes under various categories ranging from free health, insurance to cash transfer [social security allowances].

Another important factor in creating synergies on poverty alleviation, say experts, is the need for uniform criteria of defining the poor and identification of the poor households. The government is yet to issue ID cards to nearly 400,000 poor households identified by a household survey of 2070 BS in 26 districts. A survey for the remaining districts has yet to be conducted.

Dr Ram Kumar Phuyal, a member at the National Planning Commission, said that the government is now working to develop a national integrated social protection framework to bring all the scattered schemes under a single window. “We will issue ID cards to the poor and information about the households will be digitized and updated,” explained Dr Phuyal, “The ministries concerned should work in tandem to integrate the national ID card with the poverty ID card,” he added. 

On the question of lack of coordination among the three tiers of government, Dr Phuyal added, “We are on a new course of development delivery, and it takes time for each of the three governments to work under a new institutional setup.”

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