Amidst the cacophony of pessimistic news about their country, Nepalis finally have something to cheer about. A report by Oxford University has identified Nepal as a “star performer” in poverty reduction, along with Bangladesh and Rwanda. According to this study, the percentage of poor people living in Nepal (calculated on the basis of its ten indicators) has declined from 64.7 percent to 44.2 percent between 2006 and 2011. The report uses a complex methodology in which calculations based on ten different indicators are used to find both the headcount and intensity of poverty. While earlier indicators only considered GDP figures to gauge poverty level, contemporary indicators have a more comprehensive approach to calculating poverty.
The focus on GDP alone can badly distort realities: a country with a high rate of inequality may give a deceptive impression of its citizens’ wellbeing through a high GDP, which takes no account of inequality. In contrast, MPI (Multi-dimensional Poverty Index) employed by Oxford University researchers provides a more nuanced picture with indicators like child mortality rate, nutrition, sanitation and water factored in.
The results of the Oxford study are corroborated by separates field-specific studies in Nepal. For example, the census documents the decrease in child mortality, increase in education, and increase in access to water, sanitation and electricity, findings which are reflected in the Oxford report. The report is also corroborated by the Nepal Living Standards Survey. Although differing in the exact figures, the Nepal Living Standards Survey also reports a decline in poverty in Nepal (by 2 percent per annum, as compared to the Oxford report’s 4 percent).
And yet, when viewed in conjunction with the lackluster economic growth in Nepal, the results of the Oxford report appear almost unbelievable. The report, crediting “an active, vocal, and sometimes disgruntled civil society” as well as the “rise of women’s voice in politics as well as civil society” for the achievements, does not indicate how the poverty reduction was achieved. Other financial reports on Nepal provide the missing piece of the puzzle: with a high unemployment rate and increasing exodus of youth abroad, Nepal owes its positive indicators to remittance.
A quarter of Nepal’s people are still living below the line of poverty (according to Nepal Living Standards Survey), and hence, reduction in poverty is something that Nepal desperately needs. However, decline in poverty without a corresponding growth in economy is not sustainable. The ten year long insurgency and the subsequent political instability has left the country’s agriculture, trade and industry sector in shambles. In order to ensure that Nepal continues to make progress in reducing poverty and improving the lives of its citizens, it is important to promote domestic agriculture and industry and create jobs for the youth, which is the only sustainable route to economic growth and self-sufficiency.
In the meantime, it is important to nurture the asset which has helped Nepal progress despite its myriad problems: an engaged citizenry. The Oxford report’s singling out “active civic engagement” as the key to poverty reduction is proof that true democracy, in which the voice of the people is taken into account, has the potential to change society for the better.
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