KATHMANDU, Dec 18: A child born in Nepal will only achieve half of their potential productivity as an adult because of the low access to and quality education and health services, shows a report of the World Bank (WB).
Unveiling Nurturing Nepali Talent to Foster Economic Growth – Nepal Human Capital Review, the multilateral lender said Nepal’s Human Capital Index (HCI) stood at 0.50 as of 2020, meaning children born today are expected to realise only half of their productivity potential as adults due to the low access and quality of education and health services in the country.
The HCI measures the accumulation of human capital and thus the potential productivity of the next generation workers. This index is calculated based on three subcomponents – child survival, education, and health, while its value ranges between 0 and 1.
Book review: Analyzing political economy of federalism in Nepal
As per the report, Nepal’s economic growth is driven by the accumulation of wealth, which includes four types of capital. These are the produced capital (such as infrastructure, buildings, and machinery), natural capital (like land, minerals, and gas), human capital, and net foreign assets (such as reserves and foreign investments).
Although the country has achieved notable progress in key health and education indicators over recent decades, one-fourth of children are still stunted, which hampers their ability to learn and affects their future productivity. Compared to countries with similar income levels, Nepal’s per capita investment in education and health is significantly low.
Another key factor behind Nepal’s low level of human capital accumulation is the ongoing challenges with the implementation of federalism. “While the federal structure was designed to improve the delivery of essential services like education and healthcare, significant issues related to unclear roles, inadequate funding, and poor coordination across government levels have hindered progress.”
These implementation challenges create a huge barrier for the delivery of education, health, and social protection services. Without addressing these federalism-related barriers, it will be difficult to accelerate human capital accumulation in Nepal, the WB states in its HCI report.
The WB’s report also underlined a significant variation in HCI across provinces highlighting the provincial inequities in access to quality education and healthcare and future productivity. On average, children born in Karnali are expected to reach only 46 percent of their potential productivity, while those born in Bagmati are projected to reach 58 percent of their potential productivity. Those living in the Lumbini district – fall in the middle and are expected to reach 51 percent of their potential.
