1. POVERTY IN NEPAL: CHARACTERISTICS AND CHALLENGES Trilochan Pokharel, NASC, tpokharel@nasc.org.np

2. Objectives © NASC 2014 2  explain the concept of poverty  examine the characteristics of poverty  describe the poverty reduction strategy in Nepal  discuss policy gaps

3. Session content © NASC 2014 3  Understanding poverty  Characteristics of poverty  Poverty reduction strategy in Nepal  Policy gaps

4. Story about poverty © NASC 2014 4 The poor die in hospital wards that lack drugs, in villages that lack antimalarial bed nets, in houses that lack safe drinking water. They die namelessly, without public comment. Sadly, such stories rarely get written. Most people are unaware of the daily struggles for survival, and of the vast numbers of impoverished people around the world who lose that struggle. Jeffery D. Sachs, 2004, The End of Poverty

5. Story… © NASC 2014 5  1 million death  Period 1973-1977  Cause – famine Lack of entitlements Amartya Sen, 1981, Poverty and Famines: An Essay on Entitlement and Deprivation. Why people die in famine? – Amartya Sen Bangladesh Famine

6. What is (not) poverty? © NASC 2014 6  Poverty is not natural and static.  It is manifestation of human activities. It goes over the life course and across the generation.

7. What... © NASC 2014 7  Poverty is not lack of particular item.  It is a multifaceted construct.

8. Which line we travel? © NASC 2014 8 PROTECTIVE Capabilities, enabling people to with stand economic shocks natural disasters conflicts PROTECTIVE Capabilities, enabling people to with stand economic shocks natural disasters conflicts ECONOMIC Capabilities to earn income consume have assets ECONOMIC Capabilities to earn income consume have assets POLITICAL Capabilities including human rights voice political freedom participation POLITICAL Capabilities including human rights voice political freedom participation HUMAN Capabilities based on health education nutrition shelter HUMAN Capabilities based on health education nutrition shelter SOCIO-CULTURAL Capabilities concerning dignity valued membership society social status SOCIO-CULTURAL Capabilities concerning dignity valued membership society social status GENDER GOVERNANCE Source: www.poverty-wellbeing.net

9. Different people... different arguments © NASC 2014 9  Poverty is not explained by single domain study.  It requires cross-disciplinary research. Because they cannot afford.... Because they are exploited.... Because there is social inequality.... Because state is unable to reach to people.... Because there are too many to feed....

10. Is this the difference? © NASC 2014 10

11. Understanding poverty © NASC 2014 11 If poverty were deprivation, the questions are:  Yet deprivation of WHAT?  By how much?  Over what time period?  Whose? A country, region, village, family individual.

12. Understanding poverty © NASC 2014 12  Money metric (conventional approach)  World Bank's $1 ($1.25 since 2005) and $2 concept  NLSS 's poverty line  Capability approach (Human Development- Amartya Sen)  Social exclusion approach  Participatory approaches (Robert Chambers)

13. Convergence in poverty measurement (Nepal) Source: World Bank, 2013 © NASC 2014 13

14. But… Source: World Bank, 2013 © NASC 2014 14

15. Poverty measurement in Nepal (2010/11)... © NASC 2014 15  Food - NRs. 11,929  Non food - NRs. 7,332  Total- NRs. 19,261  Average calorie required - 2,220 cl Source: CBS, 2011

16. % pop below poverty line © NASC 2014 16 Source: CBS, 2011

17. Progress made so far... © NASC 2014 17 Source: CBS, 2011

18. Gini coefficient © NASC 2014 18 Source: CBS, 2011

19. Share of Income (%) Source: World Bank, 2013 © NASC 2014 19

20. Per capita consumption deciles (in NRs.) © NASC 2014 20 Source: CBS, 2011

21. % of hh receiving remittance © NASC 2014 21 Source: CBS, 2011

22. % of GDP © NASC 2014 22 Country name2009201020112012 Tajikistan35.1(47.2)40.946.947.5 Kyrgyz Republic 20.926.427.630.8 (38.0) Nepal23.121.7 (25.2)22.425.0 Moldova22 (26.3)23.322.824.5 Lesotho32.12826.123.8 Samoa23.821.32223.2 Bermuda23.22222.621.8 Armenia8.810.719.721.3 (32.4) Haiti20.922.320.620.4 (58.7) Source: World Bank, 2013 Figures in parenthesis are percentage of population below national poverty line in respective year.

23. Live example © NASC 2014 23

24. Utilization of remittances © NASC 2014 24 Source: CBS, 2011

25. Distribution of HPI (NHDR 2014) © NASC 2014 25 Source: NPC, 2014

26. HPI in 2006 © NASC 2014 26 Source: UNDP 2009

27. There has been improvement © NASC 2014 27 Source: NPC, 2014

28. Poverty reduction strategies © NASC 2014 28  Ninth Plan (1997-2002)  poverty alleviation as its main objective and interlinked with development sectors  reduced poverty from 42.0 (1996) to 30.8 (2003)  Tenth Plan (2002-2007)  poverty alleviation by mobilizing the means and resources, through the mutual participation of the government, local agencies, NGOs, private sector and civil society, to extend economic opportunities and open new environment that enlarge employment opportunities

29. Poverty reduction strategy paper (PRSP) © NASC 2014 29 Four pillars of Tenth Plan/ PRSP  High, sustainable, broad based economic growth  Social sector development including human development  Targeted programme including social inclusion  Good governance

30. Three Year Plan (2013/14-2015/16) © NASC 2014 30 Objective Reduce population below poverty line to 18 percent Strategies 1.Increase productive employment and opportunities 2.Emphasize on capacity development, productivity, distributive justice and equitable development 3.Coordinate poverty reduction programmes organized by different sectors and organizations 4.Implement demand based targeted programme 1.Increase productive employment and opportunities 2.Emphasize on capacity development, productivity, distributive justice and equitable development 3.Coordinate poverty reduction programmes organized by different sectors and organizations 4.Implement demand based targeted programme

31. Big questions  What have made contributions to poverty reduction?  Government policy interventions?  Labour migration?  Anything other?  Reaching the bottom of pyramid?  Decomposed analysis?  Targeting the targets? © NASC 2014 31

32. A Story of Poverty © NASC 2014 32

33. The missing links 33 Who? Where? How many? Why? What would happen? Who connects? How long will it take? What can we do? What cost? © NASC 2014

34. Policy gaps © NASC 2014 34  Contradiction in politics and development agenda  Development politics  Politics on development

35. Policy… © NASC 2014 35  Poverty reduction and employment  Mainstreaming poverty reduction programmes  Poverty as a cross-cutting issue  Effectiveness of poverty reduction policies  Utilization of fragmented money

36. Opportunities... © NASC 2014 36  Level of people's awareness  Demographic, gender and peace dividend  National and international commitment for inclusive development  Social capital  Remittances

37. The focus areas… © NASC 2014 37  Pro-poor and inclusive growth  Investing in human capital (health, education, food security etc)  Investing in physical capital (water, sanitation, rural roads, electricity, rural development etc)  Redefining investment- nutrition, health, education  Reducing social inequality  Good governance  Rights-based approach to development

38. Establishing the links © NASC 2014 38 Improving state interventions

39. References © NASC 2014 39 National Planning Commission, 2002, The Tenth Five Year Plan 2002-2007, Kathmandu: National Planning Commission. National Planning Commission, 2003, The Tenth Plan: Poverty Reduction Strategy Paper 2002-2007, Kathmandu: National Planning Commission. National Planning Commission, 2007, Three Year Interim Plan 2006/07-2009/10, Kathmandu: National Planning Commission. National Planning Commission, 2011, Three Year Plan 2010/11 -2012/13: Approach Paper, Kathmandu: National Planning Commission. National Planning Commission, 2011, Millennium Development Goals: Needs Assessment for Nepal 2010, Kathmandu: National Planning Commission. National Planning Commission, 2013, The Thirteenth Plan Approach Paper, Kathmandu: National Planning Commission. Central Bureau of Statistics, 2011, Nepal Living Standard Survey-III: Press Release, Kathmandu: Central Bureau of Statistics.

40. Contd... © NASC 2014 40 Polak, Paul, 2008, Out of Poverty: What Works when Traditional Approaches Fail, San Francisco: Berrett-Koehler Publishers, Inc. The World Bank, 2000, Poverty Reduction in the 1990s: An Evaluation of Strategy and Performance, Washington D. C.: IBRD. United Nations Development Programme, 2010, Human Development Report 2010, New York: UNDP. Sachs, Jeffrey D, 2005, The End of Poverty: Economics Possibilities of Our Time, New York: The Penguin Press. The World Bank, 2003, Poverty in Guatemala, Washington DC: The World Bank.

41. © NASC 2014 41 Thank you for your patience