Monday, April 2, 2012
America's tax gap, Russia's GDP, world's poor
All charts are from different articles in The Economist (www.economist.com). If you're getting this in email, please visit my blog to see the chart images.
Labels: america, poverty, russia, usa
Thursday, January 19, 2012
Articles in Republica and Kathmandu Post
First, Republica has my article on how we can learn from China and grow. The title is "Model Watch". The first two paragraphs:
Chinese Prime Minister Wen Jiabao’s Nepal visit on Saturday made quite a lot of headlines in the Nepali national dailies. The constant newspaper reporting and the “curfews” imposed in various roads in Kathmandu were reminders of how important and heavyweight the Chinese premier, and ergo China, is considered in this part of the world. This rise in China’s importance, not just in South Asia but also in the global arena, is because of its unprecedented economic growth: China is the second largest economy in the world and is expected to overtake the United States by 2020.
What has pushed China from poverty to the second largest economy in a span of few decades? The question merits some explanations if we are to learn any lessons from China’s rise. Most importantly, we need to learn to adopt and implement the economic policies and programs that like that of China for our own economic growth.
Second, The Kathmandu Post has my article on the state-society relationship in Nepal. The title is "Relaxing the noose". The first paragraph:
There is this notion amongst intellectuals in Nepal debating the state-society relationship that a stronger state negatively affects the strength of civic society. The notion comes out of years of experience in the form of oppression from the hands of strong states. This is especially true in Nepal since oppression and repression were commonplace during the Rana rule and the Panchayat system. However, a stronger state need not always imply a weaker civic society.
Labels: china, development, federalism, Kathmandu Post, poverty, Republica, SSR
Friday, January 6, 2012
Global Poverty Facts and Stats
If you are getting this in your email, the pictures will not be visible in your email. Please visit my blog (khanalm.blogspot.com) to see the original post.
Source of today's charts and graphs: www.globalissues.org
Source of today's charts and graphs: www.globalissues.org
Sunday, September 18, 2011
Poverty Reduction and Inclusive Growth
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The following opinion piece was published in Republica on September 18, 2011. The direct Republica link is here.
In 2010, a report for UNDP prepared by Oxford University caused a furor in Nepal when it mentioned that 65 percent of us lived under poverty. The report made its calculations by observing factors like nutrition, electricity, food, energy, drinking water and sanitation, maternal mortality, student enrollment, livelihood and availability of property. The study defined an MPI index—Multi-dimensional Poverty Index—as a measurement of poverty.
The MPI had two parts: Incidence of Poverty and Average Intensity of Deprivation. Incidence of poverty recorded the proportion of the Nepali population that was multi-dimensionally poor. The average intensity of deprivation recorded the average proportion of the indicators in which the population was deprived. The study claimed that 64.7 percent of Nepali households were poor, and 54 percent deprived.
Needless to say, the National Planning Commission (NPC) countered the findings of that report, and suggested that the national poverty was only 25.4 percent. The basic difference between the two numbers arises out of the mechanics of measurement. The Oxford measurement was clearly influenced by Prof Amartya Sen’s ideas of measuring poverty levels by observing overall human development and access to facilities. On the other hand, NPC’s measurement is pretty straightforward in specifying a poor person as being somebody who consumes less than 2144 calories per day. The NPC should have bothered to learn this difference before countering the findings.
However, despite the mechanics involved in measuring poverty, it is undeniable that poverty is still a problem, and a constant hindrance to our economic growth. The fact remains that our political, social and economic problems all arise out of, and contribute to, one common factor: Poverty. In addition, what the Oxford study highlighted was a lack of inclusiveness in our economic growth because of which marginalized groups and minorities in Nepal continue to suffer under poverty.
There are certain factors that have significant impact on whether we are poor or vulnerable to becoming poor. Variances in poverty level depend on rural-urban divide, ecological zones, ethnic groups, castes, literacy level, and gender. For example: According to the findings of the Nepal Living Standard Survey (NLSS), a rural household is more likely to be under poverty than an urban household. NLSS 2004 showed that 95 percent of the poor lived in rural areas.
Looking at the raw numbers, it seems that poverty is declining in Nepal. If the past trends hold true, it is safe to say that we are less poor today, and less vulnerable compared to our situation a decade or two ago. For example, in 1996, people in the mountains were more likely to live under poverty than those in the Terai or the hills. In 2004, those in the hills were more likely to be poor than those in the mountains.
However, an improvement in poverty in one scenario does not necessarily indicate improvement in all other fronts. Incidence of poverty reduction in the mountains today could be the result of declining mountain population due to migration downwards to the hills. Many people from the mountains and hills migrated because of Maoist insurgency, lack of economic opportunities, and changing environment and climate. Migration is also the main reason for drastic decline in poverty incidence in the mid-western and far-western regions since 1996.
Among the factors that have been observed to reduce poverty in households, education is the most important. Around 42 percent of illiterate households were poor in 2004. But, if at least one member of the household had more than 11 years of schooling, there was only 1.6 percent chance that the household would still be poor. The good news for us in this regard is that youth literacy rate is increasing today. As our youths become more literate, we can expect that to have an impact in lowering our poverty rates.
However, despite becoming more literate and educated, our youths are struggling to find jobs at home. As a result, they find themselves unemployed and disillusioned. Our inability to create jobs for them has a tendency to undo the progress that we have made by educating them. Our inability to harness the youth education and energy severely hinders our fight against poverty. If Nepal is to follow an inclusive growth approach, inclusion of our youths is vital to that approach.
There is a general consensus among Nepali experts that inclusive growth brings forth sustained and equitable development, social inclusion, empowerment of women, and security in the country. However, this consensus has not been translated into results. Experts have raised their concerns on issues such as integration of trade policy into overall development goals and strategies; export-led growth strategy with a human face; promotion of employment-intensive economic activities; making aid more inclusive and productive; and effective leadership. Until these desired results can be obtained, critics believe that Nepal will not see a proper inclusive growth.
The critics are right to some extent. A 2008 research by Magnus Hatlebakk, prepared for the Norwegian Embassy in Nepal, showed that Tamang and Rai people of eastern hills have high poverty rates. The highest poverty rates are found among the minorities like Magars, Dalits, and Tharus. NLSS I and II show high poverty among the minorities, and low among the upper caste Brahmins and Chhetris. 46 percent of Dalits, 41 percent of Muslims, and 43 percent of Janajatis were poor in 2004. According to a 2005 UNDP report, poverty rates for Dalits were 15 percent higher than the national poverty rate.
Therefore, there clearly exists a strong link between social exclusion—as defined by the caste hierarchy—and economic poverty. In recent years, remittance income has reduced the poverty incidence on female headed households. So, gender dimension in poverty could be reducing. However, despite some improvements in recent years, we have many more miles to go in achieving inclusive growth.
The following opinion piece was published in Republica on September 18, 2011. The direct Republica link is here.
In 2010, a report for UNDP prepared by Oxford University caused a furor in Nepal when it mentioned that 65 percent of us lived under poverty. The report made its calculations by observing factors like nutrition, electricity, food, energy, drinking water and sanitation, maternal mortality, student enrollment, livelihood and availability of property. The study defined an MPI index—Multi-dimensional Poverty Index—as a measurement of poverty.
The MPI had two parts: Incidence of Poverty and Average Intensity of Deprivation. Incidence of poverty recorded the proportion of the Nepali population that was multi-dimensionally poor. The average intensity of deprivation recorded the average proportion of the indicators in which the population was deprived. The study claimed that 64.7 percent of Nepali households were poor, and 54 percent deprived.
Needless to say, the National Planning Commission (NPC) countered the findings of that report, and suggested that the national poverty was only 25.4 percent. The basic difference between the two numbers arises out of the mechanics of measurement. The Oxford measurement was clearly influenced by Prof Amartya Sen’s ideas of measuring poverty levels by observing overall human development and access to facilities. On the other hand, NPC’s measurement is pretty straightforward in specifying a poor person as being somebody who consumes less than 2144 calories per day. The NPC should have bothered to learn this difference before countering the findings.
However, despite the mechanics involved in measuring poverty, it is undeniable that poverty is still a problem, and a constant hindrance to our economic growth. The fact remains that our political, social and economic problems all arise out of, and contribute to, one common factor: Poverty. In addition, what the Oxford study highlighted was a lack of inclusiveness in our economic growth because of which marginalized groups and minorities in Nepal continue to suffer under poverty.
There are certain factors that have significant impact on whether we are poor or vulnerable to becoming poor. Variances in poverty level depend on rural-urban divide, ecological zones, ethnic groups, castes, literacy level, and gender. For example: According to the findings of the Nepal Living Standard Survey (NLSS), a rural household is more likely to be under poverty than an urban household. NLSS 2004 showed that 95 percent of the poor lived in rural areas.
Looking at the raw numbers, it seems that poverty is declining in Nepal. If the past trends hold true, it is safe to say that we are less poor today, and less vulnerable compared to our situation a decade or two ago. For example, in 1996, people in the mountains were more likely to live under poverty than those in the Terai or the hills. In 2004, those in the hills were more likely to be poor than those in the mountains.
However, an improvement in poverty in one scenario does not necessarily indicate improvement in all other fronts. Incidence of poverty reduction in the mountains today could be the result of declining mountain population due to migration downwards to the hills. Many people from the mountains and hills migrated because of Maoist insurgency, lack of economic opportunities, and changing environment and climate. Migration is also the main reason for drastic decline in poverty incidence in the mid-western and far-western regions since 1996.
Among the factors that have been observed to reduce poverty in households, education is the most important. Around 42 percent of illiterate households were poor in 2004. But, if at least one member of the household had more than 11 years of schooling, there was only 1.6 percent chance that the household would still be poor. The good news for us in this regard is that youth literacy rate is increasing today. As our youths become more literate, we can expect that to have an impact in lowering our poverty rates.
However, despite becoming more literate and educated, our youths are struggling to find jobs at home. As a result, they find themselves unemployed and disillusioned. Our inability to create jobs for them has a tendency to undo the progress that we have made by educating them. Our inability to harness the youth education and energy severely hinders our fight against poverty. If Nepal is to follow an inclusive growth approach, inclusion of our youths is vital to that approach.
There is a general consensus among Nepali experts that inclusive growth brings forth sustained and equitable development, social inclusion, empowerment of women, and security in the country. However, this consensus has not been translated into results. Experts have raised their concerns on issues such as integration of trade policy into overall development goals and strategies; export-led growth strategy with a human face; promotion of employment-intensive economic activities; making aid more inclusive and productive; and effective leadership. Until these desired results can be obtained, critics believe that Nepal will not see a proper inclusive growth.
The critics are right to some extent. A 2008 research by Magnus Hatlebakk, prepared for the Norwegian Embassy in Nepal, showed that Tamang and Rai people of eastern hills have high poverty rates. The highest poverty rates are found among the minorities like Magars, Dalits, and Tharus. NLSS I and II show high poverty among the minorities, and low among the upper caste Brahmins and Chhetris. 46 percent of Dalits, 41 percent of Muslims, and 43 percent of Janajatis were poor in 2004. According to a 2005 UNDP report, poverty rates for Dalits were 15 percent higher than the national poverty rate.
Therefore, there clearly exists a strong link between social exclusion—as defined by the caste hierarchy—and economic poverty. In recent years, remittance income has reduced the poverty incidence on female headed households. So, gender dimension in poverty could be reducing. However, despite some improvements in recent years, we have many more miles to go in achieving inclusive growth.
Labels: inclusive growth, poverty
Tuesday, August 30, 2011
Links for August 30, 2011
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1. $1.6b Chinese loan for West Seti Hydel Project
2. Handicraft exports rise 11 percent on strong demand from China, US
*Rs 92.89 million in 2009/10
*Rs 207.12 million in 2010/11
Sales to Tibet Autonomous Region:
*Rs 33.16 million in 2009/10
*Rs 181.40 million in 2010/11
*That is a 500 percent increase
Sales to the US:
*Rs 739.48 million in 2009/10
*Rs 889.27 million in 2010/11
*US is the main market for Nepali silver handicrafts with exports amounting to Rs 152.9 million last year
*Exports of textile-based goods decreased by 5.08 percent
*Exports of non-textile-based goods increased by 31.72 percent
*Metal crafts were the largest export with a value of Rs 679.3 million
*Woolen goods were second with Rs 495.4 million
*The 10 largest importers of Nepalese handicrafts are (in order): US,Germany, China, Canada, Tibet, Japan, UK, France, Italy and Netherlands.
3. $7.7m Japanese grant assistance for poverty reduction
4. Brace for costly Chinese clothes this Dashain
5. Jumla apples to be costlier
1. $1.6b Chinese loan for West Seti Hydel Project
...Beijing has agreed the loan for the 750 MW project...
2. Handicraft exports rise 11 percent on strong demand from China, US
Exports of Nepali handicraft products climbed 11.71 percent in the last fiscal year...amounting to Rs 3.1 billion in fiscal year 2010-11, up from Rs 2.7 billion in the previous yearSales to mainland China:
*Rs 92.89 million in 2009/10
*Rs 207.12 million in 2010/11
Sales to Tibet Autonomous Region:
*Rs 33.16 million in 2009/10
*Rs 181.40 million in 2010/11
*That is a 500 percent increase
Sales to the US:
*Rs 739.48 million in 2009/10
*Rs 889.27 million in 2010/11
*US is the main market for Nepali silver handicrafts with exports amounting to Rs 152.9 million last year
*Exports of textile-based goods decreased by 5.08 percent
*Exports of non-textile-based goods increased by 31.72 percent
*Metal crafts were the largest export with a value of Rs 679.3 million
*Woolen goods were second with Rs 495.4 million
*The 10 largest importers of Nepalese handicrafts are (in order): US,Germany, China, Canada, Tibet, Japan, UK, France, Italy and Netherlands.
3. $7.7m Japanese grant assistance for poverty reduction
...for three projects in Nepal aimed at reducing child malnutrition, poverty reduction and greater access to clean energy for rural poor
First of the three projects, ‘Reducing Child Malnutrition through Social Protection’, seeks to enhance the system and processes for planning and delivering the government’s cash transfers, particularly the child grant in Karnali districts
Second project, ‘Support for Targeted and Sustainable Development Programe for Highly Marginalized Groups’ will provide targeted support to Dalits and Janajatis in hills
The third project, ‘Improving Gender Inclusinve Access to Clean and Renewable Energy in Bhutan, Nepal and Sri Lanka’, a regional programme for South Asia, will support the rural electrification programme of the Nepal Electricity Authority
4. Brace for costly Chinese clothes this Dashain
...rise in transportation charges and strengthening of Baht will make garments imported from Thailand expensive by around 10 to 15 percent...Also...price of readymade garments and footwear items imported from China will go up by as much as 40 percent...this Dashain
...valuation of Chinese currency has been increasing at a rate of 4.5 percent every year
...the price of cotton ...hit a 15-year high recently...it has become 80 percent more expensive this year as compared to the start of the last year
5. Jumla apples to be costlier
District Cooperatives Association (DCA), Jumla, has increased prices by 17 percent as compared to prices of the past year
The association has set differential prices based on quality of apples...
Grade ´A´ organic apples at Rs 35 per kg
Grade ´B´ at Rs 30
Grade ´C´ at Rs 20
Grade ´A´ non-organic apples at Rs 30 per kg
Grade ´B´ at Rs 25
Grade ´C´ at Rs 20
Apples produced in 14 wards of Kartikswami, Mahat and Patmara VDCs have received organic food certification from Organic Certification of Nepal.District Agriculture Development Office (DADO) plans to apply for organic certification for apples produced in all 30 VDCs in the districtAnd, this news should be worrying our government:
The district had produced a total of 3,300 tons of apples last year. But only 55 tons of apples produced in the district could be taken to market last year.
Labels: apples, dashain, foreign aid, handicraft, hydroppower, jumla, poverty, west seti
Sunday, August 28, 2011
Economics Links
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1. Recessions are always and everywhere a monetary phenomena
2. How do you know who is truly poor? Ask the neighbors---concludes an MIT study conducted in Indonesia
3. How accurate are policy expectations? Evidence from the US
4. Apples, wheat, and haircuts: output and demand
5. Is Economic inequality linked to biased self-perception?
1. Recessions are always and everywhere a monetary phenomena
2. How do you know who is truly poor? Ask the neighbors---concludes an MIT study conducted in Indonesia
...based on fieldwork conducted in 640 Indonesian villages
There are two striking results...First, when citizens are asked to make collective judgments about the relative wealth of their neighbors, the outcomes are very close to those produced by objective measures. Second, citizens are far more satisfied by the results when they are consulted than when they are left out of the process.
...the researchers found no evidence of “elite capture,” the attempt by local leaders to manipulate the rankings for the benefit of their own relatives or political allies.
3. How accurate are policy expectations? Evidence from the US
4. Apples, wheat, and haircuts: output and demand
Actual investment equals actual saving in all three economies all the time. As it must. But the three economies are different. The output of apples takes forever to adjust to bring desired investment equal to desired saving. The output of wheat adjusts in one year. The output of haircuts adjusts instantly.
All three economies are, of course, ideal types. The real world is a mixture of all three, and a lot more complex, with different firms operating in different stages of the production process, so that goods-in-process (intermediate goods) must also be bought and sold.
But, is the real world moving slowly towards a haircut economy? Or is it moving the other way, towards an apple economy?
5. Is Economic inequality linked to biased self-perception?
Labels: demand, expectations, Indonesia, inequality, monetary economics, output, poverty, recession
Monday, August 8, 2011
Youths and Poverty in Nepal: The Connection
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I made a presentation, on behalf of Dr Bishnu Dev Pant-- the Executive Director of IIDS, at the National Conference on Youth and Development organized by the Rotary International District 3292. The conference was held in Hattiban, Lalitpur on September 17-18, 2010. The following was my presentation titled "Youth and Poverty in Nepal: The Connection".
I made a presentation, on behalf of Dr Bishnu Dev Pant-- the Executive Director of IIDS, at the National Conference on Youth and Development organized by the Rotary International District 3292. The conference was held in Hattiban, Lalitpur on September 17-18, 2010. The following was my presentation titled "Youth and Poverty in Nepal: The Connection".
According to the United Nations, over a billion people in the world today live in unacceptable poverty. Most of these people live in low-income countries that suffer from malnutrition; hunger; limited access to education; higher mortality rates; social discrimination; lack of participation in civil decision-making; homelessness and inadequate housing. The UN suggests that the best way to escape poverty and develop economically in these poverty-stricken countries is through programs designed to uplift the youths in these countries. The UN believes that program focusing on the youths is much more effective than programs focusing on other demographics when it comes to lifting a nation out of poverty.
While on the topic of youths, the latest National Labor Force Survey (NLFS) of 2008 mentions that around 60 percent of the Nepalese population is below 25 years of age. If the ratio holds today, it means that around 18 million people in this country are below 25 years of age. This shows that most people in this country are young. If Nepal wants to develop, it should follow the suggestion of the United Nations, and increase its funding for programs that help the youths. Programs supporting education, health, family planning and employment for youths should receive more funding.
At the start of 1800, a Nepali mother was giving birth to 6.2 children on average, compared to 7 children by an American woman, and 4.5 children by a Norwegian woman. This shows that in the beginning of 1800, Nepal was better than America but worse than Norway in terms of fertility rate. However, the industrial revolution in the US that began in the early 1800s, started to develop the US economy. As a result, healthcare facilities and nutritional intake improved among its population. Programs on health, education, poverty reduction, sanitation and hygiene started receiving increased budgets. So, the fertility rate went down.
In comparison, Nepal saw no economic development until the 1970s. As a result, a Nepali woman was still giving birth to 6.2 children on average in 1970. However, foreign aid started pouring into Nepal beginning in the 1970s, especially in the field of health and education. This resulted in improving health and education facilities. As a result, the fertility rate in Nepal started dropping during and after the 1970s. Today, on average, a woman in the US gives birth to 2.2 children, a Norwegian woman gives birth to 1.9 children, and a Nepali woman gives birth to 2.9 children. This statistic goes on to show that although Nepal was slow to start the progress, it has rapidly caught up with most developed nations when it comes to lowering the fertility rate.
Between 1990 and 2008, the fertility rate (birth per woman) in Nepal declined from 5.16 to 2.9. On the other hand, births per 1000 teenage mothers (aged between 15 and 19) between 1998 and 2008 declined from 126 to 98. This shows that on average, a Nepali woman gave birth to 50 percent fewer babies in 2008 compared to 1990, while an average Nepali teenage mother gave birth to about 33 percent fewer babies in 2008 compared to 1998.
So, there is a markedly noticeable improvement since the 1990 democracy in terms of fertility rate. The possible factors that resulted in this improvement could be the increasing female education, the equality laws, increased opportunities for minorities and women in government services, and increasing foreign and domestic aid for minorities and women.
The improvement in fertility rate, which is comparable to developed nations like the US and Norway, is a matter of pride for all the Nepalese women. However, Nepal has a long way to go in terms of infant mortality rate. Less than 3 infants out of 1000 live births die in Norway, and about 6 infants out of 1000 live births die in the US before their first birthday. However, 46 infants out of 1000 live births die in Nepal before their first birthday. This high infant mortality rate suggests that Nepal still lacks the proper healthcare facilities and infrastructure to ensure the survival of its babies. Nepal cannot, seriously, expect to develop and prosper economically if it continues to lose its future labor force through infant mortality.
However, there’s some good news in this front. The immunization rates for DPT and Measles in Nepal was below 10 percent in 1980. This shows that despite a decade of introduction of these vaccines, the population was skeptical on using the vaccines. But, the vaccination rate was around 80 percent in 2008. The increasing vaccination rate coincides with the lowering fertility rate in Nepal. This shows that women in Nepal, before 1970, were giving birth to too many children to ensure at least a couple of them survived diseases like Diphtheria, Polio, Tetanus, Measles, and Mumps. Once the population discovered that vaccination was increasing the survival rate of babies, they started having fewer babies. And, this is good news in the fight against poverty in Nepal as well. Research has shown that poverty has a strong correlation with fertility rate.
Another factor that correlates with poverty is the literacy rate. As youths become more literate, they gain invaluable information on sex, family planning and diseases. Such knowledge informs and empowers the population to make right choices. Statistics show that literacy rate among youths has increased in the last few decades. Today, about 76 percent of female youths, and 80 percent of male youths in Nepal are literate. Grouped together, the time series of youth literacy in Nepal shows that around 80% of all youths, aged between 15 and 24, are literate.
This is exciting news for the future of Nepal. About 60 percent of Nepal’s population is below 25 years of age. So, we are a country full of young people. The youths in this country are the driving force of the nation and its economy. So, an increase in the literacy rates among Nepalese youths suggests that our population is becoming more literate, more educated, and therefore, more productive.
Since youths make most of the population in Nepal, and therefore most of its labor force, it becomes our responsibility to make sure that we provide education and training to them so that they can compete with the global labor force. Total expenditure on education has increased since 1990. Foreign aid for education is very low, has erratic fluctuations, and not very contributing in promoting education.
Despite an increase in total education spending, there has been no increase in public education spending since 1990. After 1990, increase in public expenditure on education has been less than 1 percent. To call that increase ‘unsatisfactory’ would be an understatement. Urban areas do not suffer from this lack in spending as they have increased private spending on education. However, lack of public funding affects the rural areas because they are not attractive to private spenders. Rural youths lack the same opportunities as their urban counterparts in terms of access to affordable education.
For a country that keeps mentioning the issues of education and poverty as its topmost agendas, a public spending increase of less than 1 percent in the last 20 years does not help sustain its image of ‘trying’. An increase of less than 1 percent does not qualify as trying; it suggests ‘giving up’. This governmental give-up has resulted in millions of rural youths who will be undereducated if not uneducated, and will be poor all their life.
Besides education, the factor that affects poverty is the health of the population. We should provide healthcare and medical benefits to our citizens in order to make our labor force healthy and productive. However, the total health spending as a percent of GDP has declined in the last decade. This lack of healthcare spending has resulted in an unfit and unhealthy population. This, in turn, has resulted in declining productivity and sustained poverty rates.
The worst is that out of the total spending on health, government’s contribution is only around 31 percent. Most spending is incurred by private sector, which is bad news since private sector investment in healthcare is always limited to urban areas. So, there are millions of rural Nepalese who lack basic healthcare due to low private and public spending in rural areas. The government needs to address these issues, and increase its health related spending in rural areas if it wants to improve the quality of life among rural population and lower their poverty level. We have always known that health is wealth. So, we cannot even think about reducing poverty levels unless we improve the health related investments.
One positive facet of the current Nepalese demography is that the ratio of young literate females to males has increased steadily since 1990. This suggests that although there are millions of youths in Nepal who lack education, among the ones who are educated, female youths are becoming equally educated as male youths. This gender equality in education has contributed in reducing poverty, increasing productivity in the labor force, and improving the overall economy.
Speaking of poverty, national poverty declined by 10.9 percent between 1996 and 2004. Urban poverty declined by 1.5 percent each year, and rural poverty declined by 1.08 percent each year during this period. This difference in urban and rural poverty decline suggests that there has not been a conscious effort to reduce rural poverty, and that rural areas need more help.
Although extreme poverty, those making less than 1.25 USD a day, has lowered significantly, the Gini coefficients have shown a significant increment. Between 1995/96 and 2003/04, the Gini index in rural areas increased from 30.8 to 34.9; increased from 42.7 to 43.6 in urban areas; and increased from 34.2 to 41.4 nationally. Also, the highest 10 percent of earners have increased their share of national income, and lowest 10 percent earners have seen a decline in their share. In other words, the poor are getting poorer, and the rich are getting richer.
The increase in the Gini index and the degradation in the income share ratios suggest that our society is becoming more unequal every year. These statistics also show that there has not been a conscious effort to help those at the bottom of the society. The poor, essentially, have been left to fend off poverty on their own. In other words, if anything has been done by the government or the various NGOs and INGOs in this country to alleviate poverty and help the poor, the statistics do not show it. Until and unless the people at the bottom of the income strata are helped, alleviation of poverty and the thought of an equal society will remain unfulfilled in Nepal.
Since agriculture is still the major component of our GDP, the decline in agriculture in Nepal has meant that more people are unemployed and poor. The agricultural contribution to GDP is at its lowest level during the last 30-40 years. The liberalization of Nepalese economy post-1990 democracy was always bound to allocate resources, including capital and labor, to other sectors of the economy like manufacturing and service. While agriculture was always en route to decline, the decline has occurred too rapidly, without giving the agricultural labor an opportunity to train and educate itself so that it may be employed in other booming sectors.
Government’s failure to act on this matter has resulted in millions of agricultural laborers losing their jobs with no alternatives. Lack of training and education has resulted in these laborers not being able to find jobs in other sectors within Nepal. As a result, they have been forced, in a way through government inaction, to seek employment overseas. While such overseas employment brings remittances and is beneficial in the short-term, it is not a desirable outcome of the unemployment and poverty situation. A long-term solution to the agricultural unemployment and poverty is to provide education, health benefits and jobs to these laborers and retain them in our economy. As a growing economy, we cannot afford to lose our labor force in its prime working age to some other country. We should develop policies to keep our youths at home.
A glaring and sobering statistic in the fight against poverty comes from the latest National Labor Force Survey conducted in 2008. The survey showed that 1 million male and 1 million female children between the ages of 5 and 9 are active in the labor force i.e. they work. Another 1.2 million male and 1.1 million female children between the ages of 10 and 14 are also active in the labor force. We already have programs and laws designed to ensure that children in Nepal do not have to work. The fact that a government sponsored survey showed these results, and there was no subsequent action taken to mitigate the issue of child labor, shows a systemic failure of our government.
This shows that we, as a society, have failed in our duties to educate and take care of our children. These 4.3 million children deserve better. If these children stay active in the labor force, they will grow up to become youths with little to no education. And, an increase in number of youths with little to no education means poverty will rise again in Nepal. This is a current problem, and a major one at that. Somebody needs to ask our government: Why are these 4.3 million children in Nepal working, and is there something being done to help them?
In conclusion, Nepal currently suffers from poor spending in health and education. Rural areas have been neglected, and rural youths do not have equal access to various amenities like their urban counterparts. There are too many children active in the labor force, and these children are being robbed of their childhood while our society looks the other way. The abandonment of our rural youths and our children will lead to increase in poverty level in Nepal when these children and youths grow up and become a member of our labor force. In order to grow and develop economically, we need to nurture and educate our children and youths. We need to provide healthcare benefits to all our citizens. Only then can we even dream about economic development and alleviation of poverty in Nepal.
Labels: GINI, inequality, poverty, youth
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