Trends and Drivers of Poverty Reduction in Nepal: A Historical Perspective

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Geographical Dynamics of Poverty in Nepal between 2005 and 2011: Where and How?

“…Nonetheless, for the most severely impoverished countries in Sub-Saharan Africa and South Asia, the economic background underpinning income poverty keeps playing a fundamental role in constricting general living and the development of conditions of health and education, as well as living standards, especially when the nation cannot deliver adequate basic public services, such as piped water, electricity, cooking fuel or sanitation [24]. As for our study, the Nepalese poor's economic well-being is much more related with the aforementioned basic facilities, against a background of sluggish economic growth with very few exports, as well as high population growth with high dependency of the rural population on the primary industrial sector [74]. In addition, Nepal offers research potential for studying spatial poverty induced by terrain and geographical environment at a country level.…”

“…From 1995 to 2010, around 50% of the poverty eradication observed in Nepal relied on labor income growth, especially for nonagricultural activities [71]. Specifically, the second half of the 2000s witnessed a succession of unprecedented increase in remittances on the share of GDP, from 15% in 2005 to 22% in 2010 [74]. There was no doubt that non-agricultural income, including migrants working abroad, underscored a significant role for poverty reduction.…”

“…There may be geographic or administrative units smaller than districts that could better reflect the refined spatial texture of poverty dynamics, as well as being beneficial to illustrating the potential factors driving poverty change. The period from 2005 to 2011 is critical to the nation, as it coincided with the half decade of unsettled post-conflict recovery after a violent and enervating Maoist conflict, as well as being the period in which Nepal's overall economy shuddered forward and started to have an inferior economic growth of around 3% to 4% [74]. Additionally, this paper aims to utilize the available secondary data to make an assessment of poverty in Nepal from 2005 to 2011, which is a critical period for the country, as illustrated.…”

Socio-economic development in South Asia: The past 50 years

“…For an attempt to operationalize the concept of GNH in terms of practical policy-making, see, among others, RoyalGovernment of Bhutan (1999).27 Some of the policy choices are analysed in ADB (2013) and World Bank (2014).28 I have used the international poverty line for the sake of comparability across countries. Estimates of poverty based on national poverty lines tend to be somewhat higher; the time path is also not identical, but long-term trends are roughly similar to those based on the international poverty line.29 For a detailed analysis of the processes of poverty reduction in the region, see, among others, Osmani (2017),Osmani et al (2006),Sen and Ali (2017), and World Bank (2013) on Bangladesh; ADB (2014) and NSB (2014) on Bhutan;Uematsu et al (2016) and World Bank (2016a) on Nepal; Lopez-Calix et al (2014) on Pakistan; andGunatilaka et al (2009) and World Bank (2015b, 2016b) on Sri Lanka. 30 A recent, carefully conducted econometric exercise has estimated that, in the absence of microfinance, rural poverty would have been 46 per cent in 2010 instead of 33 per cent, the actual poverty rate.…”

Regional Differentials in Multidimensional Poverty in Nepal: Rethinking Dimensions and Method of Computation

“…By this definition, the latest official figures suggest that more than 35% of the total population is living below the poverty line in Nepal. However, the application of the concept of relative poverty is virtually absent in Nepal (Alkire, Adriana, & Roche, 2013; Central Bureau of Statistics [CBS], 2011; Nepal Human Development Report [NHDR], 2014;Uematsu, Shidiq, & Tiwari, 2016;World Bank, 2016).…”