According to the National Planning Commission (NPC)´s recent progress report on the MDGs, the proportion of people in Nepal below the poverty line has declined to 25.4 per cent by 2010, down from 42 per cent in 1990. [break]
In order to achieve its MDG, Nepal needs to reduce the poverty rate to 21 per cent by 2015. Various studies point out that Nepal is likely to achieve its poverty reduction target by 2013, two years before the deadline, with the completion of the new three-year interim plan drafted by the NPC.
Similarly, according to the NPC report, Nepal has also succeeded in reducing the proportion of people with less than $ 1 income per day. Albeit that recent statistics are not available, Nepal had reduced poverty to 24.1 per cent by 2005, 9.4 per cent lower than it was in 1990.
Not so rosy
However, when the incidence of extreme poverty and hunger is meticulously examined beyond the two indicators, Nepal´s progress in combating poverty has not been so satisfactory. Contrary to what the indicators of extreme poverty and hunger -- determined on the basis of national averages - suggest, the intensity of poverty has deepened, meaning more people are vulnerable to starvation, especially in the rural areas.
Cases of people committing suicide due to poverty in far-flung villages after killing near and dear ones, something unhead of until a few years ago, seem to be on the rise. And the food crisis in Karnali has become increasingly acute.
Going by the NPC´s own report, geographical and social variances in poverty are alarming. According to a 2009 report by the Central Bureau of Statistics (CBS), the poverty incidence in rural areas is 28.5 per cent, almost four times higher than in urban areas where it stands at 7.6 per cent. There has not been any significant progress in narrowing this gap between rural and urban areas, proven by the fact that the poverty gap gauged in 2009 was almost the same as in 2005.
Similarly, the poverty reduction rate in the rural areas is slower than in urban areas, according to the same 2009 CBS report. "The national poverty rate has obviously come down," said a development analyst who has been assisting the NPC in formulating policies, "However, the poverty gap between the rural and urban areas is widening."
According to the NPC report, the percentage of poor people in the mountain region has declined very slowly from 2004 to 2009, compared to the hills and the tarai. The slowness of the poverty decline in the mountains has not been reflected in the national average. The significant poverty decline in the hills and Tarai has helped the national average of poverty decline rate drop by over five per cent in this period.
"The slowness of the poverty decline rate in the mountains may be the consequence of the relatively little access of people from this area to overseas jobs," a development analyst said. "Our achievement in reducing the poverty rate is largely due to remittance, which pours mainly into the Hills and Tarai rather than the mountains," he said. "This is indicative of the fact that our development is uneven."
Really reduced?
The proportion of people with less than $1 income a day has obviously come down. But this average daily income to measure the level of extreme poverty was determined by the United Nations (UN) in 2000. Given the ever-soaring inflation rate, the 10-year-old daily average income of $1is irrelevant. Globally, many development analysts and economists have proposed $1.25 as the new average daily income. As per this new standard, which the UN is reportedly mulling, the incidence of poverty in Nepal is higher than what the NPC has proudly stated in its report.
According to Pushkar Bajracharya, an NPC member who conducted an independent study in 2009 using the yet-to-be-endorsed average daily income of $1.25, Nepal´s poverty rate has indeed increased. Currently, 41.3 per cent of the people, 10.8 per cent higher than in 1990, earn less than $1.25 per day. "Given the inflation rate, it is essential to define the average daily income," Bajracharya said. "And, by the new definition, the poverty rate has not really decreased."
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