KATHMANDU, Dec 15: Nepal is heading toward becoming the poorest country in South Asia, thanks to the prolonged Madhes unrest and the Indian blockade.
Currently, Nepal is the third poorest country in the region after Bangladesh and India, according to the latest World Bank report, which has not included Afghanistan, the newest member of the regional body, Saarc.
However, the current Madhes unrest and Indian blockade are pushing almost one million more Nepalis into poverty. They will be joining the nearly one million already nudged into poverty by the devastating earthquakes of April and May.
According to a central bank report-- 'Impact of India's unofficial blockade on Nepal's economy' -- some 800,000 more Nepalis will be pushed below the poverty line. This conclusion is based on a study of the losses faced by agriculture, industry as well as the service sector.
Currently, one in almost four Nepalis (23.7 percent) is under the extreme poverty line -- living on $1.25 or less per day -- and one in two (56 percent) is under the poverty line of $2 per day, compared to 43.3 percent in Bangladesh and 23.6 percent in India living under the extreme poverty line, and 76.5 percent and 59.2 percent respectively under the poverty line, says the report.
The current political impasse coupled with the devastating earthquakes is going to push around 2 million Nepalis under the poverty line. This means the rate of poverty is going to increase by almost 7 percent, according to former vice-chairman of the National Planning Commission, Deependra Bahadur Kshetry. “It could be even worse in reality, due to the severe impact of the current fuel shortage, especially cooking gas,” he added
The increase in poverty in a very short span of time - eight months from April to December - is going to render the country the poorest in the region, he said.
Worse still, the population in the tarai is going to be the poorest in the country as they have lost their employment and remain barred from economic activity due to the unrest.
According to the Small Area Estimation of Poverty conducted by the Central Bureau of Statistics (CBS) in 2013, the districts that were once prosperous - including Saptari, Siraha, Rautahat, Bara and Parsa - dropped into the list of the poorest districts following the Madhes movement in 2005-06. These same districts are going to be hit hard again as the current Madhes agitation has forced some 2,200 industries to close, leaving around 220,000 people unemployed, as per figures from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
“From being the poorest country in the region in 1990, Nepal improved its position to the third poorest behind Bangladesh and India," according to the World Bank global poverty estimates that monitor trends and progress toward achieving the Millennium Development Goals (MDGs). The world has moved on to Sustainable Development Goals (SDGs) from this year.
Nepal moved ahead of Bangladesh in 1999 and India in 2008.
The recent World Bank global poverty estimates update has assessed poverty using two internationally comparable poverty lines - $1.25 and $2 per
capita per day. Both international poverty lines are converted to local currency using the latest (2005) Purchasing Power Parity (PPP) exchange rates.
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