Current state of poverty in Nepal

By Suman K Sharma

Poverty in Nepal is chronic and widespread with roughly half of the population living below the poverty line. Based on the Human Development Report 2000, Nepal is ranked 144 in the Human Development Index value (HDI) which is below all its South Asian neighbours except for Bangladesh. Large segments of the poor are hard-core poor barely eking out a subsistence living on fragile, vulnerable ecosystems and large areas of the country lack even the most basic infrastructure which is reflected by low economic and indicators at the district level. There are wide variations based on rural-urban divide, geography, ethnic group and occupational caste.

The Nepal Living Standards Survey (NLSS) conducted by the Central Bureau Statistics (CBS) provides the most recent estimate of poverty both at the national and regional levels using household consumption expenditure data. Using the NLSS data, the NPC estimated that about 42 percent of the population is living blow the poverty line. The poverty line was estimated to be NRs. 4,404 on the basis of a daily per capita calorie requirement of 2124, average price level prevailing in 1995/96 for this food basket, and a factor to account for non-food expenditures. When a different poverty line is used, the poverty estimates naturally tend to vary. Irrespective of the definitions used, it is seen that at present roughly about half of the population of Nepal is living under the poverty line.

Large disparities are seen in poverty incidence across various geographical regions. NLSS data indicate that 44 percent of the rural households and 23 percent of the urban households were estimated to live below the poverty line. Given that close to 88 percent of the total population resides in rural areas of Nepal, poverty is much more severe in rural areas compared to the urban areas. When we look at poverty incidence by ecological zones, it does not vary much between the Hill and Terai zones but is much higher in the Mountain zone. Distribution of poverty incidence across the five development regions indicates that households in the eastern and central development regions are less poor than those compared to other development regions. Further, the rural poor in the remote western part of the country are generally poorer than those from the other rural areas.

The HDI value for Nepal for 2000 (based on 1998 data) is 0.474 indicating a low level of human development even by South Asian standards. All countries in South Asia are better placed than Nepal in terms of HDI value, except Bangladesh with an HDI value of 0.461. Various social and economic indicators have been improving since the collection of such indicators was started roughly four decades ago. However, as the country started with very low values for such indicators and the progress in most of the cases has been at a relatively low pace the current situation is characterised by low levels of socio-economic indicators even by South Asian standards. Almost two-thirds of the adult population cannot read or write, less than half the population have access to safe drinking water, the country has the highest infant mortality rate (98 per thousand) in South Asia, and about half the children below five years of age are underweight. Also, data indicate that low achievements in respect of human development tend to go together with low levels of income and consumption. The poor have the lowest level of achievements in literacy, health and access to health care. They also tend to have a higher rate of fertility, caused in part by lower awareness about contraception, which tends to aggravate their poverty in terms of income, education and health.

As in the case of income poverty, large disparities are seen in social indicators across regions and socio-economic groups. For instance, people in rural areas are twice as more likely to be illiterate than those in urban areas. Illiteracy rates are the highest among the lower caste groups as well as among the disadvantaged groups. The other social indicators such as access to health, education, safe drinking water are lower in rural areas as compared to those in urban areas. Further, these indicators are the lowest in the remote areas (mostly western, mid-western and far western hill and mountain districts) and for the disadvantaged groups.

In the context of Nepal, the social exclusion aspect of poverty is manifested mainly through gender-based exclusion and caste/ethnicity based exclusion. The exclusion-led discrimination against women covers domains of physical survival, health and educational opportunities, ownership of assets, mobility, overall cultural status, etc. Another major component of social exclusion is based on caste and ethnicity. For example, poverty incidence is higher among the people belonging to the lower caste groups, ethnic minorities such as the Limbus, Tamangs, Magars, Tharus, Musahars, etc, and tribal groups such as the Chepangs, Raute, etc. The lowest caste groups are severely deprived of opportunities in all dimensions of life - cultural, social, political and economic. Significant disparities in human development indicators are visible between the lowest caste groups and upper caste groups. The lowest caste groups have a literacy rate of only 18 percent compared to 47 percent for the upper caste groups, a life expectancy of only 51 years compared to 57 years for the upper caste groups, an infant mortality rate of 118 compared to 85 among the upper caste groups, and almost 15 times higher absolute poverty than at the national level. The situation of women belonging to the lowest caste groups is even more disturbing, for example as reflected by a very low, only 7 percent, of literacy rate among them in addition to a very poor level of other social indicators. The other hard high group of poor consists of the Dalits who are comprised of the lower occupational castes such as Kami (blacksmith), Damai (tailor), Sarki (shoemaker) etc. Among the Dalits, the Dalit women are at an even more disadvantaged position mainly because of their low status within their own groups.

To sum up, poverty in Nepal has the following characteristics: (a) As measured by consumption based measures roughly half of the population lives below the poverty line (b) Rural poverty measured by poverty incidence is twice as high as urban poverty. Given that 88 percent of the population reside in rural areas, poverty in Nepal has a mostly rural face (c) Poverty incidence is the highest in remote, backward hills and mountain districts (d) Poverty incidence across various ethnic groups varies significantly - those at the bottom are occupational caste groups, ethnic minorities, and indigenous tribes (e) Poverty is more prevalent in women than men as a result of the lower access to and control of resources of women compared to that of men. Women work substantially longer hours in non-paying work than their male counterparts in rural areas but because of the lack of control of resources and the low position of women in society even within the household the situation of women is much weaker.

(The author teaches at the Central Department of Economics, Tribhuvan University and works
as a researcher at the Institute for Integrated Development Studies)

Sabihaa, a hope for many

By ‘Akash’

Japan has always been eager to help Nepal. Major areas in which Japan has offered a helping hand are telecom, education, industries, agriculture, community development etc. Conservation of natural resources and capacity building of rural people of Nepal are among the major concern of Japan International Cooperation Agency. With the goal of poverty alleviation and improvement of natural environment through active participation of people, a project, in cooperation with Department of Soil Conservation and Watershed Management under Ministry of Forest, had been started back in 1995 with the name ‘Community Development and Forest/Watershed Conservation Project’ (CDFWCP).

During first phase people of 90 wards, from four VDCs of Parbat district and six VDCs of Kaski district were among the target beneficiaries. More than 835 sub-projects (490 Kaski, 345 Parbat) covering income generating, watershed management, community infrastructure development activities, were implemented. Capacity building programs such as various training and study tours were frequently organized. During first phase 193 trainings were conducted and more than four thousand participants benefited. Forty-four study tours were organized and above six hundred had participated. Successful completion of first phase has enhanced enthusiasm among the people for the second phase.

Second phase has targeted five-village development committees from each Parbat and Kaski district. In order to familiarize this project among rural people a nickname Sabihaa has been chosen. Which stands for ‘Samudaik Bikas Tatha Hariyali Aayojana (community development and greenery promotion, in Nepali). Project head quarter is located in Ratna chowk, Pokhara and has its branch office in Kusma. Mr. Hiroki Katsuragawa, chief adviser of Sabihaa project has made a great effort to convince and assure Japanese officials in JICA head quarter Tokyo, who were suspicious about prevailing security situation in remote areas of Nepal. Mr Katsuragawa, former Japanese government officer, who has worked many years in Japan and Thailand as a social forestry expert had arrived Nepal as a chief adviser for this project. Good cooperation as usual from government and some changes that have already been made would help us launch this project without any hindrances, Mr. Katsuragawa stated. Project’s major concern is to empower rural, deprived people and community for the management of their community resources in a sustainable way, he emphasized.

For the second phase of Sabihaa all sub projects that will be implemented are classified in two categories such as integrated community resource management activity (all activities related to improve/conserve community resource) and power program (adult literacy class and life improvement programme). Power program is a special capacity building and empowerment program for illiterate, poor, occupational caste and women. Two motivators and one mid level technician of district soil conservation office will support implementation of activities in each target VDC. Mr. Atsutoshi Hirabayashi, who is a community development expert in Sabihaa, is also very hopeful about this project. After working more than four years in African countries and in Cambodia more than one year as a development worker, he took over a position of community development expert in this project in November 1999. Mr Hirabayashi, who has already started speaking Nepali fluently, believes that a community development worker must be polite, good listener, and a person with good interpersonal skills and should live a simple life while working in community. For the effectiveness of training and extension activities, planned for the second phase, Ms Yasuko Oda assists and supervises training and extension activities in the project. Previously she had worked for Basic Primary Education Project for four years in Nepal. Her name could be found in many textbooks for primary education in Nepal. JICA experts’ team, which also includes a gender expert, watershed management expert, and a coordinator, is very effective and efficient. After the approval from joint coordination committee meeting held on 24th August 2000, in Kathmandu, Project Management Meeting was organized in Pokhara on 29th of August 2000. Among the participants were assistant resident representative of JICA/Nepal, DDC Chairpersons and Chief district officers of Parbat and Kaski, Superintendent of Police Kaski, chairperson of target VDCs, local NGOs and INGO representatives, officials from district soil conservation office Parbat and Kaski, government officials, project employees etc. Participants had shown great interest in this project and provided valuable suggestions and assured about coordination and cooperation in the future.

Implementation procedure of this project has been designed in such a way, which encourages people’s participation in every aspect. In this way people will receive on the job training in each activities they are involved. Participatory approach, as a key concept of the project, will enable people for sustainable community development. Project will also emphasize on integrated community resource management, gender equity and coordination with local governing bodies and line agencies in order to empower people who are involved.

Problems of child trafficking for labour

By Khim Sharma

The rural economy should be strengthened first in order to control girls trafficking and child labour since both these problems owe their origin largely to poverty - Khim Sharma, The Kathmandu Post, June 17, 1999.

Although somewhat deterministic and not quite complete in itself, this generalization is based upon the realization that the children who are trafficked and used as labourer or sexually abused usually come from the poorer families and not from the well-off families. Poverty as a crosscutting factor and impinging on every aspect of life sets an ideal condition for the negligence of children when it comes to food, cloth, education and health care. The facts that children are physically weak; require less food, space, cloth and wages and are unable to raise voice against all forms of abuses make them very vulnerable to a number of miseries. Weaker bonds between parents and children, lack of emotional security, poor self image, the perception of parents on children as economic assets as concomitant of poverty, bad company and misinformation about the urban life, often projected as luxurious or glamorous, also fan the problem. In the process, these children end up as beggars, domestic servants and child prostitutes. Those lucky enough to catch the attention of rehabilitation centres further undergo the risk of being sexually abused.

However, in the context of Nepal, it is also equally true that in the continuum of problems, a vast majority of the Nepalese population—both male and female—considers poverty as the major problem. To this population, the major purpose of life is to free itself from the grip of poverty, and its ultimate goal is to live a better material conditions of life which often means better food, better house, better cloth, better income and better education. Ironically, problems such as child trafficking and child abuse occupy less favourable niche in this continuum. Clearly, the humanistic dimension relating to the wellbeing of children is still weak and even potential to be confused as "imposed". An umbrella institution casting positive light on this issue and streamlining the isolated activities is still missing in Nepal.

Strengthening the national economy through alleviating poverty by first attacking on the economic factors and socio-political processes should be taken as the first stepping stone in the elimination of child trafficking. Some relevant programmes that are worth recommendations include: placing emphasis on national spending in rural areas for the development of critical infrastructures or the fulfilment of basic requirements such as irrigation, improved variety of seeds and saplings, fertilizers, and rural roads in the context of agriculture. Transplantation of appropriate technology, hardware or software, to make economic activities less labour intensive or less dependent on child labour is also highly recommended since it is believed to increase both the economic returns and participation of children in school. These programs, potential to yield extensive spillover effects on rural communities and able to rate very high on the cost-benefit analysis, should make a biggest bite on
the programme budget. Micro credit programmes, preferably requiring no collateral, should also be targeted to both the urban and rural population.

The non-economic interventions that are recommended here for consideration include strengthening and expanding of family planning services, advocating the values of smaller families and making communities realize that the trafficking of children is both illegal and unethical. In this context, introduction and enforcement of stronger laws or the amendment of Civil Code is recommended since a grievance on the ambiguity of Civil Code has been repeatedly made. In the meantime, enforcement of Local Governance Act is recommended in order to empower communities to identify, plan, implement and monitor their children’s programmes. An additional activity proposed here includes the capacity building of the authorities and NGOs working at the points of exit and the vesting of power in them to handle the diverse aspects of child trafficking. If child labour is accepted in moderate form by communities, then a law pinpointing the minimum wages, working conditions and working hours should be introduced.

Three things emanate from this discussion. First, the elimination of child trafficking for labour or for any other purposes can never materialize through isolated efforts, but only through comprehensive efforts. Second, its elimination is a gradual process, but dedication, tirelessness, coordination and clarity can speed up the process. Third, and most importantly, the paradigm emphasizing the value of children, should stay with us for ever and should not be over thrown by another paradigm to make it obsolete or forgotten soon.

How was Kathmandu valley’s medieval economy ?

This book is one of the recent publications of CNAS. It is an outcome of an earlier project to prepare a national history of Nepal initiated by CNAS in 1985. Although there were several volumes in Nepali and English and French on the general history of the Kathmandu valley, there was no separate volume particularly focused on the economic history of the valley as such. In this way, this book is the first of its kind. I hope that this will be welcomed by the academic community interested in it.

According to the authors, this book covers a period of about 890 years between AD 879 and 1768. It contains ten sections (chapters). Section I presents an introduction with a historical background of Kathmandu valley and the expansion of its settlements and rapid urbanisation there. Section II describes the natural resources such as land, forest and minerals. Section III deals with agriculture and land management system in which it describes the agricultural production, irrigation system, agricultural technology, animal husbandry, land management system under which the types of land and landownership are described. It also describes the system of land sale, mortgage and categorisation. The tenant and land-tax system are also described in this section.

Section IV describes the industrial tradition in Kathmandu valley. The industry included textile industry, metallurgy, minerals industry, industry related to woodcraft, stone craft, and pottery. This section also deals with occupations with oil, sugar-cane, and flour-mills. Obviously, those "industries" were very small and probably confined to individual families. There was never an industrial revolution marked by mechanisation in Kathmandu valley unlike in European cities.

Section V deals with the labour force and occupational classes. It describes the various occupational classes and castes and their work. Wages, labour as tax, and slavery are also described in it. However, no solid evidence of the existence of slavery is provided. Since there was no large-scale industrial work, there was also no need for a large-scale slave labour as in the cotton, tobacco and sugar-cane plantations in American and African colonies about the same time.

Section VI describes the entrepot trade and commerce in and through the valley. It describes the external trade and business guilds and organisations of Kathmandu. It also describes the trade routes, customs offices, and trading communities. The centres of periodic fairs are also described.

Section VII describes the traditional methods of economic transactions, including its monetary and exchange system. Remarkably, Kathmandu was civilised enough to use golden and silver coins for monetary exchange during the Malla rule (ca 879-1768). In fact the golden coins were in use even before the Mallas. The Licchavis who ruled in the valley from the first century up to the end of the ninth century had already founded the infrastructure of a civilised society and government in the valley. We have copper coins of the early Licchavis who were the cognates of the Guptas in the plains of India.

Section VIII describes the units of measurements. The land measurement system is of special interest in a community which was predominantly agricultural. Section IX describes the transportation and communication system in the medieval Kathmandu valley. There is no evidence of the use of the animals of burden for transportation in and out of the valley. Kathmandu valley was remarkable for the lack of mobility of its people. As late as 1957, there was no motor car road linking Kathmandu with the rest of the world although the network of railroad in India thanks to the British Raj was one of the remarkable features of South Asian transportation system.

Finally, Section X describes the financial system of the government. It describes the sources of revenue such as regular tax (from what?), occasional or special taxes for special purposes, and other sources. This chapter also presents a few details on the expenditure of the state such as organising the special religious and cultural events or construction of temples.

Thus it is clear from the title of its sections that the book covers almost all pertinent aspects of Kathmandu valley’s economy. But it is more descriptive/narrative than analytical. It contains mostly the statements of the obvious such as: "the economy of Kathmandu valley was basically agricultural and was supplemented by its entrepot trade between Tibet and India."

Reading the book, a few questions arise in the minds of the reader. What was the administrative mechanism to collect taxes from the people? Were taxes collected only in the form of cash or kind as well? Did the Malla kingdoms have any budgeting system? Although the question of defence may not come under the purview of this book, one tempted to ask: How much did they spend on defence? What kind of defence system did they maintain? How did they fall pretty to the Gorkhali attack?

It would be more useful if the book had analysed the growth of art and culture in the Kathmandu valley supported by its wealth that was comparatively greater than that of the other mountain kingdoms. The Malla or the Khasa kingdoms in the far western Karnali basin of Nepal were also prosperous, and they had built artistic temples and statues of deities. A comparative perspective on the large valley of Kathmandu and its economy and that of the other smaller mountain valleys would be useful.

This book is based on both primary and secondary sources. The material base for this book was researched by several native and foreign historians such as Percival Landon, Silvain Levi, Surya Bikram Gewali, Dilli Raman Regmi, Dhanavajra Vajracharya, Raniero Gnoli, Luciano Petech, Bernhard Kolver and Hem Raj Shakya to name just a few. But it is still suspected that there is a huge amount of unpublished materials on the Malla period history of Kathmandu. So focusing on the economy of medieval Kathmandu, it would be much better if it were an analysis of primary sources such as unpublished documents. The book refers to old documents such as thya-saphu, dhara-pau, but it does not explain what those words mean. The reader has to just guess that they are probably Newari words, but one cannot guess their exact meaning. It would be better if the book had contained a glossary. It would also be better if it were proofread more carefully.

The book is a part of the national history project intended to give a holistic picture of Nepal’s national history, which has, so far, been more or less focused on the Kathmandu valley alone as the present volume, like others, exemplifies. Recently however, there are a few publications on the smaller kingdoms of western Nepal such as Gorkha, Lamjung, Kaski, Tanahun, Palpa and Jumla. Such works by young Nepalese scholars are welcome contributions as they will gradually fill more pieces in the zigsaw puzzle of Nepal’s history. The present work can be expected to be one such piece to fill the picture, and whet the reader’s appetite for more research in the question that arise from it.

Reviewed by
Jayaraj Acharya