NATIONAL 9 (Spotlight Weelky)]

Human Development, Poverty Reduction And Good Governance

By DR. HENNING KARCHER

National Human Development Reports take the Human Development Report approach to the country level and are prepared and owned by national teams. The Nepal Human Development Report 2001 has been published by the United Nations Development Programme; however, it has been prepared by an independent team of authors, who have had full editorial independence. The first Human Development Report, commissioned by the United Nations Development Programme in 1990 — under the leadership of Mahbub ul Haq — came at a time when concern for balancing budgets and economic growth seemed a higher international priority than concern for people.

An important aspect of this report is that it is more than just a book. This report reflects a unique process throughout which advocacy, dialogue, discussion, exchange and learning about the critical concerns of poverty reduction, human development, and good governance, have been ongoing. Several workshops were held, bringing together eminent experts and a wide range of stakeholders, to discuss and debate first drafts of individual chapters, and then a draft of the entire Report. These workshops provided a forum for lively, critical exchange of views and information, on the issues raised by the report. In this way, many people from many walks of life helped shape the document.

As all National Human Development Reports represent independent efforts, their scope and nature, the process for their preparation, and follow-up, vary greatly from country to country. They focus on a balanced concern for equity, sustainability, productivity and empowerment. These reports have four main characteristics, which strengthen their impact:

Above all, they advocate human development. The Nepal Human Development Report 2001 is no exception. The Report clearly states that economic growth alone is insufficient to promote development and improve the lives of the poor in Nepal. Economic growth must be pro-poor, that is, must be labor intensive and accompanied by policies and programs that mitigate inequalities and facilitate income and employment generation for the poor, particularly women and other traditionally excluded groups. The Report applies for the first time the concept of a "pro-poor growth index" to data for Nepal to evaluate whether or not the country's growth over the last decades has been pro-poor. It appears that during the period 1996/97 to 1999/2000, economic growth in Nepal has been moderately pro-poor. While data constraints prevent any conclusions being drawn for earlier periods, the Report emphasizes the utility of the pro-poor growth index as a tool for policy makers, that should be further developed.

However, even pro-poor economic growth may not ensure human development. The Report also emphasizes the importance of health and education for human development, and analyzes critical issues in resource management and the delivery of essential social services. For example, despite increasing priority given to basic and primary education, nearly 30 percent of Nepali children, mostly those from poor households or disadvantaged groups and regions, lack access to basic primary education. For girls, the figure rises to 40%. The Report identifies centralized education management as the root cause of the ineffective delivery of basic education, and calls for expediting the process of entrusting management of basic social services to locally elected bodies and communities.

National Human Development Reports highlight critical national concerns. In most countries, the first National Human Development Report provides a general profile of the state of human development, as did the excellent first Nepal Human Development Report in 1998. Subsequent reports tend to address specific themes. This is the case of the second NHDR, which explores the links between human development, poverty reduction and good governance. Governance and decentralization are not new topics of discussion in Nepal. However, this Report re-examines these questions from the viewpoint of human development, and shows that without good governance — without citizen participation, equity, transparency and accountability, and efficiency in the management of public resources and the delivery of basic social services — human development will not improve. Decentralized governance is a step in the right direction, a step taken with the Local Self Governance Act of 1999. The Report highlights many areas where further reform is necessary. For example, many tasks related to developing social services are theoretically devolved to local governments, but public resources flow through line agencies, making the local government — poverty reduction linkage weak. In the year 2000, 82% of the budget was spent for central level programmes, and only 18% for those at the district level. The Report calls on the government to implement a time-bound national action plan for decentralization reform that assigns clear responsibilities for management, monitoring and coordination of the process. The tasks of the central and local governments need to be clearly demarcated, and the centrally controlled personnel management system of local governments needs to be revised to give genuine autonomy to local bodies.

Furthermore, as the chapter on Public Expenditure points out, there is a need to move towards a people-centered budget if human development goal are to be achieved. A pro-poor budget must incorporate the interests and voices of the poor, and must allocate higher budgets to the sectors that directly benefit the poor. And it is here that this Nepal Human Development Report also addresses the donor community: it calls for a reorientation of foreign aid in favor of rural infrastructure and priority social sectors. At present, only 15% of foreign aid to the social sector is directed to human priority concerns.

These observations are related to the third characteristic of National Human Development Reports: they provide tools for development planning. The Report describes the situation of human development in Nepal, using the Human Development Index, the Gender-related Development Index, the Gender Empowerment Measure, and the Human Poverty Index. The most recent data available, including both raw data and published statistics, have been used to calculate these indices, thus providing an up-to-date picture of human development in the country. The Report also evaluates the somewhat uneven progress in human development since the NHDR 1998, in which disaggregated indices for the different areas of the country were first calculated. This analysis points to obvious policy implications. For example, the mid- and far western development regions are characterized by high human and income poverty, low human development, deep gender disparity and low gender empowerment. In the far western mountains eco-development region, the HDI actually declined between 1996 and 2000, and only increased by 1.3% in the mid-western mountains (compared to 15.6% for the country as a whole). Clearly, programmes designed to reduce these regional disparities must be reinforced.

Other findings are also quite interesting. Surprisingly, human development is no longer the highest in the central hills eco-development region, which encompasses the highly urbanised districts of the Kathmandu Valley; human development is higher in the Eastern hills. In fact, in the central hills, the HDI only increased by 0.8% between 1996 and 2000, compared to 15% in the eastern hills, and to an impressive 25.9% in the central mountains.

It is also interesting to note that the HDI for rural areas increased by 16.1% and in urban areas by only 8.6% during the same period. While this shows that progress is being made, rural-urban disparities remain enormous. The Human Poverty Index for rural areas (41.4) is almost twice as high as for urban areas (23.9).

The human development indices also highlight differences between the capabilities and achievements of women in relation to men. Two main observations can be made, with obvious policy implications. First, low human development cannot be used to explain gender discrimination. Some areas suffer from relatively low human development, but show little difference in deprivation between men and women, whereas other areas have relatively higher overall human development, but with greater differences between men and women. This means that policies that foster overall human development will not necessarily reduce gender disparities; gender sensitive programs are essential. Secondly, relatively high gender development, that is, little disparity between men and women in terms of life expectancy, literacy and schooling, and per capita income, does not necessarily ensure high gender empowerment, that is, equal participation in economic and political spheres. Empowering women will require more than just providing access to health services and education.

The Report shows that one way to enhance empowerment is through social mobilization, in particular with focussed support for women. In fact, a whole chapter has been devoted to social mobilization and its importance in improving both governance and human development. The chapter points out that social mobilization is a long-term process of education and awareness building and that it must no longer be seen just as a local intervention at the grassroots level, but should become a national effort. This requires critically evaluating social mobilization approaches in order to identify best practices, and carefully monitoring results to ensure that the poorest of the poor are included. For example, an evaluation of seven VDCs supported by the South Asian Poverty Alleviation Programme (SAPAP) revealed that overall living conditions improved for 83% of the better-off poor, but for only 44% of the very poor. Local governments should be strongly encouraged, through policy support and incentives, to use a part of their income and block grants in favor of the ultra-poor and social mobilization efforts that target them.

The Report also devotes an entire chapter to monitoring progress in poverty reduction and governance. Monitoring is a key tool for development planning. Without monitoring, there is no way to know if policies and programs are having the desired effects, if the actual consequences are those intended, and if not, why. This subject is particularly pertinent in light of the upcoming Tenth Plan. Poverty Reduction Strategy Paper, which calls for strengthening existing monitoring mechanisms, and introducing new ones. However, the Report does not stop at a call for the establishment of an effective poverty monitoring system, which would in and of itself improve governance. The Report goes on to suggest that it is necessary to monitor governance itself, to ensure that progress is being made towards increased ownership, equity, transparency, accountability and efficiency in all domains — not just in the administration of projects designed to reduce poverty. Since so much evidence points to the necessity of good governance in reaching the goals of poverty reduction and human development, the government should consider including the monitoring of governance in its overall poverty monitoring efforts.

Finally, the fourth characteristic of National Human Development Reports is that they articulate people's perceptions and priorities. This new NHDR incorporates the results of a governance survey conducted in rural areas, which reveals the degree of participation of men and women, and advantaged and disadvantaged groups in the planning and implementation of basic social services. We trust that this report will make a contribution to better understanding and improving governance in Nepal.

(This article is based on a speech delivered by Dr. Henning Karcher, UNDP Resident Representative on the occasion of the launch of the Human Development Report 2001)