May 20, 2005

Despite accusations of failure of plural society, the country has made tremendous improvement in the poverty reduction in the last twelve years

By KESHAB POUDEL

Despite being mired in political instability, chaos and political violence, the pluralistic political experiment of the last decade has shown that open society and liberal democratic system can bring about the change in the lives of rural poor.

A woman engaged in poverty : Income- generating activity

The recently released report of Nepal Living Standard Survey disclosed that Nepal’s poverty had declined from 42 percent to 31 percent in the last one decade. At a time when some politicians including the ministers of the present cabinet are trying to project the last twelve years of democratic exercise as utter failure, the economic prosperity achieved during the period was immense.

This reduction is not an overnight transformation. The infrastructures built in the latter decade in Panchayat system also have major contribution to the present phase of economic development. Like the followers of multi-party democracy who did not give any credit to Panchayat, the present set of politicians and ministers are trying to cover the success of the last 12 years.

Headcount suggest that poverty has dramatically declined in Nepal between 1995-96 and 2003-04. In 2003-04, 31 percent of population was poor in Nepal compared to 42 percent in 1995/96. Thus, the incident of poverty in Nepal declined by about 11 percentage points (or 26 percent) over the course of eight years, a decline of 3.7 percent per year.

Conducted by Central Bureau of Statistics (CBS), the NLSS II showed that the incident of poverty in urban areas more than halved (it declined from 22 to 10 percent, a change of 9.7 per year), its incidence remained higher than in urban areas.

From commercialization of agriculture to remittances and to community forestry, Nepal has made tremendous improvement in all different sectors. The reports suggest that the remittances are one of the key factors behind the reduction of poverty.

Last week at a program organized by the CBS, various stakeholders from Nepal and the World Bank discussed different reasons behind the poverty reduction in Nepal. Presenting Poverty Trends in Nepal between 1995-96 and 2003-04, the World Bank’s Elena Glinskya explained the economic growth and other areas that contributed for the reduction of poverty. As remittance played a key role in poverty reduction in recent years, World Bank’s Michael Lokshin and Mikhail Bontch Osmlovski compared the contribution of remittance in Nepal from NLSS I and NLSS II.

Chaired by Dr. Yubraj Khatiwada, a member of National Planning Commission, the last paper of the first session was on micro-finance. In his paper, the World Bank’s Daniel Westbrook highlighted the micro-finance situation of Nepal in NLSS II.

Keshav Raj Kanel, chief of Community Forestry Division of Department of Forest, presented the role of community forestry in enhancing the income of rural population. In another session chaired by Dr. Hari Krishna Upadhyaya, a member of National Planning Commission, Dilip Parajuli of DFID-Nepal presented a paper on employment and earning in Nepal 1995-96 and 2003-04. Mona Sur of the World Bank presented extensive paper on agriculture, non-farm employment and rural poverty in Nepal.

Participated by experts from Nepal and abroad, the two-day workshop was full of intensive debate and discussion. The second day workshop begun under the chairmanship of Dr. Bal Gopal Vaidya with the presentation of paper by Ishan Ajwad of the World Bank on education and health. Maitreyi Das of the World Bank presented paper on Poverty and Child Nutrition in Nepal.