Nepal: The Profile of Poverty

Kishor Kumar Guru-Gharana

Associate Professor, College of Business Adm. Texas, US

(Pages from History)

The Poverty Incidence:

The National Planning Commission conducted a national survey of Employment, Income and Consumption Patterns in 1976-77 which estimated poverty incidence of 32.9 in 1976 based on minimum per capita daily calorie requirement of 2256 calories. Similarly, the Basic Needs Program in 1984-85 derived poverty lines assuming minimum daily per capita requirements of 2140 calories for the Terai, 2340 calories for the Hill and Mountain and 2250 calories for all Nepal; 65 percent of budget devoted to food; and all calorie requirements met from cereals, pulses and potatoes only. The estimated poverty line at 1984-85 prices was 73 percent of per capita income, indicating a situation of pervasive poverty. But the 1984-85 MPHBS of Nepal Rastra Bank estimated about 43.1 percent as rural poverty incidence following the above definition and 19.2 percent as urban poverty incidence giving a national average of 41.4 percent. However, all micro-level studies conducted at that time indicated much higher rural poverty incidence (between 50 to 60 percent). This may be because MPHBS failed to adequately cover households at the extreme of the income distribution (richest and poorest). As a result, the inequality in income distribution was also under-reported. It may also be because of the unsuitability of calorie based definition as remarked by the 1991 WB/UNDP study which estimated 70 percent absolute poor using US $ 150 as the poverty line and 66 percent using M. Lipton’s definition based on share of food in total budget.

As mentioned above, the Eighth Plan estimate of poverty incidence in 1992 was 49 percent of the population. Thus, ignoring for the moment the comparability and reliability of the various estimates, one thing seems clear, that the incidence of poverty in Nepal is temporarily rising rather than falling despite donor-assisted development interventions related to poverty alleviation. Based on micro and macro level studies and reports, the best guess estimate of present poverty incidence is 55 percent of the total population or about 11 million absolute poor in a total population of 20 million. The marginal difference between poverty line income (around US $ 180), and the high inequality in income distribution (Gini coefficient above 0.6), indicate that poverty is pervasive in Nepal and the exact percentage estimate is not very important. What is more important is to realize that this poverty incidence and poverty mass is temporally rising, especially due to sluggish growth with a dualistic nature, high population growth (2.1 percent per year) and rising unemployment and underemployment (unemployment rate about 8 percent but under employment above 50 percent of available person-days per year).

Characteristics of the Poor in Nepal:

It is estimated that 95 percent of poor live in rural areas. Out of these rural poor, four-fifths are either agriculture self-employed or agriculture laborers (with or without tenancy). The average operational land holding of a poor farmer in Terai is about 0.14 ha. Per capita (about one third of average for non-poor), and in the hills about 0.05 ha. per capita (about one half of average for non-poor). Moreover, quality (productivity) of land of the poor is usually much lower than that of the non-poor. According to a recently concluded survey of Rural Credit, there are about 78 percent small and marginal farmer households out of total farm households, and these small and marginal farmers own only 47 percent of land and have average per capita annual income less than US $ 100.

The only important asset that the poor possess is unskilled labor which they are forced to sell at extremely low wages. Opportunities for non-farm employment are few and the demand for agricultural labor is highly seasonal. The rate of rural underemployment is reported to be over 40 percent. In addition to chronic poverty, the rural poor are also grinded under the burden of inherited and increasing indebtedness at a much higher rate of interest than the institutional rate (from 36 to over 100 percent). The recent rural credit survey shows 39 percent of rural families under debt (86 percent or whom borrowed from non-institutional sources, only 20 percent from institutional and 6 percent from both). A majority of the poor is actually “hard-core’ or “ultra” poor, who spend most (about three-fourth) of their budget on food alone, a small portion on clothes and fuel, and almost nil on health and education. Without strong public support, therefore, there can be no human progress for the majority of people in Nepal.

Women often constitute a relatively more deprived group because of intra-household as well as social and legal discrimination between the sexes. Most rural females of age 16 years and above are either lactating or pregnant and give birth to about six children during their reproductive age. Gender disparity starts right from birth, continues through different stages of the girl’s life, and is deepened and perpetuated through various rituals. Sons are considered assets while daughters are considered liabilities, although females on average have 25 to 40 percent more work load than males. The education, health and nutrition of women and girls are much lower than those for men and boys, particularly in rural areas. Both the girl child and woman suffer relatively more severely from the consequences of poverty. The cultural emphasis on the sacrifices of woman, and disparity in access to economic resources and social services are the major causes for the larger deprivation of females. The plight of poor women is a serious issue because the health and education of mothers influence the well-being and future of their children and other family members. The gender disparity suggests the need for programs especially targeted toward women and girl child until they are brought into the mainstream of social and economic activities and enjoy equal access to economic resources and social services.

Most of the poor are given birth by a malnourished and illiterate mother, suffer from birth complications, birth injuries, neonatal tetanus, low birth weight and infant mortality risks (99 per thousand live births is the national average, and obviously much higher for the poor). Poor children suffer from Acute Respiratory Infection, Diarrhoeal disease, typhoid, Tetanus, etc and malnutrition especially in Vitamin A, Iron, Protein, and Iodine. The national average of child malnourishment is 50 percent and child mortality is 145 per 1000, which are much higher for poor children. The poor child receives no toilet or personal sanitation training or pre-school education and suffers from inadequate parental care as the parents are busy in eking out the means of survival. Many children also suffer from severe attacks of measles and sometimes Tuberculosis, Polio, Malaria, Meningitis, etc. The surviving poor children, especially girls, have to assist their parents in farming, livestock rearing, water, fuel wood and fodder collection, and household chores, even if some children get the opportunity to attend school, most of them will be very irregular and eventual drop-outs because of frequent illness, forced child-labor, distance to walk to schools, and not the least because of early marriage, especially of girls (the average primary school completion rate is only 35 percent. much lower for rural areas and poor children).

The survivors are married early, and start another cycle of poverty, only at a deeper scale because of degraded environmental resources, inheritance of fewer assets but more debts, and increasing scarcity of opportunities for employment. For most poor, over forty- five is old age, approaching retirement, not from work, but from life and its sufferings. The plans, programs and projects made in Kathmandu with the help of donors, usually flow like ripples on the surface and leave these hard-core poor, who lie like bed-rocks at the bottom, completely untouched.

# This article was written some seventeen years back by the author. We presume not so much have changed over the years and thus published through the kind permission of the NEFAS/FES for those who have been working on Poverty alleviation sector.  Thanks the author and the publishers.

PS: The author currently resides in Texas and is Associate Professor, Business Administration & MIS College of Business, Texas A&M University-Commerce. 

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Comments

  • Posted on - 2013-05-03    by     Saroj Lamichhane
  • Kishor Sir, Namaste! Although, over all financial status of Nepalese people could be seen improved but not in sense that they are increased. Due to 'MAOIST' movement it was successful to shared cash/property from 'Haves' to 'have not and Remittance is playing vital role to sustain economically Nepal right now. Its true that Socio-Economic and Socio - Cultural factors in which Woman status, Birth status/situation in rural areas are still similar as you have noted 17 years ago. Certainly few changes could be seen in Education, health, transport and Poverty eradication but I can't proudly say the growth of Nepalese development are satisfactory. The other hand , Agriculture ,the back bone of Nepalese Economy is gradually in declining status where as Industries are collapsing. Unemployment in one hand one of the great headache for the nation where as foreign employment opportunity could not be improved . Hydro projects are very slow or passive and Tourism industry almost like the legend. Most of the economical activities in Nepal are not more than traditional or just for 'Hand to Mouth'. National and international investors are confused to invest since the government is unable to assure them and guarantee their investment. There are numerous sectors of potentiality in Nepal to invest but the world is scared on it. I think, lack of hard working, Study and investigations, Moral and diplomatic quality/efficiency on politicians and bureaucrats , practical/ vocational education system are responsible for Nepalese poverty. The grate danger is that what ever the property shared to 'Have not' during Maoist movement, are spending mostly on unproductive sectors like importing materials, fixed assets, Iron, fuel , vehicles ,and luxurious items only. Such amounts are also not successful even to collect 'Gold'. Besides, foreign interference, Brain Drain, Poor Agriculture, Deficit Trade Balance, and Policy of Donner nations etc are also not back warded to increase Nepalese poverty. Saroj Lamichhane, Nepal
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