Nepal improves living standard in last two decades but people still vulnerable to poverty, reveals new WB report

Moving up the ladder report release

World Bank Nepal and Samriddhi Foundation organized a joint Econ-ity discussion on poverty reduction and social mobility in Nepal based on an upcoming report by the World Bank titled “Moving Up the Ladder” on July 29, 2016 at Hotel Annapurna.

“Moving Up the Ladder” attempts to contribute to the public discourse around poverty reduction and long term economic development and the fundamental question of how to build, share and sustain prosperity in Nepal, for all Nepalis, today and in the future.

Find details of the event stated in our official press release here!

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Nepal improves living standard in last two decades but people still vulnerable to poverty, reveals new WB report

June 29, 2016

Kathmandu, Nepal – A new report on poverty reduction and social mobility in Nepal by the World Bank reveals that living standards have improved in the last two decades but not sufficiently enough to move those who have escaped poverty to a more secure middle class. As a result, a majority of the population today constitutes a vulnerable group that is either perilously close to falling back into poverty or otherwise struggling to cement their economic security.

The report, titled ‘Moving up the Ladder’, was released at a joint Econ-ity event hosted by World Bank and Samriddhi Foundation at Hotel Annapurna. The program was chaired by Hon’ble Dr. Yuba Raj Khatiwada, Vice-Chair – National Planning Commission and moderated by Mr. Sujeev Shakya, Chair – Nepal Economic Forum. The panel comprised of Dr. Swarmin Wagle, Former Member – NPC, Dr. Shailesh Tiwari, Senior Economist – World Bank and Deepak Thapa, Director – Social Science Baha.

Sailesh Tiwari of The World Bank presented the report to an audience of diverse stakeholders including renowned educationists, policy makers, and bureaucrats.  The report takes stock of the living standards trends in Nepal in the last two decades, investigates the drivers of these trends and identifies key challenges that still lie ahead in improving the economic conditions of Nepalis, particularly for the poor. The report also examines the trends in inequality to understand the economic underpinnings of the demand for inclusion that has so fundamentally shaped Nepal’s contemporary socio-political landscape. It also presents some novel insights on social and economic mobility experienced by Nepalis across generations as well as over a lifetime.

In light of its findings, the report recommends certain directional changes for growth realization. First, equalizing opportunities and leveling the playing field to enable Nepalis from all walks of life to participate to economic life is not only a sensible way to move forward on the inclusion agenda, but it is also likely to be good for growth. Second, given inequalities within regions, there is also an urgent need to strengthen equalizing investments, through scholarships, health insurance and social safety nets that should ideally be targeted on the basis on economic need. Third, in order to redress the residual effects of past disadvantages, some form of affirmative action may have to be maintained.

The report also suggest the need to enhance economic and human productivity in agriculture and to accelerate the creation of productive jobs. Additionally, building a better understanding of not just the migration process in general but also of what can be done to make the process more efficient and less costly so that successive cohorts of Nepali migrants have better information of opportunities abroad, can become more productive and can have access to better quality jobs abroad appears to be of prime importance.

Dr. Yubaraj Khatiwada led the discussion by stating that an outflow of migrants had reduced pressure on domestic markets and wages. But he also stated that this was a short-term phenomenon and there was an urgent need to increase Nepal’s global competitiveness, especially by using technology. He touched upon the importance of community endeavors such as agricultural cooperatives and micro-finance organizations that played an important role in poverty reduction. Dr. Khatiwada also addressed the state’s new three-year plan that plans to focus on creating more jobs and absorbing labor force in the economy.

Deliberating on the state of poverty in the country, Dr. Swarnim Wagle talked on how a large population was just one shock away from falling back into the poverty trap. He commented on the paper’s findings that indicated that inequality in Nepal had not changed for quite some time and had remained relatively stable, saying that politicians would possibly be more than willing to deny this statistic. He also reiterated the importance of remittance in reducing poverty in the country.

“Inequality is inevitable but policies can be put into place to reduce it.” – Dr. Swarnim Wagle.   

He touched upon how not just linear movement but intra-structural movement – such as a move from low-productive agriculture to high-productive agriculture – could be substantial in poverty reduction.

Deepak Thapa of Social Science Baha was also supportive of the idea that labor income had contributed to poverty reduction but urged people to understand the varied definitions of what constituted a migrant. Thapa also underlined how social networks made a difference in access to resources.

Audience discussion revolved around the need to also understand and use other global dimensions of poverty and address physical vulnerability as a key deterrent to prosperity. Issues on whether gender needed to be given more space when addressing poverty and suggestions on how this metaphorical ladder towards prosperity could be achieved was also well discussed. Sujeev Shakya concluded the discussion by deliberating on how asset mobilization was generally slow in Nepal and needed be furthered to help decrease percentage of the poor.

To download the full report, please click here!

Econ-ity is an award-winning regular media forum hosted by Samriddhi Foundation since 2012 to create a discourse on contemporary economic issues, which is continued through an online platform as well.

The World Bank is a vital source of financial and technical assistance to developing countries around the world. The World Bank Group comprises five institutions managed by their member countries. Established in 1944, the World Bank Group is headquartered in Washington, D.C with more than 10,000 employees in more than 120 offices worldwide.

Samriddhi Foundation is an independent policy institute based in Kathmandu that focuses on economic policy reform. Established in 2007, Samriddhi aims at facilitating a discourse on pragmatic market based solutions for a free and prosperous Nepal.

For more details and comments on the paper, please contact Deependra Chaulagain (Samriddhi Foundation) at / 9851052781.