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Nepal: Poverty severe in Province 6 and 2
August 23rd, 2015
By Kuvera Chalise.
Province number 6 and 2 have severe poverty among six federal provinces that are under discussion among the political parties.
Eight eastern Tarai districts, which were affected by the Tarai Movement of 2007, fall in Province number 2, whereas all the districts in Province number 6, which are demanding unified-far west, are far below the national poverty level.
According to Nepal Living Standard Survey (NLSS) 2010-11, some 25.2 per cent of the total population of the country is below poverty line. Forty-two districts – out of the 75 districts – of the country fall under the poverty line, according to the survey.
Out of eight districts in Province number 2, six fall below the poverty line, whereas all the 19 districts in Province number 6 fall below poverty line.
According to Central Bureau of Statistics (CBS), a person having average income below Rs 19,261 is defined as poor. A person earning under Rs 53 per day comes under national poverty line, as per the Nepal Living Standard Survey 2010-11 conducted by the CBS.
Province number 1 is the richest compared to other provinces. Only 17.96 per cent of the population of Province number 1 is below poverty line.
Similarly, 20.33 per cent of population in Province number 3 falls under the poverty line, whereas some 19.21 per cent of the population falls under poverty line in Province number 4 and 25.64 per cent of the population of Province number 5 are below the poverty line.
But Province number 2 has 27.95 per cent of population under poverty line and Province number 6 has 42.23 of the population – the highest among six provinces – under the poverty line.
Economist Keshav Acharya blames short-sightedness of political leaders for unscientific demarcation of federal provinces. “Political leaders have federated the country not on the basis of their economic strength and viability but for their own benefits,” he said, adding that the leaders just want to have their political career secured, not the country’s future.
Likewise, Nepal Small Area Estimates of Poverty-2011 report also indicates that districts in Province number 2 have not fared well economically in recent past. Of the total 25 prosperous districts a decade ago, some 11 – Parsa, Dhanusha, Saptari, Siraha, Bara, Rautahat, Manang, Myagdi and Jumla – have fallen down to the poorest category. Parsa, Dhanusha, Saptari, Siraha, Bara, Rautahat are among the eight districts of Province number 2. The Tarai-Madhesh Movement of 2007 and the political apathy of Tarai-Madhesh leaders have damaged economy of these districts as they have fallen from prosperous districts’ category to the poorest in a decade, especially after Tarai-Madhesh Movement in 2007.
Kathmandu was the most prosperous district according to Nepal Small Estimates of Poverty-2001. But Nepal Small Estimates of Poverty-2011 report states that Kaski is the most prosperous district of the country, whereas Bajura is the poorest.
The Nepal Small Estimates of Poverty-2011 study conducted by CBS with technical assistance of World Bank has not only mapped poverty in small areas across the country but also mapped the gap between rich and poor and severity of poverty in all 75 districts.
Despite having huge natural resources and immense tourism potential, all the 19 districts of Province number 6 are under the poverty line. According to Acharya, all the castes in Province number 6 are poor compared to other districts, but in Province number 2 poverty concentration is higher in lower castes. “The concentration of poverty is higher in lower castes in Tarai-Madhesh,” he said, explaining that the Hills lower caste are better off compared to Tarai-Madhesh lower caste populace also due to political indifference.
Not only poverty, rich-poor gap and severity of poverty is also higher in both Provinces 2 and 6.
According to Nepal Small Area Estimates of Poverty- 2011 report, Bajura is the poorest district – in the country – with 64.1 per cent people under poverty line, followed by Kalikot (58 per cent), Bajhang (57 per cent), Humla (56 per cent) and Darchula (53 per cent). All the poorest five districts fall in Province number 6.
Likewise, Saptari, which is in Province number 2, is the poorest district in Tarai-Madhesh. Some 39.5 per cent of Saptari populace earns less than Rs 53 in a day making the lives of Tarai-Madhesh people harder.
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Investment in nutrition is key to unlocking a better future: WFP
October 27th, 2013By Kuvera Chalise.
The UN World Food Programme (WFP) is marking World Food Day on October 16 by highlighting the power of nutrition to transform individuals, societies and economies, and the need to make it central to all development efforts.
· Supporting the creation of a solid evidence base to guide countries in their nutrition policies and strategies, like the recent Cost of Hunger in Africa survey.
IMF estimates 4.5 per cent growth this fiscal year
October 6th, 2013
By Kuvera Chalise.
The International Monetary Fund (IMF) has projected higher economic growth – at 4.5 per cent from earlier projection of four per cent in April in its flagship publication IMF’s World Economic Outlook 2013 – for the current fiscal year 2013-14 due to favourable monsoon and speedy implementation process of budgetary programmes.
In last fiscal year, growth decelerated due to weak agricultural activity and delayed approval of the budget, which impeded capital expenditure and, together with strong revenue growth, led to a fiscal surplus.
“The degree of economic growth depends on the progress in capital investment in infrastructure sector, especially on roads and hydropower sectors,” said senior resident representative of IMF for Nepal Thomas J Richardson, during a press conference here today.
On the back of minimum utilisation of remittance to boost economic activities, Richardson also suggested that the earning of Nepali migrant workers should be channelised to productive sectors.
The IMF mission led by its senior official Alexander Pitt also consulted with finance minister Shankar Prasad Koirala, governor of the central bank Dr Yubraj Khatiwada and other senior government officials, National Planning Commission (NPC) vice chair Rabindra Kumar Shakya, finance secretary Shanta Raj Subedi and other senior officials, apart from private sector representatives and development partners during the visit that started on September 26 and ended yesterday.
“Inflationary pressures are rising due to the depreciation of Nepali rupee against US dollar and continued strong credit growth,” IMF said in its press note, estimating that weakening value of Nepali currency against US dollar has put pressure on price of food commodities.
However, Nepal should maintain existing peg of Nepali rupees with Indian rupees, it suggested, adding that the peg continues to benefit Nepal in view of its close economic relationship with India. “Moreover, the recent depreciation creates an opportunity to benefit from enhanced international competitiveness.”
Despite Nepal’s better prospects, the mission indicated that key risks to the economic outlook emanate from recent developments in India, the major trading partner and closest neighbour of Nepal.
But the measures to address the impact will be different from India as Nepal’s main problem is low production,” said chief of the research department at the central bank Min Bahadur Shrestha, on the occasion. “The central bank had been implementing policies that facilitate growth such as requiring banks to invest at least 12 per cent of their total lending in the farm and hydropower sectors and providing refinance facility at reduced interest rates for productive sector lending,” he added.
“The protracted slowdown in India is likely to bring adverse effects on the economic growth to Nepal,” the mission said.
Tighter monetary policy in India and excess liquidity in Nepal had widened the gap between banking interest rates in the two countries, which could increase financial sector vulnerabilities, the IMF Article IV consultation mission said, also recommending a tighter monetary condition to reduce the gap between the interest rates in the two countries as a tighter monetary policy in India has kept interest rates at a high level while excess liquidity in Nepal has forced banks here to bring down interest rates. “It has been observed that whenever interest rates on deposits fall in Nepal, capital flight to India takes place.”
In near term, the rupee depreciation is raising price pressures and exacerbating the already high losses of the state-owned Nepal Oil Corporation,” Richardson said, as always suggesting that NOC should adopt the automatic price adjustment of the petroleum products as practiced in the southern neighbor and lift the subsidy that has failed to serve needy people or poor of the remote villages and highly benefiting the rich people in urban areas.
“The government should have spent the money on essential sectors like education, health and hydropower instead of subsidising the fossil fuels for the urbanites,” he added.
The mission meant to assess recent macroeconomic developments and progress on key reforms in the financial sector, public financial management and tax administration also voiced concern over the mounting financial risk due to practices of same person being banker and entrepreneur. “One cannot become both banker and entrepreneur, as it creates conflict of interest,” Richardson added.
Likewise, the IMF, in collaboration with World Bank, is conducting Financial Sector Assessment (FSA) in November for a comprehensive and in-depth analysis of financial sector. Richardson said that IMF is conducting first ever financial assessment in Nepal. “A team of experts will arrive Nepal in November for FSA,” he said adding that FSA is a key instrument of IMF’s surveillance and provides input for consultation.
According to him the assessment will also include Financial System Stability Assessment that provides technical notes, including additional background information and analyses, and detailed assessments of standard of financial sector in Nepal. While the financial sector’s health has improved, the IMF mission considers that risks are still significant. “Asset quality remains a concern, while connected lending and conflicts of interest are widespread, and the fragmentation of the banking system makes supervision difficult,” it said.
“The regular Article IV consultation visit is expected to take place in April or May of 2014, following a joint World Bank – IMF financial sector assessment scheduled for November 2013–February 2014.”
Mobile data traffic to grow 72 per cent in 2013
June 5th, 2013
By Kuvera Chalise.
Global mobile data traffic expanded at 69 per cent in 2012 and is anticipated to grow at 72 per cent this year to reach 23,000 peta bytes, according to a study ABI Research.
Total mobile data traffic will likely reach 131,000 peta bytes by 2018. As of first quarter, only few of mobile operators have fully engaged on a small cell strategy that incorporates Wi-Fi hotspots and small cell LTE base stations.
Operators that have adopted a small cell strategy include Softbank NTT Docomo, SK Telecom, KT, Uplus and Verizon Wireless.
The research estimates that the available spectrum for the mobile cellular community will increase from around 300 MHz to 1,500 MHz over the next five to ten years.
Incumbent mobile operators and equipment vendors would prefer this spectrum to be allocated on a dedicated basis but the US Federal Communications Commission (FCC), the European Commission, UK’s Ofcom, and a number of additional governments are keen to evaluate radio technologies, such as white space TV, as they would enhance spectrum capacity while allowing co-habiting users.