Wide Disparities Persist in Nepal

February 27, 2002

Even with an annual economic growth rate of five per cent and significant improvements in life expectancy and education over the last decade, two out of five Nepalis continue to live in abject poverty, according to a new report commissioned by UNDP and prepared by an independent team of experts.

The Nepal Human Development Report 2001, http://www.undp.org.np/publications/nhdr2001/index.html launched recently by Prime Minister Sher Bahadur Deuba in Kathmandu, focuses on the theme of poverty reduction and governance. It points to striking disparities in the country's development that underlie the current crisis, precipitated by Maoist insurgents.

The Prime Minister said that the report would be a valuable reference for development practitioners and a guide for the government's 10th five year plan, which will focus on poverty reduction, in terms of defining and reaching target groups.

UNDP Resident Representative Henning Karcher said the report highlights issues of national concern and presents recommendations to promote human development and encourage participation by marginalized and deprived communities.

Most of Nepal's growth over the last 15 years took place outside the agricultural sector - the main source of livelihood for 80 per cent of Nepalis. Rugged terrain and the vagaries of the monsoon hinder both rural development and delivery of basic social services to these areas.

The report also highlights the persistent problem of caste and gender discrimination, along with the marginalization of a number of ethnic groups. It warns that cost to the government of debt service and increasing security expenditures limits resources available for improving rural living conditions. In addition, young democratic institutions and a lack of capacity in government have led to disappointing results for human development efforts.

Nepal nonetheless has a distinguished history of community initiatives in providing social services, says the report, especially in education. In other sectors, particularly irrigation and forestry, community-based poverty reduction efforts provide useful lessons for improving health, education and other services. In addition, the current decentralization process can significantly cut the costs of efforts to reduce poverty reduction, provided reforms are also implemented at the central and middle levels of government.

The report analyzes policy problems and examines governance in four dimensions, including ownership, equality, accountability and efficiency. It also addresses the much-neglected subject of monitoring as a tool for tracking poverty reduction and human development, as well as improving governance.

Earlier this month UNDP helped coordinate participation by UN agencies at the Nepal Development Exhibition in Kathmandu, which coincided with a meeting of government officials and representatives from over two dozen donor countries and international agencies at the Nepal Development Forum, convened by the government and the World Bank.

Mr. Karcher told the forum that promoting the rule of law and judiciary reform are critical for ensuring effective governance and attracting foreign investment. He noted that links between strategies on poverty, gender and the environment have been weak, and poverty programmes have not focused on gender inequality, a major source of poverty.

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