Dr. Lok Nath Bhusal

Poverty is a situation in which people face difficulties to fulfill their basic needs. Such needs range from food, clothing, shelter, education, health and other necessities to maintain a socially acceptable living standard. This generally makes people unhappy. In the traditional money-metric approach to poverty measurement, food and non-food poverty baskets are identified and their monetary value is calculated. Based on this, a poverty line is determined, below which people consume less than what is required to have a non-poor living standard. Many developing countries, including Nepal, follow this approach in calculating their official poverty estimates.
Currently, about 18.6 percent of Nepal’s population is below this national poverty line. Absolute poverty has been reducing in the country over the years, but the number of poor people has remained largely the same. This unitary approach to poverty measurement has been questioned, and a new multi-dimensional poverty measure has been developed. Ten indicators under education, health and living standard dimensions have been identified to measure the extent of poverty in the country. This makes it multi-dimensional. Poverty can also be measured based on the extent of social exclusion, unhappiness, discrimination, vulnerability and injustices imposed upon the people. Given the different approaches to poverty measurement, the type and nature of anti-poverty policies have also been different. This article is an attempt to review Nepal’s past efforts to reduce poverty and the challenges which need to be overcome if prosperity and happiness has to be ensured in the country.
Given that poverty is a cross-cutting issue, Nepal has undertaken a number of macro and micro efforts to overcome poverty in the country.

Policy efforts
First, the constitutions of Nepal promulgated in the past have increasingly articulated the agenda for a prosperous and inclusive state where poverty and marginalization is reduced and eliminated through various policy interventions. This has been reflected in the objectives of the state as well as the state policies outlined in the constitution. Second, the National Development Plans of past and present have also opened the space for designing and implementing a number of developmental policies aimed at tackling poverty in the country. This ranges from determining the role of state, market, cooperatives and non-governmental sectors in the development of the country. It is important to note here that some periodic plans had poverty alleviation/reduction as their sole objective. Third, in order to maintain logical coherence of different level of developmental policies, poverty reduction has been increasingly mainstreamed in the sectoral policies of the government. For instance, industrial, trade and agriculture policies have also progressively aimed at reducing poverty in the country after 1990.
These include the establishment of a new Ministry of Cooperative and Poverty Alleviation, the establishment of Poverty Alleviation Fund (PAF), poverty-focused organizational units in the sectoral ministries, establishment of Social Security Fund to address the needs and concerns of working people, involvement of private sector, Cooperatives and International/Non-governmental Organisations (I/NGOs) in poverty reduction efforts, among others.
There is a provision of Social Security Allowances to targeted beneficiaries vulnerable to poverty, launching of the Prime Minister Employment Programme (PMEP) targeted to working-age unemployed and poor people. Through the PMEP, the government is ensuring 100 days of minimum employment as an integral part of right to employment as enshrined in the Article 33 of the Constitution. The implementation of targeted poverty alleviation projects, such as a number of projects under the Poverty Alleviation Fund, various subsidies provided to poor farmers and entrepreneurs and targeted anti-poverty interventions by various non-governmental actors are few specific targeted anti-poverty interventions.
The main challenges of poverty reduction in Nepal can be identified as follows:
There is a challenge to carry-out pro-poor economic reforms (land reforms, pro-poor budget, taxation, employment, skill development, subsidies, loans, etc.). Similarly, redistribution of income and wealth (various researches have demonstrated that poverty is reduced when inequality reduces) is another impending challenge to genuinely tackle poverty.
Carrying out comprehensive and effective governance reform is another challenge in the way of overcoming poverty in the country. Research studies have revealed that the better the quality of governance, the faster will be poverty reduction. For this to happen, controlling corruption, ensuring pro-poor service delivery, ending all forms of social and cultural discriminations and ensuring access to productive resources and participation of poor in decision-making process is very crucial.
Better targeting of anti-poverty interventions is another challenge in tackling poverty. This can be done mainly through improving poverty measurement system, better identification of the poor and their households and robust targeting with no inclusion and exclusion errors. Better targeting with sustainability of the intervention reduces costs and other administrative hassles, and thereby helps obtain the intended results. Given the federal system of governance in the country, targeting should also be carried out in coordination with the federal, state and local government programmes dealing with poverty. A poor household management information system must be an essential component for designing and implementing targeted anti-poverty interventions.

Structural challenges
To conclude, approaches to poverty measurement determine the nature of anti-poverty policies. Poverty is still an acute human problem in Nepal. With several past efforts aimed at boosting economic growth and ensuring equitable redistribution of income and wealth, absolute poverty has been reducing in the country, with many people just stepping above the narrowly defined poverty line. However, more deep-rooted structural challenges, accompanied by governance reforms and better targeting in effective coordination and partnership with all development actors, must be overcome if Nepal has to alleviate all forms of poverty and realize its declared vision of Prosperous Nepal Happy Nepali.

(Dr. Bhusal is an expert in poverty, employment and social protection)