Nepal betters in social protection

Nepal does moderately better, despite being a low-income country – in the South Asian region – with an Social Proetction Index (SPI) of 0.068 as it spends 2.1 per cent of GDP per capita of $463 according to 2009 data, on social protection, where as countries like Bangladesh, Bhutan, and India spend less than two per cent of GDP on social protection and have relatively low SPIs of 0.051 or lower, according to a report.
However, the 19 countries, including Nepal that have SPIs lower than 0.100 – less than 10 per cent of poverty-line expenditures or 2.5 per cent of GDP per capita – would would have to increase expenditures on social protection substantially to have a suitable SPI, said the report ‘The Social Protection Index: Assesing Results for Asia and the Pacific,’ published by the Asian Development Bank today.
Almost universally, their expenditures in 2009 were less than three per cent of GDP, it said, adding that it is among five low-income countries – like Nepal Afghanistan, Bangladesh, Cambodia and Tajikistan, whose low-incomes are likely to constrain their ability to mobilise the necessary revenue – that progress on social protection needs to be accelerated. “However, among the low-income countries Nepal ranks second in SPI ranking to Kyrgyz Republic.”
Among the South Asian countries, Nepal’s SPI index (0.068) comes third after Sri Lanka (0.121) and Maldives (0.073), whereas India (0.051), Pakistan (0.047), Afghanistan (0.046), Bangladesh (0.043) and Bhutan (0.036) lags behind Nepal.
Some of the countries for which spending on pensions – public or private – represented more than half of all social protection spending in 2009 are Nepal, Azerbaijan, Fiji, Georgia, Malaysia, the Marshall Islands, Mongolia, Pakistan, Solomon Islands, Sri Lanka, and Viet Nam.

However, Nepal is moving in the opposite direction, progressively lowering criteria for eligibility for social pensions (noncontributory), including the retirement age, to increase access and extend benefits to more vulnerable groups, stated the report that has listed Japan with 0.416 SPI at the top as it spends some 19.2 per cent of its total $39,714 GDP per capita at current price in 2009.

Nepal Score Card

Social Protection Index, 2009

Overall SPI – 0.068

Social Protection Index (Unweighted)
Social insurance – 0.098

Social Assistance – 0.055

Labour Market programmes – 0.014

Social Protection Index (Weighted)
Social insurance – 0.039

Social Assistance – 0.028

Labour Market programmes – 0.001
Public health expenditure – 1.7 per cent of GDP
(Source: Asian Development Bank report, ‘The Social Protection Index: Assesing Results for Asia and the Pacific’.)