Remittance help reduce poverty not government policy: UN human rights expert

Nepal's poverty has reduced not due to government policy rather with the help of remittance inflow, according to a UN expert.

"Poverty reduction owes more to remittances than to proactive government anti-poverty policies," the UN special rapporteur and extreme poverty and human rights, Olivier De Schutter, said today after conducting an 11-day official mission.

"A quarter of the decline in poverty can be attributed to outmigration only, with estimates showing that, without remittances, poverty would have increased in Nepal,” he said, adding that remittances in Nepal were 10 times larger than foreign aid and 2.5 larger than total exports only in 2017. "It is clear that much more needs to be done by the government to meet its own target of reducing multidimensional poverty to 11.5 per cent by 2023-2024,” the expert said, suggesting the government to ensure its skills and training programmes reach the poorest families. "While public works programmes such as the Prime Minister’s Employment Programme (PMEP) have considerable potential, in practice the programme has yet to deliver on its promise of providing 100 days of work per person per year. "In the country, 80 per cent of workers are informal, which exposes them to higher rates of abuse, largely because the government lacks the ability to enforce minimum wage legislation in the informal sector.|

Although informal workers should also contribute to and benefit from the Social Security Fund (SSF), there is currently no plan to include them in the programme, he added.

Nepal has one of the most progressive constitutions in the world, but many of its promises still are to be fulfilled, De Schutter, said, adding that Nepal has succeeded in reducing multidimensional poverty by 12.7 per cent between 2014 and 2019, and its Human Development Index (HDI) has improved, as have indicators related to health and education. "But significant gaps remain."

"Women are still lagging on a number of indicators," he said, adding that though banned, caste-based and ethnicity-based discrimination remain a reality in social life, and it is a major factor explaining the perpetuation of poverty. "Land issues remain unresolved, despite the efforts to accelerate the rehabilitation of former bonded labourers and to ensure landless Dalit benefit from land redistribution."

De Schutter’s fact-finding mission began on December 29, just weeks after the UN General Assembly voted a resolution inviting Nepal, along with Bangladesh and Lao People’s Democratic Republic, to prepare for graduation from the status of Least Developed Country (LDC) to that of an emerging economy. Nepal will benefit from a five-year transition period. “Graduation from LDC status is a major milestone for Nepal,” De Schutter said, adding that poverty reduction must be at the heart of the country’s transition strategy to ensure that no groups are left behind."

The UN expert met with communities who suffer from intersecting forms of deprivation. Most were landless daily wage labourers working in agricultural or informal jobs and struggling to send their children to school. Many were from historically disadvantaged and discriminated groups including Dalit, Madhesi, and Indigenous people, as well as women. “The stark inequalities resulting from the deeply entrenched norms and values of the Nepali caste system continue to perpetuate disadvantage today,” De Schutter added.

Women suffer the brunt of a historically patriarchal society, earning almost 30 per cent less than men, suffering from higher rates of informality, owning only 19.7 per cent of homes and land, and enduring a 17.5 per cent literacy gap compared to men, the UN poverty expert noted. "Nepal can and must do better,” he said.

Children experience the worst forms of deprivation because of the poverty their families face, he added. Over one million children work in Nepal, and in rural areas over a fifth of children do.

"During my mission, I met with countless families whose children, especially girls, engaged in agricultural or domestic work,” De Schutter said. "Wealth inequality is a major factor: over 20 per cent of children in poverty work, compared to only five percent of children from rich families."

“The government must take child poverty seriously and take the necessary steps to end child marriage and labor and improve quality of and access to education,” he added.

During his mission, the special rapporteur visited Bagmati, Karnali, Lumbini provinces, as well as Province 2. He met with nine ministries, including six ministers, as well as local and provincial authorities, people affected by poverty, civil society organisations, and development cooperation and UN agencies.

World Bank highlights resource gap to maintain federalism

The World Bank (WB) has concluded resource gap to maintain the three-tier government. Releasing a report, 'Public Expenditure Review (PER) Report on Fiscal Policy for Sustainable Development', the multilateral development partner also said the government should also introduce five key reform measures to support fiscal sustainability and its transition towards green, resilient, and inclusive development.

The World Bank, in its report, has also identified five top priority reform measures. It has suggested on encouraging the update of sub-national spending responsibilities through the intergovernmental grants system.

Supporting exports and job creation through reforms to import duties, strengthening domestic revenue including a review in VAT exemptions, enhancing public capital spending by rolling out the National Project Bank and providing fiscal incentives for a green growth transition are among measures that World Bank has recommended to achieve the goal.

The World Bank has also stated that Nepal has made significant strides in implementing fiscal federalism but excessive dependency of the sub-national governments on the intergovernmental transfers and revenue sharing, which accounts for around 30 per cent of the annual budget, to fulfill their financial demands.

“While federalism is helping bring policymaking closer to the people, it has also increased fiscal spending and exacerbated by the Covid-19 pandemic led to a sharp rise in fiscal deficits and public debt,” the report reads, stressing the importance of strengthening investment processes and fiscal policies for green growth, and fiscal policy reforms to enable Nepal to use its green electricity surplus to mitigate air pollution to protect the health of people and the economy.

With the country’s transition to federalism, expenditure responsibilities have been devolved to subnational governments that are predominantly financed through intergovernmental transfers and revenue sharing. These now account for between 8 per cent and 9 per cent of GDP per year (or close to 30 per cent of the annual budget). 

“This report provides an analytical basis to inform our reform efforts to strengthen federalism and create fiscal space to support our new focus on a green, resilient, and inclusive development (GRID) model,” finance secretary Madhu Kumar Marasini said, adding that it complements our ongoing efforts to refine the fiscal transfer system put in place the systems for monitoring and reporting for a more results oriented and accountable delivery of local services.”

Likewise, World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervosthis said that the human development PER, both of which will help inform the design of World Bank support to Nepal, including through our ongoing support through our various Development Policy Credits."

JICA to support strengthening of seed production, supply and quality control system

JICA signed Record of Discussions with the government for the technical cooperation project 'Strengthening Seed Production, Supply and Quality Control System Project'.

The implementation period of the project is for 5 years (starting from March 2022 to March 2027) and the executing agency is Seed Quality Control Center (SQCC), Ministry of Agriculture and Livestock Development (MOALD), Nepal Agricultural Research Council (NARC), and Ministry of Land Management, Agriculture and Cooperatives (MoLMAC) of province No 1, according to a press note issued by the JICA.

The project shall be implemented in Province 1, mainly Jhapa, Morang, Sunasari and Udayapur districts, it reads, adding that the purpose of the project is 'to strengthen Rice seed production, supply and quality control system' to improve productivity of rice by means of dissemination of quality improved seeds in Province No 1 and to strengthen the implementation of the rice seed production, supply and quality control system in Nepal. 

Rice is fundamental crop of Nepali agriculture. Everyone eats it, and farmers gain income out of it. In order to make crop tasty, nutritious, and productive, the most important factor remains the quality of rice seeds.

Even though rice farming contributes around 15 per cent to the gross domestic production (GDP) of Nepal, there is still possibility to increase its yield therefore usage of improved seed and increasing the replacement rate of seed are the key.

According to the statistic, seed replacement rate of rice in Nepal is around 20 per cent now, therefore, the government has the strategy to raise the percentage to 25 per cent. And it is estimated that the use of improved seeds with good quality will increase its yield by 15 per cent. However, there are several processes before farmers can use the improved seeds with good quality, it is necessary to improve of the quality of the system and capacity to produce the quality seed in Nepal. In this context, holistic support for improving seed production was requested to JICA.

The project is expected to contribute for sustainable social and economic development of Nepal during and after the implementation period of the project.