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Page 1: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Nepal SCDSupplemental Annex

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Page 2: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

In the last 20 years Nepal has secured impressive progress in reducing poverty

1

Source: World Bank. 2016. Moving up the Ladder: Poverty Reduction and Social Mobility in Nepal. World Bank, Washington DC

Page 3: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Nepal has also made impressive gains in education and health, and on many measures, performs relatively well compared to structural peers. 

2

Page 4: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

This has been achieved despite low growth and almost no productivity growth during the last 20 years

3-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

TFP growth Trend growth (HP filter)(percent change)

-4-202468

10

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Trend Growth (HP filter) GDP Growth (Percent)

Page 5: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Remittances directly account for 27% of all poverty reduction from 1996 to 2011, and high rates of migration also had indirect impacts on poverty

4

Drivers of poverty reduction 1996‐2011

15

3616

52

33

50

27 24 32

0%

20%

40%

60%

80%

100%

National Urban Rural

ResidualRemittancesLabor incomeHousehold demographics

Shrestha, M. 2017. The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal. Mimeo, World Bank.

Source: World Bank. 2016. Moving up the Ladder: Poverty Reduction and Social Mobility in Nepal. World Bank, Washington DC

An increase in the migration rate of 10 percent reduce the village poverty rate by 7 percentage points. This estimate suggests that migration rates to Gulf‐Malaysia explains 40 percent of the actual decline in poverty between 2001 and 2011. 

Impact of migration on poverty, 2001‐2011

Page 6: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Indirect impact of migration: an increase in village migration by 10 percentage points increases wages by 25 percent, largely driven by increase in agricultural wages and non‐farm wages for women

5

Shrestha, M. 2017. The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal

Page 7: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Indirect impact of migration: migration reduced labor force participation (LFP), estimates vary but suggest that LFP of remaining members of households with migrants fell

Higher village migration rates increase LFP among households with migrant members, but the impact is weaker than for households without migrants.

6Shrestha, M. 2017. The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal

Wage employment falls, self‐employment increases, hours supplied fall, among households with migrants. (Another study also documents similar results, Lokshin and Glinskaya, WBER 2009)

Phadera, L. 2016. International Migration and its Effect on Labor Supply of the Left‐Behind Household Members: Evidence from Nepal

Page 8: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Indirect impact of migration: remittances enabled increased investments in health and education, particularly female education

7

Shrestha, M. 2017. The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal

Page 9: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Other factors also contributed to Nepal’s progress: progress on health and education was aided by an increase in community and private schools

85% of primary and lower secondary enrollment is in community schools and the number of community schools has increased rapidly to keep up with increasing enrollment rates. 

Sources: Educational Statistics of Nepal (1995), School Level Educational Statistics of Nepal (2005), Flash Reports (2010, 2015), Ministry of Education, Department of Education

8

05000

100001500020000250003000035000

Com

mun

ity

Priv

ate

Com

mun

ity

Priv

ate

Com

mun

ity

Priv

ate

Primary (1-5) LowerSecondary

(6-8)

Secondary(9-10)

(number of schools)

1995 2005 2015

0.08 0.12 0.06 0.12 0.15

0.92 0.88 0.94 0.88 0.85

67.572.1

86.894.5 96.6

1995 1999 2005 2010 20150.0

20.0

40.0

60.0

80.0

100.0

0%

20%

40%

60%

80%

100%

Share of primary level enrollment (by school type)

Private schools Community schools

NER

0.20 0.250.08 0.14 0.16

0.80 0.750.92 0.86 0.84

26.1031.30

46.50

69.30

77.70

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

0%

20%

40%

60%

80%

100%

1995 1999 2005 2010 2015

Share of lower secondary enrollment (by school type)

Community schools

Private schools

NER

Page 10: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

And increased private spending: private expenditure accounts for 55 percent of total expenditure in education … making private contributions to education some of the highest in the world

Source: UNESCO. 2016. Global Education Monitoring Report

9

Page 11: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Private expenditure also accounts for 60 percent of total expenditure in health … making private contributions to health some of the highest in the world

10

0

10

20

30

40

50

60

70

Out of pocket health expenditure as a % of totalexpenditure

Private expenditure as a % of total expenditure

Nepal Strutural peers Remittance dependent Low income South Asia region

Source: Find My Friends using the Health Nutrition and Population Statistics

Page 12: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Although the share of public spending on health and education is low, public spending was maintained during a decade of conflict and increased post‐2006 

11

Page 13: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Higher public spending on education and health allowed the government to remove user fees which substantially increased access to basic services

Sophie Witter Sunil Khadka Hom Nath Suresh Tiwari. The national free delivery policy in Nepal: early evidence of its effects on health facilities. Health Policy and Planning, Volume 26, Issue suppl_2, 1 November 2011, Pages 84–91

Presentation Title 12

Page 14: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Although public spending on education and health increased, government spending on health and education remains below peers

WDI Indicators using find my friends

13

0

20

40

60

80

100

120

Public healthexpenditure (as a %

of GDP)

Governmentexpenditure per

student, primary (%of GDP per capita)

Governmentexpenditure per

student, secondary(% of GDP per capita)

Governmentexpenditure per

student, tertiary (%of GDP per capita)

Nepal Structural Peers Remittance dependent South Asia Region

Page 15: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Despite welfare gains, there is an urgent need to change Nepal’s development model: Growth opportunities are being missed resulting in slow growth

14

400

500

600

700

800

900

1,000

1,100

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

(GNI, 2016$)

LIC graduation threshold

GNI per capita

Source: World Bank. 2017. CEM

Business as usual would result in the trend rate of growth slowing to an average 3 percent per year from 2017 to 2030

Page 16: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Inequities that underpin fragility have not yet been addressed

15

0.7

0.8

2.1

1.8

0.6

0.0

0.4

0.5

1.9

0.6

0.0 0.5 1.0 1.5 2.0 2.5

Inclusion, Inclusive

Equity, Equal, Equality

Rights

Justice

Sovereign, Sovereignty

1990 2015

Source: World Bank. 2016. Moving up the Ladder: Poverty Reduction and Social Mobility in Nepal. World Bank, Washington DC

Rights, equity and inclusion dominate the constitution in 2015 much more than in 1990 highlighting the importance of this agenda in Nepal today

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

Dalit fromrural hills

Dalit fromurban hills

Brahminfrom urban

hills

Middleclass fromurban Terai

Janajatifrom rural

Terai

Dalit fromrural Terai

to India to other external destinations

Source: Raju, D. and J. Rajbhandhary, eds. Forthcoming. “Youth labor in Nepal”. World Bank, Washington D.C. 

Probability of migrating abroad relative to Brahmin in Kathmandu 

Rates of international migration are higher for groups that are less favored in the domestic job market (such as Janajati and Muslims)

Page 17: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Welfare gains are vulnerable to natural disasters and other uninsured risks

16

6450

31

2835

45

7 14 22

0%10%20%30%40%50%60%70%80%90%

100%

1995/96 2003/04 2010/11

Poor Vulnerable Middle Class Upper

45% of Nepali are vulnerable to becoming poor.

Source: World Bank. 2016. Moving up the Ladder: Poverty Reduction and Social Mobility in Nepal. World Bank, Washington DC

Source: Walker, Khadka and Pandey, 2017. “Risk and Vulnerability in Nepal” using the  Nepal Household Risk and Vulnerability Survey 2016.Notes: Light-colored bands show 95% confidence interval for share of food insecure households among those reporting/not reporting the given shock between 2014 and 2016. Sample frame excludes metropolitan areas as defined in 2010

Impact of Shocks on Food Insecurity, Non‐metropolitan Nepal, 2016

Page 18: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Welfare gains are vulnerable to natural disasters and other uninsured risks (2)

17

0%

2%

4%

6%

8%

10%

1 2 3 4 5Expenditure Quintile

Proportion ofhousehold expenditurein:  Health

Source: Jacoby, H. 2017. Analysis for Nepal SCD using the 2016 Household Risk and Vulnerability Survey

Out of pocket spending on health care comprises 3‐4% of expenditure of those just above the poverty line, pushing many into poverty

Page 19: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

There are also opportunities and risks arising from the demographic transition that Nepal is undergoing

18

2,000 1,000 0 1,000 2,0000-4

10-1420-2430-3440-4450-5460-6470-7480-8490-94100+

(age group)

Male Female

(thousan

2050

2,000 1,000 0 1,000 2,0000-4

10-1420-2430-3440-4450-5460-6470-7480-8490-94100+

(age group)

Male Female

(thousan

2015

Source: World Bank. 2017. CEM

Page 20: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Part B: Elements of a new approach1. Encouraging political inclusion, reducing institutional capture, and eliminating clientelism. 2. Promoting private sector investment to create more and better jobs. 3. Harnessing the potential of natural resources. 4. Ensuring all Nepalese are equally able to invest in and use human capital. 5. Increasing resilience to natural disasters and health shocks. 6. Getting more from migration. 

19

Page 21: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Governance has deteriorated in Nepal

20Source:World Governance Indicators

Area 1: Encouraging political inclusion, reducing institutional capture, and eliminating clientelism

Page 22: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Firms in Nepal have lower rates of taxation than regional and structural peers

Source: Find my friends

21

0

10

20

30

40

50

60

Nepal Structural peers Remittancedependent

Low income South Asia region

Total tax rate (percent of profit)

Area 1: Encouraging political inclusion, reducing institutional capture, and eliminating clientelism

Page 23: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Political instability and lack of infrastructure are major constraints to firm growth and job creation

22

Area 2: Promoting private sector investment to create more and better jobs

0200400600800

1000120014001600

Fixed line andmobile cellularsubscriptions(per 1,000people)

Electricityconsumption(kilowatt hoursper capita)

Total roadnetwork (kmper 100,000people)

Electric powertransmission

anddistributionlosses (US$

lost per 1,000US$ of output)

Nepal has large infrastructure gaps

Nepal South Asia Structural peers

Page 24: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

FDI is low

23

Area 2: Promoting private sector investment to create more and better jobs

Page 25: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Tariffs are high

24

Source: World Bank. 2017. CEM

Area 2: Promoting private sector investment to create more and better jobs

Page 26: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Remittances have contributed to real exchange rate appreciation and increasing real wages which reduce export competitiveness

25

Source: World Bank. 2017. CEM

Weak growth and limited job opportunities

High reservation wages and

appreciation of real

exchange rate

Outward migration and

large-scale remittances

Low competitiveness

Geo

grap

hy /

in

fras

truc

ture

gap

Gov

erna

nce

/ Im

plem

enta

tion

ca

paci

ty

Ski

lls /

edu

cati

onal

ou

tcom

es

0

100

200

300

400

500

600

700

80

85

90

95

100

105

110

115

120

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

(Index number, 2010=100)

Real exchange rate

Remittances (right)

(3-m mov. avg. USD m)

Area 2: Promoting private sector investment to create more and better jobs

Page 27: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Access to finance is worse in Nepal than in South Asia on average, and is worse for smaller firms and women‐owned enterprises

Source: Enterprises Survey 2013 26

Area 2: Promoting private sector investment to create more and better jobs

Page 28: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Nepal has untapped comparative advantage in production on non‐traditional higher value crops in areas of higher elevation

World Bank. 2016. Source of Growth in Agriculture. World Bank, Washington DC. 

Area 3: Harnessing the potential of natural resources

Page 29: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Growth in agriculture has been low and volatile driven by high prices and favorable monsoons rather than any growth in productivity.

World Bank. 2016. Source of Growth in Agriculture. World Bank, Washington DC. 

Area 3: Harnessing the potential of natural resources

Page 30: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Cereal yields are low compared to neighboring countries, even when comparing production in lowland Nepal to other lowland neighbors

World Bank. 2016. Source of Growth in Agriculture. World Bank, Washington DC. 

Area 3: Harnessing the potential of natural resources

Page 31: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Diversification from cereals towards higher productivity fruits and vegetables has been limited

The area allocated to paddy fell from 76 percent in 2003/4 to 72 percent in 2010/11. There has been a modest increase in diversification, mainly driven by changes in the Hills (although the mountains are still the most diversified). 

World Bank. 2016. Source of Growth in Agriculture. World Bank, Washington DC. 

Area 3: Harnessing the potential of natural resources

Page 32: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

The share of crop produced for market falls significantly with distance

Source: M. Shahe Emran and Forhad Shilpi. 2008. “The Extent of the Market and Stages of Agricultural Specialization” World Bank Policy Research Working Paper 4535

Area 3: Harnessing the potential of natural resources

Page 33: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Input use is relatively high (4 out of 5 households use fertilizer) and with a few exceptions do not show large gradients across consumption quintiles.

0%10%20%30%40%50%60%70%80%90%

100%

Own/rent tractor o

rthresher

Used im

prov

ed se

eds

Used fertilizer

Used pe

sticide

Own/rent tractor o

rthresher

Used im

prov

ed se

eds

Used fertilizer

Used pe

sticide

Own/rent tractor o

rthresher

Used im

prov

ed se

eds

Used fertilizer

Used pe

sticide

Mountain Region Hills Region Terai Region

Poorest

2

3

4

Richest

Source:  Jacoby, H. 2017. Analysis for Nepal SCD using the 2016 Household Risk and Vulnerability Survey 

Area 3: Harnessing the potential of natural resources

Page 34: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Access to good sanitation and clean water is relatively good in Nepal

Source: Find my friends

33

0102030405060708090

100

Improved sanitation facilities (% ofpopulation with acccess)

Improved water source (% of populationwith access)

Nepal Strutural Peers Low income South Asia Region

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 35: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Starting primary school on time, finishing primary school on time, being well‐nourished in early childhood, having clean water to drink, adequate sanitation and electricity are in large part determined by a child’s gender, parental wealth and education, and location.

34

Circumstances of birth determine investments in a child’s education…

Goma is a girl, born in rural Kalikot. Her parents are illiterate, belong to the Dailitcommunity and are in the bottom 20 percent of Nepal’s wealth distribution.

Champa is also a girl born to a household otherwise very similar to Goma’s. But Champa’s parents are from a village in Siraha.

Avidit is a boy born to an upper caste household in urban Kathmandu. Both his parents have a university education and come from affluent backgrounds.

0

10

20

30

40

50

60

70

80

90

100

Started primaryon time

Finished primaryon time

Avidit Goma Champa

(probability)

Source:  World Bank . 2016. Moving Up the Ladder. World Bank, Washington DC. 

96

8069

95 10085

48

9 6

36

84

48

6 5

31

0102030405060708090

100

Avidit Goma Champa

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 36: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Analysis of performance in national examinations such as the SLC or the National Assessment of Student Achievement (NASA) administered to eight‐graders, show the odds of passing to be skewed in favor of children with favorable birth circumstances.

35

45

29

27

38

0% 20% 40% 60% 80% 100%

Passing School Leaving certificate

Pass Grade 8 Science

Pass Grade 8 Nepali

Pass Grade 8 Mathematics

Ethnicity GenderParental Occupation or Income Parental EducationDistrict HQ/District-Urban/Rural Private/Public

55-73% of inequality is explained by circumstances

of birth

Contribution to inequality (percent)

Source:  World Bank . 2016. Moving Up the Ladder. World Bank, Washington DC. 

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

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School quality more generally, proxied by the education of the school head, falls with remoteness perhaps reflecting the absence of private education provision in more remote areas or the challenge of providing high quality public services in remote locales.

0102030405060708090

100

1 2 3 4 5

Remoteness quintile

Remoteness and education quality

Director ofsecondary schoolhas a bachellor'sdegree or higher (%)

Private to public useof schooling (ratio)

Source:  Jacoby, H. 2017. Analysis for Nepal SCD using the 2016 Household Risk and Vulnerability Survey 

36

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 38: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Providing basic secondary health services in remote locations is similarly challenging.

Kiran Regmi, Senendra Upreti, Maureen Dar Iang, Hom Nath Subedi, Devi P Prasai, Kapil Babu Dahal, ChhayaJha, Shilu Aryal, Swaraj Rajbhandari, Rachel Phillipson, Stephen Keeling, Alison Dembo Rath, and Deborah Thomas. October 2013. A study on access to maternal, neonatal, and child health services in remote areas of Nepal: consolidated report of findings. (Note VDC is Village Development Committee). 37

40

5046

41

94

49

2113

29

13

65

25

9

05

12

38

20

0

10

20

30

40

50

60

70

80

90

100

Taplejung Rasuwa Gorkha Rukum Bajura Fivedistricts

Prop

ortio

n of woe

mn giving

 birth in a hea

lth fa

cility 

or hospital

District headquarter

VDCs within 8 hours travelling distance

VDCs >8 hours of travelling distance

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

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Household survey data collected in rural Nepal in 2016 shows that spending on health and education and attendance at private school increases with wealth

38

0.0

0.1

0.2

0.3

0.4

1 2 3 4 5Expenditure Quintile

Private to Publicuse of: Healthvisits

Private to Publicuse of:Schooling

Source:  Jacoby, H. 2017. Analysis for Nepal SCD using the 2016 Household Risk and Vulnerability Survey 

0%

2%

4%

6%

8%

10%

1 2 3 4 5Expenditure Quintile

Proportion ofhouseholdexpenditure in:Health

Proportion ofhouseholdexpenditure in:Schooling

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

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Women have high labor force participation, but are in lower paid and lower quality jobs than men

39

16

8593

107121

0

20

40

60

80

100

120

140

00.10.20.30.40.50.60.70.80.91

Labor forceparticipation

Wages Estimatedearnedincome

Legislators,senior

officials andmanagers

Professionaland technical

workers

Rank

 (1=b

est, 14

2=worst

Female to m

ale ratio

 of…

Women have high labor force participation, but are in lower paid and lower quality jobs than men

World Economic Forum. 2014. The Global Gender Gap Report

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 41: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Improvements in food security, maternal education and access to good sanitation, clean water and basic health services resulted in Nepal recording the fastest recorded decline of stunting rates in the world from 2001 to 2011

40

Headey DD, Hoddinott J (2015) Understanding the Rapid Reduction of Undernutrition in Nepal, 2001–2011. PLoS ONE 10(12): e0145738. doi:10.1371/journal.pone.0145738

“In the 1990s Nepal had the highest recorded rate of child stunting in the world, with around 60 percent of children younger than 5 years being stunted, many of them severely so. From 2001 to 2011 Nepal achieved the fastest recorded reduction in child stunting in the world, reducing child stunting from 56.6 to 40.0, a reduction of 1.66 points per year.”

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

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A number of places with the highest rates of malnutrition are places with the highest rates of diarrheal disease

41

Prevalence of stunting Prevalence of diarrhea

Source:  Haslett, S., Jones, G., Isidro, M., and Sefton, A. (2014) Small Area Estimation of Food Insecurity and Undernutrition in Nepal, Central Bureau of Statistics, National Planning Commissions Secretariat, World Food Programme, UNICEF and World Bank, Kathmandu, Nepal, December 2014.

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

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Nepal performs well in providing primary health services, but less well in more complex care provision

42

0

10

20

30

40

50

60

70

80

Pregnant womenreceiving prenatal careof at least four visits (%of pregnant women)

Births attended byskilled health staff

Cause of death bycommunicable

diseases, and maternalprenatal and nutritoin

conditions

Cause of death by non‐communicable

diseases

Nepal Strutural Peers Low income South Asia Region

Source: WDI using Find my Friends

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

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Grade‐specific literacy test scores are low, but better than several other countries

43

0102030405060708090

100

Iraq

Nep

al

Jordan

Guy

ana

Jordan

Tanzan

ia

Iraq

Guy

ana

Nep

al

Gha

na

Malaw

i

Grade 3 Grade 2

Grade specific literacy test

Gove (2015) Background paper prepared for the Education for All Global Monitoring Report 2015. 

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 45: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

The quality of education system and school management scores are at the same level as structural peers (although lower than the regional average).

44

3

3.23.43.6

3.84

4.2Nep

al

Structural Pee

rs

Remittan

ce dep

ende

nt

Low in

come

South Asia Region

Nep

al

Structural Pee

rs

Remittan

ce dep

ende

nt

Low in

come

South Asia Region

Quality of education system Quality of management of schools

Quality of education

Source: WDI using Find my Friends

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 46: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Few firms provide training

Nepal Growth Diagnostic 2014 using Enterprise Survey data 

45

Area 4: Ensuring all Nepalese are equally able to invest in and use human capital

Page 47: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Climate related risks in Nepal are high

• Floods and Landslides– Estimated Annual Loss of USD 14.7m (2001‐2007)

• Glacial Lake Outburst Floods (GLOFs) and Landslides – Significant national and regional risk • The Himalayan range in Nepal constitutes 33,000 sq.km of the estimated 110,000 sq.km of glaciated area.• Glacier thinning and retreat in the Himalayas has resulted/and  continuing to result in the formation of new glacial lakes 

and the enlargement of existing ones. These are very unstable and subject to catastrophic drainage causing damage to lives and assets downstream. 

• Nepal has experienced 24 GLOF events in the recent past, several of which have caused considerable damage and loss of life

• the Bhote Koshi Sun Koshi GLOFs of 1964 and 1981. Damaged the only road link to China and disrupted transportation for several months

• the Dig sho GLOF of 1985. Destroyed the nearly completed Namche Small Hydroelectric Project

• Approximately 26 potentially dangerous lakes exist. Tsho Rolpa and Imja Tsho identified for continued and more intensive study

• Himalayan glaciers are water reservoirs for the entire South Asian sub‐region and regulate water resources in the region. Changing dynamics of the Himalayan glaciers is a significant risk to water resources in the country and the region, that is already water‐stressed.

Imja Tso glacial lake

46

Area 5: Increasing resilience to natural disasters and health shocks

Page 48: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Climate related risks in Nepal are high 

• Floods and Landslides– Estimated Annual Loss of USD 14.7m (2001‐2007)

• Floods and Landslides in non‐Himalayan region• 80% of Nepal’s rainfall (159‐5000mm per annum) occurs during monsoon period (June‐September), the timing has become 

unpredictable recently• Projections affirm that risks of flooding will increase considerably in river basins of Nepal. Global Circulation Model 

projects a wide range of precipitation changes, especially in the monsoon, 14–40% by the 2030s increasing to 52–135% by the 2090s 

• Severe urban and rural issue. Range of impacts:• Personal security (47% of flood victims die due to drowning, loss of income, diseases)

• Buildings and infrastructures (loss of rural houses and roads, inundation of urban roads‐affecting transport, economies, damages to hydroelectric plants, industries, damage to ancient cultural heritage)

• Agricultural production (86% of the population relies on agriculture, loss of crops and livestock, uncertainty in cropping patterns, pests) 

• Marginalized populations in Nepal continue to live and settle near rivers, roads and steep slopes. They own and cultivate at risk lands. 

47

Area 5: Increasing resilience to natural disasters and health shocks

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The nature of risk varies across regions: drought has the largest monetary and welfare impact in the Tarai

Shively, G. 2017. Infrastructure mitigates the sensitivity of child growth to local agriculture and rainfall in Nepal and Uganda. Proceedings of the national Academy of Sciences. vol. 114 no.5: 903‐908.

48

Area 5: Increasing resilience to natural disasters and health shocks

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Public safety nets are not well‐placed to help protect households. Existing government transfers are poorly targeted to poor households.

7.3 7.3

0

1

2

3

4

5

6

7

8

poorest 40% richest 60%

Percent of people ages 15+ that received government transfers in the last year

Source: Findex, 2014

49

Area 5: Increasing resilience to natural disasters and health shocks

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Removing social assistance or cash transfer programs would cause poverty to rise by only 0.5 percentage points

25.2 25.7

25.6

32.8 33 32.9

0

5

10

15

20

25

30

35

Current In absence of socialassistance

In absence of cashtransfer programs

Poverty Rate Gini Coefficient

50

Area 5: Increasing resilience to natural disasters and health shocks

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Transfers from family and friends are the most common source of cash in the face of emergencies

Source: Findex, 2014

0

10

20

30

40

50

60

Main source ofemergency funds:family or friends (%able to raise funds,

age 15+)

Main source ofemergency funds:financial institutionor credit card (% ableto raise funds, age

15+)

Main source ofemergency funds:

other (% able to raisefunds, age 15+)

Main source ofemergency funds:private informallender (% able to

raise funds, age 15+)

Main source ofemergency funds:savings (% able to

raise funds, age 15+)

Main source ofemergency funds:work or loan fromemployer (% able toraise funds, age 15+)

Nepal Structural peers Low income SAR

51

Area 5: Increasing resilience to natural disasters and health shocks

Page 53: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Nepali save, and save in formal accounts as much or more than peers. Savings rates are a bit lower among the poorest. 

0

10

20

30

40

50

60

Account at afinancial

institution (% age15+)

Saved any moneyin the past year (%

age 15+)

Saved any moneyin the past year,income, poorest40% (% ages 15+)

Saved any moneyin the past year,income, richest60% (% ages 15+)

Saved at afinancial

institution (% age15+)

Saved at afinancial

institution,income, poorest40% (% ages 15+)

Saved at afinancial

institution,income, richest60% (% ages 15+)

Nepal Structural peers Low income SAR

Source: Findex 2014

52

Area 5: Increasing resilience to natural disasters and health shocks

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The sources of borrowing that poorer households have access to have high interest rates

53

Bank

Relatives/friends

Employer

Moneylender

Coop/ROSCA

Other source

Bank

Relatives/friends

Employer

Moneylender

Coop/ROSCAOther source

10

15

20

25

30

35

0 5 10 15 20 25

Average Interest Rate on

 Loa

ns from

 So

urce

Proportion of Households with Loan from Source

Poorest60%

Source: Walker, Khadka and Pandey, 2017. “Risk and Vulnerability in Nepal” using the  Nepal Household Risk and Vulnerability Survey 2016.

Area 5: Increasing resilience to natural disasters and health shocks

Loan Sources and Interest Rates, Non‐metropolitan Nepal, 2016

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0 10 20 30 40

Wholesale and retail trade…

Manufacturing/factory worker

Service sector worker

Driver

Construction sector

Unemployed

Agriculture sector worker

Work prior to migration Work during migration

(percent of migrants)

Source: IOM, 2016

Migration entails a sectoral shift in employment

Area 6: Getting more from migration

Page 56: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Most returnees that would like to stay in Nepal would like to start a new business

Area 6: Getting more from migration

Page 57: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Migrants have access to information before migrating, but it is not always adequate or accurate

Area 6: Getting more from migration

Page 58: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

Migration to the Gulf and Malaysia is largely low‐skilled0

1020

30Pe

rcen

t

0 2 4 6 8 10 12 14Years of education

Temporary migrants Non-migrantscodes: 11= High school (10+2); 12 = Bachelors; 13 = Masters; 14 = PhD

0.0

5.1

.15

.2.2

5M

igra

tion

Prob

abili

ty

0 2 4 6 8 10 12 14Years of education

Gulf-Malaysia Indiacode: 13=Bachelors; 14=Masters; 15=PhD

Shrestha, M. 2017. The impact of large-scale migration on poverty, expenditures, and labor market outcomes in Nepal

Area 6: Getting more from migration

Page 59: Nepal SCD Annex Supplemental Evidence final...0.2 Dalit from rural hills Dalit from urban hills Brahmin from urban hills Middle class from urban Terai Janajati from rural Terai Dalit

The costs of migration for Nepali workers are high but not abnormal

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Pakistan

Ethiop

ia

India

Philipp

ines

Nep

al

Bang

lade

sh

India

Sri Lan

ka

Pakistan

Bulgaria

Ecua

dor

Morocco

Indo

nesia

Thailand

Vietna

m

Vietna

m

Saudi Arabia Qatar Kuwait UAE Spain Korea Malaysia

(in months of earnings in destination)

Source: World Bank KNOMAD Migration Cost survey dataset.Note: “red line” refers to migration costs in one‐month earning.

Area 6: Getting more from migration