TRADE AND POVERTY. Dr. Chiranjibi Nepal. World Economy.
Dr. Chiranjibi Nepal
Since 1950, the world economy, and in particular the developing economies have enjoyed a remarkable growth of output, not only to contrast to the disastrous period between the two world wars, but also in comparison to the period prior to the First World War.
Nepal is in the terminal year of the Tenth Plan/PRSP,2002-2007.The plan’s only development objective has been to achieve poverty reduction, with a view to reducing the number of population below poverty line to 10 Percent by the end of the Twelfth Plan, 2016-17.
Singles out 4 strategies for implementing the Plan/PRSP
In 2005/06 total allocations was 41.0 percent, which is slightly less then FY06/07 budget allocation.
However, the budget document does not contain an analysis of the actual expenditure in each of the above areas to do meaningful analysis.
Tenth Plan has a target of increasing an annual rate of economic growth at 6.2 percent.
In order to attain this rate of economic growth-agriculture 4.1 percent, industry 8.9 percent,social services 7.1 percent.
But GDP grew at the annual rate of 2.9 percent. Agriculture sector by 2.8, industry sector 2.4 and the service sector by 3.3 percent
NLSS-II has indicated that over the years, inequality is increasing between urban and rural areas.
Real per capita expenditure grew by 43 percent while poverty declined by 26 percent , during 1995/96-2003/2004. This implies that total elasticity of poverty reduction with respect to growth has been a negative of 0.6
Gini coefficient , one measure of inequality, rose from 0.34 in 1995/96 to 0.41in 2003/2004
Source: Economic Survey and NRB Quarterly Economic Bulletin (various issues).
Source: NRB Quarterly Economic Bulletin (various issues).
Source: Nepal Rastra Bank publications
Note: g = compound growth rates.
Source: Economic Survey and Nepal Rastra Bank Publications
Note: g= compound growth rate; * implies growth for 1994-95 only.
Source: Nepal Rastra Bank, * for the years 2004-2005 only, ** for 2002-05 only.
Nepal continues to suffer from high proportion of the population in absolute poverty. A substantial increase in per capita income is a prerequisite for achieving a meaningful reduction in poverty. Measures required relate to: