Nepal Leading The World In Poverty Reduction: Study

March 19, 2013Global Challengesby EW News Desk Team

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Nepal could eradicate poverty within the next 20 years if its poverty reduction rate continues on its current level of progress, said an Oxford University study published on Monday, citing “social policy investments combined with active civil society engagement” for the Himalayan state’s present success.

Alongside Bangladesh and Rwanda, Nepal has been a “star performer” in reducing poverty, according to the Oxford Poverty and Human Development Initiative (OPHI), with researchers showing that poverty has dropped from 64.7 percent of the population in 2006 to 44.2 percent in 2011.

“Countries managed to reduce multidimensional poverty through tackling a range of different deprivations, with no single formula for success emerging from the study," said an OPHI statement.

"Nepal did the best in areas like nutrition, child mortality, electricity, improved flooring and assets. Rwanda showed the biggest improvement in sanitation and water, and Bangladesh did best in improving sanitation and school attendance."

The OPHI uses the Multidimensional Poverty Index (MPI) to measure poverty rates. Unlike regular calculations based on income alone, the MPI is seen as a more holistic approach using 10 indicators such as malnutrition, education and sanitation. If people are deprived in three or more areas, they are identified as "MPI poor".

"The success of Nepal and Bangladesh in reducing poverty despite their relatively low income highlights the effectiveness of social policy investments combined with active civil society engagement," said Sabina Alkire, Director of the Oxford Poverty and Human Development Initiative (OPHI), as cited by Reuters.

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Of 22 countries having data on MPI poverty over time, 18 reduced MPI significantly, and most reduced multidimensional poverty faster than income poverty, said OPHI.

United Nations Development Programme (UNDP) country director Shoko Noda also noted that his institute’s Millennium Development Goals (MDGs) could not reflect the complete picture of poverty and encouraged countries to develop indicators similar to the MPI to paint a clearer picture.

Meanwhile in Bangladesh, poverty rates decreased by 3.2 percentage points per year between 2004 and 2007 and Rwanda by 3.4 percentage points annually from 2005 to 2010. The “star performers” were followed on the list by Ghana, Tanzania, Cambodia and Bolivia, while countries such as Madagscar, Senegal, Jordan and Peru showed no statistically significant reduction in poverty.

India reduced multidimensional poverty significantly between 1998/9 and 2005/6, though at a rate less than a-third of its poorer neighbours.

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“From 1999-2006 India did very well in certain aspects of poverty reduction; for example, MPI among the Scheduled Caste groups showed a strong reduction, and poverty among the most destitute went down faster than the average…but it’s still the case that the benefits of national poverty reduction have been enjoyed least by some of the poorer groups and regions,” said researcher Suman Seth, as cited by The Hindu.

Nonetheless, the OPHI predicted that India would take another 41 years to eradicate poverty, despite not collecting official data on MPI deprivations since 2005/06.

India, which is home to around 40 percent of the world's one billion people living below the poverty line, cut poverty by an average of only 1.2 percentage points annually between 1999 and 2006, said the study.

Read: Full Study By The Oxford Poverty and Human Development Initiative