Nepal SCDSupplemental Annex
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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
Nepal has also made impressive gains in education and health, and on many measures, performs relatively well compared to structural peers.
2
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)
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
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
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
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
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
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
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
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
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
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
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
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)
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
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
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
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
Governance has deteriorated in Nepal
20Source:World Governance Indicators
Area 1: Encouraging political inclusion, reducing institutional capture, and eliminating clientelism
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
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
FDI is low
23
Area 2: Promoting private sector investment to create more and better jobs
Tariffs are high
24
Source: World Bank. 2017. CEM
Area 2: Promoting private sector investment to create more and better jobs
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
Most returnees that would like to stay in Nepal would like to start a new business
Area 6: Getting more from migration
Migrants have access to information before migrating, but it is not always adequate or accurate
Area 6: Getting more from migration
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
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