Thursday, 29 October, 2020

Pandemic's Effect On Poverty Eradication

Aashish Mishra

Nepal can be proud of its track record on poverty reduction. In 1995, more than 40 per cent of the country’s population lived in poverty. Twenty-five years later, we have succeeded in bringing that number down to 18.6 per cent. At this rate, our aim to have ‘zero poverty’ by 2043, as set by the Poverty Alleviation Policy 2019, looked very achievable. But all that now risks being undone by the COVID-19 pandemic.
According to the World Bank’s Nepal Development Update bi-annual report, almost 31.2 per cent of Nepalis who live on between US$ 1.9 to US$ 3.2 a day may now lose that income because of the pandemic and the subsequent lockdown and restrictions imposed to contain it. Service sector growth deteriorated to 0.7 per cent, the lowest in almost two decades. Industrial growth and capacity utilisation fell from 80 to 46 per cent. Agricultural growth also contracted considerably. Simply put, this means that the incomes of people working in all sectors have shrunk.
But while people’s earnings went down, their expenditure went up. Inflation reached 6.2 per cent. Food prices spiked in the name of India’s export ban on onions, regional shortages of fruits and vegetables and domestic transport disruptions caused by the four-month-long nationwide shutdown. This further drained people’s pockets.
All these figures conclude that COVID-19 and the measures taken to control it has made nearly half of Nepal’s population vulnerable to poverty. The World Bank’s indicators show that almost 50 per cent of our countrymen might fall into absolute poverty because of the pandemic.
This is a ghastly statistic and one that came about because the coronavirus devastated our informal sector. According to the International Labour Organisation (ILO), more than 70 per cent of Nepal’s economically active population is employed in the informal sector which means that around 70 per cent of the country’s economically active population might be unemployed by the end of this outbreak. Going by ILO estimates, anywhere between 1.3 to 2 million people in the wholesale and retail trade, manufacturing, construction, transportation and accommodation sectors might lose their jobs.
So, it would not be wrong to say that this pandemic is threatening to reverse decades of progress Nepal had made in alleviating poverty. Not only that, it has also made future work in this field harder. Who should the state focus on? Or rather, who shouldn’t? Everybody needs help now. And this requires resources that Nepal just does not have. Our bureaucracy and processes are in no way prepared or experienced to handle a crisis like this and there seems to be a widespread [wrong] sentiment among citizens and authorities that the upheaval will only be temporary and things will eventually settle in place on their own.
The depth of suffering that poverty creates is inhumane. No man, woman or child should have to go hungry, sleep without a roof over their head or live without the bare minimum of clothes to cover their body because of destitution. COVID-19, or anything else for that matter, cannot be allowed to stymie our efforts for poverty alleviation because it is an indescribably important task to eradicate poverty from our society.
Therefore, the government should not delay in introducing policies to address unemployment and poverty caused by this pandemic. Its strategy should include relief packages and skill-based employment.
But, in order to provide aid, the government first needs concrete figures – something which is currently lacking. We have to depend on foreign estimations to approximate the size of our informal sector. But such assumptions do not give a sufficiently clear picture to help during the present calamity. We need to quickly mobilise our Ministry of Labour to collect figures on the number of people working in informal areas, their economic status, the nature of assistance they require (if any) and how best to deliver it. 

How do you feel after reading this news?