Friday, March 9, 2012

24.8% of population earn less than US$1.25 a day in Nepal (latest year 2010)

[This is an update to this blog post. I will put up comparable data for South Asian countries soon].

Here I will focus on the latest poverty and inequality figures published by the World Bank and compare it with the one published by CBS.

The WB’s estimate is updated with NLSS III (see this updated one as well) data. Check it out here. For Nepal, the poverty headcount at $1.25 a day (PPP) was 24.8% in 2010 [7.4 million people] and 53.1% in 2003 [13.9 million people]. It was 68% in 1995 [14.7 million people].

The table below shows a comparison of the level of poverty as shown by the WB and the NLSS III studies. The figure are pretty close. I don’t have too much of spare time to make charts, so here are is a table that shows the relevant info.

  CBS 2011 WB_Feb 2012
Poverty (%) Inequality Income or consumption share by deciles (%) Poverty (%) Inequality Income or consumption share by deciles (%)
Below national poverty line Gini index Poorest Richest Below $1.25 a day, PPP 2005) Gini index Poorest Richest
2010 25.2 32.94 9.09 26.82 24.82 32.82 3.63 26.52
2003 30.8 41.4 9.09 35.57 53.13 43.83 2.9 36.69
1995 41.8 32.2 9.10 27.09 67.97 35.23 3.41 29.1
1984   78.15 30.06 4.04 25
2008 33.9 Interpolated using two sets of survey data
2008 29.37 using survey data of 2010
2008 43.57 using survey data of 2003

Here, for CBS’s figure, the years are 2010/11, 2003/04, and 1995/96 (based on NLSS series). Note that the CBS’s poverty figure in 2010/11 cannot be compared with the previous years because of the change in consumption basket used to compute poverty level. Further, be careful with the total figures as total population is considered to be 30 million in 2010, but the Census 2011 says it is just 26.6 million. Also, for the World Bank, the default poverty line is $38.00 per month, which translates to $1.25 per day poverty line($38=$1.25*365/12). For CBS, based on current market prices, a person needs to earn at least Rs 19,261 (Rs 11,929 for food items and Rs 7,332 for non-food items) every year to buy basic food calories to stay above the national poverty line.

Anyway, the figures of CBS and WB are very close.  If we look at data for comparable year, then Nepal had the third highest headcount poverty (US$1.25 a day) in 2008.

Congratulations (major credit to remitters and very little credit to policymakers and governments) for such a remarkable feat in reducing poverty. Here is a country where you can have encouraging poverty reduction with a miserable growth rate of below 4 percent!

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