How close is Nepal to achieving the MDGs?

Since MDGs are coming to an end in 2015, global leaders, development agencies, CSOs and think-tanks are already talking about post-MDG framework and targets. One proposal is to adopt the Sustainable Development Goals (SDGs). In the last Rio+20 Summit, Nepal proposed focusing on food security and sustainable agriculture; water and sanitation; energy; sustainable cities; natural disaster; green job and social inclusion; and mountain ecosystem. As this discussion moves ahead and the global team of experts come up with some kind of quantifiable development targets for the post-MDG era, it is time to take a look at the achievements made thus far in achieving the MDGs.

Here, I am presenting a table showing the latest achievement and the target in 2015. The information is sourced from MDG Progress Report for Nepal 2010, Nepal Demographic Health Survey 2011, CBS and WB. Targets in parentheses are the revised ones as per Needs Assessment Report, Table 5.A.1. The table shows that Nepal is unlikely to achieve the target of reducing the proportion of employed people living on less than US$1.25 per day (PPP); increasing proportion of births attended by skilled birth attendant; and increasing proportion of population using an improved sanitation facility. All other targets are either achieve, likely to be achieved or potentially likely to be achieved.

Progress against MDGs target
MDGs	Specific goals	Latest achievement	Target in 2015	Scenario 2015
MDG 1	Proportion of population living on less than US$ 1.25 per day (PPP) (%)	24.8	17	Likely
	Proportion of population below national poverty line (%)	25.2	21	Likely
	Proportion of employed people living on less than US$ 1.25 per day (PPP) (%)	22	17	Unlikely
	Proportion of population below minimum level of dietary energy consumption (%)	36.1	25	Potentially likely
	Proportion of underweight children aged 6–59 months (%)	28.8	29	Likely
	Proportion of stunted children aged 6–59 months (%)	41	30
MDG 2	Net enrolment rate in primary education (%)	91.9	100	Potentially likely
	Survival rate to Grade 5 (%)	80.6	100
	Literacy rate for 15–24 years old (%)	88.6	100
MDG 3	Ratio of girls to boys at primary level	0.9	1	Likely
	Ratio of girls to boys at secondary level	1	1	Achieved
	Ratio of women to men at tertiary level	0.8	1	Potentially likely
	Ratio of literate women to men aged 15–24 years	0.83	1	Potentially likely
MDG 4	Proportion of one-year-old children immunized against measles (%)	88	>90
	Under-five mortality rate (per 1,000 live births)	54	54 (38)
	Infant mortality rate (per 1,000 live births)	46	34 (32)	Likely
MDG 5	Maternal mortality ratio (per 100,000 live births)	229	213 (134)	Likely
	Proportion of births attended by skilled birth attendant (%)	36	60	Unlikely
MDG 6	HIV prevalence among population aged 15–49 years (%)	0.49	0.35	Likely
	Clinical malaria incidence (per 1,000 population)	5.7	3.8
	Prevalence rate associated with TB (per 100,000 population)	244	210	Likely
	Death rate associated with TB (per 100,000 population)	22	20	Likely
MDG 7	Area under forest coverage (%)	39.6	40	Potentially likely
	Proportion of population using improved drinking water source (%)	88.6	73	Achieved
	Proportion of population using an improved sanitation facility (%)	39.5	53	Unlikely

Meanwhile, to achieve the MDG targets, it is estimated that Nepal will need Rs 451 billion between 2011 and 2015. The figure below shows the cumulative resource need, funding available and resource gap to meet the MDGs between 2011 and 2015. The resource gap in achieving MDG Goal 2 (education)  is about 60% of the actual expenditure (Rs 295 billion) in FY2011.

Of course, we need to be also aware of the fact that having the financial resources alone will not be sufficient to achieve the targets.

Understanding inclusive growth: Role of good governance and institutions

Inclusive growth is one of the most talked about issues in developing countries, especially those in transition, these days. It has been pretty much widely accepted that growth alone is not sufficient; it has to be followed by wider access to economic opportunities and provision of social protection for those left out of the growth process.

ADB has come up with a framework for inclusive growth, which has three main components:  (i) High and sustainable growth; (ii) Access to economic and social development opportunities; and (iii) Stronger social protection. It also has a list of 35 indicators to quantify (either directly or via proxies) inclusive growth.

The policies for inclusive growth are supported by good governance and institutions, which are quantified by looking at two components of Worldwide Governance Indicators (voice and accountability, and government effectiveness) and the corruption perception index. The information and data in this blog come from ADB’s FIGI 2012 and the related dataset (Nepal only; for other countries, see this one).

 

GOOD GOVERNANCE AND INSTITUTIONS	1990 or Nearest Year		2010 or Latest Year
Voice and accountability	−0.1	(1996)	−0.5
Government effectiveness	−0.4	(1996)	−0.8
Corruption Perceptions Index	2.2	(2010)	2.2	(2011)

The first two components of WGI are presented in standard normal units of the governance indicator, ranging from –2.5 to 2.5 with higher values corresponding to better governance outcomes. In the CPI, scores relate to perceptions of the degree of corruption and ranges from 10 (very clean) to 0 (highly corrupt).

Fiscal decentralization and FDI inflows

Here (ungated version here) is an abstract from an interesting paper on fiscal decentralization and foreign direct investment in India and China. Yong Wang argues that “endogenous policies toward FDI are favorable only when both central and local governments benefit”. Fiscal decentralization has a non-monotonic and significant impact on FDI.

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A political-economy model is developed to explain why fiscal decentralization may have a non-monotonic effect on FDI inflows through endogenous policies. Too much fiscal decentralization hurts central government incentives, whereas too little fiscal decentralization renders the local governments vulnerable to capture by the protectionist special interest groups. Moreover, the local government's preference for FDI can be endogenously polarized; therefore, a small change in fiscal decentralization across certain threshold values may lead to a dramatic difference in equilibrium FDI inflows. Empirical investigations support that the difference in fiscal decentralization is an important reason for the nine-fold difference in FDI per capita between China and India. Cross-country regression results also support the inverted-U relationship.

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Inverted-U relationship between FDI per capita and fiscal decentralization (measured by sub-national government’s overall revenue share).

China’s central and local governments are more aggressive in enticing FDI inflows than India’s. China’s central government encourages FDI inflows by offering fiscal incentives (tax holidays and tariff waiver on imported inputs to foreign-invested firms). Furthermore, the local governments as well offer favorable policies (simple license application, lower fees for land use, provision of infrastructure, etc).

Understanding inclusive growth: Stronger social protection

Inclusive growth is one of the most talked about issues in developing countries, especially those in transition, these days. It has been pretty much widely accepted that growth alone is not sufficient; it has to be followed by wider access to economic opportunities and provision of social protection for those left out of the growth process.

ADB has come up with a framework for inclusive growth, which has three main components:  (i) High and sustainable growth; (ii) Access to economic and social development opportunities; and (iii) Stronger social protection. 

It also has a list of 35 indicators to quantify (either directly or via proxies) inclusive growth. This follow up to an earlier blog post sheds some light on the third pillar of inclusive growth, i.e. stronger social protection.

It focuses on stronger social protection to prevent extreme deprivation and reduce the effects of shocks. It components include strengthened:

• Labor market policies and programs
• Social insurance programs
• Social assistance and welfare schemes
• Child protection programs
• Disaster management
• Public sector management

The table below shows the quantifiable indicators for the third pillar of inclusive growth.The information and data in this blog come from ADB’s FIGI 2012 and the related dataset (Nepal only; for other countries, see this one).

Social protection	1990 or Nearest Year		2010 or Latest Year
Social protection and labor rating	3.0	(2005)	4.0	(2011)
Social security expenditure on health as a percentage of government expenditure on health	3.6	(2001)	4.6	(2009)
Government expenditure on social security and welfare as a percentage of total government expenditure	3.1	(1995)	3.2	(2011)

In the social protection and labor component, a rating of “1” corresponds to a very weak performance, and a “6” rating to a very strong performance.

Understanding inclusive growth: Access to economic and development opportunities

Inclusive growth is one of the most talked about issues in developing countries, especially those in transition, these days. It has been pretty much widely accepted that growth alone is not sufficient; it has to be followed by wider access to economic opportunities and provision of social protection for those left out of the growth process.

ADB has come up with a framework for inclusive growth, which has three main components:  (i) High and sustainable growth; (ii) Access to economic and social development opportunities; and (iii) Stronger social protection. 

It also has a list of 35 indicators to quantify (either directly or via proxies) inclusive growth. This follow up to an earlier blog post sheds some light on the second pillar of inclusive growth, i.e. access to economic and social development opportunities.

The second pillar emphasizes broader access to economic and social development opportunities, especially for the poor and disadvantaged. Its components include improvements in:

• Basic services including health, education, water and sanitation, and electricity
• Urban development for the poor
• Rural development
• Inclusionary reforms
• Public sector management

The table below shows the quantifiable indicators for the second pillar of inclusive growth. The information and data in this blog come from ADB’s FIGI 2012 and the related dataset (Nepal only; for other countries, see this one).

Social Inclusion to Ensure Equal Access to Economic Opportunity	1990 or Nearest Year		2010 or Latest Year
Access and Inputs to Education and Health
School life expectancy (primary to tertiary) years	8.8	(2000)	8.9	(2002)
by Sex
Male	10.0	(2000)	9.9	(2002)
Female	7.5	(2000)	7.9	(2002)
Pupil-teacher ratio (primary)	39		30	(2011)
Diphtheria, tetanus toxoid, and pertussis (DTP3) immunization coverage among 1-year-olds  percent	43		82
by Residence
Urban	...		93	(2006)
Rural	...		88	(2006)
Urban-to-rural ratio	...		1.1	(2006)
by Wealth Quintile
Lowest	...		75	(2006)
Highest	...		96	(2006)
Highest-to-lowest ratio	...		1.3	(2006)
Physicians, nurses, and midwives per 10,000 population	...		6.7	(2004)
Physicians	...		2.1	(2004)
Nurses and Midwives	...		4.6	(2004)
Government expenditure on education as a percentage of total government expenditure	14.0	(1995)	17.9	(2011)
Government expenditure on health as a percentage of total government expenditure	4.1	(1995)	7.2	(2011)
Access to Basic Infrastructure Utilities and Services
Population with access to electricity percent	15.4	(2000)	43.6	(2009)
by Residence
Urban	...		89.7	(2008)
Rural	...		34.0	(2008)
Urban-to-rural ratio	...		2.6	(2008)
Share of population using solid fuels for cooking  percent	88.3	(2001)	83.3	(2006)
by Residence
Urban	39.1	(2001)	39.1	(2006)
Rural	94.1	(2001)	92.3	(2006)
by Wealth Quintile
Lowest	...		100.0	(2006)
Highest	...		31.3	(2006)
Population using improved drinking water sources  percent	76		89
by Residence
Urban	96		93
Rural	74		88
Population using improved sanitation facilities  percent	10		31
by Residence
Urban	37		48
Rural	7		27
Gender Equality and Opportunity
Gender parity in education
Primary	0.63	(1991)	0.86	(2002)
Secondary	0.46	(1991)	0.89	(2006)
Tertiary	0.33	(1991)	0.40	(2004)
Antenatal care coverage of at least one visit  percent of live births	15.4	(1991)	58.3	(2011)
by Residence
Urban	...		84.6	(2006)
Rural	...		37.5	(2006)
Urban-to-rural ratio	...		2.3	(2006)
by Wealth Quintile
Lowest	...		17.7	(2006)
Highest	...		84.1	(2006)
Highest-to-lowest ratio	...		4.8	(2006)
Antenatal care coverage of at least four visits  percent of live births	8.8	(1996)	29.4	(2006)
by Residence
Urban	...		51.9	(2006)
Rural	...		26.0	(2006)
Urban-to-rural ratio	...		2.0	(2006)
by Wealth Quintile
Lowest	...		11.0	(2006)
Highest	...		60.0	(2006)
Highest-to-lowest ratio	...		5.5	(2006)
Gender parity in labor force participation (Aged 15 and over)	0.88		0.92	(2011)
Percentage of seats held by women in national parliament	6.1		33.2	(2012)

In the next blog post, I will share information about the third pillar of inclusive growth (stronger social protection).