Nepal third poorest in S Asia

KATHMANDU, MAR 9: 

Demystifying the popular myth that Nepal is the poorest country in South Asia, a recent World Bank report revealed that it is third poorest country in the region.

“From being the poorest country in 1990, Nepal has improved its position to be the third poorest ahead of Bangladesh and India in South Asia,” according to the World Bank global poverty estimates that monitors trends and progress towards achieving Millennium Development Goals (MDGs).

Nepal moved ahead of Bangladesh in 1999 and India in 2008, it said, adding that the country has achieved MDG-1 — several years ahead of 2015 — percentage reduction in extreme poverty line of $1.25 purchasing power parity (PPP) that is used to calculate how much money would be needed to purchase the same goods and services in two different countries.

Within the South Asia region, Bangladesh is the poorest country, with 46.6 per cent of its population living under $1.25 a day, according to the report. “India has 37.4 per cent extreme poor, and with 33.9 per cent Nepal becomes third poorest, whereas Pakistan has 21 per cent, Bhutan has 9.3 per cent and Sri Lanka has 5.6 per cent of the population living under the extreme poverty line of $1.25 per day,” it added.

Though South Asia has progressed in addressing extreme poverty, it is still home to most of the developing world’s poor as about 571 million people — accounting for more than 44 per cent of the developing world’s poor — survive on less than $1.2-a-day. International poverty line is used to track MDG 1 — Eradicate Extreme Poverty and Hunger — that sets the objective of halving the proportion of people living with less than $1.25-a-day between 1990 and 2015.

The new internationally comparable poverty line estimate using $1.25 per-capita per day poverty line is very close to the new poverty estimate of 25.2 per cent using national poverty line closing the gap between national and international poverty lines. Estimates of the percentage of poor for 2010-11 almost coincides in 2010-11 at around 25 per cent by using either new national poverty line of Rs 19,261 per capita per year or international poverty line of $1.25 (2005) PPP.

However, with the higher $2-PPP per-capita per day, poverty fell only by a quarter to 57.3 per cent, said World Bank that has since the 90s started producing global poverty estimates. In order to guarantee consistency of estimates across countries, poverty is assessed using a common yardstick — the international poverty line — which is currently set at $1.25 per capita per day.

Moreover, to account for differences in cost of living, international poverty line is converted to each country’s local currency using purchasing power parity. The recent World Bank global poverty estimates update has assessed poverty using two internationally comparable poverty lines — $1.25 and $2 per capita per day. Both international poverty lines are converted to local currency using the latest 2005 PPP exchange rates.

Source: THT