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Social Protection against Crises in Nepal: Some Challenges

UNESCO-ICSSR Joint WORSKSHOP ON SOCIAL PROTECTION IN South Asia. Social Protection against Crises in Nepal: Some Challenges. Bishwa Nath Tiwari Professor, Tribhuvan University, Nepal New Delhi 18 – 19 March 2010. five sections. Background - why social protection

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Social Protection against Crises in Nepal: Some Challenges

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  1. UNESCO-ICSSR Joint WORSKSHOP ON SOCIAL PROTECTION IN South Asia Social Protection against Crises in Nepal: Some Challenges Bishwa Nath Tiwari Professor, Tribhuvan University, Nepal New Delhi 18 – 19 March 2010

  2. five sections • Background - why social protection • Effects of recent crises • Coverage of social protection in Nepal • Challenges to manage emerging risks • Suggestions/recommendations

  3. PART I WHY SOCIAL PROTECTION

  4. Apart from income and human poverty, exclusion and vulnerability are the important poverty dimensions in Nepal

  5. Spatial Exclusion:HDI varies widely from 0.435 to 0.602 Spatial Exclusion:CDR moves to 3rd position when Kathmandu is excluded

  6. Spatial and Social Exclusion:Women of remote areas have lowest level of HD.

  7. Social Exclusion: Even among the C/E of Tarai, the HDI varies high, from 0.383 to 0.625; therefore social protection is necessary

  8. Education: a significant driver - An improvement in the education of the excluded can bring a significant change

  9. PART II RECENT RISKS & THEIR IMPACT

  10. 4 recent risks/crises • Maoist conflict • Three F’s • Fuel • Food • Financial crisis

  11. effects of Maoist conflict

  12. insecurity holds back human development

  13. Effects of Food & Financial Crises • Fuel and Food crisis • macro effects – increased prices of food grains – almost 50% of rice, legumes • micro effects – affected families with reduced access to food • Financial crisis • Depreciation of Nepali Rs • Increase in remittances in the beginning but now the rate of increase decreased.

  14. PART III SOCIAL PROTECTION IN NEPAL

  15. social insurance • It is the most important component • Pension • Gratuity • Provident fund • Others • Beneficiaries – civil service holders, army, police, teachers, corporation, and to a limited extent in private sector (around half a million)

  16. social assistance • Senior citizens • Single women, widow • Dalits • Indigenous people

  17. coverage of social assistance, 2008/09

  18. public expenditure on social protection

  19. percent share of SP programmes in total SP expenditure, 2002/03

  20. impact of SP expenditure on income of poor, 2002/03

  21. cost of SP vs actual expenditure (% GDP)

  22. PART IV CHALLENGES

  23. challenges for risk management • Declining indigenous risk management practices • Limited and scattered coverage of SP • Inefficient targeting • Limited fiscal space • Revenue generation • Expenditure management • ODA • Budget deficit

  24. inefficient targeting • 75 per cent of elderly allowance was being used by non-poor households, • 72 per cent of widow’s allowance was going to non-poor single women. • NRs 3.5 billion could have been saved in 2008/09 if the scheme had been targeted only to poor

  25. inefficient targeting • more than 50 per cent of those receiving scholarships were from better-off households (top three wealth quintiles), • 64% Dalits receiving scholarships came from poorer households, and • Dalit scholarship scheme is targeted more effectively than girls’ scholarship scheme.

  26. fiscal space: government revenue and expenditure (% of GDP)

  27. fiscal space - expenditure management • Inter-sectoral – expenditure on social sector is one-third of the total development budget • Intra- sectoral allocation • There is some possibility of generating resources for social protection

  28. fiscal space: ODA contribution

  29. fiscal deficit

  30. PART V CONCLUSION AND RECOMMENDATION

  31. conclusion • Social protection is an investment • Poor, excluded and other vulnerable groups must be protected • Despite limited fiscal space, SP is affordable • It is the political will which is more important than resources

  32. Recommendations:Government • Implement a comprehensive social protection programme. • Devise self-targeting mechanism • Dialogue with private sector to extend measures • Extend to informal sector • Maintain macroeconomic stability • Encourage indigenous practices and diversify food crops.

  33. Recommendations:donors • UN agencies needs to work as “One UN” and pool their resources • Honour the commitments made at Monterrey and other international forums regarding ODA • Disburse as per the commitments

  34. Recommendations:private sector and civil society • Create decent employment opportunities • Implement social protection mechanism

  35. Thank You !

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