ADB_book_18 April.qxp - Himalayan Document Centre - icimod

Asian countries except Bangladesh and Pakistan(UNDP 2004). The human poverty index in ruralareas (42.0) is significantly higher than that in urbanareas (25.2). The incidence is most pronounced inthe Mountains (49.8), followed by the Terai (39.6)and Hills (38.8).The human empowerment index (HEI), whichis a composite index of social, economic andpolitical indicators, is 0.463 across the country,indicating a low level of empowerment. The level ofeconomic development for the country is 0.337which is below the social empowerment level of0.406, while political empowerment stands at 0.646.Among the regions, the Terai has a better HEI value(0.476) than the Hills (0.451) or Mountains (0.359); ahigher economic empowerment index (0.392compared with 0.310 and 0.236); and higher politicalempowerment index (0.674, compared with 0.568and 0.526). The economic empowerment index ofthe Terai is 16% higher than the national average.However, the social empowerment index is highestin the Hills (0.476), followed by the Terai (0.362) andthe Mountains (0.315).The HEI for urban areas is 0.620 compared with0.439 for rural areas. Urban areas surpass rural areasin all three dimensions of human empowerment. Forinstance, social empowerment in rural areas (0.372)is just 60% of that in urban areas (0.604). In terms ofeconomic empowerment, the value for rural areas is0.304, which is about 59% that of urban areas (0.518),due to higher per capita income and better access toeconomic infrastructure and employmentopportunities. The per capita income level in ruralareas is less than half the level in urban areas. Therural–urban disparity in political empowerment isless pronounced. The political empowerment scorein urban areas (0.737) is only 15% higher than that inrural areas (0.642). The overall HEI value is highest inthe central development region (0.497), decreasingin other development regions towards east and west.SummaryThe level and intensity of poverty are closely linked tothe pace and pattern of economic growth in urbanand rural areas and the income generatingopportunities associated with such growth. Ruralpoverty is worse, primarily because agriculturalgrowth—the primary source of income andemployment generation in the rural economy—hasstagnated in per capita terms over the past fewdecades. Even within rural areas, the poorersegments of the population have less access to fertileland, irrigation, modern inputs, credit, and marketingand road infrastructure. Similarly, a key determinantof the level and intensity of both income and humanpoverty is the limited or nonexistent access to basicsocial and economic infrastructure. The rural areasare badly underserved in terms of quality andcoverage of basic education, healthcare, drinkingwater, roads, and access to other infrastructure andmarkets.Poverty is also closely related to the degree ofsocial, political, and economic inclusion orexclusion. Women and ethnic groups by and largeare left out of the mainstream of developmentbecause they lack voice, empowerment,representation, and access to economicopportunities and resources. Similarly, remotedistricts further away from centers of power andinfluence are the most neglected. Another keydeterminant, which cuts across and exacerbates theimpact of these factors on the poverty pattern, isweak governance, which includes ineffectivegovernment, poor resource allocation, weakimplementation and service delivery performance,and corruption and leakages, among other factors.LivelihoodsMajor ActivitiesThe living condition of the people of Nepal isdetermined by the amount and type of resourcesavailable and by the ways the resources are utilized.Most people still depend on environmental resourcesfor securing livelihoods. The means of livelihood isgenerally related to employment opportunities,which are the outcome of investment anddevelopment efforts in utilizing the resources.Employment is linked to the process of development.The livelihood of people is reflected through theemployment structure and the proportion of peoplegainfully employed in different economic activities.It is evident that there was a gradual shift fromtraditional agriculture to non-agricultural sectorsbetween 1991 and 2001, the most recent year forwhich reliable statistics are available (Table 2.31).The agriculture, forestry, and fishery industry isthe largest in terms of employment in each region—the Mountains, Hill, and Terai—with the highestproportion (81%) in Mountain areas (Table 2.32).The major industries are conventionallyreclassified into three broad production sectors:primary, secondary, and tertiary. The primaryproduction sector includes agriculture, forestry, andfishery. The secondary sector comprises mining andquarrying and manufacturing and construction. Thetertiary sector consists of electricity, gas and watersupply; wholesale and retail trade; transport, storageand communication; finance and business services;personal and community services; and others. Thelatter two sectors combined can also be referred asChapter 2: Rural Environment, Poverty, and Livelihood23