Broad regional inequalities in human development and productive abilities persist, but these seem to be narrowing over time, says Nepal Human Development Report 2014.
Nepal’s 2014 Human Development Report, entitled Beyond Geography Unlocking Human Potential, released recently, says the pace of economic growth needs to accelerate, and be accompanied by large scale employment generation and enhanced productivity in sectors such as high-value agricultural niches, industry and infrastructure development.
The following is the overview of the report:
Overview
Nepal’s 2014 Human Development Report assesses productive abilities at different interrelated levels by using the available national data. It indicates the trends in spatial inequalities and outlines the prospects of unlocking the human potential and achieving high-quality inclusive growth.
Nepal Human Development Report 2014 comes at a time when the country is making efforts to move out of an extended political transition and has resolved to accelerate its graduation from a least developed to a developing country by 2022. The importance of inclusive growth and human development to sustain peace, achieved after a long conflict, has been deeply ingrained among all stakeholders. The agenda for the years to come is high-quality growth and equitable development in its broadest sense.
The criteria for graduating from the least developed country category include achievements in per capita gross national income (GNI), the Human Assets Index and the Economic Vulnerability Index.1 Increasing the growth rate from the current level of below 4 percent is indispensable, without compromising the essential quality of inclusiveness. At the same time, Nepal needs to maintain recent gains on some of the sub-indicators for the human assets and economic vulnerability indexes, and address shortfalls on some others.
With this background, the central theme for the present Nepal Human Development Report—the spatial dimensions of productive abilities—was developed jointly with the National Planning Commission and other relevant stakeholders. The report aims to assess productive abilities at different, interrelated levels. The measures of abilities developed in this report suggest how much capacity the Government has to accomplish high and inclusive growth in the coming years and indicate the extent to which current capabilities are being translated into measurable outputs.
The report presents a rigorous statistical analysis across space and time, using the available national data. Since there is currently no single, universally accepted definition or measure of productive ability, the report asserts that this can be reflected, directly or indirectly, by a number of indicators. The large statistical database created in the process, it is hoped, may be used by the Government and other development stakeholders to target policies and rationalize budget allocations to sectors, regions, districts and socio-economic groups.
Structure of the report
The report is organized in six chapters. Chapter 1 introduces it in the context of previous
Nepal Human Development Reports and defines, for analytical purposes, nine eco-development regions, instead of the 15 conventional ones.
Chapter 2 presents the standard human development indexes at the district level, for the first time in a decade; at the regional level; and, data permitting, at the level of various social groups. The indexes include the well known Human Development Index (HDI) and its variations including caste/ethnic and gender dimensions, as devised by the global Human Development Report. All of these emphasize looking beyond income as an indicator of development. Their values reflect the effects of past policies in strengthening human capital, which is expected to contribute positively to any indicator of productive ability.
The overall picture that emerges is that HDI values are improving, but inequalities among regions and social groups remain mostly intact, although there are signs that some of these may be narrowing. The analysis also points to specific caste, ethnic and geographic dimensions of persisting inequalities.
Chapter 3 features an innovation in measuring potential productive ability. The HDI and related indexes are essentially based on individuals. While important in their own right, these measures can be complemented by plausible indicators of productive ability that treat regions and households as units.
The chapter constructs a regional access to facilities index for each of the nine eco-development regions and analyses trends over the past two decades. The index is essentially a composite measure of the ease with which households can access certain facilities that are covered by Nepal Living Standards Survey and are critical for well-being. From a policy perspective, the index may be used to
guide resource allocations for infrastructure to make Nepal’s diverse regions more comparable
in the pursuit of inclusive growth and development.
The chapter also constructs a household well-being index for all households covered by successive survey rounds. This index is based on all information in the surveys that reflects, directly or indirectly, the overall socio-economic well-being of a household. The index is analysed along a number of dimensions, including regional, rural and urban, male- and female-headed households, and so on. Additionally, it is classified according to caste and ethnicity. It helps make the basic argument that an individual’s productive ability is significantly affected by the well-being of the household s/he comes from. Improving household well-being through appropriate policies, therefore, indirectly improves the nation’s productive ability.
The report shows that there has been no change in the ranking of regions by the regional and household indexes over time; lagging regions continue to lag. While inequalities among different social groups remain, these inequalities may be narrowing, however.
Chapter 4 estimates sectoral labour productivity as well as total factor productivity of the manufacturing sector at the regional and industry levels, on the basis of available Census and survey information. These two well-known measures of actual productivity provide a broad picture of the level of and inequalities in productivity at regional levels, and indicate the context within which individual and household productive abilities need to be appreciated. Analysis of these measures could guide policy choices, since they identify sectors and regions where productivity is already high, and that in principle may serve as engines and epicentres of growth. The report also identifies exceptional regions with a mismatch between indicators of human development and productive ability, mainly in the Eastern and Central Tarai. Rectification of the mismatch is needed in order to achieve high and inclusive development.
Chapter 5 constructs a youth ability index at the individual level for the population group aged 15-39, based on all three Nepal Living Standards Surveys. It examines trends along many relevant dimensions, with an information set much larger than that used by the HDI and related indexes. The youth ability index includes the personal characteristics of individuals, such as health, education and possible indicators of psychological well-being, albeit limited by data, and the status of the household s/he comes from.
Household capital, proxied by the well-being index calculated in Chapter 3, is included as a determinant of the potential productivity of an individual. Statistical analysis reveals a high degree of inconsistency between the potential productive ability of youth, and the type and hours of work they seem to be per-forming. To reap the demographic dividend2 of a young population, this ought to be addressed quickly.
Chapter 6 presents major conclusions and policy recommendations emanating from the analysis. It calls for pursuing policies to accelerate the narrowing of regional inequalities in human development as well as productive abilities. It urges focusing on lagging regions, expanding the reach of inclusive policies, prioritizing urban management and rural-urban linkages, and preparing for opportunities presented by the demographic dividend.
Major findings
By focusing on spatial inequalities in human development and the productive abilities of people, this report presents a picture that is both sobering and encouraging. The status quo of gaps in regional human development and productive abilities persists, but inequalities seem to be narrowing. This indicates the need to maintain, but with renewed vigour, the path of inclusive growth and development, encompassing all regions as well as socio-economic groups that have been left behind. The pace of economic growth needs to accelerate, and be accompanied by large scale employment generation and enhanced productivity in sectors such as high-value agricultural niches, industry and infrastructure development. These efforts should in part be oriented towards harnessing the tremendous vibrancy and energy of a growing population of young people.
Innovative statistical analysis combining the spatial and ethnic dimensions of productive ability makes the critical point that ethnicity, on which the current political discourse is primarily focused, has a spatial dimension. The report suggests that a fusing of the two dimensions may be relevant in setting a federal development agenda focused on a multi-pronged approach to raising productive ability and accelerating human development.
To read the complete report, please visit here.
Nepal’s 2014 Human Development Report, entitled Beyond Geography Unlocking Human Potential, released recently, says the pace of economic growth needs to accelerate, and be accompanied by large scale employment generation and enhanced productivity in sectors such as high-value agricultural niches, industry and infrastructure development.
The following is the overview of the report:
Overview
Nepal’s 2014 Human Development Report assesses productive abilities at different interrelated levels by using the available national data. It indicates the trends in spatial inequalities and outlines the prospects of unlocking the human potential and achieving high-quality inclusive growth.
Nepal Human Development Report 2014 comes at a time when the country is making efforts to move out of an extended political transition and has resolved to accelerate its graduation from a least developed to a developing country by 2022. The importance of inclusive growth and human development to sustain peace, achieved after a long conflict, has been deeply ingrained among all stakeholders. The agenda for the years to come is high-quality growth and equitable development in its broadest sense.
The criteria for graduating from the least developed country category include achievements in per capita gross national income (GNI), the Human Assets Index and the Economic Vulnerability Index.1 Increasing the growth rate from the current level of below 4 percent is indispensable, without compromising the essential quality of inclusiveness. At the same time, Nepal needs to maintain recent gains on some of the sub-indicators for the human assets and economic vulnerability indexes, and address shortfalls on some others.
With this background, the central theme for the present Nepal Human Development Report—the spatial dimensions of productive abilities—was developed jointly with the National Planning Commission and other relevant stakeholders. The report aims to assess productive abilities at different, interrelated levels. The measures of abilities developed in this report suggest how much capacity the Government has to accomplish high and inclusive growth in the coming years and indicate the extent to which current capabilities are being translated into measurable outputs.
The report presents a rigorous statistical analysis across space and time, using the available national data. Since there is currently no single, universally accepted definition or measure of productive ability, the report asserts that this can be reflected, directly or indirectly, by a number of indicators. The large statistical database created in the process, it is hoped, may be used by the Government and other development stakeholders to target policies and rationalize budget allocations to sectors, regions, districts and socio-economic groups.
Structure of the report
The report is organized in six chapters. Chapter 1 introduces it in the context of previous
Nepal Human Development Reports and defines, for analytical purposes, nine eco-development regions, instead of the 15 conventional ones.
Chapter 2 presents the standard human development indexes at the district level, for the first time in a decade; at the regional level; and, data permitting, at the level of various social groups. The indexes include the well known Human Development Index (HDI) and its variations including caste/ethnic and gender dimensions, as devised by the global Human Development Report. All of these emphasize looking beyond income as an indicator of development. Their values reflect the effects of past policies in strengthening human capital, which is expected to contribute positively to any indicator of productive ability.
The overall picture that emerges is that HDI values are improving, but inequalities among regions and social groups remain mostly intact, although there are signs that some of these may be narrowing. The analysis also points to specific caste, ethnic and geographic dimensions of persisting inequalities.
Chapter 3 features an innovation in measuring potential productive ability. The HDI and related indexes are essentially based on individuals. While important in their own right, these measures can be complemented by plausible indicators of productive ability that treat regions and households as units.
The chapter constructs a regional access to facilities index for each of the nine eco-development regions and analyses trends over the past two decades. The index is essentially a composite measure of the ease with which households can access certain facilities that are covered by Nepal Living Standards Survey and are critical for well-being. From a policy perspective, the index may be used to
guide resource allocations for infrastructure to make Nepal’s diverse regions more comparable
in the pursuit of inclusive growth and development.
The chapter also constructs a household well-being index for all households covered by successive survey rounds. This index is based on all information in the surveys that reflects, directly or indirectly, the overall socio-economic well-being of a household. The index is analysed along a number of dimensions, including regional, rural and urban, male- and female-headed households, and so on. Additionally, it is classified according to caste and ethnicity. It helps make the basic argument that an individual’s productive ability is significantly affected by the well-being of the household s/he comes from. Improving household well-being through appropriate policies, therefore, indirectly improves the nation’s productive ability.
The report shows that there has been no change in the ranking of regions by the regional and household indexes over time; lagging regions continue to lag. While inequalities among different social groups remain, these inequalities may be narrowing, however.
Chapter 4 estimates sectoral labour productivity as well as total factor productivity of the manufacturing sector at the regional and industry levels, on the basis of available Census and survey information. These two well-known measures of actual productivity provide a broad picture of the level of and inequalities in productivity at regional levels, and indicate the context within which individual and household productive abilities need to be appreciated. Analysis of these measures could guide policy choices, since they identify sectors and regions where productivity is already high, and that in principle may serve as engines and epicentres of growth. The report also identifies exceptional regions with a mismatch between indicators of human development and productive ability, mainly in the Eastern and Central Tarai. Rectification of the mismatch is needed in order to achieve high and inclusive development.
Chapter 5 constructs a youth ability index at the individual level for the population group aged 15-39, based on all three Nepal Living Standards Surveys. It examines trends along many relevant dimensions, with an information set much larger than that used by the HDI and related indexes. The youth ability index includes the personal characteristics of individuals, such as health, education and possible indicators of psychological well-being, albeit limited by data, and the status of the household s/he comes from.
Household capital, proxied by the well-being index calculated in Chapter 3, is included as a determinant of the potential productivity of an individual. Statistical analysis reveals a high degree of inconsistency between the potential productive ability of youth, and the type and hours of work they seem to be per-forming. To reap the demographic dividend2 of a young population, this ought to be addressed quickly.
Chapter 6 presents major conclusions and policy recommendations emanating from the analysis. It calls for pursuing policies to accelerate the narrowing of regional inequalities in human development as well as productive abilities. It urges focusing on lagging regions, expanding the reach of inclusive policies, prioritizing urban management and rural-urban linkages, and preparing for opportunities presented by the demographic dividend.
Major findings
By focusing on spatial inequalities in human development and the productive abilities of people, this report presents a picture that is both sobering and encouraging. The status quo of gaps in regional human development and productive abilities persists, but inequalities seem to be narrowing. This indicates the need to maintain, but with renewed vigour, the path of inclusive growth and development, encompassing all regions as well as socio-economic groups that have been left behind. The pace of economic growth needs to accelerate, and be accompanied by large scale employment generation and enhanced productivity in sectors such as high-value agricultural niches, industry and infrastructure development. These efforts should in part be oriented towards harnessing the tremendous vibrancy and energy of a growing population of young people.
Innovative statistical analysis combining the spatial and ethnic dimensions of productive ability makes the critical point that ethnicity, on which the current political discourse is primarily focused, has a spatial dimension. The report suggests that a fusing of the two dimensions may be relevant in setting a federal development agenda focused on a multi-pronged approach to raising productive ability and accelerating human development.
To read the complete report, please visit here.
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