Nepal Human Development Report 2020

Nepal Human Development Report 2020
Beyond Graduation: Productive Transformation and Prosperity

National Planning Commission has been publishing the Nepal Human Development Report since 1998, with the focus shifting considering the needs of the country. The Nepal Human Development Report 2020: Beyond LDC Graduation: Productive Transformation and Prosperity is the latest in series since its first publication in 1998. The recently published report has focused on how Nepal could meaningfully advance towards sustainable human development at a faster pace.

The report uncovers inequalities across Nepal, particularly within some provinces, denoting a wide variation in productive capabilities and opportunities. The report also suggests narrowing these gaps with a more radical strategic shift in both the supply and demand side of the economy, specifically focusing on complementary investment in empowering people through voice and choice, as well as the accountability of all levels of decision-making towards an empowerment agenda.

The report also alerts that in the post-graduation era, Nepal faces potential export losses and erosion in concessional aid, although reductions may not be very high in the short to medium term. Other risks may stem from less favorable bilateral aid terms and the phasing out of some United Nations mechanisms and other supports. A very robust transitional strategy for graduation is required to help minimize risks and maximize gains. The COVID-19 pandemic does pose a big challenge to overall human development in Nepal. For the first time in 30 years, the progress on HDI is likely to be negative.

As per the report Nepal’s national HDI score stood at 0.587 in 2019, which puts the country in the medium human development category. Its score in urban areas (0.647) surpasses that of rural areas (0.561) with a large urban-rural gap. Higher per capita income and better access to education and health services in urban areas explain such striking disparities. The HDI value also varies across provinces. As expected, Bagmati province scores the highest (0.66), followed by Gandaki province (0.62). Province 2 scores the lowest (0.51) followed by Karnali (0.538). This indicates the uneven distribution of development outcomes across different parts of the country.

Nepal’s overall human development loss due to inequality is below the loss experienced by most South Asian countries, except Bangladesh, the Maldives and Sri Lanka. Nepal is behind all South Asian countries in terms of inequality in income, however, having among the highest disparities in the region despite relatively lower inequality in health and education.

The female HDI value for Nepal is 0.549, compared to 0.619 for males. It suggests that the degree of gender disparity in human development in Nepal as a whole is not very high, with the female HDI value only 11.3 percent lower than that of males. Nepal’s GDI value reached 0.886 in 2019 from 0.75 in 1995, an increase of 18 percent.

The HDR 2020 report reveals that Nepal’s 2019 Gender Inequality Index (GII) value is 0.479. This is consistent with the 2018 value of 0.476 reported in the 2019 global Human Development Report. It indicates a fairly moderate level of gender inequality in Nepal. Similarly Nepal’s score on customs administration is the lowest and on timeliness is highest, but it is far from the best-performing country on any of the indicators. This shows that Nepal is inefficient in trade logistics.

The report appears at an unprecedented time, when not only Nepal but the entire world is struggling with the COVID-19 pandemic, which has slowed development momentum globally, with a high risk of fallback from a high growth trajectory. The pandemic requires a fresh review of the graduation plan. With sharp deceleration in economic growth, reductions in human assets and intensification of economic vulnerability, Nepal faces a changed situation. This necessitates a closer review of the scheduled graduation plan. Enhancing socioeconomic and environmental resilience by reducing vulnerabilities will likely be a crucial part of the transitional strategy.

The report presents a rigorous analysis of the socio-economic spectrum of the country, using available data across the country and across time, including a province-wise analysis. The findings have shown that some provinces are further behind than others in human and overall development.

COVID-19 crisis causes inadequate food consumption and food insufficiency among households in Nepal

WFP in cooperation with the Ministry of Agriculture and Livestock Development has published a survey report on the Impact of COVID-19 on Households in Nepal. This is the second round of the mVAM Household Survey conducted in August 2020. First round of the survey was conducted in April 2020. The survey report reveals that food insecurity across the country has decreased slightly compared to April 2020; however it remains higher than 4 years ago. According to the report 20.2 percent of the households had inadequate food consumption and 4.7 percent of households had poor dietary diversity. Overall, 11.8 percent of households adopted at least one negative coping strategy to address food shortages and about 6.7 percent of households reported that the food they had in stock was insufficient to meet their needs.

As per the report, in the first round of mVAM Household Survey conducted in April 2020, 23.2 percent of households had inadequate diet. Similarly, 7.2 percent of households had poor dietary diversity and around 45.9 percent of children between 6-23 months of age did not meet minimum dietary diversity in April.

Survey findings reveal that Sudurpaschim and Karnali provinces have the highest proportion of food insecure households, with 23.8 and 23.3 percent households consuming inadequate diet respectively. Similarly, inadequate food consumption was also relatively high in Province 2, 22.1 percent.

Report reveals that the COVID-19 crisis has continued to negatively impact livelihoods of Nepalese households, with 11 percent of households reporting job loss and 31.2 percent a reduction in income. Income reduction was the highest in Province 1 (40.5%), followed by Sudurpaschim (38.8%) and Province 2 (38.3%).

Overall, job loss and income reduction caused by the COVID-19 crisis affected household food security: inadequate food consumption and food insufficiency were more common among households that reported job loss and income reduction, compared to households that did not experience job loss and income reduction.

More than 20 percent of the respondents of the survey said that increase in food price were their major concern during the COVID-19 crisis, followed by shortage of food (16.3%), reduction in income (15.5%) and lack of work opportunities (14.8%).

The second round of the nation-wide household survey of its kind confirms continued pressure on food security, livelihoods and incomes of Nepalese households.

World Bank’s US$10.85 Million additional grant to support education sector in Nepal

The Government of Nepal and the World Bank signed a financing agreement for an additional grant of US$10.85 million to the School Sector Development Program (SSDP) to maintain access to basic education and continued learning for children amid the COVID-19 crisis. The government’s SSDP is a sector-wide program supported by IDA credit of US$185 million, together with support from Asian Development Bank, European Union, Finland, Global Partnership for Education (GPE), Japan International Cooperation Agency, Norway, USAID, UNICEF and REACH Multi-Donor Trust Fund administered by the World Bank. The program aims to improve the quality, equitable access, and efficiency of basic and secondary education in Nepal. As per World Bank Nepal, The additional grant from the GPE COVID-19 Accelerated Funds will contribute to the implementation of the Ministry of Education, Science and Technology’s COVID-19 contingency plan to mitigate and respond to the potential impacts of the pandemic on the education sector. The agreement was signed by the Joint Secretary of the Ministry of Finance, Mr. Shreekrishna Nepal on behalf of the Government of Nepal and by the World Bank Country Director for Maldives, Nepal and Sri Lanka, Mr. Faris Hadad-Zervos..

Potentially dangerous glacial lakes in Nepal

Himalayan glaciers are vulnerable to the warming climate and have been melting and retreating at unprecedented rates since the mid-20th century, impacting flow regimes in major river basins. These changes lead to the formation of new glacial lakes as well as the expansion of existing glacial lakes, increasing the risk of glacial lake outburst floods (GLOFs).

Recorded information on GLOF events shows an increment in the frequency and magnitude of these disasters in recent decades. If current warming trends and unchecked developmental activities continue, the occurrence of GLOFs and other glacial hazards could escalate, adversely impacting water availability.

ICIMOD and UNDP Nepal have prepared a comprehensive inventory of glacial lakes and identified the potentially dangerous glacial lakes in major river basins of Nepal, including the upper reach of these basins from the Tibetan Autonomous Region of China.

According to the report historically, GLOFs have had catastrophic consequences in Nepal – directly and through cascading impacts (landslides, erosion, and sedimentation) – leading to the loss of lives and livestock and damaging infrastructure and transportation routes. Twenty-six GLOF events have been recorded in Nepal since 1977 and 11 of these have had transboundary impacts.

The study found 3624 glacial lakes located in the three basins, of which 2070 lakes are in Nepal, 1509 lakes in the Tibet Autonomous Region, China and 45 lakes in India. As many as 1410 lakes are larger than or equal to 0.02 km2 which are considered large enough to cause a glacial lake outburst flood (GLOF).

Study identified Forty-seven glacial lakes as potentially dangerous glacial lakes (PDGLs) based on the following criteria: (i) characteristics of the lakes and their dams; (ii) the activity of the source glacier; and (iii) morphology of the surroundings.

According to ICIMOD the number of glacial lakes in the Koshi basin has increased from 1,160 in 1977 to 2,168 in 2010; their total area has increased from 94.4 km2 to 127.6 km2 over this period. The number of lakes has increased by 86.9% and the total lake area by 35.1%. The number of glacial lakes in the Koshi basin decreased from 2,119 in 2000 to 2,087 in 2005 and to 2,064 in 2015. The number of glacial lakes has increased in the Gandaki basin, from 377 in 2000 to 405 in 2005, and 432 in 2015. The increase in the number of glacial lakes is indicative of the rapid melting of glaciers and formation of new lakes, particularly those dammed by glacier ice and moraines. The glacial lakes in the Karnali basin increased from 1,105 in 2000 to 1,204 in 2005 but decreased to 1,128 in 2015.

Out of 3,624 lakes mapped, 1,410 lakes are equal to or larger than 0.02 km2. This is considered large enough to cause damage downstream were the lake to rupture. This potential is heightened if the lakes are associated with a large and retreating glacier. Of the 1,410 lakes, 1,358 lakes were removed, based on the damming condition, the activity of the source glaciers, and their surroundings. The remaining 52 lakes were analysed further to identify potentially dangerous glacial lakes. Eventually, 47 glacial lakes were identified as potentially dangerous. These include 42 lakes in the Koshi, 3 in the Gandaki, and 2 in the Karnali basins. With respect to political boundaries, 25 PDGLs are in the territory of the TAR, China, 21 are located in Nepal, and one PDGL is in India.

According to the report the danger levels of the PDGLs are categorized into three ranks, with Rank I being the highest:

Rank I – Large lake and possibility of expansion due to the calving of glaciers; lake close to the loose moraine end; no overflow through the moraine; steep outlet slope; hanging source glacier; chances of snow and/or ice avalanches and landslides in the surroundings impacting the lake and dam.

Rank II – Confined lake outlet; lake outlet close to compact and old end-moraine; hanging lake; distinct seepage at the bottom of end-moraine dam; gentle outward slope of moraine.

Rank III – Confined Lake Outlet; gentle outward slope of the dam; large lake but shallow depth; moraine more than 200 m wide; old and compact moraine.

Based on this, of the 47 lakes reviewed, 31 lakes were classified as belonging to Rank I, 12 lakes as Rank II, and four lakes as Rank III.

 In the past the GLOF resulted in an estimated economic loss of US$ 1.5 million, destroyed infrastructure including the Namche hydropower plant, and caused a few casualties. Before that, in 1977, a GLOF was recorded in Dudh Koshi, causing 2‒3 casualties. GLOFs can also have transboundary effects. The Zhangzangbo–cho (Ciremacho Lake) in the TAR, China, was breached in July 1981 and destroyed the Friendship Bridge on the China‒Nepal highway, and the intake dam of the Sun Koshi hydropower station, causing serious economic losses in Nepal. Damages were estimated US$ 3 million at the time.

GLOF events that have caused damage in Nepal

S.No.DateRiver basinLocation
11980-06-23TamorNagma Pokhari
21981-07-11Bhote KoshiCirenmacho Lake Zhangzangbo Valley
31985-08-04Dudh KoshiDig Tsho
41991-07-12Tama KoshiChubung
51998-09-03Dudh KoshiSabai Tsho (Tam Pokhari)
62003-08-15MadiKabache Lake
72004-08-08MadiKabache Lake
82016-07-05Bhote KoshiTAR, China
92017-04-20Barun ValleyNear Lower Barun

‘Sales of Energy’-An Upcoming Challenge

Nepal Electricity Authority (NEA) celebrates 35 years of its service of power production, transmission and distribution. NEA claims the year 2019/20 as one more successful year in supplying continuous power to its consumers and maintaining sound financial health. After tumultuous years of losses NEA is now a profit making organization since 2016/17. Its system loss has come down to 15.27% from 25.78% in 2016. According to annual report of NEA for the year 2019/20 total population with access to electricity infrastructure has reached 86% of the total household. Total number of electricity consumers increased by 7.8% from 3.91 million to 4.22 million during 2019/20. These data does not include consumers under community rural electrification, which is serving about 0.57 million consumers in rural areas. Among the entire electricity consumers domestic consumers share the largest category with 93.24% share. Industrial consumer has a share of just 1.33% but has the highest share of 45.31% in revenue generation and 35.83% as sales share. Domestic consumer has 35.27% and 44.34% share in revenue and sales.

Two new power plants, namely Upper Trishuli 3A (60 MW) and Kulekhani III (14 MW) is added to the system contributing an increase in electricity generation. NEA’s hydropower plants including small power stations generated a total of 3021 GWh of electricity in FY 2019/20. It is an increase by 18.57% over the generation of 2548 GWh in FY 2018/19. There was a decrease of 38.55% energy import from India, 1729 GWh in 2019/20 and 2813.07 GWh in 2018/19. The contribution of energy imported from India contributed 22.33% out of total available energy. Total installed capacity of NEA is 1332 MW, including 14 major hydropower stations (563.15 MW), 17 small hydro power plants (14.244 MW), 23 small hydro power plants (isolated) (4.536 MW), 2 thermal power plants (53.41 MW) and 3 solar power plants (1350 kW).

According to reports from various directorates of NEA, Covid-19 pandemic and the subsequent lockdown hampered in its regular growth. The effect of the lockdown has caused lesser revenue from the industrial sector.

 Since 2016/17 there was continuous decrease in load shedding. Before this we were forced to live in darkness with hours of load shedding. During the last four years Nepal has seen brighter times, helping countries economy to go forward. At the same time, it has also helped a great deal in saving valuable foreign currency reserve of the country which has been used to import batteries, inverters, solar panels and additional fossil fuels for generators.

As per the report, fulfilling the energy demand was the biggest challenge of NEA in the past. As per current status sale of energy is going to pose a serious challenge for NEA in coming year as 1000 MW of generation is to be commissioned by the year 2021 alone.

75% Population drinking contaminated water

Central Bureau of Statistics (CBS) conducted a national level survey, Nepal Multiple Indicator Cluster Survey 2019 (NMICS 2019) from May to November 2019. It was a part of sixth-round of the global MICS household program.

NMICS 2019 provides valuable information and the latest evidence on the situation of children and women in Nepal. The survey presents data from an equity perspective by indicating disparities by sex, province, location, education, household wealth, functional limitation and other characteristics.

NMICS 2019 interviewed 12,800 households, of which 14,805 were women aged 15-49, 5,501 were men aged 15-49, 6,658 were mothers/caretakers of children under-five years, and 7,792 mothers/caretakers of children 5-17 years. The survey also performed water quality testing for E. coli and arsenic in 2,536 households.

Survey report says 68.7% population of age group 15-24 years are living happily. Similarly 63.4% population of age group 15-49 years said they are living happily. 97.1% of population use improved source of drinking water. 75.3% of population using improved source of drinking water tested with E. coli contamination, out of this 89.1% was in Karnali Province. Similarly, 90.3% of women and men of age group 15-24 years are able to read a short statement about everyday life. Out of this only 70.6% of women in Province 2 are able to read and write. 89.9% of total population has access to electricity with Karnali Province counting the least, 44.9%.

CBS claims that the findings of the survey will be used to monitor 15th Five Year Development Plan (2076/77-2080/81) of Government of Nepal, establish Multidimensional Poverty Index (MPI) 2020. It will also contribute to the voluntary national report (VNR) as well as the UN Secretary-General’s report to UN general assembly on the achievements of Sustainable Development Goals. The survey was conducted with the technical and financial support from United Nations Children’s Fund (UNICEF) Nepal.