A national crisis caused by the April 25 earthquake and its aftermath has pushed an estimated one million people below poverty line, a Nepal government report has revealed.
Presenting the findings of the Post-Disaster Needs Assessment (PDNA) report on Saturday, National Planning Commission Vice-chairman Govinda Raj Pokharel said it was estimated that the poverty-level would go up by more than 2.5-3.5 percent.
As per the Human Development Report (2014), the poverty prevalence in Nepal is 23.8 percent.
The 7.9 magnitude earthquake on April 25 rocked as many as 36 of the 75 Nepali districts and among them 14 are worst hit where 8,800 people were killed, thousands injured and an estimated one million residents displaced.
The devastating quake and aftershocks damaged assets and properties valued at $5.13 billion (Nepalese Rs.513 billion), and the loss in terms of foreign earnings in different sectors is to the tune of $1.88 billion, the report said
The PDNA states that Nepal needs an estimated $6.66 billion, or nearly one-third of the country’s Gross Domestic Product.
The report will be tabled before the donor community at an international conference on June 25 here to collect resources for the rebuilding and reconstruction efforts.
Over the last three decades, Nepal had been registering fast improvement on the Human Development Index.
"The earthquake has affected agriculture, education, water and sanitation, and health, the crucial elements of human development. These people will turn poor because of loss of houses; income-generating opportunities; productive assets such as seeds and livestock; and durable assets such as assorted household items ranging from basic kitchen utensils to jewellery," the report said.
"This has exposed the pitfall of the poverty reduction drive launched by the government — ‘The high degree of vulnerability’," says a World Bank report, which was extended to the National Planning Commission to supplement the Post Disaster Needs Assessment.
The districts ravaged by the earthquake are not the poorest in the country.
Around 26.5 per cent of the population residing in quake-affected rural areas are categorised as poor. This figure is equivalent to national poverty rate.
On the other hand, only 9.7 per cent of the population living in quake-affected urban areas live below the poverty line. Nepal’s poverty rate stood at 24.8 per cent in 2013.
It means that around a quarter of the population in that year was living on less than $1.25 a day. But if the international poverty line of $1.25 a day was raised to $2 a day at that time, 57.3 percent of the population would have been categorised as poor.
"What this means is that a large proportion of Nepali households are just a sickness, a bad monsoon or natural disaster away from slipping back into poverty," says the World Bank report.
Considering this, the earthquake will end up pushing 700,000 to 982,000 people (2.5 to 3.5 percent of the population) into poverty in 2015-16, the report added.
According to the report, of the people who fall back into poverty, roughly 50 to 70 percent are likely to hail from rural central hills and mountains where overall vulnerability was very high prior to the earthquake.
"The earthquake is likely to have obliterated all these livelihood channels, particularly for those with limited access to other forms of assets and credit markets," it says.
Also, the need to rebuild their own houses is likely to keep many away from the labour market, leading to slowdown in non-farm activities.