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Addressing Social Exclusion: Reducing Poverty in Nepal

Social Exclusion
Despite the overwhelming loss due to earthquakes in 2015 and a near total economic seizure due to the halt in its cross-border trade with India in January 2016, Nepal reported one of the fastest poverty decline rates in the world particularly between 2003-2004 and 2010-2011. Between 1995–1996 and 2010–11, there was a 2.2 percentage point average yearly drop in the absolute poverty rate, bringing it to its present level of 25.2%. The significant increase in remittances sent by hundreds of thousands of Nepalis who have been working abroad since the late 1990s is the primary cause of the improvements in living conditions and the elimination of poverty and social exclusion. Both the quantity and the number of households in Nepal that receive remittances increased concurrently. From 1.3% of GDP in 1995 to 23% in 2010, remittances have grown in magnitude, and as of now, they account for 29% of GDP. The typical household income is now 16% remitted, up from 6% in 1995–1996.

The Complex Relationship Between Social Exclusion and Poverty

However, as evidenced by the low level of human development indices, inequality due to social exclusion demonstrates that poverty in Nepal also has inextricable links to a lack of access to the very resources required for overcoming it. A Hindu-dominated society, it has excluded four groups of people — Dalits, Madheshi or Terai people, ethnic/indigenous people and women —- from the contemporary development process be it political, economic or socio-cultural exclusion. Here are four ways that social exclusion and poverty interconnect in Nepal.

4 Facts About How Social Exclusion and Poverty Interconnect in Nepal

  1. Disparities in the prevalence of poverty in Nepal and measures of human development are one way that caste-based social exclusion takes shape. The highest caste group, the Brahmins, has a significantly lower poverty rate than the lower caste groups, who lack opportunities in all spheres of life (cultural, social, political and economic). For instance, the literacy rate for the lowest caste is barely half of that for the upper caste groups with the life expectancy of the latter being six years more than the lowest caste at 51 years. Consequently, the rate of absolute poverty is 15 times higher in the lowest-caste groups than the national average.

  2. The most glaring example of social exclusion based on ethnicity is poverty, which affects ethnic minorities like the Limbus, Tamangs, Magars, Tharus, Musahars and indigenous groups much like Chepangs and Raute more frequently than the general population as a whole. However, the Newars, who mainly inhabit the Kathmandu valley and other urban areas, have the lowest rate of poverty.

  3. The Madhesi people have continuously experienced marginalization and exclusion from political, administrative, governance, policy development and decision-making processes. This has resulted in continual issues with citizenship, identity, language and their own home territory. The Madhesi people experience extreme discrimination and have almost forgotten what it is to “belong to this nation.” Paradoxically, though, the Madhesi and Terai (referred to as the main economic hub of Nepal by Gaige (1976) community’s exile from the national mainstream has been detrimental to the nation’s steady economic growth.

  4. The situation is even more alarming for women from the lowest castes, where the literacy rate is only 7% and other social indices also show low scores. Due to their low position within their own group, Dalit women are even more disadvantaged. For instance, estimates have indicated that almost all Dalit women are living below the official poverty threshold. Discrimination, indifference and violence have links to exclusion.

 Actions to Promote Social Inclusion

The Muluki Ain Civil Code of 1854 made the extremely rigid and hierarchical caste structure legal and gave the Adivasi Janajatis (non-Hindu indigenous ethnicities) a middle-rank position within the system. In 1963, Nepal legally outlawed caste-based discrimination. The government has taken action to increase Dalit involvement in local and national governance mechanisms through legislation and initiatives. Additionally, following the political shift in 2007, the inclusion of women continued to rise.

Even though the Panchayat rule put little effort into the integration of women, women’s representation in politics increased significantly. With the rise of modern under-grounded parties, the sixth amendment to the law code in 2033 B.S. granted some rights to women. By prohibiting child marriage and polygamy, Nepal made changes to the law governing women’s property, Anshabanda (the division of property among/among those legally entitled to it), women’s trafficking, prostitution and rape, among other things. A provision of 5% women candidates for parliamentary and 20% women representatives from each ward level became obligatory alongside the provision of at least 33% of women participation in legislative parliament.

The Constitution attempted to end all forms of discrimination based on national origin, race, caste, tribe, sex, economic circumstance, language, religion, ideology or any other basis, and it guaranteed equality before the law to all Nepalese citizens. Discrimination is illegal, and those who are the victims of it may seek restitution. By gathering better-disaggregated statistics and information on the effects of various forms of discrimination on the rights of different groups, Nepal devoted itself to combating inequality and discrimination. As a result, it developed suitable laws, policies and programs.


With regard to the domestication of the Convention and its successful application, Nepal had made a number of remarkable advancements, most notably through the adoption of a federal, democratic and republican Constitution in September 2015 and the establishment of local governments. Indicators of poverty and human development have been improving nationally, although there are still some disparities based on caste, ethnicity, location and gender. Although the government is succeeding in its mission to end poverty by addressing and reversing social exclusion, more is necessary to remove prejudice towards these communities on a societal level.

– Karisma Maran
Photo: Flickr