Below the line

  • Poverty line of $1.90 per day, set by the World Bank last October, is not pertinent to the assessment of urban poverty
- Ashika Sharma & Samyam Shrestha

Mar 2, 2016-

Poverty is one of the leading buzzwords in the global economic and development discourse. The United Nation’s Millennium Development Goals (2000-2015) placed eradication of poverty and hunger at the front among its eight development goals. While the strategies for reducing world poverty is still a primary focus of the policy-makers and development practitioners, and which seemingly will continue to dominate the development discourse for quite some time, one trend that many analysts have noticed is the gradual shift in the locus of poverty from rural to urban areas—something more pronounced in developing countries, including Nepal.

Besides lower levels of income, urban poverty is often characterised by vulnerable living conditions, with limited access to healthcare, education, sanitation and other basic requirements.

Although data from various sources illustrate that Nepal has made notable progress in poverty reduction over the last 15 years, there has been an upsurge in urban poverty. According to a 2011 report of the Central Bureau of Statistics, the urban population living in poverty increased by 5.46 per cent between 2003 and 2011. 

Indeed, the overall urban population of Nepal has increased tremendously as a result of the expansion of municipalities, from 58 before May 2014 to 217 in September 2015. However, this municipal transformation aside, the urban depletion is mostly caused by the migration of the rural poor to the cities.

Urbanisation, migration and poverty

On the one hand, various studies elucidate how urbanisation helps to reduce absolute poverty as it increases the average income of people. Thus, the mobility of the rural poor to urban areas can be viewed positively. The migrants often send money back to their families, which can improve their living conditions.

 Moreover, as the economist Martin Ravallion states, the rural out-migration of the poor can also be beneficial for those who stay behind because they would have to compete less for the resources available there. However, this does not mean a change in the unequal distribution of income or relative poverty.

On the other hand, there are serious negative effects of the migration of the poor. The rural migrants who move to the cities look for employment and adequate income, but they are mostly condemned to work in low-waged jobs—therefore plunging back into poverty. Large out-migration can also lead to adverse effects on the human resources in rural communities. 

Furthermore, the absence of proper growth mechanisms has exacerbated the situation in the backcountry where poverty is centred on and prevalent among people of particular groups, forcing them to move to nearby towns and cities. The ineffectiveness or rather the lack of government policies to create lucrative jobs in rural areas, specifically targeting marginalised groups, also causes the migration.

Elusive definition of the poor

The poverty line of $1.90 per day, set by The World Bank last October, is not pertinent to the assessment of urban poverty. It overlooks the  discrepancies between the subsistence levels in the cities and on the countryside. Although the city dwellers earn more, they also spend more. One may survive with a meagre amount of money in rural areas, but they need comparatively a lot more for a similar life in Kathmandu.

Furthermore, the high inflation rate of 11.6 percent last December hit the urban poor the most. Relativity comes into play in assessing urban poverty and distinguishing the urban poor, rather than relying on the absolute poverty line. They bear little relation to local costs and realities.

A thrust at the policy level

The trend of rural-to-urban migration of the poor has contributed to reducing rural poverty in Nepal, but at the expense of the urban poor. We do not argue that urban poverty is more important than rural poverty, but do stress that urban poverty needs to be recognised and understood. Official data, including the poverty line, present a very misleading picture of urban poverty. This often leads policy-makers and development practitioners to neglect the issue of urban poverty.

The assumption that city dwellers have better income and living conditions than people in rural areas ignores the reality. Therefore, the understanding of what poverty is, who the poor are and the ways to measure poverty should be amended.

Sharma and Shrestha are researchers at Interdisciplinary Analysts, a research/consulting firm in Kathmandu

Published: 02-03-2016 08:26

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