Around 29 out of every 100 people living in Nepal are poor, with Province 2 hosting the largest number of poverty-stricken people in the country, a latest report of the National Planning Commission (NPC) says.
This poverty headcount was conducted using the brand new Nepal Multidimensional Poverty Index (MPI) developed jointly by the NPC and the UK-based Oxford University's leading centre on multidimensional poverty, Oxford Poverty and Human Development Initiative (OPHI).
This is the first time Nepal had used MPI as an official tool to measure national poverty. Until now, Nepal was using income threshold of Rs19,262 per person per year to gauge poverty. This method assumes that a person who is able to earn at least Rs19,262 per year is non-poor, because the amount is considered adequate to meet basic caloric needs and purchase essential non-food items.
Earning capacity does play an important role in reducing the incidence of poverty. Yet poverty is not the outcome of a single problem because other factors such as education and access to healthcare services, cooking fuel, electricity, improved sanitation and drinking water facilities play a crucial role in making people poor. This is where the MPI comes in, as it takes into account 10 indicators—nutrition, child mortality, years of schooling, school attendance, cooking fuel, improved sanitation, improved drinking water, electricity, flooring and roofing, and asset ownership—to measure whether people are poor. This method describes a person as poor if he or she is deprived in at least a third of 10 weighted indicators.
This method of measuring poverty is gaining prominence globally and is now embedded in the United Nations-backed Sustainable Development Goals, which, among others, aim to end poverty in all forms and dimensions within 2030.