I’d like to highlight the “Himalayan counterexample” to the trend in fiscal consolidation. Nepal, despite very low per capita income (US$730) and complex political problemes, has featured a – modest – form of social services delivery and social protection for the past 20 years. In 1995, it introduced a universal pension for senior citizens. In 2008 and following years, after the end of 10 years of civil strife, the country launched a broader range of social policy provisions to address poverty and social exclusion. They include free medication, free schooling through secondary school, education grants for disadvantaged castes, and some – albeit minimalist – provisions to co-fund access to maternity health services. The country is currently discussing an upgraded social protection framework with references to the social protection floor initiative, using a rights-based, life cycle approach.
A child grant was introduced for all children under 5 in the country’s poorest region and throughout the country for the lowest-income families of the Dalit caste in 2009. This grant has had significant impact on birth registration and good results for child nutrition. Under the new framework, the child benefit stands a good chance to be gradually but progressively universalised over the next years.
And at the same time, Nepal has succeeded in raising their revenue to GDP ratio to 20% - a much higher level than in most other low-income countries, enabling these progressive social policies to be funded primarily from the government budget. That means, in turn, that policies are firmly positioned in public policy discourse. Thanks to pressure from civil society and enlightened bureaucracies, and political competition among the factions of the elite, the social policy provisions are slowly, but steadily, improving over time.
For more information, see Yuba Raj Khatiwada and Gabriele Koehler, Nepal: social policy in a nascent welfare state. in: Gabriele Koehler and Deepta Chopra 2014, Development and Welfare Policy in South Asia. Routledge; and Amjad Rabi, Thakur Dhakal, Tomoo Okubo and Gabriele Koehler, 2015, Strategies and options for scaling up the child grant. UNICEF Nepal.
With best regards from
UNRISD senior research associate