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Policy paper

Leveling the Playing Field: How do we make social protection more transformative?

2014 — By Sanjaya K. Khanal, Gabriele Koehler, Mariana Hoffmann, Majeda Haq, Yam Nath Sharma, Dr. Bishal Gyawali, Shankar Nepal, Jyoti Pandey, Pragyan Joshi, Aniruddha Bonnerjee, Sumona Ghosh, Manish Gautam

Today social protection has a central place in development agenda. It is no longer seen just as protection for the poor but also as a way to promote growth by transforming the poor into a productive force to boost national economies. Nepal adopted this idea earlier than many other countries in the region. The introduction of old age pension for senior citizens 20 years ago was an important beginning: that programme has been continued and expanded by all successive governments. Since then, there has been rapid growth in the number of schemes to provide relief to the poor and marginalized. Today, an estimated 2.16 million people benefit from these schemes in Nepal. A large array of programmes under different headings such as cash transfers, in-kind transfers, access to services, social insurance, public works, employment/livelihood creation, and care services are being implemented. Joint Secretaries Rasmi Raj Pandey and Shankar Nepal in their recent paper entitled Role of the Ministry of Federal Affairs and Local Development in Social Protection say that Nepal has one of the highest shares of Gross Domestic Product invested in social protection. About 2.79 percent of the national budget was allocated to social security programmes last fiscal year. Coming fiscal year, this will be just over 3 percent of the budget, amounting to an estimated 1.5 percent of GDP. This is without counting expenditures on education, healthcare and a number of other subsidies. Their paper shows that the number of beneficiaries of the old-age allowance has increased seven-fold in just six years, from 344,348 in fiscal year 2006/07 to 2.16 million now. Yet, for all the programmes promoted by governments of every stripe and even with the massive growth of the beneficiary population the effect of targeted programmes on poverty reduction appears to be modest.

How can Nepal’s social protection programmes become truly transformative? What can Nepal learn from successes in Brazil and other countries? What are the areas of reform? How do major political parties plan to consolidate social protection schemes? What shape will social protection take in a federal Nepal? And what role does the private sector have? This edition of Development Advocate Nepal offers perspectives on these issues and more with the intent to spur discussion of social protection issues both broad and specific.