Social injustice and exclusion

Prajeena Karmacharya, Dr. Sarba Raj Khadka
Rural Reconstruction Nepal

Only workers employed in the public sector are covered by the public pension system, and this group comprises only 4% of the population. There is no social security system for health established by the state, and the situation is particularly alarming regarding children. All this highlights the need to promote social security funds in various sectors, with the involvement of local bodies to ensure that development plans meet local needs.

Despitemore than five decades of planned development initiatives in Nepal, key issuesdirectly related to social security remain unresolved, neglected and often evenexacerbated. Many of the ‘development strategies’ adopted throughout theseyears have been hastily implemented ad hoc measures based on a combination ofmodels derived either from other country experiences or simply from thestandardized recipes of the International Monetary Fund (IMF) and World Bank(RRN and CECI, 2007).

Throughout the country, discriminatory practices rooted in traditions are mainlybased on caste, ethnicity, class and gender. As a result, Dalits (membersof the ‘untouchable’ caste), Janajati (indigenousnationalities), the poor and women are deprived of opportunities to meet theirbasic needs of food, shelter, education and health services. Thesediscriminatory practices are more prevalent in rural and remote areas whereunequal power relations, unequal distribution of land and income and a lack ofbasic facilities are common (ESCR Sub-Committee/HRTMCC, 2007).

Nepal is classified as a least developed country and is ranked 138th on theHuman Development Index (UNDP, 2006). About 31% of the population lives belowthe national poverty line. Poverty cuts across all caste and ethnic groups,although most of the poor belong to either the Dalit and/or ethnicminority communities; the poverty incidence among Dalit and ethnic minority communities as a whole is above 40% (UNDP,2006). Meanwhile, discrimination based on the patriarchal structure has strippedthe majority of women of their human rights, and they are the mostunderprivileged even amongst the marginalized caste and class groups. Inequalityin the distribution of wealth and income also contributes to socioeconomicinsecurity. The poorest 20% of the population enjoys only 6% of the totalincome, while the wealthiest 20% enjoys 54.6%.

Nepal is currently a state party to 20 UN and seven International LabourOrganization (ILO) conventions, including the UN Covenant on Economic, Socialand Cultural Rights. Despite these commitments, the country suffers heavily fromalmost all the striking features of underdevelopment – such as rampantpoverty, unequal distribution of, access to and control over power, resourcesand opportunities, social injustice and exclusion, exploitation, anddiscrimination – which have persisted for decades and by nature are deeprooted and complex.

Government spending on the social sector has remained extremely weak. Currentpublic expenditure in health and education, a major portion of which ischannelled to recurrent expenditures, is a mere 1.5% and 3.4% of GDP,respectively (UNDP, 2006).

Social security status and trends

Theimpact of privatization

Industrialization in Nepalwas initially state-led, but in an attempt to globalize the national economy,the trade, investment, foreign exchange, financial and industrial sectors werederegulated, de-licensed and subsequently privatized. Although the IMF and theWorld Bank imposed structural adjustment policies in the 1980s, economicliberalization actually began in 1992. As a part of the development of theprivate sector, the government drew up the Privatization Act (1994), which ledto the privatization of 17 out of 47 public enterprises. Of the 17 enterprisesprivatized, four have already closed down.

The privatization of basic services such as water, education and health hasfurther increased inequality by decreasing both the quantity and quality ofpublic health and education services. The so-called Melamchi Project – a major multilateral project toimprove water supply to the Kathmandu valley – is being funded by many donors,including the Asian Development Bank, which is insisting on the privatization ofthe management of the state-owned Nepal Water Supply Corporation as aprecondition to release its loans.

Furthermore, unlike public sector workers, many employees in the private sectorare completely excluded from any formal social security system. At most, half amillion out of the country’s total of 11.2 million workers (barely 4% of thelabour force) are under some sort of formal social security coverage.

Informal sector unprotected

The extraordinarily low rate of formal social security coverage highlightsthe need to promote social security funds in various sectors, with theinvolvement of local bodies like the District Development Committees and VillageDevelopment Committees, particularly for the large masses of the population whowork in the informal and agricultural sectors (Upadhyaya, 2007).

Most workers in the informal sector are engaged in semi-skilled and low-paidjobs (Pandey, 2005, p. 101). People working in the informal sectors oftransportation (such as rickshaw pulling), portering, hotel services, factoryand industry services and agriculture are the least protected againstunpredictable circumstances. A variety of labour contracts and piece-ratepayment systems that are particularly prevalent in the private sector informaleconomy severely undermine the concept of social security for wage earners.There are also fewer and fewer opportunities for employment on a regular basis.The proportion of enterprises that employ contract workers in small numbers hasgrown from 54% to 61% (ESCR Sub-Committee/HRTMCC, 2007). Women are again themost likely to be victimized, as there is no protection mechanism in theinformal sector, and they are typically paid lower wages for the same types ofwork as their male counterparts.

Public health services neither sufficientnor reachable

The average health status of the Nepalese people is one of the lowest in theSouth Asian region. Per capita public expenditure in health is extremely low,roughly USD 2 a year (NPC and MOPE, 2003). The rate of infant mortality was 61deaths per 1,000 live births in 2005, while the maternal mortality ratio wasestimated at 415 deaths per 100,000 live births in 2002 (NPC and UN, 2005). Fiveto six thousand people die annually from tuberculosis and other waterbornediseases. The poor, Dalits and women in particular have difficultyaccessing public health facilities due to their perceived ‘lower status’ insociety (RRN and CECI, 2007).

The public health system is very weak, particularly in remote areas, whilehealth services in the urban centres are highly commercialized. In most placeswhere public health services are offered, they are barely functional due to theunavailability of trained human resources, essential medicines and/or treatmentfacilities. Only 13% of village health posts have electricity and only 29% haveresidential quarters for health professionals. Thus, health care infrastructuresare neither sufficient nor reachable by people living in remote areas (ESCRSub-Committee/HRTMCC, 2007).

Until now, there has been no social security system for health established bythe state. Those who use health care services are obliged to pay medical billsirrespective of their economic status. The government lacks any provisions toinsure medical services for the poor.

Alarming situation of children

Although the government has ratified the UN Convention on the Rights of theChild, the provisions made in the country’s laws and the government’spolicies are inadequate to ensure the rights of children and youth. Thesituation is particularly alarming with regard to children. In the first sixmonths of 2004 alone, the Nepalese organization CWIN collected 10,247 cases ofchild labour exploitation, child deaths, missing children, child abuse, childmarriage, child sex abuse, child trafficking, forced prostitution, children inconflict and juvenile delinquency, and stressed that the reported casesrepresent only a very small fraction of the true magnitude of the problems facedby the country’s children (CWIN, 2004). For the first time in history, thenewly promulgated Interim Constitution of 2007 has enshrined the rights of thechild in the list of fundamental human rights, but no steps have been taken asyet for the operationalization of this commitment.

In 2003, the government pledged to provide ‘education for all’ as part ofits Millennium Development Goals (MDGs) commitments, stating that by 2015, everychild between the ages of six and ten would have access to free and good-qualityprimary education irrespective of gender, ethnicity, religion, disability andgeographic location. Until now, however, there is no sign of steps being takentowards developing the necessary infrastructure and system to ensure that theMDG target can be met in another eight years. Moreover, there are still roughlyone million child labourers in Nepal who do not go to school (The KathmanduPost, 2007). For its part, the Central Bureau of Statistics reports that a largenumber of children are out of school owing to the decade-long conflict betweenthe state and Maoists that displaced over 100,000 families. The growth of schoolsystems has been uneven and insufficient, as 8.6% of households, particularly inremote rural areas, still do not have access to primary schooling within awalking distance of half an hour, which is the national average. As a result,education and literacy programmes hardly reach the poorest sectors of thepopulation (CBS, 2001).

Lack of pensions makes the elderly aburden

The population of Nepal is considered young, as about 39% of its totalpopulation is under 15 years of age and only 4.2% is above 65 years of age (CBS,2001). However, aging is still viewed as a problem in Nepalese society. Elderlypeople are considered a burden for the family, since they cannot engage ingainful employment and the family has to take care of them. Only workersemployed in the public sector are covered by the public pension system, and thisgroup comprises only 4% of the total population. The pension is provided toemployees who have worked for at least 20 years in a formal governmentinstitution (ESCR Sub-Committee/HRTMCC, 2007).

Conclusions and recommendations

Nepal has suffered not only from a decade-long violent conflict, but also fromstructural violence and pervasive marginalization of certain caste and ethnicgroups, women, and people living in certain geographic regions. The planningprocess in Nepal is highly centralized, and there is often a mismatch betweenlocal level needs and national level planning processes. In order to makeprogrammes more consistent with local needs and priorities, there is a need tolink local necessities with national development plans (Manandhar cited in WorldBank et al., 2002). There is no realdevolution of authority, power and/or resources to local levels, which makesbottom-up planning extremely difficult. Fundamental changes must be made notonly in the content of development plans but also in approaches to planformulation and programme implementation, so that people’s basic needs can bebetter addressed. The imbalance of authority and responsibility between thelocal and central government has made local government heavily dependent uponthe centre, and this has resulted in underdevelopment of grassroots communities,particularly those subjected to continuous marginalization, exclusion andviolence in different forms (Bhattachan and Mishra, 1997).

To narrow the gaps between national policies and local practices andyield proper social security systems for the needy, the following points need tobe taken into consideration.

• The government must practice an effective bottom-up approach of governanceto ensure that marginalized and disenfranchised groups have access to resourcesand are involved in the decision-making process at all levels. The centralizedplanning system in Nepal needs to be decentralized and should be in tune withlocal needs.
• The government should take special steps in considering an appropriate modelof equality, bringing marginalized and excluded communities into the mainstreamof political, economic, social and cultural life.
• Laws on the minimum wage and an employment policy should be enacted andenforced. There should be equal pay for men and women for work of equal value.
• Subsidies and reservation policies for marginalized groups should bedesigned and implemented within a set timeline.
• Effective mechanisms that ensure the rights to equal employmentopportunities, equal pay for work of equal value, social protection and benefitsshould be guaranteed for every woman and man.
• Local bodies, non-government organizations and trade unions should bepromoted and encouraged to work towards the attainment of social security.
• An effective social security scheme should be legally ensured for allinformal and formal sector workers.
• A minimum wage adequate to meet the daily needs of employees and theirfamilies needs to be fixed, taking into consideration the existing inflationrate. The wage rate should be reviewed periodically and a wage index must beprepared separately for different sectors.
• A policy should be introduced to guarantee a safe and secure home for poorfamilies to realize their rights to secure housing.
• Policies on clean drinking water and sanitation facilities for all should beformulated and enforced.
• Knowledge and information on every aspect of an adequate standard of livingmust be developed through documentation and proper dissemination among stateagencies and other stakeholders working in this sector.
• The government must ensure effective implementation of the national policyon internally displaced people (IDPs) without any discrimination.
• A strategic plan should be developed and implemented for the safe anddignified return, rehabilitation, reintegration, reconciliation, and survival ofall conflict-induced IDPs.
• The basic necessities of food, clothing, shelter, education, security andhealth services need to be delivered urgently with a long-term focus onsustainable livelihoods.


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Rural Reconstruction Nepal (RRN) focal persons for Social Watch. They can be contacted at: RRN, GPO box 8130, Kathmandu, Nepal. Tel: (977 1) 4415418; fax: (977 1) 4418296; e-mail:,,