Conflict and Inequality: Nepals Context

1
Conflict and Inequality Nepals Context
Yuba Raj Khatiwada UNDP Regional Centre in
Colombo
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Background

• Conflict in Nepal deep rooted in extreme poverty,
  a feudal society, historic sense of
  marginalization of certain sections/ethnic groups
  and political neglect.
• Political, economic and social exclusion based on
  class, caste, gender, ethnicity, language
  geographical isolation the breeding ground for
  Maoist insurgency.
• Grievance the main reason for conflict
  horizontal inequality not the sole source of
  conflict but instrumental to exacerbate it.
• States inability to address the grievance
  enabled the mobilization of people to join armed
  conflict.

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Poverty and Inequality during Conflict (1)

• During 1996-2004, despite on going conflict,
  poverty declined from 42 to 31 but inequality
  widened (Gini coefficient went up from 0.34 to
  0.41).
• Latest NRB HH survey shows the Gini coefficient
  at 0.37 in 2006 compared with 0.24 in 1985.
• Poverty distribution varies not only by
  geography/region but also by ethnicity.
• In some low caste HHs (dalits), poverty
  remained as high as 46 against only 14 among
  high caste HHs.
• Increasing inequality amid absolute poverty
  helped Maoists to mobilize low caste youth for
  armed conflict.

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Poverty and Inequality during Conflict (2)

• Conflict crippled the economy in the recent years
  
• GDP growth slowed down to average 3 during
  2002-2007 compared to 5 in the 1990s.
• Manufacturing production went up by lt 1 on
  average compared to nearly double digit growth
  during 1990s.
• Exports increased by less than 10 during 2002-07
  compared with nearly 20 growth in 1990s.
• Tourists arrival declined from nearly 500
  thousand in 1998 to less than 300 thousand in
  2006.
• Lack of job creation, declining real wage for
  unskilled workers, and declining share of labour
  intensive sectors in GDP must have deteriorated
  poverty and inequality.

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Inequality in Assets Distribution and Conflict (1)

• Conflicting results on the relationship between
  landlessness and conflict but correspondence
  between area of insurgency and level of poverty.
• Empirical studies have shown
• (i) greater inequality escalates deadly
  violence
• (ii) presence of social network and government
  welfare program may reduce it
• (iii) level of income is not related to
  conflict but may mitigate effect of
  inequality on the conflict.
• Nonetheless, Maoists struggle in Nepal started as
  a "class" war - targeting landowners as class
  enemies targeting feudal landlords attracted
  poor to join the rebels.

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Inequality in Assets Distribution and Conflict (2)

• More households from low caste are landless
  -nearly 79 of the Musahar and 41 of the
  Muslims are landless Terai Dalits have the
  highest proportion (28) solely dependent on
  rented-in land for agriculture.
• Dalits own just 1 of Nepals arable land, while
  only 3 Dalits own more than a hectare of land.
• Hills have very few landless households but size
  and quality of land varies significantly between
  caste and ethnic groups food self-sufficiency is
  much lower among the Dalit and Janajati groups
  (who are in the largest number of Maoist Army).

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Inequality in Assets Distribution and Conflict (3)

• Landless and marginal land holders household
  suffer from semi-feudal oppression, resulting in
  lack of land to work on and extreme poverty and
  hunger.
• Recruitment by Maoists through abduction of young
  people higher in districts where inequality
  between the landed and the landless had
  increased.
• The fight against marginalization of landless
  important part of Maoist strategy they advocated
  economic and social development through a radical
  land reform program based on the policy of land
  to the tiller.

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Spatial Inequality and Conflict

• High spatial inequality in development exists for
  decades. Geographically isolated underdeveloped
  mid western region the base area for starting
  armed conflict.
• Regional inequalities high in terms of human
  development and related indicators Mid-West the
  epicenter of conflict was at the lowest ladder of
  human development among different regions.
• Inequalities prevailing since the long past all
  3 Nepal Human Development Reports (1998, 2001,
  2004) point out Mid-West as the most
  disadvantaged region.
• Overall, the areas of Maoist insurgency in the
  early stages of the conflict are clearly the ones
  with highest human development gap.

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Horizontal Inequality and Conflict

• Decline in poverty during 1996-2004 unequal
  across castes e.g a lower decline in case of
  Muslims so are education and health outcomes.
• Newars more than 4 times as likely to be in top
  quintile as in the bottom while Janajatis
  overrepresented in the bottom, (ii) one of every
  3 Dalits is at the bottom (iii) Hill Dalits are
  nearly 4 times, and Tarai Dalits about 6 times,
  more likely to fall in the bottom rather than the
  top income quintile, (iv) only 5 Muslims in the
  top quintile.
• Higher intra-group inequality also prevails in
  each of the caste and ethnic groups.
• Youth of downtrodden community the major number
  in Maoist armed force and militia.

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Political and Social Inequality and Conflict (1)

• Political and social inequality also the source
  of economic inequality political power important
  for gaining socio-economic power, setting rules
  deciding resource allocation and benefiting from
  it.
• Men of the hill high caste and Newars dominate
  all branches of government Brahmins occupy 58
  of the positions in the bureaucracy against 13
  by Chhetris, 14 by Newars, 3.3 by Janajatis
  other than Newar, around 1 by Dalit, and around
  10 by Madhesis .
• Dalits and Janajatis underrepresented in the
  political institutions only 15.2 of the top
  party leaders are Janajatis, and only 15.8 are
  Madhesis no Dalits among the party leaders.

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Political and Social Inequality and Conflict (2)

• Educational attainment above secondary level
  ranges from less than 2 among Muslim males to
  58 in Brahmin and Chhetri males.
• Access to health also highly unequal 70 of
  Terai high caste have access to skilled birth
  attendant against 5 for Terai dalits.
• Most disadvantaged are the Dalits who comprise
  only 1.6 of high school pass and above and only
  0.8 with B.A. degrees and above, compared to
  their 12 share in the age-cohort of 6 years and
  above.
• Boys and girls from the lower caste poor
  families the largest school drop outs or failures
  - recruited by the Maoists in their army with
  some financial incentives.

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Effects of Conflict on Inequality (1)

• Government Development Budget
• Diversion of projects and programs from
  underdeveloped areas to more developed areas for
  security reason.
• No public development works in the poorer and
  conflict affected areas.
• Unutilization of local grants provided to local
  govt bodies.
• Donor retreat from conflict affected areas and
  their resources diverted to urban or peri-urban
  areas.
• Social protection schemes (e.g food for work)
  suffered
• Distributive/redistributive role of the state
  eroded due to low resource mobilization and
  weakened governance.
• Absence of monitoring prevented effective use of
  the public resources meant for pro-poor programs.

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Effects of Conflict on Inequality (2)

• Private sector and NGOs
• Re-concentration of economic activities in urban
  areas.
• Withdrawal of financial services from the rural
  areas and obstruction to micro finance
  activities.
• Remittances invested in urban real estate or
  saved in urban financial institutions.
• Reverse flow of saving from rural to urban areas
  because of insecurity.
• NGOs activities re-concentrated to more
  accessible and relatively developed areas.
• Death of bread earner, disability due to war,
  loss of employment opportunity due to closure of
  business, money extortion and burden to feed
  combatants left many poor households in deeper
  poverty.