Expanding economic opportunities for the poor by promoting enterprise and job-creation in Nepal

Overview

While Nepal has made progress in reducing poverty rates over the past twenty years, the country remains the poorest in South Asia and among the poorest in the world. In 2016, Nepal ranked 144 out of 187 countries on the UN Human Development Index, falling into the lowest category of human development. Approximately 25 per cent of people live under the national poverty line and 23 per cent earn less than US$1.25 per day. Further, the World Bank estimates that the earthquakes may have pushed an additional 2.5 to 3.5 per cent of the country's population into poverty, translating into 700,000 additional poor, demonstrating the vulnerability of Nepali households. Nepal's economic outlook is modest. Following 5.7 per cent growth in 2014, the 2015 earthquakes caused damage and loss equivalent to one third of Nepal's annual GDP. According to the Asian Development Bank (ADB), growth slowed to 2.3 per cent in 2015 and 0.8 per cent in 2016. ADB forecasts Nepal's economy to recover and grow by 4.8 per cent in FY2017. The significant investments in post-earthquake recovery and reconstruction may contribute to overcome infrastructure constraints and stimulate economic recovery and growth.

Nepal's economy offers limited employment opportunities and features a large unskilled workforce. An estimated 520,000 Nepalis obtained approval to work overseas in 2014 (International Labour Organization). The Overseas Development Institute estimates that 2.8 million Nepalis travelled to India for work, and a further 1.2 million Nepalis travelled to the Gulf countries, Malaysia and other developed countries over the past four years. Employment within Nepal is largely informal and overwhelmingly male-dominated, with only 6 per cent of women engaged in formal employment. Supporting domestic job creation, especially for women, is central to ensuring long term and inclusive economic growth.

Related initiatives

Micro-enterprise Development Program (MEDEP)

$32.3 million, 2013-2018

 The Micro-Enterprise Development Program (MEDEP) is a key initiative of Australia's aid program to Nepal and is implemented by the United Nations Development Program and the Government of Nepal. Australia has funded the program since its inception in 1998. The program trains the poor and the ultra-poor to become entrepreneurs and assists them in establishing and developing their own businesses. As well as training, the program provides business development services and access to markets, finance and technologies. To date, the program has created more than 70,800 micro-entrepreneurs and 86,000 jobs, with nearly 70 per cent of beneficiaries being women.

Related documents*

Name of document Year published Type
MEDEP Independent Evaluation 2012 Evaluation
MEDEP Independent Evaluation: management response 2012 Management response
MEDEP Programme document 2013 Programme document
MEDEP Phase IV Mid-term Evaluation 2016 Evaluation

Related links

Rapid Enterprise and Livelihoods Recovery Project (RELRP)

$8 million, 2015-2017

Under the earthquake early recovery package, Australia is providing $8 million to the United Nations Development Program for RELRP. The project provides special support measures to re-start micro-enterprises which were damaged or destroyed during the earthquake, as well as new business initiatives which will benefit communities and promote social cohesion. It is being implemented in cooperation with the Nepal Ministry of Industry and targets a total of 12,000 existing beneficiaries of two ongoing initiatives: MEDEP and Micro Enterprise Development for Poverty Alleviation Programme (MEDPA). In addition up to 2,000 new micro-entrepreneurs will be supported. This will benefit more than 60,000 family members of the micro-entrepreneurs.

 

 

* The Department of Foreign Affairs and Trade (DFAT) is committed to high standards of transparency and accountability in the management of the Australian aid program through publishing information on our website, including policies, plans, results, evaluations and research. Our practice is to publish documents after the partner government and any other partners directly involved in the delivery of the initiative have been consulted. Not all material published on this site is created by the Australian aid program and therefore not all documents reflect our views. In limited circumstances some information may be withheld for reasons including privacy and commercial sensitivity.



 

 



Last Updated: 9 May 2017