Poverty Reduction

1. The World Bank Group (WBG) has been working in a focused manner through its group
agencies and in collaboration with governments and communities in many underdeveloped and
developing countries to meet its twin goals which it aims to achieve by 2030: to eradicate
extreme poverty by reducing the number of people in the world living below the income mark
of $1.25 per day and to promote shared prosperity by fostering income growth of the bottom
40% population for every country.
2. Exterminating extreme poverty and ensuring equitable sharing of economic benefits to address
the poorest communities in developing as well as developed countries is a major economic and
humanitarian challenge that the world is faced with. Achieving these goals requires active input
and a clear set of action plan from international societies and agencies, governments, local
communities, private investors and individuals. World Bank's twin goals are ambitious but
achievable. Considering the approach being followed least developed and developing nations, it
seems very difficult to achieve these goals in 15 years from now. There is need of concrete
policy intervention and a well planned, achievable and measureable set of goals while
considering the unavoidable hurdles that will come in the way. An updated assessment of the
current economic condition of the communities should be made so that, with the goal
indicators as target, policies can be aligned towards the goals.
3. As a multinational bank offering financial and knowledge based technical resources for low
income under developed and developing countries to assist them in the endeavor of economic
development, the WBG through its 5 group agencies focusing on different approaches to
development assistance in these countries has been supporting and catalyzing the
development efforts at the local level. Each group agency of the WBG is specialized in working
with different sectors like the government, private investors, commercial banks, etc.
4. The WB provides financial resources in the form of low interest loans, credits and grants to
developing countries for the implementation of a wide range of development projects like
education system reform, hydropower projects, irrigation reforms, health, climate change,
public sector governance reform, etc. Similarly, it provides technical assistance in the form of
policy advice, and research supports, which help to enhance the optimization of the limited
human and economic resources of the developing countries in the effort to meet their
development goals and. In doing this, it helps in the institutional and communal capacity
strengthening, which ultimately helps the governments in achieving the twin goals.
5. Situations of extreme poverty and inequitable access to resources are prominent in most parts
of the world, including the South Asian Region. In Nepal, 20 % elite populations utilizes 52% of
the national income benefit is utilized by the top 20 % elite population whereas the lower 40 %
income group utilizes only 11%. The target of dropping such access gap and reducing the
segment of population with an income of less than USD 1.25 per day to less than 3% demands a
rapid and sustained high economic growth rate, which can be achieved through:
a. Boosting Self employment opportunities
b. Large long term infrastructure projects with private and public investment, which will
open access to services and opportunities for all which will also give rise to secondary
economic activities Upgraded electricity and sanitation facilities
c. Institutional and communal strengthening
d. Long term structural changes and policy refinements
6. This requires correct investment decisions to build considerable number of enough
infrastructure facilities assuring adequate social inclusion. National and foreign investments are
inevitable for boosting economic activities and developing huge infrastructure projects. This will
produce positive economic effects in the communities. During the implementation phase of such
projects, large number unemployed people will be exposed to opportunities of direct
employment. Since such projects are located in remote areas, which are economically and
socially excluded from the mainstream of national development, this will also ensure
augmentation in social inclusion. The marginalized communities will benefit directly from the
new economic activity and subsequent growth.
7. While such effort is in itself a step towards providing exposure and opportunity to the socially
and politically marginalized communities, it will also open for them, an access to other facets of
socio economic life such as education, health and nutrition. Providing these 3 elements is a key
footstep in ensuring that the twin goals being met.

8. I work as a Hydropower Engineer in a government promoted, national level financial institution

that invests in medium to large sized hydropower projects. I work in making technical and socio-
environmental risk assessment of the hydropower projects in order to decide on the feasibility of
investment. This requires the appraisal of the sustainability of the projects and the socio
economic impacts that they will generate. This answers questions such as; does the economic
return of the projects benefit the low income population? Does it improve their living
conditions? This can also be linked to the secondary impacts of the hydropower projects:
improved transportation, education facilities, access to information and improved
communication facilities.
9. The first direct benefit is the improved supply of electricity, which will help small businesses and
will also improve transportation facilities by the introduction of new fuel efficient means of
transportation. This, in turn will enhance employment opportunities and access to markets.
10. Secondary benefits from the optimal utilization of water resources will ensure that the poor have
access to safe drinking water and improved sanitation which are key indicators of poverty
reduction. It is also essential for improving the health and livelihoods of the poor, ensuring wider
environmental sustainability and reducing the urban squalor. It is also critical in addressing
gender inequalities and improving access to education for the poor.
11. In Nepal, many hydropower projects are located in remote mountains and hills, largely inhabited
by indigenous people with low income level. They are disconnected from the mainstream of
national development process. Investment in hydropower projects with due consideration
towards the involvement of the local people during each phase of development-from policy
formulation to implementation-will ensure inclusiveness. This is a direct approach to ensure
boosting shared prosperity. For instance, define water resources users' groups and monetary
policies, management of investment decisions, and supervision of construction and operation
activities will enhance local capacity strengthening and institutional development. This in turn
will ensure sustained economic growth and social prosperity.
12. Tapping the multiple benefits that arise from hydropower projects is essential for a holistic
improvement in the livelihood of the poor. In this regards, I can contribute with my skill in the
sector of integrated water resources management. This will be important because Nepal is
transiting to a federal state, which will require addressing questions regarding sharing of benefits
and riparian rights and interstate cooperation for the shared use of water resources.
13. A very effective way of addressing these issues is to develop projects that will help to improve
access to elements of prosperity such as electricity, communication, transportation, water
supply and sanitation, etc.
14. There is a huge gap in the availability of and access to infrastructures in the South Asian Region,
including Nepal. Between 1990 and 2010, the number of people living on less than US$1.25 a
day in South Asia decreased by only 18 percent, while the population grew by 42 percent. There
is lack of reliable electrical grid, water supply, sanitation facilities and roads network in this
region. Even in places where such facilities exist, there is vast disparity in the distribution and
access to the facilities. Such unavailability and disparity of facilities are major hindrances towards
the Bank's goals of reducing extreme poverty and ensuring equitable sharing of prosperity. This
challenge can be solved by increasing the investment in local, national and cross border
 infrastructures. Such investment can be made by tapping the local resources, or from the
government funds or in the form of international financing in the form of loans or grants. But,
there a big challenge in creating conducive environment to attract such large investments due to
certain situations, which are intrinsic to the social, economic and political characteristics of this
region. I as a hydropower engineer with an experience in project development works can
contribute to the Bank's role in helping governments to create favorable environment for
investment.
15. One way of bringing in investment is in the form of public private partnership. I have worked in
drafting of the loan agreement between my organization and a private investor, investing in a
37.6 MW hydropower project in eastern Nepal. This is a long term loan made available to Nepal
by International Development Association (IDA), which will be channelized to the project
through my organization. In doing this, I have gained exposure to private sector financing and
the issues that need to be considered to attract private sector in infrastructure financing. I have
also got exposure to the working principles of IDA and World Bank in general, with special focus
on the Bank's disbursement guidelines and issues relating to environmental and social
safeguards. Besides, this experience has also been relevant with regards to the concerns of
proper utilization of foreign aids to developing countries. During the process, I have worked as a
member in the committee to negotiate with the private investor of the project to drafting the
subsidiary loan agreement; incorporating the suggestions obtained from IDA. This project also
demonstrates an example of indirect benefit sharing by electrification of the four (4) affected
VDCs, which will be considered under the Bank-funded Transmission Line Project in consultation
with the government.

16. Due to a pronounced diversity in population distribution and income level of the communities in
the South Asian Region, the nature of lack of access to facilities doesn’t follow a well defined
trend. So, when planning new infrastructure projects and allocating the limited human and
economic resources to such projects, there is a clear need of (i) identification of needs and (ii)
prioritization of needs depending on population distribution, needs of communities and their
economic status. At least the basic level of access should be provided to communities with a
policy addressing the economically lower 40 % of the population, at the beginning to build a
momentum.
17. Again taking hydropower development as an example, I can play a role as a hydropower
engineer in facilitating the Bank's role in addressing these issues. Identification of areas where
 socially marginalized and economically excluded communities reside, for developing micro/small
hydropower projects will definitely bring positive benefits to the communities and help to
improve the livelihood of the people in the areas. Equally imperative is to lay the focus on proper
planning for operation and maintenance of such project. The local people may not have the
required skill and understanding for efficient operation and maintenance, which will invariably
lead to an incompetent performance of the project. There can be two ways of solving this
problem. (1)The local community through a well defined mechanism should be trained for
proper operation and maintenance of the projects. This will have multiple benefits-it will ensure
the sustainability of the project and it will also ensure close involvement of the local community
in the project, which in turn will augment their economic life. (2) Emphasis should be on small
scale solutions suited to local capabilities, understanding and skill. Such practice will bring the
grass root level of the community in the decision making process, which will assist in developing
a sense of ownership and trust towards the project. Access to the direct and indirect benefits of
the projects will be more convenient if the local community can participate in developing
strategies to boost such access. All these will go on to eradicating the economic hardships of the
people and such strategies can be made considering equitable sharing of benefits.
18. Besides developing ways to involve the local community directly in the planning, construction
and operation of projects, I can also contribute to the role of World Bank to improve the
engineering practices in the region. Principle focus should be on sustainable engineering for
positive or neutral impacts on natural resources, empowered engineering to improve the local
professional skills and also on labor based construction technologies for creating jobs and
increasing income generating activities, which will lead to an improved economic status of the
people and an augment sharing of benefits and prosperity arising from the projects. In that
regards, I have an experience in working with Asian Development Bank in formulating the
Environmental and Social Management Framework, which was developed as a part of availing a
line of credit facility by my organization from ADB, to invest in socially and environmentally
sound hydropower projects.