Why the IMF Should Play a Role in Expanding Nepal’s Child Grant Program

Nepal: IMF Should Help Expand Child Grant Program

Affordable Government Policy Protects Children’s Rights but Not Reaching Most Families

In a recent letter to the International Monetary Fund (IMF), Human Rights Watch (HRW) has urged the organization to help expand social protection to all children in Nepal under its Child Grant program. HRW argues that this policy is not only an effective and affordable measure to protect children’s rights, but it also helps reduce child poverty and inequality. HRW suggests that turning the existing child grant program into one that is available to all children would significantly improve the currently low social protection coverage in Nepal, where 40 percent of the population is under 18.

Impact on Children’s Rights and Economic Development

The expansion of the Child Grant program to all children in Nepal has the potential to have a deep impact on protecting children’s rights and enhancing the country’s economic development. Arvind Ganesan, the economic justice and rights director at HRW, highlights the importance of this expansion, stating that the program is currently universally available in only 25 out of 77 districts. Furthermore, studies have shown that the Child Grant has increased birth registration rates and enabled families to buy essential items such as food and clothing. It has also lowered the likelihood of child labor for recipients and their siblings, improving food security and health in the areas where it has been implemented.

IMF‘s Obligation to Human Rights

Under international human rights law, international financial institutions like the IMF have an obligation to help build universal social security systems that are consistent with human rights. While the IMF currently has a target to ensure that the Child Grant does not decline, HRW argues that this does not go far enough. HRW suggests making the expansion of the Child Grant a “performance criterion” for the IMF program, called the Extended Credit Facility. This would set a condition for the IMF program to support the expansion of the grant to reach more children and ultimately cover all children in Nepal.

Affordability and Budgetary Estimates

HRW highlights that budgetary estimates from the IMF‘s April 2023 staff report show that Nepal can afford to expand the child grant. According to a 2021 study by the United Nations Children’s Fund (UNICEF), expanding the grant to all children up to the age of 17 by 2035 would cost less than 0.7 percent of GDP per year. This expansion has the potential to reduce poverty among households with children by as much as 16.8 percent. Therefore, the financial feasibility of expanding the Child Grant is not a major obstacle.

Editorial: Prioritizing Children’s Rights and Social Protection

Expanding the Child Grant program to all children in Nepal is not only a matter of economic development but also a crucial step towards protecting children’s rights. The current limited coverage of the program leaves many vulnerable children without social protection and exposes them to the risk of poverty and inequality. The IMF, as a global financial institution, has a responsibility to promote human rights and support countries in building social security systems that benefit the most vulnerable members of society.

By making the expansion of the Child Grant a performance criterion for its program in Nepal, the IMF can use its influence to ensure that the government prioritizes the needs of children and extends social protection coverage to all. This would help reduce the risk of intergenerational poverty and provide a stronger foundation for Nepal‘s economic development.

Advice: Building Inclusive Social Protection Systems

The case of Nepal‘s Child Grant program highlights the importance of building inclusive social protection systems that benefit all members of society, especially vulnerable groups such as children. Governments and international financial institutions should prioritize social protection programs that have been proven effective in reducing poverty and inequality and protecting the rights of children.

In the case of Nepal, expanding the Child Grant program to all children should be a priority. The program has already shown positive results in improving birth registration rates, reducing child labor, and enhancing food security and health in the regions where it has been implemented. By extending coverage to all children, Nepal can ensure that every child has access to social security and protection from anticipated shocks.

Furthermore, other countries can learn from Nepal‘s experience and consider implementing similar programs to protect the rights of their own children. Investing in social protection is not just a moral imperative; it is also an investment in the future of society. By prioritizing the well-being and rights of children, countries can create a more equitable and prosperous future for all.

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