Nepal reluctant to gradate to a 'Developing' country

Kathmandu, Feb. 18: Nepal has submitted its country report to the UN with a note that it doesn’t want to graduate from the status of the Least Developed Country (LDC) this year as per its earlier plan. 

Questioning the criteria set by the United Nations (UN) for graduating a Least Development Country (LDC) to the developing status, Nepal said that although there were unparalleled achievements in the first generation reforms such as school enrolment, reducing child and maternal mortality, and access to drinking water, the achievement lacked sustained quality in those sectors. 

“The economic vulnerability index was prepared on the basis of vulnerability of the African nations in the 1960s and 70s. It doesn’t fit to Nepal as it’s more prone to natural disasters rather than the external shocks,” said Swarnim Wagle, Vice-President of the National Planning Commission (NPC), at a programme at his office. 

According to him, the country performed well in achieving the Millennium Development Goals (MDGs), but there was a challenge to sustain the quality of the achievements made at education, health, sanitation and environmental sectors. 

Government and the UN expert committee were prepared to graduate Nepal to the developing status in 2018. 

As per some experts, once graduated, Nepal will lose the international development finance, and the climate finance might be reduced. Similarly, it will be deprived of the preferential market access of about 4.5 billion US Dollars, which has been offered to it because of its LDC status.

 

LDCs in the world. Map Source: Wikipedia

However, the graduating country will get three-year grace period to maintain itself and get ready for the sustained ‘developing’ status. 

According to the United Nations Conference on Trade and Development (UNCTAD), Nepal is eligible to graduate only in two criteria, Human Asset Index (combination of health, nutrition and education indices) and Economic Vulnerable Index, but will be unable to meet the Per-capita Income Index. 

An LDC must have the Gross National Income (GNI) PCI of US $1242 in 2018 for the graduation while Nepal's current per capita is only $862. 

“Although Nepal has technically passed the two criteria, we don’t want to graduate this year, but target to graduate the nation by 2022,” said Wagle. 

The NPC had announced the graduation of Nepal by 2022 in its 12^th periodic plan and reinforced it in the 13^th plan. 

The draft strategy of the apex planning body in the country says that the country should register an annual economic growth rate of 9.2 per cent to meet the three criteria and needs to invest Rs. 17 trillion from 2013-2022. 

Meanwhile, NPC Vice-Chair Wagle announced his resignation from the post. 

He said that he would tender his resignation to Prime Minister KP Sharma Oli  today  (Sunday).

“I will brief the PM about the activities of the NPC in the past six months and will submit my resignation,” he said at an interaction with journalists. 

Published in The Rising Nepal daily on 19 February 2018.