CDP meeting approves Nepal’s call to withhold LDC graduation

Kathmandu, March 16

The Committee for Development Policy (CDP) has accepted Nepal’s request to withhold its least developed country (LDC) graduation.

CDP is a subsidiary advisory body of the United Nations Economic and Social Council (ECOSOC). Its meeting held on Thursday decided not to recommend Nepal for graduation to the UN General Assembly at this time following the request from the Nepal government and due to challenging economic and political scenarios in the country.

The CDP meeting, however, decided to recommend Bhutan, Kiribati, São Tomé and Príncipe and the Solomon Islands for graduation from the LDC category. The committee will send its recommendations to the UN Economic and Social Council for endorsement, which will then refer its decision to the UN General Assembly.

“Nepal and Timor-Leste also met the criteria for LDC graduation, but were not recommended for graduation at this time, due to economic and political challenges,” according to CDP.

Nepal had earlier requested the CDP of United Nations not to upgrade Nepal’s LDC status to the league of developing nations until 2021 citing that the country is not prepared for the graduation and another triennial review should be carried out in 2021.

As per the UN set criteria, any country graduating to the league of developing nations should have per capita income (PCI) of $1,245, human asset index (HAI) of 66 and economic vulnerability index (EVI) below 32. According to the statistics of fiscal year 2016-17, Nepal’s HAI and EVI stand at 68.7 and 26, respectively, and the PCI at $865.

Nepal’s request to withhold the nation’s graduation was based on the fact that the country lagged far behind in terms of per capita income criteria, though the country had met other set LDC graduation criteria of the UN.

“We’ll first boost our PCI to the required level by the 2021 review. Then we’ll be ready to graduate to the league of developing countries by 2022,” Finance Minister Yubaraj Khatiwada had told mediapersons a few days ago.

Graduation to the league of developing countries is expected to remove export preferences in developed markets for Nepal after a certain number of years, which will hit the private sector that has been seeking sustainability in terms of HAI and EVI.

The developed countries have committed to provide 0.75 per cent of their gross national income as official development assistance (ODA), of which LDCs are the major beneficiaries.

In the 47 years of the LDC category’s existence, only five countries have graduated (Botswana, Cabo Verde, Equatorial Guinea, Maldives and Samoa).