Key Takeaways:
- Change Initiative estimates $1.38–2.70B losses, central figure $1.95B (4.3% of GDP)
- Current LDC framework does not fully assess natural, physical and institutional capital
- Organisation calls for UN CDP post-event reassessment and 'graduation-with-conditions'
- Recommends Nepal–China cooperation on high-mountain risk management
KATHMANDU, SEPTEMBER 3
A global research organisation has called for a post-disaster review of Nepal's scheduled graduation from the Least Developed Country (LDC) category, arguing that the devastating August 26 floods exposed gaps in the current assessment framework.
In a new position paper, Change Initiative estimated the disaster caused US$1.38–2.70 billion in preliminary losses, with a central estimate of US$1.95 billion - 4.3% of Nepal's GDP. Nepal is scheduled to graduate from the LDC category on November 24, 2026. The organisation said the disaster occurred after the latest crisis assessment and should therefore be reflected in the final UN General Assembly decision.
Change Initiative stressed it was not discounting Nepal's development achievements, but argued that post-disaster risk and the condition of capital underpinning future growth must be considered.
Gaps in framework
The current LDC graduation framework assesses income, human assets and vulnerability, but does not adequately measure whether natural, physical and institutional capital is being maintained. The organisation's preliminary estimate includes US$805M–1.465B in physical damage and US$575M–1.23B in foregone economic activity.
It cautioned the estimate was prepared within 48 hours and is not a substitute for an official Post-Disaster Needs Assessment (PDNA). Nor does it fully account for ecosystem losses, long-term impacts on human capacity or adaptation needs.
Calls for reassessment
Change Initiative recommended the UN Committee for Development Policy (CDP) conduct a post-event vulnerability reassessment using verified interim data and the PDNA once available. It proposed a 'graduation-with-conditions' approach, maintaining concessional financing and climate support until reconstruction and resilience milestones are met.
The organisation also urged a standing mechanism to trigger rapid crisis-assessment addendums when disasters occur after the latest CDP review but before graduation.
Focus on high-mountain risk
Change Initiative called for stronger Nepal–China cooperation on high-mountain risk management, including monitoring, data sharing, early-warning protocols and risk-informed infrastructure standards. It noted the August 26 disaster originated near the border and cautioned against describing it as a classic glacial lake outburst flood.
Chief Executive M. Zakir Hossain Khan said the proposed Net Capital Sustainability Test (NCST) would complement existing criteria by assessing whether capital is being accumulated or depleted, helping ensure Nepal's graduation is durable.