Kathmandu, July 19:

A UN report unveiled today has warned the least developed countries (LDCs) that unless they adopt policies to stimulate technological catch-up, they will continue to fall behind technologically and face deepening marginalisation from the global economy.

The LDCs Report 2007 under the theme of ‘Knowledge, Technological Learning and Innovation for Development’ prepared by the United Nations Conference on Trade and Development (UNCTAD), stre-sses that focus of those policies should be on proactive technological learning by domestic enterprises rather than on co-nventionally understood technological transfer and on commercial innovation rather than on pure scientific research.

Stating that the most of the LDCs have undertaken rapid and deep trade and investment liberalisation since 1990s, the report warns, “Liberalisation without technological learning will result in increased marginalisation.”

Dr Shanker Sharma, former vice-chairman of the National Planning Commission relea-sed the report at a programme organised by the UN Information Centre in cooperation with Nepal Economic and Media Society (NECOMES), today.

Making a presentation on the key findings of the report, he said, “like most LDCs, Nepal has also failed to tie up science and technological innovation (STI) with trade and development. Thus poverty reduction and broad-based economic growth have yet to fairly take up at a desired level.”

He stressed the need of mainstreaming STI policies into national development pr-ogrammes such as PRSP in order to give an impetus to susta-ined economic development. He said that Nepal should now focus on education, especially on tertiary education with mu-ch attention on technical education like engineering and medical, in order to narrow down the technological gap.

The technology expansion and adoption in agriculture sector is much needed for a LDC like Nepal, which in contrary is least prioritised, he said adding that agriculture is am-ong the least priority areas ev-en for donors. Presenting an example of irrigation in Nepal, Dr Sharma said, “Despite irrigation being such a field that demands for more technological innovation, Nepal’s public spending in irrigation is less than one per cent of GDP.”

Usage of fertiliser in Nepal is 60 kg of total nutrient requirement, where it is 376 kg in Korea. Nepal’s expenditure on research and development is 0.7 per cent of GDP, against 2.4 per cent in rich countries.

The per capita electricity consumption is also a determining factor for technological innovation and development. The scenario is bleak in this context, as average electricity consumption stands at 91 KWh, whereas it is over 131 KWh in other states, he said.

As a result, the flow of foreign direct investment (FDI) in Nepal is much lesser compa-red to other LDCs. The FDI flow to Nepal was at an average of $60 million during 2000-2005, in contrast of $156 million to other LDC members. “Poor technology and ambiguous policies coupled with insurgency deterred the FDI flow,” Dr Sharma said adding that the flow of FDI averaged 0.1 per cent of Nepal’s GDP.

Dr Wasim Zaman, director of UNFPA, noted that the report is first of its kind of systematic study on how LDCs and their development partners can promote technological prog-ress as part of their efforts to develop domestic productive capacities. He said that it wo-uld bring issues related to STI for policy dialogue among the policymakers and planners.

Emphasising the integration of STI policies, Prof Biswambher Pyakuryal, president of Nepal Economics Association, said, “Lack of clinical analysis of major socio-economic fundamentals is our weakness. Thus, political and economic restructuring is essential.”