Kathmandu, November 20

Lack of entrepreneurship growth and slow progress in the Sustainable Development Goals are the major factors hindering the development process of least developed countries (LDCs), including Nepal, as per a report of the United Nations Conference on Trade and Development (UNCTAD).

Unveiling its annual report today, UNCTAD has indicated that lack of labour rights and women entrepreneurship are the major factors for the underdevelopment of Nepal as well other 49 LDCs.

“The report establishes a more active stance for the state in steering the emergence for dynamic and transformational local entrepreneurship,” said UNCTAD Secretary General Mukhisa Kituyi. “By encouraging policymakers to value the benefits of entrepreneurship, this report makes an invaluable contribution to efforts to add value to the least developed countries' implementation of the 2030 Agendas for Sustainable Development.”

Several structural features of the economics of LDCs tend to weaken entrepreneurship and the growth of enterprises, including limited finances, insufficient infrastructure, lack of institutions, poverty, restrictions on women's empowerment, high registration costs, and elevated political, economic and environmental risks, according to the report. The result is that most firms in LDCs are micro or small enterprises and 58 per cent of the formal firms have at most 20 employees, it added.

Speaking at a report launching programme, former vice chairman of the National Planning Commission Swarnim Wagle, stated that Nepal's progress to graduate from the LDC status to the league of developing nations has been satisfactory. “Many people have abandoned the primary occupation of agriculture but the industrial sector has not been able to employ such manpower, which is a weakness of the domestic industries.”

He further stated that if Nepal wants to graduate to the league of developing nations then the country needs to promote entrepreneurship among the youths based on the spirit of the SDGs.

The report says that large numbers of people in LDCs are forced into small-scale, low-value entrepreneurship by necessity. Entrepreneurship is dominated by self-employment which accounts for 70 per cent of total employment, informal micro and small enterprises with low chances of survival and growth and little propensity to innovate. Small firms account for 58 per cent of all firms of these countries including Nepal.

“Governments in LDCs should therefore focus on boosting entrepreneurs and established firms that seize opportunities to create innovative products and services, employ more people and grow dynamic businesses that have a transformative, ripple effect through the economy,” the report reads.