Nepal | September 23, 2020

Govt wants Nepal to remain LDC

To request UN not to upgrade it to developing country

Rewati Sapkota
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Country needs concessional foreign aid, routes for trade. We’ve to boost per capita income

Kathmandu February 28

The government has decided to request the United Nations Committee for Development Policy not to upgrade Nepal from least developed country to the league of developing nations until 2021. A Cabinet meeting today decided to write to the UNCDP stating that the country is not prepared for the graduation and another triennial review should be carried out in 2021.

“We have endorsed a proposal that Nepal should not be graduated to a developing country, as it has not met the criteria of per capita income,” Finance Minister Yubaraj Khatiwada said after the meeting.

Nepal, however, has met two — human asset index and economic vulnerability index — of the three criteria taken into account for upgrading a country.

As per the criteria set by the UN, a country graduating to the league of developing nations should have per capita income of $ 1,245, HAI of 66 and EVI below 32. According to the data of fiscal year 2016-17, Nepal’s HAI and EVI stand at 68.7 and 26, respectively, and the PCI at $ 865.

Nepal aims to graduate to the league of developing nations by 2022. However, the Economic and Social Council review has stated that technically Nepal is set to graduate to the league of developing countries, as there has been remarkable performance in two major indices.

“We’ll first boost our PCI to the required level by the 2021 review. Then we’ll be ready to graduate to a developing country,” Khatiwada told mediapersons. “But it’s too early now.”

The government decided to delay the graduation, as the country still needs concessional foreign aid and routes for trade, Khatiwada told THT, adding, “We have to boost our PCI swiftly.”

Graduation to a developing country results in removal of export preferences in developed markets after a certain year, which will hit the private sector that has been seeking sustainability of achievements in terms of HAI and EVI.

The developed countries have committed to providing 0.75 per cent of their gross national income as official development assistance and the LDCs are major beneficiaries of the ODA.

The government has said it is not the right time for the country to graduate to the league of developing nations, as it has just emerged from decade-long armed conflict, devastating earthquakes and blockade.

Following discussions with a wide range of stakeholders, including the private sector, academicians, think tanks, civil society organisations and non-government organisations, the National Planning Commission had recommended the Office of the Prime Minister and Council of Ministers that Nepal should not hasten to graduate to the league of developing nations.


A version of this article appears in print on March 01, 2018 of The Himalayan Times.

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