Sunday, March 29, 2015

Nepal to graduate to developing country from LDC before deadline

Nepal is going to graduate 'technically' to developing country status from the current Least Developed Country (LDC) status before the deadline of 2022.
Nepal has met two – out of the three – criterion to graduate to the developing country, informed National Planning Commission member Swarnim Wagle.
Of the three, a LDC has to meet atleast two criterion – Economic Vulnerability Index (EVI) and Human Assets Index (HAI) – or one criteria that is per capita gross national income (GNI) – to graduate to the developing country, according to the  UN Committee for Development Policy. But for that a country’s per capita GNI should be twice the UN threshold that is $1,242. But, UN data revealed that Nepal’s per capita gross national income stands at $659, which is way below the UN threshold.
Nepal has met Economic Vulnerability Index (EVI) and Human Assets Index (HAI) to graduate to developing country, concluded the meeting of UN Committee for Development Policy – a body under the UN Department of Economic and Social Affairs – held in New York on March 23-27.
However, Nepal has failed to meet the first criteria that is per capita gross national income (GNI), which should be $1,242 or more, which is fixed by the UN for 2015, though it has met the two other criterion.
Human Assets Index (HAI) – that is the level of the human capital present in a country that includes indicators on gross secondary enrollment ratio, and under-nourishment, under-five mortality and literacy rates – needs to be 66 or above to be eligible for graduation. Nepal scored 68.7, which is 2.7 points more than the UN threshold.
Likewise, Economic Vulnerability Index (EVI) – that measures a country’s vulnerability to external economic and environmental shocks using the eight indicators – should be 32 or less for graduation. Nepal scored 26.8, which is below the UN threshold of 32.
"Since Nepal has met the two non-income criteria, it can graduate on technical grounds,” Wagle said, adding that Nepal is now under review. "Nepal will have to sustain these achievements till 2018, when the UN will conduct another review. If it is able to sustain the current achievement, the UN Economic and Social Council will forward the proposal on Nepal’s graduation to the UN General Assembly in 2018."
The country will then formally graduate to developing countries after three years by 2021, after formal decision by the UN General Assembly. However, graduation to developing country will make Nepal unfit to get benefit that it is receiving as a LDC. Thus Nepal needs to increase its competitive capacity and increase domestic production by investing more on physical infrastructure and industries.
The planning commission has reset the deadline to 2022 – bringing it down by eight years from 2030 – last year during the third three-year interim plan.
Nepal now needs to propel economic growth to sustain the achievements and elevate it to middle income country by 2030 from the current low income country, Wagle added.

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