Nepal is among the group of 48 least developed countries of the world. During the formulation of three category nations (developed, developing and LDC) made in 1971, there were only 25 member tagged as the “Least Developed Countries”. But only 4 member nations graduated to the developing nation status and another 27 nations joined the club over the last four and half decades. Today, the UN Agency aims to reduce the number of LDCs from 48 to 24 by 2020. As poverty, inequality and underdevelopment anywhere are a threat to prosperity, the agenda of graduating as many LDCs as possible to developing country status has become a shared concern of all.
Nepal had made a vision to put a tagline of “developing nation” by the end of 2022 in the current 3 years plan. Different calculations show that Nepal had met two of the three goals, which are enough for the country to move from the league of least developed countries to that of developing nations. The United Nations Department for Economic and Social Affairs (UN DESA), the sole authority to categorize the developing status of the nation, has currently set three criteria for graduation. First is per capita gross national income (GNI), which, as of March 2012, should stand at US$1,190. Second is the human resource development, which is measured using Human Assets Index (HAI). The index includes two indicators each on education and health and the country’s score should stand at 66 or more. Third is the level of economic vulnerability, which is measured using the Economic Vulnerability Index. This index includes eight indicators, such as population, merchandise export concentration, share of agriculture, forestry and fisheries in GDP, and instability in agricultural production. The score in this index should stand at 32 or less for graduation.
Out of these three criteria, least developed countries seeking graduation must meet at least two goals during two consecutive triennial reviews of the Committee for Development Policy. But, once indicators are green signaling, they have to be retained, till the time the Committee for Development Policy meets again in 2018. Following this, the UN Economic and Social Council will review the recommendations of the Committee and forward the proposal to the UN General Assembly. The country will formally graduate after three years of formal decision taken by the General Assembly. Nepal needs to achieve at least a 9 per cent economic growth rate, on average, for the next seven/eight years. For this, huge amounts of additional capital investment are required from both the public and private sectors. The current pattern of low capital spending must be overcome through a number of legal, political and managerial reforms. This calls for political stability and good governance. Nepal needs to sustain EVI, improve HAI and accelerate GNI per capita. Nepal should use this opportunity to stimulate the economic status of the nation and prove itself as the land of tremendous opportunity.