Nepal pays the cost of conflict, could not graduate from LDCs group

By now Nepal should have been close to graduating to Developing Countries (DC) from Least Developing Countries (LDCs) group, had there not been a decade long conflict, said Dr Jagdish Chandra Pokharel, vice chair of National Planning Commission (NPC).
Launching UNCTAD Least Developed Countries Report 2010: Towards a new international development architecture for LDCs' here today in the Valley he said that Nepal has paid the price of Maoists insurency.
Nepal 's national income (GNI) per capita is only the half at $568 than it needs to graduate from LDCs.
According to the UN, LDC is a country that has low-income (three-year average GNI per capita of less than $905, which must exceed $1,086 to graduate to the DCs; human resource weakness -- based on indicators of nutrition, health, education and adult literacy -- and economic vulnerability -- based on instability of agricultural production, instability of exports of goods and services, economic importance of non-traditional activities, merchandise export concentration, handicap of economic smallness, and the percentage of population displaced by natural disasters.
"Though, Nepal has done fairly better in social front, it could not do much in the economic front," he added.
UN Resident and Humaniterian coordinator of the UN Systems in Nepal Robert Piper said that Nepal has made the fatest growth amont the LDCs, though sustainability is under question due to high dependency on external resources. "Dependency on external resources should gone down for sustainable development," he said, adding that except energy crisis, lack of infrastructure, there are a host of governance issues creating hurdles to the sustainable development.
Presenting the UNCTAD's annual report on LDCs Prof Bishwanath Tiwari said that only two LDCs graduated to DCs in last three decades.
In 1994 Botswana and in 2007 Cape Verde graduated from the category of LDC to the DCs. Out of the total 49 LDCs, 33 are in Africa, 10 are in Asia, one is in Americas and five are in Oceania. Nepal is the current chair of LDCs group in the UN.
The annual report said that the 49 least-developed countries (LDCs) had, however, weathered the global downturn better than had been anticipated. But they remained trapped in 'boom-bust cycles' that hit their resource-dependent economies.
"The number of people living in extreme poverty has increased by three million per year during the boom years of 2002-2007, reaching an estimated 421 million in 2007 - twice as many as in 1980," the report said, adding that during the boom years, the LDC group as a whole averaged annual growth rates of seven per cent. "But their dependence on exports of primary commodities increased overall and in over half of the 49 LDCs, the manufacturing share of the countries' total value added actually declined."
The subsequent financial crisis and recession of 2008-2009 led to a significant growth slowdown in the large majority of poorer countries, UNCTAD said.
Export revenues for LDCs were down by 26 per cent in 2009, while foreign direct investment (FDI) contracted by 13 per cent compared with the previous year. But the good news was that average GDP growth in LDCs, which reached 4.3 per cent in 2009, was higher than in other developing countries and developed countries.
The report also recommended that the poorest nations broaden their economies so that they benefited from, but became less dependent on, commodities such as raw natural resources.