As Nepal is gearing up to move from the group of least developed countries (LDCs) to that of developing nations, policymakers are expressing a palpable sense of nervousness on whether the country would be able to retain much of the achievements made so far by the time of formal graduation.
Criteria met
Nepal has high chances of moving to the league of developing nations by 2021, as it has met two of the three goals fixed by the United Nations (UN) for graduation.
The first criterion fixed by the UN for LDC graduation is per capita gross national income, which, as of March 2012, should stand at $1,190. Second is the human resource development, which is measured using Human Assets Index. The index includes two indicators each on education and health and the country’s score should stand at 66 or above. Third is the level of economic vulnerability, which is measured using the Economic Vulnerability Index (EVI). This index includes eight indicators and the score should stand at 32 or below for graduation.
If an LDC meets two of the three goals, it qualifies to move to the league of developing nations.
Although Nepal’s per capita gross national income — at $717 — is way below the UN threshold for graduation, it met targets included in the EVI in 2012, with a score of 26.10. Since then Nepal’s score in the EVI has improved to 24.58 with a three-year moving average of 24.91, shows a presentation made recently by National Planning Commission (NPC) Member Swarnim Wagle.
Also, recent calculations made by the NPC show that Nepal had attained a score of 67.2 in Human Assets Index in 2012, which was 1.2 points more than the UN threshold.
Nepal has since progressed on this front and now has a score of 69.2, shows Wagle’s presentation.
“Since we have already met two of the three targets, the UN Committee for Development Policy will definitely review our case in March, making the country eligible for graduation by 2021,” NPC Programme Director Ravi Shankar Sainju, who has been overseeing the country’s graduation process, told The Himalayan Times.
Cause for concern
Yet, what seems to be worrying policymakers like Sainju is uncertainty over sustainability of the progress made so far because of low per capita income in the country.
“So far, most of the LDCs have graduated on the basis of income level. But since our case is different, we are concerned about failing to retain the achievements,” said Sainju.
A paper earlier floated by NPC said that the country needs to invest a whopping Rs 19.80 trillion in various sectors till fiscal year 2021-22 to meet the UN’s per capita gross national income target required for graduation.
Sainju doubts the country will be able to mobilise such a huge fund over the next seven years, as the economy is still moving ahead at a slow pace. “But even if it does, we may not be able to make productive use of the money because we have not addressed some of the basic issues required for economic growth,” he said.
“In this regard, the country’s focus should be on providing quality education and skill-based training to raise the productivity of the workforce.”
The latest Human Development Report of the UN shows only 28.3 per cent of country’s population aged 25 and above have acquired some years of secondary level education. At the same time, many youths do not want to take up vocational courses, as they look down upon jobs such as carpentry and masonry — although they are in high demand.
“Number of years of formal education and skill-based training has direct correlation with workforce’s productivity and income level. So, the state must focus in this area,” Sainju said, adding, “This will gradually lead to labour reallocation, as it’ll encourage workers to move from low-income to high-income jobs, which will ultimately accelerate economic growth.”
Way ahead
Currently, over 60 per cent of the country’s workforce is engaged in agriculture, and 3.83 million plots of land of various sizes are being used for the purpose. But food generated from almost 60 per cent of these plots is not sufficient to feed plot owners’ family members for up to 12 months, the National Agriculture Census 2011-12 shows. This means there is almost zero return on hard labour put in by many engaged in farming jobs.
“Because of engagement in such unproductive works many are still living below the poverty line. This is the reason why labour reallocation is important,” said Sainju.
The incidence of poverty in the country dropped by 11 percentage points to 31 per cent in between 1996 and 2004 — an achievement which was widely acclaimed. Yet, as of fiscal year 2012-13, 23.8 per cent, or almost a quarter, of the total population was still trapped in poverty.
“Replaying the events of 1996 to 2004 to lift these people from the traps of poverty is almost impossible, as these groups are most vulnerable and are economically and socially backward. So, we have to give them access to education and vocational training, raise their capacity, create job and self-employment opportunities and create proper safety nets so that they can deal with income and expense shocks,” said Sainju.
“Unless we lift a significant portion of people living under the poverty line, we may not be able to increase per capita gross national income, which is crucial to sustain the progress made so far.”
Criteria met
Nepal has high chances of moving to the league of developing nations by 2021, as it has met two of the three goals fixed by the United Nations (UN) for graduation.
The first criterion fixed by the UN for LDC graduation is per capita gross national income, which, as of March 2012, should stand at $1,190. Second is the human resource development, which is measured using Human Assets Index. The index includes two indicators each on education and health and the country’s score should stand at 66 or above. Third is the level of economic vulnerability, which is measured using the Economic Vulnerability Index (EVI). This index includes eight indicators and the score should stand at 32 or below for graduation.
If an LDC meets two of the three goals, it qualifies to move to the league of developing nations.
Although Nepal’s per capita gross national income — at $717 — is way below the UN threshold for graduation, it met targets included in the EVI in 2012, with a score of 26.10. Since then Nepal’s score in the EVI has improved to 24.58 with a three-year moving average of 24.91, shows a presentation made recently by National Planning Commission (NPC) Member Swarnim Wagle.
Also, recent calculations made by the NPC show that Nepal had attained a score of 67.2 in Human Assets Index in 2012, which was 1.2 points more than the UN threshold.
Nepal has since progressed on this front and now has a score of 69.2, shows Wagle’s presentation.
“Since we have already met two of the three targets, the UN Committee for Development Policy will definitely review our case in March, making the country eligible for graduation by 2021,” NPC Programme Director Ravi Shankar Sainju, who has been overseeing the country’s graduation process, told The Himalayan Times.
Cause for concern
Yet, what seems to be worrying policymakers like Sainju is uncertainty over sustainability of the progress made so far because of low per capita income in the country.
“So far, most of the LDCs have graduated on the basis of income level. But since our case is different, we are concerned about failing to retain the achievements,” said Sainju.
A paper earlier floated by NPC said that the country needs to invest a whopping Rs 19.80 trillion in various sectors till fiscal year 2021-22 to meet the UN’s per capita gross national income target required for graduation.
Sainju doubts the country will be able to mobilise such a huge fund over the next seven years, as the economy is still moving ahead at a slow pace. “But even if it does, we may not be able to make productive use of the money because we have not addressed some of the basic issues required for economic growth,” he said.
“In this regard, the country’s focus should be on providing quality education and skill-based training to raise the productivity of the workforce.”
The latest Human Development Report of the UN shows only 28.3 per cent of country’s population aged 25 and above have acquired some years of secondary level education. At the same time, many youths do not want to take up vocational courses, as they look down upon jobs such as carpentry and masonry — although they are in high demand.
“Number of years of formal education and skill-based training has direct correlation with workforce’s productivity and income level. So, the state must focus in this area,” Sainju said, adding, “This will gradually lead to labour reallocation, as it’ll encourage workers to move from low-income to high-income jobs, which will ultimately accelerate economic growth.”
Way ahead
Currently, over 60 per cent of the country’s workforce is engaged in agriculture, and 3.83 million plots of land of various sizes are being used for the purpose. But food generated from almost 60 per cent of these plots is not sufficient to feed plot owners’ family members for up to 12 months, the National Agriculture Census 2011-12 shows. This means there is almost zero return on hard labour put in by many engaged in farming jobs.
“Because of engagement in such unproductive works many are still living below the poverty line. This is the reason why labour reallocation is important,” said Sainju.
The incidence of poverty in the country dropped by 11 percentage points to 31 per cent in between 1996 and 2004 — an achievement which was widely acclaimed. Yet, as of fiscal year 2012-13, 23.8 per cent, or almost a quarter, of the total population was still trapped in poverty.
“Replaying the events of 1996 to 2004 to lift these people from the traps of poverty is almost impossible, as these groups are most vulnerable and are economically and socially backward. So, we have to give them access to education and vocational training, raise their capacity, create job and self-employment opportunities and create proper safety nets so that they can deal with income and expense shocks,” said Sainju.
“Unless we lift a significant portion of people living under the poverty line, we may not be able to increase per capita gross national income, which is crucial to sustain the progress made so far.”
Source: THT
