As we approach the finish line and prepare to transition away from the status of one of the world’s Least Developed Countries, we must embrace the added responsibility of ensuring irreversible and sustainable graduation, and work together to ensure that no parent ever struggles to feed their family or send their children to school the way my parents, and many others from my generation once did.“In the 1970s, when Nepal was first included in the UN list of Least Developed Countries (LDCs), my parents worked as porters carrying food and other items 68 kilometres from the country’s only highway to their district of Arghakhanchi.
Together with my colleagues from the Resident Coordinator’s Office we have provided technical support to the Government of Nepal as they formulate the Smooth Transition Strategy (STS). This strategy focuses on accelerating economic transformation by bringing in foreign direct investment, expanding revenue base, accessing development finance, particularly climate finance, and catalyzing private investment. Back then, people lived on an average annual per capita income of and more than 60 per cent of the population lived in hunger and abject poverty. Nepal’s achievements go well beyond meeting these official thresholds. In 2020, poverty declined to 17 per cent, and in 2022, the level of hunger (assessed by the Global Hunger Index) was reduced from severe to moderate. Improvements to roads and infrastructure mean that rural parts of the country are now better connected.
Chasing development aspirations
Up until the 1990s, my parents could not feed us a full meal a day; and I still vividly remember queueing up at the Sarkari Khaddya Godam – the government food warehouse- to buy subsidized food. Not long after I joined the UN in Nepal in 2010 as a development analyst, the Fourth UN Conference on LDCs was held in Istanbul, marking an important step in Nepal’s long path towards LDC graduation. All these efforts will help create jobs and enhance the ability of local governments to deliver services and promote Nepal’s many Micro, Small and Medium sized enterprises, which make up almost 99 per cent of enterprises in the country. If connected to regional value chains, these MSMEs, or ‘infant industries’, many of which are women led, have huge potential to propel progress on the SDGs and Nepal’s own development goals.
Economic, security and climate challenges
ADB/Samir Jung Thapa A young girl hard at study in Nepal. As the economist at the UN Resident Coordinator’s Office (RCO) in Nepal, a key part of my role is to support the Government and other development partners prepare for this critical transition. What impact will it have on communities across the country? How can we work together to mitigate any risks? These are some of the questions which have guided my work in the RCO over the past three years. Engaging with neighbouring LDCs and drawing on UN development system expertise from the country, regional, and global level, has been a key part of the smooth transition process. Preparing Nepal for this transition requires a broad spectrum of UN support; which is why the UN Sustainable Development Cooperation Framework (2023-2027) has adopted LDC graduation and inclusive economic transformation as one of the central, cross-cutting pillars to guide the activities of the entire UN system in the country.
Harnessing potential of Nepal’s ‘infant’ enterprises
This is a proud moment for Nepal, and a proud moment for me personally. Our graduation sends a positive message to the world that Nepal is ready for its next chapter.” With the goal of implementing the ‘Istanbul Programme of Action’, Nepal set out its own 12th national plan to prioritize LDC graduation. Three years later, under the 15th plan, 2024 was set out as the hard deadline for Nepal’s graduation, which was delayed to 2026 due to the COVID-19 pandemic. © CIAT/Neil Palmer They have been participating in an international conference in Doha, Qatar, focused on how best to support their development and future graduation from the LDC group.
In the short term, the graduation is likely to keep Nepal’s economy stable. In the longer term however, there are many challenges including supply side constraints of goods, inadequate structural transformation, and the loss of flexibility in promoting Micro, Small and Medium enterprises, (MSMEs) for which we are already supporting the national authorities. On issues of gender equality and health, Nepal has also made significant strides, successfully achieving gender parity in school enrolment target in 2019 and significantly reducing under-five mortality to 28 deaths per 1000. Reaching these milestones has not been easy, especially for a country which endured a decade long armed conflict from 1996-2006 and experienced a challenging peace-building process in the aftermath. In 2015, Nepal also suffered from the tragic 7.8 magnitude earthquake that claimed over 9,000 lives and lowered GDP growth by over 1.5 percentage points from an estimate of 4.6 per cent that year.