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Strategies for Achieving Nepal’s Vision to Graduate from LDCs. Rabi S. Sainju. Presentation Outline. Nepal’s Long –term Vision LDCs Milestone and Category Timeline Criteria of LDCs LDCs Graduation Criteria Nepal’s Position Way Forward : Strategy for graduation Conclsion.

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Strategies for Achieving Nepal’s Vision to Graduate from LDCs


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    1. Strategies for Achieving Nepal’s Vision to Graduate from LDCs Rabi S. Sainju

    2. Presentation Outline • Nepal’s Long –term Vision • LDCs Milestone and Category • Timeline Criteria of LDCs • LDCs Graduation Criteria • Nepal’s Position • Way Forward : Strategy for graduation • Conclsion

    3. Nepal’s Long Term Vision in TYP • Create 'Prosperous, peaceful and just Nepal‘ , • Graduating from LDC to a developing nation by 2030, • Reduce poverty to minimum level through high rate of growth, • Secure peace, stability and good governance in all spheres of the nation, • Ensure equal opportunities to all Nepalese for their future, • End all forms of discrimination in the society

    4. What are LDCs ? • The States designated by the United Nations as Least Developed Countries” (LDCs), presently 49 countries, account for 12 percent of the global population, but share only 0.8 percent of global wealth, only 1% of world exports and less 2% of global direct investment. • The LDC category was established in 1971 to capture the needs of LDCs, notably in the form of trade-related preferential treatment and concessionary development financing for LDCs. • LDCs are deemed to suffer from severe structural handicaps (weak human assets; a high economic vulnerability), in many cases owing to geographical disadvantages, such as being small, remote, insular or land-locked. • Special measures for LDCs are designed to help overcome these constraints and achieve structural progress,

    5. Definition of of LDCs

    6. Milestones of the LDCs • 1964 – Establishment of LDCs wad advocated in UNCTAD I, Geneva • 1968 – LDCs categories were examined in detail in UNCTAD II • 1969 – UN General Assembly acknowledge the need to alleviate problem of underdevelopment in LDCs • 1970s - International Development Strategy for Second UN Development Decade: special measures for the LDCs • 1981 - First UN Conference on LDCs (LDC I), Paris: Substantial New Programme of Action (SNPA) • 1990 - Second UN Conference on LDCs (LDC II): Paris Declaration and PoA for the decade • 2000 - Millennium Declaration and MDGs: poverty identified as the most daunting challenge of new century • 2001 - Third UN Conference on LDCs (LDC III): Brussels Declaration and Programme of Action (2001-2010) • 2011 – Fourth UN Conference on LDCs (LDC IV): Istanbul Declaration « Renewed and Strengthened Global Partnership for the Development of LDC » New Programme of Action for the LDCs

    7. The LDC category WMO • 25 LDCs (1971) – 50 (2007) – 49 LDCs (2012) • Eurasia (9 countries): Afghanistan, Bangladesh, Bhutan, Cambodia, Lao PDR, Myanmar, Nepal, Timor-Leste, Yemen • Africa (34 countries) • Oceania (5 countries): Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu • North America (1 country): Haiti • 10 LDCs are Small Island Developing States • 16 LDCs are Landlocked Developing Countries • Graduated from the LDC group Over 4 decades were: • Botswana - 1994 • Cape Verde and - 2007 • Maldives - 2011

    8. LIST OF THE 49 LDCS

    9. LDC Criteria Over Time

    10. LDCs Graduation Criteria To graduate from LDC status a country must meet two of the three criteria. • Gross National Income (GNI): A country must meet the minimum GNI threshold set every three years. The 2012 level was US$1,190. • Human Assets Index: This focuses on social indicators such as nutrition, child mortality, secondary school enrolment and adult literacy. Countries eligible for graduation must be at least 20% above the threshold set. (66) • The Economic Vulnerability Index: This includes indicators related to the economic structure of a country and its ability to cope with potential ‘economic shocks', such as natural disasters. (32) The UN Committee for Development Policy (CDP) reviews the LDC list every 3 years, the last review was in March 2012. If a country meets the criteria in two successive reviews then it is eligible for graduation.

    11. Gross National Income (GNI) per capita • GNI per capita provides information on the income status of a country. The GNI measure used by the CDP is expressed in current United States Dollars. • National currencies are converted into United States Dollars according to the World Bank's Atlas Method. The Atlas Method reduces the effects of short term fluctuations in inflation and market exchange rates. • The threshold for inclusion is based on a three-year average of the level of GNI per capita, which the World Bank defines for identifying low-income countries. • The threshold for graduation is set at a higher level, usually 20 per cent above the inclusion threshold

    12. Human Asset Index (HAI) The HAI provides information regarding the level of development of human capital. It is a combination of four indicators: two indicators of health and nutrition and two of education: Figure in parenthesis indicate weight in the overall HAI

    13. Economic Vulnerability Index(EVI) Economic vulnerability to exogenous shocks is a major structural obstacle to development. The EVI is designed to reflect the risk posed to a country's development by exogenous shocks. -Population (1/8) -Remoteness (1/8) -Merchandises export concentration (1/16) -Share of Agri. , Fisheries & Forestry (1/16) -Share of population in low elevated costal zones (1/8) -Instability of exports of goods and services (1/4) -Victims of natural disasters (1/8) Instability of agriculture production (1/8) Figure in parenthesis indicate weight in the overall EVI

    14. Asymmetries between inclusion and graduation process

    15. Nepal’s Situation on 2012

    16. Index Value of Nepal Figure in parenthesis are GNI figure form World Bank Atlas

    17. Component of HDI

    18. Human Development Indicator 2013

    19. Human Development Index Trend

    20. HDI: Human Development Index Trend

    21. HDI: GNI Per Capita PPP

    22. HDI : Health Index

    23. HDI : Education Index

    24. HDI : Gender inequality Index

    25. Human Development Index Trend Nepal 2012 * 2006 data

    26. HDI trends on new component and new methodology

    27. HDI indicators for 2012 relative to selected countries and groups

    28. IHDI for 2012 relative to selected countries and groups

    29. GII for 2012 relative to selected countries and groups

    30. Multidimensional Poverty Index (MPI)

    31. Changes in MPI over time

    32. Changes across the Population (light) and among the poor (dark)

    33. Way Forward: Strategies for graduation

    34. Outcome of the development policies The development policies should result in: • broad-based and accommodation of all sectors in development process • poverty reduction and lower incidence of poverty, • significant improvement in health outcomes, • universal access for children to school, • increased access to higher education and • improved standards of education, including skill development. • better opportunities for both wage employment and livelihood, • improvement in provision of basic amenities like water, electricity, roads, sanitation and housing. • Particular attention to the needs of the ethnic and socially excluded and marginalized population. • special attention to women and children and minorities and other excluded groups

    35. Achieving Criterion 1: GNI per capita • Sustained high economic growth is necessary to reach the per capita income threshold. • High levels of foreign direct investment (FDI), particularly in the energy and manufacturing sector, could drive such growth. • All segments of population must be able to participate in the growth process and contribute to growth • It is necessary to provide opportunity, capability, access and security to all for sustained growth and productive employment in the economy • ‘demographic dividend’ need to be tapped through • provision of higher levels of health, education and skill development • an environment for enhancing good quality employment/livelihood opportunities.

    36. Achieving Criterion 1 (contd.) • create adequate livelihood opportunities with productive employment commensurate with the expectations of a growing labour force. • the pace of job creation must be greatly accelerated. this must come from a significant boost to the manufacturing /service sectors of the economy, • Accelerate creation of more rural non-farm jobs opportunities through faster expansion in agro-processing, supply chains, • increase technical personnel for various aspects of farming and also maintenance of equipment and other elements of rural infrastructure. • creation of productive jobs/livelihood opportunities in service sectors.. • reforms to streamline not only the incentive structures for the farmers, but also the institutional framework in which agriculture and related activities take place.

    37. Achieving Criterion 2: The HAI • Fulfilling all MDGs by 2015 is a core aim of the Government of Nepal, and an essential part of the TYP of the country. • Progress made so far is close to the graduation threshold relevant to the human assets weakness criterion. • Further increase in budgetary allocations to the education and health sectors is needed commensurate with output • Special efforts need to be pursued in the areas of: • nutrition (MDG 1) of children and women of reproductive age • child mortality (MDG 4), • secondary school enrolment (MDGs 2 and 3), and • adult literacy (MDG 2).

    38. Achieving Criterion 2(contd.) • Proper management of health professionals at all levels for achieving an expansion in the public provision of health services. • improvement in education and training capacities in health sector. • expand educational facilities and improving quality of education as key instruments for achieving faster sustained growth. • improve teacher training, upgrading curriculum and enforcing accountability for improving the quality of school education • academic reforms to provide greater flexibility and choice for students, • strengthen of research activity in Universities by establishing mutually-reinforcing linkages between teaching and research. • current “not-for-profit” prescription in the education sector should be reviewed in a pragmatic manner to ensure quality with equity. • Private initiatives in higher education, including viable and innovative PPP-models, need be actively promoted.

    39. Achieving Criterion 3: EVI • Nepal has made significant progress under this criterion. • Effort to make Nepal a “land-linked” rather than land-locked country. • Productive capacities need to be expanded (infrastructure, private sector development, energy, science and technology) as to make • a development multiplier”, • an essential avenue for diversifying the economy and • increasing productive employment. • Reduce the impact of external trade shocks by improving agriculture and food security, and accelerating rural development. • Improve PFM and related macroeconomic policies in order to reduce dependence on ODA and diversify the origin of resource inflows. • Policies to mobilize domestic resources and remittances to reduce infrastructure gaps. • Improve environmental mgmt to address the effects of climate change, and to strengthen resilience through improved DRR/DRM.

    40. Achieving Criterion 3(contd.) • Expand investment in infrastructure based on a combination of public and private investment through various forms of PPP. • Develop long term focus on urban planning to address heavy demand for better quality infrastructure in urban areas, especially water, sewerage, public transport and low cost housing. • Public investment in infrastructure will have to bear a large part of the infrastructure needs in backward and remote areas. • review the factors which may be constraining private investment, and take steps to rectify them. • PPP, with appropriate regulation and concern for equity, should also be encouraged in the social sectors, such as health and education. .

    41. Conclusion • Graduation strategies need to be: • strategy to develop of all sectors/aspects of the nation • mainstreamed in all development policies • developed as way of life of individual to the nation • It is necessary to raise the pace of growth: • enlarging the size of the economy, • leveling the playing field for investment and • increasing productive employment opportunities. • There is a need to have a broad based and inclusive growth to: • To sustain the present level of achievements • benefit all sections of society and • improve economic growth.

    42. Thank You Allfor your kind attention