KATHMANDU, Oct 27: Nepal could miss its target to become a 'middle-income' country by relying too heavily on remittance incomes, according to a new report prepared jointly by the Overseas Development Institute (ODI) and South Asia Watch on Trade, Economics and Environment (SAWTEE).
Economists at the two think-tanks have calculated how, based on past growth rates, Nepal is on course to graduate from a low-income country (LIC) to a lower-middle-income country (LMIC) by 2030. However, this would require creation of 6.1 million jobs, of which 3.1 million are needed simply to match population growth.
The report entitled 'Pathways to Prosperity and Inclusive Job Creation in Nepal', which was unveiled amid a ceremony in Kathmandu on Thursday, details how growth since 2000 has not been based on high-quality jobs. Instead, the lack of good jobs has resulted in young people looking for work overseas. It is estimated that up to 4 million people are working abroad, generating remittances worth more than 30 percent of GDP.
Speaking at an interaction organized to release the report, researchers urged the government and all political actors to put a long-term plan in place for economic transformation and job creation.
The report has identified agro-processing and light manufacturing, information and communication technology (ICT), tourism, and hydropower as the four key sectors of job creation.