KATHMANDU, Feb 28: Nepal has officially decided to write to the United Nations (UN) saying that it is not in a position to graduate from the Least Developed Countries (LDC) before 2021.
A cabinet meeting held on Wednesday decided to defer its plan to graduate from LDC, concluding that Nepal was not ready to graduate yet in view of the economic vulnerability the country continues to face, according to Minister Lal Babu Pandit. According to the minister, the Ministry of Foreign Affairs (MoFA) will write to the UN to this effect.
There are three graduation thresholds -Gross National Income (GNI) per capita, Human Assets Index (HAI), and Economic Vulnerability Index (EVI)-for graduating from the LDC. The LDCs that aspire for graduation must meet two of these three conditions.
Although Nepal has met the criterion of Human Asset Index and Economic Vulnerability Index, the GNI Per Capita is still too low. “We need to take our GNI per capita to US $ 1242 for graduation. But it is just about $800 now. We will graduate from LDC only after 2021,” said Minister Pandit.
The decision of the government comes ahead of the second review meeting for its graduation from the status of being a LDC to developing one. Nepal has to make final decision before the meeting of the Committee for Development Policy (CDP), an auxiliary body of the UN Economic and Social Council, scheduled for next month.
The government has cited the need of financial assistance from international community to minimize economic vulnerability behind its decision to defer LDC graduation. There are concerns already that Nepal will be deprived of various privileges including concessional financing support and other facilities in trade and developmental assistance once it decides to graduate from the LDC. As a member of LDC, Nepal currently enjoys benefits of special and differential treatment in its obligations toward World Trade Organization.