However, experts say the country can sustain the human asset index indicators till 2018 to qualify for graduation but they are doubtful it can achieve its target in financial vulnerability index indicators going by the current economic situation.
The economic vulnerability index is the country's vulnerability to the external economic and environmental shocks while the human asset index is composed of gross secondary enrollment ratio and literacy rates and under- nourishment and under-five mortality rates.
Talking to Republica, Former Finance Secretary Rameshore Khanal said the country's financial situation is shaky and sustaining the indicators of financial vulnerability won't be achievable due to external factors like dwindling remittance and dismal picture of exports as well as change in prices of internationally-sourced commodities on which the local industries are dependent on. A recent meeting of a UN body had declared that Nepal has met its target to enter into a course of graduation by meeting two indicators, except per capita Gross National Income, which is way down from the threshold of US$ 1,242.
Nepal has targeted graduating to a developing country by 2022 and for that to happen, the country needs to have investment of over $100 billion and achieve a more sustained average growth rate of 8 to 9 percent. But the progress so far is very low to achieve the target in real terms.
However, Khanal sees some prospect in improving per capita income provided that the government takes the initiative to draw investment from the domestic private sector as well as foreign direct investment. However, financial stability is also an important factor to foreign investors as they look for an investment climate of low currency devolution.
Graduation from LDC is expected to bring some glory to the country and a point of satisfaction for the government. But experts say the common populace won't have anything special to cheer.
National Planning Commission Member Chandra Mani Adhikari describes graduation as only a statistical and technical issue. But it has nothing special for the general population in real terms, he says. The country is enjoying a number of benefits from its LDC status, including a quota facility in exports as well as soft loans. "Once it graduates from that status, the country will have to look at loans with market-based interest rates from international banks and financing institutions," Khanal says.
However, Nepal, if it graduates to developing country, investors -- particularly big companies -- may eye it for investment.
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