Positive Achievements, Impacts, Challenges and Strategies
Nepal was listed as a Least Developed Country (LDC) on November 18, 1971, through United Nations Resolution No. 2768. After nearly five decades, in 2026, Nepal is attaining a historic opportunity to graduate to the status of a developing nation. This process is based on three major indicators:
1. Per Capita Gross National Income (GNI)
2. Human Asset Index (HAI)
3. Economic and Environmental Vulnerability Index (EEVI)
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| Photo: Annapurna Post |
According to UN assessments in 2015, 2018, and 2021, Nepal qualified for graduation due to consistent satisfactory progress in HAI and EVI.
Key Facts
Despite not meeting the GNI criteria, Nepal succeeded in HAI and EVI indicators.
- Required GNI: $1306 (2024) → Nepal: $1300
- Required HAI: ≥ 66 → Nepal: 76.3 (2024)
- Maximum EVI: ≤ 32 → Nepal: 29.7 (2024)
Nepal initiated the graduation process in 2015. However, due to the earthquake, constitutional transition, and the COVID-19 pandemic, the decision scheduled for 2021 was postponed by five years. Now, Nepal, along with Bangladesh, Laos, São Tomé and Príncipe, Solomon Islands, and Angola, will graduate in 2026.
Positive Aspects
1. Improvement in International Image: Nepal will be recognized globally as an emerging economy.
2. Increase in Foreign Investment: Foreign investors’ confidence will grow, strengthening economic diplomacy.
3. Enhanced Competitiveness: Domestic industries will be encouraged to become more competitive.
4. Access to Capital Markets: Nepal will be positioned to enter international debt markets.
5. Strengthened National Pride: Citizens’ confidence and sense of dignity will be reinforced.
6. Indication of Political/Economic Stability: A signal that Nepal is moving forward with long-term plans and the goal of ‘Prosperous Nepal, Happy Nepali.’
Potential Challenges
1. End of LDC-Specific Privileges: Loss of duty-free/quota-free trade benefits.
2. Reduced Development Assistance: Grants and concessional loans may decline.
3. Impact on Student Scholarships: International scholarship and research quotas may be reduced.
4. Higher Interest Rates on Loans: International loans may carry higher interest rates.
5. Reduced Dependence on Foreign Aid: Greater reliance on internal resources will be required.
6. Challenge of Transitional Management: Need for policy, legal, and structural transformation.
Suggested Strategies
1. Strengthening Domestic Industries: Reducing costs, improving productivity, and focusing on quality products.
2. Export Diversification: Exploring new markets and emphasizing high-value products.
3. Mobilization of Internal Resources: Improving tax administration and focusing on import substitution.
4. Policy Stability and Transparency: Creating an investment-friendly environment, strengthening rule of law, and enhancing good governance.
5. Strengthening Foreign Partnerships: Bilateral agreements, economic diplomacy, and active embassies.
6. Investment in Education, Health, and Skill Development: Making youth employment-oriented and reducing brain drain.
Conclusion
Nepal’s graduation to a developing country is a combination of economic transformation, national pride, and international recognition. However, to institutionalize the benefits, timely strategies, planning, and legal preparedness are necessary. By utilizing the transitional opportunity effectively, Nepal can achieve sustainable progress by building a self-reliant, inclusive, and competitive economy.
