According to UN classification, Nepal is categorized as the least developed country (LDCs). As the government could not reach the threshold, it could not get ranked up from least developed to the developing country.

As there seems to have been no progress overall, Nepal has failed in development. Though the government of Nepal has targeted and claimed a certain level of development, despite some gains, there have not been any significant changes as promised.

Nepal country flag

In 1991, the US government development agency predicted that Nepal would graduate from the rank up least developed countries by 2001, but since we were in 2020, it is still on the list of LDCs. However, Nepal is hoping to achieve that target by 2022. But as the progress report is below expected, it is sure to miss the mark again.

There have been several reasons for Nepal being still on the list of LDCs. There is no particular reason to blame for this. The war between 1996 to 2006 is ultimately one of the critical reasons why more than 17000 people were killed, economic activities were hindered, and infrastructures were destroyed.

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Corruption is the second primary reason that has been hitting the development works. The unstable government and the conflict between the political parties are considered the other main reasons for the no progress.

Nepal has been receiving foreign aid for over 60 years. It has been receiving over $1 billion in a year, which is a quarter of the government budget. Though such a massive amount of money is being received in the name of development, Nepal cannot achieve its target. Moreover, its achievement has fallen far more than expected.

According to the united nation, a least developed country has the lowest indicators of socioeconomic development and lowest human development index. Generally, if a country meets the three criteria per the UN, it is the least developed country. These categories are:

  • Poverty: Countries with GNI per capita less than the US $ 1035 are included in LDCs. To graduate from it, one must have higher than $ 1242.
  • The human development index is categorized based on nutrition, health, education, and adult literacy. Countries with less than 60 HDI are listed in LDCs, while to graduate from it, one must have a higher than 66.
  • Economic vulnerability: This is based on the financial condition of the country. Countries with more than 36 EVI (Economic Vulnerability Index) fall under LDCs, while those with less than 32 will graduate from it.
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According to the data from 2015, Nepal’s GNI is $ 659, HDI is 68.7, and EVI is 26.8.

At the moment, Nepal needs in not financial aid or technical advice. It is political as the country is not being able to achieve its target as per promised, but still, the international financial assistance has been added in the name of development.

Financial aid has been making extractive politics sustainable. The donors must be brave to demand action against the corruption. They should withdraw their financial assistance if the progress is not as needed and if the corruption is not being abolished. Unless the corruption is completely removed, there is less chance of achieving the target.