--By Dr Arjun Karki

 

The group of least developed countries (LDCs) was formed by the UN General Assembly in the 1970s. Back then, this group had 24 countries. There are three criteria to identify the countries that fall in the LDC group. The first criterion is the Human Assets Index (HAI). The second is the Gross National Income (GNI) and the third is Economic Vulnerability Index (EVI). The main objective of classifying countries as LDCs was to minimize their number by addressing their development challenges, alleviating poverty and mitigating other risks. But instead of decreasing, the number of LDCs has reached 49 today. What this means is the economic and development policies adopted by the international community to address the poor and the poor countries has failed. So far, the Maldives from Asia and Botswana and Cape Verde from Africa are the only three countries that have progressed from the LDC group to developing countries.

 

Most of the LDCs are facing political instability, internal conflicts and wars. Therefore, poverty is not the only issue for these countries. For example, Nepal, Sudan, Afghanistan, Somalia, Central African Republic and lately, Southern Sudan are facing such problems. These countries cannot resolve their political instabilities and other risks unless they iron out their economic problems. At present, the LDCs particularly lack the capabilities to tackle the challenges posed by the climate change. The latest climate change related problems are the melting of snow in the mountainous regions of Asia, rising of water level in the Pacific region and expansion of deserts and food insecurity in Africa. In this situation, LDCs cannot progress to the group of developing countries. The rules set by the World Trade Organisation (WTO) are not in favour of the LDCs and the developing countries. As the WTO rules are in favour of only the developed and rich countries, the share of LDCs in global trade is less than one percent.

 

There are two types of barriers in international trade. They are non-tariff barriers (NTBs) and tariff barriers. The LDCs are particularly affected by the NTBs. We have been demanding that the goods produced in the LDCs get a duty-free and quota-free access to the markets in Europe and the US. However, the LDCs haven’t been able to get this right despite international commitment. NTBs like sanitary and phytosanitary (SPS) measures put in place by the European Union and rule of origin (Nepali carpet which uses wool imported from New Zealand and Tibet is not recognized as an LDC product) pose as major challenges for the LDCs to participate in international trade.

 

The burden of foreign debt is another major challenge in the economic development of LDCs. The LDCs have to use more than 50 per cent of their gross domestic income to pay the interest of foreign debt alone. Therefore, in order to allow the LDCs to enter the world market, their foreign debts must be cancelled unconditionally at the earliest possible. If this happens, the LDCs can spend their national income to face the challenges related to their development.

 

The UN has already organized four global conferences on the LDCs. The first and second UN conference on LDCs were organized in Paris of France in 1981 and 1990, respectively. Similarly the third conferences was organized in Brussels in 2001 and the fourth conference was organized in Istanbul in May 2011. Thus, the latest UN programme to address the issues of LDCs is called the Istanbul Programme of Action. The overarching goal of the Istanbul Programme of Action is to overcome the structural challenges faced by the LDCs, to eradicate poverty, achieve internationally agreed development goals and enable half of the 49 LDCs to graduate out of this category by 2020.

 

Initially, Nepal had planned to graduate out of the LDC category by 2030. Truthfully speaking, that plan was not good because under the very leadership of Nepal, the commitment was expressed to graduate half of the existing LDCs out of the LDC group to the developing group. Therefore, Nepal faces a moral obligation to make a progress to the group of developing countries from the LDC group by 2020. And Nepal has made a national commitment to graduate out of the LDC group by 2022 which is a praiseworthy announcement.

 

However, Nepal faces a number of challenges. The biggest challenge is the creation of democratic deficit. A democratic deficit (or democracy deficit) occurs when ostensibly democratic organizations or institutions (particularly governments) fall short of fulfilling the principles of democracy in their practices or operation where representative and linked parliamentary integrity becomes widely discussed. The political parties and their leaders got to enjoy the fruits of democracy and peace in Nepal. However, the Nepali people at large are still deprived of the fruits of democracy and peace. This is the biggest challenge that Nepal faces in graduating out of the LDC group. 

 

However, there is hope in the air. A new Constituent Assembly has been elected and soon we will have a new parliament. If the parliament and the elected government to be formed can tactfully address the challenges being faced by the Nepali people, then we will not have to wait till 2022 to graduate out of the LDC group. 

(Dr Karki is the international coordinator of LDC Watch. This is a TC translation of Dr Karki’s article published in Aarthik Abhiyan on January 10.)