The United Nations Conference on Trade and Development (UNCTAD) Least Developed Countries (LDC) Report 2010 has also called for simulations of different types of policies which could be chosen by the LDCs as means of improving living standards and accelerating economic growth. [break]
The report has suggested policies that include accelerated growth of government spending on goods and services, accelerated infrastructure investment, export expansion and diversification and dynamic export-investment nexus.
It has also suggested the state to play a more developmental role in creating favorable conditions for job creation, capital accumulation, technological progress and structural transformation.
It has also proposed finance, trade, commodities, technology, and climate change mitigation and adaptation as five major pillars of the New International Development Architecture (NIDA).
“Combining international support measures for LDCs with a new international framework for policy as well as cooperation that can deliver more stable, equitable and inclusive development is one of the most urgent challenges facing the international community,” the report states.
Presenting the report Sunday, Prof Bishwanath Tiwari said low level capital formation due to low level of saving, low contribution of manufacturing sector and limited exports amid lack of product diversification and country-diversification has contributed to the slow progress in per capita income in LDCs.
Though Nepal undertook massive policy change in reducing role of state as market force two decades ago, economic growth has slowed down due to decade long conflict and lack of good governance and access to global trade.
“We would have achieved average economic growth of 6 percent, had we not faced decade long Maoist conflict,” Tiwari added.
Tiwari said only two countries -- Botswana and Cape Verde -- were graduated to the developing countries from the status of LDC over the last three decades.
Launching the report, Dr Jagadish Chandra Pokhrel, Vice Chairman of National Planning Commission, said slow economic growth is the major impediment to poverty reduction initiative of the government.
“Though Nepal started reducing the role of state in the market from 1990, economic growth has slowed in the lack of satisfactory progress in economic sector,” he added. Pokhrel said the government has taken the policy of diversifying products for export, develop infrastructure and mobilize domestic resources to accelerate economic growth.
“We have identified crucial sectors such as agriculture, tourism, hydropower and mine based industries as focus areas to achieve higher economic growth,” he added. Pokhrel said Nepal still has to do more in the sector of sanitation and climate change despite satisfactory progress achieved in the development of social sector such as education and health.
Robert Piper, UN Resident and Humanitarian Coordinator for Nepal, suggested the government to mobilize domestic resources to achieve higher economic growth in the country. Corruption in different levels is the major obstacle to good governance here,” he added.
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