Commentary: Bhutan and Nepal - 2 ‘least de­vel­oped coun­tries’ that could change the face of Asia

Be­cause the devel­op­ment per­for­mance of least de­vel­oped coun­tries (LDCs) has been so dis­ap­point­ing, only four have grad­u­ated to de­vel­op­ing coun­try sta­tus in the time since the cat­e­gory was es­tab­lished in 1971. None of these are in Asia.

Bhutan Times - - Editorial - (Cour­tesy : NEWSCHANNEL ASIA)

A ccord­ing to a re­cent UN re­port, “48 of the world’s most vul­ner­a­ble coun­tries will lose ground in eco­nomic devel­op­ment and face in­creas­ing lev­els of poverty” between now and 2030. The 2016 re­port of the United Na­tions Con­fer­ence on Trade and Devel­op­ment on Least De­vel­oped Coun­tries presents some wor­ri­some facts in­deed.

Least de­vel­oped coun­tries (LDCs) are those that suf­fer from se­vere struc­tural im­ped­i­ments to achieve sus­tain­able devel­op­ment. Mem­ber­ship is re­vised every three years based on the av­er­age gross na­tional in­come (GDP plus net in­come re­ceived from over­seas), hu­man as­sets (level of pop­u­la­tion un­der­nour­ished, un­der­five mor­tal­ity rate, gross sec­ondary en­rol­ment ra­tio and adult lit­er­acy rate), and eco­nomic vul­ner­a­bil­ity (such as pop­u­la­tion, re­mote­ness, mer­chan­dise ex­port con­cen­tra­tion, nat­u­ral dis­as­ters, in­sta­bil­ity of agri­cul­ture pro­duc­tion, and in­sta­bil­ity of goods and ser­vices ex­ports, among other fac­tors).


The UN re­port notes that while the 48 LDCs com­prise around 880 mil­lion peo­ple – ac­count­ing for 12 per cent of the world’s pop­u­la­tion – they face such se­ri­ous struc­tural bar­ri­ers to growth that they ac­count for less than 2 per cent of world GDP and around 1 per cent of world trade.

In LDCs broadly, the per­cent­age of peo­ple who live in ex­treme poverty has dou­bled to nearly 40 per cent since 1990, pop­u­la­tions without ac­cess to ba­sic ser­vices, such as wa­ter, has more than dou­bled, and two- thirds of peo­ple do not have elec­tric­ity.

Be­cause the devel­op­ment per­for­mance of LDCs has been so dis­ap­point­ing, only four have grad­u­ated to de­vel­op­ing coun­try sta­tus in the time since the cat­e­gory was es­tab­lished in 1971. They are Botswana ( 1994), Cape Verde ( 2007), Mal­dives ( 2011) and Samoa ( 2014). None of the coun­tries are in Asia.

Progress is so slow that only 16 LDCs are ex­pected to es­cape from this low devel­op­ment cat­e­gory by 2025. In Asia, these coun­tries are likely to be Afghanistan, Bangladesh, Bhutan, Laos, Myan­mar, Nepal and Ye­men. Among them, Bangladesh, Bhutan, Laos and Myan­mar are ex­pected to do bet­ter and achieve broad­based devel­op­ment, di­ver­si­fi­ca­tion and struc­tural eco­nomic trans­for­ma­tion. And their foun­da­tions are likely to be more ro­bust for con­tin­ued devel­op­ment.

LDCs are clas­si­fied ac­cord­ing to their ex­port spe­cial­i­sa­tion, or type of ex­ports that ac­count for at least 45 per cent of to­tal ex­ports of goods and ser­vices dur­ing the 2013- 2015 pe­riod. Ye­men is con­sid­ered to be a fuel ex­porter, Bangladesh, Bhutan and Cam­bo­dia are man­u­fac­tur­ing ex­porters, Laos and Myan­mar are mixed ex­porters, and Afghanistan and Nepal are ser­vice ex­porters. BHUTAN AND NEPAL In the case of Bhutan, the re­port has some se­ri­ous short­com­ings. It has ig­nored that Bhutan has been an im­por­tant ex­porter of hy­dro­elec­tric­ity to In­dia. Between 1997 and 2002, elec­tric­ity sales to In­dia con­trib­uted to ap­prox­i­mately 45 per cent of the coun­try’s gross na­tional rev­enue.

This has trans­lated, and will con­tinue to trans­late, into bet­ter qual­ity of life for the pop­u­la­tion, in­clud­ing ac­cess to ba­sic ser­vices, im­proved health and ed­u­ca­tion, and in­dus­trial and com­mer­cial de­vel­op­ments.

Hy­dropower has be­come the back­bone of Bhutan’s econ­omy. Thanks to elec­tric­ity sales, Bhutan’s per capita GDP has be­come one of the high­est in South Asia. This was US$ 2,580 in 2015 ( equiv­a­lent to 20 per cent of the world av­er­age), com­pared to US$1,615 in 2006.

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