Nepal Economic development

Nepal is the poorest country in South Asia. GDP per capita of 1k USD. More than half of the country’s population is under the age of 35, and each year, more than 300,000 of these young people join the ranks of those looking for work, with many either striving to go abroad as unskilled labor or languishing as part of the unproductive workforce.

1. Nepal centers around an agrarian economy. Agriculture is the lynchpin of the country's economy and employs approximately 75% of its working population of 27 million. Provides 37% of GDP.

2. One-quarter of the population falls below the poverty line

4. The unemployment rate is very high, hovers around the 50% mark

Prone to earthquakes that have devastating economic effects on the country.

Nepal has used a series of five-year plans in an attempt to make progress in economic development. It completed its ninth economic development plan in 2002; its currency has been made convertible.

GNI is highly dependent on incomes from foreign workers, therefore economic development with infrastructure in Nepal etc has not made sufficient progress. (Income from abroad)

Major towns were only recently connected to the capital by telephone and domestic air services.

Growth rate is currently around 2.5% but it is beginning to pick up as Nepal recently began exploiting their natural resources, such as tourism and hydroelectricity.

The Human Development Index (HDI) is a composite statistic of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development.

According to the HDR 2014 launched on Thursday, Nepal's HDI value increased to 0.540 from 0.463. The HDR 2014 has ranked Nepal 145th, up from last year's 157th. Low in everything.


Comparison between one health and one educational development factor- Nepal vs Singapore
Comparison between one health and one educational development factor- Nepal vs Singapore in 1990

Task 3

Institutional and political factors affecting the development of Nepal. Recently: 2010, end of Monarchy, and Maoists left the government. Recent political decisions include the lifting of a fuel rationing system and the reelection of the same prime minister. Former communist rebel leader is elected.

Education: Started off as just home schooling based system. The birth of the nepalese democracy in 1951 opened classrooms across Nepal. No. of Primary Schools in Nepal ----------- 25,927. No. of Secondary Schools in Nepal ---------- 4,450. Source: Education Bulletin 2015. A countrywide primary education system is under development, and Tribhuvan University has several campuses.

Showing Primary, Secondary and Tertiary education.
Quality of infrastructure is relatively low, especially because development of buildings is often negatively effected by earthquakes and violence.

Government priorities over the last 4 years have been the development of transportation and communication facilities, agriculture, and industry. However, there are still many major issues in the treatment of Women in Nepal.

Major issues in women’s health: Shorter life expectancy, elevated infant and child mortality rates and neglect of girls’ health, high maternal mortality rate, high male to female sex ratio. Women die earlier and more often, families generally prefer male offspring. Lack of access to adequate health services, especially reproductive health care and contraceptive devices. Many stigmas and social pressures on women’s bodies, including virginity, menstruation, and giving birth.


Sustainable Development Goals

Passed on the 5th of December 2014. Goals are contained in a paragraph that is agreed on by 54 member nations of the UN.


According to the SDG report 2016, the proportion of the world’s population living below the extreme poverty line dropped by more than half between 2002 and 2012.

Proportion of stunted children under 5 fell from 33% in 2000 to 24% in 2014.

Between 1990 and 2015, the global maternal mortality ratio declined by 44 per cent and the mortality rate of children under age 5 fell by more than half.

In 2015, 6.6 billion people, or 91 per cent of the global population, used an improved drinking water source, compared with 82 per cent in 2000.

Official development assistance totalled 131.6 billion US dollars in 2015, which was 6.9 per cent higher in real terms than in 2014 and represents the highest level ever reached.

In 2015, 10 per cent of the world’s workers and their families were living on less than 1.90 US dollars per person per day, down from 28 per cent in 2000.


Lack of finances in some LEDC’s for the SDGs project to be explained to the population.

Regular monitoring is required in order to measure and watch the development itself.

Poor government funding in countries like Nigeria

Young people aged 15 to 24 are most likely to be among the working poor: 16 per cent of all employed youth were living below the poverty line in 2015, compared to 9 per cent of working adults.

Water stress affects more than 2 billion people around the globe, a figure that is projected to rise

Suggested Improvements:

1. Build engagement in fragile states around long-term strategies that integrate humanitarian and development approaches.

2. Shift away from a centralized approach to engaging and empowering local systems. - Whole system doesn't run through one thing. Centralization leads to prioritization, therefore income gap widens.

3. Integrate peace-building programmes and conflict reduction in development.

In the Democratic Republic of Congo, for instance, chronic inter-communal violence has been a nightmarish driver of misery and underdevelopment: since 1994, ongoing conflict has killed 5.4 million people and displaced 2.6 million more. And yet there has been little funding to address inter-communal violence and land conflicts.

5. Move beyond the UN architecture- especially in fragile states.

Task 4

Task 4

Timeline for trade barriers:

  • June 28th 2016- Nepal will put trade barriers imposed by India on its exports at the top of the agenda when the commerce secretaries of the two countries meet for an Inter-Governmental Committee (IGC) meeting slated to start Tuesday in New Delhi.
  • India has started imposing trade hurdles on Nepali processed leather and tea. They have compelled Nepali tea exporters to obtain quality test certification from an Indian laboratory each time they ship tea to India. Previously, Nepali tea exporters were allowed to conduct trade with multiple parties after receiving a quality check certificate valid for six months. This is tough on Nepals tea industry because a large proportion of it's revenue was coming from exports, which are now being restricted.

Caste discrimination in Nepal has been a huge barrier to growth because it has restricted the opportunities for education and therefore employment amongst a large percentage of the population.

Week 5


In 2014 Nepal exported $1.06B, making it the 150th largest exporter in the world. During the last five years the exports of Nepal have increased at an annualized rate of 4.6%, from $845M in 2009 to $1.06B in 2014. The most recent exports are led by Knotted Carpets which represent 7.41% of the total exports of Nepal, followed by Flavored Water, which account for 6.51%.


In 2014 Nepal imported $7.75B, making it the 112th largest importer in the world. During the last five years the imports of Nepal have increased at an annualized rate of 16.6%, from $3.6B in 2009 to $7.75B in 2014. The most recent imports are led by Refined Petroleum which represent 13.6% of the total imports of Nepal, followed by Silver, which account for 3.72%.

Week 6

FDI inflow has had a large strong impact on Nepal, with a total sum of 51.4 million USD. Trade is also crucial in the development of Nepal's economy because the value of imports and exports summed, add up to what would account for 53% of the total GDP in Nepal. Average applied tariff rate is 10.9%, relatively low and excellent for protection of the Nepal economy.

This low tariff rate indicates that there is little restriction on imports to the country and therefore it is likely to be quite reliant on several imports. Due to focus in the manufacturing and agricultural sector, it is likely that many of the imports are based around capital goods that will help boost productive efficiency for firms in the primary sector across Nepal.

Aid plays the relatively least significant role in aiding Nepal's development and economic growth. A lot of income is earned abroad by workers during physical labour overseas, therefore resulting in a very high GNI relative to GDP, also suggesting that less many of those with poor education

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