Nepali Times

Nepal is performing well in terms of its Human Development Index (HDI) world ranking in UNDP’s annual Human Development Reports because of overall improvements in national-level parameters such as the literacy rate, maternal and child mortality rates, per capita income and average lifespan.

The HDI is a composite statistic that is used to rank countries into four tiers of human development. A country scores higher when indicators such as lifespan, education level and GDP per capita are higher, and fertility rate and inflation rate are lower.

The Index is based on a formula devised by UN economist Mahbub ul Haq in 1990 with the explicit purpose ‘to shift the focus of development economics from national income accounting to people-centered

policies’. He worked with Nobel laureate Amartya Sen on capabilities and functions that provided the underlying conceptual framework for development.

Nepal has recorded one of the most dramatic improvement in HDI among least developed countries, but it still lags far behind other countries in South Asia and the global South. Nepal has set a challenging goal for itself, of graduating from a ‘least developed’ to a ‘developing country’ category by the year 2020.

That is just four years away, and given how development has suffered due to political instability and poor governance, the goal is not likely to be met. Currently, Nepal ranks 145th among countries with a score of 0.548 in the HDI, among 188 countries in the Human Development.

Report 2015. Nepal’s score falls in the low human development category, and there has to be much more improvement in the indicators in order to progress to the ‘developing country’ category, such as in per capita Gross National Income, education, health, and the economic vulnerability of the people.

In education, Nepal needs to raise the average years of education of people aged 25 and above. The figure for this indicator increased by 0.1 years from that in 2013, and reached 3.3 years in 2014. However, if we compare it with fellow SAARC members, we lag behind Sri Lanka and Maldives (which are the top HDI performers in South Asia). Education of those aged 25 years and above stood at 10.8 and 5.8 years in Sri Lanka and Maldives respectively, in 2014. To catch up, Nepal has to make an enormous investment in education.

The aspect of HDI where effort is needed is in per capita income. Although Nepal’s poverty rate has fallen dramatically, mainly due to the infusion of remittance cash into the economy, there are still hurdles ahead. In 2014, the per capita Gross National Income of Nepalis rose to $2,311 from $2,194 the previous year. But to take a big leap forward, Nepal has to generate more jobs within the country by investing in high-value agriculture, manufacturing and infrastructure development.

The other component of Nepal’s HDI that needs work is in lessening the gender disparity in all aspects of development. The recent Human Development Report put Nepal’s HDI score for women lower than for men.

Nepal’s average national achievement in HDI improvement also masks serious regional disparities between hills, plains and mountains as well as between eastern and western Nepal, and in rural-urban scores. The six districts of the eastern Tarai together with the districts of the western and far-western mountains lag behind the rest of the country in just about every parameter of development.

The Nepal Human Development Report 2014 states: ‘The pace of economic growth needs to be accelerated and be accompanied by large-scale employment generation and enhanced productivity.’ There is also a need to improve education and raise the standard of Nepal’s human resources, and decrease the gender and geographical disparity in development within Nepal.

We know what needs to be done, we just need to do it.

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