Nepal was the top recipient of remittance as the share of the Gross Domestic Product (GDP) among least developed countries (LDCs) last year, according to a report released on Wednesday by the United Nations Conference on Trade and Development (UNCTAD).

The remittance growth rate in Asian LDCs, however, slowed—rising by a modest 0.8 percent. The countries received $21 billion in 2013. Nepal accounted for 25 percent of the remittance flowing into Asian LDCs. Remittance to Nepal grew 9 percent last year. In terms of the remittance as the share of GDP, Nepal was followed by Haiti and Liberia. These countries accounted for 21 percent and 20 percent of the total remittance into LDCs, respectively, last year. There are 48 countries designated by the United Nations as LDCs.

In terms of LDCs’ progress towards achieving Millennium Development Goals (MDGs), the report said Nepal achieved, or is on track of reducing extreme poverty, under-five mortality rates, maternal mortality rates and access to drinking water. Nepal has made medium progress on reducing the number of under-nourished population and access to improved sanitation facilities. However, the country is progressing slowly on net enrolment ratio in primary education.

“Asian LDCs such as Bhutan, Cambodia and Nepal, which have experienced rapid transformation of their economic structures over the past two decades, have also been among the highest achievers in reducing poverty,” the report read. The MDGs have set seven sets of outcome targets for reduction of extreme poverty and hunger, improvements in basic standards of human development (in terms of education, gender equity, health, and access to water and sanitation facilities) and environmental sustainability.

The report said a majority of LDCs are expected to miss most of the MDGs. While Asian LDCs are broadly on course to halve poverty, progress in African LDCs and Haiti has been much slower. Nepal, with per capita income $730, has economic vulnerability index at 27.8 point—the least out of 48 LDCs. The UNCTAD has identified unfavorable external environment as one of the main challenge for the LDCs.

“Adjusting to a changing external environment has always been a major challenge for the LDCs, a challenge now compounded by the subdued state of the world economy and the prevailing uncertainties,” it stated. In addition, low inflow rate of official direct assistance and a widening external resource gap have also hindered the economic growth rate of most of the LDCs. Amid the uncertain external environment, the LDCs need to adopt structural transformations that are necessary for their sustained and inclusive growth in compliance to achieving the MDGs, it said.

At the time when Nepal was having GDP growth rate of 4.5 percent in 2014, it was below the average of 6 percent for the Asian LDCs that include Afghanistan, Bangladesh, Bhutan, Cambodia, Lao People’s Democratic Republic, Myanmar and Yemen.

Published on: 18 December 2014 | The Kathmandu Post