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

Bhutan hydropower potential could change around its position in South-Asian economics. RadioFreeBarton/Flickr, CC BY-SA According 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, under-five 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% of world population – they face such serious structural barriers to growth that they account for less than 2% of world GDP and around 1% of world trade. In LDCs broadly, the percentage of people who live in extreme poverty has doubled to nearly 40% since 1990, population without access to basic services, such as water, has more than doubled, and two-thirds of people do not have electricity. Batteries provide the only access to electricity in some villages in Cambodia. Greg Willis/Flickr, CC BY-SA 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 is 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 broad-based development, diversification and structural economic transformation. And their foundations are likely to be more robust for continued development. A gigantic sitting Buddha was completed in September 2015, illustrating Bhutan’s economic transformation. Zacharie Collier, CC BY-SA LDCs are classified according to their export specialisation, or type of exports that account for at least 45% 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. 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% 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 […]

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