Nepal’s human development index improves, but risks continue

Finance Minister Bishnu Paudel and National Planning Commission Vice-chairman Pushpa Raj Kandel launch the human development index (HDI) report, in Kathmandu, on Sunday, December 13, 2020. Photo: RSS

Kathmandu, December 14

The human development index (HDI) has improved in Nepal but with persisting risks.

The HDI report prepared with the assistance of the United Nations Development Programme was made public by the National Planning Commission in Kathmandu on Sunday. It was jointly released by Finance Minister Bishnu Prasad Paudel and NPC Vice-chairman Pushpa Raj Kandel.

The report shows Nepal has now entered the mid-level of the HDI.

Nepal has now surpassed some countries in South Asia in terms of HDI, gender development index and gender equality index, which the government claims are the result of its investment. Although Nepal is still lagging behind in income indictors, it has met the indicators of human capital and financial risk.

The report, however, has made it clear that Nepal is still in risk and facing challenges. There is unequal human development between rural and urban areas and among provinces. Considering the upgrading category, all except Bagmati province are below average.

Similarly, there is a huge income gap among provinces. Province 2 is backward in terms of human capital, but the per capita income in Bagmati is more than the national average.

In terms of risk, Nepal is in a sensitive position. Some sectors are likely to see negative impacts despite a moderate impact on the measure of international assistance in trade with FDI and development financing.

Structural and institutional obstructions and disparity in policy are posing a huge challenge before sustainable development and upgrading. There are also obstructions on access to quality health and education.

The report also points out structural and spatial obstructions. Moreover, Nepal is shown incompetent in harnessing entrepreneurial capacity and demographic dividend. There is inequality in the ownership of production resources and access to property, opportunities and distribution. Likewise, high risks persist in the labour market and employment opportunities.

The report indicates additional risks in human properties and economic achievement next year due to the ongoing global crisis of Covid-19. To resolve the problems, it suggests the need for relief distribution in short, mid and long term bases, economic restoration and productive transformation, a big strategic change in the supply and demand chain, production increase, strengthening of entrepreneurship efficiency and institutional efficiency related to production and gender equality, development of human resources and good governance.

Although the UNDP was making public the world HDI report every year, the Nepal-focused report was not published regularly. The NPC says the country-focused report has come after six years.

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