One of the main objectives of mainstream development theory is to identify the reasons why certain countries are significantly less developed than others and come up with strategies to overcome any obstacles keeping them from developing. Caporaso (1980) observed that most development theories have failed as a result of their inability to explain which factor should be given the utmost importance when attempting to predict a country’s future development.
However, mainstream development theory has always placed great importance on economic growth, identifying a number of universal principles that can be applied to domestic contexts in order to promote development. (Brohman, J., 1995) For example, national development can be impeded by obstacles like war, political instability, poverty, health, lack of infrastructure, dependence on foreign aid, education etc., each of which can be tackled by adopting specific remedies.
In 2011, the IMF (2011) classified Nepal as a less developed or developing economy, whose national GDP is expected to grow by 3.8% (- 0.7% than last year) during 2012.
Among the main obstacles that have been impeding development in Nepal is poverty, which is obviously linked to several other issues, such as unemployment, environmental degradation, poor governance and so forth…
In fact, it appears that one of the reasons why Nepal hasn’t been able to resolve its poverty is its unstable Parliament and overall political situation (The Economist, 1999), as well as its reliance on help from the European Union, the United States, the World Bank and other international organisations, which might decide to provide less assistance, as a result of the Nepali government’s instability (The Financial Times, 2010).
Because poverty is one of the factors that have the most negative impact on a country’s development process, not only have the United Nations included it in their list of Millennium Development Goals, they have made it their top priority to end it within a few years. (United Nations, n.d.)
As reported by the World Bank (2006), although Nepal’s poverty rate decreased by 9% between 19996 and 2004, a significant percentage of its population still lives on less than $1.25 a day, which has been set as the international poverty line, and the lack of job opportunities is encouraging many young Nepali citizens to move to India, which has made the overall economic situation even worse. Moreover, while poverty decreased, inequality has become a huge problem, as only 10% of the country’s households
A study conducted by Deininger and Squire (1996) revealed that unequal distribution of wealth has a negative effect on a country’s growth and that the fact that only a small percentage of the population isn’t liquidity restrained increases not inequality and poverty.
Because agriculture represents 40% of the country’s GDP, measures have been put in place, such as the Agricultural Perspective Plan, to boost agricultural production and reduce poverty, however, considering that Nepal lacks both skilled workers and modern tools/equipment, the government will have to formulate and invest in agricultural development programmes to allow Nepal to start exporting food grains again, like it used to in until the 1980’s. (In Development Group Limited UK et al., 2006)