Lecture Slides of Chapter 1, Construction Management in Developing Countries, Nepal Engineering College, Pokhara University

1. Construction Management in Developing Countries
ECM 627.3
Chapter 1
Prof. Dr. Hari K. Shrestha
Nepal Engineering College
hari@nec.edu.np
1
CM in Developing Countries/Ch 1_HKS Updated: April 30, 2020

2. (देश) विकासको अिधारणा
• विकासको परिभाषा कस्ले गर्छ?
• विकासको परिभाषा ककन यति धेिै ि ककन तनिन्िि बदललिनन्र्?
• विकासको परिभाषामा िाजतनिीकिण नुन्र्? विकास कस्कोलागग?
• विकास मापनको मापदण्ड ककन तनिन्िि बदललिनन्र्?
• दीर्छकालसम्म अविकलसि िननुका आन्िरिक ि िाह्य कािणनरु
• विकलसि ि विकासशील देशनरूमा समानिा /लभन्निा
• विकासका विलभन्न आयामनरूूः
– भौतिक संिचनाको विस्िािूः बाटो, पुल, भिन, यािायाि, उजाछ, संचाि
– आर्थिक विकासूः कु ल ग्रानस््य उत्पादन (समान क्रयशक्तिमा), तनयाछि
– सामाजिक न्यायूः खाद्यान्न, लशक्षा, स्िास््य, िोजगाि, शजति र स्रोिमा पहुँच
– सामाक्जक सद्भािूः संस्काि, कानूनी राज्य, भौतिक सुिक्षा, लगानी मैत्री
िािाििण, पािदलशछिा, उत्तिदायी सुशासन, धालमछक/सास्कृ तिक/लैंगगक स्ििन्त्रिा,
भेदभाि विहननिा
– िािािरणीय न्यायूः िािाििणीय संिुलन कायम
– संिुललि विकासूः िगछगि (आगथछक िथा सामाक्जक), पेशागि, क्षेत्रगि
– दीगो विकासः लामो समयसम्म, भविष्य(भािी पुस्िा)सम्म सकािात्मक (SDG)
– देशको इज्जिूः मानलसक सुख, नागिीक स्िालभमान, गिछको िािाििण
2

3. 3
https://www.undp.org/content/dam/nepal/docs/reports/SDG%20final%20report-nepal.pdf

4. 1.1 Defining Development:
Multiple definitions of development
1. The systematic use of scientific and technical knowledge to
meet specific objectives or requirements.
2. The process of economic and social transformation that is
based on complex cultural and environmental factors and their
interactions.
3. Development is the act of expansion and growth. For example,
in a country, development is classified as growth of the economy,
growth of the people and the people's quality of life.
Which definition of development is the best, and why?
You may propose your own definition, and defend it.
4

5. Development Thinking and Policy Involves
• Different meanings of development over
time (what for?, how to measure?)
• Different dimensions – economic, social,
environmental, political-legal, science-
technology, institutional, governance,
military
• Different Stakeholders: development for
whom? At what cost?
• Different Contexts: Cultural values, social
practices, ecological conditions
5

6. Major Traditional Approaches and
definitions of development
Perspectives Definitions
• Modernization: Development is state-led economic growth –
industrial modernity; China as a good example.
• Government as the prime agency to plan and execute dev.
projects
• Development is government’s responsibility
• Government not only facilitates but also operates dev. projects
6
State-led: Government takes
responsibility of all essential sectors.
• National Security
• Law and Order
• Food Security (production/distribution)
• Basic Industry
• Education and Research
• Health and Pharmacy
• Infrastructure
• Water Supply, Sewerage, Sanitation
• Conservation (nature and heritage)…

7. 7

8. 8
China vs. U.S.A.
Brenda P. Wenning, Dec 23, 2019
“The U.S. has retained its position of being the world’s largest
economy since 1871,” according to Investopedia. “The size of the
U.S. economy was at $20.49 trillion in 2018 in nominal terms and
is expected to reach $21.35 trillion in 2019.”
China’s nominal gross domestic product (GDP) is $13.41 trillion,
making it second to the United States, but its GDP based on
purchasing power parity (PPP) is $25.27 trillion, exceeding that of
the United States. Then again, China is known for exaggerating
its growth, so the numbers may not be accurate.
With a population of 1.43 billion people, compared with about 329
million in the United States, China has a population that’s more
than four times the size of the U.S. population. American
companies that need to continue growing have become
dependent on the world’s largest consumer market. China,
meanwhile, needs America’s technology and innovation.
https://www.patriotledger.com/news/20191223/china-vs-usa

9. 9

10. 10
State-led development?
Opponents of state-led development points towards
failure of government lead projects and collapse of
countries which followed state led development.
If the Government of Nepal
properly used all the ODA it
received up to now …

11. • Neo-liberalism
Development is Market-led economic growth.
Policy: Get prices right; curb state failure through structural reform
(deregulation, liberalization, privatization); USA, UK, India after
Rajiv Gandhi, as examples. Government should facilitate, not
meddle, nor compete with the market, in development process
• NGO led Development: When government is weak, market does
not function, civic society is incapable, NGO can lead development
NGOs as partners of development, with link to the grass root and
the donors/sponsors/government
NGOs can focus, where central level government tend to neglect.
• Alternative Development: is society-led development should be
equitable, sustainable, participatory.
Themes: state & market failure; participation; local development
Bottom up approach to development; local level planning, not
central level planning, more role of think tanks, citizen groups, …
11

12. 12
Neo-liberalism: Privatization/market to lead development

13. 13
Data seems to show financial influence of INGOs/donors in Nepalese government
bodies. Source: http://www.myrepublica.com/news/24191/ July 21, 2017
Do donors/INGOs influence policy-making?

14. Critical view on the traditional approach of development:
• Focus should be on Human development :
Human capacitation and empowerment
Themes: Human resource development, HDI
• Challenges the whole notion of the traditional concept of
development.
• Development is destructive, Western concepts and forced on
indigenous societies.
• Development for whom? Don’t need development at “our”
cost.
• Themes: Local level development, Gandhian thinking, “small
is beautiful”, should be locally manageable, decentralized
development
• Environmental movements and sustainable development.
14

15. The new economic view of
development
Dudley Seers (1969)
Economic growth is necessary for national development; however,
the growth should result in measurable decline in
• Poverty
• Unemployment and
• Inequality
If one or two of these central problems have been growing worse,
especially if all three have, it would be strange to call the result
DEVELOPMENT even if per capita income doubled. Seers challenged
the notion that economic growth automatically results in societal
development.
15CM in Developing Countries/Ch 1_HKS
(1920-1983)

16. 16
Why hunger in India is worse than in Nepal: 10 points
TIMESOFINDIA.COM, Oct 13, 2017
https://timesofindia.indiatimes.com/india/why-hunger-in-india-is-worse-
than-in-nepal-10-points/articleshow/

17. 18
1.2 Denis Goulet’s Three Core Values of Development (1971)
– Life Sustenance: The ability to meet basic needs: food,
shelter, health and protection
 Self-esteem: A sense of worth and self respect (to be a
person); each person should be given his due respect
and due right
 Freedom from Servitude: To be able to choose; the
emancipation from alienating material conditions of life
and from social servitude to nature, ignorance, other
people, misery, institutions and dogmatic beliefs.
Human freedom encompasses various components of
political freedom like personal security, the rule of law,
freedom of expression, political participation, and
equality of opportunity.
CM in Developing Countries/Ch 1_HKS
https://economicsconcepts.com/new_economic_view_of_development.htm

18. 19
Development must therefore be conceived of
as a multidimensional process involving
major changes in social structures, popular
attitudes, and national institutions, as well as
the acceleration of economic growth, the
reduction of inequality, and the eradication of
poverty. -Michael P. Todaro (2008)
CM in Developing Countries/Ch 1_HKS
How many years will it take to
“eradicate” poverty from
Nepal?
What about eradicating
absolute poverty?
Should “reduction of inequality”
or “provision of justice” be the
aim of development?

19. Capability approach
Amartya Sen
• What a person is, or can be, and does or can do?
• 5 Disparities
1. Personal heterogeneities – age, gender,
disabilities, illness etc.
2. Environmental diversities
3. Variations in social climate
4. Relational perspectives
5. Distribution within family
20CM in Developing Countries/Ch 1_HKS

20. 21
Amartya Sen posits that all individuals are endowed with a certain set of
capabilities while it is simply a matter of realising these capabilities that will allow
a person to escape from poverty and their state of 'unfreedom‘. Sen questions a
fundamental assumption of development economics, arguing that income poverty
should not be the single most important factor in determining development. Sen
argues that in spite of a world of sheer abundance, there simultaneously exist
populations living in a state of 'unfreedom', unable to realise their capabilities.
Sen attempts to expand the basic interpretations of freedom by examining five
elemental forms of instrumental freedoms: political freedoms, economic
facilities, social opportunities, transparency guarantees, and protective
security. These forms of freedom are complementary, remaining interrelated and
inextricable. For Sen, these freedoms constitute not only the means, but
also the ends in development. Poverty, Sen asserts, should be seen "as a
deprivation of basic capabilities, rather than merely as low income" (Sen,
1999), contesting the general belief amongst economists who view income as the
be all and end all of development.
He is known for bringing an "ethical dimension" to a field dominated by technical
specialists. Based on the example of the former Soviet Union, Sen argued that
political liberties are necessary for sustainable development. He compared the
development strategies of India and China, arguing that Indian democratic
processes provide a firmer guarantee of long term stable growth. Sen argued
against the notion that a specific set of "Asian values" exists that might provide a
justification for authoritarian regimes.

21. 22
Economic Development Economic Growth
Implication
s
Economic development implies an upward
movement of the entire social system in
terms of income, savings and investment
along with progressive changes in
socioeconomic structure of country
(institutional and technological changes).
Economic growth refers to an increase
over time in a country`s real output of
goods and services (GNP) or real output
per capita income.
Factors Development relates to growth of human
capital indexes, a decrease in inequality
figures, and structural changes that improve
the general population's quality of life.
Growth relates to a gradual increase in
one of the components of Gross
Domestic Product: consumption,
government spending, investment, net
exports.
Measurem
ent
Qualitative. HDI (Human Development Index),
gender- related index (GDI), Human poverty
index (HPI), infant mortality, literacy rate etc.
Quantitative. Increases in real GDP.
Effect Brings qualitative and quantitative changes in
the economy
Brings quantitative changes in the
economy
Relevance Economic development is more relevant to
measure progress and quality of life in
developing nations.
Economic growth is a more relevant
metric for progress in developed
countries. But it's widely used in all
countries because growth is a necessary
condition for development.
Scope Concerned with structural changes in the
economy
Growth is concerned with increase in the
economy's output
http://www.diffen.com/difference/Economic_Development_vs_Economic_Growth

22. 23
1.3 Three Broad Objectives of National
Development
1. To increase the availability and widen the
distribution of basic needs
• Food, shelter, health and protection
• Rising per capita incomes
• Elimination of absolute poverty
• Greater employment opportunities, and
• Lessening income inequalities
are necessary but not the sufficient conditions for
development.
CM in Developing Countries/Ch 1_HKS
Despite Having Robust Economic Growth, India is Backward in
Healthcare, Sanitation, & Drinking Water
https://thewaternetwork.com/article-FfV/despite-having-robust-economic-growth-india-is-backward-in-healthcare-
sanitation-drinking-water-cL0PKwlcSTru0LUgrdRKXA, Feb 2016

23. 24
2. To raise levels/standard of living:
Enhanced material well-being
as well as greater
individual and national self-esteem
3. To expand the range of economic
and social choices
Free from servitude and dependence
Three Broad Objectives of National Development
CM in Developing Countries/Ch 1_HKS
Any differences from Gaulet’s three core values of development?

24. 25

25. 26

26. 27

27. 28

28. 29
1.4 Sources of (under)development
(intrinsic and extrinsic)
Intrinsic (factors that are within national control)
• Attitudes and aptitudes
- Attitudes and culture of the people;
- Attitude towards: (a) change and development, (b) foreign direct investment, (c)
research and innovation
- Aptitudes (natural capacity/tendency) and behavior of the elites and leaders to
effectively deal with internal and external developmental issues
• Legal structures and institutions
- Politics: Political stability, policy stability, legal stability
- Governance: facilitate versus red tape, degree of transparency/corruption
- Rule of law: uniform, fair and predictable application of law
- Democracy/Bureaucracy/autocracy
- Local capital market
- Security: financial and personal /physical
• Institutional Set up to facilitate development process
– Coordination and cooperation among the institutes
– One door versus multi layer clearance/approval
Several theories of underdevelopment: (For long list of theories of underdevelopment: http://www.professor-
frithjof-kuhnen.de/publications/causes-of-underdevelopment/0.htm )
CM in Developing Countries/Ch 1_HKS

29. 30
Extrinsic factors (factors that are beyond national control):
- Geopolitical and commercial interest that it creates compared to other countries;
(Porter’s Diamond Model); free access to international market, country’s need to
proactively compete to attract FDI, grant/loan, technology transfer
- Place of a country in a historical and cultural system; membership in multinational
organizations, like UN, Common Wealth, ASEAN, BIMSTEC, SAARC, SAFTA
- “Reforms” imposed in counterpart by multilateral organizations (like the IMF, World
Bank, IFC, ADB, AIIB) to get out of situations of deficit and indebtedness in
which the country is placed.
- Lack of interest in and comprehension for the specific dynamics of a nation, by
multinational companies.
- Changes in financing/funding policies of multinational/multilateral organizations
- Global Climate Change
- Changes in policies and priorities of donor countries, and UN System
- Protectionism of other countries
- Level of conflict among neighboring countries
- Image of country (business friendly, safety of investment and personnel,
infrastructure, availability of human resources, reliability of power/energy,
transparency, level of corruption, intellectual property right…) portrayed in
influential foreign media and embassy advisory
Sources of (under) development….(Contd.)
CM in Developing Countries/Ch 1_HKS

30. 31
Impacts on CMDC (not DC)
Intrinsic Factors Investment Work culture Quality … …
Attitudes and aptitudes
Attitudes and culture of the people
Attitude towards: (a) change and development, (b) foreign direct
investment, (c) research and innovation
Aptitudes (natural capacity/tendency) and behavior of the elites and leaders
to effectively deal with internal and external developmental issues
Legal structures and institutions
Politics: Political, policy and legal stability
Governance: facilitate versus red tape, degree of transparency
Rule of law: uniform, fair and predictable application of law
Level of corruption: financial, nepotism, intervention
Local capital market: culture and capacity
Security: financial and personal /physical
Institutional set up to facilitate development
Institutional coordination/cooperation
Internal displacement due to civil war, terrorism
Chapter 1 Assignment; File Name: CRN_Initial_Chap1 Assignment
Ex.: 30_YP_Chap1 Assignment

31. 32
Extrinsic Factor Impact on CMDC (not DC)
Geopolitical and commercial interest that it creates
compared to other countries
Place of a country in a historical and cultural system
“Reforms” imposed in counterpart by multilateral
organizations
Lack of interest in and comprehension for the specific
dynamics of a nation, by multinational companies
Changes in financing/funding policies of
multinational/multilateral organizations, eg. WCD
Changes in policies and priorities of donor countries, and
UN System, like changes in hiring, visa policy
Protectionism of other countries
Image of country portrayed in influential foreign media,
embassy advisory, UN reports, Global Survey reports
Technological type and technology level changes
Global Climate Change
Global Pandemic, Terrorist activities, War, Trade
Embargo, Major accidents,

32. 33
Extrinsic Factor Impact on CMDC (not DC)
Changes in Policies and Priorities of donor
countries, funding agencies, UN system and
other supranational agencies
State of conflict among neighbouring
countries
Image of country: Business friendliness
Safety of investment and personnel
Existing infrastructure
Human Resources and physical resources
Reliable energy supply
Transparency and level of corruption
Intellectual Property Right
Position in different index
Media
Embassy Advisory
You may add other factors.

33. 34
Impacts on CMDC
Impact Factors FDI Quality of
Works
Sustainability of
project outcome
High level of Bribery
Weak and uncoordinated regulatory institutional setup
Weak unregulated financial institutions
Legal structures and institutions
Politics: Political, policy and legal stability
Rule of law: uniform, fair and predictable application
of law
Level of corruption: financial, nepotism, intervention
Local capital market: culture and capacity
Security: financial and personal /physical
Institutional set up to facilitate development
Institutional coordination/cooperation

34. 1.5 Measures of Development
(Development Level Indicators/Indices)
Genuine Progress Indicator
• GPI: Among the things it considers are income
distribution for each country, along with household
and volunteer work (activities that enhance welfare
but do not involve monetary transactions), and, for
example, the cost of environmental degradation.
Ecological Economics doi: 10.1016/j.ecolecon.2013.04.019 (2013)
35
Don’t confuse parameters with
indices!, GPI, HDI, GNH… are
indices not parameters.

35. Measuring development
Traditional Economic Measures
Traditional economic measure (before 1970)
– Capacity of national economy
– Per capita income or per capita GNP
– Gross Domestic Product (GDP): Simon Kuznets, 1934
– Industrialization: manufacturing & service industries
– Social indicators – literacy, health, housing etc.
Issues like poverty, discrimination, unemployment, and
income distribution were not considered
36
CM in Developing Countries/Ch 1_HKS
Some recent thoughts on Nepal’s development:
http://kathmandupost.ekantipur.com/news/2016-12-05/political-bickering-unsafe-for-
nepal.html

36. New Economic Measures (Main 5) of Development (World Bank)
• Economic Policy and Debt: There are three main subcategories in this class: "Balance of Payments,"
"External Debt" and "National Accounts." Indicators measure capital and financial accounts, as well as
the current account and reserves. Measures of FDI, foreign trade and remittances, development
assistance the country receives and purchasing power parity are also included.
• Financial Sector: There are five subcategories under this heading. "Assets" and "Capital Markets" are the
two most general, and they include bank capital and market capitalization. The "Exchange Rates"
subcategory includes measures of inflation. "Interest Rates" covers the lending interest rate, the deposit
interest rate and the interest rate spread. The fifth subcategory, "Monetary Holdings," includes
measures of liability and the money supply.
• Poverty: This subcategory covers income distribution and poverty (nationally, percentage of rural
population and urban populations). Income distribution is measured by quintiles and deciles. A heading
called "Conflict and Fragility" measures battle-related deaths and homicides.
• Private Sector and Trade: Under the heading "Private Sector and Trade" includes many indicators of the
business environment, including imports and exports measured both in dollar value and by time-study
indexes. There are statistics for tariffs here, as well as measures of travel and tourism. There are also
measures of private infrastructure investment in this section, such as investment in energy,
transportation and telecommunications.
• Public Sector: Every year the World Bank assigns low income nations a set of ratings called "Country
Policy and Institutional Assessment." These ratings are important because they determine the amount
of money countries receive from the World Bank. You can find them under the "Public Sector" heading.
They measure many variables, including transparency, budgetary management and environmental
sustainability. Government finance is measured in this area--revenues, expenditures and deficits. A
figure measuring the percentage of seats held by women in the national parliament is included.
• Other Categories: The other categories of World Bank indicators include indicators that translate less
directly into terms of financial or monetary terms. They include "Education," "Environment," "Health,"
"Infrastructure" and "Labor."
37

37. 38
https://www.weforum.org/agenda/2016/07/here-is-proof-that-economic-wealth-does-not-guarantee-
the-best-quality-of-
life?utm_content=bufferdecbd&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
SocialProgressIndex
GDP PPP per capita

38. 39
The economic growth rate does not necessarily match with the
development rate of a nation because the parameters of economic
growth and national development are different.

39. HDI as a development indicator
The Human Development Index (HDI) is a composite statistics
used to rank countries by level of "human development" and
distinguish "very high human development", "high human
development", "medium human development", and "low human
development" countries. The Human Development Index (HDI),
developed by Dr. Mahboob ul Haq of Pakistan, is a comparative
measure of life expectancy, literacy, education and standards of
living for countries worldwide. It is a standard means of measuring
well-being, especially child welfare. It is used to distinguish
whether the country is a developed, a developing or an under-
developed country, and also to measure the impact of economic
policies on quality of life.
40
We aim to shift the focus of development economics from
national income accounting to people-centered policies. UNDP

40. 41
New method to calculate HDI (2010)

41. 42
Although Nepal human development index (HDI) improved gradually since 1990,
Nepal is still behind most of the South Asian countries, according to new statistics
released by the United Nations Development Programme (UNDP).
Despite gradual progress, Nepal is just ahead of Pakistan and war-torn Afghanistan
in South Asia which puts the country below average score in the region. The average
HDI score for South Asia is 0.638.
https://kathmandupost.ekantipur.com/news/2018-09-16/nepal-still-trails-most-of-
south-asian-countries.html

42. 43
Nepal HDI: 0.579, 2018

43. 44
HDI across 15 eco-development regions, Nepal, 2006
Source: Nepal Human Development Report 2009

44. 45
HDI across 15 eco-development regions, Nepal, 2011
Source: Nepal Human Development Report 2014

45. 46
Nepal’s Position: 157 in 2011 and 2012. Nepal’s HDI 0.458 (2011) and
0.463 (2012), South Asia HDI 0.558 (2012).
HDI Report 2013, as reported in Aarthik Abhiyan Rastriya Dainik,
March 16, 2013, page 1
Nepal’s Position: 147 in 2018 (UNDP’s HDI Report, 2019)
Position HDI
Life
Expectancy
Expected Years of School Mean Years of School GNI PPP $
147 0.579 70.5 12.2 4.9 2,748

46. 47
http://hdr.undp.org/sites/
all/themes/hdr_theme/co
untry-notes/NPL.pdf
2018 0.579

47. 48
Human Capital Index (HCI): Range from 0 to 1,
World Bank (October 2018)
Five Indicators: (Health and education)
1. Child Survival
2. School Enrollment
3. Quality of Learning
4. Healthy Growth
5. Adult Survival
A. Child Survival
B. School Enrollment + Quality
…..of Learning
C. Healthy Growth + Adult
…..Survival
HCI = A ˟ B ˟ C
http://www.worldbank.org/en/publication/human-capital
http://documents.worldbank.org/curated/en/300071537907028892/p
df/WPS8593.pdf
HCI is a measure of the contribution of current health and
education outcomes to the productivity of future workers.
Compares “What will be” versus “What could be”.

48. Gross National Happiness (GNH)
as a development indicator
9 Domains and 33 Indicators of GNH:
• Psychological Well being
• Health
• Time use
• Education
• Cultural diversity and resilience
• Good governance
• Community vitality
• Ecological diversity and resilience
• Living standard
Source: www.grossnationalhappiness.com
Nepal ranked in 121st position in Happy Country in 2015.
World Happiness Report 2015; http://81c27a5d9c3263e8ebcc-
2da201d1ba4d5004cb235610c26ba057.r67.cf5.rackcdn.com/WHR15.pdf

49. 50

50. 51
The World's Happiest Countries
Christopher Helman,01.19.11,
"To use economic measurements alone to gauge the success of a nation would be equivalent to
assessing the entire condition of a man simply by looking at his bank balance," Peter Mandelson,
former U.K. economic minister.
To that end, the inputs used to create the index are both objective and subjective: that's because
it's not enough to know hard data like a country's unemployment or inflation rates. It also matters
how hard people think it is to find jobs, how convinced they are that hard work can bring success.
This can get complicated. In Nepal, for example, inflation is 11%, unemployment 46%. Yet a
surprisingly high 50% of the people say they are satisfied with their standard of living and 81%
have confidence in their banks. Could be they're scared of voicing their true opinion in a shaky
democracy, or maybe the Nepalese are just endemically happier people. Legatum adjusts for
this, adding a variable called "ability to express political opinion without fear."
What's the most prosperous country in the world? Norway. What's it got that the rest of the world
doesn't? The biggest bump comes from having the world's highest per capita GDP of $53,000 a
year. Norwegians have the second-highest level of satisfaction with their standards of living: 95%
say they are satisfied with the freedom to choose the direction of their lives; an unparalleled 74%
say other people can be trusted.
Cynics (particularly those leaving comments on Legatum's excellent website) say Norway's
ranking is a fluke, that it's a boring, godless (just 13% go to church) homogeneous place to live
with a massive welfare state bankrolled by high taxes. Without massive offshore reserves of oil
and gas that it exports to the world through state-controlled Statoil ( STO - news - people ),
Norway's GDP would be far smaller.
And yet joining Norway in the top 10 prosperous countries are its Scandinavian sisters Denmark,
Finland and Sweden, with equally small and civilized Switzerland and the Netherlands also in the
club. None of these countries are blessed with great hoards of oil and gas.

51. 52

52. 53
Common Parameters between HDI and GNH Non-Common Parameters between HDI and
GNH
Formula to calculate HDI:
Numerical Example:

53. 55
Physical Quality of Life Index
Morris D. Morris developed "Physical Quality of Life Index (PQLI)". He
included three indicators like life expectancy, infant mortality rate and
literacy rate. For each indicator he devised a scale which includes the
numbers ranging from 1 to 100 where 1 represents the worst performance
by any country and 100 is the best performance. For life expectancy, the
upper limit of 100 was assigned to 77 years which was achieved, by
Sweden in 1973, and the lower limit of 1 was assigned to 28 years which
was the life expectancy of Guinea-Bissau in 1960.
Within these limits each country's life expectancy figure is ranked from 1 to
100. As the midway between the upper and lower limits of 77 and 28 years
is 52 years will be assigned a rating of 50. Similarly, for infant mortality,
the upper limit was set at 9 per thousand was achieved by Sweden in 1973
and the lower limit at 229 per thousand was achieved by Gabon in 1950.
The minimum rate regarding IMR was rated 100, while the highest IMR
was given the scale of 1. Whereas the literacy rates, measured as
percentages from 1 to 100, provide their own direct scale. Once a
country's performance in life expectancy, infant mortality and literacy has
been rated on the scale of 1 to 100, the composite index for the country is
calculated by averaging the three ratings, giving equal weight to each.
http://www.economicsconcepts.com/physical_quantity_of_life_index.htm

54. 56
Countries Per Capita GNP in Dollars PQLI
Gambia
Angola
Sudan
Pakistan
Saudi Arabia
India
Iraq
Qatar
Tanzania
Zimbabwe
Brazil
China
Sri Lanka
Singapore
Taiwan
Cost Rica
348
790
380
349
12720
253
3020
27790
299
815
2214
304
302
5220
2503
1476
20
21
34
40
40
42
48
56
58
63
72
75
82
86
87
89

55. 57
Countries fall into four broad human development categories,
each of which comprises 47 countries:
• Very High Human Development,
• High Human Development,
• Medium Human Development and
• Low Human Development (46 countries in this category).
1. Developed countries (Canada, United States, European Union
members, Japan, Israel, Australia, etc.)
2. Countries with an economy consistently and fairly strongly
developing over a longer period (China, India, Brazil, South
Africa, Costa Rica, Mexico, Egypt, much of South America, etc.)
1.6 Countries are often loosely placed
into four categories of development:
CM in Developing Countries/Ch 1_HKS

56. 3. Countries with a patchy record of
development (most countries in Africa,
Central America, and the Caribbean
excepting Jamaica (category 2); much of
the Arab world fall in this category)
4. Countries with long-term civil war or large-
scale breakdown of rule of law or non-
development-oriented dictatorship ("failed
states") (e.g. Somalia, Sudan, Burma)
Nepal ?
58CM in Developing Countries/Ch 1_HKS

57. 59

58. 1.7 Common and Different
Characteristics of Developing
Countries
60CM in Developing Countries/Ch 1_HKS

59. 1. High population growth rate
Nepal as an example:
• Total population - 23151423 (2058 BS)
• Population growth rate - 2.25 %
• Would be double by 2095 BS (2039)
• 2010: 29959364
• 2009: 29432743
• 2008: 28905358, according to the World Bank.
61CM in Developing Countries/Ch 1_HKS
1.7 Ten Common Features of Developing Countries
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_pop_grow&idim
=country:NPL&dl=en&hl=en&q=population+growth+rate+nepal

60. 2. Low level of living (low income, inequality, poverty)
S. No. Countries GDP per capita
(US $)
HDI
(177)
1 China 2000 81/101
2 Bangladesh 450 140
3 Bhutan 1430 133
4 India 820 128/134
5 Maldives 3010 100
6 Nepal 320/640(2005) 142/157
7 Pakistan 800 136
8 Sri Lanka 1310 99
62
Economic Survey July 2008/2011. HDI calculation method changed since 2010.
CM in Developing Countries/Ch 1_HKS
GDP Growth Rate: 2008/9/10/11: 6.1/ 4.9/ 4.6/ 4.5
GDP Per Capita – PPP: 1329 International Dollars, 2005
http://www.gfmag.com/gdp-data-country-reports/212-
nepal-gdp-country-report.html#axzz1l22MoAdi

61. • 30.85 % below poverty line (NLSS 2003/04) based on Rs. 7696 as
the average national poverty line.
• 24.1 % below poverty line as per 1 dollar per day based on
purchasing power parity (PPP).
63
CM in Developing Countries/Ch 1_HKS

62. 64
2071/72: PCI increase Rs. 3800

63. Ethnic Inequality in Nepal
Description % below
poverty line
Dalit 46
Janajati in
hilly areas
44
Muslim 41
Terai
Janajatis
35
Minority
castes
31
Newars 14
Brahmin/Che
ttris
18
65
Three Year Interim Plan,
Mangsir, 2064

64. 3. Low levels of productivity
66
Low
nutrition
Low
health
Low
productivity
Low
income
CM in Developing Countries/Ch 1_HKS

65. 4. Agro based economy (without
any processing or supply chain
management)
S.
No
Industries 2000/01 2004/05 2007/08
1 Agriculture & forestry 36.15 34.71 32.12
2 Fishing 0.43 0.47 0.48
3 Manufacturing 9.03 7.92 7.06
4 Construction 6.01 6.47 6.44
5 Real estate, renting &
business activities
8.29 8.69 9.91
67CM in Developing Countries/Ch 1_HKS
Composition of GDP in percentage
(Economic Survey, July 2008)
Agriculture Industry +
Manufacturing
Manufacturing
only
Services
34 16 7 51

66. 5. Unemployment and underemployment
68
S.
No.
Descriptions % age
1 Population relied on agriculture as main
occupation
78
2 Employed (15 years above) 74.3
3 Unemployed (Male 3.1 % & Female 2.7) 2.9
4 Inactive 22.8
Based on NLSS 2060/61
Three Year Interim Plan, Mangsir, 2064
Unemployment Rate in Nepal increased to 3.20
percent in 2016 from 3 percent in 2015.
Unemployment Rate in Nepal averaged 2.97 percent
from 1991 until 2016, reaching an all time high of 4.50
percent in 1996 and a record low of 1.90 percent in
1999.

67. 69
year
Economic
growth
GDP current
U.S. dollars
GDP
constant
dollars
GDP per capita
current dollars
GDP per
capita
PPP
GDP per capita
constant
dollars HDI Inflation
Capital
investment
percent of GDP
Capital
investment
in dollars
Household
consumption
percent of GDP
Household
consumption
in dollars
Savings
percent
of GDP
2000 6.2 5.49 6.9 231.43 1539.77 459.13 0.449 2.5 24.31 1.34 75.88 4.17 21.6
2001 4.8 6.01 7.2 248.83 1586.88 473.18 2.7 22.39 1.35 80.23 4.75 17.72
2002 0.12 6.05 7.2 246.8 1564.42 466.48 3 20.25 1.23 82.11 4.89 15.81
2003 3.95 6.33 7.5 254.55 1603.13 478.02 5.7 21.41 1.36 82.77 5.15 23.5
2004 4.68 7.27 7.9 288.67 1656.27 493.87 2.8 24.53 1.78 79.61 5.68 25.97
2005 3.48 8.13 8.1 318.75 1693.15 504.87 0.477 6.8 26.45 2.15 79.55 6.34 26.27
2006 3.36 9.04 8.4 350.61 1730.61 516.04 6.9 26.85 2.43 82.33 7.3 26.69
2007 3.41 10.33 8.7 396.17 1771.16 528.13 5.7 28.69 2.96 80.98 8.18 28.15
2008 6.1 12.55 9.2 476.56 1860.61 554.8 0.501 9.9 30.32 3.8 80.28 9.86 27.45
2009 4.53 12.85 9.6 483.4 1925.39 574.12 11.1 31.67 4.07 79.79 10.05 35.85
2010 4.82 16 10.1 595.43 1996.86 595.43 0.527 9.3 38.27 6.12 78.56 12.3 33.6
2011 3.42 18.91 10.4 695.88 2042.14 608.93 0.533 9.3 37.99 7.18 76.46 14.14 36.12
Source: http://www.theglobaleconomy.com/indicators_data_export.php

68. 70
http://www.theglobaleconomy.com/N
epal/Unemployment_rate/

69. As per national census 2058
• Youth unemployment – 11.43 %
• Among total labor force – 70.6 % are involved on agriculture and
29.4 % on non-agriculture sector.
• It is estimated that in 2064 total labor force has reached 11.4
million with the annual increment rate of 2.6 %.
• Also estimated is yearly 3,00,000 labor force will enter Nepalese
labor market
71

70. 72
Annapurna Post: 27 April2019

71. 73
Total Unemployed: 908000; 511000 male and 39700 female
Total employable: 7994000, Labor Force Survey, CBS, 2019
Unemployment: 11.4% (2019)
Unemployment: 2.8% (2008) and 1.0% in 1998 survey, due to volunteer
work counted as employed, as per DDG Nebil Lal Shrestha of CBS.
Subsistence agriculture activities: not counted as employed in 2019 survey
Population above 15: 207044000; 4300000 in foreign employment
Employment in informal sector: 62.2%, formal sector 37.8%
यसपटक विभागले िस्िु िथा सेिा उत्पादन ि त्यसको उपभोग िथा नाफा आजछन गने
कक्रयाकलापलाई मात्र िोजगाि मानेको र्।
अतर्ल्लो सिेक्षणमा आफ्नै उपभोगका लागग खेिीपािी, पशुपालन िथा पारििारिक उपयोगका
लागग िस्िु उत्पादन कायछमा संलग्न व्यक्तिलाई िोजगािमा गणना गरिएको गथयो।
श्रमशक्तिभन्दा बाहनिको संख्या एक किोड २७ लाख ५० नजाि र्। त्यसमध्ये ८५ लाख महनला ि
४२ लाख ५० नजाि पुरुष र्न्। ७० लाख ८६ नजाि िोजगािीमध्ये २५ लाख ४० नजाि महनला ि
४४ लाख ४६ नजाि पुरुष र्न्।
Monthly Salary: 17800; Male 19400, female: 13630
िोजगािमध्ये सनिी क्षेत्रका ४९ लाख ग्रामीण क्षेत्रका २१ लाख ८५ नजाि िोजगािीमा र्न्।
कृ वष, िन ि मार्ापालनमा २१.५ प्रतिशिले काम गर्छन्। त्यस्िै थोक िथा खुद्रा बबक्रीमा १७.५
प्रतिशि ि मोटिगाडी िथा मोटिसाइकल ममछिसम्भािमा १५.१ प्रतिशिले काम गर्छन्। उद्योगमा
१३.८ ि तनमाछण क्षेत्रमा ७.९ प्रतिशिले काम गने गिेको सिेक्षणले देखाएको र्।
आईएलओ को सनयोगमा सन् २०१७ जुलाईदेखख २०१८ जुलाईसम्म १८ नजाि र्िपरििािमा
अध्ययन गिेको गथयो।

72. 6. Technological
backwardness
74

73. 7. Underutilized natural resources
• Though Nepal is rich in natural and human
resources, the resources have not been
optimally utilized, thereby, Nepalese
people are sometimes referred to as “poor
in a rich country”.
Economic Survey July 2008
75

74. 8. Foreign trade
orientation
• Trade deficit increased by
37.7 % to 102.85 billion in
the first eight months of
FY 2007/08
• Share of trade deficit with
India was 62.1 % and with
other countries by 37.9 %
in the review period. 77

75. 78
Impact of Covid-19?

76. 9. Low concern over time
• Time is not considered as important.
• People enjoy more free time
• “Will do tomorrow” attitude
• “Personal problem” considered
• Strikes, Chakkajam (transportation/vehicle strike)
• long list of holidays
– democracy, loktantra, republic
– Death of people, student, teacher, official …
• Road maintenance at office time …
• Project delay considered normal
• Covid-19: Lock down without an exit plan?
79CM in Developing Countries/Ch 1_HKS

77. 10 Low moral orientation
• High level of bribery
• Low level of
– (a) Work ethics
– (b) Professionalism and
– (c) Integrity
80

78. 11 Too many organizations (?)
81
Organization of “Abused Husbands”

79. Developing countries are not homogeneous but are
enormously diverse in their structure. In particular it is stressed
that the developing world differs in:
• Population and geographic size.
• Language and religion.
• Experiences in the colonial era.
• Levels of education.
• Natural resource endowments.
• Types of industry.
• Role of government and degree of
democracy.
• Degree of dependency in
international economic and political
affairs.
82Do these parameters have impact on CMDC?

80. 84
End of Chapter 1
Common
Characteristics
Impact on CMDC Different
Characteristics
Impact on CMDC

81. Test yourself. Answer them using different resources.
Chapter 1: Concept of Development, Characteristics of developing & developed countries
• Select the most critical intrinsic (only one) and extrinsic (only one) cause of
underdevelopment of a country. Defend your selection (i.e., explain why that
particular cause is most critical in comparison to other causes.
• Nepal is aspiring to be promoted to “developing country” from its current status of
“lease developed country”. To achieve this goal, which national development
parameters (select only two) should be improved, and why?
• What should be the proper development model for a developing country: (a) state
led, (b) Market led and (c) Society led? Explain with reasons and examples.
• Nepal has practiced planned development since the last half century, yet Nepal is
still one of the least developed countries. List top three reasons for this state of
Nepal (reasons for failure of planned development), and propose practical solutions
to overcome each of them.
• Despite abundant natural resources (like fresh water, forest, herbs, natural beauty,
bio-diversity) many developing countries, including Nepal, are reeling under
extreme pressures of underdeveloped infrastructure. Analyze the intrinsic and
extrinsic factors of underdeveloped state of Nepal.
• Defining development of a country is a complex issue. Discuss the economic, social,
cultural, and environmental factors that may be used to define development.
• The traditional economic indicators of development of a country have been
challenged by recent scholars of development. Can a country be economically
developing and still be underdeveloped?
85

82. Test yourself. Answer them using different resources.
Chapter 1: Concept of Development, Characteristics of developing & developed countries
• The basic economic indicators of development of a country may be
increasing positively, but the country may still be underdeveloped for
many years. Agree or disagree? Give reasons.
• Discuss the basic similarities (common features) and differences among
different developing countries?
• Is there any relationship between the Human Development Index and
Gross National Happiness? Explain.
• Which one should be the ultimate measure of development: Human
Development Index or Gross National Happiness? Explain with
appropriate reasons.
• Discuss the intrinsic and extrinsic factors of underdevelopment of a
country. Explain these factors in context of Nepal.
• Is there any relationship between the level of development of a country
and the construction management methods used in the country? Discuss.
• Discuss the major factors of underdevelopment of a country. Explain
these factors in context of Nepal.
• Some of the factors of under development are (a) rule of law, (b) financial
and physical security and (c) degree of transparency in institutional
working mechanism. Explain how these factors affect (i) private
investment (ii) work culture and (iii) quality of works related to CMDC.86

83. 87

84. 88
साइकलमा कायािलय
एउटा डिलाग्दो िोग नेपाली समाजमा विस्िाि नुुँदै गिेकोमा मलाई गचन्िा लाग्र्। समाजका विद्धि् िगछ पतन
सञ्चािमाध्यममा आएका समाचािका भिमा विचाि बनाउुँर्न्। संचािमाध्यमनरू आग्रनिाखेि समाचािका शीषछक
बनाउर्न्। महनलाहनंसामा सिकािले चालेका कदमबािे प्रेलसिज्ञप्िी प्रकालसि गयौं िि कु नैपतन पबत्रकाले
र्ापेन। गेिखापत्रले समेि र्ापेन िि गिेको कामको पतन गिेन भनेि गाली ि सिकािको अलोचना भने सबैले
र्ापे। जनिालाइछ सुसूगचि गनछ ि गिेकाकाम र्ापेि कमजोिी देखाइछहदनु पने गथयो िि नाम्रो दुभाछग्य।
मान्र्ेनरू दल/अनुनाि, भूगोल िा आफ्नो इच्र्ा स्िाथछसुँग जोडेि कसैका कामको प्रशंसा िा आलोचना गर्छन्।
विषयिस्िुको गहनिाइमा पुगेि साङ्गोपाङ्गो विश्लेषण गिेि आग्रनिहनि िस्िुपिक विचािको सट्टा सिनी
हटकाहटप्पणी ि कहनलेकानीं िुरुन्िै तनष्कषछ मा पुग्र्न्। कतिपयले समस्याको जड एउटा नेिामा िा समस्या
समाधानको र्डी अको नेिामा देख्र्न्। मान्र्ेलाई देित्ि िा दानित्िकिण गने, जटील सामाक्जक आगथछक
समस्याको एउटा सपाट उत्ति खोज्ने, फलानो ठीक भएपतर् सबै ठीक नुन्र् भन्ने मान्यिा िाख्ने बौद्गधक
जमाि बढीिनेको र्। आफ्नो खास काम बानेक सबै काम जान्ने नुनखोज्ने, अकाछको आलोचनामा िमाउने,
आफ्नो किछव्य नोइन, अगधकािका मात्रै कु िा गने, सक्जलै ि िुरुन्िै उत्ति खोज्ने, अधैयछ, उत्तजेक ि हनंसक बन्दै
र् युिा पुस्िा। अकाछको दुूःखमा िमाउने, अह्राएको काम मात्र गने, जोखखम नउठाउने, अन्य मुलुकलाई िाम्रो ि
आफ्नालाई निाम्रो देख्ने, व्यक्ति, परििाि आफन्ि, इष्टलमत्र ि दलगि नाफार्ाटामा िमाउने, पढ्ने पढाउने
एउटा िि व्यिनाि अकै गने, आत्मविश्िास नभएको, अरुले सनयोगको अपेक्षामा हदनिाि दौड्ने िाि त्यनी
समय सृजनाशीलिा ि लमहननिमा नखचछने, भनसुन, दिाि िा पैसामा सबैकाम नुन्र् भन्ने धािणा िाख्ने,
आफ्नो सन्िान विदेशीको गुलाम बनेकोमा गिछ गने, आफ्नै माटोमा गरिने शािीरिक कामलाई नेय ठान्ने,
पढेको िि के नी पतन सीप नभएको, कसैलाई लगाएको गुणको प्रतिफल खोज्ने, पैसालाई सबैथोक ठान्ने,
आफ्ना बाबुआमा ि बालबच्चाको स्यानाि नगने िि युिोप-अमेरिका िा इजिायलमा बृद्ध ि बच्चाको सानै
िाम्रो स्यानाि गने, दयामाया, ममिा, सदाचाि, सुँस्कृ ति, इतिनास, भूगोल बािे बेखिि जमाि पतन देखखदैर्।
उपयुछति चरित्रले समाजलाई पिनोन्मुख बनाउुँर्। अहनले नामीलाई लमहननिी, दुिदृष्टीयुति, दृढ, सक्षम,
स्िच्र्, मुलुकप्रति माया भएको (िाष्रप्रेमी), आत्मविश्िास भएको, पौिखमा विश्िास गने, लसतने ित्पििा ि
इच्र्ाशक्ति भएको, सामाक्जक प्राणीको खाुँचो र्।
लीलामखण पौड्याल, १ जनिरि २०१३

85. 12. Dualism
Dualism holds the belief that there are two elements of existence:
Mind-Body Dualism; Physical-Spiritual Dualism
89