EDITORIAL: Boost exports

Proper incentives for the export-oriented industries will be in order as the country’s exports are decreasing every year compared with its soaring import bills

At one time Nepal was exporting garments worth Rs. 12 billion every year and providing jobs to as many as 500,000.

Then it was able to garner investment amounting to six billion rupees. However, now over 85 per cent of the garment factories have stopped operating. So far garments worth Rs. 4.2 billion has been exported in the 11 months of the fiscal 2015-16.

The garment industry was on the verge of collapse when duty-free access to the United States was discontinued after the expiry of the Multi Fibre Agreement in January 2005.

The good news for the garment industry in Nepal is that the United States has recently announced duty free facility to 66 Nepali products, including pashmina, head gear, leather products, and others.

This move is expected to entice greater investment in these sectors. According to the Garment Association of Nepal (GAN), the decline of exports in garments was due to the high cost of transportation, power outages, strikes as well as high labour costs.

Furthermore, Nepali products cost 15 per cent extra in the global market than those of Bangladesh and Cambodia.

In the meantime, Nepal has made an appeal to the European Union to extend the Generalized System of Preference facility to Nepalese exports to the European countries.

It is believed that the EU has the intention of phasing out this facility from the beginning of 2017. This facility is referred to as GSP extended to the least developed countries (LDCs).

Nepal made this appeal for this facility after the devastating earthquakes of last year and also the trade blockade for five months. The EU provides zero duty facility for the products made in the LDCs. This was done in order to strengthen the industrial base of the LDCs.

But the LDCs were unable to make the most of it in spite of the huge potentials for exports. The GSP is provided to exports from these countries with 30 per cent value addition.

If this facility is extended for another term the criteria set may be lowered to 25 per cent.

The LDCs want the European Parliament to extend the GSP facility. The major Nepali exports to the European Union comprise carpets, readymade garments and handicrafts.

The US had renewed the GSP facility for the LDCs in 2015, which had expired in July, 2013. Regarding the garment industry, Nepal could attract more investment.

After the terror attack in Dhaka with the investors looking elsewhere to invest, Nepal could also be a suitable destination for them. The GAN wants 10 per cent incentive in the total export value in order to encourage the exporters in this highly profitable venture.

The reason that Bangladesh is doing well in the export of garments is because it is providing 10 per cent incentive to its exporters. It also brings in a whopping $32 billion annually just from the export of readymade garments.

It also claims that if this is done their export base would increase by three-fold in a period of three years. If this was achieved the country would stand to benefit and the moribund garment industry would be revived.

Proper incentives for the export-oriented industries will be in order as the country’s exports are decreasing every year compared with its soaring import bills.

Speaking volumes

We in Nepal also observe Library Day, the ninth edition of which is being marked as a Library Week from August 25 (tomorrow) to August 31 with the slogan ‘Library for lifelong education”.

The Ministry of Education is taking the lead, and a committee chaired by the education secretary is reported to organize the programmes in the capital. It will be observed in all the 75 districts under the coordination of the district education office.

Now, reading should also include digital reading, apart from the traditional reading of printed books.

But the libraries in the capital city itself seem to be a non-growing field, as there is hardly any big lending library.

Indeed, there are some very small lending libraries or probably one or two libraries of second-hand books, which do not provide contemporary or updated knowledge to the seekers in a variety of fields.

The temblors of the last year have made use of the big non-lending libraries impossible, unless they are renovated and the books are neatly put back on the shelves.

The ministry would be celebrating Library Week in the best possible manner if it gave more attention to these ground realities.